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

Financial Results
for the Three Months Ended June 30, 2018
August 8, 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 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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
2017-112017-122018-012018-022018-032018-04
2018-05
2018-06[Crude Oil Price] US$/bbl
$80
¥130

$70
¥120

$60

$50
¥110

$40

Exchange Rate JPY/US$$20

US$ 76.95/bbl JPY 110.15/US$

3

¥100

$30

Crude Oil Price US$/bbl¥90[Foreign Exchange Rate] JPY/US$

Trends in Crude Oil Price and Foreign Exchange Rate

Japan Crude Cocktail (JCC) in the first 10 days of July 2018 on a prompt report basis :Actual Results and Forecasts for FY3/19（Highlights）
FY3/18[Billion JPY]

FY3/19Full (f)1Q (a)①

Full (a)②

1Q (a)③

ChangeFull (f)Previous forecasts Revised forecasts(August 8, 2018)(May 11,2018)

④

⑤*

1Q
(③-①)

Full(⑤-②)

Full(⑤-④)

59.8

230.6

57.6

265.6

284.0

(2.1)

+53.3

+18.3

Operating profit(loss)

2.2

8.7

(2.6)

0.6

2.1(4.9)

(6.6)

+1.4

Ordinary profit(loss)

5.7

3.8

(3.1)

9.9

10.0(8.9)+6.1+0.0Profit (loss)
attributable toowners of parent

5.4(30.9)

(2.2)

9.4

11.0

(7.7)

+41.9

+1.5

Net sales

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

54.63

56.20

67.95

60.00

69.50

+13.32+13.30+9.50

112.12111.67107.42110.00109.39(4.70)(2.28)(0.61)* JAPEX announced the latest forecasts by “Notice of Financial Forecasts Revision” on August 8, 2018, regarding the consolidated
financial forecasts of the fiscal year ending March 31, 2019.

4

Actual results

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

FY3/18

FY3/191Q (a)1Q (a)

ChangeSales volume435

406

(29)

Net sales

13,76913,845+76

Sales volume

291

268

(22)

Sales volume

180

137

(43)

Sales volume

144

137

(7)

Increase in sales price, despite
the decrease in sales volume ofgas in Japan

Sales volume by regionJapan
Gas produced in Japan

Overseas
Million M3

500
400

144

300
200
100-

Sales volume ofoverseas gas

137

Sales volume of gasin Japan291

FY3/18 (a)268Decrease in shale gas sales volume in Canada

Temporary demand reduction due to thecustomer’s reason

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

FY3/19 (a)5Actual results

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

FY3/18

FY3/19

1Q(a)

1Q(a)

ChangeSales volume872

711(161)

Net sales

29,53029,063(466)Sales volume78

61(17)Net sales

3,158

3,030(128)

Sales volume442

173(269)Net sales

13,5458,413(5,132)

Sales volume－242+242

Net sales

－

5,436

+5,436

Crude Oil :Decrease in sales volume, despite theincrease in sales price

Equity oil sales
Crude oil produced inJapan (*)

Crude oil produced inoverseas (**)

Diluted bitumen (***)

Oil price and exchange rate assumptions
JCC

US$/bbl

54.63

67.95

+13.32

Diluted bitumen (***)

US$/bbl

―

33.48

―

Exchange rate

JPY/US$112.12

107.42(4.70)

6Decrease in crude oil sales volume ofGarraf Oil Field, Iraq

Diluted bitumen sales commencementof the Hangingstone lease in 3Q 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 for 1Q FY3/19 ( year-on-year )FY3/18

FY3/191Q (a)

1Q (a)Net sales

59,80357,623(2,180)Gross profit

9,649

5,079(4,569)

367

143

(223)

SG&A expenses

7,011

7,571

+559

Operating profit (loss)

2,270(2,634)(4,905)Non-operating income(expenses)

3,464

(547)

(4,011)

Ordinary income (loss)

5,735(3,181)(8,917)Extraordinary income(losses)

(5)

(62)

(57)

Income taxes

634602(32)[ Million JPY]

Exploration expenses

ChangeActual results

Main factors for change
Increase factor “+” / Decrease factor “( )”Gross profit
Domestic business(¥2.5 billion)
Overseas consolidated subsidiaries(¥1.9 billion)
SG&A expenses
Increase in transportation cost at theHangingstone lease(¥0.5 billion)
Non-operating income (expenses)
Equity in earnings of affiliates(¥0.3 billion)
Foreign currency translation adjustments on
debt, foreign currency exchange gains andlosses(FY3/18) Loss of ¥0.4 billion → (FY3/19) Loss of ¥3.4 billion

Profit (loss) attributable tonon-controlling interests(397)(1,585)(1,187)

Profit (loss) attributable toowners of parent

5,492(2,261)(7,754)7(¥ 2.9 billion)
Increase in interest expenses(¥ 0.5 billion)

Revised forecasts

Price Assumptions for Revised Forecasts for FY3/19
20182019
Full year
Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar.
JCC

US$/bblExchange rate JPY/US$
JACOS
Diluted bitumen

JMLGas1.
2.

US$/bblC$/mcfPrevious forecasts

60.00
60.00
60.00
60.00
60.00
67.95 70.00 70.00 70.00 69.50
110.00 110.00 110.00 110.00 110.00
107.42 110.00 110.00 110.00 109.39

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

35.50
33.48
2.002.04

36.95
43.19
2.00
1.35

37.23
39.48
2.00
1.40

37.26
38.04
2.00
1.40

36.79
38.64
2.00
1.56

“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)

8

Revised forecasts

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

FY3/19FY3/19Previous forecasts Full (f)May 11, 2018

Revised forecasts Full (f)August 8, 2018

Sales volume

1,780

1,762

(18)Net sales

64,102

66,604+2,503

Sales volume

1,270

1,261

(9)

Sales volume666

632

(34)

Sales volume510

501

(9)

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

ChangeIncrease in sales
price, despite thedecrease in sales
volumeSales volume by region
JapanGas produced in Japan

Overseas
Million M3

2,000
1,600

510

Sales volume ofoverseas gas

Decrease in shale gas sales volumein Canada

Sales volume ofgas in Japan

Temporary demand reduction due to thecustomer’s reason

501

1,200800
400-

1,270

1,261
Sales volume of “Overseas” stated herein are amounts of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

Previous (f)Revised (f)9Revised forecasts

Revised Forecasts Crude Oil Sales for FY3/19(vs Previous Forecasts)

FY3/19FY3/19ChangePrevious forecasts Full(f) May 11, 2018

Revised forecasts Full(f) August 8, 2018

Full

Sales volume

3,368

3,310(58)

Net sales

119,835

133,476+13,642

Sales volume

265

258

(7)

Net sales

11,622

12,986+1,364

Sales volume851

720

(131)

Net sales

32,89433,447+553

Sales volume

1,197

1,284+87

Net sales

30,472

34,335+3,863

Sales volume : Thousand KL
Net sales : Million JP¥

Crude Oil :Increase in sales price, despite
the decrease in sales volume

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

Diluted bitumen (***)

Increase in crude oil sales
price of Garraf Oil Field, Iraq
despite the decrease in crude
oil sales volume
Increase in sales volume andprice of diluted bitumenof the Hangingstone lease

Oil price and exchange rate assumptions
JCC

US$/bbl

60.00

69.50

+9.50

Diluted bitumen (***)

US$/bbl

36.79

38.64

+1.85

Exchange rate

JPY/US$

110.00109.39(0.61)(*) 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 MontneyLtd. 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)
FY3/19FY3/19

Previous forecasts
Full (f)May 11, 2018

Revised forecasts
Full (f)August 8, 2018

Net sales

265,649

284,019+18,371

Gross profit

32,951

34,083+1,132

Exploration expenses

1,073

1,055

(17)

SG&A expenses

31,23430,902(332)

Operating profit (loss)

644

2,125+1,481

Non-operating income(expenses)

9,303

7,878

(1,425)

Ordinary profit (loss)

9,947

10,003+56

Extraordinary income(losses)

632

660

+28

Income taxes

1,495

968(527)

Profit (loss) attributable tonon-controlling interests(403)(1,311)(908)

Profit (loss) attributableto owners of parent

9,487

11,007+1,519[Million JPY]

11Change

Main factors for change
Increase factor “+” / Decrease factor “( )”Gross profit
Domestic business+ ¥1.7 billion
Overseas consolidated subsidiaries(¥0.6 billion)

Non-operating income (expenses)
Equity on earnings+ ¥ 1.6 billion
Foreign currency translation adjustments on
debt, foreign currency exchange gains andLosses(¥ 3.6 billion)