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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes We are subject to U.S. federal income and state tax on our allocable share of any taxable income of OpCo. During the years ended December 31, 2024 and 2023, we decreased APIC by $84.7 million and $92.5 million, respectively, related to a change in the deferred tax liability related to our estimated basis in our ownership interests in OpCo as a result of the 2024 Equity Issuances, the SilverBow Merger, Class A Conversions and 2023 Equity Issuance. As of December 31, 2024 and 2023, we did not have any uncertain tax positions. Details of current and deferred income taxes are provided in the following tables:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Federal income tax expense (benefit) | (in thousands)
Current | $ | 1,422 |  |  | $ | (17) |  |  | $ | 323 |
Deferred | (39,379) |  |  | 19,520 |  |  | 38,002 |
State income tax expense (benefit) |  |  |  |  |
Current | 3,360 |  |  | 511 |  |  | 2,790 |
Deferred | 3,525 |  |  | 3,213 |  |  | (4,824) |
Total income tax expense (benefit) | $ | (31,072) |  |  | $ | 23,227 |  |  | $ | 36,291 |
The difference between the statutory federal income tax rate and the Company's effective income tax rate is explained as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Federal income taxes statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Change in rate as a result of: |  |  |  |  |
State income tax provision, net of federal benefit | (3.1) | % |  | 1.0 | % |  | (0.6) | %
SilverBow Merger transaction costs | 3.1 | % |  | — | % |  | — | %
Change in valuation allowance (1) | (0.6) | % |  | — | % |  | 2.6 | %
Permanent adjustments | (0.1) | % |  | — | % |  | 0.9 | %
Income attributable to noncontrolling interests and redeemable noncontrolling interests | (2.6) | % |  | (15.3) | % |  | (15.6) | %
Other | 0.7 | % |  | — | % |  | (1.3) | %
Effective income tax rate | 18.4 | % |  | 6.7 | % |  | 7.0 | %
(1)During the years ended December 31, 2024 and 2022, we recognized changes in the valuation allowance related to our recognized built-in loss ("RBIL") deferred tax asset as it was not more likely than not to be fully utilized. Significant components of the Company's deferred income taxes were as follows:
| Year Ended December 31,
| 2024 |  | 2023
Deferred tax liabilities | (in thousands)
Outside basis in OpCo | $ | 529,071 |  |  | $ | 284,533 |
OpCo state deferred tax | 13,832 |  |  | 4,232 |
Total deferred tax liabilities | 542,903 |  |  | 288,765 |
Deferred tax assets |  |  |
U.S. federal and state NOLs (1) | 132,811 |  |  | 32,381 |
Recognized built-in loss carryforward | 21,637 |  |  | 20,622 |
NOL and RBIL valuation allowance | (45,136) |  |  | (44,121) |
Equity-based compensation | 47,402 |  |  | 10,630 |
Other | 15,860 |  |  | 6,672 |
Total deferred tax assets, net of valuation allowance | 172,574 |  |  | 26,184 |
Net deferred income tax liability | $ | 370,329 |  |  | $ | 262,581 |
(1)At December 31, 2024 and 2023, we had U.S. federal net operating loss carryforwards ("NOLs") of $1.9 million, net of tax, that have expiration dates beginning in 2029. At December 31, 2024 and 2023, we also have U.S. federal NOLs of $130.4 million and $30.0 million, net of tax, that were generated after 2017 and have indefinite lives but are limited to offsetting 80% of taxable income in a given tax year. In July 2024, we completed the SilverBow Merger, see NOTE 3 – Acquisitions and Divestitures for more information. As part of the preliminary purchase price allocation, we recognized a net deferred tax liability of $58.7 million to reflect differences between tax basis and the fair value of SilverBow’s assets acquired and liabilities assumed. Tax attributes related to U.S. federal NOLs and interest expense are included in the net deferred tax liability. Due to the change of ownership of SilverBow in connection with the SilverBow Merger, the availability of these attributes will have utilization limitations under Section 382. We assess the available positive and negative evidence to determine if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2024 and 2023, a valuation allowance has been recorded to recognize only the portion of the deferred tax assets that are more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted in the future. As of December 31, 2024 and 2023, we had U.S. federal and state NOLs of $132.8 million and $32.4 million, respectively. A portion of these NOLs are subject to a valuation allowance of $23.5 million as of December 31, 2024 and 2023, respectively, because we do not believe they will be recoverable as a result of limitations on their use under Section 382. During the year ended December 31, 2024 and 2023 we recorded an additional $1.0 million and $19.3 million valuation allowance related to recognized built-in-loss ("RBIL") property that was also subject to the Section 382 limitation. At December 31, 2024 and 2023, the valuation allowance related to our RBIL carryforward was $21.6 million and $20.6 million, respectively. As we noted above, we have U.S. federal net operating loss ("NOL") carryforwards and recognized built-in-loss ("RBIL") that are subject to limitation under Section 382. Pursuant to Section 382 and 383 of the U.S. Internal Revenue Code of 1986, as amended, utilization of our NOL and RBIL carryforwards is subject to an annual limitation. These annual limitations may resulted in the expiration of NOL and RBIL carryforwards prior to utilization; accordingly we have maintained a valuation allowance related to U.S. federal NOL and RBIL carryforwards that we do not believe are recoverable due to these Section 382 limitations.

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