INCOME TAXES:

An analysis of our deferred taxes follows:



	As of December 31,
	2015			2014
Tax effect of temporary differences:
Net operating loss carryforwards	$	31,624		$	99,615
Oil and gas properties – full cost	76,766			(476,367		)
Asset retirement obligations	79,618			113,907
Stock compensation	5,199			5,603
Hedges	(13,598		)	(54,439		)
Accrued incentive compensation	1,234			6,185
Other	(722		)	(966		)
Total deferred tax assets (liabilities)	180,121			(306,462		)
Valuation allowance	(180,121		)	—
Net deferred tax liabilities	$	—		$	(306,462	)

We estimate that we had ($44,096), $159 and ($10,904) of current federal income tax expense (benefit) for the years ended December 31, 2015, 2014 and 2013, respectively. For the years ended December 31, 2015, 2014 and 2013, we recorded deferred income tax expense (benefits) of ($272,311), ($102,177) and $79,629, respectively. The deferred 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 17 - Supplemental Information on Oil and Natural Gas Operations - Unaudited). We had current income tax receivables of $46,174 and $7,212 at December 31, 2015 and 2014, respectively, both of which were expected tax refunds from the carryback of net operating losses to previous tax years.

For tax reporting purposes, net operating loss carryforwards totaled approximately $97,225 at December 31, 2015. If not utilized, the majority of such carryforwards would expire in 2035. In addition, we had approximately $1,056 in statutory depletion deductions available for tax reporting purposes that may be carried forward indefinitely. Recognition of a deferred tax asset associated with these and other carryforwards is dependent upon our evaluation that it is more likely than not that the asset will ultimately be realized. As a result of the significant declines in commodity prices and the resulting ceiling test write-downs and net losses incurred over the past several quarters, we determined during 2015 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 $180,121 valuation allowance against a portion of our deferred tax assets. 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.

A reconciliation between the statutory federal income tax rate and our effective income tax rate as a percentage of income before income taxes follows:



	Year Ended December 31,
	2015	2014	2013
Income tax expense computed at the statutory federal income tax rate	35.0%	35.0%	35.0%
State taxes	0.6	1.0	1.0
Change in valuation allowance	(12.8)	—	—
IRC Sec. 162(m) limitation	(0.1)	(0.5)	0.8
Tax deficits on stock compensation	(0.1)	(0.2)	—
Other	(0.1)	(0.3)	0.1
Effective income tax rate	22.5%	35.0%	36.9%

Income taxes allocated to accumulated other comprehensive income related to oil and gas hedges amounted to ($35,737), $49,601 and ($17,003) for the years ended December 31, 2015, 2014 and 2013, respectively.

As of December 31, 2015, we had unrecognized tax benefits of $491. If recognized, all of our unrecognized tax benefits would impact our effective tax rate. A reconciliation of the total amounts of unrecognized tax benefits follows:



Total unrecognized tax benefits as of December 31, 2014	$	—
Increases (decreases) in unrecognized tax benefits as a result of:
Tax positions taken during a prior period	491
Tax positions taken during the current period	—
Settlements with taxing authorities	—
Lapse of applicable statute of limitations	—
Total unrecognized tax benefits as of December 31, 2015	$	491

Our unrecognized tax benefits pertain to a proposed state income tax audit adjustment. We believe that our unrecognized tax benefits may be reduced to zero within the next 12 months upon completion and ultimate settlement of the examination.

It is our policy to classify interest and penalties associated with underpayment of income taxes as interest expense and general and administrative expenses, respectively. We recognized $131 of interest expense and no penalties related to uncertain tax positions for the year ended December 31, 2015. No such amounts were recognized for the year ended December 31, 2014. The liabilities for unrecognized tax benefits and accrued interest payable are components of other current liabilities on our balance sheet.

The tax years 2012 through 2015 remain subject to examination by major tax jurisdictions.