Note 4 - Leases

6 Months Ended

Jun. 30, 2026

4. LEASES

The Company’s operating lease right-of-use asset and lease obligation are recognized at their discounted present value under the following captions in the Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025:

	*June 30, 2026*		*December 31, 2025*
	(in thousands)
Right-of-use asset	$	266	$	356
Lease liability
Current lease obligation	$	217	$	210
Long-term lease obligation		95		206
Total lease liabilities	$	312	$	416

The Company recognizes lease expense on a straight-line basis excluding short-term and variable lease payments, which are recognized as incurred. Short-term lease cost represents payments for oilfield equipment with original lease terms less than one year. The following are the amounts recognized as components of lease cost for the three and six months ended June 30, 2026 and 2025:

	*Three Months Ended June 30,*				*Six Months Ended June 30,*
	*2026*		*2025*		*2026*		*2025*
	(in thousands)
Operating lease cost	$	49	$	49	$	98	$	97
Short-term lease cost		25		35		51		60
Total lease costs	$	74	$	84	$	149	$	157

The Company’s Houston office operating lease does not contain implicit interest rates that can be readily determined; therefore, the Company used the incremental borrowing rates in effect at the time the Company entered into the leases.

	*As of June 30,*
	*2026*			*2025*
	(in thousands)
Weighted average lease term (years)		1.5			2.4
Weighted average discount rate		4.25	%		4.25	%

Maturity of operating lease liabilities with terms of one year or more as of June 30, 2026 is presented in the following table:

	*June 30, 2026*
	(in thousands)
2026	$	113
2027		210
Total lease payments	$	323
Less: imputed interest		(11	)
Total lease liability	$	312