6. Property, Plant and Equipment

Unproved Oil and Natural Gas Properties (Successor). As December 31, 2013 and December 31, 2012, we had $1.4 billion and $2.3 billion of unproved oil and natural gas properties on our balance sheet. During 2013, we transferred approximately $0.8 billion from unproved properties to proved properties. During 2013 and the successor period of 2012, we recorded $36 million and $23 million of amortization of unproved leasehold costs in exploration expense in our income statement. Suspended well costs were not material as of December 31, 2013 or December 31, 2012.

Asset Retirement Obligations. We have legal asset retirement obligations associated with the retirement of our oil and natural gas wells and related infrastructure. We incur these obligations when production on those wells is exhausted, when we no longer plan to use them or when we abandon them. We accrue these obligations when we can estimate the timing and amount of their settlement.

In estimating the liability associated with our asset retirement obligations, we utilize several assumptions, including a credit-adjusted risk-free rate of 7 percent and a projected inflation rate of 2.5 percent. Changes in estimates in the table below represent changes to the expected amount and timing of payments to settle our asset retirement obligations. Typically, these changes primarily result from obtaining new information about the timing of our obligations to plug and abandon oil and natural gas wells and the costs to do so. The net asset retirement liability as of December 31 on our consolidated balance sheet in other current and non-current liabilities, and the changes in that liability for the periods ended December 31 were as follows:

	Year ended December 31, 2013			March 23 (inception) to December 31, 2012
	(in millions)
Net asset retirement liability at beginning of period	$	44		$	—
Fair value of asset retirement liability at Acquisition date	—			102
Liabilities settled	(2		)	(2		)
Property sale(1)	(1		)	(64		)
Accretion expense	4			3
Liabilities incurred	7			5
Other	1			—
Net asset retirement liability at December 31(2)	$	53		$	44

(1) From March 23 to December 31, 2012, property sales relate to the sale of properties in the Gulf of Mexico.

(2) Amounts do not include $37 million and $36 million as of December 31, 2013 and 2012, respectively, of net asset retirement liability associated with our Brazil operations classified as discontinued operations.

Capitalized Interest. Interest expense is reflected in our financial statements net of capitalized interest. We capitalize interest primarily on the costs associated with drilling and completing wells until production begins. The interest rate used is the weighted average interest rate of our outstanding borrowings. Capitalized interest for the year ended December 31, 2013 was $19 million. For the period from March 23, 2012 (inception) to December 31, 2012 capitalized interest was $12 million, and for the predecessor periods from January 1, 2012 to May 24, 2012 and the year ended December 31, 2011, it was $4 million and $13 million, respectively.