ConocoPhillips, the largest U.S. independent oil and natural gas producer by market value, said it may use cash, debt and asset sales to fund its spending and dividend as it waits for production to rise.
The company expects capital spending of about $16 billion a year from 2013 to 2017, according to presentation slides for ConocoPhillips’ analyst meeting Thursday. ConocoPhillips spent more than $3 billion last year on its dividend, and the company said today it’s targeting “consistent” dividend increases.
“We got cash from operations, we got asset sales proceeds, we got cash on the balance sheet already, and we got debt capacity,” Chief Financial Officer Jeff Sheets said on a webcast of the company’s analyst meeting today. “So there really shouldn’t be any doubt that through a series of price environments that we can fund the capital and fund the dividend.”
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Assets that will be part of continuing operations generated a little less than $15 billion in cash flow last year, Sheets said. ConocoPhillips ended 2012 with $4.4 billion in total cash. In 2013, the company expects to get $9.6 billion from asset sales it has announced.
The company’s investments will create $6 billion to $7 billion of cash flow in the future, Sheets said. That means cash flow may be about $22 billion by 2017 if prices are similar to last year, Sheets said.
The company is seeking compound annual production and margin growth of 3 percent to 5 percent in coming years. Output may climb to about 1.9 million barrels of oil equivalent a day from continuing operations in 2017, compared with about 1.5 million barrels a day last year.
ConocoPhillips rose 10 cents to $58.14 at 12:24 p.m. in New York.
Independent oil companies don’t have refineries or a chemical unit.