Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Current and Deferred Components of Income Tax (Benefit) Expense

The income tax provision is as follows:


	Successor		Predecessor
In thousands	Month Ended December 31, 2020		Eleven Months Ended November 30, 2020		Year Ended December 31, 2019
Current income tax benefit
Federal	$	—	$	(3,748)	$	(591)
State	—		—		(464)
Total current income tax benefit	—		(3,748)		(1,055)
Deferred tax expense (benefit)
Federal	$	—	882		(20,989)
State	—		(1,813)		673
Valuation allowance	—		—		8,876
Total deferred income tax benefit	—		(931)		(11,440)
Total income tax benefit	$	—	$	(4,679)	$	(12,495)

Difference between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes

The following table provides a reconciliation of Lonestar's actual income tax provision amounts from the expected income tax provision amount by applying the U.S. federal statutory corporate income tax rate of 21% for the period from December 1, 2020 through December 31, 2020 (Successor), the period from January 1, 2020 through November 30, 2020 (Predecessor) and the year ended December 31, 2019 (Predecessor), as follows:


	Successor		Predecessor
In thousands	Month Ended December 31, 2020		Eleven Months Ended November 30, 2020		Year Ended December 31, 2019
Expected income tax benefit at statutory rate	$	(150)	$	(25,791)	$	(24,258)
Permanent differences	2		4,895		(48)
State taxes, net of Federal benefit	16		(2,514)		307
Fresh start valuation adjustments	—		19,589		—
Gain on settlement of liabilities subject to compromise	—		(38,187)		—
Reduction in deferred tax assets	—		12,537		—
Return to provision adjustment	—		—		2,567
Change in valuation allowance	132		28,541		8,876
Net operating loss carryback	—		(3,749)
Other	—		—		61
Actual income tax benefit	$	—	$	(4,679)	$	(12,495)

Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities as of December 31, 2020 (Successor) and 2019 (Predecessor) are as follows:


	Successor		Predecessor
In thousands	December 31, 2020		December 31, 2019
Deferred tax assets
Net operating loss carryforward	$	5,196	$	27,025
Oil and gas properties, and other property and equipment	17,828		—
Stock-based compensation	—		922
Intangibles	183		257
Derivative instruments	2,036		606
Interest expense limitation	11,753		19,243
Organizational expenses and other	553		3,306
Total deferred tax assets	$	37,549	$	51,359
Deferred tax liabilities
Oil and gas properties, and other property and equipment, principally due to intangible drilling assets	$	—	$	(43,414)

Net deferred tax assets	37,549		7,945
Valuation allowance for deferred tax assets	(37,549)		(8,876)
Net deferred tax liability, net of valuation allowance	$	—	$	(931)