Note 8 - Leases

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

8. Leases

Nature of Leases

We lease certain field equipment and other equipment under cancelable and non-cancelable leases to support our operations.

Practical Expedients and Accounting Policy Elections

Certain of our lease agreements include lease and non-lease components. For all existing asset classes with multiple component types, we have utilized the practical expedient that exempts us from separating lease components from non-lease components. Accordingly, we account for the lease and non-lease components in an arrangement as a single lease component. In addition, for all of our existing asset classes, we have made an accounting policy election not to apply the lease recognition requirements to our short-term leases (that is, a lease that, at commencement, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that we are reasonably certain to exercise). Accordingly, we recognize lease payments related to our short-term leases in our statement of operations on a straight-line basis over the lease term which has not changed from our prior recognition. To the extent that there are variable lease payments, we recognize those payments in our statement of operations in the period in which the obligation for those payments is incurred. None of our current leases contain variable payments.  Refer to “ Nature of Leases”   above for further information regarding those asset classes that include material short-term leases.

The components of our total lease expense for the three and nine months ended September 30, 2022, the majority of which is included in lease operating expense, are as follows:

	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Operating lease cost	$	2	$	10
Short-term lease expense (1)	$	118	$	434
Total lease expense	$	120	$	444
Short-term lease costs (2)	$	-	$	-

(1)	Short-term lease expense represents expense related to leases with a contract term of 12 months or less.
(2)	These short-term lease costs are related to leases with a contract term of 12 months or less which are related to drilling rigs and are capitalized as part of natural gas and oil properties on our balance sheet.

Supplemental balance sheet information related to our operating leases is included in the table below:
 

	September 30, 2022
Operating lease ROU assets	$	2
Operating lease liability - current	$	2
Operating lease liabilities - long-term	$	-

Our weighted average remaining lease term and weighted average discount rate for our operating leases are as follows:

	September 30, 2022
Weighted Average Remaining Lease Term (in years)		0.3
Weighted Average Discount Rate		6	%

Our lease liabilities with enforceable contract terms that are greater than one year mature as follows:

	Operating Leases
Remainder of 2022	$	2
2023		—
2024		—
2025		—
2026		—
Thereafter		—
Total lease payments		2
Less imputed interest		—
Total lease liability	$	2

At September 30, 2022, we had only a lease on office equipment, with minimum lease payments with commitments that had initial or remaining lease terms in excess of one year.