XML 24 R13.htm IDEA: XBRL DOCUMENT v3.19.2
Capitalized Exploratory Well Costs
6 Months Ended
Jun. 30, 2019
Capitalized Exploratory Well Costs [Abstract]  
Capitalized Exploratory Well Costs

 


6.  Capitalized Exploratory Well Costs

The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves during the six months ended June 30, 2019 (in millions):

 

Balance at January 1, 2019

 

$

418

 

Additions to capitalized exploratory well costs pending the determination of proved reserves

 

 

101

 

Reclassifications to wells, facilities and equipment based on the determination of proved reserves

 

 

(25

)

Balance at June 30, 2019

 

$

494

 

Reclassifications to wells, facilities and equipment based on the determination of proved reserves resulted from sanction of the second phase of development for the Liza Field, offshore Guyana.  Capitalized exploratory well costs capitalized for greater than one year following completion of drilling were $349 million at June 30, 2019 and primarily related to:  

Guyana: Approximately 45% of the capitalized well costs in excess of one year relates to eight successful exploration wells where hydrocarbons were encountered on the Stabroek Block (Hess 30%), offshore Guyana.  The operator plans further appraisal drilling for certain fields and is conducting pre-development planning for additional phases of development beyond the two existing sanctioned phases of development.

Gulf of Mexico: Approximately 35% of the capitalized well costs in excess of one year relates to the appraisal of the northern portion of the Shenzi Field (Hess 28%) in the Gulf of Mexico, where hydrocarbons were encountered in the fourth quarter of 2015.  Following exploration and appraisal drilling activities completed by the operator in prior years on adjacent blocks to the north of our Shenzi blocks, the operator is planning to acquire 3D seismic in 2019 for use in development planning of the northern portion of the Shenzi Field.

Joint Development Area (JDA):  Approximately 10% of the capitalized well costs in excess of one year relates to the JDA (Hess 50%) in the Gulf of Thailand, where hydrocarbons were encountered in three successful exploration wells drilled in the western part of Block A-18.  The operator has submitted a development plan concept to the regulator to facilitate commercial negotiations for an extension of the existing gas sales contract to include development of the western part of the Block.

Malaysia:  Approximately 10% of the capitalized well costs in excess of one year relates to the North Malay Basin (Hess 50%), offshore Peninsular Malaysia, where hydrocarbons were encountered in four successful exploration wells in the second quarter of 2018 and one successful exploration well drilled in the fourth quarter of 2015.  In 2019, we are continuing to conduct subsurface evaluations for consideration in future phases of field development.