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

Financial Results

for the Nine Months Ended December 31, 2018
February 12, 2019Japan Petroleum Exploration Co., Ltd.
Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

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 basedon 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 (FY3/19, 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. (JAPEX)Tokyo, JAPANTEL: +81-3-6268-7111
Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

2

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

USD/bbl90
Crude Oil Price USD/bbl
Exchange Rate JPY/USD
80

70

110

2018-122018-112018-10

2018-092018-082018-072018-06

2018-05

2018-04

2018-032018-022018-0150

2017-1260

105

JCC in the first 10 days of January 2019 on a prompt report basis:

USD 65.70/bbl

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

3

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

1Q-3Q (a)①

FY3/19Full (a)②

1Q-3Q (a)③ChangeFull (f)Previous Full (f)Revised
forecasts(November 9,2018)④forecasts(February 12,2019)⑤*

1Q-3Q(③-①)

Full(⑤-②)

Full(⑤-④)

158.2

230.6

207.4

288.3

282.3

+49.1

+51.6

(6.0)

Operating profit

4.4

8.7

1.0

0.5

0.3

(3.3)

(8.4)

(0.2)

Ordinary profit

4.1

3.8

12.2

12.3

9.8

+8.1

+6.0

(2.5)

Profit (loss)
attributable toowners ofparent(30.3)(30.9)

11.4

12.3

12.4

+41.7+43.4+0.0

Net sales

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

53.09

56.20

74.54

73.75

70.45

+21.45+14.25(3.30)

111.79111.67110.25

109.60110.19(1.54)(1.48)+0.59*JAPEX announced the latest forecasts by “Notice of Financial Forecasts Revision” on February 12, 2019, regarding
the consolidated financial forecasts of the fiscal year ending March 31, 2019.
Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

4

Actual Sales of Natural Gas in 1Q-3Q FY3/19(year-on-year)
Sales volume : Million M3
Net sales : Million JPY
Natural gas

FY3/18

FY3/191Q-3Q (a)1Q-3Q (a)Actual results

ChangeSales volume

1,272

1,248

(24)

Net sales

42,43345,667+3,234

Sales volume908

868

(40)

Sales volume

540

450(90)

Sales volume363

379

+16

Increase of sales price inJapan

Sales volume by regionJapan
Gas produced in Japan

Overseas
Million M3

1,200

Sales volume ofoverseas gas

363

379

Sales volume of gas

800
400-in Japan

908

3Q FY3/18 (a)Temporary demand reduction due tothe client’s reason

868
3Q FY3/19 (a)Sales volume of “Overseas” stated herein are amounts of Japex (U.S.) Corp.
and JAPEX Montney Ltd., which are overseas consolidated subsidiaries.

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

5

Actual Sales of Crude Oil in 1Q-3Q FY3/19(year-on-year)
Sales volume : Thousand KL
Net sales : Million JPY

Crude Oil

FY3/18

FY3/191Q-3Q(a)1Q-3Q(a)ChangeSales volume

1,767

2,502+735

Net sales

62,341

106,214+43,873

Sales volume215

190(24)

Net sales

8,597

10,350+1,753

Sales volume821356(464)

Net sales

26,345

15,941(10,403)

Sales volume14925+910

Net sales390

26,198+25,807

Equity oil sales
Crude oil produced inJapan (*)

Crude oil produced inoverseas (**)

Diluted bitumen(***)

Oil price and exchange rate assumptions
JCC

USD/bbl

53.09

74.54

+21.45

Diluted bitumen (***)

USD/bbl

36.79

39.63

+2.83

Exchange rate

JPY/USD

111.79110.25(1.54)

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

6Actual results• Increase in diluted bitumen sales
volume• Increase in sales priceDecrease in crude oil sales volumeof Garraf Oil Field, Iraq
Commencement of diluted bitumen
sales of the Hangingstone lease in3Q of 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

Actual Results for 1Q-3Q FY3/19 ( year-on-year )Main factors for change
Increase factor “+” / Decrease factor “( )”FY3/18

FY3/19[Million JPY]

1Q-3Q
(a)

1Q-3Q(a)ChangeNet sales

158,274

207,425+49,151

Gross profit

26,81625,445(1,371)

996

617(378)

SG&A expenses

21,41923,787+2,367

Operating profit

4,400

1,040(3,360)

Non-operating income(expenses)(289)

11,235+11,524

Ordinary income

4,111

12,275+8,163(73,583)

605+74,189(409)

2,000+2,409

Profit (loss) attributable
to non-controllinginterests(38,725)(522)+38,203

Profit (loss) attributableto owners of parent(30,337)

Exploration expenses

Extraordinary income(losses)
Income taxes

11,402

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

+41,740

7Gross profit
Domestic business(¥3.1 billion)
Overseas consolidated subsidiaries + ¥1.8 billion
SG&A expenses
Increase in transportation cost at theHangingstone lease(¥1.8 billion)
Non-operating income (expenses)
Equity in earnings+ ¥7.2 billion
Foreign currency translation adjustments onloan, foreign currency exchange gains and losses(FY3/18)Gains of ¥3.9 billion → (FY3/19)Loss of ¥1.2 billion(¥5.1 billion)

Increase in interest expenses (¥1.8 billion)(FY3/18)Decrease in depreciation expenses
related to the Hangingstone DEMO area
+ ¥7.8 billion
Extraordinary income (losses)(FY3/18)Decrease of impairment loss due to notproceeding LNG Project in Canada+ ¥73.5 billion(FY3/19)Gain on sales of real estate+ ¥0.7 billion

Revised forecasts

Price Assumptions for Revised Forecasts for FY3/19
2018
Jan.-Mar. Apr.-Jun.
JCCUSD/bbl

Exchange rate

JPY/USD

JACOS
Diluted bitumen

JML Gas1.
2.

USD/bbl
CAD/mcf

Revised forecasts
Previous forecasts
Revised forecasts

Revised forecasts
Previous forecasts
Revised forecasts

Jul.-Sep.

Oct.-Dec.

Jan.-Mar.

Full year

67.95
76.64
75.00
75.00
73.75
67.95
76.64
79.05
60.00
70.45
107.42 110.61 110.00 110.00 109.60
107.42 110.61 112.41 110.00 110.19

Previous forecasts

Previous forecasts

2019

33.48
33.48
2.04
2.04

43.05
43.05
1.21
1.21

41.16
41.08
1.64
1.42

30.23
25.65
1.90
2.17

37.59
36.63
1.65
1.71

“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).

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

8

Revised forecasts

Revised Forecasts Natural Gas Sales for
FY3/19 (vs Previous Forecasts)
FY3/19FY3/19Previous forecasts Full (f)November 9, 2018

Revised forecasts Full (f)February 12, 2019

Sales volume

1,731

1,723

(8)

Net sales

66,11367,049+935

Sales volume

1,231

1,235+5Sales volume614624+9

Sales volume501488(13)Sales volume : Million M3
Net sales : Million JPY
Natural gas

ChangeSales volume by region
JapanGas produced in Japan

Overseas

Million M3

1,600

501

488

1,200800400

1,231

Increase of sales pricein Japan

Sales volume ofoverseas gas

Decrease of shale gas in Canada

Sales volume ofgas in Japan

Increase in demand from local gas
distributors

1,235
Sales volume of “Overseas” stated herein are amounts of Japex (U.S.) Corp.
and JAPEX Montney Ltd., which are overseas consolidated subsidiaries.

Previous (f)Revised (f)Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

9

Revised forecasts

Revised Forecasts Crude Oil Sales for FY3/19(vs Previous Forecasts)
FY3/19FY3/19ChangePrevious forecasts
Full (f) November 9,
2018

Revised forecasts
Full (f) February 12,
2019

Full

Sales volume

3,240

3,392+151

Net sales

138,320

135,687(2,633)

Sales volume

264

265

+0

Net sales

14,093

13,636(458)

Sales volume528

685+157

Net sales

26,14928,294+2,144

Sales volume

1,183

1,178(6)Net sales

30,79230,120(672)

Sales volume : Thousand KLNet sales : Million JPY

Crude Oil :Decrease in sales price

Equity oil sales
Crude oil producedin Japan (*)
Crude oil producedin overseas (**)
Diluted bitumen(***)

Oil price and exchange rate assumptions
JCC

USD/bbl

73.75

70.45

(3.30)

Diluted bitumen (***)

USD/bbl

37.59

36.63

(0.96)

Exchange rate

JPY/USD

109.60110.19+0.59••

Decrease in sales
volume due to revised
JACOS production plan
Decrease in sales price(*) 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., JAPEXMontney Ltd. and Japex Garraf Ltd.).
(***) Royalty is excluded in the net sales and price of diluted bitumen.
Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

10

Revised forecasts

Revised Forecasts for FY3/19 (vs Previous Forecasts)
FY3/19FY3/19Previous forecasts
Full (f)November 9, 2018

Revised forecasts
Full (f)February 12, 2019

Net sales

288,330

282,326(6,004)

Gross profit

32,08932,786+697

907822(85)

SG&A expenses

30,656

31,638+982

Operating profit

526326(201)

Non-operating
income11,864

9,506(2,358)

Ordinary profit

12,3909,831(2,559)

613

581

(32)

Income taxes

1,454(1,505)(2,959)Profit (loss) attributable
to non-controllinginterests

(843)

(552)

+291

12,393

12,469+77[Million JPY]

Exploration expenses

Extraordinary income

Profit attributable toowners of parent

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

11Change

Main factors for change
Increase factor “+” / Decrease factor “( )”Gross profit
Domestic business+ ¥0.8 billion
Overseas consolidated subsidiaries(¥0.1 billion)
SG&A expenses
Transportation cost of JAPEX Montney Ltd.
(¥1.0 billion)
Non-operating income (expenses)
Equity on earnings+ ¥1.2 billion
Foreign currency translation adjustments
on loan, foreign currency exchange gains
and losses(Previous)Loss of ¥1.9 billion→ (Current)Loss of ¥5.1 billion(¥3.2 billion)

Income taxes
Application of foreign tax credit on GarrafProject+ ¥2.7 billion

Revised forecastsRevised 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)February 12, 2019

Full

Sales volume

1,773

1,723

(50)

Net sales

60,431

67,049+6,618

Sales volume

1,284

1,235(49)

Sales volume739

624(115)

Sales volume488

488

(1)

Sales volume by regionJapan
Gas produced in Japan

Overseas

Million M3

1,600

488

488

1,200
800
400-Sales volume ofoverseas gas
Sales volume ofgas in Japan

1,284

Increase of sales
price of gas in Japan1,235••

Temporary demand reduction due to theclient’s reason
Reactionally fall of increase in temporary
sales to local distribution companies inprevious year

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

FY3/18(a)FY3/19(f)Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

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) February
12, 2019

Full

Sales volume

2,506

3,392+885

Net sales

93,685

135,687+42,002

Crude oil produced
in Japan (*)

Sales volume

291

265

(27)

Net sales

12,265

13,636+1,370

Crude oil producedin overseas (**)

Sales volume

991

685

(307)

Net sales

33,74928,294(5,456)

Diluted bitumen(***)

Sales volume

160

1,178

+1,017

Net sales

4,512

30,120+25,607

Crude oil
Equity oil sales

Oil price and exchange rate assumptions
JCC

USD/bbl

56.20

70.45

+14.25

Diluted bitumen (***)

USD/bbl

39.63

36.63

(3.00)

Exchange rate

JPY/USD

111.67110.19(1.48)

Increase in sales volume,
increase in sales priceDecrease in crude oil sales
volume of Garraf Oil Field,
Iraq
Increase in sales volume of
the Hangingstone lease due
to full year 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. and Japex Garraf Ltd.).
(***)Royalty is excluded in the net sales and price of diluted bitumen.

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

13

Revised forecasts

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

FY3/18Full (a)FY3/19
Revisedforecasts Full (f)February 12,
2019

ChangeMain factors for change
Increase factor “+” / Decrease factor “( )”Gross profit

Net sales

230,629

282,326+51,696

Domestic business(¥5.5 billion)
Overseas consolidated subsidiaries (¥0.9 billion)

Gross profit

39,26332,786(6,477)

SG&A expenses

1,324822(502)

SG&A expenses

29,173

31,638+2,464

Operating income

8,764326(8,439)

Non-operating
income (expenses)(4,936)

9,506+14,442

Ordinary income

3,828

9,831

+6,003(73,231)581+73,813239(1,505)(1,744)

Profit (loss)
attributable to noncontrolling interests(38,683)(552)+38,132(FY3/18)Decrease of impairment loss due to notproceeding LNG Project in Canada+¥72.9 billion

Profit (loss)
attributable toowners of parent(30,958)

12,469+43,428(FY3/19)Gain on sales of real estate+¥0.7 billion

Exploration expenses

Extraordinary income(losses)
Income taxes

Copyright © 2019 Japan Petroleum Exploration Co., Ltd. All rights reserved.

14Increase in transportation costat the Hangingstone lease(¥2.2 billion)

Non-operating income (expenses)
Equity in earnings+¥14.2 billion

Foreign currency translation adjustments onloan, foreign currency exchange gains and losses(FY3/18)Gains of ¥2.7 billion→(FY3/19)Loss of ¥5.1 billion(¥7.8 billion)(FY3/18) Decrease in depreciation expenses
related to the Hangingstone DEMO area+¥7.7 billion

Extraordinary income (losses)