Capitalized exploration well-drilling costs: Suspended well costs

Exploratory drilling costs are capitalized until the drilling of the well is complete. If hydrocarbons are found, and, subject to further appraisal activity which may include the drilling of further wells, are likely to be capable of commercial development, the costs continue to be carried as an asset. All such carried costs are subject to technical, commercial and management review at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. If proven reserves of oil or natural gas are determined and development is sanctioned, the relevant expenditure is transferred to machinery and technical equipment. Unsuccessful exploration wells are impaired in exploration expenses.

The following table indicates the changes to the capitalized exploration well-drilling costs.

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Capitalized exploration well-drilling costs1 (million €)

 

2013

2012

1

Only fully consolidated companies; prior-year figures restated as a result of amended IFRS

As of January 1

471

299

Additions pending determination of proven reserves

223

277

Capitalized exploratory well costs charged to expense

(98)

(75)

Reclassifications to wells, facilities and equipment

(64)

(30)

As of December 31

532

471

The following table provides an aging of capitalized well costs, the amounts capitalized and, on the last line, the number of suspended exploration wells.

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Capitalized exploration well-drilling costs1 (million €)

 

2013

2012

1

Only fully consolidated companies; prior-year figures restated as a result of amended IFRS

Wells for which drilling is not complete

120

165

Wells capitalized less than one year

144

78

Wells capitalized more than one year

268

228

Total

532

471

Number of suspended wells

39

39