HOUSTON — ConocoPhillips saw both profit and production rise slightly in the third quarter, but warned that it could taper next year’s capital expenditures to react to falling oil prices.
The Houston-based exploration and production company reported earnings of $2.7 billion, or $2.17 per share, compared with $2.5 billion, or $2.00 a share, in the same quarter last year.
A large chuck of the profit came from the July sale of ConocoPhillips’ Nigerian assets. When those and a few other events were excluded, the company saw an earnings per share of $1.6 billion, or $1.29 per share — ahead of analyst’s predictions of $1.20 per share, according to a Bloomberg survey.
But the company hasn’t been immune to falling prices — ConocoPhillips revised downward its expected fourth-quarter production and became the first large oil company to acknowledge that falling oil prices would weigh on next year’s capital expenditure budget.
CEO Ryan Lance said in a conference call with investors that the company will spend lower than its previously stated goal of $16 billion for 2015, and less that its $16.7 billion total in 2014.
“We can throttle back on our less mature unconventional plays while continuing to invest in our highest margin, short-cash-cycle projects in the Eagle Ford and Bakken,” Lance said. Cuts could come first in plays such as the Permian Basin, the Niobrara and Canadian unconventional plays.
The company still expects to meet its short-term 3 percent to 5 percent production growth goal in 2015, Lance told investors.
The effects of declining prices were already visible in the third-quarter numbers. ConocoPhillips said its total realized price during this period was $64.78 per barrel of oil equivalent, compared to $69.68 in the third quarter of 2013.
At the onset of 2014, ConocoPhillips budgeted $16.7 billion for capital expenditures. That number could fall in the coming year both naturally as several major projects come out of more expensive stages and as the company pulls back, executives said. The company will announce its 2015 budget in December.
Related: ConocoPhillips closes $1.5 billion sale of upstream Nigerian assets
ConocoPhillips has pared down its holdings since it spun off its refining business Phillips 66 in 2012. The company has since been pursuing growth in the U.S. and a handful of other assets it deems more lucrative.
At the end of last year, the company announced a capital expenditures budget of $16.7 billion, 55 percent of which would flow to projects in North America.
In the lower 48 U.S., ConocoPhillips saw production increase by 44,000 barrels of oil equivalent per day to an average total of 543,000 barrels of oil equivalent per day. The increase was largely due to the strength of operations in unconventional plays, such as the Eagle Ford and the Bakken.
The Eagle Ford and the Bakken alone delivered just under half of the company’s daily U.S. production in the quarter, at a combined production that was up about 33 percent from the third quarter of the previous year. Liquids production grew 19 percent year-over-year with a 25 percent increase in crude oil production, the company said.
In Alaska, the ConocoPhillips saw a slight decline of 23,000 barrels of daily oil equivalent compared with the same period in 2013, primarily as a result of downtime at the Prudhoe Bay operations.
In Canada, third-quarter production was 276,000 barrels of daily oil equivalent, even with the previous year’s quarter. Liquids growth of 9 percent offset reduced natural gas production, the company said.
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