What will it take to bring ConocoPhillips' (NYSE:COP) market cap north of $100 billion? According to its management, by spending $16 billion annually, a combination of margin expansion and output growth will add production of 400,000 barrels of oil equivalent per day by 2017 and will drive shareholder value creation.

In order to achieve these goals, ConocoPhillips is focusing on unconventional U.S. shale plays. 60% of the additional output is going to come from American shale plays, and it gets even better. By focusing on the Eagle Ford, the Permian Basin, and the Bakken, ConocoPhillips hopes to shift its production mix from ~40% liquids to ~80% in the lower 48 states.

Higher margins and more output will compound ConocoPhillips' growth plans and significantly boost free cash flow, which can be returned to investors via share buybacks and dividend increases. All this sounds nice, of course, but words are cheap.

Words may be cheap, but mining oil sands isn't
Unconventional shale plays are a crucial part of ConocoPhillips ambitions', but that shouldn't overshadow ConocoPhillips' Canadian assets. At the end of 2012 Conoco was pumping out 93,000 bpd from its oil sands operations. Consider that the base Conoco hopes to grow off of over the next decade.

In a 50/50 joint venture with Total's (NYSE:TOT) E&P Canada subsidiary, Conoco and Total are spending billions to grow capacity at the Surmot facility. Surmot first starting producing 27,000 bpd of bitumen in the fourth quarter of 2007. By undergoing a second phase of construction, Surmot should start producing 136,000 bpd of bitumen by 2015.

Oil sand projects are notorious for cost overruns and delays, which is why both Total and Conoco investors should play close attention to what Conoco's management has to say. Conoco is the operator of Surmont, but Total has also poured billions into bringing this thing online, which is why shareholders of both companies should take note.

Over the course of ConocoPhillips' guidance, it plans to spend $5 billion on Canadian oil sands projects on top of the enormous amount it has already spent. If Surmont takes longer than expected to come online, shareholders of both ConocoPhillips and Total will see earnings depressed while no additional cash flow is being generated.

Eagle Ford, Permian Basin, and the Bakken
As I mentioned before, ConocoPhillips plans on driving its margins higher by focusing on liquids-rich plays in America.

By developing its position in the Bakken with a $4 billion investment, Conoco hopes to tack on an additional 45,000 boe/d of output by 2017. Considering most of Conoco's leaseholds are in the core counties of the play, such as McKenenzie and Dunn, roughly 90% of that output will be liquids.

Conoco will spend $8 billion developing Eagle Ford acreage to grow output by 130,000 boe/d over the same time period. With 227,000 net acres centered around the oil- and condensate-rich windows of the region, Conoco has prime acreage to generate value.

The Permian Basin growth story comes in two parts: The first is less interesting, as it involves developing the conventional part of the play to increase output by 40,000 boe/d through a $3 billion investment. What really should excite investors is Conoco's acreage in the Delaware Basin, which houses a stacked play that could be the second largest oilfield in the world according to some.

Unconventional shale development is singlehandedly the most important thing to watch for this earning season, as Conoco follows the same trajectory others have taken to grow high-margin liquids output. If Conoco is able to double the percentage of liquids in its production mix while boosting output, those assets will become cash generation machines.

Over the past two years Conoco was able to use seismic imaging to locate several promising prospects off the coast of Angola. In 2014, the company will begin to see if the data from four well programs holds up, which could provide Conoco will a large reserve base to grow output past 2017.

Foolish final thoughts
This year could bring about many great things for ConocoPhillips as it expands shale output and its projects in Angola begin to take shape. Conoco may be able to reclaim a 12-digit market cap if guidance is met, but never count your chickens before they hatch. In the near term look for comments around shale developments but keep an eye out for how its major long-term projects are unfolding as well.