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OSLO—Norway's Statoil ASA said Wednesday it would cut capital expenditure by 8% to $12 billion this year compared with previous guidance, as the oil and gas producer swung to a second-quarter net loss on the year amid weak prices and low refining margins.

Weaker-than-expected earnings across all its businesses sent the company's shares down more than 3% in early trading.

Statoil said capital expenditure would be lower than previously expected this year partly due to successful cost cuts, notably a reduction in the average time required to drill an offshore exploration well to 22 days from 46 days three years ago.

Like other Western oil companies, Statoil has delayed projects while slashing costs and capital expenditure following a plunge in oil prices over the last two years. The company has posted a net loss in six out of the latest eight quarters, written down the value of its assets and taken on more debt to finance its operations.

The company's gearing—or debt as a percentage of its capital—rose to 31.2% at the end of the second quarter, from 28.1% at the end of the first quarter and 22.4% a year ago. Statoil has previously been reluctant to exceed 30% gearing but now says the higher debt is acceptable.

"We are comfortable with a debt ratio well above 30% because we have a big toolbox, including significant flexibility in our investment portfolio," said Chief Executive Eldar Saetre. "We expect to be cash flow neutral at $60 a barrel in 2017 and $50 a barrel in 2018."

The 67% state-owned company said its net loss for the three months through June was $307 million compared with a net profit of $861 million a year earlier. Analysts had expected a net profit of $264 million. Revenue fell 33% on the year to $10.81 billion against expectations of $11.71 billion.

The company's adjusted earnings before interest and taxes, which excludes one-off effects and is seen as a key performance measure, dropped 68% on the year to $913 million against expectations of $1.31 billion. The company maintained its dividend at $0.2201 a share.

U.K. oil giant BP PLC on Tuesday posted its third straight quarterly loss, mainly due to charges related to the 2010 Deepwater Horizon spill in the Gulf of Mexico. Royal Dutch Shell PLC and Total SA are reporting on Thursday, and Exxon Mobil Corp., Chevron Corp. and Eni SpA are to publish results on Friday.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

(END) Dow Jones Newswires

July 27, 2016 05:35 ET (09:35 GMT)

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