Property, Plant and Equipment

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

3. Property, Plant and Equipment

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, 2023 (in millions):


Balance at January 1, 2023	$	886
Additions to capitalized exploratory well costs pending the determination of proved reserves	192
Reclassifications to wells, facilities and equipment based on the determination of proved reserves	(133)
Capitalized exploratory well costs charged to expense	(6)
Balance at September 30, 2023	$	939

In the first nine months, additions to capitalized exploratory well costs pending determination of proved reserves primarily related to wells drilled on the Stabroek Block (Hess 30%), offshore Guyana, and the Pickerel-1 exploration well (Hess 100%) in the Gulf of Mexico on Mississippi Canyon Block 727. Reclassifications to wells, facilities and equipment based on the determination of proved reserves resulted from the sanction of the Uaru development project, the fifth sanctioned project on the Stabroek Block, and the Pickerel-1 exploration well in the Gulf of Mexico. At September 30, 2023, 35 exploration and appraisal wells on the Stabroek Block, with a total cost of $777 million, were capitalized pending determination of proved reserves. The preceding table excludes well costs of $91 million that were incurred and expensed during the first nine months of 2023.

At September 30, 2023, exploratory well costs capitalized for greater than one year following completion of drilling of $714 million was comprised of the following:

Guyana: Approximately 86% of the capitalized well costs in excess of one year relate to successful exploration wells where hydrocarbons were encountered on the Stabroek Block. In October 2023, the operator submitted a plan for the Whiptail development project, the sixth development project on the Stabroek Block, to the Government of Guyana for approval. The operator also plans further appraisal drilling on the block and is conducting pre-development planning for additional phases of development.

U.S.: Approximately 8% of the capitalized well costs in excess of one year relate to the Huron-1 exploration well (Hess 40%) located on Green Canyon Block 69 in the Gulf of Mexico, where oil bearing reservoirs were encountered. Well results are being evaluated and planning for appraisal activities is underway.

Joint Development Area (JDA): Approximately 5% of the capitalized well costs in excess of one year relate 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 1% 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 one successful exploration well. Pre-development studies are ongoing.