BP Scores a Hat Trick of Deals and Discoveries

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With the company still mired in legal troubles, long-suffering BP (BP) investors may finally have something to smile about.

No it wasn't the complete remittance of the nearly $34 billion in fines, spill clean-up costs and penalties resulting from the Deepwater Horizon spill. But it was still pretty good for the integrated energy firm.

Over the last few days, both BP executives and roughnecks were busy scoring some major wins for the energy stock. That includes two huge deals for future production as well as finding a massive amount of energy in the Gulf of Mexico.

While these deals may not make up for the still-pending payouts and fines stemming from the 2010 oil spill, it certainly adds a fire under BP shares and could push the integrated giant higher in the new year. For investors, the story at BP may finally be getting better.

A Trio Of Wins For BP

For BP, any bit of positive news is a major win. So when it actually does something pretty spectacular, investors should take notice. In this case, BP scored a series of major production deals that should help move the stock higher over the next few years and could finally begin to put the worst oil spill in history behind it.

First up was a mammoth partnership with Middle Eastern nation and frontier market of Oman. BP will help the nation to tap its vast natural gas wealth and expand Oman's LNG exporting goals. Overall, BP will spend $16 billion over the next 15 years in order to tap vast pockets of natural gas beneath the Omani desert. The nearly 300 proposed wells will help Oman extract roughly one billion cubic feet (Bcf) per day and help the nation continue exporting natural gas, while easing its own rising appetite for the fuel.

Overall, BP expects to develop roughly 7 trillion cubic feet (Tcf) of gas in the project, as well as producing 25,000 barrels per day of condensate. The oil major will have a 60% royalty rate for whatever it produces.

But BP wasn't done yet. The second major deal for BP was a huge $45 billion project with partners such as Norway's Statoil (STO) and France’s Total (TOT). This project will tap the plethora of natural gas trapped under Azerbaijan's massive Shah Deniz field, then pipe that bounty all the way into Italy and Europe. Bringing gas from Azerbaijan to Europe is being seen a strategic move that will lessen the reliance on Russian exports and Gazprom's (OGZPY) current monopoly.

BP will lead the project and has the most to gain from the field and the expanded pipeline.

Finally, BP is getting some love here at home in the U.S.A. The energy stock found a discovery in the Gulf of Mexico that promises to be huge. The Gila well — which is co-owned with ConocoPhillips (COP) — was found in the Paleocene region of the Gulf.

It was here that BP found success with numerous other deepwater wells. The discovery closest to this new find has at least 1 billion barrels of recoverable resources, which was the biggest find in the region in more than a decade. While it's too early to tell just how much oil the new well will contain, the potential is certainly big for BP and its shareholders.

Coming Around On BP Stock

To put it bluntly, these three "wins" are enormous positives for beaten down BP. It seems like it's finally gotten back to the business of exploring and producing oil and natural gas. That's a good thing, because its rivals have had essentially three years of E&P growth while BP dealt with asset sales to pay off its spill claims.

BP isn't out of the woods just yet on that front. But these deals will ultimately lead to higher cash flows, dividends and share growth — all of which could help cushion the lingering effects of the Deepwater Horizon disaster for shareholders.

Speaking of cushions, BP stock is dirt cheap — currently trading for a P/E of less than 6. Given the new deals and that inexpensive multiple relative to its peers, BP stock could finally be moving into the buy category. Add in BP's nearly 5% dividend and shares are starting to look like a real value- despite the still lingering spill issues.

For investors, BP looks like its turnaround is finally beginning to shape.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.