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Income Taxes | 12 Months Ended
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Jun. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes We file a consolidated federal income tax return in the United States of America in addition to 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, 2021 and 2020. 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 federal and state income tax returns are open to audit under the statute of limitations for the years ended June 30, 2017 through June 30, 2020 for federal tax purposes and for the years ended June 30, 2016 through June 30, 2020 for state tax purposes. To the extent we utilize net operating losses generated in earlier years, such earlier years may also be subject to audit. The components of our income tax provision (benefit) are as follows:
| June 30, 2021 |  | June 30, 2020
Current: |  |  |
Federal | $ | (334,473) |  |  | $ | (2,264,850) |
State | 454,033 |  |  | 345,522 |
Total current income tax provision (benefit) | 119,560 |  |  | (1,919,328) |
Deferred: |  |  |
Federal | (3,987,211) |  |  | (266,482) |
State | (1,116,610) |  |  | 4,814 |
Total deferred income tax provision (benefit) | (5,103,821) |  |  | (261,668) |
Total income tax provision (benefit) | $ | (4,984,261) |  |  | $ | (2,180,996) |
For the years ended June 30, 2021 and 2020, respectively, we recognized an income tax benefit of $5.0 million and an income tax benefit of $2.2 million reflecting corresponding effective tax rates of 23.3% and (58.1)%, respectively. During the fiscal 2020 year we undertook a project to seek potential cash tax savings opportunities identifying available Enhanced Oil Recovery credits (“EOR credits”) related to our interests in the Delhi field. To take advantage of the EOR credits, we amended federal and state tax returns for the years ended June 30, 2017 and 2018 and incorporated the associated impacts into our 2019 tax returns. Principally as a result of the EOR credits, the Company recorded a net tax benefit of $2.8 million during fiscal 2020. Relative to the foregoing, the Company has a $3.1 million receivable for income tax refunds at June 30, 2021, which the Company currently anticipates to receive in the next twelve months based on inquiries and communication with the IRS, although no assurances can be made as to the actual date of receipt. During fiscal 2021, we recognized an income tax benefit of $0.3 million attributable to the EOR credit. Our effective tax rate will typically differ from the statutory federal rate as a result of state income taxes, primarily in the State of Louisiana, and differences related to percentage depletion in excess of basis, stock-based compensation, valuation allowance on deferred tax assets, and other permanent differences. 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.
| June 30, 2021 |  | % of Income Before Income Taxes |  | June 30, 2020 |  | % of Income Before Income Taxes |  |  |  |  |
Income tax provision (benefit) computed at the statutory federal rate: | $ | (4,498,661) |  |  | 21.0 | % |  | $ | 788,776 |  |  | 21.0 | % |  |  |  |  |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |
Return to provision adjustments | 20,036 |  |  | (0.1) | % |  | (2,823,527) |  |  | (75.2) | % |  |  |  |  |
Depletion in excess of tax basis | (175,840) |  |  | 0.8 | % |  | (412,215) |  |  | (11.0) | % |  |  |  |  |
State income taxes, net of federal tax benefit | (523,436) |  |  | 2.4 | % |  | 272,962 |  |  | 7.3 | % |  |  |  |  |
Permanent differences related to stock-based compensation and other | 55,278 |  |  | (0.3) | % |  | 22,408 |  |  | 0.6 | % |  |  |  |  |
Federal valuation allowance | 570,064 |  |  | (2.7) | % |  | — |  |  | — | % |  |  |  |  |
EOR credit benefit | (335,717) |  |  | 1.6 | % |  | — |  |  | — | % |  |  |  |  |
Other | (95,985) |  |  | 0.6 | % |  | (29,400) |  |  | (0.8) | % |  |  |  |  |
Income tax provision (benefit) | $ | (4,984,261) |  |  | 23.3 | % |  | $ | (2,180,996) |  |  | (58.1) | % |  |  |  |  |
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.
| Asset (Liability)
| June 30, 2021 |  | June 30, 2020
Deferred tax assets: |  |  |
Non-qualified stock-based compensation | $ | 309,671 |  |  | $ | 234,559 |
Net operating loss carry-forwards and other carry-forwards | 365,279 |  |  | 78,197 |
Derivative losses | — |  |  | 401,382 |
Asset retirement obligations (a) | 1,284,907 |  |  | 650,042 |
Other deferred tax assets | 160,313 |  |  | 53,159 |
Gross deferred tax assets | 2,120,170 |  |  | 1,417,339 |
Valuation allowance | (861,838) |  |  | (53,218) |
Net deferred tax assets | 1,258,332 |  |  | 1,364,121 |
Deferred tax liability: |  |  |
Oil and natural gas properties (a) | (7,215,534) |  |  | (12,425,144) |
Total deferred tax liability | (7,215,534) |  |  | (12,425,144) |
Net deferred tax liability | $ | (5,957,202) |  |  | $ | (11,061,023) |
(a) Certain deferred tax assets related to asset retirement obligations have been reclassified from the June 30, 2020 oil and natural gas properties deferred tax liability balance in order to conform to the current year presentation. As of June 30, 2021, we had a federal tax loss carryforward of approximately $0.6 million that we acquired through a 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 $0.2 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 Internal Revenue Code (“IRC”) Section 382. We have recorded a valuation allowance for the portion of our net operating loss that is limited by IRC Section 382. In addition, we must assess the likelihood that we will be able to realize our deferred tax assets. Realization is dependent on generating sufficient taxable income over the period the deferred tax assets are deductible. Given the Company is in a cumulative loss position, Management considered the reversal of deferred tax liabilities and tax planning strategies in making the assessment of the realization of deferred tax assets. Based upon the weight of available evidence, the Company believes that some of the deferred tax assets are not likely to be realized at the time of this report and have recorded an increase in the valuation allowance during the current year related to the federal and state deferred tax assets of $0.6 million and $0.2 million respectively.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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