Consolidated Financial Results for the Six Months Ended September 30, 2011
<under Japanese GAAP>
November 4, 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 and SR, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
November 10, 2011
Scheduled date to commence dividend payments:
November 29, 2011
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for analysts and institutional investors): Yes(Millions of yen with fractional amounts discarded, unless otherwise noted)

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

Six months ended

Operating income

Millions of yen% Millions of yen

Ordinary income% Millions of yen

Net income% Millions of yen%

September 30, 2011

104,596

13.2

6,219

61.7

7,887

60.0

6,333

234.0

September 30, 2010

92,369

30.9

3,845

34.3

4,929

(4.9)

1,896

(45.8)

Note: Comprehensive income:Six months ended September 30, 2011:
Six months ended September 30, 2010:-19,152 million yen (– %)-49,640 million yen (– %)Diluted net
income per share

Net income per share
Six months ended

Yen

Yen

September 30, 2011110.81–

September 30, 2010

33.18

–

(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2011

492,081

376,087

74.2

As of March 31, 2011

516,098

393,689

74.7

Reference: Equity

2.

As of September 30, 2011: 364,914 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)

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

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

-1-

Total
Yen

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2012 (April 1, 2011 – March 31, 2012)
Net sales
Millionsof yenFiscal year ending
March 31, 2012

229,031(Percentages indicate year-on-year changes.)
Net income per
Operating income Ordinary income
Net income
shareMillions
Millions
Millions
%
%
%
%
Yen
of yenof yenof yen

14.7

8,365

(39.6)

12,974(24.2)

10,1751.6

178.03

Note: Revisions to the consolidated financial forecasts most recently announced: Yes

4.
(1)

OthersChanges in significant subsidiaries during the six 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 September 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 September 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)
Six months ended September 30, 201157,152,671 shares
Six months ended September 30, 2010
57,152,769 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 six months ended September 30, 2011” onpage 4 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results and contents of presentation
meeting of quarterly financial results)
On November 4, 2011 (Friday), JAPEX plans to post supplementary material on its website.
In addition, JAPEX plans to hold a presentation meeting for institutional investors and analysts on November 7,
2011 (Monday). JAPEX plans to post the material distributed at this presentation meeting on its website
promptly after the meeting is held.

-2-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the six months ended September 30,
2011(1) Qualitative information regarding consolidated operating results
During the six months ended September 30, 2011, net sales was at ¥104,596 million, an increase of ¥12,226
million (+13.2%) year on year, and gross profit increased by ¥1,197 million (+5.0%) year on year to ¥25,338
million. The main factors behind the year-on-year increase in net sales and gross profit were the crude oil
price remaining high and an increase in sales volume of natural gas among others.
Exploration expenses decreased by ¥1,979 million (-32.9%) year on year to ¥4,043 million, due to a decline
in expenditures in Japan, and selling, general and administrative expenses increased by ¥802 million (+5.6%)
year on year. As a result, operating income increased, reflecting the increase in gross profit and decrease in
exploration expenses, by ¥2,373 million (+61.7%) to ¥6,219 million.
Ordinary income resulted to ¥7,887 million, increasing ¥2,958 million (+60.0%) year on year, due to anincrease in gain on sales of securities recorded in the other item of non-operating income and decreases inloss on valuation of securities and in foreign exchange losses, outweighing an increase in loss on sales of
securities.
Income before income taxes and minority interests was ¥7,845 million, a ¥5,331 million increase (+212.0%)
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 ¥4,437 million (+234.0%) year on year to ¥6,333 million.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥84,113 million, an
increase of ¥12,751 million (+17.9%) year on year. Although the absence of sales of crude oil productsbought at Japan Canada Oil Sands Limited (JACOS) had a negative impact, it was outweighed by thehighly remaining crude oil price, an increase in sales volume of natural gas and an increase in net sales ofcrude 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 ¥2,258 million, adecrease of ¥373 million (-14.2%) 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 ¥18,224 million, a decrease of ¥151 million (-0.8%) year on year.

-3-(2) Qualitative information regarding consolidated financial position
At the end of the second quarter, as compared to the end of the previous fiscal year, although current assets
increased, total assets decreased by ¥24,016 million to ¥492,081 million due to a decrease in noncurrent
assets. The rise in current assets mainly reflected an increase in short-term investment securities such as
Treasury Discount Bills and commercial papers, 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 of available-for-sale securities.
Regarding liabilities and net assets, total liabilities declined ¥6,414 million from the previous fiscal year-end
to ¥115,994 million due to a decrease in deferred tax liabilities mainly related to the abovementioned decline
in investment securities. Total net assets decreased ¥17,602 million to ¥376,087 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. outweighed by a decline in the valuation difference on available-for-salesecurities.

(3) Qualitative information regarding consolidated financial forecasts
JAPEX expects that the consolidated financial forecasts for operating income, ordinary income and net
income for Fiscal 2012 (April 1, 2011 - March 31, 2012) will be lower compared to the previous consolidated
financial forecasts announced on May 13, 2011. This is mainly due to the downward revision of the
production and sales plan of natural gas and crude oil. The previous Japan Crude Cocktail (JCC) price andforeign exchange rate assumptions were $90 per barrel and ¥85/$, respectively. Our revised consolidated
financial forecasts are based on the revised JCC price and foreign exchange rate assumptions of $100 per
barrel and ¥80/$, respectively, for the third quarter and beyond (October 1, 2011 - March 31, 2012), reflecting
the recent trend of crude oil price and foreign exchange rate. Please refer to the “Notice of Financial Forecast
Revision” released on the same day of this report, November 4, 2011.

2. Matters regarding summary information (others)(1) Changes in significant subsidiaries during the six 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) andcurrent liabilities (other) because such variance is expected to be almost completely eliminated by the endof 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 six 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 September 30, 2011

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

29,62822,68872,669
5,124
219
6,586
8,266
(1)
145,183

46,53054,38839,723
140,642

44,70354,68735,179134,570

7,296
7,296

7,188
7,188

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

176,485
33,700(44)(5,002)
205,138
346,897
492,081(Millions of yen)
As of March 31, 2011
Liabilities
Current liabilities
Notes and accounts payable-trade
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 September 30, 2011

5,057
1,547
13,348
19,953

10,722
1,063
13,66625,451

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

28,951
41,868
7,091
751
9,448
2,432
90,542
115,994

14,288279,582(10)
293,861

14,288284,773(10)
299,051

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

69,569(37)(3,668)65,862
11,173376,087
492,081(2) Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Six months ended
September 30, 2010
(April 1, 2010 –September 30, 2010)
92,36968,22824,140Net 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
Interest income
Dividends income
Other
Total non-operating income
Non-operating expenses
Loss on sales of securities
Loss on valuation of securities
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Reversal of allowance for doubtful accounts
Gain on sales of noncurrent assets
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)Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)
104,596
79,25725,338

6,112
(89)
6,023
14,272
3,845

4,043
–
4,043
15,075
6,219

258
1,509
768
2,536

864
1,337
992
3,194

0
577
602
272
1,452
4,929

318
304
440
463
1,526
7,887

10
6
16

–
138
138

91

169

2,339

–

0
2,431
2,514
243
2,270
374
1,896

11
181
7,845
1,277
6,568
235
6,333

Consolidated quarterly statements of comprehensive income
Six months ended
September 30, 2010
(April 1, 2010 –September 30, 2010)
2,270

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)Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)
6,568(50,849)
(34)
(807)

(26,023)
(20)
424

(220)

(100)

(51,911)(49,640)(25,720)(19,152)(49,868)(19,370)

227

218

(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
Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)

Six months ended
September 30, 2010
(April 1, 2010 –September 30, 2010)
257,055

253,572

563,374(3,215)(1,624)(5,352)Natural gas(thousand m3)

568,580

597,324

1,268,801(6,884)(3,721)(10,896)

LNG (t)26,56919,95044,565Crude oil (kl)E&P

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

Bitumen (kl)

198,302

176,443

409,116(198,302)(176,443)(409,116)

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. SalesSix months ended
September 30, 2010
(April 1, 2010 –September 30, 2010)
AmountVolume(Millions of yen)

E&P

Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)
AmountVolume(Millions of yen)

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

Crude oil (kl)748,695

32,730720,627

42,441

1,489,705

67,488Natural gas(thousand m3)

696,673

27,039742,266

31,1701,553,770

61,090

LNG (t)91,368

6,079

90,982

6,293

209,549

14,100

Bitumen (kl)

197,4075,512

175,429

4,207

409,359

10,141

Subtotal

71,361

84,113

152,819

2,631

2,258

7,031

14,626

16,61032,523

3,750

1,614

7,278

Subtotal

18,376

18,22439,801

Total

92,369104,596

199,651

Contract services
Oil products
Other/merchandisebusinesses
Others

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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