INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2012

INCOME TAXES

Components of deferred tax assets

(in thousands)	2012			2011
Current deferred tax assets:
Other current deferred tax assets	$	60		$	—
Total current temporary differences		60			—
Less: valuation allowance		(60	)		—
Net current deferred tax assets	$	—		$	—
Non-current deferred tax assets
Stock compensation	$	1,999		$	1,951
Property and Equipment		28			—
Oil and Gas Properties		46,194			5,485	(1)
Other non-current deferred tax assets		—			12
Total non-current deferred tax assets	$	48,221		$	7,448
Non-current deferred tax liabilities
Property and Equipment	$	—		$	(165	)
Net operating losses		22,751			15,204	(1)
		70,972			22,487
Less: valuation allowance		(70,972	)		(22,487	)
Net non-current deferred tax assets (liabilities)	$	—		$	—

(1)

During the fourth quarter of fiscal year 2012, we identified certain errors in our previously issued consolidated financial statements within our deferred tax disclosure. The error was the result of an uncertain tax position related to the year ended June 30, 2010 that had not previously been disclosed, which impacted the presentation of our deferred tax balances and related disclosures as of June 30, 2011 and 2010. We have established the tabular roll-forward to disclose this uncertain tax position in this footnote, and the June 30, 2011 deferred tax balances have been corrected. The error in our previously disclosed deferred tax balances did not impact our consolidated balance sheets or statements of operations because the Company was in an overall deferred tax asset position with a full valuation allowance. We evaluated the materiality of the errors from both a qualitative and a quantitative perspective and concluded that these errors are immaterial to our previously issued consolidated financial statements. We have corrected the consolidated financial statements presented herein to reflect the correction of these errors.

Reconciliation of actual taxes

(in thousands)	2012			2011			2010
Income tax benefit at the statutory federal rate (35%)	$	(52,256	)	$	(3,933	)	$	(2,803	)
Increase (decrease) resulting from nondeductible stock compensation		1,454			(515	)		—
Reduction of net operating losses related to excess tax benefits from non-qualifying stock options		854			—			—
Increase (decrease) resulting from nontaxable gain on derivative liability		—			270			(98	)
Other, net		1,403			14			—
Change in valuation allowance		48,545			4,164			2,901
Net income tax expense	$	—		$	—		$	—

Summary of activity related to gross unrecognized tax benefits

	Federal, State and Foreign Tax
	(In thousands)
Balance at June 30, 2009	$	0
Additions to tax positions related to the current year		5,485
Additions to tax positions related to prior years		0
Statute expirations		0
Balance at June 30, 2010	$	5,485
Additions to tax positions related to the current year		0
Additions to tax positions related to prior years		0
Statute expirations		0
Balance at June 30, 2011	$	5,485
Additions to tax positions related to the current year		0
Additions to tax positions related to prior years		0
Statute expirations		0
Balance at June 30, 2012	$	5,485