There are early signs that the global exploration sector may soon return to profit, according to Andrew Latham, Wood Mackenzie’s vice president of global exploration research.

“Based on the volumes that we can already measure, resource discovery costs are close to $2 per barrel of oil equivalent [in 2017],” Latham said in an organization statement.

“If these volumes have average development values of around $2 per barrel of oil equivalent, then the year’s discoveries will indeed be worth more than they cost to find,” he added.

Despite the potential increase in profitability, there will not be a surge in global exploration activity in 2018, Woodmac revealed.

“We expect most companies will maintain a highly cautious approach to exploration for a while yet,” Latham said. “Industry investment and well counts will remain stubbornly low in 2018”.

Woodmac expects fewer explorers to focus on fewer plays in 2018 and anticipates conventional exploration and appraisal investment to be seven percent below the 2017 spend of $40 billion.

The most-favored plays will be deepwater spots promising high resource density, rapid commercialization and breakeven prices below $50 per barrel, Woodmac stated. The organization highlighted that most of the best of these are located around the Atlantic margins. 

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