Chord Energy CorpCHRD

Chord Energy Corp Leases Disclosure

10-KFiled Feb 26, 20263 min read
Leases
The Company’s long-term leases consist primarily of office space, vehicles and other property and equipment used in its operations. The components of lease costs before joint-interest recoveries were as follows for the periods presented:
Year Ended December 31,
202520242023
 (In thousands)
Operating lease costs$29,776 $31,830 $9,853 
Variable lease costs(1)
7,992 11,137 13,391 
Short-term lease costs61,194 59,429 56,100 
Sublease income(2,515)(1,570)(199)
Finance lease costs:
Amortization of ROU assets1,988 1,569 1,367 
Interest on lease liabilities361 299 126 
Total lease costs$98,796 $102,694 $80,638 
___________________
(1)Based on payments made by the Company to lessors for the right to use an underlying asset that vary because of changes in circumstances occurring after the commencement date, other than the passage of time, such as property taxes, operating and maintenance costs, which do not depend on an index or rate.
As of December 31, 2025, maturities of the Company’s lease liabilities were as follows:
Operating LeasesFinance Leases
 (In thousands)
2026$15,625 $2,465 
20274,405 2,120 
20282,930 1,177 
20292,753 370 
20301,379 69 
Thereafter— — 
Total future lease payments27,092 6,201 
Less: Imputed interest1,918 536 
Present value of future lease payments$25,174 $5,665 
Supplemental balance sheet information related to the Company’s leases were as follows:
December 31,
Balance Sheet Location20252024
 (In thousands)
Assets
Operating lease assets(1)
Operating right-of-use assets$12,749 $38,004 
Finance lease assets(2)
Other assets5,502 5,220 
Total lease assets$18,251 $43,224 
Liabilities
Current
Operating lease liabilities(1)
Current operating lease liabilities$14,656 $37,629 
Finance lease liabilitiesOther current liabilities2,147 1,665 
Long-term
Operating lease liabilities(1)
Operating lease liabilities10,518 15,190 
Finance lease liabilitiesOther liabilities3,518 3,613 
Total lease liabilities$30,839 $58,097 
___________________
(1)The year ended December 31, 2024 includes $43.0 million of operating leases for certain operating equipment and office buildings acquired in connection with the Arrangement.
(2)Finance lease ROU assets are recorded net of accumulated amortization of $4.2 million and $2.4 million as of December 31, 2025 and 2024, respectively.

During the years ended December 31, 2024 and 2023, the Company recorded impairment charges related to the Denver offices and its related fixed assets acquired in the Arrangement and Merger of $2.5 million and $17.5 million, respectively, as a result of overall market conditions. The ROU asset impairment charges are recorded within impairment and exploration on the Consolidated Statements of Operations.
Supplemental cash flow information and non-cash transactions related to the Company’s leases were as follows:
Year Ended December 31,
202520242023
 (In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$32,007 $30,222 $15,627 
Operating cash flows from finance leases361 297 160 
Financing cash flows from finance leases1,917 1,458 1,702 
ROU assets obtained in exchange for lease obligations
Operating leases(1)
$3,694 $49,278 $22,201 
Finance leases2,513 4,094 2,307 
___________________
(1)The year ended December 31, 2024 includes $43.0 million related to operating leases acquired in the Arrangement.

Weighted-average remaining lease terms and discount rates for the Company’s leases were as follows:
December 31,
20252024
Operating leases
Weighted average remaining lease term2.5 years2.4 years
Weighted average discount rate6.5 %6.8 %
Finance leases
Weighted average remaining lease term2.8 years3.2 years
Weighted average discount rate6.7 %6.7 %

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2020Mar 8, 2021

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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