Consolidated Financial Results for the Three Months Ended June 30, 2014
<under Japanese GAAP>
August 7, 2014
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:
August 12, 2014
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, 2014
(April 1, 2014 – June 30, 2014)
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

Net income% Millions of yen%

June 30, 201482,259

36.9

8,131

47.5

13,011

65.7

9,987

70.2

June 30, 2013

60,107

6.4

5,512

51.3

7,853

76.9

5,867

69.0

Note: Comprehensive income: Three months ended June 30, 2014:
Three months ended June 30, 2013:17,871 million yen (– %)-7,142 million yen (– %)Diluted net
income per share

Net income per share
Three months ended

Yen

Yen

June 30, 2014174.75–June 30, 2013102.66–(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2014

675,434

514,127

65.4

As of March 31, 2014

663,038

496,915

63.7

Reference: Equity

2.

As of June 30, 2014: 441,635 million yen

As of March 31, 2014: 422,336 million yen

Cash dividends

Fiscal year ended
March 31, 2014
Fiscal year ending
March 31, 2015
Fiscal year ending
March 31, 2015
(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

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, 2015 (April 1, 2014 – March 31, 2015)(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,
2014

157,51431.0

14,33924.2

20,1591.3

13,597(14.4)

237.91

Fiscal year ending
March 31, 2015

323,633

17.0

33,07734.3

41,469(5.5)

27,379(5.6)

479.04

Note: 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 “(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 June 30, 2014
57,154,776 shares
As of March 31, 2014
57,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2014
2,139 shares
As of March 31, 2014
2,139 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2014
57,152,637 shares
Three months ended June 30, 2013
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 three months ended June 30, 2014” onpage 3 of the attached material to the quarterly financial results report.
(Method of accessing supplementary material on quarterly financial results)
On August 7, 2014 (Thursday), JAPEX plans to post supplementary material on its website.

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(Attached Material)
1. Qualitative information regarding settlement of accounts for the three months ended June 30, 2014
(1) Explanation of operating results
During the three months ended June 30, 2014, net sales was at ¥82,259 million, an increase of ¥22,151
million (+36.9%) year on year. Gross profit increased by ¥3,202 million (+20.2%) year on year to ¥19,078
million. The main factors behind the year-on-year increases in net sales and gross profit were increases insales volumes of crude oil from overseas and natural gas overseas and a rise in sales prices of domestic
natural gas.
Although overseas exploration expenses increased, domestic exploration expenses decreased, and as a result
exploration expenses decreased by ¥361 million (-12.8%) year on year to ¥2,458 million. Selling, general andadministrative expenses increased by ¥945 million (+12.5%) year on year to ¥8,489 million. As a result,operating income increased by ¥2,618 million (+47.5%) year on year to ¥8,131 million.
Ordinary income amounted to ¥13,011 million, an increase of ¥5,157 million (+65.7%) year on year, mainly
because of an increase in share of profit of entities accounted for using equity method.
Income before income taxes and minority interests increased by ¥5,200 million (+66.3%) year on year to¥13,048 million. After deducting income taxes and minority interests in income, net income came to ¥9,987
million, an increase of ¥4,120 million (+70.2%) 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 ¥69,224 million, an
increase of ¥21,510 million (+45.1%) year on year. This was mainly the result of increases in sales
volumes of crude oil from overseas and natural gas overseas and a rise in sales prices.
(ii) Contract Services
Net sales from contract services (involved in drilling and geological surveys) came to ¥1,332 million, adecrease of ¥457 million (-25.6%) 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 ¥11,703 million, an increase of ¥1,099 million (+10.4%) 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 increased by¥12,396 million to ¥675,434 million. The main increases were ¥25,653 million in investment securities
mainly due to stock price rises and ¥11,062 million in property, plant and equipment, and the main decreases
were ¥15,037 million in cash and deposits and ¥11,284 million in other under investments and other assets.
Total liabilities decreased by ¥4,816 million from the previous fiscal year-end to ¥161,306 million. The mainincrease was ¥7,169 million in deferred tax liabilities and the main decrease was ¥11,055 million in notes andaccounts payable - trade.
Total net assets increased by ¥17,212 million from the previous fiscal year-end to ¥514,127 million. The mainincreases were ¥14,762 million in valuation difference on available-for-sale securities and ¥9,856 million inretained earnings, and the main decreases were ¥5,336 million in foreign currency translation adjustment and¥2,086 million in minority interests.

(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, 2014, and the fiscal year ending March 31, 2015, which were announced on May 12, 2014.
This is the result of an examination made in consideration of the financial results for the three months ended
June 30, 2014.
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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) 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 first quarter ended June 30, 2014, and next by multiplying thequarterly 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
Changes in accounting policies(Application of Accounting Standard for Retirement Benefits and its Guidance)
For the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17, 2012) and the“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012), theCompany has applied the provisions set forth in the main clauses of Paragraph 35 of the AccountingStandard for Retirement Benefits and Paragraph 67 of the Guidance on Accounting Standard for
Retirement Benefits from the first quarter ended June 30, 2014, and reviewed the determination ofretirement benefit obligations and current service cost. Accordingly, the Company changed the method of
attributing expected benefit to periods from the straight-line basis to the benefit formula basis as well as
amended the calculating method of the discount rate.
Application of the Accounting Standard for Retirement Benefits and its Guidance is in line with thetransitional measures provided in Paragraph 37 of the Accounting Standard for Retirement Benefits. In
accordance with such measures, the effect of the change in the determination of retirement benefit
obligations and current service cost has been added to or deducted from retained earnings as of the
beginning of the first quarter ended June 30, 2014.
As a result of this change, as of the beginning of the first quarter ended June 30, 2014, net defined benefit
liability decreased ¥1,874 million and retained earnings increased ¥1,297 million. In addition, the effect ofthese changes on operating income, ordinary income and income before income taxes and minority
interests for the three months ended June 30, 2014 is immaterial.
.

-4-3. Consolidated financial statements(1) Consolidated quarterly balance sheet(Millions of yen)
As of March 31, 2014
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 June 30, 2014

81,031
37,222
41,203
4,653
128
6,285
24,731(48)
195,209

65,99436,352
43,5384,468
214
10,337
21,915(45)
182,774

88,541
112,011200,552

90,837
120,778
211,615

11,365
11,365

11,405
11,405

190,765
69,468(39)(4,284)
255,910
467,828
663,038

216,418
58,184(39)(4,924)
269,639492,659
675,434

(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
Other provision
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
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
Minority interests
Total net assets
Total liabilities and net assets-6-

As of March 31, 2014

As of June 30, 2014

23,61028,169370
31,30483,454

12,55431,354337
32,14876,396

21,63632,509936
6,845
16,001
4,738
82,668
166,123

19,48339,679881
4,695
15,582
4,588
84,910161,306

14,288318,433(10)
332,711

14,288328,289(10)
342,567

84,856

99,619

(56)
5,166
(340)
89,62474,579496,915
663,038

(72)
(170)
(307)
99,06772,492
514,127
675,434

(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Three months ended
June 30, 2013
(April 1, 2013 –June 30, 2013)
60,10744,231
15,876

Net 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
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodLoss on valuation of derivatives
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 sales of non-current assets
Loss on retirement of non-current assets
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, 2014
(April 1, 2014 –June 30, 2014)82,25963,18019,078

2,819
–
2,819
7,544
5,512

2,492
(34)
2,458
8,489
8,131

629
1,165

579
1,037

–

3,956

588
246
2,630

–
212
5,786

58

150

87

–

77

0

–

640

66
289
7,853

115
906
13,011

0
–
0
0

–
42
0
42

2
2
5
7,848
1,827
6,020
153
5,867

–
4
4
13,0482,263
10,785798
9,987

Consolidated quarterly statement of comprehensive income
Three months ended
June 30, 2013
(April 1, 2013 –June 30, 2013)
6,020

Income before minority interests
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 ofparentComprehensive income attributable to minority
interests-8-(Millions of yen)Three months ended
June 30, 2014
(April 1, 2014 –June 30, 2014)
10,785(15,492)
(238)
2,529
–

14,762
65(7,588)
32

38

(187)

(13,163)(7,142)

7,085
17,871(7,505)

19,430363(1,559)(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, 2014
(April 1, 2014 –June 30, 2014)

Three months ended
June 30, 2013
(April 1, 2013 –June 30, 2013)
Crude oil (kl)E&P

Natural gas(thousand m3)
LNG (t)Bitumen (kl)(Reference)
Fiscal year ended
March 31, 2014
(April 1, 2013 – March 31, 2014)

105,913466,037

828,870(2,620)(363,367)(424,040)

240,786

313,916

1,104,533(754)(89,341)(170,549)

4,389

–

12,23587,78583,676

344,757(87,785)(83,676)(344,757)

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

E&P

Three months ended
June 30, 2014
(April 1, 2014 –June 30, 2014)
AmountVolume(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2014
(April 1, 2013 – March 31, 2014)
AmountVolume(Millions of yen)

Crude oil (kl)373,042

25,031

605,757

42,707

1,559,888

108,408

Natural gas(thousand m3)

292,993

15,791

382,110

18,772

1,418,963

71,584

LNG (t)48,7304,518

46,582

4,948

268,510

26,202

Bitumen (kl)87,804

2,373

84,297

2,795

342,565

10,962

Subtotal

47,714

69,224217,157

Contract services
Oil products
Other/merchandisebusinesses
Others

1,789

1,332

8,740

8,630

9,743

42,860

1,973

1,959

7,830

Subtotal

10,603

11,70350,691

Total

60,107

82,259276,588

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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