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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax

Accordingly, the Company has not recognized a benefit for income taxes in the accompanying financial statements. Income tax benefit using the Company’s effective income tax rate differs from the U.S. federal statutory income tax rate due to the following:

		2018				2017
		(in thousands)
Income tax benefit at federal statutory rate		$	218			$	472
State income tax benefit, net of federal impact			37				38
Change in federal tax rate, net of state benefit ⁽¹⁾			-				(5,440	)
Change in state tax rate, net of federal benefit			(435	)
Loss on debt to equity conversion			-				(1,630	)
Change in value of warrant			163				-
Effect of Section 382 limitation			(1,303	)			(29,803	)
Incentive stock options and restricted stock not deductible for tax purposes			-				964
Percentage depletion carryover			4				138
Prior year true up			451				1,076
Other			50				76
Decrease in valuation allowance			815				34,109

Income tax benefit (expense)		$	-			$	-

⁽¹⁾

The change in the federal tax rate was due to the passage of Public Law 115-97 (Tax Cuts and Jobs Act). This resulted in a provisional reduction of the Company’s deferred tax assets before valuation analysis primarily due to a reduction in the U.S. statutory rate from 35% to 21%.

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows:

		2018				2017
		(in thousands)
Deferred tax assets:
Net operating loss carryover ⁽²⁾		$	3,594			$	874
Property and equipment			4,306				7,123
Percentage depletion and contribution carryovers⁽²⁾			1,721				1,872
Alternative minimum tax credit carryover ⁽²⁾			42				785
Equity method investment and other			592				398
Deferred compensation liability			9				8
Asset retirement obligations			221				221
Stock-based compensation			61				83

Total deferred tax assets			10,546				11,364

Deferred tax liabilities:
Property and equipment			-				-
Other			-				(3	)

Total deferred tax liabilities			-				(3	)

Net deferred tax assets			10,546				11,361
Less valuation allowance			(10,546	)			(11,361	)

Net deferred tax asset		$	-			$	-

⁽²⁾

In December 2017, the Company paid down debt through the issuance of common stock. This issuance represented a 49.3% ownership change in the Company. This change in ownership, combined with other equity events, triggered loss limitations under Internal Revenue Code (“I.R.C.”) Section 382. As a result, the Company wrote-off $29.8 million of gross deferred tax assets in 2017, and an additional $2.4 million in gross deferred tax assets in 2018. Since the Company has maintained a valuation allowance against these tax assets there is no impact to the consolidated statement of operations in either year.