Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

7. Leases

We are a lessee under various agreements for drilling rigs, pressure pumping equipment, vehicles, office space, compressors, certain water transportation lines and other equipment under non-cancelable operating leases expiring through 2036. Certain of our lease agreements include options to renew the lease, terminate the lease early or purchase the underlying asset at the end of the lease. We determine the lease term at the lease commencement date as the non-cancelable period of the lease, including options to extend or terminate the lease when we are reasonably certain to exercise the option. The Company’s vehicles are the only leases with renewal options that we are reasonably certain to exercise. The renewals are reflected in the right of use (“ROU”) asset and lease liability balances.

On October 1, 2024, we completed the Southwestern Merger. As part of the purchase price allocation, we recognized additional operating lease liabilities of $134 million and a related ROU asset of $134 million related to drilling rigs, pressure pumping equipment, vehicles, office space, compressors, certain water transportation lines and other equipment. Regarding our drilling rigs and pressure pumping equipment, our policy is to treat both lease and non-lease components as a single lease component. See Note 2 for additional information about the Southwestern Merger.

Our operating ROU assets are included in other long-term assets while operating lease liabilities are included in other current and other long-term liabilities on the consolidated balance sheet.

The following table presents our ROU assets and lease liabilities as of December 31, 2024 and 2023. As of December 31, 2024 and 2023, we did not have any finance leases.

	Operating Leases
	December 31, 2024		December 31, 2023
ROU assets	$	145	$	99
Lease liabilities:
Current lease liabilities	$	71	$	84
Long-term lease liabilities	74		15
Total lease liabilities, net	$	145	$	99

Additional information for the Company’s operating leases is presented below:

	Years Ended December 31,
	2024		2023		2022
Lease cost:
Operating lease cost	$	88	$	107	$	51
Short-term lease cost	62		40		74
Total lease cost	$	150	$	147	$	125
Other information:
Operating cash outflows from operating leases	$	13	$	10	$	15
Investing cash outflows from operating leases	$	137	$	137	$	110

	December 31, 2024		December 31, 2023
Weighted average remaining lease term - operating leases	3.03 years		1.24 years
Weighted average discount rate - operating leases	5.99	%	7.02	%

Maturity analysis of operating lease liabilities is presented below:

	December 31, 2024
2025	$	71
2026	37
2027	30
2028	14
2029	6
Thereafter	1
Total lease payments	159
Less imputed interest	(14)
Present value of lease liabilities	145
Less current maturities	(71)
Present value of lease liabilities, less current maturities	$	74