Question

when evaluating whether the unproved properties should be impaired, an E&P company should consider:

		the expiration of the primary lease term.
		successful rate on the lease or on nearby leases.
		future drilling plans.
		all of the above factors should be considered.

Answer 1

Answer: 3^rd option

If the property is unproved, it should be checked for impairment periodically (such as once in a year). In the process of such checking the qualitative factors should be considered mainly, like future plan, and operational prospects of the property. If these are satisfactory then the property should not be impaired.