8.  Income Taxes  

Our income tax expense for the three months ended March 31, 2018 was $0.1 million and our income tax benefit for the three months ended March 31, 2017 was $7.6 million.  Our effective tax rate was not meaningful for either period presented.  The income tax expense in the three months ended March 31, 2018 represents the interest on uncertain tax positions.  Excluding this adjustment, tax expense would have been zero for the three months ended March 31, 2018.  Our current full-year forecast for 2018 has a net operating loss for tax purposes; therefore, no current tax expense is recorded.  In addition, no deferred income tax expense is recorded due to dollar-for-dollar offsets by our valuation allowance.  The income tax benefit for the three months ended March 31, 2017 relates to net operating loss carryback claims made pursuant to Internal Revenue Code (“IRC”) Section 172(f) (related to rules for “specified liability losses”), which permit certain platform dismantlement, well abandonment and site clearance costs to be carried back 10 years.

During the three months ended March 31, 2018 and 2017, we did not receive any income tax refunds and made no income tax payments of significance.          

As of March 31, 2018, we recorded current income taxes receivable of $65.1 million.  As of December 31, 2017, the balance sheet reflects current income taxes receivable of $13.0 million and non-current income taxes receivable of $52.1 million.  The receivables primarily relate to a net operating loss claim carried back for 2017 and net operating loss claims for the years 2012, 2013 and 2014 that were carried back to prior years.  These carryback claims are made pursuant to IRC Section 172(f) described above.  The refund claims for the years 2012, 2013 and 2014 require a review by the Congressional Joint Committee on Taxation.

As of March 31, 2018 and December 31, 2017, our valuation allowance was $165.7 million and $171.5 million, respectively, related to federal and state deferred tax assets.  Net deferred tax assets were recorded related to NOLs and temporary differences between the book and tax basis of assets and liabilities expected to produce tax deductions in future periods.  The realization of these assets depends on recognition of sufficient future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible.  In assessing the need for a valuation allowance on our deferred tax assets, we consider whether it is more likely than not that some portion or all of them will not be realized.  Although our net deferred tax assets and the related valuation allowance reflect the provisions of the Tax Cuts and Jobs Act (“TCJA”), due to the timing and the complexity of the provisions of the TCJA, further adjustments may be required during 2018 in determination of the final effect in our financial statements.  

We recognize interest and penalties related to unrecognized tax benefits in income tax expense.  During the three months ended March 31, 2018 and 2017, we recorded immaterial amounts of accrued interest expense related to our unrecognized tax benefits.  For the first quarter of 2018, the amount reported as income tax expense is entirely attributable to this accrued interest.

The tax years 2013 through 2017 remain open to examination by the tax jurisdictions to which we are subject.