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Leases | 12 Months Ended
--- | ---
Dec. 31, 2022
Leases [Abstract] |
Leases |
9. | Leases
We are a lessee under various agreements for drilling rigs, compressors, vehicles, office space and gas treating plants. As of December 31, 2022, these leases have remaining terms ranging from one month to three years. 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. 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. Finance ROU assets are reflected in total property and equipment, net, while finance lease liabilities are included in other current and other long-term liabilities on the consolidated balance sheet. On November 1, 2021, we acquired Vine and, as part of the purchase price allocation, we recognized additional operating lease liabilities of $32 million and a related ROU asset of $32 million related to drilling rig leases, an office space lease and gas treating plant leases. The following table presents our ROU assets and lease liabilities as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, we did not have any finance leases.
|  | Successor
|  | Operating Leases
|  | December 31, 2022 |  | December 31, 2021
ROU assets |  | $ | 119 |  |  | $ | 38 |
Lease liabilities: |  |  |  |
Current lease liabilities |  | $ | 86 |  |  | $ | 29 |
Long-term lease liabilities |  | 33 |  |  | 9 |
Total lease liabilities, net |  | $ | 119 |  |  | $ | 38 |
As of December 31, 2022, we had operating leases of $73 million related to drilling rig leases, which have been executed but not yet commenced. These operating leases are expected to commence in 2023 with lease terms expiring through 2025. Additional information for the Company’s operating and finance leases is presented below:
|  | Successor |  |  | Predecessor
|  | Year Ended December 31, 2022 |  | Period from February 10, 2021 through December 31, 2021 |  |  | Period from January 1, 2021 through February 9, 2021 |  | Year Ended December 31, 2020
Lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | $ | — |  |  | $ | — |  |  |  | $ | 1 |  |  | $ | 9 |
Interest on lease liability |  | — |  |  | — |  |  |  | — |  |  | 1 |
Finance lease cost |  | — |  |  | — |  |  |  | 1 |  |  | 10 |
Operating lease cost |  | 51 |  |  | 33 |  |  |  | 3 |  |  | 17 |
Short-term lease cost |  | 74 |  |  | 13 |  |  |  | — |  |  | 32 |
Total lease cost |  | $ | 125 |  |  | $ | 46 |  |  |  | $ | 4 |  |  | $ | 59 |
Other information: |  |  |  |  |  |  |  |  |
Operating cash outflows from finance lease |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  | $ | 1 |
Operating cash outflows from operating leases |  | $ | 15 |  |  | $ | 7 |  |  |  | $ | — |  |  | $ | 9 |
Investing cash outflows from operating leases |  | $ | 110 |  |  | $ | 39 |  |  |  | $ | 3 |  |  | $ | 40 |
Financing cash outflows from finance lease |  | $ | — |  |  | $ | — |  |  |  | $ | 1 |  |  | $ | 9 |
|  | Successor
|  | December 31, 2022 |  | December 31, 2021
Weighted average remaining lease term - operating leases |  | 1.54 years |  | 1.44 years
Weighted average discount rate - operating leases |  | 6.64 | % |  | 3.80 | %
Maturity analysis of operating lease liabilities are presented below:
|  | Successor
|  | December 31, 2022
2023 |  | $ | 88 |
2024 |  | 38 |
2025 |  | — |
Total lease payments |  | 126 |
Less imputed interest |  | (7) |
Present value of lease liabilities |  | 119 |
Less current maturities |  | (86) |
Present value of lease liabilities, less current maturities |  | $ | 33 |
Leases |
9. | Leases
We are a lessee under various agreements for drilling rigs, compressors, vehicles, office space and gas treating plants. As of December 31, 2022, these leases have remaining terms ranging from one month to three years. 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. 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. Finance ROU assets are reflected in total property and equipment, net, while finance lease liabilities are included in other current and other long-term liabilities on the consolidated balance sheet. On November 1, 2021, we acquired Vine and, as part of the purchase price allocation, we recognized additional operating lease liabilities of $32 million and a related ROU asset of $32 million related to drilling rig leases, an office space lease and gas treating plant leases. The following table presents our ROU assets and lease liabilities as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, we did not have any finance leases.
|  | Successor
|  | Operating Leases
|  | December 31, 2022 |  | December 31, 2021
ROU assets |  | $ | 119 |  |  | $ | 38 |
Lease liabilities: |  |  |  |
Current lease liabilities |  | $ | 86 |  |  | $ | 29 |
Long-term lease liabilities |  | 33 |  |  | 9 |
Total lease liabilities, net |  | $ | 119 |  |  | $ | 38 |
As of December 31, 2022, we had operating leases of $73 million related to drilling rig leases, which have been executed but not yet commenced. These operating leases are expected to commence in 2023 with lease terms expiring through 2025. Additional information for the Company’s operating and finance leases is presented below:
|  | Successor |  |  | Predecessor
|  | Year Ended December 31, 2022 |  | Period from February 10, 2021 through December 31, 2021 |  |  | Period from January 1, 2021 through February 9, 2021 |  | Year Ended December 31, 2020
Lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets |  | $ | — |  |  | $ | — |  |  |  | $ | 1 |  |  | $ | 9 |
Interest on lease liability |  | — |  |  | — |  |  |  | — |  |  | 1 |
Finance lease cost |  | — |  |  | — |  |  |  | 1 |  |  | 10 |
Operating lease cost |  | 51 |  |  | 33 |  |  |  | 3 |  |  | 17 |
Short-term lease cost |  | 74 |  |  | 13 |  |  |  | — |  |  | 32 |
Total lease cost |  | $ | 125 |  |  | $ | 46 |  |  |  | $ | 4 |  |  | $ | 59 |
Other information: |  |  |  |  |  |  |  |  |
Operating cash outflows from finance lease |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  | $ | 1 |
Operating cash outflows from operating leases |  | $ | 15 |  |  | $ | 7 |  |  |  | $ | — |  |  | $ | 9 |
Investing cash outflows from operating leases |  | $ | 110 |  |  | $ | 39 |  |  |  | $ | 3 |  |  | $ | 40 |
Financing cash outflows from finance lease |  | $ | — |  |  | $ | — |  |  |  | $ | 1 |  |  | $ | 9 |
|  | Successor
|  | December 31, 2022 |  | December 31, 2021
Weighted average remaining lease term - operating leases |  | 1.54 years |  | 1.44 years
Weighted average discount rate - operating leases |  | 6.64 | % |  | 3.80 | %
Maturity analysis of operating lease liabilities are presented below:
|  | Successor
|  | December 31, 2022
2023 |  | $ | 88 |
2024 |  | 38 |
2025 |  | — |
Total lease payments |  | 126 |
Less imputed interest |  | (7) |
Present value of lease liabilities |  | 119 |
Less current maturities |  | (86) |
Present value of lease liabilities, less current maturities |  | $ | 33 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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