XML 37 R12.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
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,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Current portion of income tax (expense) benefit |  |  |  |  |
Federal | $ | (9,230) |  |  | $ | — |  |  | $ | — |
State | (5,531) |  |  | (373) |  |  | (449) |
Deferred portion of income tax (expense) benefit | (269,057) |  |  | (9,565) |  |  | 192,540 |
Income tax (expense) benefit | $ | (283,818) |  |  | $ | (9,938) |  |  | $ | 192,091 |
Effective tax rate | 20.3 | % |  | 21.5 | % |  | 20.1 | %
The components of the net deferred tax liabilities are as follows:
| As of December 31,
| 2022 |  | 2021
| (in thousands)
Deferred tax liabilities |  |  |
Oil and gas properties excluding asset retirement obligation liabilities | $ | 358,537 |  |  | $ | 117,085 |
Derivative assets | 3,416 |  |  | — |
Other | 6,059 |  |  | 4,835 |
Total deferred tax liabilities | 368,012 |  |  | 121,920 |
Deferred tax assets |  |  |
Federal and state tax net operating loss carryovers | 28,151 |  |  | 3,299 |
Asset retirement obligation liabilities | 24,899 |  |  | 21,899 |
Interest carryforward | 22,667 |  |  | — |
Lease liabilities | 4,525 |  |  | 4,496 |
Pension | 3,970 |  |  | 7,413 |
Stock compensation | 567 |  |  | 2,246 |
Credit carryover | 161 |  |  | 897 |
Debt discount and deferred financing costs | 59 |  |  | 20,551 |
Derivative liabilities | — |  |  | 69,283 |
Other liabilities | 3,818 |  |  | 528 |
Total deferred tax assets | 88,817 |  |  | 130,612 |
Valuation allowance | (1,616) |  |  | (18,461) |
Net deferred tax assets | 87,201 |  |  | 112,151 |
Total net deferred tax liabilities | $ | 280,811 |  |  | $ | 9,769 |
Current federal income tax refundable | $ | 770 |  |  | $ | — |
Current state income tax payable | $ | 5,316 |  |  | $ | 362 |
As of December 31, 2022, the Company had estimated federal net operating loss (“NOL”) carryforwards of $121.7 million, state NOL carryforwards of $3.3 million that expire between 2023 and 2037, and de minimus state tax credits that expire between 2023 and 2031. The Company expects to utilize the federal R&D credit carryforward from 2021. The Company commissioned a multi-year R&D credit study, which is expected to be completed in late 2023, and is likely to favorably impact the Company’s effective tax rate when the results are recorded. The Company’s policy is to not record an R&D credit until it is claimed on a filed tax return, which had not occurred at the time of this filing. 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 change in the valuation allowance as of December 31, 2021, compared with December 31, 2022, primarily relates to the change in the Company’s net derivative position from liabilities to assets and to estimated future reversals of existing taxable temporary differences, which support the realization of the remaining deductible temporary differences and carryforwards. Cumulative financial statement income exceeds cumulative financial statement losses for the periods included in the Company’s accompanying statements of operations, which reinforces the Company’s decision to not maintain a valuation allowance for certain deferred tax assets as of December 31, 2022. 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 deduction 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 balances. These differences are reported as follows:
| For the Years Ended December 31,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Federal statutory tax (expense) benefit | $ | (293,112) |  |  | $ | (9,695) |  |  | $ | 200,908 |
(Increase) decrease in tax resulting from: |  |  |  |  |
Change in valuation allowance | 16,845 |  |  | (5,073) |  |  | (10,318) |
Employee share-based compensation | 10,861 |  |  | 3,080 |  |  | (2,578) |
Return to provision | (2,183) |  |  | 1,230 |  |  | (857) |
Compensation of covered individuals | (6,297) |  |  | (1,216) |  |  | (719) |
State tax (expense) benefit (net of federal benefit) | (9,870) |  |  | (211) |  |  | 5,722 |
Other | (62) |  |  | 1,947 |  |  | (67) |
Income tax (expense) benefit | $ | (283,818) |  |  | $ | (9,938) |  |  | $ | 192,091 |
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. For all years before 2019, 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, 2022, 2021, and 2020, was $0.4 million. The Company does not expect a significant change to the recorded unrecognized tax benefits in 2023, except for any potential change related to the Company’s R&D credit study discussed above.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration