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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 4 – Income Taxes The provision for income taxes consisted of the following:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in thousands)
Current portion of income tax (expense) benefit |  |  |  |  |
Federal | $ | (8,461) |  |  | $ | (9,230) |  |  | $ | — |
State | 395 |  |  | (5,531) |  |  | (373) |
Deferred portion of income tax expense | (88,256) |  |  | (269,057) |  |  | (9,565) |
Income tax expense | $ | (96,322) |  |  | $ | (283,818) |  |  | $ | (9,938) |
Effective tax rate | 10.5 | % |  | 20.3 | % |  | 21.5 | %
The components of the net deferred tax liabilities are as follows:
| As of December 31,
| 2023 |  | 2022
| (in thousands)
Deferred tax liabilities: |  |  |
Oil and gas properties excluding asset retirement obligation liabilities | $ | 450,634 |  |  | $ | 358,537 |
Derivative assets | 12,319 |  |  | 3,416 |
Other | 6,283 |  |  | 6,059 |
Total deferred tax liabilities | 469,236 |  |  | 368,012 |
Deferred tax assets: |  |  |
Credit carryover, net | 56,097 |  |  | 161 |
Asset retirement obligation liabilities | 26,592 |  |  | 24,899 |
Lease liabilities | 4,454 |  |  | 4,525 |
Federal and state tax net operating loss carryovers | 3,271 |  |  | 28,151 |
Legal liabilities | 2,838 |  |  | — |
Pension | 2,453 |  |  | 3,970 |
Interest carryforward | 1,031 |  |  | 22,667 |
Other | 4,003 |  |  | 4,444 |
Total deferred tax assets | 100,739 |  |  | 88,817 |
Valuation allowance | (1,406) |  |  | (1,616) |
Net deferred tax assets | 99,333 |  |  | 87,201 |
Net deferred tax liabilities | $ | 369,903 |  |  | $ | 280,811 |
Current federal income tax refundable (payable) | $ | (4,899) |  |  | $ | 770 |
Current state income tax refundable (payable) | $ | 1,253 |  |  | $ | (5,316) |
As of December 31, 2023, the Company had utilized all of its remaining federal net operating loss (“NOL”) carryovers and had gross state NOL carryforwards of $74.0 million. Other than in states with no NOL carryforward expiration, the Company’s state NOL carryforwards expire between 2029 and 2039. 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 commissioned a multi-year R&D credit study in 2022, which was completed during 2023, and resulted in a favorable adjustment to the Company’s effective tax rate and a reduction of the Company’s 2022 and 2023 tax obligations. After utilizing a portion of the credits for the 2022 and 2023 tax years, the recorded net carryover R&D credit, as of December 31, 2023, expected to be utilized in future periods totaled $56.1 million. The R&D credits expire between 2037 and 2043. 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 federal tax credits, state income taxes, changes in valuation allowances, excess tax benefits and deficiencies from stock-based compensation awards, tax deduction limitations on compensation of covered individuals, 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 for the years ended December 31, 2023, 2022, and 2021, are presented below:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in thousands)
Federal statutory tax expense | $ | (191,983) |  |  | $ | (293,112) |  |  | $ | (9,695) |
(Increase) decrease in tax resulting from: |  |  |  |  |
Net federal R&D tax credit | 92,420 |  |  | — |  |  | — |
Change in valuation allowance | 210 |  |  | 16,845 |  |  | (5,073) |
State tax (expense) benefit, net of federal effect | 5,166 |  |  | (9,870) |  |  | (211) |
Other | (2,135) |  |  | 2,319 |  |  | 5,041 |
Income tax expense | $ | (96,322) |  |  | $ | (283,818) |  |  | $ | (9,938) |
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 reported. 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 2020, 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. The Company does not expect a significant change to the recorded unrecognized tax benefits in 2024, except for any potential changes related to the Company’s R&D credit study discussed above and any potential 2024 R&D credit claims. The total amount recorded for unrecognized tax benefits is presented below:
| For the Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in thousands)
Beginning balance | $ | 446 |  |  | $ | 446 |  |  | $ | 446 |
Additions based on tax positions related to current year | 23,713 |  |  | — |  |  | — |
Ending balance | $ | 24,159 |  |  | $ | 446 |  |  | $ | 446 |

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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