Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company provides for income taxes at the statutory rate of 21%. Reported income tax expense differs from the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income. These differences primarily relate to non-deductible executive compensation expenses, restricted stock unit windfalls, changes in valuation allowances, and state income taxes.
For the three and nine months ended September 30, 2023, the Company recognized income tax expense of $0.5 million and income tax benefit of $206.4 million, respectively, as a result of the release of the valuation allowance recorded against the Company’s net deferred tax assets as discussed further below. For the three and nine months ended September 30, 2022, the Company recognized
income tax expense of $3.4 million and $6.5 million, respectively, as a result of the full valuation allowance that was in place and the effect of state income taxes.
Deferred Tax Asset Valuation Allowance Management monitors company-specific, oil and natural gas industry and worldwide economic factors and assesses the likelihood that the Company’s net deferred tax assets will be utilized prior to their expiration. As previously disclosed in the Company’s 2022 Annual Report, beginning in the second quarter of 2020 and through the fourth quarter of 2022, the Company maintained a valuation allowance against its net deferred tax assets. Considering all available evidence (both positive and negative), the Company concluded that it was more likely than not that the deferred tax assets would be realized and released the valuation allowance in the first quarter of 2023. This release resulted in deferred income tax benefit of $0.7 million and $206.1 million for the three and nine months ended September 30, 2023, respectively.
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