ConocoPhillips Targets 2014 Capital Budget Of $16.7 Bln. - Update

(RTTNews) - Oil and gas company ConocoPhillips (COP) said Friday it expects capital expenditure of $16.7 billion in 2014, with sharp focus in North America.

Also, the company reiterated its 2014 annual average production target of 1,600 thousand barrels per day, or MBOED, from continuing operations.

Elaborating on its investment plans for 2014, ConocoPhillips said 55 percent of the budget is allocated toward North America and 45 percent toward Europe, Asia Pacific and other international businesses.

Salient features of its budget include: more investment in the Eagle Ford, Bakken and Permian assets; higher allocation of capital to Alaska; peak spending at the Australia Pacific LNG project; and focus on several North American unconventional plays.

Also expected is a ramp up in operated conventional exploration drilling programs in the deepwater Gulf of Mexico and Angola.

ConocoPhillips said it expects to achieve production growth in its Lower 48, Canada, Europe and Asia Pacific regions. It also plans ramp up of major project startups as well as production increases from drilling programs in the Eagle Ford, Bakken and conventional Permian plays.

ConocoPhillips categorizes its capital budget under areas such as base maintenance, development drilling programs, major projects, and exploration and appraisal.

About 13 percent of the capital budget in 2014 is allocated for maintenance of high-quality legacy base portfolio.

Further, nearly 39 percent of the budget is targeted to high-margin development drilling programs, with focus mainly on North America. The company said that growth from these programs should account for 600 MBOED of production by 2017.

The company will seek to optimize its drilling program on Eagle Ford, Bakken and Niobrara, as well as conventional and unconventional plays in the Permian. It will also target other opportunities, mainly in Alaska, Canada, Norway and Western Australia.

Major projects are expected to take up 35 percent of ConocoPhillips' budget. These include peak spending for the APLNG project in Australia as well as Canada, Europe and Asia Pacific regions. The key projects are expected to account for 400 MBOED of production by 2017.

Further, about 13 percent of the budget is allocated toward the company's exploration and appraisal program.

Meanwhile, the company said that in 2013, it expects utilizing a part of its cash to fully prepay the $2.8 billion joint venture acquisition obligation to its 50 percent owned FCCL business venture.

ConocoPhillips stock is trading at $70.55, down $0.29 or 0.41%, on a volume of 2.6 million shares on the NYSE.