Lease Commitments |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Commitments | Commitments Litigation
Management is not aware of any legal, environmental or other commitments or contingencies that would have a material effect on the Company’s financial condition, results of operations or liquidity as of December 31, 2021.
Lease Commitments
As of December 31, 2021 and 2020, we have recorded right-of-use assets of $1.8 million and $2.5 million, respectively, and lease liabilities for $2.1 million and $2.8 million, respectively, primarily related to operating leases in connection with our administrative offices located in Dallas and Midland, Texas. The office lease agreements require monthly rent payments and expire in December 2025 and August 2022, respectively. Operating lease expense is recognized on a
straight-line basis over the lease term. Operating lease cost for the years ended December 31, 2021 and 2020 was $0.8 million and $0.7 million, respectively.
While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations. There are no residual value guarantees in our lease commitments. The weighted-average lease term for our operating lease liabilities is approximately 44 months. The weighted average discount rate of our operating leases is 4.5%.
Future minimum lease payments were as follows as of December 31, 2021 (in thousands):
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