INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

The components of Energen’s income taxes consisted of the following:



Years ended December 31, (in thousands)	2017			2016			2015
Current taxes:
Federal	$	(92,236	)	$	(23,277	)	$	3,972
State	532			832			758
Total current	(91,704		)	(22,445		)	4,730
Taxes deferred:
Federal	(113,412		)	(62,205		)	(513,187		)
State	5,675			5,012			(26,548		)
Total deferred	(107,737		)	(57,193		)	(539,735		)
Total income tax benefit	$	(199,441	)	$	(79,638	)	$	(535,005	)

Schedule of Deferred Tax Assets and Liabilities

Temporary differences and carryforwards which gave rise to Energen’s deferred tax assets and liabilities were as follows:



(in thousands)	December 31, 2017			December 31, 2016
	Noncurrent			Noncurrent
Deferred tax assets:
Minimum tax credit	$	—		$	64,203
Insurance and other accruals	1,455			3,151
Compensation accruals	6,645			13,895
Deferred compensation and other costs	2,605			5,401
Derivative instruments	16,032			22,402
Federal net operating losses and other carryforwards	2,350			—
State net operating losses and other carryforwards	15,642			12,947
Other	338			535
Total deferred tax assets	45,067			122,534
Valuation allowance	(7,710		)	(5,735		)
Total deferred tax assets	37,357			116,799
Deferred tax liabilities:
Depreciation and basis differences	417,376			603,324
Other comprehensive income	223			854
Other	7,565			8,509
Total deferred tax liabilities	425,164			612,687
Net deferred tax liabilities	$	(387,807	)	$	(495,888	)

Schedule of Effective Income Tax Rate Reconciliation

Total income tax expense from operations differs from the amount which would have been provided by applying the statutory federal income tax rate of 35 percent to earnings before taxes as illustrated below:



Years ended December 31, (in thousands)	2017			2016			2015
Income tax expense (benefit) at statutory federal income tax rate	$	37,585		$	(86,503	)	$	(518,258	)
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit	3,235			925			(15,417		)
Impact of state law changes	(12		)	(9		)	(3,075		)
Impact of state deferred tax revaluation on San Juan properties	—			(153		)	(1,241		)
Change in deferred tax valuation allowance	1,975			2,500			1,305
Impact of sequestration on minimum tax credit refund	4,998			—			—
Impact of corporate rate reduction due to the Tax Cuts and Jobs Act (remeasurement of deferred taxes)	(247,844		)	—			—
Other, net	622			3,602			1,681
Total income tax benefit	$	(199,441	)	$	(79,638	)	$	(535,005	)
Effective income tax rate (%)	(185.72		)	32.22			36.13

Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of Energen’s beginning and ending amount of unrecognized tax benefits is as follows:



(in thousands)
Balance as of December 31, 2014	$	17,530
Additions based on tax positions related to the current year	2,378
Reductions based on tax positions related to the current year	(6,589		)
Reductions for tax positions of prior years	(345		)
Lapse of statute of limitations	(1,785		)
Balance as of December 31, 2015	11,189
Additions based on tax positions related to the current year	2,936
Additions for tax positions of prior years	1,484
Reductions for tax positions of prior years	(99		)
Lapse of statute of limitations	(1,300		)
Balance as of December 31, 2016	14,210
Additions based on tax positions related to the current year	1,309
Reductions for tax positions of prior years	(2,733		)
Lapse of statute of limitations	(4,416		)
Balance as of December 31, 2017	$	8,370