* Seven oil and gas discoveries made in recent weeks
* 2015 still expected to see lowest discoveries on record
* Exploration companies slash budgets after oil collapse
* Graphic on oil discoveries: http://link.reuters.com/ted84w
By Ron Bousso
LONDON, May 29 (Reuters) - Exploration firms have made arare run of oil and gas discoveries in recent weeks as moretargeted search strategies bear fruit, but they offer littlerespite to a sector that remains severely bruised by the oilprice slump.
Global exploration and production (E&P) companies that scourfrontier lands and seas in search of new energy reserves havehad meagre success in recent years, putting many under pressurebefore a near halving of oil prices since last June.
Seven successful discoveries with potential to becomecommercial have been made so far in 2015 by explorers rangingfrom independents such as Premier Oil to majorsincluding ExxonMobil, according to Anish Kapadia,Managing Director, International Upstream Research at Tudor,Pickering Holt and Co (TPH) investment bank.
Of the seven, all but one were made in the second quarter ofthe year.
By contrast, Last year saw a total of 10 new welldiscoveries, of which only 2 are estimated to be commerciallyviable, based on the TPH "Top 50ish" wells index.
"We haven't had 6 discoveries in a single quarter for a longtime," Kapadia said.
"This year people are drilling a lot less as explorationspending has fallen sharply, so companies are focusing on higherquality projects," Kapadia said.
The decline in oil price due in large part to growingproduction from U.S. shale production has led the oil and gassector to slash budgets and their exploration programmes.
"It is always a game of luck. But the luck was bound tochange because the lack of success across the industry meantthat people are taking less risk in a tighter market. With lessmoney around they can do more technical work before actuallydrilling," an industry source said.
Although the sector's shares have recovered in recent monthsafter a rebound in oil prices, investors remain wary with theoutlook for oil prices unclear.
"A cautious investor base recognises the value of coreproducing assets, but is unconvinced about pre-developmentopportunities and focuses on the risks ahead rather than theupside opportunity," analysts at Barclays said in a note,maintaining their view on the European E&P sector as neutral.
Norwegian-based consultancy Rystad Energy says 2014 was theworst year on record for conventional oil and gas discoveries,with 78 with estimated reserves of 13.3 billion barrels of oilequivalent.
And despite the sharp rise in recent weeks, 2015 is expectedto be even weaker, according to Rystad's ECude database.
"For this year, there has been less activity and spending byoil companies due to the oil price collapse. Exploration is thefirst thing you look at to cut," Rystad analyst Nils-HenrikBjurstrøm said.
The latest discovery was announced this week at the IsobelDeep exploration well in the Falkland Islands by Premier Oil,Falkland Oil and Gas and Rockhopper, just weeksafter the first discovery there.
Another was announced earlier this month at the Liza well inthe Stabroek block 120 miles offshore Guyana, which is developedby a consortium including ExxonMobil, Hess and China'sCNOOC. (Reporting by Ron Bousso, editing by David Evans)
