Consolidated Financial Results for the Three Months Ended June 30, 2011
<under Japanese GAAP>
August 5, 2011
Note: The following report is a summary of the Japanese-language original.

Company name: Japan Petroleum Exploration Co., Ltd.
Listing:
Tokyo Stock Exchange, First Section
Securities code: 1662
URL:
http://www.japex.co.jp/
President:
Osamu Watanabe
Inquiries:
Kazuyuki Yamatsu, Manager, Media Relations and SR, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
August 11, 2011
Scheduled date to commence dividend payments:–
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:
None(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the three months ended June 30, 2011
(April 1, 2011 – June 30, 2011)(Percentages indicate year-on-year changes.)
Consolidated operating results (cumulative)
Net sales

Three months ended

Operating income

Millions of yen% Millions of yen

Ordinary income% Millions of yen

Net income% Millions of yen%

June 30, 2011

52,462

12.8

4,674

(9.7)

5,573

(10.0)

4,422

18.5

June 30, 2010

46,52623.1

5,176 107.2

6,194

32.4

3,730

(9.2)

Note: Comprehensive income: Three months ended June 30, 2011: -1,653 million yen (– %)Three months ended June 30, 2010: -28,146 million yen (– %)Diluted net
income per share

Net income per share
Three months ended

Yen

Yen

June 30, 2011

77.37

–

June 30, 2010

65.27

–

(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2011

514,074

393,735

74.4

As of March 31, 2011

516,098

393,689

74.7

Reference: Equity

2.

As of June 30, 2011: 382,422 million yen

As of March 31, 2011: 385,428 million yen

Cash dividends

Fiscal year ended
March 31, 2011
Fiscal year ending
March 31, 2012
Fiscal year ending
March 31, 2012
(Forecasts)
Note:

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

20.00

–

20.00

40.00

20.00

－

20.00

40.00

Total
Yen

–

Revisions to the forecasts of cash dividends most recently announced: None

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3.

Consolidated financial forecasts for the fiscal year ending March 31, 2012 (April 1, 2011 - March 31, 2012)
Net sales
Millionsof yenFor the six months
ending September 30,
2011
Fiscal year ending
March 31, 2012

(Percentages indicate year-on-year changes.)
Net income per
Operating income Ordinary income
Net income
shareMillions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yen101,256

9.6

5,722

48.8

7,362

49.4

5,459

187.9

95.52

223,479

11.9

11,757(15.1)

15,634(8.7)

11,52815.2

201.70Note:

Revisions to the consolidated financial forecasts most recently announced: None

4.
(1)

OthersChanges in significant subsidiaries during the three months under review (changes in specified subsidiaries
resulting in the change in scope of consolidation): None

(2)

Application of specific accounting for preparing quarterly consolidated financial statements: Yes
Note:

For details, please refer to the section of “(2) Application of specific accounting for preparing quarterly consolidated financial
statements” of “2. Matters regarding summary information (others)” on page 4 of the attached material.

(3)

Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial
statements after error corrections
a. Changes in accounting polices due to revisions to accounting standards and other regulations: Noneb. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: None
d. Restatement of prior period financial statements after error corrections: None(4)

Number of issued shares (common stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of June 30, 201157,154,776 shares
As of March 31, 201157,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2011
2,105 shares
As of March 31, 2011
2,105 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 201157,152,671 shares
Three months ended June 30, 2010
57,152,796 shares* Indication regarding execution of quarterly review proceduresThis quarterly financial results report is not subject to the quarterly review procedures in accordance with the
Financial Instruments and Exchange Act. At the time of disclosure of this quarterly financial results report, thequarterly review procedures for the quarterly consolidated financial statements are in progress.
* Proper use of financial forecasts, and other special matters
The forward-looking statements, including the financial forecasts shown in this document are based on
information currently available to the Company and on certain assumptions deemed to be reasonable. Actual
performance and other results may differ materially from these forecasts due to various factors.
For the suppositions that form the assumptions for financial forecasts and cautions concerning the use thereof,
please refer to the section of “(3) Qualitative information regarding consolidated financial forecasts” of “ 1.
Qualitative information regarding settlement of accounts for the three months ended June 30, 2011” on page 4of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On August 5, 2011 (Friday), JAPEX plans to post supplementary material on its website.

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(Attached Material)
1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2011
(1) Qualitative information regarding consolidated operating results
During the three months ended June 30, 2011, net sales was at ¥52,462 million, an increase of ¥5,935million(+12.8%) year on year, and gross profit decreased by ¥1,226 million (-8.2%) year on year to ¥13,688 million.
The main factors behind the year-on-year increase in net sales were the crude oil price remaining high and anincrease in net sales of crude oil products bought owing to higher sales volume for Sakhalin crude oil among
others. The decline in profits reflected lower prices for bitumen and the impact of the high yen.
Exploration expenses decreased by ¥833 million (-34.7%) year on year to ¥1,569 million, with a decline in
expenditures in Japan outweighing an increase in expenditures in Canada. As selling, general andadministrative expenses increased by ¥109 million (+1.5%) year on year, it resulted in a decrease in operating
income of ¥502 million (-9.7%) to ¥4,674 million.
Ordinary income resulted to ¥5,573 million, declining ¥620 million (-10.0%) year on year, owing to factors
such as a switch to equity in losses of affiliates, compared with equity in earnings of affiliates previously.
Income before income taxes and minority interests was ¥5,648 million, a ¥1,831 million increase (+48.0%)
year on year, due to recording as extraordinary loss of ¥2,339 million of loss on adjustment for changes ofaccounting standard for asset retirement obligations in the same period of the previous fiscal year. Althoughincome taxes increased, net income increased by ¥691 million (+18.5%) year on year to ¥4,422 million.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥42,734 million, an
increase of ¥6,481 million (+17.9%) year on year. Although the absence of sales of crude oil productsbought at Japan Canada Oil Sands Limited had a negative impact, it was outweighed by the highly
remaining crude oil price and an increase in net sales of crude oil products bought owing to higher sales
volume for Sakhalin crude oil.
(ii) Contract Services
Net sales from contract services (involved in drilling and geophysical surveys) came to ¥833 million, adecrease of ¥190 million (-18.6%) year on year.
(iii) Other Businesses
Net sales from other businesses, such as the sale of oil products, including liquefied petroleum gas (LPG),
fuel oil and the like, the transportation of natural gas and oil products on consignment as well as othersubcontracted tasks, came to ¥8,894 million, a decrease of ¥354 million (-3.8%) year on year.

-3-(2) Qualitative information regarding consolidated financial position
At the end of the first quarter, as compared to the end of the previous fiscal year, although current assets
increased, total assets decreased by ¥2,023 million to ¥514,074 million due to a decrease in noncurrent assets.
The rise in current assets mainly reflected an increase in the repo transaction balance included in the othercurrent assets item, while the decrease in noncurrent assets was mainly due to a decline in the stock price of
INPEX CORPORATION and other companies and a drop in investment securities following the sale ofavailable-for-sale securities.
Regarding liabilities and net assets, total liabilities declined ¥2,069 million from the previous fiscal year-end
to ¥120,339 million due to a decrease in deferred tax liabilities mainly related to the abovementioned decline
in investment securities. Total net assets increased ¥45 million to ¥393,735 million, with an increase inretained earnings and a rise in minority interests from a third-party allocation of new shares by consolidated
subsidiary Japex Garraf Ltd. outweighing a decline in the valuation difference on available-for-sale securities.

(3) Qualitative information regarding consolidated financial forecasts
Regarding consolidated financial forecasts, an examination of the first quarter results revealed that nochanges are necessary to the six months and full-year forecasts released on May 13, 2011.

2. Matters regarding summary information (others)(1) Changes in significant subsidiaries during the three months under review
No items to report(2) Application of specific accounting for preparing quarterly consolidated financial statements
a. Deferral accounting of cost variance
Cost variance arising from seasonal changes in production level is deferred as current assets (other)because such variance is expected to be almost completely eliminated by the end of the cost accounting
period.
b. Calculation of taxes
For the taxes, JAPEX and some of its consolidated subsidiaries compute first by reasonably estimating theeffective tax rate after applying tax effect accounting against income before income taxes and minority
interests for the fiscal year including the three months under review, and next by multiplying the quarterly
income before income taxes and minority interests by such estimated effective tax rate. Note that income
taxes-deferred is included in income taxes.

-4-3. Consolidated financial statements(1) Consolidated quarterly balance sheets(Millions of yen)
As of March 31, 2011
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Allowance for overseas investment loss
Total investments and other assets
Total noncurrent assets
Total assets-5-

As of June 30, 2011

32,042
21,23528,186
4,535
102
5,579
30,923(1)
122,604

29,86018,09633,842
4,621
150
4,663
44,113(2)
135,346

46,53054,38839,723
140,642

46,616
56,79936,486
139,902

7,296
7,296

7,251
7,251

221,971
28,916(42)(5,291)
245,554
393,493
516,098

206,425
30,178(43)(4,986)
231,574
378,728514,074(Millions of yen)
As of March 31, 2011
Liabilities
Current liabilities
Notes and accounts payable-trade
Income taxes payable
Provision
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Other provision
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets-6-

As of June 30, 2011

5,057
925
1,547
12,423
19,953

4,486
953
1,504
13,50820,452

26,89856,531
7,121
724
9,524
1,655
102,455
122,408

27,89352,378
7,074
702
9,436
2,402
99,886
120,339

14,288279,582(10)
293,861

14,288282,861(10)
297,140

95,51817(3,968)91,566
8,261
393,689
516,098

88,274(7)(2,984)85,282
11,312393,735
514,074(2)Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Three months ended
June 30, 2010
(April 1, 2010 –June 30, 2010)
46,526
31,611
14,914

Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
Exploration subsidies
Total exploration expenses
Selling, general and administrative expenses
Operating income
Non-operating income
Dividends income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Loss on sales of securities
Loss on valuation of securities
Equity in losses of affiliates
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Reversal of allowance for doubtful accounts
Gain on sales of noncurrent assets
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on adjustment for changes of accounting standard
for asset retirement obligations
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in income
Net income-7-(Millions of yen)Three months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
52,462
38,774
13,688

2,487
(84)
2,402
7,335
5,176

1,569
–
1,569
7,444
4,674

1,251
79
504
1,834

1,128
–
1,083
2,212

0
517
–
299
817
6,194

304
289
501
218
1,313
5,573

9
0
–
10

–
138
0
139

48

63

2,339

–

–
2,387
3,816
(121)
3,937
207
3,730

0
64
5,648
1,139
4,509
86
4,422

Consolidated quarterly statements of comprehensive income
Three months ended
June 30, 2010
(April 1, 2010 –June 30, 2010)
3,937

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to minority interests-8-(Millions of yen)Three months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
4,509(32,709)(77)
707(7,251)
(18)
1,086

(3)

21

(32,084)(28,146)(6,162)(1,653)(28,389)(1,862)

243

208

(3)

Notes on premise of going concern
No items to report(4) Notes on significant changes in the amount of shareholders’ equity
No items to report-9-4. Supplemental information
Status of production and salesa. Production
Three months ended
June 30, 2011
(April 1, 2011 –June 30 2011)

Three months ended
June 30, 2010
(April 1, 2010 –June 30 2010)
134,244

126,589

563,374(1,426)(671)(5,352)Natural gas(thousand m3)

290,364

309,413

1,268,801(3,824)(2,337)(10,896)

LNG (t)14,755

10,86444,565102,045

93,429409,116(102,045)(93,429)(409,116)

Crude oil (kl)E&P

(Reference)
Fiscal year ended
March 31, 2011
(April 1, 2010 – March 31, 2011)

Bitumen (kl)Notes: 1. The figures in parentheses represent overseas production and are included in the total.
2. Part of the natural gas production volume is used as a feedstock for LNG.
3. Bitumen is a type of extra-heavy oil extracted from oil sands.

b. SalesThree months ended
June 30, 2010
(April 1, 2010 –June 30, 2010)
AmountVolume(Millions of yen)

E&P

(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2011
(April 1, 2010 – March 31, 2011)
AmountVolume(Millions of yen)

Crude oil (kl)324,825

15,393369,376

22,1781,489,705

67,488Natural gas(thousand m3)

356,459

14,226368,108

15,2991,553,770

61,090

LNG (t)48,6303,155

47,696

3,199

209,549

14,100

Bitumen (kl)

101,901

3,477

93,283

2,057

409,359

10,141

Subtotal
Contract services
Otherbusinesses

Three months ended
June 30, 2011
(April 1, 2011 –June 30, 2011)
AmountVolume36,25342,734

152,819

1,024

833

7,031

Oil products/merchandise

7,507

8,242

32,523

Others

1,741

651

7,278

Subtotal

9,248

8,894

39,801

Total

46,52652,462

199,651

Notes: 1. “Oil products/merchandise” includes liquefied petroleum gas (LPG), fuel oil, diesel oil and kerosene, and “Others”
includes the transportation of natural gas and oil products on consignment as well as other subcontracted tasks.
2. Monetary amounts in the table do not include consumption taxes.

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