Stop me if you've heard this before. A major oil company walks into a bar, reports that production is up slightly, but pricing is way up, so the quarter looked great...

Today's Big Oil conglomerate is BP PLC (NYSE:BP), one of the largest publicly traded oil companies in the world. BP reported that total revenue for the first quarter climbed about 16% and fueled a 35% rise in reported net profits.

On the basis of replacement cost profit, a somewhat goofy but useful calculation that excludes inventory gains and losses, BP showed 29% growth on a year-over-year basis, with 33% growth on a per-ordinary-share basis.

In the exploration/production segment, replacement cost profit climbed 53%. Stripping out some asset sale gains, the proper figure looks to be about 34%, which is still a strong performance. Profits were fueled by a 2% increase in total hydrocarbon production (on a barrel of oil-equivalent basis) and a 27% increase in realized prices for those hydrocarbons.

The refining/marketing business also did well, as replacement cost profit grew 54%. While BP reported a slightly lower refining throughput, the refining margin improved by 21%. This high refining margin has been great for companies like BP and Valero Energy (NYSE:VLO) because they've been able to buy relatively cheap heavy sour crudes and turn them into very profitable refined products like gasoline.

Not surprisingly, these results produced a generous bit of cash flow for the quarter. Operating cash flow climbed $2.4 billion to $9.4 billion for the quarter, and the company repurchased $2 billion worth of stock, in addition to hiking the dividend by about 26% over the year-ago level.

According to BP management, the business outlook is still pretty positive. Despite hydrocarbon inventories remaining generally above one- and five-year averages, pricing is staying strong, and there is very limited spare production capacity. What's more, BP's refining margins are staying strong into April, so Fools shouldn't expect much relief at the gas pump any time soon.

So, how should you evaluate this stock? While I could go into a treatise on discounted earnings and cash flows, the fact is that oil companies are basically trading as proxies for oil futures these days. Oil futures go up, stocks go up, and so on.

On a more fundamental level, though, BP seems reasonably priced compared with peers like ExxonMobil (NYSE:XOM) and Total SA (NYSE:TOT), but somewhat expensive compared with producers like ChevronTexaco (NYSE:CVX) and PetroChina (NYSE:PTR).

Though I have no idea where oil prices will be next week, next month, or next year, I do know that BP is a solid producer that pays a very fair dividend. With decent reserves and an ongoing involvement in projects like liquefied natural gas and gas-to-liquid technologies, BP is a perfectly legitimate option for investors looking to add Big Oil to their portfolio.

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Fool contributor Stephen Simpson owns shares of PetroChina. The Motley Fool has a disclosure policy.