Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 – Income Taxes

The following table summarizes our provision for income taxes for the periods presented: 

	Year Ended December 31,
	2021		2020		2019
Current income tax expense (benefit)
Federal	$	—	$	(1,236)	$	(1,236)
State	311		357		—
Total current income tax expense (benefit)	311		(879)		(1,236)
Deferred income tax expense (benefit)
Federal	—		1,236		1,236
State	1,249		(2,660)		2,137
Total deferred income tax expense (benefit)	1,249		(1,424)		3,373
Income tax expense (benefit)	$	1,560	$	(2,303)	$	2,137

The following table reconciles the difference between the income tax expense (benefit) computed by applying the statutory tax rate to our income (loss) before income taxes and our reported income tax expense (benefit) for the periods presented: 

	Year Ended December 31,
	2021				2020				2019
Computed at federal statutory rate	$	21,100	21.0	%	$	(65,701)	21.0	%	$	15,272	21.0	%
State income taxes, net of federal income tax benefit	1,560		1.6	%	(1,856)		0.6	%	1,494		2.1	%
Change in valuation allowance	(9,348)		(9.3)	%	64,062		(20.5)	%	(14,240)		(19.6)	%
Noncontrolling interest	(12,501)		(12.4)	%	—		—	%	—		—	%
Other, net	749		0.7	%	1,192		(0.4)	%	(389)		(0.5)	%
	$	1,560	1.6	%	$	(2,303)	0.7	%	$	2,137	3.0	%

The following table summarizes the principal components of our deferred income tax assets and liabilities as of the dates presented: 

	December 31,
	2021		2020
Deferred tax assets:
Net operating loss (“NOL”) carryforwards	$	203,243	$	180,531
Asset retirement obligations	63		1,188
Property and equipment	24,585		—
Pension and postretirement benefits	—		301
Share-based compensation	—		467
Fair value of derivative instruments	493		2,737
Interest expense limitation	13,747		—
ROU assets	—		564
Other	18		1,484
Total deferred tax assets	242,149		187,272
Less: Valuation allowance	(205,617)		(179,006)
Total net deferred tax assets	$	36,532	$	8,266
Deferred tax liabilities:
Property and equipment	$	3,357	$	7,728
Investment in the Partnership	35,968		—
ROU obligations	—		538
Total deferred tax liabilities	$	39,325	$	8,266
Net deferred tax liabilities	$	(2,793)	$	—

Income Tax Provision

For the year ended December 31, 2021, we did not have any current federal tax benefits. The provision for the years ended December 31, 2020 and 2019 includes current federal benefits of $1.2 million and $1.2 million attributable to refunds of AMT credits for the 2020 and 2019 tax years, respectively. The amounts attributable to 2020 combined the amounts attributable to 2019, which had been recognized on our consolidated balance sheets as of December 31, 2019 as a current asset, were received in 2020 as an acceleration of all AMT credits in connection with certain provisions of the CARES Act. In addition, we have recognized deferred state tax expense (benefits) of $1.2 million, $(2.7) million and $2.1 million primarily attributable to property and equipment as well as $0.3 million, $0.4 million and zero current state expense attributable to the Texas margin tax for the years ended December 31, 2021, 2020 and 2019, respectively. Our overall effective tax rates were 1.6%, 0.7% and 3.0% for the years ended December 31, 2021, 2020 and 2019, respectively.

Deferred Tax Assets and Liabilities

As of December 31, 2021, we had federal NOL carryforwards of approximately $746.8 million, a substantial portion of which, if not utilized, expire between 2032 and 2037. NOLs incurred after January 1, 2018 can be carried forward indefinitely. Because of the change in ownership provisions of the Code, use of a portion of our federal NOLs may be limited in future periods. As of December 31, 2021, we carried a valuation allowance against our federal and state deferred tax assets of $205.6 million, which includes an increase of $24.8 million related to the Lonestar Acquisition. We considered both the positive and negative evidence in determining whether it was more likely than not that some portion or all of our deferred tax assets will be realized. The amount of deferred tax assets considered realizable could, however, be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence is no longer present and additional weight is given to subjective positive evidence, including projections for growth. The valuation allowance along with $39.3 million of deferred tax liabilities fully offset our deferred tax assets. The net deferred tax liability recognized on our consolidated balance sheets as of December 31, 2021 is attributable to certain state deferred tax liabilities associated with property and equipment and unrealized hedges. The valuation allowance related to all other net deferred tax assets remains in full as of December 31, 2021 and 2020.

Following the Juniper Transactions, Ranger Oil is a holding company and all of its operating assets are held within the Partnership. Certain of the federal deferred tax assets and liabilities were reclassified to investment in partnership deferred tax liability.

Other Income Tax Matters

We had no liability for unrecognized tax benefits as of December 31, 2021 and 2020. There were no interest and penalty charges recognized during the years ended December 31, 2021, 2020 and 2019. Tax years from 2015 forward remain open for examination by the Internal Revenue Service and various state jurisdictions.