Quarterly report pursuant to Section 13 or 15(d)

Operating Leases

v3.19.3
Operating Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Operating Leases
Note 5 - Operating Leases    
We adopted the Accounting Standards Update (“ASU”) 2016-02, Leases (“Topic 842”) effective January 1, 2019. As lessee, our leasing activities primarily consist of operating leases for administrative offices, warehouses, oilfield services equipment, office equipment, computers and other items. Our leases have remaining lease terms of 1 year to 6 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year
We elected the following package of practical expedients permitted under the transition guidance:
an election to adopt the modified retrospective transition method applied at the beginning of the period of adoption, which does not require a restatement of the prior period. Accordingly, no cumulative-effect adjustment to retained earnings was made.
an election not to apply the recognition requirements in Topic 842 to short-term leases (initial lease term of 12 months or less) and recognize lease payments in the consolidated condensed statement of operations. Short-term leases have not been recorded on the balance sheet.
a practical expedient to not reassess whether a contract is or contains a lease and carry forward its historical lease classification.
a practical expedient to account for the lease and non-lease components separately (except as discussed below).
a practical expedient to account for the lease and non-lease components as a single lease component for certain assets, by class of underlying asset.
We determine whether a contract is or contains a lease at its inception. Topic 842 requires lessees to recognize operating lease right-of-use assets and operating lease liabilities on the balance sheet. An operating lease right-of-use asset represents our right to use an underlying asset for the lease term and operating lease liability represents our obligation to make lease payments arising from the lease. An operating lease right-of-use asset and operating lease liability are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease right-of-use assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. The adoption of this standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of approximately $21.0 million as of January 1, 2019.    
Supplemental lease information related to our operating leases as of September 30, 2019 is shown below:
 
Successor
Dollars in thousands
September 30,
2019
Operating lease right-of-use assets (1)
$
17,173

 
 
Operating lease liabilities - current (2)
7,466

Operating lease liabilities - noncurrent (3)
8,647

Total operating lease liabilities
$
16,113

 
 
Weighted average remaining lease term (in years)
3

Weighted average discount rate
7.4
%
(1)
This amount is included in other non-current assets in our consolidated condensed balance sheet.
(2)
This amount is included in accounts payable and accrued liabilities in our consolidated condensed balance sheet.
(3)
This amount is included in other long-term liabilities in our consolidated condensed balance sheet.


Supplemental cash flow information related to leases are as follow:
 
Successor
 
 
Predecessor
 
Six Months Ended September 30,
 
 
Three Months Ended March 31,
Dollars in thousands
2019
 
 
2019
Cash paid for amounts included in the measurement of operating lease liabilities
$
4,519

 
 
$
2,498

Operating lease right-of-use assets obtained in exchange for lease obligations
$
976

 
 
$
60


Maturities of operating lease liabilities as of September 30, 2019 were as follows:
 
Successor
Dollars in thousands
Operating
Leases
2019
$
1,930

2020
7,314

2021
4,530

2022
2,052

2023
1,593

Beyond 2023
588

Total undiscounted lease liability
18,007

Imputed interest
(1,894
)
Total operating lease liabilities
$
16,113


Future minimum operating lease payments as of December 31, 2018 were as follows:
 
Successor
Dollars in thousands
Operating
Leases
2019
$
10,722

2020
7,887

2021
4,193

2022
1,968

2023
1,540

Beyond 2023
636

Total lease payments
$
26,946


Lease expense for lease payments is recognized on a straight-line basis over the lease term. Expenses for operating leases are shown below:
 
Successor
 
Three Months Ended September 30,
Dollars in thousands
2019
Operating lease expense
$
2,071

Short-term lease expense
1,146

Variable lease expense
1,827

Total lease expense
$
5,044


 
Successor
 
 
Predecessor

Six Months Ended September 30,
 
 
Three Months Ended March 31,
Dollars in thousands
2019
 
 
2019
Operating lease expense
$
4,756

 
 
$
2,709

Short-term lease expense
1,978

 
 
787

Variable lease expense
3,676

 
 
1,840

Total lease expense
$
10,410

 
 
$
5,336