The components of the Company’s income tax expense from continuing operations are as follows (in thousands):

	For the Year Ended December 31,
	2019		2018		2017
Current
Federal	$	—	$	—	$	—
State		—		—		—
Total current		—		—		—
Deferred
Federal		—		—		—
State		—		—		—
Total deferred		—		—		—
Total income tax expense (benefit)	$	—	$	—	$	—

The Company’s income tax expense from continuing operations differs from the amount derived by applying the statutory federal rate to pretax loss principally due the effect of the following items (in thousands):

	For the Year Ended December 31,
	2019			2018			2017
Income from continuing operations	$	30,446		$	18,826		$	8,525
Statutory rate		21	%		21	%		35	%
Income tax benefit computed at statutory rate		6,394			3,953			2,984
Reconciling items:
State income taxes		200			—			—
Deferred true-up		(6,686	)		—			—
Share-based compensation		—			1,201			(576	)
Other permanent differences		2,376			54			50
Executive compensation limitation		1,263			268			496
Change in valuation allowance		7,959			(5,476	)		(145,449	)
Change in State tax rate		(11,506	)		—			142,495
Income tax expense (benefit)	$	—		$	—		$	—

Deferred income taxes primarily represent the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s deferred taxes are detailed in the table below (in thousands):

	For the Year Ended December 31,
	2019			2018			2017
Deferred tax asset:
Oil and gas properties and equipment	$	11,613		$	62,616		$	93,854
Federal tax loss carryforwards		306,743			140,059			114,652
Derivative instruments and other		—			—			1,064
Interest expense limitation carryforward		25,932			—			—
Operating lease right-of-use liabilities		8,278			—			—
Other, net		5,240			7,398			4,639
Deferred tax asset		357,806			210,073			214,209
Valuation allowance		(343,577	)		(208,324	)		(213,800	)
Net deferred tax assets	$	14,229		$	1,749		$	409
Deferred tax liability:
Derivative instruments and other	$	6,009		$	1,197		$	—
Other, net		—			552			409
Operating lease right-of-use assets		8,220			—			—
Net deferred tax liability	$	14,229		$	1,749		$	409
Reflected in the accompanying Consolidated Balance Sheets as:
Net deferred tax asset	$	—		$	—		$	—
Net deferred tax liability	$	—		$	—		$	—

Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Consolidated Financial Statements. The measurement of deferred tax assets and liabilities is based on enacted tax laws and rates currently in effect in each of the jurisdictions in which we have operations.

In recording deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income of the appropriate character during the periods in which those deferred income tax assets would be deductible. The Company considers the scheduled reversal of deferred income tax liabilities and projected future taxable income for this determination. Due to the history of losses in recent years, management believes that it is more likely than not that the Company will not be able to realize our net deferred tax assets, and therefore a valuation allowance on the entire net deferred tax asset is maintained.

The Company has U.S. federal tax loss carryforwards (“NOL”) of approximately $1.4 billion as of December 31, 2019 of which $386 million could be permanently lost. The NOL carryforwards will begin to expire in 2034. In connection with the BRMR Merger (See Note 3— Acquisition), the Company experienced an ownership change as described in IRC Section 382. As a result, the Company’s net operating losses as of December 31, 2019 as well as certain tax deductions are subject to an annual limitation imposed by Section 382 limitation. If a subsequent ownership change were to occur as a result of future transactions in the Company’s stock, the Company’s use of remaining U.S. tax attributes may be further limited.

The tax years ended December 31, 2016 through 2019 will remain open to examination under the applicable statute of limitations in the U.S. and other jurisdictions in which the Company and its subsidiaries file income tax returns. However, the statute of limitations for examination of NOLs and other similar attribute carryforwards does not commence until the year the attribute is utilized. In some instances, state statutes of limitations are longer than those under U.S. federal tax law.

As of December 31, 2019, 2018, and 2017 the Company has not recorded a reserve for any uncertain tax positions. No federal income tax payments are expected in the upcoming four quarterly reporting periods. However, if interest or penalties were to be incurred related to uncertain tax positions, such amounts would be recognized in income tax expense. In the Company’s major tax jurisdictions, the earliest year open to examination is 2007.