Note: The following press release is an English translation of the Japanese-language original

July 25, 2013
Company Name: Japan Petroleum Exploration Co., Ltd. (JAPEX)
President:

Osamu Watanabe

Inquiries:

Shoji Mihara, General Manager, Media and Investor Relations Department

TEL.:+81-3-6268-7110

The Tight Oil Initiative at the Onnagawa Formation in Akita Prefecture
Japan Petroleum Exploration Co., Ltd. (hereafter, “JAPEX”) has, since March last year,
been undertaking research and development project, including demonstration experiment,
at its oil fields in Akita Prefecture to challenge for the first tight oil (shale oil) development
in Japan.
As part of the work, JAPEX carried out acid treatment tests at the Onnagawa tightformation in October last year by utilizing an existing well of Kurosawa AK-1 (hereafter,“ AK-1 well”) at Ayukawa oil and gas field (Yurihonjo City, Akita Prefecture). Subsequently,
two flow tests were carried out to get a more accurate understanding of the capacity ofAK-1 well. As a result, a constant amount of tight oil production was confirmed (hereafter,“the Ayukawa demonstration experiment”).
The results including production volume on the Ayukawa demonstration experiment
have now been compiled and the relevant information is presented below. Based on theseresults, we would also like to inform you of new plans underway for demonstration
experiment at other oil field having the Onnagawa tight formation located in the same
prefecture.
These tight oil initiatives were carried out with the support of the Japan Oil, Gas andMetals National Corporation (JOGMEC). Please refer to our press releases dated July
20, October 4, and October 10, 2012, for more information about the Ayukawa
demonstration experiment and an outline of the agreement with JOGMEC.

1. The Ayukawa Demonstration experiment(1) Production volume and other operations
1 Acid treatment test and flowback: October 1-8, 2012
• Injection of acid treatment fluid: 141.6 kl• Amount of crude oil production: 31.1 kl (approx. 6 kl per day (estimate))• Amount of acid treatment fluid recovered (including formation water): 69.5kl
2 First flow test (in addition to well pressure measurements): November 21- December
13, 2012.
• Amount of crude oil production: 71.2 kl (approx. 6 kl per day)
• Amount of acid treatment fluid recovered (including formation water): 0.06 kl
3 Second flow test (in addition to well pressure measurements): May 13-July 10, 2013
• Amount of crude oil production: 1,419.0 kl (approx. 40 kl per day)
• Amount of acid treatment fluid recovered (including formation water): 57.9 kl

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(2) Evaluation results for the Ayukawa demonstration experiment• AK-1 well produced a cumulative total of 1,521.3 kl of crude oil through the acidtreatment test and two subsequent flow tests carried out in October last year. Intotal, 141.6 kl of acid treatment fluid was injected for this acid treatment, and acumulative total of 127.5 kl was recovered.
• The oil production rate at the end of the second flow test was confirmed at approx.
40 kl per day. As a result of the acid treatment, daily production at AK-1 wellincreased by at least 20 times compared what it was prior to the acid treatment(approx. 1.5 kl per day), therefore, we conclude that a good outcome was obtained for
the Ayukawa demonstration experiment.
• With these results in hand, we will proceed to study commercial production at AK-1
well, including preparations for ground facilities.
2. New Demonstration experiment at Fukumezawa oil field
Based on the evaluation of the Ayukawa demonstration experiment, JAPEX isformulating basic plans for a new demonstration experiment (horizontal well drilling andfracturing) at the Fukumezawa oil field (one of the Sarukawa oil fields in Oga City, Akita
Prefecture) where the Onnagawa tight formation is distributed in the same way as at theAyukawa oil and gas field. At this time, we have decided to start the preparations for
implementation of the work.
We are currently studying the details of schedule for implementation and the scope ofwork involved while seeking cooperation and support from all parties concerned. We arealso conducting surveys and studies from a range of perspectives to pay sufficient attention
to the environment.
We will continue to appeal for cooperation and support from JOGMEC for these
initiatives, including the new demonstration experiment.

Reference photographs

Oil produced in the Ayukawa
demonstration experiment

Acid treatment test underway at the Ayukawa oilfield (Akita Prefecture)
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