Consolidated Financial Results for the Three Months Ended June 30, 2012
<under Japanese GAAP>
August 3, 2012
Note: The following report is a summary of the Japanese-language original.

Company name: Japan Petroleum Exploration Co., Ltd.
Listing:
Tokyo Stock Exchange, First Section
Securities code: 1662
URL:
http://www.japex.co.jp/President:
Osamu Watanabe
Inquiries:
Shoji Mihara, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
August 9, 2012
Scheduled date to commence dividend payments:–Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:
None(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the three months ended June 30, 2012
(April 1, 2012 – June 30, 2012)(Percentages indicate year-on-year changes.)
Consolidated operating results (cumulative)
Net sales

Three months ended

Operating income

Millions of yen% Millions of yen

Ordinary income% Millions of yen

Net income% Millions of yen%

June 30, 2012

56,472

7.6

3,642(22.1)

4,438 (20.4)

3,471 (21.5)

June 30, 2011

52,462

12.8

4,674(9.7)

5,573

4,422(10.0)

18.5

Note: Comprehensive income: Three months ended June 30, 2012: -16,064 million yen (– %)Three months ended June 30, 2011: -1,653 million yen (– %)Diluted net
income per share

Net income per share
Three months endedYenYen

June 30, 2012

60.74

–

June 30, 2011

77.37

–

(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2012

507,049

389,995

74.0

As of March 31, 2012

532,890406,773

73.7

Reference: Equity

2.

As of June 30, 2012: 375,101 million yen

As of March 31, 2012: 392,597 million yen

Cash dividends

Fiscal year ended
March 31, 2012
Fiscal year ending
March 31, 2013
Fiscal year ending
March 31, 2013
(Forecast)First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

20.00

–

20.00

40.00

20.00

–

20.00

40.00

Total
Yen

–

Note: Revisions to the forecasts of cash dividends most recently announced: None-1-3.

Consolidated financial forecasts for the fiscal year ending March 31, 2013 (April 1, 2012 – March 31, 2013)(Percentages indicate year-on-year changes.)
Net sales

Operating income

Ordinary income

Net income pershare

Net income

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen

For the six months
ending September 30,
2012

106,2101.5

4,876(21.6)

5,076(35.6)

6,145(3.0)

107.52

Fiscal year ending
March 31, 2013

214,653(6.9)

10,003(33.5)

16,819(24.1)

16,526(2.9)

289.15

Note: Revisions to the consolidated financial forecasts most recently announced: Yes

*(1)

(2)

Notes
Changes in significant subsidiaries during the three months under review (changes in specified subsidiaries
resulting in the change in scope of consolidation): None
Application of specific accounting for preparing quarterly consolidated financial statements: Yes
Note: For details, please refer to the section of “(2) Application of specific accounting for preparing quarterly consolidated financialstatements” of “2. Matters regarding summary information (notes)” on page 5 of the attached material.

(3)

Changes in accounting policies, changes in accounting estimates, and restatement of prior period financialstatements after error corrections
a. Changes in accounting polices due to revisions to accounting standards and other regulations: Yes
b. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: Yes
d. Restatement of prior period financial statements after error corrections: NoneNote: Changes regarding change in depreciation method of property, plant and equipment. For details, please refer to the section of “(3)Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error
corrections” of “2. Matters regarding summary information (notes)” on page 5 of the attached material.

(4)

Number of issued shares (common stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of June 30, 201257,154,776 shares
As of March 31, 201257,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2012
2,139 shares
As of March 31, 2012
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 201257,152,637 shares
Three months ended June 30, 201157,152,671 shares-2-* Indication regarding execution of quarterly review proceduresThis quarterly financial results report is not subject to the quarterly review procedures in accordance with theFinancial Instruments and Exchange Act. At the time of disclosure of this quarterly financial results report, thequarterly review procedures for the quarterly consolidated financial statements are in progress.
* Proper use of financial forecasts, and other special matters
The forward-looking statements, including the financial forecasts shown in this document are based on
information currently available to the Company and on certain assumptions deemed to be reasonable. As such,they do not constitute guarantees by the Company of future performance. Actual performance and other results
may differ materially from these forecasts due to various factors.
For the suppositions that form the assumptions for financial forecasts and cautions concerning the use thereof,
please refer to the section of “(3) Qualitative information regarding consolidated financial forecasts” of “1.
Qualitative information regarding settlement of accounts for the three months ended June 30, 2012” on page 5of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On August 3, 2012 (Friday), JAPEX plans to post supplementary material on its website.

-3-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2012
(1) Qualitative information regarding consolidated operating results
During the three months ended June 30, 2012, net sales was at ¥56,472 million, an increase of ¥4,010 million(+7.6%) year on year, and gross profit increased by ¥1,809 million (+13.2%) year on year to ¥15,497 million.
The factors behind the year-on-year increases in net sales and gross profit were the rise in sales price ofbitumen and an increase in sales from transportation of natural gas, among others.
Exploration expenses increased by ¥2,611 million (+166.4%) year on year to ¥4,180 million, due to aconsiderable increase in domestic and overseas expenditures, and selling, general and administrative expensesincreased by ¥229 million (+3.1%) year on year to ¥7,673 million. As a result, despite the increase in grossprofit, operating income decreased by ¥1,031 million (-22.1%) to ¥3,642 million because of increases in
exploration expenses and other expenses.
Ordinary income amounted to ¥4,438 million, decreasing ¥1,135 million (-20.4%) year on year, due to thedecrease in operating income and an increase in equity in losses of affiliates, among others, outweighing
positive factors such as an increase in dividends income and decreases in loss on sales of securities and loss
on valuation of securities.
Income before income taxes and minority interests was ¥4,206 million, a ¥1,442 million decrease (-25.5%)
year on year, due to a decrease in gain on sales of noncurrent assets and an increase in loss on retirement ofnoncurrent assets. As a result of a decrease in income taxes, net income was ¥3,471 million, a ¥950 million
decrease (-21.5%) year on year.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥44,743 million, an
increase of ¥2,009 million (+4.7%) year on year, due mainly to the rise in sales prices of natural gas andbitumen.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥1,185 million, an
increase of ¥351 million (+42.2%) year on year.
(iii) Other Businesses
Net sales from other businesses, such as the sale of oil products, including liquefied petroleum gas (LPG),
fuel oil and the like, the transportation of natural gas and oil products on consignment as well as othersubcontracted tasks, came to ¥10,543 million, an increase of ¥1,649 million (+18.5%) year on year due
mainly to an increase in proceeds from transportation of natural gas on consignment.

(2) Qualitative information regarding consolidated financial position
At the end of the first quarter, as compared to the end of the previous fiscal year, although current assets
increased, total assets decreased by ¥25,840 million to ¥507,049 million due to a decrease in noncurrent
assets. The main changes in current assets were an increase in short-term investment securities due to thepurchase of Treasury Discount Bills for short-term investment purposes and a decrease in short-term loans
receivable based on repo transactions included in the other current assets item. The decrease in noncurrent
assets was mainly due to a drop in investment securities following a fall in the stock prices of INPEXCORPORATION and other companies.
Regarding liabilities and net assets, total liabilities decreased by ¥9,062 million from the previous fiscal
year-end to ¥117,054 million, mainly due to decreases in deferred tax liabilities as a result of theaforementioned drop in investment securities and in income taxes payable, exceeding an increase in notes andaccounts payable-trade. Total net assets decreased by ¥16,778 million to ¥389,995 million as a result of adecrease in valuation difference on available-for-sale securities exceeding increases in retained earnings andforeign currency translation adjustment, among others.

-4-(3) Qualitative information regarding consolidated financial forecasts
We have revised the consolidated financial forecasts for the six months ending September 30, 2012, from thefinancial forecasts announced on May 11, 2012. We upwardly revised our initial forecast for net sales due tohigher sales volume of purchased crude oil from overseas.
The consolidated financial forecasts for the full-year have been left unchanged.
Please refer to the “Notice of Financial Forecast Revision” released on the same day of this report, August 3,2012.

2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the three months under review
No items to report(2) Application of specific accounting for preparing quarterly consolidated financial statements
a. Deferral accounting of cost variance
Cost variance arising from seasonal changes in production level is deferred as current assets (other)because such variance is expected to be almost completely eliminated by the end of the cost accounting
period.
b. Calculation of taxes
For the taxes, JAPEX and some of its consolidated subsidiaries compute first by reasonably estimating theeffective tax rate after applying tax effect accounting against income before income taxes and minority
interests for the fiscal year including the three months under review, and next by multiplying the quarterly
income before income taxes and minority interests by such estimated effective tax rate. Note that income
taxes-deferred is included in income taxes.

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
Changes in accounting policies(Change in depreciation method)
Following the revision of the Corporation Tax Act, JAPEX and its domestic consolidated subsidiaries
applied the depreciation method in compliance with the revised Corporation Tax Act to property, plant andequipment acquired on or after April 1, 2012, from the first quarter ended June 30, 2012.
The impact of this change on operating income, ordinary income, and income before income taxes andminority interests for the three months under review was immaterial.

-5-3. Consolidated financial statements(1) Consolidated quarterly balance sheets(Millions of yen)
As of March 31, 2012
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and suppliesOther
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Allowance for overseas investment loss
Total investments and other assets
Total noncurrent assets
Total assets-6-

As of June 30, 2012

29,80527,392
51,870
4,407
99
4,952
46,527(1)
165,054

33,38925,53780,115
4,328
183
4,196
24,665(1)
172,41342,93256,332
33,594
132,859

41,99453,932
33,715
129,642

7,156
7,156

7,158
7,158

192,726
39,725(38)(4,593)
227,820
367,836
532,890

159,616
42,846(35)(4,593)
197,834
334,635
507,049

(Millions of yen)
As of March 31, 2012
Liabilities
Current liabilities
Notes and accounts payable-trade
Income taxes payable
Provision
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Other provision
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets-7-

As of June 30, 2012

7,251
1,897
216
23,611
32,977

10,743539
114
22,98534,382

26,19842,601
7,129
845
9,670
6,695
93,140126,117

26,06733,089
7,043
778
9,266
6,426
82,671
117,054

14,288294,323(10)
308,601

14,288296,652(10)
310,930

89,36620(5,391)
83,995
14,176
406,773
532,890

67,91067(3,807)64,171
14,893389,995
507,049

(2) Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Three months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
Total exploration expenses
Selling, general and administrative expenses
Operating income
Non-operating income
Dividends income
Other
Total non-operating income
Non-operating expenses
Loss on sales of securities
Loss on valuation of securities
Equity in losses of affiliates
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Other
Total extraordinary losses
Income before income taxes and minority interestsIncome taxes
Income before minority interests
Minority interests in income
Net income

52,462
38,774
13,688-8-(Millions of yen)Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)
56,472
40,975
15,497

1,569
1,569
7,444
4,674

4,180
4,180
7,673
3,642

1,128
1,083
2,212

1,449
580
2,029

304
289
501
218
1,313
5,573

–
–
903
330
1,234
4,438

138
0
139

2–
2

63
0
64
5,648
1,139
4,509
86
4,422

227
6
234
4,206
659
3,546
75
3,471

Consolidated quarterly statements of comprehensive income
Three months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of theparent
Comprehensive income attributable to minority interests

4,509-9-(Millions of yen)Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)
3,546(7,251)(18)
1,086(21,462)
71
1,800

21(20)(6,162)(1,653)(19,610)(16,064)(1,862)(16,352)

208

288

(3)

Notes on premise of going concern
No items to report(4) Notes on significant changes in the amount of shareholders’ equity
No items to report(5)

Significant subsequent events
Assignment of working interest pertaining to bitumen of Japan Canada Oil Sands Limited (JACOS)
on May 30, 2012 (MST), consolidated subsidiary JACOS assigned a 25% working interest pertaining tobitumen (a type of extra-heavy oil extracted from oil sands) in Liege lease, which was one of the oil sandleases owned by JACOS, to a Canadian petroleum company for CAD32.5 million. As a result, an amountequivalent to the assignment amount will be recorded as extraordinary income in the second quarter ending
September 30, 2012.

- 10 -

4. Supplemental information
Status of production and sales
1. Production
Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)

Three months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
126,589

123,528547,777

(671)

(540)

(2,527)Natural gas(thousand m3)

309,413282,176

1,288,978(2,337)(374)(4,435)

LNG (t)10,864–22,943

93,42997,157382,394(93,429)(97,157)(382,394)

Crude oil (kl)E&P

(Reference)
Fiscal year ended
March 31, 2012
(April 1, 2011 – March 31, 2012)

Bitumen (kl)Notes: 1. The figures in parentheses represent overseas production and are included in the total.
2. Part of the natural gas production volume is used as a feedstock for LNG.
3. Bitumen is a type of extra-heavy oil extracted from oil sands.

2. SalesThree months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
AmountVolume(Millions of yen)

E&P

(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2012
(April 1, 2011 – March 31, 2012)
AmountVolume(Millions of yen)

Crude oil (kl)369,376

22,178376,555

22,296

1,395,833

80,754Natural gas(thousand m3)

368,108

15,299358,369

15,837

1,730,381

74,957

LNG (t)47,696

3,199

48,0393,828

216,21115,930

Bitumen (kl)93,283

2,057

97,196

2,781382,378

9,137

Subtotal

42,73444,743

180,779

833

1,185

8,360

8,242

8,623

36,585

651

1,919

4,912

Subtotal

8,894

10,54341,497

Total

52,46256,472

230,638

Contract services
Otherbusinesses

Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)
AmountVolumeOil products/merchandise
Others

Notes: 1. “Oil products/merchandise” includes liquefied petroleum gas (LPG), fuel oil, gas oil and kerosene, and “Others”
includes the transportation of natural gas and oil products on consignment as well as other subcontracted tasks.
2. Monetary amounts in the table do not include consumption taxes.

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