Income Taxes Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three and nine months ended September 30, 2015, we recorded income tax benefits of $15.8 million and $280.8 million, respectively. The income tax benefits were a result of our losses before income taxes attributable primarily to ceiling test write-downs of our oil and gas properties (see Note 10 - Investment in Oil and Gas Properties). Our effective tax rate for the three and nine months ended September 30, 2015 was 5.1% and 26.7%, respectively. These percentages differed from the federal statutory rate of 35.0% primarily due to the establishment of a valuation allowance against deferred tax assets, state income taxes and other permanent differences.

As a result of the significant declines in commodity prices and the resulting ceiling test write-downs and net losses incurred over the past four quarters, we determined that it was more likely than not that a portion of our deferred tax assets will not be realized in the future. Accordingly, we established a $96.5 million valuation allowance against a portion of our deferred tax assets in the third quarter of 2015. Our assessment of the realizability of our deferred tax assets is based on the weight of all available evidence, both positive and negative, including future reversals of deferred tax liabilities.