By Ernest Scheyder
HOUSTON (Reuters) - ConocoPhillips (NYSE:COP), the largest U.S. independent oil producer, reported a better-than-expected quarterly profit on Thursday helped by rising crude prices, though it slashed its capital budget to further cut costs.
Those cost curbs come as other U.S. oil producers as well bid to control spending and focus on shareholder returns, with crude prices not expected to markedly rise before the end of the decade.
"We are focused on free cash flow generation, strong financial returns, shareholder value creation and distributions," Chief Executive Ryan Lance said in a statement.
The company's stock fell a penny to $49.95 in premarket trading on Thursday.
Conoco reported third-quarter earnings of $420 million, or 34 cents a share, compared to a loss of $1.04 billion, or 84 cents per share, a year earlier.
Excluding one-time items such as asset sales and costs to exit Nova Scotia operations, Conoco earned 16 cents per share. By that measure, analysts expected earnings of 8 cents per share, according to Thomson Reuters I/B/E/S.
The company also lowered its 2017 capital budget by 10 percent to $4.5 billion.
Production fell 23 percent to 1.2 million barrels of oil equivalent per day. Some of Conoco's output in the U.S. Gulf of Mexico and the Eagle Ford shale of Texas was pushed offline by hurricanes in the U.S. Gulf Coast region earlier this year, denting profit.
In the aftermath of Hurricane Harvey, which battered the Houston, Texas region in August, Conoco was unable to reach its global headquarters in western Houston, forcing the company to run all of its operations remotely.
Conoco said it still expects to end the year pumping about 1.4 million boepd, with its operations outside the United States making up for the production drops following Harvey.
Conoco will hold a conference call with investors to discuss the results on Thursday morning.