ConocoPhillips, the largest independent in the United States, was the first on Thursday to announce plans to reduce capital spending to cope with the recent downturn in oil prices. Some drilling cutbacks will be made, but not within two of its best rate-of-return plays, the Eagle Ford and Bakken shales.

Based on the swift decline in oil prices, capital spending could be cut by as much as 4% in 2015, based on preliminary forecasts. This year the super independent is set to spend $16.7 billion globally. Preliminary targets now see spending at below $16 billion, CEO Ryan Lance told financial analysts. He discussed the budget and projected plans during a third quarter conference call.

The decrease in expenditures won’t impact strategic objectives of 3-5% volume and margin growth because the company will drop more exploratory drilling and focus on high-margin producing projects, like the Eagle Ford and Bakken, Lance said.

“In 2014, our committed capital for major projects and maintenance represents about 50% of our capital, and this declines to approximately 30% by 2016,” he said. The decline in spending is coming at an opportune time, as crude oil prices have turned south in the past few months. “Events like the recent price downturn underscore the importance of staying focused on the fundamentals. We know this is a cyclical business and we’ve been here before…We intend to make prudent adjustments at this time, while continuing to monitor the environment.

“Importantly, at this time, we do not see any major impediment to our ability to deliver on our stated goals for the next few years, and those are 3-5% volume and margin growth with the competitive dividend. We still believe this is a winning formula for our shareholders and we have a plan to deliver.”

There’s “steady growth” coming from North American unconventionals, the CEO said. “At current commodity prices, our capital investments generate attractive returns. And in the unconventionals, we have a multi-year inventory of projects that have a cost of supply that is lower than the prices we’re seeing today.”

ConocoPhillips is working through the capital budget now and will announce more details in December.

“What you should expect is that we will exercise the flexibility we have and announce a range of capital spending that is not only lower than 2015, but lower than our stated target of $16 billion per year,” Lance set. “Across the Lower 48 we can throttle back on our less mature unconventional plays, while continuing to invest in our highest margin short cash cycle projects in the Eagle Ford and the Bakken shales. These are the best returns on our portfolio and give us the confidence that we need to meet our volume target of 3-5% even with a bit lower capital next year.”

In the Lower 48, 3Q2014 production averaged 343,000 boe/d, a 9% overall increase year/year and a 25% increase in crude oil production. The liquids-rich Eagle Ford and Bakken assets led the growth, which combined averaged 212,000 boe/d, one-third higher than a year ago. Sequentially, Eagle Ford output was flat, in line with guidance, “as we continue to shift to pad drilling and bring new wells on line in batches,” said exploration chief Matt Fox.

“The Eagle Ford averaged 157,000 boe/d in the third quarter,” Fox said. “This represents a 31,000 boe/d, or 25% increase, from the same quarter last year. We continue to execute and evaluate pilot tests in the Eagle Ford, including single horizontal well test in the Upper Eagle Ford,” closer to East Texas. “These tests have been encouraging and we’ll soon begin testing a three layer development concept by placing a layer of wells in the Upper Eagle Ford and two layers of wells in the Lower Eagle Ford. The wells will be drilled 660 feet of [pad] in each layer. We call this an 80-acre triple stack.”

In the Bakken, production averaged 55,000 boe/d, 62% higher from a year ago. Pilot tests also are ongoing in the play using 160-acre spacing. “But based on the results we’ve seen to-date, it’s too early to make decision of ultimate spacing there,” said Fox.

ConocoPhillips also is making “good progress” in the Permian Basin and in the Niobrara formation — but those are early-stage developments, which may receive less spending if crude oil prices remain lower than forecast.

“In the Permian, we’re currently focused on appraising the multiple stack horizons in the Delaware Basin,” said Fox. “And then in Niobrara, we’re testing several alternative well configurations and completion techniques. In both areas we continue to see encouraging results.”

In Canada, quarterly production was 276,000 boe/d, flat with a year ago. Liquids output was up 9%, offset by reduced natural gas production. Unconventional activity also continues in the Duvernay and Montney formations in Canada. Alaska production for the quarter was 155,000 boe/d, a drop of 23,000 boe/d from a year ago, primarily on a turnaround at Prudhoe Bay.

Quarterly net profits were up 9% from a year ago on higher output, which overcame a drop in commodity prices. Net earnings were $2.7 billion ($2.17/share), compared with $2.5 billion ($2.00). Cash provided by continuing operating activities was $4.15 billion; excluding a $22 million decrease in working capital on asset sales, the producer generated $3.93 billion in cash from operations. In addition, the company funded $4.6 billion in capital expenditures and investments for continuing operations, and paid dividends of $9 million.