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Leases | 6 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
Leases | Leases Operating Leases Description of Lease In March 2013, we entered into a ten-year real estate lease contract (the "Real Estate One Lease") with a commencement date of April 1, 2013, as part of the expansion of our equipment yard. During the six months ended June 30, 2023 and 2022, the Company made lease payments of approximate ly $0.1 million a nd $0.2 million, respectively. The assets and liabilities under this contract are included in our Completion Services reportable segment. In addition to the contractual lease period, the contract included an optional renewal of up to ten years, however, the Company terminated the Real Estate One Lease at the end of the term, March 1, 2023. We accounted for our Real Estate One Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Real Estate One Lease because we concluded that the accounting effe ct was insignificant. As part of our expansion of our hydraulic fracturing equipment maintenance program, we entered into a two year maintenance facility real estate lease contract (the "Maintenance Facility Lease") with a commencement date of March 14, 2022. During the six months ended June 30, 2023 and 2022, the Company made lease payments of approximately $0.2 million a nd $0.1 million, respectively. In addition to the contractual lease period, the contract includes an optional renewal for three additional periods of one year each, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Maintenance Facility Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for our Maintenance Facility Lease as an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Maintenance Facility Lease because we concluded that the accounting effect was insignificant. As of June 30, 2023, the weighted average discount rate and remaining lease term was approximately 3.4% and 0.7 years, respectively. In August 2022 and December 2022, we entered into three year equipment leases (the "Electric Fleet Leases") for a total of four electric hydraulic fracturing fleets with 60,000 hydraulic horsepower ("HHP") per fleet. The Electric Fleet Leases contain an option to purchase the equipment after the initial three-year term for each lease. The Electric Fleet Leases have not yet commenced. We currently do not control the assets under the Electric Fleet Leases because they are currently being manufactured by the vendor and we have not taken possession of the assets. The delivery of the electric fleets is as each fleet is manufactured and we currently expect to take delivery of most of the electric fleets in the second half of 2023. Given that the Company has not yet taken possession of the assets under the Electric Fleet Leases, the Company has not accounted for the right of use and lease obligation on its balance sheet as of June 30, 2023. In October 2022, we entered into a real estate lease contract for 5.3 years (the "Real Estate Two Lease"), with a commencement date of March 1, 2023. During the six months ended June 30, 2023, the Company made lease payments of approxim ately $0.1 million. The assets and liabilities under this contract are included in our Completion Services reportable segment. In addition to the contractual lease period, the contract includes two optional renewals of one year each, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Real Estate Two Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for our Real Estate Two Lease as an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Real Estate Two Lease because we concluded that the accounting effect was insignificant. As of June 30, 2023, the weighted average discount rate and remaining lease term was approximately 6.3% and 4.8 years, respectively. As part of the Silvertip Acquisition, we assumed two real estate leases (the "Silvertip One Lease" and "Silvertip Two Lease," and collectively the "Silvertip Leases") with remaining terms of 4.8 years and 6.1 years, respectively, from the Silvertip Acquisition Date. During the six months ended June 30, 2023, we extended the Silvertip One Lease for an additional 1.3 years. During the six months ended June 30, 2023, the Company made lease payments of approximately $0.1 million and $0.2 million on the Silvertip One Lease and S ilvertip Two Lease, respectively. The assets and liabilities under these contracts are recorded in our wireline operating segment within our Completion Services reportable segment. T he Silvertip Leases do not have any renewal options, residual value guarantees, covenants or financial restrictions. Further, the Silvertip Leases do not contain variability in payments resulting from either an index change or rate change. We accounted for the Silvertip One Lease and the Silvertip Two Lease as operating leases. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Silvertip Leases because we concluded that the accounting effect was insignificant. As of June 30, 2023, the weighted average discount rate and remaining lease term for the Silvertip One Lease was approximately 6.3% and 5.4 years, respectively. As of June 30, 2023, the weighted average discount rate and remaining lease term for the Silvertip Two Lease was approximately 2.1% and 5.4 years, respectively. In January 2023, we entered into a three year equipment lease (the "Power Equipment Lease") for certain power generation equipment. The Power Equipment Lease has not yet commenced. We currently do not control the assets under the lease and have not taken possession of the assets. Therefore, the Company has not accounted for the right of use and lease obligation in its balance sheet as of June 30, 2023. In March 2023, we entered into a real estate lease contract for 5.7 years (the "Silvertip Three Lease"), with a commencement date of April 1, 20 23. During the six months ended June 30, 2023, the Company made lease payments of approximately $0.03 million on the Silvertip Three Lease. The assets and liabilities under this contract are recorded in our wireline operating segment within our Completion Services reportable segment. The cont ract does not include a residual value guarantee, covenants or financial restrictions. Further, the Silvertip Three Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for the Silvertip Three Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Silvertip Three Lease because we concluded that the accounting effect was insignificant. As of June 30, 2023, the weighted average discount rate and remaining lease term was approximately 6.3% and 5.4 years, respectively. In June 2023, we entered into an office space lease contract for 5.0 years (the "Silvertip Office Lease"), with a commencement date of June 1, 2023. During the six months ended June 30, 2023, the Company made lease payments of approximately $0.01 million on the Silvertip Office Lease. The assets and liabilities under this contract are recorded in our wireline operating segment within our Completion Services reportable segment. The cont ract does not include a residual value guarantee, covenants or financial restrictions. Further, the Silvertip Office Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for the Silvertip Office Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. As of June 30, 2023, the weighted average discount rate and remaining lease term was approximately 6.5% and 4.9 years, respectively. As of June 30, 2023, the total operating lease right-of-use asset cost was approximat ely $7.8 million, and accumulated amortization was approximately $2.1 million. As of December 31, 2022, our total operating lease right-of-use asset cost was approximately $4.6 million, and accumulat ed amortization was approximately $1.5 million. For the six months ended June 30, 2023 and 2022, we recorded operating lease cost of approximatel y $0.7 million and $0.3 million, respectively, in our statements of operations. Maturity Analysis of Lease Liabilities The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our operating lease as of June 30, 2023 are as follows:
(in thousands) |  | Totals
2023 |  | $ | 737 |
2024 |  | 1,232 |
2025 |  | 1,195 |
2026 |  | 1,209 |
2027 |  | 1,225 |
2028 |  | 821 |
Total undiscounted future lease payments |  | 6,419 |
Less: amount representing interest |  | (730) |
Present value of future lease payments (lease obligation) |  | $ | 5,689 |
The total cash paid for amounts included in the measurement of our operating lease liability during the six months ended June 30, 2023 was approximatel y $0.7 million. During the six months ended June 30, 2023, we recorded a non-cash lease obligation totaling approximately $3.1 million as a result of our execution of the Real Estate Two Lease, the Silvertip Three Lease and the Silvertip Office Lease and our extension of the Silvertip One Lease. During the six months ended June 30, 2022, total cash paid for amounts included in the measurement of our operating lease liability was approximately $0.3 million. During the six months ended June 30, 2022, we recorded a non-cash lease obligation of approximately $0.6 million as a result of our execution of the Maintenance Facility Lease. Short-Term Leases We elected the practical expedient, consistent with ASC 842, to exclude leases with an initial term of twelve months or less ("short-term lease") from our balance sheet and continue to record short-term leases as a period expense. For the six months ended June 30, 2023 and 2022 our short-term lease expense was approximatel y $0.5 million and $0.4 million, respectively.

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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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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