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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Components of Income Tax Expense (Benefit)

Income Tax Expense (Benefit)

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

		Year Ended December 31,
		2020				2019				2018
Current income tax expense (benefit)
United States		$	(499	)		$	437			$	—
Mexico			185				1,183				1,345
Total current income tax expense (benefit)		$	(314	)		$	1,620			$	1,345
Deferred income tax expense (benefit)
United States		$	35,923			$	(37,131	)		$	1,064
Mexico			(26	)			(630	)			513
Total deferred income tax expense (benefit)			35,897				(37,761	)			1,577
Total income tax expense (benefit)		$	35,583			$	(36,141	)		$	2,922

Summary of Reconciliation of Income Taxes Computed at U.S. Federal Statutory Tax Rate to Income Tax Expense (Benefit)

A reconciliation of income tax expense (benefit) computed at the U.S. federal statutory tax rate to the Company’s income tax expense (benefit) is as follows (in thousands, except percentages):

		Year Ended December 31,
		2020				2019				2018
Income tax expense (benefit) at the federal statutory tax rate		$	(90,304	)		$	4,744			$	47,137
Earnings not subject to tax			—				—				9,980
State income taxes			(14,215	)			1,396				11,738
Foreign income taxes			—				—				1,008
Foreign rate differential			(1,030	)			(4,948	)			432
Prior year taxes			(4,237	)			(1,950	)			417
Other adjustments			—				137				800
Change in tax status			—				—				(35,925	)
Legal entity reorganization			(17,566	)			39,336				—
Change in valuation allowance			162,213				(75,196	)			(32,665	)
Other permanent differences			722				340				—
Total income tax expense (benefit)		$	35,583			$	(36,141	)		$	2,922
Effective tax rate			(8.27	)%			(159.99	)%			1.30	%

Summary of Significant Components of Deferred Tax Assets and Liabilities

Net deferred tax assets (liabilities) reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities were as follows (in thousands):

		Year Ended December 31,
		2020				2019
Deferred tax assets:
Federal net operating loss		$	133,804			$	131,204
Foreign tax loss carryforward			45,980				2,316
State net operating loss			25,740				24,270
Asset retirement obligations			106,604				89,059
Tax credits			522				449
Derivatives			16,346				2,794
Other well equipment inventory			9,470				10,014
Accrued bonus			3,069				3,753
Operating lease liabilities			4,904				2,317
Other			7,727				7,004
Total deferred tax assets			354,166				273,180
Valuation allowance			(178,998	)			(19,118	)
Total deferred tax assets, net		$	175,168			$	254,062
Deferred tax liabilities:
Oil and gas properties		$	170,596			$	211,216
Deferred financing			1,765				3,752
Operating lease assets			1,652				1,814
Prepaid			3,216				3,419
Total deferred tax liabilities			177,229				220,201
Net deferred tax asset (liability)		$	(2,061	)		$	33,861

Summary of Net Operating Loss Carryovers

The table below presents the details of the Company’s net operating loss carryovers as of December 31, 2020 (in thousands):

		Amount				Expiration Year
Federal net operating losses		$	537,938			2035 - 2037
Federal net operating losses		$	99,223			Unlimited
Foreign tax loss carryforward		$	153,266			2025 - 2030
State net operating losses		$	400,568			2025 - 2040

Summary of Balances In Uncertain Tax Positions

Balances in the uncertain tax positions are as follows (in thousands):

		Year Ended December 31,
		2020				2019
Total unrecognized tax benefits, beginning balance		$	791			$	360
Increases in unrecognized tax benefits as a result of:
Tax positions taken during a prior period			(208	)			8
Tax positions taken during the current period			65				423
Settlements with taxing authorities			—				—
Lapse of applicable statute of limitations			—				—
Total unrecognized tax benefits, ending balance		$	648			$	791

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