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ConocoPhillips is making a massive wager on the future of shale and oil sands drilling, pledging to spend 50 per cent more over the next three years in the U.S. and Canada after crude prices fell by more than half.

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The oil and gas industry’s biggest deal in at least a decade could set in motion a series of mergers as the largest energy companies look to cut costs and restore profits.





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The third-largest U.S. oil company plans expenditures of about $11.5 billion a year, according to a company presentation Wednesday. It will steer more funds to projects from Texas to North Dakota as spending winds down on major developments in locations such as Australia.

The Houston-based oil and gas producer, which spun off refining operations in 2012, also set a target of boosting production by 6.3 per cent to 1.7 million barrels a day by 2017 amid the worst price crash in five years.

The spending plan amounts to a vote of confidence in the future of North American oil as some have questioned the viability of prospects in Texas and Canada with crude trading around $50 a barrel. The company’s operating costs are among the lowest in North America, Brian Youngberg, an analyst at Edward Jones in St. Louis, said in a telephone interview ahead of the company’s analyst day presentation.