Leases (Tables)

6 Months Ended

Jun. 30, 2026

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


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Finance lease costs - interest on lease liabilities	$	2,385		$	2,848		$	4,863		$	5,775
Operating lease costs, excluding short-term leases(1)		903			1,081			1,806			2,156
Short-term lease costs(2)		791			29,995			35,897			70,108
Variable lease costs(3)		670			667			1,340			1,334
Variable and fixed sublease income		(403	)		(396	)		(800	)		(793	)
Total lease costs	$	4,346		$	34,195		$	43,106		$	78,580

(1)

Operating lease costs 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 and well intervention vessels, most of which are short-term contracts not recognized as a ROU asset and lease liability on the Condensed Consolidated Balance Sheets. The short-term operating lease costs incurred during the periods presented are not necessarily indicative of the Company’s future short-term lease costs and obligations, as it routinely executes short-term contracts for the use of drilling rigs to support its drilling activities. Short-term lease costs for drilling rigs can vary significantly based on the timing of the drilling program. Market conditions can also contribute to the volatility and variability of short-term drilling rig lease costs.

(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 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 ROU asset and lease liability, adjusted for initial direct costs and incentives were as follows (in thousands):


	June 30, 2026		December 31, 2025
Operating leases:
Operating lease assets	$	8,345	$	9,214

Current portion of operating lease liabilities	$	3,872	$	3,657
Operating lease liabilities		10,051		11,956
Total operating lease liabilities	$	13,923	$	15,613

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

Other current liabilities	$	22,472	$	21,473
Other long-term liabilities		78,641		90,169
Total finance lease liabilities	$	101,113	$	111,642

Supplemental Cash Flow Information Related to Leases

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


	Six Months Ended June 30,
	2026		2025
Operating cash outflow from finance leases	$	4,863	$	5,775
Operating cash outflow from operating leases	$	2,611	$	2,969