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Note 4 - Leases

6 Months Ended

Jun. 30, 2024

4. LEASES

The Company’s operating lease right-of-use asset and lease liability are recognized at their discounted present value under the following captions in the Condensed Consolidated Balance Sheets on June 30, 2024 and December 31, 2023:

	*June 30, 2024*		*December 31, 2023*
	(in thousands)
Right-of-use asset	$	612	$	693
Lease liability
Current lease obligation	$	189	$	182
Long-term lease obligation		515		611
	$	704	$	793

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 oilfield equipment with original lease terms less than one year. Following are the amounts recognized as components of lease cost for the three and six months ended June 30, 2024 and 2023:

	*Three Months Ended June 30,*				*Six Months Ended June 30,*
	*2024*		*2023*		*2024*		*2023*
	(in thousands)
Operating lease cost	$	49	$	49	$	97	$	114
Short-term lease cost		138		184		350		453
Sublease income		-		-		-		-
Total lease costs	$	187	$	233	$	447	$	567

The Company’s Houston office operating lease does 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 June 30,*
	*2024*			*2023*
	(in thousands)
Weighted average lease term (years)		3.4			4.4
Weighted average discount rate		4.25	%		4.25	%

Maturity of operating lease liabilities with terms of one year or more as of June 30, 2024 are presented in the following table:

	*June 30, 2024*
	(in thousands)
2024	$	107
2025		218
2026		224
2027		210
Total lease payments	$	759
Less: imputed interest		(55	)
Total lease liability	$	704