Cobalt Annual Report 2015 - page 109

Cobalt International Energy, Inc.
Notes to Consolidated Financial Statements (Continued)
F-17
8. Property, Plant, and Equipment
Property, plant, and equipment is stated at cost less accumulated depreciation/amortization and consisted of the following:
Estimated
Useful Life
(Years)
December 31,
2015
December 31,
2014
($ in thousands)
Oil and Gas Properties:
Proved properties:
Well and development costs................................................
$ 71,463 $ 183,221
Total proved properties.............................................................
71,463
183,221
Unproved properties:
Oil and gas leasehold ..........................................................
382,976
406,643
Less: accumulated valuation allowance ..............................
(175,963) (208,725)
207,013
197,918
Exploration wells in process ...............................................
615,258
330,099
Total unproved properties.........................................................
822,271
528,017
Total oil and gas properties, net................................................
893,734
711,238
Other Property and Equipment:
Computer equipment and software ...........................................
3
5,350
5,214
Office equipment and furniture ................................................
3 - 5
1,349
1,329
Leasehold improvements ..........................................................
3 - 10
2,150
2,118
8,849
8,661
Less: accumulated depreciation and amortization ....................
(6,647)
(5,245)
Total other property and equipment, net...................................
2,202
3,416
Property, plant, and equipment, net ..........................................
$ 895,936 $ 714,654
The Company recorded $1.4 million, $1.7 million, and $1.3 million of depreciation and amortization expense for the years
ended December 31, 2015, 2014 and 2013, respectively.
Proved Oil and Gas Properties
The Heidelberg project was formally sanctioned for development in mid-2013. As a result of the project sanction, the Company
reclassified its Heidelberg exploration well costs to proved property well and development costs and these costs will be amortized
when the related proved developed reserves are produced. As of December 31, 2015, prior to recognition of impairment charges, the
well and development costs consisted of $104.0 million relating to well costs for the Heidelberg #1 exploration well, Heidelberg #3
appraisal well, and the Heidelberg #4 and Heidelberg #6 development wells and $221.2 million for costs associated with field
development. As of December 31, 2014, the well and development costs consisted of $51.1 million relating to well costs for the
Heidelberg #1 exploration well, Heidelberg #3 appraisal well, and the Heidelberg #4 and Heidelberg #6 development wells and
$132.1 million for costs associated with field development.
During 2015, proved oil and gas properties with a carrying amount of $325.2 million were written down to their fair value of
$68.4 million, resulting in impairment charges of $256.8 million. Significant Level 3 inputs associated with the calculation of
discounted cash flows used in the impairment analysis include the Company's estimate of future crude oil and natural gas prices,
production costs, development expenditures, anticipated production of proved, probable and possible reserves, appropriate risk-
adjusted discount rates and other relevant data.
1...,99,100,101,102,103,104,105,106,107,108 110,111,112,113,114,115,116,117,118,119,...136
Powered by FlippingBook