Leases |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases Operating Leases
Description of Lease
In March 2013, we entered into a year real estate lease contract (the "Real Estate Lease") with a commencement date of April 1, 2013, as part of the expansion of our equipment yard. The lease is with an entity in which a former director of the Company has a noncontrolling equity ownership interest. During the nine months ended September 30, 2020 and 2019, the Company made lease payments of approximately $0.3 million and $0.3 million, respectively. The assets and liabilities under this contract are equally allocated between our cementing and coiled tubing segments. In addition to the contractual lease period, the contract includes an optional renewal of up to years, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Real Estate Lease does not contain variability in payments resulting from either an index change or rate change. Effective January 1, 2019, the remaining lease term in our present value estimate of the minimum future lease payments was four years.
Consistent with the requirements of the new lease standard, ASC 842, we have determined the Real Estate Lease to be an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the real estate lease because we concluded that the accounting effect was insignificant. As of September 30, 2020, the weighted average discount rate and remaining lease term was 6.7% and 2.5 years, respectively.
As of September 30, 2020, our total operating lease right-of-use asset cost was approximately $1.2 million, and accumulated amortization was approximately $0.5 million. For the nine months ended September 30, 2020 and 2019, we recorded operating lease cost of approximately $0.3 million and $0.3 million, respectively, in our statement of operations.
Finance Leases
Description of Ground Lease
In 2018, we entered into a year land lease contract (the "Ground Lease") with an exclusive option to purchase the land exercisable beginning one year from the commencement date of October 1, 2018 through the end of the contractual lease term. The Ground Lease did not include any residual value guarantee, covenants or financial restrictions. Further, the Ground Lease did not contain variability in payments resulting from either an index change or rate change. In March 2020, the Company exercised its option and purchased the land associated with the Ground Lease for approximately $2.5 million. For the nine months ended September 30, 2020 and 2019, the interest on our finance lease was approximately $0 and $0.1 million, respectively.
Maturity Analysis of Lease Liabilities
The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our operating lease as of September 30, 2020 are as follows:
The total cash paid for amounts included in the measurement of our operating and finance lease liabilities during the nine months ended September 30, 2020 was approximately $0.3 million and $0.03 million, respectively. During the nine months ended September 30, 2019, total cash paid for amounts included in the measurement of our operating and finance lease liabilities was approximately $0.3 million and $0.3 million, respectively.
Short-Term Leases
We elected the practical expedient, consistent with ASC 842, to exclude leases with an initial term of twelve months or less ("short-term leases") from our balance sheet and continue to record short-term leases as a period expense. For the nine months ended September 30, 2020 and 2019 our short-term lease expense was approximately $0.8 million and $1.0 million, respectively. At September 30, 2020, the total remaining lease commitments for all of our short-term leases and lodging commitments was approximately $6.0 million.
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| Leases | Leases Operating Leases
Description of Lease
In March 2013, we entered into a year real estate lease contract (the "Real Estate Lease") with a commencement date of April 1, 2013, as part of the expansion of our equipment yard. The lease is with an entity in which a former director of the Company has a noncontrolling equity ownership interest. During the nine months ended September 30, 2020 and 2019, the Company made lease payments of approximately $0.3 million and $0.3 million, respectively. The assets and liabilities under this contract are equally allocated between our cementing and coiled tubing segments. In addition to the contractual lease period, the contract includes an optional renewal of up to years, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Real Estate Lease does not contain variability in payments resulting from either an index change or rate change. Effective January 1, 2019, the remaining lease term in our present value estimate of the minimum future lease payments was four years.
Consistent with the requirements of the new lease standard, ASC 842, we have determined the Real Estate Lease to be an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the real estate lease because we concluded that the accounting effect was insignificant. As of September 30, 2020, the weighted average discount rate and remaining lease term was 6.7% and 2.5 years, respectively.
As of September 30, 2020, our total operating lease right-of-use asset cost was approximately $1.2 million, and accumulated amortization was approximately $0.5 million. For the nine months ended September 30, 2020 and 2019, we recorded operating lease cost of approximately $0.3 million and $0.3 million, respectively, in our statement of operations.
Finance Leases
Description of Ground Lease
In 2018, we entered into a year land lease contract (the "Ground Lease") with an exclusive option to purchase the land exercisable beginning one year from the commencement date of October 1, 2018 through the end of the contractual lease term. The Ground Lease did not include any residual value guarantee, covenants or financial restrictions. Further, the Ground Lease did not contain variability in payments resulting from either an index change or rate change. In March 2020, the Company exercised its option and purchased the land associated with the Ground Lease for approximately $2.5 million. For the nine months ended September 30, 2020 and 2019, the interest on our finance lease was approximately $0 and $0.1 million, respectively.
Maturity Analysis of Lease Liabilities
The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our operating lease as of September 30, 2020 are as follows:
The total cash paid for amounts included in the measurement of our operating and finance lease liabilities during the nine months ended September 30, 2020 was approximately $0.3 million and $0.03 million, respectively. During the nine months ended September 30, 2019, total cash paid for amounts included in the measurement of our operating and finance lease liabilities was approximately $0.3 million and $0.3 million, respectively.
Short-Term Leases
We elected the practical expedient, consistent with ASC 842, to exclude leases with an initial term of twelve months or less ("short-term leases") from our balance sheet and continue to record short-term leases as a period expense. For the nine months ended September 30, 2020 and 2019 our short-term lease expense was approximately $0.8 million and $1.0 million, respectively. At September 30, 2020, the total remaining lease commitments for all of our short-term leases and lodging commitments was approximately $6.0 million.
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