The value of exploration company Petrel Resources quadrupled after it said it had found as much as one billion barrels of oil off the south-west coast.
The vast reserves are in the so-called South Porcupine basin, which is a huge area off the coast of Kerry.
Petrel believes new computer analysis shows several oil fields on top of one another.
This would make it relatively easy to extract any oil because a single well could suck up oil from many fields.
The snag for Petrel is that any oil is 200km from the coast and lies beneath 1km of water and 3km of rock.
The oil industry is changing quickly as new techniques and high prices allow companies to extract oil from areas that were once believed to be too difficult to drill.
The International Energy Agency said it expects the United States to become the world’s largest oil producer by around 2020, temporarily overtaking Saudi Arabia, thanks to these techniques.
Shares in Petrel soared fourfold to 27 pence from 6 pence on London's AIM stock exchange after the company reported a raft of promising drilling targets in the South Porcupine basin.
Petrel is one of the many companies set up by serial entrepreneur and former UCD academic John Teeling, who has also made millions from whiskey and mining companies.
Mr Teeling told the Irish Independent that the success of Providence Resources, which has also found signs of gigantic oil reserves in the Porcupine Basin, had put Ireland on the map with international investors and oil companies.
Petrel would now look for a partner to share the expense of drilling for oil and apply to the Government for a licence, he added.
London stockbroker Northland Capital described Petrel's comments as "very bullish" but warned that drilling in these waters would be difficult and costly.
The Government sold licences to explore in Irish waters late last year after the previous administration started a process to issue new licences to encourage exploration.
There was little interest at the time and most licences were sold cheaply to Irish companies.
Like other exploration companies, Petrel has used advanced computer programmes to examine old data gathered during previous exploration campaigns.
This data can now be analysed using modern computer programmes that are much better at telling companies whether oil can be found in any area.
Providence Resources, which is looking for oil in several areas off the Irish coast, said yesterday that there were a possible 872 million barrels of recoverable oil at its Drombeg prospect off the west coast.
New seismic tests show there could be oil close to the ExxonMobil-operated Dunquin field, Providence told a conference on oil in the Atlantic, which was held in Dublin.
Petrel Resources is one of the many small exploration companies listed on London's AIM stock exchange but it has been around for 20 years in some shape or form.
It has been focused on Iraq and Ghana in recent times but previously drilled in Irish waters in the 1990s.
It was Petrel chief executive David Horgan who kept plugging away at the company's Irish interests when other directors had lost interest and wanted to focus on exploration further from home.
Yesterday, as Petrel's shares soared, Mr Horgan's strategy seemed to be paying off.
Mr Horgan has benefitted from several trends in the oil industry.
The first trend is rising prices, which make it economically feasible to extract oil from deep sea fields.
The second trend is new technology, which makes it easier to find oil.
The third trend is a new belief in the prospects for major oil finds in Ireland.
That belief has already pushed shares in rivals such as Providence and Lansdowne to great heights.
Yesterday was Petrel's turn.
Now these companies must find partners and begin the difficult work of extracting the oil and bringing it ashore.