Norway's Statoil plunged to an unexpected loss in the fourth quarter of last year.
Statoil said it was cutting its long-term assumptions for the price of oil and took a $2.3 billion impairment charge on the value of its assets as a result.
But the state-controlled company cheered some analysts with a higher than expected production forecast for 2017.
It plans to cut another $1 billion in costs and also said the average break-even price for its new projects had fallen sharply.
Though oil prices have recovered in recent months, helped by output cuts by major producers, they remain well below levels of more than $100 a barrel earlier in the decade.
Statoil said today it now expected benchmark Brent crude to reach $75 a barrel in 2020, compared with a previous forecast of $83, and $80 in 2030, compared with $100 before.
Earlier, BP said it expected oil prices to remain above $50 a barrel this year, as it also missed fourth-quarter earnings forecasts.
Statoil said it made a net operating loss of $1.9 billion for the quarter, compared to an operating profit of $152m in the same time in 2015 and analysts' average forecast of a $2.1 billion profit.
The company's adjusted operating profit fell to $1.66 billion from $1.78 billion a year earlier, missing analysts' forecast for a rise to $2.27 billion as its international unit's performance fell short of expectations.
It also estimated its average break-even price for new projects by 2022 had fall to $27 a barrel from $41 this time last year.
Statoil forecast its capital expenditure would rise to $11 billion this year from a downwardly revised $10 billion in 2016, with spending on oil and gas exploration steady at $1.5 billion.
The company added it would cut another $1 billion in costs this year on top of the $3.2 billion it has already cut. It maintained its dividend policy and said it may buy back shares, subject to approval from shareholders.
Statoil shares have gained 31% over the past year.