Source - SMW
Faroe Petroleum  saw a significant reduction in cash flow from operations, as a result of lower production and a reduction in realised prices to $38.5 per boe in H1 2016 from $51.5 per boe in H1 2015.

Revenue in the period was £23.1 million (H1 2015: £51.1 million).  Revenue adjusted for under-lifts and over-lifts was £43.3 million (H1 2015: £63.7 million).  

The decrease in revenue reflects a reduction in production, mainly due to Njord and Hyme being suspended in June 2016 for upgrades and strengthening.  Hedging gains of £4.1 million net of premium were realised in H1 2016 (H1 2015: £4.2 million) and are included in other income.  

Hedging gains in H1 2016 were predominantly from gas sales where Faroe hedged a significant portion of production at a weighted average 44 pence per therm in the period.

Cost of sales for the period was £24.2 million (H1 2015: £36.0 million).  Cost of sales excluding over-lifts and under-lifts (see paragraph above) was £44.4 million (H1 2015: £48.5 million) reflecting a reduction in production. DDA for the period was £13.7 million (H1 2015: £20.4 million).  With lower revenue and higher opex per boe, EBITDAX in H1 2016 was lower at £16.8 million compared to £39.8 million in H1 2015. 

Pre-tax expensed exploration costs for the half year were £25.9 million (H1 2015: £9.0 million) and include write-offs of the Kvalross (£14.5 million) and Perth (£6.4 million) costs and a number of licences where active exploration activity has ceased.  

Expensed exploration costs also include £1.7 million (H1 2015: £3.3 million) of pre-award expenditure, which comprises costs associated with licence round applications.  Expensed administration costs in H1 2016 were £4.2 million (H1 2015: £2.7 million).  

The increase in administrative expenses was due to the time-writing charge out rate for 2015 being adjusted in March 2016 with retrospective effect.  The Group made a loss before tax of £35.9 million (H1 2015: £0.4 million profit) which mainly reflects the operating loss as outlined above.  

The non-cash tax credit for the period was £22.9 million (H1 2015 tax charge: £7.1 million) largely reflecting lower profits from production in Norway and higher exploration write-offs.  

The post-tax loss was £13.0 million (H1 2015: £6.7 million).  

At 4:20pm: (LON:FPM) Faroe Petroleum PLC share price was +2.38p at 67.63p

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