(Reuters) - ConocoPhillips (N:COP) quarterly profit topped analysts' estimates on Thursday, as the world's largest independent oil and gas producer turned more cost efficient by deploying better technology and selling some assets besides benefiting from higher oil prices.
Those measures also helped the Houston-based company raise its 2018 capital expenditure forecast for the second time this year.
Chief Executive Ryan Lance said the company would keep its focus on free cash flow to ensure better shareholder returns. "This is what the market can expect from us again in 2019."
The results and CEO comment sent shares up a percent in pre market trading.
Conoco is one of the first major U.S. oil producers to report third-quarter results and often an indicator of the sector's performance. The company said it now expects to spend $6.1 billion this year, up from its July forecast of $6 billion.
U.S. oil producers have been under pressure from investors to produce more oil at lower costs. But with oil prices steadily rising, Conoco's higher capital expenditure indicated that companies can now afford to spend more.
Brent crude prices (LCOc1) touched nearly $85 earlier this month and is expected to hit the $100 mark by the end of 2018, as U.S. sanctions on Iran remove a major supplier from the global markets.
Conoco sold each barrel oil equivalents at a 46 percent higher rate in the quarter and saw production go up by nearly 2 percent.
The company said net income rose to $1.9 billion, or $1.59 per share, in the third-quarter ended Sept. 30, from $420 million, or 34 cents per share, a year earlier.
During the quarter, the company earned $345 million related to a settlement agreement with Venezuela's PDVSA.
The proceeds were part of a first installment under a deal to satisfy a $2 billion arbitration award Conoco won earlier this year over broken oil contracts in the South American country more than a decade ago.
Excluding one-time items, the company earned $1.36 per share, beating analysts' estimate of $1.18 per share, according to Refinitiv data.
The company's global output, excluding Libya, rose 22,000 barrels of oil equivalent per day (boe/d) to 1.22 million boe/d, helped by higher output from Europe and Alaska.
Conoco is set to host a conference call later in the day to discuss details of results.