A little-known energy exploration company said on Tuesday that it has made a world-class oil discovery in remote Alaska, potentially breathing new life into the state’s declining North Slope.

Caelus Energy LLC, a closely-held firm backed by private-equity fund Apollo Global Management LLC, said it made the oil find in the shallow waters of Smith Bay, about 300 miles north of the Arctic Circle.

The company says it expects to be able to extract between 1.8 billion and 2.4 billion barrels from the discovery, probably using barges built along the Gulf Coast, then towed to Alaska and permanently sunk in the bay to create man-made drilling islands.

If those initial estimates prove to be correct, the discovery would be substantial—larger than Exxon Mobil Corp.’s 2015 discovery off the coast of Guyana in South America.

“It is not going to be easy, but we’ve had projects like this around the world,” said Caelus Energy Chief Executive James Musselman. He previously led Kosmos Energy Ltd. and the former Triton Energy, exploration firms that made giant finds off the west African coast.