Annual report pursuant to Section 13 and 15(d)

Leases

Leases

12 Months Ended

Dec. 31, 2022

Note 11 – Leases

We generally have lease arrangements for office facilities and certain office equipment, certain field equipment including compressors, drilling rigs, crude oil storage tank capacity, land easements and similar arrangements for rights-of-way, and certain gas gathering and gas lift assets. Our short-term leases included in the disclosures below are primarily comprised of our contractual arrangements with certain vendors for operated drilling rigs, crude oil storage tank capacity and our field compressors. Our primary variable lease was represented by our field gas gathering and gas lift agreement with a midstream service provider and the lease payments are charged on a volumetric basis at a contractual fixed rate.

The following table summarizes the components of our total lease cost for the periods presented:


	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	889	$	891	$	979
Short-term lease cost	49,418		24,655		23,721
Variable lease cost	32,370		24,807		21,932
Less: Amounts charged as drilling costs 1	(43,867)		(21,213)		(20,708)
Total lease cost recognized in the consolidated statement of operations 2	$	38,810	$	29,140	$	25,924

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1 Represents the combined gross amounts paid and (i) capitalized as drilling costs for our working interest share and (ii) billed to joint interest partners for their working interest share for short-term leases of operated drilling rigs.

2 Includes $14.9 million, $10.8 million and $11.2 million recognized in GPT, $23.1 million, $17.4 million and $13.8 million recognized in Lease operating expense (“LOE”) and $0.8 million, $0.9 million and $1.0 million recognized in G&A for the years ended December 31, 2022, 2021, and 2020, respectively.

The following table summarizes supplemental cash flow information related to leases for the periods presented:


	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	952	$	981	$	943
ROU assets obtained in exchange for operating lease obligations	$	118	$	—	$	388

The following table summarizes supplemental balance sheet information related to leases as of the dates presented:


		December 31,
Leases	Balance Sheet Location	2022		2021
Assets
ROU assets – operating leases	Other assets	$	989	$	1,671

Liabilities
Current operating lease obligations	Accounts payable and accrued liabilities	$	907	$	914
Non-current operating lease obligations	Other non-current liabilities	200		975
Total operating lease obligations		$	1,107	$	1,889

The following table presents other information as it relates to operating leases as of the dates presented:


	December 31,
	2022		2021
Weighted-average remaining lease term – operating leases	1.5 years		2.1 years
Weighted-average discount rate – operating leases	3.33	%	3.13	%

As of December 31, 2022, maturities of our operating lease liabilities consisted of the following:


	December 31, 2022
2023	$	907
2024	175
2025	29
2026	26
2027	1
Total undiscounted lease payments	1,138
Less: imputed interest	(31)
Total operating lease obligations	$	1,107