Texaco Inc. geologist Robert Ryan didn't suspect he was helping change the energy future of the Gulf of Mexico when he gave the go-ahead for a well that would break the world record for deep-water drilling.

The project known as BAHA, undertaken in 1996 by Texaco and its partners, Royal Dutch Shell Plc (RDSA), Amoco Corp. and Mobil Corp., was a dry hole. That normally would've made it a flop. Instead, BAHA's discovery of oil-rich sands where none were thought to exist was the first step in unlocking a $1.5 trillion trove of crude that's revived the prospects of a body of water many thought had long ago given up most of its fossil-fuel riches.

Just as technology has allowed explorers to tap vast new oil and natural gas supplies in onshore shale fields, it's now reinventing the Gulf. BAHA was the first deep-water well to try plumbing the Lower Tertiary, a layer of the earth's crust formed more than 25 million years ago after mammals had replaced dinosaurs as the dominant life form.

A series of recent finds in the ultra-deep has profoundly changed the thinking on U.S. offshore geology, with 2013 seeing the Gulf of Mexico become one of the most promising frontier oil plays in the world and the fastest-growing offshore market.

New seismic equipment and computer power has allowed explorers to see into once-invisible layers of rock. Engineering innovations enable them to drill five miles into the earth through waters more than 10,000 feet deep, where temperatures are more than hot enough to boil water and high pressures approach the weight of four cars resting on one square inch.

The Gulf is heading for record deep-water output equivalent to almost 2 million barrels of oil a day in 2020, according to industry researchers Wood Mackenzie Ltd. The U.S. estimates about 15 billion barrels of recoverable oil remain to be found in the Lower Tertiary.

While most U.S. shale fields have now been identified and mapped, the Gulf is seen as having much bigger yet-to-be-discovered potential -- 48 billion barrels of oil compared to the 13 billionbarrels estimated for onshore and coastal oilfields, according to U.S. data.

Investment is pouring in, with 42 drilling rigs operating in 1,000 or more feet of water as of Sept. 9 -- 35 percent more than four years earlier, according to U.S. data on the Gulf. By the end of 2015, 60 rigs are slated to be working in the deep water off U.S. shores, estimates Brian Uhlmer, an analyst at Global Hunter Securities LLC in Houston.

David Fuller's view This is a fascinating and hugely significant discovery and development project which is only now coming into production. Importantly, technology is once again proving that Mother Earth remains a cornucopia of oil and gas supplies for our rapidly developing global economy. Indeed, it actually underpins our global economic expansion for many more decades, during which renewable energy sources, led by solar power, will be refined and perfected to the point where they can eventually become the major sources for our inexhaustible energy requirements.

Lest future generations take this almost for granted, think back over the second half of the last century and the earlier years this century. Most forecasters were convinced that recoverable supplies of global oil were rapidly diminishing. They feared that the free world would be held to ransom by a dwindling, mostly despotic and unstable group of energy suppliers. They forecast that energy prices would only rise in real rather than inflationary terms.

Fullermoney has forecast that technological innovation would result in a much more favourable outlook for both energy supplies and their real cost before the end of this decade, not least since US oil companies invented hydraulic fracturing technology, commonly know as fracking.

Today, global energy supplies remain tight, not least because most other countries have been slow to adopt fracking technology, mainly for political reasons and because they invested heavily and prematurely in expensive, unreliable and often objectionable renewable energies of which wind farms are the worst. Nevertheless, virtually all countries now have the capacity to improve both the security and cost of their future energy supplies.

Leading oil and natural gas companies are an undervalued sector, arguably with a bright future, despite the certainty that oil prices will decline somewhat further in real terms. Their future long-term earnings will be boosted by technological improvements and expanding demand as the global economy continues to grow.

Chevron Corp (CVX US) (monthly, weekly & daily) sells at an estimated p/e of 10.24 and yields 3.22%, according to Bloomberg. It remains in an orderly long-term upward trend.

Exxon Mobile (XOM US) (monthly, weekly & daily) sells at an estimated p/e of 11.61 and yields 2.85%. It is steadying near the lower side of its medium-term range

BP (BP/ LN) (monthly, weekly & daily) sells at an estimated p/e of 9.05 and yields 5.79%. It remains rangebound and has yet to recover following the expensive explosion at its Macondo well in the Gulf of Mexico in April 2010.

Royal Dutch Sell B-Shares (RDSB LN) (monthly, weekly & daily), which is the largest position in my personal long-term investment portfolio, sells at an estimated P/E of 8.84 and yields 5.23%. It is also steadying at the lower side of its medium-term trading range.