Note: The following press release is an English translation of the Japanese-language original

July 26, 2017
Company Name: Japan Petroleum Exploration Co., Ltd. (JAPEX)
Representative:

Hideichi Okada, President

Inquiries:

Media and Investor Relations Dept.

TEL.:+81-3-6268-7110

Pacific NorthWest LNG Project in British Columbia, Canada, Is Not Proceeding

Japan Petroleum Exploration Co., Ltd. (JAPEX) announced today that Pacific NorthWest LNG(hereinafter "PNW LNG"), Canadian operating company for the Pacific NorthWest LNG Project in British
Columbia, Canada (hereinafter "the PNW LNG Project"), has decided not to proceed with the PNW LNG
Project which JAPEX has been pursuing through its Canadian subsidiary JAPEX Montney Ltd. (JML). Thiswas announced by PNW LNG on July 25, 2017 (Pacific Daylight Time (PDT), Canada).
We participated in the PNW LNG Project since 2013 for the purpose of producing LNG from our shalegas reserves in North Montney in British Columbia, Canada (hereinafter "the Upstream Project") in order tosecure long-term supply of LNG to our domestic market through Soma LNG terminal, and have madesteady efforts for the development of shale gas resources and the realization of the PNW LNG Project(*1).
However, we have reached the decision not to proceed because the circumstances in the LNG industry
have changed dramatically compared to the time we decided to participate in the PNW LNG Project.
The construction of our Soma LNG terminal continues as planned and is scheduled to commence
operation from March 2018. Considering the current circumstances in the LNG market, we believe thatmultiple alternative sources of supply are available for the procurement of LNG for the time being.
In the Upstream Project we are producing natural gas at the rate of approximately 500 million cubic feetper day (approximately 90,000 boe/day). JAPEX and JML together with partners remain committed toexploring all options to maximize the value of the Upstream Project and will continue to implement anefficient development of significant gas assets taking advantage of JAPEX's strengths and expertise in theE&P business.
This decision is part of the aspiration of JAPEX to respond to the changed circumstances in the global oiland gas industry by making efforts to transform itself into a lean and resilient corporation. We will continue
to strive to improve our corporate value by enhancing flexibility and precision of making investment
decisions.
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Followed by this resolution, there will be a total loss of approximately CAD 102 million(JPY8,700Million(*2)) on our consolidated financial results ending March 31, 2018, which includes theextraordinary loss of termination of approximately 900km pipeline construction plan estimated atapproximately CAD 65 million (JPY 5,500 million(*2)) and the non-operating expense as the equity method
investment loss of PNW LNG estimated at approximately CAD 37 million (JPY 3,200 million(*2)). The
consolidated financial forecast of the fiscal year ending March 31, 2018 is under examination including theafore-mentioned impact and will be announced at the same time as the announcement of the Consolidated
Financial Results for the three months ended June 30, 2017 scheduled on August 8, 2017. In addition, any
impact to the Upstream Project associated with the decision not to proceed with the PNW LNG Project will
be examined carefully based on the asset valuation review and other information, and will be disclosed
properly if necessary.
*1: Announced on June 12, 2015 (Refer to "Conditional Final Investment Decision (FID) of LNG Project inBritish Columbia Canada")*2: Exchange Rate is JPY85/CAD###2/2