Note 7. Capitalized Exploratory Well Costs

Changes in capitalized exploratory well costs are as follows and exclude amounts that were capitalized and subsequently expensed in the same period:

	Six Months Ended June 30, 2011
(millions)
Capitalized Exploratory Well Costs, Beginning of Period	$	426
Additions to Capitalized Exploratory Well Costs Pending Determination of Proved Reserves		114
Reclassified to Proved Oil and Gas Properties Based on Determination of Proved Reserves (1)		(53	)
Capitalized Exploratory Well Costs Charged to Expense		(15	)
Capitalized Exploratory Well Costs, End of Period	$	472

(1)	Includes $13 million related to the Flyndre project in the North Sea.

The following table provides an aging of capitalized exploratory well costs (suspended well costs) based on the date the drilling was completed and the number of projects for which exploratory well costs have been capitalized for a period greater than one year since the completion of drilling:

	June 30,		December 31,
	2011		2010
(millions)
Exploratory Well Costs Capitalized for a Period of One Year or Less	$	153	$	148
Exploratory Well Costs Capitalized for a Period Greater Than One Year After Completion of Drilling		319		278
Balance at End of Period	$	472	$	426
Number of Projects with Exploratory Well Costs That Have Been Capitalized for a Period Greater Than One Year After Completion of Drilling		10		9

The following table provides a further aging of those exploratory well costs that have been capitalized for a period greater than one year since the completion of drilling as of June 30, 2011:

			Suspended Since
	Total		2010		2009		2008 & Prior
(millions)
Country/Project
Offshore Equatorial Guinea
Blocks O and I	$	102	$	3	$	14	$	85
Offshore Cameroon
YoYo		34		-		-		34
Offshore Israel
Dalit		20		-		20		-
Deepwater Gulf of Mexico
Deep Blue		75		56		19		-
Gunflint		49		-		-		49
Redrock		17		-		-		17
North Sea
Selkirk		20		-		-		20
Other
3 projects of $10 million or less each		2		2		-		-
Total	$	319	$	61	$	53	$	205

Blocks O and I Blocks O and I are crude oil, natural gas and natural gas condensate discoveries. During second quarter 2011 we drilled a successful appraisal well at the Carmen/Diega prospect.

YoYo YoYo is a 2007 natural gas and condensate discovery. We have acquired and processed additional 3-D seismic information.

Dalit Dalit is a 2009 natural gas discovery. We are currently working with our partners on a cost-effective development plan.

Deep Blue Deep Blue (Green Canyon Block 723) is a significant exploratory well, which began drilling during 2009. The well found hydrocarbon pay in multiple intervals. When the deepwater Gulf of Mexico moratorium was announced in May 2010, we were required to suspend sidetrack drilling activities. We recently obtained approval for a drilling permit and plan to resume exploration drilling during third quarter of 2011.

Gunflint Gunflint (Mississippi Canyon Block 948) is a 2008 crude oil discovery. Our plans to conduct appraisal drilling activities in 2010 were delayed by the deepwater Gulf of Mexico moratorium. Once a drilling permit is approved, we plan to resume drilling activities. We are also reviewing host platform options.

Redrock Redrock (Mississippi Canyon Block 204) is a 2006 natural gas/condensate discovery and is currently considered a co-development candidate with Raton South (Mississippi Canyon Block 292). We are in the process of developing Raton South as a subsea tieback to a host platform at Viosca Knoll Block 900. We plan to develop Redrock after Raton South commences production, which is currently expected to occur by the end of 2011.

Selkirk The Selkirk project is located in the UK sector of the North Sea. Capitalized costs to date primarily consist of the cost of drilling an exploratory well. We are currently working with our partners on a cost-effective development plan, including selection of a host facility.