Consolidated Financial Results for the Six Months Ended September 30, 2013
<under Japanese GAAP>
November 8, 2013
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:
Shoji Mihara, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
November 12, 2013
Scheduled date to commence dividend payments:
November 29, 2013
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, 2013
(April 1, 2013 – September 30, 2013)(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, 2013

120,281

13.5

11,543 549.1

19,902549.9

15,883–September 30, 2012

105,958

1.3

1,778 (71.4)

3,062(61.2)(24,433)–

Note: Comprehensive income: Six months ended September 30, 2013:
Six months ended September 30, 2012:

12,067 million yen (– %)-40,803 million yen (– %)Diluted net
income per share

Net income per share
Six months ended

Yen

Yen

September 30, 2013277.91–

September 30, 2012

(427.51)–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2013599,290

436,174

65.6

As of March 31, 2013

525,172

403,625

72.8

Reference: Equity

2.

As of September 30, 2013: 393,043 million yen

As of March 31, 2013: 382,441 million yen

Cash dividends

Fiscal year ended
March 31, 2013
Fiscal year ending
March 31, 2014
Fiscal year ending
March 31, 2014
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

20.00

–

20.00

40.00

–

25.00
–

25.00

50.00

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, 2014 (April 1, 2013 – March 31, 2014)(Percentages indicate year-on-year changes.)
Net sales

Fiscal year ending
March 31, 2014

Operating income

Ordinary income

Net income pershare

Net income

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen

232,692

0.7

20,72249.0

28,783

2.5

21,511–376.39Note: Revisions to the consolidated financial forecasts most recently announced: None

*
(1)

(2)

Notes
Changes in significant subsidiaries during the six months under review (changes in specified subsidiaries
resulting in the change in scope of consolidation): None
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 (notes)” 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 policies 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, 2013
57,154,776 shares
As of March 31, 2013
57,154,776 sharesb. Number of treasury shares at the end of the period
As of September 30, 2013
2,139 shares
As of March 31, 2013
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2013
57,152,637 shares
Six months ended September 30, 201257,152,637 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 in accordance with the
Financial Instruments and Exchange Act 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. As such,they do not constitute guarantees by the Company of future performance. 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) Explanation of consolidated financial forecasts and other forward-looking
statements” of “1. Qualitative information regarding settlement of accounts for the six months ended
September 30, 2013” on page 4 of the attached material to the quarterly financial results report.
(Method of accessing contents of presentation meeting of quarterly financial results)
On November 11, 2013, JAPEX plans to hold a presentation meeting for institutional investors and analysts.
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,
2013(1) Explanation of operating results
During the six months ended September 30, 2013, net sales was at ¥120,281 million, an increase of ¥14,323
million (+13.5%) year on year. This was mainly the result of an increase in sales prices due to the impact offoreign exchange rates, despite negative factors such as sales volume declines for crude oil and natural gas.
Gross profit increased by ¥8,522 million (+36.1%) year on year to ¥32,161 million. This was mainly the
result of the aforementioned increase in sales prices and a decrease in cost of sales due to decreased
depreciation and amortization and decreased variable cost in line with a decline in sales volume of naturalgas.
Exploration expenses decreased by ¥1,593 million (-21.8%) year on year to ¥5,723 million, due to aconsiderable decrease in overseas expenditures, and selling, general and administrative expenses increased by¥350 million (+2.4%) year on year to ¥14,893 million. As a result, operating income increased by ¥9,765
million (+549.1%) year on year to ¥11,543 million.
Ordinary income amounted to ¥19,902 million, increasing ¥16,839 million (+549.9%) year on year, mainly
because of the respective turnarounds from equity in losses of affiliates and foreign exchange losses recordedin the same period of the previous fiscal year to equity in earnings of affiliates and foreign exchange gains.
Income before income taxes and minority interests was ¥19,905 million, increasing ¥51,615 million year on
year mainly due to the absence of impairment loss that was recorded in the same period of the previous fiscal
year under extraordinary loss. Net income was ¥15,883 million, increasing ¥40,316 million year on year
despite an increase in income taxes.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥94,614 million, an
increase of ¥10,803 million (+12.9%) year on year. This was mainly the result of an increase in net salesof purchased crude oil, particularly Sakhalin crude oil, reflecting an increase in sales prices due to a
substantial swing towards yen depreciation in foreign exchange rates, which outweighed sales volume
declines for domestically produced crude oil, bitumen and natural gas.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥4,005 million, an
increase of ¥1,557 million (+63.6%) 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 as well as other subcontracted tasks,
came to ¥21,662 million, an increase of ¥1,962 million (+10.0%) year on year.

(2) Explanation of financial position
At the end of the second quarter, as compared to the end of the previous fiscal year, although current assets
decreased, noncurrent assets increased, and total assets increased by ¥74,118 million to ¥599,290 million as aresult. In current assets, the main factor for change was a decrease in short-term loans receivable based on
repo transactions included in the other current assets item. In noncurrent assets, the main factors for change
included a decrease in investment securities due to a fall in stock prices, an increase in investments relating todevelopment of the Garraf oilfield in Iraq, and the recognition of assets relating to a project for thedevelopment and production of shale gas in the province of British Columbia in Canada.
Regarding liabilities and net assets, total liabilities increased by ¥41,568 million from the previous fiscal
year-end to ¥163,115 million, as a result of an increase in short-term loans payable exceeding decreases innotes and accounts payable-trade and in deferred tax liabilities as a result of the aforementioned drop in-3-

investment securities. Total net assets increased by ¥32,549 million to ¥436,174 million as a result of
increases in retained earnings and foreign currency translation adjustment exceeding a decrease in valuationdifference on available-for-sale securities.

(3) Explanation of consolidated financial forecasts and other forward-looking statements
We have not revised the consolidated financial forecasts for the year ending March 31, 2014 from thefinancial forecasts announced on May 10, 2013.

2. Matters regarding summary information (notes)(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.
However, in cases where the calculation of taxes using such estimated effective tax rate yields a result thatis not reasonable to a significant extent, the effective statutory tax rate is used.
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, 2013
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
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
Construction in progress
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, 2013

53,87032,33753,414
4,490
77
7,007
37,479(31)
188,645

55,81931,84755,426
4,701
796
6,404
13,528(37)
168,485

2,957
87,72590,68380,883
101,378
182,261

10,394
10,394

10,512
10,512

177,304
62,806(31)(4,630)235,449
336,526
525,172

170,01772,504(31)(4,458)238,031430,805599,290

(Millions of yen)
As of March 31, 2013
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans 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 September 30, 2013

18,947–
170
22,037
41,155

13,327
49,825
212
23,171
86,53624,19731,983
6,938
886
10,8585,526
80,391
121,547

22,992
29,124
6,534
847
11,9395,140
76,579163,115

14,288291,990(10)306,268

14,288306,730(10)
321,008

78,310226(2,362)
76,173
21,183
403,625
525,172

71,462(188)760
72,035
43,131
436,174599,290

(2) Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)
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
Interest income
Dividends income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Subsidy income
Gain on transfer of mining rights
Other
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Impairment loss
Other
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes
Income (loss) before minority interests
Minority interests in income
Net income (loss)

105,958
82,32023,638-7-(Millions of yen)Six months ended
September 30, 2013
(April 1, 2013 –September 30, 2013)
120,281
88,12032,161

7,316
–
7,316
14,542
1,778

5,728
(4)
5,723
14,893
11,543

805
1,442
–
706
2,953

1,209
1,181
4,041
2,394
8,826

141
744
357
426
1,669
3,062

270
–
–
197
467
19,902

300
2,495
1
2,796

40
–
0
41

532
37,031
6
37,570(31,710)(7,772)(23,938)495(24,433)35–
2
38
19,905
3,983
15,92138
15,883

Consolidated quarterly statements of comprehensive income
Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)
Income (loss) 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(23,938)-8-(Millions of yen)Six months ended
September 30, 2013
(April 1, 2013 –September 30, 2013)15,921(17,777)
749
197(6,852)
(437)
3,459

(34)

(23)

(16,865)(40,803)(3,854)
12,067(41,401)

11,745

598

322

(3)

Notes to consolidated financial statements(Notes on premise of going concern)
No items to report(Notes on significant changes in the amount of shareholders’ equity)
No items to report-9-4. Supplemental information
Status of production and sales
1. Production
Six months ended
September 30, 2013
(April 1, 2013 –September 30, 2013)

Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)(Reference)
Fiscal year ended
March 31, 2013
(April 1, 2012 – March 31, 2013)

239,751

209,333

482,306(1,134)(9,935)(5,840)534,262504,685

1,080,116(555)(38,774)(1,199)226

10,803

602

188,486

165,551

348,948(188,486)(165,551)(348,948)

Crude oil (kl)E&P

Natural gas(thousand m3)
LNG (t)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.

2. SalesSix months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)
AmountVolume(Millions of yen)

E&P

(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2013
(April 1, 2012 – March 31, 2013)
AmountVolume(Millions of yen)

Crude oil (kl)732,685

41,754

712,272

48,808

1,335,639

78,834Natural gas(thousand m3)

685,316

30,054

614,873

31,883

1,455,708

69,795

LNG (t)89,062

7,292

91,037

8,811

229,242

19,098Bitumen (kl)

187,429

4,708

165,479

5,110

349,198

9,694

Subtotal
Contract services
Otherbusinesses

Six months ended
September 30, 2013
(April 1, 2013 –September 30, 2013)
AmountVolume83,81094,614

177,423

2,447

4,005

9,674

Oil products/merchandise

15,824

17,81336,034

Others

3,876

3,849

7,953

Subtotal

19,70021,662

43,988

Total

105,958

120,281

231,086

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

- 10 -