ConocoPhillips CEO Ryan Lance on May 14 repeated a pledge to restrain spending, saying the U.S. oil producer would not be drawn into pricey mergers and acquisitions.

ConocoPhillips plans to keep its capital spending at around $6 billion this year, Lance told shareholders at the company's annual meeting. ConocoPhillips has won billions of dollars in arbitration awards over the expropriation of its assets in Venezuela and posted a first-quarter profit that topped estimates.

"We're sticking to our plan," Lance said.

Rival Occidental Petroleum Corp. last week agreed to buy Anadarko Petroleum Corp. for $38 billion in a deal that includes expensive financing from billionaire Warren Buffett. The deal keeps Anadarko's prime position in the Permian Basin of West Texas and New Mexico out of the grasp of Chevron Corp., which had sought to buy it for $33 billion.

"Do we wish we were larger in the Permian? Sure," Lance said. "It has to be competitive in the portfolio and that's a high bar."

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ConocoPhillips will continue to do small deals that add neighboring properties to its portfolio, buy royalty interests and add smaller assets—for which it spent about $1 billion last year. The company holds around 800,000 acres in the Permian Basin, including shale and conventional properties.

"The big corporate M&A that requires these very large premiums that we've seen here in the last month or so, those are very tough," Lance said. "Those are hard to do. Those are destructive to value. They're destructive to returns."

The company also does not intend to wade back into deepwater Gulf of Mexico projects because they are not cost competitive, Lance said following the shareholder meeting.

"I wouldn't expect us to be going anytime soon into an area that we don't think is competitive with our current portfolio," Lance said.

The company expects to expand its production and increase its dividend, even if oil prices fall below $40 per barrel, Lance said, and is positioned to weather "the ups and downs of our business."

Its shares jumped 2.6% to $62.76 on May 14.