Consolidated Financial Results for First Quarter of Fiscal Year Ending March 31, 2005
August 13, 2004
Note: The following report is a translation of the Japanese-language original.
Company Name: Japan Petroleum Exploration Co., Ltd.
(Company Code: 1662, First Section, Tokyo Stock Exchange)(URL: http://www.japex.co.jp/)
President: Yuji Tanahashi
Inquiries: Koichi Shimomura, Manager, Media Relations, Administration Department
TEL: (03) 5461-7413
1. Notes Relating to Preparation of Quarterly Financial Statements(1) Use of simplified accounting procedures: Yes
Income taxes are calculated using an estimated annual income tax rate based on the statutory tax rate.
(2) Changes in accounting treatment from the most recent consolidated fiscal year: No(3) Changes in scope of consolidation and application of equity method: Yes
Consolidated (Added): 1 company; Equity-method (Excluded): 1 company
2. Consolidated Financial Results for First Quarter of Fiscal Year 2005 (April 1, 2004 – June 30, 2004)(1) Consolidated Operating Results (Amounts less than one million yen have been omitted)
Net Sales
Operating Income
Ordinary Income
Net Income(¥ million)% (¥ million)% (¥ million)% (¥ million)%
1Q of FY05
22,996
4.5
1,671 (56.8)
4,262 (14.2)
3,612 12.9
1Q of FY04
22,003
3,868
4,965
3,198
−
−
−
−
96,713
12,44914,468
9,960（Ref.）FY04
Net Income per
Share
(¥)

Diluted Net Income
per Share(¥)

1Q of FY05
63. 20−
1Q of FY04
55. 96−
172.
76（Ref.）FY04−(Notes)
1. Percentage figures for net sales, operating income and other items represent changes compared with thecorresponding period of the previous fiscal year.
2. Diluted net income per share is not shown because there are no shares with a dilutive effect.
Qualitative Information Concerning Consolidated Business Performance
In the first quarter ended June 30, 2004, consolidated net sales totaled ¥22,996 million, up 4.5%, from the same
period of the previous year. Operating income totaled ¥1,671 million, down 56.8%, from the same period of theprevious year. Ordinary income totaled ¥4,262 million, down 14.2%, from the same period of the previous year. Net
income totaled ¥3,612 million, up 12.9%, from the same period of the previous year.
Below is a summary of earnings data for each of the Company’s business segments by division.
1. Oil and Natural Gas Segment(a) E&P Division
The E&P division sells crude oil, natural gas and liquefied natural gas (LNG). Net sales totaled ¥17,972 million,
down 4.1%, from the same period of the previous year, reflecting lower sales volume for natural gas, in spite of
crude oil sales increased due to a sharp rise in crude oil prices.
(b) Contract Services Division
The Contract Services Division accepts orders mainly for drilling projects and geological and geophysical surveys.
Net sales totaled ¥1,797 million, up 95.1%, from the same period of the previous fiscal year, reflecting an increasein the volume of contract services orders.
-1-(c) Other Businesses DivisionThis division mainly includes the manufacturing and trading of products such as LPG and fuel oil, thetransmission of third-party gas, and other miscellaneous consignment orders. Net sales totaled ¥2,892 million, up
45.0%, from the same period of the previous fiscal year, reflecting higher orders for third-party gas transmission.
2. Geothermal Energy Segment
Geothermal Energy Division
The Geothermal Energy sells steam used for electric power generation. Net sales totaled ¥334 million, down 3.9%,
reflecting lower steam sales volume.
(2) Consolidated Financial Position
Total Assets(¥ million)
247,927
238,850
246,765

June 30, 2004
June 30, 2003
(Ref.) Mar. 31,
2004

Shareholders’Equity

%
79.6
79.2
79.3

Shareholders’Equity Ratio per
Share
(¥)
3,451.26
3,310.96
3,422.80(¥ million)(3,422)(3,312)(4,599)Cash and Cash
Equivalents at
Period-End(¥ million)
24,237
24,27827,851

Shareholders’Equity Ratio(¥ million)
197,254
189,237
195,715(3) Consolidated Cash Flows
Operating
Activities
1Q of FY05
1Q of FY04
（Ref.）FY04(¥ million)
2,290
5,267
21,522

Investing Activities(¥ million)(2,520)(1,542)(12,677)

Financing
Activities

Qualitative Information Concerning Consolidated Financial Position
Total assets at June 30, 2004 stood at ¥247,927 million, an increase of ¥1,161 million from the previous fiscal year,
mainly reflecting Japex New Nanhai Ltd. became a consolidated subsidiary of the Company instead of an affiliate
accounted for under the equity method. Shareholders’ equity rose ¥1,539 million to ¥197,254 million. Shareholders’equity ratio was 79.6%.
Cash and cash equivalents at June 30, 2004 stood at ¥24,237 million, a decrease of ¥3,613 million from the previous
fiscal year.
(Cash Flows from Operating Activities)
Operating activities provided net cash of ¥2,290 million, mainly reflecting income before income taxes andminority interests of ¥4,224 million and income taxes of ¥1,884 million.
(Cash Flows from Investing Activities)
Investing activities used net cash of ¥2,520 million, mainly reflecting outflow was ¥4,865 million for the purchaseof property, plant and equipment and inflow was ¥1,830 million for the proceeds from purchase of consolidated
subsidiary stock accompanied by changes in scope of consolidation.
(Cash Flows from Financing Activities)
Financing activities used net cash of ¥3,422 million, reflecting mainly outflows of ¥1,905 million for the paymentof cash dividends and ¥706 million for the repayment of long-term debt.

-2-

3. Consolidated Forecast for Fiscal Year 2005(April 1, 2004 – March 31, 2005)
Net Sales
Ordinary Income(¥ million)(¥ million)
Interim Period
43,873
5,571
Fiscal Year-end
84,163
11,313Net Income(¥ million)
4,865
9,556

Reference :Non-consolidated Forcast for Fiscal Year 2005(April 1, 2004 – March 31, 2005)
Net Sales
Ordinary Income
Net Income(¥ million)(¥ million)(¥ million)
Interim Period
40,0394,247
4,063
Fiscal Year-end
72,8099,819
8,291
Note: The forecast above was prepared on the basis of information available at the time of the release of thisdocuments. Due to various factors, the actual result may differ from these projections.

Qualitative Information Concerning Forecast
Due to rise crude oil prices and change from part of the international crude oil sales second half of FY05 to the firsthalf of FY05, the Company expects first half net sales to rise ¥6.7billion, or 18.2% to ¥43.8billion compared withconsolidated financial results forecast published in the Company’s consolidated financial results FY2004 releasedon May 17, 2004. The Company forecasts ordinary income for first half of ¥5.5 billion, up ¥3billion, or 121.2% andnet income for first half of ¥4.8 billion, up ¥1.8 billion, or 59.2%.
The Company does not change full year forecast due to unclear of an outlook of crude oil price.
Below is a revision of original financial results forecasts in the fiscal period ending September 2004(April 1, 2004 –September 30, 2004), which were announced on May 17, 2004.
(1) Consolidated (April 1, 2004 – September 30, 2004)
Net Sales
Ordinary Income(¥ million)(¥ million)
Previous Forecast (A)37,100
2,518
Revised Forecast (B)43,873
5,571
Increase (B – A )
6,773
3,053
Increase Ratio (%)
18.2%
121.2%Net Income(¥ million)
3,055
4,865
1,809
59.2%

(2) Non-consolidated (April 1, 2004 – September 30, 2004)
Net Sales
Ordinary Income(¥ million)(¥ million)
Previous Forecast (A)33,266
2,458
Revised Forecast (B)40,0394,247
Increase (B – A )
6,773
1,790
Increase Ratio (%)
20.3%
72.8%

Net Income(¥ million)
2,516
4,063
1,546
61.4%

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1.Consolidated 1st Quarter Balance Sheet(¥ million)
1Q of FY05

FY04

As of Jun. 30,2004

As of Mar. 31, 2004

1. Cash and deposits

22,86922,201

667

20,263

2. Notes and accounts receivable

9,258

11,430(2,172)8,336

3. Marketable securities

6,494

9,854

(3,360)7,412

4. Inventories

7,662

6,116

1,546

7,436

5. Other current assets

5,888

5,343

544

5,291

Less: Allowance for doubtful receivables

(12)

(13)

1

(37)

52,16054,932(2,772)

48,703

Description

Change1Q of FY04
As of Jun. 30, 2003

(Assets)
ⅠCurrent assets

Total current assets
ⅡFixed assets
1. Property, plant and equipment(1) Buildings and structures

51,82453,411(1,587)56,263(2) Machinery and equipment

23,042

23,697(654)

12,699(3) Land

12,053

12,0511

12,011(4) Other property, plant and equipment

14,81011,415

3,395

14,722

Total property, plant and equipment

101,731100,576

1,155

95,697

1,889

819

1,069

604

2. Intangible fixed assets
3. Investments and others(1) Investments in securities

84,22384,771(547)

86,721(2) Others

20,032

19,121910

21,691

(123)

(123)

0

(139)

(11,986)(13,334)

1,347(14,428)

Less: Allowance for doubtful receivables
Allowance for losses on overseas investments
Total investments and others

92,14690,436

1,710

93,844

Total fixed assets

195,767

191,832

3,934

190,146

Total assets

247,927

246,765

1,161

238,850

3,218

2,353

864

2,583

−

600

(600)

−

(Liabilities)
I Current liabilities
1. Notes and accounts payable
2. Short-term bank loans
3. Current portion of long-term debt

4,347

2,306

2,041

2,312

4. Other current liabilities

9,798

11,539(1,740)7,839

Total current liabilities

17,363

16,798564

12,734

1. Long-term debt

6,256

9,003

(2,747)

10,603

2. Accrued retirement benefits for employees

3,693

3,574

118

3,500

3. Accrued retirement benefits for officers

613

696

(82)

588

4. Accrued estimated cost of abandonment of wells

2,319

2,423

(103)

3,179

5. Accrual for losses on projects

12,02910,975

1,053

11,512

6. Other long-term liabilities

2,411

2,186

225

2,155

Total long-term liabilities

27,32328,859(1,535)31,539Total liabilities

44,68745,658(970)

44,274

5,986

5,392

593

5,339

II Long-term liabilities(Minority interests)
Minority interests in consolidated subsidiaries(Shareholders’ equity)
I Common stock

14,28814,288−14,288II Retained earnings

182,351

180,826

1,525

174,064

III Unrealized holding gain on securities

3,517

3,412

104

2,893

IV Translation adjustments(2,900)(2,810)(89)(2,009)

(2)

(1)

(1)

−

Total shareholders’ equity

197,254

195,715

1,539

189,237

Total liabilities, minority interests and shareholders’ equity

247,927

246,765

1,161

238,850

V Treasury stock-4-

2. Consolidated 1st Quarter Statements of Income(¥ million)
Description

1Q of FY05

1Q of FY04

ChangeApr. – Jun. 2004

Apr. – Jun. 2003

FY04
Apr. 03 – Mar. 04

I Net sales

22,99622,003992

96,713

II Cost of sales

15,22813,0372,190

58,060

7,768

8,966

(1,198)38,653

1. Exploration expenses

1,157

358

798

5,888

2. Exploration subsidies

(24)

(1)

(23)

(675)

Gross profit
III Exploration expenses

Total exploration expense

1,133

357

775

5,213

4,963

4,740

223

20,990

1,671

3,868

(2,196)

12,449

1. Interest income

279

338

(58)

1,192

2. Dividend income

IV Selling, general and administrative expenses
Operating income
V Non-operating income

1,046

897

148

1,298

3. Reversal of allowance for losses on overseas investments

587

2,230

(1,643)2,705

4. Equity in profit of non-consolidated subsidiaries and affiliates

874

−

874

−

5. Other non-operating income

319

238

81

759

3,107

3,705

(597)

5,956

73

94

(21)

346

2. Loss on sale of securities

60

−

60

34

3. Devaluation loss on securities

105

−

105

498

4. Equity in losses of non-consolidated subsidiaries and affiliates

−

2,221

(2,221)

2,072

5. Provision for accrued estimated cost of abandonment of wells

35

80

(45)

160

6. Provision for losses on projects

200

93

107

129

7. Other non-operating expenses

40

117

(77)

695

Total non-operating income
VI Non-operating expenses
1. Interest expense

Total non-operating expenses
Ordinary income

516

2,607

(2,091)

3,937

4,262

4,965

(703)

14,468

2

3

(0)

25

VII Extraordinary income
1. Reversal of allowance for doubtful receivables
VIII Extraordinary losses
1. Loss on disposal of fixed assets

40

11

28

286

4,224

4,956

(731)

14,207

Income taxes

554

1,666

(1,111)

3,955

Minority interests

57

91

(33)

291

3,612

3,198

413

9,960

Income before income taxes and minority interests

Net income-5-3. 1st Quarter Consolidated Statements of Cash Flows(¥ million)
Description
I Operating activities
1. Income before income taxes and minority interests
2. Depreciation and amortization
3. Loss on devaluation of marketable securities and investments in securities
4.Increase (decrease) in allowance for doubtful receivables
5. Increase in provision for accrued retirement benefits for employees
6. Increase (decrease) in provision for accrued retirement benefits for officers
7. Increase (decrease) in provision for accrued estimated cost of abandonmentof wells
8. Decrease in provision for allowance for losses on overseas investments and

1Q of FY05
Apr. – Jun. 2004

1Q of FY04
Apr. – Jun. 2003

FY04
Apr. 03 – Mar. 04

4,224
3,160
105
(1)
115
(82)

4,956
2,439
−
11
223
(10)

14,207
11,043
498
(27)
303
97

(99)

55

(638)

(293)

(2,198)(3,830)(1,326)73(1,236)94(2,491)
346

(51)

(135)

(305)

60

−

34

(874)
2,644
(1,546)(1,829)
11
(116)
4,175
(1,884)
2,290

2,221
3,409
1,349
(4,650)
−
(155)
6,373
(1,106)
5,267

2,072
310
2,669
(2,161)(211)
1,408
23,326(1,803)
21,522

(10)
300
−
819
(4,865)116(144)(2,835)
1,068

(10)
−
−
2,145
(3,446)−(77)(4,448)
3,094

(335)
15
(2,998)7,890(15,734)38(423)(9,030)
5,106

1,830

−

−

(12)
23
1,331
(142)
(2,520)

(94)
18
1,199
76
(1,542)

(89)
554
2,638
(309)
(12,677)

III Financing activities
1.Decrease in short-term bank loans
2. Repayment of long-term debt
3. Purchase of treasury stock
4. Cash dividends paid
5. Dividends paid to minority shareholders
6. Interest paid
Net cash used in financing activities

(600)
(706)
(1)
(1,905)(192)(17)(3,422)

(900)
(708)
−
(1,428)(197)(78)(3,312)(300)(2,315)(1)(1,428)(197)(356)(4,599)IV Effect of exchange rate changes on cash and cash equivalents
V Increase (decrease) in cash and cash equivalents
VI Cash and cash equivalents at beginning of year
VII Cash and cash equivalents at period-end

39(3,613)27,851
24,237(0)411
23,86624,278(260)
3,984
23,86627,851

accrual for losses on projects
9. Interest and dividend income
10. Interest expense
11. Gain on redemption and sales of marketable securities and investments insecurities
12. Loss on redemption and sales of marketable securities and investments insecurities
13. Equity in losses (profits) of non-consolidated subsidiaries and affiliates
14. Decrease in notes and accounts receivable
15. Decrease (increase) in inventories
16. Increase (decrease) in notes and accounts payable
17. Increase (decrease) in consumption tax payable
18. Other, net
Subtotal
19. Income taxes (paid) refunded
Net cash provided by operating activities
II Investing activities
1. Investments in time deposits
2. Proceeds from time deposits
3. Payments for purchase of marketable securities
4. Proceeds from redemption and sale of marketable securities
5. Additions to property, plant and equipment
6. Proceeds from sales of property, plant and equipment
7. Additions to intangible fixed assets
8. Payments for purchase of investments in securities
9. Proceeds from redemption and sale of investments in securities
10. Proceeds from purchase of consolidated subsidiary stock accompanied bychanges in scope of consolidation
11. Increase in loans receivable
12. Decrease in loans receivable
13. Interest and dividends received
14. Other, net
Net cash used in investing activities-6-4.Status of Production and Sales
１．Production(1) Oil and Natural Gas Segment
Division

1Q of FY 2005

Product

Apr. 1 – Jun. 30, 2004
Crude
E&P

574,417 kl（3,131）

241,485 thousand ㎥(1,889)

L

N

G

3,141

ｔ

−

L

P

G

2,223

ｔ

2,487

11,171kl

11,916

Fuel oil, etc.

(Ref.) FY2004
Apr. 1, 2003 – Mar. 31, 2004

kl

133,099(1,101)

231,198 thousand ㎥(890)

Natural gas

Other
Businesseskl

128,791(1,090)oil

1Q of FY2004
Apr. 1 –Jun. 30, 2003

1,036,120 thousand ㎥（7,231）
6,589

ｔ

ｔ

10,811ｔ

kl

52,393kl（Notes）
1. The figures in parentheses in E&P represent overseas production and are included in the total.
2. Part of the oil production volume is used as a feedstock for LPG, fuel oil and other products.
3. Part of the natural gas production volume is used as a feedstock for LNG, LPG and other energies.

(2) Geothermal Energy Segment
Division

1Q of FY 2005

Product

Apr. 1 – Jun. 30, 2004
Geothermal

Steam

Energy270,687

1Q of FY2004
Apr. 1 – Jun. 30, 2003

ｔ285,079(Ref.) FY 2004
Apr. 1, 2003 – Mar. 31, 2004

ｔ1,107,443

ｔ

２．Sales(1)Oil and Natural Gas Segment
Division

1Q of FY2005
Apr. 1 – Jun. 30, 2004

Product

VolumeAmount
kl

Crude

Oil

353,464

Volume(¥ million)

8,947

Natural Gas

259,830

362,856

N

G

Subtotal
Contract
services
小計

8,003

P

314,508

32,963thousand㎥

10,364

1,296,389

ｔ

42,560ｔ

1,021

14,71875,883

3,837

17,972−

18,740−79,361

−

1,797

−

921

−

7,049

1,797

−

921

−

6,865

321

735

ｔ

(¥ million)

7,040

kl

Other
Businesses

1,528,507(¥million)

−

−

G

7,640

Amountkl

20,468ｔ

L

Volume(¥million)

thousand㎥ｔ

LAmountkl

thousand㎥

E&P（Ref.）FY2004
Apr. 1,2003 Mar. 31, 2004

1Q of FY2004
Apr.1 – Jun. 30, 2004

374

31,506kl

Fueloil,etc

22,278968

O t h e r s−

Subtotal
Total

7,049
ｔ

(¥ million)(¥ million)

1,514
kl

21,320800

89,090

3,517

1,602

−

818

−

4,182

−

2,892

−

1,994

−

9,213

−

22,662−

21,656−

95,624-7-

(2)Geothermal Energy Segment
Division

Product

1Q of FY2005
Apr. 1 – Jun. 30, 2004
VolumeGeothermal
EnergyAmount
ｔ

Steam
Total

（Ref.）FY2004
Apr. 1, 2003 Mar. 31, 2004

1Q of FY2004
Apr. 1 – Jun. 30, 2003
VolumeAmountｔ(¥ million)

VolumeAmountｔ(¥ million)(¥ million)

254,527334

274,239347

1,061,336

1,089

−

334

−

347

−

1,089

（Notes）
1. Others in Other Businesses includes revenue from the transmission of third-party gas through JAPEX’s pipeline network and salescommissions.
2. Monetary amounts in the tables do not include consumption tax.

-8-