Income taxes

Income tax expense consists of the following for the years ended December 31:



	2014			2013			2012
Current tax expense
Federal tax benefit	$	(22	)	$	(29	)	$	(23	)
State tax expense	574			1,144			141
Current tax expense	552			1,115			118
Deferred tax expense
Federal tax expense	115,699			30,327			35,579
State tax expense	8,192			1,407			2,140
Deferred tax expense	123,891			31,734			37,719
	$	124,443		$	32,849		$	37,837

Income tax expense differed from amounts computed by applying the U.S. Federal income tax rate as follows for the years ended December 31:



	2014		2013		2012
Statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	2.6	%	3.8	%	2.1	%
Statutory depletion	(0.2	)%	(0.7	)%	(0.04	)%
Valuation allowance	—	%	(1.7	)%	—	%
Other	(0.1	)%	0.7	%	(0.04	)%
Effective tax rate	37.3	%	37.1	%	37.0	%

Components of the deferred tax assets and liabilities are as follows at December 31:



	2014			2013
Deferred tax assets related to
Asset retirement obligations	$	12,988		$	8,777
Accrued expenses, allowance and other	15,057			14,508
Derivative instruments	—			129
Net operating loss carryforwards
Federal	121,556			124,855
State	15,052			13,350
Statutory depletion carryforwards	3,833			2,867
Alternative minimum tax credit carryforwards	308			308
	168,794			164,794
Less valuation allowance	(10,499		)	(10,385		)
Deferred tax asset	158,295			154,409
Deferred tax liabilities related to
Derivative instruments	(88,910		)	—
Property and equipment	(245,629		)	(206,799		)
Inventories	(1,243		)	(1,205		)
Deferred tax liability	(335,782		)	(208,004		)
Net deferred tax liability	(177,487		)	(53,595		)
Less net current deferred tax (liability) asset	(60,728		)	9,260
Long-term deferred tax liability	$	(116,759	)	$	(62,855	)

Approximately $(67,352) and $2,252 of the current deferred tax (liability) asset at December 31, 2014 and 2013, respectively, relates to our short-term derivative instruments. Additionally, the current deferred tax asset (liability) includes an asset of approximately $1,553 and $656 related to asset retirement obligations at December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, taxes receivable of $336 and $434, respectively, are included in accounts receivable.

We have federal net operating loss carryforwards of approximately $347,000 at December 31, 2014, which will expire between 2027 and 2034 if unused. At December 31, 2014, we have state net operating loss carryforwards of approximately $386,000, which will expire between 2015 and 2032 if unused. In addition, at December 31, 2014 we had federal percentage depletion carryforwards of approximately $11,000, which are not subject to expiration.

At December 31, 2014, approximately $262,000 of the state net operating loss carryforwards have been reduced by a valuation allowance based on our assessment that it is more likely than not that a portion will not be realized.

Realization of our deferred tax assets is dependent upon generating sufficient future taxable income. Although realization is not assured, we believe it is more likely than not that our deferred tax assets will be realized. The amount of our deferred tax assets considered realizable, however, could be reduced in the near-term if estimates of future taxable income are reduced.