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Leases
 12 Months Ended
Dec. 31, 2023
Leases  
Leases

Note 8 – Leases

 

As a lessee, the Company leases its corporate office headquarters in Tulsa, Oklahoma and one field office. The leases expire between 2024 and 2028. 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 for use by 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 $424,000 and $267,000 for the years ended December 31, 2023 and 2022, respectively. Cash paid for right of use lease was approximately $404,000 and $268,000 for the same period.

 

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

               
   As of December 31, 
   2023   2022 
         
Net operating lease asset (included in Other Property and Equipment)  $1,077,031   $776,219 
           
Current portion of lease liability  $432,822   $256,975 
Long-term lease liability   544,382    547,692 
Total right of use lease liabilities  $977,204   $804,667 

 

 

The weighted average remaining term for the Company’s right of use leases is 2.28 years. The weighted average discount rate was 8.56% in 2023.

 

Maturities of lease liabilities as of December 31, 2023 are as follows:

 

       
2024   $498,654 
2025    430,631 
2026    136,545 
2027    12,400 
2028    — 
Thereafter    — 
Total lease payments    1,078,230 
Less imputed interest    (101,026)
Total lease obligation    $977,204