The market isn't a perfectly efficient machine, but it still amazes me how it reacts blindly to downgrades that make little sense. The good news for investors is that these reactions present a buying opportunity -- in this case, for shares of Whiting Petroleum (NYSE: WLL).

The stock fell 10% on Thursday, after BMO Capital Markets analyst Phillip Jungwirth unexpectedly downgraded the stock following the announcement of second-quarter results. Here's what makes the downgrade a head-scratcher: The results beat analysts' estimates.

A few days back, I wrote about the exciting prospects for this company in the exploration and production space. True to form, the latest results exceeded expectations, with net profits jumping by 69% over the year-ago quarter. Core operational earnings, or EBITDA, stands at $192 million -- a phenomenal 108% growth over the corresponding period.

Huge potential
Jungwirth thinks Whiting's success so far isn't enough to drive meaningful growth. It's true that higher oil prices -- with 82% of production being crude oil and natural gas liquids -- did contribute to higher cash flows this quarter. But what I'm truly impressed with is the progress Whiting has shown in developing its Bakken shale properties. 

With two full-time crews dedicated to the Williston Basin in North Dakota, Whiting has already demonstrated successful flow tests, with eight different regions clocking more than 1,000 barrels of oil equivalent per day. That's what I'd call hardcore evidence with regard to the Bakken reserves.  

The flow rate for the Arnegard 21-26H well in McKenzie County has, in fact, delivered a very impressive 3,092 barrels of oil equivalent per day. Little wonder, then, that the company plans to drill 11 operated wells by the end of this year. With 17 rigs operating in the Williston Basin, management's earnestness to get into production mode is clear. The upshot for Foolish investors is a fantastic buying opportunity.

After all, Continental Resources (NYSE: CLR) and Brigham Exploration (NYSE: BEXP) have already made a killing in these fields. Brigham's economic value has already increased by a substantial 11.6% this year, and we're definitely not looking at a one-time show. Meanwhile, Continental -- the largest Bakken operator -- has been hugely promising in terms of production this year.

The Foolish bottom line
Whiting's impressive second-quarter results have already prompted management to increase the 2011 capital budget to $1.6 billion from $1.35 billion. I sense a fantastic buying opportunity here, given the recent plunge in its stock prices. I'd doubted whether the market had factored in the growth potential of this stock, and the latest drop only confirms my suspicions. Foolish investors must take note.