62
Dry hole expense and impairment.
Dry hole expense and impairment increased by $175.7 million during the year ended
December 31, 2015, as compared to the year ended December 31, 2014. The increase is due to impairment of proved property and
unproved leasehold properties and dry hole expense written off against exploration wells as reflected in the following table:
Year Ended December 31,
2015
2014
Increase
(Decrease)
($ in thousands)
Impairment of Unproved leasehold:
Other leasehold(1)........................................................ $ 15,494 $ 57,308 $ (41,814)
Amortization of leasehold with carrying value under
$1 million..................................................................
11,403
10,662
741
Impairment of Proved property:
Heidelberg.................................................................... 256,779
— 256,779
Dry Hole Expense:
Ligurian #1 exploration well........................................
(2)
46
(48)
Ligurian #2 exploration well........................................
203
—
203
Ardennes #1 exploration well ......................................
347
(133)
480
Aegean #1 exploration well .........................................
668
3,920
(3,252)
Anchor #1 exploration well .........................................
(2,043)
38,075 (40,118)
Yucatan #2 exploration well ........................................
(203)
17,313 (17,516)
Shenandoah by-pass #3 appraisal well.........................
147
5,032
(4,885)
North Platte #2 appraisal well......................................
18,358
—
18,358
Shenandoah VSP..........................................................
248
—
248
Shenandoah #4 appraisal well......................................
6,564
—
6,564
Criollo exploration well ...............................................
(18)
—
(18)
Other Impairments:
Obsolete inventory .......................................................
1,015
1,000
15
$ 308,960 $ 133,223 $ 175,737
(1) Other leasehold includes certain unproved oil and gas leases for properties in the U.S. Gulf of Mexico with
carrying value greater than $1 million that we have no exploration activity planned, based on our three-year
exploration plan, during the remaining term of the leases.
General and administrative.
General and administrative costs increased by $14.9 million during the year ended December 31,
2015 as compared to the year ended December 31, 2014. The increase in general and administrative costs during this period was
primarily attributed to a $4.3 million increase in staff related expenses which includes non-cash equity compensation, an increase of
$3.4 million in legal and consulting fees and a decrease of $9.2 million in recoveries from partners associated with drilling activities
offset by a $2.0 million decrease in insurance and office support costs.
Depreciation and amortization.
Depreciation and amortization did not materially change during the year ended December 31,
2015 as compared to the year ended December 31, 2014.
Other income (expense).
Other income (expense) decreased by $13.1 million for the year ended December 31, 2015 as
compared to the year ended December 31, 2014. The decrease was primarily due to a $16.8 million increase in interest expense
associated with the issuance of the 3.125% convertible senior notes due 2024 on May 13, 2014, a $19.1 increase in amortization of
debt issuance costs and accretion of discount, offset by an increase in capitalized interest of $47.4 million due to increased project
activity and a $1.6 million increase in other income attributed to gain on sale of other assets during the year ended December 31, 2015.
Income taxes.
As a result of net operating losses, for income tax purposes, we recorded a net deferred tax asset of
$896.3 million and $568.0 million with a corresponding full valuation of $896.3 million and $568.0 million for the years ended
December 31, 2015 and 2014, respectively.
