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Property, Plant and Equipment | 3 Months Ended
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Mar. 31, 2017
Property, Plant And Equipment [Abstract] |
Property, Plant and Equipment | ﻿ Note B – Property, Plant and Equipment ﻿ ﻿ E xploratory Wells ﻿ Under Financial Accounting Standards Board (FASB) guidance exploratory well costs should continue to be capitalized 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. ﻿ At March 31, 201 7, the Company had total capitalized exploratory well costs pending the determination of proved reserves of $166.4 million. The following table reflects the net changes in capitalized exploratory well costs during the three-month periods ended March 31, 201 7 and 201 6. ﻿ ﻿
﻿ |  |  |  |  |
﻿ |  |  |  |  |
﻿(Thousands of dollars) | 2017 |  |  | 2016
﻿Beginning balance at January 1 | $ | 148,500 |  |  | 130,514
﻿Additions pending the determination of proved reserves |  | 39,653 |  |  | –
﻿Reclassifications to proved properties based on the determination of proved reserves |  | (13,370) |  |  | –
﻿Capitalized exploratory well costs charged to expense |  | (8,360) |  |  | –
﻿Other adjustments |  | – |  |  | (886)
﻿Balance at March 31 | $ | 166,423 |  |  | 129,628
Note B – Property, Plant and Equipment (Contd.) ﻿ The following table provides an aging of capitalized exploratory well costs based on the date the drilling was completed for each individual well and the number of projects for which exploratory well costs have been capitalized. The projects are aged based on the last well drilled in the project. ﻿
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﻿ |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  | March 31,
﻿ | 2017 |  | 2016
﻿(Thousands of dollars) | Amount |  | No. of Wells |  | No. of Projects |  | Amount |  | No. of Wells |  | No. of Projects
﻿Aging of capitalized well costs: |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Zero to one year | $ | 48,202 |  | 2 |  | 2 |  | $ | 65,136 |  | 7 |  | 6
﻿One to two years |  | 53,729 |  | 3 |  | 3 |  |  | – |  | – |  | –
﻿Two to three years |  | – |  | – |  | – |  |  | 31,627 |  | 2 |  | –
﻿Three years or more |  | 64,492 |  | 6 |  | – |  |  | 32,865 |  | 4 |  | –
﻿ | $ | 166,423 |  | 11 |  | 5 |  | $ | 129,628 |  | 13 |  | 6
﻿ Of the $118.2 million of e xploratory well costs capitalized more than one year at March 31, 201 7, $64.5 million is in Brunei, and $53.7 million is in Malaysia. In all geographical areas, either further appraisal or development drilling is planned and/or development studies/plans are in various stages of completion. The capitalized well costs charged to expense in the first quarter 2017 included one well in Block H, offshore Malaysia in which development of the well could not be justified due to noncommercial hydrocarbon quantities found and change in development plan due to low commodity prices. ﻿ Divestments ﻿ In January 2017, a Canadian subsidiary of the Company completed its disposition of the Seal field in Western Canada. Total cash consideration to Murphy upon closing of the transaction was approximately $49.0 million. Additionally, the buyer assumed the asset retirement obligation of approximately $85.9 million. A $132.4 million pretax gain was reported in the first quarter of 2017 related to the sale. Also, in January 2017, a U.S. subsidiary of the Company completed its disposition of several non-core properties in the North Tilden area of Eagle Ford Shale. Total cash consideration to Murphy upon closing of the transaction was approximately $14.8 million. There was no gain or loss recorded related to this sale. ﻿ Impairments ﻿ During the first quarter of 2016, declines in future oil and gas prices led to impairments in certain of the Company’s producing properties and the Company recorded pretax nonca sh impairment charges of $95.1 million to reduce the carrying values to their estimated fair values for the Terra Nova field offshore Canada and the Western Canada onshore heavy oil producing properties at Seal. The fair values were determined by internal discounted cash flow models using estimates of future production, prices from futures exchanges, costs, and a discount rate believed to be consistent with those used by principal market participants in the applicable region. ﻿ Other ﻿ The Company has an interest in the Kakap field in Block K Malaysia. The Kakap field is operated by another company and was jointly developed with the Gumusut field owned by others. In the fourth quarter 2016, the Company recorded $39.0 million in redetermination expense related to an expected reduction in the Company’s working interest covering the period from inception through year-end 2016 at Kakap. In February 2017, PETRONAS officially approved the redetermination that reduces the Company’s working interest effective April 1, 2017. The Company currently expects to settle the redetermination in cash in the second quarter of 2017. It is possible that the final adjustment amount could be different than the current estimate.

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- Definition The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 + Details
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