Conoco sees third-quarter profit rise, 2015 capex seen lower
By Anna Driver
(Reuters) - ConocoPhillips (COP.N: Quote), the largest U.S. independent oil and gas company, on Thursday reported higher third-quarter profit after the sale of its Nigerian unit and said overall spending would decline next year, partly in response to falling crude oil prices.
Crude oil prices have tumbled more than 20 percent in recent weeks as global demand slows and supplies rise. Crude traded in New York fell to a more than two-year low on Monday at $79.44 a barrel but recovered a bit to above $81 on Thursday.
Conoco expects to spend less than $16 billion next year, down from the $16.7 billion projected for 2014, Ryan Lance, the chief executive officer, told investors on a conference call to discuss earnings.
Over the last several years, Conoco has shed lower-margin assets, directing more capital to projects like shale drilling in Eagle Ford area in south Texas and the Bakken formation in North Dakota that offer higher returns and faster production growth.
Even with a drop in spending, the company expects to meet its forecast to boost oil and gas output 3 percent to 5 percent in 2015, Lance told investors.
Conoco will continue to invest near current levels in Eagle Ford and Bakken, but has the flexibility to pare spending in exploration and on less-developed fields in such places as the Permian Basin in West Texas and western Canada, it said.
"Beginning in 2015 capital in our major projects begins to taper off," said Lance, "We have significantly more flexibility to ramp up or down our capital as circumstances dictate."
Profit rose to $2.7 billion, or $2.17 per share, from $2.5 billion, or $2.00 per share, in the 2013 third quarter. Continued...