Property, Plant and Equipment

6 Months Ended

Jun. 30, 2013

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Note B – Property, Plant and Equipment

Under U.S. generally accepted accounting principles for companies that use the successful efforts method of accounting, exploratory well costs should continue to be capitalized 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.

At June 30, 2013, the Company had total capitalized exploratory well costs pending the determination of proved reserves of $444.4 million. The following table reflects the net changes in capitalized exploratory well costs during the six-month periods ended June 30, 2013 and 2012.

(Thousands of dollars)	2013			2012
Beginning balance at January 1	$	445,697			556,412
Additions pending the determination of proved reserves		27,129			85,851
Reclassifications to proved properties based on the determination of proved reserves		(28,398	)		(42,431	)
Capitalized exploratory well costs charged to expense		0			(32,187	)
Balance at June 30	$	444,428			567,645

The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed for each individual well and the number of projects for which exploratory well costs have been capitalized. The projects are aged based on the last well drilled in the project.

	June 30,
	2013						2012
(Thousands of dollars)	Amount		No. of Wells		No. of Projects		Amount		No. of Wells		No. of Projects
Aging of capitalized well costs:
Zero to one year	$	49,994		3		1	$	103,807		36		6
One to two years		37,898		5		1		103,141		15		3
Two to three years		73,863		7		3		67,197		9		2
Three years or more		282,673		26		5		293,500		37		5
	$	444,428		41		10	$	567,645		97		16

Of the $394.4 million of exploratory well costs capitalized more than one year at June 30, 2013, $273.0 million is in Malaysia, $114.8 million is in the U.S. and $6.6 million is in Brunei. In Malaysia either further appraisal or development drilling is planned and/or development studies/plans are in various stages of completion. In the U.S. drilling and development operations are planned. In Brunei field development plans are being prepared by the operator.

See also Note E for discussion regarding a capital lease of production equipment at the Kakap field.