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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The income tax provision consists of the following:
| 2019 |  | 2018 |  | 2017
| (In thousands)
Current: |  |  |  |  |
State | $ | — |  |  | $ | (1,530 | ) |  | $ | 2,167 |
Federal | (7 | ) |  | 253 |  |  | 3,362 |
Deferred: |  |  |  |  |
State | (7,556 | ) |  | 1,530 |  |  | (118 | )
Federal | — |  |  | (322 | ) |  | (3,602 | )
Total income tax (benefit) expense provision | $ | (7,563 | ) |  | $ | (69 | ) |  | $ | 1,809 |
A reconciliation of the statutory federal income tax amount to the recorded expense follows:
| 2019 |  | 2018 |  | 2017
| (In thousands)
Income (loss) before federal income taxes | $ | (2,009,921 | ) |  | $ | 430,491 |  |  | $ | 436,961 |
Expected income tax at statutory rate | (422,083 | ) |  | 90,403 |  |  | 152,936 |
State income taxes | (28,316 | ) |  | (511 | ) |  | 2,299 |
Other differences | 3,372 |  |  | 1,078 |  |  | 5,731 |
Remeasurement due to Tax Cut and Jobs Act | — |  |  | — |  |  | 190,034 |
Change in valuation allowance due to current year activity | 439,464 |  |  | (91,039 | ) |  | (158,704 | )
Change in valuation allowance due to Tax Cuts and Jobs Act | — |  |  | — |  |  | (190,487 | )
Income tax (benefit) expense recorded | $ | (7,563 | ) |  | $ | (69 | ) |  | $ | 1,809 |
The tax effects of temporary differences and net operating loss carryforwards, which give rise to deferred tax assets and liabilities at December 31, 2019, 2018 and 2017 are estimated as follows:
| 2019 |  | 2018 |  | 2017
| (In thousands)
Deferred tax assets: |  |  |  |  |
Net operating loss carryforward | $ | 269,851 |  |  | $ | 164,363 |  |  | $ | 120,626 |
Oil and gas property basis difference | 289,850 |  |  | 3,595 |  |  | 151,260 |
Investment in pass through entities | 58,951 |  |  | 8,620 |  |  | 12,343 |
Stock-based compensation expense | 1,440 |  |  | 616 |  |  | 813 |
Business energy investment tax credit | 370 |  |  | 369 |  |  | 369 |
Charitable contributions carryover | 297 |  |  | 269 |  |  | 255 |
Change in fair value of derivative instruments | 11,219 |  |  | 2,761 |  |  | — |
Foreign tax credit carryforwards | 943 |  |  | 2,009 |  |  | 2,074 |
Accrued liabilities | 669 |  |  | 834 |  |  | 285 |
ARO liability | 12,744 |  |  | 16,923 |  |  | 15,897 |
Non-oil and gas property basis difference | — |  |  | 104 |  |  | 171 |
Lease liability | 12,128 |  |  | — |  |  | — |
State net operating loss carryover | 13,258 |  |  | 11,526 |  |  | 6,954 |
Interest expense carryforward | 23,818 |  |  | — |  |  | — |
Total deferred tax assets | 695,538 |  |  | 211,989 |  |  | 311,047 |
Valuation allowance for deferred tax assets | (647,575 | ) |  | (211,987 | ) |  | (298,830 | )
Deferred tax assets, net of valuation allowance | 47,963 |  |  | 2 |  |  | 12,217 |
Deferred tax liabilities: |  |  |  |  |
Non-oil and gas property basis difference | 1,859 |  |  | — |  |  | — |
Change in fair value of derivative instruments | 26,410 |  |  | 2 |  |  | 11,009 |
Right of use asset | 12,128 |  |  | — |  |  | — |
Other | 3 |  |  | — |  |  | — |
Total deferred tax liabilities | 40,400 |  |  | 2 |  |  | 11,009 |
Net deferred tax asset | $ | 7,563 |  |  | $ | — |  |  | $ | 1,208 |
The company recognized an income tax benefit of $7.6 million in 2019 and an income tax benefit of $69.0 thousand in 2018. The income tax benefit for 2019 consists mainly of a partial release of valuation allowance that was maintained against our Oklahoma deferred tax asset, as the Company believes that it can utilize a portion of its Oklahoma state NOL through carrybacks and carryforwards to offset Oklahoma sourced income from the sale of assets. The Company has an available federal tax net operating loss carryforward estimated at approximately $1.3 billion as of December 31, 2019. This carryforward will begin to expire in the year 2023. The Company also has state net operating loss carryovers of $244.5 million that began to expire in 2019 and federal foreign tax credit carryovers of $0.9 million which began to expire in 2019. At each reporting period, the Company weighs all available positive and negative evidence to determine whether its deferred tax assets are more likely than not to be realized. As a result of this analysis at December 31, 2019, the Company determined a valuation allowance was necessary with respect to its deferred tax assets, except for its Oklahoma state NOL. The more significant evidential matter relates to the Company’s recent cumulative losses resulting primarily from impairments to the full cost pool during 2019 and the decline in commodity prices. At December 31, 2019, the Company has recorded a total valuation allowance of $647.6 million related to the federal and state net deferred tax assets for which it believes do not meet the more likely than not threshold. There was an increase of $439.5 million, a decrease of $86.8 million and a decrease of $347.0 million to the valuation allowance during 2019, 2018 and 2017, respectively. The increase in the valuation allowance in 2019 was primarily due to increases in net deferred tax assets from pre-tax losses resulting from impairments in the Company's oil and natural gas properties. The decrease in the valuation allowance in 2018 was primarily due to decreases in net deferred tax assets due to pre-tax income. The decrease in the valuation allowance in 2017 was primarily due to pre-tax income and remeasurement of deferred tax assets due to the Tax Cuts and Jobs Act. The Company’s ability to utilize NOL carryforwards and other tax attributes to reduce future federal taxable income is subject to potential limitations under Internal Revenue Code Section 382 ("Section 382") and its related tax regulations. The utilization of these attributes may be limited if certain ownership changes by 5% shareholders (as defined in Treasury regulations pursuant to Section 382) and the effects of stock issuances by the Company during any three-year period result in a cumulative change or more than 50% in the beneficial ownership of the Company. As of December 31, 2019, the Company has completed a Section 382 analysis, which reflects that no ownership change has occurred to further limit the use of NOL carryforwards or other tax attributes. There are conditions that exist that are beyond the Company’s control which could cause an ownership change in the future and create a significant limitation on the Company's ability to utilize those tax attributes. As of December 31, 2019, the Company has recorded a liability associated with uncertain tax positions of $3.1 million.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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