(Reuters) -U.S. oil and gas producer ConocoPhillips (NYSE:COP)' second-quarter profit beat Wall Street estimates on Thursday, benefiting from higher output and commodity prices.
The beat comes as ConocoPhillips is pursuing a $22.5 billion takeover of Marathon Oil (NYSE:MRO), one of the largest deals of the quarter that is currently under review by the Federal Trade Commission. The combination would create a company pumping 2.26 million barrels of oil and gas per day, and add 1.32 billion barrels of proved reserves to ConocoPhillips' 6.8 billion.
The Houston, Texas-based company said its plans to close the Marathon deal in late fourth quarter remains on track, and reiterated its $9 billion minimum shareholder return for 2024, even as some investors had expected an increase.
"COP's ability to buyback stock is limited until after the MRO shareholder vote, making an increase somewhat challenging," RBC Capital Markets analysts said in a note.
The company also updated its full-year capital expenditure forecast to about $11.5 billion, compared with $11.0 billion to $11.5 billion previously, to reflect progress on its project in Alaska and increased Lower 48 partner-operated activity.
It forecast its full-year output to be between 1.93 million and 1.94 million boepd, compared with 1.91 million to 1.95 million previously.
But its third-quarter production is expected to be lower than that in the second quarter due to planned turnarounds in Canada, Lower 48, Alaska, Norway, Malaysia and Qatar.
ConocoPhillips' second-quarter production rose 4% to 1.95 million barrels of oil equivalent per day (boepd).
Higher volumes were complemented by higher prices, which rose 4% to $56.56 per barrel of oil equivalent (boe) in the quarter ended June 30.
The company posted adjusted earnings of $1.98 per share, compared with analysts' average estimate of $1.96, according to LSEG data.