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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of income tax provision (benefit)

The components of income tax benefits and expense were as follows (in thousands):

			Successor									Predecessor
			Period from May 18, 2021 through December 31, 2021									Period from January 1, 2021 through May 17, 2021						Year Ended December 31, 2020						Year Ended December 31, 2019
Current:
State			$	(39)								$	(7,968)					$	—					$	—
Federal			—									—						(273)						(7)
Deferred:
State			—									—						7,563						(7,556)
Federal			—									—						—						—
Total income tax (benefit) expense provision			$	(39)								$	(7,968)					$	7,290					$	(7,563)

Schedule of reconciliation to the statutory federal income tax

A reconciliation of the statutory federal income tax amount to the recorded expense follows (in thousands):

			Successor									Predecessor
			Period from May 18, 2021 through December 31, 2021									Period from January 1, 2021 through May 17, 2021						Year Ended December 31, 2020						Year Ended December 31, 2019
(Loss) income before federal income taxes			$	(112,868)								$	243,026					$	(1,617,843)					$	(2,009,921)
Expected income tax at statutory rate			(23,702)									51,036						(339,747)						(422,083)
State income taxes			(3,177)									(12,484)						(14,696)						(28,316)
Bankruptcy adjustments			44,748									(111,285)
Remeasurement of state deferred tax asset			(7,966)									—
Other differences			2,841									445						10,800						3,372
Change in valuation allowance due to current year activity			(12,783)									64,320						350,933						439,464
Income tax (benefit) expense recorded			$	(39)								$	(7,968)					$	7,290					$	(7,563)

For the Predecessor period ending May 17, 2021, the Company has an effective tax rate of (3.3)% and an income tax benefit of $8.0 million. The tax benefit is entirely attributable to an Oklahoma refund claim associated with an examination relating to historical tax returns. The effective tax rate differs from the statutory tax rate due to the Company’s valuation allowance position and the permanent adjustments relating to the Chapter 11 Emergence. For the Successor Period, the Company has an effective tax rate of 0.03% and tax expense of $39 thousand. The tax expense is entirely attributable to the Oklahoma refund claim that was filed during the third quarter, resulting in an adjustment to the benefit recorded during the Predecessor Period. We did not record any additional income tax expense for the Successor Period as a result of maintaining a full valuation allowance against our net deferred tax asset.

Schedule of deferred tax assets and liabilities

The tax effects of temporary differences and net operating loss carryforwards, which give rise to deferred tax assets and liabilities at December 31, 2021, and 2020 are estimated as follows (in thousands): 

			Successor															Predecessor
			December 31, 2021															December 31, 2020
Deferred tax assets:
Net operating loss carryforward and tax credits			$	298,127														$	415,719
Oil and gas property basis difference			432,959															463,705
Investment in pass through entities			58,751															61,078
Change in fair value of derivative instruments			86,296															7,656
Other			31,298															41,292
Total deferred tax assets			907,431															989,450
Valuation allowance for deferred tax assets			(907,358)															(985,528)
Deferred tax assets, net of valuation allowance			73															3,922
Deferred tax liabilities:
Other			73															3,922
Total deferred tax liabilities			73															3,922
Net deferred tax asset			$	—														$	—

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- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 12
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