Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2018 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company provides for income taxes at the statutory rate of 21%. The statutory rate is adjusted for permanent differences expected to be realized, which primarily relate to non-deductible executive compensation expenses, restricted stock windfalls and shortfalls, and state income taxes.
As a result of the write-down of oil and natural gas properties in the latter part of 2015 and the first half of 2016, the Company incurred a cumulative three year loss. Because of the impact the cumulative loss has on the determination of the recoverability of deferred tax assets through future earnings, the Company assessed the ability to realize its deferred tax assets based on the future reversals of existing deferred tax liabilities. Accordingly, the Company established a full valuation allowance for the net U.S. federal deferred tax asset in 2015. In subsequent periods where the Company has recorded pre-tax income, it has reversed a portion of the U.S. federal valuation allowance, net of discrete items, to the extent necessary to offset U.S. federal income tax expense on pre-tax income recorded for the period. Income tax expense recorded in this period primarily relates to deferred State of Texas gross margin tax. The valuation allowance was $30,281 as of September 30, 2018.
|