Editor’s note: A previous version of this article stated that Cobalt had $19 billion in cash and liquidity; this has been corrected to show that the company in fact has $2.3 billion in cash and liquidity. The Fool regrets the error.

In 1996, a hunch paid off when a geologist received approval to drill for oil deep in the Gulf of Mexico. Drilling into a geologic formation referred to as the Lower Tertiary, oil was discovered where none was thought to exist. Subsequent advances in technology allowed geologists to see deeper into the ocean floor where salt deposits had previously obscured the view. With the better look, oil companies found oil worth pursuing. As the chart below shows, rather than declining oil production, offshore Gulf oil looks to grow. Let's look at some companies set to profit from it. 

 

 An old hand in the Gulf
As owner of the largest natural gas processing facility in the Gulf, Anadarko Petroleum (APC), constantly makes money from its deepwater exploration activities there. Boasting a 70% success rate for oil exploration and appraisal, it's not hard to see how Anadarko can generate $3 billion is free cash flow. The company projects even more production and revenues for the future.

The Gulf of Mexico figures prominently in this future production. During its presentation at the USB Houston Energy Symposium, Anadarko claimed eight exploratory wells in the Gulf, second only to its exploration of the massive Mozambique offshore natural gas fields. Underscoring the value of oil production, Anadarko recently sold a 10% stake in one of its Mozambique gas fields to finance other operations, including its Gulf of Mexico activities. Having scored three major oil finds in the Gulf this year, reallocated capital to the Gulf looks like a shrewd move.

Anadarko pays less than 1% in dividends, so its a growth stock investment. While it experienced ups and downs, particularly in conjunction with the Deepwater Horizon oil rig disaster, the stock has climbed from around $30 a share to just over $94 a share in the past five years.

A new kid on the block
The potential of oil in previously ignored geology drives Cobalt International Energy (NYSE: CIE). Emphasis, potential. The company focuses its offshore exploration work in the Gulf of Mexico, Gabon, and Angola. The thesis is the same in all three locations: search for oil in so-called pre-salt formations, places where oil exploration hasn't been done. As described above, potential exists in all these plays, but to date the company has yet to produce any oil or revenue.

So how much oil could Cobalt's assets contain? According to the company's recent investor presentation, its Gulf of Mexico and West African holdings could collectively hold as much as 1 billion barrels of oil equivalent with low entry costs. Great news for a company that went public in 2009. Unfortunately, first oil from any of its deep water plays isn't expected until mid-2016. More oil production should arrive the following year.

So how will the company fare from now until 2016? During its second quarter earnings conference call, Cobalt claimed just under $2.3 billion in cash and liquidity. The company projects capital expenditures of $750 million to $900 million for this upcoming year. All told, Cobalt believes it has funds to carry it "well into 2015." So what's going to happen in late 2015 to mid-2016? Repeated calls to the company seeking comment on this question were not returned.

Still drilling after all these years
Boasting the youngest fleet of drillships and with it, one of the highest average utilization rates and dayrates, SeaDrill (SDRL) provides the means to extract oil from under the Gulf's waves. At the end of August 2013, Seadrill had three rigs operating off the US or Mexican coast with three more either in transit or under construction. The company projects strong demand for its most lucrative rigs in the future.

For investors, SeaDrill offers an impressive dividend that has steadily climbed since 2009. The current yield comes in at about 5.9%. Further, the company sells at under 10 times earnings. The stock has climbed less than $10 a share in 2009 to around $45 a share today. Given that offshore drilling demand remains strong and trending toward longer term contracts, SeaDrill could well continue on its run.

The big dark cloud on the horizon is $3 billion in debt that comes due in 2017. Along similar lines, while SeaDrill reports an operating cash flow of $1.36 billion, its levered cash flow is a negative $516 million. Most of the company's debt pays for new rigs under construction and leased in advance by such companies as ExxonMobil, Statoil and Petrobras. Still, if for some reason demand for offshore drilling slows, SeaDrill could be in trouble.

Final Foolish thoughts
For overall safety, go with Anadarko. It just scored three big discoveries in the Gulf and owns assets in other US and foreign plays to spread the risk. The company enjoys a levered cash flow of $2.5 billion and growing revenues. With a dividend of less than 1%, an income stock it is not. For that, go with SeaDrill but mind the debt. Cobalt explores where oil is to be found, but with that funding gap in late 2015, early 2016, I'd steer clear until the company actually produces oil.