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Leases (Tables)

3 Months Ended

Mar. 31, 2020

The table below presents the components of the Company’s lease costs for the periods indicated:


	Three Months Ended March 31,
	2020	2019
	(In thousands)
Components of Lease Costs
Finance lease costs	$576	$—
Amortization of right-of-use assets ⁽¹⁾	510	—
Interest on lease liabilities ⁽²⁾	66	—
Operating lease costs ⁽³⁾	17,277	9,565
Impairment of Operating lease ROU assets ⁽⁴⁾	1,593	—
Short-term lease costs ⁽⁵⁾	1,688	1,498
Variable lease costs ⁽⁶⁾	4	—
Total lease costs	$21,138	$11,063

(1) Included as a component of “Depreciation, depletion and amortization” in the consolidated statements of operations.

(2) Included as a component of “Interest expense, net of capitalized amounts” in the consolidated statements of operations.

(3) For the three months ended March 31, 2020 and 2019, approximately $14.2 million and $8.7 million were costs associated with drilling rigs and were capitalized to “Evaluated properties, net” in the consolidated balance sheets and the other remaining operating lease costs were components of “General and administrative” and “Lease operating” in the consolidated statements of operations.

(4) As a result of the downturn in economic conditions in conjunction with our ongoing effort to consolidate various office locations due to the Carrizo Acquisition, the Company evaluated certain of its office leases for impairment. Upon evaluation, the Company recorded an impairment of certain of its Operating lease ROU assets of $1.6 million which is a component of “Merger and integration expenses” in the consolidated statements of operations.

(5) Short-term lease costs exclude expenses related to leases with a contract term of one month or less.

(6) Variable lease costs include additional payments that were not included in the initial measurement of the lease liability and related ROU asset for lease agreements with terms greater than 12 months. Variable lease costs primarily consist of incremental usage associated with drilling rigs.

Assets And Liabilities, Lessee

The table below presents supplemental balance sheet information for the Company’s leases as of the periods indicated:


	As of March 31,
	2020	2019
	(In thousands)
Leases
Operating leases:
Operating lease ROU assets	$56,050	$40,977

Current operating lease liabilities	$37,686	$29,134
Long-term operating lease liabilities	35,746	11,751
Total operating lease liabilities	$73,432	$40,885

Financing leases:
Other property and equipment	$2,313	$—
Accumulated depreciation	(658)	—
Other property and equipment, net	$1,655	$—

Current financing lease liabilities	$927	$—
Long-term financing lease liabilities	724	—
Total financing lease liabilities	$1,651	$—

Lease Term and Discount Rate, Lessee

The table below presents the weighted average remaining lease terms and weighted average discounts rates for the Company’s leases for the period indicated:


	As of March 31, 2020
Weighted Average Remaining Lease Term (In years)
Operating leases	4.5
Financing leases	2.3

Weighted Average Discount Rate
Operating leases	5.5	%
Financing leases	8.1	%

Lessee, Operating Lease, Liability, Maturity

The table below presents the maturity of the Company’s lease liabilities as of March 31, 2020:


	Operating Leases	Financing Leases
	(In thousands)
Remainder of 2020	$37,161	$1,021
2021	13,122	275
2022	5,363	234
2023	5,012	233
2024	4,765	38
Thereafter	17,903	—
Total lease payments	83,326	1,801
Less imputed interest	9,894	150
Total	$73,432	$1,651

Finance Lease, Liability, Maturity

The table below presents the maturity of the Company’s lease liabilities as of March 31, 2020:


	Operating Leases	Financing Leases
	(In thousands)
Remainder of 2020	$37,161	$1,021
2021	13,122	275
2022	5,363	234
2023	5,012	233
2024	4,765	38
Thereafter	17,903	—
Total lease payments	83,326	1,801
Less imputed interest	9,894	150
Total	$73,432	$1,651