Everything is looking up for Chesapeake Energy (NYSE:CHK). Earnings per share are up. Production is up. Net income is up. In fact, the only thing down is capital spending. 

America's second-largest natural gas producer, and tenth largest producer of oil and natural gas liquids, reported adjusted net income of $405 million or $0.59 per share. This beat estimates by $0.11 per share, a 97% increase over the same quarter the year before.

First quarter profit soared with a 47% surge in revenue and higher production. In fact, production was so good that the company raised its adjusted production growth outlook for 2014 to 9% to 12%, compared to its February forecast of 2% to 4% growth.

Chesapeake Energy's production increased by 11% to an average of 675,200 barrels of oil equivalent per day (BOE/d). This increase in production was mainly due to a surge in natural gas liquids volumes, which were up 63% over the previous year. Meanwhile, oil volumes increased 20% and natural gas production moved up by 4%.

In a statement in the company's press release commenting on the quarter, CEO Doug Lawler called it "an important and defining quarter."

Lawler took over the company last year after former CEO Aubrey McClendon was ousted by shareholders. Lest you think that the former CEO may have some regrets over getting booted, think again. One key detail of his separation package is that he holds a 2.5% interest in every single one of the wells the company drills until June 30.

Under McClendon, Chesapeake had a problem with spending the cash brought in from operations. In this most current quarter, however, Chesapeake cut 50% from its capital spending plan. Even after the cuts the company was still able to complete 234 total wells in the quarter, which is just 40 less than it drilled in first quarter of 2013. After this earnings announcement, it's good to be McClendon.

Chesapeake has announced plans to spin-off of its oilfield services division, which expects to complete by June 30. The name of the company will be Seventy Seven Energy. The division, which offers drilling, hydraulic fracturing, and rig relocation services, made about $2.2 billion in revenue last year. The proposed restructure is in line with the company's ongoing strategy of shifting focus from natural gas drilling to liquids production. Chesapeake estimates that the oilfield services business will take away $1.1 billion of debt from its books. Additionally, Seventy Seven Energy will pay Chesapeake Energy a dividend of about $400 million, which it will use to apply to pay off inter-company debt. 

Devon Energy
Devon Energy (NYSE:DVN) also made an earnings announcement recently, just without the resulting buzz that Chesapeake earned. It must be noted that while Devon didn't have quite the stellar performance that Chesapeake pulled off, Devon did pretty well for itself (and shareholders) too.

The natural gas and oil company reported a profit of $324 million, or 79 cents a share, compared with a year-earlier loss of $1.34 billion. Adjusted earnings were $547 million, or $1.34 per share, for a 103% improvement over last year's first quarter. Revenue went up 89% to $3.73 billion.

"Our disciplined focus on high-margin drilling opportunities led to outstanding growth in oil production and enhanced profitability in the first quarter," said John Richels, president and chief executive officer.

Production averaged 691,000 BOE/d this quarter. Adjusted for asset sales that was 7% higher than last year's first quarter. Growth was fueled by the company's U.S. oil production, which surged 56% over the past year.

Leading the way was Devon Energy's Permian Basin assets, where production increased 36% over last year's first quarter and is up 9% over the past quarter. The other highlight was the company's newly acquired position in the Eagle Ford Shale. Production in the Eagle Ford averaged 49,000 BOE/d, however, that's expected to grow to a range of 65,000-70,000 by next quarter. In comparison, Chesapeake Energy's Eagle Ford net production averaged approximately 88,000 BOE/d during the 2014 first quarter.

Surging oil production, along with higher commodity prices and lower costs, pushed Devon Energy's operating cash flow up 41% over the past year to $1.4 billion. That enabled the company to raise its quarterly dividend by 9% -- from $0.22 per share to $0.24 per share -- which is the ninth increase since 2004. 

Devon has morphed from a natural-gas company to an oil company. Its recent moves include a $6 billion deal for assets in the Eagle Ford oil play and its part in the formation of a master limited partnership with Crosstex Energy LP (NYSE:ENLC). The new MLP is known as Enlink Midstream LLC (NYSE:ENLK).

Foolish conclusion
All in all, it wasn't a bad quarter for the oil and natural gas production industry. Both Chesapeake and Devon look to be making the right moves for a strong and productive future. Earnings and production are both on the rise, and both look ready to continue performing in the long run. 

Erin McBride has no position in any stocks mentioned. The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.