15. Accounting for suspended exploratory well costs

The company continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.

The following two tables provide details of the changes in the balance of suspended exploratory well costs as well as an aging summary of those costs.

Change in capitalized suspended exploratory well costs:


millions of dollars	2013			2012			2011
Balance as at January 1		167			163			120
Additions pending the determination of proved reserves		12			16			43
Charged to expense		-			-			-
Reclassification to wells, facilities and equipment based on the determination of proved reserves		(6	)		(12	)		-
Balance as at December 31		173			167			163

Period end capitalized suspended exploratory well costs:

millions of dollars	2013			2012			2011
Capitalized for a period of one year or less		6			16			43

Capitalized for a period of between one and five years		167			151			120
Capitalized for a period of greater than one year		167			151			120

Total		173			167			163

Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below provides a numerical breakdown of the number of projects with suspended exploratory well costs which had their first capitalized well drilled in the preceding 12 months and those that have had exploratory well costs capitalized for a period greater than 12 months.


	2013		2012		2011
Number of projects with first capitalized well drilled in the preceding 12 months		-		-		1
Number of projects that have exploratory well costs capitalized for a period of greater than 12 months		1		1		1
Total		1		1		2

The project with exploratory well costs capitalized for a period greater than 12 months as of December 31, 2013 had drilling in the preceding 12 months.