Consolidated Financial Results for the Nine Months Ended December 31, 2012
<under Japanese GAAP>
February 8, 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:
February 13, 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 nine months ended December 31, 2012
(April 1, 2012 – December 31, 2012)(Percentages indicate year-on-year changes.)
Consolidated operating results (cumulative)
Net sales

Operating income% Millions of yen

Ordinary income% Millions of yen

Net income

Nine months ended

Millions of yen% Millions of yen%

December 31, 2012

164,519

(0.7)

7,477

30.3

11,64440.9(18,083)–

December 31, 2011

165,685

14.7

5,740

(6.6)

8,265

(8.8)

6,264

12.8

Note: Comprehensive income: Nine months ended December 31, 2012: -35,467 million yen (– %)Nine months ended December 31, 2011: -15,604 million yen (– %)Diluted net
income per share

Net income per share
Nine months ended

Yen

Yen

December 31, 2012

(316.41)–

December 31, 2011109.61–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of December 31,
2012

482,790372,300

73.3

As of March 31, 2012

532,890406,773

73.7

Reference: Equity

2.

As of December 31, 2012: 354,110 million yen

As of March 31, 2012: 392,597 million yen

Cash dividends

Fiscal year ended
March 31, 2012
Fiscal year ending
March 31, 2013
Fiscal year ending
March 31, 2013
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

20.00

–

20.00

40.00

–

20.00

–
20.00

40.00

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

-1-

Total
Yen

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2013 (April 1, 2012 – March 31, 2013)(Percentages indicate year-on-year changes.)
Net sales

Fiscal year ending
March 31, 2013

Operating income

Ordinary income

Net income pershare

Net income

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

228,749(0.8)

11,925(20.7)

25,031

13.0(5,152)–(90.15)

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

*
(1)

(2)

Notes
Changes in significant subsidiaries during the nine months under review (changes in specified subsidiaries
resulting in the change in scope of consolidation): None
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 5 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: Yes
b. Changes in accounting policies due to other reasons: Nonec. Changes in accounting estimates: Yes
d. Restatement of prior period financial statements after error corrections: None
Note: Changes regarding change in depreciation method of property, plant and equipment. For details, please refer to the section of “(3)Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error
corrections” of “2. Matters regarding summary information (notes)” on page 5 of the attached material.

(4)

Number of issued shares (common stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of December 31, 201257,154,776 shares
As of March 31, 201257,154,776 sharesb. Number of treasury shares at the end of the period
As of December 31, 2012
2,139 shares
As of March 31, 2012
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 201257,152,637 shares
Nine months ended December 31, 201157,152,663 shares-2-* 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 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) Qualitative information regarding consolidated financial forecasts” of “1.
Qualitative information regarding settlement of accounts for the nine months ended December 31, 2012” onpage 5 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On February 8, 2013 (Friday), JAPEX plans to post supplementary material on its website.
(Significant impairment loss on noncurrent assets)
Owing to a decline in production capacity at the Yufutsu Oil and Gas Field in Tomakomai City, Hokkaido, theCompany reduced the book value of the business assets for production operation at the Oil and Gas Field totheir recoverable value and posted an impairment loss of ¥37,031 million in the six months ended September
30, 2012.

-3-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the nine months ended December 31,
2012(1) Qualitative information regarding consolidated operating results
During the nine months ended December 31, 2012, net sales was at ¥164,519 million, a decrease of ¥1,166
million (-0.7%) year on year. Although an increase in receipt of transportation fee of natural gas had apositive impact, it was outweighed by negative factors including a decline in natural gas sales volume. Grossprofit increased by ¥4,122 million (+11.7%) year on year to ¥39,220 million. This primarily reflected theaforementioned increase in receipt of transportation fee of natural gas and a decrease in cost of sales due todecreased depreciation and amortization and decreased variable cost due to a decline in sales volume ofnatural gas.
Exploration expenses increased by ¥3,449 million (+58.2%) year on year to ¥9,374 million, due to aconsiderable increase in domestic and overseas expenditures, and selling, general and administrative expenses
decreased by ¥1,063 million (-4.5%) year on year to ¥22,369 million. As a result, operating income increasedby ¥1,736 million (+30.3%) year on year to ¥7,477 million.
Ordinary income amounted to ¥11,644 million, increasing ¥3,379 million (+40.9%) year on year, due mainly
to decreases such as a loss on valuation of securities and a loss on sales of securities included in Others in
Non-operating expenses, and the turnaround from foreign exchange losses in the same period of the previous
fiscal year to foreign exchange gains.
Loss before income taxes and minority interests was ¥23,063 million, a ¥31,263 million profit decline year on
year. Although a ¥2,572 million gain on transfer of mining rights by assignment of working interest
pertaining to bitumen of Japan Canada Oil Sands Limited (JACOS) was recorded in extraordinary income inthe six months ended September 30, 2012, this was outweighed by other items including the posting under
extraordinary loss of a ¥37,031 million impairment loss in the same six-month period, on business assets for
production operation at the Yufutsu Oil and Gas Field in Hokkaido, due to a decline in production capacity at
the Oil and Gas Field. Net loss was ¥18,083 million, a profit decline of ¥24,348 million year on year. This
reflected a decrease in income taxes mainly due to the recording of deferred tax assets accompanying the
aforementioned posting of impairment loss.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥129,527 million, adecrease of ¥3,897 million (-2.9%) year on year. Although there were positive factors including an
increase in LNG sales volume and a rise in LNG sales prices, these were outweighed by mainly a decline
in natural gas sales volume.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥3,941 million, an
increase of ¥459 million (+13.2%) 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 ¥31,050 million, an increase of ¥2,271 million (+7.9%) year on year due mainly to an increase inreceipt of transportation fee of natural gas.

(2) Qualitative information regarding consolidated financial position
At the end of the third quarter, as compared to the end of the previous fiscal year, although current assets
increased, total assets decreased by ¥50,100 million to ¥482,790 million due to a decrease in noncurrent
assets. The main changes in current assets were an increase in cash and deposits, an increase in notes andaccounts receivable-trade, and a decrease in short-term loans receivable based on repo transactions includedin the other current assets item. The decrease in noncurrent assets was mainly due to a decrease in property,-4-plant and equipment from the aforementioned posting of impairment loss on business assets at the Yufutsu
Oil and Gas Field in Hokkaido, and a drop in investment securities following a fall in the stock prices of
INPEX CORPORATION and other companies.
Regarding liabilities and net assets, total liabilities decreased by ¥15,627 million from the previous fiscal
year-end to ¥110,490 million, mainly due to decreases in deferred tax liabilities as a result of theaforementioned drop in investment securities and in long-term loans payable exceeding an increase in notes
and accounts payable-trade. Total net assets decreased by ¥34,472 million to ¥372,300 million as a result of adecline in retained earnings resulting from the aforementioned posting of net loss and a decrease in valuationdifference on available-for-sale securities exceeding a rise in minority interests from a third-party allocationof new shares by consolidated subsidiary Japex Garraf Ltd., among others.

(3) Qualitative information regarding consolidated financial forecasts
JAPEX expects that the consolidated financial forecasts for net sales, operating income and ordinary income
for Fiscal 2013 (April 1, 2012 - March 31, 2013) will be higher compared to the previous consolidated
financial forecasts announced on October 26, 2012, and a smaller net loss is now expected. This is mainly due
to an increase in dividends income and a change in the following assumptions based on the most recent Japan
Crude Cocktail (JCC) price and the exchange-rate trend. The JCC price has been revised from $100 per barrel
to $110 per barrel and the foreign exchange rate has been changed from ¥80/$ to ¥85/$ for the forth quarter(January 1, 2013 - March 31, 2013). Please refer to the “Notice of Financial Forecast Revision” released on
the same day of this report, February 8, 2013.

2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the nine 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) 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 and minority
interests for the fiscal year including the nine 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.

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period
financial statements after error corrections
Changes in accounting policies(Changes in accounting policies for items that are difficult to distinguish from changes in accounting
estimates)
Following the revision of the Corporation Tax Act, JAPEX and its domestic consolidated subsidiaries
applied the depreciation method in compliance with the revised Corporation Tax Act to property, plant andequipment acquired on or after April 1, 2012, from the first quarter ended June 30, 2012.
The impact of this change on operating income, ordinary income, and loss before income taxes andminority interests for the nine months under review was immaterial.

-5-3. Consolidated financial statements(1) Consolidated quarterly balance sheets(Millions of yen)
As of March 31, 2012
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment 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-6-

As of December 31, 2012

29,80527,392
51,870
4,407
99
4,952
46,527(1)
165,054

34,51132,791
52,702
4,468
513
5,670
43,706(2)
174,362

132,859

90,750

7,156
7,156

9,708
9,708

192,726
39,725(38)(4,593)
227,820
367,836
532,890

162,216
50,360(32)(4,575)207,969
308,427
482,790

(Millions of yen)
As of March 31, 2012
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-7-

As of December 31, 2012

7,251
216
25,50932,977

13,695
108
24,471
38,274

26,19842,601
7,129
845
9,670
6,695
93,140126,117

22,494
26,247
6,987
839
9,433
6,213
72,215
110,490

14,288294,323(10)
308,601

14,288273,953(10)
288,231

89,36620(5,391)
83,995
14,176
406,773
532,890

70,289352(4,763)65,87918,189372,300
482,790

(2) Consolidated quarterly statements of income and Consolidated quarterly statements ofcomprehensive income
Consolidated quarterly statements of income
Nine months ended
December 31, 2011
(April 1, 2011 –December 31, 2011)
Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
Total exploration expenses
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Other
Total non-operating income
Non-operating expenses
Equity in losses of affiliates
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on transfer of mining rights
Other
Total extraordinary income
Extraordinary loss
Impairment loss
Other
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes
Income (loss) before minority interests
Minority interests in income
Net income (loss)

165,685
130,587
35,098-8-(Millions of yen)
Nine months ended
December 31, 2012
(April 1, 2012 –December 31, 2012)
164,519
125,298
39,2205,924
5,924
23,433
5,740

9,374
9,374
22,369
7,477

1,319
2,370
1,154
4,845

1,449
2,538
1,400
5,388

648
1,671
2,320
8,265

533
687
1,221
11,644

–
140
140

2,572
352
2,924

–
206
206
8,199
1,492
6,707
442
6,264

37,031
601
37,632(23,063)(5,566)(17,497)586(18,083)

Consolidated quarterly statements of comprehensive income
Nine months ended
December 31, 2011
(April 1, 2011 –December 31, 2011)
Income (loss) 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

6,707

-9-

(Millions of yen)
Nine months ended
December 31, 2012
(April 1, 2012 –December 31, 2012)(17,497)(20,079)(17)(1,993)(19,070)
387
730

(221)

(17)

(22,311)(15,604)(17,969)(35,467)(15,740)(36,200)

136

732

(3)

Notes on premise of going concern
No items to report(4)

Notes on significant changes in the amount of shareholders’ equity
No items to report(5)

Other notes(Significant impairment loss on noncurrent assets)
Owing to a decline in production capacity at the Yufutsu Oil and Gas Field in Tomakomai City, Hokkaido,
the Company reduced the book value of the business assets for production operation at the Oil and Gas
Field to their recoverable value and posted an impairment loss of ¥37,031 million for the six months ended
September 30, 2012.

- 10 -

4. Supplemental information
Status of production and sales
1. Production
Nine months ended
December 31, 2012
(April 1, 2012 –December 31, 2012)

Nine months ended
December 31, 2011
(April 1, 2011 –December 31, 2011)(Reference)
Fiscal year ended
March 31, 2012
(April 1, 2011 – March 31, 2012)

396,036361,253

547,777(2,030)(2,882)(2,527)Natural gas(thousand m3)

930,565

806,025

1,288,978(4,151)(866)(4,435)

LNG (t)22,943226

22,943

280,781259,828

382,394(280,781)(259,828)(382,394)

Crude oil (kl)E&P

Bitumen (kl)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. SalesNine months ended
December 31, 2011
(April 1, 2011 –December 31, 2011)
AmountVolumeNine months ended
December 31, 2012
(April 1, 2012 –December 31, 2012)
AmountVolumeCrude oil (kl)

1,121,449

64,415

1,088,919

62,563

1,395,833

80,754Natural gas(thousand m3)

1,214,494

52,082

1,067,339

47,377

1,730,381

74,957

LNG (t)148,311

10,652

159,964

12,922

216,21115,930

Bitumen (kl)281,029

6,274

262,390

6,663

382,378

9,137(Millions of yen)

E&P

Subtotal
Contract services
Otherbusinesses(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2012
(April 1, 2011 – March 31, 2012)
AmountVolume(Millions of yen)

133,424

129,527

180,779

3,481

3,941

8,360

Oil products/merchandise

25,995

25,11236,585

Others

2,784

5,938

4,912

Subtotal

28,77931,05041,497

Total

165,685

164,519

230,638

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.

- 11 -