Property, Plant and Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

3. Property, Plant and Equipment

Assets Held for Sale:

On October 5, 2020, we entered into an agreement to sell our 28% working interest in the Shenzi Field in the deepwater Gulf of Mexico for total consideration of $505 million, subject to customary adjustments, with an effective date of July 1, 2020. See Note 14. Subsequent Events. At September 30, 2020, property, plant and equipment totaling $483 million and asset retirement obligations totaling $79 million associated with the Shenzi Field were presented as Assets held for sale and as liabilities held for sale within Accrued Liabilities, respectively, in our Consolidated Balance Sheet.

Capitalized Exploratory Well Costs:

The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves during the nine months ended September 30, 2020 (in millions):


Balance at January 1, 2020	$	584
Additions to capitalized exploratory well costs pending the determination of proved reserves	96
Reclassifications to wells, facilities and equipment based on the determination of proved reserves	(80)
Capitalized exploratory well costs charged to expense	(125)
Balance at September 30, 2020	$	475

In September, we sanctioned the development plan for the Payara Field on the Stabroek Field, Offshore Guyana and reclassified well costs totaling $80 million to wells, facilities and equipment based on the determination of proved reserves. In the first quarter of 2020, the Corporation expensed previously capitalized well costs of $125 million, primarily related to the northern portion of the Shenzi Field (Hess 28%) in the Gulf of Mexico due to reprioritization of the Corporation’s forward capital program in response to the significant decline in crude oil prices. The table above does not include $41 million of well costs incurred and expensed during the first nine months of 2020.

Capitalized exploratory well costs capitalized for greater than one year following completion of drilling were $329 million at September 30, 2020 and primarily related to:

Guyana: Approximately 80% of the capitalized well costs in excess of one year relate to 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 three existing sanctioned phases of development.

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 ongoing 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 relate to the North Malay Basin (Hess 50%), offshore Peninsular Malaysia, where hydrocarbons were encountered in five successful exploration wells. Subsurface evaluation and pre-development studies for future phases of development are ongoing.