Will BHP Billiton plc’s Share Price Rise Faster Than BP plc, Tullow Oil plc, Premier Oil PLC And Royal Dutch Shell Plc After H1 Results?

Are shares in BHP Billiton plc (LON:BLT) (LSE:BLT.L) a better option for investors than BP plc (LON:BP) (LSE:BP.L), Tullow Oil plc (LON:TLW) (LSE:TLW.L), Premier Oil PLC (LON:PMO) (LSE:PMO.L) and Royal Dutch Shell Plc (LON:RDSB) (LSE:RDSB.L)?

BHP Billiton plc
BHP Billiton plc

The share price of BHP Billiton plc (LON:BLT) (LSE:BLT.L) has moved 0.4% lower after its H1 results release. Its profit has moved back into positive territory following a loss-making H1 2015, with profit from operations of $6057 million. This works out as a basic EPS of $0.602, which is encouraging for investors after H1 2015’s EPS of minus $1.065.

BHP Billiton’s share price could benefit from productivity gains of $1.2 billion achieved in H1 2016. It remains on target to hit $1.8 billion of gains for FY2017, excluding any impact of industrial action at Escondida. Unit cash costs decreased at its major assets compared to H1 2015.

Capital and exploration expenditure decreased by 38% to $2.7 billion. BHP Billiton now expects to invest $5.6 billion in FY2017 and $6.3 billion in FY2018. Free cash flow was boosted by strong operating performance and improving capital productivity, which led to FCF of $5.8 billion.

The company’s shares could also be aided by a stronger balance sheet in my opinion. Net debt of $20.1 billion is down from $26.1 billion at 30 June 2016. This is reflective of improved FCF and a fair value adjustment of $2 billion related to interest rate and forex movements.

In 2017, BHP Billiton’s shares have risen 7%. That’s ahead of other oil/resources shares such as BP plc (LON:BP) (LSE:BP.L), Tullow Oil plc (LON:TLW) (LSE:TLW.L), Premier Oil PLC (LON:PMO) (LSE:PMO.L) and Royal Dutch Shell Plc (LON:RDSB) (LSE:RDSB.L). Premier Oil’s share price is 4% higher, while Tullow Oil has dropped 12%, Shell is down 7% and BP’s share price is 11% lower.

In my opinion, BHP Billiton’s shares are appealing from a long-term investment perspective. I think its financial standing is improving and I see more scope for this to take place given its plans on spending and efficiencies. I’m optimistic about BP, Shell and Tullow Oil, but see Premier Oil as a riskier share due to its smaller size. I’m upbeat about the oil sector and with BHP Billiton’s diversity, I think it has relative investment appeal.

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