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Note 11 - Income Taxes | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 11. INCOME TAXES The components of the income tax provision for the years ended December 31, 2023 and 2022 include the following:
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | (9 | ) |  |  | 28 |
Total current income tax |  | $ | (9 | ) |  | $ | 28 |
Deferred: |  |  |  |  |  |  |  |
Federal |  | $ | (351 | ) |  | $ | (1,765 | )
State |  |  | (531 | ) |  |  | (156 | )
Total deferred income taxes |  | $ | (882 | ) |  | $ | (1,921 | )
Total income tax benefit |  | $ | (891 | ) |  | $ | (1,893 | )
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:
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Income tax benefit at federal statutory rate (21%) |  | $ | (6,982 | ) |  | $ | (600 | )
State income tax benefit, net of federal benefit |  |  | (541 | ) |  |  | (95 | )
Prior year true up |  |  | - |  |  |  | (509 | )
Compensation |  |  | 224 |  |  |  | 187 |
Acquisition |  |  | - |  |  |  | 1,056 |
Other |  |  | (284 | ) |  |  | - |
Change in valuation allowance |  |  | 6,692 |  |  |  | (1,932 | )
Income tax benefit |  | $ | (891 | ) |  | $ | (1,893 | )
The components of deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows:
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryover |  | $ | 9,012 |  |  | $ | 8,443 |
Property and equipment |  |  | 1,244 |  |  |  | - |
Percentage depletion and contribution carryovers |  |  | 1,987 |  |  |  | 2,004 |
Deferred compensation liability |  |  | 150 |  |  |  | 256 |
Asset retirement obligations |  |  | 4,220 |  |  |  | 3,581 |
Stock-based compensation |  |  | 428 |  |  |  | 439 |
Lease obligations |  |  | 179 |  |  |  | 224 |
Derivatives |  |  | - |  |  |  | 390 |
Other |  |  | 212 |  |  |  | 249 |
Total deferred tax assets |  |  | 17,432 |  |  |  | 15,586 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | - |  |  |  | (6,107 | )
Derivatives |  |  | (421 | ) |  |  | - |
Lease assets |  |  | (156 | ) |  |  | (198 | )
Total deferred tax liabilities |  |  | (577 | ) |  |  | (6,305 | )
Net deferred tax assets |  |  | 16,855 |  |  |  | 9,281 |
Less valuation allowance |  |  | (16,871 | ) |  |  | (10,179 | )
Net deferred tax liability |  | $ | (16 | ) |  | $ | (898 | )
As of December 31, 2023, the Company has approximately $24.7 million in net operating loss carryovers for federal income tax purposes. The net operating losses incurred prior to January 5, 2022 are subject to an Internal Revenue Code (IRC) Section 382 limitation as a result of a change of control incurred in conjunction with the transaction that closed on that day. IRC. Section 382 limits the Company’s ability to utilize certain tax attributes to offset taxable income in future years. Due to the existence of a net unrealizable built in loss (“NUBIL”), assets at the time of the 2017 change in control, the Company also has realized built in losses (“RBIL”) that exceed the annual limitation. As of December 31, 2023, the Company has approximately $10.6 million of RBIL carryovers, which carry forward indefinitely subject to the annual limitation. The Company recognizes, measures, and discloses uncertain tax positions whereby tax positions must meet a “more-likely-than-not” threshold to be recognized. During the years ended December 31, 2023 and 2022, no adjustments were recognized for uncertain tax positions. The Company files income tax returns in U.S. federal and multiple state jurisdictions. The Company is subject to tax audits in these jurisdictions until the applicable statute of limitations expires. With certain exceptions, the Company is no longer subject to U.S. federal tax examinations for tax years prior to 2020. The Company is open for various state tax examinations for tax years 2019 and later. The Company’s policy is to recognize potential interest and penalties accrued related to uncertain tax positions within income tax expense. For the years ended December 31, 2023 and 2022, the Company did not recognize any interest or penalties in its Consolidated Statements of Operations, nor did it have any interest or penalties accrued in its Consolidated Balance Sheets at December 31, 2023 and 2022 related to uncertain tax positions.

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