ConocoPhillips reduces long-term production outlook

ConocoPhillips, the third-largest U.S. oil company, cut its projection for long-term production growth.

Output will increase at a rate of 2 percent, according to slides for a presentation that Chief Executive Officer Jim Mulva and other executives are making to analysts today in New York. The company, which didn’t specify the term for the projection, previously said production would increase at an annual rate of 3 percent. The estimate includes the company’s stakes in Russia’s OAO Lukoil and Canada’s Syncrude oil-sands project.

“We’ve been saying 3 percent growth on our production,” Mulva said in the presentation. “We could make it 3 percent by spending more money, but we feel that given the capital structure and what we want to do on shareholder distributions, 2 percent looks better to us.”

Houston-based ConocoPhillips is focusing its spending on capital projects, stock buybacks and dividends after selling assets to cut debt the past two years. Borrowings, which increased to as much as 30 percent of capital after the 2006 acquisition of Burlington Resources, fell to 19 percent of capital at the end of 2007, ConocoPhillips said in January.

Bloomberg News