Norway's Statoil cut its 2016 capital spending guidance as it missed quarterly earnings forecasts on July 27, hit by persistently low crude prices and higher-than-expected costs.

Statoil's adjusted operating profit fell almost 70% to $913 million in the second quarter from $2.9 billion a year ago, well below analysts' expectations for about $1.4 billion.

It was the second oil major this week, after BP Plc (NYSE: BP), to post below-par results and to announce yet another reduction in 2016 investments.

"[The] consensus was too optimistic on cost reduction," said RBC Capital Markets analyst Biraj Borkhataria, noting that, at $2.9 billion, capex far outstripped a cash inflow of $1.1 billion in the quarter.

Statoil is slashing jobs, projects and investments to cope with a 60% drop in the price of crude since mid-2014.

In February, it pledged to increase cost-cutting by 50% to $2.5 billion on an annual basis from this year and to ax up to 19% of its workforce, compared with cost-cutting and job reductions at the height of the crude price boom.

Statoil's shares were down 2% at 1245 GMT, the worst performance in a European oil and gas sector up 0.89%.

The fall was tempered by Statoil's plan to cut its 2016 target for capital spending to $12 billion from $13 billion, and its 2016 exploration spending target to $1.8 billion from $2 billion.

All three divisions of the company missed forecasts, and it was Statoil's worst-ever adjusted operating profit, apart from that posted in its first quarter.

"What this set of results does do ... is serve as a reminder of how challenging a $45 per barrel environment really is," Barclays said in a note.

Costs

Statoil's key Norwegian E&P division produced less oil and gas than expected, had higher exploration costs and higher-than-expected operating expenses and general and administrative expenses, Swedbank analyst Teodor Sveen-Nielsen said in a note.

For the international division, "at first glance it looks like the miss is solely explained by high opex," he added.

For its third division, marketing, midstream and processing, Statoil cited weaker refinery margins, as did BP.

"Our financial results were affected by low oil and gas prices in the quarter," CEO Eldar Saetre said during a presentation, adding that maintenance activity in the quarter led to higher costs.

Though oil prices have climbed more than 60% from a near 13-year low in January, they remain more than 60% below their June 2014 peak.

Statoil kept its quarterly dividend at $0.2201 per share as promised, and said it would pay the same amount in the third quarter. It also maintained its production guidance, expecting annual organic production growth of around 1% from 2014 to 2017.

Saetre said he saw "clear signs" the oil market would reach a balance between supply and demand "in the course of this year."