Capitalized Exploratory Well Costs

We capitalize exploratory well costs until a determination is made that the well has found proved reserves or is deemed noncommercial. If a well is deemed to be noncommercial, the well costs are immediately charged to exploration expense as dry hole cost.

Changes in capitalized exploratory well costs are as follows and exclude amounts that were capitalized and subsequently expensed in the same period:



	Year Ended December 31,
	2012			2011			2010
(millions)
Capitalized Exploratory Well Costs, Beginning of Period	$	696		$	466		$	463
Additions to Capitalized Exploratory Well Costs Pending Determination of Proved Reserves	360			322			161
Reclassified to Proved Oil and Gas Properties Based on Determination of Proved Reserves	(18		)	(55		)	(155		)
Capitalized Exploratory Well Costs Charged to Expense ⁽¹⁾	(114		)	(37		)	(3		)
Other ⁽²⁾	(24		)	—			—
Capitalized Exploratory Well Costs, End of Period	$	900		$	696		$	466


⁽¹⁾	Amount primarily represents Deep Blue (deepwater Gulf of Mexico) exploratory well costs capitalized prior to December 31, 2012. Although hydrocarbons were found in both the initial exploration well and subsequent sidetrack, we and our partners decided not to proceed with additional appraisal activities.


⁽²⁾	Amount relates to Selkirk (North Sea) exploratory well costs capitalized prior to December 31, 2012. During the fourth quarter of 2012, our Selkirk field, which is included in discontinued operations, was determined to be uneconomic for joint development and was charged to exploration expense. See Note 3. Acquisitions and Divestitures.

The following table provides an aging of capitalized exploratory well costs based on the date that drilling commenced, and the number of projects that have been capitalized for a period greater than one year:



	December 31,
	2012		2011		2010
(millions)
Exploratory Well Costs Capitalized for a Period of One Year or Less	$	355	$	318	$	166
Exploratory Well Costs Capitalized for a Period Greater Than One Year Since Commencement of Drilling	545		378		300
Balance at End of Period	$	900	$	696	$	466
Number of Projects with Exploratory Well Costs That Have Been Capitalized for a Period Greater Than One Year Since Commencement of Drilling	14		13		13

The following table provides a further aging of those exploratory well costs that have been capitalized for a period greater than one year since the commencement of drilling as of December 31, 2012:



			Suspended Since
	Total		2011		2010		2009 & Prior
(millions)
Country/Project:
Offshore Equatorial Guinea
Carla	$	12	$	12	$	—	$	—
Carmen	22		1		1		20
Diega	82		45		2		35
Felicita	35		2		2		31
Yolanda	18		1		1		16
Offshore Cameroon
YoYo	45		5		2		38
Offshore Israel
Leviathan	108		67		41		—
Leviathan-1 Deep	28		28		—		—
Tanin 1	31		31		—		—
Dolphin 1	22		22		—		—
Dalit	22		—		1		21
Offshore Cyprus
Cyprus A-1	57		57		—		—
Deepwater Gulf of Mexico
Gunflint	54		—		—		54
Other
Projects of $10 million or less each	9		—		5		4
Total	$	545	$	271	$	55	$	219

Carla/Carmen/Diega Carla is a 2011 crude oil discovery on both Block O and I, Carmen is a 2009 crude oil discovery on Block O, and Diega is a 2008 condensate and oil discovery on Block I. We continue our appraisal program for Carla and Diega and have encountered hydrocarbons in multiple appraisal wells and side-tracks. We are currently evaluating regional development scenarios for these three discoveries, which includes possible sanctioning of Carla during 2013.

Felicita/Yolanda Felicita is a 2008 condensate and natural gas discovery on Block O. Yolanda is a 2008 condensate and natural gas discovery on Block I. We are currently evaluating regional natural gas development options for these discoveries.

YoYo YoYo is a 2007 natural gas and condensate discovery. During 2011 we acquired and processed additional 3-D seismic information and are continuing evaluations for future drilling potential. We are also working with the government of Cameroon to assess gas commercialization options.

Leviathan Leviathan is a 2010 natural gas discovery. During 2012, we continued to evaluate the discovery with the successful drilling of the Leviathan-3 appraisal well and spud the Leviathan-4 appraisal well. We have project and commercial teams in place and are in the process of screening multiple development concepts. Due to Leviathan's size, full field development, and realization of maximum economic value will require several development phases. Each of these development options would require a multi-billion dollar investment and require a number of years to complete. Engineering design and planning work are currently underway for a potential first phase of development. In addition, we announced that the partners in the Leviathan Project had agreed in principle on a proposal to sell a 30% working interest in the Leviathan licenses to Woodside Energy Ltd. (Woodside). Woodside is Australia’s largest producer of LNG with over 25 years of experience and has strong working relationships with many potential customers in the Asian LNG markets.

Leviathan-1 Deep In January 2012, we returned to the Leviathan-1 well and began drilling toward two deeper intervals in order to evaluate them for the existence of crude oil (Leviathan-1 Deep). In May 2012, due to high well pressure and the mechanical limits of the wellbore design, we suspended drilling operations. Although the well did not reach the planned objective, we are encouraged by the possibility of an active thermogenic (crude oil generating) hydrocarbon system at greater depths within the basin. We are continuing our evaluation of Leviathan-1 Deep and will integrate the data from the Leviathan-1 Deep well into our model to update our analysis and design a drilling plan specifically to test the deep oil concept. We have secured a rig with the capabilities necessary to reach the target objective and plan to begin drilling an exploratory well in fourth quarter of 2013.

Tanin 1 Tanin 1 is a 2011 natural gas discovery located in the Alon A block, offshore Israel. We and our partners are currently reviewing alternatives for the development of reserves from this asset.

Dolphin 1 Dolphin 1 is a 2011 natural gas discovery located in the Hanna license, southwest of the Tamar gas field. We and our partners are currently reviewing alternatives for the development of reserves from this asset.

Dalit Dalit is a 2009 natural gas discovery. We and our partners are working on a development plan which would include tie-in to the Tamar platform and have submitted a development plan to the Israeli government.

Cyprus During the fourth quarter of 2011, we drilled a successful natural gas exploration well (A-1) in Block 12. We submitted an appraisal plan to the Cyprus government during July 2012 and are reviewing locations for appraisal drilling activities.

Gunflint Gunflint (Mississippi Canyon Block 948) is a 2008 crude oil discovery. In July 2012, we drilled a successful Gunflint appraisal well. We plan to drill a second appraisal well targeting the south area of the reservoir during first quarter of 2013. Front-end conceptual studies have been completed, and we are working toward sanctioning of a scalable development project in 2013. We are currently targeting 2017 for production start-up utilizing a standalone facility. If we choose to connect to an existing third-party host, the project could have an accelerated completion schedule.