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

Consolidated Financial Results
for the Six Months Ended September 30, 2016
November 8 , 2016

Japan Petroleum Exploration Co .,Ltd.

Cautionary Statement
Any information contained herein with respect to JAPEX’s plans, forecasts, strategies
and other statements that are not historical facts are forward-looking statements about
the future performance of JAPEX. Readers should be aware that the actual results andevents may be different from these projections because of various factors that could
occur in the future.
The provision of this document should not be construed as a solicitation for 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:
1H = First half (1Q-2Q)
2H = Second half (3Q-4Q)(a) = Actual results(f) = Forecasts
FY = Fiscal Year (FY3/17, for instance, means 12 months ending March 31, 2017)
Any inquiries about the information contained herein or other Investor Relations questions arerequested to be directed to:Investor Relations Group, Media & Investor Relations Dept.
Japan Petroleum Exploration Co., Ltd.
Tokyo, JAPANTEL: +81-3-6268-7111

2

2013-09
2013-10
2013-112013-12
2014-01
2014-022014-032014-04
2014-05
2014-06
2014-072014-08
2014-09
2014-10
2014-11
2014-12
2015-01
2015-022015-032015-04
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［Crude Oil Prices US$/bbl]
$120
¥160

$110
¥150

$100

$90

Crude Oil prices
US$/bbl (Left axis)
Exchange Rate
JP¥/US$ (Right axis)

3

¥140

¥130

$80
¥120

$70
¥110$60¥100$50¥90$40¥80$30¥70

Japan Crude Cocktail (JCC) Price in the first 10 days of October 2016 on a prompt
report basis: US$ 45.38/bbl JP¥ 101.53/US$［Foreign Exchange Rate JP¥/US$］

Trends in Crude Oil Prices and Foreign Exchange Rate

Revised Forecasts for FY3/17 (Highlight)
FY3/16
Billion ¥Full (a)FY3/17
Previous
forecasts
1H (f)
Aug.5, 2016 ①

1H (a) ②

Difference

Previous
Revisedforecasts
forecasts
Full (f)Full (f)Aug.5, 2016 ③ Nov.8, 2016 ④

1H（②-①）

Full（④-③）

240.3

90.1

91.4

198.0189.5+1.3-8.5

Operating income(loss)

8.3

-3.3

-3.2

-0.5

-1.2

+0.1-0.7

Ordinary income(loss)

4.6

-0.4

-2.2

0.7

-3.7

-1.7

-4.4

Profit (loss)
attributable to ownersof parent

2.0

0.3

-1.2

1.8

-0.3

-1.6

-2.2

US$/bbl

51.48

43.81

41.64

46.87

43.34

-2.17-3.53

Bitumen price US$/bbl

21.05

9.90

9.94

10.31

10.28

+0.04

-0.03

Exchange rate JP¥/US$

121.06107.34107.67106.10103.63

+0.33

-2.47

Net sales

JCC price4

1H Result

Actual Financial Results for 1H FY3/17 (Summary)Billion ¥Net Sales
Operatingincome (loss)
Ordinary income(loss)
Profit (loss)
attributable toowners of parent

FY3/16

1H (a)

124.1
5.4
8.8
7.9

Aug. 5 , 2016

90.1
-3.3
-0.4
0.3

FY3/17
1H (a)

91.4
-3.2
-2.2
-1.2

Difference%

Billion ￥140.0+1.5%+ %+ %+ %Billion ￥Net Sales (left axis)

124.1

11.0

120.0
100.0
80.0

9.0

8.8
7.9

91.4

90.1

59.21

Bitumen price
US$/bbl

26.16

43.81

7.0
5.0

5.4

3.0

60.0

JCC price
US$/bblExchange rate
JP¥/US$

FY3/171H (f)

41.64

0.3

1.0

40.0

121.449.90
107.34

9.94-0.4
20.0

107.670.0
Main points of difference with previous forecasts (Aug.5, 2016) and actual results□Net Sales+ ¥1.3 billion
Re-schedule of crude oil sales of Garraf Oil Field, Iraq
□Operating income+ ¥0.1 billion□Ordinary income- ¥1.7 billion
Fluctuations in foreign currency exchange rate (-2.2billion), Equity in earnings (+0.2billion)□Profit attributable to owners of parent - ¥1.6 billion

5-3.3
FY3/16 1H(a)FY3/17 1H(f)-1.0-1.2-3.0-2.2-3.2
FY3/17 1H(a)right axis
Operating income
Ordinary income
Profit attributable owners of parent-5.0

1H Result

Actual Sales of Natural Gas in 1H FY3/17 (vs 1H FY3/16)
FY3/16
1H(a)Sales volume : Million M3
Net sales : Million ￥Natural gas

FY3/17
1H (a)

Difference

Sales volume820

845+24

Net sales

33,031

23,184-9,846

Breakdown
Domestic gas

Sales volume579

531-47(Domestically produced gas)

Sales volume(361)

(324)

(-36)

Overseas gas

Sales volume241313+71

Million M3

1,000
800
600
400200-

Sales volume of overseas gas

241313
Sales volume of domestic gas

579

531
Sales volume of “Overseas gas” stated herein are amount of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

FY3/16 1H

FY3/17 1H

6

1H Result

Actual Sales of Crude Oil in 1H FY3/17 (vs 1H FY3/16)
Sales volume : Thousand KL
Net sales : Million ¥FY3/16

FY3/17

1H (a)

1H (a)

Difference

Sales volume

1,480

1,715+235

Net sales

57,14843,792-13,355

Sales volume180149-30

Net sales

8,427

4,645

-3,781

Sales volume669

986+317

Net sales

24,41623,112-1,303

Sales volume143

91

-51

Net sales

2,927

589

-2,338JCC price

US$/bbl

59.21

41.64

-17.57

Bitumen price

US$/bbl

26.16

9.94

-16.22

Exchange rateJP¥ / US$

121.44107.67-13.77

Crude oil

Decline in sales prices

Breakdown
Domestic crude oil *1

Overseas crude oil *2

Bitumen *3

Assumptions

7*1

Sales volume and net sales of“Domestic crude oil” do notinclude purchased crude oil.

*2

Sales volume and net sales of“Overseas crude oil” areamounts of 3 overseas
subsidiaries (Japex (U.S.)
Corp., JAPEX Montney Ltd.
and Japex Garraf Ltd.).

*3

Royalty is excluded in the netsales and price of Bitumen.

1H Result

Actual Results for 1H FY3/17 (year-on-year)
Million ¥FY3/16

FY3/17(a)(a)

Difference

Causes of increase(+) or decrease(-)
Gross profit
Domestic crude oil and natural gas - ¥7.6 billion
Overseas consolidated subsidiaries - ¥5.3 billion
Reduction of consignment revenue - ¥1.6 billion

Net sales

124,157

91,494-32,663

Gross profit26,408

11,675-14,733

Exploration expenses

4,769

645

-4,124

SG&A expenses

16,231

14,243-1,987

Operating income (loss)

5,407-3,213-8,621

SG&A expenses
Decrease of transportation cost andG&A expenses of JACOS- ¥0.4 billion

Non-operating income(loss)

3,434

975

-2,459

Cost reduction- ¥1.5 billion

Ordinary income (loss)

8,842-2,238-11,081

Extraordinary income(loss)

-72

-270

-198

Non-operating income (loss)
Equity in earnings- ¥2.2 billion

Income taxes

3,660

414

-3,245

Profit (loss) attributable
to non-controllinginterests-2,853-1,657+1,196

Profit (loss) attributableto owners of parent

7,963-1,267-9,2308

Exploration expenses
Overseas exploration
Domestic exploration- ¥3.4 billion- ¥0.6 billion

Revised Full Year Forecasts

Assumptions of Revised Forecasts for FY3/17
2016
2017
Full year
Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar.

[Assumptions]

JCC price

US$/bblExchange rate JP\/US$
JACOS
Bitumen
JML
Gas
1.

2.

Previous forecasts

37.17
50.00
50.00
50.00
46.87
37.17 45.92 45.00 45.00 43.34
110.71 105.00 105.00 105.00 106.10
110.71 105.32 100.00 100.00 103.63

Revised forecasts
Previous forecasts
Revised forecasts

US$/bblPrevious forecasts

CA$/mcf

Previous forecasts

Revised forecasts
Revised forecasts

7.12
7.12
1.58
1.58

16.80 16.95 1.34
1.94
1.94
1.36
2.14
1.94

10.31
10.28
1.68
1.74

“JACOS Bitumen” stated herein Bitumen selling price of Japan Canada Oil Sands Ltd. (Deduction of Royalty).
On the premise of a temporarily suspend a production operation in Demo area from May 2016, the second half of sales
does not expect.
“JML Gas” stated herein gas sales price of JAPEX Montney Ltd. (Deduction of Royalty)

9Revised Full Year Forecasts

Revised Full Year Forecasts for FY3/17 (Summary)Previous
forecasts
Full(f)Aug.5,2016

Billion ¥1,980

Net Sales

Revisedforecasts
Full(f)Nov.8,2016

1,895

Difference
VS Previous
Forecasts(%)

Difference-85-4.3%

Operating income(loss)-5-12-7-%

Ordinary income (loss)

7-37-44-%

Profit (loss)
attributable to ownersof parent

18-3-22-%

Billion￥

220.0
200.0

Billion￥Net Sales (left axis)

198.0

5.0

189.5

3.0

180.0

1.8

160.02.00.7

140.0

1.00.0120.0
JCC price

US$/bbl

46.87

43.34

-3.53

Bitumen price

US$/bbl

10.31

10.28

-0.03

Exchange rate

JP¥/US$106.10103.63

-2.47

100.0
80.0

-0.3

-0.5
-1.2

□Net Sales- ¥8.5 billion Decline in sales prices□Operating income - ¥0.7 billion Decrease in gross profit (- ¥0.4 billion)□Ordinary income - ¥4.4 billion Fluctuations in foreign currency exchange
rate (-3.6 billion)□Profit attributable to owners of parent - ¥2.2 billion
Reduction of corporate tax (+0.9 billion)

1020.0-1.0
-2.0
-3.0

60.0
40.0

Main points of difference with previous forecasts (Aug.5, 2016) and revised
forecast (November 8, 2016) *Causes of increase (+) or decrease (-)

4.0

-3.7
Previous forecasts Revised forecasts(f)Aug.5,2016(f)Nov.8,2016
right axis
Operating income
Ordinary income
Profit attributable to owners of parent

-4.0
-5.0

Revised Forecasts Natural Gas Sales in FY3/17(vs Previous Forecasts)
Previous forecasts
Full(f)
Aug 5, 2016

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

Revised Full Year Forecasts

Revised forecasts
Full(f)Nov.8, 2016

Difference

Sales volume

1,816

1,828+13Net sales

55,04753,847-1,200

Breakdown
Domestic gas

Sales volume

1,252

1,245-7(Domestically produced gas)

Sales volume(732)

(733)

(+1)

Overseas gas

Sales volume

563

583

+20

Million M3

2,000
Sales volume of overseas gas

1,600

563

583

1,252

1,245

Sales volume of domestic gas

1,200
800
400-

Previous forecasts

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

Revised forecasts11Revised Forecasts Crude Oil Sales in FY3/17(vs Previous Forecasts)
Sales volume : Thousand KL
Net sales : Million ￥Previousforecasts
Full(f)Aug.5, 2016

Revisedforecasts
Full(f)Nov.8, 2016

Revised Full Year Forecasts

Difference

Sales volume

2,725

2,852+127

Net sales

79,50675,000-4,506

Sales volume299

302+3Net sales

10,1339,309-824

Sales volume

1,486

1,496+11

Net sales

40,18335,543-4,640

Sales volume

92

92+0

Net sales

624592-31

JCC price

US$/bbl46.87

43.34-3.53

Bitumen price

US$/bbl10.3110.28-0.03

Exchange rate

JP¥/US$106.10

103.63-2.47

Crude Oil

Decline in sales prices

Breakdown
Domestic crude oil*1Overseas crude oil*2

Bitumen *3
Assumptions

12*1

Sales volume and net sales of“Domestic crude oil” do notinclude purchased crude oil.

*2

Sales volume and net sales of“Overseas crude oil” areamounts of 3 overseas
subsidiaries (Japex (U.S.)
Corp., JAPEX Montney Ltd.
and Japex Garraf Ltd.).

*3

Royalty is excluded in the net
sales and price of Bitumen.

Revised Full Year Forecasts

Revised Forecasts for FY3/17 (vs Previous Forecasts)
Previous forecasts
Full(f)Aug. 5, 2016

Revised forecasts
Full(f)Nov.8, 2016

Net sales

198,057

189,528-8,529

Gross profit

29,607

29,154-454

Exploration expenses

1,839

1,845

+6

SG&A expenses

28,31828,594+276

Operating income (loss)-549-1,285-736

Non-operating income

1,274-2,439-3,714

Ordinary income (loss)

725-3,725-4,450Million ￥Difference

Extraordinary income-313

97+410

Income taxes

1,569

584-985

Profit (loss) attributable tonon-controlling interests-3,031-3,871-840Profit (loss) attributable toowners of parent

1,874-341-2,215

13Causes of increase(+) or decrease(▲)
Gross profit
Domestic crude oil and natural gas- ¥1.2billion
Overseas consolidated subsidiaries+ ¥0.3billion
Other+ ¥0.5billion

Non-operating income (loss)
Foreign currency translation
adjustments on debt, foreignexchange gains and losses(Previous) Gains ¥1.6billion→(Current) Losses ¥ 1.9billion- ¥3.6billion
Equity in earnings+¥0.1billion

Revised Full Year Forecasts

Revised Forecasts Natural Gas Sales in FY3/17 (vs FY3/16)
Sales volume : Million M3
Net sales : Million ￥Natural gas

FY3/16

FY3/17Full (a)Revised forecasts
Full(f) Nov.8,2016

Difference

Sales volume

1,780

1,828+47

Net sales

68,46953,847-14,622

Breakdown
Domestic gas

Sales volume

1,275

1,245-31(Domestically produced gas)

Sales volume(769)

(733)

(-35)

Overseas gas

Sales volume504

583+78Million M3

2,000
1,600

504583

Sales volume of domestic gas

1,200800

1,275

1,245

400
-

Sales volume of overseas gas

FY3/16 Full(a)Sales volume of “Overseas gas” stated herein are amount of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

FY3/17 Full(f)14Revised Full Year Forecasts

Revised Forecasts Crude Oil Sales in FY3/17 (vs FY3/16)
FY3/16
Sales volume : Thousand KL
Net sales : Million ¥Full (a)FY3/17
Revisedforecasts
Full(e)Difference

Nov.8,2016

Sales volume

3,233

2,852-381

Net sales

102,91875,000-27,917

Domestic
crude oil *1

Sales volume340

302-38Net sales

13,8159,309-4,506

Overseas
crude oil *2

Sales volume

1,616

1,496-119

Net sales

48,38435,543-12,841

Sales volume306

92-214

Net sales

4,894592-4,302

JCC price

US$/bbl

51.48

43.34

-8.14

Bitumen

US$/bbl

21.05

10.28

-10.77

Exchange rate

JP¥/US$

121.06103.63-17.43

Crude oil

Decline in sales prices

Breakdown

Bitumen *3
Assumptions

15*1

Sales volume and net sales of“Domestic crude oil” do notinclude purchased crude oil.

*2

Sales volume and net sales of“Overseas crude oil” areamounts of 3 overseas
subsidiaries (Japex (U.S.)
Corp., JAPEX Montney Ltd.
and Japex Garraf Ltd.).

*3Royalty is excluded in the net
sales and price of Bitumen.

Revised Full Year Forecasts

Revised Forecasts for FY3/17 (vs FY3/16)
Million ￥FY3/16
Full (a)Causes of increase(+) or decrease(-)

FY3/17
Revised forecasts
Full(f)Nov.8, 2016

Difference

Net sales

240,302

189,528-50,774

Gross profit

47,27929,154-18,126

Exploration expenses

6,516

1,845-4,670

SG&A expenses

32,42628,594-3,833

Operating income (loss)

8,336-1,285-9,622

Gross profit
Domestic crude oil and natural gas- ¥8.7billion
Overseas consolidated subsidiaries- ¥7.5billion
Reduction of consignment revenue- ¥2.6billion
Exploration expenses
Overseas exploration - ¥3.5billion
Domestic exploration - ¥1.1billion

Non-operating income(loss)-3,684-2,439+1,245

SG&A expenses
Decrease of transportation cost andG&A expenses of JACOS - ¥1.4 billion

Ordinary income (loss)

4,652-3,725-8,376

Othere.g. Cost reduction

Extraordinary income-3,143

97+3,239

Income taxes

6,388

584-5,804

Profit (loss) attributable
to non-controllinginterests-6,970

Profit (loss) attributableto owners of parent

2,090-3,871-341

16+3,099-2,431- ¥2.4 billion

Non-operating income (losses)
Equity in earnings- ¥4.3billion
Foreign currency translation
adjustments on debt, other foreignexchange gains and losses(Previous) Losses ¥8.8illion→(Current) Losses ¥1.9billion+ ¥6.8billion

Revised Full Year Forecasts

Assumptions and Impact on Profits [2H]
FY3/16
1Q-4Q(a)FY3/17
1Q(a)

2Q(a)

3Q(f)

4Q(f)

1Q-4Q(f)

JCC price

US$/bbl

51.48

37.17

45.92

45.00

45.00

43.34

Exchange rate

JP¥/US$121.06

110.71105.32100.00100.00103.63

Canadian gas

CA$/mcf

2.11

1.58

1.36

2.14

1.94

1.74

Assumptions

JCC price(3Q-4Q)

Exchange rate(3Q-4Q)

US$ 45.00/bbl

100.00 JP¥/US$

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

Canadian gas(4Q)
CA$ 1.94/mcf
JP¥ 80/CA$

A weakening in JP¥ 1/US$
exchange rates would
push profits up by…

CA$ 1/mcf increase inCanadian gas prices would
push profits up by…

Operating incomeJP¥ 120millionJP¥ 70millionJP¥ 520million

Profit attributableto owners of parentJP¥ 90millionJP¥ 30millionJP¥ 240million

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.

17