NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (1) The Company drilled three exploratory wells in the Anadarko Basin that did not have economically  recoverable reserves (i.e. dry wells) and as such, all associated costs were written off.  2014 2013 Year ended 31 December  US$’000 US$’000 Costs carried forward in respect of areas of interest in:  Exploration and evaluation phase, at cost 156,680  167,694  Provision for impairment  (1,550)  (1,550)  Total Exploration and Evaluation Expenditure  155,130  166,144  a) Movements in carrying amounts:  Exploration and evaluation  Balance at the beginning of the period  166,144  33,439  Amounts capitalised during the period  39,670  14,770  Fair value of assets acquired  -  151,115  Allocation of working interest assets acquired  34,184  -  Exploration costs expensed $^{(1)}$  (10,934)  Reclassifications to assets held for sale  -  (1,104)  Amounts transferred to development phase  (59,209)  (31,999)  Exploration tenements sold during the period  (14,725)  (77)  Balance at end of period  155,130  166,144  NOTE 18 – EXPLORATION AND EVALUATION EXPENDITURE  In July 2014, the Company acquired the working interest in approximately 9,200 gross (5,700 net) in Dimmit County,  Texas. The purchase price included an initial cash payment of $35.5 million and a commitment to drill four Eagle  Ford wells. The purchase price was allocated between exploration and evaluation and development and production  assets based on discounted cash flows of developed producing wells.  The ultimate recoupment of costs carried forward for exploration phase is dependent on the successful development  and commercial exploitation or sale of respective areas. - 85 -  2014  2013  Year ended 31 December  US$’000  US$’000  Property and equipment, at cost 2,570  1,603  Accumulated depreciation  (1,016)  (556)  Total Property and Equipment  1,554  1,047  a) Movements in carrying amounts:  Balance at the beginning of the period  1,047  423  Amounts capitalised during the period  967  886  Depreciation expense  (460)  (262)  Balance at end of period  1,554  1,047  NOTE 19 – PROPERTY AND EQUIPMENT 