ConocoPhillips (NYSE: COP) is the third-largest U.S. member of Big Oil and while turning in a reasonably solid quarter, isn't impressing the market, which has lowered its share price during each of the past two days.

The company, which sits behind ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) in the domestic oil company pecking order, earned $3.03 billion in the first quarter of the year, or $2.09 per share, compared with $2.1 billion, or $1.40 a share, for the first quarter of 2010. However, eliminating the $394 million in gains from the sales of North American properties, along with the jettisoning of its stake in Russia's OAO Lukoil, Conoco's earnings were $2.6 billion, or $1.82 a share, from $2.2 billion, or $1.47 a share.

The company's revenues for the quarter increased 27% to $58.2 billion. Analysts had reached a consensus per-share expectation of $1.93, or 5% above the actual results.

Despite the general quality of the metrics, as CEO Jim Mulva said, "While our financial results were much improved from a year ago, E&P production and R&M capacity utilization did not meet our targets." He then noted that the quarter had been negatively affected by about $200 million of unexpected downtime and variable compensation expense tied to performance in the prior year.

The quarter's production was reduced by about 7% to an average of 1.7 million barrels of oil equivalent per day. The reductions, which were largely tied to "normal field declines," were centered in the North Sea, the Lower 48, China, and Alaska and amounted to about 90,000 BOE/D. The company compensated for all but about 10,000 BOE/D from new production and increased well efficiency in several locations.

The downtime, which amounted to about 65,000 BOE/D, included a brief shutdown of the Trans Alaska Pipeline -- of which BP (NYSE: BP) owns the largest stake -- in January and more recent events in Libya. At the same time, with Conoco involved in a program of weeding out noncore assets, year-on-year production was affected by about 50,000 BOE/D. On the acquisition side, ConocoPhillips marked a pair of Norwegian blocks in the Barents Sea, another wildcat play in the North Sea, and acreage in the Wolfcamp shale.

The largely West Texas Wolfcamp remains dominated by the de facto master of shale plays, Chesapeake (NYSE: CHK), along with such smaller independent plays as Approach Resources (Nasdaq: AREX). Conoco is also active in such mature unconventional plays as the Eagle Ford, the Barnett, and the Bakken.

Downstream, expanded global refining margins allowed the company to post earnings of $482 million. Furthermore, its chemicals operation also posted earnings of $193 billion, a record of its own and a radical departure from a year-ago $4 million loss.

ConocoPhillips is clearly in transition. It's resumed its share repurchase program during the quarter and lowered its debt by about $400 million. According to CFO Jeffrey Sheets, most of its $8.4 billion in quarter-end cash and short-term investments will be used for share repurchases.

My inclination is to keep close tabs on the company's progress with the assistance of My Watchlist, Motley's free, personalized stock monitoring service. I recommend that you do the same.

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