Consolidated Financial Results for the Six Months Ended September 30, 2015
<under Japanese GAAP>
November 6, 2015
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:
Samdeck Nakamoto, General Manager, Media and Investor Relations Department
TEL: +81-3-6268-7110 (from overseas)
Scheduled date to file Quarterly Report:
November 11, 2015
Scheduled date to commence dividend payments:
December 2, 2015
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for analysts and institutional investors): Yes(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the six months ended September 30, 2015
(April 1, 2015 – September 30, 2015)
Consolidated operating results (cumulative)(Percentages indicate year-on-year changes.)
Net sales

Six months ended

Operating income

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary income% Millions of yen% Millions of yen%

September 30, 2015

124,157 (15.5)

5,407(64.2)

8,842(64.3)

7,963(57.8)

September 30, 2014

146,850

15,11030.9

24,73624.3

18,87318.8

22.1

Note: Comprehensive income: Six months ended September 30, 2015: (22,665) million yen (– %)Six months ended September 30, 2014: 30,375 million yen (151.7 %)Net income per share
Six months ended

Diluted net income per share
Yen

Yen

September 30, 2015139.34–September 30, 2014330.23–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2015

720,989

524,678

61.2

As of March 31, 2015

736,862

540,647

62.5

Reference: Equity

2.

As of September 30, 2015: 441,294 million yen

As of March 31, 2015: 460,398 million yen

Cash dividends

Fiscal year ended
March 31, 2015
Fiscal year ending
March 31, 2016
Fiscal year ending
March 31, 2016
(Forecasts)

First quarter
Yen

Second quarter
Yen

Annual dividends
Third quarter
Yen

Fiscal year-end
Yen

–

25.00

–

25.00

50.00

–

25.00
–

25.00

50.00

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, 2016 (April 1, 2015 – March 31, 2016)(Percentages indicate year-on-year changes.)
Net sales

Fiscal year ending
March 31, 2016

Operating income

Profit attributable
Ordinary income to owners of parent

Net income pershare

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

257,724(15.5)

8,679(73.0)

5,877(89.3)

6,970(76.4)

121.95

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
Note: For details, please refer to “(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 restatementa. 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: None
d. Restatement: None
Note: For details, please refer to “(3) Changes in accounting policies, changes in accounting estimates, and restatement” of “2. Mattersregarding summary information (notes)” on page 4 of the attached material.

(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, 2015
57,154,776 shares
As of March 31, 2015
57,154,776 sharesb. Number of treasury shares at the end of the period
As of September 30, 2015
2,139 shares
As of March 31, 2015
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2015
57,152,637 shares
Six months ended September 30, 2014
57,152,637 shares* Indication regarding execution of quarterly review procedures
At the time of disclosure of this quarterly financial results report, the quarterly review procedures for thequarterly 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 “(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, 2015” onpage 4 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
JAPEX plans to hold a presentation meeting for institutional investors and analysts on November 9, 2015.
JAPEX plans to post the material distributed at this presentation meeting on its website promptly after the
meeting is held.

-2-

(Attached Material)
1. Qualitative information regarding settlement of accounts for the six months ended September 30,
2015(1) Explanation of operating results
During the six months ended September 30, 2015, net sales was at ¥124,157 million, a decrease of ¥22,692
million (-15.5%) year on year. Gross profit decreased by ¥8,106 million (-23.5%) year on year to ¥26,408
million. The main factors behind the year-on-year decreases in net sales and gross profit were falls in sales
prices of domestically produced crude oil, overseas crude oil and natural gas, and a decrease in sales volume
of domestically produced crude oil.
Exploration expenses increased by ¥1,509 million (+46.3%) year on year to ¥4,769 million. This was theresult of a considerable increase in overseas expenditures. Selling, general and administrative expenses
increased by ¥87 million (+0.5%) year on year to ¥16,231 million. As a result, operating income decreased by¥9,703 million (-64.2%) year on year to ¥5,407 million.
Ordinary income amounted to ¥8,842 million, a decrease of ¥15,894 million (-64.3%) year on year. This was
mainly because of a decrease in share of profit of entities accounted for using equity method, and theturnaround from foreign exchange gains in the same period of the previous fiscal year to foreign exchange
losses.
Income before income taxes decreased by ¥15,980 million (-64.6%) year on year to ¥8,770 million. Profit
attributable to owners of parent came to ¥7,963 million, a decrease of ¥10,910 million (-57.8%) year on year.
Below is a breakdown of sales.
(i) E&P
Net sales from E&P (including liquefied natural gas (LNG) and bitumen) came to ¥98,113 million, adecrease of ¥22,301 million (-18.5%) year on year. This was mainly the result of fall in sales price and adecrease in sales volume of domestically produced crude oil.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥5,542 million, an
increase of ¥2,292 million (+70.5%) 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, etc., as well as other subcontracted tasks, came to¥20,500 million, a decrease of ¥2,683 million (-11.6%) year on year.

(2) Explanation of financial position
At the end of the second quarter, as compared to the end of the previous fiscal year, total assets decreased by¥15,873 million to ¥720,989 million. The main factor behind this decrease was a decrease of ¥14,771 million
in total current assets partly due to a decrease in cash and deposits, and a decrease of ¥ 21,530 million in total
investments and other assets partly due to a decrease in investment securities, despite an increase of ¥20,441
million in total property, plant and equipment partly due to an increase in construction in progress.
Total liabilities increased by ¥95 million from the previous fiscal year-end to ¥196,310 million. The main
factor behind this increase was an increase of ¥68,927 million in total non-current liabilities partly due to anincrease in long-term loans payable, despite a decrease of ¥68,831 million in total current liabilities partly due
to a decrease in short-term loans payable.
Total net assets decreased by ¥15,968 million from the previous fiscal year-end to ¥524,678 million. The
main factor behind this decrease was a decrease of ¥20,203 million in valuation difference on
available-for-sale securities, and a decrease of ¥ 5,542 million in foreign currency translation adjustment,
despite an increase of ¥6,534 million in retained earnings.

-3-(3) Explanation of consolidated financial forecasts and other forward-looking statements
JAPEX expects that the consolidated financial forecasts for net sales, operating income, ordinary income andprofit attributable to owners of parent for the fiscal year ending March 31, 2016 will be lower compared tothe previous financial forecasts announced on May 12, 2015. This is mainly due to the expectation thatweaker sales prices for crude oil and natural gas overseas will cause lower revenues and the expected
recognition of exchange differences on foreign currency denominated liabilities as a non-operating expense.
Our revised consolidated financial forecasts are based on the revised Japan Crude Cocktail (JCC) price andforeign exchange rate assumptions of $50 per barrel and ¥120/$, respectively, for the third quarter andbeyond (October 2015 to March 2016), reflecting the recent trend of oil prices and foreign exchange rate.
Please refer to the "Notice of Financial Forecast Revision" released on the same day of this report, November
6, 2015.

2. Matters regarding summary information (notes)(1) Changes in significant subsidiaries during the six months under review
No item 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 for the fiscal year
including the second quarter, and next by multiplying the quarterly income 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.

(3) Changes in accounting policies, changes in accounting estimates, and restatement
Changes in accounting policies(Application of Accounting Standard for Business Combinations, etc.)
Effective from the first quarter ended June 30, 2015, the Company has applied the “Accounting Standard
for Business Combinations” (ASBJ Statement No. 21, September 13, 2013), the “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22, September 13, 2013), the “AccountingStandard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013), etc. As a result, themethod of recording the amount of difference caused by changes in the Company’s ownership interests in
subsidiaries in the case of subsidiaries under ongoing control of the Company was changed to one in which
it is recorded as capital surplus, and the method of recording acquisition-related costs was changed to one
in which they are recognized as expenses for the fiscal year in which they are incurred. Furthermore, forbusiness combinations carried out on or after the beginning of the first quarter ended June 30, 2015, theaccounting method was changed to one in which the reviewed acquisition cost allocation resulting from thefinalization of the provisional accounting treatment is reflected in the quarterly consolidated financial
statements for the quarterly period to which the date of business combination belongs. In addition, thepresentation method for “Net income” and other related items was changed, and the presentation of“Minority interests” was changed to “Non-controlling interests.” To reflect these changes, the Company
has reclassified its quarterly and full-year consolidated financial statements for the six months of theprevious fiscal year and the previous fiscal year.
Application of the Accounting Standard for Business Combinations, etc. is in line with the transitional
measures provided for in paragraph 58-2 (4) of the Accounting Standard for Business Combinations,paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and paragraph 57-4
(4) of the Accounting Standard for Business Divestitures. The Company is applying the said standard, etc.
prospectively from the beginning of the first quarter ended June 30, 2015.
As a result of this change, the effect of these changes on operating income, ordinary income and income
before income taxes for the six months ended September 30, 2015 and on capital surplus at the end of thesecond quarter ended September 30, 2015 is immaterial.
-4-3. Consolidated financial statements(1) Consolidated quarterly balance sheet(Millions of yen)

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
Non-current assets
Property, plant and equipment
Construction in progress
Other, net
Total 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 non-current assets
Total assets-5-

As of March 31, 2015

As of September 30, 2015

92,95625,24845,605
4,551
250
7,488
22,430(38)
198,492

75,75621,806
62,140
4,605
311
5,272
13,858(31)
183,721132,122
157,595
289,718

151,318
158,842
310,160

9,949
9,949

9,936
9,936

187,926
54,140(47)(3,317)
238,701
538,369
736,862

160,224
60,189(54)(3,187)217,171537,268
720,989

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Provision
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Deferred tax liabilities
Provision
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
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 March 31, 2015

As of September 30, 2015

6,728
50,809311
55,019112,868

8,398
–
189
35,44844,036

20,72636,657
1,005
3,534
17,475
3,946
83,346196,21498,36328,764214
3,451
17,233
4,245
152,273
196,310

14,288–346,441(10)
360,719

14,288
157
352,976(10)
367,411

86,17465,9703
12,980521
99,67880,249540,647
736,862

(52)
7,437
528
73,883
83,384
524,678
720,989

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Six months ended
September 30, 2014
(April 1, 2014 –September 30, 2014)
146,850
112,334
34,515Net sales
Cost of sales
Gross profit
Exploration expenses
Exploration expenses
Exploration subsidies
Total exploration expenses
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision for allowance for losses on overseas
investments
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Other
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-7-(Millions of yen)Six months ended
September 30, 2015
(April 1, 2015 –September 30, 2015)
124,157
97,74826,408

3,387
(126)
3,260
16,143
15,110

4,791
(21)
4,769
16,231
5,407

1,154
1,104

800
1,046

7,187

2,350

1,204
10,651

424
4,622

318
–

392
593

558

–

148
1,026
24,736

201
1,187
8,842

–
42
0
42

0
–
–
0

28
–
28
24,750
4,781
19,968
1,095
18,873

71
1
72
8,770
3,660
5,109
(2,853)
7,963

Consolidated quarterly statement of comprehensive income

Six months ended
September 30, 2014
(April 1, 2014 –September 30, 2014)
19,968

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 ofparentComprehensive income attributable tonon-controlling interests-8-(Millions of yen)Six months ended
September 30, 2015
(April 1, 2015 –September 30, 2015)
5,109

15,483
6(5,084)37(20,205)(55)(7,512)
6

(35)

(9)

10,40630,375(27,775)(22,665)

30,805(17,480)(430)(5,185)(3)Notes to 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-9-4. Supplemental information
Status of production and sales
1. Production
Six months ended
September 30, 2014
(April 1, 2014 –September 30, 2014)
Crude oil (kl)E&P

Natural gas(thousand m3)
LNG (t)Bitumen (kl)Six months ended
September 30, 2015
(April 1, 2015 –September 30, 2015)(Reference)
Fiscal year ended
March 31, 2015
(April 1, 2014 – March 31, 2015)

959,072

882,059

1,990,143(759,035)(704,192)(1,601,853)

627,616684,307

1,302,003(194,138)(280,533)(436,841)

894

250

1,000

152,305

142,664

332,757(152,305)(142,664)(332,757)

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. SalesSix months ended
September 30, 2014
(April 1, 2014 –September 30, 2014)
AmountVolume(Millions of yen)

E&P

Six months ended
September 30, 2015
(April 1, 2015 –September 30, 2015)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2015
(April 1, 2014 – March 31, 2015)
AmountVolume(Millions of yen)

Crude oil (kl)954,605

68,118

1,336,750

54,2202,064,266

121,240Natural gas(thousand m3)

775,20737,458820,504

33,031

1,710,779

83,974

LNG (t)88,7499,455

81,8987,934

274,044

28,311

Bitumen (kl)152,709

5,382

143,2882,927

332,342

12,105

Subtotal

120,415

98,113245,631

Contract services
Oil products
Other/merchandisebusinesses
Others

3,250

5,542

10,487

19,55016,14041,040

3,633

4,360

7,751

Subtotal

23,18420,50048,792

Total

146,850

124,157

304,911

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.

- 10 -