Leases (Tables)

6 Months Ended

Jun. 30, 2019

Expenses related to finance and operating leases included in the Consolidated Financial Statements are as follows:



(Thousands of dollars)	Financial Statement Category	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
Operating lease ^1,2	Lease operating expenses	$	57,381		115,904
Operating lease ²	Selling and general expense	3,235			6,344
Operating lease ²	Other operating expense	894			894
Operating lease ²	Property, plant and equipment	32,115			55,562
Operating lease ²	Asset retirement obligations	—			3,024
Finance lease
Amortization of asset	Depreciation, depletion and amortization	210			420
Interest on lease liabilities	Interest expense, net	101			202
Sublease income	Other income	(422		)	(639	)
Net lease expense		$	93,514		181,711

¹ For the three months and six months ended June 30, 2019, includes variable lease expenses of $6.6 million and $13.8 million, respectively, primarily related to additional volumes processed at a gas processing plant.

² For the three months ended includes $10.4 million for Lease operating expense, $1.2 million for Selling and general expense, $28.7 million for Property, plant and equipment, net relating to short-term leases due within 12 months. For the six months ended includes $22.4 million for Lease operating expense, $2.3 million for Selling and general expense, $48.8 million for Property, plant and equipment, net and $3.0 million for Asset retirement obligations relating to short-term leases due within 12 months. Expenses primarily relate to drilling rigs and other oil and gas field equipment.

Schedule of Maturity of Lease Liabilities

aturity of Lease Liabilities໿



(Thousands of dollars)	Operating Leases ¹			Finance Leases		Total
2019	$	112,185		534		112,719
2020	107,652			1,069		108,721
2021	59,788			1,069		60,857
2022	54,548			1,069		55,617
2023	54,041			1,069		55,110
Remaining	474,598			5,610		480,208
Total future minimum lease payments	862,812			10,420		873,232
Less imputed interest	(266,009		)	(2,083	)	(268,092	)
Present value of lease liabilities²	$	596,803		8,337		605,140

¹ Excludes $271.8 million of minimum lease payments for leases entered but not yet commenced. These payments relate to an expansion of an existing gas processing plant and payments are anticipated to commence at the end of 2019 for 20 years.

² Includes both the current and long-term portion of the lease liabilities.

Summary of Lease Term and Discount Rate

Lease Term and Discount Rate



	June 30, 2019
Weighted average remaining lease term:
Operating leases	12 years
Finance leases	10 years
Weighted average discount rate:
Operating leases	5.0	%
Finance leases	4.7	%

Summary of Other Lease Information

Other Information໿



(Thousands of dollars)	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	90,598
Operating cash flows from finance leases	204
Financing cash flows from finance leases	335
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	6,033