From what I know...
If its thick black smoke then It does sounds like it desperately needs an overhaul. Your piston rings might be leaking and thats what causing engine oil to drip into the combustion chamber and since engine oil can't burn properly, you're seeing thick black smoke out of the exhaust.
If the smoke is light grey, like a 2 Stroke engine's smoke, then it means your bike is running rich on petrol. In that case, you need to tune your carb. An engine running too rich can't work in optimal condition and hence can't reach its top speed. But since you've mentioned "reducing engine oil" I highly doubt thats the case with your bike, sorry for the bearer of bad news!
As for knocking or "tick-tick" sound, its related to valves. Get your valves cleared from a mechanic and it'll be solved.
Hope it helps.