The legacy of BP’s (NYSE:BP) Deepwater Horizon disaster has spread beyond the companies involved in that particular well. Since the moratorium on drilling has been lifted, activity has returned to the region and the latest auction was a rousing success, led by deepwater permits.

However, the return to production activities has come with a few extra caveats.

Aside from new safety measures — such as double ram blowout preventers — on new rigs in the region, the U.S. Department of Interior’s Bureau of Ocean Energy Management, Regulation, and Enforcement has enacted new rules governing the production process and one very big rule about what happens after a well finishes up its usefulness.

Although that ruling can be a headache and a cash sink for the E&P firm’s various operating wells in the Gulf, it has been blessing for a small handful for firms that do well decommissioning. And there’s big investment money to be made in this “idle iron.”

New Regulation

In the wake of Deepwater Horizon spill, the BOEMRE got serious when it comes to preventing another such disaster. As such, they enacted legislation that requires operators to plug and abandon (P&A) wells and subsequently decommission platforms that have outlived their productive lives. Now, three years after the law was enacted, decommissioning activity in the Gulf is set to surge.

With the new regulation in place and the Gulf of Mexico becoming an aging field — at least the shallow and midwater regions — decommissioning operating wells is generating a boom for businesses that specialize in the removal of structures and seabed debris.

There are more than 813 platforms and other structures that are “dead in the water,” representing a staggering $3 billion opportunity for the decommissioning market over the next five years. And that amount could grow as more rigs age and increase the volume of decommissioning and demand for contractors.

Two Picks

While that $3 billion might seem small compared to some of the huge CAPEX we’ve seen lately from several energy producers, the bulk of P&A providers are smaller firms. Even a few billion dollars can really move the needle. In fact, most of the decommissioning players in the Gulf are family run mom-and-pop businesses.

However, there are a few publicly traded firms investors should look at to cash in on the trend.

As the leading provider of construction and abandonment services in the Gulf of Mexico, TETRA Technologies (NYSE:TTI) should be on your list if you’re looking at P&A as a portfolio play. TETRA offers a variety of solutions for abandoning depleted oil wells in addition to decommissioning pipelines, platforms and associated infrastructure. More importantly, the company has made this business sector a priority, which will only serve to strengthen its dominant position in P&A.

Those efforts are already taking shape, given the company’s reported 250% increase in non-GAAP earnings per share for TETRA’s latest quarter. Shares of TTI currently look cheap at just 10 times next year’s earnings.

For investors really looking to “move the needle,” small-cap Cal Dive (NYSE:DVR) is a good pick. Through its diversified fleet of 29 vessels — including 10 construction barges capable of operating in water depths of up to 1,000 feet — DVR provides manned diving, undersea pipeline construction, platform installation, decommissioning and salvage services to the offshore industry. While the 1,000-foot range might not seem like much, remember that most of the region’s idle iron sits in shallow waters — perfectly suited to Cal Dive’s capabilities.

With revenues of about $147 million and an order backlog of around $172 million, Cal Dive will really profit from increased P&A activities in 2013. It’s already been tapped by several firms to tackle their well decommissioning efforts. Back in January, Cal Dive inked a deal with an unidentified Gulf of Mexico operator to cover the abandonment of 16 wells, seven pipelines, and the removal of eight structures. That deal is estimated to be worth about $25 million.

While P&A might not be as sexy as fracking or deepwater drilling, the recent rules changes in the Gulf could make it an interesting and profitable side-play in the energy markets. Both TETRA and Cal Dive are two prime choices to take advantage of the pickup in P&A activity.

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