Consolidated Financial Results for the Three Months Ended June 30, 2022
<under Japanese GAAP>
August 9, 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:–
Scheduled date to file Quarterly Report:
August 10, 2022
Presentation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting (for institutional investors and analysts):
1.
(1)

Yes

(Millions of yen with fractional amounts discarded, unless otherwise noted)

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

Three months ended

Operating profit

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary profit% Millions of yen% Millions of yen%

June 30, 2022

58,61717.0

9,810 188.5

22,600 115.4

15,640 120.1

June 30, 2021

50,083

(1.8)

3,400

10,491

7,106

Note: Comprehensive income: Three months ended June 30, 2022:
Three months ended June 30, 2021:

19,821 million yen
17,818 million yen

Basic earnings per share
Three months ended––(11.2 %)(– %)Diluted earnings per share

Yen

Yen

June 30, 2022

283.66–

June 30, 2021

124.50–(2)–

Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of June 30, 2022

487,596

418,394

79.1

As of March 31, 2022

471,941

402,770

78.7

Reference: Equity

2.

As of June 30, 2022: 385,791 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

110.00–110.00220.00

AnnualYen–

Note: Revisions to the latest forecasts of cash dividends: Yes

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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

275,755

10.7

39,705100.4

50,98816.7

40,007–734.79Note: Revisions to the consolidated financial forecasts most recently announced: Yes

*
(1)

(2)

Notes
Changes in significant subsidiaries during the three months under review (changes in specified subsidiaries
resulting in the change in scope of consolidation): Yes
New inclusion: –Exclusion: one company (Canada Oil Sands Co., Ltd.)
Application of specific accounting for preparing quarterly consolidated financial statements: Yes

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.

(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 June 30, 2022
57,154,776 shares
As of March 31, 2022
57,154,776 sharesb. Number of treasury shares at the end of the period
As of June 30, 2022
2,433,510 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)
Three months ended June 30, 2022
55,136,725 shares
Three months ended June 30, 2021
57,074,794 shares* 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 three months ended June30, 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 three months ended June 30,2022(1) Explanation of operating results
During the three months ended June 30, 2022, net sales was ¥58,617 million, an increase of ¥8,533 million(+17.0%) year on year. Gross profit was ¥16,696 million, an increase of ¥5,517 million (+49.4%) year on
year. Main factors behind the year-on-year increase for net sales and increase for gross profit were upside
performances in sales of crude oil and natural gas in Japan as a result of the rising price of crude oil,despite the revenue-reducing effect of the absence of sales of diluted bitumen as a result of the transfer of
all the shares of Japan Canada Oil Sands (JACOS), which had been a consolidated subsidiary that
promoted the oil sands project in Canada in the previous fiscal year.
Exploration expenses was ¥97 million, a decrease of ¥34 million (-26.1%) year on year. Selling, generaland administrative expenses was ¥6,788 million, a decrease of ¥858 million (-11.2%) year on year. As aresult, operating profit increased by ¥6,410 million year on year to ¥9,810 million.
Ordinary profit increased by ¥12,108 million year on year to ¥22,600 million, due mainly to increases inshare of profit of entities accounted for using equity method and foreign exchange gains.
Profit before income taxes increased by ¥12,108 million year on year to ¥22,598 million. Profit attributableto owners of parent increased by ¥8,533 million year on year to ¥15,640 million.
Below is a breakdown of net sales.
(i) E&P BusinessNet sales from the E&P Business came to ¥7,266 million, a decrease of ¥9,530 million (-56.7%) year
on year, mainly due to the absence of the sales of diluted bitumen resulting from the transfer of all theshares of JACOS, despite a rise in the selling price of crude oil.
(ii) Infrastructure/Utility BusinessNet sales from the Infrastructure/Utility Business came to ¥36,009 million, an increase of ¥12,999
million (+56.5%) 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 ¥15,341 million, an increase of ¥5,064 million (+49.3%) year on year.

(2) Explanation of financial position
At the end of the first quarter, total assets increased by ¥15,654 million from the previous fiscal year-end to¥487,596 million.
Current assets decreased by ¥2,968 million from the previous fiscal year-end. This was mainly due todecreases in notes and accounts receivable - trade, and contract assets, and income taxes refund receivable
included in other, despite an increase in cash and deposits. Non-current assets increased by ¥18,623 million
from the previous fiscal year-end. This was mainly due to an increase in recoverable accounts included inother under investments and other assets, a rise in market values of investment securities, and the recordingof construction in progress, etc. under property, plant and equipment.
Liabilities increased by ¥30 million from the previous fiscal year-end to ¥69,201 million.

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Current liabilities decreased by ¥997 million from the previous fiscal year-end. This was due mainly to adecrease in notes and accounts payable - trade. Non-current liabilities increased by ¥1,027 million from theprevious 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 ¥15,624 million from the previous fiscal year-end to ¥418,394 million. The main
factor was an increase in 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 May 13, 2022.
Please refer to the “Notice of Financial Forecasts Revision, Dividend Forecast Revision and Recording of
Non-operating Income” released on August 9, 2022, the same day of this report.

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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 June 30, 2022

147,241

174,701

47,56426,985

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

3,000
2,180
142
12,202
4,789(51)
223,951

92,837
5,802

96,743
5,779

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

115,827
45,637(45)(297)
161,123
263,645487,596(Millions of yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
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 June 30, 2022

11,4791,905
11,85625,2417,416
1,844
14,98324,244

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

18,131
3,333
516
19,3353,640
44,957
69,201

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

14,2882,607
324,776(6,445)335,227

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

49,271(1,506)
1,392
1,405
50,56332,603418,394
487,596(2) Consolidated quarterly statement of income and Consolidated quarterly statement ofcomprehensive income
Consolidated quarterly statement of income
Three months ended
June 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
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commitment fees
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)Three months ended
June 30, 2022

50,08338,904
11,179
132
7,647
3,400

58,61741,92016,696
97
6,788
9,810

37
48

149
47

3,549

5,988

3,851
178
7,666

6,748
82
13,015

322
73
178
574
10,491

1
76
147
225
22,600

0
0

–
–

1
1
10,489
2,832
7,656
550
7,106

1
1
22,5985,304
17,293
1,653
15,640Consolidated quarterly statement of comprehensive income(Millions of yen)Three months ended
June 30, 2021
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-

Three months ended
June 30, 2022

7,656

17,293

5,274
(307)
5,438
(59)

926
94
1,107
(58)

(184)

458

10,162
17,8182,527
19,821

16,974

18,167843

1,653

(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 June 30, 2022, it acquired 2,355,100 treasury shares.
As a result, treasury shares increased by ¥2,558 million during the three months ended June 30, 2022,
amounting to ¥6,445 million as of June 30, 2022.

(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 first 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)

At the end of the first quarter, the specific dissipation of the COVID-19 pandemic still remains uncertain,
and the impact on economic activities in Japan and overseas has continued. Although the timing COVID19 dissipates is still unknown and difficult to be predicted, we expect that the situation will gradually
recover as time goes by.
Currently, amid economic sanctions against Russia and chaos in the energy market, although the global
prices for crude oil and natural gas are stuck at a high level, we consider there is a possibility that various
structural changes brought about by the prolonged effect of the COVID-19 pandemic and global progress
toward decarbonization could pose risks for future demand for fossil fuels. In light of the changes in thebusiness environment surrounding our company and the trend of rising global carbon prices, our projection
for the medium- to long-term oil price is set at $50 per barrel.
Should assumptions change under such circumstances, we have options involving recoverability ofdeferred tax assets with respect to accounting estimates of high uncertainty. The estimate change resulting
from the above-mentioned hypothetical fluctuations may impact taxable income for the JAPEX Group
including its consolidated subsidiaries, and the amount of deferred tax assets recorded may increase or
decrease.

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

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

191,636

143,592

806,390(118,779)(83,395)(525,392)

256,822

129,753

674,588(129,403)(1,020)(132,025)

246,887–

656,377(246,887)(–)(656,377)

LNG (t)421
249
Electricity(thousand
679,638
546,523
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
Three months ended
June 30, 2021
(April 1, 2021 –June 30, 2021)
Net sales
Sales volume(Millions of yen)

Crude oil (kL)E&PBusiness

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

5,556

79,277

7,251

669,926

41,056

351,045

10,058––959,777

31,121

128,298

1,181

732

14

130,214

1,244

16,796

7,266

73,422Natural gas(Japan)(thousand m3)

233,299

10,709231,801

17,923

1,061,244

58,024

LNG (t)52,567

4,397

49,551

6,062

295,536

22,596

Electricity(thousand kWh)765,257

7,163

665,930

10,986

3,023,294

34,320

Others

739

1,037

4,903

23,00936,009

119,845

1,021

1,173

6,395

8,722

13,75747,354

533

410

2,122

Subtotal

10,277

15,34155,872

Total

50,08358,617249,140

Subtotal

Otherbusinesses(Millions of yen)

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

114,834

Subtotal

Infrastructure/Utility
BusinessThree months ended
June 30, 2022
(April 1, 2022 –June 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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