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LEASES | 12 Months Ended
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Dec. 31, 2024
Leases [Abstract] |
LEASES | LEASES We have operating leases primarily for carbon sequestration easements, drilling rigs, vehicles and commercial office space. ASC 805 Business Combinations, requires lease-related assets and liabilities acquired to be measured as if the lease were new at the acquisition date, using our incremental borrowing rate. The Aera leases are still being evaluated. We intend for leases acquired through the acquisition to retain the previous lease classification. We have recorded the following amounts on our balance sheet as of December 31, 2024 and 2023:
| Classification |  | 2024 |  | 2023
Assets |  |  | (in millions)
Operating lease, net | Other noncurrent assets |  | $ | 105 |  |  | $ | 73 |
Finance lease, net | PP&E |  | 3 |  |  | — |
Total lease assets |  |  | $ | 108 |  |  | $ | 73 |
Liabilities |  |  |  |  |
Current |  |  |  |  |
Operating lease | Accrued liabilities |  | $ | 15 |  |  | $ | 15 |
Finance lease | Accrued liabilities |  | 1 |  |  | — |
Long-term |  |  |  |  |
Operating lease | Other long-term liabilities |  | $ | 76 |  |  | $ | 55 |
Finance lease | Other long-term liabilities |  | 2 |  |  | — |
Total lease liabilities |  |  | $ | 94 |  |  | $ | 70 |
We combine lease and nonlease components in determining fixed minimum lease payments for our drilling rigs and commercial office space. If applicable, fixed minimum lease payments are reduced by lease incentives for our commercial office space and increased by mobilization and demobilization fees for our drilling rigs. Certain of our lease agreements include options to extend or terminate the lease, which we may exercise at our sole discretion. For our existing leases, we did not include these options in determining our fixed minimum lease payments over the lease term. Our leases do not include options to purchase the leased property. Lease agreements for our fleet vehicles include residual value guarantees, none of which are recognized in our financial statements until the underlying contingency is resolved. In addition, we have entered into easements with respect to our carbon management segment. Our right-of-use asset for these easements was $57 million and $36 million for the years ended December 31, 2024 and 2023, respectively. Variable lease costs for our drilling rigs include costs to operate, move and repair the rigs. Variable lease costs for commercial office space include utilities and common area maintenance charges. Variable lease costs for our fleet vehicles include other-than-routine maintenance and other various amounts in excess of our fixed minimum rental fee. Our lease costs, including amounts capitalized to PP&E, shown in the table below are before joint-interest recoveries. Lease payments are reduced by joint interest recoveries on our consolidated statement of operations through our joint-interest billing process.
| Year ended December 31,
| 2024 |  | 2023
| (in millions)
Operating lease costs | $ | 26 |  |  | $ | 23 |
Short-term lease costs(a) | 50 |  |  | 52 |
Variable lease costs | 2 |  |  | 2 |
Total operating lease costs | 78 |  |  | 77 |
Finance lease costs | 1 |  |  | — |
Sublease income | (2) |  |  | (2) |
Total lease costs | $ | 77 |  |  | $ | 75 |
(a)Contracts with terms of less than one month or less are excluded from our disclosure of short-term lease costs. We sublease certain commercial office space to third parties where we are the primary obligor under the head lease. The lease terms on those subleases never extend past the term of the head lease and the subleases contain no extension options or residual value guarantees. Sublease income is recognized based on the contract terms and included as a reduction of operating lease cost under our head lease. Other supplemental information related to our operating leases as of December 31, 2024 and 2023 is provided below:
| Year ended December 31,
| 2024 |  | 2023
| (in millions)
Cash paid for lease liabilities |  |  |
Lease liabilities associated with operating activities | $ | 29 |  |  | $ | 28 |
Lease liabilities associated with investing activities | $ | 8 |  |  | $ | 2 |
Lease liabilities associated with financing activities | $ | 1 |  |  | $ | — |
ROU assets obtained in exchange for new operating lease liabilities | $ | 52 |  |  | $ | 32 |
ROU assets obtained in exchange for new finance lease liabilities | $ | 3 |  |  | $ | — |
| 2024 |  | 2023
Operating Leases |  |  |
Weighted-average remaining lease term (in years) | 5.95 |  | 7.34
Weighted-average discount rate | 8.1 | % |  | 6.7 | %
Finance Leases |  |  |
Weighted-average remaining lease term (in years) | 3.37 |  | — |
Weighted-average discount rate | 9.0 | % |  | — | %
Our operating and finance lease payments as of December 31, 2024 are as follows:
| Operating Leases |  | Finance Leases
| (in millions)
2025 | $ | 27 |  |  | $ | 1 |
2026 | 25 |  |  | 1 |
2027 | 19 |  |  | 1 |
2028 | 17 |  |  | — |
2029 | 12 |  |  | — |
Thereafter | 23 |  |  | — |
Less: Interest | (24) |  |  | — |
Present value of lease liabilities | $ | 99 |  |  | $ | 3 |

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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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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