Size counts in the business world, and many company managers would sell you their grandmother if it meant a bit more growth. Not all size is truly equal, though, and AnadarkoPetroleum (NYSE:APC) seems to have gotten a bit better by getting a bit smaller. Although Anadarko's decision to sell some properties last year has affected production, it has helped the balance sheet.

For the second quarter, Anadarko reported that net revenue climbed 10% to $1.59 billion. Operating margins improved significantly (from 47.6% to 53%) and the company posted 23% operating income growth. Although reported EPS missed the mean estimate by a penny, I don't think that's a big deal at all.

Interestingly, though, while the mean estimate was $2.13, my screen shows a high estimate of $2.76 a share -- wouldn't you love to know what that analyst was thinking?

Anyways, as-reported daily average production volumes fell more than 16% to 428,000 barrels of oil equivalent per day. But, since Anadarko sold some of its properties, a straight year-on-year comparison isn't quite fair. To that end, the company reported that production volumes actually increased by 10% once adjusted for the sold properties.

Like pretty much every other oil and gas company, Anadarko reported higher realized prices for its goods. Gas prices were up 20% and oil prices were up 47%, results that are consistent with what we've seen from other energy companies.

Anadarko has not wasted the benefits of those asset sales and its improved financial performance. Long-term debt has fallen by about $1.3 billion and the company has improved its debt-to-equity ratio from about 55% a year ago to about 37% in this quarter. During that same span of time, the company also repurchased $1.7 billion worth of stock in the open market.

I won't pretend that Anadarko is the best exploration and production company out there. Smaller producers such as Apache (NYSE:APA) and Ultra Petroleum (AMEX:UPL) and larger companies such as Motley Fool Income Investor pick Total (NYSE:TOT) and PetroChina (NYSE:PTR) have their particular charms. But I am impressed with management's willingness to focus on cash generation and overall improvement. Should the energy markets stay strong, that focus could certainly reward shareholders.

For more oil and gas takes:

Fool contributor Stephen Simpson owns shares of PetroChina.