Exploration spending in the West Australian oil and gas sector dropped by more than 10 per cent in the September quarter.
The latest WA Resources and Economics Report shows that contributed to total expenditure on mineral and petroleum exploration falling by 6.2 per cent from the prior quarter.
"The decline in total exploration spend is driven by the decrease in petroleum exploration which fell by 10.6 per cent from the previous June quarter to $752 million," the report, compiled by the WA Chamber of Minerals and Energy and accounting firm KPMG, shows.
It said capital expenditure on exploration projects in the WA mining and oil and gas sectors fell for most of 2013, as the construction phase moved to production, primarily in iron ore and gas.
But the picture appears to be more positive for mining companies.
Total mineral exploration expenditure appeared to turn around in the September quarter, increasing by 3.5 per cent to $396 million.
"While it is too early to determine, this could potentially be a positive sign that exploration companies have come out of the end of the downturn and are seeking to re-commence exploration initiatives," the report said.
In the six months to October 2013, total capital expenditure on committed major projects in Western Australia fell by 14 per cent to $121.8 billion, from $141.7 billion in the six months to April.
The drop in value was due to a large number of major projects being completed during the period.
The market value of companies measured by the index at the end of November stood at $78.9 billion, down 0.7 per cent from the end of August.
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