Profits from oil and gas exploration may have hit a seven-year high in 2017, according to analysts Wood Mackenzie.
The market intelligence specialists say firms have emerged leaner from the oil downturn, focussing on high-impact discoveries after a period of low-risk, low-reward activity.
WoodMac says that while it is too early to measure exact profits, they could be at their highest since 2010.
Meanwhile, exploration well success rates were at 36% – the highest since point since 2013.
Six giant and 15 large discoveries were made in 2017, accounting for 78% of total discovered resources.
Kosmos BP’s Yakaar gas discovery in the ultra-deepwater of Senegal is the largest discovery of the year so far.
Meanwhile WoodMac expects giant discoveries of Zama in Mexico, Eridu in Iraq, Whale in the US Gulf of Mexico and Horseshoe in Alaska to be declared commercial in the near-term.
Dr Andrew Latham, vice president of exploration research said: “2017 looks like the most profitable year for the oil and gas exploration sector since 2010.
“Explorers invested only around US$40 billion in conventional exploration and appraisal, down from US$95 billion in 2014. This reduced spend focused on making discoveries with a good chance of early commercialisation.
“This included more emphasis on high-impact exploration in ultra-deepwater and frontier basins after a period of focusing on low-risk, small-prospect drilling.
“Exploration well success rates of 36% are the highest since 2013. Operators are being rewarded for refocusing their portfolios and high-grading prospects. The average new field discovery size held up at 63 mmboe compared with 57 mmboe in 2016 and a 10-year average of 68 mmboe.
“It is too early to measure exact exploration returns for 2017, but there is a strong likelihood that exploration created value. Low discovery costs and a weighting towards large, commercial oil finds should mean that full-cycle returns achieved double digits for the first time since 2010.”
Exploration added over 12 billion barrels of oil equivalent conventional new field volumes in 2017.
Oil accounted for 7 billion barrels – nine of the top 10 largest discoveries were oil-weighted.
Dr Latham added: “These volumes are currently the smallest annual total for a decade but we expect that they will be boosted by further disclosure and appraisal.
“This resource creep has averaged around 40% over the decade. If repeated for 2017, total discoveries for the year will amount to 16-18 billion boe.”