Impairments and Exploration Expenses

Impairments

As a result of our announced disposition of our Canadian business in the first quarter of 2017, we recorded a pre-tax non-cash impairment charge of $6.6 billion primarily related to property, plant and equipment. This impairment in our Canadian business is reflected as discontinued operations in the consolidated statements of income and the consolidated statements of cash flows for all periods presented

The following table summarizes impairment charges of proved properties:



	Year Ended December 31,
(in millions)	2017		2016		2015
Total impairments	$	229	$	67	$	721

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2017 - Impairments were primarily a result of lower forecasted long-term commodity prices and the anticipated sales of certain non-core proved properties in our International E&P segment of $136 million. Additionally, included in proved property impairments was $89 million relating to the Gulf of Mexico and certain conventional Oklahoma assets primarily as a result of lower forecasted long-term commodity prices.


•	2016 - Impairments of $67 million consisted primarily of proved properties in Oklahoma and the Gulf of Mexico as a result of lower forecasted commodity prices and revisions to estimated abandonment costs.


•	2015 - Impairments included $340 million for the goodwill impairment of the United States E&P reporting unit, and $335 million related to proved properties (primarily in Colorado and the Gulf of Mexico) as a result of lower forecasted commodity prices, and $44 million associated with our disposition of natural gas assets in East Texas, North Louisiana and Wilburton, Oklahoma.

See Note 6 for relevant detail regarding segment presentation, Note 12 for further detail regarding the goodwill impairment and Note 14 for fair value measurements related to impairments of proved properties and long-lived assets.

Exploration expense

The following table summarizes the components of exploration expenses:



	Year Ended December 31,
(In millions)	2017		2016		2015
Exploration Expenses
Unproved property impairments	$	246	$	195	$	655
Dry well costs	77		25		212
Geological and geophysical	25		5		31
Other	61		98		73
Total exploration expenses	$	409	$	323	$	971

Unproved property impairments and dry well costs

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2017 - As a result of lower forecasted long-term commodity prices and the anticipated sales of certain non-core properties in our International E&P segment, we recorded a non-cash charge of $159 million comprised of $95 million in unproved property impairments; and $64 million in dry well costs related to our Diaba License G4-223 in the Republic of Gabon. Also, because of our decision not to develop the Tchicuate offshore Block in the Republic of Gabon, we recorded a non-cash impairment charge of $43 million to unproved property.


•	2016 - Unproved property impairments recorded of $195 million were primarily a result of our decision to not drill any of our remaining Gulf of Mexico undeveloped leases and also includes certain other unproved properties in the United States. Lower dry well expense was a result of the strategic decision to transition out of our conventional exploration program during 2015.

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2015 - Primarily due to changes in our conventional exploration strategy (Gulf of Mexico, Canadian in-situ assets and Harir block in the Kurdistan Region of Iraq), relinquishment of certain properties in the Gulf of Mexico, the operated Solomon exploration well in the Gulf of Mexico and our unproved property in Colorado as a result of the proved property impairment mentioned above. Dry well costs include the operated Solomon exploration well in the Gulf of Mexico, and our operated Sodalita West #1 exploratory well in E.G.

See Note 6 for relevant detail regarding segment presentation of unproved property impairments.