Leases

12 Months Ended

Dec. 31, 2020

Magnolia’s leases primarily consist of real estate, vehicles, and field equipment. The Company’s leases have remaining lease terms of up to 7 years, some of which include options to renew or terminate the lease. The exercise of lease renewal options is at the Company’s sole discretion. Magnolia’s lease agreements do not contain any restrictive covenants or material residual value guarantees.

As most of Magnolia’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.


(In thousands)	December 31, 2020			December 31, 2019
Operating Leases
Operating lease assets	$	6,470		$	4,035

Operating lease liabilities - current	$	1,801		$	2,550
Operating lease liabilities - long-term	5,703			1,476
Total operating lease liabilities	$	7,504		$	4,026

Weighted average remaining lease term (in years)	4.2			1.9
Weighted average discount rate	4.0		%	3.8		%

For the years ended December 31, 2020 and 2019, the Company incurred $3.4 million and $2.8 million, respectively, of lease costs for operating leases included on the Company’s consolidated balance sheet, $21.4 million and $26.9 million, respectively, for short-term lease costs, and $1.7 million and $3.2 million, respectively, for variable lease costs. Cash paid for amounts included in the measurement of lease liabilities in operating cash flows from operating leases for the years ended December 31, 2020 and 2019 are $3.0 million and $2.8 million, respectively.

Maturities of lease liabilities as of December 31, 2020 under the scope of ASC 842 are as follows:


(In thousands)
Maturity of Lease Liabilities	Operating Leases
2021	$	2,054
2022	1,843
2023	1,391
2024	1,139
2025	1,135
After 2025	600
Total lease payments	$	8,162
Less: Interest	(658)
Present value of lease liabilities	$	7,504