Marching in tandem with the price of oil, energy company earnings are on the upswing, too.

Before yesterday's opening bell, ConocoPhillips (NYSE:COP) checked in with its second-quarter results. Talk about a gusher: Thanks largely to soaring oil prices, the firm delivered $2.21 per share on net income of $3.1 billion. These figures are substantially higher than those of the year-ago period and, not coincidentally, leave analysts eating dust, too.

Not surprisingly, investors were intent on joining the fun, sending ConocoPhillips' shares up nearly 1.4% on the day.

Second-quarter highlights for the Houston-based company include an increase in exploration and production revenue of some 43% compared with the second quarter of 2004. The firm received a hefty chunk of change from its roughly 12% stake in Russian energy titan LUKOIL, too. That politically risky investment netted ConocoPhillips an additional $148 million in revenue.

Congratulations all around, of course, but the lingering question with energy company stocks is just how long the party will continue. Strong worldwide demand has acted like rocket booster for the sector over the last year, and it's hard for the inner contrarian in me not to wonder how these commodity businesses -- which is, after all, what they are -- will fare in less frothy times.

ConocoPhillips, at any rate, has at least one decent answer to that query.

In addition to reaping the benefits of increased pricing power, the firm boasts a highly efficient refining and marketing arm -- a unit that also contributed to the firm's robust quarter. With its refineries operating near capacity throughout the period, in fact, ConocoPhillips' R&M operating income came in at $1.1 billion -- a 35.7% increase over the comparable 2004 figure.

That operational strength bodes well for the firm's future, but as the No. 3 player in a field that rewards economies of scale, ConocoPhillips needs every competitive advantage it can get. ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) are bigger boys on the block, after all, and for my money, ConocoPhillips' current multiples don't reflect a sufficient "size matters" discount. If only on the margins, the firm is simply more sensitive to oil price fluctuations than its larger rivals.

Don't get me wrong: We're talking about a solid company here, one that became even stronger after Conoco and Phillips hooked up in 2002. Nevertheless, investors intent on drilling for further profits in the energy sector should probably eye the industry's bigger players -- a group that also includes international concern Total (NYSE:TOT) -- before filling up with ConocoPhillips.

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Shannon Zimmerman runs point on The Motley Fool's Champion Funds newsletter service. Shannon doesn't own any of the securities mentioned above. The Fool has a strict disclosure policy .