NOTE F. Exploratory Well 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. 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 each of the years ended December 31, 2013, 2012 and 2011:



	Year Ended December 31,
	2013			2012			2011
	(in thousands)
Beginning capitalized exploratory well costs	$	212,670		$	107,596		$	96,193
Additions to exploratory well costs pending the determination of proved reserves	1,219,797			926,084			524,313
Reclassification due to determination of proved reserves	(1,044,815		)	(790,373		)	(480,716		)
Disposition of assets sold	(92,855		)	—			(28,938		)
Impairment of properties	(86,761		)	—			—
Exploratory well costs charged to exploration and abandonment expense (a)	(49,134		)	(30,637		)	(3,256		)
Ending capitalized exploratory well costs (b)	$	158,902		$	212,670		$	107,596

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(a)	Includes exploration and abandonment expense reclassified as discontinued operations of $43.3 million, $21.6 million, and $180 thousand in 2013, 2012 and 2011, respectively.


(b)	Includes $60.3 million of capitalized exploratory well costs classified as held for sale in the accompanying consolidated balance sheet as of December 31, 2013.

The following table provides an aging, as of December 31, 2013, 2012 and 2011 of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year, based on the date drilling was completed:



	Year Ended December 31,
	2013		2012		2011
	(in thousands, except well counts)
Capitalized exploratory well costs that have been suspended:
One year or less	$	115,955	$	190,678	$	107,596
More than one year	42,947		21,992		—
	$	158,902	$	212,670	$	107,596
Number of projects with exploratory well costs that have been suspended for a period greater than one year	1		1		—

Alaska - Nuna. The Company's Nuna project, which has $42.9 million of suspended project costs as of December 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 study to evaluate the potential for onshore production facilities to support the project. The capitalized exploratory well costs associated with the Nuna project are classified as held for sale in the accompanying consolidated balance sheet as of December 31, 2013.

Alaska - Oooguruk. As of 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 performed repairs to correct a subsurface safety valve and a tubing leak in the third quarter of 2013. These repairs enabled a production test in the fourth quarter of 2013, which had negative results. Based on the negative production test results, the Company has discontinued any future plans to complete and produce the well. Accordingly, an exploration and abandonment charge of $33.7 million was recorded in the fourth quarter of 2013 to write off the K-13 well's carrying value, which is included in loss from discontinued operations, net of tax in the accompanying consolidated statements of operations.