The MLP bear market is now history, but so too are many of the upstream partnerships that used to offer yields tied to oil and gas production.

Linn Energy and Breitburn Energy Partners have filed for bankruptcy, while Atlas Resource Partners is teetering on the brink. The remaining operators have drastically slashed or entirely suspended distributions, as low energy prices expose their excessive leverage and weak cash flow. Steering subscribers away from upstream MLPs in 2014 might have been the most valuable advice we’ve shared here.

The upstream MLP sector got what it deserved: it was a highly promotional structure made possible by  mountains of debt, its high costs obscured by repeated helpings of the borrowed “growth capital.” But we haven’t stopped fielding questions about investment opportunities in oil production.

With oil prices still  unsustainably low, there ought to be a way to profit from their eventual recovery while still earning a decent yield. And there is, only it’s not an MLP — not that that has ever stopped us.

BP (NYSE: BP) pays a quarterly dividend of 60 cents per share, which works out to an annualized yield of 6.7% based on the stock’s latest close near $36.

Of course, in dubious imitation of the bad old days at the upstream MLPs (and, to be fair, of the current state of affairs at the other oil supermajors), the dividend is currently being financed entirely by growing debt.

Like its brethren, BP has been hit hard over the last 18 months by the collapse of energy prices, which has wiped out roughly $15 billion in annual upstream profits.

The bottom line has been cushioned somewhat by profits from BP’s far-flung refining and petrochemical operations, primarily in Europe.

The company continues to toil under the heavy burden of sanctions and reparations for the 2010 Gulf of Mexico oil spill. The Deepwater Horizon disaster has so far cost BP more than $56 billion, with billions more yet to be paid out for remediation and claims by Gulf Coast businesses. But a recently approved settlement with states and the federal government at least lends hope that in a few more years outlays for the spill might start to dwindle.

By then, the dismal industry conditions that have torched BP’s upstream profits without doing the refining business many favors will hopefully be just a nasty memory.

Source: BP’s Q1 earnings presentation

The dramatic cost reductions BP has pushed through at its drilling sites and production platforms around the globe have management aiming to cover the dividend as well as capital spending out of operating cash flow next year even at oil prices as low as $50-55 per barrel.

And while Gulf spill costs will continue to tax the balance sheet until crude goes significantly higher, the asset sales already realized and others still to come should help BP get there without cutting the dividend.

What we’re left with is a thoroughly diversified and well run supermajor with long-term profitability currently obscured by the energy price slump, the refining margin slump and of course those onerous spill costs. At the same time BP has the proved reserves and drilling prospects that should allow it to maintain modest organic production growth and rebuild its cash flow at sustainable crude prices.

In fact, BP remains by far the cheapest supermajor based on the value of its reserves, as this comparison from May shows:

This is not going to be a get-rich-quick pick, but that’s not what we’re after in this bottom-fishing expedition. We’re after a reliable yield and capital appreciation tied to meaningfully higher energy prices in the years ahead. And that’s a deal BP seems likely to deliver. We’re adding the stock to the Growth Portfolio with a buy limit of $42.