Chord Energy Corp

13. Income Taxes

The Company’s effective tax rate was 26.8% and 24.7% of pre-tax income, respectively, for the three and six months ended June 30, 2024 as compared to an effective tax rate of 24.4% and 23.9% for the three and six months ended June 30, 2023, respectively.

The effective tax rate for the three months ended June 30, 2024 was higher than the statutory federal rate of 21% primarily as a result of the impact of state income taxes and Canadian losses for which no benefit is recognized. The effective tax rate for the three months ended June 30, 2023 was higher than the statutory federal rate of 21% primarily as a result of state income taxes.

The effective tax rates for the six months ended June 30, 2024 and June 30, 2023 were higher than the statutory federal rate of 21% primarily as a result of state income taxes.

On May 31, 2024, the Company completed the Arrangement, and as a result recognized a net deferred tax liability of $1.2 billion in its purchase price allocation as of the acquisition date primarily to reflect the difference between the tax basis and the fair value of Enerplus’ assets acquired and liabilities assumed. The Company did not record a Canadian deferred tax asset due to the lack of continued operations in Canada going forward.