Here's one measure of just how big the current crude oil production boom is: Sometime this year, monthly U.S. crude oil production is expected to exceed crude oil imports, a situation that hasn't been seen since February 1995.
The reasons are the shale oil and gas boom, made possible by hydraulic fracturing, and discoveries of huge reserves beneath the deep waters of the Gulf of Mexico, an area where Texas-based Anadarko Petroleum Company (NYSE:APC) is making big discoveries.
On Tuesday, Anadarko said its 2 Shenandoah exploratory well found a 1,000-foot deep zone of pay dirt. To find the oil, Anadarko drilled to 31,405 feet below the seabed. The rig that drilled the wildcat was in 5,800 feet of water.
"With ownership in the successful Shenandoah wells, the adjacent Yucatan prospect, and the very encouraging results from the nearby Coronado well, Anadarko is strategically positioned in the Shenandoah Basin, which has the potential to become one of the most prolific new areas in the deepwater Gulf of Mexico,” Bob Daniels, senior vice president of deepwater and international exploration, said.
Wall Street is paying close attention. UBS AG responded on Wednesday by raising its price target on Anadarko's shares to $105 from $102. Its shares recently traded at $86.27, up 3.6 percent, or $2.99.
"Conservatively assuming an average net pay of 650 foot for Shenandoah, we estimate gross resource potential at about 720 million barrels of oil equivalent, above our prior 325 million barrels of oil equivalent estimate," UBS analyst William A. Featherston said in a note.
Capital One Southcoast called the discovery "game changing" for Anadarko, adding the "exciting story is far from over," according to MarketWatch.
Discoveries such as the 2 Shenandoah are part of the reason for the Energy Information Administration's forecast that U.S. crude oil production will exceed imports sometime this year.
“Monthly crude oil production in the United States is expected to exceed the amount of U.S. crude oil imports later this year for the first time since February 1995,” the EIA said. “The gap between monthly U.S. crude oil production and imports is projected to be almost two million barrels per day by the end of next year.”
Here's how the EIA envisions the event:
Mike Obel assigns, edits and writes stories about business, markets, finance and economics. Before coming to International Business Times, he worked on the Finance Desk of...