15. Accounting for suspended exploratory well costs

The company continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.

Exploratory well costs at year-end 2016 that were capitalized as part of the Horn River project for a period greater than 12 months were expensed in 2017.

The following two tables provide details of the changes in the balance of suspended exploratory well costs, as well as an aging summary of those costs.

Change in capitalized suspended exploratory well costs:


millions of Canadian dollars	2017			2016			2015
Balance as at January 1		143			167			167
Additions pending the determination of proved reserves		-			-			-
Charged to expense		(143	)		(24	)		-
Reclassification to wells, facilities and equipment based on the determination of proved reserves		-			-			-
Balance as at December 31		-			143			167

Period end capitalized suspended exploratory well costs:


millions of Canadian dollars	2017		2016		2015
Capitalized for a period of one year or less		-		-		-
Capitalized for a period of between one and ten years		-		143		167
Capitalized for a period of greater than one year		-		143		167

Total		-		143		167

Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below provides a breakdown of the number of projects with exploratory well costs capitalized in the preceding 12 months and those that have had exploratory well costs capitalized for a period greater than 12 months.


	2017		2016		2015
Number of projects with first capitalized well drilled in the preceding 12 months		-		-		-
Number of projects that have exploratory well costs capitalized for a period of greater than 12 months		-		1		1
Total		-		1		1