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

May 13, 2021
Japan Petroleum Exploration Co., Ltd.

Sale of Shale Gas Project Interest in Canadaand Recording of Extraordinary Loss Related to the ProjectJapan Petroleum Exploration Co., Ltd. (JAPEX) announced that its Board of Directors has resolved to sell
10% of all ownership interest in the North Montney Joint Venture which undertakes the shale gas project inCanada (hereinafter "the NM project") to Petronas Energy Canada Ltd. (hereinafter "PECL"), the operator ofthe NM project. The interest is owned by JAPEX Montney Ltd. (hereinafter "JML"), an overseas consolidated
subsidiary.
The NM project proceeds with shale gas development and production in the North Montney area of British
Columbia, Canada. JAPEX participated in the NM project through JML in April 2013 and had proceededwith a feasibility study of the LNG project in addition to the shale gas development and production. Even after
the decision not to proceed with the LNG project in July 2017 due to changes in the business environment,
JAPEX has been working with PECL and its partners to maximize the value of the NM project by optimizing
the development plan.
On the other hand, JAPEX formulated the medium-term business plan in 2018 with the recognition of thenecessity to transform our business structure for the sustainable growth even in the market environment of
50-60 US dollars per barrel. Based on the recognition, our E&P projects have been striving to improve theirprofitability by optimizing the business portfolio, including the sale of the asset.
The environment surrounding the E&P business is expected to become even more severe due to theprolonging effects of the COVID-19 since early last year, including the structural changes by the new normal
after the COVID-19 and accelerating the global decarbonization. Therefore, JAPEX has decided to sell 10% of
all ownership interest in the North Montney Joint Venture which undertakes the NM project to PECL, withthe judgement that would be difficult to recover JML's performance early.
JML is going to sign the contract concerning the interest sale with PECL on May 13, 2021. (MDT, local timein Calgary) All procedures of this sale are expected to complete by the end of June 2021.
As a result of this transaction, JAPEX expects to record an extraordinary loss of approximately 493 million
Canadian dollars (about 39.4 billion Japanese yen*) in the consolidated financial results for the second quarterof the fiscal year ending March 31, 2022.
The impact mentioned above has already been reflected in the forecast of consolidated business performancefor the fiscal year ending March 31, 2022, disclosed today. In the event of any revision or change in theestimated amount of impact or timing of posting due to the progress of future procedures, etc., we will disclosesuch information as appropriate.
Note: * Calculated based on the exchange rate assumption of 80 yen per Canadian dollar.

＜Appendix＞
Outline of the Canadian shale gas project as of May 13, 2021
Mineral License
North Montney Area, British Columbia, Canada
Project Company
JAPEX Montney Ltd.
Shareholders: JAPEX 55%, Japan Oil, Gas and Metals National Corporation (JOGMEC) 45%

Operator
Interest

StatusPetronas Energy Canada Ltd.
PETRONAS Group62%
Sinopec Group15%
JAPEX Group10%
Indian Oil Group
10%
Petroleum Brunei Group
3%Natural gas production and sale to the market in Western Canada

Note: The LNG project in Lelu Island, Prince Rupert was decided not to proceed in July 2017.

< Previous Announcement Link>・“JAPEX Participates in Natural Gas Development & Production Project and LNG Project in British
Columbia, Canada” on March 4, 2013
・“Pacific NorthWest LNG Project in British Columbia, Canada, Is Not Proceeding” on July 26, 2017
・“ Notice Regarding Recording of Provision of Allowance for Doubtful Accounts in Extraordinary Loss in Nonconsolidated Financial Results” on March 10, 2021###