Consolidated Financial Results for the Nine Months Ended December 31, 2022
<under Japanese GAAP>
February 10, 2023

Note: The following report is a summary of the Japanese-language original.

Company name: Japan Petroleum Exploration Co., Ltd.
Listing:
Prime Market, Tokyo Stock Exchange
Securities code: 1662
URL:
https://www.japex.co.jp/
Representative: FUJITA Masahiro, Representative Director and President
Inquiries:
ASAI Masaru, General Manager, Corporate Communication Office
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to commence dividend payments:–
Scheduled date to file Quarterly Report:
February 10, 2023
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for institutional investors and analysts):
1.
(1)

Yes

(Millions of yen with fractional amounts discarded, unless otherwise noted)

Consolidated financial results for the nine months ended December 31, 2022
(April 1, 2022 – December 31, 2022)
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

December 31, 2022

225,105

31.4

38,742 232.6

57,878 135.9

43,286–

December 31, 2021

171,364

14.2

11,64924,533(85,057)–

Note: Comprehensive income: Nine months ended December 31, 2022:
Nine months ended December 31, 2021:

Basic earnings per share% Millions of yen–

47,880 million yen(96,808) million yen

–

%

(– %)
(– %)

Diluted earnings per share

Nine months ended

Yen

Yen

December 31, 2022

793.00–December 31, 2021

(1,491.67)–(2)% Millions of yen

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of December 31,
2022

536,475

436,61375.4

As of March 31, 2022

471,941

402,770

78.7

Reference: Equity

2.

As of December 31, 2022: 404,590 million yen

As of March 31, 2022: 371,638 million yen

Cash dividends

Fiscal year ended
March 31, 2022
Fiscal year ending
March 31, 2023
Fiscal year ending
March 31, 2023
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

25.00

–

25.00

50.00

–

150.00–180.00330.00Note: Revisions to the latest forecasts of cash dividends: Yes-1-

AnnualYen

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentages indicate year-on-year changes.)

Net sales

Fiscal year ending
March 31, 2023

Operating profit

Ordinary profit

Profit attributable Basic earnings per
to owners of parent
shareMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen326,679

31.1

61,250209.2

78,96480.8

60,000–1,100.97

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): Yes
New inclusion: one company (JAPEX Insurance Ltd.)
Exclusion: one company (Canada Oil Sands Co., Ltd.)

Note: For details, please refer to “(3) Notes to quarterly consolidated financial statements (Changes in significant subsidiaries during thenine months under review)” of “2. Consolidated financial statements and significant notes thereto” on page 9 of the attachedmaterial.

(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, 2022
54,300,076 shares
As of March 31, 2022
57,154,776 sharesb. Number of treasury shares at the end of the period
As of December 31, 2022
73,730 shares
As of March 31, 2022
1,518,982 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 2022
54,586,057 shares
Nine months ended December 31, 2021
57,021,331 shares

Note: For details, please refer to “(3) Notes to quarterly consolidated financial statements (Application of specific accounting for
preparing quarterly consolidated financial statements)” of “2. Consolidated financial statements and significant notes thereto” onpage 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 our company and on certain assumptions deemed to be reasonable. As
such, they do not constitute guarantees by our company of future performance. Actual performance and otherresults 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, 2022” 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,
2022(1) Explanation of operating results
During the nine months ended December 31, 2022, net sales was ¥225,105 million, an increase of ¥53,740
million (+31.4%) year on year. Gross profit was ¥63,888 million, an increase of ¥29,377 million (+85.1%)
year on year. Main factors behind the year-on-year increase for net sales and increase for gross profit
include a rise in the selling prices of crude oil and natural gas in Japan as a result of the rising price of
crude oil and LNG, despite the absence of sales of diluted bitumen as a result of the transfer of all theshares of Japan Canada Oil Sands Limited (JACOS), which had been a consolidated subsidiary to promote
the oil sands project in Canada in the previous fiscal year.
Exploration expenses was ¥2,000 million, an increase of ¥1,646 million (+465.1%) year on year. Selling,
general and administrative expenses was ¥23,145 million, an increase of ¥637 million (+2.8%) year on
year. As a result, operating profit was ¥38,742 million, an increase of ¥27,093 million (+232.6%) year on
year.
Ordinary profit was ¥57,878 million, an increase of ¥33,345 million (+135.9%) year on year, due mainly toa recording of gain on derivatives.
Profit before income taxes improved by ¥130,456 million year on year to ¥57,851 million (loss before
income taxes of ¥72,604 million in the same period of the previous fiscal year) due mainly to the absenceof loss on sale of shares of subsidiaries resulting from the transfer of all the shares in JACOS in the same
period of the previous fiscal year, and loss on transfer of interests resulting from the transfer of JAPEXMontney Ltd.’s interest in the shale gas project of North Montney Area in British Columbia, Canada.
Profit attributable to owners of parent improved by ¥128,344 million year on year to ¥43,286 million (lossattributable to owners of parent of ¥85,057 million in the same period of the previous fiscal year).
Below is a breakdown of net sales.
(i) E&P BusinessNet sales from the E&P Business came to ¥35,902 million, a decrease of ¥18,657 million (-34.2%)
year on year, mainly due to the absence of the sales of diluted bitumen resulting from the transfer of all
the shares of JACOS, despite a rise in the selling price of crude oil.
(ii) Infrastructure/Utility BusinessNet sales from the Infrastructure/Utility Business came to ¥141,748 million, an increase of ¥62,583
million (+79.1%) year on year. This was mainly the result of a rise in the selling prices due to therising crude oil price and LNG price, despite the decreased sales volume for natural gas (Japan) andelectricity.
(iii) Other Businesses
Net sales from other businesses, such as the contract services (drilling and geological surveys, etc.),
sale of oil products, including liquefied petroleum gas (LPG), fuel oil and the like, as well as othersubcontracted tasks, came to ¥47,454 million, an increase of ¥9,815 million (+26.1%) year on year.

(2) Explanation of financial position
At the end of the third quarter, total assets increased by ¥64,533 million from the previous fiscal year-end
to ¥536,475 million.
Current assets increased by ¥29,272 million from the previous fiscal year-end. This was due to increases incash and deposits, and raw materials and supplies. Non-current assets increased by ¥35,261 million fromthe previous fiscal year-end. This was mainly due to an increase in recoverable accounts included in other
under investments and other assets, the recording of wells and construction in progress under property,
plant and equipment, and other factors.
-3-

Liabilities increased by ¥30,689 million from the previous fiscal year-end to ¥99,861 million.
Current liabilities increased by ¥31,058 million from the previous fiscal year-end. This was due mainly toincreases in income taxes payable and notes and accounts payable - trade. Non-current liabilities decreasedby ¥368 million from the previous fiscal year-end.
Net assets increased by ¥33,843 million from the previous fiscal year-end to ¥436,613 million. The main
factors were increases in retained earnings and foreign currency translation adjustment.

(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts for the fiscal year ending March 31, 2023 have been revised from theforecasts announced on November 10, 2022.
Please refer to the “Notice of Financial Forecasts Revision, Year-End Dividend Forecast Revision andRecording of Non-operating Expenses and Non-operating Income” disclosed on February 10, 2023, thesame day of this report.

-4-

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

As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsSecurities
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
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 December 31, 2022

147,241

163,977

47,564

46,328

3,030
2,143
29
12,503
14,458(51)
226,920

3,000
2,721
205
25,065
14,944(51)
256,192

92,837
5,802

108,949
5,918

108,91037,812(45)(297)
146,380
245,021471,941

116,326
49,475(45)(341)
165,414280,282
536,475

(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Income taxes payable
Provisions
Other
Total current liabilities
Non-current liabilities
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-sale securities
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 December 31, 2022

11,479
2,196
1,905
9,660
25,241

18,732
11,351
1,927
24,28856,30016,867
3,376
486
19,5393,659
43,92969,171

17,327
3,404
633
19,6232,570
43,56099,861

14,288
2,607
310,592(3,886)323,602

14,288–338,881(136)
353,034

48,346(1,862)
89
1,464
48,036
31,131
402,770
471,941

46,200
(978)
5,046
1,287
51,55632,023436,613536,475

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Nine months ended
December 31, 2021
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
methodForeign exchange gains
Gain on derivatives
Other
Total non-operating income
Non-operating expenses
Interest expenses
Late charges
Provision for loss on disaster
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of shares of subsidiaries
Loss on transfer of interests
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent-7-(Millions of yen)

Nine months ended
December 31, 2022

171,364
136,853
34,511353
22,508
11,649225,105
161,216
63,8882,000
23,14538,742

164
2,255

749
1,719

9,466

6,734

5,100
–
624
17,610

4,864
6,082
271
20,422

1,246
2,215
361
903
4,726
24,533

3
–
576
705
1,285
57,8781,307
39,826
41,1330–0

994,372
43,616273
138,272(72,604)
10,743(83,348)
1,708(85,057)

27
–
–
–
27
57,851
13,49044,361
1,074
43,286

Consolidated quarterly statement of comprehensive income(Millions of yen)

Nine months ended
December 31, 2021
Profit (loss)
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 of parent
Comprehensive income attributable to non-controllinginterests-8-

Nine months ended
December 31, 2022

(83,348)

44,361(12,678)
(287)
(406)
(177)

(2,142)
85
4,943
(176)

89

809

(13,460)(96,808)

3,519
47,880(98,164)

46,806

1,355

1,073

(3) Notes to quarterly consolidated financial statements(Notes on premise of going concern)
No item to report.

(Notes on significant changes in the amount of shareholders’ equity)

At a meeting of the Board of Directors held on November 9, 2021, JAPEX made a resolution concerning
the repurchase of own shares, and as of December 31, 2022, it acquired 2,854,700 treasury shares.
Consequently, treasury shares increased by ¥4,262 million during the nine months ended December 31,
2022.
Also, at a meeting of the Board of Directors held on November 9, 2021, JAPEX made a resolution
concerning the cancellation of own shares, and as of September 30, 2022, it cancelled 2,854,700 treasury
shares. Therefore, as of December 31, 2022, capital surplus, retained earnings and treasury shares
decreased by ¥2,607 million, ¥5,396 million and ¥8,004 million, respectively.

(Changes in significant subsidiaries during the nine months under review)

JAPEX Insurance Ltd., has been newly established and included in the scope of consolidation from thesecond quarter. In addition, JAPEX Insurance Ltd. qualifies as a specified subsidiary of JAPEX.

(Changes in the scope of consolidation or the scope of application of the equity method)
Significant changes in the scope of application of the equity method

Effective the first quarter, Abashiri Biomass Power 2 LLC., an affiliate of JAPEX, became an equity
method affiliate of JAPEX due to its increased material significance.

(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 liabilities (other)because such variance is expected to be almost completely eliminated by the end of 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.

(Additional information)
Accounting estimates in connection with the spread of novel coronavirus disease (COVID-19)

There are no significant changes with respect to assumptions about the impact of COVID-19 described in(Additional information) of Quarterly Report for the three months ended June 30, 2022.

(Significant subsequent events)
Business transfer to new company in Sakhalin-1 ProjectThrough its equity method affiliate Sakhalin Oil and Gas Development Co., Ltd. (SODECO), JAPEX has
been participating in the Sakhalin-1 Project, a crude oil and natural gas development project off the coastof Sakhalin Island, Russia. A new business entity Sakhalin-1 Limited Liability Company (hereinafter“LLC”) was established on October 14, 2022, pursuant with the Presidential Decree No. 723 of theRussian Federation on October 7, 2022 and Governmental Decree No. 1808 of the Russian Federation on
October 12, 2022, and the contractual rights and obligations pursuant to the production sharing agreement
were transferred to LLC.
SODECO was approved by the government of the Russian Federation to subscribe for a proprietary equity
in the LLC, according to its 30% interest in the Sakhalin 1 project. We are currently reviewing the impactof this matter on our financial position, operating results, and cash flows for the next quarter andsubsequent periods.

-9-

3. Supplemental information
Status of production and sales(1) Production
Nine months ended
December 31, 2021
(April 1, 2021 –December 31, 2021)

Nine months ended
December 31, 2022
(April 1, 2022 –December 31, 2022)(Reference)
Fiscal year ended
March 31, 2022
(April 1, 2021 – March 31, 2022)

652,573

513,632

806,390(441,584)(340,781)(525,392)

515,424

377,860

674,588(130,981)(6,800)(132,025)

656,377–

656,377(656,377)(–)(656,377)

2,136
1,258
LNG (t)Electricity(thousand
1,979,477
1,783,118
kWh)
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.

2,136

Crude oil(kL)
E&P
Business

Natural gas(thousand m3)
Bitumen (kL)

Infrastructure/
UtilityBusiness- 10 -

2,655,529

(2) Sales
Nine months ended
December 31, 2021
(April 1, 2021 –December 31, 2021)
Net sales
Sales volume(Millions of yen)

Crude oil (kL)E&PBusiness

Dilutedbitumen (kL)Natural gas(overseas)(thousand m3)

LNG (t)Infrastructure/Utility Electricity
Business(thousand kWh)
Others(Millions of yen)

22,241

402,80735,672669,926

41,056

959,777

31,121––

959,777

31,121

129,429

1,197

5,260

230

130,214

1,244

54,56035,90273,422

727,889

36,135692,086

62,625

1,061,244

58,024217,254

16,822

213,137

34,877295,536

22,5962,241,078

22,6562,146,280

40,843

3,023,294

34,320

3,550

3,400

4,903

79,165

141,748

119,845

4,625

6,121

6,395

31,33039,83547,354

1,682

1,496

2,122

Subtotal

37,63847,45455,872

Total

171,364

225,105

249,140

Subtotal

Otherbusinesses(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2022
(April 1, 2021 – March 31, 2022)
Net sales
Sales volume421,772

Subtotal
Natural gas(Japan)(thousand m3)

Nine months ended
December 31, 2022
(April 1, 2022 –December 31, 2022)
Net sales
Sales volume

Contract
services
Oil products/merchandise
Others

Notes: 1. “Crude oil” includes crude oil that the JAPEX Group produced in oil fields and the crude oil purchased fromother companies.
2. Diluted bitumen is bitumen diluted by ultra-light crude oil for pipeline transportation.
3. “Natural gas (Japan)” of the Infrastructure/Utility Business refers to gas supplied in Japan via pipeline andcomprises the total of natural gas produced in Japan and regasified LNG. Natural gas (Japan) is classified underthe Infrastructure/Utility Business, since both natural gas produced in Japan and LNG vaporized gas are soldtogether by our company’s supply network, which consists of the natural gas fields in Japan and the LNG
terminals that vaporize gas linked by a pipeline network.
4. “Others” of the Infrastructure/Utility Business includes commissioned transportation of natural gas and contracted
vaporization of LNG used for power plant fuel, etc.
5. Under the Other businesses, “Oil products/merchandise” includes liquefied petroleum gas (LPG), fuel oil, gas oiland kerosene, and “Others” includes other subcontracted tasks.

- 11 -