XML 27 R12.htm IDEA: XBRL DOCUMENT
v3.5.0.1

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | 6. Income Taxes The Company files a consolidated federal income tax return and various state income tax returns. The amount of income taxes the Company records requires the interpretation of complex rules and regulations of federal and state taxing jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years prior to 2013. Significant components of net deferred tax assets (liabilities) at March 31 are as follows:
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Percentage depletion carryforwards |  | $ | 1,718,721 |  |  | $ | 1,535,126 |
Deferred stock-based compensation |  |  | 49,090 |  |  |  | 36,958 |
Asset retirement obligation |  |  | 415,166 |  |  |  | 384,467 |
Net operating loss |  |  | 1,493,914 |  |  |  | 720,308 |
Other |  |  | 6,413 |  |  |  | 11,111 |
|  |  | 3,683,304 |  |  |  | 2,687,970 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Excess financial accounting bases over tax bases of property and equipment |  |  | 2,834,340 |  |  |  | (3,348,840 | )
Deferred tax asset (liability) |  | $ | 848,964 |  |  | $ | (660,870 | )
Valuation allowance |  |  | (848,964 | ) |  |  | - |
Net deferred tax asset (liability) |  | $ | - |  |  | $ | (660,870 | )
As of March 31, 2016, the Company has a statutory depletion carryforward of approximately $5,000,000, which does not expire. At March 31, 2016, the Company had a net operating loss carryforward for regular income tax reporting purposes of approximately $6,600,000, which will begin expiring in 2029. The Company’s ability to use some of its net operating loss carryforwards and certain other tax attributes to reduce current and future U.S. federal taxable income is subject to limitations under the Internal Revenue Code. A valuation allowance for deferred tax assets is required when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of this deferred tax asset depends on the Company's ability to generate sufficient taxable income in the future. Management believes it is more-likely-than- not that the net deferred tax asset will not be realized by future operating results. The income tax provision consists of the following for years ended March 31, 2016, 2015 and 2014:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current income tax expense |  | $ | - |  |  | $ | - |  |  | $ | 6,500 |
Deferred income tax (benefit) expense |  |  | (660,870 | ) |  |  | (197,499 | ) |  |  | 5,250 |
Total income tax provision: |  | $ | (660,870 | ) |  | $ | (197,499 | ) |  | $ | 11,750 |
Effective tax rate |  |  | (14 | )% |  |  | (37 | )% |  |  | 4 | %
The current income tax expense for fiscal year 2014 is the Company’s alternative minimum tax that cannot offset with its alternative minimum tax net operating loss. A reconciliation of the provision for income taxes to income taxes computed using the federal statutory rate for years ended March 31 follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Tax expense at federal statutory rate (1) |  | $ | (1,577,789 | ) |  | $ | (183,085 | ) |  | $ | 106,374 |
Statutory depletion carryforward |  |  | (35,034 | ) |  |  | (71,292 | ) |  |  | (127,204 | )
Change in valuation allowance |  |  | 848,964 |  |  |  | - |  |  |  | - |
Effect of graduated rates |  |  | 64,585 |  |  |  | 12,221 |  |  |  | (13,841 | )
Permanent differences |  |  | 31,904 |  |  |  | 44,657 |  |  |  | 46,421 |
Other |  |  | 6,500 |  |  |  | - |  |  |  | - |
Total income tax (benefit) expense |  | $ | (660,870 | ) |  | $ | (197,499 | ) |  | $ | 11,750 |
Effective income tax rate |  |  | (14 | )% |  |  | (37 | )% |  |  | 4 | %
(1) The federal statutory rate was 34% for fiscal years ending March 31, 2016, 2015 and 2014. For the years ended March 31, 2016, 2015 and 2014, the Company did not have any uncertain tax positions. A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Unrecognized tax benefits at beginning of period |  | $ | 679,000 |  |  | $ | 679,000 |  |  | $ | 677,000 |
Additions based on tax positions related to the current year |  |  | - |  |  |  | - |  |  |  | 2,000 |
Changes to tax positions of prior years |  |  | - |  |  |  | - |  |  |  | - |
Settlements |  |  | - |  |  |  | - |  |  |  | - |
Expirations |  |  | - |  |  |  | - |  |  |  | - |
Unrecognized tax benefits at end of period |  | $ | 679,000 |  |  | $ | 679,000 |  |  | $ | 679,000 |
While the amount of unrecognized tax benefits may change in the next 12 months, the Company does not expect any change to have a significant impact on its results of operations. The recognition of the total amount of the unrecognized tax benefits would have an impact on the effective tax rate. If these unrecognized tax benefits are disallowed, the Company will be required to pay additional taxes. Based on the material write-downs of the carrying value of our oil and natural gas properties for the year ending March 31, 2016, we are in a net deferred tax asset position at year end. We believe it is more likely than not that these deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the two-year period ending March 31, 2016. Such objective negative evidence limits the ability to consider other subjective positive evidence, such as our projections for future growth. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as expected future growth.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration