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LEASES

12 Months Ended

Dec. 31, 2022

2. LEASES

The Company leases equipment and office space pursuant to operating leases. We determine if an arrangement is or contains a lease at inception and combine lease and nonlease components, when fixed, for all lease contracts. Nonlease components include common area maintenance charges on office leases and, when applicable, services associated with equipment leases. Operating leases with a lease term greater than 12 months where the Company is the lessee are included in “Operating lease right of use assets” and “Operating lease liabilities” on the consolidated balance sheets and recorded based on the present value of the future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of lease payments. The Company does not recognize right of use assets and lease liabilities for short-term leases that have a lease term of 12 months or less, but rather recognizes the lease payments associated with its short-term leases when incurred.

Payments due under the lease contracts include fixed payments plus, in some instances, variable payments. Variable lease payments, if applicable, associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments, when applicable, are presented as "Gathering and other” or "General and administrative” in the consolidated statements of operations in the same line item as the expense arising from the fixed lease payments on the operating leases.

The “Operating lease right of use assets” outstanding on the consolidated balance sheets as of December 31, 2022 and 2021 both have initial lease terms of 2.3 years. The table below summarizes the Company’s leases for the periods indicated (in thousands, except years and discount rate):


	Years Ended December 31,
	2022			2021
Lease cost
Operating lease costs	$	391		$	444
Short-term lease costs		7,972			3,152
Variable lease costs		—			375
Total lease costs	$	8,363		$	3,971

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	391		$	537
Right-of-use assets obtained in exchange for new operating lease liabilities		—			841
Weighted-average remaining lease term - operating leases		0.9	years		1.9	years
Weighted-average discount rate - operating leases		4.29	%		4.29	%

Future minimum lease payments associated with the Company’s non-cancellable operating leases for office space and equipment as of December 31, 2022, are presented in the table below (in thousands):


	December 31, 2022
2023	$	359
Total operating lease payments		359
Less: discount to present value		(7)
Total operating lease liabilities		352
Less: current operating lease liabilities		352
Noncurrent operating lease liabilities	$	—