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Leases (Tables)

3 Months Ended

Mar. 31, 2024

The components of lease costs were as follows (in thousands):


	Three Months Ended March 31,
	2024			2023
Finance lease cost - interest on lease liabilities	$	3,372		$	3,708
Operating lease cost, excluding short-term leases(1)		897			908
Short-term lease cost(2)		12,652			32,985
Variable lease cost(3)		616			363
Variable and fixed sublease income		(359	)		—
Total lease cost	$	17,178		$	37,964

(1)

Operating lease cost reflect a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis.

(2)

Short-term lease costs are reported at gross amounts and primarily represent costs incurred for drilling rigs, most of which are short-term contracts not recognized as a right-of-use asset and lease liability on the Condensed Consolidated Balance Sheets.

(3)

Variable lease costs primarily represent differences between minimum payment obligations and actual operating charges incurred by the Company related to its long-term leases.

Schedule of Right-of-Use ("ROU") Asset and Lease Liability, Adjusted for Initial Direct Costs and Incentives

The present value of the fixed lease payments recorded as the Company’s right-of-use (“ROU”) assets and lease liabilities, adjusted for initial direct costs and incentives were as follows (in thousands):


	March 31, 2024		December 31, 2023
Operating leases:
Operating lease assets	$	12,676	$	11,418

Current portion of operating lease liabilities	$	3,543	$	2,666
Operating lease liabilities		18,271		18,211
Total operating lease liabilities	$	21,814	$	20,877

Finance leases:
Proved properties	$	166,261	$	166,261

Other current liabilities	$	18,279	$	17,834
Other long-term liabilities		126,461		131,230
Total finance lease liabilities	$	144,740	$	149,064

Supplemental Cash Flow Information Related to Leases

The table below presents the supplemental cash flow information related to leases (in thousands):


	Three Months Ended March 31,
	2024		2023
Operating cash outflow from finance leases	$	3,372	$	3,708
Operating cash outflow from operating leases	$	1,217	$	1,265

ROU assets obtained in exchange for new operating lease liabilities(1)	$	1,601	$	12,971

(1)

See QuarterNorth Acquisition and EnVen Acquisition each in Note 2 — Acquisitions and Divestitures.