Consolidated Financial Results for the Nine Months Ended December 31, 2019
<under Japanese GAAP>
February 10, 2020

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:
https://www.japex.co.jp/
Representative: Masahiro Fujita, Representative Director and President
Inquiries:
Shigeyoshi Hasegawa, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
February 12, 2020–
Scheduled date to commence dividend payments:
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for institutional investors and analysts): None
1.
(1)(Millions of yen with fractional amounts discarded, unless otherwise noted)

Consolidated financial results for the nine months ended December 31, 2019
(April 1, 2019 – December 31, 2019)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Operating profit% Millions of yen

Profit attributable toowners of parent

Ordinary profit

Nine months ended

Millions of yen% Millions of yen

December 31, 2019247,819

19.5

11,533–

December 31, 2018

207,425

31.1

1,040

(76.4)

19,849% Millions of yen

%

61.7

16,55645.2

12,275 198.5

11,402–

Note: Comprehensive income: Nine months ended December 31, 2019: 20,791 million yen (– %)Nine months ended December 31, 2018: (14,536) million yen (– %)Basic earnings per share

Diluted earnings per share

Nine months ended

Yen

Yen

December 31, 2019289.68–December 31, 2018199.51–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of December 31,
2019665,801

467,292

65.2

As of March 31, 2019655,288

450,156

63.6

Reference: Equity

2.

As of December 31, 2019: 434,187 million yen

As of March 31, 2019: 416,488 million yen

Cash dividends

Fiscal year ended
March 31, 2019
Fiscal year ending
March 31, 2020
Fiscal year ending
March 31, 2020
(Forecast)First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

10.00

–

30.00

40.00

–

25.00

–
25.00

50.00

Note: Revisions to the latest forecasts of cash dividends: None

-1-

AnnualYen

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2020 (April 1, 2019 – March 31, 2020)(Percentages indicate year-on-year changes.)

Net sales

Fiscal year ending
March 31, 2020

Operating profit

Ordinary profit

Profit attributable Basic earnings per
to owners of parent
shareMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen

325,763

21.6

14,109509.927,859122.5

23,49359.1

411.06

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

*
(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(3)

Changes in accounting policies, changes in accounting estimates, and restatementa. 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: None(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, 201957,154,776 shares
As of March 31, 201957,154,776 sharesb. Number of treasury shares at the end of the period
As of December 31, 2019
2,303 shares
As of March 31, 2019
2,207 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 201957,152,539 shares
Nine months ended December 31, 201857,152,637 shares

Note: For details, please refer to “(3) Notes to consolidated financial statements (Application of specific accounting for preparing
quarterly consolidated financial statements)” of “2. Consolidated financial statements and significant notes thereto” on page 9 of
the attached material.

* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* 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 andother 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, 2019” on page 4 of the attached material to the quarterly financial results report.

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(Attached Material)
1. Qualitative information regarding settlement of accounts for the nine months ended December 31,
2019(1) Explanation of operating results
During the nine months ended December 31, 2019, net sales was ¥247,819 million, an increase of ¥40,393
million (+19.5%) year on year. Gross profit was ¥35,157 million, an increase of ¥9,712 million (+38.2%)
year on year. Major factors behind the year-on-year increases for net sales were growth in sales volume ofdiluted bitumen in Japan Canada Oil Sands Limited (JACOS) Hangingstone leases and growth in sales
volume of crude oil. The major factor behind the year-on-year increase for gross profit was an improvementin profit from diluted bitumen sales stemming from the narrowing light-heavy differential (*1) in the oilsands project.
Exploration expenses was ¥716 million, an increase of ¥99 million (+16.1%) year on year. Selling, generaland administrative expenses was ¥22,907 million, a decrease of ¥879 million (-3.7%) year on year. As aresult, operating profit increased by ¥10,492 million year on year to ¥11,533 million.
Ordinary profit increased by ¥7,574 million year on year to ¥19,849 million. Ordinary profit was mainly
affected by a decrease in share of profit of entities accounted for using equity method and a decrease in gain
on reversal of asset retirement obligations year on year, despite the turnaround from foreign exchange losses
to foreign exchange gains.
Profit before income taxes increased by ¥6,805 million year on year to ¥19,686 million. Profit attributableto owners of parent increased by ¥5,153 million year on year to ¥16,556 million.
(*1) The differential between Western Canadian Select (WCS), which is the reference price for heavy crude
oil from the oil sands in Canada, and the WTI, which is the reference price of light crude oil.
Below is a breakdown of sales.
(i) Oil and Gas
Net sales from oil and gas (including liquefied natural gas (LNG) and diluted bitumen) came to ¥203,996
million, an increase of ¥34,585 million (+20.4%) year on year. This was mainly the result of growth insales volume of crude oil and diluted bitumen.
(ii) Contract Services
Net sales from contract services (drilling and geological surveys, etc.) came to ¥12,903 million, an
increase of ¥7,906 million (+158.2%) 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¥30,919 million, a decrease of ¥2,099 million (-6.4%) year on year.

(2)

Explanation of financial position
At the end of the third quarter, total assets increased by ¥10,513 million from the previous fiscal year-end to¥665,801 million.
Current assets increased by ¥28,549 million from the previous fiscal year-end, mainly due to increases incash and deposits, and notes and accounts receivable - trade. Non-current assets decreased by ¥18,036
million from the previous fiscal year-end. This was mainly due to a decrease in property, plant and equipment
resulting from the proceeding of depreciation and a decrease in recoverable accounts included in other ininvestments and other assets resulting from the progress in the recovery despite an increase in investment
securities resulting from the rise in market values.
Liabilities decreased by ¥6,622 million from the previous fiscal year-end to ¥198,508 million.

-3-

Current liabilities decreased by ¥3,667 million from the previous fiscal year-end. This was mainly due todecreases in advances received and current portion of long-term borrowings included in other in current
liabilities despite an increase in notes and accounts payable - trade. Non-current liabilities decreased by¥2,954 million from the previous fiscal year-end. This was mainly due to a decrease in long-term borrowings
resulting from the reclassification of borrowings with repayments due in one year or less to current liabilities,
and the impact of fluctuation in foreign exchange rates despite an increase in deferred tax liabilities resulting
from the above-mentioned rise in market values of investment securities.
Net assets increased by ¥17,135 million from the previous fiscal year-end to ¥467,292 million. The main
factors were increases in retained earnings and valuation difference on available-for-sale securities.

(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts for the fiscal year ending March 31, 2020 have been revised from theforecasts announced on November 8, 2019.
Please refer to the “Notice of Financial Forecasts Revision” released on February 10, 2020, the same day ofthis report.

-4-

2. Consolidated financial statements and significant notes thereto(1) Consolidated quarterly balance sheet

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
Buildings and structures, net
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-(Millions of yen)

As of March 31, 2019

As of December 31, 2019

117,468
20,825
2,330
4,559
362
7,589
12,985(33)
166,087

135,762
35,161
2,700
4,475
281
11,0625,227(32)
194,637

185,198
123,915309,114173,521
119,618
293,139

7,399
7,399

6,675
6,675

137,794
35,995(46)(1,057)
172,686
489,200
655,288

153,333
18,860(44)(800)
171,348
471,164
665,801

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Provisions
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Provisions
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
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 March 31, 2019

As of December 31, 2019

7,666
400
24,311
32,3789,301
408
19,00028,710127,715
22,3303,452
1,236
15,335
2,681
172,752
205,131

120,890
26,285
3,476
965
15,317
2,863
169,797
198,508

14,288157
331,306(10)
345,741

14,288
157
344,668(11)
359,102

66,29673,859

(2)
3,338
1,114
70,74733,668450,156
655,2881
265
958
75,084
33,105467,292
665,801

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Nine months ended
December 31, 2018
Net sales
Cost of sales
Gross profit
Exploration expenses
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodGain on reversal of asset retirement obligations
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
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)

Nine months ended
December 31, 2019

207,425
181,980
25,445617
23,7871,040

247,819
212,661
35,157716
22,907
11,533

1,157
2,064

846
2,996

8,895

6,796

3,369
891
16,379–1,561
12,201

3,090
1,244
808
5,144
12,275

3,486
–
398
3,885
19,849

715
715

0
0

64
45
110
12,8802,000
10,879(522)
11,402

14149
163
19,686
3,105
16,58024
16,556

Consolidated quarterly statement of comprehensive income(Millions of yen)

Nine months ended
December 31, 2018
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 to noncontrolling interests-8-

Nine months ended
December 31, 201910,87916,580(26,126)
(42)
731
(22)

7,554
4
(3,138)
(155)

42

(53)

(25,416)(14,536)

4,211
20,791(14,101)

20,893

(435)

(102)

(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.

(Application of specific accounting for preparing quarterly consolidated financial statements)
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.

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 third 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.

-9-3. Supplemental information
Status of production and sales(1) Production
Nine months ended
December 31, 2018
(April 1, 2018 –December 31, 2018)
Crude oil (kl)Oil andgas

Natural gas(thousand m3)
LNG (t)Bitumen (kl)Nine months ended
December 31, 2019
(April 1, 2019 –December 31, 2019)(Reference)
Fiscal year ended
March 31, 2019
(April 1, 2018 – March 31, 2019)

801,671904,172

1,157,037(607,218)(678,804)(892,535)

883,380

810,969

1,170,457(379,522)(322,018)(488,436)

5,501

4,341

5,600

639,003

864,674

812,720(639,003)(864,674)(812,720)

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) Sales
Nine months ended
December 31, 2018
(April 1, 2018 –December 31, 2018)
AmountVolume(Millions of yen)

Oil andgas

Nine months ended
December 31, 2019
(April 1, 2019 –December 31, 2019)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2019
(April 1, 2018 – March 31, 2019)
AmountVolume(Millions of yen)

Crude oil (kl)

1,577,301

80,0162,323,025

108,049

1,888,653

94,579Natural gas(thousand m3)

1,248,114

45,667

1,176,897

45,8701,731,141

67,820

LNG (t)257,746

17,527205,391

14,402

322,331

22,913

Dilutedbitumen (kl)925,487

26,1981,290,970

35,674

1,176,091

30,116

Subtotal

169,410

203,996

215,429

Contract services
Oil products
Other/merchandisebusinesses
Others

4,997

12,903

7,342

29,401

26,86039,820

3,617

4,059

5,387

Subtotal

33,01830,91945,207

Total

207,425

247,819

267,980

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. Diluted bitumen is bitumen diluted by ultra-light crude oil for pipeline transportation.
3. Monetary amounts in the table do not include consumption taxes.

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