Oil prices have bounced around quite a bit over the past year. WTI, the primary U.S. benchmark price, has topped $80 a barrel several times, including earlier this month. However, it has cooled off since then and is currently in the mid-$70s.

The price of crude oil has a meaningful impact on oil stocks. Here's a look at whether it's still worth buying shares of ConocoPhillips (COP -2.08%) now that oil has dipped below $80 a barrel again.

Cashing in on crude oil

ConocoPhillips is one of the world's leading exploration and production companies. Its oil, natural gas, and natural gas liquids (NGL) production averaged over 1.9 million barrels of oil equivalent (BOE) per day in the third quarter of last year. The company sold its oil for an average of $76.77 during that period and its total output for an average of $54.18 per BOE. That price point enabled the company to generate $4.7 billion in cash from operations. It used that money to invest in expanding its operations, pay dividends ($900 million), repurchase shares ($1.2 billion), and maintain a strong balance sheet ($7.1 billion of cash and short-term investments at the end of the period).

As its results last quarter showcase, ConocoPhillips can produce a lot of cash when crude oil is in the $70s. Through the first nine months of last year, it generated $14.9 billion of cash from operations. It produced an average of 1.9 million BOE per day, which it sold for an average of $55.77 per BOE (and $78.88 per barrel of oil). It used that cash to fully cover its capital expenditures and investments ($8.8 billion), repurchase shares ($3.5 billion), and pay dividends ($2.7 billion). The company also used some of the cash it built up on its balance sheet to repay $500 million of debt at maturity.

ConocoPhillips can generate that much cash at an oil price below $80 because of its low cost of supply. It has about 20 billion barrels of resources with a cost of supply of $40 per barrel or lower, with an average cost of supply of $32 per barrel. With crude prices in the $70s, ConocoPhillips can produce a lot of cash.

Enhancing its already low-cost oil business

ConocoPhillips is in an even better position to cash in on the current oil price environment than last year. That's because it has now closed its $22.5 billion acquisition of Marathon Oil. CEO Ryan Lance commented on the acquisition when the company announced the deal last May. He noted, "This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position." Overall, the company added over 2 billion barrels of resources with an estimated average cost of supply below $30 per barrel.

In addition to the low-cost production, the deal is immediately accretive to the company's cash flow from operations and free cash flow. On top of that, ConocoPhillips expects to capture more than $1 billion in cost and capital synergies within the first full year of closing the transaction, which occurred at the end of November. That's double the $500 million it initially expected.

That outlook drives the company's view that it can return more cash to investors in the future. It has already increased its dividend by 34%. It plans to deliver dividend growth in the top 25% of companies in the S&P 500 in the future. ConocoPhillips also plans to ramp up its share repurchase rate from over $5 billion annually to more than $7 billion per year.

Still a buy at sub-$80 oil

ConocoPhillips has loads of low-cost oil, even more so after adding Marathon's low-cost supplies. That enables the company to produce lots of cash when crude oil is in the $70s. Because of that, the oil stock is still a buy after oil's recent dip from $80, especially since the Marathon deal will enable it to produce even more cash at a lower price point.