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1997 ANNUAL REPORT |
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Notes to Consolidated Financial Statements |
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1997 ANNUAL REPORT |
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Notes to Consolidated Financial Statements |
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3. Provision for Income Taxes
The following is an analysis of the consolidated income tax provision:
| Year Ended December 31, | |||
| 1997 | 1996 | 1995 | |
| ------------ | ------------ | ------------ | |
| Current | $ 77,402 | $ 759,253 | $ (344,137) |
| Deferred | 10,742,015 | 9,001,080 | 2,326,162 |
| ------------ | ------------ | ------------ | |
| Total | $ 10,819,417 | $ 9,760,333 | $ 1,982,025 |
| ========= | ========= | ========= | |
There are differences between income taxes computed using the statutory rate (34% for 1997, 1996, and 1995) and the Company’s effective income tax rates (32.7%, 33.9%, and 28.7% for 1997, 1996, and 1995, respectively), primarily as the result of certain tax credits available to the Company. Reconciliations of income taxes computed using the statutory rate to the effective income tax rates are as follows:
| 1997 | 1996 | 1995 | |
| ------------ | ------------ | ------------ | |
| Income taxes computed at federal statutory rate | $11,264,066 | $ 9,787,166 | $ 2,344,143 |
| State tax provisions, net of federal benefits | 48,058 | 75,936 | 84,202 |
| Nonconventional fuel source credit | (294,000) | (306,000) | (370,000) |
| Depletion deductions in excess of basis | (51,000) | (26,520) | (34,000) |
| Other, net | (147,707) | 229,751 | (42,320) |
| ------------ | ------------ | ------------ | |
| Provision for income taxes | $ 10,819,417 | $ 9,760,333 | $ 1,982,025 |
| =========== | =========== | =========== |
The tax effects of significant temporary differences representing the net deferred tax liability at December 31, 1997 and 1996, were as follows:
| 1997 | 1996 | |
| --------------- | --------------- | |
| Deferred tax assets: | ||
| Alternative minimum tax credits | $ 1,831,299 | $ 1,517,470 |
| Other | 237,587 | -- |
| --------------- | --------------- | |
| Total deferred tax assets | $ 2,068,886 | $ 1,517,470 |
| Deferred tax liabilities: | ||
| Oil and gas properties | $ 26,785,212 | $ 15,935,855 |
| Other | 637,824 | 875,572 |
| ---------------- | ---------------- | |
| Total deferred tax liabilities | $ 27,423,036 | $ 16,811,427 |
| ---------------- | ---------------- | |
| Net deferred tax liability | $ 25,354,150 | $ 15,293,957 |
| ============== | ============== |
The Company did not record any valuation allowances against deferred tax assets at December 31, 1997, 1996, and 1995.
At December 31, 1997, the Company had alternative minimum tax credits of $1,831,299 that carry forward indefinitely available to reduce future regular tax liability to the extent they exceed the related tentative minimum tax otherwise due.
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