Note: This document is an English translation of the Japanese-language original

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2018
＜Supplementary Material＞
May 11, 2018

Japan Petroleum Exploration Co., Ltd.

Cautionary Statement
This document contains future prospects such as plans, forecasts, strategies, and others which are
not historical fact and these are made by the management’s judgement based on the obtainable
information at the time of the disclosure. Actual results may significantly differ from those future
prospects due to various factors.
This document is not intended to invite investment.
Copyright : All information contained herein is protected by copyright, and may not be copied or
reproduced without prior consent of JAPEX.
Note: Abbreviations used herein are as follows:(a) = Actual results(f) = Forecasts
FY = Fiscal Year (FY3/18, for instance, means 12 months ended March 31, 2018)
Any inquiries about the information contained herein or other Investor Relations questions
are requested to be directed to:Investor Relations Group, Media & Investor Relations Dept.
Japan Petroleum Exploration Co., Ltd.
Tokyo, JAPANTEL: +81-3-6268-7111

12015-04
2015-05
2015-06
2015-072015-08
2015-09
2015-10
2015-11
2015-12
2016-01
2016-02
2016-03
2016-04
2016-05
2016-06
2016-072016-08
2016-09
2016-10
2016-11
2016-122017-012017-022017-032017-04
2017-05
2017-06
2017-072017-082017-092017-10
2017-112017-122017-012017-022017-03［Crude Oil Price US$/bbl]
$110

$100

$70

Exchange Rate JPY/US$

Crude Oil Price US$/bbl

Japan crude cocktail (JCC) price in the first 10 days of April 2018
on a prompt report basis: US$66.01/bbl JPY105.68/US$
2

¥120

$90
¥110

$80
¥100

¥90

$60
¥80

$50
¥70

$40
¥60

$30
¥50

$20
¥40

［Foreign Exchange Rate JPY/US$］

Trends in Crude Oil Price and Foreign Exchange Rate
¥130

Actual Results for FY3/18 and Forecasts for FY3/19 (Highlight)■ Actual Results for FY3/18 (vs FY3/17)
Billion JPY

FY3/17(a)FY3/18(a)Billion ¥Change

230.6+23.4+11%

Operating profit

0.6

8.7+8.0-%

Ordinary profit

2.2

3.8+1.6+72%

Profit (loss) attributableto owners of parent

3.4-30.9-34.4-%

180.0

45.60

56.20

+10.60

+23%

150.0

JCC price(US$/bbl)
Exchange rate(JPY/US$)

108.53111.67+3.14+2%■ Forecasts for FY3/19 (vs FY3/18)
FY3/18(a)FY3/19(f)

230.6

265.6

+35.0+15%

Operating profit

8.7

0.6-8.1-92%

Ordinary profit

3.8

9.9+6.1

+159%

-30.9

9.4+40.4-%

Billion JPY
Net sales

Profit (loss)attributableto owners of parent

JCC price(US$/bbl)
Exchange rate
(JPY/US$)

18.0

230.6

240.0

207.1

Net sales

Billion ¥

270.0

210.0

120.0

207.1

265.6

Net Sales (Left Axis)

9.99.4

8.7

2.2
0.6

3.4

15.0
12.0
9.0
6.0

3.8
0.6

3.0

90.0

0.0

60.0-3.0

Change56.20

60.00

+3.80

+6%

111.67110.00

-1.67

-1%

3

-30.9

30.0
0.0

FY3/17 (a)FY3/18 (a)-6.0

FY3/19 (f)Right Axis
Operating Profit
Ordinary Profit
Profit (loss) attributable to owners of parent-9.0

Actual Result

Actual Results for FY3/18 (Summary)Billion JPY

FY3/18

FY3/17 (a)Initial Forecasts(f) (May 12, 2017)

Revised Forecasts(f) (Aug.8, 2017)

Revised Forecasts(f) (Feb.9, 2018)

207.1

214.8

211.0

230.5

230.6

Operating profit

0.6

2.9

4.4

6.7

8.7

Ordinary profit

2.2

5.4

-0.9

5.4

3.8

Profit (loss) attributableto owners of parent

3.4

5.5

1.2

-28.4

-30.9

45.60

50.00

51.27

53.60

56.20

108.53110.00110.62111.30111.67

Net sales(a)Assumptions
JCC price(US$/bbl)

Exchange rate(JPY/US$) Initial Forecasts (May 2017)

Revised Forecasts (August 2017)

Revised Forecasts (February 2018)【+】 Increase in sales price and volume, Fluctuation in foreign currency exchange gains/losses【-】 Losses on the Pacific NorthWest LNG Project (the PNW LNG Project), Losses on the Oil Sands Project atHangingstone DEMO area, Impairment loss on the Shale Gas Project in Canada Revised Forecasts (February 2018)

Second Revision (April 2018) and Actual Result (May 2018)【+】 Increase in sales price, Increase in sales volume of domestic crude oil【-】 Share of loss of entities accounted for using equity method, related to Japan Drilling Co., Ltd.
4

Actual Result

Natural Gas sales for FY3/18 (year-on-year)
Sales volume : Million M3
Net sales : Million JPY

FY3/17

FY3/18ChangeFull (a)Full (a)FullSales volume1,864

1,773-91

Net sales

55,32960,431+5,101

Domestic gas

Sales volume

1,265

1,284+19(Domesticallyproduced gas)

Sales volume(744)

(739)

(-5)

Overseas gas

Sales volume599

488-111Natural gas

Increase in sales price

Breakdown(Million M3)

2,000
1,600

599

1,265

Decrease in shale gas sales volume in
CanadaSales volume ofdomestic gas

Increase in sales volume due to severe
winter488

1,200800

Sales volume ofoverseas gas

1,284

400
Sales volume of “Overseas gas” stated herein are amounts of Japex(U.S.) Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

FY3/17 (a)FY3/18 (a)5Actual Result

Crude Oil sales for FY3/18 (year-on-year)
FY3/17Full (a)FY3/18Full (a)ChangeFullSales volume

2,762

2,506

-255

Net sales

82,09893,685+11,587

Sales volume

301

291

-10

Net sales

10,273

12,265+1,991

Sales volume

1,181

991

-189

Net sales

28,65333,749+5,095

Sales volume

91

―

-91

Net sales

669

―

-669

Sales volume―160+160

Net sales

―

4,512

+4,512

Sales volume : Thousand KLNet sales : Million JPY
Crude oil

Increase in sales price

Breakdown
Domestic crude oil (*)

Overseas crude oil (**)

Bitumen (***)

Diluted bitumen (****)
Assumptions
JCC price

US$/bbl

45.60

56.20

+10.60

Bitumen (***)

US$/bbl

9.94

―

―

Diluted bitumen price(****)

US$/bbl

―

39.63

―

JPY / US$108.53111.67+3.14

Exchange rate

6

Increase in crude oil sales volume from
Garraf Oil Field, Iraq.
Suspended SAGD operations at theHangingstone DEMO area
Commencement of production operations
at the Hangingstone Joint Venture area(*)
Sales volume and net sales of“Domestic crude oil” stated herein do notinclude purchased crude oil.
(**)
Sales volume and net sales of“Overseas crude oil” stated herein areamounts of 3 overseas subsidiaries (Japex(U.S.) Corp., JAPEX Montney Ltd. and Japex
Garraf Ltd.).
(***),(****) Royalty is excluded in thenet sales and price of bitumen and dilutedbitumen.

Actual Result

Actual Results for FY3/18 (year-on-year)
Main factors for change
Increase factor (+) / Decreasing factor (-)

FY3/17

FY3/18(a)(a)

Net sales

207,130

230,629+23,499

Gross profit

32,17239,263+7,090Exploration expenses1,512

1,324-188

Non-operating income (expenses)
Equity in earnings+ ¥1.6 billion

SG&A expenses

29,97529,173-801(FY3/17) Loss of ¥4.2 billion → (FY3/18) Loss of ¥2.6 billion

Operating profit (loss)

685

8,764

+8,079Foreign currency translation adjustments on debt,
foreign currency exchange gains and losses

Non-operating income(expenses)

1,537-4,936-6,473

Ordinary profit (loss)

2,222

3,828

+1,606Extraordinary income(losses)

970-73,231-74,202

1,642

239-1,402

Million JPY

Income taxesChangeProfit (loss) attributable
to non-controllinginterests-1,892-38,683-36,791

Profit (loss) attributableto owners of parent

3,443-30,958-34,401

7Gross profit
Domestic crude oil and natural gas + ¥3.9 billion
Overseas consolidated subsidiaries + ¥3.3 billion(FY3/17) Profit of ¥3.4 billion → (FY3/18) Profit of ¥2.7 billion- ¥ 0.7 billion
Depreciation expenses related to the Hangingstone
DEMO area- ¥ 7.8 billion

Extraordinary losses
Loss on the PNW LNG ProjectContract cancellation loss due to termination of pipeline
construction plan- ¥ 5.4 billion
Impairment loss due to the revision to the development planof the shale gas project- ¥ 67.4 billion

Forecasts for FY3/19

Full Year Forecasts for FY3/19[Assumptions for Crude Oil Price and Exchange Rate]
Upper: from January 2017 to March 2018.
Lower: from January 2018 to March 2019.

Jan.-Mar. Apr.-Jun.
JCC price

US$/bblExchange rate JPY/US$

JACOS
Diluted bitumen

JMLgas1.
2.

US$/bblC$/mcf2017(a)

54.63
49.88
54.49
64.89
56.20
60.00
60.00
60.00
60.00
60.00
112.12 111.38 111.77 111.39 111.67
110.00 110.00 110.00 110.00 110.00

2018(f)2017(a)2018(f)2017(a)2018(f)2017(a)2018(f)Jul.-Sep. Oct.-Dec. Jan.-Mar.

Fullyear

35.50
2.71
2.00

36.95
2.67
2.00

36.79
37.23
1.37
2.00

39.76
37.26
1.29
2.00

39.63
36.79
2.07
2.00

“JACOS Diluted bitumen” stated herein is the diluted bitumen sales price of Japan Canada Oil Sands Ltd. (Royalty excluded)
Production operation at the “Hangingstone expansion area” commenced in the middle of 2017.
“JML gas” stated herein is the gas sales price of JAPEX Montney Ltd. (Royalty excluded)

8Forecasts for FY3/19

Natural Gas Sales Forecasts for FY3/19
Sales volume : Million M3
Net sales : Million JPY

FY3/18

FY3/19ChangeFull (a)Full (f)FullSales volume

1,773

1,780+7

Net sales

60,43164,102+3,670

Domestic gas

Sales volume

1,284

1,270-14(Domesticallyproduced gas)

Sales volume(739)(666)(-73)

Overseas gas

Sales volume488

510+21Natural gas ：Increase in sales price

Breakdown(Million M3)

2,000
1,600

488510

1,284

1,270

1,200

Sales volume ofoverseas gas

Increase in shale gas sales volume inCanada

Sales volume ofdomestic gas

Decrease from the increase in sales
volume due to severe winter in theprevious term

800
400
-Sales volume of “Overseas gas” stated herein are amounts of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

FY3/18 (a)FY3/19 (f)9Forecasts for FY3/19

Crude Oil Sales Forecasts for FY3/19
FY3/18

FY3/19ChangeFull (a)Full (f)FullSales volume

2,506

3,368+861

Net sales

93,685

119,835+26,149

Sales volume

291

265

-27

Net sales

12,265

11,622-643

Sales volume991

851

-141

Net sales

33,74932,894-855

Sales volume160

1,197+1,037

Net sales

4,512

30,472+25,960

JCC price

US$/bbl

56.20

60.00

+3.80

Diluted bitumen (***)

US$/bbl

39.63

36.79

-2.84

Exchange rate

JPY /US$111.67110.00-1.67

Sales volume : Thousand KL
Net sales : Million JPY
Crude oil

Increase in sales price

Breakdown
Domestic crude oil (*)

Overseas crude oil (**)

Diluted bitumen (***)

Decrease in crude oil sales volume from Garraf
Oil Field, Iraq
Increase sales volume because of thecommencement of fulll year production
operation at the Hangingstone Expansion
Project in CanadaAssumptions

(*)
(**)
(***)

Sales volume and net sales of “Domestic crude oil” stated herein do not include purchased crude oil
Sales volume and net sales of “Overseas crude oil” stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX MontneyLtd. and Japex Garraf Ltd.)Royalty is excluded in the net sales and price of diluted bitumen

10Forecasts for FY3/19

Forecasts for FY3/19
Million JPY

FY3/18

FY3/19(a)(f)

ChangeGross profit

Net sales

230,629

265,649+35,019

Gross profit

39,263

32,951-6,312

Exploration expenses

1,324

1,073-252

SG&A expenses

29,173

31,234+2,060

Operating profit (loss)

8,764

644

-8,121Non-operating income(expenses)-4,9369,303+14,240

Ordinary profit (loss)

3,828

9,947

+6,119Extraordinary income(losses)-73,231632+73,864

239

1,495

+1,256

Profit (loss) attributable
to non-controllinginterests-38,683-403+38,280

Profit (loss) attributableto owners of parent-30,958

Income taxes

Main factors for changeIncrease factor (+) / Decreasing factor (-)
Domestic crude oil and natural gas - ¥1.5 billion
Overseas consolidated subsidiaries + ¥2.0 billion
Operating cost in the Soma LNG Terminal - ¥0.6 billion

SG&A expenses

Reduction of G&A expenses of JAPEX (Non-consolidated)+ ¥0.7 billion
Increase in transportation expenses due to due to thefull year production operation at the Hangingstone
Expansion Project in Canada- ¥2.5 billion

Non-operating income (expenses)
Equity in earnings+ ¥8.9 billion(FY3/18) Loss of ¥2.6 billion → (FY3/19) Profit of ¥6.3 billion

9,487+40,446

11Foreign currency translation adjustments on debt,
foreign currency exchange gains and losses(FY3/18) Profit of ¥2.7 billion → (FY3/19) Not estimated- ¥2.7 billion
Decrease in depreciation expenses related to theHangingstone DEMO area in FY3/18 + ¥7.8 billion

Extraordinary income (loss)
Decrease in losses on the PNW LNG Project in FY3/18+ ¥72.9 billion

Forecasts for FY3/19

Assumptions and Impact on Profits
JCC price

Exchange rate

Canadian gas prices

US$60.00/bbl

JPY110.00 / US$

C$2.00/mcf(JPY88.00/C$)

FY3/19Impact on Profits

US$1/bbl increase in JCC
prices would push profits
up by...

A weakening in JPY1/US$
exchange rates would pushprofits up by…

C$1/mcf increase in gas
prices would push profits upby…

Operating profit

JPY 610 million

JPY 270 million

JPY 550 million

Profit (loss)
attributable to ownersof parent

JPY 500 million

JPY 180 million

JPY 410 million

Assumptions

Assumptions

FY3/18

FY3/19Full (a)Full (f)ChangeJCC price

US$/bbl

56.20

60.00

+3.8

Exchange rateJPY/US$

111.67110.00-1.67

Canadian gas prices

C$/mcf

2.07

2.00

-0.07

Note:

In addition to the impact of exchange rate fluctuations shown above, translation adjustments of foreigncurrency-denominated receivables and payables also occur.
Actual profits are influenced by a variety of other factors besides crude oil prices and exchange rates.

12