We capitalize exploratory well costs until a determination is made that the well has either found proved reserves or that it is impaired. Capitalized exploratory well costs are presented in natural gas and oil properties in the accompanying consolidated balance sheets. If an exploratory well is determined to be impaired, the well costs are charged to exploration expense in the accompanying consolidated statements of income.

We believe these wells exhibit sufficient quantities of natural gas to justify future development. The remaining suspended well requires completion activities and infrastructure expansion in order to classify the reserves as proved. The following table reflects the changes in capitalized exploratory well costs for the six months ended June 30, 2026 and the year ended December 31, 2025:


	Six Months Ended June 30, 2026			Year Ended December 31, 2025
	(in thousands)
Balance at beginning of period	$	19,292		$	12,569
Additions to capitalized exploratory well costs pending proved reserves determination		9,883			6,723
Reclassifications to development cost based on determination of proved reserves		(22,332	)		—
Capitalized exploratory well costs, charged to expense		—			—
Balance at end of period	$	6,843		$	19,292
Less exploratory well costs capitalized for one year or less	$	—		$	—
Exploratory well costs capitalized for more than one year	$	6,843		$	19,292
Number of projects with exploratory well costs capitalized for more than one year		1			2