Consolidated Financial Results for the Six Months Ended September 30, 2019
<under Japanese GAAP>
November 8, 2019

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 commence dividend payments:
December 16, 2019
Scheduled date to file Quarterly Report:
November 11, 2019
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for institutional investors and analysts): Yes
1.
(1)(Millions of yen with fractional amounts discarded, unless otherwise noted)

Consolidated financial results for the six months ended September 30, 2019
(April 1, 2019 – September 30, 2019)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Six months ended

Operating profit

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary profit% Millions of yen% Millions of yen%

September 30, 2019

162,346

41.0

7,730

–

13,636 954.4

12,069 395.9

September 30, 2018

115,136

2.5(1,183)–

1,293

2,433 (68.6)

Note: Comprehensive income: Six months ended September 30, 2019:
Six months ended September 30, 2018:

Basic earnings per share
Six months ended

4,625 million yen (-36.1 %)7,235 million yen (-49.9 %)Diluted earnings per share

Yen

Yen

September 30, 2019211.19–September 30, 2018

42.59

–

(2)

(85.4)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2019651,501

452,551

64.4

As of March 31, 2019655,288

450,156

63.6

Reference: Equity

2.

As of September 30, 2019: 419,546 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: Yes-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%Yen318,351

18.8

11,735407.3

21,89874.9

18,82027.4

329.29Note: Revisions to the consolidated financial forecasts most recently announced: Yes

*
(1)

Notes
Changes in significant subsidiaries during the six 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 September 30, 201957,154,776 shares
As of March 31, 201957,154,776 sharesb. Number of treasury shares at the end of the period
As of September 30, 20192,265 shares
As of March 31, 2019
2,207 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 201957,152,562 shares
Six months ended September 30, 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 six months ended
September 30, 2019” on page 4 of the attached material to the quarterly financial results report.

-2-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the six months ended September 30,
2019(1) Explanation of operating results
During the six months ended September 30, 2019, net sales was ¥162,346 million, an increase of ¥47,210
million (+41.0%) year on year. Gross profit was ¥23,101 million, an increase of ¥8,975 million (+63.5%)
year on year. Major factors behind the year-on-year increases were as follows: for net sales, there were
growth in sales volume of diluted bitumen in Japan Canada Oil Sands Limited (JACOS) Hangingstone leases
and growth in sales volume of crude oil, while for gross profit, there was an improvement in profit from
diluted bitumen sales stemming from the narrowing light-heavy differential (*1) in the oil sands business.
Exploration expenses was ¥358 million, a decrease of ¥4 million (-1.4%) year on year. Selling, general andadministrative expenses was ¥15,013 million, an increase of ¥67 million (+0.5%) year on year. As a result,operating profit improved by ¥8,913 million year on year to ¥7,730 million (operating loss of ¥1,183 million
in the same period of the previous fiscal year).
Ordinary profit increased by ¥12,342 million year on year to ¥13,636 million, due mainly to the turnaroundfrom foreign exchange losses to foreign exchange gains, despite a decrease in share of profit of entities
accounted for using equity method.
Profit before income taxes increased by ¥11,704 million year on year to ¥13,617 million. Profit attributableto owners of parent increased by ¥9,636 million year on year to ¥12,069 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 ¥131,969
million, an increase of ¥40,254 million (+43.9%) year on year. This was mainly the result of an increasein sales volume of crude oil and diluted bitumen.
(ii) Contract Services
Net sales from contract services (drilling and geological surveys, etc.) came to ¥10,474 million, an
increase of ¥7,648 million (+270.6%) 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¥19,902 million, a decrease of ¥692 million (-3.4%) year on year.

(2) Explanation of financial position
At the end of the second quarter, total assets decreased by ¥3,786 million from the previous fiscal year-end
to ¥651,501 million.
Current assets increased by ¥22,755 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 ¥26,542
million from the previous fiscal year-end. This was mainly due to a decrease in investment securities
resulting from the fall in market values and a decrease in recoverable accounts included in other ininvestments and other assets resulting from the progress in the recovery.
Liabilities decreased by ¥6,181 million from the previous fiscal year-end to ¥198,950 million.
Current liabilities increased by ¥1,971 million from the previous fiscal year-end. This was largely due to anincrease in notes and accounts payable - trade despite a decrease in accrued consumption taxes included inother in current liabilities. Non-current liabilities decreased by ¥8,152 million from the previous fiscal year-3-

end, mainly due to a decrease in deferred tax liabilities resulting from the above-mentioned fall in market
values of investment securities and a decrease in long-term borrowings resulting from the impact offluctuation in foreign exchange rates and the reclassification of borrowings with repayments due in one year
or less to current liabilities.
Net assets increased by ¥2,394 million from the previous fiscal year-end to ¥452,551 million. The main
factor was an increase in retained earnings, despite a decrease in valuation difference on available-for-salesecurities.

(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 August 9, 2019.
Please refer to the “Revision of Financial Forecasts, Interim Dividend, and Year-end Dividend” released on
November 8, 2019, the same day of this 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 September 30, 2019

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

133,697
28,311
2,400
5,082
297
10,7158,371(33)
188,843

185,198
123,915309,114

176,227
121,249
297,476

7,399
7,399

6,916
6,916

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

135,369
23,825(44)(886)
158,264
462,657
651,501

(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 September 30, 2019

7,666
400
24,311
32,378

12,170512
21,66634,349127,715
22,3303,452
1,236
15,335
2,681
172,752
205,131

120,714
21,182
3,440
1,013
15,284
2,964
164,600
198,950

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

14,288
157
341,661(11)
356,096

66,296

61,903

(2)
3,338
1,114
70,74733,668450,156
655,288

9
525
1,010
63,44933,005452,551
651,501

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Six months ended
September 30, 2018
Net sales
Cost of sales
Gross profit
Exploration expenses
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodOther
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)Six months ended
September 30, 2019

115,136
101,009
14,126362
14,946(1,183)

162,346
139,244
23,101358
15,013
7,730

745
1,032

584
1,658

5,489

4,405

559
7,827

1,934
8,584

1,825
2,940
584
5,351
1,293

2,433
–
244
2,677
13,636

715
715

–
–

60
35
96
1,912
394
1,518
(915)
2,433

3
15
19
13,617
1,512
12,10434
12,069

Consolidated quarterly statement of comprehensive income(Millions of yen)Six months ended
September 30, 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-

Six months ended
September 30, 2019

1,518

12,1048,006
45(2,287)(14)(4,394)12(2,827)
(103)

(31)

(164)

5,717
7,235

(7,478)
4,625

8,117

4,772

(881)

(146)

(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) becausesuch 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 second 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
Six months ended
September 30, 2018
(April 1, 2018 –September 30, 2018)
Crude oil (kl)Oil andgas

Natural gas(thousand m3)
LNG (t)Bitumen (kl)Six months ended
September 30, 2019
(April 1, 2019 –September 30, 2019)(Reference)
Fiscal year ended
March 31, 2019
(April 1, 2018 – March 31, 2019)504,987

547,580

1,157,037(376,001)(397,084)(892,535)

585,037

530,853

1,170,457(262,561)(214,469)(488,436)

4,808

3,891

5,600

338,534

561,946

812,720(338,534)(561,946)(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
Six months ended
September 30, 2018
(April 1, 2018 –September 30, 2018)
AmountVolume(Millions of yen)

Oil andgas

Six months ended
September 30, 2019
(April 1, 2019 –September 30, 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)782,391

41,0481,469,861

68,902

1,888,653

94,579Natural gas(thousand m3)

813,097

27,835

746,637

29,362

1,731,141

67,820

LNG (t)145,796

9,574

149,179

10,319322,331

22,913

Dilutedbitumen (kl)496,568

13,257

838,297

23,385

1,176,091

30,116

Subtotal

91,715

131,969

215,429

Contract services
Oil products
Other/merchandisebusinesses
Others2,826

10,474

7,342

18,17017,16839,820

2,424

2,733

5,387

Subtotal

20,594

19,90245,207

Total

115,136

162,346

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.

- 10 -