Consolidated Financial Results for the Three Months Ended June 30, 2015
<under Japanese GAAP>
August 7, 2015
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:
http://www.japex.co.jp/
President:
Osamu Watanabe
Inquiries:
Samdeck Nakamoto, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
August 11, 2015
Scheduled date to commence dividend payments:–
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:
None(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the three months ended June 30, 2015
(April 1, 2015 – June 30, 2015)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Three months ended

Operating income

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary income% Millions of yen% Millions of yen%

June 30, 2015

60,035 (27.0)

5,362(34.1)

8,300(36.2)

6,825(31.7)

June 30, 201482,259

8,131

47.5

13,011

65.7

9,987

70.2

36.9

Note: Comprehensive income: Three months ended June 30, 2015:
Three months ended June 30, 2014:(2,944) million yen (– %)17,871 million yen (– %)Net income per share
Three months ended

Diluted net income per share
Yen

Yen

June 30, 2015

119.43–June 30, 2014174.75–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2015

737,969

543,049

62.4

As of March 31, 2015

736,862

540,647

62.5

Reference: Equity

2.

As of June 30, 2015: 460,767 million yen

As of March 31, 2015: 460,398 million yen

Cash dividends

Fiscal year ended
March 31, 2015
Fiscal year ending
March 31, 2016
Fiscal year ending
March 31, 2016
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

25.00

–

25.00

50.00

25.00

–

25.00

50.00

Total
Yen

–

Note: Revisions to the forecasts of cash dividends most recently announced: None

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3.

Consolidated financial forecasts for the fiscal year ending March 31, 2016 (April 1, 2015 – March 31, 2016)(Percentages indicate year-on-year changes.)
Net sales

Operating income

Profit attributable
Ordinary income to owners of parent

Net income pershare

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen

For the six months
ending September 30,
2015

144,019

(1.9)

3,899

(74.2)

6,523(73.6)

5,848(69.0)

102.32

Fiscal year ending
March 31, 2016

271,118(11.1)

9,120(71.6)

14,012(74.4)

11,705(60.4)

204.80Note: Revisions to the consolidated financial forecasts most recently announced: None

*
(1)

Notes
Changes in significant subsidiaries during the three 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
Note: For details, please refer to “(2) Application of specific accounting for preparing quarterly consolidated financial statements” of“2. Matters regarding summary information (notes)” on page 4 of the attached material.

(3)

Changes in accounting policies, changes in accounting estimates, and restatementa. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
b. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: None
d. Restatement: None
Note: For details, please refer to “(3) Changes in accounting policies, changes in accounting estimates, and restatement” of “2. Mattersregarding summary information (notes)” on page 4 of the attached material.

(4)

Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2015
57,154,776 shares
As of March 31, 2015
57,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2015
2,139 shares
As of March 31, 2015
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2015
57,152,637 shares
Three months ended June 30, 2014
57,152,637 shares* Indication regarding execution of quarterly review procedures
At the time of disclosure of this quarterly financial results report, the quarterly review procedures for thequarterly consolidated financial statements in accordance with the Financial Instruments and Exchange Act are
in progress.
* 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 and other 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 three months ended June 30, 2015” onpage 4 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On August 7, 2015 (Friday), JAPEX plans to post supplementary material on its website.

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(Attached Material)
1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2015
(1) Explanation of operating results
During the three months ended June 30, 2015, net sales was at ¥60,035 million, a decrease of ¥22,223 million(-27.0%) year on year. Gross profit decreased by ¥5,088 million (-26.7%) year on year to ¥13,990 million.
The main factors behind the year-on-year decreases in net sales and gross profit were falls in sales prices ofdomestically produced crude oil, overseas crude oil and natural gas, and decreases in sales volumes ofdomestically produced crude oil and overseas crude oil.
Exploration expenses decreased by ¥2,225 million (-90.5%) year on year to ¥233 million. This was mainly
the result of a considerable decrease in Japan and overseas expenditures. Selling, general and administrative
expenses decreased by ¥93 million (-1.1%) year on year to ¥8,395 million. As a result, operating income
decreased by ¥2,768 million (-34.1%) year on year to ¥5,362 million.
Ordinary income amounted to ¥8,300 million, a decrease of ¥4,710 million (-36.2%) year on year, mainly
because of a decrease in share of profit of entities accounted for using equity method.
Income before income taxes decreased by ¥4,759 million (-36.5%) year on year to ¥8,289 million. Profit
attributable to owners of parent came to ¥6,825 million, a decrease of ¥3,161 million (-31.7%) year on year.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥47,101 million, adecrease of ¥22,123 million (-32.0%) year on year. This was mainly the result of fall in sales prices and adecrease in sales volumes of domestically produced crude oil and overseas crude oil.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥2,861 million, an
increase of ¥1,529 million (+114.8%) 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¥10,073 million, a decrease of ¥1,629 million (-13.9%) year on year.

(2) Explanation of financial position
At the end of the first quarter, as compared to the end of the previous fiscal year, total assets increased by¥1,106 million to ¥737,969 million. The main factor behind this increase was an increase of ¥16,401 million
in total investments and other assets partly due to an increase in investment securities, despite a decrease of¥15,361 million in total current assets partly due to a decrease in short-term loans receivable (“other” undercurrent assets).
Total liabilities decreased by ¥1,294 million from the previous fiscal year-end to ¥194,920 million. The main
factor behind this decrease was a decrease of ¥25,079 million in total current liabilities partly due to adecrease in current portion of long-term loans payable (“other” under current liabilities), despite an increaseof ¥23,785 million in total non-current liabilities partly due to an increase in long-term loans payable.
Total net assets increased by ¥2,401 million from the previous fiscal year-end to ¥543,049 million. The main
factor behind this increase was a decrease of ¥5,186 million in total accumulated other comprehensive
income partly due to a decrease in foreign currency translation adjustment, despite an increase of ¥5,556
million in total shareholders’ equity partly due to an increase of retained earnings, and an increase of ¥2,031
million in non-controlling interests.

-3-(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts have been left unchanged from the forecasts for the six months ending
September 30, 2015, and for the fiscal year ending March 31, 2016, which were announced on May 12, 2015.
This is the result of an examination made in consideration of the financial results for the three months ended
June 30, 2015.

2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the three months under review
No item to report(2) Application of specific accounting for preparing quarterly consolidated financial statements
a. 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.
b. 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 income before income taxes for the fiscal year
including the first quarter, and next by multiplying the quarterly income 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.

(3) Changes in accounting policies, changes in accounting estimates, and restatement
Changes in accounting policies(Application of Accounting Standard for Business Combinations, etc.)
Effective from the first quarter ended June 30, 2015, the Company has applied the “Accounting Standard
for Business Combinations” (ASBJ Statement No. 21, September 13, 2013), the “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22, September 13, 2013), the “AccountingStandard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013), etc. As a result, themethod of recording the amount of difference caused by changes in the Company’s ownership interests in
subsidiaries in the case of subsidiaries under ongoing control of the Company was changed to one in which
it is recorded as capital surplus, and the method of recording acquisition-related costs was changed to one
in which they are recognized as expenses for the fiscal year in which they are incurred. Furthermore, forbusiness combinations carried out on or after the beginning of the first quarter ended June 30, 2015, theaccounting method was changed to one in which the reviewed acquisition cost allocation resulting from thefinalization of the provisional accounting treatment is reflected in the quarterly consolidated financial
statements for the quarterly period to which the date of business combination belongs. In addition, thepresentation method for “Net income” and other related items was changed, and the presentation of“Minority interests” was changed to “Non-controlling interests.” To reflect these changes, the Company
has reclassified its quarterly and full-year consolidated financial statements for the three months of theprevious fiscal year and the previous fiscal year.
Application of the Accounting Standard for Business Combinations, etc. is in line with the transitional
measures provided for in paragraph 58-2 (4) of the Accounting Standard for Business Combinations,paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and paragraph 57-4
(4) of the Accounting Standard for Business Divestitures. The Company is applying the said standard, etc.
prospectively from the beginning of the first quarter ended June 30, 2015.
As a result of this change, the effect of these changes on operating income, ordinary income and income
before income taxes for the three months ended June 30, 2015 and on capital surplus at the end of the firstquarter ended June 30, 2015 is immaterial.

-4-3. Consolidated financial statements(1) Consolidated quarterly balance sheet(Millions of yen)
As of March 31, 2015
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
Construction in progress
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-

As of June 30, 2015

92,95625,24845,605
4,551
250
7,488
22,430(38)
198,492

83,385
18,55158,572
4,458
404
6,189
11,606(37)
183,130

132,122
157,595
289,718

134,431
155,276
289,707

9,949
9,949

10,027
10,027

187,926
54,140(47)(3,317)
238,701
538,369
736,862

196,922
61,485(47)(3,256)
255,103554,838
737,969(Millions of yen)
As of March 31, 2015
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Provision
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Provision
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
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 June 30, 2015

6,728
50,809311
55,019112,868

5,159
46,622
260
35,74587,78820,72636,657
1,005
3,534
17,475
3,946
83,346196,21443,25638,911
207
3,403
16,891
4,461
107,131
194,920

14,288–346,441(10)
360,719

14,288159
351,838(10)
366,275

86,174

91,596

3
12,980521
99,67880,249540,647
736,862

(3)
2,374
524
94,49282,281
543,049
737,969

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Three months ended
June 30, 2014
(April 1, 2014 –June 30, 2014)82,25963,18019,078Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
Exploration subsidies
Total exploration expenses
Selling, general and administrative expenses
Operating income
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
Provision for allowance for losses on overseas
investments
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Subsidy income
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Other
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-7-(Millions of yen)Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
60,03546,045
13,990

2,492
(34)
2,458
8,489
8,131

249
(15)
233
8,395
5,362

579
1,037

407
1,037

3,956

1,849

212
5,786

198
3,493

150
64

203
251

640

–

51
906
13,011

99
555
8,300

42
0
42

–
0
0

4
–
4
13,0482,263
10,785
798
9,987

10
1
11
8,289
1,881
6,407
(418)
6,825

Consolidated quarterly statement of comprehensive income

Three months ended
June 30, 2014
(April 1, 2014 –June 30, 2014)
10,785

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 tonon-controlling interests-8-(Millions of yen)Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
6,407

14,762
65(7,588)
32

5,419
(6)
(14,583)
3

(187)

(184)

7,085
17,871(9,351)(2,944)

19,4301,991(1,559)(4,935)(3)Notes to consolidated financial statements(Notes on premise of going concern)
No items to report(Notes on significant changes in the amount of shareholders’ equity)
No items to report-9-4. Supplemental information
Status of production and sales
1. Production
Three months ended
June 30, 2014
(April 1, 2014 –June 30, 2014)
Crude oil (kl)E&P

Natural gas(thousand m3)
LNG (t)Bitumen (kl)Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)(Reference)
Fiscal year ended
March 31, 2015
(April 1, 2014 – March 31, 2015)

466,037

362,5021,990,143(363,367)(268,860)(1,601,853)

313,916

342,974

1,302,003(89,341)(125,356)(436,841)

–

5

1,000

83,676

79,351

332,757(83,676)(79,351)(332,757)

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. SalesThree months ended
June 30, 2014
(April 1, 2014 –June 30, 2014)
AmountVolume(Millions of yen)

E&P

Three months ended
June 30, 2015
(April 1, 2015 –June 30, 2015)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2015
(April 1, 2014 – March 31, 2015)
AmountVolume(Millions of yen)

Crude oil (kl)605,757

42,707525,067

23,5172,064,266

121,240Natural gas(thousand m3)

382,110

18,772

418,087

17,725

1,710,779

83,974

LNG (t)46,582

4,948

42,315

4,554

274,044

28,311

Bitumen (kl)

84,297

2,795

77,6201,303

332,342

12,105

Subtotal

69,224

47,101

245,631

Contract services
Oil products
Other/merchandisebusinesses
Others

1,332

2,861

10,487

9,743

8,073

41,040

1,959

2,000

7,751

Subtotal

11,703

10,073

48,792

Total

82,25960,035

304,911

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. Monetary amounts in the table do not include consumption taxes.

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