Provision (Benefit) for Income Taxes

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



	Year Ended December 31, 2019		Year Ended December 31, 2018
Income (Loss) Before Income Taxes	$	93,074	$	75,543

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



	Year Ended December 31, 2019			Year Ended December 31, 2018
Current	$	519		$	(86	)
Deferred	(22,101		)	1,014
Total	$	(21,582	)	$	928

Reconciliations of income taxes computed using the U.S. Federal statutory rates of (21%) to the effective income tax rates are as follows (in thousands):



	Year Ended December 31, 2019		Year Ended December 31, 2018
Federal Statutory Rate	21.0	%	21.0	%
State tax provisions (benefits), net of federal benefits	1.0	%	1.2	%
Executive compensation limitation	0.3	%	0.3	%
Other, net	0.1	%	0.2	%
Valuation allowance adjustments	(45.5	)%	(21.4	)%
Effective rate	(23.0	)%	1.2	%

The tax effects of temporary differences representing the net deferred tax asset (liability) at December 31, 2019 and 2018 were as follows (in thousands):



	Year Ended December 31, 2019			Year Ended December 31, 2018
Deferred tax assets:
Federal net operating loss (“NOL”) carryovers	$	67,610		$	71,736
Other carryover items	552			583
Asset retirement obligations	960			920
Share-based compensation	1,210			906
Lease liability	1,999			—
Other	874			956
Valuation allowance	—			(42,335		)
Total deferred tax assets	$	73,205		$	32,766

Deferred tax liabilities:
Oil and gas exploration and development costs	$	(48,329	)	$	(30,935	)
Derivative contracts	(1,820		)	(2,817		)
Leased assets	(1,968		)	—
Other	(1		)	(28		)
Total deferred tax liabilities	(52,118		)	(33,780		)

Net deferred tax asset (liabilities)	$	21,087		$	(1,014	)

State net deferred tax liabilities	$	(1,582	)	$	(1,014	)
Federal net deferred tax assets	22,669			—
Net deferred tax asset (liabilities)	$	21,087		$	(1,014	)

The Company was in a net deferred tax asset position, at both December 31, 2019 and 2018. Prior to the quarter ended June 30, 2019, management had determined that it was not more likely than not that the Company would realize future cash benefits from its remaining federal carryover items and other deferred tax assets and, accordingly, had maintained a full valuation allowance to offset its net deferred tax assets in excess of deferred tax liabilities. During the quarter ended June 30, 2019, the Company completed several operational initiatives that resulted in increased production, lower development costs and an expanded inventory of development prospects. The successful results attributable to these initiatives led to management's determination, after weighing both positive and negative evidence, that the Company will more likely than not be able to realize the benefits of its deferred tax assets. Accordingly, the Company released the valuation allowance, resulting in a net deferred tax benefit of $21.6 million for the year ended December 31, 2019.

The Company’s valuation allowance balance was $0 million and $42 million at December 31, 2019 and 2018, respectively. The Company recorded a net deferred tax liability for state income tax purposes at December 31, 2019 and 2018.

The Company’s NOL carryforward asset is attributable to Federal tax losses of $93 million generated from 2014 through 2015, $156 million generated in 2017, $67 million generated for 2018, and a $0.4 million tax loss for 2019. The losses generated between 2014 and 2015 are subject to an annual utilization limit under Sec. 382. These losses will expire between 2034 and 2035 if not utilized. The 2017 loss will expire in 2037 if not utilized. The 2018 and 2019 losses will not expire under the current tax code, but their usage will be limited to 80% of taxable income.

As of December 31, 2019, the Company does not have any accrued liability for uncertain tax positions. We do not believe the total of unrecognized tax positions will significantly increase during the next 12 months.

The Company's policy is to record interest and penalties related to potential underpayment of any unrecognized tax benefits as a component of income tax expense. The Company has not incurred any interest or penalties associated with unrecognized tax benefits.

Our U.S. federal and state income tax returns from 2016 forward are subject to examination. For years prior to 2016 our U.S. federal returns are subject to examination to the extent of our net operating loss (NOL) carryforwards. There are no material unresolved items related to periods previously audited by the taxing authorities.