HELSINKI (AP) — Norwegian energy company Statoil says it was hit by lower oil prices, increased depreciation and higher drilling costs in the second quarter, causing net profit to fall 16 percent to 10.1 billion kroner ($1.2 billion).

Revenue dropped to 124 billion kroner in the period, down from more than 142 billion kroner a year earlier.

CEO Eldar Saetre said Tuesday that the company “delivered encouraging operational performance with good production growth and high regularity” in the quarter, adding that it will continue to cut costs as part of an efficiency program that was “on track.”

Statoil said it expects pre-tax cash flow effects of some $1.7 billion, as from 2016, and cautioned that scheduled maintenance in the third quarter would reduce quarterly production.

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