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 capitalized as construction in progress. All such capitalized 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. If 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 expenses are 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.

Capitalized exploration well-drilling costs1 (in million €)

 

 

2014

2013

1

Only fully consolidated companies

As of January 1

 

532

471

Additions pending determination of proven reserves

 

152

223

Capitalized exploratory well costs charged to expense

 

(203)

(98)

Reclassifications to wells, facilities and equipment

 

(48)

(64)

As of December 31

 

433

532

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

Capitalized exploration well-drilling costs1 (in million €)

 

 

2014

2013

1

Only fully consolidated companies

Wells for which drilling is not complete

 

135

120

Wells capitalized less than one year

 

48

144

Wells capitalized more than one year

 

250

268

Total

 

433

532

Number of suspended wells

 

41

39