Consolidated Financial Results for the Nine Months Ended December 31, 2014
<under Japanese GAAP>
February 6, 2015
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:
Samdeck Nakamoto, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
February 12, 2015
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 nine months ended December 31, 2014
(April 1, 2014 – December 31, 2014)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Operating income% Millions of yen

Ordinary income

Nine months ended

Millions of yen% Millions of yen

December 31, 2014

229,43127.3

23,880December 31, 2013180,259

9.6

15,977 113.7

49.5

40,573

Net income% Millions of yen

%

35.1

29,342

61.6

30,030 157.9

18,161–

Note: Comprehensive income: Nine months ended December 31, 2014: 32,617 million yen (9.8 %)Nine months ended December 31, 2013: 29,711 million yen (– %)Diluted net
income per share

Net income per share
Nine months ended

Yen

Yen

December 31, 2014

513.41–

December 31, 2013317.77–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of December 31,
2014

706,120

527,159

63.9

As of March 31, 2014

663,038

496,915

63.7

Reference: Equity

2.

As of December 31, 2014: 451,146 million yen

As of March 31, 2014: 422,336 million yen

Cash dividends

Fiscal year ended
March 31, 2014
Fiscal year ending
March 31, 2015
Fiscal year ending
March 31, 2015
(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

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, 2015 (April 1, 2014 – March 31, 2015)(Percentages indicate year-on-year changes.)
Net sales

Fiscal year ending
March 31, 2015

Operating income

Ordinary income

Net income

Net income pershare

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen324,378

17.3

34,68140.8

48,81911.2

35,37421.9

618.95

Note: Revisions to the consolidated financial forecasts most recently announced: None

*
(1)

Notes
Changes in significant subsidiaries during the nine 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 December 31, 2014
57,154,776 shares
As of March 31, 2014
57,154,776 sharesb. Number of treasury shares at the end of the period
As of December 31, 2014
2,139 shares
As of March 31, 2014
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 2014
57,152,637 shares
Nine months ended December 31, 2013
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 nine months ended December 31, 2014” onpage 3 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On February 6, 2015 (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 nine months ended December 31,
2014(1) Explanation of operating results
During the nine months ended December 31, 2014, net sales was at ¥229,431 million, an increase of ¥49,172
million (+27.3%) year on year. Gross profit increased by ¥5,807 million (+12.4%) year on year to ¥52,681
million. The main factors behind the year-on-year increases in net sales and gross profit were increases insales volumes of crude oil overseas and natural gas overseas.
Although overseas exploration expenses increased, domestic exploration expenses decreased, and as a result
exploration expenses decreased by ¥3,509 million (-45.6%) year on year to ¥4,182 million. Selling, generaland administrative expenses increased by ¥1,413 million (+6.1%) year on year to ¥24,617 million. As a result,operating income increased by ¥7,902 million (+49.5%) year on year to ¥23,880 million.
Ordinary income amounted to ¥40,573 million, an increase of ¥10,542 million (+35.1%) year on year, mainly
because of an increase in foreign exchange gains.
Income before income taxes and minority interests increased by ¥18,583 million (+84.6%) year on year to¥40,561 million reflecting the absence of impairment loss that was recorded as extraordinary losses in thecorresponding period of the previous year. Although income taxes and minority interests in income increased,
net income came to ¥29,342 million, an increase of ¥11,181 million (+61.6%) year on year.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥186,689 million, an
increase of ¥47,710 million (+34.3%) year on year. This was mainly the result of increases in sales
volumes of crude oil overseas and natural gas overseas.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥6,277 million, adecrease of ¥48 million (-0.8%) 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¥36,464 million, an increase of ¥1,510 million (+4.3%) year on year.

(2) Explanation of financial position
At the end of the third quarter, as compared to the end of the previous fiscal year, total assets increased by¥43,082 million to ¥706,120 million. The main factor behind this increase was an increase of ¥57,459 million
in property, plant and equipment due to an increase in construction in progress.
Total liabilities increased by ¥12,838 million from the previous fiscal year-end to ¥178,961 million. The main
factor behind this increase was an increase of ¥14,276 million in current liabilities due to an increase in
short-term loans payable.
Total net assets increased by ¥30,244 million from the previous fiscal year-end to ¥527,159 million. The main
factor behind this increase was an increase of ¥27,782 million in retained earnings.

(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts have been left unchanged from the forecasts for the fiscal year ending
March 31, 2015, which were announced on November 7, 2014. This is the result of an examination made inconsideration of the financial results for the nine months ended December 31, 2014.

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2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the nine 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 third quarter, 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.

(3) Changes in accounting policies, changes in accounting estimates, and restatement
Changes in accounting policies(Application of Accounting Standard for Retirement Benefits and its Guidance)
For the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012) and the“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012), theCompany has applied the provisions set forth in the main clauses of Paragraph 35 of the AccountingStandard for Retirement Benefits and Paragraph 67 of the Guidance on Accounting Standard for
Retirement Benefits from the first quarter ended June 30, 2014, and reviewed the determination ofretirement benefit obligations and current service cost. Accordingly, the Company changed the method of
attributing expected benefit to periods from the straight-line basis to the benefit formula basis as well as
amended the calculating method of the discount rate.
Application of the Accounting Standard for Retirement Benefits and its Guidance is in line with thetransitional measures provided in Paragraph 37 of the Accounting Standard for Retirement Benefits. In
accordance with such measures, the effect of the change in the determination of retirement benefit
obligations and current service cost has been added to or deducted from retained earnings as of the
beginning of the nine months ended December 31, 2014.
As a result of this change, as of the beginning of the nine months ended December 31, 2014, net defined
benefit liability decreased ¥1,874 million and retained earnings increased ¥1,297 million. In addition, theeffect of these changes on operating income, ordinary income and income before income taxes andminority interests for the nine months ended December 31, 2014 is immaterial.
.

-4-3. Consolidated financial statements(1) Consolidated quarterly balance sheet(Millions of yen)

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 March 31, 2014

As of December 31, 2014

81,031
37,222
41,203
4,653
128
6,285
24,731(48)
195,20978,73630,71044,140
4,748
478
6,582
25,952(41)
191,30988,541
112,011200,552

114,462
143,549
258,012

11,365
11,365

11,561
11,561

190,765
69,468(39)(4,284)
255,910
467,828
663,038

195,968
54,058(39)(4,749)245,237
514,811706,120

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
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
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
Minority interests
Total net assets
Total liabilities and net assets-6-

As of March 31, 2014

As of December 31, 2014

23,61028,169370
31,30483,4549,700
42,845550
44,634
97,731

21,63632,509936
6,845
16,001
4,738
82,668
166,123

21,82233,459964
4,379
16,4784,125
81,229178,961

14,288318,433(10)
332,711

14,288346,216(10)
360,494

84,85685,330

(56)
5,166
(340)
89,62474,579496,915
663,038

164
5,442
(284)
90,65276,013
527,159
706,120

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Nine months ended
December 31, 2013
(April 1, 2013 –December 31, 2013)180,259
133,385
46,874

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
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Provision for allowance for losses on overseas
investments
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Subsidy income
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
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)
Nine months ended
December 31, 2014
(April 1, 2014 –December 31, 2014)
229,431
176,750
52,681

7,841
(149)
7,692
23,204
15,977

4,380
(197)
4,182
24,61723,880

1,833
2,247

1,717
2,312

7,396

8,920

1,414
2,182
15,0744,372
767
18,089

560

535

–

476

461
1,021
30,030384
1,397
40,573

40
0
41

42
0
42

107
7,983
2
8,093
21,978
3,797
18,18019
18,16153––
53
40,561
8,797
31,7642,421
29,342

Consolidated quarterly statement of comprehensive income
Nine months ended
December 31, 2013
(April 1, 2013 –December 31, 2013)
18,180

Income before minority interests
Other 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 to minority
interests-8-(Millions of yen)
Nine months ended
December 31, 2014
(April 1, 2014 –December 31, 2014)
31,764

7,343
(160)
4,341
–

468
226
(44)
55

5

147

11,53029,711853
32,617

29,15030,370

561

2,247

(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
Nine months ended
December 31, 2013
(April 1, 2013 –December 31, 2013)(Reference)
Fiscal year ended
March 31, 2014
(April 1, 2013 – March 31, 2014)

318,779

1,311,646

828,870(17,441)(1,017,611)(424,040)

Natural gas(thousand m3)

796,253959,256

1,104,533(97,460)(308,669)(170,549)

LNG (t)12,2351,000

12,235258,174

244,617344,757(258,174)(244,617)(344,757)

Crude oil (kl)E&P

Nine months ended
December 31, 2014
(April 1, 2014 –December 31, 2014)

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. SalesNine months ended
December 31, 2013
(April 1, 2013 –December 31, 2013)
AmountVolume(Millions of yen)

E&P

Nine months ended
December 31, 2014
(April 1, 2014 –December 31, 2014)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2014
(April 1, 2013 – March 31, 2014)
AmountVolume(Millions of yen)

Crude oil (kl)955,164

66,3891,466,538

98,091

1,559,888

108,408

Natural gas(thousand m3)

985,960

49,7601,219,348

59,2201,418,963

71,584

LNG (t)147,954

14,551

204,356

20,773

268,510

26,202

Bitumen (kl)

257,3128,277

244,984

8,603

342,565

10,962

Subtotal

138,978

186,689

217,157

Contract services
Oil products
Other/merchandisebusinesses
Others

6,326

6,277

8,740

29,30430,96042,860

5,649

5,503

7,830

Subtotal

34,95336,46450,691

Total

180,259

229,431

276,588

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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