Faroe Petroleum has managed to reduce its operating costs to $22 per barrel.

The independent oil and gas company confirmed the five-month run at $22pb in its latest production update.

In turn, the firm’s cash and net cash increased from £14million in December to £107million and £84million in May this year.

Production for the five month period averaged 11,324 barrels of oil equivalent per day (boepd). Following a successful wireline campaign on the Schooner and Ketch fields, (UK) production has continued at stable rates, surpassing company forecasts.

Despite the dipped oil price, the company confirmed an aggressive drilling campaign for the year ahead.

Chief executive Graham Stewart said: “I am delighted to report that Faroe Petroleum is performing very well despite continuing low oil prices and sector instability. 2015 is proving to be Faroe’s most active year to date, with several exceptional prospects to be drilled and production at an all-time high. Faroe’s consistent strategic focus and prudent approach to financial management have ensured that we have a strong balance sheet and are well placed to take advantage of attractive opportunities.

“Kicking off our follow-up drilling programme on the significant 2014 Pil and Bue discoveries, I am very pleased to announce the spudding of the Boomerang exploration well, located in the same licence and within tie-back distance of the producing Njord field infrastructure. I am also delighted that we can look forward to a further near-term exploration well, on the Shell-operated Portrush prospect, again located close to the Njord and Draugen fields.