US ENERGY CORP Leases Disclosure
4. LEASES
The Company’s right-of-use assets and lease liabilities are recognized at their discounted present value under the following captions in the Consolidated Balance Sheets as of December 31, 2025 and 2024:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Right of use asset | ||||||||
| Operating lease | $ | 356 | $ | 528 | ||||
| Lease liability | ||||||||
| Current lease obligation | 210 | 196 | ||||||
| Long-term lease obligation | 206 | 415 | ||||||
| $ | 416 | $ | 611 | |||||
The Company recognizes lease expense on a straight-line basis excluding short-term and variable lease payments, which are recognized as incurred. Following are the amounts recognized as components of rental expense for the years ended December 31, 2025 and 2024:
| December 31, | ||||
| 2025 | 2024 | |||
| (in thousands) | ||||
| Operating lease cost | $ | 218 | $ | 213 |
| Short-term lease cost | 118 | 426 | ||
| Total lease costs | $ | 336 | $ | 639 |
The Houston office operating lease commenced in May 2022 and is for a term of 67 months. The base rent under the lease escalates $0.50 per square foot each twelve-month period during the term of the lease. In addition, the Company is responsible for its share of operating expenses and tax expenses as defined in the lease.
Short-term lease cost is associated with short-term lease agreements primarily related to compressors and field equipment rentals contracted for 12 months or less.
The Company’s office operating lease agreements did not contain implicit interest rates that could be readily determined; therefore, the Company used the incremental borrowing rates in effect at the time the Company entered into the leases.
| As of December 31, | ||||||||
| 2025 | 2024 | |||||||
| Weighted average lease term (years) | 1.9 | 2.9 | ||||||
| Weighted average discount rate | 4.25 | % | 4.25 | % | ||||
Maturity of operating lease liabilities with terms of one year or more as of December 31, 2025 are presented in the following table:
| December 31, 2025 | ||||
| (in thousands) | ||||
| 2026 | $ | 224 | ||
| 2027 | 210 | |||
| Total future lease payments | $ | 434 | ||
| Less: imputed interest | (18 | ) | ||
| Total lease liability | $ | 416 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 26, 2024 | |
| 2022 | Apr 13, 2023 | |
| 2021 | Mar 28, 2022 | |
| 2020 | Mar 26, 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.