What: Shares of Weatherford (NYSE: WFT) soared more than 19% by 1:00 p.m. EST on Thursday. Fueling the surge was the oil-field service company's surprisingly strong fourth-quarter results.

So what: Weatherford reported fourth-quarter revenue of just over $2 billion, which was down 10% from last quarter and down 46% year over year because of the continued weakness in the oil market. Further, the company reported a net loss of $102 million, or $0.13 per share. However, investors overlooked both of those negatives and focused on the positive. Namely, it was finally free-cash-flow positive. After reporting $168 million in free cash flow from operations during the quarter, it pushed the company's full-year cash flow from operations into positive territory for the first time since 2010.

While that's a noteworthy accomplishment, Weatherford has a long way to go before it catches up to its oil-field service peers. To put things into perspective, the company only converted $0.01 of every dollar of revenue into cash flow in 2015, while rival Halliburton (HAL 0.36%) was able to convert $0.12 of every dollar of revenue into cash flow last year. Halliburton's ability to generate higher margins have been the key to its ability to outperform Weatherford over the past five years.

That aside, one of the big contributors to Weatherford's ability to finally deliver positive free cash flow was because it refocused its operations after closing 21 manufacturing operating facilities while reducing its headcount by 14,000 employees. Together, these reductions reduced the company's annualized costs by $1.4 billion.

Weatherford isn't done reducing its costs just yet; it announced plans to close another nine manufacturing and service facilities in the first half of this year, while laying off another 6,000 employees. Those reductions are expected to enable the company to run for a prolonged period of very low oil-field service activities.

Now what: Weatherford is finally starting to turn the corner and generate positive cash flow. That said, given that the downturn in the oil market is only growing worse, it still has work to do. That's why it's continuing to focus on right-sizing its business and reducing its costs so it can better compete against its stronger rivals.