INPEX CORPORATION

Financial Results
for the six months ended June 30, 2020
August 7, 2020

Agenda Corporate Overview
 Consolidated Financial Results for the six months ended June 30, 2020
 Consolidated Financial Forecasts for the year ending December 31, 2020

Copyright © 2020 INPEX CORPORATION. All rights reserved.

1

Cautionary Statement
This presentation includes forward-looking information that reflects the plans andexpectations of the Company. Such forward-looking information is based on the current
assumptions and judgments of the Company in light of the information currently available toit, and involves known and unknown risks, uncertainties and other factors. Such risks,
uncertainties and other factors may cause the Company’s performance, achievements orfinancial position to be materially different from any future results, performance,
achievements or financial position expressed or implied by such forward-looking information.
Such risks, uncertainties and other factors include, without limitation:
 Price volatility and change in demand in crude oil and natural gas
 Foreign exchange rate volatility
 Change in costs and other expenses pertaining to exploration, development andproduction
The Company undertakes no obligation to publicly update or revise the disclosure of
information in this presentation (including forward-looking information) after the date of thispresentation.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

2

Corporate Overview

Takayuki Ueda
Representative Director, President & CEO

FY 2020/12 Second Quarter Financial Results Highlights

FY2020/12 Q2
Financial Results(Jan to June 2020)

Net Sales

Net Income(Loss)

Income before
One-off Profit (Loss)*1

Net Production¥391.6 billion(¥120.7 billion)¥36.4 billion

582,000 BOED

(51.5% decrease YoY*2)(9% increase YoY*2)(30.5% decrease YoY*2)(January to June 2020)*1 Income before one-off profit (loss): Net income (loss) attributable to owners of parent minus one-off profit (loss)*2 Period of YoY comparison: January to June 2019

FY2020/12 Full Year
Financial Forecasts

 Net Sales: ¥730.0 billion
 Net Income (Loss): (¥136.0 billion)
 Income before one-off profit (loss)*1: ¥36.2 billion

Dividend per Share No change from the previous forecast
 Total annual dividend of ¥24 per share (forecast) including interim dividendof ¥12 and year-end dividend of ¥12 (forecast)Response to
Low Oil Prices

 Maintaining investment and cost reduction measures in progress Securing sufficient liquidity and free cash flow
 Implementing COVID-19 countermeasures at INPEX operational sites toensure steady production

Project Highlights

 Ichthys LNG: Steady production in progress Abadi LNG Project: Preparations to commence FEED in progress Abu Dhabi: Development work ongoing to increase production capacity

Copyright © 2020 INPEX CORPORATION. All rights reserved.

4

Recognition of Impairment Losses, Revision of FY2020 Consolidated
Financial Forecasts, Dividend
 Recognition of Impairment Losses

 Impairment tests conducted on assets in light of such factors as the drop in oil prices due to factors such as the
spread of COVID-19 resulted in the recognition of 192.4 billion yen in impairment losses (net income impact ofapproximately 162.7 billion yen after incorporating tax effect) in 2Q FY2020.
RegionOceania
United States

AssetsImpairment Losses (billion yen)Prelude FLNG Project

130.8

Bayu Undan Project

8.9

Shale Oil Project (Eagle Ford)

33.6

Lucius Oil Field

18.9
Total Amount

192.4

 Revision of FY2020 Consolidated Financial Forecasts

 As a result of factors including the recognition of the impairment losses in 2Q FY2020, net income attributable toowners of parent is down 146 billion yen compared to the previous forecast to minus 136 billion yen.
(billion yen)
Net income/loss attributable to owners of parent

Previous Forecast

Revised Forecasts(Aug 6, 2020)

Ref. Income before
one-off profit (loss)*

10.0(136.0)36.2(May 12, 2020)* Income before one-off profit (loss): Net income (loss) attributable to owners of parent minus one-off profit (loss) Dividend There is no change from the previous forecast. An interim dividend of ¥12 and an year-end dividend of ¥12(forecast) totalling an annual dividend of ¥24 (forecast) per share.
Shareholder Return Policy
During the term of the Medium-term Business Plan 2018-2022, maintain stable base dividends and enhance dividends
in stages in accordance with the growth of the Company's financial results with a payout ratio of 30% or more.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

5

Response to Low Oil Prices
Investment and Cost Reduction MeasuresFY2020 development and exploration reduction targets and progress We have been pursuing our initial targets to reduce development investment by over 20% and exploration
investment by over 40% groupwide compared to our initial forecasts. As a result, we have made sufficient
progress so far to expect to reduce investment in overall development and exploration by over 30 percent andover 50 percent, respectively.

Will consider further reduction measures beyond 2021 in preparation for prolonged low oil prices

Will further pursue cost reduction in all other areas including OPEX and management costs
Capital Expenditure

FY2020 Investment Cost Forecast(billion yen)
Capital Expenditure

Reduction from
Initial Forecasts
Difference

201

177

(91)

(34%)

Exploration Expenditure

30

16

13

(17)

(57%)

Others

3

2

2

(1)

(33%)

301

219

192

(109)

36%)

Investment and cost reduction measures






300

301
30

16

200

Others

3

219

%

268

Total Expenditure

InitialMay
Aug
Forecasts Target Forecasts(billion yen)

Exploration Expenditure

2

192
13

2

268

100

201

177

0

InitialMay
Aug
Ichthys (Australia): Revise investment plans and operations
Forecast
TargetForecast
Abu Dhabi: Reduce drilling costs, suspend or postpone operations
Eagle Ford (US): Postpone scheduled development work including production well drilling and completion, restrict operations tominimum lease requirements, change plans flexibly in view of oil prices
Exploration: Consider suspension and/or postponement of exploration and appraisal drilling in Australia, Gulf of Mexico, Abu
Dhabi (onshore), etc.
New projects: Rigorously screen and evaluate new projects

Copyright © 2020 INPEX CORPORATION. All rights reserved.

6

Response to Low Oil Prices
Securing Sufficient Liquidity and Free Cash Flow

 INPEX maintains abundant liquidity on
hand and has sufficient commitment lines.
INPEX will further strengthen its
financial base with the following
measures.

FY2020 Free Cash Flow Forecast*(billion yen)
Approx.
350

 Continue to maintain abundant liquidity
on hand. Available fund as of December
31, 2020 is expected to be approximately¥200 billion.
 Continue to maintain commitment lines
with sufficient amounts and durationfrom core banks.

Approx.
190

Approx.
160

 Expect to secure approximately ¥160
billion in free cash flow* for FY2020.

* Including the Ichthys Downstream IJVCopyright © 2020 INPEX CORPORATION. All rights reserved.

7

Response to the Low Oil Price
Implementing COVID-19 Countermeasures for Steady Production
 Stable operations and energy supply are being steadfastly maintained through various initiatives at
INPEX-operated sites including Ichthys LNG facilities in Australia and the Minami-Nagaoka Gas
Field and Naoetsu LNG Terminal in Japan. These initiatives are all based on prioritizing the healthand safety of employees and contractors.
 The INPEX-operated Ichthys LNG Project in Australia instituted measures to prevent infection at an early stage
by adopting special shifts including isolation periods, monitoring and regulating access to work sites andimposing restrictions and requirements on LNG vessel operations. The project plans to continue implementing
the appropriate measures as required.
 At worksites in Japan, access is restricted to operations personnel only. Measures are taken to secure backup
personnel to mitigate workforce shortages in case of an infection. Strict access segregation and zoning measures
dividing operations and non-operations personnel to reduce the risk of infection.
 At the Eagle Ford Shale Oil Project in the United States, all personnel are required to undergo medical screening
and temperature checks prior to accessing worksites. The use of masks and hand sanitizers is required anddisinfection work is carried out regularly, while an infection countermeasure plan has been developed.
 INPEX continues to strengthen COVID-19 prevention measures at other oil and gas production operations
around the world to maintain a stable supply of energy.

 In February 2020, INPEX has established a crisis management task force at its head office to respondto the COVID-19 pandemic and all employees have been strongly encouraged to work from home
and to avoid business trips. All INPEX employees based in Japan followed a directive to work fromhome in principle during the state of emergency announced by the Japanese Government. After thestate of emergency was lifted, approximately 70% of the total workforce were directed to work from
home, as well as to utilize staggered commuting & flexible working arrangements in order to avoid
crowds and to minimize the risk of infection.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

8

Net Production
 Net production for the first half increased reflecting the successful ramp-up of the Ichthys
LNG Project.
600(Thousand BOED)

500
400

534

582
3%

4%
42%
43%

300
9%

Americas10%0Eurasia
Asia/Oceania

200
100

Middle East/Africa

38%

40%

5%

4%

(Reference figures)
Same period of
the previous year
(January - June 2019)

FY2020/12 Q2(January - June 2020)

Japan* Net production for FY2020/12 Q2 (January to June 2020). The production volume under the production sharing contracts entered into by the INPEX Groupcorresponds to the net economic take of the INPEX Group.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

9

Ichthys LNG Project Production Status
 Stable operations have been maintained without shutdowns, etc., as a result of various
countermeasures against the spread of COVID-19.
 Number of LNG Cargoes 56 LNG cargoes shipped between January and June 2020
 Approximately 10 LNG cargoes per month expected for FY2020
PeriodLNG

OnshoreOffshore
Condensate Condensate

LPG

October 2018 to March 2019

31

4

10

6

April to December 2019

84

16

23

23

January to June 2020

56

9

16

16

Total since production start-up till June 2020

171

29

49

45

 Project Loan Refinancing
 Concluded a refinancing of approximately 8.3 billion US dollars in June 2020
 Reduced the financial commitment of Ichthys LNG Pty Ltd
 Operational Expenditure Competitive production cost in comparison to the company’s other producing assets
 Maintenance Plan
 No large-scale maintenance work is planned in FY2020
Copyright © 2020 INPEX CORPORATION. All rights reserved.

10Exploration Blocks in Vicinity of Ichthys Field INPEX holds participating interests in 18 exploration blocks in the vicinity of the Ichthys
Field. To date, gas reservoirs have been discovered including Crown, Lasseter, Mimia
and Burnside. These gas reservoirs extend across at least 9 blocks.
 Land secured for possible additional LNG processing trains in Darwin.
Copyright © 2020 INPEX CORPORATION. All rights reserved.

11

Abadi LNG Project
Production Capacity

Total output of natural gas (LNG equivalent): 10.5 million
tons per year including• Approximately 9.5 million tons of LNG per year
• Local gas supply via pipeline
Up to approximately 35,000 barrels of condensate per day Production Sharing Contract (PSC) Term











From November 16, 1998 to November 15, 2055
PSC amendment and extension agreements signed in
October 2019, extending the PSC from 2028 to 2055

Milestones

Sufficiently Strong Project Economics

The project was listed as a national strategic project in June2017 and as a priority infrastructure project in September
2017 by the Indonesian government.
In July 2019, Indonesian authorities approved the revisedplan of development based on an onshore LNG
development scheme.
In February 2020, INPEX signed an MoU with PT PLN andwith PT Pupuk Indonesia, each concerning the long-term
domestic gas supply from the Abadi LNG Project.

PSC term secured until 2055
Excellent reservoir productivity enabling efficientdevelopment
Confirmed sufficient reserves enabling production of 9.5
million tons of LNG per year and local gas supply via
pipeline for more than 20 years
Sufficient financial conditions secured through three
economic incentives (exemption of indirect tax, applicationof investment credits and introduction of incremental profit
sharing after tax.)

ScheduleContinue preparations to commence FEED work at an earlystage, although delay is expected due to the COVID-19
pandemic. FEED work is expected to take one to two years.
Targeting production start-up in the latter half of the 2020s.
Pursuing efficient development leveraging the expertiseand experience acquired through the Ichthys LNG Project.

Abadi LNG Project Development Concept
Copyright © 2020 INPEX CORPORATION. All rights reserved.

12

Progress on other key overseas projects supporting our business
Abu Dhabi Onshore Concession(In Production in Abu Dhabi)

 Target Production Capacity
 2 million bbl/d

 Areas of Progress Development work is ongoing to increase production capacity toapproximately 2 million bbl/d

Kashagan Oil Field(In Production in Kazakhstan) Areas of Progress Production volume reached 370 thousand bbl/d
 Work ongoing to increase production volume to 450 thousandbbl/d
Copyright © 2020 INPEX CORPORATION. All rights reserved.

Abu Dhabi Offshore Oil Fields(Upper Zakum, Lower Zakum, Satah and Umm Al Dalkh)(In Production in Abu Dhabi)

 Target Production Capacity
ナダ






Upper Zakum: 1 million bbl/d
Lower Zakum: 0.45 million bbl/dSatah: 25 thousand bbl/d
Umm Al Dalkh: 20 thousand bbl/d

 Areas of Progress Development work is ongoing to increase the combined production
capacity of the four fields to approximately 1.5 million bbl/d
 As the asset leader of the Lower Zakum Oil Field, INPEX is currently
playing a leading role in advancing development and working closelywith ADNOC and its partners.

ACG Oil Fields(In Production in Azerbaijan)

 Areas of Progress Achieved 500 million-ton (3.7 billion barrels) cumulative production
milestone in December 201913

Natural Gas Business in Japan and Renewable Energy Business andEffective CO2 Utilization Technology Development
Natural Gas Business in Japan

Renewable Energy Business andEffective CO2 Utilization Technology Development

Naoetsu LNG Terminal

Natural Gas Sales Volume* FY2019/12 (9 months): approx. 1.51 billion m3
 FY2020/12 first half (6 months): approx. 1.07 billion m3
 FY2020/12 forecast (12 months): approx. 2.06 billion m3
Naoetsu LNG Terminal
 Started commercial operations at Naoetsu LNG Terminal
in December 2013
 Toyama Line completed in June 2016
 First LNG cargo (Pacific Breeze) from Ichthys LNG Projectcalled at Naoetsu LNG Terminal in October 2018
 First call by Oceanic Breeze carrying Ichthys cargo in
February 2019

* 1m3 =41.8605MJ

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Methanation Testing FacilitySarulla Geothermal Independent Power Producer (IPP) Project
 Commercially operating since May 2018 in Indonesia



Geothermal Power Business in Japan
 Environmental impact assessment ongoing Flow tests commenced in 2020 in Akita Prefecture, Japan

Methane Synthesis (Methanation)
 Completed construction & commissioning of a methane
synthesis test facility (producing methane from CO2 andhydrogen) at the INPEX-operated Koshijihara Plant in Niigata
Prefecture, Japan Various test operations ongoingOffshore Wind Power Project Consortium was formed for an offshore wind power project in
Akita Prefecture.

サルーラ地熱IPP事業
サルーラ地熱IPP事業

14

Consolidated Financial Results
for the six months ended June 30, 2020

Daisuke Yamada
Director, Managing Executive Officer,
Finance & AccountingComparison with 2Q FY2020/12
 INPEX’s accounting period changed to the January to December period from the April to
March period from the fiscal year ended December 31, 2019. FY2020 second quarter figures
are compared with the reference figures of the January to June 2019 period.

(Reference figures) Same period of the previous year (January to June 2019）*1
2019
Jan-Mar
INPEX and subsidiaries with
provisional settlements of accounts*2
Subsidiaries
with a December 31 fiscal year-end*3

Apr-Jun（Reference figures）
Same periodof the previous year

2020
Jul-Sep

Oct-Dec

Jan-MarApr-Jun

Jul-Sep

Oct-Dec

FY2020
Second Quarter*1 Adjusted actual figures are unaudited figures for reference purposes only
*2 INPEX, major domestic subsidiaries and overseas subsidiaries with provisional settlements of accounts. Subsidiaries with a December 31 fiscal year-end thatprovisionally settled their accounts on March 31 due to the relatively large impact of their performance on the Company’s consolidated financial accounts.
*3 Subsidiaries adopting an accounting period from January to December.

Copyright © 2020 INPEX CORPORATION. All rights reserved.

16

Highlights of the Consolidated Financial Results
for the six months ended June 30, 2020
(Reference)
2Q FY2020
Same Period Last Year
(January - June ’20)
(January - June ’19)
Net sales(Billions of yen)

Change% Change

563.1

391.6

(171.4)(30.5%)

Crude oil sales

421.3

246.3

(175.0)(41.5%)Natural gas sales (including LPG)

132.3

138.2

5.8

4.5%

9.4

7.1

(2.3)

(25.0%)

Operating income (Billions of yen)

269.1

123.7

(145.3)(54.0%)

Ordinary income (Billions of yen)

270.7

149.2

(121.4)(44.9%)Net income (loss) attributable toowners of parent (Billions of yen)

82.4

(120.7)(203.2)-

Net income (loss) per share* (Yen)

56.48(82.73)(139.21)-(24.07)(36.4%)

Others* Average number of INPEX shares issued and outstanding during the six months ended June 30, 2020: 1,460,203,039

Average crude oil price (Brent) ($/bbl)

66.17

42.10

Average exchange rate (¥/$)

110.06108.25

Copyright © 2020 INPEX CORPORATION. All rights reserved.

1.81 yen
1.6%
appreciation appreciation
17

Crude Oil Sales(Reference)
Same Period Last Year
(January - June ’19)

2Q FY2020(January - June ’20)

Net sales (Billions of yen)

421.3

246.3

(175.0)(41.5%)

Sales volume (thousand bbl)

57,78460,894

3,111

5.4%

Average unit price of overseas production($/bbl)

66.21

37.27

(28.94)(43.7%)

Average unit price of domestic production(¥/kl)

46,27031,382(14,888)(32.2%)

Average exchange rate (¥/$)

110.13108.41

1.72yenappreciation

1.6%
appreciation(Reference)
Same Period Last Year
(January – June ’19)

2Q FY2020(January – June ’20)

ChangeJapan403(64.1 thousand kl)

335(53.2 thousand kl)(68)(-10.9 thousand kl)(17.0%)

Asia & Oceania

7,719

7,209

(510)

(6.6%)

Eurasia (Europe & NIS)

6,417

8,486

2,070

32.3%

Middle East & Africa

42,531

42,925394

0.9%

Americas

714

1,940

1,225

171.6%

57,78460,894

3,111

5.4%

Sales volume by region (thousand bbl)

Total
Copyright © 2020 INPEX CORPORATION. All rights reserved.

Change% Change% Change18

Natural Gas Sales (excluding LPG)
(Reference)
Same Period Last Year
(January - June ’19)

2Q FY2020(January - June ’20)

Net sales (Billions of yen)

130.9

136.7

5.8

4.4%

Sales volume (million cf)

185,197

222,856

37,65920.3%

Average unit price of overseas production($/thousand cf)

4.21

4.17

(0.04)(1.0%)

Average unit price of domestic sales (¥/m3)

57.46

50.65

(6.81)(11.9%)

Average exchange rate (¥/$)

110.10108.45

1.65yenappreciation

1.5%
appreciation(Reference)
Same Period Last Year
(January - June ’19)

2Q FY2020(January - June ’20)

Japan

41,866(1,122 million m3 *)39,826(1,067 million m3 *)(2,040)(-55 million m3 *)(4.9%)

Asia & Oceania
Eurasia (Europe & NIS)
Middle East & Africa
AmericasTotal

126,285
3,983
13,063
185,197

168,905
4,853
9,272
222,856

42,620870(3,791)
37,65933.7%
21.8%(29.0%)
20.3%

Sales volume by region (million cf)* 1m3=41.8605MJ

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Change% Change

Change% Change19

Analysis of Net Sales Decrease(Billions of Yen)
700

38.0

600

Crude Oil

(193.8)Natural Gas (including LPG)

(8.1)

500
400
300

(201.9)563.1

Crude Oil

+22.6

Natural Gas (including LPG)

+15.3

Crude Oil

(3.8)

Natural Gas (including LPG)

(1.2)

(5.1)

(2.3)

200

391.6

100
0
(Reference)
Same Period Last Year
(January - June ’19)

Increase inSales Volume

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Decrease in
Unit Price

Exchange rate
(Appreciation of Yen)

Others2Q FY2020(January - June ’20)
20

Statement of Income(Billions of Yen)

(Reference)
2Q FY2020
Same Period Last Year
(January - June ’19) (January - June ’20)

Change% Change

Net sales

563.1

391.6

(171.4)(30.5%)

Cost of sales

246.8

226.0

(20.8)(8.4%)

Gross profit

316.3

165.6

(150.6)(47.6%)

Exploration expenses

10.2

4.6

(5.5)

(54.1%)

Selling, general andadministrative expenses

36.9

37.1

0.2

0.6%

Operating income

269.1

123.7

(145.3)(54.0%)

Other income

23.2

45.3

22.1

95.2%

Other expenses

21.6

19.9

(1.7)

(8.1%)

Ordinary income

270.7

149.2

(121.4)(44.9%)

5.4

192.4

186.9

-

189.3

78.2

(111.0)(58.7%)

Extraordinary loss (Impairment loss)
Total income taxes
Net income (loss) attributable to noncontrolling interests

(6.5)

(0.6)

5.9

-

Net income (loss) attributable toowners of parent

82.4(120.7)(203.2)-

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Increase in sales volume :+38.0

Decrease in unit price :(201.9)Exchange rate:
Others :

(5.1)
(2.3)

Cost of sales for Crude Oil:
(Change)138.3(31.7)

Cost of sales for Natural Gas*: 81.9
(Change)+12.6* Including LPG

Main factors for change :Equity in earnings of affiliates +21.1
Foreign exchange gain

+3.7

Main factors for change :Foreign exchange loss

(5.6)

Main factors for change :Prelude FLNG Project
Eagle Ford
Lucius Oil Field
Bayu-Undan+130.8
+33.6
+18.9
+8.9

21

Analysis of Income before One-off Profit (Loss) Decrease(Billions of Yen)

Copyright © 2020 INPEX CORPORATION. All rights reserved.

* Income before one-off profit (loss)= Net income (loss) attributable to owners of parent − one-off profit (loss)

22

Analysis of Impact of One-off Profit (Loss)(億円)(Billions of Yen)

50

Prelude FLNG Project(130.8)Eagle Ford
(33.6)
Lucius Oil Field(18.9)
Bayu-Undan Gas-Condensate Field (8.9)

36.4

0

(50)

(120.7)

(100)
29.7

14.0
(2.7)

(5.9)

(150)
(192.4)(200)

Income before
one-off
profit (loss)

Impairment loss

Tax effect on
Impairment loss

2Q FY2020(January – June ‘20)

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Refinance(Ichthys LNG Project)

Loss onvaluation of
investment securities

Others

Net income (loss)
attributable toowners of parent
2Q FY2020(January – June ‘20)

23

Balance Sheet

December 2019

June 2020

Change% Change

419.8

512.2

92.4

22.0%

2,275.3

2,115.4(159.8)(7.0%)

Intangible assets

535.3

454.0

(81.2)(15.2%)

Recoverable accounts under production sharing

568.3

573.4

5.0

0.9%

Other

1,118.0

1,084.9(33.0)(3.0%)

Less allowance for recoverable
accounts under production sharing(66.8)(69.1)

(2.2)

3.3%

Total assets

4,849.9

4,671.0(178.9)(3.7%)

Current liabilities

401.4

372.9

(28.5)(7.1%)

Long-term liabilities

1,151.3

1,243.9

92.6

8.0%

Total net assets

3,297.1

3,054.1(243.0)(7.4%)(Non-controlling interests)

256.4

252.2

(4.1)

(1.6%)

Total liabilities and net assets

4,849.9

4,671.0(178.9)(3.7%)Net assets per share (Yen)2,082.43

1,918.88(163.55)(7.9%)(Billions of yen)
Current assets
Tangible fixed assets

Copyright © 2020 INPEX CORPORATION. All rights reserved.

Summary of financial information for
Ichthys downstream JV (100% basis,including the Company’s equity share
66.245%)(Billions of yen)
• Current assets : 81.0
• Fixed assets : 3,630.2• Total assets:
3,711.2*Fixed assets include interest expense
which are not included in CAPEX,
and capitalized costs before FID.

The total of long-term loans and shortterm loans is 1.2 trillion yen.
Adding the off-balanced net loans of
the Ichthys IJV brings the total of
INPEX net loans to be 2.2 trillion yen(as of June, 2020).

(Billions of yen)
Total shareholders’ equity: (147.0)
Accumulated other comprehensive
income : (91.7)• Unrealized gain (loss) fromhedging instruments: (47.9)• Translation adjustments: (36.3)

24

Statement of Cash Flows2Q FY2020(January - June ’20)

(Reference)
April - September ’19

Income before income taxes(43.1)

271.1

Depreciation and amortization

88.8

83.0

Impairment loss

192.4

-

Recovery of recoverable accounts under production sharing (capital expenditures)

14.8

19.3

Recoverable accounts under production sharing (operating expenditures)

(1.2)

(4.2)

(121.4)(187.0)43.2(27.6)

173.5

154.5

Payments for time deposits / Proceeds from time deposits(54.1)

0.0

Payments for purchases of tangible fixed assets(68.2)(66.2)

Payments for purchases of marketable securities/investment securities and proceedsfrom sales of marketable securities/investment securities

0.8

(1.0)

Investment in recoverable accounts under production sharing (capital expenditures)(18.9)(21.8)

Long-term loans made / Collection of long-term loans receivable(25.4)(75.1)-(30.0)

(1.9)

(0.1)

Net cash provided by (used in) investing activities(167.7)(194.4)

Net cash provided by (used in) financing activities

124.0

24.9

Cash and cash equivalents at end of the period

303.1

219.1

(Billions of Yen)

Income taxes paid
Other
Net cash provided by (used in) operating activities

Payments for acquisitions of participating interests
Other

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25

Consolidated Financial Forecasts
for the year ending December 31, 2020

Daisuke Yamada
Director, Managing Executive Officer,
Finance & AccountingDifferences between Consolidated Financial Forecasts
and Actual Results for the six months ended June 30, 2020

 Assumptions
1st half(May 12, 2020)(Previous Forecasts)

Crude oil price (Brent) (US$/bbl)

40.4

Exchange rate (yen/US$)

109.5

1st half(August 6, 2020)(Actual Results)

Crude oil price (Brent) (US$/bbl)

42.1

Exchange rate (yen/US$)108.3

 Differences between Consolidated Financial Forecasts and Actual Results for the six
months ended June 30, 2020
Previous Forecasts(May 12, 2020)

Actual Results

Change% Change

Net Sales (billions of yen)

408.0

391.6

(16.3)(4.0%)

Operating income (billions of yen)

133.0

123.7

(9.2)

(6.9%)

Ordinary income (billions of yen)

145.0

149.2

4.2

2.9%

Net income (loss) attributable to owners ofparent (billions of yen)

35.0

(120.7)(155.7)-

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27

Revisions of Financial Forecasts
for the year ending December 31, 2020

 Assumptions
1st half (Jan-Jun)

2nd half (Jul-Dec)

Full year

Crude oil price (Brent) (US$/bbl)

40.4

30.0

35.2

Exchange rate (yen/US$)

109.5

110.0

109.7

1st half (Jan-Jun)

2nd half (Jul-Dec)

Full year

Crude oil price (Brent) (US$/bbl)

42.1

40.0

41.1

Exchange rate (yen/US$)

108.3

105.0

106.6

(May 12, 2020)(August 6, 2020)

 Financial Forecasts for the year ending December 31, 2020
Previous forecasts(May 12, 2020)

Revised forecasts(August 6, 2020)

Change% Change

Net sales (billions of yen)

710.0

730.0

20.0

2.8%

Operating income (billions of yen)

172.0

203.0

31.0

18.0%

Ordinary income (billions of yen)

163.0

200.0

37.0

22.7%

Net income (loss) attributable to owners ofparent (billions of yen)

10.0

(136.0)(146.0)- Dividend per share
End of 2Q

End of fiscal year
(forecast)

Full year(forecast)¥12.00¥12.00¥24.00

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28

Analysis of Income before One-off Profit (Loss) Increase(Billions of Yen)
Crude Oil Price (Brent) Assumptions (US$/bbl)
1st half 2nd half
Full year
May 12 Forecast 40.4
30
35.2
Aug 6 Forecast
42.1
40
41.1

* Income before one-off profit (loss)= Net income (loss) attributable to owners of parent − one-off profit (loss)
Exchange Rate Assumptions (Yen/US$)
1st half 2nd half Full year
May 12 Forecast
109.5
110
109.7
Aug 6 Forecast
108.3
105
106.6

17.7
7.7

Reversal of Loss on Valuationof investment securities at 1st
Quarter

10.0

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29

Analysis of Impact of One-off Profit (Loss)(Billions of Yen)

* Income before one-off profit (loss)= Net income (loss) attributable to owners of parent − one-off profit (loss)

PreludeEagle Ford
LuciusBayu-Undan(130.8)(33.6)(18.9)(8.9)

1st half 14.0
2nd half (8.0)

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30