The massive find of conventional oil on state land could bring relief to budget pains in Alaska brought on by slumping production in the state and the crash in oil prices.

The new discovery was made in just the past few days in Alaska's North Slope, which was previously viewed as an aging oil basin.

Spanish oil giant Repsol (REPYY) and its privately-held U.S. partner Armstrong Energy announced the find on Thursday, predicting production could begin as soon as 2021 and lead to as much as 120,000 barrels of output per day.

The oil resources lie in a well, called Horseshoe, that's 75% owned by Denver-based Armstrong. Repsol owns the rest of this well.

There are increasing signs that shale oil producers are preparing to ramp up output after surviving a two-year price war with OPEC.