Income Taxes

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

For the three months ended March 31, 2014, the Company incurred a net income tax expense of $541,000 compared to a net income tax expense of $147,000 for the three months ended March 31, 2013. These represent effective income tax rates of approximately 32% and 19% for the three months ended March 31, 2014 and, 2013, respectively. The effective tax rate for the first three months of 2014 is calculated based on forecasted annual net income for 2014 adjusted for estimated permanent tax differences such as oil depletion allowances. As of March 31, 2014, our balance sheet reflects an income tax receivable of $2,614,000 which is included in prepaid expenses and other current assets.

The Company classifies interest and penalties incurred on tax payments as income tax expenses. During the first three months ended March 31, 2014, the Company had no income tax payments for the 2014 tax year.