Oil exploration has never been for the faint-hearted. But the risk in Australia is there will be fewer and fewer companies prepared to step up to the challenge.

Optimism always rides high in the run-up to a drilling campaign, inordinately so among some “mum and dad" investors. But the cold reality of failed wells hits hard, especially for smaller companies: just witness AWE ’s disappointing drilling run in New Zealand, which drove a 35 per cent drop in the stock price in little over six months. Retiring chief executive Bruce Wood would have hoped for a very different legacy from the $175 million program.