Nov. 8 (UPI) -- U.S. supermajor ConocoPhillips said Wednesday its annual plan for $5.5 billion in spending is pegged on U.S. crude oil prices at $50 per barrel.
The company said it was on pace to cut its debt load through a disciplined approach that managed its portfolio of 15 billion barrels of oil equivalent with a supply cost of less than $35 per barrel. Spending, meanwhile, will be about $5.5 billion per year.
"The three-year plan averages annual capital expenditures of $5.5 billion, based on a flat real West Texas Intermediate price of $50 per barrel," the company stated.
West Texas Intermediate, the U.S. benchmark for the price of oil, was near $57 per barrel early in the Wednesday session. WTI has held steady above the psychological threshold of $50 per barrel since Oct. 10 and this week topped a two-year high.
A crackdown on corruption in Saudi Arabia followed escalating tensions between the Sunni kingdom and Lebanon, a nation where the Shiite movement Hezbollah holds government seats. That added to a risk premium added in October because of simmering tensions in northern Iraq.
A January agreement by members of the Organization of Petroleum Exporting Countries to work to drain the surplus from the five-year average in global crude oil inventories helped put a floor under crude oil prices, which collapsed in early 2016 below $30 per barrel.
In their monthly report for October, OPEC economists said they expected WTI to trade in a range between $50 per barrel and $55 per barrel for 2018. Anything above that would likely encourage U.S. producers to expand drilling activities.
Ryan Lance, the chairman and CEO at Conoco, said the company is more disciplined now than during the market downturn last year.
"During 2017, we significantly transformed ConocoPhillips to succeed across a range of commodity prices," he said in a statement.