Consolidated Financial Results for the Six Months Ended September 30, 2012
<under Japanese GAAP>
November 2, 2012
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 8, 2012
Scheduled date to commence dividend payments:
December 4, 2012
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:Yes (for analysts and institutional investors)(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the six months ended September 30, 2012
(April 1, 2012 – September 30, 2012)(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, 2012

105,958

1.3

1,778

(71.4)

3,062(61.2)

September 30, 2011

104,596

13.2

6,219

61.7

7,887

60.0

(24,433)%–

6,333 234.0

Note: Comprehensive income: Six months ended September 30, 2012: -40,803 million yen (– %)Six months ended September 30, 2011: -19,152 million yen (– %)Diluted net
income per share

Net income per share
Six months ended

Yen

Yen

September 30, 2012

(427.51)–

September 30, 2011110.81–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2012

480,129367,298

72.9

As of March 31, 2012

532,890406,773

73.7

Reference: Equity

2.

As of September 30, 2012: 350,052 million yen

As of March 31, 2012: 392,597 million yen

Cash dividends

Fiscal year ended
March 31, 2012
Fiscal year ending
March 31, 2013
Fiscal year ending
March 31, 2013
(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, 2013 (April 1, 2012 – March 31, 2013)(Percentages indicate year-on-year changes.)
Net sales

Fiscal year ending
March 31, 2013

Operating income

Ordinary income

Net income pershare

Net income

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

222,228(3.6)

10,304(31.5)

18,855(14.9)(11,630)–(203.50)

Note: 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 5 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: Yes
b. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: Yes
d. Restatement of prior period financial statements after error corrections: None
Note: Changes regarding change in depreciation method of property, plant and equipment. For details, please refer to the section of “(3)Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error
corrections” of “2. Matters regarding summary information (notes)” on page 5 of the attached material.

(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, 201257,154,776 shares
As of March 31, 201257,154,776 sharesb. Number of treasury shares at the end of the period
As of September 30, 2012
2,139 shares
As of March 31, 2012
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 201257,152,637 shares
Six months ended September 30, 201157,152,671 shares-2-* 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. 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) Qualitative information regarding consolidated financial forecasts” of “1.
Qualitative information regarding settlement of accounts for the six months ended September 30, 2012” onpage 5 of the attached material to the quarterly financial results report.
(Method of accessing contents of presentation meeting of quarterly financial results)
On November 2, 2012 (Friday), JAPEX plans to hold a presentation meeting for institutional investors andanalysts. JAPEX plans to post the material distributed at this presentation meeting on its website promptly after
the meeting is held.
(Significant impairment loss on noncurrent assets)
Owing to a decline in production capacity at the Yufutsu Oil and Gas Field in Tomakomai City, Hokkaido, theCompany reduced the book value of the business assets for production operation at the Oil and Gas Field totheir recoverable value and posted an impairment loss for them. The amount of impairment loss on the relevant
assets posted for the six months under review was ¥37,031 million. For the background to the impairment loss
and the associated financial forecast revision, please refer to the “Notice of Recording of Impairment Loss ofBusiness Assets, Announcement of Financial Forecast Revision and Difference between Non-consolidated
Forecast and Performance in the Previous Fiscal Year” released on October 26, 2012.

-3-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the six months ended September 30,
2012(1) Qualitative information regarding consolidated operating results
During the six months ended September 30, 2012, net sales was at ¥105,958 million, an increase of ¥1,362
million (+1.3%) year on year. Although a decline in natural gas sales volume had a negative impact, it was
outweighed by positive factors including an increase in transportation fee of natural gas. Gross profit
decreased by ¥1,700 million (-6.7%) year on year to ¥23,638 million, despite positive factors including the
aforementioned increase in transportation fee of natural gas. This primarily reflected a decline in natural gas
sales volume and an increase in cost of sales due to a rise in expenses for the stable supply of natural gas in
Hokkaido during the winter.
Exploration expenses increased by ¥3,272 million (+80.9%) year on year to ¥7,316 million, due to aconsiderable increase in domestic and overseas expenditures, and selling, general and administrative expenses
decreased by ¥532 million (-3.5%) year on year to ¥14,542 million. As a result, operating income decreasedby ¥4,441 million (-71.4%) year on year to ¥1,778 million due to the decline in gross profit and the increasein exploration expenses.
Ordinary income amounted to ¥3,062 million, decreasing ¥4,825 million (-61.2%) year on year, due to thedecrease in operating income and an increase in equity in losses of affiliates, among others, outweighing
positive factors such as an increase in dividends income and a decrease in foreign exchange losses.
Loss before income taxes and minority interests was ¥31,710 million, a ¥39,556 million profit decline year on
year. Although a ¥2,495 million gain on transfer of mining rights by assignment of working interest
pertaining to bitumen of Japan Canada Oil Sands Limited (JACOS) was recorded in extraordinary income,this was outweighed by other items including the posting under extraordinary loss of a ¥37,031 million
impairment loss on business assets for production operation at the Yufutsu Oil and Gas Field in Hokkaido,
due to a decline in production capacity at the Oil and Gas Field. Net loss was ¥24,433 million, a profit declineof ¥30,766 million year on year. This reflected a decrease in income taxes mainly due to the recording ofdeferred tax assets accompanying the aforementioned posting of impairment loss.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥83,810 million, adecrease of ¥303 million (-0.4%) year on year. Although there were positive factors including increases inbitumen sales volume and sales prices, as well as a rise in LNG sales prices, these were outweighed byother factors including a decline in natural gas sales volume and a fall in sales prices for purchased crude
oil due to a decline in crude oil prices.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥2,447 million, an
increase of ¥189 million (+8.4%) 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 fee of natural gas and oil products as well as other subcontracted
tasks, came to ¥19,700 million, an increase of ¥1,475 million (+8.1%) year on year due mainly to anincrease in transportation fee of natural gas .

(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 ¥52,761 million to ¥480,129 million due to a decrease in noncurrent
assets. The main changes in current assets were an increase in cash and deposits, an increase in short-term
investment securities due to the purchase of Treasury Discount Bills for short-term investment purposes, anincrease in raw materials from the purchase of LNG, and a decrease in short-term loans receivable based on-4-repo transactions included in the other current assets item. The decrease in noncurrent assets was mainly due
to a decrease in property, plant and equipment from the aforementioned posting of impairment loss on
business assets at the Yufutsu Oil and Gas Field in Hokkaido, and a drop in investment securities following afall in the stock prices of INPEX CORPORATION and other companies.
Regarding liabilities and net assets, total liabilities decreased by ¥13,286 million from the previous fiscal
year-end to ¥112,831 million, mainly due to decreases in deferred tax liabilities as a result of theaforementioned drop in investment securities and in long-term loans payable exceeding an increase in notes
and accounts payable-trade. Total net assets decreased by ¥39,475 million to ¥367,298 million as a result of adecline in retained earnings resulting from the aforementioned posting of net loss and a decrease in valuationdifference on available-for-sale securities exceeding a rise in minority interests from a third-party allocationof new shares by consolidated subsidiary Japex Garraf Ltd., among others.

(3) Qualitative information regarding consolidated financial forecasts
We have not revised the consolidated financial forecasts for the year ending March 31, 2013 from thefinancial forecasts announced on October 26, 2012.

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 liabilities (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 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.

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
Changes in accounting policies(Changes in accounting policies for items that are difficult to distinguish from changes in accounting
estimates)
Following the revision of the Corporation Tax Act, JAPEX and its domestic consolidated subsidiaries
applied the depreciation method in compliance with the revised Corporation Tax Act to property, plant andequipment acquired on or after April 1, 2012, from the first quarter ended June 30, 2012.
The impact of this change on operating income, ordinary income, and loss before income taxes andminority interests for the six months under review was immaterial.

-5-3. Consolidated financial statements(1) Consolidated quarterly balance sheets(Millions of yen)
As of March 31, 2012
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
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-6-

As of September 30, 2012

29,80527,392
51,870
4,407
99
4,952
46,527(1)
165,054

34,722
25,76565,599
4,891
274
8,280
39,323(1)
178,854

132,859

89,808

7,156
7,156

7,001
7,001

192,726
39,725(38)(4,593)
227,820
367,836
532,890

163,488
45,603(32)(4,595)
204,464
301,274
480,129

(Millions of yen)
As of March 31, 2012
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-7-

As of September 30, 2012

7,251
216
25,50932,977

19,145129
20,87740,153

26,19842,601
7,129
845
9,670
6,695
93,140126,117

22,432
26,838
6,968
830
9,296
6,310
72,677
112,831

14,288294,323(10)
308,601

14,288
268,747(10)
283,025

89,36620(5,391)
83,995
14,176
406,773
532,890

71,599662(5,234)67,027
17,245367,298
480,129

(2) Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)
Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
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
Equity in losses of affiliates
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on transfer of mining rights
Other
Total extraordinary income
Extraordinary loss
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)

104,596
79,25725,338-8-(Millions of yen)Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)
105,958
82,32023,6384,043
4,043
15,075
6,219

7,316
7,316
14,542
1,778

864
1,337
992
3,194

805
1,442
706
2,953

213
440
873
1,526
7,887

744
357
568
1,669
3,062

–
138
138

2,495
301
2,796

–
181
181
7,845
1,277
6,568
235
6,333

37,031
538
37,570(31,710)(7,772)(23,938)495(24,433)

Consolidated quarterly statements of comprehensive income
Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)
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

6,568

-9-

(Millions of yen)Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)(23,938)(26,023)(20)
424(17,777)
749
197

(100)

(34)

(25,720)(19,152)(16,865)(40,803)(19,370)(41,401)

218

598

(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(5)

Other notes(Significant impairment loss on noncurrent assets)
Owing to a decline in production capacity at the Yufutsu Oil and Gas Field in Tomakomai City, Hokkaido,
the Company reduced the book value of the business assets for production operation at the Oil and Gas
Field to their recoverable value and posted an impairment loss for them. The amount of impairment loss on
the relevant assets posted for the six months under review was ¥37,031 million.

- 10 -

4. Supplemental information
Status of production and sales
1. Production
Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)

Six months ended
September 30, 2011
(April 1, 2011 –September 30, 2011)
253,572

239,751

547,777(1,624)(1,134)(2,527)Natural gas(thousand m3)

597,324534,262

1,288,978(3,721)(555)(4,435)

LNG (t)19,950226

22,943

176,443

188,486

382,394(176,443)(188,486)(382,394)

Crude oil (kl)E&P

(Reference)
Fiscal year ended
March 31, 2012
(April 1, 2011 – March 31, 2012)

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

E&P

(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2012
(April 1, 2011 – March 31, 2012)
AmountVolume(Millions of yen)

Crude oil (kl)

720,627

42,441

732,685

41,754

1,395,833

80,754Natural gas(thousand m3)

742,266

31,170685,316

30,054

1,730,381

74,957

LNG (t)90,982

6,293

89,062

7,292

216,21115,930

Bitumen (kl)

175,429

4,207

187,429

4,708

382,378

9,137

Subtotal
Contract services
Otherbusinesses

Six months ended
September 30, 2012
(April 1, 2012 –September 30, 2012)
AmountVolume84,11383,810180,779

2,258

2,447

8,360

Oil products/merchandise

16,61015,82436,585

Others

1,614

3,876

4,912

Subtotal

18,224

19,70041,497

Total

104,596

105,958

230,638

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

- 11 -