NATURAL GAS SERVICES GROUP INCNGS

NATURAL GAS SERVICES GROUP INC Leases Disclosure

10-KFiled Mar 16, 20262 min read
Leases
Our operating leases are primarily related to property leases for administrative and field offices, storage facilities, temporary housing and office equipment. Our operating leases have remaining lease terms of one to seven years. Renewal and termination options are included in the lease term when it is reasonably certain that we will exercise the option. Our finance leases were primarily related to vehicles used in our rental business; however, we terminated all such leases during 2024 and purchased the vehicles and recorded them in property and equipment. Prior to their termination, our finance leases generally had lease terms of three years. Our lease agreements do not contain any contingent rental payments, material residual guarantees or material restrictive covenants.
The following table reflects the amounts related to leases that are recorded on our Consolidated Balance Sheets as of the dates presented:
Classification on ConsolidatedDecember 31,
DescriptionBalance Sheets20252024
Operating lease assetsOther assets$2,373 $607 
Current operating lease liabilitiesAccrued liabilities$462 $153 
Noncurrent operating lease liabilitiesOther long-term liabilities1,911 454 
Total lease liabilities$2,373 $607 
Weighted average remaining lease term (in years)4.93.8
Weighted average discount rate7.4 %8.3 %
Operating lease costs are recognized on a straight-line basis over the lease term. Total operating lease costs for the years ended December 31, 2025, 2024 and 2023 were approximately $1.0 million, $0.7 million and $0.5 million, respectively.
The following table summarizes the cash paid for amounts included in the measurement of liabilities included in our Consolidated Statements of Cash Flows for the periods presented:
Year Ended December 31,
202520242023
Operating lease cost (1) (2)
$1,010 $712 $485 
Finance lease cost (3)
$— $622 $95 
(1)    Lease costs are classified in the Consolidated Statements of Operations within cost of revenues and selling, general and administrative expenses.
(2)     Includes costs of $0.6 million, $0.1 million and $0.3 million for leases with terms of 12 months or less and $0.4 million, $0.6 million and $0.2 million for leases with terms greater than 12 months for the years ended December 31, 2025, 2024 and 2023, respectively.
(3)    All finance leases were terminated during 2024.
The following summarizes the future maturities of our lease liabilities for the periods presented:
Year Ending December 31,
2026$594 
2027573 
2028554 
2029455 
2030361 
Thereafter323 
Total lease payments2,860 
Less: Imputed interest(487)
Total$2,373 
Rent expense under such leases was $0.4 million, $0.6 million and $0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 17, 2025
2023Apr 1, 2024
2022Mar 31, 2023
2021Mar 18, 2022
2020Mar 31, 2021
2019Mar 31, 2020

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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