ConocoPhillips is planning for a slight increase in capital expenditures for its existing assets in 2022 but will place priority on integrating the former Shell assets in the Permian basin of west Texas and south-east New Mexico.

During the US independent’s third-quarter earnings call on Tuesday, chief executive Ryan Lance said the sector appears to be entering a “very constructive time” as a result of higher oil and natural gas prices.

The company is leaning towards holding close to its $7 billion capital budget estimate announced in June.

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“That [plan] included a modest ramp in the Lower 48, to reactivate our optimised plateau plans, some incremental base Alaska investment and some longer-cycle, low-cost supply investments in Canada and in Norway,” Lance said.

“Since June, we’ve seen some inflation pressures, especially in the Lower 48. However, at this point, we'd expect to adjust scope modestly to maintain our base capital at a level that is roughly consistent with our June update. And then, of course, we'll add capex for the Shell properties,” he added.

For the rest of the year, Lance said ConocoPhillips' goal will be to complete the $9.5 billion acquisition of Shell’s Permian basin assets, then work on combining them with the company’s existing portfolio.

“Once we close, we will be working diligently to integrate these properties and capture efficiencies in a similar fashion to what we've achieved through the Concho Resources integration,” he said.

ConocoPhillips said its Lower 48 production averaged 790,000 barrels per day during the third quarter, including about 445,000 bpd from the Permian basin, 217,000 bpd from the Eagle Ford shale of south Texas and 95,000 bpd from the Bakken shale of North Dakota. Of the three, company officials indicated the Permian would continue to receive the lion’s share of capital funding.

“The way we think about managing the Eagle Ford, the Bakken and the Permian is there’s one asset that we can allocate capital around,” executive vice president of the Lower 48 Tim Leach said.

“The Eagle Ford and the Bakken are much closer to being at their optimal plateau than the Permian is," he added.

In August, ConocoPhillips' Willow project on the North Slope of Alaska was halted by a federal court decision to void its existing permits. Senior vice president of global operations Nick Olds said ConocoPhillips and the Biden administration had chosen not to contest the decision, but maintained the project was still alive.

“We feel the best and most efficient approach there is to really work through the three substantive issues that were identified in the district court ruling,” he said. “We'll do that through additional NEPA [National Environmental Policy Act] analysis. We're currently engaged with the BLM [US Bureau of Land Management] and the co-operating agencies up there, just working through those.”

For the third quarter, ConocoPhillips reported earnings of $2.4 billion, $1.78 per diluted share, compared to loss of $500 million, or 42 cents per share, in the third quarter of last year.