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LEASES
 9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
LEASES LEASES
The Company's right-of-use assets and lease liabilities are recognized at their discounted present value on the balance sheet, which include leases related to the asset classes reflected as of the dates indicated in the table below (in thousands):
September 30, 2021December 31, 2020
Operating leases
Field equipment(1)
$20,716 $27,537 
Corporate leases6,519 1,481 
Vehicles 811 468 
Total right-of-use asset$28,046 $29,486 
Field equipment(1)
$20,716 $27,537 
Corporate leases6,830 1,900 
Vehicles811 468 
Total lease liability$28,357 $29,905 
Finance leases
Right-of-use asset - field equipment(1)
$— $219 
Lease liability - field equipment(1)
$— $117 
__________________________
(1) Includes compressors, certain gas processing equipment, and other field equipment.

The lease amounts disclosed are presented on a gross basis. A portion of these costs may have been or will be billed to other working interest owners, and the Company's net share of these costs, once paid, are included in various line items on the statements of operations or capitalized to oil and gas properties or other property and equipment, as applicable.
The Company recognizes operating lease expense on a straight-line basis. Finance lease expense is recognized based on the effective interest method for the lease liability and straight-line amortization for the right-of-use asset, resulting in more cost being recognized in earlier lease periods. Short-term and variable lease payments are recognized as incurred. Short-term lease cost represents payments for leases with a lease term of one year or less, excluding leases with a term of one month or less. Short-term leases include drilling rigs and other equipment. Drilling rig contracts are structured based on an allotted number of wells to be drilled consecutively at a daily operating rate. Short-term drilling rig costs include a non-lease labor component, which is treated as a single lease component.
The following table summarizes the components of the Company's gross lease costs incurred during the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Operating lease cost(1)
$3,635 $3,462 $10,529 $10,560 
Finance lease cost:
Amortization of right-of-use assets
— 6 3 13 
Interest on lease liabilities— 1 1 3 
Short-term lease cost281 129 492 2,011 
Variable lease cost(2)
(9)(89)56 (133)
Sublease income(3)
(91)(89)(274)(267)
Total lease cost$3,816 $3,420 $10,807 $12,187 
____________________________
(1) Includes office rent expense of $0.5 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $1.3 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively.
(2) Variable lease cost represents differences between lease obligations and actual costs incurred for certain leases that do not have fixed payments related to both lease and non-lease components. Such incremental costs include lease payment increases or decreases driven by market price fluctuations and leased asset maintenance costs.
(3) The Company has subleased a portion of one of its office spaces for the remainder of the office lease term.

The Company does not have any leases with an implicit interest rate that can be readily determined. As a result, the Company used the incremental borrowing rate, based on the Credit Facility benchmark rate, adjusted for facility utilization and lease term, to calculate the respective discount rates. Please refer to Note 5 - Long-term Debt for additional information.
The Company has certain lease agreements that provide for the option to extend, purchase, or terminate early, which was evaluated on each lease to arrive at the proper lease term. There were some leases for which the option to extend or purchase was factored into the resulting lease term. There were no leases where early termination was factored into the resulting lease term. The Company's weighted-average remaining lease terms and discount rates for operating leases as of September 30, 2021 are as follows:
Operating Leases
Weighted-average lease term (years)3.2
Weighted-average discount rate 3.97%
Supplemental cash flow information related to leases for the three and nine months ended September 30, 2021 and 2020 consisted of the following (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$3,293 $3,187 $9,783 $9,599 
Operating cash flows from finance leases— 1 1 3 
Financing cash flows from finance leases— 31 21 71 
Right-of-use assets obtained in exchange for new operating lease obligations$3,136 $918 $8,635 $8,306 
Right-of-use assets obtained in exchange for new finance lease obligations— — — 219 
As of September 30, 2021, future commitments by year for the Company's operating with a lease term of one year or more are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the balance sheet as follows (in thousands):
Operating Leases
Remainder of 2021$3,557 
202211,594 
20237,509 
20243,564 
20251,290 
Thereafter2,765 
Total lease payments30,279 
Less: imputed interest(1,922)
Total lease liability$28,357 
LEASES LEASES
The Company's right-of-use assets and lease liabilities are recognized at their discounted present value on the balance sheet, which include leases related to the asset classes reflected as of the dates indicated in the table below (in thousands):
September 30, 2021December 31, 2020
Operating leases
Field equipment(1)
$20,716 $27,537 
Corporate leases6,519 1,481 
Vehicles 811 468 
Total right-of-use asset$28,046 $29,486 
Field equipment(1)
$20,716 $27,537 
Corporate leases6,830 1,900 
Vehicles811 468 
Total lease liability$28,357 $29,905 
Finance leases
Right-of-use asset - field equipment(1)
$— $219 
Lease liability - field equipment(1)
$— $117 
__________________________
(1) Includes compressors, certain gas processing equipment, and other field equipment.

The lease amounts disclosed are presented on a gross basis. A portion of these costs may have been or will be billed to other working interest owners, and the Company's net share of these costs, once paid, are included in various line items on the statements of operations or capitalized to oil and gas properties or other property and equipment, as applicable.
The Company recognizes operating lease expense on a straight-line basis. Finance lease expense is recognized based on the effective interest method for the lease liability and straight-line amortization for the right-of-use asset, resulting in more cost being recognized in earlier lease periods. Short-term and variable lease payments are recognized as incurred. Short-term lease cost represents payments for leases with a lease term of one year or less, excluding leases with a term of one month or less. Short-term leases include drilling rigs and other equipment. Drilling rig contracts are structured based on an allotted number of wells to be drilled consecutively at a daily operating rate. Short-term drilling rig costs include a non-lease labor component, which is treated as a single lease component.
The following table summarizes the components of the Company's gross lease costs incurred during the three and nine months ended September 30, 2021 and 2020 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Operating lease cost(1)
$3,635 $3,462 $10,529 $10,560 
Finance lease cost:
Amortization of right-of-use assets
— 6 3 13 
Interest on lease liabilities— 1 1 3 
Short-term lease cost281 129 492 2,011 
Variable lease cost(2)
(9)(89)56 (133)
Sublease income(3)
(91)(89)(274)(267)
Total lease cost$3,816 $3,420 $10,807 $12,187 
____________________________
(1) Includes office rent expense of $0.5 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $1.3 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively.
(2) Variable lease cost represents differences between lease obligations and actual costs incurred for certain leases that do not have fixed payments related to both lease and non-lease components. Such incremental costs include lease payment increases or decreases driven by market price fluctuations and leased asset maintenance costs.
(3) The Company has subleased a portion of one of its office spaces for the remainder of the office lease term.

The Company does not have any leases with an implicit interest rate that can be readily determined. As a result, the Company used the incremental borrowing rate, based on the Credit Facility benchmark rate, adjusted for facility utilization and lease term, to calculate the respective discount rates. Please refer to Note 5 - Long-term Debt for additional information.
The Company has certain lease agreements that provide for the option to extend, purchase, or terminate early, which was evaluated on each lease to arrive at the proper lease term. There were some leases for which the option to extend or purchase was factored into the resulting lease term. There were no leases where early termination was factored into the resulting lease term. The Company's weighted-average remaining lease terms and discount rates for operating leases as of September 30, 2021 are as follows:
Operating Leases
Weighted-average lease term (years)3.2
Weighted-average discount rate 3.97%
Supplemental cash flow information related to leases for the three and nine months ended September 30, 2021 and 2020 consisted of the following (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$3,293 $3,187 $9,783 $9,599 
Operating cash flows from finance leases— 1 1 3 
Financing cash flows from finance leases— 31 21 71 
Right-of-use assets obtained in exchange for new operating lease obligations$3,136 $918 $8,635 $8,306 
Right-of-use assets obtained in exchange for new finance lease obligations— — — 219 
As of September 30, 2021, future commitments by year for the Company's operating with a lease term of one year or more are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the balance sheet as follows (in thousands):
Operating Leases
Remainder of 2021$3,557 
202211,594 
20237,509 
20243,564 
20251,290 
Thereafter2,765 
Total lease payments30,279 
Less: imputed interest(1,922)
Total lease liability$28,357