ConocoPhillips (NYSE: COP) recently reported surprisingly strong third-quarter results, easily overcoming the impact from Hurricane Harvey. Not only was production at the high end of its guidance range despite shutting down some output due to the storm, but earnings were double what analysts anticipated. Driving those results was the positive impact of the company's strategic portfolio transformation. The revamp was front and center on the company's third-quarter conference call, during which CFO Don Wallette updated investors on its progress. He noted four areas that show just how far the company has come in a short amount of time. Image source: Getty Images. Significantly improved the balance sheet Wallette led off his prepared remarks on the call by saying that "this quarter was another impactful one for our company" because it executed "a number of transformational decisions to accelerate our differentiated, disciplined and returns-focused strategy." Two of the decisions were the sale of its San Juan Basin and Panhandle assets, which closed during the quarter. Those deals put the company on pace to jettison $16 billion in assets this year, led by its surprising decision to sell several Canadian oil and gas properties to Cenovus Energy (NYSE: CVE). Wallette noted that the company used a significant portion of these proceeds to reduce debt: In the third quarter, we paid down another $2.4 billion of debt, bringing our balance sheet debt to $21 billion. In the quarter, we received a credit rating upgrade, and we are on track for the year-end debt balance to be under our target of $20 billion. The improvement in the company's credit profile will positively impact its ability to generate cash flow in future years. The debt reduction, for example, will reduce its interest expenses while the credit rating upgrade will improve future borrowing costs. To put the near-term impact into perspective, ConocoPhillips noted that the Cenovus sale would not affect cash flow from operations because the decline in interest expenses from the debt reduction would completely offset the lost income stream. Returned a boatload of cash to shareholders In addition to shoring up its balance sheet, Wallette said the company: Repurchased $1 billion of our shares during the quarter, which takes us to over $2 billion repurchased for the year, representing about a 3.5% reduction in outstanding shares year to date. We expect to buy back another $1 billion of shares in the fourth quarter. Between our dividend and expected share buybacks, capital return to shareholders would represent the equivalent of 60% to 70% of our operating cash flow in 2017. Wallette went on to point out that the best way to get a clear picture of the impact of ConocoPhillips' capital allocation decisions was to look at the change in production on a per debt-adjusted share basis, which takes into account the effect of the debt and share count reductions. By using this metric, Wallette pointed out that production "grew by 19% compared to the third quarter of last year." That's a much sharper growth rate than the company delivered overall, since output only rose 1.4% last quarter after adjusting for asset sales. Image source: Getty Images. Generated more than enough cash to meet its needs As impressive as the balance sheet improvement and cash returns have been this year, an even more remarkable accomplishment is that ConocoPhillips has been able to live within cash flow at current oil prices. Overall, Wallette noted that the company generated $4.5 billion in cash from operations so far this year, "which exceeds capex and dividends by over $400 million." Furthermore, the CFO pointed out that the company didn't need "market help to get to cash neutrality" since oil has remained relatively low. Among the drivers is a 15% year-over-year reduction in adjusted operating costs and efficiency gains that have enabled the company to stretch its drilling dollars. Reduced a future liability One other thing Wallette pointed out was that ConocoPhillips' operating cash flow would have been $600 million higher this year. However, it chose to make a one-time $600 million payment to its U.S. pension fund and accelerate the funding of that future obligation. The company saw that as an opportunity to strategically reduce a long-term liability, which Wallette noted would "reduce cash flow volatility and increase flexibility going forward." The wind at its back ConocoPhillips is ending 2017 in a much stronger position than it entered the year. It jettisoned a slew of lower0margin assets, which gave it the cash to shore up its balance sheet and buy back its cheap stock. Meanwhile, it continued pushing down costs so that it's generating more than enough money to increase production and pay a growing dividend. As a result, ConocoPhillips enters 2018 with significant momentum, as it's poised to thrive at lower oil prices. 10 stocks we like better than ConocoPhillipsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and ConocoPhillips wasn't one of them! That's right -- they think these 10 stocks are even better buys. Click here to learn about these picks! *Stock Advisor returns as of October 9, 2017Matthew DiLallo owns shares of ConocoPhillips. 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