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TheStreet Open House

BP Returns From Exile, Wins Gulf Bids

NEW YORK (TheStreet) -- A pariah from the Gulf of Mexico, British Petroleum (BP), more commonly known as BP, has returned from exile.

After being banned from receiving U.S. government contracts and from participating in the lucrative Gulf of Mexico lease auctions, BP has finally won the confidence of regulators. The ban, which was imposed after the infamous 2010 deep-water Horizon disaster, has now been lifted.

As expected, BP participated in the government sale of Gulf of Mexico acreage held on Wednesday and ended up winning 24 of its 31 bids.

Moreover, the oil giant has found a way to bypass the U.S. crude export ban and could become the first company to sell crude outside of the U.S. in four decades (although it would technically be selling slightly refined crude).

Although BP recently reported a massive drop in quarterly profits, its long term outlook appears brighter. The company's American depositary receipts (ADR) are down about 2% this year, trading mid-day at  to $46.50. This implies a price-to-earnings ratio of just 6.4. The company offers a juicy yield of 4.7% and is attractive for long term investors.

BP has finally reached on an agreement with the Environmental Protection Agency. After 16 difficult months, the struggling oil giant can once again start doing business with the federal government. After the Horizon oil spill disaster in 2010, BP was banned in 2012 from getting any U.S. government contracts and from leasing additional offshore properties in the Gulf of Mexico.

Due to the ban, BP went from one of the top fuel suppliers to the Pentagon to the biggest losers among all government contractors.

Last year, BP witnessed a loss of $654 million in federal contracts due to the absence of any major U.S. government or military contracts. This was in stark contrast to 2012, when BP was awarded contracts worth $2.51 billion.

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