U.S. oil producer ConocoPhillips (COP.N) posted a bigger-than-expected quarterly profit on Thursday, on rising crude prices and cost cuts.

Conoco, like many of its peers, has seen results steadily improve in recent quarters alongside commodity prices and as better technology makes operations more efficient.

The company's stock has also risen as it has prioritized shareholder returns over production increases, an approach increasingly favored by Wall Street.

Conoco reported a profit of US$888 million, or 75 cents per share, in the first quarter, compared with US$586 million, or 47 cents per share, in the year-ago quarter.

Excluding one-time items, the company earned 96 cents per share, exceeding the 73 cents expected by analysts, according to Thomson Reuters I/B/E/S.

"We remain focused on creating value for our shareholders by maintaining discipline, following our priorities and staying committed to our returns-focused value proposition," Chief Executive Ryan Lance said in a statement.

Production fell 23 per cent to 1.2 million barrels of oil equivalent per day (boe/d) as a result of recent asset sales.

Conoco kept its 2018 capital budget at US$5.5 billion, but raised its production outlook slightly and now expects to pump 1.2 million to 1.24 million boe/d this year.

Conoco on Wednesday said an international arbitration court ordered Venezuela's state-run oil company, PDVSA, o pay it $2.04 tbillion for early dissolution of two joint ventures for producing oil in the OPEC-member country.

Conoco executives plan a conference call with investors to discuss the results later on Thursday. The company's stock has risen 17 per cent so far this year, outpacing the S&P 500.

Rivals Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) are due to report results on Friday.