ConocoPhillips (NYSE:COP) started 2018 off with a bang by delivering expectation-crushing results for the first quarter. Those stronger-than-expected earnings, when combined with rising oil prices and its share buyback program, have helped drive the oil giant's stock up more than 27% so far this year, making it one of the best-performing oil stocks during the first half of 2018. As a result, expectations are running high as the company gears up to announce its second-quarter results later this week. Here are three things to keep an eye on when the company releases that report.

1. See where production came within its guidance range

One of the catalysts driving ConocoPhillips' strong showing in the first quarter was production, which averaged 1.224 million barrels of oil equivalent per day (BOE/D) and was above the high end of its 1.18 million to 1.22 million BOE/D guidance range. Heading into the second quarter, the company anticipates output averaging 1.17 million to 1.21 million BOE/D, which is lower due to seasonal maintenance activities. However, that would still put ConocoPhillips on pace to produce between 1.2 million to 1.24 million BOE/D for the full year, which would be 5% higher than 2017 and slightly above its initial forecast even though a third-party gas pipeline issue in Malaysia will keep output from that region offline all year.

Oil pumps at dusk

Image source: Getty Images.

Given that outlook, investors should see if the company encountered any issues while performing maintenance on its assets in Australia, Europe, and Alaska. If not, then it should at least be able to produce within its guidance range. Meanwhile, strong drilling results in the U.S. could drive output toward the top end of that forecast (or even above).

2. Look for earnings to beat expectations

ConocoPhillips' guidance-beating production in the first quarter enabled it to crush analysts' expectations. While the consensus was that the company would earn $0.67 per share, it ended up reporting a quarterly profit of $0.96 per share.

Heading into the second quarter, the current consensus is that the company will earn $1.07 per share even though production will be lower. That's because the oil giant should get an added boost from its share repurchase program as well as from higher oil prices. However, ConocoPhillips has had a knack for beating expectations in recent quarters by topping its production forecast and keeping a tight lid on costs. The hope is that the company can continue that trend in the second quarter.

3. Check for changes to its spending plan

ConocoPhillips set its capital budget at $5.5 billion for 2018, which was enough money to grow production by about 5% versus last year. The company set that spending plan assuming oil would average about $50 a barrel this year. However, with crude now in the $70s, it's possible that the company might make some adjustments, especially in light of a few other changes this year.

One area to keep an eye on is ConocoPhillips' drilling plans in U.S. shale plays. The company anticipated that the big three -- Bakken, Eagle Ford, and Permian Basin -- would be its key growth drivers in 2018, delivering 20% production growth versus last year. However, pipeline constraints in the Permian have had producers rethinking their plans. Halcon Resources (NYSE:HK) was one of the first to announce that it would slow its pace by reducing its drilling fleet from four to three. As a result, Halcon's production in the second half might not be as high as anticipated.

ConocoPhillips also hinted that it might reduce its drilling activities in the Permian due to the pipeline issues. CEO Ryan Lance told Financial Times that he's "not sure it makes sense to drill into that headwind." So it's possible that the company will reallocate capital away from the Permian and toward the Bakken and Eagle Ford. Given that possibility, investors should see if the company does indeed shift spending to those regions and if that has any impact on its budget and production guidance for 2018.

Anticipating a strong quarter

Expectations are high that ConocoPhillips will post strong second-quarter earnings this week, especially given the positive impact from higher oil prices and its share repurchase program. As long as the company didn't encounter any unexpected maintenance issues, then it should report good financial results. However, if the company does disappoint and shares take a hit, then it would likely be a great buying opportunity given the upside potential of its needle-moving share repurchase program.

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.