Roughly 7.5 million barrels of oil are produced every single day in America. While that's only about 40% of our daily demand, it's heading in the right direction. In fact, net imports are expected to have fallen from a peak of 60% in 2005 to just 29% by next year. Clearly, the oil and gas boom we've been reading about is making a real impact. 

The booming Bakken and Eagle Ford shale plays have delivered much of the recent production gains. However, future gains could come from another shale play that by some estimates holds more oil and gas than both of the plays combined. Best of all, while the play has actually been producing for decades, it is really just getting started on the next phase of its booming growth.

The play I'm referring to is the Permian Basin of Texas. While it has already produced more than 30 billion barrels of oil in its history, there is still a lot of oil left in its tank. Producers are using new technology to target the play and the results are truly stunning. Take a look at the following slide and note how production has shot up in recent years:

Source: Pioneer Natural Resources Investor Presentation (link opens a PDF)

The slide notes that the initial boost was attributed to an increase in vertical activity, which were done in lower levels of the play. However, more recent growth has been fueled by a switch to horizontal drilling.

Horizontal drilling has been a real game-changer for Pioneer Natural Resources (PXD -0.65%). On the company's last conference call CEO Scott Sheffield said something that's really incredible. In talking about a recent well that was drilled horizontally, he noted that in six months the well had produced about 140,000 barrels of oil equivalent. What's truly remarkable is that a typical vertical well would have taken 30 to 35 years to produce the same amount of oil. That's game-changing, and it's the main reason why the Permian can be expected to really drive oil production growth over the next few decades, as the chart below clearly demonstrates.

Source: Pioneer Natural Resources Investor Presentation

Note how oil production is expected to steadily climb from about 1.2 million barrels per day to nearly 3.5 million barrels a day by 2025. That trend will not only make America's energy future more secure, but it will deliver profitable growth for Permian producers.

Pure-play Permian producer Concho Resources (CXO) is one of the many companies with a great position in this play. Focused drilling has its oil production up 22% over the past year. This has helped it push its cash margins back up to historic levels. But, its best days are very likely still to come as it's currently working to determine how best to develop the significant resource potential that it has already identified.

Meanwhile, the Permian is a play that natural gas producers like Devon Energy (DVN -0.95%) are turning to in order to deliver higher margin oil production growth. This year alone Devon expects to grow its oil production from the play by nearly 40%. The Permian is really the backbone of its plan to grow its oil production by 16%-19% this year, in order to move the needle on the oil portion of its production mix, which stood at 24% of total production as of the end of last quarter.

The Permian Basin really is a world class oil play. Over time it could turn out to hold the best shale oil resources in the country and really become the next great oil field. That's actually pretty remarkable, because it already has been one of America's greatest oil field's. However, its the future potential growth that puts companies like Pioneer, Concho and Devon in a position to deliver solid, long-term oil production growth, which should really reward investors.

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