NOTE 10 — INCOME TAXES:

An analysis of our deferred taxes follows:


	As of December 31,
	2014		2013
Tax effect of temporary differences:
Net operating loss carryforwards		$99,615		$24,437
Oil and gas properties – full cost		(476,367)		(576,393)
Asset retirement obligations		113,907		180,905
Stock compensation		5,603		5,537
Hedges		(54,439)		826
Accrued incentive compensation		6,185		9,189
Other		(966)		(3,484)

		($306,462)		($358,983)

We estimate that we have approximately $159, ($10,904) and $15,022 of current federal income tax expense (benefit) for the years ended December 31, 2014, 2013 and 2012, respectively. We have a $7,212 current income tax receivable at December 31, 2014.

For tax reporting purposes, net operating loss carryforwards totaled approximately $281,240 at December 31, 2014. If not utilized, such carryforwards would begin expiring in 2033 and would completely expire by the year 2034. In addition, we had approximately $920 in statutory depletion deductions available for tax reporting purposes that may be carried forward indefinitely. Recognition of a deferred tax asset associated with these carryforwards is dependent upon our evaluation that it is more likely than not that the asset will ultimately be realized.

A reconciliation between the statutory federal income tax rate and our effective income tax rate as a percentage of income before income taxes follows:


	Year Ended December 31,
	2014	2013	2012
Income tax expense computed at the statutory federal income tax rate	35.0%	35.0%	35.0%
State taxes	1.0	1.0	1.0
IRC Sec. 162(m) limitation	(0.5)	0.8	0.6
Tax deficits on stock compensation	(0.2)	-	-
Other	(0.3)	0.1	(0.5)

Effective income tax rate	35.0%	36.9%	36.1%

Income taxes allocated to accumulated other comprehensive income related to oil and gas hedges amounted to $49,601, ($17,003) and $3,918 for the years ended December 31, 2014, 2013 and 2012, respectively.

As of December 31, 2014 and 2013, we had no unrecognized tax benefits.

The tax years 2011 through 2013 remain subject to examination by major tax jurisdictions.