| 12. | Income Taxes |
The Company has net operating losses carried forward of $11,794,287 available to offset taxable income in future years which expire beginning in fiscal 2024.
The Company is subject to United States federal and state income taxes at a rate of 34%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:
| 2016 | 2015 | |||||||
| Benefit at statutory rate | $ | (1,359,691 | ) | $ | (259,793 | ) | ||
| Permanent differences and other: | 237 | 1,034 | ||||||
| Valuation allowance change | 1,359,454 | 258,759 | ||||||
| Income tax provision | $ | – | $ | – | ||||
The significant components of deferred income tax assets and liabilities as at December 31, 2016 and 2015 are as follows:
| 2016 | 2015 | |||||||
| Net operating losses carried forward | $ | 4,010,057 | $ | 3,834,274 | ||||
| Oil and gas properties | 125,566 | 125,566 | ||||||
| Stock compensation expense | 1,252,079 | 68,408 | ||||||
| Other | 377 | 377 | ||||||
| Total deferred income tax assets | 5,388,079 | 4,028,625 | ||||||
| Valuation allowance | (5,388,079 | ) | (4,028,625 | ) | ||||
| Net deferred income tax asset | $ | – | $ | – | ||||