Chevron (as operator for its partners, Phillips, Champlin, and Impkemix) discovered the Point Arguello oil field in 1981. The discovery well, the Chevron et al P-0316-1, was drilled in federal waters 8.5 mi (13.7 km) south of Point Arguello, California. Delineation drilling has confirmed the discovery of a giant oil field with estimated recoverable reserves in excess of 300 million bbl of oil.

The oil field is located within a small depocenter at the southern edge of the offshore Santa Maria basin. This local depocenter may contain over 15,000 ft (4,600 m) of Neogene rocks. The Point Arguello accumulation is trapped in a large north-northwest-trending anticlinal complex. The primary reservoir is the middle and upper Miocene Monterey Formation, composed of fractured cherts, porcellanites, siliceous mudstones, and dolostones. Calculated fracture permeabilities range up to 3 darcys. Crestal wells have indicated productivities, after acid, of approximately 6,000 BOPD.