Note: The following report is an English translation of the Japanese-language original.

Financial Results
for the Six Months Ended September 30, 2018
<Supplementary Material>
November 9 , 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 forward-looking statements about the future performance of JAPEX. 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 orreproduced without prior consent of JAPEX.

Note: Abbreviations used herein are as follows:(a) = Actual results(f) = Forecasts
FY = Fiscal Year (FY3/19, for instance, means 12 months ending March 31, 2019)
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

2

Trends in Crude Oil Price and Foreign Exchange Rate
JPY/USD¥115

USD/bbl$90
Crude Oil Price USD/bbl
Exchange Rate JPY/USD
$80

¥110

$70

$60

2018-092018-082018-072018-06

2018-05

2018-04

2018-032018-022018-012017-122017-112017-10¥105
2017-09$50

Assumption of crude oil price and exchange rate in the second half of FY3/19

USD 75.00/bbl JPY 110.00/USD
3

Actual Results and Forecasts for the FY3/19 (Highlights)
FY3/18[Billion JPY]

FY3/19ChangeFull (f)Previousforecasts(August 8,2018)④

Full (f)Revisedforecasts(November 9,2018)⑤*2Q (a)①

Full (a)②

2Q (a)
③

112.3

230.6

115.1

284.0

288.3

+2.7

+57.7

+4.3

Operating profit(loss)

3.4

8.7(1.1)

2.1

0.5(4.6)

(8.2)

(1.5)

Ordinary profit

8.8

3.8

1.2

10.0

12.3

(7.5)

+8.5

+2.3

Profit (loss)
attributable toowners of parent

7.7(30.9)

2.4

11.0

12.3

(5.3)

+43.3

+1.3

Net sales

2Q（③-①）

Full（⑤-②）

Full（⑤-④）

Oil price and exchange rate assumptions
JCC(USD/bbl)
Exchange rate
(JPY/USD)

52.44

56.20

72.47

69.50

73.75

+20.03+17.55+4.25111.79

111.67109.18109.39109.60(2.61)(2.07)+0.21*JAPEX announced the latest forecasts in “Notice of Financial Forecasts Revision” on November 9, 2018, regarding theconsolidated financial forecasts of the fiscal year ending March 31,2019.

4

Actual results

Actual Sales of Natural Gas in 2Q FY3/19 ( year-on-year )FY3/182Q (a)

Sales volume : Million M3
Net sales : Million JPY

FY3/192Q (a)

ChangeSales volume

833

813

(20)

Net sales

26,83927,835+995

Japan

Sales volume569

548

(20)

Gas produced in Japan

Sales volume344287(56)Overseas

Sales volume264

264

0Natural gas

Increase in sales priceSales volume by region

Million M3

900600300-Sales volume ofoverseas gas

264

569

264

Sales volume ofgas in Japan

Temporary demand reduction due to theclient’s reason

548
Sales volume of “Overseas” stated herein are amounts of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

2Q FY3/18(a)2Q FY3/19(a)5Actual results

Actual Sales of Crude Oil in 2Q FY3/19 ( year-on-year )FY3/182Q(a)FY3/192Q(a)Sales volume1,548

1,278(269)

Net sales

53,08654,305+1,219

Sales volume146

131(15)Net sales

5,713

6,927+1,213

Sales volume809

185(624)

Net sales

25,604

9,298(16,306)

Sales volume-496+496

Net sales-

13,257+13,257

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

Increase in sales price

Equity oil sales
Crude oil produced inJapan (*)
Crude oil produced inoverseas (**)
Diluted bitumen(***)

Oil price and exchange rate assumptions
JCCUSD/bbl

52.44

72.47

+20.03

Diluted bitumen (***)

USD/bbl-38.37-

Exchange rate

JPY/USD

111.79109.18(2.61)

6

Decrease in crude oil sales volume ofGarraf Oil Field, Iraq
Commencement of diluted bitumen
sales of the Hangingstone lease in 3Qof 2017(*) Sales volume and net sales of “Crude oil
produced in Japan” stated herein do not include
purchased crude oil(**) Sales volume and net sales of “Crude oil
produced in overseas” stated herein are amountsof 3 overseas subsidiaries (Japex (U.S.) Corp.,
JAPEX Montney Ltd. and Japex Garraf Ltd.)(***) Royalty is excluded in the net sales andprice of diluted bitumen

Actual Results for 2Q FY3/19 ( year-on-year )[ Million JPY]

FY3/182Q (a)FY3/192Q (a)ChangeNet sales

112,382

115,136+2,754

Gross profit

17,884

14,126(3,757)

643

362(280)

13,788

14,946+1,157

Operating profit (loss)

3,452(1,183)(4,635)Non-operating income(expenses)

5,435

2,476(2,959)

Ordinary income (loss)

8,888

1,293(7,594)

Exploration expenses
SG&A expenses

Extraordinary income(losses)

Actual results

Main factors for change
Increase factor “+” / Decrease factor “( )”Gross profit
Domestic business(¥2.6 billion)
Overseas consolidated subsidiaries(¥1.0 billion)
SG & A expenses
Increase in transportation cost at theHangingstone lease(¥1.1 billion)
Non-operating income (expenses)
Equity in earnings+ ¥2.1 billion
Foreign currency translation adjustments on debt,
foreign currency exchange gains and losses

(12)

618

+630

1,108394(714)(¥ 3.9 billion)

Profit (loss) attributable tonon-controlling interests

10(915)(926)

Increase in interest expenses(¥ 1.1 billion)

Profit (loss) attributable toowners of parent

7,756

2,433(5,322)

Income taxes

7(FY3/18 2Q)Gains of ¥0.9 billion→ (FY3/19 2Q)Loss of ¥2.9 billion

Revised forecasts

Price Assumptions for Revised Forecasts for FY3/192018
2019
Full year
Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar.
JCC

USD/bblExchange rate JPY/USDJACOS
Diluted bitumen

JML
Gas

1.
2.

USD/bbl
CAD/mcf

Previous forecasts

67.95
70.00
70.00
70.00
69.50
67.95 76.64 75.00 75.00 73.75
107.42 110.00 110.00 110.00 109.39
107.42 110.61 110.00 110.00 109.60

Revised forecasts
Previous forecasts
Revised forecasts
Previous forecasts
Revised forecasts
Previous forecasts
Revised forecasts

33.48
33.48
2.04
2.04

43.19
43.05
1.35
1.21

39.48
41.16
1.40
1.64

38.04
30.23
1.40
1.90

“JACOS Diluted bitumen” stated herein is the diluted bitumen sales price of Japan Canada Oil Sands Ltd. (Excl. Royalty).
“JML Gas” stated herein is the gas sales price of JAPEX Montney Ltd. (Excl. Royalty)

838.64
37.59
1.56
1.65

Revised forecasts

Revised Forecasts Natural Gas Sales for FY3/19(vs Previous Forecasts)

FY3/19FY3/19Previous forecasts Full (f)August 8, 2018

Revised forecasts Full (f)November 9, 2018

Sales volume

1,762

1,731(30)

Net sales

66,604

66,113(490)

Sales volume

1,261

1,231(30)

Sales volume632

614(17)

Sales volume

501

501

0

Sales volume : Million M3
Net sales : Million JPY
Natural gas

ChangeDecrease in sales volume

Sales volume by regionJapan
Gas produced in Japan

Overseas
Million M3

2,000
1,600

Sales volume ofoverseas gas

501

501

1,200
800400-

Sales volume ofdomestic gas

1,261

1,231

Previous (f)Revised (f)Reduction in sales to large clients

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

9Revised Forecasts Crude Oil Sales for FY3/19

Revised forecasts(vs Previous Forecasts)

FY3/19Previous forecasts
Full (f)August 8, 2018

FY3/19
Revised forecasts
Full (f)November 9, 2018

Sales volume

3,310

3,240(69)

Net sales

133,476

138,320+4,843

Crude oil produced inJapan (*)

Sales volume258

264+6Net sales

12,986

14,093+1,107

Crude oil produced inoverseas (**)

Sales volume

720

528

(191)

Net sales

33,447

26,149(7,297)

Sales volume

1,284

1,183

(100)

Net sales

34,33530,792(3,542)

Sales volume : Thousand KL
Net sales : Million JPY

Crude oilChange

Increase in sales price

Equity oil sales

Diluted bitumen (***)

Decrease in crude oil sales volumeof Garraf Oil Field, Iraq
Decrease in sales volume due toreview of JACOS production plan/
Review sales price

Oil price and exchange rate assumptions
JCC

USD/bbl

69.50

73.75

+4.25

Diluted bitumen (***)

USD/bbl38.64

37.59(1.05)

Exchange rate

JPY/USD

109.39109.60+0.21(*) Sales volume and net sales of “Crude oil produced in Japan” stated herein do not include purchased crude oil.
(**) Sales volume and net sales of “Crude oil produced in overseas” stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX Montney Ltd. and Japex
Garraf Ltd.).
(***) Royalty is excluded in the net sales and price of diluted bitumen.

10Revised forecasts

Revised Forecasts for FY3/19 (vs Previous Forecasts)
Previous forecasts
Full (f)August 8, 2018

Revised forecasts
Full (f)November 9, 2018

Net sales

284,019

288,330+4,310Gross profit

34,08332,089(1,993)

Exploration expenses

1,055907(148)

SG&A expenses

30,90230,656(246)

Operating income (loss)

2,125

526

(1,599)Non-operating income(expenses)

7,878

11,864+3,985

Ordinary income

10,003

12,390+2,387

Extraordinary income(losses)

660

613

(46)

Income taxes

968

1,454+486

Profit (loss) attributable tonon-controlling interests(1,311)

(843)

+468

Profit (loss) attributable toowners of parent11,007

12,393+1,386[Million JPY]

11Change

Main factors for change
Increase factor “+” / Decrease factor “( )”Gross profit
Domestic business+ ¥0.2billion
Overseas consolidated subsidiaries(¥2.2billion)

Non-operating income(expenses)
Equity on earnings+ ¥2.4billion
Foreign currency translation
adjustments on debt, foreignexchange gains and losses(Previous) Loss of ¥3.6billion→(Current) Loss of ¥1.9billion+ ¥1.6billion

Revised forecasts

Revised Forecasts Natural Gas Sales for FY3/19(year-on-year)
Sales volume : Million M3
Net sales : Million JPY

Natural gas

FY3/18

FY3/19ChangeFull (a)Revised forecasts Full (f)November 9, 2018

Full

Sales volume

1,773

1,731(41)Net sales

60,431

66,113+5,682

Sales volume

1,284

1,231(54)Sales volume

739

614

(124)

Sales volume488

501+12

Increase in sales priceof gas in Japan

Sales volume by region
JapanGas produced in Japan

OverseasMillion M3

2,000
1,600

Sales volume ofoverseas gas

488

501

1,200800

Sales volume ofgas in Japan

1,284

400-1,231

Increase in shale gas sales volumein Canada・Temporary demand reduction
due to the client’s reason
・Recoil reduction of increase intemporary demand from local
distribution companies inprevious year

Sales volume of “Overseas” stated herein are amounts of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.
FY3/18(a)FY3/19(f)12Revised forecasts

Revised Forecasts Crude Oil Sales for FY3/19(year-on-year)
Sales volume : Thousand KL
Net sales : Million JPY

FY3/18

FY3/19ChangeFull (a)Revised forecasts
Full (f) November 9,
2018

FullSales volume2,506

3,240+734

Net sales

93,685

138,320+44,634

Sales volume

291

264

(27)

Net sales

12,265

14,093+1,829

Crude oil produced inoverseas (**)

Sales volume991

528(464)

Net sales

33,74926,149(7,600)

Diluted bitumen(***)

Sales volume160

1,183+1,023

Net sales

4,512

30,792+26,280

Crude oil
Equity oil sales
Crude oil produced inJapan (*)

Oil price and exchange rate assumptions
JCC

USD/bbl

56.20

73.75

+17.55

Diluted bitumen(***)

USD/bbl

39.63

37.59

(2.04)

Exchange rate

JPY/USD

111.67109.60(2.07)

Increase in sales volume,increase in sales priceDecrease in crude oil sales
volume of Garraf Oil Field, Iraq
Increase in sales volume of theHangingstone lease due to fullyear production andachievement of plateau
production(*)Sales volume and net sales of “Crude oil produced in Japan” stated herein do not include purchased crude oil.
(**)Sales volume and net sales of “Crude oil produced in overseas” stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX Montney Ltd. andJapex Garraf Ltd.).
(***)Royalty is excluded in the net sales and price of diluted bitumen.

13Revised Forecasts for FY3/19 (year-on-year)[Million JPY]

FY3/18Full (a)FY3/19
Revised forecasts
Full (f)November 9,
2018

ChangeNet sales

230,629

288,330+57,700

Gross profit

39,26332,089(7,174)

Exploration expenses

1,324907(418)

SG&A expenses

29,17330,656+1,482

Operating income(loss)

8,764

526(8,238)(4,936)

11,864+16,800

Non-operating income(expenses)
Ordinary income
Extraordinary income(losses)
Income taxes

3,828

12,390+8,562(73,231)

613+73,845

239

1,454+1,215

Revised forecastsMain factors for change
Increase factor “+” / Decrease factor “( )”Gross profit
Domestic business (¥6.3 billion)
Overseas consolidated subsidiaries (¥0.8 billion)

SG&A expenses
Increase in transportation cost at theHangingstone lease due to full year production(¥2.3 billion)

Non-operating income (expenses)
Equity in earnings of affiliates+ ¥12.9 billion

Foreign currency translation adjustments on debt,
foreign currency exchange gains and losses(FY3/18)Gains of ¥2.7 billion→(FY3/19)Gains of¥1.9 billion- ¥4.6 billion(FY3/18) Decrease in amortization expenses
related to the Hangingstone DEMO area+ ¥7.8 billion

Extraordinary income (losses)

Profit (loss) attributable
to non-controllinginterests(38,683)(843)+37,841(FY3/18)Impairment loss spikes due to notproceeding LNG Project in Canada + ¥72.9 billion

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

12,393+43,352(FY3/19)Gains on sales of real estate+ ¥0.7 billion

14

Assumptions and Impact on Profits [3Q-4Q]
FY3/18Full(a)

Revised forecasts

FY3/19
1Q(a)

2Q(a)

3Q(f)

4Q(f)

Full(f)JCC

USD/bbl

56.20

67.95

76.64

75.00

75.00

73.75

Exchange rate

JPY/USD

111.67107.42110.61110.00110.00109.60

Canadian gas

CAD/mcf

2.07

2.04

1.21

1.64

1.90

1.65

Assumptions

JCC(3Q-4Q)

Exchange rate
(3Q-4Q)

USD75.00/bbl

JPY110.00/USD

Canadian gas(4Q)
CAD1.90/mcf
JPY85/CAD

Impact on Profit

USD1/bbl increase in JCC
would push profits up by...

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

CAD 0.5/mcf increase in
Canadian gas prices wouldpush profits up by…

Operating income(loss)

JPY 100million

JPY 130million

JPY 70million

Profit (loss) attributableto owners of parent

JPY 80million

JPY 70million

JPY 60million

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

15