11. SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED)

Estimates of reserve quantities and related standardized measure of discounted net cash flows are estimates only, and are not intended to reflect realizable values or fair market values of reserves. Reserve estimates are inherently imprecise and estimates of new discoveries are more imprecise than producing oil and gas properties. Additionally, the price of oil has been very volatile and downward changes in prices can significantly affect quantities that are economically recoverable. Accordingly, estimates are expected to change as future information becomes available and these changes may be significant.

Proved reserves are estimated reserves of crude oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are those expected to be recovered through existing wells, equipment and operating methods.

The standardized measure of discounted future net cash flows are computed by applying average price for the year (with consideration of price changes only to the extent provided by contractual arrangements) to the estimated future production of proved oil and gas reserves, less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, less estimated future income tax expenses. The estimated future net cash flows are then discounted using a rate of 10% per year to reflect the estimated timing of the future cash flows.

Capitalized Costs Related to Oil and Gas Activities

Aggregate capitalized costs relating to our crude oil and natural gas producing activities, including asset retirement costs and related accumulated depreciation, depletion & amortization are shown below (in thousands):

	United		Republic of
	States		Guinea		Total
June 30, 2014
Unproved properties	$	—	$	14,259	$	14,259
Proved properties	—		—		—
	—		14,259		14,259
Less accumulated DD&A	—		—		—
Net capitalized costs	$	—	$	14,259	$	14,259

June 30, 2013
Unproved properties	$	—	$	21,174	$	21,174
Proved properties	—		—		—
	—		21,174		21,174
Less accumulated DD&A	—		—		—
Net capitalized costs	$	—	$	21,174	$	21,174

June 30, 2012
Unproved properties	$	—	$	39,278	$	39,278
Proved properties	—		—		—
	—		39,278		39,278
Less accumulated DD&A	—		—		—
Net capitalized costs	$	—	$	39,278	$	39,278

Costs Incurred in Oil and Gas Activities

Costs incurred in connection with our crude oil and natural gas acquisition, exploration and development activities are shown below (in thousands):

	United		Republic of
	States		Guinea			Total
June 30, 2014
Property acquisition:
Unproved	$	—	$	—		$	—
Exploration	—		(6,586		)	(6,586		)
Development	—		—			—
Total costs incurred	$		$	(6,586	)	$	(6,586	)

June 30, 2013
Property acquisition:
Unproved	$	—	$	441		$	441
Exploration	—		5,381			5,381
Development	—		—			—
Total costs incurred	$		$	5,822		$	5,822

June 30, 2012
Property acquisition:
Unproved	$	—	$	90,834		$	90,834
Exploration	—		28,556			28,556
Development	—		—			—
Total costs incurred	$	—	$	119,390		$	119,390

During the year ended June 30, 2014, we incurred $0.2 million of exploration costs. Additionally, during the year ended June 30, 2014, our oil and gas property balance decreased by $6.8 million after reaching a lawsuit settlement with AGR that resulted in the release to AGR of excess drilling equipment and the release to us of $17.7 million of previously escrowed cash.

Proved Reserves

We do not hold any proved reserves as of June 30, 2014 and 2013.