Exploratory Costs

The Company capitalizes exploratory well and project costs until a determination is made that the well or project has either found proved reserves, is impaired or is sold. After an exploratory well has been completed and found oil and gas reserves, a determination may be pending as to whether the oil and gas reserves can be classified as proved. In those circumstances, the Company continues to capitalize the well or project costs pending the determination of proved status if (i) the well has found a sufficient quantity of reserves to justify its completion as a producing well and (ii) the Company is making sufficient progress assessing the reserves and the economic and operating viability of the project. The Company's capitalized exploratory well and project costs are presented in proved properties in the accompanying consolidated balance sheets. If the exploratory well or project is determined to be impaired, the impaired costs are charged to exploration and abandonments expense.

The following table reflects the Company's capitalized exploratory well and project activity during the three months ended March 31, 2013:



	Three Months Ended March 31, 2013
	(in thousands)
Beginning capitalized exploratory costs	$	212,670
Additions to exploratory costs pending the determination of proved reserves	351,575
Reclassification due to determination of proved reserves	(262,754		)
Exploratory well costs charged to exploration expense	(7,734		)
Ending capitalized exploratory costs	$	293,757

The following table provides an aging, as of March 31, 2013 and December 31, 2012, of capitalized exploratory costs and the number of projects for which exploratory costs have been capitalized for a period greater than one year based on the date drilling was completed:



	March 31, 2013		December 31, 2012
	(in thousands, except project counts)
Capitalized exploratory costs that have been suspended:
One year or less	$	174,841	$	190,678
More than one year	118,916		21,992
	$	293,757	$	212,670

Number of projects with exploratory costs that have been suspended for a period greater than one year	2		1

Alaska - Oooguruk. As of each of March 31, 2013 and December 31, 2012, the Company had $22.0 million of suspended well costs recorded for the K-13 well in the Alaska Oooguruk field. Drilling on the K-13 well was completed during September 2011. During well completion operations, subsurface damages were sustained. The Company plans to recomplete the well during 2013. The well may require additional stimulation work that, if required, will be done during the first quarter of 2014 to initiate production.

Alaska - Nuna. The Company's Nuna project, which has $96.9 million of suspended project costs as of March 31, 2013, includes the Nuna-1 exploration well that was drilled during 2012 to test the Torok formation and a second appraisal well that was drilled and logged during the first quarter of 2013. The Company flow-tested the Nuna-1 well during the second quarter of 2012 and again in the first quarter of 2013. The second appraisal well encountered a mechanical problem and could not be flow-tested before the end of the winter drilling season. The results of the flow-tests on the Nuna-1 well and the log data from the second Nuna well are both very encouraging. The Company is currently conducting a front-end engineering design ("FEED") study to evaluate the potential for onshore production facilities to support the project.