Income Taxes

3 Months Ended

Mar. 31, 2025

Income Taxes

Income Taxes

Note 17. Income Taxes

The Company’s current income tax benefit (expense) was less than ($0.1) million and was ($1.4) million for the three months ended March 31, 2025 and 2024, respectively.

The Company’s deferred income tax benefit (expense) was $1.5 million and $4.7 million for the three months ended March 31, 2025 and 2024, respectively.

The effective tax rates for the three months ended March 31, 2025 and 2024 were 20.8% and 26.0%, respectively. The item that had the most significant impact on the difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the three months ended March 31, 2025 was vested stock compensation. The item that had the most significant impact on the difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the three months ended March 31, 2024 was the weighted state accrual rate.

Valuation Allowance

In assessing deferred tax assets, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The assessment considers all available information including, among other things, historical and forecasted taxable income and operating history, the scheduled reversal of deferred tax liabilities and available tax planning strategies. As of March 31, 2025, the Company had three years of cumulative book income. Furthermore, management determined that the Company’s ability to maintain long-term profitability despite near-term changes in commodity prices and capital and operating costs demonstrated that there is sufficient positive evidence to conclude that it is more likely than not that all net deferred tax assets are realizable.