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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s income tax expense consists of the following:
| Year Ended December 31,
| 2013 |  | 2012 |  | 2011
| (In thousands)
Current: |  |  |  |  |
Federal | $ | 475 |  |  | $ | — |  |  | $ | — |
State | — |  |  | 7 |  |  | — |
| 475 |  |  | 7 |  |  | — |
Deferred: |  |  |  |  |
Federal | 122,853 |  |  | 82,841 |  |  | 42,809 |
State | 11,730 |  |  | 9,638 |  |  | 3,980 |
| 134,583 |  |  | 92,479 |  |  | 46,789 |
Total income tax expense | $ | 135,058 |  |  | $ | 92,486 |  |  | $ | 46,789 |
For the years ended December 31, 2013, 2012 and 2011, the Company’s effective tax rate differs from the federal statutory rate of 35% primarily due to state income taxes. The reconciliation of income taxes calculated at the U.S. federal tax statutory rate to the Company’s effective tax rate for the years ended December 31, 2013, 2012 and 2011, is set forth below:
| Year Ended December 31,
| 2013 |  | 2012 |  | 2011
| (%) |  | (In thousands) |  | (%) |  | (In thousands) |  | (%) |  | (In thousands)
U.S. federal tax statutory rate | 35.00 | % |  | $ | 127,056 |  |  | 35.00 | % |  | $ | 86,056 |  |  | 35.00 | % |  | $ | 44,163 |
State income taxes, net of federal income tax benefit | 2.06 | % |  | 7,469 |  |  | 2.47 | % |  | 6,068 |  |  | 2.38 | % |  | 3,004 |
Other | 0.14 | % |  | 533 |  |  | 0.15 | % |  | 362 |  |  | (0.30 | )% |  | (378 | )
Annual effective tax expense | 37.20 | % |  | $ | 135,058 |  |  | 37.62 | % |  | $ | 92,486 |  |  | 37.08 | % |  | $ | 46,789 |
Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2013 and 2012, were as follows:
| Year Ended December 31,
| 2013 |  | 2012
| (In thousands)
Deferred tax assets |  |  |
Net operating loss carryforward | $ | 17,215 |  |  | $ | 13,926 |
Bonus and stock-based compensation | 8,060 |  |  | 3,571 |
Derivative instruments and other | 1,664 |  |  | — |
Total deferred tax assets | 26,939 |  |  | 17,497 |
Deferred tax liabilities |  |  |
Oil and natural gas properties | 343,751 |  |  | 191,271 |
Derivative instruments | — |  |  | 8,455 |
Total deferred tax liabilities | 343,751 |  |  | 199,726 |
Total net deferred tax liability | $ | 316,812 |  |  | $ | 182,229 |
The Company generated a federal net operating tax loss of $14.7 million and accrued $0.5 million of current income tax expense for the year ended December 31, 2013. The net operating loss carryforwards consist of $50.9 million of federal net operating loss carryforwards, which expire between 2030 and 2033, and $34.0 million of state net operating loss carryforwards, which expire between 2017 and 2033. The tax benefits of carryforwards are recorded as an asset to the extent that management assesses the utilization of such carryforwards to be more likely than not. When the future utilization of some portion of the carryforwards is determined not to be more likely than not, a valuation allowance is provided to reduce the recorded tax benefits from such assets. Management believes that the Company’s taxable temporary differences and future taxable income will more likely than not be sufficient to utilize substantially all its tax carryforwards prior to their expiration. Pursuant to authoritative guidance, the Company’s $17.2 million deferred tax asset related to net operating loss carryforwards is net of $1.8 million of unrealized excess tax benefits related to excess stock-based compensation on federal and state net operating losses of $4.8 million and $3.5 million, respectively. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2013, the Company had no unrecognized tax benefits. With respect to income taxes, the Company’s policy is to account for interest charges as interest expense and any penalties as tax expense in the Consolidated Statement of Operations. The Company files income tax returns in the U.S. federal jurisdiction and in North Dakota, Montana and Texas. The Company’s income tax returns have not been audited by the IRS or any state jurisdiction. Its statute of limitation for the year ended December 31, 2013 will expire in 2017. The Company’s earliest open year in its key jurisdictions is 2010 for both the U.S. federal jurisdiction and various U.S. states. The current portion of the Company’s net deferred taxes was an asset of $6.3 million at December 31, 2013 and a liability of $4.6 million at December 31, 2012.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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