Norwegian oil and gas group Statoil missed second quarter expectations on lower oil and gas prices but maintained its full-year targets, including its ambitious capital spending plans.

Statoil said today its adjusted operating profits fell 17 per cent to 38 billion crowns (€4.9 billion), trailing analysts' expectation for 40.7 billion crowns as its realised oil and gas prices fell much more than markets anticipated. Record output at its fields outside Norway pushed equity production to 1.967 million barrels of oil equivalents (boe) per day, above expectations for 1.92 million barrels.

Statoil’s production and profitability have taken a hit this year as the firm faces a range of challenges, including unexpected outages, the lingering impact of divestments, maturing fields in the North Sea and lower oil prices.

It is also racing to bring new fields onstream, and the firm repeated that it will spend €14 billion on capital expenditure this year as it plans to lift daily output above 2.5 million barrels of oil equivalents per day by 2020. The firms also stuck to its target of sinking 50 wells this year and spending €2.6 billion on exploration as it drills in some of the offshore world's hot spots, like Brazil, east Africa and the Norwegian Arctic.

Investors have shied away from the stock as the heavy capital spending will eat up much of the firm’s free cash-flow for years to come.

The stock has underperformed the European oil and gas index, falling 8 per cent over the past year while the index is down 2 per cent.