Provision (Benefit) for Income Taxes

Income (Loss) before taxes is as follows (in thousands):



	Year Ended December 31,
	2015			2014			2013
Income (Loss) Before Income Taxes	$	(1,734,514	)	$	(433,470	)	$	198

The following is an analysis of the consolidated income tax provision (benefit) (in thousands):



	Year Ended December 31,
	2015			2014			2013
Current	$	(410	)	$	314		$	(12	)
Deferred	(80,133		)	(150,357		)	2,652
Total	$	(80,543	)	$	(150,043	)	$	2,640

Reconciliations of income taxes computed using the U.S. Federal statutory rate (35%) to the effective income tax rates are as follows (in thousands):



	Year Ended December 31,
	2015			2014			2013
Income taxes (benefit) computed at U.S. statutory rate	$	(607,080	)	$	(151,714	)	$	69
State tax provisions (benefits), net of federal benefits	(18,064		)	(5,935		)	(184		)
Non-deductible equity compensation	252			666			1,127
Stock-based compensation tax shortfall	1,703			2,409			558
Valuation allowances	542,289			4,635			385
Expiration of carryover items	333			288			400
Other, net	24			(392		)	285
Provision (benefit) for income taxes	$	(80,543	)	$	(150,043	)	$	2,640

Effective rate	4.6		%	34.6		%	1,333.4		%

The Company’s operations are concentrated in Texas and Louisiana. The Company’s state tax provision varies in proportion to the overall statutory rate due to differences in deductions allowed for U.S. Federal and state income taxes.

During 2015, write-downs of oil and gas properties reduced the Company’s book value to less than its Federal and state income tax basis. We believe it is more likely than not that the Company will be unable to utilize loss carryovers and amortizable tax basis in excess of the book carrying value of its properties. Accordingly, the Company increased its valuation allowance by $542 million which reduced the carrying value of the Company’s deferred tax assets to zero. The 2014 net deferred tax liability was reversed in 2015 and is reflected in the 2015 Statement of Operations as the deferred tax benefit. The 2014 tax benefit was primarily attributable to a reduction in the Company’s deferred tax liability resulting from a book write-down in oil and gas properties.

The tax effects of temporary differences representing the net deferred tax asset (liability) at December 31, 2015 and 2014 were as follows (in thousands):



	Year Ended December 31,
	2015			2014
Deferred tax assets:
Federal net operating loss (“NOL”) carryovers	$	287,720		$	141,896
NOLs for excess stock-based compensation	(9,571		)	(9,606		)
Oil and gas exploration and development costs	214,413			—
State NOL carryovers	18,384			15,525
Alternative minimum tax credits	2,092			2,092
Other Carryover Items	1,215			1,294
Asset Retirement Obligations	22,884			26,388
Unrealized share-based compensation	9,953			9,471
Valuation allowance	(553,283		)	(11,327		)
Other	6,193			4,056
Total deferred tax assets	$	—		$	179,789

Deferred tax liabilities:
Oil and gas exploration and development costs	$	—		$	(258,326	)
Other	—			(1,596		)
Total deferred tax liabilities	$	—		$	(259,922	)

Net deferred tax liabilities	$	—		$	(80,133	)

Net current deferred tax assets	—			6,243

Net non-current deferred tax liabilities	$	—		$	(86,376	)

The federal NOL carryovers totaling $822.1 million will expire between 2027 and 2035 if not utilized in earlier periods. Deferred tax benefits for excess stock-based compensation deductions represent stock-based compensation that have generated tax deductions that have not resulted in a cash tax benefit because the Company has NOL carryovers. The Company will recognize the federal NOL net deferred tax assets associated with excess stock-based compensation tax deductions only if all other components of the NOL carryover tax assets are fully utilized prospectively. If and when the excess stock-based compensation related NOL carryover tax assets are realized, the benefit will be credited directly to equity. The state NOL carryovers are for Louisiana. The Louisiana loss carryovers are scheduled to expire between 2016 and 2030.

All of the Company's deferred tax assets as of December 31, 2015 are fully reserved by the valuation allowance. The valuation allowances at the end of 2014 was primarily attributable to the Louisiana NOL carryovers.

U.S. Federal income tax returns for 2007 forward, Louisiana income tax returns from 2000 forward, and Texas franchise tax returns after 2010 remain open to possible examination by the taxing authorities. There are no material unresolved items related to periods previously audited by these taxing authorities. No other jurisdiction returns are significant to our financial position.

As of December 31, 2015, we do not have any accrued liability for uncertain tax positions. We do not believe the total of unrecognized tax positions will significantly increase or decrease during the next 12 months.

As a result of the Company’s bankruptcy and planned reorganization, the ultimate realization of our net operating losses (“NOL”) and tax basis is uncertain. Our tax attributes may be reduced and / or subject to annual utilization limits depending on several factors including ownership changes and other factors. A significant portion of our NOL may be offset by tax gains or cancellation of debt.