What was the total exploration and appraisal expenditure for Petro Stopping Center in 2024?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Exploration and evaluation costs | |||
| Exploration expenditure written off | 374 | 272 | 69 |
| Other exploration costs | 107 | 86 | 87 |
| Exploration expense for the year | 481 | 358 | 156 |
| Intangible assets – exploration and appraisal expenditurea | 871 | 879 | 773 |
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the intangible assets related to exploration and appraisal expenditure totaled $871 million in 2024. This figure represents the company's investment in identifying and evaluating potential oil and natural gas resources. These costs are initially capitalized as intangible assets. They include expenses related to geological surveys, geophysical studies, and the drilling of exploration wells.
These capitalized costs are subject to regular review to ensure that the company intends to develop or extract value from the discovery. If it is determined that development will not occur, the costs are expensed. This process involves significant judgment to determine whether it is appropriate to continue carrying costs associated with exploration wells and exploratory-type stratigraphic test wells on the balance sheet. The determination of potentially economic oil and natural gas reserves from an exploration well is usually made within one year of well completion, but can take longer depending on the complexity of the geological structure.
For a prospective Petro Stopping Center franchisee, understanding these exploration and appraisal expenditures is crucial because they reflect the company's ongoing investments in securing future resources. While franchisees are not directly involved in these activities, the financial health and resource base of Petro Stopping Center can impact the long-term stability and success of the franchise system. Therefore, it is important for potential franchisees to consider these factors when evaluating the overall viability of the franchise opportunity.