It's no surprise that exploration and production companies that specialize in liquids production (read: oil and natural-gas liquids) have managed to come up trumps in their first-quarter earnings. Higher crude-oil prices have given these companies the impetus to increase production, and Denver-based Whiting Petroleum (NYSE: WLL) has done just that. The company's impressive first-quarter results should have investors salivating about its future prospects.

Impressive first quarter
Net income for the first quarter shot up an amazing 400% to $98 million from $19 million a year ago. While core revenue from oil and gas sales grew 31% in the comparative period, total costs and expenses were relatively flat. Whiting managed to cut back on commodity derivative losses by more than $105 million this time. Management correctly anticipated oil and natural-gas prices, which resulted in the exceptional boost to its bottom line.

Actually beat expectations
On the operations front, Whiting delivered well beyond upper guidance levels, which again is impressive. Total first-quarter production went up 22% year over year and 14% from last year's fourth quarter. The average daily production of 80,747 barrels of oil equivalent -- of which liquids comprised 85% -- exceeded the upper end of guidance by about 1,660 Boe per day. In fact, the company has now revised its production guidance for this year, which would indicate 17% to 22% production growth over 2011. This is over and above the 4,500 Boe per day of production Whiting will transfer to its royalty trust, Whiting USA Trust II (NYSE: WHZ), as part of the production agreement. The trust, formed last December, owns a nonoperating stake in certain oil- and gas-producing properties in such U.S. regions as the Rocky Mountains, the Permian Basin, and the Gulf Coast.

Whiting, I believe, is on track to meets its production targets. The company's primary operating locations are in the lucrative Bakken reserves. The Three Forks and Sanish plays, combined with the western Williston Basin areas of Pronghorn, Lewis and Clark, and Hidden Bench have contributed to the production hike. Says CEO James Volker, "The science that we did in these areas in 2011 is paying off in 2012." I wouldn't disagree. The company plans to increase the number of rigs in the Williston Basin to 24 from the current 19 rigs by September.

Just follow the outstanding examples
Production from the Sanish field in March stood at 33,920 Boe per day -- a solid 19% improvement from December's levels. Competitors operating in this region have been extremely successful in the last 12 months. Kodiak Oil & Gas (NYSE: KOG) improved production levels and acquired more assets in the Williston basin last year. Kodiak had a fantastic year with better days to come. Continental Resources (NYSE: CLR) had an extraordinary run in 2011. The biggest operator in the Bakken is aiming to triple production in five years.

Whiting looks set to increase production. The Lewis and Clark, Pronghorn, and Hidden Bench prospects look especially promising, with initial flow rates in some of the wells clocking more than 1,800 Boe per day. The potential looks huge. Though Whiting's stock has risen 15% from the start of this year, it's down 18% in the last 12 months. Currently the stock could be a bargain.

Foolish bottom line
Whiting is not just into the Bakken shale play. Its projects in the Niobrara shale, along with interests in enhanced oil-recovery projects, warrant attention. Whichever way the company turns, The Motley Fool will help you stay up to speed on the top news and analysis on Whiting. All you need to do right now is add Whiting Petroleum to your free watchlist.

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