Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Note 4. Income Taxes

We evaluate our estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and apply this tax rate to our ordinary income or loss to calculate our estimated tax liability or benefit. Our income taxes are based on an estimated statutory rate of approximately 38% in 2017 and 2016. Our effective tax rate for the three months ended September 30, 2017, differed from our estimated statutory rate, primarily due to the impact of recognizing a tax benefit of $8.6 million in the current quarter for enhanced oil recovery income tax credits, which was offset in part by a stock-based compensation deduction shortfall (tax deduction less than book expense) of $2.1 million. With pre-tax income for the three months ended September 30, 2017 being close to break-even, the net tax benefit from these items had a significant impact on the current quarter’s effective tax rate.