Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Details of income tax provisions and deferred income taxes from continuing operations are provided in the following tables.
The components of income tax benefits were as follows (in thousands):
Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022
Current:
State $ —  $ —  $ — 
Federal —  —  — 
Deferred:
State 11,747  (26,704) — 
Federal (67,824) (498,452) — 
Total income tax benefit provision $ (56,077) $ (525,156) $ — 
A reconciliation of the statutory federal income tax amount to the recorded benefit follows (in thousands):
Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022
Income (loss) before federal income taxes $ (317,463) $ 945,760  $ 494,701 
Expected income tax at statutory rate (66,668) 198,610  103,887 
State income taxes 4,765  (2,581) 2,227 
Remeasurement of state deferred tax asset 54  —  13,869 
Return to provision 5,800  (5,592) (17,075)
Other differences 1,857  1,982  1,117 
Change in valuation allowance due to current year activity (1,885) (717,575) (104,025)
Income tax benefit recorded $ (56,077) $ (525,156) $ — 
For the year ended December 31, 2024, the Company's effective tax rate was 18% and an income tax benefit of $56.1 million. For the year ended December 31, 2023, the Company's effective tax rate was (56)% and an income tax benefit of $525.2 million. For the year ended December 31, 2022, the Company's effective tax rate was 0%. The higher effective income tax rate for the year ended December 31, 2024, is primarily related to the valuation allowance the Company released during the year ended December 31, 2023.
The tax effects of temporary differences and net operating loss carryforwards, which give rise to deferred tax assets and liabilities at December 31, 2024 and December 31, 2023 are estimated as follows (in thousands): 
Year Ended December 31, 2024 Year Ended December 31, 2023
Deferred tax assets:
Net operating loss carryforward and tax credits $ 345,770  $ 399,017 
Oil and gas property basis difference 194,412  143,769 
Investment in pass through entities 65,210  68,114 
Stock-based compensation expense 1,821  1,262 
Change in fair value of derivative instruments 6,106  — 
Other assets 56,849  52,730 
Total deferred tax assets 670,168  664,892 
Valuation allowance for deferred tax assets (83,695) (85,757)
Deferred tax assets, net of valuation allowance 586,473  579,135 
Deferred tax liabilities:
Change in fair value of derivative instruments 3,401  50,448 
Right of use asset 1,281  3,003 
Other 558  528 
Total deferred tax liabilities 5,240  53,979 
Net deferred tax asset $ 581,233  $ 525,156 
At each reporting period, the Company weighs all available positive and negative evidence to determine whether its deferred tax assets are more likely than not to be realized. A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax assets will not be realized. To assess the likelihood, the Company uses estimates and judgment regarding future taxable income and considers the tax laws in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include current financial position, results of operations, both actual and forecasted, the reversal of deferred tax liabilities and tax planning strategies as well as the current and forecasted business economics of the oil and gas industry. Based upon the Company’s analysis, the Company currently believes it is more-likely-than-not that a portion of the Company's federal and state deferred tax assets will be utilized. The Company has maintained a $83.7 million valuation allowance associated with its federal and state deferred tax assets.
The Company will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to the deferred tax assets. Changes in positive and negative evidence, including differences between estimated and actual results, could result in changes in the valuation of the deferred tax assets that could have a material impact on the consolidated financial statements. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time.
The Company has an available federal tax net operating loss carryforward estimated at approximately $1.6 billion as of December 31, 2024. These federal net operating loss carryforwards of approximately $264.5 million generated in tax years prior to 2018 will begin to expire in 2036. As a result of the Tax Cuts and Jobs Act, the 2018 through 2024 federal NOL carryforwards of $1.3 billion have no expiration. The Company also has state net operating loss carryovers of approximately $394.5 million that will begin to expire in 2025.
As of December 31, 2024, we had no liability for uncertain tax positions.