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Leases
 9 Months Ended
Sep. 30, 2023
Leases  
Leases

Note 9 - Leases

 

As a lessee, the Company leases its corporate office headquarters in Tulsa, Oklahoma and one field office. The leases expire between 2024 and 2027. The corporate office has an option to renew for an additional five-year term. The option to renew the lease is generally not considered reasonably certain to be exercised. Therefore, the period covered by such optional period is not included in the determination of the term of the lease and the lease payments during these periods are similarly excluded from the calculation of right-of-use lease asset and lease liability balances.

 

The Company also leases vehicles primarily used in our field operations. These vehicle leases typically have a three-year life.

 

The Company recognizes right-of use lease expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved, typically during the period in which they are paid. Variable right-of-use lease payments typically include charges for property taxes, insurance, and variable payments related to non-lease components, including common area maintenance.

 

Right-of-use lease expense was approximately $288,000 and $191,000 for the nine months ended September 30, 2023 and 2022, respectively. Cash paid for right-of-use leases was approximately $279,000 and $192,000 for the same periods.

 

Supplemental balance sheet information related to the right-of-use leases is as follows:

   September 30, 2023   December 31, 2022 
           
Operating lease asset - net (included in Other Property and Equipment)  $1,213,403   $776,219 
           
Current portion of lease liability  $424,819   $256,975 
Long-term lease liability   654,524    547,692 
Total right-of-use lease liabilities  $1,079,343   $804,667 

The weighted average remaining term for the Company’s right-of-use leases is 2.5 years.

 

Maturities of lease liabilities are as follows as of September 30, 2023:

        
Year 1    $500,197 
Year 2     454,117 
Year 3     226,702 
Year 4     21,700 
Year 5     — 
Total lease payments     1,202,716 
Less imputed interest     (123,373)
Total lease obligation    $1,079,343