XML 26 R11.htm IDEA: XBRL DOCUMENT v3.23.1
LEASES
 12 Months Ended
Dec. 31, 2022
Leases  
LEASES

4. LEASES

 

During the year ended December 31, 2022, the Company acquired right-of-use assets and operating lease liabilities of $953 thousand associated with entering into a non-cancellable, long-term lease agreement for office space in Houston, Texas. The Company’s right-of-use assets and lease liabilities are recognized at their discounted present value under the following captions in the consolidated balance sheets at December 31, 2022 and 2021:

 

         
   December 31, 
   2022   2021 
   (in thousands) 
Right of use asset          
Operating lease  $868   $120 
Lease liability          
Short-term operating lease   189    114 
Long-term operating lease   794    19 
Total operating leases  $983   $133 

 

The Company recognizes lease expense on a straight-line basis excluding short-term and variable lease payments, which are recognized as incurred. Short-term lease cost represents payments for office leases with original terms less than one year. Beginning in March 2020, the Company subleased its Denver, Colorado office and recognizes sublease income as a reduction of rent expense. The term of the sublease is through the term of the Company’s Denver office lease, which terminates in January 2023. Following are the amounts recognized as components of rental expense for the years ended December 31, 2022 and 2021:

 

         
   December 31, 
   2022   2021 
   (in thousands) 
Operating lease cost  $246    125 
Short-term lease cost   560    9 
Sublease income   (71)   (64)
Total lease costs  $735   $70 

 

The Houston operating lease commenced in May 2022 and is for a term of 67 months. The lease contains a seven-month rent abatement period. The base rent under the lease escalates $0.50 per square foot each twelve-month period during the term of the lease. In addition, the Company is responsible for its share of operating expenses and tax expenses as defined in the lease.

 

Short-term lease cost is associated with short-term lease agreements primarily related to compressors and field equipment rentals contracted for 12 months or less.

 

The Company’s Denver and Houston office operating leases do not contain implicit interest rates that can be readily determined; therefore, the Company used the incremental borrowing rates in effect at the time the Company entered into the leases.

 

   As of December 31, 
   2022   2021 
     
Weighted average lease term (years)   4.8    1.1 
Weighted average discount rate   4.34%   9.26%

 

Maturity of operating lease liabilities with terms of one year or more as of December 31, 2022 are presented in the following table:

 

  

   December 31, 2022 
   (in thousands) 
2023   225 
2024   213 
2025   218 
2026   224 
2027   209 
Total lease payments  $1,089 
Less: imputed interest   (106)
Total lease liability  $983 

 

In August 2021, the Company sold a 14-acre tract in Riverton, Wyoming with a two-story, 30,400 square foot office building for $440 thousand and recognized a $151 thousand loss. The Company recognized net rental property income of $8 thousand related to the Riverton, Wyoming office building for the year ended December 31, 2021.