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Note 4 - Leases

9 Months Ended

Sep. 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 September 30, 2024 and December 31, 2023:

	*September 30, 2024*		*December 31, 2023*
	(in thousands)
Right-of-use asset	$	570	$	693
Lease liability
Current lease obligation	$	193	$	182
Long-term lease obligation		466		611
Total lease liabilities	$	659	$	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 nine months ended September 30, 2024 and 2023:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2024*		*2023*		*2024*		*2023*
	(in thousands)
Operating lease cost	$	49	$	49	$	146	$	162
Short-term lease cost		27		312		377		731
Total lease costs	$	76	$	361	$	523	$	893

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 September 30,*
	*2024*			*2023*
	(in thousands)
Weighted average lease term (years)		3.2			4.2
Weighted average discount rate		4.25	%		4.25	%

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

	*September 30, 2024*
	(in thousands)
2024	$	54
2025		218
2026		224
2027		210
Total lease payments	$	706
Less: imputed interest		(47	)
Total lease liability	$	659