Capitalized Exploratory Well Costs and Undeveloped Leasehold Costs

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. On a quarterly basis, we review the status of suspended exploratory well costs and assess the development of these projects. If a well is deemed to be noncommercial, the well costs are 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:



(millions)	Three Months Ended March 31, 2017
Capitalized Exploratory Well Costs, Beginning of Period	$	768
Additions to Capitalized Exploratory Well Costs Pending Determination of Proved Reserves	6
Reclassified to Proved Oil and Gas Properties Based on Determination of Proved Reserves ⁽¹⁾	(203		)
Capitalized Exploratory Well Costs, End of Period	$	571


⁽¹⁾	Amount relates to the approval and sanction of the first phase of development of the Leviathan field offshore Israel. Initial Leviathan field proved reserves are expected to be recorded in 2017.

The following table provides an aging of capitalized exploratory well costs based on the date that drilling commenced:



(millions)	March 31, 2017		December 31, 2016
Exploratory Well Costs Capitalized for a Period of One Year or Less	$	58	$	69
Exploratory Well Costs Capitalized for a Period Greater Than One Year Since Commencement of Drilling ⁽¹⁾	513		699
Balance at End of Period	$	571	$	768


⁽¹⁾	The decrease from December 31, 2016 is attributable to the reclassification of the Leviathan field to development work in process, partially offset by the capitalization of interest during the period on remaining exploratory wells.

Undeveloped Leasehold Costs

Undeveloped leasehold costs as of March 31, 2017 totaled $2.3 billion, primarily comprised of $2.2 billion related to US onshore unproved properties. These costs were derived from allocated fair values as a result of a business combination or other purchase of unproved properties and, in that the properties are primarily held by production, they are subject to impairment testing utilizing a future cash flows analysis.

The remaining undeveloped leasehold costs as of March 31, 2017 included $86 million related to Gulf of Mexico unproved properties and $52 million related to international unproved properties. These costs are evaluated as part of our periodic impairment review. If, based upon a change in exploration plans, availability of capital and suitable rig and drilling equipment, resource potential, comparative economics, changing regulations and/or other factors, an impairment is indicated, we will record impairment expense related to the respective leases.

During first quarter 2017, we completed a geological evaluation of certain deepwater Gulf of Mexico leases and determined that $18 million of undeveloped leasehold cost should be written-off.