Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

7.        Leases

The Company leases offices and storage from third-parties for our corporate and field locations under operating leases, which include commitments related to the guarantee of lease agreement with Solaris Energy Management, LLC, a related party of the Company, related to the rental of the office space. Refer to Note 13. “Related Party Transactions” for additional information regarding related party transactions recognized. We also sublease this office space to a third party that is classified as an operating lease. Upon completion of the primary term, both parties have substantive rights to

terminate the leases. As a result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term.

As of December 31, 2023 and 2022, the Company had property, plant and equipment under finance leases with a cost of $9,189 and $7,157, respectively, and accumulated depreciation of $3,364 and $917, respectively.

The components of lease expense were as follows:

	December 31,		December 31,		December 31,
	2023		2022		2021
Operating lease cost (1)	$	2,471	$	1,254	$	1,187
Finance lease cost:
Amortization of ROU assets		2,452		775		26
Interest on lease liabilities		327		115		4
Sublease income		(50)		—		—
Total lease cost	$	5,200	$	2,144	$	1,217

(1) Includes short term leases.

Future minimum lease payments under non-cancellable operating leases as of December 31, 2023 were as follows:

Year Ending December 31,	Operating Leases		Finance Leases
2024	$	2,267		2,673
2025		2,096		1,998
2026		1,949		498
2027		1,848		—
2028		1,663		—
Thereafter		9,514		—
Total future minimum lease payments		19,337		5,169
Less: effects of discounting		(6,411)		(306)
Total lease liabilities	$	12,926	$	4,863

Future minimum lease payments due to us under the sublease as of December 31, 2023 were as follows:

Year Ending December 31,		Sublease Income
2024	$	203
2025		230
2026		351
2027		358
2028		303
Total minimum future rental income	$	1,445

Supplemental cash flow information related to leases were as follows:

	December 31,		December 31,		December 31,
	2023		2022		2021
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,474	$	1,219	$	1,138
Financing cash flows from finance leases		2,502		1,610		30

Other information related to leases was as follows:

	December 31,		December 31,
	2023		2022
Weighted Average Remaining Lease Term
Operating leases		10.8 years		11.9 years
Finance leases		2.5 years		2.9 years
Weighted Average Discount Rate
Operating leases		7.1%		6.3%
Finance leases		5.7%		5.7%