Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax liabilities and assets are as follows:



	Years Ended December 31,
	2014			2015			2016
	(In thousands)
Deferred tax liabilities:
Hedge contracts	$	8,114		$	9,578		$	—
Assets held for sale	—			—			3,390
Other	4,458			4,042			4,431
Total deferred tax liabilities	12,572			13,620			7,821
Deferred tax assets:
U.S. full cost pool	3,352			35,689			48,436
Capital loss carryforward	12,325			7,767			7,361
Depletion carryforward	4,936			5,558			5,216
U.S. net operating loss carryforward	50,941			67,531			80,670
Alternative minimum tax credit	1,104			757			757
Hedge contracts	—			—			3,135
Total deferred tax assets	72,658			117,302			145,575
Valuation allowance for deferred tax assets	(60,086		)	(103,682		)	(137,754		)
Net deferred tax assets	12,572			13,620			7,821
Net deferred tax	$	—		$	—		$	—

Significant components of the provision (benefit) for income taxes are as follows:



	Years ended December 31,
	2014			2015			2016
	(In thousands)
Current:
Federal	$	(276	)	$	(242	)	$	—
State	(11		)	(37		)	—
	$	(287	)	$	(279	)	$	—
Deferred:
Federal	$	—		$	—		$	—
	$	—		$	—		$	—

At December 31, 2016, the Company had, subject to the limitation discussed below, $230.5 million of net operating loss carryforwards for U.S. tax purposes. The U.S. federal loss carryforward will expire in varying amounts from 2022 through 2036, if not utilized.

The use of our net operating loss carryforwards will be limited if there is an "ownership change" in our common stock, generally a cumulative ownership change exceeding 50% during a three year period, as determined under Section 382 of the Internal Revenue Code. As of December 31, 2016, we have not had an ownership change as defined by Section 382. In addition to any Section 382 limitations, uncertainties exist as to the future utilization of the operating loss carryforwards. Therefore, the Company has established a valuation allowance of $60.1 million at December 31, 2014, $103.7 million at December 31, 2015 and $137.8 million at December 31, 2016.

The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense is:



	Years ended December 31,
	2014			2015			2016
	(In thousands)
Tax (expense) benefit at U.S. statutory rates (35%)	$	(22,044	)	$	44,586		$	33,732
(Increase) decrease in deferred tax asset valuation allowance	15,480			(43,596		)	(34,072		)
Alternative minimum tax	—			568			—
Rate differential for non US income	(39		)	—			—
State income taxes	—			—			—
Accrual of prior year federal taxes (2009 and 2013)	287			37			—
Permanent differences	(950		)	(1,371		)	(1,133		)
Return to provision estimate revision	4,562			—			1,473
Tax benefit related to the sale of Canadian subsidiary	3,501			—			—
Increase in asset for partnership distribution	—			—			—
Other	(510		)	55			—
	$	287		$	279		$	—

During 2016, the Company increased deferred tax assets by $28.3 million primarily related to increases in the full cost pool assets and net operating loss carryforward. The deferred tax assets were fully offset by a valuation allowance which was reduced at the same time.

As of December 31, 2016, 2015 and 2014, the Company did not have any accrued interest or penalties related to uncertain tax positions. The tax years 2012 through 2016 remain open to examination by the tax jurisdictions to which the Company is subject.