XML 35 R23.htm IDEA: XBRL DOCUMENT v3.19.1

Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Leases

As discussed in Note 2 — Summary of Significant Accounting Policies, the Company adopted ASC 842 as of January 1, 2019 using the modified retrospective method, which resulted in the Company recognizing operating lease ROU assets and lease liabilities of $31.1 million and $37.1 million, respectively. In addition, the Company recognized offsetting finance lease ROU assets and lease liabilities of $6.0 million. There was no impact to the opening equity balance as a result of adoption as the difference between the asset and liability balance is attributable to reclasses of pre-existing balances, such as deferred rent, into the lease asset balance. Prior period amounts are not adjusted and continue to be reported in accordance with the previous guidance, Accounting Standards Codification 840 (“ASC 840”).

In accordance with the adoption of ASC 842, management determines whether an arrangement is a lease at its inception. The Company’s operating and finance leases consist primarily of office space, drilling rigs, vehicles and other property and equipment used in its operations. The operating lease ROU asset also includes any lease incentives received in the recognition of the present value of future lease payments. The Company considers renewal and termination options in determining the lease term used to establish its ROU assets and lease liabilities to the extent the Company is reasonably certain to exercise the renewal or termination. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments. The Company has determined their respective incremental borrowing rates based upon the rate of interest that would have been paid on a collateralized basis over similar tenors to that of the leases.

For the three months ended March 31, 2019, the Company incurred lease expenses, which includes short-term leases. The following table sets forth the Company’s components of lease expense:

	Three Months Ended March 31, 2019
	(In thousands)
Operating lease costs	$	11,676
Variable lease costs(1)	1,040
Short-term lease costs	463
Finance lease costs:
Amortization of ROU assets	566
Interest on lease liabilities	55
Total lease costs	$	13,800

___________________

(1) Based on payments made by the Company to lessors for the right to use an underlying asset that vary because of changes in circumstances occurring after the commencement date, other than the passage of time, such as property taxes, operating and maintenance costs.

The amounts disclosed herein include costs associated with properties operated by the Company that are presented on a gross basis and do not reflect the Company's net proportionate share of such amounts. A portion of these costs have been or will be billed to other working interest owners.

The Company’s share of operating, variable and short-term lease costs are either capitalized and included in property, plant and equipment on the Company’s Condensed Consolidated Balance Sheets or are recognized in the Company’s Condensed Consolidated Statements of Operations in lease operating expenses, midstream expenses and general and administrative expenses, as applicable. The finance lease costs for the amortization of ROU assets and the interest on lease liabilities disclosed above are included in depreciation, depletion and amortization and interest expense, net of capitalized interest, respectively, on the Company’s Condensed Consolidated Statements of Operations.

As of March 31, 2019, maturities of the Company’s lease liabilities are as follows:

	Operating Leases				Finance Leases
	(In thousands)
2019 (excluding the three months ended March 31, 2019)	$	12,804			$	1,880
2020	3,643				2,495
2021	1,140				1,658
2022	2,297				888
2023	2,345				63
Thereafter	12,801				361
Total future lease payments	$	35,030			$	7,345
Less: Imputed interest	4,288				514
Present value of future lease payments	$	30,742			$	6,831

As of December 31, 2018, future minimum annual rental commitments under non-cancelable leases under ASC 840 were as follows:

	(In thousands)
2019	$	8,723
2020	7,009
2021	6,005
2022	5,130
2023	4,361
Thereafter	13,134
Total future minimum lease payments	$	44,362

Supplemental balance sheet information related to the Company’s leases are as follows:

		Balance Sheet Location		March 31, 2019
				(In thousands)
Assets
Operating lease assets		Operating right-of-use assets		$	24,741
Finance lease assets(1)		Other assets		6,855
Total lease assets				$	31,596
Liabilities
Current
Operating lease liabilities		Current operating lease liabilities		$	13,135
Finance lease liabilities		Other current liabilities		2,485
Long-term
Operating lease liabilities		Operating lease liabilities		17,610
Finance lease liabilities		Other liabilities		4,530
Total lease liabilities				$	37,760

___________________

(1) Finance lease ROU assets are recorded net of accumulated amortization of $0.6 million as of March 31, 2019.

Supplemental cash flow information and non-cash transactions related to the Company’s leases are as follows:

	March 31, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,671
Operating cash flows from finance leases	55
Financing cash flows from finance leases	256
ROU assets obtained in exchange for lease obligations
Operating leases	$	5,029
Finance leases	1,433

Weighted-average remaining lease term and discount rate for the Company’s are as follows:

	As of March 31, 2019
Operating Leases
Weighted average remaining lease term	6.3 years
Weighted average discount rate	3.9	%
Finance Leases
Weighted average remaining lease term	3.8 years
Weighted average discount rate	3.6	%

Leases

Leases

As discussed in Note 2 — Summary of Significant Accounting Policies, the Company adopted ASC 842 as of January 1, 2019 using the modified retrospective method, which resulted in the Company recognizing operating lease ROU assets and lease liabilities of $31.1 million and $37.1 million, respectively. In addition, the Company recognized offsetting finance lease ROU assets and lease liabilities of $6.0 million. There was no impact to the opening equity balance as a result of adoption as the difference between the asset and liability balance is attributable to reclasses of pre-existing balances, such as deferred rent, into the lease asset balance. Prior period amounts are not adjusted and continue to be reported in accordance with the previous guidance, Accounting Standards Codification 840 (“ASC 840”).

In accordance with the adoption of ASC 842, management determines whether an arrangement is a lease at its inception. The Company’s operating and finance leases consist primarily of office space, drilling rigs, vehicles and other property and equipment used in its operations. The operating lease ROU asset also includes any lease incentives received in the recognition of the present value of future lease payments. The Company considers renewal and termination options in determining the lease term used to establish its ROU assets and lease liabilities to the extent the Company is reasonably certain to exercise the renewal or termination. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. 

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments. The Company has determined their respective incremental borrowing rates based upon the rate of interest that would have been paid on a collateralized basis over similar tenors to that of the leases.

For the three months ended March 31, 2019, the Company incurred lease expenses, which includes short-term leases. The following table sets forth the Company’s components of lease expense:

	Three Months Ended March 31, 2019
	(In thousands)
Operating lease costs	$	11,676
Variable lease costs(1)	1,040
Short-term lease costs	463
Finance lease costs:
Amortization of ROU assets	566
Interest on lease liabilities	55
Total lease costs	$	13,800

___________________

(1) Based on payments made by the Company to lessors for the right to use an underlying asset that vary because of changes in circumstances occurring after the commencement date, other than the passage of time, such as property taxes, operating and maintenance costs.

The amounts disclosed herein include costs associated with properties operated by the Company that are presented on a gross basis and do not reflect the Company's net proportionate share of such amounts. A portion of these costs have been or will be billed to other working interest owners.

The Company’s share of operating, variable and short-term lease costs are either capitalized and included in property, plant and equipment on the Company’s Condensed Consolidated Balance Sheets or are recognized in the Company’s Condensed Consolidated Statements of Operations in lease operating expenses, midstream expenses and general and administrative expenses, as applicable. The finance lease costs for the amortization of ROU assets and the interest on lease liabilities disclosed above are included in depreciation, depletion and amortization and interest expense, net of capitalized interest, respectively, on the Company’s Condensed Consolidated Statements of Operations.

As of March 31, 2019, maturities of the Company’s lease liabilities are as follows:

	Operating Leases				Finance Leases
	(In thousands)
2019 (excluding the three months ended March 31, 2019)	$	12,804			$	1,880
2020	3,643				2,495
2021	1,140				1,658
2022	2,297				888
2023	2,345				63
Thereafter	12,801				361
Total future lease payments	$	35,030			$	7,345
Less: Imputed interest	4,288				514
Present value of future lease payments	$	30,742			$	6,831

As of December 31, 2018, future minimum annual rental commitments under non-cancelable leases under ASC 840 were as follows:

	(In thousands)
2019	$	8,723
2020	7,009
2021	6,005
2022	5,130
2023	4,361
Thereafter	13,134
Total future minimum lease payments	$	44,362

Supplemental balance sheet information related to the Company’s leases are as follows:

		Balance Sheet Location		March 31, 2019
				(In thousands)
Assets
Operating lease assets		Operating right-of-use assets		$	24,741
Finance lease assets(1)		Other assets		6,855
Total lease assets				$	31,596
Liabilities
Current
Operating lease liabilities		Current operating lease liabilities		$	13,135
Finance lease liabilities		Other current liabilities		2,485
Long-term
Operating lease liabilities		Operating lease liabilities		17,610
Finance lease liabilities		Other liabilities		4,530
Total lease liabilities				$	37,760

___________________

(1) Finance lease ROU assets are recorded net of accumulated amortization of $0.6 million as of March 31, 2019.

Supplemental cash flow information and non-cash transactions related to the Company’s leases are as follows:

	March 31, 2019
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,671
Operating cash flows from finance leases	55
Financing cash flows from finance leases	256
ROU assets obtained in exchange for lease obligations
Operating leases	$	5,029
Finance leases	1,433

Weighted-average remaining lease term and discount rate for the Company’s are as follows:

	As of March 31, 2019
Operating Leases
Weighted average remaining lease term	6.3 years
Weighted average discount rate	3.9	%
Finance Leases
Weighted average remaining lease term	3.8 years
Weighted average discount rate	3.6	%

X

- References

No definition available.

+ Details

Name:	us-gaap_LeasesAbstract
Namespace Prefix:	us-gaap_
Data Type:	xbrli:stringItemType
Balance Type:	na
Period Type:	duration

X

- 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 http://asc.fasb.org/subtopic&trid=77888251

+ Details

Name:	us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration

X

- 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 http://asc.fasb.org/subtopic&trid=77888251

+ Details

Name:	us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix:	us-gaap_
Data Type:	nonnum:textBlockItemType
Balance Type:	na
Period Type:	duration