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MRO » Topics » Exploration expenses increased $89 million in 2007 from 2006. Exploration expenses related to dry wells and other write-offs totaled $233 million and $166 million in 2007 and 2006.These excerpts taken from the MRO 10-K filed Feb 27, 2009. Exploration expenses increased $89 million in 2007 from 2006. Exploration expenses related to dry wells and other write-offs totaled $233 million and $166 million in 2007 and 2006. Net interest and other financial income or costs reflected $41 million of income for 2007, a favorable change of $4 million from 2006. Included in net interest and other financial income or costs were foreign currency transaction gains of $2 million and $16 million for 2007 and 2006. Gain on foreign currency derivative instruments in 2007 represents gains on foreign currency derivative instruments entered to limit our exposure to changes in the Canadian dollar exchange rate related to the cash portion of the purchase price for Western. These derivative instruments were settled on October 17, 2007. Provision for income taxes decreased $1,121 million in 2007 from 2006 primarily due to the $2,130 million decrease in income from continuing operations before income taxes. The decrease in our effective income tax rate in 2007 was primarily a result of the $193 million benefit of applying the Canadian income tax rate reductions enacted subsequent to our acquisition of Western to the applicable net deferred tax liabilities. These tax rates will decrease from 32 percent to 25 percent by 2012. The following is an analysis of the effective income tax rates for continuing operations for 2007 and 2006. See Note 12 to the consolidated financial statements.
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Table of ContentsIndex to Financial StatementsDiscontinued operations related to the exploration and production businesses which were sold in June 2006. After-tax gains on the disposal of $8 million and $243 million were also included in discontinued operations for 2007 and 2006. See Note 8 to the consolidated financial statements. Exploration expenses increased $89 million in 2007 from 2006. Exploration expenses related to dry wells and other write-offs totaled $233 million and $166 million in 2007 and 2006. Net interest and other financial income or costs reflected $41 million of income for 2007, a favorable change of $4 million from 2006. Included in net interest and other financial income or costs were foreign currency transaction gains of $2 million and $16 million for 2007 and 2006. Gain on foreign currency derivative instruments in 2007 represents gains on foreign currency derivative instruments entered to limit our exposure to changes in the Canadian dollar exchange rate related to the cash portion of the purchase price for Western. These derivative instruments were settled on October 17, 2007. Provision for income taxes decreased $1,121 million in 2007 from 2006 primarily due to the $2,130 million decrease in income from continuing operations before income taxes. The decrease in our effective income tax rate in 2007 was primarily a result of the $193 million benefit of applying the Canadian income tax rate reductions enacted subsequent to our acquisition of Western to the applicable net deferred tax liabilities. These tax rates will decrease from 32 percent to 25 percent by 2012. The following is an analysis of the effective income tax rates for continuing operations for 2007 and 2006. See Note 12 to the consolidated financial statements.
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Table of ContentsIndex to Financial StatementsDiscontinued operations related to the exploration and production businesses which were sold in June 2006. After-tax gains on the disposal of $8 million and $243 million were also included in discontinued operations for 2007 and 2006. See Note 8 to the consolidated financial statements. | EXCERPTS ON THIS PAGE:
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