Consolidated Financial Results for the Three Months Ended June 30, 2013
<under Japanese GAAP>
August 7, 2013
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:
Shoji Mihara, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
August 12, 2013
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, 2013
(April 1, 2013 – June 30, 2013)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Three months ended

Operating income

Millions of yen% Millions of yen

Ordinary income% Millions of yen

June 30, 2013

60,107

6.4

5,512

51.3

June 30, 2012

56,472

7.6

3,642 (22.1)

7,853

Net income% Millions of yen

%

76.9

5,867

69.0

4,438 (20.4)

3,471(21.5)

Note: Comprehensive income: Three months ended June 30, 2013: -7,142 million yen (– %)Three months ended June 30, 2012: -16,064 million yen (– %)Diluted net
income per share

Net income per share
Three months ended

Yen

Yen

June 30, 2013102.66–

June 30, 2012

60.74

–

(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2013

501,792

395,638

74.5

As of March 31, 2013

525,172

403,625

72.8

Reference: Equity

2.

As of June 30, 2013: 373,792 million yen

As of March 31, 2013: 382,441 million yen

Cash dividends

Fiscal year ended
March 31, 2013
Fiscal year ending
March 31, 2014
Fiscal year ending
March 31, 2014
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

20.00

–

20.00

40.00

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, 2014 (April 1, 2013 – March 31, 2014)(Percentages indicate year-on-year changes.)
Net sales

Operating income

Ordinary income

Net income

Net income pershare

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

For the six months
ending September 30,
2013

99,741

(5.9)

9,294

422.6

12,462

306.9

9,677

–

169.31

Fiscal year ending
March 31, 2014

232,692

0.7

20,72249.0

28,783

2.5

21,511–376.39Note: 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 the section of “(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 restatement of prior period financial
statements after error corrections
a. 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 of prior period financial statements after error corrections: None(4)

Number of issued shares (common stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of June 30, 2013
57,154,776 shares
As of March 31, 2013
57,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2013
2,139 shares
As of March 31, 2013
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2013
57,152,637 shares
Three months ended June 30, 201257,152,637 shares* Indication regarding execution of quarterly review proceduresThis quarterly financial results report is not subject to the quarterly review procedures in accordance with the
Financial Instruments and Exchange Act. At the time of disclosure of this quarterly financial results report, thequarterly review procedures for the quarterly 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 the section of “(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,
2013” on page 4 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On August 7, 2013 (Wednesday), JAPEX plans to post supplementary material on its website.

-2-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2013
(1) Explanation of operating results
During the three months ended June 30, 2013, net sales was at ¥60,107 million, an increase of ¥3,634 million(+6.4%) year on year and gross profit increased by ¥379 million (+2.4%) year on year to ¥15,876 million.
The main factor behind the year-on-year increases in net sales and gross profit was an increase in sales prices
due to the impact of foreign exchange rates.
Exploration expenses decreased by ¥1,360 million (-32.5%) year on year to ¥2,819 million, due to aconsiderable decrease in overseas expenditures, and selling, general and administrative expenses decreasedby ¥129 million (-1.7%) year on year to ¥7,544 million. As a result, operating income increased by ¥1,869
million (+51.3%) year on year to ¥5,512 million.
Ordinary income amounted to ¥7,853 million, increasing ¥3,414 million (+76.9%) year on year, due mainly
to the turnaround from foreign exchange losses in the same period of the previous fiscal year to foreignexchange gains and a decrease in equity in losses of affiliates, which outweighed negative factors such as adecrease in dividends income.
Income before income taxes and minority interests was ¥7,848 million, increasing ¥3,642 million (+86.6%)
year on year mainly due to a decrease in loss on retirement of noncurrent assets. Net income was ¥5,867
million, increasing ¥2,395 million (+69.0%) year on year despite an increase in income taxes.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥47,714 million, an
increase of ¥2,970 million (+6.6%) year on year. This was mainly the result of an increase in net sales ofpurchased crude oil, particularly Sakhalin crude oil, reflecting an increase in sales prices due to a
substantial swing towards yen depreciation in foreign exchange rates, which outweighed sales volume
declines for domestically produced crude oil, bitumen and natural gas.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥1,789 million, an
increase of ¥604 million (+51.0%) 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 and oil products as well as other subcontracted tasks,
came to ¥10,603 million, an increase of ¥60 million (+0.6%) 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 decreased by¥23,380 million to ¥501,792 million. This was mainly due to a drop in investment securities following a fallin the stock prices of INPEX CORPORATION and other companies.
Regarding liabilities and net assets, total liabilities decreased by ¥15,393 million from the previous fiscal
year-end to ¥106,153 million, mainly due to decreases in notes and accounts payable-trade and in deferred tax
liabilities as a result of the aforementioned drop in investment securities. Total net assets decreased by ¥7,986
million to ¥395,638 million as a result of a decrease in valuation difference on available-for-sale securities
exceeding increases in retained earnings and foreign currency translation adjustment.

-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, 2013, and the fiscal year ending March 31, 2014, which were announced on May 10, 2013.
This is the result of an examination made in consideration of the financial results for the three months ended
June 30, 2013.

2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the three months under review
No items 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)because such variance is expected to be almost completely eliminated by the end of 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 and minority
interests for the fiscal year including the three months under review, and next by multiplying the quarterly
income before income taxes and minority interests 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.

-4-3. Consolidated financial statements(1) Consolidated quarterly balance sheets(Millions of yen)
As of March 31, 2013
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
Noncurrent assets
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 noncurrent assets
Total assets-5-

As of June 30, 2013

53,87032,33753,414
4,490
77
7,007
37,479(31)
188,645

61,76029,711
56,533
4,467
273
6,849
23,579(30)
183,145

90,68391,987

10,394
10,394

10,418
10,418177,304
62,806(31)(4,630)235,449
336,526
525,172

153,543
67,356(31)(4,629)216,240
318,646
501,792

(Millions of yen)
As of March 31, 2013
Liabilities
Current liabilities
Notes and accounts payable-trade
Provision
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Other provision
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets-6-

As of June 30, 2013

18,947
170
22,037
41,155

13,058238
21,53834,83524,19731,983
6,938
886
10,8585,526
80,391
121,547

22,86825,0066,612
800
10,6905,338
71,318106,153

14,288291,990(10)306,268

14,288296,714(10)
310,992

78,310226(2,362)
76,173
21,183
403,625
525,172

62,81912(31)62,80021,846395,638501,792

(2) Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)
56,472
40,975
15,497
4,180
7,673
3,642

Net sales
Cost of sales
Gross profit
Exploration expenses
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Loss on valuation of derivatives
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Other
Total extraordinary income
Extraordinary loss
Loss on sales of noncurrent assets
Loss on retirement of noncurrent assets
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in income
Net income-7-(Millions of yen)Three months ended
June 30, 2013
(April 1, 2013 –June 30, 2013)
60,10744,231
15,876
2,819
7,544
5,512

365
1,449
–
215
2,029

629
1,165
588
246
2,630

72
903
–
257
1,234
4,438

58
87
77
66
289
7,853

2
–
2

0
0
0

–
227
6
234
4,206
659
3,546
75
3,471

2
2
–
5
7,848
1,827
6,020
153
5,867

Consolidated quarterly statements of comprehensive income
Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to minority interests

3,546

-8-

(Millions of yen)Three months ended
June 30, 2013
(April 1, 2013 –June 30, 2013)
6,020(21,462)71
1,800(15,492)
(238)
2,529

(20)

38

(19,610)(16,064)(13,163)(7,142)(16,352)(7,505)

288

363

(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, 2013
(April 1, 2013 –June 30, 2013)

Three months ended
June 30, 2012
(April 1, 2012 –June 30, 2012)
Crude oil (kl)E&P

Natural gas(thousand m3)
LNG (t)Bitumen (kl)(Reference)
Fiscal year ended
March 31, 2013
(April 1, 2012 – March 31, 2013)

123,528

105,913482,306(540)(2,620)(5,840)282,176

240,786

1,080,116

(374)

(754)

(1,199)

–

4,389

602

97,15787,785348,948(97,157)(87,785)(348,948)

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, 2012
(April 1, 2012 –June 30, 2012)
AmountVolume(Millions of yen)

E&P

Three months ended
June 30, 2013
(April 1, 2013 –June 30, 2013)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2013
(April 1, 2012 – March 31, 2013)
AmountVolume(Millions of yen)

Crude oil (kl)

376,555

22,296

373,042

25,031

1,335,639

78,834Natural gas(thousand m3)

358,369

15,837

292,993

15,791

1,455,708

69,795

LNG (t)48,0393,828

48,7304,518

229,242

19,098Bitumen (kl)97,1962,781

87,804

2,373

349,198

9,694

Subtotal

44,74347,714

177,423

Contract services
Oil products
Other/merchandisebusinesses
Others

1,185

1,789

9,674

8,623

8,630

36,034

1,919

1,973

7,953

Subtotal

10,543

10,60343,988

Total

56,47260,107231,086

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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