By Sabrina Valle and Arunima Kumar
(Reuters) -U.S. oil producer ConocoPhillips (NYSE:COP) on Thursday beat Wall Street's estimates for third-quarter profit and raised its quarterly dividend 14%, amid higher prices and production.
Shares rose more than 5% on the dividend increase, with the company saying it could sustain the higher level through 2024 depending on oil and gas prices.
The cash distribution comes during industry consolidation that has created stronger rivals in U.S. shale, where Conoco is a major player with production of 1.8 million barrels of oil equivalent per day (boepd).
Last month, Exxon (NYSE:XOM) and Chevron Corp. (NYSE:CVX) bought shale producers Pioneer Natural Resources (NYSE:PXD) and Hess Corp (NYSE:HES), respectively, for more than $50 billion in stock each.
Chief Executive Ryan Lance dismissed any negative effects from stronger competitors in the U.S. Permian basin. Consolidation "is going to continue" but ConocoPhillips has a "high bar" for mergers and acquisitions, Lance told analysts on a conference call.
The company is returning to shareholders this year about half of its cash flow, or $11 billion, which is more than the proportional returns of Exxon and Chevron.
Higher oil prices in the third quarter drove adjusted earnings up 17% compared to the previous quarter, to $2.6 billion. Profits fell by 43% compared to the same quarter last year as oil prices retreated from multi-year highs following Russia's invasion of Ukraine.
ConocoPhillips said production for the third quarter was a record 1.806 million boepd, up 52,000 boepd from a year earlier. It expects fourth-quarter production of as much as 1.90 million boepd.
Excluding items, ConocoPhillips reported third-quarter profit of $2.16 per share, topping analysts' average estimate of $2.08 per share, according to LSEG data.
"Results were solid, driven by robust production. There are several new production start-ups that should provide COP momentum into 2024," said Scott Hanold, analyst at RBC Capital Markets.