Suspended Wells

12 Months Ended

Dec. 31, 2016

Note 8—Suspended Wells and Other Exploration Expenses

The following table reflects the net changes in suspended exploratory well costs during 2016, 2015 and 2014:

	Millions of Dollars
	2016		2015	2014

Beginning balance at January 1	$	1,260	1,299	994
Additions pending the determination of proved reserves		225	331	478
Reclassifications to proved properties		(27)	(28)	(9)
Sales of suspended well investment		(247)	-	(57)
Charged to dry hole expense		(148)	(342)	(107)
Ending balance at December 31	$	1,063	1,260	1,299

The following table provides an aging of suspended well balances at December 31:

		Millions of Dollars
		2016		2015	2014

Exploratory well costs capitalized for a period of one year or less		$	132	235	466
Exploratory well costs capitalized for a period greater than one year			931	1,025	833
Ending balance		$	1,063	1,260	1,299
Number of projects with exploratory well costs capitalized for a
	period greater than one year		26	28	30

The following table provides a further aging of those exploratory well costs that have been capitalized for more
than one year since the completion of drilling as of December 31, 2016:

	Millions of Dollars
			Suspended Since
		Total	2013–2015	2010–2012	2002–2009


Greater Poseidon—Australia⁽²⁾		177	157	15	5
Shenandoah—Lower 48⁽¹⁾		161	118	-	43
Greater Clair—UK⁽²⁾		131	120	11	-
Surmont 3 and beyond—Canada⁽¹⁾		107	55	29	23
NPRA—Alaska⁽¹⁾		93	70	-	23
Caldita/Barossa—Australia⁽¹⁾		77	-	-	77
Middle Magdalena Basin—Colombia⁽¹⁾		31	31	-	-
Limbayong—Malaysia⁽¹⁾		23	23	-	-
Alpine Satellite—Alaska⁽²⁾		22	-	-	22
Bohai—China⁽²⁾		19	19	-	-
Kamunsu East—Malaysia⁽²⁾		19	19	-	-
NC 98—Libya⁽²⁾		15	11	-	4
Sunrise—Australia⁽²⁾		13	-	-	13
Other of $10 million or less each⁽¹⁾⁽²⁾		43	25	3	15
Total	$	931	648	58	225
(1)Additional appraisal wells planned.
(2)Appraisal drilling complete; costs being incurred to assess development.

In line with our July 2015 announcement of plans to reduce future deepwater exploration spending, we recognized before-tax cancellation costs of $335 million and wrote off $48 million of before-tax capitalized rig costs in relation to the termination of our Gulf of Mexico deepwater drillship contract with Ensco in the Lower 48 segment in the third quarter of 2015. In July 2016, we entered into an agreement to terminate our final Gulf of Mexico deepwater drillship contract. The drillship, used to drill our operated deepwater well inventory in the Gulf of Mexico through April 2016, was contracted on a shared, three-year term. Accordingly, we recorded before-tax rig cancellation charges and third party costs of $146 million in our Lower 48 segment in 2016. These charges are included in the “Exploration expenses” line on our consolidated income statement.

In February 2017, we reached a settlement agreement on our contract for the Athena drilling rig, initially secured for our four-well commitment program in Angola. As a result of the cancellation, we will recognize a before-tax charge of $43 million net in the first quarter of 2017.