Leases

9 Months Ended

Sep. 30, 2020

Note 3. Leases

We evaluate contracts for leasing arrangements at inception. We lease office space, equipment, and vehicles that have non-cancelable lease terms. Leases with a term of 12 months or less are not recorded on our balance sheet. As part of the Chapter 11 Restructuring, the Predecessor elected to terminate some of its operating leases, primarily related to office space.

Lease costs for operating leases or leases with a term of 12 months or less are recognized on a straight-line basis over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset are recognized separately, with the depreciable life reflective of the expected lease term. The Predecessor previously subleased part of the office space included in its operating leases for which it received rental payments. Since those office space leases were terminated during the Chapter 11 Restructuring, the underlying sublease agreements were also terminated as of September 30, 2020.

The following tables summarize the components of lease costs and sublease income:



		Successor		Predecessor
		Period from Sept. 19, 2020 through		Period from July 1, 2020 through		Three Months Ended
In thousands	Income Statement Presentation	Sept. 30, 2020		Sept. 18, 2020		Sept. 30, 2019
Operating lease cost	General and administrative expenses	$	8	$	1,715	$	1,187
	Lease operating expenses	19		121		—
	CO₂ operating and discovery expenses	2		11		—
		$	29	$	1,847	$	1,187

Finance lease cost
Amortization of right-of-use assets	Depletion, depreciation, and amortization	$	1	$	5	$	54
Interest on lease liabilities	Interest expense	—		2		2
Total finance lease cost		$	1	$	7	$	56

Sublease income	General and administrative expenses	$	100	$	790	$	964



		Successor		Predecessor
		Period from Sept. 19, 2020 through		Period from Jan. 1, 2020 through		Nine Months Ended
In thousands	Income Statement Presentation	Sept. 30, 2020		Sept. 18, 2020		Sept. 30, 2019
Operating lease cost	General and administrative expenses	$	8	$	5,683	$	6,014
	Lease operating expenses	19		214		—
	CO₂ operating and discovery expenses	2		37		—
		$	29	$	5,934	$	6,014

Finance lease cost
Amortization of right-of-use assets	Depletion, depreciation, and amortization	$	1	$	9	$	1,188
Interest on lease liabilities	Interest expense	—		3		40
Total finance lease cost		$	1	$	12	$	1,228

Sublease income	General and administrative expenses	$	100	$	2,584	$	3,331