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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The income tax provision for continuing operations consists of the following:
| 2012 |  | 2011 |  | 2010
Current: |  |  |  |  |
State | $ | 84,000 |  |  | $ | — |  |  | $ | 40,000 |
Federal | 646,000 |  |  | 282,000 |  |  | 95,000 |
Deferred: |  |  |  |  |
State | 2,214,000 |  |  | — |  |  | — |
Federal | 23,419,000 |  |  | (372,000 | ) |  | (95,000 | )
Total income tax expense (benefit) provision from continuing operations | $ | 26,363,000 |  |  | $ | (90,000 | ) |  | $ | 40,000 |
A reconciliation of the statutory federal income tax amount to the recorded expense follows:
| 2012 |  | 2011 |  | 2010
Income from continuing operations before federal income taxes | $ | 98,199,000 |  |  | $ | 108,332,000 |  |  | $ | 47,403,000 |
Expected income tax at statutory rate | 34,370,000 |  |  | 37,916,000 |  |  | 16,591,000 |
State income taxes | 1,493,000 |  |  | 4,227,000 |  |  | 2,378,000 |
Other differences | 292,000 |  |  | (146,000 | ) |  | (111,000 | )
Changes in valuation allowance | (9,792,000 | ) |  | (42,087,000 | ) |  | (18,818,000 | )
Income tax expense (benefit) recorded for continuing operations | $ | 26,363,000 |  |  | $ | (90,000 | ) |  | $ | 40,000 |
The tax effects of temporary differences and net operating loss carryforwards, which give rise to deferred tax assets and liabilities at December 31, 2012, 2011 and 2010 are estimated as follows:
| 2012 |  | 2011 |  | 2010
Deferred tax assets: |  |  |  |  |
Net operating loss carryforward | $ | 1,513,000 |  |  | $ | 40,880,000 |  |  | $ | 20,967,000 |
Oil and gas property basis difference | — |  |  | — |  |  | 32,054,000 |
FASB ASC 718 compensation expense | 762,000 |  |  | 520,000 |  |  | 347,000 |
Investment in pass through entities | — |  |  | 78,000 |  |  | 722,000 |
AMT credit | 1,643,000 |  |  | 1,000,000 |  |  | 693,000 |
Non-oil and gas property basis difference | — |  |  | 103,000 |  |  | 279,000 |
Charitable contributions carryover | 5,000 |  |  | 3,000 |  |  | — |
Unrealized gain on hedging activities | 3,836,000 |  |  | — |  |  | — |
Foreign tax credit carryforwards | 2,074,000 |  |  | — |  |  | — |
State net operating loss carryover | 4,315,000 |  |  | 6,410,000 |  |  | — |
Total deferred tax assets | 14,148,000 |  |  | 48,994,000 |  |  | 55,062,000 |
Valuation allowance for deferred tax assets | (4,629,000 | ) |  | (12,347,000 | ) |  | (54,434,000 | )
Deferred tax assets, net of valuation allowance | 9,519,000 |  |  | 36,647,000 |  |  | 628,000 |
Deferred tax liabilities: |  |  |  |  |
Oil and gas property basis difference | 15,049,000 |  |  | 35,637,000 |  |  | — |
Investment in pass through entities | 3,618,000 |  |  | — |  |  | — |
Non-oil and gas property basis difference | 227,000 |  |  | — |  |  | — |
Investment in nonconsolidated affiliates | 9,232,000 |  |  | — |  |  | — |
Unrealized gain on hedging activities | — |  |  | 10,000 |  |  | — |
Total deferred tax liabilities | 28,126,000 |  |  | 35,647,000 |  |  | — |
Net deferred tax asset (liability) | $ | (18,607,000 | ) |  | $ | 1,000,000 |  |  | $ | 628,000 |
The Company has an available federal tax net operating loss carryforward estimated at approximately $4,323,000 as of December 31, 2012. This carryforward will begin to expire in the year 2018. Based upon the December 31, 2012 net deferred tax liability position of the Company's oil and gas assets, management believes that this is a positive source of evidence to utilize the carryforward before it expires. Therefore, a valuation allowance has not been provided at December 31, 2012. A valuation allowance has been provided at December 31, 2011 and 2010 because it was management’s belief in those years, based upon the Company’s past history of no taxable income and future projections of no taxable income during the carryforward period, it was more likely than not that the net deferred tax assets would not be realized. The Company also has state net operating loss carryovers of $84,031,000 from Oklahoma and Louisiana that will begin to expire in 2013, alternative minimum tax credits of $1,643,000 with no expiration date and federal foreign tax credit carryovers of $2,074,000 which begin to expire in 2017. The Company has recorded a valuation allowance of $4,629,000 related to state net operating loss carryovers and foreign tax credit carryovers as the carryovers may not be utilized based upon a more likely than not basis. In 2012, the Diamondback Contribution generated an estimated $61.9 million taxable gain. As a result, the Company recognized $9,792,000 of its deferred tax assets which had previously been subject to a valuation allowance. The Company also recognized $25,633,000 of deferred tax expense in 2012 primarily due to the utilization of prior net operating losses from the Diamondback Contribution gain. Current federal expense in 2012, 2011 and 2010 is primarily attributable to alternative minimum tax. The Company also had income tax expense of $84,000 and $40,000 related to state income tax for the years ended December 31, 2012 and 2010.

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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 Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: 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 7: 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 8: 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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