Good morning. My name is Steve, and I will be your conference operator today. At this time, I would like to welcome everyone to the 2013 Anadarko Petroleum Corporation Investor Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.
I would now like to turn the conference over to your host for today John Colglazier, Vice President, Investor Relations and Communications. Please go ahead, sir.
Thank you, Steve. Good morning, everyone. We are glad you could join us today as we host Anadarko's 2013 investor conference call. In a moment we will turn the call over to Al Walker who will be followed by Bob Gwin, Chuck Meloy, Doug Lawler, and Bob Daniels, as they provide an outlook on our 2013 plans and our portfolio opportunities and forward growth.
Our presentation today includes our best and most reasonable estimates and actual results could differ materially from what we discuss today. So, I encourage you to review the Risk Factors associated with our business in our forward-looking statements in our 2012 10-K press releases and filings.
We will also reference certain non-GAAP measures. So be sure to see the reconciliations in our Appendix slides.
In addition, unless otherwise noted, we have used a flat NYMEX price deck of $90 per barrel of oil and $3.50 per Mcf for gas, which represents consensus prices a couple of weeks ago.
Before we start, I would also like to introduce two new members of the IR team who will be happy to help you with your questions after the call. Brian Kuck, a 15 year geologist, most recently a General Manager in the Gulf of Mexico, and Bill Tedesco, a 10 year geologist with the company, most recently Exploration Manager of our East Africa opportunities.
At the end of the prepared remarks, we look forward to answering your question. And with that let me turn the call over to Al.
Thanks, John, and good morning. I appreciate everybody taking the time to get with us this morning. You're going to find this morning I think we're very proud of Anadarko, our employees, our values, our culture. And I think again, and you've heard us talk about this a lot, we are really of a mind that believes that our portfolio differentiates us in a lot of different ways.
It does it through the solid and predictable things that we're able to do year in and year out, and you're going to hear today, as John made reference from each member of our senior leadership team, about the strengths that have delivered on this particular strategy for a number of years.
One of the things we hope to show you this morning is greater transparency and our multiyear capital efficient growth, and be able to show you that we have significant option value and continue to give you industry leading and a big commitment to exploration.
So let's dive then a little bit deeper if we can. One of the three things that I really want to hit on this morning is the issues associated with short cycle, medium cycle, and longer cycle investing. In the U.S. Onshore, these are multiple of what others can do and they give us value leverage that others can't. In the short cycle, where we look at pretty much cash on cash types of returns, the Wattenberg as you've heard us talk about is clearly one of the best assets in our portfolio and, as you've heard us also talk in the past, we believe our rates to return there exceed 100%.
We've got a very good focus on Liquids growth and you're going to also hear us talk a little bit about the fact that we think we can grow our volumes in liquids this year with 30,000 barrels a day versus the year before, and that our massive and expanding midstream position is an enabler for that growth and this higher margin.
In the Deepwater and International Ops area, Doug Lawler is going to talk a little bit about some of the things we see in our midterm spin cycle. There we're going to talk about some of the large and very important oil projects we're working on that have extremely attractive margins, and we also have had great success with value enhancements through the promotes we've had at Lucius and one that we have pending for Heidelberg.
We're also going to finish with Bob Daniels talking quite a bit about how we're going to build for the future through exploration. We got a number of transformational rather targets and play opening opportunities to talk to you about today. And I would be very remiss if I didn't point out the fact that Bob and our exploration folks over the last five years continue to have just incredible success, frankly in a way that very few others can talk about with over 70% of our exploration/appraisal wells being successful.
So this is a very attractive optionality from our standpoint. We continue to create value in and around this portfolio with the farm outs and the promotes that we use and the high grading that Bob and his folks to in order to make sure that post-delivery, we're delivering the most value we can for our shareholders.
This next slide talks about of our track record the last five years. I'm not going to spend a lot of time saying anything individually about what we've achieved as you've heard me at many -- on many occasions talk about how proud I'm of this five-year track record and strong result.
But just like in your business, I think what you've done is a great indicator of what you can do, and I think this really speaks to what we've been able to accomplish the last five years and gives us a tremendous foundation for the things you're going to hear us talk about today about what we're going to do.
If you were on our earnings call, I think you've heard me say that 2012 was nothing short of an outstanding year for Anadarko. I think we did this almost across the board by anyone's measure. Our volumes growth was well above guidance. We continue to show efficiency throughout our operating portfolio onshore. We've had another year of material exploration success and we are one of the most active managers of our portfolio and, in 2012, we monetized over $1 billion of various assets. Doing this, at the same time, by maintaining financial discipline and being mindful of the importance of that.
One of the things that's not included in our results that I really do want to talk about is the fact that we continue to benefit from the $4.4 billion net present value of the resolution of the Algerian TPE dispute.
So, with that, let's talk a little bit about what we're positioned to do for 2013. You've heard us talk and we're going to say it again today, we are extremely well-positioned going into '13 and the years beyond. Our highest margin opportunities are places where we're allocating capital in the short run, giving us rates of return in the 30% to 100% category; we're advancing lots of different oil mega projects, and again we will be one of those active explorers around the world in the deepwater.
Now, when you look at the five-year track record and you see the type of sales volume growth we've achieved, this year we're going to project about 5% growth with respect to sales and volumes. One thing I want to point out in that 5% are two things for each, and you to please take in consideration, that 5% sales volume growth represents what we believe will be somewhere in the neighborhood of 11% or greater production growth for debt adjusted share, and also takes into account ethane and weather adjustments that we've made. There is significant ethane rejection in our assumptions in net volume growth. So if we're incorrect and ethane does recover through the course of the year, a lot of the volume growth within the range that we're giving you today is really a function of whether or not the ethane markets come back during the year, not assuming that they will.
Now, one of the things that we've also been able to show you in this information is 10% growth in oil volumes and as I made reference that's a 30,000 barrel a day increase over the prior year. And if you look out over the next couple of years, liquids are going to be make up going back to 2012 where it was at 43%, we believe in 2013 liquids will make up 40% of our mix, and as you go out one more year to 2014, we're going to be in excess of 50% with the liquids mix coming out of our volumes growth.
Now turning, if I can, to next slide, the reserves, we are almost there on our three and five plans. We believe that by the end of 2014, we will deliver on what we told you a few years ago is a objective of getting 3,000 barrels of crude reserves by the end of 2014.
Now, we are not just doing it through adding of barrel sometimes at higher very cost or we are not pudding up the portfolio to achieve it either. This year, we achieved a very attractive funding and development cost we believe to the last five years, the $15 per BOE that we have been able to accomplish is extremely repeatable and predictable. And then if you look at the onshore component of that the numbers actually even more attractive $12 or less per BOE.
Now, one of the other things also to be a little bit proud of and point out if you haven’t seen it, in 2012 only that 2% of our reserves were impacted by the 31% drop in natural gas prices. So, when you look at a portfolio and its ability to sustain price volatility that’s an extremely good report card from my perspective.
Now, when you couple that with a higher margin capital efficient mega project that we are going to talk about today in more detail, some of which have no capital associated with them, we believe our reserves and our ability to grow reserves can be done at a very competitive cost.
Moving over to the next slide, Anadarko is pretty confident in the future. I think when you look at this, you can see that we are taking a view as to what we might look like by the end of this decade. It is a pretty good 2020 vision in terms of what you can see both from a growth standpoint and how we are going to get there. We have been predicting a 5% to 7% compounded annual growth in production, and we generally do this with inventory that we had in hand so you can see it, you know where its coming from, and again if you look at the five-year track record of what we have done in the last five years, its easier and more comfortable to assume our ability to continue to repeat that quite high.
When you look at the fact that Wattenburg has 4,000 identifiable drilling sites today and the Eagleford has 2500 though we have tremendous upside if gas prices recover, and I’m sure you are going to hear that from a lot of companies and we are not unique in that regard. But just to give you a sense for how much leverage in our portfolio today, at $4.50 we have another 10,000 drilling locations that have just dry gas plays.
We believe that exploration will continue to add to what we have today in our inventory and they are going to continue to do play opening opportunities they are going to again differentiate our ability to do things that others can or cannot do as well as we do.
Moving on to kind of what we see 2013 being, I think for us this year we like to refer to 2013 has a potential breakout year. We think that some of the things we have been able to do the last five years are going to real start to take some traction. I mean, I have made reference in several occasions. In fact, in 2012 was an outstanding year but I think the best has to come.
When we look at the volume growth we have and the fact that most of that volume growth, if not almost all of it, is coming through oil and liquids related growth per day, we are doubling our activity in the Wattenberg and El Merk in Algeria will be starting up this quarter. We have big exploration projects underway. In the Shenandoah mini-basin, we are very encouraged by what we are seeing and Bob is going to talk a little bit more about that today.
We have the new places this year. We are going to actually be drilling our first exploration wells in Kenya, New Zealand and, yes, believe it or not we are finally going to get the well in China in 4311 drill this year.
So, I'm not going to be shy about saying that I think we can continue to show you value acceleration. We've done and I think a good job as not I like sometimes think industry-leaving with respect to divestitures and being able to apply the carried interest deals that we have been able to construct so far. And I think what is really important and I have made comments to this in the past is that one of the things we hope to do and be able to demonstrate you today is that we are going to start to plateau the net spend in our CapEx and grow the growth. That is going to really help the efficiency of our capital spend and the intensity associated with that. And I guess lastly, I am very confident in our case associated with Tronox. And the watch word I think for this year is that we believe we are going to see clarity in and around Tronox.
So, with that let me turn it over to Bob Gwin.
Al, thank you. Turn to Slide 14. At the top of the page you can see that Anadarko enters 2013 with a very strong cash position. What you do not see on the page is that we also in 2012 repaid $2.5 billion, the entire $2.5 billion borrowed under our $5 billion revolver. So, in the aggregate, we now have over $7.5 billion of total liquidity. We are also proud of what we accomplished in reducing net debt to capitalization in 2012 from 41% to 34% as shown in the table. And we are taking that same discipline approach in 2013, keeping our spending within in cash flow, and that cash flow being supported by hedges. Those hedges by the way are detailed in an attachment to this morning's press release. In the aggregate, we got about 60% of our forecasted gas production, at about 50% of our forecasted oil production hedged for the year.
As you see at the bottom of the page, we expect to reduce leverage further during 2013, down to about 30% at strip pricing. And this number could go even lower during the balance of the year depending upon monetizations, which I discuss in the next slide. And we're always looking for ways to accelerate value and that's evidenced by the way that we've actively managed the asset portfolio over the last several years. In particular, last three years, we have had about $5 billion of monetization. This does not include any of the asset sales to our Western Gas MLP, and I’m going to discuss that further in a moment.
In 2013, I mean in 2012 rather, we executed on over $1.3 billion of transactions in the aggregate. That was about $1 billion of it through carried interest transactions which the structure we very much like, Lucius and at Salt Creek. And then in 2013, we have already executed on a couple of transactions. We have exited Indonesia, and we have divested of our legacy investments in the soda-ash joint venture that we were in. I don’t know if many of you even knew we are in that joint venture but it was with $310 million to us in cash upfront as well as we have a $50 million contingency feature that’s based on future soda-ash prices.
The transactions at the bottom of the page which we are working on for 2013, you have heard about previously I mentioned them not a lot of detail but at Heidelberg, Al mentioned this on the earnings call we are considering a carried interest approach similar to the Lucius transaction. Mozambique is also a candidate for this carried interest approach; we'd used it real effectively in the past. And to be clear there, we are looking at selling up to a 10% working interest that compares to our current 36.5% working interest in Mozambique.
And then in Brazil, we talked about this at last year’s investor conference and put this on hold due to the unitization discussions that were undergoing. We decided not to wait on the unitization process to be completed and move forward anyway. And so, we are currently getting ready to restart our efforts to sell our discoveries there.
Turning to the following slide, our portfolio was designed to generate a lot of cash and it has. In 2012, it generated around $7.2 billion in cash. In 2013, we expect our operations to grow that cash generation increased by about 11% over $8 billion of cash flow at strip prices.
And in addition during the first six months of the year, we'll receive the remaining $700 million benefit from the Algerian tax resolution. And so, in total, this is over $8.7 billion of cash that we will be bringing in during 2013.
Since our portfolio investments have opportunities that offer 30% to over 100% rates of return, we are going to reinvest the majority of our cash in our operations. But as the table shows where we compare this $8.7 billion to our capital budget guidance range to 7.2 to 7.6 that Al just talked about, we have the ability to generate a lot of free cash in the current price environment.
And so, as that materializes, we are going to look at various options for using this cash as the year progresses. And that includes potentially further reducing debt and improving our debt adjusted metrics, as well as revisiting our dividend policy. However, we obviously also are going to need clarity on the Tronox situation before we take any definitive actions on these fronts.
I want to take a moment on Slide 17. So it talks you about our WES and our WGP investments. This slide really addresses another way that we've accelerated value realization, and I want to make sure you understand the transaction we did in December because I think it's noteworthy.
As a little history, WES is the ticker symbol for Western Gas Partners, and that's our midstream MLP. We took it public in the middle of 2008; it's performed very well since then, and over those last four plus years Anadarko has sold a number of midstream assets to WES. Obviously, Anadarko controls WES and Anadarko's midstream organization operates the WES assets.
APC has received $2.2 billion of cash-to-date through those asset sale proceeds and partnership distributions. So, in December of last year, we placed all of the WES General Partnership and Limited Partnership's interest owned by Anadarko into a new entity called as Western Gas Equity Partners, the ticker symbol is WGP, and we took that entity public. It has performed exceptionally well since then and in fact it now has a market value of about $7.5 billion. This makes Anadarko's public equity and to its interest worth a little over $6.8 billion currently, and that's over $13 per APC share.
Now, as you might expect with this kind of success in the future we're going to continue to execute upon the proven model, and we expect it's going to continue to generate material additional cash for APC, and that cash is not included in the metrics that I showed you on the prior slides.
If we turn here to my final slide, our objectives are pretty straight forward, and this is consistent with the way that we've managed the business historically. We want to keep it simple. We want to spend within our cash flow. We want to have a strong balance sheet to maintain flexibility, and then we want to continue to accelerate value realization and improve returns through the transactions and the structures we've focused on.
So, with that, I'd like to turn over to Chuck Meloy; he is our Senior Vice President for U.S. Onshore Exploration and Production.
Thank you, Bob. I'd like to start by thanking all the employees of Anadarko and our contractors assisting Anadarko in achieving this spectacular 2012. I thank each and every one of you.
I think the first thing we ought to do just take a quick look back at 2012. As you can see on the chart on the bottom left, we produced 519,000 barrels equivalent driven by an outstanding asset base, which you see on the graphic on the right, that's our stack of investment opportunities. These assets allowed us to grow by 72,000 barrels a day in 2012.
We also averaged 80,000 barrels of oil production in 2012, which is a tremendous leap over 2011. Just an indicative number would be for the fourth quarter 2012 our oil production is up 40% over the comparable period in 2011, as a majority of our CapEx was invested in the top-end of this asset stack with the very best margins.
We added over 350 million barrels of reserve additions, which was our best year ever, and I think of indication the performance of our team, you can see the efficiencies we realized during the course of the year. Great improvement in our drilling performance, 20% reduction in the cost of our completions, and our LOE was down by 14%.
We also had the busiest year ever in the midstream business as Bob alluded to earlier. It's the driving force behind the value realization embedded in our asset team -- in our asset as well as WES and WGP.
Our safety performance was 40% -- our safety instance rate was 40% below industry average, and so our team did a great job on that. And if you look again at the chart in the bottom left our oil and liquids percentages continue to grow. In 2013, you can see the growth we're anticipating.
So, let's start on 2013 on the next page. We're going to use the momentum we built in 2012 to attack our asset base and deliver outstanding growth. You can see that our growth expectation is around 10% from 2012 to 2013 with a huge increase in oil volumes. That of course is driven by Wattenberg, Maverick, the Permian Basin, and other liquid based assets.
We're allocating capital to projects to generate 30% to 100% rate of returns. And this is at a very competitive F&D. I think one measure we can use to judge the efficiency of this program is what we're adding volumes for on a flowing barrel basis, and we're adding in at $35,000 per flowing barrel. That's about half what the comparable product mix would be acquired for in today's market.
You can see the split in capital in the right, with the most of the capital going to our development capital around $4 billion. But I think importantly you also see our commitment to exploration. We're investing in new resource plays in proven basins with an objective to add more optionality to our portfolio with higher margin barrels. And you can see on the map, on the chart that we have tremendous asset base and the real growth is coming from the higher margin assets.
Let's focus in on Wattenberg. Al mentioned Wattenberg earlier. This is our biggest and most valuable asset on U.S. Onshore. It's a mass of resource, over a billion barrels with an upside up to 1.5 billion barrels. He also mentioned we have over 4,000 horizontal drill sites at 5,000 foot lateral length averaging almost 350,000 barrels per well. Currently, we are doing a lot of experimentation and field trials to optimize our lateral lengths, spacings and our completions. We are anticipating that we can grow these laterals from 5,000 to upwards of 10,000 foot in some instances, so a number of wells could come down and our EURs per well could get well.
But if you look at the standard well today, which is about 4500 foot lateral of 350,000 barrels of EUR and has a value of almost $7 million pre-tax on a per well basis that returns in excess of 100% at the price deck that Al mentioned.
We're doubling our well activity in 2013 to almost 300 Wattenberg wells. When we do the math that’s converting almost $2 billion of value into our program. We are going to do this with 11 horizontal rigs and they are currently stood up and working in Wattenburg today.
The backbone of this opportunity is in our infrastructure that we had in the field and I’m going to expand on that on the next page. But I think importantly, we should keep in mind that roughly 60% of the wells that we drill in Wattenburg have a strong mineral interest from our land grant that enables us to enhance our returns and deliver these kinds of results.
If you look at the graphic on the bottom left, you can see this remarkable ramp up that we are seeing with the expectation of growing from around 91,000 barrels a day average production in 2012 to over 120,000 barrels a day of production in 2013.
Moving on to the next slide, this is just an indication of what a huge business Wattenburg is. You see the statistics on the infrastructure itself. This is a tremendous piece of business that's compact, it’s in a center where we can take great advantage of the economies of scale and we continue to add to this business. We're essentially off to a running start when we really put this and equilibrate it to other big resource plays in the United States.
Wattenburg today is free cash flowing even at the spend rate we are on today, which is around $1.7 billion. A list to the other activities that we are doing to expand this infrastructure in the bottom left, and essentially what we are trying to do is continue to increase our takeaway capacity both oil and gas and you see those profiles on the right. So, this thing is going to continue to grow as we continue to invest and we are essentially pacing our drilling program with our ability to takeaway the hydrocarbons. What I anticipate in 2014 is to increase further our drilling rate to probably 350 plus wells.
The top-tier asset I want to spend a few moments on is the Eagle Ford. This is again a tremendous asset, it has over 6000 million barrels of net resources with 250 core wells with average EURs of 600,000 barrels per well, and has a high liquid composition within that 600,000 barrels. We are also doing large scales infrastructure additions with Brasada Plant. There is a picture of it there on the left. All of these activities enable us to show this significant CAGR on our sales volumes. We have increased the production over 100% per year for the last four years.
One of things I am really proud of right here is the drilling efficiency and cost controls that our drilling and completion teams have put in place for the Eagleford asset. You can see hour our days of drilling per well has come down each year and each quarter during the course of 2012 and the average cost of our wells have decreased for almost 33% through the course of 2012.
This is a commodity business and cost and efficiency matters, and our teams are very much focused on continuous improvement. And I think you see that in everyone of our performance elements. If can look down through the list, we are an industry leader in footage drill per day with many of the top 25 rigs under our employment. Each year we are have fast pace, lower cost completions than the competition, and you can see that on the bottom right where -- on the graphic on the bottom right where the completion cost per lateral foot has come down for over $500 of foot to almost $250 of foot. There is a direct correlation between EUR and lateral length. And as we reduced the cost to complete each foot of lateral it has a direct impact on lowering our F&D.
The cool thing is we have over 30,000 predictable and repeatable drill sites to do this work on. And just in the last two years we have saved almost $700 million using this approach. So, it has been a very value accretion provided by this, this activity has been tremendous to Anadarko.
So, let us look at our onshore business holistically. I think it is clear and I hope we demonstrated to you in the previous slides that we can create value through economies of scale. The existing infrastructure, the contracting capabilities we have, with the rig fleet that we use, and the type of construction work that we do, utilizing what our management both sourcing and disposal and using automation to drive savings and inefficiencies.
This is an illustration on the bottom left just gives you an idea what this can mean to us. Over the last five years, our OpEx has gone from monthly $5 of barrels to $3.10 a barrel in U.S. Onshore. That's an $860 million savings. If you just take and then make an assumption that's roughly $200 million a year of savings, think what the annuity value of that kind of activity is and the margin expansion capability associated with it.
Another cut at this is the graphic on the right. This is on the y-axis there is your percent liquids, which is usually directly correlative to margins, and on the x-axis is lower cost. So the cut in the horizontal plain, the Anadarko star where for our production mix, we're the lowest cost operator, and if you take on the vertical size through our cost structure, we have the highest margin, highest percent liquids equivalent producers in our cost. This is outstanding effort from our field teams.
I think the economies of scale are less demonstrated in our midstream and it's hard to imagine what the scale of this operation is, we're talking 15,000 miles of pipe, 5 Bcf of throughput, and plant capacity over 2.5 Bcf a day. That's an enormous business. It's also the feedstock for our WES and WGP entities which Bob referred to earlier. So this activity bodes well for the future of those assets.
In our view, our midstream has a competitive advantage that enables us operational control of these assets, timely well connect, and improves our price realizations across all three products. The graphic on the right in the shadowboxes demonstrates the current project expansions that we have underway. This is significant processing enhancements in all of our key assets, along with NGL transportation and to our premium markets in Mont Belvieu. The graphic on the left just shows that we anticipate the EBIDTA growth to be from this activity and you could see it's a substantial improvement year on year.
So, again, looking at the big picture, this is our recipe for success for driving growth and value in our U.S. onshore assets. We have the economies of scale. Our drilling and completion teams continue to set the bar and in many circumstances the best-in-class in the industry, while leveraging our mass and midstream growth to enable our production growth. We're focused on the cost efficiencies and we're doing it right with a very strong safety performance environmental stewardship. The graphic on the left just demonstrates as clear as it can be the value and the delivery of these elements of our business with over 100,000 barrels per day.
With that I would like to turn it over to Doug.
Thanks Chuck, and good morning. When you look at the International and Deepwater part of our portfolio it's marked by two significant elements. The first is our cash generating capability, which is very strong and robust, and in addition to that is our project management capabilities, which are one of our core competencies and competitive advantages.
In 2012, we had an outstanding year in the international and deepwater area. We saw significant cash flow generation. We also saw several of our, all our multiple -- big projects advance across the globe. We have activity taking place either to maintain production volumes or to increase production and value through our mega projects across the globe. As you look at the slide on the map, you can see the different areas in which we're operating or have an interest in. These areas have a 75% oil composition and what's highlighted here on the green is the high EBITDAX per barrel, the significant margins in value that's generated for the company. What's not noted here is the cost management and the excellent capital discipline that also is executed in all of these projects.
On generating a significant cash flow in 2012, we also built serious momentum as we move forward in our portfolio. Just a couple of noteworthy items that I wanted to highlight. First in the Gulf of Mexico, we recognized first production in our Caesar/Tonga development. We also executed, as Bob Gwin highlighted, at the Lucius field a JV which will enable a tax efficient carry-through first production to enhance that value. We also have underway the spar construction for our 9th and 10th deepwater floating offshore facilities in the Gulf of Mexico.
On your right there is a graphic in our strategy and that we're going to design one and build two Lucius and Heidelberg spars both the design or both the capable producing 80,000 barrels per day, with Lucius coming online in the first quarter of 2014 and with Heidelberg in 2016. We also want to note we had sought significant progress in Ghana in 2012. We surpassed 110 barrels a day and what's significant to note there at mid-year 2012 we were basically half of that rate.
We also submitted our TEN Plan of development, which will be our second FPSO in Ghana, and I also want to highlight that we've made significant progress in Mozambique. The appraisal and testing program that was conducted in 2012 confirmed the world class reservoirs and the productivity. We also at the end of the year awarded our onshore and offshore feed, work to be done for the liquefaction facility and then the deepwater infrastructure. And then, probably most notably is that we reached heads of agreement with Eni, which is going to enable the framework and foundation to jointly develop the large mass of resources that we've discovered in Mozambique.
Just looking forward in 2013, on the top right, we anticipate our capital program to be $1.3 billion and our total sales volume to total 72 million barrels.
This is my favorite slide in this section because I think it really highlights the value that's generated from the deepwater and international area. If you look on the right, the source of our high quality -- or the source of this growth that we anticipate is really coming from all the high quality exploration work that's being done within the company. As you can see the stack there and the pipeline of projects coming forward in just a few years we'll be ramping up by the end of the decade to approximately 150,000 barrels a day of oil projects or oil indexed projects.
What's great about this is there's additional exploration potential that's moving through the pipeline. This stack does not include Vito or Shenandoah or other exploration projects. This growth rate is made possible because of the consistent and on-time budget delivery and the project management capability in the organization. It's also enhanced by the value acceleration in the JVs that we've conducted, the one recently completed at Lucius for $556 million and as Bob Gwin had noted the hydro plant for Heidelberg and Mozambique.
When you look at the bottom of this graph as we approach the end of the decade, you can see the significant EBIDTAX growth that's anticipated to take place as a result of these identified mega projects. We quickly in a few years get up to generating over $4 billion in EBIDTAX per year and what's significant to note is that we anticipate that we'll have a very flat CapEx expenditure of roughly $1 billion a year through the end of the decade. And this is made possible by the JVs that we -- and opportunistic monetizations that take place that we've identified with Lucius and plans for Heidelberg and Mozambique, but it's just an outstanding growth curve in earnings and value generation for the company.
We could just take a deeper look at Lucius. We continue to be very excited about that project and, as I mentioned, this would be the ninth deepwater operated facility that we have in the Gulf of Mexico. Our 28% interest in this large 300 million barrel resource is exciting and encouraging, particularly when we highlight and can highlight for you that we've invested very little capital and as a result of this carry see this to be a 100% rate of return project and have the market value presently at $2.8 billion for that 28%.
The project is on time and on budget. The most recent well that was drilled to the west and the development well encountered 910 feet of high quality oil pay. We're excited about that because we saw the myosin in this section in this well that was encouraging and helped to add to that 300 million barrel resource opportunity that we see. The wells, the rock quality and the fluid properties are outstanding. We anticipate high flow rates from the well. And if you look at the bottom right you can see the hole, the spar hole that's under fabrication, is expected to be completed in April and set sail for the Gulf of Mexico. The project is on time and on budget. And with that, as I mentioned earlier, with first oil in 2014.
Moving to the Green Canyon area, if you look at his value corridor for Anadarko, it just continues to be outstanding and generate significant value for the company. Heidelberg is advancing and it will be the 10th operated deepwater development in the Gulf. As I mentioned, we expect to replicate that Lucius spar. First oil here is expected in 2016. The resource range here is also very large of 200 million to 400 million barrels. And you can see that by adding this infrastructure it provides a significant competitive advantage to Anadarko, and that's highlighted by Caesar/Tonga, where we have another very large discovery and development that has resulted in a 200 million to 400 million barrel resource range. Three wells are currently online but we avoided over a $1 billion in capital because we could tieback to the constitution spar.
So continuing to put Lucius, install Lucius, Heidelberg, and other structures as we maintain and build this momentum and the Gulf of Mexico is a strong competitive advantage for us.
We did see first production as I noted in the first quarter of 2012. We have additional drilling activity taking place in Caesar/Tonga area, as well as additional development drilling in Ticonderoga and other workover programs on our spars to continue to enhance our margins and our value.
Just a quick look at Ghana, as I mentioned earlier, just a fantastic performance this year. We have three additional Phase 1A wells that will be completed in online in 2013. We have started working with the partnership on expansion project that will hopefully allow us to increase the capacity there and to see additional value generated.
The TEN Plan of development, as I noted, was submitted at the end of the year. We're working with Ghanaian government and the partnership there with first oil anticipated in 2016. And you can see that there is number of other opportunities that this infrastructure and the addition of the 10 FPSO will provide further opportunities for tiebacks that add to that value creation in deepwater.
As Al had noted we expect to see first production from El Merk in the first quarter. Our first production will come from the first of three trains and we expect to see that ramp continue during the year. When all three trains are online, we'll be producing approximately 30,000 barrels a day and that will generate or drive 10% year-over-year growth in Algeria and that number will increase above that in 2014.
Just a few specifics around the large scale project and the management of this significant project to Anadarko. There's three very large trains that are going to have a total of about 160,000 barrels a day of total capacity once completed. And just to note there are over 10,000 workers at peak construction and this was done very safely and we're a contractor, we've just realized over 25,000 million man hours of work completed without a lost time accident.
Just a little more detail on Mozambique. We continue to be very encouraged and excited about the size and magnitude of Mozambique and the value that it's bringing to Anadarko. The resource range you're familiar with where we've highlighted in the past of 35 to 65 Tcf of recoverable natural gas. We also noted that the wells are capable of producing between 100 million and 200 million cubic feet a day because of the high quality rock property. We also secured at the end of 2012 the land necessary for this LNG Park that we're looking to develop that's approximately 17,000 acres in the Afungi Peninsula of the Cabo Delgado province in Mozambique.
The HOA that we signed with the Eni has also enabled us to maintain a schedule where we anticipate first cargos from the first train in 2018. And you might ask yourself and I think it's a good question, what does 50 million ton per annum look like? You can see that in the graph below as you see the ramp as we ramp -- as we build up to 10 trains in Mozambique what that profile looks like. It's defined by stable production, stable cash flow, and stable reserve additions, and 50 million ton places Mozambique in one of the very top LNG developments in the world. So, we're very excited about it and anticipate more good things to come from Mozambique where the potential monetization will take place.
Looking at next slide, we also believe that part of the value drivers in Mozambique that it is a cost advantage LNG development. The high quality extensive reservoirs will reduce our development costs and require fewer wells to develop the fuel. We also, as you see in the graphic, the outline of the land that's available to us through our -- that we secured the 17,000 acres is highlighted in yellow. You can also see that conceptual design of the LNG Park where the train locations are identified as well as the port and the airstrip, and it also highlights that there is additional land available for continued development and expansion.
Also another cost driver is that the reservoirs are located in approximately 25 miles offshore. So the infrastructure cost are not -- will not be as significant compared to some of the others in the world, and we're also utilizing proven technologies not only in the subsurface side, but also on the liquefaction side onshore. That gives us the confidence that we see the first two trains the estimated cost to be in the $15 billion range. As we advance the development, we anticipate those costs will continue to come down.
We believe we have a clear path to producing that 50 million ton per annum project in Mozambique. Several accomplishments in 2012, and 2013 through '18 we have a number of noted items here. I won't read each of them. But it's important to note that we anticipate to secure our reserve certification in early part of this year, both for Prosperidade and for the Golfinho complex, as well as the working on marketing agreements and preparing with the as the feed work concludes to execute EPC contracts. This is all leading to, as I mentioned, achieving first cargos. We'll continue to work closer with the government and the partner alignment will be critical as we look to continue to expand the development of that 50 million ton per annum.
Just in closing for the international and deepwater section of the presentation, just to highlight this is high margin oil. The growth rate is very, very strong as you can see by the graph again on the right. We will continue to look at monetizations and opportunities to minimize the capital intensity, ways to accelerate value in a tax efficient way. We will continue to make the best use of the project expertise that we have in managing these large projects. And if you look at the bottom left of the slide, you can see by independent analysis how Anadarko continues to perform in the top right quartile, which represents the fast performance, low cost operator in driving these large big scale projects worldwide. We'll continue to use our global deepwater experience and the technology available to continue and advance and build on Anadarko's portfolio in the future.
Now, I hand it over to Bob Daniels.
All right. Thank you, Doug, and good morning everybody. You know at Anadarko the role of explorations to deliver the new value and optionality to the company. And last year during the same conference I described to you the exploration process that rolls into our exploration strategy that's shown in the upper right. And it starts with the skill set, focusing on what we're good at and making sure that when we're looking for things we're playing to the skill set. We always look at improving petroleum systems that minimizes our risk, gives us running room. The competitive terms are very important to make sure that we are focusing on the value side of it to make sure that we are going to make money at the end of the day when we find something. And we want some running room, so we have invested a lot of time, effort and capital into these exploration prospects. And we want to make sure that if we are successful we have room to run with those. When you add to our strategy the people, the technology and the processes we have in place, you have a competitive advantage. And I think the results speak for themselves.
When you look the lower right, this is a graft prepared by Wood McKenzie. It's a five year look at global deepwater exploration companies and the value they are creating from their investments. And Anadarko is the number one company according to Wood Mac. We think that speaks very well of what we are doing and what we will continue to do, that is our track record, but when we look at the future it is equally bright.
2012 was another year of just tremendous success for us. We have two of the top ten discoveries in the world, both in Mozambique in Golfinho and Atum. If you look over at the upper right of the discoveries we had, they are really focused in East Africa and West Africa. You move down in the appraising section and that is where we bring the Gulf of Mexico in, and those are the three areas that you will see more and more focus on in 2013. But overall, the 67% deepwater exploration/appraisal success, extremely proud of that and that is a testament to the team that we have here and the processes we put in place.
Last year I told you that our investments in 2012 would lead to target of delivering 800 million BOEs for resources to the company net. And actually, when we look back in 2012, we delivered over 1.5 billion barrels of net discovered resources into the company. This is the optionality. And now, we are looking at who we can best accelerate the value realization and that is why you see so many wells in the appraisal phase. But equally important just how we accelerate that value realization, and that is transferring the projects over into the development team with enough information that we have confidence that they are going to be moving forward. And we transferred over 730 million barrels of net discovered resources into the development team and they are listed in the lower right hand box.
When you look at 2013, it's going to be more of the same. We are going to focusing a value accretion and acceleration. We do that with three bullets at the top. We want to leverage our exploration success that's enhancing value, test new plays that's creating the value and expand the portfolio which is the future value. If you look at the program of the year, we are going to invest about a $1 billion of capital. And we've targeted for 2013 about 800 million barrels of discovered resources delivered into the company, that's our main number. And that is about the same as last year, both on the capital and the resource side.
If you look down to the pie chart kind of in the middle of the right-hand side of the page, most of the focus will be on drilling as it was in the 2012. Both exploration/appraisal, although I would say 2013 is going to be more heavily loaded into the exploration and we are excited about that. There is really -- this capital is really going to be invested into four areas of focus in 2013. First would be the Gulf of Mexico where we expect to drill six to eight exploration appraisal wells. Second would be West Africa, where we are expecting seven to nine wells, East Africa 9 to 11 wells and then, new plays, where we can draw four, five wells in New Plays looking for that future value. I would like to explain to you in more detail though how we focus on these areas and why we are excited about them.
So, when we say leveraging exploration success, it means focusing on value accretion. What are we leveraging? Well, we are leveraging our people, the concepts that we have developed in the exploration phase. The technology and tools had been successful for us in applying them elsewhere and again, that commercial focus. These lead us -- utilizing these leads us to identify, capture, evaluate, and explore. And that leads to deep portfolio of opportunities. I would like to show you a little bit more of those. And those opportunities are all focused around our skills and our knowledge.
So, I mentioned what we are focusing on in this 2013 to Gulf of Mexico. We are focusing on leveraging the expertise and experience we have developed over 25 years. The Cretaceous Fan Plays in West Africa, where we are focused on play expansion built on proprietary tools and knowledge. The Basin-Floor Fan Play that we discovered in Mozambique, focusing on depositional and structural styles, improving petroleum systems. And then, Unconventional Plays, we are going to focus on the commerciality based on U.S. Shale experience in the international arena.
Let me show you more detail how this focus works. So, the Cretaceous Fan Play, why are we focused on that? Well, significant oil opportunities, very large stratigraphic traps and there is high discovery rate out there. We have 28 million acres in the cretaceous fan play. We have very significant competitive advantage that are listed there. And what have we done within this play thus far? Well, we have the play opening discovery at Jubilee; this gives us proprietary knowledge which we have to leverage. We have got a bunch of appraisal that came out of our westward expansion. This is our leveraging of success. And then, we have got development and producing assets now, that is acceleration of value.
If you look at 2013, our planned activity is drilling in Côte d’Ivoire exploration and appraisal, finish the exploration in Ghana, and few more appraisal wells there. And then in Liberia/Sierra Leone basins late 2013 probably drill some exploratory wells there.
If you look at the graphic on the map where there is an arrow going from West Africa to south that's the play expansion to the south where we picked up acreage in South Africa that is in this play, the Cretaceous Fan Play. 2013 will be focused on identifying and high grading prospects there leading to drilling in the future. So when you focus on the Cretaceous Fan Play, it's a play that extends from Sierra Leone to South Africa and Anadarko controls 28 million acres in this proven petroleum system.
In East Africa we're building out success there. We like this play because they're massive basin-floor fans. In certain areas we have potential for oil, but even where we're getting gas, the gas price is linked into oil, and we have first mover advantage again. We got 11 million acres in the East African position and this is a very significant deepwater play that Doug talked about what we've already found there. We got the knowledge in the play from our working it for about the past six years. And then, of course, the operational expertise and efficiencies that come from doing things over and over where we've seen our drill cost go down and drill times go down significantly, allowing us to do more.
So what have we done in this play? Well, of course, the play opening discovery again. That's the proprietary knowledge that we need to leverage, and then the appraisal and development that are moving through the system, this is accelerating the value.
In 2013, we'll have some more exploration and appraisal drilling in Mozambique and two wells up in Kenya, exploratory wells to open up a new play to the north in similar depositional setting. We're drilling the first of those right now. Again, look at the map and see the arrows going up out of Mozambique into Kenya and over to South America.
When you think about South America it's not something different, this is something that is very, very similar. This is leveraging what we know in Mozambique into a new area that has the same depositional and structural style in a proven petroleum system.
And then we're going to be looking at the new areas. Some play-opening drilling that will lead to our future value. We're focused this year on some large low relief structures four ways typically. We've got substantial running room in both of the areas that we're going to be drilling. And why we like these two areas? Well, the South China Sea is new basin, a new sag basin that has not been tested but its offset by discoveries to the north. We've got 2 million acres. We've got a very nice prospect that we top set and we'll come back and finish the well out in 2013, and we've got substantial running room if we have success here to follow-on on that 2 million acres.
New Zealand is very similar. We have 10 million acres in New Zealand. Its frontier basin but has significant potential. It has oil production in the Taranaki Basin and good proven petroleum system in the Canterbury. We anticipate starting drilling in 2013 and we'll carryover into 2014, but these are two areas that with success will give a significant running room into the future.
And then, of course, the Gulf of Mexico, which is an area that just keeps on giving value or offering valuable opportunities to the company. Right now, we have five wells underway and exploration/appraisal wells. We're also going to be testing multi-block four way structure this year and we're drilling our first Norphlet Test out in the eastern Gulf of Mexico.
Why do we like the Gulf of Mexico? Well, first off we've got 3 million gross acres out there and that's a position that we've acquired over a 25-year exploration program that has had numerous successes. That leads to a deep prospect inventory multiyear. The project management skills that Doug mentioned allows us to really increase the value out here along with the existing infrastructure. This is an oil province. The margins we see here are phenomenal, world-class reservoirs, these things are -- when you find a good discovery here like Heidelberg, like Lucius, and like some of the ones we're appraising, these are as good as you can find in the world especially with that proximity to the markets.
If you look over at the boxes on the left what we've done, we're appraising out in Shenandoah and Vito. And as Al mentioned, Shenandoah that's where we found the enhanced lower tertiary and our discovery well in 2009, we're drilling the first appraisal well. We're done with that and we're very excited with what we're seeing, but we're not finished with the evaluation. So we're not going to give you more details at this time but we've leveraged that discovery and the enhanced lower tertiary reservoir and fluid properties by getting into the Coronado and Yucatan exploratory prospects in that same mini basin.
Vito is a Miocene sand system that we're leveraging through lease sales and we're successful with that. That's moving through the appraisal phase. Doug talked about Heidelberg and Lucius of course Caesar/Tonga's production -- is producing, but we also want to remember how we utilized the optionality with the monetized assets that are listed there that created significant value for the company in 2006.
In 2013, we expect to drill six and eight exploration and appraisal wells in the Gulf of Mexico and we're looking forward to more success there.
So, to conclude, with kind of our scorecard, this is the value and the optionality scorecard that we keep track of. Since 2004 we've discovered over 5 billion barrels net resources for Anadarko. That's from investing about $8 billion. And then you look at the monetize side that's bringing the value forward about $8 billion worth of value that we brought forward essentially covered our total capital program.
Now, we have retained significant go forward value which we are already producing about 200,000 barrels a day of production from the discoveries we have made and we have 4 billion barrels of net resources moving through the system. That gives us the value and the optionality.
If you look down at the lower left, this describes the optionality. We find something, we take into appraisal and we make decisions that each point along the way whether we are going to divest of it, whether we are going to optimize it as we did at Lucius and are going to do at Heidelberg and Mozambique. And that's again value acceleration and having those discoveries give us the options to do that.
And we've retained significant value ourselves. When you look at the chart on the lower right hand side, this is just a stack the same as what Doug shared you except we have added in the things that we found since 2004 and what they are doing now in the production phase.
This does not include any additional exploration success, it does not include any of the wells that are in the appraisal phase; only things that we have confidence that are moving through the system are already on production. You can see that the value that's retained by Anadarko from this exploration success is very significant.
So when we think about Anadarko going forward, on the exploration side, the portfolio is there, the strategy is in place, it's been delivering value over the years, it will continue to deliver value too. 2013 is going to be an exciting year for us from the exploration phase and we continue to look at additional ways to create value for the company and enhance the optionality.
So with that, I will turn the call back to John Colglazier or Al Walker.
All right. If we can let's open it up to the questions. I know a number of you probably are ready to go with that. I think the first one up may be Doug Leggate.
(Operator Instruction). And Doug Leggate from Bank of America-Merrill Lynch. Your line is now open.
Doug Leggate - Bank of America-Merrill Lynch
I have got two questions if I may, first one I guess to Chuck. In terms of the longer laterals in Wattenburg, Chuck, can you give us some idea as to what extent of your portfolio might qualify or is too early? And I have got a quick follow up please.
Doug, I don’t have the exact proportion, but it's quite a hard number, probably over 50% as we go forward would qualify. And we are just assessing the value of those activities as well as the risk of more and more completion in individual wells. And the early returns are really good. Us and our neighbors are having outstanding results with those longer laterals. So our momentum is toward those longer laterals. We're just taking it step by step and making sure we are learning the lessons before we get too deep into it.
Doug Leggate - Bank of America-Merrill Lynch
So how should we think about the program this year, Chuck, in terms of how many of your 350 odd wells are going to be in that category?
Doug, we haven't really landed on that yet. My expectation would be sort of in the 10% or better.
Doug Leggate - Bank of America-Merrill Lynch
My follow up is really I guess this is for you Alan on the Mozambique monetization, and I think this is the first time you've really laid out what you think the ultimate production potential could be and obviously it is quite long dated, but as you think about how you structure a potential sell down, and I think you said around 10% of your position in the past, how should we think about you are balancing your priorities between releasing cash and getting future carries? And can you give us an update as to how you see the potential capital gains implications if you did have to try and take some cash out of there? And I will leave with that. Thanks.
All right. Understandable question, Doug. I am afraid until we get an offer on the table, it is a little premature from our perspective to kind of comment. We are in discussions with a number of people and I think the way in which we could start we looked at selling down or promoting our positions is probably the best thing I can point you to. I don’t think that pattern of activity is likely to stop. At the same time, I just don't want to get ahead of myself a little bit here if you can appreciate that because until we have something to announce, I really can't explain what it is that we are going to do, because a lot of that has to do with ultimate partner that we just decide if we want to go forward with here is the part of this sell down.
Doug Leggate - Bank of America-Merrill Lynch
Would you anticipate remaining operator of both the first two and potentially all 10 trains?
Our current plan, Doug, are to be the operators throughout.
You next question comes from the line of Brian Singer from Goldman Sachs. Your line is now open.
Brian Singer - Goldman Sachs
I just had a couple of specific questions with regard to the guidance and the first is with regard to the first quarter. As it looks like US oil volumes are projected to be down versus the fourth quarter and wondered if you could comment on that? And then looking at Algeria, should we expect once that market fully online that we just add 30000 to the first quarter number or are there declines or other listing issues out there?
Brian, I'm going to let John answer that and if there is additional questions after you got there either Bob Gwin and myself will be happy to.
Yeah, Brian, in regards to our US oil volumes that you are mentioning, we are going to continue to see ramping oil volumes in Wattenberg, continue to see it at Eagleford and some of the other onshore plays. I think you are going to see Alaska relatively flat but you are going to see declines in our base Gulf of Mexico assets, which will end up U.S just on US onshore. As regards to -- what is the other question, Brian?
Brian Singer - Goldman Sachs
Just looking at Algeria and whether we should expect ultimate Algeria volumes at once El Merk is fully ramped up to kind of be about 80,000 or whether they are declines elsewhere?
Yeah. What you are looking at in Algeria and I think Doug alluded to talking about what to expect for 13, which is we will have the El Merk come on in the coming weeks. It will ramp throughout the year as the other two facilities come on, should exit the year around 30,000 barrel a day net. And I think what you are going to see going into 2014 is a pretty substantial growth coming from Algeria. You should have the full year of El Merk volumes, but to your point you will see a 10% or so decline in the base Algeria volumes from HBNS and (inaudible).
Brian, this is Al. If I could just make sure to point out because I know you get it and a lot of people get it, but when you look back over last five years we have been pretty conservative with respect to how we project going in any given year our sales volume growth. And I think this year is another example. We are not trying to assume that we are going to be in the market where we are going to be able to have ethane as a part of the yield stream. I know lot of you understand that it is $0.18 to $0.20 per gallon, it is not really going to make that much difference to the cash flow whether we reject it or produce it.
On the other hand, I think the other thing you keep in mind is, as we look at growth in any particular year we try to give you that weather adjusted view because we recognize that we operate in areas where weather can impact that. So, the combination of the two this year does lead us to believe it is the best thing as the guidance we can give you, assuming we get into a period where we are just going to have ethane rejection throughout the year is only that 5% growth, which is the lower end of our guidance that we have given you multiyear.
Keep in mind that of that mix of oil is substantially increasing. As a percentage of that and for the margin, this year is substantially higher as we move into higher volume business coming from oil and liquid. So, I caution you by that I might look at the 5% not fully understand it. We try to give a very conservative view of our growth this year, hoping that the ethane market does rebound sooner than we anticipate it to do. Keeping in mind at the same time the type of growth that we are showing this year is still coming off of a very good year last year. And we have been able to in the years past always give you good indications to where we think our guidance is going to be on any particular metric and try every time we can to exceed that. And I think history would suggest that we have done not a bad job in that.
Brian Singer - Goldman Sachs
Thanks. And if I could ask one more on CapEx, you have talked about $7.2 billion to $7.6 billion that you mentioned and excludes Western Gas Partners, MLP, I believe that in 2012 represented a $500 plus million. So, when we think about the kind of the real number, is that actually $500 million plus higher than that or how should we compare it to the kind of the actual reported number for 2012?
Yeah. I think you saw the major expansion projects going on in 2012 with the Lancaster Plant or Brasada Plant and some of the other build outs as the WES assets, you will see that has kind of ramp down. This year I think we are at 529 last year, it will be less than that this year. And in the slide that Bob Gwin showed on cash flow for the year, we had excluded from both the cash flow and the capital, the contributions from WES in both.
Unidentified Company Speaker
And then, west is going to be having it is called coming up well, it will provide a specific numbers on guidance on that 28 for capital and CapEx.
Your next question comes from line of Charles Meade with Johnson Rice. Your line is now opened.
Charles Meade - Johnson Rice
Good morning, gentleman. I'm sorry to belabor this a little bit, but can you talk about what your baseline for ethane rejection is right now or are you rejecting ethane across 100% of your portfolio or is that really just happening up in the Wattenberg you are recovering it down in East Texas side?
Well, just to put in perspective, I think it is in the order of around 3 million barrels for the year as what we are generally putting into the guidance. And that -- what that is essentially half of year of rejection mostly in the Rockies and in East Texas, and in the rest of the areas we actually have economical recovery.
Charles Meade -- Johnson Rice
And then, just couple other small quick points. The [Sapena] well, you guys showed that it is still drilling. I think your partners came out there and made a disclosure related in conjunction with an offering that they had been through most but not all of the objective section in salt water-ran reservoirs, can you talk about how -- what the distribution of I guess the prospectivity for the -- for what you have seen versus what remains to be seen in that well?
Charles, (inaudible) price when they actually released something in a well is drilling because it is. It had multiple objectives and we are not through all of those objectives. So, I guess I'd leave it at that.
Charles Meade -- Johnson Rice
And then, maybe one more quick one for you Bob. When is that Raptor well, do you think you'll have results on that?
Raptor is probably 75 to 90 days out so.
Charles Meade -- Johnson Rice
Okay. Great. Thank you, gentlemen.
(inaudible) Northrock well.
Your next question comes from the line of Arun Jayaram from Credit Suisse. Your line is open.
Arun Jayaram -- Credit Suisse
I wanted to see if you could talk about your future plans beyond 2013 in the Wattenberg you’ve given us some preliminary 2014 guidance. I think you have an inventory of 4,000 wells, plan to do more than 300, but as you put some of these infrastructure projects in the rear-view mirror, do you plan over time, Chuck, to accelerate that well count or just going forward?
Yeah. This is Chuck. We absolutely do this, that baby is going straight up. The project is performing well. You saw the graph in the report that showed it’s going from 91,000 barrels a day to over 120,000 barrels that’s the kind of growth that we anticipate going forward. We have about 300 wells this year. Next year, we hope to push that to 350 and it really depends on what kind of lateral links we drill, that type of thing is the exact number of wells but what we hope to do is gain a lot of additional exposure to reservoir either through lateral links or increased drilling pacing, and we’ve been pacing it with the infrastructure expansions.
You see the graphs on that one page I showed you earlier that in 2014 you see a significant jump up in expansions, and that will give us the opportunity to accelerate, and with each bit of acceleration we gain value for the asset and convert that opportunity to real cash flow. And that’s what we’re intending to do and we’re just going to do it at the pace that accommodates our maximum capital utility.
Arun Jayaram -- Credit Suisse
Bob, when do you plan to drill your third well at Shenandoah? Would that be Shenandoah, pardon me, would that be a 2013 event?
I don’t know exactly when we’re going to drill the third well. We’re planning on a potential bypass core here to get some rock data, so I guess that would be the third operation out there, and that could be almost immediately if we are able to secure the permits to do that. Of course, we’re still on the logging job, so we have more to do there as we speak, but we will be trying to accelerate it into the schedule just based on what rigs are available and what else we have going on.
Arun Jayaram -- Credit Suisse
And last one from me would be any update on the potential timing on the Phobos exploration well in the Gulf?
Phobos is a long well, remember that spud in December and had dual objectives, the Pliocene and Miocene, and then also the lower tertiary Wilcox, and so it’s going to take a while. We always said that was going to be about 120 day well, so we’re about halfway through that time right now. So, it’s got ways to go.
Your next question comes from the line of Joe Magner with Macquarie. Your line is open.
Joe Magner - Macquarie
Just in terms of the Wattenberg still projecting average EURs around 350,000 BOE. Does that include the impact of extended rich wells and if not how could those influence that average EUR or how do those compare on a standalone basis?
Joe, this is Chuck. The 350,000 barrels for each well is associated with about 4500 foot lateral. And what we've seen is that with there is a direct correlation between lateral length and recovery. So, as we are able to stretch these things out to 7500 foot or thereabouts or even 9,000 feet you will see that that recovery per well go up. And so, ideally that's what we want to do. And we're evaluating each one of those steps very carefully to make sure that we continue to have a very high capital efficiency. We don't have a longer time to first production, increase our completion risk or any of those kind of those. We want to chop off each one of those and get the same kind of value better than what we're doing with our shorter laterals.
Joe Magner - Macquarie
I guess in addition to the longer laterals you're drilling out there, are there any other initiatives that are being assessed or planned to increase recoveries out of the field tighter spacing, stacked development of the (inaudible) refractions existing laterals, anything on those line?
Were certainly continuing our spacing. There's a lot of work being done around the field with regard to where you are in the field and what the optimum spacing. We have 11 rigs working, around 3 of those are doing experimentation on spacing. So, that's something that we're job one right now to get it right the first time as it marks through the field.
The other idea is we have of course you mentioned and that's what everybody is doing is is looking at the different completion technologies that are available to us, choke management as well as if there is any opportunity for enhanced recovery either through lifting activities or ejection of gas. There's a lot of things being considered and we'll test those as we move along.
Joe Magner - Macquarie
Just one clarification. The longer dated production profile for Mozambique is having 10 trains. Is that assuming those trains would be allocated or associated with area 1 development specifically or will those be shared between Area 1 and Area 4, just wanted to clarify?
Joe, its Doug Lawler. We haven't provided that information yet as we continue to work with the forecast. The reason why we showed a gross curve was to show the magnitude how significant it is. So, we'll be providing more color on that in the future.
Joe, this is Al. let me just add to Doug's comment. I think we've been very encouraged and quite happy with the conservation we've been having with Eni. If you recall back in December we announced heads of agreement on how we will look at those unitizations of (inaudible). Doug and I along with our colleagues at Eni M/s Scaroni and Descalzi actually met this week with the president of the country and certain officials and continue to be very encouraged that we're going to be able to work together to get something done there during the calendar year 2013 where we can reach our FIV milestone in 2014. So I don’t really have any good news in that front. I am very happy with the working relationship ENI has shown, and I think as we can and we certainly look forward able to talk more specifically about what is on their block and our block in the very near future.
Your next question comes from the line of John Herrlin from Societe Generale. Your line is open.
John Herrlin - Societe Generale
With Mozambique, do you have a data room open or you just talking with companies that have made forward solicitations to you?
John, this is Bob Gwin. We're doing both. We've got a data room open. We are coordinating our activities with Videocon another company that are looking to sell a 10% interest in the aggregate, therefore about a 20% interest which makes it very attractive from a materiality perspective to a number of global players and obviously we've had a number of calls that have come in since the coke transaction. And so, we're sorting through those and working through the process now.
Of course as you might expect that's a relatively long process and so we're not, we don’t think something is imminent in coming days necessarily. But we've got some progress there and we see it at the 2013 transaction.
John Herrlin - Societe Generale
The next one from me is also for Bob as well. When you look at the Cretaceous versus the Basin floor accumulations, could you address how you assess risk/award, or maybe the too esoteric a question, but how you approach the different plat types?
John, I mean it actually is a good question. We should talk about it sometime, but it’s a hard one to answer on the phone. But let me give you a brief on it. The Cretaceous fan play has the entire complex of fans from the slope deposit all the way up to the basin floor. But we're seeing most of the accumulation in the more proximal setting. And so that has an impact or influence on how you look for these, the scale of them and the connectivity, all of those different kinds of things. Whereas when we get into the basin floor fan at Mozambique, we are truly in this huge amalgamated fan complexes which lends out the scale, the connectivity, the quality, the sorting is just phenomenal. And so you've gotten rid of through the winnowing and the disproportion of it a lot of the things, the components would degrade the permeabilities. So from that standpoint I guess those are how we evaluate them. But then you got to get into the commercial side of it, which is whole another level of complexity with the cretaceous fans being typically oil, that’s everything significantly bulk of the resources have been in oil. And the basin-floor fans in Mozambique and up and down East Africa have shown to be predominance of gas, do you think there is potential for oil in certain areas based on your petroleum system. But the expansion of that would be to South America, we think we may put the two things together where we actually have the basin-floor fan play, the link to extension compressional structural style that we see in Mozambique over offshore Columbia and the proven oil prone petroleum system. So that’s why we are so excited about the expansion of that play over into Columbia.
John Herrlin - Societe Generale
Yeah. That’s what I was kind of trying to get. Norphlet oil or gas?
Oil. That would be playing up the (inaudible) type discoveries.
John Herrlin - Societe Generale
And last one, New Zealand, are you all worried about geothermal gradient not being too hot?
That's something when you’re in the frontier basin that you always have to worry about. Then we do our modeling, then we do sensitivities around that. Of course, in the Canterbury basin we have a well on the shelf that tested very rich gas, it was 10 million a day and about 2200 barrels of condensate from the same zones that we’re going to be looking at really lesser depths beneath the mud line in the deep water. So, we do think there’s’ going to be a lot of liquid associated with it regardless, and then up in the Taranaki Basin you have a mixed space oil and gas, and again as you get up more distilled, you have less overburden and potentially less heat and so you may still be in the old phase out there.
Your next question comes from the line of Bob Brackett from Bernstein Research. Your line is open.
Robert Brackett - Bernstein Research
I’m intrigued by the Algeria unconventionals. Can you talk about what the opportunity might be there?
Well, let me if I could on that, Bob, I think it’s not just Algeria alone it's actually all of North Africa. Bob’s got a very good approach. We’re trying to take there. We’re in early discussions with the Algerian associate, with their share of resources, and that conversation that this tick of the day, we can’t go into any details but we do see a lot going on in North Africa. And I’m going to let Bob give little more color on that but I hope that some point in near future to be able to talk a little more about what we’re specifically going to do in Algeria.
Yeah, Bob, as we talk about planned our skill set; obviously we’ve had great success with the shale resources in the U.S. We understand what it takes to make those work, and so the exploration team has been looking actively internationally to where they might work in that arena. And of one the areas that we ended up kind of coming home to is North Africa, and it’s not just the subsurface side of it but more so it’s the above ground side of it. The proximity to markets where you can get local markets and then into Europe, so good pricing, access to water, surface access, all of the different components that go into it allowed us to establish a position there.
We have an acreage position in Southern Tunisia which is an extension of the Berkine Basin over in Tunisia where we think we have some interesting shale potential that we will be testing this year with two wells. These will be our science wells where we go in and get core data to look at thermal maturity, TOC, porosity, rock type, all of the different components that go into the making of the decision whether or not to move forward.
We also have a very large position in Southeast Morocco, again budding up against the Algerian border and this is a very similar concept. We’re looking at the shales that come in from Algeria and extend into Morocco. That is what we call prospection agreement where we had to drill some shallow core holes and shoot some seismic data which we completed. We’re now in the analytical phase of that and we’re making decision whether we move forward.
And as Al discussed, we’re in discussions with the Algerians about what they want to do with their potential shale resources. And if you put it all together we could have a very, very nice position in North Africa for the future. This is a long-term investment but we do think it’s something that plays to our skill set and that we’re moving forward with.
Robert Brackett - Bernstein Research
And just a follow-up I guess these would be Solorian age targets and would they work under existing Algerian PSE terms or would you need to see some softening there?
Well, Bob, we have two objectives. The Solorian obviously is very well-known source rock in the North Africa all the way into the Middle East, but we’re also looking at a Devonian source rock which is localized more to the Berkine Basin and several others that we think actually generate most of the oils that we found in the Berkine Basin. So, we think both of those have significant potential and so depending on the burial depth and depositional setting we’ll be looking at both of those. They’re very, very similar from a chemical makeup, total organic carbon, all the different components are almost identical rocks even the one is Solorian and the other is Devonian Age.
As to the fiscal terms, no, we didn’t think that they would work under the existing fiscal terms, and the Algerians have rewritten their petroleum legislation; it's moving through the system right now, and with what we have seen it will be more attractive for us to go in but we have not seen the final version of that. Tunisia and Morocco both have much more attractive fiscal terms which is one of the reasons we established those positions.
Your next question comes from the line of Scott Hanold with RBC. Your line is open.
Scott Hanold - RBC
You all highlighted the value potential the midstream assets, so your two questions with that. First, your existing ownership in the public midstream company, is there any monetization opportunity there for Anadarko that you are looking at in terms of like selling down some of that interest and taking some cash in? And the second part of this question is, what is the size of sort of other non-WES owned assets within Anadarko that could potentially be dropped down in the future?
Scott, it's Bob Gwin. On the first question, I think the short answer is yes. We own 91% of that entity. We obviously have a lock up agreement for a six month period following the IPO that takes us into June. We don’t have any specific plans to sell down pieces of that, but I would expect that we would over a time for a couple of reasons. Number one, obviously it helps to realize some cash at the Anadarko level and secondly the liquidity at WGP is fairly limited today and to have that security trade efficiently it is our obligation to get more liquidity into the market so that it can trade better.
That said, we expect to see over $150 million of distributions from WGP coming back to Anadarko this year due t the strong cash that flows into WGP and Anadarko's substantial ownership position. So either way selling or not telling we see it as a source of EBITDA -- a source of cash that comes in during the year.
We have got at the Anadarko level a large inventory of asset that continues to grow. We're spending a round number call it a $0.5 billion dollars of capital on midstream assets. You saw the slide that Chuck had, a lot of those assets are assets that Western Gas is spending its own capital on and they will detail that in their call next week.
I think its just a continued execution of the plan, it gives us a ready place to go sell assets in the Western Gas for retaining operating control to support our upstream operation and then with the full cycle economics growing through WGP, it gives us a lot of optionality for the future.
Scott Hanold - RBC
Thanks for that and a follow up question here. Looking at slide 21 and that shows where you were spending your money in your onshore US plays; you know looks like there is a step up in activity in the Marcellus Shale. What is your view on that? Obviously gas prices are still a little bit soft, why is the activity stepping up a little bit?
This is Chuck. The activity in the Marcellus was down substantially actually with time. We are currently running about four rigs with the Marcellus; we had peak running at you know 9 or 10 and so, we have taken a considerable step down. I think what you are just seeing is the fact that we are getting more efficient with what we are doing and you get additional wells for the same number of rigs, but the program in general is coming down. Although I would like to say that if you look at the economics for this program still delivers very good rate of returns and RRE is fantastic.
And the other part of the equation is our non-op position that Chesapeake operates, and they continue with a fairly strong program most of these minute activities and their program too is very good (inaudible). So, the growth is outstanding primarily because we are putting on wells that have already been drilled and that we are completing them, but the activity itself from the new well perspective has come down substantially.
Scott Hanold - RBC
So when I look at the 54 wells versus the 80 wells in '12 to '13 is that wells to be spud or is that wells being brought on there, what is the number of percent because that's like almost a 250% increase?
That's actually our production rate that you see there so.
Scott Hanold - RBC
Okay. I'm sorry I misunderstood that. No, I apologize. Okay, that clarifies that. And one more quickly in the Eagleford shale your well count is 2500 compared to I think it was 4,000 last year at your analyst overview. Does that have to do with lateral length or has something changed there?
It actually, yes, it is a combination of two things, the biggest one is lateral length where we produced the number of wells we actually have to drill to drill at the core and that's why you have seen the increase in the EUR on each of the wells. That's the same kind of conversation we had about Wattenberg a little earlier. As we pushed these lateral lengths out there our EURs come out.
And the other thing is we have, it is a minor portion of it but it is an important portion, we have really pulled down to the core of this program and so those wells that are showing are those that have extraordinarily good economics and the hedgier positions that we have we are discounting for the time being.
Scott Hanold - RBC
So how many locations were associated with hedgier positions?
It is a small number, I don’t have the exact number, but the important point I think is that within the core we still have the 600 million barrels and we can get it down with fewer wells.
Your next question comes from the line of Amir Arif from Stifel. Your line is now open.
Amir Arif - Stifel
Just a few quick questions. On your total CapEx for '13 out of the 7.2 7.6, how much is for exploration on an absolute basis, and how does that compared to the '12?
Amir, on the international side of it, international deepwater its about $1 billion, and then there is onshore US that Chuck referenced and overall it adds up to about 20% of that total capital program.
Amir Arif - Stifel
20%, and how does that compared to 2012 exploration CapEx?
Yeah, it about flat.
Amir Arif - Stifel
And then in terms of timing of the exploration wells, the Kenya well that's drilling you know when we will have results from that?
Each of those wells is about a 90 day well and we have been on that about a month. So, we have got ways to go and then the second well we will follow it. So, I would expect we will have the entire program done mid-year or early third quarter.
Amir Arif - Stifel
Then South China Sea, New Zealand, are those late '13 testing?
South China Sea depends on when the rig comes back, it should be April, May. We topped at that well already. And so, the rig moved off for typhoon season. So, it is going to come back in that timeframe and it does not have whole lot more to do; it is just going to drill and hunt through the objectives, we are setting right above them.
New Zealand will be late in the year. The drilling window there is really December through April. So, we've got a rig that is coming out of the shipyard in Southeast Asia new build, do some sea trials on the way over to New Zealand and plan to spud about the 1st of December of this year and then continue with at least the two well program on into 2014.
Amir Arif - Stifel
And then, just finally on the Brazil asset sale timing, is that -- can you give us a sense of, is that a first half event, second half?
This is Bob Gwin again. That's -- it's uncertain. We are preparing to restart the process and we will get a data room open. And between the some of the moving pieces around unitizations etc, and then the time for an A&P approval, we expect to make a lot of progress in 2013. I would expect that it ends up being later of the year type of event, but we will have to see. We certainly expect to see some interest there but there is just some moving pieces that make it hard to estimate the time.
Your next question comes from the line of Geoff Bird with allNovaScotia. Your line is open.
Geoff Bird - allNovaScotia
I am just wondering if you guys can give me an update on the company's activities at Bear Head, Nova Scotia. I know there is -- the provincial government here recently extended the construction permit there. And I have also heard that there have been a few Indian and Chinese groups touring here with an idea to export L&G?
Jeff, this is Al Walker. I think a few years ago we abandoned our aspirations for that and as such took a charge, a modest charge during that calendar year. We do not have any current ongoing discussions with anybody. We did a lot of over the (inaudible) some interest in it. Whether that ever materializes in anything, I am really today not in a position to give you a guesstimate on that. I will tell you that it is not something we spend a lot of time on.
Geoff Bird - allNovaScotia
All right. And so, the construction permit was just extended in December, so that is just to sort of keep things idling or?
Well, I think it is just a maintenance requirement on our part to recognize some day that probably worth something to somebody or may be even to us but it is not an asset today that we spend a lot of time on.
Your next question comes from line of David Heikkinen from Heikkinen Energy Advisors. Your line is open.
David Heikkinen -- Heikkinen Energy Advisors
Just a couple of follow-up questions. On a success case, Chuck, longer laterals at Wattenberg, how much of your acreage or inventory could actually be accessed by the 7500 and 9,000 foot laterals?
David, we talked earlier it's a quite bit of them probably in excess of 50% and that number depending upon unitization and that type of thing could even increase from there. It's really a matter of where do we get the best value either drilling these shorter laterals quicker or taking the longer laterals takes a little more time, put them online and seeing if we can get incremental EUR for the amount that we invest. So, we're in the optimization stage right now, other parties in the field are doing the same thing.
David Heikkinen -- Heikkinen Energy Advisors
Sticking in the U.S., does Anadarko have a right of first refusal on your non-operative Marcellus?
David, that is a complicated question and a complicated answer, simply because both we and Chesapeake have promoted down interest there. I'm sure if there was ever an opportunity that would come forward where Chesapeake might consider something, it would be in everyone's best interest probably we'll have a conversation about how all that would work.
David Heikkinen -- Heikkinen Energy Advisors
And then we've assumed -- Doug asked a question on Mozambique monetization, we had assumed that there is an opportunity potentially to sever the producing operations and the LNG trains and treat those with different terms for monetizing each part. Is that still reasonable as a potential outcome or is that not on the table?
Hey, David, this is Doug. We have an advantage to a point that we could make that decision at this point of time.
David Heikkinen -- Heikkinen Energy Advisors
And kind of final comment, Al, I just wanted to wish you luck. I mean, this is your first year during the transition and I know you'll do a great job. So thanks a lot, Al.
Thanks David. I appreciate it. I'm very confident about the fact that I've got a lot of smart people I've work around that contribute in ways sometimes that are obvious and sometimes not so obvious. We're very blessed by deep talented employee organization and the guys I work around everyday are just the best I've ever seen. So thank you.
Your next question comes from the line of Eliot Javanmardi from Capital One Southcoast. Your line is open.
Eliot Javanmardi - Capital One Southcoast
I know you mentioned it but just for clarification, how much of the ethane rejection is actually not in the guidance? Did you say, you said 3 million barrels?
Yes, certainly about 3 million barrels.
Eliot Javanmardi - Capital One Southcoast
And then just a follow-up then, you mentioned Coronado and Shenandoah. Is Yucatan close to be doing yet, any color there?
Eliot, Yucatan is a little bit farther behind. It has not gone through the objective section yet it has come out a base of salt and they're doing some BOP work right now. So it's probably six weeks away just estimating from having results whereas Coronado, Yucatan are down. They're in the process of acquiring all the open whole information then we'll be talking about them once we have that information finalized.
Your next question comes from the line of David Tameron with Wells Fargo. Your line is open.
David Tameron - Wells Fargo
I think Al you mentioned the 11% debt adjusted per share growth number. What assumptions do you've going in that? Is that some of that free cash flow based on the debt, can you talk a little bit more about that?
Yeah, David, great question. And it does we kind of have assumed the static share price and we calculated that. We don't get too aggressive we're using that particular variable to distort the outcome.
And then, David, it's based on the leverage reduction assumptions that I had on one of the slides in the presentation.
David Tameron - Wells Fargo
Okay. And then --
And then, David, 11% you can see why we think the 11% reduction growth -- production growth rather for debt adjusted shares are far more important number than usually more highly correlated number the share price performance in this gross production growth.
David Tameron - Wells Fargo
Yeah, I agree. And then Al, you referred to perhaps some dividend increase some going to debt pay down. Can you just expand on that a little bit, and obviously waiting on some of the litigation but once that's resolved can you just give us some more color how you're thinking about?
You bet. Well, as I mentioned, I think this year we will reach clarity but not resolution likely on Tronox, but with that clarity particularly with our views in terms of how that case will come out. And couple that with the fact that we continue to do a lot of things to reduce the capital intensity associated with our growth, it would be my hope that as those situations kind of converge that we'll be able to take a hard look at doing something with the dividend yields because I recognize today and we as a management team recognize today that's something we would like to try to focus on because as our share price goes up and we keep the dividend payout where it is, the yield continues to get less competitive to our peers, and we also believe that it's a good indication the confidence that we have in our business model and our ability to deliver future results.
So, I'd say stay tuned on that one, couple of variables that we're sort of work-in-progress on and I'm hopeful sometime in the near future to be able to talk about what we're going to do on the dividend policy side.
David Tameron - Wells Fargo
Let me just run through a couple more, if you'll have patience with me. Codell, Chuck can you talk about what you guys are seeing from the Codell and the Wattenberg?
Yeah, our current program has about two-thirds of our wells drilling in the Niobrara and about a third in the Codell. The actual well performance is very, very similar. It doesn't look like the Codell needs quite the density that the Niobrara does in the well. So you get you can more capital efficiently drain it, which is good news. And the performance has been right up there with the Niobrara wells with regard to returns, in excess of 100% where we've the royalty advantage. And what we're trying to do is develop them in lock step, just one right after the other move through a section completely drill out that section. Right now our optimum count is around 12 per section and that's about eight Niobrara wells and four Codell wells.
David Tameron - Wells Fargo
And then the 35 -- you mentioned that metric 35,000 barrels a day is what you had in perfection at. Do you have any reference point where that was in the past couple of years? I realize it's shift a little bit with the oil mix and cost going up, but can you give us any reference point?
That's been in the neighborhood for the last several years. But it's right about that and I think the point is we're flowing more and more oil barrels in that numbers so that the margins are continuing to expand, and with reduction with OpEx that we've seen recently, you've -- you get more for each of those barrels in the denominator and it's a pretty good equation.
David Tameron - Wells Fargo
Okay. And the last one, I'll jump off. BP, there was an announcement yesterday on the paper about BP and some of the dollar surrounding the Clean Water. Can you, I don't know if anybody wants to address that if you can address that and if you feel comfortable, can you give us some more color how that impacts you and your current take down in Gulf of Mexico?
Yeah, David, this is Bobby Reeves, I'll try. That's probably good news for BP and their negotiations with the Department of Justice on their ultimate Clean Water Act fines. I don't think it really has any impact on ours. So I think we've talked about it before that the fines and penalties under the Clean Water Act are fault based. We weren't there. We were a passive investor in the well and as such we don't have fault. So I think ultimately our responsibility if any will be insignificant and not material.
Your next question comes from the line of Subash Chandra with Jefferies. Your line is open.
Good morning. This is actually (inaudible) Subash's associate. Just wondering if you could give us a quick update on the Utica and what you've been seeing with the southern wells that you're flowing there?
Yeah, this is Chuck. We continue to test those wells and what we intend to do is go through a reasonable link of productions we get good evaluation of our exploration program there. As you know we've spread those out over a very large area. And us in conjunction with industry partners are getting a good look at how those wells will perform over time and that will be a input into our assessment of the investment opportunity, early returns are pretty good.
Do you envision any major activity there this year?
Well we'll get done with our testing program and see what it gives us with regard to the opportunity before making a decision on how active we'll be.
I'm showing there are no further questions at this time.
Okay. Thank you, operator. If I could just in closing as you guys look at this final slide I just wanted, if I can, have you look at the three items at the bottom of the slide and just say when it comes to investment returns, you've heard us say this before, I'm going to emphasize it again we're extremely internal rate of return or return focused with our capital allocation that will continue. You've heard us talk about how we've created a lot of resources over the last five years and the expectation we're going to continue to do that.
One of the things on the resource conversion that I just want to be sure I emphasize is that we want to continue to increase the velocity of how we spend that capital and the activity associated with it. And then on the value creation portion there we are really doing, I think a pretty darn good job and we're going to continue to emphasize this in our own activities more and more, but we're going to manage how we balance the short, the medium, and long capital spend, so that in the process that we grow our EBITDAX per share and we increase our EBITDAX per barrel. We recognize those are very important things to do with the allocation of capital it's also important to build a transparency in terms of how we get the future growth objectives we've laid out.
The short cycle spend for us as you've heard us talk about today really focuses on high margin areas and that's going to continue and as we look at the medium term cycle you heard Doug talk a lot about how we're managing a number of the mega projects all of which have oil in their production mix, and that the capital associated with those type of lot of promos things that we're using other people's capital or third party capital for it.
And lastly, the type of track record that Bob Daniel has been able to demonstrate with his exploration group, I really don't think has a peer. We see that as a building block for the future and very important that our value creation gets captured in a way in which we manage our business and more importantly how we make sure that we look at and understand the short-term needs to grow EBITDAX per share and EBITDAX per BOE.
Today I'm very happy with the success we've had in the Gulf of Mexico. We look forward to what we think would be a very likely consistent outcome with Heidelberg, we had at Lucius, and I know Bob and his folks are looking forward to a day where they can give you a lot more color about what we're seeing in Shenandoah.
So with that, in closing, we appreciate everyone's time and attention this morning. We'll continue to work really hard for our shareholders and try to do the things that we believe at the end of the day creates what could be a real breakout year for us this year. We see an awful lot of things that makes us very happy and we hope over time it does the same for investors, your employees, and our employees, and your those that work very hard for you everyday will continue to do that, and we're again excited and pleased with what '13 has to offer, and again one more time 2012 was outstanding.
So from that base we believe our future looks pretty bright and appreciate everybody's time and attention today. Thank you.
Ladies and gentleman this concludes today's conference call. You may now disconnect.
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