Santos said Thursday it would scale back exploration drilling for unconventional gas resources in the Australian outback, as tumbling commodity prices continue to stymie a replication of the US shale-gas boom overseas.

"In the current climate our focus is on maximising efficiencies and operating only the best wells," Santos chief executive David Knox told shareholders at the company's annual general meeting.

"We are scaling back our unconventional program in the short term."

Santos's decision comes just weeks after Chevron Corp decided to pull out of an Australian shale-gas joint venture with Beach Energy.

The geological properties of Australia's vast shale-gas reserves remain little understood. Santos and Beach have experienced some promising results from early exploration and appraisal drilling, although the extraction process remains relatively expensive and it could be many years before reserves can be developed commercially.