Consolidated Financial Results for the Three Months Ended June 30, 2009
August 7, 2009
Note: The following report is a summary of the Japanese-language original.

Company name:
Listing:
Securities code:
URL:
President:
Inquiries:

Japan Petroleum Exploration Co., Ltd.
Tokyo Stock Exchange, First Section1662
http://www.japex.co.jp/
Osamu Watanabe
Shigeyoshi Hasegawa, Manager, Media Relations, Media & Investor Relations Department
TEL: (03) 6268-7110
Scheduled date to file Quarterly Report:
August 13, 2009
Scheduled date to commence dividend payments: –(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.
(1)Consolidated financial results for the three months ended June 30, 2009
(April 1, 2009 – June 30, 2009)
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, 2009

37,790(36.1)

2,497(45.8)

4,679(15.2)

4,106

(1.8)

June 30, 2008

59,123

–

4,607

–

5,520

–

4,181

–

Net income per share

Diluted net
income per share

Three months ended

Yen

Yen

June 30, 2009

71.85

–

June 30, 2008

73.17

–

(2)

Consolidated financial position
Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

As of June 30, 2009

527,604

398,08274.1

6,844.69

As of March 31, 2009

500,444378,22774.1

6,486.85

Reference: Equity

2.

As of June 30, 2009: 391,194 million yen

As of March 31, 2009: 370,743 million yen

Cash dividends
Cash dividends per share
Record dateFiscal year ended
March 31, 2009
Fiscal year ending
March 31, 2010
Fiscal year ending
March 31, 2010
(Forecast)First quarter

Second quarter

Third quarter

Fiscal year-end

Annual

Yen

Yen

Yen

Yen

Yen

–

20.00

–

20.00

40.00

20.00

–

20.00

40.00

–

Note: Revisions to the forecasts of cash dividends in the current quarter: None

–1–

3.

Consolidated financial forecasts for the fiscal year ending March 31, 2010 (April 1, 2009 – March 31, 2010)(Percentages indicate year-on-year changes.)
Net sales
Millions ofyen

Six months ending
September 30, 2009
Fiscal year ending
March 31, 2010%

Operating income

Ordinary income

Millions ofyenMillions of
yen

%

%

Net income pershare

Net income
Millions of
yen

%

Yen

69,913 (37.0)

1,334 (89.4)

3,043 (77.2)

2,105 (77.5)

36.83

153,422 (24.1)

6,454 (67.9)

10,748 (51.9)

7,744 (38.3)

135.50Note: Revisions to the consolidated financial forecasts in the current quarter: Yes

4.
(1)

OthersChanges in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None

(2)

Application of simplified accounting and special accounting for preparing the quarterly consolidated financial
statements: Yes
Note:

(3)

Changes in accounting policies, procedures, and methods of presentation for preparing the quarterly
consolidated financial statements (changes described in the section of “Changes in significant matters forming
the basis of preparing the quarterly consolidated financial statements”)
a. Changes due to revisions to accounting standards and other regulations: Yes
b. Changes due to other reasons: None
Note:

(4)

For more details, please refer to the section of “4. Others” of “[Qualitative Information and Financial
Statements]” on page 4.

For more details, please refer to the section of “4. Others” of “[Qualitative Information and Financial
Statements]” on page 4.

Number of issued shares (common stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of June 30, 2009
57,154,776 shares
As of March 31, 2009
57,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2009
1,825 shares
As of March 31, 2009
1,783 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
Three months ended June 30, 2009
57,152,961 shares
Three months ended June 30, 2008
57,153,339 shares* Proper use of financial forecasts, and other special matters
Concerning the financial forecasts for the fiscal year ending March 31, 2010, refer to “Notice of Financial
Forecast Revision” released today.
The forecast statements shown in this document are based on information that was available at the time of
preparation. Actual performance may differ materially from these forecasts due to various factors.

–2–

[Qualitative Information and Financial Statements]
1.

Qualitative information regarding consolidated operating results
During the three months ended June 30, 2009, net sales was at ¥37,790 million, a decrease of ¥21,333 million(-36.1%) year on year, as gross profit decreased by ¥5,979 million (-32.1%) year on year to ¥12,675 million.
This decrease in net sales and gross profit compared to the same period of the previous fiscal year is mainly
due to the appreciation of the yen and a drop in crude oil prices.
Exploration expenses decreased by ¥3,296 million (-53.5%) year on year to ¥2,866 million, due to a decline indomestic expenses, and selling, general and administrative expenses also decreased by ¥573 million (-7.3%)
year on year to ¥7,310 million, which is a result of a fall in special petroleum gain levy in China. As a resultof the above, operating income fell ¥2,109 million (-45.8%) year on year to ¥2,497 million.
Ordinary income was ¥4,679 million, a decrease of ¥840 million (-15.2%) year on year due to a turnaround of
foreign exchange losses in the previous fiscal year to gains.
Please note that, because of the increase in the importance of Diamond Gas Netherlands B.V., an affiliate of
JAPEX, it is included in the scope of equity-method applicable companies from the three months ended June30, 2009.
Income before income taxes and minority interests was ¥4,586 million, a decrease of ¥917 million (-16.7%)
year on year, and net income was ¥4,106 million, a decrease of ¥75 million (-1.8%) year on year as a result of
lower income taxes.
Below is a summary of earnings by business division.
(i)

E&P Division
The E&P Division sells crude oil, natural gas, liquefied natural gas (LNG) and bitumen. During the threemonths ended June 30, 2009, this Division posted net sales of ¥34,681 million, down ¥20,276 million(-36.9%) year on year, due to drops in crude oil and bitumen prices.

(ii) Contract Services Division
The Contract Services Division is primarily involved in drilling and geophysical surveys. During thethree months ended June 30, 2009, it recorded net sales of ¥419 million, down ¥84 million (-16.8%) year
on year.
(iii) Other Businesses Division
The Other Businesses Division is primarily involved in the sale of oil products, including liquefied
petroleum gas (LPG) and fuel oil, the transportation of natural gas and oil products on consignment aswell as other subcontracted tasks. During the three months ended June 30, 2009, this Division posted net
sales of ¥2,689 million, down ¥972 million (-26.6%) year on year.

2.

Qualitative information regarding consolidated financial position
Total assets as of June 30, 2009, stood at ¥527,604 million, an increase of ¥27,160 million, from the previous
fiscal year end. This is mainly due to an increase in investment securities due to the rise in the stock price of
INPEX CORPORATION.
Regarding liabilities and net assets, total liabilities was up ¥7,305 million to ¥129,522 million year on year,with total net assets also up ¥19,854 million to ¥398,082 million, mainly due to the increase in deferred tax
liabilities and a greater valuation difference on available-for-sale securities brought upon by the
aforementioned increase in investment securities.

3.

Qualitative information regarding consolidated financial forecasts
The full-year forecast released on May 14, 2009, has been revised. Please refer to the “Notice of Financial
Forecast Revision” released on the same day of this report, August 7, 2009.

–3–

4.

Others(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in
the change in scope of consolidation)
No items to report(2) Application of simplified accounting and special accounting for preparing the 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, the Company and some of its consolidated subsidiaries compute first by reasonably
estimating the effective tax rate after applying tax effect accounting against income before income taxes
and minority interests for the fiscal year including the first quarter under review, and next by multiplying
the quarterly income before income taxes and minority interests by such estimated effective tax rate. Notethat income taxes-deferred is included in income taxes.

(3) Changes in accounting policies, procedures, and methods of presentation for preparing the quarterly
consolidated financial statements•

Changes in accounting standards
Before the change, revenue from construction contracts was recognized on the percent of completion
method for long-term, large-scale projects (lasting one year or more and revenue of ¥3.0 billion or more).
Other projects were treated on the completed contract method. However, from the first quarter ended June30, 2009, the “Accounting Standard for Construction Contracts” (ASBJ Statement No. 15, December 27,2007) and the “Guidance on Accounting Standard for Construction Contracts” (ASBJ Guidance No. 18,
December 27, 2007), are adopted and, concerning the completed portion by the end of the first quarter of
construction contracts started during same, construction projects for which a certainty of completion isrecognized are recorded on the percent of completion method (rate of progress estimated by the cost-ratio
method), and all other projects on the completed contract method.
The effect on net sales, operating income, ordinary income and income before income taxes and minority
interests as a result of the above is immaterial.

–4–5. Consolidated financial statements(1) Consolidated balance sheets(Millions of yen)

As of June 30, 2009

As of March 31, 2009
(Summary)

AssetsCurrent assets
Cash and deposits

24,191

27,702

Notes and accounts receivable-trade

15,053

17,050

Short-term investment securities

12,858

11,510

Merchandise and finished goods

4,432

4,255

561

553

Raw materials and supplies

7,627

6,200

Other

32,23529,859(12)(12)

96,947

97,120142,545

142,767

806

1,063

Other

3,295

3,328

Total intangible assets

4,101

4,392

Investment securities

269,604

241,945

Other

20,59320,091(70)(68)

Allowance for overseas investment loss

(6,118)(5,803)

Total investments and other assets

284,009

256,164

Total noncurrent assets

430,656

403,324

Total assets

527,604

500,444

Work in process

Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Intangible assets
Goodwill

Investments and other assets

Allowance for doubtful accounts–5–

(Millions of yen)

As of June 30, 2009

As of March 31, 2009
(Summary)

Liabilities
Current liabilities
Notes and accounts payable-trade

9,266

6,508

Income taxes payable

285

392

Provision

211

282

Other

13,73916,909Total current liabilities

23,50324,093Long-term loans payable

24,40825,325

Deferred tax liabilities

68,51260,108Provision for retirement benefits

5,960

5,732

Provision for cost of abandonment

5,910

5,725

Other provision

661

694

Other

565

535

Total noncurrent liabilities

106,018

98,123

Total liabilities

129,522

122,216

Capital stock

14,28814,288Retained earnings

259,168

255,499(9)(9)

Total shareholders’ equity

273,447

269,778

Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

121,174

105,430(2)(0)

Foreign currency translation adjustment(3,426)(4,465)

Total valuation and translation
adjustments

117,746

100,964

Minority interests

6,887

7,484

Total net assets

398,082378,227

Total liabilities and net assets

527,604

500,444

Noncurrent liabilities

Net assets
Shareholders’ equity

Treasury stock–6–

(2) Consolidated statements of income(Millions of yen)Three months ended
June 30, 2008
(April 1, 2008 – June 30, 2008)
59,123Three months ended
June 30, 2009
(April 1, 2009 – June 30, 2009)
37,790

Cost of sales

40,46925,115Gross profit

18,654

12,675

Exploration expenses

7,083

2,892

Exploration subsidies

(920)

(25)

Total exploration expenses

6,162

2,866

Selling, general and administrative expenses

7,883

7,310

Operating income

4,607

2,497

1,433

1,527

Equity in earnings of affiliates

637

612

Other

654

708

2,725

2,848

Provision for overseas investment loss–

315

Provision for cost of abandonment

–

193

1,021

–

791

157

Total non-operating expenses

1,812

666

Ordinary income

5,520

4,679

Net sales

Exploration expenses

Non-operating income
Dividends income

Total non-operating income
Non-operating expenses

Foreign exchange losses
Other

Extraordinary income
Reversal of allowance for doubtful
accounts
Gain on prior period adjustment

5

2

–

147

Other

–

0

Total extraordinary income

5

150

20

11

–

231

20

243

5,504

4,586

1,275

355

47

124

4,181

4,106

Extraordinary loss
Loss on retirement of noncurrent assets
Retirement benefit expenses for priorperiods
Total extraordinary losses
Income before income taxes and minority
interests
Income taxes
Minority interests in income
Net income–7–(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

6.

Other information(1) Changes in presentation method(Quarterly consolidated balance sheets)
The “provision for retirement benefits” and “provision for cost of abandonment,” which were included in“provision” of noncurrent liabilities as of June 30, 2008, are presented separately from the first quarter ended
June 30, 2009, because they exceeded 1% of the total of liabilities and net assets. The “provision for
retirement benefits” and “provision for cost of abandonment” included in “provision” of noncurrent liabilities
as of June 30, 2008, amounted to ¥5,427 million and ¥4,139 million, respectively.
(Quarterly consolidated statements of income)The “provision for overseas investment loss” and “provision for cost of abandonment,” which were included
in “other” of non-operating expenses for the three months ended June 30, 2008, are presented separately fromthe three months ended June 30, 2009, because they exceeded 20% of total non-operating expenses. The“provision for overseas investment loss” and “provision for cost of abandonment” included in “other” of nonoperating expenses for the three months ended June 30, 2008, amounted to ¥320 million and ¥138 million,
respectively.

–8–

(2) Status of production and salesa. Production
Oil and natural gas segment
Division

Product

Three months ended
June 30, 2008
(April 1, 2008 – June 30, 2008)

Crude oil (kl)Natural gas(thousand m3)

E&P

LNG (t)Bitumen (kl)Three months ended
June 30, 2009
(April 1, 2009 – June 30, 2009)(Reference)
Fiscal year ended
March 31, 2009
(April 1, 2008 – March 31, 2009)

182,381

147,493748,022(41,565)(18,027)(136,632)

285,962

273,565

1,286,621(13,350）(13,254)(57,843)

7,873

11,236

46,796

106,430

98,597416,369(106,430)(98,597)(416,369)

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.

b.

Sales
Oil and natural gas segment

Division

Product

Three months ended
June 30, 2008
(April 1, 2008 – June 30, 2008)
VolumeE&P

Three months ended
June 30, 2009
(April 1, 2009 – June 30, 2009)

Amount(Millions of yen)

VolumeAmount(Millions of yen)

(Reference)
Fiscal year ended
March 31, 2009
(April 1, 2008 – March 31, 2009)
AmountVolume(Millions of yen)

Crude oil (kl)499,41436,857458,977

16,3481,919,959

102,845Natural gas(thousand m3)

325,699

11,505319,813

13,779

1,485,961

54,126

LNG (t)40,787

2,771

38,816

3,035

177,401

13,412

Bitumen (kl)

106,748

3,822

98,074

1,517

417,423

13,087

Subtotal

54,957

34,681

183,471

Contract services

504

419

4,739

Other businesses

3,661

2,689

13,91659,12337,790202,127

Total

Notes: 1. Other Businesses Division is primarily involved in the sale of oil products, including liquefied petroleum gas (LPG)
and fuel oil, the transportation of natural gas and oil products on consignment as well as other subcontracted tasks.
2. Monetary amounts in the table do not include consumption tax.

–9–