XML 29 R18.htm IDEA: XBRL DOCUMENT
v3.24.3

Leases | 9 Months Ended
--- | ---
Sep. 30, 2024
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. The assets and liabilities under this contract are included in our Hydraulic Fracturing 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. During the nine months ended September 30, 2023, the Company made lease payments of approximate ly $0.1 million. 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. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. During the nine months ended September 30, 2024 and 2023, the Company made lease payments of approximately $0.1 million a nd $0.2 million, respectively. In addition to the contractual lease period, the contract included an optional renewal for three additional periods of one year each, however, the Company terminated the Maintenance Facility Lease at the end of the term, March 13, 2024. 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. In August 2022 and December 2022, we entered into equipment lease contracts for a duration of approximately three years each for a total of four FORCE® electric-powered hydraulic fracturing fleets with 60,000 hydraulic horsepower ("HHP") per fleet. The Electric Fleet Leases contain options to either extend each lease for up to three additional periods of one year each or purchase the equipment at the end of their initial term of approximately three years or at the end of each subsequent renewal period. The first of these leases (the "Electric Fleet One Lease") commenced on August 23, 2023 when we received some of the equipment associated with the first FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $7.1 million on the Electric Fleet One Lease, including variable lease payments of approximately $0.9 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $5.8 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet One Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet One Lease contains variable payments based on equipment usage. The Electric Fleet One Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet One 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.3% and 2.2 years, respectively. The second of the Electric Fleet Leases (the "Electric Fleet Two Lease") commenced on November 1, 2023 when we received some of the equipment associated with the second FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $6.9 million, on the Electric Fleet Two Lease, including variable lease payments of approximately $0.7 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $6.1 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Two Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Two Lease contains variable payments based on equipment usage. The Electric Fleet Two Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.2% and 2.4 years, respectively. The third of the Electric Fleet Leases (the "Electric Fleet Three Lease") commenced on December 19, 2023, when we received some of the equipment associated with the third FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $6.5 million, on the Electric Fleet Three Lease, including variable lease payments of approximately $0.4 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $8.5 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Three Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Three Lease contains variable payments based on equipment usage. The Electric Fleet Three Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet Three 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was approximately 7.2% and 2.5 years, respectively. The fourth of the Electric Fleet Leases (the "Electric Fleet Four Lease") commenced on February 9, 2024, when we received some of the equipment associated with the fourth FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $4.6 million, on the Electric Fleet Four Lease, including variable lease payments of approximately $0.5 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $1.9 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Four Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Four Lease contains variable payments based on equipment usage. The Electric Fleet Four Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet Four 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.2% and 2.8 years, respectively. In June 2024, we entered into an additional three-year equipment lease (the "Electric Fleet Five Lease" and together with the leases for our first four FORCE® fleets, the "Electric Fleet Leases") with 72,000 HHP. The Electric Fleet Five Lease commenced on September 13, 2024, when we received some of the equipment associated with the fourth FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $0.1 million, on the Electric Fleet Five Lease. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $2.0 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Five Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Five Lease contains variable payments based on equipment usage. The Electric Fleet Five Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet Five 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.2% and 3.0 years, respectively. As of September 30, 2024, we have not received some of the equipment contracted under the Electric Fleet Five Lease. Since we have not taken possession of these assets and do not control them, we have not accounted for the associated right-of-use asset and lease obligation on our balance sheet as of September 30, 2024. We currently expect to receive majority of the remaining equipment associated with the fifth fleet in the fourth quarter of 2024. 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 nine months ended September 30, 2024 and 2023, the Company made lease payments of approxim ately $0.3 million and $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 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximatel y 6.3% and 3.6 years, respectively. As part of our acquisition of Silvertip Completion Services Operating, LLC, we assumed two real estate lease contracts (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 November 1, 2022. During 2023, we extended the Silvertip One Lease for an additional 1.3 years. During the nine months ended September 30, 2024, the Company made lease payments of approxim ately $0.1 million and $0.2 million on t he Silvertip One Lease and S ilvertip Two Lease, respectively. During the nine months ended September 30, 2023, the Company made lease payments of approxi mately $0.1 million and $0.2 million on t he 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 September 30, 2024, the weighted average discount rate and remaining lease term for the Silvertip One Lease was approxim ately 6.3% and 4.2 years, respectively. As of September 30, 2024, the weighted average discount rate and remaining lease term for the Silvertip Two Lease was approximately 2.1% and 4.2 years, respectively. In March 2023, we entered into a real estate le ase contract for 5.7 years (the "Silvertip Three Lease"), with a commencement date of April 1, 20 23. During the nine months ended September 30, 2024 and 2023, the Company made lease payments of appro ximately $0.1 million an d $0.06 million, respectively. 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximately 6.3% and 4.2 years, respectively. On June 1, 2023, we commenced an office space lease contract for 5.0 years (the "Silvertip Office Lease"). During the nine months ended September 30, 2024 and 2023, the Company made lease payments of approximately $0.1 million and $0.05 million, respectively, 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 contract 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximately 6.5% and 3.7 years, res pectively. In August 2023, in connection with the relocation of our corporate office, we entered into an office space lease contract for 2.1 years (the "Corporate Office Lease"), with a commencement date of September 8, 2023. During the nine months ended September 30, 2024, the Company made lease payments of approximately $0.3 million on the Corporate Office Lease. The assets and liabilities under this contract are recorded in our Completion Services reportable segment. In addition to the contractual lease period, the contract includes an optional renewal for 0.8 years, 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 Corporate Office Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for the Corporate 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximately 7.1% and 1.0 year, res pectively. As of September 30, 2024, the total operating lease right-of-use asset cost was approximately $163.8 million, and accumulated amortization was approximately $36.7 million. As of December 31, 2023, our total operating lease right-of-use asset cost was approximately $85.8 million, and accumulated amortization was approximately $7.2 million. Finance Leases Description of Lease In January 2023, we entered into a three-year equipment lease contract (the "Power Equipment Lease") for certain power generation equipmen t with a commencement date of August 23, 2023. During the nine months ended September 30, 2024 and 2023, the Company made lease payments o n the Power Equipment Lease of approximately $15.3 million and $1.1 million, respectively. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In addition to the contractual lease period, the contract includes an optional renewal for one year, 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 Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for the Power Equipment Lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets. As of September 30, 2024, the weighted average discount rate and remaining lease term was approximately 7.3% and 1.9 years, respectively. As of September 30, 2024, the total finance lease right-of-use asset cost was approximat ely $54.8 million, and accumulated amortization was approximately $19.3 million. As of December 31, 2023, the total finance lease right-of-use was approximately $52.6 million, and accumulated amortization was approximately $5.2 million. Maturity Analysis of Lease Liabilities The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our leases as of September 30, 2024 are as follows:
(in thousands) |  | Operating Leases |  | Finance Leases
2024 |  | $ | 9,697 |  |  | $ | 5,229 |
2025 |  | 38,680 |  |  | 20,915 |
2026 |  | 37,916 |  |  | 13,462 |
2027 |  | 11,332 |  |  | — |
2028 |  | 821 |  |  | — |
Total undiscounted future lease payments |  | 98,446 |  |  | 39,606 |
Less: amount representing interest |  | (8,639) |  |  | (2,494) |
Present value of future lease payments (lease obligation) |  | $ | 89,807 |  |  | $ | 37,112 |
Supplemental cash flow information related to leases are as follows:
|  | Nine Months Ended September 30,
(in thousands) |  | 2024 |  | 2023
Cash paid for amounts included in the measurements of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 23,929 |  |  | $ | 1,430 |
Operating cash flows from finance lease |  | 2,272 |  |  | 196 |
Financing cash flows from finance lease |  | 13,067 |  |  | 889 |
Noncash lease obligations arising from obtaining right-of-use assets related to: |  |  |  |
Operating leases (1) |  | 53,071 |  |  | 24,890 |
Finance lease (2) |  | 2,230 |  |  | 27,244 |
(1)D uring the nine months ended September 30, 2024, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Two Lease, the Electric Fleet Three Lease, the Electric Fleet Four Lease and the Electric Fleet Five Lease. During the nine months ended September 30, 2023, we recorded a noncash operating lease obligations a rising from obtaining right-of-use assets related to our execution of the Real Estate Two Lease, the Silvertip Three Lease, the Silvertip Office Lease, the Electric Fleet One Lease and the Corporate Office Lease, and our extension of the Silvertip One Lease. (2)During the nine months ended September 30, 2024, we recorded noncash finance lease obligations related to the Power Equipment Lease. During the nine months ended September 30, 2023, we recorded noncash finance lease obligations arising from obtaining right-of-use assets related to the commencement of the Power Equipment Lease. Short-Term Leases We elected the practical expedient option, 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. Initial Direct Costs We elected to analogize to the measurement guidance of ASC 360 to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs. Lease Costs The components of lease costs are as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease cost |  | $ | 12,884 |  |  | $ | 1,178 |  |  | $ | 33,845 |  |  | $ | 1,857 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  | 4,849 |  |  | 977 |  |  | 14,117 |  |  | 977 |
Interest on lease liabilities |  | 704 |  |  | 196 |  |  | 2,272 |  |  | 196 |
Total finance lease cost |  | 5,553 |  |  | 1,173 |  |  | 16,389 |  |  | 1,173 |
Variable lease cost |  | 1,107 |  |  | — |  |  | 2,526 |  |  | — |
Short-term lease cost |  | 210 |  |  | 173 |  |  | 657 |  |  | 626 |
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. The assets and liabilities under this contract are included in our Hydraulic Fracturing 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. During the nine months ended September 30, 2023, the Company made lease payments of approximate ly $0.1 million. 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. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. During the nine months ended September 30, 2024 and 2023, the Company made lease payments of approximately $0.1 million a nd $0.2 million, respectively. In addition to the contractual lease period, the contract included an optional renewal for three additional periods of one year each, however, the Company terminated the Maintenance Facility Lease at the end of the term, March 13, 2024. 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. In August 2022 and December 2022, we entered into equipment lease contracts for a duration of approximately three years each for a total of four FORCE® electric-powered hydraulic fracturing fleets with 60,000 hydraulic horsepower ("HHP") per fleet. The Electric Fleet Leases contain options to either extend each lease for up to three additional periods of one year each or purchase the equipment at the end of their initial term of approximately three years or at the end of each subsequent renewal period. The first of these leases (the "Electric Fleet One Lease") commenced on August 23, 2023 when we received some of the equipment associated with the first FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $7.1 million on the Electric Fleet One Lease, including variable lease payments of approximately $0.9 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $5.8 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet One Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet One Lease contains variable payments based on equipment usage. The Electric Fleet One Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet One 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.3% and 2.2 years, respectively. The second of the Electric Fleet Leases (the "Electric Fleet Two Lease") commenced on November 1, 2023 when we received some of the equipment associated with the second FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $6.9 million, on the Electric Fleet Two Lease, including variable lease payments of approximately $0.7 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $6.1 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Two Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Two Lease contains variable payments based on equipment usage. The Electric Fleet Two Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.2% and 2.4 years, respectively. The third of the Electric Fleet Leases (the "Electric Fleet Three Lease") commenced on December 19, 2023, when we received some of the equipment associated with the third FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $6.5 million, on the Electric Fleet Three Lease, including variable lease payments of approximately $0.4 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $8.5 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Three Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Three Lease contains variable payments based on equipment usage. The Electric Fleet Three Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet Three 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was approximately 7.2% and 2.5 years, respectively. The fourth of the Electric Fleet Leases (the "Electric Fleet Four Lease") commenced on February 9, 2024, when we received some of the equipment associated with the fourth FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $4.6 million, on the Electric Fleet Four Lease, including variable lease payments of approximately $0.5 million. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $1.9 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Four Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Four Lease contains variable payments based on equipment usage. The Electric Fleet Four Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet Four 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.2% and 2.8 years, respectively. In June 2024, we entered into an additional three-year equipment lease (the "Electric Fleet Five Lease" and together with the leases for our first four FORCE® fleets, the "Electric Fleet Leases") with 72,000 HHP. The Electric Fleet Five Lease commenced on September 13, 2024, when we received some of the equipment associated with the fourth FORCE® electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2024, the Company made lease payments of approximately $0.1 million, on the Electric Fleet Five Lease. During the nine months ended September 30, 2024, the Company incurred initial direct costs of approximately $2.0 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet Five Lease. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet Five Lease contains variable payments based on equipment usage. The Electric Fleet Five Lease does not include a residual value guarantee, covenants or financial restrictions. We accounted for the Electric Fleet Five 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. As of September 30, 2024, the weighted average discount rate and remaining lease term was appro ximately 7.2% and 3.0 years, respectively. As of September 30, 2024, we have not received some of the equipment contracted under the Electric Fleet Five Lease. Since we have not taken possession of these assets and do not control them, we have not accounted for the associated right-of-use asset and lease obligation on our balance sheet as of September 30, 2024. We currently expect to receive majority of the remaining equipment associated with the fifth fleet in the fourth quarter of 2024. 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 nine months ended September 30, 2024 and 2023, the Company made lease payments of approxim ately $0.3 million and $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 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximatel y 6.3% and 3.6 years, respectively. As part of our acquisition of Silvertip Completion Services Operating, LLC, we assumed two real estate lease contracts (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 November 1, 2022. During 2023, we extended the Silvertip One Lease for an additional 1.3 years. During the nine months ended September 30, 2024, the Company made lease payments of approxim ately $0.1 million and $0.2 million on t he Silvertip One Lease and S ilvertip Two Lease, respectively. During the nine months ended September 30, 2023, the Company made lease payments of approxi mately $0.1 million and $0.2 million on t he 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 September 30, 2024, the weighted average discount rate and remaining lease term for the Silvertip One Lease was approxim ately 6.3% and 4.2 years, respectively. As of September 30, 2024, the weighted average discount rate and remaining lease term for the Silvertip Two Lease was approximately 2.1% and 4.2 years, respectively. In March 2023, we entered into a real estate le ase contract for 5.7 years (the "Silvertip Three Lease"), with a commencement date of April 1, 20 23. During the nine months ended September 30, 2024 and 2023, the Company made lease payments of appro ximately $0.1 million an d $0.06 million, respectively. 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximately 6.3% and 4.2 years, respectively. On June 1, 2023, we commenced an office space lease contract for 5.0 years (the "Silvertip Office Lease"). During the nine months ended September 30, 2024 and 2023, the Company made lease payments of approximately $0.1 million and $0.05 million, respectively, 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 contract 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximately 6.5% and 3.7 years, res pectively. In August 2023, in connection with the relocation of our corporate office, we entered into an office space lease contract for 2.1 years (the "Corporate Office Lease"), with a commencement date of September 8, 2023. During the nine months ended September 30, 2024, the Company made lease payments of approximately $0.3 million on the Corporate Office Lease. The assets and liabilities under this contract are recorded in our Completion Services reportable segment. In addition to the contractual lease period, the contract includes an optional renewal for 0.8 years, 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 Corporate Office Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for the Corporate 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 September 30, 2024, the weighted average discount rate and remaining lease term was approximately 7.1% and 1.0 year, res pectively. As of September 30, 2024, the total operating lease right-of-use asset cost was approximately $163.8 million, and accumulated amortization was approximately $36.7 million. As of December 31, 2023, our total operating lease right-of-use asset cost was approximately $85.8 million, and accumulated amortization was approximately $7.2 million. Finance Leases Description of Lease In January 2023, we entered into a three-year equipment lease contract (the "Power Equipment Lease") for certain power generation equipmen t with a commencement date of August 23, 2023. During the nine months ended September 30, 2024 and 2023, the Company made lease payments o n the Power Equipment Lease of approximately $15.3 million and $1.1 million, respectively. The assets and liabilities under this contract are included in our Hydraulic Fracturing reportable segment. In addition to the contractual lease period, the contract includes an optional renewal for one year, 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 Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change. We accounted for the Power Equipment Lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets. As of September 30, 2024, the weighted average discount rate and remaining lease term was approximately 7.3% and 1.9 years, respectively. As of September 30, 2024, the total finance lease right-of-use asset cost was approximat ely $54.8 million, and accumulated amortization was approximately $19.3 million. As of December 31, 2023, the total finance lease right-of-use was approximately $52.6 million, and accumulated amortization was approximately $5.2 million. Maturity Analysis of Lease Liabilities The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our leases as of September 30, 2024 are as follows:
(in thousands) |  | Operating Leases |  | Finance Leases
2024 |  | $ | 9,697 |  |  | $ | 5,229 |
2025 |  | 38,680 |  |  | 20,915 |
2026 |  | 37,916 |  |  | 13,462 |
2027 |  | 11,332 |  |  | — |
2028 |  | 821 |  |  | — |
Total undiscounted future lease payments |  | 98,446 |  |  | 39,606 |
Less: amount representing interest |  | (8,639) |  |  | (2,494) |
Present value of future lease payments (lease obligation) |  | $ | 89,807 |  |  | $ | 37,112 |
Supplemental cash flow information related to leases are as follows:
|  | Nine Months Ended September 30,
(in thousands) |  | 2024 |  | 2023
Cash paid for amounts included in the measurements of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 23,929 |  |  | $ | 1,430 |
Operating cash flows from finance lease |  | 2,272 |  |  | 196 |
Financing cash flows from finance lease |  | 13,067 |  |  | 889 |
Noncash lease obligations arising from obtaining right-of-use assets related to: |  |  |  |
Operating leases (1) |  | 53,071 |  |  | 24,890 |
Finance lease (2) |  | 2,230 |  |  | 27,244 |
(1)D uring the nine months ended September 30, 2024, we recorded noncash operating lease obligations a rising from obtaining right-of-use assets related to the receipt of equipment under the Electric Fleet Two Lease, the Electric Fleet Three Lease, the Electric Fleet Four Lease and the Electric Fleet Five Lease. During the nine months ended September 30, 2023, we recorded a noncash operating lease obligations a rising from obtaining right-of-use assets related to our execution of the Real Estate Two Lease, the Silvertip Three Lease, the Silvertip Office Lease, the Electric Fleet One Lease and the Corporate Office Lease, and our extension of the Silvertip One Lease. (2)During the nine months ended September 30, 2024, we recorded noncash finance lease obligations related to the Power Equipment Lease. During the nine months ended September 30, 2023, we recorded noncash finance lease obligations arising from obtaining right-of-use assets related to the commencement of the Power Equipment Lease. Short-Term Leases We elected the practical expedient option, 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. Initial Direct Costs We elected to analogize to the measurement guidance of ASC 360 to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs. Lease Costs The components of lease costs are as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease cost |  | $ | 12,884 |  |  | $ | 1,178 |  |  | $ | 33,845 |  |  | $ | 1,857 |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of right-of-use assets |  | 4,849 |  |  | 977 |  |  | 14,117 |  |  | 977 |
Interest on lease liabilities |  | 704 |  |  | 196 |  |  | 2,272 |  |  | 196 |
Total finance lease cost |  | 5,553 |  |  | 1,173 |  |  | 16,389 |  |  | 1,173 |
Variable lease cost |  | 1,107 |  |  | — |  |  | 2,526 |  |  | — |
Short-term lease cost |  | 210 |  |  | 173 |  |  | 657 |  |  | 626 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance 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
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration