Costs Incurred
Our oil and natural gas acquisition, exploration and development activities are conducted in the
United States. The following table summarizes the costs incurred during the last three years (in
thousands):
Year Ended December 31,
2011
2010
2009
Consolidated entities
Property acquisition costs
Unproved properties . . . . . . . . . . . . . . . . . . . . . . . . $ 36,562 $ 612,471 $ 1,121,644
Proved properties . . . . . . . . . . . . . . . . . . . . . . . . . .
9,236
48,078
5,072
Exploration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,147,858
719,004
1,309,396
Development costs . . . . . . . . . . . . . . . . . . . . . . . . . .
708,519
363,242
272,820
$ 1,902,175 $ 1,742,795 $ 2,708,932
Entity’s share of equity investee
(1)
Property acquisition costs
Unproved properties . . . . . . . . . . . . . . . . . . . . . . . . $ 15,523
Proved properties
-
Exploration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
175,802
Development costs . . . . . . . . . . . . . . . . . . . . . . . . . .
17,190
$ 208,515
(1) Amounts relate to our equity investment in McMoRan acquired on December 30, 2010. Our proportionate share of
McMoRan’s 2010 costs incurred is not presented because it is insignificant as PXP owned the investment for one day and it
is not practicable to determine one day of costs incurred.
Amounts presented include capitalized general and administrative expense of $77.1 million, $68.0
million and $67.3 million in 2011, 2010 and 2009, respectively, and capitalized interest expense of
$115.4 million, $128.0 million and $113.8 million in 2011, 2010 and 2009, respectively. We had no
international exploration costs in 2011; in 2010 and 2009, our international exploration costs, primarily
in offshore Vietnam, were $1.7 million and $42.3 million, respectively.
During the second quarter of 2010, we completed our interpretation of seismic and drilling data
from our two offshore Vietnam exploratory wells and decided not to pursue additional exploratory
activities in this area. We terminated our production sharing contract in accordance with its terms. The
costs related to our Vietnam oil and gas properties not subject to amortization were transferred to our
Vietnam full cost pool where they were subject to the ceiling limitation
.
Because our Vietnam full cost
pool had no associated proved oil and gas reserves, we recorded a non-cash pre-tax impairment
charge of $59.5 million. We also recorded a corresponding tax benefit of $23.0 million.
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