Note 7. Capitalized Exploratory Well Costs

We capitalize exploratory well costs until a determination is made that the well has found proved reserves or is deemed noncommercial. If a well is deemed to be noncommercial, the well costs are immediately charged to exploration expense.

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

		Three Months Ended March 31, 2012
(millions)
Capitalized Exploratory Well Costs, Beginning of Period	$	696
Additions to Capitalized Exploratory Well Costs Pending Determination of Proved Reserves		93
Reclassified to Proved Oil and Gas Properties Based on Determination of Proved Reserves		-
Capitalized Exploratory Well Costs Charged to Expense		-
Capitalized Exploratory Well Costs, End of Period	$	789

The following table provides an aging of capitalized exploratory well costs based on the date that drilling commenced, and the number of projects that have been capitalized for a period greater than one year:

	March 31,		December 31,
	2012		2011
(millions)
Exploratory Well Costs Capitalized for a Period of One Year or Less	$	345	$	318
Exploratory Well Costs Capitalized for a Period Greater Than One Year Since Commencement of Drilling		444		378
Balance at End of Period	$	789	$	696
Number of Projects with Exploratory Well Costs That Have Been Capitalized for a Period Greater Than One Year Since Commencement 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 commencement of drilling as of March 31, 2012:

			Suspended Since
	Total		2011		2010		2009 & Prior
(millions)
Country/Project
Offshore Equatorial Guinea
Blocks O and I	$	114	$	2	$	6	$	106
Offshore Cameroon
YoYo		41		1		2		38
Offshore Israel
Leviathan		86		45		41		-
Dalit		22		-		1		21
Deepwater Gulf of Mexico
Gunflint		70		11		3		56
Deep Blue		75		2		54		19
North Sea
Selkirk		22		-		1		21
Other
3 projects of $10 million or less each		14		6		8		-
Total	$	444	$	67	$	116	$	261

Blocks O and I Blocks O and I are crude oil, natural gas and natural gas condensate discoveries. During the second quarter of 2011, we drilled the successful Diega appraisal well which encountered both crude oil and natural gas. We have drilled two sidetracks, each of which encountered hydrocarbons. We are currently finalizing our appraisal of Diega and are evaluating regional development scenarios.

YoYo YoYo is a 2007 natural gas and condensate discovery. During 2011 we acquired and processed additional 3-D seismic information and are continuing evaluations for future drilling potential.

Leviathan Leviathan is a 2010 natural gas discovery. We are continuing to evaluate the discovery with the successful drilling of the Leviathan-3 appraisal well. We will require an additional one or two appraisal wells to further define Leviathan's natural gas areal extent in order to determine the best development option including subsea tieback to existing shallow water platform, semi-submersible platform, FPSO, or LNG.

In January 2012, we resumed drilling at the Leviathan-1 well in order to evaluate two additional intervals for the existence of crude oil. Results from these deeper tests are expected during the second quarter of 2012.

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

Gunflint Gunflint (Mississippi Canyon Block 948) is a 2008 crude oil discovery. We are currently drilling the first of up to three appraisal wells that we anticipate drilling to fully evaluate the extent of the reservoir. We are also reviewing host platform options including subsea tieback to an existing third-party host and construction of a new facility.

Deep Blue Deep Blue (Green Canyon Block 723) was a significant test well which began drilling in 2009. When the Deepwater Moratorium was announced in May 2010, we were required to suspend side track drilling activities. We resumed drilling activities and found additional hydrocarbons in high quality reservoirs in 2011. We have completed the analysis of the data obtained from the side track well and are working with our existing and potential new partners regarding their participation in an appraisal well.

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.