Consolidated Financial Results for Fiscal Year Ended March 31, 2006
May 15, 2006
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 year-end consolidated accounts: May 15, 2006
U.S. GAAP not applied(Amounts less than one million yen have been omitted)
1. Consolidated Results for Fiscal 2006 (April 1, 2005 – March 31, 2006)(1) Consolidated Operating Results
Net Sales(¥ million)

Operating Income(¥ million)%

Ordinary Income(¥ million)%%

FY2006

138,798

34.6

27,01884.1

31,19064.1

FY2005

103,150

6.7

14,67817.9

19,001

31.3

Net Income

Net Income
per Share

Diluted Net
Income per
ShareOrdinary
Income-to-Total
Assets Ratio

Return on
EquityOrdinary
Income-to-Net
Sales Ratio(¥ million)

%

(¥)

(¥)

%

%

%

20,21652.8

352.11

−

6.0

6.7

22.5

FY2006

FY2005
13,23432.9
230.05
−
5.4
5.9
18.4
(Notes)
1. Equity in net income (loss) of non-consolidated subsidiaries and affiliates: FY2006 (￥587million)
FY2005 ¥116 million
2. Average number of outstanding shares (Consolidated): FY2006: 57,153,733 shares
FY2005: 57,154,118 shares
3. Changes in accounting methods: No
4. Percentage figures for net sales, operating income and other monetary 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

FY2006

Shareholders’ Equity(¥ million)(¥ million)

532,516

386,222

Shareholders’ Equity Ratio

Shareholders’ Equity
per Share

%

(¥)

72.5

FY2005
393,733
293,152(Note) Number of shares issued and outstanding (consolidated) at fiscal year-end:

74.5
FY2006
FY2005

6,756.00
5,127.67
57,153,686
57,153,822(3) Consolidated Cash Flows
Operating Activities

FY2006

Investing Activities

Financing Activities

Cash and Cash Equivalents
at Period-end(¥ million)(¥ million)(¥ million)(¥ million)

32,850(20,063)(6,088)43,082

FY200521,936(15,805)786
34,568(4) Number of Consolidated Subsidiaries and Affiliates
Consolidated subsidiaries: 17 Non-consolidated subsidiaries accounted for by the equity method: 0 Equity-method subsidiaries: 7(5) Changes in Scope of Consolidation and Application of Equity Method
Consolidated subsidiaries (Added): 1 (Excluded): 1 Equity-method affiliates (Added): 0(Excluded): 2
2. Forecasts for Fiscal 2007 (April 1, 2006 – March 31, 2007)
Net Sales

Ordinary Income(¥ million)

Interim Period

Net Income(¥ million)

55,216

9,185

Full Year
123,91024,920(Reference) Estimated net income per share for the year ending March 31, 2007 is ¥301.68.

(¥ million)
6,556
17,242

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. Please refer to the attached materials for more information related to these estimates.

1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 petroleum and natural gas. Guided by this mission, the Company has steadily discovered
petroleum 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 withregard to a stable supply, JAPEX Group is actively focused on constructing a new business model that not only relies
on expanding 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 tochanges 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, and thesale of oil and natural gas.
・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 the medium andlong-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 petroleum 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. Concept and Policies on Lowering an Investment Unit
The company deems that lowering an investment unit promotes broader participation of investors from expanded
range, including individual investors, in the stock market and that it is an effective measure to improve the liquidityof stocks. To implement such measure, the company takes the stock prices, the circulation situation of stocks and the
distribution situation into consideration and will judge it after examining expense to need for and an effectprudentially.

4. Medium-term Business Strategy and Critical Issues
Japan’s energy industry is entering an era of full-scale competition, ushered in by rapid deregulation, beginning withrevisions to the Gas Business Law and the Electric Utility Law. As such, competition is intensifying almost on adaily 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 the “common carrier” concept in gas transmission. Under thisconcept, companies, including JAPEX, that possess gas pipelines above a certain capacity are obligated to open theirpipelines for third-party access. As a result of these and other developments, the Company’s gas business is facing amajor turning point.

2

In the current environment, natural gas, a major earnings base for the JAPEX Group, is drawing significant attention
for its clean energy characteristics. Government efforts to bolster environmental measures in the wake ofenforcement of the Kyoto Protocols, coupled with activities to tackle global warming on the corporate and individuallevel, are likely to continue to drive demand for natural gas. This presents opportunities for JAPEX to further
develop its natural gas business.
Moreover, the mounting concerns over recent escalation in global fuel prices and supply stability, has underscoredthe importance of exploration and development operations. Based on recognition that petroleum will continue to playa critical part and the central role as a primary energy source in Japan. JAPEX Group, for its part, will continue toposition these activities as key elements of its business base. Accordingly, expanding natural gas sales andmaintaining and enlarging reserves of oil and natural gas are critical issues for the Company.

Expanding sales of natural gas and upgrading and expanding the supply system
To cope with the intensifying competitive environment as well as expand sales of environment-friendly natural gas,
the Group is working to construct a natural gas business that seamlessly integrates services and facilities, fromupstream (E&P) through mid-stream (transmission and storage) to downstream (supply to large users and local
distribution companies, or LDCs).
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 is working to expand and upgrade its transmission
network by constructing a new natural gas pipeline, slated for completion in 2006, between the cities of Shiroishi andKoriyama by branching from its Niigata-Sendai pipeline. Furthermore, the Company has determined to commence afull-scale survey on construction of Sendai-Iwaki subsea gas pipeline to supply natural gas to customers along thesouthern coastline of Fukushima Prefecture.
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, Hokuriku, andKyushu regions to supply natural gas to a broader base of customers. To expand supply to users within Hokkaido by
LNG tank containers from its LNG plant in Yufutsu, which is located in the region, JAPEX is taking steps toaugment a liquefaction plant scheduled for completion in fiscal 2008.
Through the ongoing development of its gas operations, JAPEX is targeting natural gas sales volume of 1.7 billion
m3 in fiscal 2008. Moreover, leveraging the Group’s upstream division uniqueness, JAPEX is upgrading its natural
gas transmission and underground storage network organically linking a range of facilities and services in a drive to
put gas operations on a more solid footing.

Conducting efficient E&P and securing new reserves
With its business centered on E&P, the JAPEX Group continually works to maintain and expand its reserves, andstrives to further expand and upgrade its system for providing stable supplies of petroleum and natural gas over thelong term. Specifically, to significantly expand cost-competitive domestic reserves, a key source of earnings, theCompany is conducting exploration, mainly in Niigata, Akita, and Hokkaido prefectures with the aim of adding
substantial new gas reserves. It is also conducting exploration aimed at tapping reserves in areas surrounding existinggas fields. In this way, the Company is able to conduct interlocking, tactical exploration that affords greater
efficiencies.
Furthermore, recognizing the importance of establishing a stable overseas business base from a long-term viewpoint,
the Company will work to increase operating efficiency and carry out exploration in areas identified as key
geographies. Specifically, the Company aims to increase the efficiency of operations and development at fields
where it currently carries out oil and gas production. Moreover, in uncovering new business, the Company seeks toacquire the rights to oil and gas fields that are already on stream, as well as fields that have been discovered but

3remain undeveloped, both of which offer relatively low risk and high early returns, with consideration given to thebalanced preservation of exploration assets over long-term operating periods. From a part of the Company’s move,on Iraq, Japex has stepped up technical cooperation with the Ministry of Oil to establish firm relations with the
Ministry and on Libya, the Company has propelled exploration activities in the blocks granted thtough the tender ofOctober 2005. And further, the Company will continue to secure new projects in its target E&P areas.

Addressing environmental issues
JAPEX, as a company that supplies environment-friendly natural gas, feels an obligation to contribute toenvironmental protection. The Company therefore works to increase internal environmental awareness throughongoing use of internal environment management systems (all company sites have acquired ISO 14001 certification),and to reduce the environmental impact of its business activities. At the same time, JAPEX is contributing toenvironmental activities on the societal level by, among other actions, participating in and funding tree planting
programs in Japan and overseas.
In Japan, emissions rights trading and other new environmental businesses are being steadily generated in an effort tohelp reduce the nation’s greenhouse gas levels. For its part, JAPEX will continue pushing ahead with efforts topromote natural gas use from a variety of angles, and appropriately apply Group technologies in the environment
business field. To this end, the Company is proactively 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, andtechnologies for storing carbon dioxide underground.
The JAPEX Group aims to utilize these activities to further strengthen its operating base and enhance its
competitiveness as well as bolster operating efficiency. The ultimate goal is to achieve sustainable development andmaximize shareholder value.

5. Relationships With Parent Company and Others
JAPEX has no parent company.

4III. Business Results and Financial Position
1. Business Results(1) Overview of the fiscal year ended March 31, 2005
In the fiscal year ended March 31, 2006, the Japanese economy moved onto a firm recovery track, with revitalizationof capital investment in the corporate sector as a result of improvement of corporate earnings, and with individual
consumption maintaining a tendency to steady increase by improvement of employment and household sector.
On the other hand, in the state of petroleum market, from the beginning of the fiscal year international crude oil
prices rose steadily and the yen was shifting in a basic tone of depreciation in the currency market, resulting in a
sharp rise in prices for domestic crude oil. Meanwhile, due to acceleration in the pace of deregulation, domestic
natural gas prices remained still weak 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 fiscal year ended March 31, 2006, consolidated net sales totaled ¥138,796 million, up ¥35,645 million, or
34.6 %, from the previous fiscal year. Driving this growth was the price of crude oil, which stabilized at a high level.
Operating income totaled ¥27,018 million, up ¥12,339 million, or 84.1%, from the previous fiscal year, reflecting
increased sales and a full-year contribution of consolidated overseas project companies, which outweighed a higher
cost of sales and increased exploration expenses. Ordinary income totaled ¥31,190 million, up ¥12,189 million, or
64.1%, from the previous fiscal year.
As a result, consolidated net income totaled ¥20,216 million, up ¥6,981 million, or 52.8%, from the previous fiscal
year.
Base on the above result, the Company plans to pay an annual dividend of ¥40 per share, comprising interim andyear-end dividends of ¥15 and ¥25 per share, respectively, for this fiscal year ended March 31, 2006.

Below is a summary of earnings data for each of the Company’s business division.
(a) E&P Division
The E&P division sells crude oil, natural gas and liquefied natural gas (LNG). Net sales totaled ¥117,504 million, up¥34,537 million, or 41.6%, from the previous fiscal year, reflecting higher crude oil sales on a sharp rise in crude oil
prices.
(b) Contract Services Division
The Contract Services Division accepts orders mainly for drilling projects and geological and geophysical surveys.
Net sales totaled ¥7,148 million, up ¥161 million, or 2.3%, from the previous fiscal year.
(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. Net sales totaled ¥14,143 million, up¥1,765 million, or 14.3%, from the previous fiscal year, reflecting higher sales of petroleum products.

5

(2) Outlook for the fiscal year ending March 31, 2007
For the fiscal year ending March 31, 2007, the Company expects consolidated net sales to decline ¥14.9 billion, or
10.7%, from this fiscal year to ¥1,239 billion, based mainly on projections for lower sales for trading crude oil.
The Company forecasts that ordinary income will decline ¥6.3 billion, or 20.1%, to ¥24.9 billion due largely to lower
sales for overseas crude oil and increased selling, general and administrative (SG&A) expenses. These factors are
expected to offset a firm increase in sales of domestically produced natural gas.
The Company expects net income to decline ¥3.0 billion, or 14.7%, to ¥17.2 billion.
These forecasts were formulated on the following assumptions: 1) a price of US$60/barrel for imported crude oil and2) an exchange rate of ¥110/US$.

2. Financial Condition(1) Overview① Balance sheet
Total assets at the end of this fiscal year stood at ¥532,516 million, an increase of ¥138,783 million, or 35.2%, fromthe previous fiscal year end. This large increase was due chiefly to valuation gains on shares held by JAPEX in
INPEX CORPORATION.
Current assets increased ¥7,532 million, or 10.6%, from the previous fiscal year end, mainly due to increase inaccount receivable and marketable securities.
In fixed assets, property, plant and equipment increased ¥6,178 million, or 6.5%. This increase was mainly due tocapital expenditures such as for the acquisition of gas supply facilities from the city of Tsubame, for drilling
production well, for construction of the Shiroishi-Koriyama pipeline and for the land acquisition for expansion of thecentral terminal of the Yurihara oil and gas field.
Intangible fixed assets declined ¥671 million, or 9.6%. This decrease was due to amortaization of goodwill booked
following the acquisition of additional shares in Canada Oil Sands and other companies.
Investments and others increased ¥125,743 million, or 56.9%. This stemmed from an increase of ¥118,877 million,
or 54.9%, in investments in securities mainly due to valuation gains on shares held in INPEX.
Total liabilities rose ¥47,150 million, or 51.6%, to ¥112,969 million. Despite long-term debt and the current portionof long-term debt declined ¥973 million, or 6.1% in total, deferred tax liabilities at the fiscal year-end increased¥42,343 million, or 91.6% due to recognition of the tax effect on valuation gains on the aforementioned INPEX
shares, compared to the end of the previous fiscal year.
Shareholders’ equity rose ¥93,070 million, or 31.7%, to ¥386,222 million. Retained earnings rose ¥17,978 million,
or 9.4%, to ¥209,095 million, reflecting net income less dividends and other appropriations. Unrealized holding
gains on securities rose ¥73,636 million, or 83.4%, to ¥161,949 million due to valuation gains on shares of INPEX.
As a result, the shareholders’ equity ratio declined from 74.5% to 72.5%, while shareholders’ equity per share
increased from ¥5,127.67 to ¥6,756.00.
Credit guarantees for bank loans taken out by affiliated companies and others, treated as contingent liabilities, rose
¥5,548 million, or 24.3%, to ¥28,341 million.

6

② Cash flows
As of March 31, 2006, cash and cash equivalents totaled ¥43,082 million, up ¥8,514 million, compared to the end of
the previous fiscal year. Below is a summary of cash flows of each activity.
Net cash provided by operating activities was ¥32,850 million, an increase of 49.8%, from the previous fiscal year.
The main components were ¥31,166 million in income before income taxes and minority interests and ¥13,951
million in depreciation and amortization, which outweighed ¥7,515 million in payment of debt guarantees and¥4,766 million in increase in notes and accounts receivable.
Net cash used in investing activities amounted to ¥20,063 million, an increase of 26.9%, from the previous fiscal
year. The main uses were ¥21,042 million in additions to property, plant and equipment and in others.
Net cash used in financing activities amounted to ¥6,088 million. This was mainly attriburable to ¥8,973 million in
the repayment of long-term debt, ¥2,142 in dividend payments, and ¥2,029 in payment of capital reduction forminority interests, while cash increased due to ¥8,000 million in proceeds from long-term debt.

(2) Tend of Cash Flow Indicators
Fiscal Years Ended March 31

2002

2003

2004

2005

2006

Shareholders’ equity ratio (%)
Shareholders’ equity ratio on
mark-to-market basis (%)
Debt repayment period (years)
Interest coverage ratio (times)

75.2

77.1

79.3

74.5

72.5

−

−

96.4

63.6

78.9

1.2
12.5

0.7
34.5

0.5
60.3

0.7
86.8

0.5
188.1

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
* JAPEX listed on the Tokyo Stock Exchange on December 10, 2003.
* The above 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 liabilities shown on the consolidated balance sheets. Interest paid is that shown on the consolidated
statement of cash flows.

73. Risk Factors
The following are a few of the range of different factors that could potentially impact the operating results of the
JAPEX Group. Please be aware that factors with the potential to affect business performance are not limited to those
discussed below.
c Risks associated with business operations
The exploration stage of business operations is inherently highly risky. These operations require substantial
investments and extended timeframes to conduct activities beginning with initial surveys and including exploration
work to the discovery of resources. Furthermore, there are no assurances that oil or gas will be found. Substantial
investments are also required to commercialize newly found reserves, as JAPEX must drill development wells andconstruct production and transmission facilities. Due to these factors, long lead times are typically required from thestart of a particular project until an investment can be recovered and earnings generated. During this period, theoperating environment can undergo any number of changes that may make it difficult to achieve the original
investment goals of the project.
d Factors causing volatility in crude oil sales
JAPEX markets crude oil at international prices. Consequently, the price at which the Company sells crude oil isaffected by market trend , such as the level of output set by OPEC and trends in the international balance of supply
and demand, as well as fluctuations in exchange rates. To reduce associated risks, the Company engages in crude oilswap transactions, although this approach does not entirely eliminate all associated risks.
e 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 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, the deregulation of Japan’s energy markets and other factors carries the risk oflower unit selling prices and lower sales volumes of natural gas.

8

Ⅳ．Consolidated Financial Statements
１．Consolidated Balance Sheets(As of March 31, 2005)
Description(Assets)
Ⅰ Current assets
１．Cash and deposits
２．Notes and accounts receivable
３．Marketable securities
４．Inventories
５．Deferred income taxes
６．Other current assets
Less: Allowance for doubtful receivables
Total current assets
Ⅱ Fixed assets
１．Property, plant and equipment(1) Buildings and structures
Accumulated depreciation(2) Wells
Accumulated depreciation(3) Machinery and equipment
Accumulated depreciation(4) Land(5) Construction in progress(6) Other property, plant and equipment
Accumulated depreciation
Property, plant and equipment, net
２．Intangible fixed assets(1) Goodwill(2) Others
Total intangible fixed assets
３．Investments and others(1) Investments in securities(2) Long-term loans receivable(3) Long-term account receivable(4) Deferred tax assets(5) Others
Less: Allowance for doubtful receivables
Allowance for losses on overseas
investments
Total investments and others
Total fixed assets
Total assets

Amount (¥ million)

32,77813,913
6,688
9,158
706
7,561
(17)
70,788113,155
67,132
31,401
25,28264,09537,775

10,467
7,723（％）

29,63918,713
15,966
8,794
837
4,389
(19)
78,321

116,219
73,31937,012
29,251
68,561
40,274

6,118
26,32011,191
2,536
2,743
94,933

Amount (¥ million)

18.0

46,023

5,082
1,922
7,004

10,906
8,269

（％）

14.7

42,8997,760
28,28613,131
6,396

24.1

2,637
101,112

19.0

1.8

4,132
2,200
6,333

1.2

216,4672,366−
457
10,238(211)

335,345
1,827
9,351
432
9,008
(120)

(8,312)(9,095)221,005
322,944393,733

9(As of March 31, 2006)

56.1
82.0
100.0

346,749
454,195
532,516

65.1
85.3
100.0

(As of March 31, 2005)

Description

Amount (¥ million)(Liabilities)
Ⅰ Current liabilities
１．Notes and accounts payable
２．Current portion of long-term debt
３．Income taxes payable
４．Other current liabilities
Total current liabilities
Ⅱ Long-term liabilities
１．Long-term debt
２．Deferred tax liabilities
３．Accrued retirement benefits for employees
４．Accrued retirement benefits for officers
５．Accrued estimated cost of abandonment of wells
６．Accrual for losses on projects
７．Other long-term liabilities
Total long-term liabilities
Total liabilities

3,047
8,973
992
16,092
29,105(Minority interests)
Minority interests in consolidated subsidiaries(Shareholders’ equity)
Ⅰ Common stock
Ⅱ Retained earnings
Ⅲ Unrealized holding gains on securities
Ⅳ Translation adjustments
Ⅴ Treasury stock
Total shareholders’ equity
Total liabilities, minority interests and shareholders’equity10(As of March 31, 2006)（％）

Amount (¥ million)

（％）

7.4

8,195
−
6,208
11,15725,5614.8

7,000
46,213
3,831
773
2,690
1,688
77
62,27591,38015.8
23.2

15,00088,556
4,735
761
2,943
871
100
112,969
138,531

21.2
26.0

9,199

2.3

7,762

1.5

14,288191,116
88,313(561)(4)
293,152

3.6
48.6
22.4
(0.1)
(0.0)
74.5

14,288209,095
161,949894(4)386,222

2.7
39.2
30.4
0.2
(0.0)
72.5

393,733

100.0

532,516100.0

２．Consolidated Statements of Income
FY2005(Apr. 1, 2004 – Mar. 31, 2005)
Description

Amount (¥ million)

Ⅰ
Ⅱ

Net sales
Cost of sales
Gross profit
Ⅲ Exploration expenses
１．Exploration expenses
２．Exploration subsidies
Ⅳ Selling, general and administrative expenses
Operating income
Ⅴ Non-operating income
１．Interest income
２．Dividend income
３．Gain on sale of securities
４．Equity in profit of non-consolidated subsidiaries andaffiliates
５．Reversal of allowance for losses on overseas
investments
６．Reversal of accrual for losses on projects
７．Exchange gains
８．Other non-operating income
Ⅵ Non-operating expenses
１．Interest expense
２．Loss on sale of securities
３．Loss on redemption of securities
４．Devaluation loss on securities
５．Equity in losses of non-consolidated subsidiaries andaffiliates
６．Provision for accrued estimated cost of abandonmentof wells
７．Provision for allowance for losses on overseas
investments
８．Other non-operating expenses
Ordinary income
Ⅶ Extraordinary gains
１．Reversal of allowance for doubtful receivables
Ⅷ

Extraordinary losses
１．Loss on disposal of fixed assets
２．Earthquake disaster recovery expenses
Income before income taxes and minority interests
Current income taxes
Deferred income taxes
Minority interests
Net income

6,445
(317)

（％）

103,15061,046
42,104

100.0
59.2
40.8

6,127
21,298
14,678

5.9
20.7
14.2

FY2006(Apr. 1, 2005 – Mar. 31, 2006)

10,800(1,122)

1,164
1,669
148

1,367
2,548
222

116

−

1,376

−

957
−
978

814
847
1,426

6,411

6.2

（％）

Amount (¥ million)

261
145
306
121

144
93
0
1

−

587

513

522

−

784

138,796
77,43361,362

100.0
55.8
44.2

9,677
24,66627,018

6.9
17.8
19.5

7,226

5.2

739

2,088
19,001

2.0
18.4

919

3,054
31,190

2.2
22.5

−

−

−

77

77

0.1

871
18,129

0.8
17.6

101
31,166

0.1
22.5

4,270
624
13,234

4.2
0.6
12.8

9,294
1,655
20,216

6.7
1.2
14.6

665
206
1,801
2,469

11

101
−
8,845
448

３．Consolidated Statements of Shareholders’ Equity

Description
Retained earnings
Ⅰ Balance at beginning of year
Ⅱ Add:
１．Net income
Ⅲ Deduct:
１．Cash dividends paid
２．Bonuses to officers(of which to auditors)
３．Effect of change in scope of consolidation
Ⅳ Balance at end of year

FY2005(Apr. 1, 2004 – Mar. 31, 2005)

FY2006(Apr. 1, 2005 – Mar. 31, 2006)

Amount (¥ million)

Amount (¥ million)

180,826
13,234
2,857
86
(3)
−

12

13,234

2,944
191,116

191,116
20,216
2,143
95
(3)
0

20,2162,238
209,095

４．Consolidated Statements of Cash Flows

Description
Ⅰ Operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortaization of goodwill
Loss on devaluation of marketable securities and investments in securities
Increase (decrease) in allowance for doubtful receivables
Increase in provision for accrued retirement benefits for employees
Increase in provision for accrued retirement benefits for officers
Decrease in provision for accrued estimated cost of abandonment of wells
Decrease in provision for allowance for losses on overseas investments and accrual for losses
on projects
Interest and dividend income
Interest expense
Gain on redemption and sales of marketable securities and investments in securities
Loss on redemption and sales of marketable securities and investments in securities
Equity in losses (gains) of unconsolidated subsidiaries and affiliates
Decrease (increase) in notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable
Increase (decrease) in consumption tax payable
Other, net
Subtotal
Payments of debt guarantee
Income taxes paid
Net cash provided by operating activities

FY2005(Apr. 1, 2004 –Mar. 31, 2005)

FY2006(Apr. 1, 2005 –Mar. 31, 2006)

Amount (¥ million)

Amount (¥ million)

18,12914,081
−
121
90
244
76
(12)

31,166
13,951
946
1
(89)
903
(11)
97

(2,173)(30)(2,833)
261
(239)
452
(116)
(1,823)(3,042)
152
783
1,922
26,075−(4,139)21,936(3,916)
144
(428)
94
587
(4,766)
363
6,260
(322)
(2,151)42,799(7,515)(2,432)32,850

(30)
330
(100)
4,220
(11,978)550(586)(14,588)7,435(1,302)561(5,998)
10,536(21,042)79(743)(11,819)
5,792

Ⅱ Investing activities
Investments in time deposits
Proceeds from time deposits
Payments for purchase of marketable securities
Proceeds from redemption and sale of marketable securities
Additions to property, plant and equipment
Proceeds from sales of property, plant and equipment
Additions to intangible fixed assets
Payments for purchase of investments in securities
Proceeds from redemption and sale of investments in securities
Payments for purchase of consolidated subsidiary stock accompanying changes in scope of
consolidation
Increase in loans receivable
Decrease in loans receivable
Interest and dividends received
Other, net
Net cash used in investing activities(2,269)−(1,127)
186
2,815
(662)
(15,805)(3,128)
2,353
4,124
523
(20,063)

Ⅲ Financing activities
Decrease in short-term bank loans
Proceeds from long-term debt
Repayment of long-term debt
Purchase of treasury stock
Cash dividends paid
Dividends paid to minority shareholders
Interest paid
Payment of capital reduction for minority interests
Net cash provided by (used in) financing activities
Ⅳ Effect of exchange rate changes on cash and cash equivalents
Ⅴ Increase in cash and cash equivalents
Ⅵ Cash and cash equivalents at beginning of the period
Ⅶ Increase in cash and cash equivalents due to merger
Ⅷ Decrease in cash and cash equivalents due to exclusion of subsidiaries from consolidation
Ⅸ Cash and cash equivalents at the period-end

(600)
7,000
(2,311)(2)(2,854)
(192)
(252)
−
786
(199)
6,717
27,851−−
34,568(158)
8,000(8,973)(0)(2,142)(609)(174)(2,029)(6,088)1,020
7,720
34,568870(76)
43,08213

V. Status of Production and Sales
1.

Production(1) Oil and Natural Gas Segment
Division

Product

FY 2005(Apr. 1, 2004 – March 31, 2005)

Crude oil

Natural gas
E&P

FY2006(Apr. 1, 2005 – Mar. 31, 2006)

696,814 kl

805,612 kl(101,436)(164,842)

1,091,902 thousand m3

1,279,066 thousand m3(2,904)(62,335)

LNG

19,771 t

25,901 t

Bitumen−449,785 kl(449,785)

LPG

10,338 t

10,737 t

Fuel oil, etc.

49,751 kl

55,719 kl

FY 2005(Apr. 1, 2004 – Mar. 31, 2005)

FY2006(Apr. 1, 2005 – Mar. 31, 2006)

863,241 t−

Other Businesses(2) Geothermal Energy Segment
Division
Geothermal Energy

Product
Steam(Notes)1. The figures in parentheses in E&P 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 energies.
4. Bitumen is heavy oil extracted from oil sands.
5. No steam production was made since this fiscal year due to that Japex Geothermal Kyushu Ltd. assigned its geothermal business to Kyushu
Electric Power Co., Inc. in the previous fiscal year.

142. Sales(1) Oil and Natural Gas Segment
Division

Product

FY 2005(Apr. 1, 2004 – Mar. 31, 2005)
VolumeAmountkl(¥ million)

1,380,337

Crude oil

38,211

thousand m3

Natural gas

kl

1,413,717

4,888

124,736kl−−

Contract Services
Subtotal

448,951

82,966

−

6,987

−

6,987
t

LPG

30,781

117,504
−

7,148

−

7,148

(¥ million)t(¥ million)

1,622

26,234

1,755

kl

4,202

94,430Fuel oil, etc.

6,526

−

kl

Other Businesses

6,252
kl

−

Subtotal

43,539t98,825

Bitumen61,185thousand m

39,867t

LNG(¥ million)

1,485,849
3

1,276,887

E&P

FY2006(Apr. 1, 2005 – Mar. 31, 2006)
VolumeAmount102,125

5,934

Others

−

6,553

−

6,453

Subtotal−

12,378−14,143

Total−

102,332−

138,796(2) Geothermal Energy Segment
Division

Product

FY 2005(Apr. 1, 2004 – Mar. 31, 2005)
VolumeGeothermal Energy

Steam
Total

Amountt

FY2006(Apr. 1, 2005 – Mar. 31, 2006)
Volume(¥ million)

Amountt(¥ million)

813,999

818

−

−

−

818

−

−

(Notes)1. Others in Other Businesses includes revenue from the transmission of third-party gas through JAPEX’s pipeline network and salescommissions.
2. No steam sales was made since this fiscal year due to that Japex Geothermal Kyushu Ltd. assigned its geothermal business to Kyushu
Electric Power Co., Inc. in the previous fiscal year.
3. Monetary amounts in the table do not include consumption tax.

15