Consolidated Financial Results for the Six Months Ended September 30, 2022
<under Japanese GAAP>
November 10, 2022

Note: The following report is a summary of the Japanese-language original.

Company name: Japan Petroleum Exploration Co., Ltd.
Listing:
Prime Market, Tokyo Stock Exchange
Securities code: 1662
URL:
https://www.japex.co.jp/
Representative: FUJITA Masahiro, Representative Director and President
Inquiries:
ASAI Masaru, General Manager, Corporate Communication Office
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to commence dividend payments:
December 12, 2022
Scheduled date to file Quarterly Report:
November 11, 2022
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for institutional investors and analysts):
1.
(1)(Millions of yen with fractional amounts discarded, unless otherwise noted)

Consolidated financial results for the six months ended September 30, 2022
(April 1, 2022 – September 30, 2022)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Six months ended

Operating profit

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary profit% Millions of yen% Millions of yen

September 30, 2022

120,708

1.9

19,304 102.3

43,084 122.7

September 30, 2021

118,507

20.8

9,540

19,349Note: Comprehensive income: Six months ended September 30, 2022:
Six months ended September 30, 2021:

Basic earnings per share
Six months ended–

34,953 million yen(110,004) million yen–%

31,430–(119,676)

–

(– %)
(– %)

Diluted earnings per share

Yen

Yen

September 30, 2022

573.89–September 30, 2021

(2,096.81)

–

(2)

Yes

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2022

509,949

431,832

78.1

As of March 31, 2022

471,941

402,770

78.7

Reference: Equity

2.

As of September 30, 2022: 398,214 million yen

As of March 31, 2022: 371,638 million yen

Cash dividends

Fiscal year ended
March 31, 2022
Fiscal year ending
March 31, 2023
Fiscal year ending
March 31, 2023
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

25.00

–

25.00

50.00

–

150.00–150.00300.00Note: Revisions to the latest forecasts of cash dividends: Yes-1-

AnnualYen

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2023 (April 1, 2022 – March 31, 2023)(Percentages indicate year-on-year changes.)

Net sales

Fiscal year ending
March 31, 2023

Operating profit

Ordinary profit

Profit attributable Basic earnings per
to owners of parent
shareMillionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%Yen

304,56322.2

45,242

128.4

66,951

53.3

53,000–972.52

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

*
(1)

Notes
Changes in significant subsidiaries during the six months under review (changes in specified subsidiaries
resulting in the change in scope of consolidation): Yes
New inclusion: one company (JAPEX Insurance Ltd.)
Exclusion: one company (Canada Oil Sands Co., Ltd.)

Note: For details, please refer to “(3) Notes to quarterly consolidated financial statements (Changes in significant subsidiaries during thesix months under review)” of “2. Consolidated financial statements and significant notes thereto” on page 9 of the attachedmaterial.

(2)

Application of specific accounting for preparing quarterly consolidated financial statements: Yes(3)

Changes in accounting policies, changes in accounting estimates, and restatementa. Changes in accounting policies due to revisions to accounting standards and other regulations: Noneb. Changes in accounting policies due to other reasons: Nonec.
Changes in accounting estimates: None
d. Restatement: None(4)

Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2022
54,300,076 shares
As of March 31, 2022
57,154,776 sharesb. Number of treasury shares at the end of the period
As of September 30, 2022
73,510 shares
As of March 31, 2022
1,518,982 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2022
54,766,817 shares
Six months ended September 30, 2021
57,075,423 shares

Note: For details, please refer to “(3) Notes to quarterly consolidated financial statements (Application of specific accounting for
preparing quarterly consolidated financial statements)” of “2. Consolidated financial statements and significant notes thereto” onpage 9 of the attached material.

* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* Proper use of financial forecasts, and other special matters
The forward-looking statements, including the financial forecasts shown in this document are based on
information currently available to our company and on certain assumptions deemed to be reasonable. As
such, they do not constitute guarantees by our company of future performance. Actual performance and otherresults may differ materially from these forecasts due to various factors.
For the suppositions that form the assumptions for financial forecasts and cautions concerning the use
thereof, please refer to “(3) Explanation of consolidated financial forecasts and other forward-looking
statements” of “1. Qualitative information regarding settlement of accounts for the six months ended
September 30, 2022” on page 4 of the attached material to the quarterly financial results report.

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(Attached Material)
1. Qualitative information regarding settlement of accounts for the six months ended September 30,
2022(1) Explanation of operating results
During the six months ended September 30, 2022, net sales was ¥120,708 million, an increase of ¥2,200
million (+1.9%) year on year. Gross profit was ¥33,980 million, an increase of ¥8,195 million (+31.8%)
year on year. Main factors behind the year-on-year increase for net sales and increase for gross profit
include a rise in the selling prices of crude oil and natural gas in Japan as a result of the rising price of
crude oil and LNG, despite the absence of sales of diluted bitumen as a result of the transfer of all theshares of Japan Canada Oil Sands Limited (JACOS), which had been a consolidated subsidiary to promote
the oil sands project in Canada in the previous fiscal year.
Exploration expenses was ¥1,140 million, an increase of ¥887 million (+351.6%) year on year. Selling,
general and administrative expenses was ¥13,535 million, a decrease of ¥2,455 million (-15.4%) year on
year. As a result, operating profit increased by ¥9,764 million year on year to ¥19,304 million.
Ordinary profit increased by ¥23,734 million year on year to ¥43,084 million, due mainly to an increase inforeign exchange gains and a recording of gain on valuation of derivatives.
Profit before income taxes improved by ¥162,383 million year on year to ¥43,068 million (loss before
income taxes of ¥119,315 million in the same period of the previous fiscal year) due mainly to the absenceof loss on sale of shares of subsidiaries resulting from the transfer of all the shares in JACOS in the same
period of the previous fiscal year, and loss on transfer of interests resulting from the transfer of JAPEXMontney Ltd.’s interest in the shale gas project of North Montney Area in British Columbia, Canada.
Profit attributable to owners of parent improved by ¥151,106 million year on year to ¥31,430 million (lossattributable to owners of parent of ¥119,676 million in the same period of the previous fiscal year).
Below is a breakdown of net sales.
(i) E&P BusinessNet sales from the E&P Business came to ¥14,142 million, a decrease of ¥35,678 million (-71.6%)
year on year, mainly due to the absence of the sales of diluted bitumen resulting from the transfer of all
the shares of JACOS, despite a rise in the selling price of crude oil.
(ii) Infrastructure/Utility BusinessNet sales from the Infrastructure/Utility Business came to ¥76,779 million, an increase of ¥30,397
million (+65.5%) year on year. This was mainly the result of a rise in the selling prices of natural gas(Japan) and electricity due to the rising crude oil price and LNG price, despite the decreased sales
volume for electricity.
(iii) Other Businesses
Net sales from other businesses, such as the contract services (drilling and geological surveys, etc.),
sale of oil products, including liquefied petroleum gas (LPG), fuel oil and the like, as well as othersubcontracted tasks, came to ¥29,786 million, an increase of ¥7,482 million (+33.5%) year on year.

(2) Explanation of financial position
At the end of the second quarter, total assets increased by ¥38,007 million from the previous fiscal yearend to ¥509,949 million.
Current assets increased by ¥10,884 million from the previous fiscal year-end. This was due to an increasein cash and deposits despite a decrease in notes and accounts receivable - trade, and contract assets. Noncurrent assets increased by ¥27,123 million from the previous fiscal year-end. This was mainly due to anincrease in recoverable accounts included in other under investments and other assets, the recording of
construction in progress under property, plant and equipment, and other factors.

-3-

Liabilities increased by ¥8,945 million from the previous fiscal year-end to ¥78,117 million.
Current liabilities increased by ¥9,980 million from the previous fiscal year-end. The main factor was anincrease in income taxes payable. Non-current liabilities decreased by ¥1,034 million from the previous
fiscal year-end. This was mainly due to a decrease in deferred tax liabilities resulting from the fall inmarket values of investment securities and other factors.
Net assets increased by ¥29,061 million from the previous fiscal year-end to ¥431,832 million. The main
factors were increases in foreign currency translation adjustment and retained earnings.

(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts for the fiscal year ending March 31, 2023 have been revised from theforecasts announced on August 9, 2022.
Please refer to the “Notice of Financial Forecasts Revision, Recording of Non-operating Income, Interim
Dividend Payout and Dividend Forecast Revision” disclosed on November 10, 2022, the same day of thisreport.

-4-

2. Consolidated financial statements and significant notes thereto(1) Consolidated quarterly balance sheet(Millions of yen)

As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsSecurities
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
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 September 30, 2022

147,241

176,455

47,56429,567

3,030
2,143
29
12,503
14,458(51)
226,920

3,000
2,447
143
15,596
10,646(51)
237,804

92,8375,802

104,084
5,895

108,91037,812(45)(297)
146,380
245,021471,941

108,750
53,757(45)(297)
162,165
272,144509,949

(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Income taxes payable
Provisions
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Retirement benefit liability
Provisions
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
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 September 30, 2022

11,479
2,196
1,905
9,660
25,241

10,325
9,393
1,878
13,62435,222

16,867
3,376
486
19,5393,659
43,92969,171

16,2603,372
547
19,5303,185
42,895
78,117

14,288
2,607
310,592(3,886)323,602

14,288–335,169(135)
349,322

48,346(1,862)
89
1,464
48,036
31,131
402,770
471,941

44,963(1,683)
4,265
1,346
48,892
33,617
431,832
509,949

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Six months ended
September 30, 2021
Net sales
Cost of sales
Gross profit
Exploration expenses
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Gain on valuation of derivatives
Other
Total non-operating income
Non-operating expenses
Interest expenses
Late charges
Commitment fees
Provision for loss on disaster
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of shares of subsidiaries
Loss on transfer of interests
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent-7-(Millions of yen)Six months ended
September 30, 2022

118,50792,72225,784
252
15,991
9,540

120,708
86,72733,9801,140
13,535
19,304

87
2,186

406
1,651

6,470

6,684

3,941
–
450
13,137

9,176
6,446
173
24,540

1,305
1,087
144
377
412
3,327
19,349

2
–
155
250
352
760
43,084

16
16

–
–

4
94,12244,281
272
138,681(119,315)(484)(118,831)
844(119,676)

15
–
–
–
15
43,068
8,970
34,0972,667
31,430Consolidated quarterly statement of comprehensive income(Millions of yen)Six months ended
September 30, 2021
Profit (loss)
Other 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 of parent
Comprehensive income attributable to non-controllinginterests-8-

Six months ended
September 30, 2022

(118,831)

34,097

9,023
(224)
205
(118)

(3,378)
(64)
4,036
(117)

(58)

379

8,827
(110,004)

855
34,953(110,496)

32,285491

2,667

(3) Notes to quarterly consolidated financial statements(Notes on premise of going concern)
No item to report.

(Notes on significant changes in the amount of shareholders’ equity)

At a meeting of the Board of Directors held on November 9, 2021, JAPEX made a resolution concerning
the repurchase of own shares, and as of September 30, 2022, it acquired 2,854,700 treasury shares.
Consequently, JAPEX acquired treasury shares of ¥4,262 million during the six months ended September
30, 2022.
Also, at a meeting of the Board of Directors held on November 9, 2021, JAPEX made a resolution
concerning the cancellation of own shares, and as of September 30, 2022, it cancelled 2,854,700 treasury
shares. Therefore, as of September 30, 2022, capital surplus, retained earnings and treasury shares
decreased by ¥2,607 million, ¥5,396 million and ¥8,004 million, respectively.

(Changes in significant subsidiaries during the six months under review)

JAPEX Insurance Ltd., has been newly established and included in the scope of consolidation from thesecond quarter of the current fiscal year. In addition, JAPEX Insurance Ltd. qualifies as a specified
subsidiary of JAPEX.

(Changes in the scope of consolidation or the scope of application of the equity method)
Significant changes in the scope of application of the equity method

Effective the first quarter, Abashiri Biomass Power 2 LLC., an affiliate of JAPEX, became an equity
method affiliate of JAPEX due to its increased material significance.

(Application of specific accounting for preparing quarterly consolidated financial statements)
Deferral accounting of cost variance

Cost variance arising from seasonal changes in production level is deferred as current assets (other) andcurrent liabilities (other) because such variance is expected to be almost completely eliminated by the endof the cost accounting period.

Calculation of taxes

For the taxes, JAPEX and some of its consolidated subsidiaries compute first by reasonably estimating theeffective tax rate after applying tax effect accounting against profit before income taxes for the fiscal year
including the second quarter, and next by multiplying the quarterly profit before income taxes by such
estimated effective tax rate.
However, in cases where the calculation of taxes using such estimated effective tax rate yields a result thatis not reasonable to a significant extent, the effective statutory tax rate is used.
Note that income taxes - deferred is included in income taxes.

(Additional information)
Accounting estimates in connection with the spread of novel coronavirus disease (COVID-19)

There are no significant changes in the second quarter of the fiscal year ending March 31, 2023 withrespect to assumptions about the impact of COVID-19 described in (Additional information) of Quarterly
Report for the three months ended June 30, 2022.

(Significant subsequent events)
Business transfer to new company in Sakhalin-1 ProjectThrough its equity method affiliate Sakhalin Oil and Gas Development Co., Ltd. (SODECO), JAPEX has
been participating in the Sakhalin-1 Project, a crude oil and natural gas development project off the coastof Sakhalin Island, Russia. A new business entity Sakhalin-1 Limited Liability Company (hereinafter“LLC”) was established on October 14, 2022, pursuant with the Presidential Decree No. 723 of theRussian Federation on October 7, 2022 and Governmental Decree No. 1808 of the Russian Federation on
October 12, 2022, and the contractual rights and obligations pursuant to the production sharing agreement
were transferred to LLC.
Through permission by the government of the Russian Federation to acquire the shares of LLC according
to its interest ratio, SODECO will be able to continue to participate in the Sakhalin-1 project. We are
currently reviewing the effects for the Sakhalin-1 Project by this event as well as the monetary impacts on
the financial position, operating results, and cash flows for the next quarter and subsequent periods.

-9-

3. Supplemental information
Status of production and sales(1) Production
Six months ended
September 30, 2021
(April 1, 2021 –September 30, 2021)

Six months ended
September 30, 2022
(April 1, 2022 –September 30, 2022)(Reference)
Fiscal year ended
March 31, 2022
(April 1, 2021 – March 31, 2022)

468,284

297,110806,390(327,049)(181,998)(525,392)

371,479

246,826

674,588(129,984)(1,922)(132,025)

656,377–

656,377(656,377)(–)(656,377)

LNG (t)1,717
1,102Electricity(thousand
1,430,044
1,206,213
kWh)
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.

2,136

Crude oil(kL)
E&P
Business

Natural gas(thousand m3)
Bitumen (kL)

Infrastructure/
UtilityBusiness- 10 -

2,655,529

(2) Sales
Six months ended
September 30, 2021
(April 1, 2021 –September 30, 2021)
Net sales
Sales volume(Millions of yen)

Crude oil (kL)E&PBusiness

Dilutedbitumen (kL)Natural gas(overseas)(thousand m3)(Millions of yen)

17,494

141,842

14,101

669,926

41,056

959,777

31,121––

959,777

31,121

128,747

1,204

1,494

40

130,214

1,244

49,82014,14273,422Natural gas(Japan)(thousand m3)

455,915

21,238446,423

35,966

1,061,244

58,024

LNG (t)96,9608,186

94,053

13,486295,536

22,596

1,605,817

14,9981,452,999

25,251

3,023,294

34,320Electricity(thousand kWh)
Others

1,960

2,074

4,903

46,382

76,779

119,845

3,394

3,861

6,395

17,85325,03747,354

1,055

887

2,122

Subtotal

22,30329,78655,872

Total

118,507

120,708

249,140

Subtotal

Otherbusinesses(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2022
(April 1, 2021 – March 31, 2022)
Net sales
Sales volume345,053

Subtotal

Infrastructure/Utility
Business

Six months ended
September 30, 2022
(April 1, 2022 –September 30, 2022)
Net sales
Sales volume

Contract
services
Oil products/merchandise
Others

Notes: 1. “Crude oil” includes crude oil that the JAPEX Group produced in oil fields and the crude oil purchased fromother companies.
2. Diluted bitumen is bitumen diluted by ultra-light crude oil for pipeline transportation.
3. “Natural gas (Japan)” of the Infrastructure/Utility Business refers to gas supplied in Japan via pipeline andcomprises the total of natural gas produced in Japan and regasified LNG. Natural gas (Japan) is classified underthe Infrastructure/Utility Business, since both natural gas produced in Japan and LNG vaporized gas are soldtogether by our company’s supply network, which consists of the natural gas fields in Japan and the LNG
terminals that vaporize gas linked by a pipeline network.
4. “Others” of the Infrastructure/Utility Business includes commissioned transportation of natural gas and contracted
vaporization of LNG used for power plant fuel, etc.
5. Under the Other businesses, “Oil products/merchandise” includes liquefied petroleum gas (LPG), fuel oil, gas oiland kerosene, and “Others” includes other subcontracted tasks.

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