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Note 4 - Leases

9 Months Ended

Sep. 30, 2025

4. LEASES

The Company’s operating lease right-of-use asset and lease obligation are recognized at their discounted present value under the following captions in the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024:

	*September 30, 2025*		*December 31, 2024*
	(in thousands)
Right-of-use asset	$	400	$	528
Lease liability
Current lease obligation	$	206	$	196
Long-term lease obligation		259		415
Total lease liabilities	$	465	$	611

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. The following are the amounts recognized as components of lease cost for the three and nine months ended September 30, 2025 and 2024:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2025*		*2024*		*2025*		*2024*
	(in thousands)
Operating lease cost	$	49	$	49	$	146	$	146
Short-term lease cost		34		27		94		377
Total lease costs	$	83	$	76	$	240	$	523

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,*
	*2025*			*2024*
	(in thousands)
Weighted average lease term (years)		2.2			3.2
Weighted average discount rate		4.25	%		4.25	%

Maturity of operating lease liabilities with terms of one year or more as of September 30, 2025 is presented in the following table:

	*September 30, 2025*
	(in thousands)
2025	$	55
2026		224
2027		210
Total lease payments	$	489
Less: imputed interest		(24	)
Total lease liability	$	465