Cautious explorers still eyeing new Australian opportunities

High costs and mature areas have not deterred investors from Australia's upstream

Costs are high and budgets tight, but explorers are still keen to tap Australia's emerging plays. That's true even if drilling more mature areas to feed the country's expanding liquefied natural gas (LNG) export business - or even hit oil - may look more attractive.  Investors assessing Australian opportunities in their global portfolios remain concerned about high discovery costs and the expected decline in returns. As a result, the number of offshore wells drilled in Australia has fallen by more than two-thirds since 2003, while the total cost has increased five-fold (see Figure 1), to more than A$130 million ($121m). Higher rig day rates are partly to blame, but drilling is also shifting