8. 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)	Six Months Ended June 30, 2017
Capitalized Exploratory Well Costs, December 31, 2016	$	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, June 30, 2017	$	571


⁽¹⁾	Amount relates to the approval and sanction of the first phase of development of the Leviathan field, offshore Israel. During second quarter 2017, we recorded Leviathan field proved undeveloped reserves of 551 MMBoe, net.

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



(millions)	June 30, 2017		December 31, 2016
Exploratory Well Costs Capitalized for a Period of One Year or Less	$	19	$	69
Exploratory Well Costs Capitalized for a Period Greater Than One Year Since Commencement of Drilling ⁽¹⁾	552		699
Balance at June 30, 2017	$	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

We reclassify undeveloped leasehold costs to proved property costs when proved reserves, including proved undeveloped reserves, become attributable to the property as a result of our exploration and development activities.

As of June 30, 2017, we had remaining undeveloped leasehold costs, to which proved reserves had not been attributed, of $3.1 billion, primarily related to properties acquired of $1.6 billion in the Clayton Williams Energy Acquisition, and $1.2 billion and $185 million attributable to Delaware Basin and Eagle Ford Shale assets, respectively, acquired in the Rosetta Resources Inc. acquisition. Undeveloped leasehold costs were derived from allocated fair values as a result of business combinations or other purchases 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 June 30, 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 the first six months of 2017, we completed a geological evaluation of certain Gulf of Mexico leases and determined that $18 million of undeveloped leasehold cost should be written-off.