Oil and gas producer ConocoPhillips topped Wall Street estimates for quarterly profit on Thursday and raised its capital budget and annual production target for 2018, as it seeks to take advantage of higher crude prices.

Houston-based ConocoPhillips, America's biggest independent oil and gas producer, now expects to produce between 1.23 million barrels of oil equivalent per day (boe/d) and 1.26 million boe/d in 2018. It had previously forecast production of between 1.2 million boe/d and 1.24 million boe/d.

The company now expects to spend $6 billion this year to reflect a higher $65 per barrel price environment, Conoco said. It had initially budgeted $5.5 billion for 2018.

The higher forecast was a result of more output across several of the company's operating regions and the completion of an acquisition in the Alaska Western North Slope, ConocoPhillips said.

The company, one of the first major U.S. oil producers to report earnings for the second quarter, said it realized an average price of $54.32 per barrel of oil equivalent in the three months ended June 30, up from $36.08 a year earlier.

Its financial results, like those of its peers, have steadily improved in recent quarters, buoyed by higher commodity prices and as better technology makes operations more efficient.

However, ConocoPhillips' second-quarter production, excluding Libya, fell 214,000 boe/d year-over-year to 1.2 million boe/d.

Net income attributable to the company was $1.6 billion or $1.39 per share in the second quarter, compared with a loss of $3.4 billion or $2.78 per share a year earlier.

Excluding one-time items, ConocoPhillips earned $1.09 per share, edging past analysts' average estimate of $1.08 per share, according to Thomson Reuters I/B/E/S.

(Reporting by John Benny; Editing by Sai Sachin Ravikumar and Shailesh Kuber)