The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Nathan Slaughter NEW YORK ( StreetAuthority) -- With all the changes to the United States' energy landscape recently, it's easy to overlook one of the country's most important petroleum-producing regions: the Gulf of Mexico. For energy investors, drilling in the Gulf is hardly a new story. U.S. oil companies have been producing in this part of the country for years. Out of the 5 million barrels of crude the U.S. brings to the surface each day, 33% -- or 1.5 million barrels -- comes from this petroleum-rich region. But if you think this means we're done seeing growth in the Gulf, then you're sorely mistaken. According to the U.S. Department of the Interior (DOI), the Gulf of Mexico is home to roughly 75% of the nation's undiscovered offshore resources -- the bulk of which has been off limits to U.S. oil companies for years. But starting June 20, 2012, that's all about to change.
The auction is scheduled for June 20 in New Orleans... and the stakes are huge. As Director the Bureau of Ocean Energy Management (BOEM) Tommy Beaudreau said, "The Central Gulf of Mexico remains the area with the greatest oil and gas potential in the entire United States outer continental shelf." Overall, the BOEM estimates there are 31 billion barrels of oil and 134 trillion cubic feet of recoverable reserves in the central Gulf -- nearly a 4.5-year supply of oil and a 5.5-year supply of gas for the United States. That's a big prize waiting to be uncovered. Any of those 7,250 blocks could be hiding a bonanza. One stock that looks good now, but will likely look even better after June 20 is Anadarko Petroleum ( APC). As one of the world's largest independent oil and gas producers, Anadarko is one of the top players in the Gulf. The company has a working interest in more than 500 lease blocks that cover approximately 3 million acres. Anadarko has spent about $8 billion hunting in the Gulf and other places since 2005. And those investments have paid off in a big way -- adding 4 billion barrels to the firm's potential resource base. Better yet, Anadarko has a proven ability to develop new discoveries more quickly and efficiently than its peers. The credit belongs to eight production platform hubs, which link to satellite fields in the region. As it stands, Anadarko pulls about 110,000 barrels of oil equivalent out of the Gulf of Mexico every day. This accounts for one-sixth of the firm's overall production. And management has its sights set on 100 potential new targets. So when the DOI opens up 38 million new acres for exploration, odds are good that Anadarko will be knocking at the door. Even if they don't, then the company is still poised to bring mega-projects such as Heidelberg and Lucius online within the next two years -- both of which are brimming with more than 200 million barrels of oil and gas. Let me warn you though, there are plenty of risks associated with drilling in the Gulf. Deepwater well leaks can lead to lost revenue, fines, litigation, permit delays, public relations headaches and other serious problems that can send investors running.
But during the past five years, Anadarko has maintained an 80% success rate for deepwater exploration and appraisal, the best in the business. Over the same time frame, the company has raised annual sales volume by 144 million barrels, booked 1.5 billion barrels of new reserves, and generated $2 billion in free cash flow. All of that has translated into an 85% return for stockholders. Of course, past performance doesn't guarantee future results. But it does give you a good indication of the type of company this is. Action to Take: With the June 20 lease auctions unlocking a wave of new exploration potential in the Gulf, I think Anadarko looks like one of the best ways to play this coming oil boom. Nathan Slaughter does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.
This "Forever" Stock is up 13,000% in 40 Years... and it's STILL a Great Investment The Market Just Handed Investors 4 Major Bargain Opportunities... The ONLY Stock You Should Buy in This Sector