12. 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, 2017
Unproved properties	$	—	$	—	$	—
Proved properties		—		—		—
		—		—		—
Less accumulated DD&A		—		—		—
Net capitalized costs	$	—	$	—	$	—

June 30, 2016
Unproved properties	$	—	$	—	$	—
Proved properties		—		—		—
		—		—		—
Less accumulated DD&A		—		—		—
Net capitalized costs	$	—	$	—	$	—

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, 2017
Property acquisition:
Unproved	$	—	$	—	$	—
Exploration		—		13,316		13,316
Development		—		—		—
Total costs incurred	$	—	$	13,316	$	13,316

June 30, 2016
Property acquisition:
Unproved	$	—	$	—	$	—
Exploration		—		—		—
Development		—		—		—
Total costs incurred	$	—	$	—	$	—

Proved Reserves

We do not hold any proved reserves as of June 30, 2017 and 2016.