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56 Chevron Corporation 2012 Annual Report
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
e projects for the $821 referenced above had the fol-
lowing activities associated with assessing the reserves and the
projects’ economic viability: (a) $359 (six projects) – undergo-
ing front-end engineering and design with nal investment
decision expected within three years; (b) $218 (four projects)
– development concept under review by government; (c) $202
(ve projects) – development alternatives under review; (d)
$42 (eight projects) – miscellaneous activities for projects with
smaller amounts suspended. While progress was being made
on all 46 projects, the decision on the recognition of proved
reserves under SEC rules in some cases may not occur for
several years because of the complexity, scale and negotiations
connected with the projects. However, the majority of these
decisions are expected to occur in the next three years.
e $2,180 of suspended well costs capitalized for a
period greater than one year as of December 31, 2012, repre-
sents 166 exploratory wells in 46 projects. e tables below
contain the aging of these costs on a well and project basis:
Number
Aging based on drilling completion date of individual wells: Amount of wells
1997–2001 $ 65 23
2002–2006 416 41
2007–2011 1,699 102
Total $ 2,180 166
Aging based on drilling completion date of last Number
suspended well in project: Amount of projects
1999 $ 8 1
2003–2007 322 8
2008–2012 1,850 37
Total $ 2,180 46
Note 19
Stock Options and Other Share-Based Compensation
Compensation expense for stock options for 2012, 2011 and
2010 was $283 ($184 after tax), $265 ($172 after tax) and
$229 ($149 after tax), respectively. In addition, compensa-
tion expense for stock appreciation rights, restricted stock,
performance units and restricted stock units was $177 ($115
after tax), $214 ($139 after tax) and $194 ($126 after tax) for
2012, 2011 and 2010, respectively. No signicant stock-based
compensation cost was capitalized at December 31, 2012,
or December 31, 2011.
Cash received in payment for option exercises under all
share-based payment arrangements for 2012, 2011 and 2010
was $753, $948 and $385, respectively. Actual tax benets
realized for the tax deductions from option exercises were
$101, $121 and $66 for 2012, 2011 and 2010, respectively.
Cash paid to settle performance units and stock appre-
ciation rights was $123, $151 and $140 for 2012, 2011 and
2010, respectively.
Chevron Long-Term Incentive Plan (LTIP) Awards under
the LTIP may take the form of, but are not limited to, stock
options, restricted stock, restricted stock units, stock appreci-
ation rights, performance units and nonstock grants. From
April 2004 through January 2014, no more than 160 million
shares may be issued under the LTIP, and no more than
64 million of those shares may be in a form other than a stock
option, stock appreciation right or award requiring full payment
for shares by the award recipient. For the major types of awards
outstanding as of December 31, 2012, the contractual terms
vary between three years for the performance units and 10 years
for the stock options and stock appreciation rights.
Unocal Share-Based Plans (Unocal Plans) When Chevron
acquired Unocal in August 2005, outstanding stock options
and stock appreciation rights granted under various Unocal
Plans were exchanged for fully vested Chevron options and
appreciation rights. ese awards retained the same provi-
sions as the original Unocal Plans. Unexercised awards began
expiring in early 2010 and will continue to expire through
early 2015.
Note 18 Accounting for Suspended Exploratory Wells – Continued