What happened

Shares of Bill Barrett Corporation (NYSE:HPR) skyrocketed on Wednesday and were up more than 18% at 12:45 p.m. EDT. That's after the shale driller posted expectation-smashing third-quarter results and boosted its full-year outlook.

So what

Heading into the third quarter, analysts expected that Bill Barrett would post an adjusted loss of $0.20 per share due to the impact of low oil prices. However, the company's loss came in much less than expected at $0.08 per share.

Drilling rigs in the mountains.

Image source: Getty Images.

Several factors fueled that better-than-expected result. First, production was up 26% from just the second quarter, led by a 33% increase in higher-margin oil volumes. Further, the company delivered that growth while spending less capital than expected. In addition to that, lease operating costs declined by 15% from last quarter. That combination of higher production and lower expenses helped improve profitability. 

As a result of that strong showing, Bill Barrett boosted its full-year outlook, with it now expecting that output will increase 21% from last year at the midpoint of its guidance after adjusting for asset sales. Further, the company said it started marketing its Uinta Oil Program assets in Utah so it can focus on its fast-growing DJ Basin position in Colorado.

Now what

Bill Barrett has taken investors on a wild ride this year -- plunging more than 50% at one point -- and is still down more than 15% for the year even after today's rally. That said, the company could have more upside ahead since it expects to accelerate its growth rate to 30% next year, which could fuel an even greater increase in cash flow given the recent rise in oil prices. While the company is a high-risk growth stock, undaunted investors could make a mint on Bill Barrett if crude keeps climbing and the company delivers on its ambitious growth plan.