increase to 65 full-time employees from the prior year-end amount of 58, as well as additional employee bonus amounts resulting from the improved commodity price environment. 

## Transaction costs 

For the year ended December 31, 2018, transactions costs consisted of $13.5 million, primarily associated with the proposed Sabalo Acquisition terminated in December 2018. During the year ended December 31, 2017, we recorded $4.7 million in transaction costs primarily associated with the Bold Transaction completed in May 2017. See Note 3. Acquisitions and Divestitures  in the Notes to Consolidated Financial Statements. 

## Interest expense, net 

Interest expense includes commitment fees, amortization of deferred financing costs, and interest on outstanding indebtedness. Interest expense for the year ended December 31, 2018 was $2.9 million compared to $2.7 million for the comparable period in 2017. The $0.2 million increase in interest expense was primarily due to higher average borrowings outstanding compared to the prior year period. See Note 13. Long-Term Debt in the Notes to Consolidated Financial Statements. 

## Gain on sale of oil and gas properties, net 

During the year ended December 31, 2018, we sold certain non-core oil and gas properties including our non-operated Eagle Ford assets located in south Texas, recording gains totaling $1.9 million. During the year ended December 31, 2017, we sold all of our oil and natural gas leases, oil and natural gas wells and associated assets located in the Williston Basin in North Dakota. We also sold certain of our non-core oil and natural gas properties in Texas, Montana, Oklahoma and North Dakota. In connection with these sales, we recorded gains totaling $9.1 million. See  Note 3. Acquisitions and Divestitures  in the Notes to Consolidated Financial Statements. 

## Gain (loss) on derivative contracts, net 

For the year ended December 31, 2018, we recorded a net gain on derivative contracts of $60.9 million, consisting of unrealized mark-to-market gains of $76.0 million, partially offset by net realized losses on settlements of $15.1 million. For the year ended December 31, 2017, we recorded a net loss on derivative contracts of $8.0 million, consisting of unrealized mark-to-market losses of $7.3 million and net realized losses on settlements of $0.7 million. 

## Litigation Settlement 

For the year ended December 31, 2018, we recorded an expense of $4.7 million related to the settlement of certain litigation. See Note 16. Commitments and Contingencies  in the Notes to Consolidated Financial Statements. 

## Income tax (expense) benefit 

During the year ended December 31, 2018, we recorded total income tax expense of $2.5 million which included (1) deferred income tax expense for Lynden US of $1.9 million as a result of its share of the distributable income from EEH, offset by a $0.5 million discrete income tax benefit related to refundable AMT tax credits resulting from the TCJA, (2) deferred income tax expense for Earthstone of $7.4 million as a result of its share of the distributable income from EEH, which was used to reduce the valuation allowance recorded against its deferred tax asset as future realization of the net deferred tax asset cannot be assured and (3) deferred income tax expense of $1.1 million related to the Texas Margin Tax. Lynden Corp incurred no material income or loss, or related income tax expense or benefit, for the year ended December 31, 2018. 

During the year ended December 31, 2017, we recorded a total income tax benefit of $16.4 million which included (1) income tax benefit of $8.6 million, of which $4.8 million related to the reduction of that amount in its deferred tax liability resulting from the federal corporate income tax rate reduction to 21%, (2) a $7.7 million income tax benefit for Earthstone as a discrete item during the current reporting period, which resulted from a change in assessment of the realization of its net deferred tax assets due to the deferred tax liability that was recorded with respect to its investment in EEH as part of the Bold Transaction as an adjustment to Additional paid-in capital in the Consolidated Statement of Equity, and (3) income tax expense of $12.6 million related to the reduction of the amount in its deferred tax asset resulting from the federal corporate income tax rate reduction to 21% which was fully offset by the reduction in its valuation allowance for that amount because the future realization of such loss cannot be reasonably assured and is subject to a full valuation allowance. Lynden Corp incurred no material income or loss, or related income tax expense or benefit, for the year ended December 31, 2017. 

## Liquidity and Capital Resources 

