Exploratory Costs

6 Months Ended

Jun. 30, 2011

Exploratory Costs

Exploratory Costs

NOTE C. 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. The Company's capitalized exploratory well and project costs are presented in proved properties in the 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 and six months ended June 30, 2011:

	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
				(in thousands)
Beginning capitalized exploratory costs	$	80,530		$	96,193
Additions to exploratory costs pending the determination of proved reserves		140,081			214,345
Reclassification due to determination of proved reserves		(135,338	)		(195,682	)
Disposition of assets sold		—			(28,938	)
Exploratory well costs charged to exploration expense		(162	)		(807	)
Ending capitalized exploratory costs	$	85,111		$	85,111

The following table provides an aging, as of June 30, 2011 and December 31, 2010 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:

	June 30, 2011		December 31, 2010
	(in thousands, except project counts)
Capitalized exploratory costs that have been suspended:
One year or less	$	77,129	$	70,635
More than one year		7,982		25,558
	$	85,111	$	96,193
Number of projects with exploratory costs that have been suspended for a period greater than one year		1		3

As of June 30, 2011, the Company has one project with exploratory costs that has been suspended for a period of one year or more, which is described below. As of December 31, 2010, the Company had three Tunisian projects with exploratory costs that had been suspended for a period of one year or more, all of which were included in the Pioneer Tunisia assets sold during February 2011.

South Texas Project. As of June 30, 2011, the Company has $8.0 million of suspended exploratory costs associated with a formation test well in South Texas. The well is currently awaiting finalization of the project's ongoing fracture stimulation and completion designs. The Company successfully completed one other test well in the project and plans to drill a third test well during the second half of 2011. Information gained from the wells is being utilized to finalize the project's fracture stimulation and completion designs. Future production from the project would utilize existing production and marketing infrastructure.