ConocoPhillips is something of a prodigal son. Investors have taken the U.S. energy group back into the fold since it repented its wayward habits. It’s understandable that the valuation gap with peers would close. But it’s hard to see why Conoco is already rated almost in line with the best-in-class Exxon Mobil. It still has plenty to prove.

Admittedly Conoco’s second-quarter numbers, reported on Wednesday, will help. With far more exposure to U.S. refining than the likes of Exxon and Chevron, Conoco cashed in on a recovery in crack spreads — the profit made turning crude oil into fuels.

That may have been largely out of the control of Jim Mulva, the chief executive, but he can take credit for efforts to repair the damage done in a series of poorly-timed deals a few years ago — notably the 2006 purchase of Burlington Resources — that eventually led to $34 billion of goodwill write-downs. Sales of a stake in Syncrude Canada and part of Conoco’s Lukoil holding represent a strong start to the company’s $10 billion asset sale program, designed to reduce debt.

Slimming down should boost Conoco’s return on equity, too. Already, with its shares outpacing rival U.S. oil giants so far this year, Conoco’s enterprise value stands just north of 4 times estimated EBITDA for 2010 — in line with Exxon’s multiple. That’s only one metric. Yet it suggests that Conoco is to all intents and purposes out of the woods.

But that’s getting ahead of reality. Shrinking its business may be good in some ways, but the company’s output will fall both this year and next. Refining is a tough business, with crack spreads only looking healthy now compared with recent anorexic extremes. Conoco is also heavily exposed to natural gas through Burlington, and prices in the U.S. market, though at least stable, are at weak levels. With legislative moves to discourage carbon emissions currently in the Washington deep-freeze, a hoped-for boost for clean-burning gas is nowhere in sight.

For sure, Conoco has embarked determinedly on the road to self-improvement. Even so, it’s too soon to forget the company’s erratic history or ignore potential problem areas. Until there’s a longer record of solid progress, this prodigal son merits a more skeptical welcome.