Leases

6 Months Ended

Jun. 30, 2022

LEASES

Operating Leases. We are a lessee through noncancellable lease agreements for property and equipment consisting primarily of office space, land, vehicles, and equipment used in both our operations and administrative functions.

The following table sets forth the maturities, weighted average remaining lease term, and weighted average discount rate of our operating lease liabilities as of June 30, 2022:


	Amount
	(In thousands)
Ending June 30,
2022	$	2,017
2023	1,996
2024	2,024
2025	2,065
2026	437
2027 and beyond	—
Total future payments	8,539
Less: Interest	1,115
Present value of future minimum operating lease payments	7,424
Less: Current portion	1,571
Total long-term operating lease payments	$	5,853

Weighted average remaining lease term (years)	4.2
Weighted average discount rate (1)	6.65		%

1.Our weighted average discount rates represent the rate implicit in the lease or our incremental borrowing rate for a term equal to the remaining term of the lease.

Finance Leases. During 2014, Superior entered into finance lease agreements for 20 compressors with initial terms of seven years and an option to purchase the assets at 10% of their then fair market value at the end of the term. These finance leases were discounted using annual rates of 4.0% and the underlying assets were included in gas gathering and processing equipment. Superior purchased the leased assets for $3.0 million in May 2021.

The following table shows information about our lease assets and liabilities on our unaudited condensed consolidated balance sheets:


	Classification on the unaudited condensed consolidated balance sheets	June 30, 2022		December 31, 2021
		(In thousands)
Assets
Operating lease right of use assets	Right of use assets	$	7,362	$	12,445
Total right of use assets		$	7,362	$	12,445

Liabilities
Current liabilities:
Operating lease liabilities	Current operating lease liabilities	$	1,571	$	3,791
Non-current liabilities:
Operating lease liabilities	Operating lease liabilities	5,853		8,677
Total lease liabilities		$	7,424	$	12,468

The following table shows certain information related to the lease costs for our finance and operating leases for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Components of total lease cost:
Amortization of finance leased assets	$	—	$	181	$	—	$	1,248
Interest on finance lease liabilities	—		4		—		33
Operating lease cost	923		984		2,231		2,011
Short-term lease cost (1)	3,418		3,179		6,954		5,771
Variable lease cost	—		—				—
Total lease cost	$	4,341	$	4,348	$	9,185	$	9,063

1.Short-term lease cost includes amounts capitalized related to our oil and natural gas segment of $0.7 million and $0.1 million during the three months ended June 30, 2022 and 2021, respectively, and $1.2 million and $0.2 million during the six months ended June 30, 2022 and 2021, respectively.

The following table shows supplemental cash flow information related to leases for the periods indicated:


	Six Months Ended June 30,
	2022		2021
	(In thousands)
Cash payments made on operating leases	$	2,190	$	2,063
Cash payments made on finance leases	$	—	$	3,216
Lease liabilities recognized in exchange for new operating lease right of use assets	$	909	$	167