Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 3 Months Ended
Mar. 31, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The following table presents Callon’s net unrecognized tax benefits relating to its reported net losses and other temporary differences from operations:
 
 
March 31, 2012
 
December 31, 2011
Deferred tax asset:
 
 
 
 
Federal net operating loss carryforward
 
$
86,572

 
$
86,551

Statutory depletion carryforward
 
7,354

 
7,032

Alternative minimum tax credit carryforward
 
208

 
208

Asset retirement obligations
 
3,597

 
3,552

Other
 
7,362

 
6,935

Deferred tax asset before valuation allowance
 
105,093

 
104,278

Less: Valuation allowance
 
—

 
—

Total deferred tax asset
 
105,093

 
104,278

Deferred tax liability:
 
 

 
 

Oil and natural gas properties
 
40,996

 
40,782

Total deferred tax liability
 
40,996

 
40,782

Net deferred tax asset
 
$
64,097

 
$
63,496


The effective tax rate for the three-month period ended March 31, 2012 was 28% compared to 0% for the period ended March 31, 2011. The variance is attributable to the impact of the valuation allowance against net deferred tax assets throughout 2011 until it was reversed as of December 31, 2011. The rate for 2011 would have been 33% excluding the impact of the valuation allowance. The most significant change from 2011 to 2012 other than the valuation allowance was the impact of statutory depletion rate of 2.45% in the first quarter of 2011 vs. 12.14% in the first quarter of 2012.

We believe our recorded assets and liabilities are reasonable; however, tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, and therefore our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions. We do not have a liability for uncertain tax positions or any accrued interest or penalties as of March 31, 2012.