Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Tax Disclosure
Note 12—Income Taxes
Income tax expenses and benefits included in the consolidated statements of operations are detailed below:
Year Ended December 31,
(in thousands)202220212020
Current taxes
Federal$— $— $— 
State(2,796)(569)— 
(2,796)(569)— 
Deferred taxes
Federal(106,011)— 80,091 
State(11,485)— 5,033 
(117,496)— 85,124 
Income tax (expense) benefit$(120,292)$(569)$85,124 
A reconciliation of the statutory federal income tax expense, which is calculated at the federal statutory rate of 21%, to the income tax expense from continuing operations for the periods presented is provided below. In connection with the Merger and issuance the issuance of Class C Stock of the Company, noncontrolling interest in partnership is the Company’s largest reconciling item to the federal statutory rate.
Year Ended December 31,
(in thousands)202220212020
Income tax (expense) benefit at the federal statutory rate$(182,728)$(29,136)$161,768 
State income tax (expense) benefit - net of federal benefit(16,007)(1,648)9,046 
Noncontrolling interest in partnership49,309 — (496)
Nondeductible stock-based and other compensation(10,827)(6,609)(8,047)
Nondeductible expenses(122)(83)(151)
Change in valuation allowance40,083 36,907 (76,996)
Income tax (expense) benefit$(120,292)$(569)$85,124 
The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are presented below:
(in thousands)December 31, 2022December 31, 2021
Deferred tax assets:  
Net operating loss carryforwards$73,337 $110,371 
Capitalized intangible drilling costs— 113,625 
Stock-based compensation— 4,198 
Derivative assets— 7,770 
Asset retirement obligations— 3,837 
Other assets273 4,712 
Total deferred tax assets73,610 244,513 
Deferred tax liabilities:
Investment in OpCo(73,535)— 
Oil and gas properties— (207,013)
Total deferred tax liabilities(73,535)(207,013)
Valuation allowance(6)(40,089)
Net deferred tax asset (liability)$69 $(2,589)
The following table summarizes the amounts and classification in the consolidated balance sheets of the Company’s deferred taxes outstanding at the respective balance dates:
(in thousands)December 31, 2022December 31, 2021
Deferred tax assets:
Other noncurrent assets$4,499 $— 
Deferred tax liabilities:
Deferred income taxes(4,430)(2,589)
Total deferred income taxes, net$69 $(2,589)

In connection with the Merger, the Company recorded a $412.7 million reduction in equity to reflect the change in its ownership interest in OpCo, which is net of a deferred income tax benefit of $120.2 million.
As of December 31, 2022, the Company had approximately $349.2 million and $0.2 million of U.S. federal and state net operating loss carryovers, respectively. Approximately $270.4 million and $0.2 million of these U.S. federal and state net operating loss carryovers expire in 2037, respectively.
The Company periodically assesses whether it is more-likely-than-not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating loss carry forwards. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. The Company generated taxable income in the current year and is projecting future taxable income exclusive of reversing items. Based upon these earnings and the expected timing of the reversal of its existing taxable temporary differences, management determined it is more-likely-than-not that, with the exception of certain state net operating loss carryovers, the remaining deferred income tax assets existing at December 31, 2022 will be realized. Accordingly, a benefit of $40.1 million has been recognized related to the change in valuation allowance for the year ended December 31, 2022.
The calculation of the Company’s tax liabilities involves uncertainties in the application of complex tax laws and regulations. The Company gives financial statement recognition to those tax positions that it believes are more-likely-than-not to be sustained upon the examination by the Internal Revenue Service or other governmental agency. As of December 31, 2022 and 2021, the Company did not have any accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. Interest and penalties related to uncertain tax positions are reported in income tax expense.
The Company is subject to the following material taxing jurisdictions: U.S., Colorado, New Mexico, and Texas. As of December 31, 2022, the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2018 through 2022.