Consolidated Financial Results for the Interim Period Ended September 30, 2004
November 15, 2004
Note: The following report is a summary of the Japanese-language original.
Company Name: Japan Petroleum Exploration Co., Ltd.
Stock Listing: Tokyo Stock Exchange
Company Code: 1662
Location of Head Office: Tokyo(URL: http://www.japex.co.jp/)
President: Yuji Tanahashi
Inquiries: Koichi Shimomura, Manager, Media Relations, Administration Department TEL: (03) 5461-7413
Date of the Board of Directors meeting to settle term-end consolidated accounts: November 15, 2004
U.S. GAAP not applied
1. Consolidated Results for the FY2005 Interim Period (April 1, 2004 – September 30, 2004)(1) Consolidated Operating Results(Amounts less than one million yen have been omitted)
Net Sales

FY2005 Interim
FY2004 Interim
FY2004 Full Year(¥ million)
46,37142,352
96,713Operating Income

%
9.5
11.8

(¥ million)
3,139
5,679
12,449Net Income

FY2005 Interim
FY2004 Interim
FY2004 Full Year(¥ million)
5,583
4,762
9,960

Ordinary Income%(44.7)
106.1(¥ million)
7,259
7,169
14,468Net Income per Share

%
17.3
175.0

%
1.2
338.6

Diluted Net Income per Share

(¥)
97.69
83.31
172.76(¥)−−(Notes)
1. Equity in net income (loss) of non-consolidated subsidiaries and affiliates
FY2005 Interim: ¥997 million FY2004 Interim: (¥2,298 million) FY2004 Full Year: (¥2,072 million)
2. Average number of outstanding shares during the period (Consolidated):
FY2005 Interim: 57,154,267 shares FY2004 Interim: 57,154,776 shares FY2004 Full Year: 57,154,715 shares
3. Changes in accounting methods: Yes
4. Percentage figures for net sales, operating income and other items represent changes compared with the previous fiscal year.
5. Diluted net income per share is not shown because there are no shares with a dilutive effect.

(2) Consolidated Financial Position
Total Assets

FY2005 Interim
FY2004 Interim
FY2004 Full Year(¥ million)
247,756
239,774
246,765

Shareholders’ Equity(¥ million)
202,178
190,398
195,715(Note) Number of shares issued and outstanding (consolidated) at period end:1

Shareholders’ Equity Ratio

Shareholders’ Equity
per Share

%
81.6
79.4
79.3
FY2005 Interim
FY2004 Interim
FY2004 Full Year(¥)
3,537.42
3,331.28
3,422.80
57,154,063
57,154,776
57,154,472

(3) Consolidated Cash Flows
Operating Activities

FY2005 Interim
FY2004 Interim
FY2004 Full Year

Investing Activities(¥ million)
6,874
9,332
21,522Financing Activities(¥ million)(1,522)(3,969)(12,677)(¥ million)(4,092)(3,821)(4,599)Cash and Cash Equivalents
at Period-End(¥ million)
29,20525,32827,851(4) Number of Consolidated Subsidiaries and Affiliates
Consolidated subsidiaries: 15
Non-consolidated subsidiaries accounted for by the equity method: 1
Equity-method affiliates: 9(5) Changes in Scope of Consolidation and Application of Equity Method
Consolidated subsidiaries (Added): 2(Excluded): 0
Equity-method affiliates (Added): 0(Excluded): 2
2. Forecasts for FY2005 (April 1, 2004 – March 31, 2005)
Net Sales

Full Year

Ordinary Income(¥ million)
99,558(¥ million)
16,470Net Income(¥ million)
11,043(Reference) Estimated net income per share is ¥ 193.21
Note: The above estimates have been made based on information available as of the date of this release. Actual results may differ from theseestimates due to a variety of factors.

2II. Management Policies
1. Fundamental Business Policies
Since its establishment in 1955, Japan Petroleum Exploration Co., Ltd. (JAPEX) has pursued its mission ofcontributing to Japan’s energy supplies by securing reserves and expanding production centered on the
exploration, development, and sale of oil and natural gas. Guided by this mission, the Company has steadily
discovered oil and natural gas reserves to result in the business base of today.
In light of its expanding role as a supplier and, consequently, related increases in its responsibility to society,
JAPEX Group is actively focused on constructing a new business model that not only relies on increasing
reserves but also upgrading and expanding transmission systems for natural gas and other initiatives. As such,
the Group aims to move forward as a company with the competitive capabilities required to respond to changes
in its operating environment. The section below outlines the Group’s business philosophy in this respect.
“Taking on the challenge of new energy value creation and increasing corporate value”
・Contribute to the supply of energy through global exploration and production (E&P) activities.
・Contribute to coexistence between the planet and its population by developing and promoting the use ofenvironment-friendly natural gas.
・Pursue sustainable growth and maximize shareholder value by placing top priority on winning andmaintaining the trust of society, customers, shareholders and employees.

2. Fundamental Policy on Dividends
The Company’s basic policy is to sustain stable dividends over the long term. Taking into account themedium-term outlook for the business, dividend payments are set based on respect for the return of profits toshareholders. While considering the need to acquire new reserves as an energy company that plays a role inproviding stable supplies of oil and natural gas, indispensable resources for society, the policy also takes into
account the need for retained earnings to finance the acquisition of new reserves and to upgrade and improvetransmission systems, primarily pipelines.
3. Medium-term Business Strategy and Critical Issues
Japan’s energy industry is entering an era of full-scale competition, ushered in by rapid deregulation, beginningwith revisions to the Gas Business Law and the Electric Utility Law. As such, competition is intensifying
almost on a daily basis with the entry of new players into each energy sector.
Specifically, the Gas Business Law was revised in April 2004, thereby further expanding the scope of
deregulation. In addition, the Japanese government has introduced a concept of “common carrier” in gas
transmission. Under this concept, companies, including JAPEX, that possess gas pipelines above a certain
capacity are obligated to open their pipelines for third party access. As a result of these and other developments,
the Company’s gas business is facing a major turning point.
In the current environment, natural gas, a major earnings base for the JAPEX Group, is drawing significant
attention for its clean energy characteristics. Going forward, the Company believes demand for natural gas is
likely to rise steadily due to the proliferation of distributed energy sources, including micro gas turbines andfuel cells, and acceleration in the expansion and upgrade of natural gas supply networks. This presents
opportunities for JAPEX to further develop its natural gas business. Moreover, JAPEX will continue toposition oil as a core element in the Group’s business, based on recognition of the central role this resource
still plays as a primary energy source in Japan.
Accordingly, expanding natural gas sales, and in parallel, maintaining and increasing reserves of oil and naturalgas, are critical issues for the Company.

3Expanding sales of natural gas and upgrading and expanding the supply system
To expand sales of natural gas while coping with the intensifying competitive environment, the Company must
be able to address the expectations and requirements of a much broader user base. Specifically, the Company isworking to construct a business that seamlessly integrates services and facilities, from upstream (E&P) throughmid-stream (transmission and storage) to downstream (marketing). The Company is therefore promoting sales
to existing major gas suppliers and city gas providers, tapping overseas gas sources to replenish domestic
reserves, working to strengthen its transmission and storage network, which allows the Group to more fully
leverage its upstream divisions, and integrating this network with its environmental businesses.
From this perspective, the Company is stepping up efforts to expand sales of natural gas passing through its
Yufutsu-Sapporo and Niigata-Sendai pipelines. Simultaneously, it will work to expand and upgrade its
transmission network by constructing a new natural gas pipeline to the city of Koriyama by way of Fukushima,by branching its Niigata-Sendai pipeline.
JAPEX’s LNG Satellite System is designed to serve customers in geographic areas not reached by its pipeline
network. LNG is loaded onto tanker trucks and railway tank containers and shipped to the Tohoku, Kanto,
Hokuriku, and Kyushu regions to supply natural gas to a broader base of customers. The Company is also
working to promote sales to users within Hokkaido by dispatching LNG tank containers from its LNG plant in
Yufutsu, which is located in the region.
Through these and other initiatives, JAPEX aims to expand the annual sales volume of natural gas (including
LNG products) to 1.7 billion m3 by the year ending March 31, 2009 (Fiscal 2009).
In addition, JAPEX believes securing overseas gas sources is another critical issue to increase the stability andflexibility of supply. While continuing to purchase LNG from Malaysia LNG Tiga, a contract started in March
2003, the Company also actively participates in the Sakhalin Pipeline Project, a strategic initiative to build aninternational pipeline to supply natural gas to Japan.

Conducting efficient E&P and securing new reserves
With its business centered on E&P, the JAPEX Group continually works to sustain and increase its reserves,and strives to further expand and upgrade its system for providing stable supplies of oil and natural gas over thelong term. Specifically, to increase domestic reserves, which are both an important source of earnings and costcompetitive, the Company is conducting exploration, mainly in Niigata, Akita, and Hokkaido prefectures with theaim of adding substantial new gas reserves. It is also conducting exploration aimed at tapping reserves in areas
surrounding existing gas fields. In this way, the Company is able to conduct interlocking, tactical and aggressive
exploration that affords greater efficiencies.
Furthermore, recognizing the importance of maintaining stable revenue from the overseas E&P business, theCompany is working to increase operating efficiency and carry out exploration in areas identified as key
geographies. Specifically, the Company aims to increase the efficiency of operations at fields where it currently
carries out oil and gas production. Moreover, in uncovering new business, the Company seeks to acquire therights to oil and gas fields that are already on stream, as well as fields that have been discovered but remain
undeveloped, both of which offer relatively low risk and rapid returns, with consideration given to the balanced
preservation of exploration assets over long-term operating periods.
The Japan Oil, Gas and Metals National Corporation (JOGMEC) was established in February 2004, inheriting
the functions of Japan National Oil Corporation (JNOC). Japan is thus heading for a turning point in terms ofreinforcing its system for promoting the nation’s resource and energy policies as JNOC accelerates the disposalof its assets prior to its dissolution. Against this backdrop of asset disposal by JNOC, and from the perspectiveof maximizing corporate value, JAPEX will continue to take a positive approach to acquiring new assets that4

dovetail with its business strategy. During the period under review, it acquired Japex New Nanhai Ltd. andJawa Oil Co., Ltd.

Addressing environmental issues
As global environmental issues become more serious, JAPEX, as a company that supplies environment-friendly naturalgas, feels an obligation to contribute to environmental protection. The Company therefore works to increase
environmental awareness within the company through ongoing use of internal environment management systems(acquisition of ISO14001), and reducing the environmental impact of its business activities.
JAPEX will continue pushing ahead with efforts to inject added value into the supply of natural gas, andappropriately apply Group technologies in the environment business field. To this end, the Company isproactively taking on R&D themes in new fields such as gas-to-liquid technology, which can be used to extract
liquid fuel from methane, the main component of natural gas.
The JAPEX Group aims to utilize these activities to further strengthen its operating base and enhance its
competitiveness, thereby bolstering operating efficiency. The ultimate goal is to achieve sustainable
development and maximize shareholder value.

4. Basic stance and progress on strengthening corporate governance(1) Basic stance on corporate governance
The JAPEX Group recognizes the importance of corporate governance in translating efficient management intohigher earnings and in ensuring the company plays a valuable role in society. The Company therefore makes it a
top priority to continually reinforce and upgrade its corporate governance systems.
(2) Measures to strengthen corporate governance
The Board of Directors and corporate auditors (together with the Audit Committee, comprising all the
Company’s auditors) are responsible for overseeing executive actions carried out by each director. JAPEX
therefore employs what is known as a Corporate Auditing System.
The Board of Directors meets monthly. In addition to making decisions pertaining to important business andaffairs of the corporation, the Board oversees executive actions based on status reports it receives from directors.
Also, from the perspective of speeding up decision-making, an Executive Committee, comprising full-time
directors that reside in Tokyo, meets weekly to make decisions regarding items that are not subject to decision by
the Board of Directors. It also deliberates on items in support of decision-making by the Board. No outside
directors are appointed to the Executive Committee.
Corporate auditors, who attend Board meetings on an as-needed basis, also exchange opinions with Board memberswith executive functions as part of their oversight function. The Board of Auditors has four members, two of whom
are outside auditors. Outside auditors have no special relationships with the Company.
In addition to implementing corporate governance based on this management structure, the Company conducts
investor relations activities, including holding earnings results meetings and posting data on its corporatewebsite, to increase management transparency, with the goal of ensuring optimal business execution in any
operating environment.

5. Basic policies on relationships with related parties (parent company and others)
As of September 30, 2004, JNOC held 49.94% of the Company’s outstanding shares. In addition, some JAPEX
subsidiaries and affiliates engaged in overseas E&P activities received equity investment as well as credit
guarantees from JNOC.
Directors and employees of JNOC do not serve concurrently as directors of JAPEX. In addition, there is no
exchange of employees between the Company and JNOC.

5

Pursuant to the Law on Abolition of the JNOC and the Metal Mining Agency of Japan, officially announced inJuly 2003, JOGMEC was established on February 29, 2004, taking over many of the functions of the JNOC,
including investment/credit guarantees, R&D, and the re-commissioning of basic research in Japan.

6III. Business Results and Financial Position
1. Business Results(1) Overview of the Interim Period
In the first half of fiscal 2005, ended September 30, 2004, the Japanese economy recovered moderately as therecent improvement in the corporate sector spread to the household sector.
Meanwhile, in the petroleum market, although exchange rates were stable on the whole, international crude oil
prices rose, supporting strong prices for domestic crude oil. Still, due to acceleration in the pace of deregulation,
domestic natural gas prices remained problematic for the Company amid escalating competition among energy
sectors.
Under these conditions, the JAPEX Group worked to maintain robust pipeline operations with the aim of
ensuring stable supplies of affordable and safe energy over the long term. In addition, the Group focused its
collective efforts on efficient E&P both in Japan and overseas.
In the interim period ended September 30, 2004, consolidated net sales totaled ¥46,371 million, up ¥4,018
million, or 9.5%, compared to a year earlier. Driving this growth was higher sales of crude oil on the back ofrising prices, government orders for exploration drilling and other factors.
Operating income totaled ¥3,139 million, down ¥2,539 million, or 44.7%, from the previous interim period.
This reflected a higher cost of sales in line with increased sales of oil and government orders for exploration
drilling, as well as depreciation and amortization expenses and a greater volume of domestic exploration work.
Ordinary income totaled ¥7,259 million, up ¥89 million, or 1.2%, from a year earlier due to increases inequity-method earnings and other factors.
As a result, consolidated net income for the interim period totaled ¥5,583 million, up ¥821 million, or 17.3%,
from the previous year.
Below is a summary of earnings data for each of the Company’s business segments by division.
① Oil and Natural Gas Segment(a) E&P Division
The E&P division sells crude oil, natural gas and liquefied natural gas (LNG). Interim net sales totaled ¥37,141
million, up ¥1,182 million, or 3.3%, from a year earlier, primarily reflecting higher sales of crude oil on theback of rising prices.
(b) Contract Services Division
The Contract Services Division accepts orders mainly for drilling projects and geophysical surveys. Interim net
sales totaled ¥2,641 million, up ¥814 million, or 44.6%, from the previous interim period. This increase wasmainly due to government orders for methane hydrate exploration drilling.
(c) Other Businesses DivisionThis division mainly includes the sale of petroleum products such as LPG and fuel oil, the transmission of
third-party gas and petroleum products, and other miscellaneous consignment orders. Interim net sales totaled¥5,914 million, up ¥2,040 million, or 52.7%, from a year earlier, reflecting higher revenues from third-party
transmission orders and increased sales of petroleum products.
② Geothermal Energy Segment
Geothermal Energy Division
The Geothermal Energy Division sells steam used for power generation and undertakes work related togeothermal exploration technology and R&D on a contract basis. Interim net sales totaled ¥674 million, down
¥18 million, or 2.7%, reflecting lower sales volumes of steam for power generation.

7

(2) Financial Position
Interim Cash Flows
As of September 30, 2004, cash and cash equivalents totaled ¥29,205 million, up ¥1,354 million, or 4.9%,
compared to March 31, 2004. This increase was mainly attributable to income before income taxes andminority interests of ¥6,712 million and depreciation and amortization of ¥6,817 million, against outflows of¥6,839 million for the acquisition of property, plant and equipment, and ¥5,687 million for the acquisition of
securities.
Net cash provided by operating activities was ¥6,874 million, a decrease of 26.3%, from the previous year. The
main components were ¥6,712 million in income before income taxes and minority interests and ¥6,817
million in depreciation and amortization, against an increase in inventories of ¥3,419 million and income taxes
paid of ¥1,938 million.
Net cash used in investing activities amounted to ¥1,522 million, down 61.7% from a year earlier. This was
mainly attributable to ¥6,839 million for the acquisition of property, plant and equipment and proceeds of¥5,103 million related to the acquisition of shares in subsidiaries accompanying a change in the scope of
consolidation (a net cash inflow arising from the difference between outflows for the purchase of shares in
Japex New Nanhai Ltd. and Jawa Oil Co., Ltd. and the funds held by these companies).
Net cash used in financing activities was ¥4,092 million, up 7.1% year on year. Main components were cash
dividends paid of ¥1,997 million and cash used for the repayment of long-term debt of ¥1,153 million.

Cash Flow Indicators
Fiscal 2003
InterimYear-End

Fiscal 2004
InterimYear-End

Shareholders’ equity ratio (%)
76.0
77.1
79.4
79.3
Shareholders’ equity ratio on
—
—
—
96.4
mark-to-market basis (%)
Debt repayment period (years)
—
0.7
—
0.5
Interest coverage ratio (times)
12.0
34.5
49.7
60.3
Notes:
Shareholders’ equity ratio: Shareholders’ equity/total assets
Shareholders’ equity ratio on mark-to-market basis: Total market capitalization/total assets
Debt repayment period: Interest-bearing debt/net cash provided by operating activities
Interest coverage ratio: Net cash provided by operating activities/interest paid

Fiscal 2005
Interim
81.6
109.3
—
46.6

* JAPEX listed on the Tokyo Stock Exchange on December 10, 2003.
* The various indicators are calculated based on consolidated financial figures.
* Total market capitalization is calculated using the closing stock price at the end of the term multiplied by the
number of shares outstanding at the end of the term (excluding treasury stock).
* Net cash flow from operating activities is that shown on the statement of consolidated cash flows.
Interest-bearing debt is all debt subject to interest payments within debt shown on the consolidated balance
sheets. Interest paid is that shown on the consolidated statement of cash flows.

8(3) Forecasts for the Fiscal Year Ending March 31, 2005
For the fiscal year ending March 31, 2005, the Company expects consolidated net sales to increase ¥2.8
billion, or 2.9%, from the previous fiscal year, to ¥99.5 billion, based mainly on expected higher crude oil
prices.
Although JAPEX anticipates increased exploration expenses related to more aggressive exploration activities
during the period, higher oil prices have led to an improvement in the financial position of overseas projectcompanies, meaning JAPEX expects to partially reverse allowance for losses on overseas investments
and accrual for losses on projects. Consequently, the Company is projecting a year-on-year increase inordinary income of ¥2.0 billion, or 13.8%, to ¥16.4 billion. Compared to the previous year, net income isexpected to increase by ¥1.0 billion, or 10.8%, to ¥11.0 billion.
Since October 2004, the Niigata-Chuetsu region of Japan has been hit by a series of earthquakes. Based on themost current damage reports, JAPEX expects these earthquakes to have only a negligible impact on sales.
However, the Company expects to book an extraordinary loss of ¥0.5 billion for earthquake-related damageand ¥60 million in non-operating expenses for providing support to the quake-hit region. These charges havebeen factored into the above forecasts.
The above forecasts assume: 1) prices of US$39/barrel and US$37/barrel for imported crude oil for the thirdand fourth quarters of fiscal 2005, respectively; and 2) an exchange rate of ¥110/US$ for both the third andfourth quarters in the second half of fiscal 2005.
The following is a comparison of current forecasts with those announced on May 17, 2004, together withfull-year results for fiscal 2004.
(Millions of yen)
Net Sales
Ordinary Income
Net Income
Previous Forecasts: A
Current Forecasts: B
Change: B – A
Change (%)(¥ million)
84,16399,55815,39518.2%(¥ million)
11,313
16,4705,157
45.5%(¥ million)
9,556
11,043
1,487
15.5%

A number of risks and uncertainties have the potential to affect JAPEX’s business performance, including, but
not limited to, the following:① Operational risk
The JAPEX Group’s business requires substantial investment over long periods in the exploration stage.
However, there is no guarantee that resources will be discovered. As such, the Company’s business is high risk
by nature. Moreover, even after resources are discovered, heavy investment is still required, including for the
drilling of development wells and the construction of related production and transmission facilities.
Accordingly, long lead times are typically required from the time of project initiation to investment recovery
and contribution to profits. In the meantime, there is a risk that various changes in the operating environment
will prevent desired investment objectives from being attained.
② Factors causing volatility in crude oil sales
JAPEX markets crude oil in Japan at international prices. Consequently, the price at which the Company sells
crude oil is affected by market trends, such as the level of output set by OPEC and trends in the internationalbalance of supply and demand, as well as fluctuations in exchange rates. To reduce associated risks, theCompany engages in crude oil swap transaction, although this approach does not entirely eliminate all
associated risks.
③ Factors causing volatility in natural gas sales
Selling prices for natural gas are normally set based on fixed contracts with customers and denominated in yen.
As such, prices are not affected by short-term fluctuations in prices for internationally traded natural gas or

9exchange rates. However, volumes of gas sales to local distribution companies (LDCs) do exhibit seasonality,that is, lower demand in the summer and higher demand in the winter. In addition, sales volume declines
during warm winters. Furthermore, over the longer term, deregulation of Japan’s energy markets carries therisk of lower unit selling prices and lower sales volume for natural gas.
(3) Distribution of Dividends
The Company will pay an interim dividend of ¥15.00 per share in accordance with a decision by the Board of
Directors on November 15, 2004.

10

Ⅳ．Consolidated Interim Financial Statements
１． Consolidated Interim Balance Sheets
Description

As of Sept. 30, 2004

As of March 31, 2004

Amount (¥ million)

Amount (¥ million)

ChangeAmount(¥ million)

As of Sept. 30, 2003
Amount (¥ million)(Assets)
Ⅰ

Current assets
１．Cash and deposits

27,71622,201

２．Notes and accounts receivable

9,728

11,4305,992

３．Marketable securities

6,095

9,854

10,526

４．Inventories

9,535

6,116

9,060

５．Other current assets

6,770

5,343

5,619

Less: Allowance for doubtful receivables
Total current assets
Ⅱ

20,887(11)(13)

59,83654,932(19)
4,903

52,067

Fixed assets
１．Property, plant and equipment(1）Buildings and structures(2）Machinery and equipment(3）Land45,993
21,831
11,233(4）Other property, plant and equipment

14,06053,411
23,697
12,051
93,11911,415

1,892

２．Intangible fixed assets

54,785
12,381
12,015100,576(7,457)

819

1,072

15,457

94,640728

３．Investments and others(1）Investments in securities

83,896

84,771

84,869(2）Others
Less: Allowance for doubtfulreceivables
Allowance for losses on overseas
investments
Total fixed assets

20,556

19,121

21,617

(184)

(123)

(123)
90,436

2,472

187,920

191,832(3,912)

187,706

247,756

246,765991

239,774

１．Notes and accounts payable

2,464

2,353

1,184

２．Short-term bank loans
３．Current portion of long-term debt
４．Other current liabilities

9,306
14,207600
2,306
11,539

50
2,310
9,378

25,978

16,798

Total assets(11,360)

92,908(13,334)(14,026)

92,337（Liabilities）
Ⅰ

Current liabilities

Total current liabilities
Ⅱ

9,179

12,923Long-term liabilities
850

9,003

10,156

２．Accrued retirement benefits for employees

3,896

3,574

3,711

３．Accrued retirement benefits for officers
４．Accrued estimated cost of abandonment ofwells
５．Accrual for losses on projects

679

696

625

１．Long-term debt

2,492

2,423

2,834

2,635

10,975

11,609

６．Other reserves

58

-

-

７．Other long-term liabilities

668

2,186

2,153

Total long-term liabilities

11,281

28,859(17,578)

31,091

Total liabilities

37,25945,658(8,398)44,015

8,319

5,392

2,926

5,360

（Minority interests）
Minority interests in consolidated
subsidiaries（Shareholders’ equity）
Ⅰ

Common stock

14,28814,288-14,288Ⅱ
Ⅲ
Ⅳ

Retained earnings
Unrealized holding gain on securities
Translation adjustments

184,323
3,865
(295)

180,826
3,412(2,810)

3,496
453
2,515

175,627
2,515(2,032)

Ⅴ

Treasury stock
Total shareholders’ equity
Total liabilities, minority interests andshareholders’ equity

(3)

(1)

(1)

-

202,178

195,715

6,463

190,398

247,756

246,765991

239,77411

２．Consolidated Interim Statements of Income
Fiscal 2005
1st half
Description

Amount (¥ million)

Fiscal 2004
1st half

ChangeFiscal 204

Amount (¥ million)

Amount(¥ million)

Amount (¥ million)Ⅰ

Net sales

46,37142,352

4,018

96,713Ⅱ

Cost of sales

30,28525,742

4,542

58,06016,086

16,609(523)

38,653

Ⅲ

Exploration expenses

Gross profit

１．Exploration expenses

2,908

２．Exploration subsidies(81)

Ⅳ Selling, general and administrative expenses
Operating income
Ⅴ

Ⅵ

1,387

1,439

10,120

(211)

9,543

576

(675)

20,990

5,213

3,139

5,679

(2,539)12,449Non-operating income
575

636

1,192

２．Dividend income

1,071

925

1,298

３．Equity in profit of unconsolidated subsidiaries
and affiliates

997

-

-

４．Reversal of allowance for losses on overseas
investments

1,213

2,632

2,705

５．Reversal of accrual for losses on projects

419

-

-

６．Other non-operating income

533

4,809

375

4,569

239

759

5,956

Non-operating expenses
141

183

346

２．Loss on sale of securities

-

-

34

３．Devaluation loss on securities

95

-

498

４ Equity in losses of unconsolidated subsidiaries
and affiliates

-

2,298

2,072

257

22

160

６．Provision for losses on projects

-

260

129

７．Other non-operating expenses

195

５．Provision for accrued estimated cost ofabandonment of wells

Ordinary income

690

314

7,259

3,079

(2,389)

7,169

89

695

3,937
14,468Extraordinary income
１．Reversal of allowance for doubtful receivables

Ⅷ

2,826

5,888

１．Interest income

１．Interest expense

Ⅶ

1,598

3

3

10

10

(6)

25

25

550

550

134

134

416

286

286

7,045

(333)

Extraordinary losses
１．Loss on disposal of fixed assets
Income before income taxes and minority
interests

6,712

Current income taxes

1,912

Deferred income taxes(913)

Minority interests
Net income

2,674
998

(553)

14,207
2,568

2,121

(1,122)

1,386

3,955

129

161

(32)

291

5,583

4,762

821

9,960

12

３．Consolidated Interim Statements of Shareholders’ Equity
Description

Fiscal 2005
1st half
Amount (¥ million)

Fiscal 2004
1st half
Amount (¥ million)

Fiscal 2004
Amount (¥ million)（Retained earnings）
Ⅰ

Balance at beginning of year

Ⅱ

Add
１．Net income

Ⅲ

5,583

5,583

172,370

4,762

4,762

172,370

9,960

9,960

Deduct１．Cash dividends paid

2,000

1,428

1,428

２．Bonuses to officers

86

75

75

（Incl. statutory auditors）
Ⅳ

180,826

Balance at end of year

(

3)

2,087
184,323

(

4)

1,504
175,627

(

4)

1,504
180,826

13

４．Consolidated Interim Statements of Cash Flows
Fiscal 2005
1st half
Description

Amount (¥ million)

Fiscal 2004
1st half
Amount(¥ million)

ChangeFiscal 2004

Amount(¥ million)

Amount (¥ million)

Ⅰ Operating activities
Income before income taxes and minority interests

6,712

7,045

14,207

Depreciation and amortization

6,817

4,972

11,043

Loss on devaluation of marketable securities and investments in securities

95

44

498

Increase (decrease) in allowance for doubtful receivables

58

(7)

(27)

Increase (decrease) in provision for accrued retirement benefits for employees

317

435

303

Increase (decrease) in provision for accrued retirement benefits for officers
Increase (decrease) in provision for accrued estimated cost of abandonment of
wells
Decrease in provision for allowance for losses on overseas investments andaccrual for losses on projects
Interest and dividend income

(17)

26

97

65

(287)

(638)

(1,465)(2,503)(3,830)(1,646)(1,561)(2,491)

141

183

346

(58)

(182)

(305)

Interest expense
Gain on redemption and sales of marketable securities and investments insecurities
Loss on redemption and sales of marketable securities and investments insecurities
Equity in losses (gains) of unconsolidated subsidiaries and affiliates

69

-

34

(997)

2,298

2,072

Decrease (increase) in notes and accounts receivable

2,295

5,753

310

Decrease (increase) in inventories(3,419)

(274)

2,669

Increase in prepaid expenses

-

(819)

-

Decrease in advances

-

284

-

(1,569)(5,712)(2,161)

67

(90)

(211)

1,345

902

1,408

Increase (decrease) in notes and accounts payable
Increase (decrease) in consumption tax payable
Other, net
Subtotal

8,813

10,506(1,938)(1,173)

6,874

9,332

Investments in time deposits

(40)

(320)

Proceeds from time deposits

330

-

15

Payments for purchase of marketable securities(100)(2,998)(2,998)

Income taxes (paid) refunded
Net cash provided by operating activities(1,692)

23,326(1,803)(2,457)

21,522Ⅱ Investing activities(335)

Proceeds from redemption and sale of marketable securities

1,888

3,613

7,890

Additions to property, plant and equipment(6,839)(4,444)(15,734)

Proceeds from sales of property, plant and equipment

122

0

38

Additions to intangible fixed assets

(216)

(251)

(423)

Payments for purchase of investments in securities(5,687)(5,139)(9,030)

Proceeds from redemption and sale of investments in securities
Proceeds from purchase of consolidated subsidiary stock accompanied by changes
in scope of consolidation
Increase in loans receivable

2,506

4,072

5,106

5,103

-

(89)

(152)

(253)

Decrease in loans receivable

33

25

554

Interest and dividends received

1,727

1,651

2,638

Other, net
Net cash used in investing activities

(197)

75

(1,522)(3,969)

(309)
2,447

(12,677)

Ⅲ Financing activities
Increase (decrease) in short-term bank loans
Repayment of long-term debt
Acquisition of treasury stock

(600)

(850)

(300)

(1,153)(1,157)(2,315)

(1)

-

(1)

(1,997)(1,428)(1,428)Dividends paid to minority shareholders

(192)

(197)

(197)

Interest paid

(147)

(187)

(4,092)(3,821)

Cash dividends paid

Net cash used in financing activities
Ⅳ Effect of exchange rate changes on cash and cash equivalents
Ⅴ Increase in cash and cash equivalents

(356)
(270)

(4,599)

93

(79)

172

(260)

1,354

1,462

(108)

3,984

Ⅵ Cash and cash equivalents at beginning of the period

27,851

23,866

3,984

23,866

Ⅶ Cash and cash equivalents at period-end

29,20525,3283,876

27,851

14

Ⅴ．Status of Production and Sales
1.

Production(1) Oil and Natural Gas Segment

Division

E&P

Other Businesses

Fiscal 2005
1st half

Fiscal 2004
1st half

Product

Fiscal 2004

C r u d eo i l263,824 kl（1,822）

255,759 kl（2,286）574,417 kl（3,131）Naturalgas453,140 k m3
（3,511）

477,696 k m3
（1,665）

1,036,120 k m3
（7,231）

L

N

G

L

P

742

ｔ

7,253

ｔ

6,589

ｔ

G

4,290

ｔ

4,640

ｔ

10,811ｔ

Fuel oil, etc.

24,775kl

23,010kl

52,393kl(Notes)1. The figures in parentheses in E&P Operations represent overseas production and are included in the total.
2. Part of the oil production volume is used as a feedstock for LPG, fuel oil and other products.
3. Part of the natural gas production volume is used as a feedstock for LNG, LPG and other products.

(2) Geothermal Energy Segment

Division
Geothermal Energy

2.

Fiscal 2004
1st half

Product
S

t

e

a

m

Fiscal 2005
1st half

574,928ｔ

Fiscal 2004

552,788ｔｔ

1,107,443

Sales(1) Oil and Natural Gas Segment

Division

Fiscal 2004
1st half

Product

VolumeAmountkl

Crude oil

750,787

Volume15,705Natural gas

693,467
552,778ｔ

LNG
Subtotal
Contract
Services
Subtotal

Other
Businesses

Amount(¥ million)kl

18,476

1,528,507(¥ million)
32,963thousand ㎥

16,5681,296,389

ｔ

42,560ｔ30,236

1,502

42,4482,096−

35,958−37,141−

79,361

−

1,826

−

2,641

−

7,049

−

1,826

−

2,641

−

7,049

ｔ

LPG

Volumethousand ㎥

18,750571,446

Amountkl(¥ million)

thousand㎥

E&P

Fiscal 2004

Fiscal 2005
1st half

13,118ｔ(¥ million)
649

13,795kl

75,883(¥ million)ｔ(¥ million)

669

31,506

1,514

kl

43,6883,837

kl

Fuel oil, etc

38,213

1,532

1,950

89,090

Others

−

1,691

−

3,294

−

4,182

Subtotal

−

3,874

−

5,914

−

9,213

Total

−

41,659−45,697−

95,624

3,517

15

(2) Geothermal Energy Segment

Division

Fiscal 2004
1st half

Product

VolumeGeothermal
EnergyAmount
ｔ

Steam
Total

Fiscal 2005
1st half
VolumeAmountｔ(¥ million)

Fiscal 2004
VolumeAmountｔ(¥ million)(¥ million)

553,620692

527,863674

1,061,336

1,089

−

692

−

674

−

1,089

(Notes)1. Others in Other Businesses includes revenue from the transmission of third-party gas through JAPEX’s pipeline network and sales commissions.
2. Monetary amounts in the table do not include consumption tax.

16

Non-consolidated Financial Results for the Interim Period Ended September 30, 2004
November 15, 2004
Note: The following report is a summary of the Japanese-language original.
Company Name: Japan Petroleum Exploration Co., Ltd.
Stock Listing: Tokyo Stock Exchange
Company Code: 1662
Location of Head Office: Tokyo(URL: http://www.japex.co.jp/)
President: Yuji Tanahashi
Inquiries: Koichi Shimomura, Manager, Media Relations, Administration Department TEL:(03) 5461-7413
Date of the Board of Directors meeting to settle period-end
Interim dividend system: Yes
non-consolidated accounts: November 15, 2004
Date of interim dividend payment:
Trading unit system: One unit 100 shares
December 8, 2004
1. Non-consolidated Results for the FY2005 Interim Period (April 1, 2004 – September 30, 2004)(1) Non-consolidated Operating Results(Amounts less than one million yen have been omitted)

FY2005 Interim
FY2004 Interim
FY2004 Full YearNet Sales(¥ million)
41,29536,68982,343％
12.6
7.1

Net Income(¥ million)％
4,057(22.4)
5,229
115.2
9,602

Operating Income(¥ million)％
2,701(47.2)
5,120
113.3
10,506

Ordinary Income(¥ million)％
5,164(27.1)
7,086
250.5
12,481Net Income per Share(¥)
70..9991.49
166.56

FY2005 Interim
FY2004 Interim
FY2004 Full Year
(Notes)
1. Average number of outstanding shares during the period: FY2005 Interim: 57,154,267 shares FY2004 Interim:
57,154,776 shares FY2004: 57,154,715 shares
2. Changes in accounting methods: No
3. Percentage figures for net sales, operating income and other items represent changes compared with the previous fiscal
year.
(2) Dividends

FY2005 Interim
FY2004 Interim
FY2004 Full Year

Interim Dividend per
Share
(¥)
15.00
0.00
――――

Dividends per Share for the
Fiscal Year
(¥)
――――
――――
35.00

(3) Non-consolidated Financial Position
Total Assets

Shareholders’Equity(¥ million)
189,397
181,716
186,923

Shareholders’Equity Ratio

Shareholders’ Equity
per Share(¥)
3,313.80
3,179.36
3,269.05(¥ million)％
FY2005 Interim
218,82686.6
FY2004 Interim
211,55585.9
FY2004 Full Year
217,80285.8(Notes)Number of shares issued and outstanding at period end: FY2005 Interim 57,154,063 shares
FY2004 Interim 57,154,776 shares
FY2004 Full Year 57,154,472 shares
Number of treasury stock at period end:
FY2005 Interim 713 shares
FY2004 Interim 0 shares
FY2004 Full Year 304 shares

172. Non-consolidated Forecast for FY2005 (April 1, 2004 – March 31, 2005)
Dividends per Share for the Fiscal YearNet Sales
Ordinary Income
Net Income
Year-end(¥ million)(¥ million)(¥ million)(¥)(¥)
Full Year
85,21012,1999,041
15..0030..00（Reference）Estimated net income per share is ¥158.18
Difference from previous forecast (May 17, 2004)
Net Sales
Ordinary Income
Net Income(¥ million)(¥ million)(¥ million)
Previous Forecast (A)72,8099,819
8,291
Revised Forecast (B)85,21012,1999,041
Change (B-A)
12,401
2,380
750
Change (%)
17.0%
24.2%
9.0%
Note: The above estimates have been made based on information available as of the date of this release. Actual
results may differ from these estimates due to a variety of factors.

18