Leases |
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| Leases | Note 9 – Leases As a lessee, the Company leases its corporate office headquarters in Tulsa, Oklahoma, and one field office. The leases expire between 2026 and 2027. The corporate office has an option to renew for an additional five-year term. The option to renew the lease is generally not considered reasonably certain to be exercised. Therefore, the period covered by such optional period is not included in the determination of the term of the lease and the lease payments during these periods are similarly excluded from the calculation of right-of-use lease asset and lease liability balances. The Company leases vehicles primarily used in our field operations, which typically have a three-year life. We also entered into two equipment leases during the six months ended June 30, 2026, which are included within oil and natural gas properties, net within the unaudited interim condensed consolidated balance sheets. Each equipment lease has a two-year life with an option to purchase at the end of the respective lease. The option to purchase is generally not considered reasonably certain to be exercised and therefore not included in the determination of the lease. The Company recognizes right-of-use lease expense on a straight-line basis, except for certain variable expenses that are recognized when the variability is resolved, typically during the period in which they are paid. Variable right-of-use lease payments typically include charges for property taxes, insurance, and variable payments related to non-lease components, including common area maintenance. Right-of-use lease expense was approximately $0.2 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively. Cash paid for right-of-use lease was approximately $0.2 million and $0.1 million for the same respective periods. Supplemental balance sheet information related to the right-of-use leases is as follows:
The weighted-average remaining term for Empire’s right-of-use leases is 1.58 years, and the weighted-average discount rate is 5.26% as of the second quarter of 2026. Maturities of lease liabilities are as follows as of the date presented:
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