Occidental Petroleum Just Discovered Oil in an Exploratory Well Off the Gulf of America. Here Are 2 More Stocks That Could Soar as a Result.

The U.S. oil and gas company Occidental Petroleum (NYSE: OXY) announced this morning that it has found oil in the Gulf of America, previously known as the Gulf of Mexico. The company said the discovery was made at the Bandit site, about 125 miles south of the Louisiana coast.

During exploration at Bandit, Occidental observed high-quality, full-to-base oil-bearing Miocene sands. The company owns over 45% of the Bandit and said it is still examining the results of its discovery to determine next steps.

Image source: Getty Images.

Occidental also said there is potential for a subsea tie-back, or connection, to nearby Occidental facilities, which would allow the company to leverage underwater pipelines and infrastructure to connect this newer offshore well to existing production platforms.

"Occidental is focused on strengthening our Gulf of America portfolio," Jeff Simmons, senior vice president of subsurface technology and chief petrotechnical officer, said in a statement. "We believe this discovery demonstrates the continued importance of the Gulf of America as a strategic source of reliable domestic oil supply that supports long-term energy security."

Aside from Occidental, here are two other oil stocks that could benefit from this discovery.

The Bandit prospect is a joint venture

Oil production in the Gulf of America accounts for roughly 15% of U.S. oil production, so it is a key strategic area for U.S. oil companies.

On its fourth-quarter earnings call, Occidental Petroleum's management team said it planned to invest in projects in the Gulf of America, particularly mid-cycle projects, which are generally characterized by a high capital investment up front that yields more reliable cash flow long term. Occidental Petroleum views mid-cycle projects as a key part of its strategy.

Occidental, however, is only one of three owners of the Bandit prospect. Chevron (NYSE: CVX) owns over 37% of the project, while Woodside Energy Group (NYSE: WDS), an Australian petroleum company, owns 17.5%.

According to the digital news site Chron, the Bandit site, with its "very high-pressure conditions," is considered one of the deepest wells in the Gulf of America, at over 40,000 feet. The project hopes to break a record set by the nearby Ardennes well in 2013.

Experts believe a successful well in this area could extract 230 million barrels of oil equivalent (BOE), which is much higher than the average well's production in the Permian Basin, another key U.S. oil field in west Texas and parts of Southeastern Mexico.

Obviously, there is a lot riding on the Bandit, so the discovery announcement today is good news for Occidental, Chevron, and Woodside Energy, all of which have seen their stocks skyrocket this year, due to higher oil prices resulting from the Iran war.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.