Chevron Corp. reported a larger-than-expected loss in the first quarter amid rough industry conditions and low crude prices. The No. 2 U.S. oil producer vowed Friday to keep slashing its spending and shift its focus to high-return, shorter-cycle projects to boost its revenue.

Chevron (NYSE:CVX) on Friday reported a loss of $725 million, or 39 cents per share, in the first three months of 2016, compared with earnings of $2.6 billion, or $1.37 per share, in the same period a year ago. The gloomy quarterly results mark the second consecutive loss for Chevron, which until last year hadn’t reported a quarterly loss in more than a decade.

Still, the San Ramon, California-based producer beat estimates on revenue. Chevron’s first-quarter revenue came in at $23.5 billion, compared with $34.5 billion a year ago. Analysts polled by Thomson Reuters had expected Chevron to report a loss of 20 cents per share on $21.4 billion in revenue.

Chevron’s stock was lately up 0.17 percent at $102.57 a share.

“First-quarter results declined from a year ago,” John Watson, Chevron’s chairman and CEO, said in a statement. “Our upstream business was impacted by a more than 35 percent decline in crude oil prices. Our downstream operations continued to perform well, although overall industry conditions and margins this quarter were weaker than a year ago.”

Chevron’s downstream refining segment fell by nearly 50 percent to $735 million in the first quarter. Its upstream production and exploration segment posted a loss of $1.46 billion for the quarter, compared with earnings of $1.56 billion a year ago.

Watson said the company remained focused on improving free cash flow, while revenues could get a boost from Chevron’s growing liquefied natural gas segment. Production from Chevron’s LNG project in Angola was “imminent,” and a cargo shipment was expected in May, he said. Chevron in March announced its first LNG production and first cargo shipment from its Gorgon Project in Australia — although the venture, which was long delayed and over budget, shut down this month due to technical problems and could stay closed for up to two months.

The CEO noted that Chevron this year started production at its Chuandongbei natural gas project in southwest China. The company continues to ramp up production in the U.S. Permian shale basin and elsewhere, he added.

Chevron’s capital and exploration expenditures totaled $6.5 billion in the first quarter, down by nearly a quarter from its $8.6 billion in spending the same period last year. First-quarter cash flow from operations was $1.1 billion in the first quarter, compared with $2.3 billion in the previous period.

“We continue to lower our cost structure with better pricing, work flow efficiencies and matching our organizational size to expected future activity levels,” Watson said in the statement. “Our capital spending is coming down. We are moving our focus to high-return, shorter-cycle projects and pacing longer-cycle investments.”