6. Property, Plant and Equipment

Assets Held for Sale

Exploration and Production: In March 2013, the Corporation approved a plan to divest its E&P assets in Thailand (comprising the Pailin (Hess 15%) and Sinphuhorm (Hess 35%) fields) and Indonesia (comprising the Pangkah (Hess 75%) and Natuna (Hess 23%) fields). At September 30, 2013, the book value of assets associated with these properties totaled $1,670 million, primarily consisting of the net property, plant and equipment balances and allocated goodwill of $170 million, which were reported as Assets held for sale. In addition, liabilities related to these properties totaled $474 million, primarily consisting of asset retirement obligations and deferred income taxes, which were reported in Liabilities associated with assets held for sale. At December 31, 2012, assets and liabilities related to the ACG and Beryl fields, which were divested in the first quarter of 2013, were classified as held for sale.

Downstream Businesses: As of September 30, 2013, the assets and liabilities of the downstream businesses have been classified as held for sale. In July 2013, the Corporation announced an agreement to sell its energy marketing business, and the sale closed in November 2013 for cash proceeds of $1.2 billion before post-closing adjustments. In October 2013, the Corporation also announced an agreement to sell its U.S. East Coast terminal network and St. Lucia terminal for $850 million before post-closing adjustments. This transaction is also expected to close in the fourth quarter of 2013. See Note 2, Discontinued Operations – Downstream Businesses and Note 15, Subsequent Events.

Capitalized Exploratory Well Costs: The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves for the nine months ended September 30, 2013 (in millions):


Balance at January 1	$	2,259
Additions to capitalized exploratory well costs pending the determination of proved reserves		183
Reclassifications to wells, facilities and equipment based on the determination of proved reserves		(69	)
Capitalized exploratory well costs charged to expense		(7	)
Dispositions and other		(78	)

Balance at September 30, 2013	$	2,288

The preceding table excludes exploratory dry hole costs of $80 million which were incurred and subsequently expensed in 2013. Capitalized exploratory well costs greater than one year old after completion of drilling were $2,105 million at September 30, 2013. Approximately 40% of the capitalized well costs in excess of one year related to Block WA-390-P, offshore Western Australia, where development planning and commercial activities, including negotiations with potential liquefaction partners, are ongoing. Successful negotiation with a third party liquefaction partner is necessary before the Corporation can negotiate a gas sales agreement and sanction development of the project. Approximately 24% related to the Corporation’s Pony discovery on Block 468 in the deepwater Gulf of Mexico, and 7% related to the Pony #3 well on Block 469. The Corporation has signed an exchange agreement with the partners of the adjacent Green Canyon Blocks 512 and 511, which contain the Knotty Head discovery. Under this agreement, Hess was appointed operator and has a 20% working interest in the blocks, which are now collectively referred to as the Stampede project. An application to unitize Blocks 468, 512, the western half of 469 and the eastern half of 511 is planned to be filed with the Bureau of Safety and Environmental Enforcement in the fourth quarter of 2013. Field development planning is progressing and the project is targeted for sanction in 2014. Approximately 12% of the capitalized well costs in excess of one year related to offshore Ghana where the Corporation completed drilling its seventh successful exploration well in February 2013. Appraisal plans for the block were submitted to the Ghanaian government for approval in June 2013 and the Corporation has begun pre-development studies on the block. Approximately 12% related to Area 54, offshore Libya, where the Corporation is pursuing commercial options. The remainder of the capitalized well costs in excess of one year related to projects where further drilling is planned or development planning and other assessment activities are ongoing to determine the economic and operating viability of the projects.