Consolidated Financial Results for the Six Months Ended September 30, 2023
<under Japanese GAAP>
November 10, 2023

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/en/
Representative: FUJITA Masahiro, Representative Director and President
Inquiries:
MATSUMOTO Akinori, General Manager, Corporate Communication OfficeTelephone:+81-3-6268-7111 (from overseas)
Scheduled date to commence dividend payments:
December 12, 2023
Scheduled date to file Quarterly Report:
November 13, 2023
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, 2023
(April 1, 2023 – September 30, 2023)(Percentages indicate year-on-year changes.)
Consolidated operating results (cumulative)
Net sales

Six months ended

Operating profit

Millions of yen% Millions of yen% Millions of yen

150,70824.9

28,501

September 30, 2022

120,708

1.9

19,304 102.3

Note: Comprehensive income: Six months ended September 30, 2023:
Six months ended September 30, 2022:

Basic earnings per share
Six months ended

47.6

39,13570,817 million yen
34,953 million yen% Millions of yen

%

(9.2)

27,770(11.6)

43,084 122.7

31,430–(102.6%)(–%)

Diluted earnings per share

Yen

Yen

September 30, 2023

512.09–September 30, 2022

573.89–Consolidated financial position
Total assets

Reference: Equity

Net assets
Millions of yen%

619,769

515,803

77.8

457,16974.9

568,180

As of September 30, 2023: 482,190 million yen

As of March 31, 2023: 425,632 million yen

Cash dividends

Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024
Fiscal year ending
March 31, 2024
(Forecasts)

Equity ratio

Millions of yen
As of September 30,
2023
As of March 31, 2023

2.

Profit attributable toowners of parent

Ordinary profit

September 30, 2023

(2)

Yes

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen–

150.00–220.00370.00–125.00–125.00250.00Note: Revisions to the latest forecasts of cash dividends: Yes-1-

AnnualYen

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2024 (April 1, 2023 – March 31, 2024)(Percentages indicate year-on-year changes.)

Net sales

Fiscal year ending
March 31, 2024

Operating profit

Ordinary profit

Profit attributable Basic earnings pershare
to owners of parent

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

325,400(3.3)

48,800(21.4)

57,000(31.4)

45,000(33.2)

833.06

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): None

(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, 2023
54,300,076 shares
As of March 31, 2023
54,300,076 sharesb. Number of treasury shares at the end of the period
As of September 30, 2023
65,253 shares
As of March 31, 2023
73,730 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2023
54,229,503 shares
Six months ended September 30, 2022
54,766,817 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, 2023” 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,
2023(1) Explanation of operating results
During the six months ended September 30, 2023, net sales was ¥150,708 million, an increase of ¥30,000
million (+24.9%) year on year. Gross profit was ¥43,304 million, an increase of ¥9,323 million (+27.4%)
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 price of natural gas in Japan as a result of the increase in LNG price, etc., andthe growth of sales volume for crude oil in North America.
Exploration expenses was ¥982 million, a decrease of ¥158 million (-13.9%) year on year. Selling, generaland administrative expenses was ¥13,820 million, an increase of ¥285 million (+2.1%) year on year. As aresult, operating profit was ¥28,501 million, an increase of ¥9,196 million (+47.6%) year on year.
Ordinary profit was ¥39,135 million, a decrease of ¥3,948 million (-9.2%) year on year, due mainly todecreases in share of profit of entities accounted for using equity method and foreign exchange gains.
Profit before income taxes decreased by ¥3,946 million year on year to ¥39,121 million. Profit attributableto owners of parent decreased by ¥3,659 million year on year to ¥27,770 million.
Below is a breakdown of net sales.
(i) E&P BusinessNet sales from the E&P Business came to ¥47,536 million, an increase of ¥33,393 million (+236.1%)
year on year, mainly due to the growth of sales volume for crude oil in North America.
(ii) Infrastructure/Utility BusinessNet sales from the Infrastructure/Utility Business came to ¥74,686 million, a decrease of ¥2,093
million (-2.7%) year on year. This was mainly the result of the decreased sales volume for LNG,
despite factors for increased net sales such as a rise in the selling price of natural gas in Japan due tothe increase in LNG price, etc., and the growth of 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 ¥28,486 million, a decrease of ¥1,300 million (-4.4%) year on year.

(2) Explanation of financial position
Total assets at the end of the second quarter increased by ¥51,589 million from the previous fiscal year-end
to ¥619,769 million.
Current assets decreased by ¥20,716 million from the previous fiscal year-end. This was mainly due todecreases in notes and accounts receivable - trade, and contract assets and raw materials and supplies. Noncurrent assets increased by ¥72,305 million from the previous fiscal year-end. This was mainly due toincreases in the recording of wells, etc. under property, plant and equipment, and a rise in market values ofinvestment securities.
Liabilities decreased by ¥7,044 million from the previous fiscal year-end to ¥103,966 million.
Current liabilities decreased by ¥21,990 million from the previous fiscal year-end. This was due mainly to adecrease in notes and accounts payable - trade. Non-current liabilities increased by ¥14,946 million fromthe previous fiscal year-end. This was mainly due to an increase in deferred tax liabilities resulting from therise in market values of investment securities and other factors.
Net assets increased by ¥58,633 million from the previous fiscal year-end to ¥515,803 million. The main
factor was an increase in valuation difference on available-for-sale securities.

-3-(3) Explanation of consolidated financial forecasts and other forward-looking statements
The consolidated financial forecasts for the fiscal year ending March 31, 2024 have been revised from theforecasts announced on August 9, 2023.
Please refer to the “Notice of Financial Forecasts Revision, Interim Dividend Payout, and Year-end
Dividend Forecast Revision” disclosed on November 10, 2023, the same day of this report.

-4-

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

As of March 31, 2023
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, 2023

191,956

187,239

48,47443,517

3,000
2,216
11
21,613
14,574(54)281,791

3,000
2,744
183
15,7428,701(54)261,075

118,4115,569

143,032
5,569

115,940
46,855(47)(341)
162,407286,388568,180

167,981
42,514(47)(357)
210,091
358,694
619,769(Millions of yen)
As of March 31, 2023
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
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, 2023

26,4899,333
2,331
26,09664,25010,466
9,211
2,178
20,40342,25920,461
3,428
620
20,0432,206
46,759111,01034,0093,437
273
20,586
3,399
61,706
103,966

14,288362,989(136)
377,141

14,288378,742(121)
392,90946,324
(699)
2,275
590
48,491
31,536457,169
568,180

80,14784
8,572
476
89,28033,612515,803619,769

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Six months ended
September 30, 2022
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
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
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent-7-(Millions of yen)Six months ended
September 30, 2023

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

150,708
107,404
43,304982
13,82028,501

406
1,651

985
2,035

6,684

1,270

9,176
6,446
173
24,5406,352–
524
11,167

2
155
250
352
760
43,084

58
159
141
174
533
39,135

–
–

0
0

15
15
43,068
8,970
34,0972,667
31,43013
13
39,121
9,092
30,0292,258
27,770Consolidated quarterly statement of comprehensive income(Millions of yen)Six months ended
September 30, 2022
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-8-

Six months ended
September 30, 2023

34,09730,029(3,378)
(64)
4,036
(117)

33,818
492
6,155
(114)

379

436

855
34,95340,78870,81732,28568,559

2,667

2,257

(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)
No item to report.

(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 3 LLC., an affiliate of JAPEX, became an equity
method affiliate of JAPEX due to its increased material significance.
Effective the second quarter, Longboat JAPEX Norge AS became an equity method affiliate of JAPEX
because JAPEX acquired its shares.

(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)because such variance is expected to be almost completely eliminated by the end of 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.

(Significant subsequent events)
Repurchase and cancellation of own shares

At the Board of Directors meeting held on November 10, 2023, JAPEX resolved to repurchase its own
shares in accordance with the provisions of Article 156 of the Companies Act as applied pursuant to Article
165, paragraph (3) of the same Act, and also resolved to cancel a portion of its own shares in accordancewith the provisions of Article 178 of the Companies Act.
(1) Reasons for the repurchase and cancellation of own shares
JAPEX will carry out the acquisition of its own shares in order to improve capital efficiency andenhance shareholder returns. All of the own shares to be repurchased this time will be cancelled inorder to increase shareholder profits through a decrease in the total number of issued shares.
(2) Details of resolution of the Board of Directors concerning the repurchase of own shares(i) Types of shares to be repurchased
Common shares(ii) Total number of shares to be repurchased
Up to 3 million shares(5.53% of the total number of outstanding shares (excluding treasury shares))(iii) Total value of shares to be repurchased
Up to ¥20 billion(iv) Repurchase period
From November 13, 2023 to August 30, 2024(v) Repurchase method
Market purchases based on the discretionary dealing contract regarding repurchase of own
shares(3) Details of resolution of the Board of Directors concerning the cancellation of own shares(i) Types of shares to be cancelled
Common shares(ii) Total number of shares to be cancelled
All of the shares repurchased as stated in (2) above(iii) Scheduled date of cancellation
September 30, 2024

-9-

3. Supplemental information
Status of production and sales(1) Production
Six months ended
September 30, 2022
(April 1, 2022 –September 30, 2022)
Crude oil (kL)E&P Business
Natural gas(thousand m3)

Six months ended
September 30, 2023
(April 1, 2023 –September 30, 2023)(Reference)
Fiscal year ended
March 31, 2023
(April 1, 2022 –March 31, 2023)

297,110546,545751,616(181,998)(440,374)(518,697)

246,826

255,876

523,998(1,922)(27,541)(14,136)

LNG (t)1,102–
Infrastructure/
Utility Business Electricity
1,206,213
1,717,047(thousand 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.

- 10 -

1,258
2,509,471

(2) Sales

E&P BusinessSix months ended
September 30, 2022
(April 1, 2022 –September 30, 2022)

Six months ended
September 30, 2023
(April 1, 2023 –September 30, 2023)

Sales
volumeSales
volumeNet sales(Millions of yen)

Crude oil (kL)141,842

14,101

650,60347,259695,633

55,703Natural gas(overseas)(thousand m3)

1,494

40

25,790276

11,494360

Subtotal

14,14247,53656,063Natural gas(Japan)(thousand m3)

446,423

35,966

399,748

36,389989,051

97,360

LNG (t)94,053

13,486

61,567

6,049

340,503

51,572

1,452,999

25,251

1,946,513

29,251

3,005,864

58,735

Infrastructure/
Utility Business Electricity(thousand kWh)
Others

2,074

2,996

5,988

76,77974,686

213,657

Contract
services

3,861

3,117

7,750

Oil products/
merchandise

25,03723,75556,573

887

1,612

2,447

Subtotal

29,78628,486

66,771

Total

120,708

150,708

336,492

Subtotal

Other
Businesses

Net sales(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2023
(April 1, 2022 –March 31, 2023)
Sales
Net sales(Millions of yen)volumeOthers

Notes: 1. “Crude oil” includes crude oil that the JAPEX Group produced in oil fields and the crude oil purchased fromother companies.
2. “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.
3. “Others” of the Infrastructure/Utility Business includes commissioned transportation of natural gas and contracted
vaporization of LNG used for power plant fuel, etc.
4. 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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