LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

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.

In September 2021, we entered into an operating lease agreement for our headquarters office space which generated right of use assets and liabilities at lease inception of $8.4 million.

The following table presents the maturities, weighted average remaining lease term, and the weighted average discount rate of our operating lease liabilities as of December 31, 2022:

	Amount
	(In thousands)
Ending December 31,
2023	$	1,999
2024	2,004
2025	2,044
2026	1,472
2027	—
2028 and beyond	—
Total future payments	7,519
Less: Interest	879
Present value of future minimum operating lease payments	6,640
Less: Current portion	1,605
Total long-term operating lease payments	$	5,035
Weighted average remaining lease term (years)	3.7
Weighted average discount rate (1)	6.7		%

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 are included in gas gathering and processing equipment. Superior purchased the leased assets for $3.0 million in May 2021.

The following table presents the operating and finance lease assets and liabilities on our consolidated balance sheets:

	Balance Sheet Classification	December 31, 2022		December 31, 2021
		(In thousands)
Assets
Operating lease right of use assets	Right of use assets	$	6,551	$	12,445
Total lease right of use assets		$	6,551	$	12,445
Liabilities
Current liabilities:
Operating lease liabilities	Current operating lease liabilities	$	1,605	$	3,791
Non-current liabilities:
Operating lease liabilities	Operating lease liabilities	5,035		8,677
Total lease liabilities		$	6,640	$	12,468

The following table presents the components of total lease cost for our operating and finance leases during the periods indicated:

	Year Ended December 31,
	2022		2021
	(In thousands)
Components of total lease cost:
Short-term lease cost (1)	$	10,650	$	12,898
Operating lease cost	3,278		4,546
Amortization of finance leased assets	—		1,248
Interest on finance lease liabilities	—		33
Total lease cost	$	13,928	$	18,725

1.Short-term lease cost includes amounts capitalized related to our oil and natural gas segment of $1.8 million and $1.5 million for the year ended December 31, 2022 and 2021, respectively.

The following table presents supplemental cash flow information related to our operating and finance leases during the periods indicated:

	Year Ended December 31,
	2022		2021
	(In thousands)
Cash payments made on operating leases	$	3,210	$	4,605
Cash payments made on finance leases	$	—	$	3,216
Lease liabilities recognized in exchange for new operating lease right of use assets	$	909	$	11,155