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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Note 4 – Income Taxes The provision for income taxes consists of the following:
| For the Years Ended December 31,
| 2021 |  | 2020 |  | 2019
| (in thousands)
Current portion of income tax (expense) benefit |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | 3,826 |
State | (373) |  |  | (449) |  |  | (1,618) |
Deferred portion of income tax (expense) benefit | (9,565) |  |  | 192,540 |  |  | 41,835 |
Income tax (expense) benefit | $ | (9,938) |  |  | $ | 192,091 |  |  | $ | 44,043 |
Effective tax rate | 21.5 | % |  | 20.1 | % |  | 19.1 | %
The components of the net deferred tax liabilities are as follows:
| As of December 31,
| 2021 |  | 2020
| (in thousands)
Deferred tax liabilities |  |  |
Oil and gas properties excluding asset retirement obligation liabilities | $ | 117,085 |  |  | $ | 83,816 |
Other | 4,835 |  |  | 10,054 |
Total deferred tax liabilities | 121,920 |  |  | 93,870 |
Deferred tax assets |  |  |
Derivative liabilities | 69,283 |  |  | 36,311 |
Asset retirement obligation liabilities | 21,899 |  |  | 18,424 |
Debt discount and deferred financing costs | 20,551 |  |  | 23,925 |
Pension | 7,413 |  |  | 7,183 |
Federal and state tax net operating loss carryovers | 3,299 |  |  | 3,898 |
Stock compensation | 2,246 |  |  | 2,701 |
Credit carryover | 897 |  |  | 7,543 |
Other liabilities | 5,024 |  |  | 7,273 |
Total deferred tax assets | 130,612 |  |  | 107,258 |
Valuation allowance | (18,461) |  |  | (13,388) |
Net deferred tax assets | 112,151 |  |  | 93,870 |
Total net deferred tax liabilities | $ | 9,769 |  |  | $ | — |
Current state income tax payable | $ | 362 |  |  | $ | 853 |
As of December 31, 2021, the Company estimated complete utilization of its federal net operating loss (“NOL”). The Company has state NOL carryforwards of $4.2 million and de minimus state tax credits which expire between 2022 and 2037. The Company’s current valuation allowance includes an amount for state NOL carryforwards and state tax credits, which are expected to expire before they can be utilized. The Company estimated its federal research and development (“R&D”) credit carryforward at $0.9 million, which will expire between 2028 and 2033 if not used, but the Company expects to utilize this credit before it expires. The remaining valuation allowance includes amounts related primarily to the Company’s net derivative liabilities, a portion of which the Company estimates will convert to an unused federal NOL in future years as a result of having cumulative financial statement losses exceeding cumulative financial statement income for the periods included in the Company’s accompanying statements of operations. Recorded income tax expense or benefit differs from the amount that would be provided by applying the statutory United States federal income tax rate to income or loss before income taxes. These differences primarily relate to the effect of state income taxes, excess tax benefits and deficiencies from stock-based compensation awards, tax limitations on compensation of covered individuals, changes in valuation allowances, the cumulative impact of other smaller permanent differences, and can also reflect the cumulative effect of an enacted tax rate change, in the period of enactment, on the Company’s net deferred tax asset and liability balance. These differences are reported as follows:
| For the Years Ended December 31,
| 2021 |  | 2020 |  | 2019
| (in thousands)
Federal statutory tax (expense) benefit | $ | (9,695) |  |  | $ | 200,908 |  |  | $ | 48,519 |
(Increase) decrease in tax resulting from: |  |  |  |  |
Employee share-based compensation | 3,080 |  |  | (2,578) |  |  | (3,346) |
Acquisition basis, expired statute of limitation | 1,658 |  |  | — |  |  | — |
Return to provision | 1,230 |  |  | (857) |  |  | (152) |
State tax (expense) benefit (net of federal benefit) | (211) |  |  | 5,722 |  |  | (260) |
Compensation of covered individuals | (1,216) |  |  | (719) |  |  | (471) |
Change in valuation allowance | (5,073) |  |  | (10,318) |  |  | 13 |
Other | 289 |  |  | (67) |  |  | (260) |
Income tax (expense) benefit | $ | (9,938) |  |  | $ | 192,091 |  |  | $ | 44,043 |
Acquisitions, divestitures, drilling activity, and basis differentials, which impact the prices received for oil, gas, and NGLs, impact the apportionment of taxable income to the states where the Company owns oil and gas properties. As these factors change, the Company’s state income tax rate changes. This change, when applied to the Company’s total temporary differences, impacts the total state income tax (expense) benefit reported in the current year. Items affecting state apportionment factors are evaluated upon completion of the prior year income tax return, after significant acquisitions and divestitures, if there are significant changes in drilling activity, or if estimated state revenue changes occur during the year. During the year ended December 31, 2021, the Company recorded tax benefit and expense items which decreased the Company’s change in valuation allowance and resulted in a net zero impact to the Company’s 2021 tax rate. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020. The primary feature of the CARES Act that the Company benefited from was the acceleration of its refundable Alternative Minimum Tax (“AMT”) credits. On April 1, 2020, the Company filed an election to accelerate its remaining refundable AMT credits of $7.6 million. The Company received the refund in July 2020. For all years before 2018, the Company is generally no longer subject to United States federal or state income tax examinations by tax authorities. The Company complies with authoritative accounting guidance regarding uncertain tax provisions. The entire amount of unrecognized tax benefit reported by the Company would affect its effective tax rate if recognized. Interest expense in the accompanying statements of operations includes a negligible amount associated with income taxes. The total amount recorded for unrecognized tax benefits for each of the years ended December 31, 2021, 2020, and 2019, was $0.4 million. The Company does not expect a significant change to the recorded unrecognized tax benefits in 2022.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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