All things considered, ConocoPhillips (NYSE:COP) performed admirably in 2014. Its stock only lost 1% of its value, which isn't bad considering that the stock did take investors on a wild ride as oil prices dropped nearly 50% on the year. As we look ahead to 2015 there are three things I think the company should do in order to deliver stronger returns in the year ahead.

First thing to do: Buy back stock
ConocoPhillips has one of the strongest balance sheets in the energy industry. As the following slide notes, its credit is rated investment grade and it has the capacity to add debt while maintaining its current rating.

Source: ConocoPhillips Investor Presentation.

Given its balance sheet strength, I think the company should take advantage of its currently cheap stock and initiate a large stock buyback. I'd like to see the company authorize a 5% buyback where it completes half of the authorization in the first half of the year while leaving it room to buy back more stock later should further weakness in oil prices over the next few years create another buying opportunity.

Second thing to do: Boost the dividend
Along with the stock buyback, I'd like to see the company boost its dividend early in the year. Over the past two years the company has boosted its payout with the third-quarter dividend. However, I think that it should use the dividend savings on the buyback to boost its payout even earlier. For example, if the company bought back 2.5% of its stock, it could boost its dividend by that amount, which is about $0.02 per share. It could then consider another dividend boost later in the year if oil prices, and therefore its cash flow, vastly improve.

Source: ConocoPhillips.

Third thing to do: Become a buyer
The last thing I'd like to see ConocoPhillips do this year is make a large acquisition. Over the past few years the company has focused all of its attention on divesting slower-growth assets and reinvesting that cash into organic growth projects. However, with some of its North American-focused peers now starving for cash, this could be a great opportunity for the company to go on the offensive.

ConocoPhillips has no glaring weakness in terms of geographical needs, as the company's assets span the globe and it's particularly strong in North America. That said, its position in the Permian Basin has yet to drive the results we're seeing with companies like Pioneer Natural Resources or Concho Resources, as both companies have been driving double-digit production growth from the basin over the past few years after switching to horizontal drilling. ConocoPhillips could look to take advantage of the recent weakness in Permian Basin-focused stocks as top drillers like Pioneer and Concho have dropped 30% from recent highs. Or, it could go the deep-value route, as there are a number of other companies with strong horizontal drilling programs in the basin that could run into liquidity issues over the next year if oil prices don't improve. Either way, I think ConocoPhillips could create a lot of long-term value by boosting its position in the Permian Basin by taking advantage of the downturn to acquire a smaller rival.

All in all, ConocoPhillips is in a really strong position as we enter 2015. The company has a very strong balance sheet, which it should use to take advantage of the turmoil in the oil market. I'd like to see the company buy back stock, boost its payout, and then, when the time is right, pounce by making an acquisition.