Leases

12 Months Ended

Dec. 31, 2020

Note 5. Leases

We evaluate contracts for leasing arrangements at inception. We lease office space, equipment, and vehicles that have non-cancelable lease terms. Currently, our outstanding leases have remaining terms up to 7 years, with certain land leases having remaining terms up to 49 years. Leases with a term of 12 months or less are not recorded on our balance sheet. As part of the Chapter 11 Restructuring, the Predecessor elected to terminate some of its operating and finance leases, primarily related to office space. The table below reflects our operating lease right-of-use assets and operating lease liabilities, which primarily consist of our office leases:


	Successor		Predecessor
In thousands	December 31, 2020		December 31, 2019
Operating leases
Operating lease right-of-use assets	$	20,342	$	34,099

Operating lease liabilities – current	$	1,350	$	6,901
Operating lease liabilities – long-term	19,460		41,932
Total operating lease liabilities	$	20,810	$	48,833

The majority of our leases contain renewal options, typically exercisable at our sole discretion. At emergence, we recorded right-of-use assets and liabilities based on the fair value of lease payments and utilized our incremental borrowing rate based on information available at the Emergence Date. The following weighted average remaining lease terms and discount rates related to our outstanding operating leases:

Successor

Predecessor

December 31, 2020

December 31, 2019

Weighted average remaining lease term

6.3 years

5.7 years

Weighted average discount rate

5.6

6.7

Lease costs for operating leases or leases with a term of 12 months or less are recognized on a straight-line basis over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset are recognized separately, with the depreciable life reflective of the expected lease term. The Predecessor Company previously subleased part of the office space included in its operating leases for which it received rental payments. Since those office space leases were terminated during the Chapter 11 Restructuring, the underlying sublease agreements were also terminated. The Successor Company subsequently entered into an operating lease for a new corporate office space which commenced in October 2020. The following table summarizes the components of lease costs and sublease income:


		Successor		Predecessor
		Period from Sept. 19, 2020 through Dec. 31, 2020		Period from Jan. 1, 2020 through Sept. 18, 2020		Year Ended
In thousands	Income Statement					Dec. 31, 2019
Operating lease cost	General and administrative expenses	$	872	$	5,683	$	8,924
	Lease operating expenses	158		214		58
	CO2 operating and discovery expenses	14		37		5
		$	1,044	$	5,934	$	8,987
Finance lease cost
Amortization of right-of-use assets	Depletion, depreciation, and amortization	$	3	$	9	$	1,188
Interest on lease liabilities	Interest expense	1		3		40
Total finance lease cost		$	4	$	12	$	1,228

Sublease income	General and administrative expenses	$	100	$	2,584	$	4,127

Our statement of cash flows included the following activity related to our operating and finance leases:


	Successor		Predecessor
	Period from Sept. 19, 2020 through Dec. 31, 2020		Period from Jan. 1, 2020 through Sept. 18, 2020		Year Ended
In thousands					Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	341	$	7,341	$	10,995
Operating cash flows from interest on finance leases	1		3		40
Financing cash flows from finance leases	78		10		1,275

Right-of-use assets obtained in exchange for lease obligations
Operating leases	19,902		1,049		415
Finance leases	—		162		—

The following table summarizes by year the maturities of our lease liabilities as of December 31, 2020:


	Operating
In thousands	Leases
2021	$	2,496
2022	4,149
2023	4,135
2024	4,111
2025	4,149
Thereafter	6,263
Total minimum lease payments	25,303
Less: Amount representing interest	(4,493)
Present value of minimum lease liabilities	$	20,810