Note: The following press release is an English translation of the Japanese-language original

August 8, 2017
Company Name: Japan Petroleum Exploration Co., Ltd.
Securities Code:

1662

Representative:

Hideichi Okada, President

Inquiries:

Kazunari Hirata, General Manager, Media and Investor Relations Department

TEL:+81-3-6268-7110

Notice of Financial Forecasts Revision
and Recognition of Non-operating Expenses, Extraordinary Losses, Income Taxes - DeferredJapan Petroleum Exploration Co., Ltd. (JAPEX) hereby revised its consolidated financial forecasts announced on May 12,
2017, and announced recognition of non-operating expenses, extraordinary losses and income taxes - deferred based on ourrecent business trends and performance as follows.
1. Notice of Financial Forecasts Revision(1) Revision to consolidated forecasts for FY2018/3 (April 1, 2017 - March 31, 2018)
Operating
OrdinaryNet sales
profitprofit(loss)(loss)(Unit:Millions of yen)

Profit (loss)
attributable toowners ofparent(Unit:Millions of yen)

(Unit:Millions of yen)

(Unit:Millions of yen)

Net income(loss)
per share(Unit: yen)Previous forecasts (A)214,878

2,988

5,424

5,564

97.36Revised forecasts (B)211,025

4,489(910)

1,219

21.33

Difference in amount (B - A)

(3,853)

1,501(6,335)(4,345)

(1.8)

50.2

-(78.1)

207,130

685

2,222

3,443

Rate of change (%)(Reference) FY 2017/3

60.24

Note: FY=Fiscal Year (FY2018/3, for instance, means 12 months ending March 31, 2018)(2) Reasons for the revision:Operating profit is expected to increase due to the increases in sales volumes and price of domestic crude oil and natural gas,compared to the previous announcement on May 12, 2017, while net sales is expected to decrease due to the decrease in sales
volume of overseas crude oil.
Ordinary profit is expected to turn to ordinary loss, due to recognizing share of loss of entities accounted for using equity
method by the decision not to proceed the Pacific NorthWest LNG project in Canada (hereinafter “PNW LNG”) anddepreciation of all remaining balance of property, plant and equipment related to the 3.75 section area (hereinafter “DEMOArea”) by the decision to not to re-start production operations in the DEMO Area of Canada Oil Sands Project.
Profit attributable to owners of parent is expected to be secured, although it decreases compared to the previously announced
forecasts. This is due to recognizing loss attributable to non-controlling interests and decrease in taxes such as income taxes,
despite extraordinary losses for not proceeding PNW LNG.
1/2

(Reference)[Crude Oil (CIF: Cost, Insurance and Freight) Price]
Previous:

50.00 US$/bbl of the assumption from April 2017 to March 2018

Revised:54.63 US$/bbl of the result from April to June 201750.00 US$/bbl of the assumption from July 2017 to March 2018

[Exchange Rate]
Previous:

110.00 yen/US$ of the assumption from April 2017 to March 2018

Revised:112.12 yen/US$ of the result from April to June 2017110.00 yen/US$ of the assumption from July 2017 to March 2018

*The aforementioned forecasts are based on management’s assumptions with information available at this time and the actual
results may be different from the forecast figures because of various factors that could occur in the future.

2. Recognition of Non-operating expenses(1) Recognition of share of loss of entities accounted for using equity method
We are expecting to record share of loss of entities accounted for using equity method of CAD 37million (JPY 3,200 million
by exchange rate of JPY 85/CAD) as announced on “Pacific NorthWest LNG Project in British Columbia, Canada, Is Not
Proceeding” on July 26, 2017.
(2) Recognition of depreciation
We are expecting to record depreciation by the unit-of-production method equal to the remaining balance of property, plantand equipment USD 69 million (JPY 7,600 million by exchange rate of JPY 110/USD) relating to the Demo Area as
announced on “Start of Production Operations in Oil Sands Project at Hangingstone Leases in the Province of Alberta, Canadaand Decision not to Re-start Operations in the 3.75 Section Area” on August 8, 2017.
3. Recognition of extraordinary losses
We are expecting to record extraordinary losses of 65 million (JPY 5,500 million by exchange rate of JPY 85/CAD) fortermination of the 900-km pipeline construction plan by the decision not to proceed the PNW LNG project as we announced
on “Pacific NorthWest LNG Project in British Columbia, Canada, Is Not Proceeding” announced on July 26, 2017.
4. Recognition of income taxes - deferred
we are expecting to record deferred tax assets of approximately JPY 2,000 million and also record the same negative amountto income taxes-deferred due to record of depreciation of all remaining balance of property, pland and equipment USD 69
million (JPY 7,600 million by exchange rate of JPY 110/USD) relating to the Demo Area as announced on “Start ofProduction Operations in Oil Sands Project at Hangingstone Leases in the Province of Alberta, Canada and decision not toRe-start Operations in the 3.75 Section Area” on August 8, 2017..
###2/2