And you saw us last year announce 2.2 million tons from NPL at Saguaro, and in the fourth quarter, we signed 0.2 million tons off of Sempra’s ECA project on the west coast of Mexico for five years. So we’re continuing to look for opportunities that really fit that framework. But regarding your question on permitting right now, Port Arthur’s in a great spot.
Lloyd Byrne: Okay. Great. So it doesn’t change any plans going forward?
Bill Bullock: It’s not impacting us right now.
Lloyd Byrne: Thank you.
Operator: Thank you. Our next question will come from the line of John Royall with JPMorgan.
John Royall: Hi. Thanks for taking my question. So my question’s on Willow. You have the sanction out of the way now, and even post-sanction, we’ve seen some news flow around lawsuits, which I assume you have some confidence in as an organization that won’t cause any delays, but maybe you can confirm that. And then beyond that, maybe you can just speak to the construction plan for the year and what you’re hoping to accomplish in terms of the progression of the build in 2024 specifically.
Andy O’Brien: Hey, John. This is Andy. I can take that question. So, yes, it’s pretty nice to also be at a point now where we can start talking about the project and not just give you a legal update. But we will, given your question, I’ll start with a bit of a legal update, because as you mentioned, we had a fair bit of positive activity in the fourth quarter on that front. So just to sort of summarize where we are right now is that, we’re very pleased that both the Alaska District Court and the 9th Circuit allowed construction work to proceed on the North Slope. And then separately, the Alaska District Court upheld the legality of the ROD issued by the BLM. So as you mentioned, this is currently being appealed to the 9th Circuit.
But as we said before, we believe the BLM and the cooperating agencies conducted a really thorough process that satisfied all the legal requirements for them to grant their approvals. So these positive rulings gave us the certainty to make the FID decision. Now then, in terms of the second part of your question on execution itself, since taking the FID, we’re really pleased with how quickly we’ve ramped up the activity. We’re now into our second winter construction season on the North Slope. And we’re mobilizing 1,200 workers right now who are going to be building gravel roads, gravel paths for the facilities and beginning laying pipelines. We’re also making some pretty significant progress with our modular facility fabrications. So we do expect 2024 capital to be in the upper end of the previously communicated annual ranges of $1 billion per year to $1.5 billion per year.
But our estimate for the capital to first production remains unchanged at $7 billion to $7.5 billion. Now just to give you a bit more color in terms of the progress, we’re now at a point where we have three quarters of the project scope under firm contract and expect to have 90% of that under contract by the end of 2024. And of those contracts that we’ve issued so far, 70% are either lump sum or unit rate contracts and then these kind of contracts, we’ve agreed a price now, so we have limited exposure to future inflation. So it’s still very early, but with all major projects, it’s really important we get off to a fast start. And we’re really pleased that’s exactly what we’re doing with Willow. So just to wrap it up, it’s great to see at this point now our team’s in full execution mode, focused on actually building Willow.
John Royall: Thank you.
Operator: Thank you. Our next question will come from the line of Neal Dingmann with Truist Securities. Your line is now open.
Neal Dingmann: Good morning. Thanks for taking my question. My question is more kind of how you’re thinking about production growth. You certainly have laid out pretty what I call a stable, a flattish plan for the year, for first quarter for the year. I guess kind of two questions around that. One, if you continue to be more efficient as you have been, would you take those savings and plow back to the ground and boost production a bit more or would those savings go back to the shareholders in some fashion? And then secondly, a couple of your large peers continue to be growing even a bit more than you in the firm and I’m just wondering how you view sort of from a macro position your responsibility when it comes to production growth?
Dominic Macklon: Yeah. Neal, it’s Dominic here. I think, I mean, first of all, I think, it’s probably three questions there, actually. I’ll take the activity one. We were holding our Lower 48 activity flat this year versus last year. We like that, we’re still seeing some modest growth there and we get — we’re really focused on efficiency there. And so, if we did get more efficient and we felt there was some capital headroom there, I think, I suspect that we would pretty much hold things flat, because we’re just so focused on efficiency. We don’t want to swing our programs around. In terms of the total growth rate, remember, growth is an outcome of our plan. We’re not chasing growth. It’s really an outcome of a return that’s focused on returns.
And so, we’re pretty happy with that sort of modest level growth. It’s pretty consistent with what we said at AIM. In terms of the overall profile, just to give you a bit of color on that, I mean, Bill mentioned a lot of this in his prepared remarks. But we do expect sort of underlying production in the range of 2% to 4% growth this year versus last year. And the good thing about it is that we’re seeing growth this year, not just coming from the Lower 48, but also from across our International portfolio. So it’s nice to see the diversity of that portfolio coming through. And then, of course, on top of that organic growth, we have the additional Surmont 50% interest on top of that. In terms of the shape for the year, fairly rateable year-over-year growth by quarter, except for Q1, we have the weather impacts.
Bill mentioned that, about 20,000 barrels a day of weather we’ll see in Q1, and then in Q3, we have our turnaround impacts. So we have about 25,000 barrels a day to 30,000 barrels a day of turnaround impacts this year. Most of that will be in the third quarter and that includes a sort of month-long turnaround we have at Surmont, which occurs every five years. So — but anyway, we’re all very pleased with just where the growth is coming from. We’re pleased with the level of growth and I think we’re pretty committed to keep the program steady, stable and focus on efficiency.
Ryan Lance: Yeah. And I just reiterate, we just don’t want to whipsaw the team’s either up or down. We just like the constant pace of the execution and find that gets the efficiencies at a maximum, gets our returns. It really maximizes our returns.
Neal Dingmann: It’s great to hear that, guys. It makes much more sense. Thank you so much.
Operator: Thank you. Our next question will come from the line of Josh Silverstein with UBS. Your line is now open.
Josh Silverstein: Thanks, everybody. So I just wanted to touch on the Montney. This is one of the key growth areas that you had highlighted back in April last year. You mentioned the processing facilities started up in the back half of the year as well. I know it’s 60% liquids, but how has the lower natural gas price environment changed the way you’re thinking about development there? And along those same lines, I know there’s only a small uptick in Canadian spend for the year. I figured that might be related to Surmont more than this. So any help there would be great? Thanks.
Andy O’Brien: Yeah. Hi. This is Andy. Yeah. Maybe just taking the first part of your question sort of the natural gas, it really doesn’t impact our long-term development plans. And then, also putting that in context is sort of, we know we have our position in Surmont where we actually are a user of natural gas. So, that doesn’t really change our Montney development plans. I think, in terms of the progress we’re making on Montney, we are going to be ramping this year. We’ve just started the second rig and just to give you sort of some context of the numbers here where in our full year 2023 production was about 24,000 barrels a day. We averaged 33,000 barrels a day in the fourth quarter and that — that’s — we’re expecting that to grow now throughout the year. And then in terms of the CapEx, the modest growth CapEx you’re seeing in Canada, it is a combination of additional equity we have in Surmont, but also adding the second rig of the Montney.
Josh Silverstein: Thanks, guys.
Operator: Thank you. Our next question will come from the line of Bob Brackett with Bernstein. Your line is now open.
Bob Brackett: Yeah. Good morning. I was looking at the triple-digit organic reserve replacement ratio and wondering some of the moving parts and kind of curious what impact did the sanctioning of Willow play on that?
Dominic Macklon: Hey, Bob. Dominic. Yes. Yeah. I mean, we’re very pleased to see a strong organic and total reserve replacement again this year and we’re seeing strong contributions from across the portfolio. So on the organic side, first of all, Lower 48 is doing well, with the advancement of our resource development plans, it’s organic replacement ratio is well in excess of 100%. We’ve got contributions from Montney. And then the Willow piece, yeah, that’s a really strategic piece for us. So we — the way it works with bookings on major projects, you have an initial booking and then you book as the project develops, that’s normal. So our initial booking was 160 — about 160 million barrels on Willow. So that’s what we book on sanction.
And then as we develop up the development wells and the project, we’ll see that approach towards our base case resource estimate of 600 million barrels for willow. So, yeah, very strong there. And, of course, on the total reserve replacement, we add in the A&D and we get the benefit of about 200 million barrels of resource that came with — reserves that came with the Surmont 50% acquisition. So, again, another year of strong total reserve replacement for us, which is good.
Bob Brackett: Yeah. Very clear. Thanks.
Operator: Thank you. Our next question will come from the line of Sam Margolin with Wolfe Research. Your line is now open.
