ConocoPhillips (COP) said it plans to spend $15.8 billion on capital projects in 2013, with the bulk of it directed toward continuing oil and gas production in North America.
The Houston-based energy company said that its budget is roughly flat to its expected capital spending in 2012.
"Similar to 2012, next year's investments will be directed predominantly toward high-quality growth projects and programs that are already in execution mode, as well as exploration opportunities to build inventory for the future," said Chief Executive Ryan Lance.
Roughly 60% of next year's spending will be allocated to North America, while around 40% will be directed to Europe, the Asia Pacific and other international businesses.
Around 40% of the capital budget will go toward production in ConocoPhillips' existing assets, with a focus on unconventional drilling in liquids-rich areas of the continental U.S., including the Eagle Ford, Bakken, Barnett and Niobrara regions. Dry gas plays will receive minimal funding, the energy company said, reflecting rock-bottom natural gas prices.
Another 35% of the budget will be spent on major projects geared toward future production, including the FCCL joint venture and Surmont oil sands projects in Canada, expansion projects in Norway's North Sea, and offshore developments in Malaysia.
Exploration and appraisal accounts for around 15% of the budget, including drilling in the Gulf of Mexico and appraising liquids-rich shale plays in North America.
"Our 2013 capital budget provides funding for the key growth projects and programs in our portfolio and provides flexibility to capture new opportunities that may arise," said Mr. Lance.
ConocoPhillips is in the midst of a three-year repositioning aimed at improving its balance sheet and focusing on more profitable, less risky unconventional fields in North America. The company has been shedding assets, and spun off its refining arm earlier this year to Phillips 66 (PSX).
Mr. Lance said Friday that the company will continue its program of divestitures in 2013, and expects to deliver on long-term annual growth rate targets of 3% to 5% on volumes and margins, with a "compelling" dividend.
Shares were up 49 cents in recent trading to $57.84. The stock is up 4.1% so far this year.
Copyright (c) 2012 Dow Jones & Company, Inc.
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