OREANDA-NEWS. February 02, 2018. ConocoPhillips raised its 2018 output guidance while keeping its capital expenditure (capex) plan unchanged as a result of major project starts up and improved well performance.

Output this year is now expected at 1.195-1.235mn b/d of oil equivalent (boe/d) versus 1.18-1.22mn boe/d given at its annual analyst meet in November. Production in 2017 came in at 1.36mn boe/d versus 1.57mn boe/d in 2016. The full-year impact from dispositions was 191,000 boe/d and 434,000 boe/d in 2016. Excluding that, underlying 2017 production increased by 32,000 boe/d, or 3pc.

The world's biggest independent reset itself in 2017 through hefty asset sales, including exiting the Canadian oil sands business, which helped company shore up its balance sheet by reducing its debt and lowering costs further to operate in a low oil price environment.

In all, it sold assets worth $16bn last year, with which it paid down $7.6bn of debt, ending the year with debt of $19.7bn. Capex last year was $4.6bn versus the guidance of $4.5bn. It has kept its capex guidance for this year at $5.5bn, in line with a three-year plan outlined in November.

The restructuring is helping the independent fund its capex and dividend with cash from operating activities at a time when many of its peers continue to generate negative cash flow amid lower oil prices. In 2017, ConocoPhillips generated cash worth $7.1bn from operations, enough to fund the capex and dividends of $1.3bn.

"2017 was a very successful year by all measures," chief executive Ryan Lance said. "While the outlook for commodity prices has improved, our operating plan remains unchanged and we have already taken clear actions to demonstrate our commitment to maintain discipline and follow our priorities."

Amid the strengthened balance sheet, the company expanded its previously announced 2018 share repurchases by 33pc, from $1.5bn to $2bn. It also acquired Anadarko's 22pc non-operated stake in the Western North Slope project of Alaska, as well as its interest in the Alpine pipeline, for $400mn in cash. In 2017, the gross daily output from the assets was 63,000 boe/d. In addition, ConocoPhillips will have 100pc ownership in about 1.2mn acres of exploration and development lands.

The company's preliminary 2017 year-end proved reserves were 5bn bl of oil equivalent (boe). The total reserve replacement ratio, including a reduction of 1.9bn boe from asset sales, was a negative 168pc. But without the impact of asset sales, the organic reserve replacement ratio is expected to be a positive 200pc. It made net reserve additions of 605mn boe, about 70pc of which was in its US unconventional assets and 15pc in Asia Pacific and the Middle East. An improvement in oil prices helped add another 431mn boe of reserves across its assets in North America.