EXPLORATORY COSTS

Energen capitalizes exploratory drilling costs until a determination is made that the well or project has either found proved reserves or is impaired. After an exploratory well has been drilled and found oil and natural gas reserves, a determination may be pending as to whether the oil and natural gas quantities can be classified as proved. In those circumstances, Energen continues to capitalize the drilling 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) Energen is making sufficient progress assessing the reserves and the economic and operating viability of the project. Capitalized exploratory drilling costs are presented in proved properties in the balance sheets. If the exploratory well is determined to be a dry hole, the costs are charged to exploration expense. Other exploration costs, including geological and geophysical costs, are expensed as incurred.

The following table sets forth capitalized exploratory well costs and includes additions pending determination of proved reserves, reclassifications to proved reserves and costs charged to expense:



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2015			2014			2015			2014
Capitalized exploratory well costs at beginning of period	$	99,926		$	166,458		$	119,439		$	57,600
Additions pending determination of proved reserves	113,734			258,724			533,255			623,913
Reclassifications due to determination of proved reserves	(82,325		)	(258,123		)	(521,359		)	(513,263		)
Exploratory well costs charged to expense	—			(1,217		)	—			(2,408		)
Capitalized exploratory well costs at end of period	$	131,335		$	165,842		$	131,335		$	165,842

The following table sets forth capitalized exploratory well costs:



(in thousands)	September 30, 2015		December 31, 2014
Exploratory wells in progress (drilling rig not released)	$	14,161	$	18,781
Capitalized exploratory well costs capitalized for a period of one year or less	117,174		100,658
Total capitalized exploratory well costs	$	131,335	$	119,439

No wells were capitalized for a period greater than one year as of September 30, 2015 or December 31, 2014. At September 30, 2015, Energen had 55 gross exploratory wells either drilling or waiting on results from completion and testing. Of these wells, 47 are located in the Permian Basin and the remaining 8 are located in the San Juan Basin.