b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021 (Continued)Landandbuildingsaremeasuredathistorical Otherthanlicensecosts,noamortizationischargedcost,lessaccumulateddepreciationonbuildings, duringtheexplorationandevaluationphase.andimpairmentlossesifany,arerecognizedatthedateofrevaluation. Oil propertiesExploration and evaluation assets Thecostsofproductiondevelopmentsuchasdrilling,testingandcompletionofdevelopmentExplorationandevaluationactivityinvolve wellsarecapitalized,notwithstandingifthesewellsthesearchforhydrocarbonresources,the aresuccessfulornot.Capitalizedcostsconsistdeterminationoftechnicalfeasibilityandthe ofthepurchasepriceofmaterialsandservices,assessmentofcommercialviabilityofanidentified includingtheGroupsinternalservices.Capitalizedresource. costsforwells,equipmentandproductionfacilitiesOncethelegalrighttoexplorehasbeenacquired, are depreciated using the units of production costs directly associated with an exploration well(UOP)method.arecapitalizedasexplorationandevaluation Allcostsfordevelopmentwells,relatedplantprojectsinprogressuntilthedrillingofthewellis andequipment,andrelatedAssetRetirementcompleteandtheresultshavebeenevaluated. Obligation(ARO)arecapitalized.CapitalizedcostsThesecostsincludedirectlyattributableemployee relatingtoinvestmentsintheoilfield,includingremuneration,materialsandfuelused,rigcosts productivelandproperties,aredepreciatedbasedand payments made to contractors. ontheUOPmethod,generallybyindividualfield,astheproveddevelopedreservesareproduced.Geologicalandgeophysicalcostsarerecognized TheUOPfactorisderivedfromtheyearoilintheconsolidatedstatementofprofitorloss,as productionandtherelatedproveddevelopedoilincurred. reserves.Ifnopotentiallycommercialhydrocarbonsare Oil propertiesassets under constructiondiscovered,theexplorationassetiswrittenoff ExpenditureistransferredfromExplorationandthroughtheconsolidatedstatementofprofitorloss evaluationassetstoAssetsunderconstructionas a dry hole.whichisasubcategoryofOilandgaspropertiesIfextractablehydrocarbonsarefoundand,subject oncetheworkcompletedtodatesupportstofurtherappraisalactivity(e.g.thedrillingof thefuturedevelopmentoftheassetandsuchadditionalwells),itisprobablethattheycanbe developmentreceivesappropriateapprovals.Aftercommerciallydeveloped,thecostscontinueto transferoftheexplorationandevaluationassets,becarriedasprojectsinprogresswhilesufficient/ allsubsequentexpenditureontheconstruction,continued progress is made in assessing theinstallation or completion of infrastructure facilities commercialityofthehydrocarbons. suchaspipelinesandthedrillingofdevelopmentwells,includingunsuccessfuldevelopmentCostsdirectlyassociatedwithappraisalactivity ordelineationwells,iscapitalizedwithinoilundertakentodeterminethesize,characteristics properties.andcommercialpotentialofareservoirfollowing Developmentexpenditureisnetofproceedsfromtheinitialdiscoveryofhydrocarbons,includingthe thesaleofoilproducedduringthedevelopmentcostsofappraisalwellswherehydrocarbonswere phase to the extent that it is considered integral to notfound,areinitiallycapitalizedasprojectsin thedevelopmentoftheasset.Anycostsincurredprogress. in testing the assets to determine whether they Allsuchcapitalizedcostsaresubjecttotechnical, arefunctioningasintended,arecapitalized,commercialandmanagementreview,aswellas netofanyproceedsreceivedfromsellinganyreviewforindicatorsofimpairmentatleastonce productproducedwhiletesting.Wheretheseayear.Thisistoconfirmthecontinuedintent proceedsexceedthecostoftesting,anyexcessistodeveloporotherwiseextractvaluefromthe recognizedintheconsolidatedstatementofprofitdiscovery.Whenthisisnolongerthecase,the or loss.costs are written off through the consolidatedWhenadevelopmentprojectmovesintothestatementofprofitorloss. productionstage,allassetsincludedinAssetsWhenprovedreservesofoilareidentifiedand underconstructionarethentransferredtodevelopmentissanctionedbymanagement,the Producingassetswhichisalsoasub-categoryrelevantcapitalizedexpenditureisfirstassessed ofOilproperties.Thecapitalizationofcertainforimpairmentand(ifrequired)anyimpairment construction/developmentcostsceases,andlossisrecognized,thentheremainingbalanceis costs are either regarded as part of the cost of transferred to oil properties.inventoryorexpensed,exceptforcostswhich83'