ConocoPhillips (NYSE:COP), the world's largest independent exploration and production company by production and proved reserves, announced last week that it plans to spend $16.7 billion next year on capital projects, as it seeks to boost drilling activity in onshore U.S. resource basins, as well as in the deepwater Gulf of Mexico, Alaska, and other regions.

The planned increase in next year's spending represents a $900 million, or 6%, increase over this year's expected capital expenditure level. Let's take a closer look at where the company plans to spend its money in 2014.

Development drilling
Roughly 39% of Conoco's total 2014 budget, or about $6.5 billion, will go toward high-margin development-drilling activity. Approximately two-thirds of these funds, or $4.3 billion, are earmarked for the company's Lower 48 drilling program, mainly targeting the Eagle Ford, Permian Basin, and Bakken -- three of the company's most prized assets.

The remaining $2.2 billion from the development drilling funds will be set aside for other conventional and unconventional opportunities, primarily in Alaska, Canada, Norway, and western Australia. The company expects these development-drilling programs to account for 600,000 barrels per day of production by 2017, helping offset production declines from the company's older fields.

Global growth projects
Internationally, Conoco is allocating roughly 35% of its 2014 capital budget, or about $5.8 billion, toward global growth projects in Canada, Europe, and the Asia-Pacific region. In Canada, where Conoco has working interests in four major oil sands assets and four additional undeveloped leases, activity will continue at Surmont Phase 2, Foster Creek, and Christina Lake.

In Europe, the company will concentrate its investments on Eldfisk II in Norway's North Sea and the Britannia Long-term Compression and Clair Ridge projects in the U.K. In the Asia-Pacific, Conoco will target the APLNG joint venture, a massive gas-export project slated for first production in mid-2015, as well as offshore projects in Malaysia. By 2017, the company estimates these projects will boost total production by roughly 400,000 barrels per day.

Exploration and appraisal and base maintenance
Conoco also plans to allocate roughly 13% of next year's capital budget, or about $2.2 billion, toward its exploration and appraisal program. It plans to spend $870 million on exploration and appraisal activity across various North American unconventional plays, including the Permian, the Niobrara shale in Nebraska and Colorado, and Canada's Duvernay shale, with the remaining $1.3 billion earmarked for exploration programs mainly in the deepwater Gulf of Mexico and Angola. Lastly, the remaining 13% of the company's 2014 capital budget will be used for maintaining its legacy base portfolio.

Conoco's strategy
Among ConocoPhillips' top priorities are delivering 3%-5% growth in both production and margins through 2017, while maintaining its compelling dividend. To achieve these goals, the company has been divesting noncore international assets at a blistering pace, while ramping up oil production from onshore U.S. operations.

Many of ConocoPhillips' peers are employing a similar strategy. For instance, Anadarko (NYSE:APC) recently sold its interest in a Mozambique gas field to fund its onshore U.S. drilling program, where it is targeting the Eagle Ford shale and Colorado's Wattenberg field, while Occidental Petroleum (NYSE:OXY) plans to sell a portion of its Middle East assets to lower its geopolitical risk and concentrate on North American liquids-rich opportunities.

Similarly, Devon Energy (NYSE:DVN) sold most of its international assets a few years ago to finance drilling programs in liquids-rich plays in the Permian Basin and the Mississippi-Woodford trend, while Apache (NYSE:APA) recently divested a portion of its Egyptian oil and gas assets in order to target more lucrative, high-growth opportunities in Texas and Oklahoma.

Like its peers, Conoco recently divested stakes in Kazakhstan's Kashagan oil field, as well as oil fields in Nigeria and Algeria. Since 2012, the company has raised $12.4 billion from asset sale proceeds, which will be used to fund organic growth programs and for general corporate purposes.

A wealth of opportunities
While ConocoPhillips is still very much focused on its Lower 48 drilling program, which is expected to account for more than 60% of its production growth over the next several years, it also has numerous exciting opportunities elsewhere. With such a rich pipeline of developmental and exploratory prospects across a number of global unconventional and conventional resource plays, Conoco definitely appears to be on track to meet its target of 3%-5% production and margin growth through 2017.