Accounting for suspended exploratory well costs

12 Months Ended

Dec. 31, 2021

Accounting for suspended exploratory well costs

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. At December 31, 2021 the company had no capitalized suspended exploratory well costs (2020 - $0 million, 2019 - $0 million).

Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. At December 31, 2021 the company had no projects with exploratory wells costs capitalized (2020 - 0, 2019 - 0).