Deepwater well in the Gulf of Mexico could become largest source of new domestic oil for U.S. since discovery of Alaska’s North Slope.

Chevron Corp., Statoil ASA and Devon Energy Corp. have announced an oil discovery deep below the Gulf of Mexico that could potentially boost U.S. oil and gas reserves by as much as 50 percent.

Known as the Jack 2, the well is located approximately 270 miles southwest of New Orleans and has produced a sustained flow rate of 6,000 barrels of oil per day. The well was drilled over 5 miles deep below the sea’s floor and marks a new area for exploration for oil companies who had passed previously due to the great depths involved in drilling.

Although the finding will not produce an immediate impact on domestic oil supply the discovery could lead to a huge boost to the U.S. reserves. Chevron is expected to drill another appraisal well next year and could actually begin commercial production as soon as 2008.

Chevron, the largest lease holder in the deepwater Gulf of Mexico, owns 50% of the Jack 2 well. George Kirkland, an executive vice president for Chevron  stated “ Our strategic position in the deepwater Gulf of Mexico will continue to be a platform for future growth.”

Statoil ASA and Devon Energy Corp. each own 25% of the Jack 2 well.