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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Note 13 – Income Taxes The current and deferred income tax provision for the years ended December 31, 2022 and 2021 were comprised for the following:
|  | 2022 |  |  | 2021 |
Current |  | $ | 208,898 |  |  | $ | — |
Deferred |  |  | — |  |  |  | — |
Income tax provision (benefit) |  | $ | 208,898 |  |  | $ | — |
At December 31, 2022, the Company had net operating loss carryforwards of approximately $18.6 million for federal income tax purposes available to offset future taxable income, as limited by the applicable provisions, which expire at various dates beginning in 2022 for the federal net operating loss carryforwards. In accordance with Section 382 of the Internal Revenue Code, the usage of the Company's net operating loss carryforwards may be limited in the event of a change in ownership. A full Section 382 analysis has not been prepared and NOLs could be subject to limitation under Section 382. Deferred tax assets and liabilities are the result of temporary differences between the financial statement carrying values and the tax basis of assets and liabilities. The Company’s net tax position as of December 31, 2022 and 2021 is as follows:
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |  |  |
Loss carry-forwards |  | $ | 4,789,586 |  |  | $ | 5,341,256 |
Oil and gas Properties |  |  | — |  |  |  | 1,239,723 |
Right of use assets |  |  | 7,341 |  |  |  | 8,036 |
Stock option grants |  |  | 1,369,105 |  |  |  | 796,188 |
Asset retirement obligation |  |  | 6,616,407 |  |  |  | — |
Derivatives |  |  | — |  |  |  | 27,210 |
Other |  |  | 436,477 |  |  |  | — |
Total deferred tax assets |  |  | 13,218,916 |  |  |  | 7,412,413 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Oil and gas Properties |  |  | (5,552,159 | ) |  |  | — |
Other property and equipment |  |  | (171,650 | ) |  |  | (459,745 | )
Derivatives |  |  | (31,369 | ) |  |  | — |
Other |  |  | (69,688 | ) |  |  | — |
Total deferred tax liabilities |  |  | (5,824,866 | ) |  |  | (459,745 | )
Net deferred tax asset (liability) before valuation allowance |  |  | 7,394,050 |  |  |  | 6,952,668 |
Valuation allowance |  |  | (7,394,050 | ) |  |  | (6,952,668 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
Reconciliations of the tax provision computed at the statutory federal rate to the Company’s total income tax benefit for the years ended December 31, 2022 and 2021 are as follows:
| 2022 |  | 2021
| $ |  | % |  | $ |  | %
Provision (benefit) at statutory rate | 1,531,536 |  | 21.0% |  | (3,909,142) |  | 21.0%
State taxes (net of federal impact) | 350,632 |  | 4.9% |  | (893,518) |  | 4.8%
Nondeductible expenses | 21,052 |  | 0.3% |  | 3,503,996 |  | -18.8%
Return to Accrual | (2,135,704) |  | -29.3% |  | — |  |
Valuation Allowance | 441,382 |  | 6.1% |  | 1,298,664 |  | -7.0%
Income tax provision | 208,898 |  | 3% |  | — |  | 0%
Utilization of the Company’s loss carryforwards is dependent on realizing taxable income. The Company recorded valuation allowances of $7.4 million and $7.0 million as of December 31, 2022 and 2021, respectively, due to the uncertainty related to its ability to utilize some of its deferred income tax assets, primarily consisting of net operating loss carryforwards prior to expiration or limitation under Section 382 as discussed above. The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would likely than not would be sustained by examination. Therefore, at December 31, 2022, the Company has not established any reserves for, nor recorded any unrecognized benefits related to uncertain tax positions.

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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) -URI https://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 https://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 https://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 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 -SubTopic 270 -Section 50 -Paragraph 1 -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 -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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