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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s income tax expense (benefit) from continuing operations consists of the following:
 Year Ended December 31,
 202320222021
(In thousands)
Current:
Federal$15,877 $7,127 $— 
State3,824 883 4 
Total current tax expense19,701 8,010 4 
Deferred:
Federal264,154 (46,767)(977)
State31,394 (8,127)— 
Total deferred tax expense (benefit)295,548 (54,894)(977)
Total income tax expense (benefit)$315,249 $(46,884)$(973)
The reconciliation of income taxes from continuing operations calculated at the U.S. federal tax statutory rate to the Company’s effective tax rate is set forth below: 
 Year Ended December 31,
 202320222021
 (%)(In thousands)(%)(In thousands)(%)(In thousands)
U.S. federal tax statutory rate21.0 %$281,196 21.0 %$291,068 21.0 %$39,477 
State income taxes, net of federal income tax benefit2.6 %35,219 2.6 %36,156 3.0 %5,679 
Non-deductible executive compensation0.4 %5,999 0.7 %9,204 1.3 %2,510 
Change in valuation allowance— %— (27.2)%(377,233)(71.7)%(134,713)
Discharge of debt and nondeductible professional fees— %— — %— 46.3 %87,070 
Other(0.5)%(7,165)(0.5)%(6,079)(0.4)%(996)
Annual effective tax expense (benefit)23.5 %$315,249 (3.4)%$(46,884)(0.5)%$(973)
Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows:
 December 31,
 20232022
 (In thousands)
Deferred tax assets
Net operating loss carryforward$318,145 $316,085 
Derivative instruments— 72,761 
Bonus and equity-based compensation14,324 9,806 
Other deferred tax assets17,469 7,863 
Total deferred tax assets349,938 406,515 
Less: Valuation allowance(9,266)(9,617)
Total deferred tax assets, net$340,672 $396,898 
Deferred tax liabilities
Oil and natural gas properties$367,046 $117,995 
Derivative instruments3,638 — 
Investment in partnerships54,452 69,867 
Other deferred tax liabilities10,858 8,810 
Total deferred tax liabilities$435,994 $196,672 
Total deferred tax assets (liabilities), net$(95,322)$200,226 
The Company’s effective tax rate for the year ended December 31, 2023 was 23.5% of pre-tax income from continuing operations, as compared to an effective tax rate of (3.4)% of pre-tax income from continuing operations for the year ended December 31, 2022. The effective tax rate from continuing operations for the year ended December 31, 2023 was higher than the statutory federal rate of 21% primarily as a result of the impact of state income taxes. The effective tax rate from continuing operations for the year ended December 31, 2022 was lower than the statutory federal rate of 21% primarily as a result of the Company’s valuation allowance, the substantial majority of which was released as of December 31, 2022. This benefit was partially offset by the impacts of state income taxes.
As of December 31, 2023, the Company had gross U.S. federal net operating loss (“NOL”) carryforwards of $1,087 million, of which approximately $988.7 million will not expire and $98.3 million will expire from 2032 to 2037. In addition, the Company had gross state NOL carryforwards of $2,406 million as of December 31, 2023, which expire between 2024 and 2042. The Company and Whiting both experienced an “ownership change” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), in the past, including as a result of the Merger. Accordingly, under Section 382 of the Code, the Company’s NOL carryforwards and other tax attributes (collectively, “Tax Benefits”) are subject to various limitations going forward. However, the limitations applicable under Section 382 of the Code resulting from the Merger are not expected to have a material impact on the realizability of the Company’s deferred tax assets.
Tax Benefits are recorded as an asset to the extent that management assesses the utilization of such Tax Benefits to be more likely than not, and when the future utilization of some portion of the Tax Benefits is determined not to be more likely than not, then a valuation allowance is provided to reduce the Tax Benefits from such assets.
The Company’s estimated valuation allowance as of December 31, 2023 was $9.3 million, which relates to state NOL carryforwards, and is approximately consistent with the valuation allowance as of December 31, 2022.
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. The Company had no unrecognized tax benefits as of December 31, 2023 and 2022. 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 its Consolidated Statements of Operations. The Company files a U.S. federal income tax return and income tax returns in the various states where it operates. As the Company has NOL carryforwards from previous tax years, of which the earliest relate to the 2012 tax year, the Internal Revenue Service (“IRS”) may examine the Company’s loss years back to the 2012 tax year.
In the fourth quarter of 2022, the Company filed a non-automatic method change with the IRS to change the method of accounting for losses on undeveloped oil and gas leases that have expired for an entity acquired as part of the Merger. The method change was subsequently approved by the IRS in 2023, resulting in additional tax deductions on the 2022 tax return.