3. INCOME TAXES

The Company’s provision (benefit) for income taxes is detailed as follows:



	2014		2013		2012
Current:
Federal	$	4,996,000	$	1,813,000	$	1,452,000
State		214,000		150,000		20,000
		5,210,000		1,963,000		1,472,000
Deferred:
Federal		5,702,000		4,003,000		1,126,000
State		908,000		764,000		676,000
		6,610,000		4,767,000		1,802,000
	$	11,820,000	$	6,730,000	$	3,274,000

The difference between the provision (benefit) for income taxes and the amount which would result from the application of the federal statutory rate to income before provision (benefit) for income taxes is analyzed below for the years ended September 30:



	2014		2013		2012

Provision (benefit) for income taxes at statutory rate	$	12,887,512	$	7,241,517	$	3,725,749
Percentage depletion		(1,466,456)		(1,059,303)		(846,040)
State income taxes, net of federal provision (benefit)		1,018,550		572,650		464,677
State net operating loss valuation allowance (release)		-		-		(31,000)
Other		(619,606)		(24,864)		(39,386)
	$	11,820,000	$	6,730,000	$	3,274,000

Deferred tax assets and liabilities, resulting from differences between the financial statement carrying amounts and the tax basis of assets and liabilities, consist of the following at September 30:



	2014		2013
Deferred tax liabilities:
Financial basis in excess of tax basis, principally
intangible drilling costs capitalized for financial
purposes and expensed for tax purposes	$	40,052,983	$	33,557,515
Derivative contracts		739,817		165,402
		40,792,800		33,722,917
Deferred tax assets:
State net operating loss carry forwards		498,539		782,785
Deferred directors' compensation		1,159,355		1,021,717
Restricted stock expense		475,561		426,788
Other		695,338		137,620
		2,828,793		2,368,910
Net deferred tax liabilities	$	37,964,007	$	31,354,007

At September 30, 2014, the Company had an income tax benefit of $498,539 related to Oklahoma state income tax net operating loss (OK NOL) carry forwards expiring from 2028 to 2031. There is no valuation allowance for the OK NOL’s as management believes they will be utilized before they expire.