Leases (Tables)

6 Months Ended

Jun. 30, 2021

Lessee Disclosure [Abstract]

Summary of Lease Related Expenses

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

		Three Months Ended June 30,				Six Months Ended June 30,
(Thousands of dollars)	Financial Statement Category	2021		2020		2021		2020
Operating lease 1,2	Lease operating expenses	$	48,049	$	53,588	$	94,133	125,189
Operating lease 2	Transportation, gathering and processing	9,982		9,137		19,758		19,063
Operating lease 2	Selling and general expense	2,453		3,281		5,273		6,750
Operating lease 2	Other operating expense	2,427		4,201		4,842		4,615
Operating lease 2	Property, plant and equipment	26,738		13,104		31,634		37,660
Operating lease	Impairment of assets	—		6,555		—		6,555
Finance lease
Interest on lease liabilities	Interest expense, net	86		92		172		188
Sublease income	Other income	(662)		(336)		(958)		(642)
Net lease expense		$	89,073	$	89,636	$	154,854	199,392

1  Variable lease expenses. The three and six months ended June 30, 2021 included variable lease expenses of $8.2 million and $13.5 million; and for the three and six months ended June 30, 2020 included variable lease expenses of $6.0 million and $12.3 million, respectively, primarily related to additional volumes processed at a gas processing plant.

2  Short-term leases due within 12 months.The three and six months ended June 30, 2021 included $11.1 million and $23.5 million for Lease operating expense, $7.6 million and $14.9 million for Transportation, gathering and processing, $0.5 million and $1.3 million for Selling and general expense and $10.0 million and $14.9 million for Property, plant and equipment, net relating to short term leases due within 12 months. The three and six months ended June 30, 2020 included $21.4 million and $54.3 million for Lease operating expense, $6.6 million and $8.0 million for Transportation, gathering and processing, $1.0 million and $2.2 million for Selling and general expense, $7.5 million and $22.9 million for Property, plant and equipment, net, and $2.4 million for other operating expense 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 Operating Lease Liabilities

Maturity of Lease Liabilities

(Thousands of dollars)	Operating Leases		Finance Leases	Total
2021	$	109,284	534	109,818
2022	185,790		1,068	186,858
2023	138,692		1,069	139,761
2024	133,502		1,069	134,571
2025	83,210		1,069	84,279
Remaining	726,103		3,472	729,575
Total future minimum lease payments	1,376,581		8,281	1,384,862
Less imputed interest	(382,394)		(1,403)	(383,797)
Present value of lease liabilities 1	$	994,187	6,878	1,001,065

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

Schedule of Maturity of Finance Lease Liabilities

Maturity of Lease Liabilities

(Thousands of dollars)	Operating Leases		Finance Leases	Total
2021	$	109,284	534	109,818
2022	185,790		1,068	186,858
2023	138,692		1,069	139,761
2024	133,502		1,069	134,571
2025	83,210		1,069	84,279
Remaining	726,103		3,472	729,575
Total future minimum lease payments	1,376,581		8,281	1,384,862
Less imputed interest	(382,394)		(1,403)	(383,797)
Present value of lease liabilities 1	$	994,187	6,878	1,001,065

1 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, 2021
Weighted average remaining lease term:
Operating leases	11 years
Finance leases	8 years
Weighted average discount rate:
Operating leases	5.4	%
Finance leases	4.7	%

Summary of Other Lease Information

Other Information

	Six Months Ended June 30,
(Thousands of dollars)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	87,768	$	90,831
Operating cash flows from finance leases	172		188
Financing cash flows from finance leases	371		336
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases ¹	$	94,788	277,662

1 The six months ended June 30, 2021 includes $90.3 million related to an offshore drilling rig with a lease term of 16 months. The six months ended June 30, 2020 includes $268.8 million related to a 5-year lease for the Cascade/Chinook FPSO in the U.S. Gulf of Mexico.