EXPLORATORY COSTS

Energen capitalizes exploratory drilling costs until a determination is made that the well or project has either found proved reserves or is impaired. After an exploratory well has been drilled and found oil and natural gas reserves, a determination may be pending as to whether the oil and natural gas quantities can be classified as proved. In those circumstances, Energen continues to capitalize the drilling costs pending the determination of proved status if (i) the well has found a sufficient quantity of reserves to justify its completion as a producing well and (ii) Energen is making sufficient progress assessing the reserves and the economic and operating viability of the project. Capitalized exploratory drilling costs are presented in unproved properties in the balance sheets. If the exploratory well is determined to be impaired, the impaired costs are charged to exploration expense. Other exploration costs, including geological and geophysical costs, are expensed as incurred.

The following table sets forth capitalized exploratory well costs and includes additions pending determination of proved reserves, reclassifications to proved reserves and costs charged to expense:



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2014			2013			2014			2013
Capitalized exploratory well costs at beginning of period	$	166,458		$	72,172		$	57,600		$	79,791
Additions pending determination of proved reserves	258,724			99,428			623,913			319,008
Reclassifications due to determination of proved reserves	(258,123		)	(112,821		)	(513,263		)	(340,020		)
Exploratory well costs charged to expense	(1,217		)	—			(2,408		)	—
Capitalized exploratory well costs at end of period	$	165,842		$	58,779		$	165,842		$	58,779

The following table sets forth capitalized exploratory wells costs and includes amounts capitalized for a period greater than one year:



(in thousands)	September 30, 2014		December 31, 2013
Exploratory wells in progress	$	29,059	$	14,794
Capitalized exploratory well costs capitalized for a period of one year or less	136,783		42,481
Capitalized exploratory well costs for a period greater than one year	—		1,206
Total capitalized exploratory well costs	$	165,842	$	58,481

At September 30, 2014, Energen had 56 gross exploratory wells either drilling or waiting on results from completion and testing. These wells are located primarily in the Permian Basin.