Consolidated Financial Results for the Three Months Ended June 30, 2016
<under Japanese GAAP>
August 5, 2016
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:
Hideichi Okada
Inquiries:
Samdeck Nakamoto, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
August 9, 2016
Scheduled date to commence dividend payments:
To be determined
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for institutional investors and analysts): None
(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the three months ended June 30, 2016
(April 1, 2016 – June 30, 2016)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Three months ended

Operating income

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary income% Millions of yen% Millions of yen%

June 30, 2016

42,096 (29.9)

(974)

–

3,313

(60.1)

1,909(72.0)

June 30, 2015

60,035 (27.0)

5,362(34.1)

8,300(36.2)

6,825(31.7)

Note: Comprehensive income: Three months ended June 30, 2016:
Three months ended June 30, 2015:(9,838) million yen (– %)(2,944) million yen (– %)Basic earnings per share
Three months ended

Diluted earnings per share

Yen

Yen

June 30, 2016

33.41

–

June 30, 2015

119.43–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2016

704,133

485,379

58.4

As of March 31, 2016

707,601495,31759.5

Reference: Equity

2.

As of June 30, 2016: 411,185 million yen

As of March 31, 2016: 421,009 million yen

Cash dividends

Fiscal year ended
March 31, 2016
Fiscal year ending
March 31, 2017
Fiscal year ending
March 31, 2017
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

25.00

–

25.00

50.00

25.00

–

25.00

50.00

Total
Yen

–

Note: 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, 2017 (April 1, 2016 – March 31, 2017)(Percentages indicate year-on-year changes.)
Net sales

Operating income

Profit attributable Basic earnings per
Ordinary income to owners of parent
shareMillionsof yenMillionsof yen%Millionsof yenFor the six months
ending September 30,
2016

90,129(27.4)(3,316)–(466)

Fiscal year ending
March 31, 2017

198,057(17.6)

(549)

–

725

%

Millionsof yen

%

Yen

–

399

(95.0)

6.98(84.4)

1,874(10.3)

32.79%

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

*
(1)

Notes
Changes 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 “(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 restatementa. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
b. Changes in accounting policies due to other reasons: Nonec.
Changes in accounting estimates: None
d. Restatement: None
Note: For details, please refer to “(3) Changes in accounting policies, changes in accounting estimates, and restatement” of “2. Mattersregarding summary information (notes)” on page 4 of the attached material.

(4)

Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 201657,154,776 shares
As of March 31, 201657,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2016
2,139 shares
As of March 31, 2016
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 201657,152,637 shares
Three months ended June 30, 2015
57,152,637 shares* Indication regarding execution of quarterly review procedures
At the time of disclosure of this quarterly financial results report, the quarterly review procedures for thequarterly 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 “(3) Explanation of consolidated financial forecasts and other forward-looking statements” of“1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2016” onpage 4 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On August 5, 2016 (Friday), JAPEX posts a supplementary material on its website in the same time.

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(Attached Material)
1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2016
(1) Explanation of operating results
During the three months ended June 30, 2016, net sales was ¥42,096 million, a decrease of ¥17,938 million(-29.9%) year on year. Gross profit was ¥6,446 million, a decrease of ¥7,543 million (-53.9%) year on year.
The main factors behind the year-on-year decreases in net sales and gross profit were falls in sales prices ofcrude oil and natural gas, and decreases in sales volumes of domestically produced crude oil and domestic
natural gas.
Exploration expenses was ¥125 million, a decrease of ¥107 million (-46.3%) year on year. Selling, generaland administrative expenses was ¥7,295 million, a decrease of ¥1,099 million (-13.1%) year on year. As aresult, operating income deteriorated by ¥6,336 million year on year to an operating loss of ¥974 million(operating income of ¥5,362 million in the same period of the previous fiscal year).
Ordinary income amounted to ¥3,313 million because of turning from foreign exchange losses in the same
period of the previous fiscal year to foreign exchange gains. However, the amount of decrease was ¥4,987
million (-60.1%) year on year.
Profit before income taxes decreased by ¥5,229 million (-63.1%) year on year to ¥3,059 million. Profit
attributable to owners of parent decreased by ¥4,916 million (-72.0%) year on year to ¥1,909 million.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥33,431 million, adecrease of ¥13,669 million (-29.0%) year on year. This was mainly the result of fall in sales price anddecreases in sales volumes of domestically produced crude oil and domestic natural gas.
(ii) Contract Services
Net sales from contract services (drilling and geological surveys, etc.) came to ¥1,131 million, a decreaseof ¥1,730 million (-60.5%) 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, etc., as well as other subcontracted tasks, came to¥7,533 million, a decrease of ¥2,539 million (-25.2%) year on year.

(2) Explanation of financial position
At the end of the first quarter, total assets decreased by ¥3,468 million to ¥704,133 million as compared to theend of the previous fiscal year. The main factors behind this decrease were a decrease of ¥3,349 million in
total current assets partly due to a decrease in securities and a decrease of ¥7,730 million in total investments
and other assets partly due to a decrease in investment securities, despite an increase of ¥8,055 million in total
property, plant and equipment partly due to an increase in construction in progress.
Total liabilities increased by ¥6,469 million from the previous fiscal year-end to ¥218,753 million. The main
factor behind this increase was an increase of ¥6,397 million in total non-current liabilities partly due to anincrease in long-term loans payable.
Total net assets decreased by ¥9,937 million from the previous fiscal year-end to ¥485,379 million. The main
factor behind this decrease was a decrease of ¥10,698 million in accumulated other comprehensive income
due to decreases in foreign currency translation adjustment and valuation difference on available-for-salesecurities.

-3-(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts for the six months ending September 30, 2016 and for the fiscal year
ending March 31, 2017 have been revised from the forecasts announced on May 12, 2016.
Please refer to the “Notice of Financial Forecasts Revision” released on August 5, 2016, the same day of thisreport.

2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the three months under review
No item 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 profit before income taxes for the fiscal year
including the first quarter, and next by multiplying the quarterly profit before income taxes 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.

(3) Changes in accounting policies, changes in accounting estimates, and restatement
Changes in accounting policies(Application of Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016)
Following the revision to the Corporation Tax Act, certain domestic consolidated subsidiaries have appliedthe “Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016” (ASBJ PITF No. 32,
June 17, 2016) from the first quarter ended June 30, 2016, and changed the depreciation method forfacilities attached to buildings and structures acquired on or after April 1, 2016 from the declining balancemethod to the straight line method.
The effect of this on the consolidated financial results for the three months ended June 30, 2016 isimmaterial.

(4) Additional information(Implementation Guidance on Recoverability of Deferred Tax Assets)
The “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26,
March 28, 2016) has been applied from the first quarter ended June 30, 2016.

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3. Consolidated financial statements(1) Consolidated quarterly balance sheet(Millions of yen)
As of March 31, 2016
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
Non-current 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 non-current assets
Total assets-5-

As of June 30, 2016

104,359
24,642
23,551
4,414
29
4,135
12,536(30)
173,638

115,693
20,879
2,876
4,547
163
4,382
21,774(27)
170,289

179,420
156,797336,218

187,404
156,869
344,273

9,698
9,698

9,254
9,254

135,261
55,691(58)(2,847)
188,046
533,963
707,601

129,290
53,869(58)(2,784)
180,316
533,844704,133

(Millions of yen)
As of March 31, 2016
Liabilities
Current liabilities
Notes and accounts payable - trade
Provision
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Provision
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-6-

As of June 30, 2016

8,585
68
23,63632,2907,435
4724,87932,361130,030
24,267229
3,574
17,811
4,079
179,994
212,284

138,905
22,447447
3,431
17,2493,910
186,391
218,753

14,288
157
345,674(10)
360,109

14,288
157
346,548(10)
360,984

50,55445,8103
10,087
253
60,89974,308495,317707,601

(64)
4,225
229
50,20074,194
485,379
704,133

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
60,03546,045
13,990Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
Exploration subsidies
Total exploration expenses
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Provision for loss on business liquidation
Other
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-7-(Millions of yen)Three months ended
June 30, 2016
(April 1, 2016 –June 30, 2016)
42,09635,650
6,446

249
(15)
233
8,395
5,362

135
(10)
125
7,295
(974)

407
1,037

299
1,037

1,849

–

–
198
3,493

3,452
216
5,006

203

228

–

370

251
99
555
8,300

–
119
718
3,313

0
0

–
–

10
–
1
11
8,289
1,881
6,407
(418)
6,825

3
249
–
253
3,059
471
2,588
678
1,909

Consolidated quarterly statement of comprehensive income
Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
6,407

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests-8-(Millions of yen)Three months ended
June 30, 2016
(April 1, 2016 –June 30, 2016)
2,588

5,419
(6)
(14,583)
3(4,746)(68)(6,874)
35

(184)

(772)

(9,351)(2,944)(12,426)(9,838)

1,991(10,028)(4,935)189

(3)Notes to consolidated financial statements(Notes on premise of going concern)
No item to report.

(Notes on significant changes in the amount of shareholders’ equity)
No item to report.

(Changes in the Scope of Consolidation and the Scope of Application of the Equity Method)
Significant changes in the scope of application of the equity method
There have been no significant changes in the scope of application of the equity method. Furthermore,from the first quarter ended June 30, 2016, the results of the subsidiaries and associates of Japan DrillingCo., Ltd. have been included in the calculation when applying the equity method, as their importance has
increased.

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4. Supplemental information
Status of production and sales
1. Production
Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
Crude oil (kl)E&P

Natural gas(thousand m3)
LNG (t)Bitumen (kl)Three months ended
June 30, 2016
(April 1, 2016 –June 30, 2016)(Reference)
Fiscal year ended
March 31, 2016
(April 1, 2015 – March 31, 2016)

362,502388,459

1,908,080(268,860)(311,247)(1,564,057)

342,974

358,243

1,331,251(125,356)(166,930)(507,328)

5

3,699

2,202

79,351

65,396306,432(79,351)(65,396)(306,432)

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. SalesThree months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
AmountVolume(Millions of yen)

E&P

Three months ended
June 30, 2016
(April 1, 2016 –June 30, 2016)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2016
(April 1, 2015 – March 31, 2016)
AmountVolume(Millions of yen)

Crude oil (kl)525,067

23,517646,504

17,8962,926,653

98,023Natural gas(thousand m3)

418,087

17,725436,037

12,4391,780,537

68,469LNG (t)42,315

4,554

40,542

2,765

208,246

17,715

Bitumen (kl)

77,6201,303

65,280329

306,436

4,894

Subtotal

47,10133,431

189,103

Contract services
Oil products
Other/merchandisebusinesses
Others

2,861

1,131

9,797

8,073

6,370

32,609

2,000

1,163

8,792

Subtotal

10,073

7,533

41,401

Total

60,03542,096240,302

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.

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