Dry Oil Company, a successful-efforts company, drilled an exploratory well offshore at a cost of $1 million.

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Dry Oil Company, a successful-efforts company, drilled an exploratory well offshore at a cost of $1 million. The well was dry, but Dry Oil felt that the G&G data obtained from the well was promising and drilled another well close to the first one. Should the first well be expensed or capitalized?

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