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Income Taxes

12 Months Ended

Jun. 30, 2023

Income Taxes

Income Taxes

Note 6. Income Taxes

The Company files 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, 2023 and 2022. The Company believes that it has 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 its 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 fiscal years ended June 30, 2020 through June 30, 2022 for federal tax purposes and for the fiscal years ended June 30, 2018 through June 30, 2022 for state tax purposes. To the extent the Company utilizes net operating losses (“NOLs”) generated in earlier years, such earlier years may also be subject to audit.

Income tax (expense) benefit for the years ended June 30, 2023 and 2022 is comprised of the following (in thousands):

​

​	​	​	​	​	​	​
​		June 30, 2023			June 30, 2022
Current:	​	​		​	​
Federal	​	$	(9,600)	​	$	(6,309)
State	​	​	(768)	​	​	(1,062)
Total current income tax (expense) benefit	​	​	(10,368)	​	​	(7,371)
Deferred:	​	​		​	​
Federal	​	​	457	​	​	(913)
State	​	​	(161)	​	​	(229)
Total deferred income tax (expense) benefit	​	​	296	​	​	(1,142)
Total income tax (expense) benefit	​	$	(10,072)	​	$	(8,513)

​

For the year ended June 30, 2023 the Company recognized income tax expense of $10.1 million and had an effective tax rate of 22.2% compared to income tax expense of $8.5 million and an effective tax rates of 20.7% for the year ended June 30, 2022. During the years ended June 30, 2023 and 2022, the Company recognized an income tax benefit of $0.1 million for both periods related to the vesting of restricted stock awards.

The Company’s effective tax rate will typically differ from the statutory federal rate as a result of state income taxes, primarily in the states of Louisiana, North Dakota, and Texas, due to percentage depletion in excess of basis, enhanced oil recovery credit, and other permanent differences. The following table presents the reconciliation of the Company’s income taxes calculated at the statutory federal tax rate to the income tax (expense) benefit (in thousands).

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

% of Income

​

​

​

​

% of Income

​

​

​

​

​

​

Before

​

​

​

​

Before

​

​

June 30, 2023

Income Taxes

June 30, 2022

Income Taxes

​

Income tax (expense) benefit computed at the statutory federal rate:

​

$

(9,511)

​

​

21.0

%

$

(8,640)

​

21.0

%

Reconciling items:

​

​

​

​

​

​

​

​

​

​

​

Depletion in excess of tax basis

​

​

78

​

​

(0.2)

%

​

190

​

(0.5)

%

State income taxes, net of federal tax benefit

​

​

(734)

​

​

1.6

%

​

(1,020)

​

2.5

%

Permanent differences related to stock-based compensation and other

​

​

96

​

​

(0.2)

%

​

3

​

—

%

Federal valuation allowance

​

​

—

​

​

—

%

​

623

​

(1.5)

%

EOR credit benefit

​

​

—

​

​

—

%

​

377

​

(0.9)

%

Other

​

​

(1)

​

​

—

%

​

(46)

​

0.1

%

Income tax (expense) benefit

​

$

(10,072)

​

​

22.2

%

$

(8,513)

​

20.7

%

​

In certain prior years, the Company undertook a project to seek potential cash tax savings opportunities identifying available Enhanced Oil Recovery credits (“EOR credits”) related to its interests in the Delhi Field. During the year ended June 30, 2022, the Company recognized an income tax benefit of $0.4 million attributable to the EOR credit. The EOR credit was not available for fiscal year 2023.

​

In the prior year, the Company released its valuation allowance of $0.6 million. The Company considered all positive and negative evidence to assess the likelihood that it will be able to realize its deferred tax assets. Realization is dependent on generating sufficient taxable income over the period the deferred tax assets are deductible. For the three-year period ending June 30, 2022, the Company was in a cumulative income position. Based on the weight of available evidence, the Company believed that is more likely than not that the deferred tax assets will be realized.

​

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. The components of net deferred income tax assets (liabilities) recognized are as follows (in thousands):

​

​	​	​	​	​	​	​
​		June 30, 2023			June 30, 2022
Deferred tax assets:	​	​		​	​
Non-qualified stock-based compensation	​	$	250	​	$	106
Net operating loss carry-forwards and other carry-forwards	​	​	—	​	​	8
Derivative losses	​	​	—	​	​	427
Asset retirement obligations	​	​	3,883	​	​	3,128
Other deferred tax assets	​	​	201	​	​	238
Net deferred tax assets	​	​	4,334	​	​	3,907
Deferred tax liability:	​	​		​	​
Oil and natural gas properties	​	​	(11,137)	​	​	(11,006)
Total deferred tax liability	​	​	(11,137)	​	​	(11,006)
​	​	​	​	​	​	​
Net deferred tax liability	​	$	(6,803)	​	$	(7,099)

​

X

- References

No definition available.

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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 https://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)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
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-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 740
-SubTopic 10
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-URI https://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
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-URI https://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 https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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