Crude oil prices have bounced around quite a bit over the past year. That volatility has weighed on the share prices of oil producers such as Pioneer Natural Resources (NYSE:PXD) -- its market cap has tumbled by more than 30% since last August.

But as management made clear during the company's second-quarter conference call, the company isn't sitting idly by. It's using the financial flexibility of its healthy balance sheet to take advantage of the situation and gobble up its own shares.

$20 bills and a calculator along with an oil pump.

Image source: Getty Images.

Aggressively returning cash to investors

CEO Scott Sheffield led off the call by highlighting the moves the company is making to create shareholder value:

The first key point is we continued to buy back stock. And obviously, where the stock is today, we'll be continuing to aggressively buy back stock in the third quarter to average our price down. What's great is that we had the best balance sheet of the independents in the business to allow us to do this. 

Overall, the company repurchased $200 million worth of its shares during Q2. That brought its year-to-date total to $528 million. Overall, the company repurchased 3.7 million shares -- about 2% of shares outstanding -- for an average price of $141. 

Sheffield also made it clear that his company will stick with that strategy, given that the share price has continued to decline. Pioneer can easily afford to do so, since its business is generating excess cash, and it has one of the best balance sheets in the sector. It should make short work of its $2 billion stock repurchase authorization, which will stretch even further now that it's trading around $120 a share.

Other oil producers are binging on buybacks too

Pioneer Natural Resources is one of a growing list of oil companies that see big-time value in their own shares. That's clear from the ramp-up in repurchase activity across the sector this year. U.S. energy giant ConocoPhillips (NYSE:COP), for example, boosted its buyback program again during the second quarter. With its shares tumbling due to oil price weakness, it accelerated its buybacks to spend $1.25 billion on its stock -- about $500 million more than anticipated. Moreover, rather than reducing its pace of repurchases in the second half of the year, ConocoPhillips added another $500 million to its program. As a result, it's now on track to spend $3.5 billion on stock buybacks this year -- and that figure could wind up even higher given the amount of cash that's coming into its business.

Devon Energy (NYSE:DVN) has also been aggressively buying back its stock. As of early August, the company had spent $4.4 billion on a jaw-dropping 24% of its outstanding shares -- by far the largest percentage buyback in the sector. Meanwhile, Devon expects to buy back another $600 million of its stock by year-end. That has it on track to reduce its share count by 30% from where it was at the end of 2018. It could continue repurchasing shares in the future since it has a top-tier balance sheet, and can generate significant free cash flow even at lower oil prices.

Many investors have grown tired of the energy sector's volatility and underperformance in recent years, which is leading them to steer clear of oil stocks. Because of that, valuations continue to fall even though many producers are generating gushers of free cash flow, which they're using to aggressively buy back their shares. Given just how much stock those companies are repurchasing, value-focused investors might want to take a closer look at this sector.