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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses and tax credit carry-forwards. Under this method, deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that includes the enactment date.

The income tax provision (benefit) for the years ended December 31, 2024, 2023, and 2022 consists of the following:

 (In thousands)202420232022
Current
Federal$— $— $— 
State959 915 3,101 
Deferred   
Federal145,224 209,168 164,453 
State14,402 22,035 20,627 
Valuation Allowance(76)(154,345)(185,080)
Total Tax Expense$160,509 $77,773 $3,101 

The following is a reconciliation of the reported amount of income tax expense for the years ended December 31, 2024, 2023, and 2022 to the amount of income tax expenses that would result from applying the statutory rate to pretax income (loss).
 (In thousands)202420232022
Income Before Taxes and NOL$680,817 $1,000,742 $776,338 
Federal Statutory Rate21.00 %21.00 %21.00 %
Taxes Computed at Federal Statutory Rates143,026 210,156 163,031 
State Tax, Net of Federal Taxes14,985 24,769 20,270 
Other True-Up Adjustments6,998 (3,527)3,532 
Perm Differences(4,424)720 1,347 
Valuation Allowance(76)(154,345)(185,080)
Reported Tax Expense$160,509 $77,773 $3,101 

A valuation allowance is established to reduce deferred tax assets if it is determined that it is more likely than not that the related tax benefit will not be realized. On a quarterly basis, management evaluates the need for and adequacy of valuation allowances based on the expected realizability of the deferred tax assets and adjusts the amount of such allowances, if necessary. During 2024, in evaluating whether it was more likely than not that the Company’s net deferred tax assets were realized through future net income, management considered all available positive and negative evidence, including (i) its earnings history, (ii) its ability to recover net operating loss carry-forwards, (iii) the projected future income and results of operations, and (iv) its ability to use tax planning strategies. Based on all the evidence available, at December 31, 2024 and December 31, 2023 the Company recorded valuation allowances of $1.8 million and $1.9 million, respectively.

At December 31, 2024, the Company had a NOL carryforward for federal income tax purposes of $447.2 million, which is net of the IRC Section 382 limitation, and gross state NOL carryforwards of $646.0 million. The determination of the state NOL carryforwards is dependent upon apportionment percentages, state income tax rates, and state laws that can change from year to year and that can thereby impact the amount of the deferred tax asset related to such carryforwards. If unutilized, all of the federal net operating losses will expire from 2031 to 2037, except for $325.3 million of federal net operating losses that have an indefinite life. If unutilized, all of the state net operating losses will expire from 2024 to 2043, except for $179.8 million of state net operating losses that have an indefinite life.

The significant components of the Company’s deferred tax assets (liabilities) were as follows:

 Year Ended December 31,
(in thousands)20242023
Net Operating Loss (NOLs) and Tax Credit Carryforwards$117,035 $146,039 
Share Based Compensation477 864 
Accrued Interest1,005 1,006 
Allowance for Doubtful Accounts2,293 927 
Crude Oil and Natural Gas Properties and Other Properties(434,486)(278,993)
Interest Carryforwards68,926 43,328 
Derivative Instruments13,181 8,386 
Other5,337 11,836 
Total Net Deferred Tax Liabilities Before Valuation Allowance(226,232)(66,607)
Valuation Allowance(1,806)(1,881)
Total Net Deferred Tax Liabilities$(228,038)$(68,488)

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards. The Company has no liabilities for unrecognized tax benefits.

The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the years ended December 31, 2024, 2023 and 2022, the Company did not recognize any interest or
penalties in its statements of operations, nor did it have any interest or penalties accrued in its balance sheet at December 31, 2024 and 2023 relating to unrecognized benefits.

The tax years 2024, 2023, 2022 and 2021 remain open to examination for federal income tax purposes and by the other major taxing jurisdictions to which the Company is subject. Additionally, NOLs from 2012-2024 could be adjusted in the future when such NOLs are utilized.