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Leases | 12 Months Ended
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Dec. 31, 2019
Leases [Abstract] |
Leases | LEASES The Company determines if an arrangement is a lease at inception of the contract. If an arrangement is a lease, the present value of the related lease payments is recorded as a liability and an equal amount is capitalized as a right of use asset on the Company’s consolidated balance sheet. The Company elected to include payments for non-lease components associated with certain leases when determining the present value of the lease payments. Right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company’s estimated incremental borrowing rate, determined at the lease commencement date using the Company’s average secured borrowing rate, is used to calculate present value. The weighted average estimated incremental borrowing rate used for the year ended December 31, 2019 was 3.52% and 3.70% for operating leases and financing leases, respectively. For these purposes, the lease term includes options to extend the lease when it is reasonably certain that the Company will exercise such option. Leases with terms of 12 months or less at inception are not recorded on the consolidated balance sheet unless there is a significant cost to terminate the lease, including the cost of removal of the leased asset. As the Company is the responsible party under these arrangements, the Company records the resulting assets and liabilities on a gross basis in its consolidated balance sheets. The following table presents supplemental consolidated statement of operations information related to lease expenses, on a gross basis, for the year ended December 31, 2019 (in thousands). Lease payments represent gross payments to vendors, which, for certain of our operating assets, are partially offset by amounts received from other working interest owners in our operated wells.
| Year Ended
| December 31, 2019
Operating leases |
Lease operating | $ | 11,877 |
Plant and other midstream services | 110 |
General and administrative | 3,209 |
Total operating leases(1) | 15,196 |
Short-term leases |
Lease operating | 10,441 |
Plant and other midstream services | 4,983 |
General and administrative | 27 |
Total short-term leases(2)(3) | 15,451 |
Financing leases |
Depreciation of assets | 976 |
Interest on lease liabilities | 134 |
Total financing leases | 1,110 |
Total lease expense | $ | 31,757 |
_____________________
(1) | Does not include gross payments related to drilling rig leases of $28.1 million for the year ended December 31, 2019 that were capitalized and recorded in “Oil and natural gas properties, full-cost method” in the consolidated balance sheet at December 31, 2019.
(2) | These costs are related to leases that are not recorded as right of use assets or lease liabilities in the consolidated balance sheet as they are short-term leases.
(3) | Does not include gross payments related to short-term drilling rig leases and other equipment rentals of $90.3 million for the year ended December 31, 2019 that were capitalized and recorded in “Oil and natural gas properties, full-cost method” in the consolidated balance sheet at December 31, 2019.
The following table presents supplemental consolidated balance sheet information related to leases as of December 31, 2019 (in thousands).
|  | December 31, 2019
Operating leases |  |
Other long-term assets |  | $ | 85,668 |
Other current liabilities |  | $ | (50,164 | )
Other long-term liabilities |  | (41,459 | )
Total operating lease liabilities |  | $ | (91,623 | )
Financing leases |  |
Other property and equipment, at cost |  | $ | 2,677 |
Accumulated depreciation |  | (1,324 | )
Net property and equipment |  | $ | 1,353 |
Other current liabilities |  | $ | (799 | )
Other long-term liabilities |  | (524 | )
Total financing lease liabilities |  | $ | (1,323 | )
The following table presents supplemental consolidated cash flow information related to lease payments for the year ended December 31, 2019 (in thousands).
|  | Year Ended December 31, 2019
Cash paid related to lease liabilities |  |
Operating cash payments for operating leases |  | $ | 14,941 |
Investing cash payments for operating leases |  | $ | 28,034 |
Financing cash payments for financing leases |  | $ | 918 |
Right of use assets obtained in exchange for lease obligations entered into during the period |  |
Operating leases |  | $ | 59,740 |
Financing leases |  | $ | 597 |
The following table presents the maturities of lease liabilities at December 31, 2019 (in years).
Weighted-Average Remaining Lease Term |  | December 31, 2019
Operating leases |  | 2.7
Financing leases |  | 2.1
The following table presents a schedule of future minimum lease payments required under all lease agreements as of December 31, 2019 and 2018, respectively (in thousands).
|  | December 31, 2019
|  | Operating Leases |  | Financing Leases
2020 |  | $ | 50,164 |  |  | $ | 799 |
2021 |  | 27,279 |  |  | 517 |
2022 |  | 5,010 |  |  | 179 |
2023 |  | 4,177 |  |  | — |
2024 |  | 4,217 |  |  | — |
Thereafter |  | 5,716 |  |  | — |
Total lease payments |  | 96,563 |  |  | 1,495 |
Less imputed interest |  | (4,940 | ) |  | (172 | )
Total lease obligations |  | 91,623 |  |  | 1,323 |
Less current obligations |  | (50,164 | ) |  | (799 | )
Long-term lease obligations |  | $ | 41,459 |  |  | $ | 524 |
|  | December 31, 2018
|  | Operating Leases |  | Financing Leases
2019 |  | $ | 39,457 |  |  | $ | 1,240 |
2020 |  | 12,009 |  |  | 913 |
2021 |  | 3,513 |  |  | 534 |
2022 |  | 3,209 |  |  | 455 |
2023 |  | 3,234 |  |  | — |
Thereafter |  | 7,680 |  |  | — |
Total lease payments |  | 69,102 |  |  | 3,142 |
Less imputed interest |  | (4,300 | ) |  | (130 | )
Total lease obligations |  | 64,802 |  |  | 3,012 |
Less current obligations |  | (39,457 | ) |  | (1,240 | )
Long-term lease obligations |  | $ | 25,345 |  |  | $ | 1,772 |
Leases | LEASES The Company determines if an arrangement is a lease at inception of the contract. If an arrangement is a lease, the present value of the related lease payments is recorded as a liability and an equal amount is capitalized as a right of use asset on the Company’s consolidated balance sheet. The Company elected to include payments for non-lease components associated with certain leases when determining the present value of the lease payments. Right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company’s estimated incremental borrowing rate, determined at the lease commencement date using the Company’s average secured borrowing rate, is used to calculate present value. The weighted average estimated incremental borrowing rate used for the year ended December 31, 2019 was 3.52% and 3.70% for operating leases and financing leases, respectively. For these purposes, the lease term includes options to extend the lease when it is reasonably certain that the Company will exercise such option. Leases with terms of 12 months or less at inception are not recorded on the consolidated balance sheet unless there is a significant cost to terminate the lease, including the cost of removal of the leased asset. As the Company is the responsible party under these arrangements, the Company records the resulting assets and liabilities on a gross basis in its consolidated balance sheets. The following table presents supplemental consolidated statement of operations information related to lease expenses, on a gross basis, for the year ended December 31, 2019 (in thousands). Lease payments represent gross payments to vendors, which, for certain of our operating assets, are partially offset by amounts received from other working interest owners in our operated wells.
| Year Ended
| December 31, 2019
Operating leases |
Lease operating | $ | 11,877 |
Plant and other midstream services | 110 |
General and administrative | 3,209 |
Total operating leases(1) | 15,196 |
Short-term leases |
Lease operating | 10,441 |
Plant and other midstream services | 4,983 |
General and administrative | 27 |
Total short-term leases(2)(3) | 15,451 |
Financing leases |
Depreciation of assets | 976 |
Interest on lease liabilities | 134 |
Total financing leases | 1,110 |
Total lease expense | $ | 31,757 |
_____________________
(1) | Does not include gross payments related to drilling rig leases of $28.1 million for the year ended December 31, 2019 that were capitalized and recorded in “Oil and natural gas properties, full-cost method” in the consolidated balance sheet at December 31, 2019.
(2) | These costs are related to leases that are not recorded as right of use assets or lease liabilities in the consolidated balance sheet as they are short-term leases.
(3) | Does not include gross payments related to short-term drilling rig leases and other equipment rentals of $90.3 million for the year ended December 31, 2019 that were capitalized and recorded in “Oil and natural gas properties, full-cost method” in the consolidated balance sheet at December 31, 2019.
The following table presents supplemental consolidated balance sheet information related to leases as of December 31, 2019 (in thousands).
|  | December 31, 2019
Operating leases |  |
Other long-term assets |  | $ | 85,668 |
Other current liabilities |  | $ | (50,164 | )
Other long-term liabilities |  | (41,459 | )
Total operating lease liabilities |  | $ | (91,623 | )
Financing leases |  |
Other property and equipment, at cost |  | $ | 2,677 |
Accumulated depreciation |  | (1,324 | )
Net property and equipment |  | $ | 1,353 |
Other current liabilities |  | $ | (799 | )
Other long-term liabilities |  | (524 | )
Total financing lease liabilities |  | $ | (1,323 | )
The following table presents supplemental consolidated cash flow information related to lease payments for the year ended December 31, 2019 (in thousands).
|  | Year Ended December 31, 2019
Cash paid related to lease liabilities |  |
Operating cash payments for operating leases |  | $ | 14,941 |
Investing cash payments for operating leases |  | $ | 28,034 |
Financing cash payments for financing leases |  | $ | 918 |
Right of use assets obtained in exchange for lease obligations entered into during the period |  |
Operating leases |  | $ | 59,740 |
Financing leases |  | $ | 597 |
The following table presents the maturities of lease liabilities at December 31, 2019 (in years).
Weighted-Average Remaining Lease Term |  | December 31, 2019
Operating leases |  | 2.7
Financing leases |  | 2.1
The following table presents a schedule of future minimum lease payments required under all lease agreements as of December 31, 2019 and 2018, respectively (in thousands).
|  | December 31, 2019
|  | Operating Leases |  | Financing Leases
2020 |  | $ | 50,164 |  |  | $ | 799 |
2021 |  | 27,279 |  |  | 517 |
2022 |  | 5,010 |  |  | 179 |
2023 |  | 4,177 |  |  | — |
2024 |  | 4,217 |  |  | — |
Thereafter |  | 5,716 |  |  | — |
Total lease payments |  | 96,563 |  |  | 1,495 |
Less imputed interest |  | (4,940 | ) |  | (172 | )
Total lease obligations |  | 91,623 |  |  | 1,323 |
Less current obligations |  | (50,164 | ) |  | (799 | )
Long-term lease obligations |  | $ | 41,459 |  |  | $ | 524 |
|  | December 31, 2018
|  | Operating Leases |  | Financing Leases
2019 |  | $ | 39,457 |  |  | $ | 1,240 |
2020 |  | 12,009 |  |  | 913 |
2021 |  | 3,513 |  |  | 534 |
2022 |  | 3,209 |  |  | 455 |
2023 |  | 3,234 |  |  | — |
Thereafter |  | 7,680 |  |  | — |
Total lease payments |  | 69,102 |  |  | 3,142 |
Less imputed interest |  | (4,300 | ) |  | (130 | )
Total lease obligations |  | 64,802 |  |  | 3,012 |
Less current obligations |  | (39,457 | ) |  | (1,240 | )
Long-term lease obligations |  | $ | 25,345 |  |  | $ | 1,772 |

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