What happened

Shares of Northern Oil & Gas, Inc. (NYSEMKT:NOG) are flying high, up 12% as of 10:30 a.m. EDT, after the company reported better-than-expected first-quarter results.

So what

Northern Oil & Gas earned an adjusted $11.3 million, or $0.17 per share, in the first quarter, which came in $0.05-per-share ahead of analysts' expectations. Fueling that strong showing was a 35% year-over-year improvement in production from the company's assets in the Bakken Shale due to well performance that exceeded expectations.

A drilling rig in North Dakota under an overcast sky

Image source: Getty Images.

Those strong well results enabled Northern Oil & Gas to increase its full-year production guidance. The company now sees output rising 26% to 30% this year, up from its previous view of 18% to 22% growth. It's worth noting that this estimate doesn't include any production from Salt Creek Oil and Gas, which the company recently agreed to acquire, suggesting that production will likely increase by an even higher rate in 2018.

Now what

"With our disciplined capital allocation process and record wells coming online, we expect to continue the operational momentum through the rest of the year and further execute on our consolidation strategy," CEO Brandon Elliott said. That plan could fuel further gains in Northern Oil & Gas stock this year, especially if oil prices remain strong. However, shares will likely be very volatile given the company's small size and focus on the Bakken, which is why investors who are looking for an oil stock to buy might want to consider one of these larger and more diversified oil producers instead.

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