64
Dry hole expense and impairment.
Dry hole expense and impairment decreased by $90.9 million during the year ended
December 31, 2014, as compared to the year ended December 31, 2013. The decrease is due to impairment of unproved leasehold
properties and dry hole expense written off against exploration wells as reflected in the following table:
Year Ended December 31,
2014
2013
Increase
(Decrease)
($ in thousands)
Impairment of Unproved leasehold:
Ardennes prospect .................................................................... $
— $ 29,122 $
(29,122)
Aegean prospect .......................................................................
—
38,499
(38,499)
Other leasehold(1) ....................................................................
57,308
10,002
47,306
Amortization of leasehold with carrying value under
$1 million...............................................................................
10,662
9,417
1,245
Dry Hole Expense:
Ligurian #1 exploration well ....................................................
46
631
(585)
Ardennes #1 exploration well ...................................................
(133)
66,133
(66,266)
Aegean #1 exploration well ......................................................
3,920
53,235
(49,315)
Anchor #1 exploration well ......................................................
38,075
—
38,075
Yucatan #2 exploration well.....................................................
17,313
—
17,313
Shenandoah by-pass #3 appraisal well .....................................
5,032
—
5,032
Diaman #1 exploration well......................................................
—
17,066
(17,066)
Other Impairments:
Obsolete inventory....................................................................
1,000
—
1,000
$ 133,223 $ 224,105 $
(90,882)
(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 decreased by $0.8 million during the year ended December 31,
2014 as compared to the year ended December 31, 2013. The decrease in general and administrative costs during this period was
primarily attributed to a $10.2 million increase in staff related expenses which includes non-cash equity compensation and a
$3.0 million increase in insurance and office support costs, offset by a decrease of $3.7 million in legal and consulting fees and an
increase of $10.5 million in recoveries from partners associated with drilling activities.
Depreciation and amortization.
Depreciation and amortization did not change significantly during the year ended
December 31, 2014 as compared to the year ended December 31, 2013.
Other income (expense).
Other income (expense) increased by $12.5 million for the year ended December 31, 2014 as
compared to the year ended December 31, 2013. The increase was primarily due to a $9.4 million increase in interest expense
associated with the issuance of the 3.125% convertible senior notes due 2024 on May 13, 2014 and a $3.0 million decrease in other
income attributed to gain on sale of other assets during the year ended December 31, 2013.
Income taxes.
As a result of net operating losses, for income tax purposes, we recorded a net deferred tax asset of
$568.0 million and $461.6 million with a corresponding full valuation of $568.0 million and $461.6 million for the years ended
December 31, 2014 and 2013, respectively.
Liquidity and Capital Resources
As of December 31, 2015, we had approximately $1.2 billion in cash, which includes cash and cash equivalents, investments,
and restricted cash, but excludes cash and restricted cash held within assets held for sale. This amount of $1.2 billion includes the
$250 million we received from Sonangol pursuant to the Purchase and Sale Agreement, which is classified as restricted cash pending
the closing of the Angola Transaction. We expect to expend approximately $450 to $500 million for our U.S. Gulf of Mexico capital
expenditures in 2016, which excludes general and administrative and interest expense. In addition, we expect to spend approximately
$110 million on a net basis for operations on Blocks 20 and 21 Angola pending the closing of the Angola Transaction. Pursuant to the
terms of the Purchase and Sale Agreement governing the Angola Transaction, we are entitled to reimbursement of such amounts upon
