Clay Gaspar
Executive Vice President and Chief Operating Officer at Devon Energy
Thank you, Rick, and good morning, everyone. In addition to our strong 2022 financial results, Devon also continued to run a strong operational execution as well. As you can see on Slide 14, this was evidenced by several noteworthy accomplishments, including a new all-time high for oil production that was underpinned by another year of world-class well productivity in the Delaware. Devon's oil weighted production mix coupled with our low cost asset base allowed us to capture record margins and maintain low reinvestment rates of just over 30% of cash flow. We also efficiently expanded our resource base in 2022 with proved reserves advancing 12% through the combination of strong drilling results and by seamlessly integrating two property acquisitions during the year.
Flipping to Slide 15, you can see that the strong operating results in 2002 also placed us in the top echelon of capital efficiency for the entire industry differentiating Devon in this crowded and competitive space. These operational achievements across every phase of the business demonstrate the power of Devon's advantaged asset portfolio, the success of our rigorous capital allocation process and the quality of our people to extract the most value out of these assets through superior execution.
For the remainder of my prepared remarks, I plan to discuss the key capital objectives and catalyst of our '23 operating plan. For '23, we plan to maintain a very similar activity level as compared to the fourth quarter of '22, which was the first full quarter of operations with our recently acquired assets in the Williston Basin and Eagle Ford. Overall, we plan to run consistently 25 rigs throughout the year resulting in approximately 400 new wells placed online in 2023.
Turning to Slide 16. Once again, the Delaware Basin will be the top funded asset in our portfolio, representing roughly 60% of our total capital budget for this year. To execute on this on this plan, we will operate 16 rigs across our acreage footprint with the sweet spots in Southern Lea and Eddy Counties in Stateline area of Texas receiving most of the funding. Approximately 90% of our capital will be allocated towards high return development activity in the Upper Wolfcamp and Bone Spring, while the remaining 10% will be allocated toward delineating upside opportunities in the deeper Wolfcamp that will add to the depth and quality of our inventory in the basin.
Importantly, we expect overall well productivity from this program to be very consistent with the high quality wells we have brought online over the past few years. We are also well-positioned to maximize value for our production in the Delaware for the upcoming year. The marketing team has done an excellent job of diversifying across multiple transportation outlets and sales points allowing us to avoid many of the takeaway constraints in the basin. Looking specifically at the gas volumes, approximately 95% of our gas in the Delaware is protected by either firm takeaway constraints -- excuse me, contracts or Gulf Coast by regional basis swaps.
With oil production, we expect our revenue to benefit from a -- access to premium Brent pricing through Penn Oak's export terminal in Corpus Christi. This advanced pricing combined with low LOE plus GP&T cost structure of around $7 per BOE will drive another year of strong margins and excellent free cash flow from this franchise asset. And lastly on this slide, I would like to provide a few more thoughts on our first quarter infrastructure downtime in the Delaware. As pointed out on the map in late January, we had a fire at one of our compressor stations in the Stateline area that severely damaged the electrical system and the DI unit. This station is our largest operated compressor facility in the basin with capacity of 90 million cubic feet per day and is a key component to our centralized gas lift operations in the surrounding area.
We have secured necessary replacement equipment and the team is currently onsite repairing the facility. With this disruption and other third-party midstream downtime in the area, we expect to have a negative production impact of 10,000 BOE per day in the first quarter. With the quick reaction time and the team's focus on safety and recovery, we expect to have this facility back up and the affected production fully restored by mid-March and we do not expect to have any negative production impacts drag into the second quarter.
Turning to Slide 17 and moving on to the Eagle Ford. The team has done a great job integrating the Validus acquisition into our operations resulting in our fourth quarter production nearly doubling to 68,000 BOE per day. With this increased scale, the Eagle Ford will play a much bigger role in our capital allocation in the upcoming year accounting for just over 15% of our total capital spend. During the year, we plan to run a steady three rig program with 70% of the activity deployed towards developing our recently acquired acreage in Karnes County with the remaining capital invested in our JV partner BPX in DeWitt County.
Overall, this development-oriented activity is designed to maintain steady production in 2023.
Looking beyond the production trajectory, a key catalyst for this asset in upcoming year will be the continued appraisal of resource upside from tighter redevelopment spacing and refracs. Early results indicate there is a lot more oil to be recovered from these prolific play overtime. As we get more data points, I expect to provide more commentary on this important resource expansion catalyst in the near future.
Moving to the Anadarko Basin. In 2022, the team's approach of wider well spacing and larger completions design consistently delivered triple-digit returns with the benefit of our $100 million carry with El. As we look ahead to 2023, I expect continued value-creation as we plan to deploy a steady program of four operated rigs once again carried by Dow. This program is expected to result in around 40 new wells placed online focused on primarily the co-development of the Meramec and the Woodford formations in the condensate window of the play. The carried returns of these projects will once again be very strong allowing us to maintain a steady production profile throughout the year while harvesting significant amounts of free cash flow.
For both the Williston and Powder River Basins, I want to begin by acknowledging the tremendous job our field personnel did in fighting through extremely challenging weather conditions over the past few months. While operations in the fourth quarter were certainly slowed due to these hard conditions, the production from the business was resilient collectively averaging 80,000 BOE per day between these assets in the Williston and the Powder River Basin. Looking ahead to 2023, approximately 10% of our capital spend will be deployed across these two plays resulting in approximately 50 new wells placed online during the year. Approximately tow-thirds the Rockies capital activity will reside in the Williston Basin. In 2023, the capital objectives for this asset are to efficiently sustain production through low risk infill drilling, evaluate resource upside with a handful of refrac tests and generate around $700 million of cash flow at today's pricing.
In the Powder, our objective is designed to build upon the three mile laterals success from last year by taking the next step in the progression of the Niobrara with spacing tests of up to four wells per unit. These pilots will not only help us better understand spacing, but also help us inform optimal landing zones and completion designs. The key takeaway here is that Powder is one of the few emerging oil plays in North America and we have a 300,000 acre net position in the core of the oil fairway providing Devon an important oil growth catalyst for the future. Overall, we're very excited about the prospects in 2023. I believe with the high-quality slate of projects we have lined up for the upcoming year, we expect to continue to deliver top tier capital efficiency that investors have become accustomed to. We're also well-positioned to refresh and add our depth of inventory as we execute on these programs in 2023.
A good visual reminder of Devon's depth of inventory and upside potential is on Slide 18. I've covered this topic at length during previous calls, so I won't go through the details today, but I do want to emphasize two key takeaways from the slide. First, we have identified roughly 12 years of high return development inventory evaluated at mid-cycle prices. This inventory positions us to deliver highly competitive results for the foreseeable future. And secondly, I want to highlight that this inventory does not fall off a cliff at the end of the year 12. We expect to systematically refresh this inventory over time as we successfully characterize and de-risk the many upside opportunities that exist across our diverse set of assets.
And lastly, on Slide 19, we are continuing to make significant strides in our environmental performance as outlined in our recently published sustainability report. This comprehensive report details Devon's aggressive mid and long-term ESG targets including those highlighted on the right-side of the slide, as well as meaningful steps that we've taken towards meeting these targets. Our actions demonstrate the priority we have placed on long-term carbon reduction intensity of our operations. I'm really proud of the team's commitment to doing business in the right way, which means mandating -- which means balancing that three mandates: first, providing the critical energy to power the world's economy; second, provide compelling and sustainable returns to our investors; and third, do all of this in an environmentally conscious way. You can expect Devon to continue to raise the bar on all three of these imperatives.
With that, I will turn the call over to Jeff for the financial review. Jeff?
