ConocoPhillips (NYSE: COP) is coming off an outstanding year. The oil giant produced market-crushing returns in 2018 as even crashing crude prices in the fourth quarter proved to be no match for its drilling machine. One of the keys to the company's success is that it routinely beat its production guidance, which enabled it to trounce analysts' earnings expectations every quarter last year.

The oil producer will try to keep that streak alive when it reports first-quarter results later this week. Here are a few things to keep an eye on in that report.

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1. Check if production was above the midpoint once again

As mentioned, one of the keys to ConocoPhillips' success last year was its strong drilling results. That enabled the oil giant to consistently deliver quarterly production well above the midpoint of its guidance range despite maintenance issues and infrastructure outages at some of its fields. Helping fuel its stronger-than-expected performance was its big three shale plays: the Bakken, Eagle Ford, and Permian Basin.

On the one hand, ConocoPhillips anticipates getting off to a slow start to 2019. After pumping an average of 1.313 million barrels of oil equivalent per day (BOE/D) during the fourth quarter, the company sees its output averaging between 1.29 million and 1.33 million BOE/D during 2019's first quarter. That's due to the expected negative impacts of planned maintenance in Qatar and a government-mandated production cut in Canada. One thing to watch is whether the company can produce toward the top end of that range. That seems possible, since not only has well productivity across its shale plays continued improving but Canada also eased its restrictions in February after oil prices in the country bounced back sharply.

2. See if earnings maintained their expectation-beating ways

ConocoPhillips routinely surprised analysts last year by posting better numbers than their consensus estimate:

Despite the company's history of posting stronger-than-expected numbers, analysts don't expect much from ConocoPhillips during the first quarter. The current consensus is that the company will post only $0.84 per share of adjusted earnings. That's below what it reported during the fourth quarter, even though crude prices enjoyed their best quarterly performance in a decade. Given the bounce back in oil, especially in Canada, it seems quite likely that ConocoPhillips could report expectation-beating results once again.

3. Look for any positive alterations to its 2019 game plan

Like most oil companies, ConocoPhillips responded to crashing crude prices during last year's fourth quarter by keeping a lid on capital spending in 2019. The oil giant set its budget at $6.1 billion, which matched last year's level. The company noted that it could fund its budget on the cash flows produced as long as oil was around $40 a barrel. The company aimed to use the free cash flow generated above that level, as well as the cash on its balance sheet, to pay its dividend and repurchase $3 billion in stock this year.

Crude prices, however, have quickly recovered, which puts ConocoPhillips on track to produce a gusher of excess cash this year. The company therefore might alter its 2019 plans. It could, for example, boost spending to drill additional wells or return more money to shareholders through an expanded repurchase program. The latter option bears watching since the company has authorized a $15 billion buyback and had roughly $9 billion remaining as of the end of last year. It could accelerate its pace not only due to surging cash flow but because it recently sold another asset.

Anticipating a strong quarter

It seems highly likely that ConocoPhillips will maintain its momentum by reporting strong first quarter results. Not only does it seem as if production could come in toward the top end of its guidance range but analysts' expectations appear to be way too low. Add in the potential for an acceleration to its share repurchase pace, and ConocoPhillips' stock could pop after it posts first-quarter results this week.

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Matthew DiLallo owns shares of ConocoPhillips. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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