XML 55 R21.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes We file a consolidated federal income tax return in the United States and various combined and separate filings in several state and local jurisdictions. There were no unrecognized tax benefits nor any accrued interest or penalties associated with unrecognized tax benefits during the years ended June 30, 2018, 2017 and 2016. We believe that we have appropriate support for the income tax positions taken and to be taken on the Company's tax returns and that the accruals for tax liabilities are adequate for all open years based on our assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. The Company's tax returns are open to audit under the statute of limitations for the years ending June 30, 2015 through June 30, 2017 for federal tax purposes and for the years ended June 30, 2014 through June 30, 2017 for state tax purposes. The components of our income tax provision (benefit) are as follows:
| June 30, 2018 |  | June 30, 2017 |  | June 30, 2016
Current: |  |  |  |  |
Federal | $ | 1,186,649 |  |  | $ | 168,152 |  |  | $ | 8,731,290 |
State | 652,238 |  |  | 581,593 |  |  | 264,254 |
Total current income tax provision | 1,838,887 |  |  | 749,745 |  |  | 8,995,544 |
Deferred: |  |  |  |  |
Federal | (5,498,890 | ) |  | 3,880,522 |  |  | 541,891 |
State | 228,034 |  |  | 210,397 |  |  | 33,344 |
Total deferred income tax provision | (5,270,856 | ) |  | 4,090,919 |  |  | 575,235 |
| $ | (3,431,969 | ) |  | $ | 4,840,664 |  |  | $ | 9,570,779 |
The following table presents the reconciliation of our income taxes calculated at the statutory federal tax rate to the income tax provision (benefit) in our financial statements. The rate for 2018 is 27.55% due to our fiscal tax year. This is a result of the transition from the previously enacted 34% federal statutory rate to the new federal tax rate of 21%,, enacted December 31, 2017. Going forward, the federal statutory rate that will be applied is 21%. Our federal statutory rate for fiscal 2017 and 2016 was 34%. The effective tax rates for annual income tax provision (benefit) were approximately (21)%, 38% and 28% year ended June 30, 2018, 2017 and 2016, respectively. Excluding the permanent adjustment of $6.1 million benefit from the revaluation of our deferred income tax liabilities and valuation allowance at December 31, 2017, the effective rate for the year ended June 30, 2018, would have been 16% of income before income taxes. Our effective tax rate for fiscal 2018 is less than the statutory rate primarily as a result of the reduction in federal tax rate from newly enacted tax legislation as well as the benefit derived from statutory depletion in excess of tax basis partly offset by the state of Louisiana income taxes. Our effective tax rate for 2017 exceeded the statutory rate primarily as a result of state of Louisiana income taxes, partly offset by depletion in excess of basis. The effective tax rate for 2016 is less than the statutory rate primarily due to the benefit derived from statutory depletion in excess of tax basis and relatively lower state income taxes because a significant legal settlement and derivative gains were not taxable in Louisiana.
| June 30, 2018 |  | % of Income Before Income Taxes |  | June 30, 2017 |  | % of Income Before Income Taxes |  | June 30, 2016 |  | % of Income Before Income Taxes
Income tax provision computed at the statutory federal rate: | $ | 4,459,940 |  |  | 27.6 | % |  | $ | 4,380,892 |  |  | 34.0 | % |  | $ | 11,638,588 |  |  | 34.0 | %
Reconciling items: |  |  |  |  |  |  |  |  |  |  |
Adjustment of deferred income liability for lower statutory federal tax rate | (5,949,389 | ) |  | (36.8 | )% |  | — |  |  | — | % |  | — |  |  | — | %
Change in valuation allowance due to newly enacted tax legislation | (111,818 | ) |  | (0.7 | )% |  | — |  |  | — | % |  | — |  |  | — | %
Depletion in excess of tax basis | (2,433,530 | ) |  | (14.9 | )% |  | (92,196 | ) |  | (0.7 | )% |  | (2,242,620 | ) |  | (6.6 | )%
State income taxes, net of federal tax benefit | 718,337 |  |  | 4.4 | % |  | 522,713 |  |  | 4.1 | % |  | 196,415 |  |  | 0.6 | %
Permanent differences related to stock-based compensation | (139,333 | ) |  | (0.9 | )% |  | 27,884 |  |  | 0.2 | % |  | — |  |  | — | %
Other | 23,824 |  |  | 0.1 | % |  | 1,371 |  |  | — | % |  | (21,604 | ) |  | (0.1 | )%
Income tax (benefit) provision | $ | (3,431,969 | ) |  | (21.2 | )% |  | $ | 4,840,664 |  |  | 37.6 | % |  | $ | 9,570,779 |  |  | 28.0 | %
Deferred income taxes primarily represent the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Prior to 2017, deferred tax assets and liabilities are classified as either current or noncurrent on the balance sheet based on the classification of the related asset or liability for financial reporting purposes. Also prior to 2017, deferred tax assets and liabilities not related to specific assets or liabilities on the financial statements are classified according to the expected reversal date of the temporary difference or the expected utilization date for tax attribute carryforwards. Beginning in 2017, all deferred tax assets and liabilities are classified as noncurrent. See note below on ASU 2015-17.
| Asset (Liability)
| June 30, 2018 |  | June 30, 2017 |  | June 30, 2016
Deferred tax assets: |  |  |  |  |
Non-qualified stock-based compensation | $ | 144,956 |  |  | $ | 367,159 |  |  | $ | 553,182 |
Net operating loss carry-forwards | 680,186 |  |  | 852,477 |  |  | 386,808 |
AMT credit carry-forward | — |  |  | 110,564 |  |  | — |
Other | 24,207 |  |  | 18,581 |  |  | 130,947 |
Gross deferred tax assets | 849,349 |  |  | 1,348,781 |  |  | 1,070,937 |
Valuation allowance | (180,628 | ) |  | (292,446 | ) |  | (292,446 | )
Total deferred tax assets | 668,721 |  |  | 1,056,335 |  |  | 778,491 |
Deferred tax liability: |  |  |  |  |
Oil and natural gas properties | (11,224,156 | ) |  | (16,882,626 | ) |  | (12,513,863 | )
Total deferred tax liability | (11,224,156 | ) |  | (16,882,626 | ) |  | (12,513,863 | )
Net deferred tax liability | $ | (10,555,435 | ) |  | $ | (15,826,291 | ) |  | $ | (11,735,372 | )
The above assets and liabilities are present on the balance sheet as follows:
| June 30, 2018 |  | June 30, 2017 |  | June 30, 2016
Current deferred tax asset | $ | — |  |  | $ | — |  |  | $ | 105,321 |
Non-current deferred tax liability | 10,555,435 |  |  | 15,826,291 |  |  | 11,840,693 |
Net liability | 10,555,435 |  |  | 15,826,291 |  |  | 11,735,372 |
As the result of prospectively adopting ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes on July 1, 2016, current deferred tax assets have been subsequently netted together with noncurrent deferred income tax liabilities. As of June 30, 2018, we had a federal tax loss carryforward of approximately $1.2 million that we acquired through the reverse merger in May 2004. The majority of the tax loss carryforwards from the reverse merger expired without being utilized. We will be able to utilize a maximum of $0.3 million of these carryforwards in equal annual amounts of $39,648 through 2023 and the balance is not able to be utilized based on the provisions of IRC Section 382. We have recorded a valuation allowance for the portion of our net operating loss that is limited by IRC Section 382. During fiscal 2016 we utilized the remaining amount of $25.3 million of net operating losses ("NOL's") created primarily from tax deductions in excess of book deductions related to the exercise of non-qualified stock options and incentive warrants in fiscal 2014. NOL's related to such stock-based awards had not affected our future tax provision for financial reporting purposes, nor had it been recognized as a deferred tax asset for these future benefits. In fiscal 2016, we recognized a tax benefit for utilization of these NOL's to offset cash taxes that would otherwise have been payable as an increase in additional paid in capital of $9,650,657. In addition, as of June 30, 2018, the Company has an estimated carryforward of percentage depletion in excess of basis of approximately $1.1 million. These future deductions are limited to 65% of taxable income in any period.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration