v3.26.3
Leases
 9 Months Ended
Sep. 30, 2026
Leases [Abstract]  
Leases
Note Q – Leases
Nature of Leases
The Company has entered into various operating and finance leases such as a natural gas processing plant, floating production storage and off-take vessels, buildings, marine vessels, vehicles, drilling rigs, pipelines and other oil and natural gas field equipment.
Options to extend lease terms are at the Company’s discretion. Early lease terminations are a combination of Company discretion and mutual agreement between the Company and the lessor. Purchase options also exist for certain leases.
During the third quarter of 2026, the Company commenced a finance lease for a floating storage and offloading vessel associated with its Vietnam operations. The lease term extends from September 2026 through October 2039, coinciding with the expiration of the relevant production sharing contract. The Company recognized a finance lease right-of-use asset of $103.4 million and a finance lease liability of $83.9 million in connection with this arrangement, with approximately $19.5 million in lease payments made prior to commencement. Finance lease right-of-use assets are contained in “Property, plant and equipment, at cost less accumulated depreciation, depletion and amortization” on the Consolidated Balance Sheets.
In October 2026, the Company entered into an agreement for the use of a deepwater drillship in the Gulf of America. The initial term of the agreement covers 10 wells. Based on current estimates of well durations and applicable rates, the aggregate consideration associated with the initial term is approximately $225 million to $325 million on a gross basis. Actual payments may differ based on the duration of each well and the contractual rate applicable during periods of operation, movement, standby, or other activities. The agreement also provides the Company with options for up to five additional wells at rates to be agreed upon before exercise of the options. The agreement is anticipated to commence in the first quarter of 2027. As the agreement was executed after September 30, 2026 and had not commenced as of that date, no right-of-use asset or lease liability related to the agreement was recognized in these financial statements.
Maturity of Lease Liabilities
(Thousands of dollars)Operating LeasesFinance LeasesTotal
2026$84,456 $6,399 $90,855 
2027192,907 15,025 207,932 
202864,533 15,025 79,558 
202961,051 14,214 75,265 
203057,995 13,608 71,603 
Remaining354,124 70,141 424,265 
Total future minimum lease payments815,066 134,412 949,478 
Less imputed interest(161,310)(39,691)(201,001)
Present value of lease liabilities 1
$653,756 $94,721 $748,477 
1 Includes both the current and long-term portion of the lease liabilities.

Lease Term and Discount Rate
September 30, 2026December 31, 2025
Weighted average remaining lease term:
Operating leases8 years7 years
Finance leases12 years5 years
Weighted average discount rate:
Operating leases5.5 %5.5 %
Finance leases7.1 %5.4 %
Leases
Note Q – Leases
Nature of Leases
The Company has entered into various operating and finance leases such as a natural gas processing plant, floating production storage and off-take vessels, buildings, marine vessels, vehicles, drilling rigs, pipelines and other oil and natural gas field equipment.
Options to extend lease terms are at the Company’s discretion. Early lease terminations are a combination of Company discretion and mutual agreement between the Company and the lessor. Purchase options also exist for certain leases.
During the third quarter of 2026, the Company commenced a finance lease for a floating storage and offloading vessel associated with its Vietnam operations. The lease term extends from September 2026 through October 2039, coinciding with the expiration of the relevant production sharing contract. The Company recognized a finance lease right-of-use asset of $103.4 million and a finance lease liability of $83.9 million in connection with this arrangement, with approximately $19.5 million in lease payments made prior to commencement. Finance lease right-of-use assets are contained in “Property, plant and equipment, at cost less accumulated depreciation, depletion and amortization” on the Consolidated Balance Sheets.
In October 2026, the Company entered into an agreement for the use of a deepwater drillship in the Gulf of America. The initial term of the agreement covers 10 wells. Based on current estimates of well durations and applicable rates, the aggregate consideration associated with the initial term is approximately $225 million to $325 million on a gross basis. Actual payments may differ based on the duration of each well and the contractual rate applicable during periods of operation, movement, standby, or other activities. The agreement also provides the Company with options for up to five additional wells at rates to be agreed upon before exercise of the options. The agreement is anticipated to commence in the first quarter of 2027. As the agreement was executed after September 30, 2026 and had not commenced as of that date, no right-of-use asset or lease liability related to the agreement was recognized in these financial statements.
Maturity of Lease Liabilities
(Thousands of dollars)Operating LeasesFinance LeasesTotal
2026$84,456 $6,399 $90,855 
2027192,907 15,025 207,932 
202864,533 15,025 79,558 
202961,051 14,214 75,265 
203057,995 13,608 71,603 
Remaining354,124 70,141 424,265 
Total future minimum lease payments815,066 134,412 949,478 
Less imputed interest(161,310)(39,691)(201,001)
Present value of lease liabilities 1
$653,756 $94,721 $748,477 
1 Includes both the current and long-term portion of the lease liabilities.

Lease Term and Discount Rate
September 30, 2026December 31, 2025
Weighted average remaining lease term:
Operating leases8 years7 years
Finance leases12 years5 years
Weighted average discount rate:
Operating leases5.5 %5.5 %
Finance leases7.1 %5.4 %