Leases

3 Months Ended

Mar. 31, 2025

Note 7 – Leases

Amounts Recognized in the Condensed Consolidated Balance Sheets

The condensed consolidated balance sheets consist of the following amounts relating to operating and finance leases (in thousands):


	As of March 31,		As of December 31,
	2025		2024
Operating right-of-use assets
Real property	$	18,065	$	19,480
	$	18,065	$	19,480
Operating lease liabilities
Current	$	7,530	$	6,809
Non-current		10,672		12,739
	$	18,202	$	19,548


	As of March 31,		As of December 31,
	2025		2024
Finance right-of-use assets
Vehicles	$	23,077	$	21,871
	$	23,077	$	21,871
Finance lease liabilities
Current	$	12,162	$	7,837
Non-current		9,934		13,389
	$	22,096	$	21,226

Additions to right-of-use assets during the three months ended March 31, 2025 and 2024, were approximately $4.1 million and $1.1 million, respectively. Disposals to right-of-use assets during the three months ended March 31, 2025, were approximately $2.3 million. There was no disposal of right-of-use assets during the three months ended March 31, 2024.

The weighted average lessee’s incremental borrowing rate applied to the operating and finance lease liabilities on March 31, 2025 was 6.7% and 7.7%, respectively. The weighted average lessee’s incremental borrowing rate applied to the operating and finance lease liabilities on December 31, 2024 was 6.7% and 8.0%, respectively. The weighted average remaining lease term for operating and finance lease on March 31, 2025 was 3.58 years and 2.03 years, respectively. The weighted average remaining lease term for operating and finance lease on December 31, 2024 was 3.77 years and 2.10 years, respectively.

Amounts Recognized in the Condensed Consolidated Statements of Operations

The condensed consolidated statements of operations consist of the following amounts relating to leases (in thousands):


	Three Months Ended March 31,
	2025		2024
Amortization of real property operating right-of-use assets
(included in general and administrative expenses)	$	2,052	$	161
Interest expense of vehicles finance right-of-use assets
(included in interest expense)	$	1,037	$	572
Depreciation of vehicles finance right-of-use assets
(included in depreciation and amortization)	$	2,154	$	56

Variable lease expense	$	—	$	—
Short-term lease expense	$	225	$	—

The below table shows the total cash outflows for leases for the periods presented (in thousands):


	Three Months Ended March 31,
	2025		2024
Operating cash flows from operating leases	$	1,848	$	—
Financing cash flows from finance leases		2,829		1,109
Total cash outflows for leases	$	4,677	$	1,109

The table below reconciles the undiscounted future minimum operating and finance lease payments to the operating and finance lease liabilities recorded on the balance sheet as of March 31, 2025 (in thousands):


	Operating Lease			Finance Lease
Remainder of 2025	$	6,532		$	10,082
2026		6,618			9,909
2027		3,261			4,303
2028		1,539			117
2029		1,194			—
Thereafter		1,278			—
Total future minimum lease payments		20,422			24,411
Less: Amount of lease payments representing interest		(2,220	)		(2,315	)
Present values of future minimum lease payments	$	18,202		$	22,096

Lessor Accounting

Rental agreements are for the rental of our compressor systems to customers. Rental revenue for the three months ended March 31, 2025 and 2024, were approximately $97.3 million and $46.2 million, respectively. Revenue related to these rental agreements is reflected as rental revenue in the condensed consolidated statements of operations.

Scheduled future minimum lease payments to be received by the Company as of March 31, 2025 for each of the next five years is as follows (in thousands):


	Amount
Remainder of 2025	$	125,983
2026		69,598
2027		30,679
2028		961
2029		—
Thereafter		—
Total	$	227,221