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Leases | 3 Months Ended
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Mar. 31, 2020
Lessee Disclosure [Abstract] |
Leases | Leases Nature of Leases The Company has entered into various operating leases such as a gas processing plant, floating production storage and off-take vessels, buildings, marine vessels, vehicles, drilling rigs, pipelines and other oil and gas field equipment. Remaining lease terms range from 1 year to 20 years, some of which may include options to extend leases for multi-year periods and others which include options to terminate the leases within 1 month. Options to extend lease terms are at the Company’s discretion. Early lease terminations are a combination of both at Company discretion and mutual agreement between the Company and lessor. Purchase options also exist for certain leases. Related Expenses Expenses related to finance and operating leases included in the Consolidated Financial Statements are as follows:
|  |  |  | Three Months Ended March 31,
(Thousands of dollars) |  | Financial Statement Category |  | 2020 |  | 2019
Operating lease 1,2 |  | Lease operating expenses |  | $ | 71,601 |  |  | 48,671 |
Operating lease 2 |  | Transportation, gathering and processing |  | 9,926 |  |  | 9,852 |
Operating lease 2 |  | Selling and general expense |  | 3,469 |  |  | 3,109 |
Operating lease 2 |  | Other operating expense |  | 414 |  |  | — |
Operating lease 2 |  | Property, plant and equipment |  | 24,556 |  |  | 23,447 |
Operating lease 2 |  | Asset retirement obligations |  | — |  |  | 3,024 |
Finance lease |  |  |  |  |  |
Amortization of asset |  | Depreciation, depletion and amortization |  | 268 |  |  | 210 |
Interest on lease liabilities |  | Interest expense, net |  | 96 |  |  | 101 |
Sublease income |  | Other income |  | (306 | ) |  | (217 | )
Net lease expense |  |  |  | $ | 110,024 |  |  | 88,197 |
1 The three months ended March 31, 2020 and 2019 included variable lease expenses of $6.3 million and $7.2 million, respectively, primarily related to additional volumes processed at a gas processing plant. 2 The three months ended March 31, 2020 included $32.9 million for Lease operating expense, $1.4 million for T ransportation, gathering and processing, $1.2 million for Selling and general expense and $15.4 million for Property, plant and equipment, net relating to short-term leases due within 12 months. The three months ended March 31, 2019 included $12.0 million for Lease operating expense, $1.1 million for Selling and general expense, $20.1 million for Property, plant and equipment, net and $3.0 million for Asset retirement obligations relating to short-term leases. Expenses primarily relate to drilling rigs and other oil and gas field equipment. Maturity of Lease Liabilities໿
(Thousands of dollars) | Operating Leases 1 |  | Finance Leases |  | Total
2020 | $ | 103,106 |  |  | 801 |  |  | 103,907 |
2021 | 135,875 |  |  | 1,069 |  |  | 136,944 |
2022 | 116,818 |  |  | 1,069 |  |  | 117,887 |
2023 | 114,990 |  |  | 1,069 |  |  | 116,059 |
2024 | 110,652 |  |  | 1,069 |  |  | 111,721 |
Remaining | 478,780 |  |  | 4,541 |  |  | 483,321 |
Total future minimum lease payments | 1,060,221 |  |  | 9,618 |  |  | 1,069,839 |
Less imputed interest | (247,935 | ) |  | (1,842 | ) |  | (249,777 | )
Present value of lease liabilities 2 | $ | 812,286 |  |  | 7,776 |  |  | 820,062 |
1 Excludes $256.7 million of minimum lease payments for leases entered but not yet commenced. These payments relate to an expansion of an existing gas processing plant and payments are anticipated to commence at the end of 2020 for 20 years. 2 Includes both the current and long-term portion of the lease liabilities. Lease Term and Discount Rate
| March 31, 2020
Weighted average remaining lease term: |
Operating leases | 9 years |
Finance leases | 9 years |
Weighted average discount rate: |
Operating leases | 5.3 | %
Finance leases | 5.1 | %
Other Information໿
| Three Months Ended March 31,
(Thousands of dollars) | 2020 |  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 53,039 |  |  | 44,730 |
Operating cash flows from finance leases | 102 |  |  | 102 |
Financing cash flows from finance leases | 168 |  |  | 160 |
Right-of-use assets obtained in exchange for lease liabilities: |  |  |
Operating leases ¹ | $ | 274,237 |  |  | 311 |
1 The three months ended March 31, 2020 includes $268.8 million related to a 5-year lease for the Cascade/Chinook FPSO in the U.S. Gulf of Mexico.
Leases | Leases Nature of Leases The Company has entered into various operating leases such as a gas processing plant, floating production storage and off-take vessels, buildings, marine vessels, vehicles, drilling rigs, pipelines and other oil and gas field equipment. Remaining lease terms range from 1 year to 20 years, some of which may include options to extend leases for multi-year periods and others which include options to terminate the leases within 1 month. Options to extend lease terms are at the Company’s discretion. Early lease terminations are a combination of both at Company discretion and mutual agreement between the Company and lessor. Purchase options also exist for certain leases. Related Expenses Expenses related to finance and operating leases included in the Consolidated Financial Statements are as follows:
|  |  |  | Three Months Ended March 31,
(Thousands of dollars) |  | Financial Statement Category |  | 2020 |  | 2019
Operating lease 1,2 |  | Lease operating expenses |  | $ | 71,601 |  |  | 48,671 |
Operating lease 2 |  | Transportation, gathering and processing |  | 9,926 |  |  | 9,852 |
Operating lease 2 |  | Selling and general expense |  | 3,469 |  |  | 3,109 |
Operating lease 2 |  | Other operating expense |  | 414 |  |  | — |
Operating lease 2 |  | Property, plant and equipment |  | 24,556 |  |  | 23,447 |
Operating lease 2 |  | Asset retirement obligations |  | — |  |  | 3,024 |
Finance lease |  |  |  |  |  |
Amortization of asset |  | Depreciation, depletion and amortization |  | 268 |  |  | 210 |
Interest on lease liabilities |  | Interest expense, net |  | 96 |  |  | 101 |
Sublease income |  | Other income |  | (306 | ) |  | (217 | )
Net lease expense |  |  |  | $ | 110,024 |  |  | 88,197 |
1 The three months ended March 31, 2020 and 2019 included variable lease expenses of $6.3 million and $7.2 million, respectively, primarily related to additional volumes processed at a gas processing plant. 2 The three months ended March 31, 2020 included $32.9 million for Lease operating expense, $1.4 million for T ransportation, gathering and processing, $1.2 million for Selling and general expense and $15.4 million for Property, plant and equipment, net relating to short-term leases due within 12 months. The three months ended March 31, 2019 included $12.0 million for Lease operating expense, $1.1 million for Selling and general expense, $20.1 million for Property, plant and equipment, net and $3.0 million for Asset retirement obligations relating to short-term leases. Expenses primarily relate to drilling rigs and other oil and gas field equipment. Maturity of Lease Liabilities໿
(Thousands of dollars) | Operating Leases 1 |  | Finance Leases |  | Total
2020 | $ | 103,106 |  |  | 801 |  |  | 103,907 |
2021 | 135,875 |  |  | 1,069 |  |  | 136,944 |
2022 | 116,818 |  |  | 1,069 |  |  | 117,887 |
2023 | 114,990 |  |  | 1,069 |  |  | 116,059 |
2024 | 110,652 |  |  | 1,069 |  |  | 111,721 |
Remaining | 478,780 |  |  | 4,541 |  |  | 483,321 |
Total future minimum lease payments | 1,060,221 |  |  | 9,618 |  |  | 1,069,839 |
Less imputed interest | (247,935 | ) |  | (1,842 | ) |  | (249,777 | )
Present value of lease liabilities 2 | $ | 812,286 |  |  | 7,776 |  |  | 820,062 |
1 Excludes $256.7 million of minimum lease payments for leases entered but not yet commenced. These payments relate to an expansion of an existing gas processing plant and payments are anticipated to commence at the end of 2020 for 20 years. 2 Includes both the current and long-term portion of the lease liabilities. Lease Term and Discount Rate
| March 31, 2020
Weighted average remaining lease term: |
Operating leases | 9 years |
Finance leases | 9 years |
Weighted average discount rate: |
Operating leases | 5.3 | %
Finance leases | 5.1 | %
Other Information໿
| Three Months Ended March 31,
(Thousands of dollars) | 2020 |  | 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases | $ | 53,039 |  |  | 44,730 |
Operating cash flows from finance leases | 102 |  |  | 102 |
Financing cash flows from finance leases | 168 |  |  | 160 |
Right-of-use assets obtained in exchange for lease liabilities: |  |  |
Operating leases ¹ | $ | 274,237 |  |  | 311 |
1 The three months ended March 31, 2020 includes $268.8 million related to a 5-year lease for the Cascade/Chinook FPSO in the U.S. Gulf of Mexico.

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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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