9. Income Taxes

The components of the provision (benefit) for income taxes for the years ended December 31, 2013 and 2012 are as follows:


	Year Ended December 31,
(Thousands of dollars)	2013			2012
Current:
Federal	$	(462	)	$	16
State		266			(130	)

Total current		(196	)		(114	)
Deferred:
Federal		6,549			7,009
State		465			(39	)

Total deferred		7,014			6,970

Total income tax provision	$	6,818		$	6,856

The components of net deferred tax assets and liabilities are as follows:


	At December 31,
(Thousands of dollars)	2013		2012
Current Assets:
Accrued liabilities	$	683	$	613
Allowance for doubtful accounts		118		124
Derivative contracts		677		(83	)

Total current deferred income tax assets	$	1,478	$	654

Non-Current Assets:
Alternative minimum tax credits	$	5,852	$	5,890
Net operating loss carry-forwards		168		114
Percentage depletion carry-forwards		4,543		4,287
Derivative contracts		—		91

Total non-current assets		10,563		10,382
Non-Current Liabilities:
Basis differences relating to managed partnerships		2,462		1,492
Depletion and depreciation		39,694		33,084
Derivative contracts		369		—

Total non-current liabilities		42,525		34,576

Net non-current deferred income tax liabilities	$	31,962	$	24,194

The total provision for income taxes for the years ended December 31, 2013 and 2012 varies from the federal statutory tax rate as a result of the following:


	Year Ended December 31,
(Thousands of dollars)	2013			2012
Expected tax expense	$	6,491		$	7,450
State income tax, net of federal benefit		488			(112	)
Percentage depletion		(422	)		(902	)
Other, net		261			420

Total income tax provision	$	6,818		$	6,856

The Company showed a net operating loss on its 2012 federal income tax return, which was carried back to the 2010 and 2011 tax years, resulting in total refunds of $685,000. The net operating loss and related refunds were the result of elections to deduct intangible drilling costs in 2012 which was made upon filing the return in 2013, and the refunds result in the lowering of the current federal income tax expense in 2013.

Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. Differences relating to oil and gas properties owned through Prime Offshore are reflected under “Depletion and depreciation,” while basis differences relating to the managed partnerships are reflected under “Basis differences relating to managed partnerships.”

The Company is entitled to percentage depletion on certain of its wells, which is calculated without reference to the basis of the property. To the extent that such depletion exceeds a property’s basis, it creates a permanent difference, which lowers the Company’s effective rate.

The Company has $5.9 million in alternative minimum tax (“AMT”) credits which can be used to lower the regular tax liability to the tentative AMT amount in years where the tentative AMT amount is less. These credits do not expire.

The Company has not recorded any provision for uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. The 2004, 2005, 2006, and 2009 federal income tax returns have been audited by the Internal Revenue Service, while the 2010, 2011 and 2012 returns remain open for examination. Returns for unexamined earlier years may be examined and adjustments made to the amount of percentage depletion and AMT credit carryforwards flowing from those years into an open tax year, although in general no assessment of income tax may be made for those years on which the statute has closed. State returns for the years 2010, 2011 and 2012 remain open for examination by the relevant taxing authorities.