Consolidated Financial Results for Fiscal Year Ended March 31, 2008
May 15, 2008
Note: The following report is a summary of the Japanese-language original.
Company Name: Japan Petroleum Exploration Co., Ltd.
Stock Listing: Tokyo Stock Exchange
Company Code: 1662
(URL: http://www.japex.co.jp/)
President: Yuji Tanahashi
Inquiries: Shigeyoshi Hasegawa, Manager, Media Relations, Media and Investor Relations Department TEL: (03) 6268-7110
Scheduled date for ordinary general shareholders’ meeting: June 25, 2008
Scheduled date for commencement of dividend payment: June 26, 2008
Scheduled date for filing Securities Report: June 26, 2008(*In this report, amounts less than one million yen have been omitted.)
1. Consolidated Results for Fiscal 2008 (April 1, 2007 – March 31, 2008)(1) Consolidated Operating Results
Note: Percentages indicate changes over the same period in the previous fiscal year.
Net Sales

Operating Income

Ordinary Income

Net Income

Million Yen%

Million Yen%

Million Yen%

Million Yen%

FY2008207,63822.1

19,625(34.0)

27,247(21.5)

20,097(4.2)

FY2007

170,018

22.5

29,71910.0

34,705

11.3

20,982

3.8

Net Income per
Share-Basic
FY2008Net Income per
Share-Diluted

Ratio of Ordinary
Income to Total Assets

Return on Equity

Ratio of Operating
Income to Sales

Yen

Yen

%

%

%

351.65

-

4.7

4.5

9.5

5.3
FY2008 ¥2,193 million

6.2

17.5
FY2007 ¥690 million

FY2007367.12
Note: Equity in net income (loss) of non-consolidated subsidiaries and affiliates:(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Million Yen

Million Yen%

Yen

620,946448,22670.8

7,696.00

71.0

7,185.80

FY2008FY2007
578,059
Note: Equity: FY2008 ¥439,852 million

418,929
FY2007 ¥410,694 million(3) Consolidated Cash Flows
Cash Flows from

Cash Flows from

Cash Flows from

Cash and Cash Equivalents

Operating Activities

Investing Activities

Financing Activities

at End of Term

Million Yen

Million Yen

FY200834,314(53,169)

Million Yen
1,522

Million Yen
42,440FY200734,256(18,140)

917

60,1992. Cash Dividends

Year-End

Full Year

Total Annual
Cash Dividends

Yen
20.00
20.00

Yen
20.00
20.00

Yen
40.00
40.00

Million Yen
2,286
2,286

%
10.9
11.4

Ratio of
Dividends to Net
Assets(Consolidated)
%
0.6
0.5

20.00

20.00

40.00

-

20.5

-

Cash Dividends per Share
Record-Date
FY2007
FY2008FY2009(Forecast)Interim

Dividend Payout
Ratio(Consolidated)

3. Forecasts for Fiscal 2009 (April 1, 2008 – March 31, 2009)
Net Sales

Operating Income

Ordinary Income

Net Income

Net Income per ShareFY 2009

Million Yen%

Million Yen%

Million Yen%

Million Yen%

YenFirst 2Qs

86,404

(5.4)

1,651

(81.7)

3,540(74.4)

2,822(70.9)

49.38

Full Year

193,772

(6.7)

8,860

(54.9)

14,321(47.4)

11,141(44.6)

194.93

4. Others(1) Change to significant subsidiaries during the term (those changes accompanying change in scope of consolidation): No(2) Change to accounting policy, procedure, and method of presentation for preparing consolidated financial statements (those to be
described in the section of the Change of Significant Accounting Policies on the Preparation of Consolidated Financial Statements)
i. Change due to amendment of accounting standard:

Yes

ii. Change due to other reasons:Yes1(3) Outstanding shares (common shares)
i. Shares outstanding at term-end (including treasury stock) FY2008
ii. Treasury stock

FY200857,154,776 shares FY2007

57,154,776 shares

1,407 shares FY2007

1,224 shares

Reference: Summary of Non-Consolidated Results
1.Financial Highlights (April 1, 2007 - March 31, 2008)(1) Non-Consolidated Financial Results
Net Sales

Percentages indicate changes over the same period in the previous fiscal year.

Operating Income

Ordinary Income

Net Income

Million Yen%

Million Yen%

Million Yen%

Million Yen%

FY2008

171,563

40.5

18,5600.9

17,726(25.7)

14,279(8.7)

FY2007122,12929.4

18,402

2.7

23,84819.2

15,645

6.2

Net Income

Net Income

per Share-Basicper Share-Diluted

Yen
249.84273.75

FY2008FY2007Yen-(2) Consolidated Financial Position
Total Assets

FY2008Net Assets

Equity Ratio

per Share

Million Yen

Million Yen%

Yen

567,469

408,81472.0

7,152.94

72.6

6,736.05

FY2008FY2007
Note: Equity:

Net Assets

530,610
384,989¥408,814 million FY2007 ¥384,989 million

2. Forecasts for Fiscal 2009 (April, 1, 2008 - March, 31, 2009)
Net Sales

Operating Income

Ordinary Income

Net Income

Net Income per Share

Million Yen%

Million Yen%

Million Yen%

Million Yen%

YenFirst 2Qs

67,880

(8.9)

5,856

(33.7)

4,107(58.7)

3,433(52.9)

60.06

Full Year

155,167(9.6)

14,126(23.9)

12,562(29.1)

10,497(26.5)

183.67* Disclaimer Regarding Forecasts Statements
The forecasts statements in this document have been made based on information available as of the date of this release. Actual results may
differ from those estimates due to a variety of factors.

2

Ⅰ. Business Results(1) Analysis of Business Performance
In the consolidated fiscal year ended March 31, 2008, the Japanese economy continued its moderate recovery in the areas of improved
corporate earnings and steady growth of capital investments, however, with consumer spending in a slump, there are heightened risks ofan economic slowdown attributable to a decrease in activity in the US in the wake of the sub-prime mortgage loan crisis and otherfactors.
The price of crude oil CIF (including cost, insurance and freight) rose from below the $60 per barrel level in the beginning of the fiscal year
to a high level of more than $90 per barrel at the end of the fiscal year as global demand for crude oil increased.
In the area of FOREX, although the value of the yen against the US dollar moved from about ¥120 at the beginning of the fiscal year tounder ¥100 in March of this year, the crude oil price for the Group rose compared with the previous fiscal year greatly due to a hike in the
crude oil CIF price.
The sales price of natural gas for the Group has been relatively cost-competitive among energy sectors as a result of increasing oil products
prices pushed up by galloping crude oil. However, due to increased industry participation by non-energy sector businesses along withacceleration in the pace of deregulation, the market environment encompassing the Group continues to be stringent.
Under these conditions, the JAPEX Group worked to maintain production and transportation operations with the aim of ensuring stablesupplies of affordable and safe energy over the long term. In addition, the Group focused its collective efforts on efficient E&P both in Japanand overseas.
Net sales in the fiscal year were strong at ¥207,638 million, an increase of ¥37,620 million (+22.1%) year on year.
Gross profit decreased by 2.9% or ¥1,888 million year on year to ¥63,955 million due to the overhaul at an FSO (Floating Storage andOffloading) facility incurred by consolidated subsidiary Japex New Nanhai Ltd., the increase in the cost of sales due to the accounting of avaluation loss subsequent to the early application of the Accounting Standard for Measurement of Inventories and the liquidation of Jawa Oil
Co, Ltd.
For operating income, compared to the previous fiscal year, an expansion of exploration activities in Libya, Canada and the Philippines
causing an increase in exploration expenses of ¥5,381 million (+65.8%) and the commencement of depreciation of the Shiroishi-Koriyama
pipeline leading to a hike in selling, general and administrative expenses of ¥2,824 million (+10.1%) resulted in an operating income postingof ¥19,625 million, down ¥10,093 million or 34% year on year.
Ordinary income was ¥27,247 million, a decrease of ¥7,457 million (-21.5%) year on year due to improved investment returns based on theequity method and an increase in dividend income causing a margin of profit decrease that is lower than operating income despite an increasein non-operating expenses attributable to the foreign exchange gain’s fall to a negative figure and a loss on valuation of marketablesecurities.
Net income was ¥20,097 million, a decrease of ¥884 million (-4.2%) year on year as a result of lower income taxes.
The performance of each of the sectors of our business was as follows:(A) E&P Division
The E&P Division sells crude oil, natural gas, liquefied natural gas (LNG) and bitumen. This division recorded net sales of ¥187,660 million,
an increase of ¥37,122 million (+24.7%) from the previous fiscal year, on the back of soaring crude oil prices and higher volumes of natural
gas sales and purchases of oil produced in Sakhalin.
(B) Contract Services Division
The Contract Services Division is primarily involved in drilling and geophysical surveys, recorded net sales of ¥5,395 million in the fiscal
year, an increase of ¥11 million (+0.2%) from the previous fiscal year.
(C) Other Businesses
Our Other Businesses Division is primarily involved in the sale of oil products, including liquefied petroleum gas (LPG) and fuel oil, as wellas transportation of natural gas and oil products on consignment. Net sales in the fiscal year were ¥14,582 million, an increase of ¥486
million (+3.5%) from the preceding fiscal year.
Outlook for the fiscal year ending March 31, 2009
Our forecast is based on a crude oil CIF price of $80 per barrel and an exchange rate of ¥105/$. Actual non-consolidated results for the fiscal
year under review came to $76.21 per barrel and ¥114.66/$.
Net sales is expected to decrease by ¥13,867 million from the previous fiscal year to ¥193,772 million. Although sales of natural gas are
expected to increase because of increases in town gas sales in Hokkaido and along the Shiroishi-Koriyama pipeline, sales of crude oil are
expected to decrease as the overseas production of oil drops and the yen appreciates.
Operating income is expected to decrease year on year by ¥10,765 million to ¥8,860 million due to an increase of exploration expenses. In
Japan, exploratory drilling operations are planned for four exploration wells (two on land and two offshore) and one exploitation well (onland) for a total of five wells. Overseas, exploratory drilling of two wells in Libya (one on land and one offshore) based on seismic survey
data is planned. Through domestic and overseas projects such as these, we plan to aggressively conduct our exploration operations.
Ordinary income and net income are forecast to decrease by ¥12,927 million and ¥8,957 million from the previous fiscal year to ¥14,321
million and ¥11,141 million, respectively.

3(2) Analysis of financial condition
Overview
i. Balance sheet
Total assets at the end of this fiscal year stood at ¥620,946 million, an increase of ¥42,887 million (+7.4%), from the previous fiscal year end.
Of this, current assets decreased ¥16,143 million (-15.4%) to ¥89,008 million, and fixed assets grew ¥59,030 million (+12.5%) to ¥531,937
million.
The primary change in current assets is the ¥14,989 million decrease in marketable securities due to redemptions for commercial paper, etc.
In fixed assets, property, plant and equipment increased ¥25,654 million (+22.2%) due to the increase in production facilities at the Yufutsu
oil and gas field in Hokkaido, one of the main facilities of the Company, as well as the addition of production wells both in Japan andCanada. Intangible fixed assets fell ¥1,406 million (-18.5%). This decrease was due to a decline from amortization of goodwill. Investments
and others increased by ¥34,782 million, (+9.9%), due to an increase in investment in marketable securities in connection with theacquisition of Energi Mega Pratama Inc. (EMPI) stock and the rise in the market value of the stock of INPEX Holdings, Inc.
Total year-end liabilities rose ¥13,589 million (+8.5%) to ¥172,720 million, year on year mainly due to the increase in deferred tax liabilities
brought upon by an increase in the value of investment securities and new long-term debt allocated for the procurement of funds forinvestment in EMPI.
Total year-end net assets increased ¥29,297 million (+7.0%) to ¥448,226 million, year on year as a result of an increase in retained earnings
and a rise in unrealized holding gains on securities.
As a result, the equity ratio as of March 31, 2008 was 70.8%.
ii. Cash flows
As of March 31, 2008, cash and cash equivalents (hereinafter, “net cash”) totaled ¥42,440 million, down ¥17,758 million, compared to theend of the previous fiscal year. Below is a summary of cash flows for each activity.
(Cash flows from operating activities)
Net cash provided by operating activities was ¥34,314 million. This is mainly attributable to ¥26,305 million in income before income taxes,¥16,669 million in depreciation and amortization and ¥8,599 million in payment of income taxes.
(Cash flows from investing activities)
Net cash used in investing activities amounted to ¥53,169 million. The main uses were ¥43,702 million for additions to property, plant andequipment in Japan and Canada, as iterated above, and ¥21,808 million expended for the acquisition of investment securities such as EMPI
stock.
(Cash flows from financing activities)
Net cash provided by financing activities amounted to ¥1,522 million. This was mainly due to the amount of revenue derived from long-term
debt of ¥6,935 million for the procurement of funds to be directed for investment in EMPI exceeding the amount of total expenditures suchas ¥2,285 million of dividend payments and ¥2,278 million in long-term debt reimbursements.
(Ref.) Trend of Cash Flow Indicators
Fiscal Years Ended March 31

2004

2005

2006

2007

2008

Equity ratio (%)

79.3

74.5

72.5

71.0

70.8

Equity ratio on mark-to-market basis (%)

96.4

63.6

78.9

87.1

60.7

Interest-bearing debt to cash flow ratio(years)

0.5

0.7

0.5

0.6

0.7

Interest coverage ratio (times)

60.3

86.8

188.1

323.3

148.5

Notes:
Equity ratio: Equity/total assets
Equity ratio on mark-to-market basis: Total market capitalization/total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/cash flows
Interest coverage ratio: Cash flow/interest paid
*1. The above indicators are calculated based on consolidated financial figures.
*2. Total market capitalization is calculated based on the number of shares outstanding (excluding treasury stock).
*3. Cash flow is net cash flow from operating activities.
*4. Interest-bearing debt is all debt subject to interest payments within liabilities shown on the consolidated balance sheets.

4(3) Fundamental Policy on Allocation of Profits and Dividends for This Year and Next Year
The Company’s basic policy is to sustain stable dividends over the long term. Taking into account the medium and long-term outlook for thebusiness, dividend payments are set based on respect for the return of profits to shareholders. While considering the need to secure newreserves as an energy company that plays a role in providing stable supplies of oil and natural gas, indispensable resources for society, thepolicy also takes into account the need for retained earnings to finance the replacement of reserves and to upgrade and improve transportation
systems, primarily pipelines.
Based on the above reasoning, an annual dividend of ¥40 per share (¥20 yen per share interim dividend and ¥20 yen per share year-end
dividend) is planned for the current year. The same dividend of ¥40 yen per share is planned for the following year as well.
(4) Risk Factors
The disclosure of this section is omitted as there is no significant change from the Risk Factors described in the latest Securities Report filedon June 26, 2007.

5

Ⅱ. Business Policies(1) Fundamental Business Policies
Since its establishment in 1955, Japan Petroleum Exploration Co., Ltd. (JAPEX) has pursued its mission of contributing to Japan’s energy
supplies by securing reserves and expanding production centered on the exploration, development, and sale of oil and natural gas. Guided bythis mission, the Company has steadily discovered oil and natural gas reserves to result in the business base of today.
In light of its expanding role as a supplier and, consequently, related increases in its responsibility to society with regard to a stable supply,
the JAPEX Group is actively focused on constructing a new business model that not only relies on expanding reserves but also upgradingand expanding transportation systems for natural gas and other initiatives. As such, the Group aims to move forward as a company with thecompetitive capabilities required to respond to changes in its operating environment. The section below outlines the Group’s businessphilosophy in this respect.
Taking on the challenge of new energy value creation and increasing corporate value・Contribute to the supply of energy through global exploration and production (E&P) activities.
・Contribute to coexistence between the planet and humankind by developing and promoting the use of environment-friendly
natural gas.
・Pursue sustainable growth and maximize shareholder value by placing top priority on winning and maintaining the trust ofsociety, customers, shareholders and employees.
(2) Medium- and Long-Term Business Strategy and Critical Issues
With changes in social conditions marked by an increase in the importance of global warming countermeasures and the recent escalation in
the price of crude oil and other natural resources paired with the progress of deregulation ushered in by revisions to the Gas Business Law
and the Electric Utility Law, the business environment encompassing JAPEX is undergoing a rapid transformation. As such, the JAPEXGroup will aim to further increase its corporate value through the establishment of a clear action plan for the attainment of importantbusiness objectives over the long term.
Conducting efficient E&P and discovering new reserves
The replacement and expansion of reserves, which are depleted by production and sales activities, and the formulation of a larger supply
structure of oil and natural gas that would ensure long-term stability is of paramount importance to JAPEX, a company whose corecompetency rests in E&P, development and sales.
In its high-risk oil and natural gas E&P business, JAPEX is striving to uncover promising projects and conduct efficient E&P activities all inan effort to realize the discovery and securement of untapped oil and gas reserves.
Specifically, in order to expand the volume of cost-competitive domestic reserves, which at present represent the largest source of revenue
for the Company, JAPEX will continue to proactively effectuate E&P activities with the restructuring of Japanese oil and gas exploration as
an important concern and build a new revenue platform through the acquisition of overseas interests with a focus on the balance of its
investments.
Japan:In Hokkaido, Akita and Niigata, in light of the geological potential, expansibility, economic effects and other aspects, JAPEX will
systematically conduct E&P activities efficiently combining efforts aimed at the addition of large-scale gas reserves as well as field growth
in areas surrounding existing oil and gas fields.
For E&P aimed at the addition of large-scale gas reserves, JAPEX is considering a Yufutsu-type structure in southern central Hokkaido andon the south coast of Hokkaido and green tuff formations in Niigata. Despite relatively-high geological risk, because success in the venture
would bring the addition of substantial reserves to the JAPEX arsenal, the Company is effectuating important tasks aimed at early
exploratory drilling taking into consideration seismic survey results already made compiled.
For E&P geared towards field growth, JAPEX is contemplating the Yufutsu area in Hokkaido, the Kosei, Yurihara and Ayukawa areas in
Akita and the Kitakanbara area and Higashi-Niigata to Iwafune coastline in Niigata. Even though many of the prospective reserves in eachindividual oil and gas field area are mid-scale, on a relative basis, the geological risk is low and the Company can benefit from short-term
revenues due to their addition. Therefore, E&P work is effectuated on an equal basis annually with a keen eye on the production conditionsof existing fields and the cost burden of joint venture partners.
Overseas:
In addition to the continuation of expansion efforts targeting domestic reserves, the aggrandizement of overseas reserves, production volume
and revenue levels is also essential for the formulation of a stable managerial base over the long-term.
Because of this, JAPEX will zero in on Southeast Asia, specifically Indonesia, Canada, the Middle East, North Africa and Sakhalin as focus
areas and infusing managerial resources focused on unearthing opportunities within them, work on comparably low risk, early return projects
presently under production or already discovered but not yet developed in an effort to secure a stable volume of reserves, production as well
as revenue and build an investment portfolio well-balanced with respect to long-term exploration projects with relatively high return
prospects.
Also, the Company will take an interest in gauging the future need for additional LNG procurement for its domestic natural gas supply
business and look for opportunities to participate in upstream and midstream LNG projects mainly in focus areas.
Enhancing the efficiency of the natural gas operation system
In order to encourage the further development of the Company in the energy markets in this highly competitive period, it is not only
necessary for JAPEX to meet the changes in the climate encompassing the natural gas business brought upon by the progression of
deregulation and an increase in public awareness towards environmental problems and fulfill its responsibilities as a supplier to natural gas
consumers, but also strengthen its capabilities with respect to the various demands and expectations of a growing number of consumers andfind better, more attractive ways to supply gas.
To achieve this, JAPEX will promote its efficient “Gas Integration” system from upstream (E&P) through mid-stream (transportation andstorage) to downstream (supply to large users and local distribution companies, or LDCs) in its core competency, the natural gas supply
business, and differentiate itself from all other gas suppliers by formulating a gas business model that organically combines the facilities andservice functions of the Company.

6

Specifically, JAPEX will expand its domestic reserves and introduce additional overseas gas sources to complement them. It will establish atransportation and underground storage network utilizing the unique characteristics a company that owns its upstream interests, increase
efforts geared at expanding sales along its gas pipelines by adding new lines and promote the diffusion of natural gas for a broad range ofapplications by supplying LNG satellites to regions without pipeline access. Further, the Company will promote cooperative efforts withlocal town gas suppliers as a wholesaler based on its traditional principle of coexistence and mutual prosperity with these suppliers.
In addition, in order to diversity sources of revenue and increase profits, it is important for JAPEX to develop its natural gas supply system as
a new revenue platform, focus on the access of gas pipelines to third parties in tune with the revised Gas Business Law as an important futurebusiness chance and, in an effort to push forward the development of technologies utilizing natural gas, aggressively research and develop
gas-to-liquids (GTL) technology involving synthesizing liquid fuels from methane, the main component of natural gas, as well as DME
production technology and other technologies and aim for the diversification of gas supply methods through a fusion with environmental
businesses.
Based on the above fundamental policy, due to the sharp increase in industrial consumers in the domestic natural gas market as a result of therealization of relative price advantages on the heels of soaring crude oil and petroleum product prices, JAPEX is effectuating capital
investments aimed at the aggrandizement of its domestically produced gas supply capacity and increasing its overseas LNG purchases alongwith rationalizing its gas sales prices to match imported LNG CIF price levels.
Further, with a keen eye on long-term sustainable development for the future based on the aforementioned supply and demand circumstances,
JAPEX is looking to secure new LNG sources through the acquisition of upstream interests by latter half of the 2010s decade that will allow
it to build a revenue platform in its upstream LNG division and aggressively expand the sale of gas in Japan.
Technology R&D and addressing environmental issues
Faced with the ever growing severity of environmental issues, JAPEX, a supplier of environmentally-friendly natural gas, is striving to
reduce the environmental impact of its business activities as a naturally assumed contribution to the environment as well as morecomprehensive tasks.
Specifically, the Company will increase the added value of its natural gas supply services, promote the application of the JAPEX Group heldtechnologies to environmental fields, develop GTL and DME production technology, develop technology for Carbon Capture and Storage(CCS) based on oil and gas E&P techniques and proactively engage in new fields such as methane hydrate development technology.
JAPEX will also increase its contributions to environment activities on the social level by, among other actions, participating in and funding
forestation programs in Japan and in bio-carbon funds.

The JAPEX Group aims to utilize these activities to further strengthen its operating base and enhance its competitiveness as well as bolster
operating efficiency. The ultimate goal is to achieve sustainable development and maximize shareholder value.

7

Ⅲ．Consolidated Financial Statements(1) Consolidated Balance Sheets(As of March 31, 2007)
Description(Assets)
I Current assets
1. Cash and deposits
2. Notes and accounts receivable
3. Marketable securities
4. Inventories
5. Deferred income taxes
6. Other current assets
Less: Allowance for doubtful receivables
Total current assets
II Fixed assets
1. Property, plant and equipment(1) Buildings and structures
Accumulated depreciation(2) Wells
Accumulated depreciation(3) Machinery and equipment
Accumulated depreciation(4) Land(5) Construction in progress(6) Other property, plant and equipment
Accumulated depreciation
Property, plant and equipment, net
2. Intangible fixed assets(1) Goodwill(2) Others
Total intangible fixed assets
3. Investments and others(1) Investments in securities(2) Long-term loans receivable(3) Long-term accounts receivable(4) Deferred tax assets(5) Others
Less: Allowance for doubtful receivables
Allowance for losses on overseas
investments
Total investments and others
Total fixed assets
Total assets

Amount (¥ million)

27,16924,451
32,714
8,683
1,047
11,097(12)
105,152

133,488
78,59542,75032,09672,89843,63911,611
8,773(As of March 31, 2008)（％）

139,690
84,96754,14035,38983,05948,013

10,65429,258
13,164
4,699

3,122
4,463
7,585

13,860
9,417

8

（％）

14.3

54,722
18,75135,04615,305
12,89320.0

4,443
141,162

22.7

1.3

2,092
4,086
6,179

1.0

341,162
769
4,908
658
11,745(95)(9,335)349,812472,907
578,059

27,79425,865
17,724
10,492
2,295
4,846
(10)
89,00818.2

54,892

2,838
115,508

Amount (¥ million)

376,137
7,489
2,065
749
5,872
(97)

60.5
81.8
100.0

(7,621)
384,595
531,937
620,946

62.0
85.7
100.0

(As of March 31, 2007)

Description

Amount (¥ million)(Liabilities)
I Current liabilities
1. Notes and accounts payable
2. Income taxes payable
3. Reserve for directors’ bonus
4. Accrual for losses on disasters
5. Other current liabilities
Total current liabilities
II Long-term liabilities
1. Long-term debt
2. Deferred tax liabilities
3. Accrued retirement benefits for employees
4. Accrued retirement benefits for officers
5. Accrued estimated cost of abandonment of wells
6. Accrual for losses on projects
7. Other long-term liabilities
Total long-term liabilities
Total liabilities

9,395
3,807
96
23,56536,864
17,722
94,267
5,434
608
3,459
601
170
122,265
159,130

9(As of March 31, 2008)（％）

Amount (¥ million)

（％）

6.4

13,469
1,414
102
487
23,38238,857

6.2

21.1
27.5

21,922
101,477
5,272
511
4,126
310
241
133,862
172,720

21.6
27.8

(As of March 31, 2007)

Description

Amount (¥ million)(Net Assets)
I Shareholder’s equity
1. Capital
2. Capital reserves
3. Treasury stock
Total Shareholder’s equity
II Difference on valuation and conversion, etc.
1. Difference on valuation of other marketablesecurities
2. Deferred gain (loss) on hedging
3. Translation adjustments
Total difference on valuation and conversion, etc.
III Minority interest
Total net assets
Total liabilities and net assets

10(As of March 31, 2008)（％）

Amount (¥ million)(%)

14,288227,413(5)
241,696

2.5
39.3
(0.0)
41.8

14,288245,225(7)
259,506

2.3
39.5
(0.0)
41.8

168,23455
707
168,9978,234
418,929
578,059

29.1
0.0
0.1
29.2
1.5
72.5
100.0

179,629(0)716
180,3468,373
448,226
620,946

28.9
(0.0)
0.1
29.0
1.4
72.2
100.0

(2) Consolidated Statements of Income
FY2007(Apr. 1, 2006 – Mar. 31, 2007)
Description
I Net sales
II Cost of sales
Gross profit
III Exploration expenses
1. Exploration expenses
2. Exploration subsidies
IV Selling, general and administrative expenses
Operating income
V Non-operating income
1. Interest income
2. Dividend income
3. Gain on sale of securities
4. Equity in profit of non-consolidated subsidiaries andaffiliates
5. Reversal of allowance for losses on overseas
investments
6. Reversal of accrual for losses on projects
7. Exchange gains
8. Other non-operating income
VI Non-operating expenses
1. Interest expense
2. Loss on sale of securities
3. Devaluation loss on securities
4. Provision for accrued estimated cost of abandonmentof wells
5. Provision for allowance for losses on overseas
investments
6. Exchange loss
7. Other non-operating expenses
Ordinary income
VII Extraordinary gains
1. Reversal of allowance for doubtful receivables
2. Gain on sales of fixed assets
3. Income from distribution of remained asset
VIII Extraordinary losses
1. Loss on disposal of fixed assets
2. Earthquake disaster recovery expenses
3. Head office relocation cost
4. Others
Income before income taxes and minority
interests
Current income taxes
Deferred income taxes
Minority interests
Net income

Amount (¥ million)

8,987
(809)

（％）

170,018
104,174
65,844

100.0
61.3
38.7

8,178
27,946
29,719

4.8
16.4
17.5

FY2008(Apr. 1, 2007 – Mar. 31, 2008)

207,638
143,682
63,955

100.0
69.2
30.8

13,55930,77019,625

6.5
14.8
9.5

12,051

5.8

4,430
27,247

2.2
13.1

0.6

1
1
-

2

0.0

1,012

0.6

218
709
18

945

0.4

34,66020.4

26,305

12.7

5,426
780
20,097

2.6
0.4
9.7

13,856
(297)

1,355
2,805
118

1,606
5,184
85

690

2,193

270
229
1,179

1,110
291
1,580

6,649

3.9

120
241
54

313
172
1,578

569

748

242
434

1,242
375

0
966
387
587
37

9,421
2,487

11

（％）

Amount (¥ million)

1,663
34,705967

11,9091,768
20,982

1.0
20.4

7.0
1.1
12.3

6,165
(738)

3. Consolidated Statements of Shareholders’ Equity and Statement of Changes in Shareholder’s Equity, etc.
Consolidated Statement of Changes in Shareholders’ Equity etc.
Fiscal Year (from April 1, 2006 to March 31, 2007)

Balance as ofMarch 31,2006
Changes during
Fiscal Year
Distributions
from Capitalreserve (note)
Distributions
from Capitalreserve
Directors’
bonuses (note)
Net income
Acquisition oftreasury stock
Changes during
Fiscal Year otherthanshareholders’equity items(net)

CapitalShareholder’s equity
CapitalTreasury
reserves
stock

14,288209,095

(4)

Total
share
holder’s
equity223,379

Difference on valuation and conversion etc.
Transition
Total
Deferred
Difference on
adjustments
difference on
gainvaluation ofvaluation and(loss) on
otherconversion,
hedging
marketableetc.
securities

161,949-894

162,843(Unit: ¥ million)
Minority
Totalinterests
net
assets

7,762

393,985(1,428)(1,428)(1,428)(1,143)(1,143)(1,143)(92)
20,982(92)
20,982(92)
20,982

(0)

(0)

(0)

6,285

55

(187)

Total changes
during Fiscal
Year18,318(0)
18,317
6,285
55
(187)
Balance as ofMarch 31,2007
14,288227,413(5)
241,696
168,23455
707(Note) These items represent distribution of earnings resolved at the ordinary general shareholders’ meeting in June 2006.

6,154

472

6,626

6,154

472

24,943

168,9978,234

418,929

Fiscal Year (from April 1, 2007 to March 31, 2008)

Balance as ofMarch 31,2007
Changes during
Fiscal Year
Distributions
from Capitalreserve
Net income
Acquisition oftreasury stock
Changes during
Fiscal Year otherthanshareholders’equity items(net)
Total changes
during Fiscal
Year
Balance as ofMarch 31,2008

CapitalShareholder’s equity
CapitalTreasury
reserves
stock

14,288227,413(5)(2,286)20,097
(1)

Total
share
holder’s
equity241,696

Difference on valuation and conversion etc.
Transition
Total
Deferred
Difference on
adjustments
difference on
gainvaluation ofvaluation and(loss) on
otherconversion,
hedging
marketableetc.
securities

168,23455

707

168,997(Unit: ¥ million)
Minority
Totalinterests
net
assets8,234

418,929(2,286)20,097(2,286)20,097(1)(1)

11,394(56)

911,348138

11,487-

17,811(1)

17,810

11,394(56)

911,348138

29,297

14,288245,225(7)

259,506

179,629(0)716

180,3468,373

448,226

12

4. Consolidated Statements of Cash Flows

Description
I Operating activities
1. Income before income taxes and minority interests
2. Depreciation and amortization
3. Amortization of goodwill
4. Loss on devaluation of marketable securities and investments in securities
5. Increase (decrease) in allowance for doubtful receivables
6. Increase (decrease) in provision for accrued retirement benefits for employees
7. Increase (decrease) in provision for accrued retirement benefits for officers
8. Increase (decrease) in provision for accrued estimated cost of abandonment of wells
9. Increase (decrease) in provision for allowance for losses on overseas investments andaccrual for losses on projects
10. Interest and dividend income
11. Interest expense
12. Gain on redemption and sales of marketable securities and investments in securities
13. Loss on redemption and sales of marketable securities and investments in securities
14. Equity in gains (losses) of unconsolidated subsidiaries and affiliates
15. Increase (decrease) in notes and accounts receivable
16. Increase (decrease) in inventories
17. Increase (decrease) in notes and accounts payable
18. Increase (decrease) in consumption tax payable
19. Income from distribution of remained asset
20. Other, net
Subtotal
21. Collection of claim for indemnity of guaranteed debt implementation
22. Income taxes paid
Net cash provided by operating activities
II Investing activities
1. Investments in time deposits
2. Proceeds from time deposits
3. Proceeds from redemption and sale of marketable securities
4. Additions to property, plant and equipment
5. Proceeds from sales of property, plant and equipment
6. Additions to intangible fixed assets
7. Payments for purchase of investments in securities
8. Proceeds from redemption and sale of investments in securities
9. Increase in loans receivable
10. Decrease in loans receivable
11. Interest and dividends received
12. Revenue from distribution of remained asset
13. Other, net
Net cash used in investing activities
III Financing activities
1. Increase (decrease) in short-term bank loans
2. Proceeds from long-term debt
3. Repayment of long-term debt
4. Purchase of treasury stock
5. Cash dividends paid
6. Dividends paid to minority shareholders
7. Interest paid
8. Payment of capital reduction for minority interests
9. Dividends paid to minority shareholders for liquidation of subsidiary
Net cash provided by (used in) financing activities
IV Effect of exchange rate changes on cash and cash equivalents
V Increase (decrease) in cash and cash equivalents
VI Cash and cash equivalents at beginning of the period
VII Cash and cash equivalents at the period-end

13

FY2007(Apr. 1, 2006 –Mar. 31, 2007)
Amount (¥ million)

FY2008(Apr. 1, 2007 –Mar. 31, 2008)
Amount (¥ million)

34,66014,938
1,006
54
(32)
699
(153)
510

26,305
16,669
1,029
1,578
(0)
(161)
(96)
602

(29)
(4,161)
120
(119)
241
(690)
(5,733)
111
3,757
(550)
(966)
(180)
43,481
2,643(11,868)
34,256(2,005)(6,791)
313
(395)
191
(2,193)(1,161)(1,808)
5,962
332
2,976
41,345
1,568(88,599)
34,314(3,334)948
1,300(23,485)28(1,388)(4,950)
7,643
(165)
1,241
4,283
1,047
(1,309)(18,140)(8,096)
10,934
1,078(43,702)7(613)(21,808)
7,573(7,929)
340
7,532
2
1,510
(53,169)

(47)
5,000
(0)
(2,571)(1,015)
(105)
(342)
917
84
17,11743,08260,1996,935(2,278)(1)(2,285)
(306)
(231)
(310)
1,522
(426)
(17,758)
60,19942,440Ⅴ. Others(1) Status of Production and Sales
1.

Production

Oil and Natural Gas Segment
FY2007(Apr. 1, 2006 – March 31, 2007)

FY2008(Apr. 1, 2007 – Mar. 31, 2008)

Crude oil (kl)

791,517(186,759)

761,636(147,397)

Natural gas (thousand m3)

1,247,087(62,705)

1,288,606(58,946)

25,58433,610447,430(447,430)

410,363(410,363)

Division

Product

E&P
LNG (t)Bitumen (kl)(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 heavy crude oil extracted from oil sands.

2.

Sales

Oil and Natural Gas Segment

Division

Product

Crude Oil (kl)Natural Gas (thousand m3)

FY2007(Apr. 1, 2006 – Mar. 31, 2007)

FY2008(Apr. 1, 2007 – Mar. 31, 2008)
VolumeAmount84,931

2,041,192

117,923

1,411,309

44,9491,486,910

48,982

208,384

10,879170,453

10,285444,985

9,777

409,743

10,468VolumeAmount

1,821,618(¥ million)(¥ million)

E&P
LNG (t)Bitumen (kl)Subtotal

150,538

187,660

Contract services

Subtotal

5,383

5,395

Other Businesses

Subtotal

14,096

14,582

Total

170,018

207,638(Notes)1. Other Businesses Division is primarily involved in the sale of oil products, including liquefied petroleum gas (LPG) and fuel oil, as
well as transportation of natural gas and oil products on consignment.
2. Monetary amounts in the table do not include consumption tax.

14