ConocoPhillips Inc (NYSE:COP) announced that is 2015 capex is $13.5 billion, down by 20% from last year.

The company said its capital budget next year reflects lower spending on major projects (several are nearing completion), and the deferral of spending on its unconventional plays in North America.

The stock price of ConocoPhillips (NYSE:COP) more than 3% to $65.35 per share, around 1:37 in New York, after announcing the reduction of its capex next year.

ConocoPhillips

ConocoPhillips still expects 3% production growth

ConocoPhillips (NYSE:COP) still expects to achieved a 3% production growth in 2015 from continuing operations (excluding Libya) despite its lower investment level.

According to the company, its primary sources of production growth include its major project startups in Canadam Europe and Malaysia, and its development drilling programs in the Eagle Ford and Bakken.

ConocoPhillips (NYSE:COP) also expects new production from 2015 major project startups at Eldfisk II, The Australia Pacific LNG (APLNG) Project and Surmont Phase 2.

ConocoPhillips is focus on cash flow neutrality

Ryan Lance, chairman and CEO of ConocoPhillips (NYSE:COP) said, “We are setting our 2015 capital budget at a level that we believe is prudent given the current environment. This plan demonstrates our focus on cash flow neutrality and a competitive dividend, while maintaining our financial strength.”

In addition, Lance emphasized that the company is fortunate to have significant flexibility in capital program. According to him, “Spending on several major projects has peaked, and we will get the benefit of production uplift from those projects over the next few years.”

Furthermore, lance said they indentified inventory in the company’s unconventional plays, where ConocoPhillips (NYSE:COP) also retain a high degree of capital flexibility.

ConocoPhillips (NYSE:COP) said its 2015 capital budget funding for base maintenance and corporate expenditures, development drilling programs, major projects, exploration and appraisal spending.

The company allocated around $1.9 billion for base maintenance and corporate expenditures, $5 billion for development drilling programs, $4.8 billion for sanctioned major projects and $1.8 billion for exploration and appraisal programs.

Last month, Lance encouraged the export of impending surplus of light (unconventional) oil of the United States, which could help create more jobs and boosts economic development while reducing gasoline prices and improving global energy security.

ConocoPhillips said it will provide further details regarding its 2015 capital program and production outlook during its fourth-quarter conference on January 29 and analyst meeting on April 8.