Lease Position
| | | | | | | | | | | |
| (in thousands) | September 30, 2025 | | September 30, 2024 |
Operating lease commitments, including probable extensions1 | $ | 158,086 | | | $ | 104,535 | |
| | | |
| Discounted using the lessee's incremental borrowing rate | $ | 147,581 | | | $ | 77,316 | |
| (Less): short-term leases recognized on a straight-line basis as expense | (864) | | | (404) | |
| (Less): other | (637) | | | (182) | |
| Lease liability recognized | $ | 146,080 | | | $ | 76,730 | |
| | | |
| Of which: | | | |
| Current lease liabilities | $ | 35,960 | | | $ | 16,997 | |
| Non-current lease liabilities | 110,120 | | | 59,733 | |
(1)Our future minimal rental payments exclude optional extensions that have not been exercised but are probable to be exercised in the future. Those probable extensions are included in the operating lease liability balance.
The recognized right-of-use assets relate to the following types of assets:
| | | | | | | | | | | |
| (in thousands) | September 30, 2025 | | September 30, 2024 |
| Real estate properties | $ | 113,877 | | | $ | 66,842 | |
| Drilling equipment | 9,721 | | | 234 | |
| | | |
| Total right-of-use assets | $ | 123,598 | | | $ | 67,076 | |
Lease Costs
The following table presents certain information related to the lease costs for our operating leases:
| | | | | | | | | | | | | | | | | |
| Year ended September 30, |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 30,795 | | | $ | 11,693 | | | $ | 11,004 | |
| Short-term lease cost | 25,795 | | | 1,567 | | | 1,437 | |
| Total lease cost | $ | 56,590 | | | $ | 13,260 | | | $ | 12,441 | |
Lease Terms and Discount Rates
The table below presents certain information related to the weighted average remaining lease terms and weighted average discount rates for our operating leases:
| | | | | | | | | | | |
| September 30, 2025 | | September 30, 2024 |
| Weighted average remaining lease term | 9.9 | | 11.6 |
| Weighted average discount rate | 5.2 | % | | 5.1 | % |
Lease Obligations
Future minimum rental payments required under operating leases having initial or remaining non-cancelable lease terms in excess of one year at September 30, 2025 (in thousands) are as follows:
| | | | | |
| Fiscal Year | Amount |
| 2026 | $ | 31,067 | |
| 2027 | 17,672 | |
| 2028 | 15,888 | |
| 2029 | 14,677 | |
| 2030 | 12,777 | |
| Thereafter | 66,005 | |
Total1 | $ | 158,086 | |
(1)Our future minimal rental payments exclude optional extensions that have not been exercised but are probable to be exercised in the future. Those probable extensions are included in the operating lease liability balance.
Of the $158.1 million of future minimum rental payments, $66.4 million is attributable to our recently acquired subsidiary, KCA Deutag.
During the fiscal year ended September 30, 2025, we updated the lease for our Tulsa corporate headquarters for common area maintenance and parking expenses, resulting in a $13.8 million increase to right-of-use assets and lease liability on our Consolidated Balance Sheets. The additional right of use asset will be amortized over the remaining 10.3 years of the original lease term. The future minimum lease payments for our corporate headquarters office space represent a material portion of the amounts shown in the table above.
During the fiscal year ended September 30, 2024, we amended the lease for our Tulsa corporate headquarters, resulting in a $5.9 million increase to right-of-use assets and lease liability on our Consolidated Balance Sheets. The additional right of use asset will be amortized over the remaining 11 years of the original lease term. The future minimum lease payments for our corporate headquarters office space represent a material portion of the amounts shown in the table above.
During the fiscal year ended September 30, 2024, we amended the lease for our Tulsa industrial facility. As part of the amendment, we extended the lease term, now continuing through June 30, 2035 with two five-year renewal options, resulting in an increase of $18.1 million to the right-of-use assets and lease liability on our Consolidated Balance Sheet. We recognized one of the five-year renewal options as part of our right-of-use assets and lease liabilities. This contract is accounted for as an operating lease. The future minimum lease payments for the Tulsa industrial facility represent a material portion of the amounts shown in the table above.