日時： 最終印刷日時：2004/11/18 18:11

FY2005 Semiannual Consolidated Financial Results
November 17, 2004

Note: The following report is an English translation of the Japanese-language original.

Company name

INPEX CORPORATION

Code number

1604

Stock Exchange on
which the Company
is listed
Location of the head
officeTokyo Stock
Exchange
Tokyo

(URL

http://www.inpex.co.jp/)
Kunihiko Matsuo, President
Representative
Seiya Ito, Director & General Manager, Corporate Planning & Management Dept.
Contact person
TEL+81-3-5448-1238
Date of the meeting of theBoard of Directors for theNovember 17, 2004
FY2005 semiannual financial
results
Prepared in accordance withaccounting principles generallyNo
accepted in the United States ofAmerica
1. Results of FY2005 Semiannual (April 1, 2004–September 30, 2004)(1) Consolidated operating results
Note: Amounts less than one million yen are rounded off.
Net sales
Operating income
Ordinary income％

Million yen

FY2005semiannual
FY2004
semiannual
FY2004

116,546138.4

110,316152.2

110,188
218,83121.5

48,87893,876

5.9

43,748
94,77359.6

Net income(Notes) 1.
2.

3.
4

Net income per share—basic％

Net income per share—diluted

Yen

Yen

33,01784.5

17,596.54

17,89864.1

30,377.50(10,125.83)—

58,838.76(19,612.92)—

34,781—Equity in earnings of affiliates: FY2005 semiannual, (¥479) million; FY2004 semiannual, ¥1,027 million; FY2004, ¥452 million
Average number of shares issued and outstanding in each period (consolidated): FY2005 semiannual, 1,876,337 shares; FY2004
semiannual, 589,200 shares; FY2004, 589,200 shares
On May 18, 2004, there was a 3-for-1 stock split of common stock. Net income per share for FY2004 semiannual and FY2004 restated
for the effect of this stock split is presented in parentheses.
Change in accounting policy: No
The percentage expressions for net sales, operating income, ordinary income and net income represent the change from thecorresponding period of the preceding year.

(2) Consolidated financial position
Total assets
Million yen

FY2005semiannual
FY2004
semiannual
FY2004Note:％

Million yen

94.2

Million yen

FY2005semiannual
FY2004
semiannual
FY2004％

Million yen

213,939

Note: Amounts less than one million yen are rounded off.
shareholders’Shareholders’ equity Ratio ofequity
Net assets per share％

Million yen

Yen

718,155

367,508

51.2

191,427.36

508,955
525,298

263,055
278,11351.7
52.9

446,462.08
471,826.00(148,820.69)(157,275.33)

Number of shares issued and outstanding at the end of each period (consolidated): FY2005 semiannual, 1,919,832 shares; FY2004
semiannual, 589,200 shares; FY2004, 589,200 shares
On May 18, 2004, there was a 3-for-1 stock split of common stock. Net assets per share for FY2004 semiannual and FY2004 restated forthe effect of this split are presented in parentheses.

― 1 ―日時： 最終印刷日時：2004/11/18 18:11(3) Consolidated cash flows

Note: Amounts less than one million yen are rounded off.
Cash and cash
Cash flows from
Cash flows fromequivalents
at end of theinvesting activities
financing activities
periodCash flows fromoperating activities
Million yen

FY2005semiannual
FY2004
semiannual
FY2004

Million yen

Million yen

Million yen

63,516(56,543)

4,944

121,182

31,85044,464(196,100)(218,121)

124,125
151,120

37,97554,582(4) Scope of consolidation and equity method
Number of consolidated subsidiaries
Number of unconsolidated subsidiaries accounted for by the equity method
Number of affiliated companies accounted for by the equity method

27 companies
None
11 companies(5) Changes in scope of consolidation and equity method
Consolidated subsidiaries
Affiliated companies accounted for under the equity method

Increase
1 companies
4 companies

2. Estimated Consolidated Operating Results for FY2005 (April 1, 2004–March 31, 2005)
Net sales
Ordinary income
Million yen

FY2005(full-year)

Million yen

402,800

200,900

Decrease
1 company
1 companies

Net income
Million yen

54,300

Reference: The forecast of ¥28,283.69 of net income per share for FY2005 is calculated based on the expected
number of shares issued and outstanding of 1,919,833.75 at March 31, 2005.
* The aforementioned forecasts are based on currently available information and contain many
uncertainties. Changing business conditions may cause actual results to differ from the above forecasts.
Issues relating to the above forecasts are referred to on page 10 of the accompanying materials.

― 2 ―Ⅰ Overview of the INPEX GroupThe INPEX Group consists of INPEX CORPORATION, 27subsidiaries, 11affiliated companies and their
two subsidiaries (as of September 30, 2004). The group primarily engages in the exploration, development,
production and sales of crude oil and natural gas in the Republic of Indonesia and the Commonwealth ofAustralia, as well as in the Middle East, the coastal states around the Caspian Sea and South America. In
addition, we provide loans and investments to companies engaged in the aforementioned activities. Our
business segment is crude oil and natural-gas-related products.
The following diagram shows our group’s business flow.
Customers(Power companies, gas companies, petrochemical companies and oil refineries, etc.)
In Preparation

INPEX BTC PIPELINE, Ltd.
(Consolidated subsidiary)

Sales of Gas

Sales ofCrude OilPERTAMINA

Natural Gas Liquefied Plant

INPEX Trading, Ltd.

INPEX DLNGPL Pty Ltd.
(Consolidated subsidiary)

Sales of Crude
Oil and Gas(Consolidated subsidiary)
Supply of Gas
Sales of Crude Oil

Our Exploration and Development Companies

Middle and Downstream

Trading companies
and other business
entities

Pipeline

Our Production Companies

Consolidated subsidiaries
Azadegan Petroleum Development, Ltd.
INPEX North Caspian Sea, Ltd.
INPEX Browse, Ltd.
INPEX Masela, Ltd.
And 10 other subsidiaries

Equity-Method affiliates
INPEX Offshore North Campos, Ltd.
MI Berau B.V.

Equity-Method affiliates
Albacora Japão Petróleo Limitada
JJI S&N B.V.
And 4 other affiliates

Subsidiary of Equity-Method affiliate

Upstream

Japan Oil Development Co., Ltd.
INPEX ABK, Ltd.
INPEX Sahul, Ltd.
INPEX Alpha, Ltd.
INPEX Natuna, Ltd.
INPEX Tengah, Ltd.
INPEX Jawa, Ltd.
INPEX Sumatra, Ltd.
INPEX Southwest Caspian Sea, Ltd.

Consolidated subsidiaries

Frade Japão Petróleo Limitada
One Subsidiary of Equity-Method affiliate

Subcontracting

INPEX CORPORATION
12.41％
Japan Petroleum Exploration Co., Ltd.*
53.96％
49.94％
Major Shareholder

Japan National Oil Corporation (JNOC)*

Note: Japan National Oil Corporation and Japan Petroleum Exploration Co., Ltd., are investors in our subsidiaries andaffiliated companies. As our 343,725 shares of common stock then held by Japan National Oil Corporation were sold at thetime of our company’s stock listing on the First Section of the Tokyo Stock Exchange as of November 17, 2004, the numberof our company’s shares held by Japan National Oil Corporation totaled 692,308.75 (accounting for a 36.06% of our issued
shares) as of that date.

― 3 ―II Management Policy
1. Basic management principles
Our fundamental business is to secure stable profitability by accruing reserves of crude oil andnatural gas and developing, producing and selling them, as well as growing corporate value
continuously. Production is decreasing at our currently held reserves, therefore we must find newreserves via exploration or the purchase of assets over the medium to long term. To maintain our global
interests in the exploration, development and production of crude oil and natural gas, we must
aggressively pursue promising business opportunities. Our fundamental business strategy is to ensurestable earnings in the medium to long term through the sustainable growth of reserves and production
with a regional strategy, a well-balanced portfolio and the diversification of our natural gas business.
2. Basic profit distribution principles
Our basic policy is to maximize corporate value by using retained earnings to maintain and increase
reserves and production while maintaining a stable dividend payment to shareholders.
The reserves of crude oil and gas that serve as our business foundation are continually diminishedthrough production. Therefore, we must constantly pursue new reserves to enable us to return profits toour shareholders. As such, we have invested aggressively in the Republic of Indonesia, theCommonwealth of Australia, the Middle East and the coastal states around the Caspian Sea to stabilize
and expand our business foundation with a medium- to long-term view. Our strong financial base isessential in carrying out such investments. We maintain a basic principle of paying a stable dividend
while considering the balance between returning profits to shareholders and enhancing the financial
foundation.

3. Management strategy and medium- to long-term issues
Our fundamental management policy for our group assures stable earnings and increases sustainablecorporate value through obtaining crude oil and gas reserves and developing, producing and sellingthem. Because our reserves are diminished via production, we must constantly acquire new reserves. To
this end, we have invested aggressively in core target areas (e.g., the Middle East, the coastal statesaround the Caspian Sea, South America and Africa).
To grow further, we plan to invest in exploring and developing existing and new projects mainly in
our core areas—the Masela Block of Indonesia and the WA-285-P (Ichthys) gas project inAustralia—as well as in the Middle East and Azadegan, Kashagan and ACG along the coastal areas of
the Caspian Sea. We must make such large investments every term, and we will take the necessary
measures to obtain the financing.
The following issues must be resolved to further develop our business.
（1）Well-balanced asset portfolio① Regional balance
Through the last fiscal year, our production was heavily centered in Asia and Oceania. Looking
ahead, we will expand our share in the Middle East and the coastal areas of the Caspian Sea
through obtaining working interests in ACG and Azadegan, development in Kashagan andintegration with Japan Oil Development Co., Ltd.
We recognize the need to reduce our dependence on a specific region from the viewpoint ofcountry and operating risks. We intend to form a regionally balanced portfolio in terms of global
assets by investing in other promising areas.
② Balance between crude oil and gas
In terms of output by product, about 70% was natural gas through the last fiscal year, but theshare of crude oil will increase in the future.
― 4 ―Crude oil is a sensitive commodity, therefore the selling price fluctuates in the marketplace. On
the other hand, customers are not fixed for a long period, the required investment for production
and transportation facilities is small and the duration for development is comparatively short.
Accordingly, profitability can be obtained shortly after discovery.
Natural gas requires heavy investment and a long preparation period to construct the liquefaction
plant and pipeline for commercial production. Because the buyer also must make a big investment
to receive natural gas, a stable long-term contract is essential. Even with a stable development andproduction partner, profitability can be maintained only through an assured customer base.
In beginning a new project, we focus on a balance between crude oil and natural gas to ensure an
efficient investment with a view toward long-term cash flow.
③ Balance of exploration, development and production (project stage)Because crude oil and gas reserves are limited, we continuously seek to acquire new reserves toretain profitability. For this purpose, we reinvest in exploration to discover new profitable reserves
while maintaining our production revenue. Projects at each stage—exploration, development andproduction—must be stable and execute without interruption. To achieve a balance, we invest in
exploration and buy producing or undeveloped oil and gas fields.
④ Balance between operator and nonoperator
In acting as an operator of a project, we face managerial issues such as the difficulty in securing
manpower and the heavy burden of financing. However, experiences as operator can also increase
our opportunities to obtain working interests by improving technical capabilities and acquiring
credit from oil producing countries and oil resource developers. In serving as an operator, weaddress manpower planning, including outsourcing, and the effective utilization of management
resources.
⑤ Balance of contract type
We plan to diversify the risk caused by oil price volatility by balancing production sharing
contracts, or concession contracts, for which profit is linked to the price of oil, and service
contracts, such as buyback or fixed margin contracts, for which profitability is less influenced byoil prices and amounts are fixed.
（2）Project selection relative to the expiration of working interests (maintaining and increasing
production beyond 2017)
The production sharing contract for the offshore Mahakam contract area, which is our group’s
major production project, expires in 2017 and the concession contract for the ADMA block ends in2018. Although we focus on extended contracts, production is expected to decline as the remaining
reserves decline even if the contract is renewed. We intend to keep and increase production beyond
2017 by obtaining working interests from other companies or participating in new projects or taking
over companies having substantial production and stable cash flow.
（3）Strengthening cooperation with leading domestic and foreign companies
Developing crude oil and gas is risky. These large-scale projects require huge investments andpresent high risks, which make it difficult for the development to be handled by a single privatecompany. Typically, several companies form a consortium to promote business internationally. Ourgroup plans to expand business and diversify risk by increasing opportunities for participation inprojects through enhancing cooperation with the major international oil companies, the national oil
companies of oil-producing countries and leading private oil resource developers, trading companies
and other energy-related companies.
― 5 ―（4）Highly efficient and transparent corporate management
As our group has a heavy responsibility to assure the stable supply of energy to Japan efficiently,
we must expand not only our social responsibility but also our sensitivities in conducting business
operations in domestic and international communities. For this reason, we intend to manage ourbusiness efficiently and transparently in line with global standards.
（5）Environmental efforts
Environmental issues are a matter of worldwide concern and, in particular, global warming. We
make every effort to minimize the effects on surrounding areas when we explore, develop andproduce energy resources. At the same time, our core business is natural gas because it discharges a
relatively small amount of CO2 and NOx at combustion, and we intend to further promote its use.
（6）New fields
New technologies such as GTL and DME generate oil substitutes in liquid form under normal
temperature by reformulating. These substitutes have attracted attention because they contain almost
no pollutants. As our group has large reserves of natural gas, we are participating inresearch-and-development projects for GTL and DME. We plan to develop a new gas field byintroducing these new technologies.
The INPEX Group intends to ensure stable earnings and continued improvement of corporate value
in the medium to long term by maintaining and expanding crude oil and gas reserves and production as
our business basis while always paying attention to sustaining financial soundness.
4. Fundamental policy for corporate governance
INPEX helps to ensure a stable supply of energy to Japan, a social responsibility it takes very seriously.
Within this context, INPEX recognizes that enhancing corporate governance is an important management
imperative.
(1) Company Organizations① Management Bodies
a. Directors and Board of Directors
At INPEX, representative directors and other directors who act as executive officers carry out business
operations. The execution of these business operations is overseen by the Board of Directors, which also
discusses and decides on important business affairs. Meetings of the Board are convened once a month andat other times as necessary. The Board is made up of 18 directors, 4 of whom are outside directors. Each ofthese four outside directors serve concurrently as directors of Japan Petroleum Exploration Co., Ltd.,
Mitsubishi Corporation, Mitsui Oil Exploration Co., Ltd. and Marubeni Corporation, corporateshareholders of INPEX. As businesspeople with extensive knowledge and experience in INPEX’s businessfields, these outside directors are asked to express opinions on management of the company’s businesses
that contribute to their development from both specialist and objective perspectives. The previously
mentioned corporate shareholders all operate businesses in the same field as INPEX and therefore compete
against the INPEX Group from time to time. For this reason, INPEX recognizes the need to abide byspecial corporate governance measures with respect to the possibility of conflicts of interest. To this end,
each of INPEX’s directors, including outside directors, is required to sign a written undertaking to comply
with the Japanese Commercial Code relating to such matters as noncompetition practices, proper treatmentof transactions giving rise to a conflict of interest and unauthorized information disclosure. This reflects theimportance of precisely carrying out their duties as directors with a high level of awareness of such matters.
b. Executive Committee
Made up of managing directors and above, the Executive Committee was established in April 2002 to
expedite decision-making. In principle, the Committee is convened every week, and at other times as― 6 ―necessary, to decide on matters that do not require a resolution of the Board and to conduct discussions thatfacilitate Board decisions. In addition to the aforementioned members of the Committee, executive
directors and standing statutory auditors, as well as representatives of departments related to resolutions
and reports being discussed also attend these meetings.
c. Statutory Auditors and Board of Statutory Auditors
INPEX employs the statutory auditor system. Statutory auditors attend important meetings such as theBoard of Directors and Executive Committee. In addition, they conduct interviews with departments asnecessary and audit the execution of duties of directors with regard to the company’s overall businessaffairs and individual projects based on reports from relevant departments and other information.
Furthermore, statutory auditors receive reports related to every audit from the independent auditors andinternal audit reports from the Internal Audit Department. The Board of Statutory Auditors, which consistsof all statutory auditors, determines auditing policy, formulates audit plans and receives reports on thestatus of audits and other matters from statutory auditors. To bolster the audit system, the number ofstatutory auditors was increased from three to four in June 2002. The result is that there are now threeoutside statutory auditors (one standing and two part-time) and one other statutory auditor (standing).
Moreover, since June 2003, the Board of Statutory Auditors has convened every month instead of every
three months as before.
d. Internal Audit
The Internal Audit Department was established as an organization independent from business departments
and directly responsible to the president, to ensure the appropriateness and efficiency of business activities.
As a body cutting across the INPEX Group, the Internal Audit Department evaluates the internal control
systems of the group, including overseas offices. It also examines and evaluates the status of management
bodies, the efficiency of business operations and other matters, pinpointing problem areas, making
necessary reports and conducting follow-up audits to confirm the status of improvements. The activities of
the Internal Audit Department thus contribute to the proper management of the INPEX Group.
②Classes of Share and Corporate GovernanceThe company’s Articles of Incorporation stipulate that certain major corporate decisions require aresolution by the holder of the special class share, in addition to the approval of the ordinary general
meeting of shareholders or Board of Directors. The one special class share was issued on November 17,
2004, concurrently with listing of INPEX’s common stock on the Tokyo Stock Exchangeand held byJapan National Oil Corporation (JNOC).
Major corporate decisions include “the appointment and removal of directors”, “the disposition of material
assets”, “amendments to the Articles of Incorporation”, “mergers, share exchange or share transfer”,“capital reductions” and “dissolution”. The special class share will allow the holder to veto any
appointment or removal of directors or merger, share exchange or share transfer, provided 20% or more of
the voting rights attached to shares of common stock are held by a single non-public entity or a single
non-public entity and its joint shareholders.
JNOC has established guidelines for the exercise of the special class share’s veto rights (with respect todecisions not approved by a meeting of the special class shareholder) in accordance with its internalbusiness regulations. JNOC may veto any one of the aforementioned major corporate decisions only to theextent that it determines a proposed action or transaction (1) will likely result in INPEX being managed in amanner inconsistent with its goal of securing a stable energy supply for Japan as a national flag company;(2) will likely adversely affect the goal of efficiently securing a stable energy supply for Japan as a national
flag company; or (3) may affect the exercise of voting rights of the special class share held by JNOC.
Furthermore, JNOC is obliged to obtain the approval of the Minister of Economy, Trade and Industry
before exercising its voting rights or carrying out any other action at the general meeting of the special― 7 ―class shareholder.
The exercise of veto rights by the special class share is thus restricted. With the existence of this class ofshare, however, INPEX can minimize the risk of losing management control to foreign-owned concerns
and an unsolicited takeover for speculative reasons. Moreover, because the scope of the veto is limited andguidelines have been set by JNOC for the exercise of veto rights, the special class share is an absolute
minimum necessary measure that is highly transparent and does not unjustly impinge on INPEX’s ability tooperate with flexibility and efficiency.
(2) Risk Management and Corporate Ethics
INPEX recognizes that two factors are vital to increase corporate value amid drastic changes in its
operating environment: forestalling and mitigating losses by properly managing risk inherit in its business
operations; and maintaining and strengthening trust with customers, investors and other parties. A wide
range of risk factors could affect corporate value. With respect to risks associated with management
decisions such as management strategy, related departments analyze and examine issues, receiving advice
from attorneys of law and other outside specialists as necessary. Materially important projects are decided
on by the Board of Directors after first being discussed by the Executive Committee and other managerial
bodies. Subsequent changes in matters related to these projects are then closely monitored.
The INPEX Group has formulated a set of Business Principles that embody the basic policies of its
corporate activities. These principles encompass corporate goals; code of conduct; corporate growth; ethics;
health, safety and environment; and contributions to society. The INPEX Group believes that by strictly
adhering to these principles it can maintain and increase the trust and credibility of the company in the eyesof shareholders, employees, business partners and international society—a vital element of continuous
corporate development. The company’s commitment to this approach is unwavering.
5. Fundamental policy for relations with concerned parties (parent company)
The Japan National Oil Corporation (JNOC), which held 53.96% of our issued shares at the end of
September 2004, is a public corporation that was established by the Japan National Oil Corporation
Law (Law No. 99 implemented on July 29, 1967). JNOC promotes the independent development of
crude oil and gas and the stockpiling of crude oil and LP gas. JNOC provides investment, financing anddebt guarantees for some of our subsidiaries and affiliates engaged in the overseas exploration of crude
oil and gas.
No individuals double as a director for our group and as either a director or officer of JNOC. Also,
there is no staff on loan from JNOC to us.
Based on the Reorganization and Rationalization Plan for Special Public Corporations by cabinet
approval on December 19, 2001, JNOC was abolished and part of its operations were transferred to anindependent administrative agency. The law abolishing the Japan National Oil Corporation Law and theMetal Mining Agency of Japan Law (Law No. 94 in 2002) and the Japan Oil, Gas and Metals National
Corporation Law was implemented on July 26, 2002. Japan Oil, Gas and Metals National Corporation
was established on February 29, 2004, and many of JNOC’s operations, including investment and debt
guarantees, and the operation of the Metal Mining Agency of Japan to secure the supply of mineral
resources of nonferrous metal, were transferred to the new entity.

Note: Our 343,725 shares of common stock then held by Japan National Oil Corporation were sold at the time of ourcompany’s stock listing on the First Section of the Tokyo Stock Exchange as of November 17, 2004. As a result, the numberof our company’s shares held by Japan National Oil Corporation totaled 692,308.75 (accounting for a 36.06% of our issued
shares) as of that date.

― 8 ―Ⅲ Results of Operations and Financial Position(1) Results for the Six Months Ended September 30, 2004
During the six-month period ended September 30, 2004, the Japanese economy saw several signs of growth
slowdown of exports, mining and manufacturing production and capital investment, which had previously beenon the rise, although personal spending, supported by the continued improvement of the employment situation,
continued to remain steady in general. In these circumstances, it would be necessary for us to carefully watch
future business trends although the underlying economic recovery seems to have been firmly kept going on thewhole.
Crude oil prices and exchange rates have significant effects on the revenues and expenditures of our group.
Crude oil prices rose rapidly during this six-month period due to several factors such as a noticeable increase of
speculative transactions in the crude oil futures market, as well as geopolitical risks including the decline of
OPEC’s spare production capacity, the destabilized political situation in the Middle East and steady growth in
crude oil demand in major consumer countries including Asian countries, particularly China, and the UnitedStates. As a consequence, the average price of our crude oil for the six-month period increased 37.8%, toUS$37.17 per barrel from US$10.19 for the corresponding six-month period a year before.
Meanwhile, principally reflecting step-by-step rises in interest rates in the United States, the exchange rate ofJapanese yen against the U.S. dollar depreciated gradually from ¥105.63 at the beginning of the period to ¥111.05
as of September 30, or a difference of ¥5.42. Consequently, the average exchange rate for crude oil sales of ourcompany was ¥110.15 per US dollar, which is yen appreciation of ¥8.19, or 6.9% year over year.
In these business circumstances, our company’s net sales for the six months ended September 30, 2004,
increased ¥103,750 million, or 94.2%, year over year to ¥213,939 million. Of this figure, net sales of crude oil
accounted for ¥127,896 million, a remarkable increase of ¥94,458 million, or 282.5%, from the previous
corresponding six-month period a year ago. Major contributing factors were a year-over-year increase in sales
volume of 20,606 thousand barrels, or 200.0%, to 30,910 thousand barrels and a rise in the average oil sales priceof 37.8% as described above despite the yen’s appreciation in terms of the average exchange rate. The rise in sales
volume mainly reflected the consolidation of the operating performance of Japan Oil Development Co., Ltd., into
our company’s operating results from the beginning of fiscal 2004 and an increase in sales volume at INPEXSouthwest Caspian Sea, Ltd. Net sales of natural gas increased ¥9,292 million, or 12.1% year over year, to¥86,043 million. Higher gas sales prices interlocked with the crude oil prices was a major contributor to better net
sales of natural gas despite the higher appreciation of the yen and a slight reduction in LNG sales volume.
Cost of sales for the six-month period increased ¥37,908 million, or 70.8%, to ¥91,453 million due principally
to a rise in crude oil sales volume and an increase in natural gas-related expenses, for example, in association withthe renewed investment to boost production capacity at the Offshore Mahakam PSC. Exploration costs were¥982 million, down ¥4,068 million, or 80.6%, compared with the corresponding six-month period a year ago.
Selling, general and administrative expenses were ¥4,956 million, up ¥2,243 million, or 82.7％ year over year,
and operating income increased ¥67,668 million, or 138.4％, to ¥116,546 million.
Other income decreased ¥937 million, or 25.8％, to ¥2,695 million, while other expenses increased ¥162
million, or 1.9%, to ¥8,925 million. As a consequence, ordinary income for the six months ended September 30,
2004, increased ¥66,567 million, or 152.2％, to ¥110,316 million.
―9―

Income taxes were ¥83,032 million, up ¥54,059 million, or 186.6% year over year, mainly due to the increased
amount of foreign tax payments derived from the integration of Japan Oil Development Co., Ltd. As a result, net
income of our company for the six months ended September 30, 2004, increased ¥15,118 million, or 84.5％, to¥33,017 million.

As our company primarily engages in the exploration, development, production, and sales of crude oil and naturalgas, results of operations by business segment are not described herein.

(2) Financial Position
Total assets of our company at the end of this six-month period amounted to ¥718,155 million, up ¥192,857
million from ¥525,298 million at the end of the previous fiscal year. Current assets at the end of this six-month
period increased ¥96,169 million to ¥203,122 million, reflecting increases in cash and deposits and accounts
receivable—trade. Fixed assets increased ¥96,687 million to ¥515,032 million, mainly due to increases intangible fixed assets, investment securities and recoverable accounts under production sharing. Total liabilities atthe end of this six-month period amounted to ¥317,502 million, up ¥103,197 million from ¥214,305 million at theend of the previous fiscal year. Current liabilities increased ¥72,434 million to ¥101,329 million, while long-term
liabilities were ¥216,173 million, up ¥30,762 million from the end of the previous fiscal year. Minority interests
in consolidated subsidiaries increased ¥265 million from the end of the previous fiscal year to ¥33,144 million.
Shareholders’ equity was ¥367,508 million, up ¥89,394 million from the end of the previous fiscal year. This
rise in shareholders’ equity principally reflected the new inclusion of ¥62,402 million in additional paid-in capital
due to the integration of Japan Oil Development Co., Ltd. via equity swap and an increase of ¥27,000 million inretained earnings.

As for cash flows during the six-month period, net cash provided by operating activities amounted to ¥63,516
million, mainly reflecting the expanded crude oil sales volume and the rises in prices of crude oil and natural gas.
Meanwhile, net cash used in investing activities amounted to ¥56,543 million, which was kept within the amountof cash provided by operating activities. The net increase in cash and cash equivalents totaled ¥10,706 million
with the addition of ¥4,944 million in net cash provided by financing activities during the six months ended
September 30, 2004, and others.
Cash and cash equivalents at end of the six-month period totaled ¥121,182 million by adding cash and cash
equivalents of ¥55,894 million at beginning of the period for the newly consolidated subsidiary to the above netincrease in cash and cash equivalents during the period, compared with ¥54,582 million at the end of the previous
fiscal year.
（3）Full-Year Outlook
On a full-year basis, consolidated net sales for the year ending March 31, 2005, are expected to increase¥183.9 billion, or 84.1%, over the previous year to ¥402.8 billion. This would reflect the integration of JapanOil Development Co., Ltd., as a subsidiary and an expected increase in sales prices of our products.
Consolidated ordinary income is expected to reach ¥200.9 billion, up ¥106.1 billion, or 112.0% year overyear, supported by such positive would-be factors as an increase in net sales and a decline in investment for― 10 ―

exploration projects.
As a consequence, net income for the year ending March 31, 2005, is expected to increase ¥19.5 billion, or
56.1%, over the previous year to ¥54.3 billion.
In these estimates, the crude oil price for the second-half period is assumed to be US$30 per barrel (forBrent crude) with the exchange rate of the Japanese yen against the U.S. dollar at ¥108.

― 11 ―

ファイル名:430-03

更新日時:2004/11/18 18:43 印刷日時:04/11/18 18:43

Ⅳ Semiannual consolidated financial statements(1) Semiannual consolidated financial statements
1) Consolidated balance sheets

Accounts

As of September 30,
2003
Amounts
Ratio

As of September 30,
2004 (A)Amounts
Ratio％(Assets)
Current assets
Cash and deposits*2
Accounts receivable-tradeMarketable securities
Inventories
Other
Less allowance for
doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets*1
Intangible assets
Exploration and development rights
Other
Total intangible assets
Investments and otherassetsInvestment securities *2
Recoverable accounts
under production sharing
Other
Less allowance for
doubtful accounts
Less allowance for recoverable accounts under
production sharing
Less allowance for investments in exploration
Total investments andother assets
Total fixed assets
Total assets

Fluctuation(A) - (B)(Millions of yen)
As of March 31, 2004
(B)
Amounts
Ratio

％

％

54,475
13,68528,531828
4,740

129,742
39,75012,761
1,255
19,64666,02020,485(6,218)362
15,531

63,722
19,265
18,979
892
4,115

(14)

(33)

(11)

(21)

102,24620.1

203,12228.3

96,169106,952

20.4

32,428

6.4

68,947

9.6

33,80535,141

6.7(615)

134,367

4,971
4,355

3,540
137,908

135,034
3,713
138,747

133,75127.2

8,512
142,263

19.8

88,927

103,444

24,073

79,371

191,108

225,946

17,178208,768

11,09924,222

16,350

7,871

(130)

(687)

(357)

(329)

(49,402)(44,938)(262)(44,676)(6,068)(4,166)

1,544(5,710)26.2

235,53246.3

303,82142.3

58,526245,295

46.7

406,708
508,955

79.9
100.0

515,032
718,155

71.7
100.0

96,687
192,857

418,345525,298

79.6
100.0

― 12 ―

ファイル名:430-03

更新日時:2004/11/18 18:43 印刷日時:04/11/18 18:43(Millions of yen)Accounts

As of September 30,
2003

As of September 30,
2004 (A)Amounts

Amounts

Ratio
％

Ratio

Fluctuation(A) - (B)

As of March 31, 2004
(B)
Amounts

％

Ratio
％

(Liabilities)
Current liabilities
Accounts payable
Current portion of
long-term debt
Income taxes payable

1,941

16,783

13,511

3,272

131

1,229

1,111

117

10,75038,33429,963

8,371

Allowance

3,636

1,447

(1,725)

3,172

Other

21,47143,53329,573

13,959Total current liabilities

37,932

72,43428,894

7.5

101,329

14.1

5.5

Long-term liabilities
Long-term debt
*2
Accrued employees’
retirement benefits
Accrued officers’ retirement benefits
Other

166,100

179,881

10,574

169,307

770

1,438

654

783

453

497

(14)

511

13,55534,355

19,547

14,808

Total long-term liabilities

180,87935.5

216,173

30.1

30,762

185,410

35.3

Total liabilities

218,81143.0

317,50244.2

103,197

214,305

40.8

27,087

5.3

33,1444.6

265

32,878

6.3

29,4605.8

29,4604.1―

29,4605.6

62,402

8.7

62,402―(Minority interests)
Minority interests in consolidated subsidiaries(Shareholders’ equity)
Common stock
Additional paid-in capital―

Retained earnings
Unrealized holding gain
(loss) on securities
Translation adjustments

232,74445.7

276,62838.5

27,000249,628

47.5

(33)

(0.0)

256

0.0

102

154

0.0

884

0.2

(1,238)

(0.1)

(110)

(1,128)(0.2)

Total shareholders’ equity

263,055

51.7

367,508

51.2

89,394

278,113

52.9

Total liabilities, minority
interests and shareholders’equity508,955

100.0

718,155

100.0

192,857

525,298

100.0― 13 ―

2) Consolidated statements of income

Accounts(Millions of yen)
For the six months For the six months
Fluctuation For the year ended
ended September 30, ended September(B) - (A)March 31, 2004
30, 2004 (B)2003 (A)Amounts
Ratio Amounts Ratio
Amounts Amounts Ratio％

Net sales
Cost of sales
Gross profit
Exploration expenses
Selling, general and adminis*1
trative expenses
Operating income
Other income
Interest income
Equity in earnings of affiliates
Gain on sales of mining
rights
Reversal of allowance forinvestments in exploration
Other
Other expenses
Interest expense
Equity in losses of affiliates
Provision for allowance forrecoverable accounts under
production sharing
Amortization of explorationand development rights
Foreign exchange loss
Other
Ordinary income
Income before income taxes
and minority interests
Income taxes-current
Income taxes-deferred
Minority interests
Net income％％

110,188
53,54556,642
5,050

100.0
48.6
51.4
4.6

213,939
91,453
122,485
982

100.0
42.7
57.3
0.5

103,750
37,90865,842(4,068)218,831
105,758
113,072
11,552

100.0
48.3
51.7
5.3

2,713

2.5

4,956

2.3

2,243

7,644

3.5

48,878
3,633
540
1,027

44.4
3.3

116,546
2,695
1,603
―

54.5
1.3

67,668(937)
1,062(1,027)

93,876
15,503
1,574
452

42.9
7.1

1,497

―

(1,497)

1,497

―

744

744

―

(219)
162
505
479

11,97814,606
1,816
―

567
8,763
679
―

348
8,925
1,184
479

8.0

4.2

6.7

5,890

180

(5,709)10,056

390

890

500

746

551
1,251
43,748

39.7

5,251
938
110,316

51.6

4,700
(312)
66,567―
1,986
94,77343.3

43,74839.7

110,31651.6

66,567

94,773

43.3

(2.4)
16.2

83,032(4,835)(896)
33,017(0.4)
15.4

54,059(4,314)
1,704
15,11855,081
5,237(326)
34,781(0.1)
15.9

28,972(520)(2,601)
17,898― 14 ―

更新日時:2004/11/17 15:06

ファイル名:430-05

印刷日時:04/11/17 23:02

3) Consolidated statements of retained earnings(Millions of yen)Accounts

For the six months
ended September 30,
2003 (A)For the six months
ended September 30,
2004 (B)

Fluctuation(B) - (A)For the year ended
March 31, 2004

Amounts

Amounts

Amounts

Amounts(Additional paid-in capital)
Balance at beginning of theperiod―――Addition:
Increase due to a share exchange transaction―

Balance at end of the period

62,40262,402――62,40262,402―

220,852

249,628

28,775

220,852

33,017

15,11834,781(Retained earnings)
Balance at beginning of theperiodAddition:
Net income

17,89817,89833,01734,781

Deduction:
Cash dividends paid

5,892

5,892

―

5,892

Directors’ bonuses

114

124

10

114

(included statutory auditors’)

(7)

6,016

10

(5)

276,628

43,883

Balance at end of the period

6,006

(9)

232,744― 15 ―

6,006
249,628

4) Consolidated statements of cash flows(Millions of yen)

Item

Cash flows from operating activities
Income before income taxes andminority interests
Depreciation and amortization(Gain) loss on sales of tangibles fixed
assetsAmortization of goodwill(Reversal of) provision for allowancefor doubtful accounts
Provision for allowance for recoverable
accounts under production sharing(Reversal of ) provision for accrued
retirement benefits
Interest and dividend income
Interest expense
Foreign exchange (gain) loss
Equity in losses (earnings) of affiliates
Gain on sales of mining rights
Gain on sales of investment securities
Accounts receivable
Recovery of recoverable accounts
under production sharing (capital
expenditure)
Recoverable accounts under production
sharing (operating expenditures)
Inventories
Accounts payable
Other receivables
Accrued expenses
Long-term accrued expenses
Advance payments received
Bonuses to directors and statutory
auditors
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating
activities

For the six
months ended
September 30,
2003 (A)For the six
months ended
September 30,
2004 (B)

Fluctuation(B) - (A)For the year
ended
March 31, 2004

Amounts

Amounts

Amounts

Amounts

43,748110,316

66,567

94,773

1,012

5,589

4,576

4,049

49

(46)

(95)

58

84

84

―

168

(12)

470

483

123

6,564

262

(6,302)

11,284

(213)

41

254

(141)

(570)
679
1,828
(1,027)(1,497)(62)
2,103(1,688)
1,184
4,170
479
―
―
(7,218)(1,118)
505
2,342
1,507
1,497
62
(9,321)(1,711)
1,816(11,980)(452)(1,497)(63)(2,521)

9,314

16,728

7,414

21,744(7,826)(3,077)

4,748(13,827)545(1,597)
(452)
(74)
(855)
5,859

(362)
3,699
(5,932)
13,037
1,546
1,877

(908)
5,296
(5,480)13,111
2,402(3,982)

480
(266)
(389)
541
(741)
(2,160)

(114)

(127)

(13)

(114)

243
57,7301,116(481)(26,515)(3,393)
137,642
1,983(1,047)(75,061)(3,636)
79,912866(565)(48,546)(827)
98,3482,471(1,322)(55,033)

31,85063,516

31,66644,464― 16 ―

For the six
For the six
months ended months ended Fluctuation
September 30, September 30, (B) - (A)2003 (A)2004 (B)

Accounts

Cash flows from investing activities
Proceeds from sales of marketable securities
Purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchase of intangible assets
Proceeds from sales of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Investment in recoverable accounts under
production sharing (capital expenditures)
Additional acquisition of shares of consolidated
subsidiary
Decrease in short-term loans receivables
Long-term loan madeCollection of long-term loans receivables
Purchase of mining rights
Proceeds from sales of mining rights
Proceeds from purchase of subsidiaries’ stock
resulting in changes in the scope of consolidation
Other
Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from minority interests for additional
sharesCash dividends paid
Restricted cash deposited
Proceeds from refund of restricted cash
Other
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of theperiodIncrease in cash and cash equivalents due to a shareexchange transaction
Cash and cash equivalents at end of the period

For the year
ended March
31, 2004

Amounts

Amounts

Amounts

Amounts

9,495(4,872)10(0)―(15,105)683

14,221(5,541)349(3)
0(33,490)
―

4,725
(668)
338
(2)
0
(18,385)(683)

20,706(8,920)22(0)0(19,661)
3,685(26,858)(30,829)(3,970)(58,997)

―

―

―

(633)

(11)
(0)
0
(162,476)
3,052

(0)
(735)
2
―
―

11
(735)
1
162,476(3,052)1(0)
2(163,511)
3,052

―

―

―

3,992

(17)
(196,100)(516)(56,543)(498)
139,556

2,139(218,121)

117,781(58)

10,792(1,700)(106,989)(1,642)

136,028(195)

28,794

1,244(27,550)

30,320(5,892)(16,500)――
124,125(5,892)
―
580
(79)
4,944

―
16,500580(79)(119,181)(5,892)(9,140)――151,120(314)(1,212)(897)(1,295)(40,438)

10,706

51,144(23,831)

78,41454,582(23,831)

78,414―55,89455,894―37,975

121,182

83,20654,582― 17 ―

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

Notes to the semiannual consolidated financial statements
For the six months ended
September 30, 2003
1. Scope of consolidation
No. of consolidated subsidiaries: 25
Major subsidiaries

For the six months ended
September 30, 2004
1. Scope of consolidation
No. of consolidated subsidiaries: 27
Major subsidiaries

INPEX Natuna, Ltd., INPEX Alpha,Ltd., INPEX ABK, Ltd., INPEX Sahul, Ltd., INPEX North Caspian Sea,
Ltd., INPEX Southwest Caspian Sea,
Ltd., INPEX Browse, Ltd., INPEX
Masela Ltd.

Japan Oil Development Co., Ltd.,INPEX Natuna, Ltd., INPEX Alpha,Ltd., INPEX ABK, Ltd., INPEX Sahul, Ltd., INPEX North Caspian Sea,
Ltd., INPEX Southwest Caspian Sea,
Ltd., INPEX Browse, Ltd., INPEX
Masela Ltd.
During this semiannual period:
No. of new companies included inconsolidated subsidiaries
1
No. of companies excluded fromconsolidated subsidiaries
1
Details for the above changes:(1) Japan Oil Development Co., Ltd.,
has been included due to acquisitionof shares through a share exchangetransaction.

(2) INPEX Rabe Timor Sea, Ltd., hasbeen excluded due to completion ofliquidation

For the year ended March 31, 2004
1. Scope of consolidation
No. of consolidated subsidiaries: 27
Major subsidiaries
INPEX Natuna, Ltd., INPEX Alpha,Ltd., INPEX ABK, Ltd., INPEX Sahul, Ltd., INPEX North Caspian Sea,
Ltd., INPEX Southwest Caspian Sea,
Ltd., INPEX Browse, Ltd., INPEX
Masela Ltd.
During this fiscal year:
No. of new companies included inconsolidated subsidiaries
3
No. of companies excluded fromconsolidated subsidiaries

1

Details for the above changes:(1) INPEX Jawa, Ltd., and INPEX
Smatra, Ltd., have been included due
to increase of the shareholding ratio.
(2) Azadegan Oil Development, Ltd.,
has been included to establishment of
the company.

Unconsolidated subsidiary:None
2. Application of equity method
Unconsolidated subsidiary accounted
for by the equity method

Unconsolidated subsidiary:
Same as on the left
2. Application of equity method
Unconsolidated subsidiary accounted
for by the equity method(3) INPEX West Natuna, Ltd., hasbeen excluded due to completion ofliquidation
Unconsolidated subsidiary:
Same as on the left
2. Application of equity method
Unconsolidated subsidiary accounted
for by the equity

None

Same as on the left

Same as on the left

No. of affiliates accounted for by theequity method:10

No. of affiliates accounted for by theequity method:
11

No. of affiliates accounted for by theequity method:
8

Major affiliates:
INPEX Jawa, Ltd., MI Berau B.V.,
ALBACORA JAPAO PETROLEO
LTDA, INPEX Offshore North Campos, Ltd.

Major affiliates:
MI Berau B.V., ALBACORA JAPAOPETROLEO LTDA, INPEX Offshore
North Campos, Ltd.

Major affiliates:
MI Berau B.V., ALBACORA JAPAOPETROLEO LTDA, INPEX Offshore
North Campos, Ltd.

During this semiannual period:
No. of new companies included inaffiliates accounted for by the equity
method:4

During this fiscal year:
No. of companies excluded from affiliates accounted for by the equity
method:2

No. of companies excluded from affiliates accounted for by the equity
method:1
Details for the above changes:(1) BP-Japan Oil Development Company Ltd., which is an affiliate of Japan Oil Development Co., Ltd., hasbeen included due to acquisition ofshares through a share exchange transaction.

― 18 ―

Details for the above changes:(1) Japex AC, Ltd., has been deleted
by completion of liquidation.

ファイル名:430-07

For the six months ended
September 30, 2003

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2004
(2) Angola Japan Oil Co., Ltd.,AJOCO Exploration Co., Ltd. and
AJOCO ’91 Exploration Co., Ltd.
have been included due to increase of
the shareholding ratio as a result of
acquisition of additional shares.

Procedures for application of the equity method:
Regarding affiliates accounted for by
the equity method that have a different
closing date than the consolidated
closing date for the semiannual period,
we use the semiannual financial
statements of each company.

(3) INPEX Northland Ltd., has been
excluded due to completion of liquidation.
Procedures for application of the equity method:
Regarding affiliates accounted for by
the equity method that have a different
closing date than the consolidated
closing date for the semiannual period,
we use the semiannual financial
statements of each company.
For some companies, however, we use
semiannual financial statements prepared for consolidation purpose as of
the consolidated closing date.

― 19 ―For the year ended March 31, 2004
(2) INPEX Jawa, Ltd., has been included in consolidated subsidiaries
due to increase of the shareholding ratio as a result of acquisition of additional shares and, therefore, has been
excluded from affiliates accounted forby the equity method.

Procedures for application of the equity method:
Regarding affiliates accounted for by
the equity method that have a different
closing date than the consolidated
closing date for the year, we use thefinancial statements of each company.

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

For the year ended March 31, 2004

3. Closing dates for the semiannual
period of consolidated subsidiaries

3. Closing dates for the semiannual
period of consolidated subsidiaries

3. Closing dates for the fiscal yearof consolidated subsidiaries

Companies for which the closing
date for the semiannual period differs from the consolidated closing
date are as follows.

Companies for which the closing
date for the semiannual period differs from the consolidated closing
date are as follows.

Companies for which the closing
date for the fiscal year differs fromthe consolidated closing date are as
follows.

Company

Closing date No
for semian- te
nualCompany

Closing date No
for semian- te
nualDec. 31

1

INPEX Tengah, Ltd.

Dec. 31

1

INPEX East Arguni, Ltd

Dec. 31

1

INPEX West Arguni, Ltd.

Dec. 31

1

INPEX Browse, Ltd.

Dec. 31

1

INPEX Rabe Timor Sea, Ltd.

Dec. 31

1

INPEX Masera, Ltd.

Dec. 311

Dec. 311

Dec. 31

1

INPEX South Natuna, Ltd.

Dec. 31

1

1

INPEX Timor Sea, Ltd.
INPEX Sahul, Ltd.
INPEX Alpha, Ltd.

Dec. 31
Dec. 31
Dec. 311
1
1June 30

1

INPEX North Makassar, Ltd.

Dec. 31

1

June 30

1

INPEX Northeast Sahara, Ltd.

Dec. 31

1

INPEX North Caspian Sea, Ltd.

Dec. 31

1

INPEX North Natuna, Ltd.

Dec. 311

Dec. 311

Dec. 311

Dec. 311

Dec. 31
Dec. 311
1June 30

1

INPEX ABK, Ltd.

June 30

1

INPEX Tengah, Ltd.

June 30

1

INPEX Tengah, Ltd.

June 30

1

INPEX East Arguni, Ltd

June 30

1

INPEX East Arguni, Ltd

June 30

1

INPEX West Arguni, Ltd.

June 30

1

INPEX West Arguni, Ltd.

June 30

1

INPEX Browse, Ltd.

June 30

1

INPEX Browse, Ltd.

June 30

1

INPEX Rabe Timor Sea, Ltd.

June 30

1

INPEX Masera, Ltd.

June 30

1

INPEX Masera, Ltd.

June 30

1June 30

1June 30

1

INPEX Offshore Northeast Mahakam, Ltd.
INPEX Southwest Caspian Sea,
Ltd.

June 30

1June 30

1

INPEX South Natuna, Ltd.

June 30

1

INPEX South Natuna, Ltd.

June 30

1

INPEX Timor Sea, Ltd.
INPEX Sahul, Ltd.
INPEX Alpha, Ltd.

June 30
June 30
June 30

1
1
1

INPEX Timor Sea, Ltd.
INPEX Sahul, Ltd.
INPEX Alpha, Ltd.

June 30
June 30
June 30

1
1
1

INPEX North Makassar, Ltd.

June 30INPEX North Makassar, Ltd.

June 30

1

INPEX Northeast Sahara, Ltd.

INPEX Northeast Sahara, Ltd.

June 30

1

INPEX North Caspian Sea, Ltd.

INPEX North Caspian Sea, Ltd.

June 30

1

INPEX North Natuna, Ltd.

June 30

1

INPEX West Natuna, Ltd

June 30

1June 30

1June 30

1June 30
June 30

1
1

INPEX Offshore North Mahakam, Ltd.
INPEX Offshore South Sulawesi,
Ltd.
INPEX BTC Pipeline, Ltd.
INPEX DLNGPL Pty Ltd

Note 1. We used the semiannual financial statements of the consolidated
subsidiaries as of their closing date forthe semiannual period. However, thenecessary adjustments have been madeto the semiannual financial statementsof those companies to reflect any significant transactions made between the
Company’s closing date and those of
the consolidated subsidiaries.

INPEX North Natuna, Ltd.
INPEX Offshore North Mahakam, Ltd.
INPEX Offshore South Sulawesi,
Ltd.
Azadegan Petroleum Development, Ltd.
Japan Oil Development Co., Ltd.
INPEX BTC Pipeline, Ltd.
INPEX DLNGPL Pty Ltd

June 30

1June 30

1June 30

1June 30

1June 30

2June 30
June 3011Note 1. We used the semiannual financial statements of the consolidated
subsidiaries as of their closing date forthe semiannual period. However, thenecessary adjustments have been madeto the semiannual financial statementsof those companies to reflect any significant transactions made between the
Company’s closing date and those of
the consolidated subsidiaries.
Note 2. The semiannual financial
statements are prepared as of the consolidated closing date.

― 20 ―

Closing date No
teINPEX ABK, Ltd.
INPEX ABK, Ltd.

INPEX Offshore Northeast Mahakam, Ltd.
INPEX Southwest Caspian Sea,
Ltd.

Company

INPEX Offshore Northeast Mahakam, Ltd.
INPEX Southwest Caspian Sea,Ltd.

INPEX Offshore North Mahakam, Ltd.
INPEX Offshore South Sulawesi,
Ltd.
Azadegan Petroleum Development, Ltd.
INPEX BTC Pipeline, Ltd.
INPEX DLNGPL Pty Ltd

Note 1. We used the financial statements of the consolidated subsidiaries
as of their closing date for the fiscal
year. However, the necessary adjustments have been made to the financial
statements of those companies to reflect any significant transactions madebetween the Company’s closing date
and those of the consolidated subsidiaries.

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

For the year ended March 31, 2004

4. Accounting policies
1) Valuation method of significant assets

4. Accounting policies
1) Valuation method of significant assets

4. Accounting policies
1) Valuation method of significant assets(1) Securities
Other securities
With a determinable market
value
Other securities with a determinable market value arestated at fair value with any
changes in unrealized holding
gain or loss, net of the applicable income taxes, included
directly in shareholders’ equity. Cost of securities sold isdetermined by the moving
average method.

(1) Securities
Other securities
With a determinable market
value(1) Securities
Other securities
With a determinable market
valueSame as on the left

Same as on the left

Without a determinable market
value
Other securities without a determinable market value arestated at cost determined by
the moving average method.

Without a determinable market value
Same as on the left

Without a determinable market value
Same as on the left(2) Inventories
Inventories are stated principally at cost determined by
the average method(2) Inventories
Same as on the left(2) Inventories
Same as on the left

2) Depreciation method of significant depreciable assets2) Depreciation method of significant depreciable assets2) Depreciation method of significant depreciable assets(1) Tangible fixed assets
Depreciation of tangible
fixed assets is determinedprimarily by the decliningbalance method, except forthe buildings (excluding facilities annexed) acquired on
and after April 1, 1998, on
which depreciation is computed by the straight-line
method, at rates based on theuseful lives and residual
value of the respective assets
as prescribed by the corporate tax law. However, depreciation of certain mining
facilities of two domestic
subsidiaries is computed by
the unit-of-production
method.

(1) Tangible fixed assets
Depreciation of tangible
fixed assets is determinedprimarily by the decliningbalance method, except forthe buildings (excluding facilities annexed) acquired on
and after April 1, 1998, on
which depreciation is computed by the straight-line
method, at rates based on theuseful lives and residual
value of the respective assets
as prescribed by the corporate tax law. However, depreciation of mining
facilities is mainly computedby the unit-of-production
method.

(1) Tangible fixed assets
Depreciation of tangible
fixed assets is determinedprimarily by the decliningbalance method, except forthe buildings (excluding facilities annexed) acquired
on and after April 1, 1998,
on which depreciation iscomputed by the straightline method, at rates basedon the useful lives and residual value of the respective assets as prescribed by
the corporate tax law. However, depreciation of certain
mining facilities of two
domestic subsidiaries iscomputed by the unit-ofproduction method.

― 21 ―

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

For the year ended March 31, 2004

(2) Intangible fixed assets
Exploration and development
rights at the exploration stage
are fully amortized in the year
such rights are acquired andthose at the production stage
are amortized by the unit-ofproduction method.

(2) Intangible fixed assets
Exploration and development
rights at the exploration stage
are fully amortized in the year
such rights are acquired andthose at the production stage
are amortized by the unit-ofproduction method.

(2) Intangible fixed assets
Exploration and development
rights at the exploration stage
are fully amortized in the year
such rights are acquired andthose at the production stage
are amortized by the unit-ofproduction method.

Other intangible fixed assets
are amortized by the straightline method at rates based on
the useful lives and residual
value of the respective assets asprescribed by the corporate tax
law.

Mining rights are mainly amortized by the unit-of-production
method.

Other intangible fixed assets
are amortized by the straightline method at rates based on
the useful lives and residual
value of the respective assets asprescribed by the corporate tax
law.

Capitalized computer software
costs are being amortized overa period of five years.

Other intangible fixed assets
are amortized by the straightline method at rates based on
the useful lives and residual
value of the respective assets asprescribed by the corporate tax
law.

Capitalized computer software
costs are being amortized overa period of five years.

Capitalized computer software
costs are being amortized overa period of five years.
3) Accounting for deferred assets
Deferred assets are charged toincome as incurred.
4) Basis for significant allowances(1) Allowance for doubtful receivables
The allowance for doubtfulreceivables is provided at an
amount determined based on
the historical experience ofbad debt with respect to ordinary receivables, plus anestimate of uncollectible
amounts determined by reference to specific doubtfulreceivables from customers
which are experiencing financial difficulties.

3) Accounting for deferred assets
Same as on the left

3) Accounting for deferred assets
Same as on the left

4) Basis for significant allowances(1) Allowance for doubtful receivables
Same as on the left

4) Basis for significant allowances(1) Allowance for doubtful receivables
Same as on the left

(2) Allowance for recoverable
accounts under production
sharing
An allowance for recoverable accounts under production sharing is provided forprobable losses on investments made during the exploration phase under
production sharing contracts
arising from the failure to
discover commercial oil andgas.

(2) Allowance for recoverable
accounts under production
sharing(2) Allowance for recoverable
accounts under production
sharing

Same as on the left

― 22 ―

Same as on the left

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

For the year ended March 31, 2004

(3) Allowance for investments
in exploration(3) Allowance for investment in
exploration(3) Allowance for investment in
exploration

The allowance for investments in exploration is provided for future potential
losses on investments in exploration companies at an
estimated amount based on
the net assets of the investees.
(4) Accrued employees’ retirement benefits
Accrued employees’ retirement benefits are provided at
the amount calculated basedon the retirement benefit obligation at end of the semiannual period.

Same as on the left

(4) Accrued employees’ retirement benefits
Same as on the left

(4) Accrued employees’ retirement benefits
Accrued employees’ retirement benefits are provided at
the amount calculated basedon the retirement benefit obligation at end of the year.
Because the Company andsubsidiaries are classified as
small enterprises, we employ a simplified method (atthe amount which would be
required to be paid if all active employees voluntarily
terminated their employment
as of the balance sheet date)
for the calculation of the retirement benefit obligation.

Because the Company andsubsidiaries are classified as
small enterprises, we employ a simplified method (atthe amount which would be
required to be paid if all active employees voluntarily
terminated their employment
as of the balance sheet date)
for the calculation of the retirement benefit obligation.
(5) Accrued officers’ retirement
benefits
Accrued officers’ retirement
benefits are stated at theamount which would be required to be paid if all officers voluntarily terminatedtheir services as of the balance sheet date based on
their respective internal
rules.

Same as on the left

(5) Accrued officers’ retirement
benefits
Same as on the left

― 23 ―(5) Accrued officers’ retirement
benefits
Same as on the left

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

For the year ended March 31, 2004

5) Translation of consolidated
subsidiaries’ significant assets
and liabilities denominated inforeign currencies into yen in
preparation of their semiannual financial statements

5) Translation of consolidated
subsidiaries’ significant assets
and liabilities denominated inforeign currencies into yen in
preparation of their semiannual financial statements

5) Translation of consolidated
subsidiaries’ significant assets
and liabilities denominated inforeign currencies into yen in
preparation of their financial
statements

Monetary assets and liabilities
denominated in foreign currencies are translated into yen at
the exchange rates prevailing at
the balance sheet date. The
resulting exchange gain or loss
is credited or charged to income.

Same as on the left

Same as on the left

6) Accounting for important
leases6) Accounting for important
leases

The revenue and expense accounts of the overseas subsidiaries are translated into
yen at the rates of exchange in
effect at the balance sheet
date. Except for the components of shareholders’ equity,
the balance sheet accounts arealso translated into yen at therates of exchange in effect atthe balance sheet date. The
components of shareholders’equity are translated at their
historical exchange rates.
Translation adjustments arepresented as a component ofshareholders’ equity and minority interests.
6) Accounting for important
leasesNon-cancelable leases are primarily accounted for as operating leases except that leaseagreements which stipulate thetransfer of ownership of theleased assets to the lessee areaccounted for as finance leases.

――――――――――― 24 ―

Non-cancelable leases areprimarily accounted for as operating leases except that leaseagreements which stipulate
the transfer of ownership ofthe leased assets to the lessee
are accounted for as financeleases.

ファイル名:430-07

更新日時:2004/11/18 18:27 印刷日時:04/11/18 18:27

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

7) Other significant matters for
preparation of semiannual
consolidated financial statements

7) Other significant matters for
preparation of semiannual
consolidated financial statements

7) Other significant matters for
preparation of consolidated
financial statements(1) Consumption tax
Transactions subject to consumption tax are recorded at
amounts exclusive of consumption tax.

(1) Consumption tax
Same as on the left

(1) Consumption tax
Same as on the left

(2) Recoverable accounts under
production sharing(2) Recoverable accounts under
production sharing(2) Recoverable accounts under
production sharing

Cash investments made by
the Company during exploration, development and production phases under aproduction sharing contract
are recorded as “Recoverable
accounts under production
sharing” so long as they arerecoverable under the termsof the relevant contract.
When the Company receives
the natural gas and crude oilin accordance with the contract, an amount corresponding to the purchase costs ofthe products (i.e., a cost recovery portion of the investments) is released fromthis account5 Scope of cash and cash equivalents in the semiannual consolidated statement of cash flow
Cash (cash and cash equivalents) in the semiannual consolidated statement of cash
flow consisted of cash on hand,cash in banks which can bewithdrawn on demand, andshort-term investments with amaturity of three months orless when purchased which caneasily be converted to cash andare subject to little risk ofchange in value.

For the year ended March 31, 2004

Same as on the left

Same as on the left

5 Scope of cash and cash equivalents in the semiannual consolidated statement of cash flow
Same as on the left

5 Scope of cash and cash equivalents in consolidated statementof cash flow
Cash (cash and cash equivalents) in the consolidated
statement of cash flow consisted of cash on hand, cash inbanks which can be withdrawn on demand, and shortterm investments with a maturity of three months or lesswhen purchased which caneasily be converted to cash
and are subject to little risk ofchange in value.

― 25 ―

更新日時:2004/11/17 14:58

ファイル名:430-08

印刷日時:04/11/17 23:04

Notes(For the semiannual consolidated balance sheets)
As of September 30, 2003
*1 Accumulated depreciation
Accumulated depreciation of
tangible fixed assets was¥21,975 million.
*2 Pledged assets
Cash and deposits of ¥16,500
million were pledged ascollateral for long-termborrowings of ¥80,847 million
and guarantee obligation of¥7,021 million.

3 Contingent liabilities

As of September 30, 2004
*1 Accumulated depreciation
Accumulated depreciation of
tangible fixed assets was¥213,202 million.
*2 Pledged assets
Cash and deposits of ¥8,560
million were pledged ascollateral for long-termborrowings of ¥90,819 million
and guarantee obligation of¥8,590 million.

As of March 31, 2004
*1 Accumulated depreciation
Accumulated depreciation of
tangible fixed assets was¥23,145 million.
*2 Pledged assets
Cash and deposits of ¥9,140
million were pledged ascollateral for long-termborrowings of ¥83,090 million
and guarantee obligation of¥7,264 million.

In addition, investment
securities of ¥2,743 million
were pledged as collateral for
the BTC pipeline project
financing.

In addition, investment
securities of ¥2,722 million
were pledged as collateral for
the BTC pipeline project
financing.
3 Contingent liabilities

3 Contingent liabilities

The Company and its
consolidated subsidiaries were
contingently liable as guarantors
of indebtedness of the following
companies:

The Company and its
consolidated subsidiaries were
contingently liable as guarantors
of indebtedness of the following
companies:

The Company and its
consolidated subsidiaries were
contingently liable as guarantors
of indebtedness of the following
companies:

Millions of yen

Millions of yen
Sakhalin Oiland Gas2,728
Development
Co., LtdALBACORA
JAPAO
3 ,324
PETROLEO
LIMITADAJJI S&N B.V.
4,661

Millions of yen
Sakhalin Oiland Gas1,918
Development
Co., LtdALBACORA
JAPAO
3,514
PETROLEO
LIMITADAJJI S&N B.V.
4,028

Total

Total

ALBACORAJAPAOPETROLEO
LIMITADA

4,071

JJI S&N B.V.

4,064

Sakhalin Oiland GasDevelopment
Co., Ltd

1,378

Total

9,515

10,714

In addition, INPEX BTC
Pipeline, LTD, a consolidated
subsidiary, was contingently
liable as guarantor ofindebtedness of BTC Pipeline
Project Finance in the amountof ¥4,455 million until BTC
Pipeline project completion(guarantee for completion).

― 26 ―

9,461

In addition, INPEX BTC
Pipeline, LTD, a consolidated
subsidiary, was contingently
liable as guarantor ofindebtedness of BTC Pipeline
Project Finance in the amountof ¥4,330 million until BTC
Pipeline project completion(guarantee for completion).

更新日時:2004/11/17 14:58

ファイル名:430-08

印刷日時:04/11/17 23:04(For the semiannual consolidated statements of income)For the six months ended
September 30, 2003
*1. Major accounts and amounts
included in selling, general andadministrative expenses were as
follows:
Millions of yen
Personnel expenses
1,550(Including provision for
accrued officers’ retirement
benefits
67)(Including provision for
accrued employees’ retirement
benefits
70)
Travel and
166transportation
expenses
Depreciation
399
expenses

For the six months ended
September 30, 2004
*1.

Major accounts andamounts included in selling,
general and administrative
expenses were as follows;

Personnel
expensesMillions of yen
2,510(Including provision for
accrued officers’ retirement
benefits
88)(Including provision for
accrued employees’ retirement
benefits
112)
Depreciation
expenses― 27 ―

888

For the year ended March 31, 2004
*1.

Major accounts andamounts included in selling,
general and administrative
expenses were as follows:

Personnel
expensesMillions of yen
3,254(Including provision for
accrued officers’ retirement
benefits
139)(Including provision for
accrued employees’ retirement
benefits
103)
Travel and402transportation
expenses
Depreciation
2,329
expenses

更新日時:2004/11/17 14:58

ファイル名:430-08

印刷日時:04/11/17 23:04(For the semiannual consolidated statements of cash flows)
For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

Cash and cash equivalents as of
the balance sheet date arereconciled to the accounts
reported in the semiannual
consolidated balance sheet as
follows:

Cash and cash equivalents as of
the balance sheet date arereconciled to the accounts
reported in the semiannual
consolidated balance sheet as
follows:

Millions of yen
Cash and deposits
54,475Time deposits(16,500)
pledgedCash and cash
equivalents at end
37,975of the semiannual
periodMillions of yen
Cash and deposits
129,742
Time deposits(8,560)pledgedCash and cash
equivalents at end
121,182of the semiannual
period― 28 ―For the year ended March 31, 2004
Cash and cash equivalents as of
the balance sheet date arereconciled to the accounts
reported in the consolidatedbalance sheet as follows:

Cash and deposits
Time deposits
pledgedCash and cash
equivalents at endof the year

Millions of yen
63,722(9,140)54,582

更新日時:2004/11/17 15:14

ファイル名:430-09

印刷日時:04/11/17 23:04(Segment information)
1. Business segment information
For the six months ended September 30, 2003
As net sales and operating income of the oil and natural gas business constituted more than 90% of the consolidated totals, the disclosure of business segment information has been omitted.
For the six months ended September 30, 2004
As net sales and operating income of the oil and natural gas business constituted more than 90% of the consolidated totals, the disclosure of business segment information has been omitted.
For the year ended March 31, 2004
As net sales and operating income of the oil and natural gas business constituted more than 90% of the consolidated totals, the disclosure of business segment information has been omitted.
2. Geographical segment information
For the six months ended September 30, 2003
(Millions of yen)
AsiaOther
Total
Eliminations Consolidated
Oceania
Ⅰ Net sales and operating income
Net sales(1) Sales to third parties
106,068
4,119
110,188—
110,188(2) Intergroup sales and transfers
—
3,178
3,178
(3,178)—
Total
106,068
7,298
113,366(3,178)110,188
Operating expenses
58,9295,640
64,570(3,260)61,309Operating income
47,1391,657
48,79682
48,878Notes: 1. Countries and areas are segmented based on their geographic proximity and their mutual operational
relationships.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia- Oceania････Indonesia, Australia and East Timor(2) Other････United Arab Emirates, Republic of Azerbaijan
For the six months ended September 30, 2004
AsiaOceania
Ⅰ Net sales and operating income
Net sales(1) Sales to thier parties
128,630(2) Intergroup sales and transfers—
Total
128,630
Operating expenses
69,564
Operating income (loss)

59,066

NIS

Middle
East

Other

Total

(Millions of yen)
Elimina- Consolitions
dated

—
7,187
7,187
5,237

85,308―85,30829,797———60

213,939
7,187
221,126
104,660—(7,187)(7,187)(7,267)

213,939—
213,939
97,392

1,949

55,511(60)

116,46580

116,546

Notes: 1. Countries and areas are segmented based on their geographic proximity and their mutual operational
relationships.
2. Major countries and areas that belong to segments are as follows:(1) Asia -Oceania････Indonesia, Australia, East Timor(2) NIS
････Republic of Azerbaijan, Republic of Kazakhstan(3) Middle East ････United Arab Emirates, Islamic Republic of Iran(4) Other････Japan
3 Change of classification of region
In the past, because the Middle East accounted for less than 10% of total sales and operating income,it was included in “Other” However, following subsidization by Japan Oil Development Co., Ltd.,during the semiannual period under review, both sales and operating income in the Middle East now
exceed 10% of the respective totals. Therefore, we changed the regional classification to Middle East.
The following table shows restatements of geographical information under the new classification.

― 29 ―

更新日時:2004/11/17 15:14

ファイル名:430-09

For the six months ended September 30, 2003
Asia- Oceania
Ⅰ Net sales and operating income
Net sales(1) Sales to third parties
106,068(2) Intergroup sales or transfers—
Total106,068
Operating expenses
58,929Operating income (loss)
47,139

NIS

—
3,178
3,178
2,637
540

Middle
East

4,119
—
4,119
2,942
1,176

Other

印刷日時:04/11/17 23:04(Millions of yen)
Elimina- Consolitions
dated

Total

—
—
—
64
(64)

110,188
3,178
113,366
64,574
48,792For the year ended March 31, 2004
Asia Oceania
Ⅰ Net sales and operating income
Net sales(1) Sales to third parties(2) Intergroup sales or transfers
Total
Operating expenses
Operating income (loss)

211,422—
211,422
121,426
89,995NIS

Middle
East

—
6,506
6,506
4,754
1,752

7,408
—
7,408
5,321
2,086

NIS

Other

Other

218,8316,506
225,337
131,622
93,715For the year ended March 31, 2004
Asia Oceania

Total

110,188—
110,188
61,30948,878(Millions of yen)
Elimina- Consolitions
dated

Total

—
—
—
119
(119)

—
(3,178)(3,178)(3,264)86—(6,506)(6,506)(6,667)160

218,831—
218,831
124,954
93,876(Millions of yen)
EliminaConsolitions
dated

Ⅰ Net sales and operating income
Net sales(1) Sales to third parties
211,422
7,408
218,831
218,831――(2) Intergroup sales or transfers
6,506
6,506
(6,506)―――
Total
211,4226,506
7,408
225,337(6,506)
218,831
Operating expenses
121,4264,754
5,440
131,621(6,666)
124,954
Operating income
89,995
1,752
1,968
93,716
159
93,876
Notes:
1.Countries and areas are segmented based on their geographic proximity and their mutual operational
relationships.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia - Oceania････Indonesia, Australia, East Timor(2) NIS
････Republic of Azerbaijan, Republic of Kazakhstan(3) Other････United Arab Emirates, Islamic Republic of Iran
3.Change of classification of region
In the past, NIS was included in “Other”. However, we changed the regional classification to NIS.

― 30 ―

更新日時:2004/11/17 15:14

ファイル名:430-09

印刷日時:04/11/17 23:04

3. Overseas sales
For the six months ended September 30, 2003
(Millions of yen)
Asia
I.

Overseas sales

Other26,377

Total
2,106

II. Consolidated sales

28,484
110,188

III. Overseas sales as a percentage of consolidated
23.9
1.9
25.9
sales (%)
Notes: 1. Countries and areas are segmented based on their geographic proximity.
2. Major countries and areas that belong to segments other than Japan are as follows:(1) Asia････South Korea, Taiwan, Indonesia(2) Other････Australia
3. Overseas sales consisted of export sales of the Company and its domestic consolidated subsidiaries
and sales (other than exports to Japan) of its foreign consolidated subsidiaries.
For the six months ended September 30, 2004
(Millions of yen)
Asia
I.

Overseas sales

Other

67,985

Total
2,133

II. Consolidated sales

70,118
213,939

III. Overseas sales as a percentage of consolidated
31.8
1.0
32.8
sales (%)
Notes: 1 Countries and areas are segmented based on their geographic proximity.
2 Major countries and areas that belong to segments other than Japan are as follows:(1) Asia････South Korea, Taiwan, Indonesia, Singapore, Thailand(2) Other････Australia
3.Overseas sales consisted of export sales of the Company and its domestic consolidated subsidiaries
and sales (other than exports to Japan) of its foreign consolidated subsidiaries.
For the year ended March 31, 2004
(Millions of yen)
Asia
I.

Overseas sales

Other
58,089II. Consolidated sales

Total
6,257

64,346
218,831

III. Overseas sales as a percentage of consolidated
26.5
2.9
29.4
sales (%)
Notes: 1. Countries and areas are segmented based on their geographic proximity.
2.Major countries and areas that belong to segments other than Japan are as follows:(1) Asia････South Korea, Taiwan, Indonesia, Singapore(2) Other････Australia
3.Overseas sales consisted of export sales of the Company and its domestic consolidated subsidiaries
and sales (other than exports to Japan) of its foreign consolidated subsidiaries.

― 31 ―

ファイル名:430-10

更新日時:2004/11/18 19:28 印刷日時:04/11/18 19:28(Leases)
For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

Financing leases except for those which
stipulate the transfer of ownership ofthe leased assets to the lessees
1. The pro forma acquisition costs, accumulated depreciation and net
book value of the leased assets at
end of the semiannual period wereas follows:
Acquisitioncosts――――――――――――――For the year ended March 31, 2004
Financing leases except for those which
stipulate the transfer of ownership ofthe leased assets to the lessees
1. The pro forma acquisition costs, accumulated depreciation and net
book value of the leased assets at
end of the fiscal year were as follows:(Millions of yen)
AccumulatedNet
deprebookciationvalue

Acquisition
costs(Millions of yen)
AccumulatedNet
deprebookciationvalue

Tangible
fixed
assets19

19―

Tangible
fixed
assets

19

19

―

Total

19

19

―

Total

19

19

―

2. Future minimum lease payments
subsequent to the end of the semiannual period(Millions of yen)Less than one year―
More than one year
―
Total
―

2. Future minimum lease payments
subsequent to the end of the fiscal
year(Millions of yen)Less than one year―
More than one year
―
Total
―

3. Lease payments, depreciation ofleased assets and the interest portion
included in the lease payments during the semiannual period were as
follows:(Millions of yen)
Lease payments
1
Amortization
1
Interest expense―
4. Method for calculation of depreciation and interest expense

3.

Method of calculation of depreciation… Straight-line method over the respective lease term with a residual
value of zero.

Method of calculation of depreciation… Straight-line method over the respective lease term with a residual
value of zero.

Calculation method for equivalentamount of interest expense… The interest portion included in thelease payments is calculated as thedifference between the aggregate
lease payments over the lease term
and the relevant pro forma acquisition costs. Interest expense is allocated to each period by the interest
method over each respective leaseterm.

Calculation method for equivalentamount of interest expense… The interest portion included in thelease payments is calculated as thedifference between the aggregate
lease payments over the lease term
and the relevant pro forma acquisition costs. Interest expense is allocated to each period by the interest
method over each respective lease
term.

Lease payments, depreciation ofleased assets and the interest portion included in the lease payments during the year were as
follows:(Millions of yen)
Lease payments
1
Amortization
1
Interest expense―
4. Method for calculation of depreciation and interest expense― 32 ―

更新日時:2004/11/17 14:59 印刷日時:04/11/17 23:05

ファイル名:430-11(Securities)
1 Securities with determinable market value(Millions of yen)Classification
Other
securities

As of September 30, 2003
Acquisition Carrying
cost
value

(1) Stocks

As of September 30, 2004

Carrying
Difference Acquisition
cost
value

As of March 31, 2004

Carrying
Difference Acquisition
cost
value

Difference

270

297

26

287

354

67

287

353

66

67,01966,919(100)

71,13571,301

165

54,12554,183

58

10,636

10,676

39

5,916

5,947

30

9,188

9,222

33

Other

―

―

―

―

―

―

―

―

―

(3) Other

―

―

―

―

―

―

―

―

―

Total

77,926

77,892(34)

77,33977,603264

63,60063,758158(2) Bonds
National
and local
government
bonds,
Corporatebonds

2 Major securities without a determinable market value(Millions of yen)Classification

As of September 30, 2003

As of September 30, 2004

Other securities

Carrying value

Carrying value

As of March 31, 2004
Carrying value

Unlisted stocks

16,125

18,627

17,402Trust beneficiary certificates

3,519

2,000

3,509

Note: An allowance is provided for investments in exploration companies included in unlisted stocks above at an estimatedamount based on the net assets of the investees.

(Derivatives)
For the six months ended September 30, 2003
No relevant matters
For the six months ended September 30, 2004
No relevant matters

For the year ended March 31, 2004
No relevant matters― 33 ―

ファイル名:430-12

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55(Information for per share)
For the six months ended September 30,
2003

For the six months ended September 30,
2004

Net assets per share¥446,462.08

Net assets per share¥191,427.36

Net assets per share¥471,826.00

Net income per share forthe semiannual period¥30,377.50

Net income per share forthe semiannual period¥17,596.54

Net income per share¥58,838.76

For the year ended March 31, 2004

The Company made a 3-for-1 stock
split on May 18, 2004. The following
table shows the amounts per share
information if this stock split had been
made at the beginning of the previous
year.

Notes:For the six months
ended September
30, 2003
Net assets per
share ¥148,820.69

For year ended
March 31, 2004

Net income pershare for thesemiannual period¥10,125.83

Net income pershare¥19,612.92

Net assets per
share ¥157,275.33

1. Diluted net income per share is not presented because there are no dilutive potential of shares of common stock
2. Net income per share is calculated based on the following:
For the six months
ended September 30,
2003

For the six months
ended September 30,
2004

17,89833,01734,781

-

-

114

(-)

(-)

(114)

17,89833,017

34,667

589

1,876

589

Net income for the period (Millions of yen)

For the year ended
March 31, 2004

Amount not attributable to common
stockholders (Millions of yen)
(Directors’ bonuses as appropriation of profit)
Net income attributable to common stockholders(Millions of yen)
Average number of shares in the period(Thousand of shares)― 34 ―

ファイル名:430-12

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55(Significant subsequent events)

For the six months ended September 30,
2003

For the six months ended September 30,
2004

1. At the extraordinary meeting of theBoard of Directors held on October
10, 2003, it was resolved that INPEX
Offshore South Sulawesi, Ltd.,
consolidated subsidiary of theCompany, withdraw from exploratory
activities in the area where INPEX
Offshore South Sulawesi, Ltd. had
mining rights due to the declining
potential of successful exploration.
Since related recoverable accounts
under production sharing are fully
reserved, no loss on the withdrawal
was recognized.

1. Issuance of special class share and theresulting capital increase

2. At the extraordinary meeting of Boardof Directors held on November 14,
2003, it was resolved that INPEX East
Arguni, Ltd. and INPEX West Arguni,Ltd., consolidated subsidiaries,
withdraw from exploratory activities
in the area where they had mining
rights due to the declining potential of
successful exploration Since related
recoverable accounts under
production sharing are fully reserved,
no loss on the withdrawal wasrecognized.

For the year ended March 31, 2004
1. Share exchange with Japan Oil
Development Co., Ltd.

At the extraordinary general meeting
At the meeting of the Board ofof shareholders held on May 10, 2004,
Directors held on March 29, 2004, it
it was resolved that the content of thewas resolved that Japan Oil
special class share and issuance of theDevelopment Co., Ltd., would become
share in conformity with Article 280our wholly owned subsidiary through a2, Section 2, of the Commercial Codeshare exchange. The share exchange
was approved.
contract was signed on the same day.
At the meeting of the Board of
The share exchange contract was
Directors held on October 12, 2004, it
approved at the extraordinary general
was resolved that the Company would
meeting of the shareholders held on
issue one special class share to Japan
April 15, 2004.
National Oil Corporation, andpayment for the share was made on(1) Outline of the share exchange
November 17, 2004.
As a result, capital became ¥29,460① Purpose of the share exchange
million and the number of shares
As we intend to become a core
issued and outstanding totaled
company to promote the oil
1,919,833.75, comprisingdevelopment business in Japan, we
1,919,832.75 common shares and 1
are seeking to diversify in our
special class share.
business operations. It was deemed
desirable for our group to have Japan(1) Outline for issuing the special classOil Development Co., Ltd., to be oursharewholly owned subsidiary in terms ofdiversifying our regions, balancing① Class of share
Special class share of the Company
between crude oil and natural gas,balancing between operators and non② Number of shares issued
operators, and ensuring current stableOne
production and future increases of③ Issuing priceproduction; the Company had been
¥465,000 per shareproducing and selling crude oil in the④ Method of issue
United Arab Emirates for many years
One special class share was issued toas an operator.
Japan National Oil Corporation by② Content of the share exchange
allocation method to a third party.
The Company acquired from Japan⑤ Date of issue
Oil Development Co., Ltd., in
November 17, 2004
accordance with Articles 352 or 363
There is no plan to list the specialof the Commercial Code.
class share.
③ Date of the share exchange
May 17, 2004
(2) Description of the Special Class Share① Matters to be resolved at meetings of ④ Number of the shares issued andexchanged under the share
the Special Class Shareholder
exchange contract
The Articles of Incorporation of the
The Company issued 50,744.25 new
Company provides that decisions onshares of common stock andthe following material mattersexchanged them for 2 shares of Japan
concerning the management of the
Oil Development Co., Ltd.’s common
Company require a resolution of astock held by Japan National Oil
meeting of the Special Class
Corporation.
Shareholder in addition to a
⑤ Incremental common stock andresolution of a meeting of common
additional paid-in capitalshareholders of the Company or a
No increase in common stock wasmeeting of the Board of Directors.
required due to the share exchange,
but additional paid-in capital was
required to be increased by ¥62,402
million.
⑥ Effective date for dividend
April 1, 2004

― 35 ―

ファイル名:430-12

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55

For the six months ended September 30,
2003

For the six months ended September 30,
2004

3. Per the resolution of Directors dated
November 28, 2003, it is resolved that
INPEX BTC Pipeline, Ltd.,
consolidated subsidiary enter into
Completion Agreement and related
contracts with Citibank, N.A., as anagent bank for the management ofcollateral and other relevant parties
and to incur a completion guarantee inorder to participate in a BTC pipeline
project As the completion guarantee
was the core of the contract, it was
divided into two forms and threedegrees and was designed such thatliabilities of debt for warrantableguarantee, depending on the causes ofclaims for guarantee redemption andpolitical risk, would be gradually
reduced. Under the guarantee, wehave contingent liability of $65
million at maximum. Also, at the315th regular meeting of Board of
Directors held on November 28, 2003,
it was resolved that the Company
would enter into a Payment Guarantee
Agreement and related contracts withan agent bank, Societe Generale, andrelevant third parties. Under the
Payment Guarantee Agreement, weplan to guarantee the maximum of$33.15 million debt. We expected toenter into the contract in January
2004.

(a) Election or removal of Directors(2) Brief summary of Japan Oil
A resolution of a meeting of theDevelopment Co., Ltd.
Representative Shigeru Usui, President
Special Class Shareholder is required
for the election or removal of aCapital: ¥18,800 million
Director of the Company if, at theAddress: 5-6-6, Hiroo, Shibuya-ku,
time of a resolution of a meeting ofTokyo
the common shareholders of the
Major business:
Company for the election or removal
Exploration and development of crudeof such Director, 20% or more of theoil and selling crude oilvoting rights of such shareholders ofcommon shares is held by a single① Operating income and net income
shareholder other than the(year ended December 31, 2003)
Government of Japan, JNOC or an
independent administrative body that
Operating income ¥259,696 million
is fully funded by the Government ofNet loss¥58,602 million
Japan (“Public Entity”) or jointly
The above amounts reflect civil
held by such single shareholder andrehabilitation-related gain of ¥124,545
a “Joint Shareholder” as defined inmillion and civil rehabilitation-related
the Articles of Incorporation of theloss of ¥192,396 million.
Company (such independent
shareholder and Joint Shareholder② Assets, liabilities and shareholders’shall be referred to as a “Non-Public
equity (as of December 31, 2003)
Entity”) (provided, however, that, in
accordance with (d) below, this does
（Millions of yen）
not apply to any election or removal Current
Current
104,777
154,647
assetsliabilities
of a Director stipulated in a contract
Longconcerning a merger, share exchange Fixed
23,77048,264 term
assetsor share transfer set out in (d)liabilities
below).
Total
Total

4. At the extraordinary meeting of Boardof Directors held on November 28,
2003, it was resolved that WestNatuna, Ltd., consolidated subsidiary,
would dismiss its operation.
Since related recoverable accounts
under production sharing are fully
reserved, no loss was recognized.

For the year ended March 31, 2004

assetsThe Articles of Incorporation of theCompany contains provisions that
stipulate whether, in a given
instance, a Non-Public Entity isdeemed to hold or not hold 20% ormore of the voting rights of theshareholders of common shares of
the Company.
(b) Disposition of material assets
A resolution of a meeting of theSpecial Class Shareholder isrequired for the disposition of any
material assets of the Company or
the Company’s subsidiaries(“disposition of material assets”
means any disposition whose
consideration is 20% or more of thetotal assets set out in the mostrecent audited consolidated
financial statements of theCompany or where a sale of such
assets is 20% or more of the total
consolidated sales set out in themost recent consolidated financial
statements of the Company).

153,041

liabilities
shareholders’ equity(Capital
Total
liabilities
andshareholders’ equity(25,375)
365,200 ）153,041

As of December 31, 2003, Japan Oil
Development Co., Ltd. was in theprocessofcivilrehabilitation
proceedings and the civil rehabilitation
plan was completed on January 31,
2004.
A summary of Japan Oil
Development Co., Ltd.’s financial
position as of March 31, 2004 is asfollows:（Millions of yen）
Current
assetsFixed
assetsTotal
assetsCurrent
73,629liabilities
Long47,595 term
liabilities
Total
121,225
liabilities
Shareholders’ equity(Capital
Total
liabilities
andshareholders’ equity― 36 ―

178,417

42,592
22,77365,36555,85918,800 ）121,225）

ファイル名:430-12

For the six months ended September 30,
2003

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55

For the six months ended September 30,
2004

For the year ended March 31, 2004

2. Stock split(c) Amendment to the Articles ofIncorporation
At the meeting of the Board of Directors(i) the objectives of the Company
held on April 15, 2004, it was resolved(ii) granting voting rights to any sharesthat the Company issued new shares forother than the common shares of the a stock split in the following manner.
Company (except for the voting
rights at meetings of the Special(1) The Company made a 3-for-1 stock
Class Shareholder already granted
split effective May 18, 2004
to the Special Class Share).
① Increase in common shares as aresult of the stock split(d) Integration
1,279,888.50 shares
A resolution of a meeting of the Special② Details of stock split
Class Shareholder is required for
We made a 3-for-1 stock split of the(i) any merger where the Company
common stock whose stockholders are
becomes the dissolved company, or
listed on the final shareholder list as ofany merger where the Company
May 1, 2004. Shares and odd shares forbecomes the surviving company and the stock split included in 50,744.25 new
20% or more of the voting rights ofshares issued through the share
all the shareholders of common
exchange with Japan Oil Development
shares of the Company are held by a Co., Ltd., on May 17, 2004.
Non-Public Entity at the time suchmerger is complete,(2) Effective date for dividend(ii) any share exchange where theApril 1, 2004
Company becomes a wholly-owned
subsidiary, or any share exchange
where the Company becomes a
Had this stock split been made as ofparent company owning 100% of
April 1, 2002, amounts per sharethe shares of and 20% or more of
information for the years ended March
the voting rights of all the31, 2003 and 2004 would have been as
shareholders of common shares offollows:
the Company are held by a NonPublic Entity at the time such share
FY2003
FY2004exchange is complete, orNet assets per share
Net assets per share(iii) any share transfer where special¥143,389.73¥157,275.33
class shares of the new holding
Net
income
per
share
Net
incomeper sharecompany with the same rights as¥15,726.17¥19,612.92
those held by the Special Class
Shareholder of the Company underthe Articles of Incorporation of theCompany are not granted to theSpecial Class Shareholder of theCompany, or any share transfer
approved and resolved by a meetingof the common shareholders of theCompany where special class sharesof the new holding company withthe same rights as those held by theSpecial Class Shareholder of theCompany under the Articles ofIncorporation of the Company are
granted to the Special Class
Shareholder of the Company but
20% or more of the voting rights ofall the shareholders of commonshares of such new holding
company are held by a Non-Public
Entity at the time such sharetransfer is complete.

― 37 ―

ファイル名:430-12

For the six months ended September 30,
2003

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55

For the six months ended September 30,
2004
With respect to (i) through (iii)
above, the Articles of Incorporationof the Company contains provisions
that stipulate whether, in a given
instance, a Non-Public Entity isdeemed to hold or not hold 20% ormore of the voting rights of all theshareholders of common shares of
the Company or the new holding
company.
(e) Capital Reduction
A resolution of a meeting of theSpecial Class Shareholder isrequired for any reduction of theCompany’s capital in order to repay
funds to shareholders of theCompany.
(f) Dissolution
A resolution of a meeting of theSpecial Class Shareholder isrequired for dissolution of theCompany by resolution of ameeting of the commonshareholders.
② Voting rights of meetings ofcommon shareholders, dividends,
distribution of residual assets,
redemption

For the year ended March 31, 2004
3. Issuance of special class share
At the meeting of the Board of Directors
held on April 15, 2004, it was resolvedthat the Company amend its Articles ofIncorporation and issue one special classshare, and the resolution was approvedby the extraordinary general meeting of
the shareholders held on May 10, 2004.
The category of shares, number ofshares to be issued and issuing pricewere designated as follows.
Special class share(1) Method of subscription
All shares were issued to Japan
National Oil Corporation by
allocation to a third party.
(2) Number of new shares issued
One share(3) Issue PriceSame price as the offer price of theoffering of the Company’s common
stock on condition of the resolution
under the Article 280-2, Section 2, of
the Commercial Code(4) Total issue value
Number of shares issued multipliedby the issuing price

Unless otherwise provided by laws
(5) Due date for payment
or ordinances, the Special Class
To be determined
Share does not have any voting
rights at meetings of commonshareholders of the Company. The (6) Voting rights
A special class share has no voting
Special Class Share will receive therights at the general shareholders
same amount of dividends, interim
meeting
dividends and distributions ofresidual assets as common shares.
(7) Provisions for matters requiring
The Special Class Share will be
resolution at the general meeting ofredeemed if the Special Class
the special class shareholder
Shareholder requests redemption,or by resolution of the Board of
Directors of the Company if theSpecial Class Share is transferred toa party other than the Government ofJapan or an independentadministrative body that is fully
funded by the Government of Japan.

― 38 ―

ファイル名:430-12

For the six months ended September 30,
2003

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55

For the six months ended September 30,
2004(3) Guidelines regarding exercising
voting rights at meetings of theSpecial Class Shareholder by the
Allottee
Guidelines have been established in(a) the Statement of Business
Operations (the statement which has
been authorized by the Minister of
Economy, Trade and Industry
pursuant to Article 20 of the Japan
National Oil Corporation Law) of
JNOC, which will subscribe for theSpecial Class Share and (b) the“Criteria for Exercising Voting
Rights of the Special Class Share of
INPEX” formulated with theapproval of the Minister of
Economy, Trade and Industry
pursuant to the Statement of
Business Operations, and theseguidelines stipulate that matters may
be rejected at meeting of the Special
Class Shareholder in only certain
cases, and that the prior approval of
the Minister of Economy, Trade andIndustry must be obtained if any
action is to be taken at a meeting of
the Special Class Shareholder.
(4) Handling of the Special Class Shareand Guidelines after dissolution of
JNOC
JNOC, which will subscribe for theSpecial Class Share, is scheduled tobe dissolved on or before July 25,
2005, after which the Special Class
Share is scheduled to be assumed by
the Government of Japan or another
Public Entity. JNOC has stipulated apolicy, with respect to the handlingof the Guidelines if the Special Class
Share is assumed by a Public Entity,that the Special Class Share will beassumed under the same terms as
those set out in the Guidelines of
JNOC at the time of its dissolution,
provided there is no change in theenergy policy of Japan. This policy
has also been acknowledged by the
Agency for Natural Resources andEnergy.

― 39 ―For the year ended March 31, 2004
The following matters require
resolution of the general shareholders
meeting of the special class stock
shareholder.
①

②
③

④

At the time of a resolution for theappointment or removal of
directors at a general meeting ofshareholders, 20% or more of thevoting rights attached to shares ofour common stock are held by asingle non-public entity or a single
non-public entity and its joint
shareholders
Disposition of all or part of thematerial assets
In the case of the Company’s
subsidiary disposing of important
assets, the Company exercises
voting rights at the generalshareholders meeting of its
subsidiary.
Amendment to the Article of
Incorporation with respect to (i)the objectives of the Company or(ii) granting voting rights to any
shares other than the commonshares of the Company (except for
the voting rights at meetings of theSpecial Class Shareholder alreadygranted to the Special Class
Share).

ファイル名:430-12

For the six months ended September 30,
2003

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55

For the six months ended September 30,
2004(5) Brief summary of subscriber
NameJapan National Oil Corporation
Number of shares
One share
Amount paid
¥465,000
Address
2-2-2, Uchisaiwaicho, Chiyodaku, Tokyo
Name of representative
Makoto Saito, President
Established by Japan National Oil
Corporation Law (Law No. 99, July29, 1967)
Description of business
Administration of Japan National
Oil Corporation’s assets
Relationship with the Company
Equity relations
Number of shares of subscriber
held by the Company
None
Business relations (For the year
ended March 31, 2004)
Acquisition of securities
Personnel relations
None― 40 ―For the year ended March 31, 2004
⑤ Mergers, share exchanges andshare transfers except for thefollowing cases;(a) Mergers where the Company
become the surviving company,
unless 20% or more of the voting
rights attached to shares of theCompany’s common stock areheld by a single non-public entity
or a single non-public entity andits joint shareholders at the timeof the completion of such merger.
(b) Share exchanges where theCompany becomes a whollyowning parent company, unless
20% or more of the voting rights
attached to shares of theCompany’s common stock areheld by a single non-public entity
or a single non-public entity andits joint shareholders at the timeof the completion of such shareexchange.
(c) Share transfers where a new
holding company is establishedand the granting of class sharesof such new holding company tothe holder of our special classshare with rights that are thesame as those of our special classshare under the new holding
company’s articles ofincorporation is approved byresolution of the general meetingof shareholders for such sharetransfer, unless 20% or more of
the voting rights attached toshares of common stock of the
new holding company are heldby a single non-public entity or asingle non-public entity and its
joint shareholders at the time of
the completion of such sharetransfer.

ファイル名:430-12

For the six months ended September 30,
2003

更新日時:2004/11/18 19:55 印刷日時:04/11/18 19:55

For the six months ended September 30,
2004

For the year ended March 31, 2004

⑥ Reduction of the Company’s statedcapital that results in a redemptionof funds to shareholders.
⑦ Dissolution by resolution of thegeneral shareholders meeting(8) Redemption① Redemption of a special class
As a result of the share exchange thatshare requires its shareholder’s
became effective on May 17, 2004,
written request to the Company.
Japan Oil Development Co., Ltd.,② If the special class share isbecame a wholly owned subsidiary oftransferred to a party other than the
the Company.
government of Japan, theAs a part of a civil rehabilitation plan,
Company may redeem such special
Japan Oil Development Co., Ltd.,
class share by resolution of theissued a new share allotted to Japan
Board of Directors regardless of
National Oil Corporation with an
the wishes of the special classissued value of ¥10 million onshareholder.
January 29, 2004. For this matter,③ The redemption price will be theOversea Oil Development Co. Ltd., amarket price on the day of request
former shareholder of Japan Oilfor ①, and for ②, the market
Development Co., Ltd., appealed toprice on the day before thethe Tokyo District Court for theredemption date (both the day offollowing items on February 23,
request and the day before the2004.
redemption date are referred to as(a) Rescission of a resolution for“effective day”). If the common
approval to issue the new share toshare is listed on the Tokyo StockJapan National Oil Corporation at an
Exchange, the closing price of a
extraordinary general shareholders
common share on the effective day
meeting of Japan Oil Development
will be the market price ofCo., Ltd.
redemption. If a closing price does(b) Rescission of issuing the new
not exist on a effective day, thenshare
the redemption price will be the
The Tokyo District Court dismissed
closing price on the day closest to
all accusations on October 14, 2004.
the effective day.
The court decision was confirmed on
October 28, 2004. The court appeal
related to the aforementioned
4 Assignment of the mineral rights ofprocedure of civil rehabilitation has
INPEX North Makassar, Ltd.
been brought to the end by thecourt
decision.

2. Finalizing the verdict of the first trial
regarding a claim to abolish a
resolution at a general shareholders
meeting of Japan Oil Development
Co., Ltd., by Oversea Oil
Development Co., Ltd.

At the meeting of the Board of
Directors held on September 2,
2004, it was resolved that INPEX
North Makassar, Ltd., a majority
owned subsidiary of the Company,
would assign its mining rights andrelated obligations to a third party
due to a decline in expected
profitability. The assignment of themining rights and related obligations
is expected to become effective
November 22, 2004, subject to an
approval of the government of
Republic of Indonesia. No gain orloss on the assignment of mining
rights and related obligations will berecognized.

― 41 ―

1ファイル名:430-13 ver.3

更新日時:2004/11/17 15:39

印刷日時:04/11/17 23:11

Ⅴ Actual production, orders received and actual sales(1) Actual production
The following table shows actual production by business segment in each period.
ClassificaFor the year ended March 31, 2004
For the six months ended September 30,
tion
2004
Millions of barrels
Millions of barrels
Crude oil
34.0
21.8
The oil andNatural
BCF
BCF
natural gas
gas
160.5
297.3
business
Millions of BOE
Millions of BOE
Total
60.8
71.4
Notes: 1. The above table indicates the values corresponding to the net economic take of our group withregard to the production volume in the production sharing contracts. The equity-method
affiliates’ quota is included. The values for FY2004 calculated by multiplying the production
volume at the mining areas owned by our group by our company’s right ratio are 32 million
barrels in crude oil and 539 BCF in natural gas.
2. Since the merger of Japan Oil Development Co., Ltd., in May 2004, its production and the
production by its affiliate have been included from April 2004.
3. We acquired equity interests of Angola Japan Oil Co., Ltd., AJOCO Exploration Co., Ltd. and
AJOCO ’91 Exploration Co., Ltd. in September 2004 and these three companies have become
affiliates accounted for under the equity method. However, their production has been included
from April 2004.

Business segment(2) Orders received
There is no production for orders received.
(3) Actual salesa) We take back the full amount of crude oil produced under production sharing contracts, and primarilysell it to Japanese power companies and refineries. Natural gas is sold in the form of LNG and LPG to
Japanese power companies and gas companies through PERTAMINA. We also sell part of it to customers
in Taiwan and South Korea. In addition, we sell it, as crude gas, to the Indonesian market through
PERTAMINA.
b) Sales by classification during each period were as follows:(Millions of yen)
For the six months
For the six months
Fluctuation
For the year ended
ended September 30, ended September 30,
Classification
2003
2004
(B) – (A)March 31, 2004
(A)
(B)
Crude oil

33,437

127,896

94,45868,783Natural gas

76,75086,0439,292

150,047

Total

110,188

213,939

103,750

218,831

Notes: 1. The above amounts do not include the related consumption tax.
2. Sales for major customers were as follows:
Periods

Customer
PERTAMINA

For the six months ended
September 30, 2003
(A)

For the six months ended
September 30, 2004
(B)

Fluctuation(B) – (A)For the year ended
March 31, 2004

Amount（Millionsof yen）

Ratio（％）

Amount（Millionsof yen）

Amount(Millions ofyen)Amount（Millionsof yen）

Ratio（％）

77,18970.1

151,077

69.0

Ratio
（％）

87,154― 42 ―

40.7

9,964

ファイル名:430-14Ver2

更新日時:2004/11/18 18:18 印刷日時:04/11/18 18:53

FY2005 Semiannual Non-Consolidated Financial Results
November 17, 2004

Note: The following report is an English translation of the Japanese-language original.
Company name

INPEX CORPORATION

Code number

1604

Stock Exchange on
which the Company
is listed
Location of the head
officeTokyo Stock
Exchange
Tokyo(URL http://www.inpex.co.jp/)
Representative
Kunihiro Matsuo, President
Contact person
Seiya Ito, Director & General Manager, Corporate Planning & Management Dept.
TEL +81-3-5448-1238
November 17, 2004
Paying interim
Yes
Date of the meeting of thedividend
Board of Directors for the
FY2005 semiannual financial
results
Starting date for the interim—
Shares constitutingNo
dividend payment
one unit
1. Results for FY2005 Semiannual (April 1, 2004–September 30, 2004)
Note: Amounts less than million yen are rounded off.
(1) Operating results
Net sales

Operating income％

Millions of yen

FY2005semiannual
FY2004
semiannual
FY2004％

Millions of yen％

Millions of yen

95,22213.2

50,095

6.4

50,66629.9

84,112

22.9

47,09920.8

38,99324.8

168,239

92,648Net income

76,205

Net income per share％

Millions of yen

FY2005semiannual
FY2004
semiannual
FY2004

Ordinary income

Yen

21,741

43.2

11,587.35

15,18241.8

25,767.66(8,589.22)

47,959.97(15,986.65)

28,349Notes: 1. Average number of shares issued and outstanding in each period: FY2005 semiannual, 1,876,337 shares; FY2004 semiannual, 589,200
shares; FY2004, 589,200 shares.
On May 18, 2004, there was a 3-for-1 stock split. Net income for FY2004 semiannual and FY2004 restated for the effect of this stock
split is presented in parentheses.
2. Change in accounting policy: No.
3. The percentage expressions for net sales, operating income, ordinary income and net income represent the change from thecorresponding period of the preceding year.

(2) Cash dividends
Interim cash dividends per share Annual cash dividends per shareYen

FY2005semiannual
FY2004
semiannual
FY2004

Yen

0.00

—

0.00

—

—

10,000.00― 43 ―

ファイル名:430-14Ver2

更新日時:2004/11/18 18:18 印刷日時:04/11/18 18:53(3) Financial position

Note: Amounts less than million yen are rounded off

Total assets

Shareholders’ equity

Millions of yen

FY2005semiannual
FY2004
semiannual
FY2004

Ratio of shareholders’equityNet assets per share％

Millions of yen

Yen

390,163

348,07989.2

181,307.39

292,526

256,45587.7

435,260.58(145,086.86)

301,376

269,81389.5

457,776.99(152,592.33)

Notes: 1. Number of shares issued and outstanding at the end of each period: FY2005 semiannual, 1,919,832 shares; FY2004 semiannual,
589,200 shares; FY2004, 589,200 shares.
On May 18, 2004, there was a 3-for-1 stock split. Net assets for FY2004 semiannual and FY2004 restated for the effect of this stock
split are presented in parentheses.
2 Number of treasury stocks at the end of each period: FY2005 semiannual, — shares; FY2004 semiannual, — shares; FY2004, —shares.

2. Estimated Operating Results for FY2005 (April 1, 2004–March 31, 2005)
Net sales
Millions of yen

FY2005(Full-year)
Reference:*

178,000

Ordinary income

Net income

Millions of yen

Millions of yen

86,10035,700

Annual cash dividends pershare
End of fiscal
year
Yen

3,333.00

Yen

3,333.00

The FY2005 forecast for net income per share of ¥18,595.36 is calculated based on an expected
1,919,833.75 shares issued and outstanding.
The aforementioned forecasts are based on currently available information and contain many
uncertainties. Actual results may differ from the above forecasts due to changes in business conditions.
In addition, issues related to the above forecasts are referred to on page 10 in the accompanying
materials.

― 44 ―

ファイル名:430-15

更新日時:2004/11/18 19:34 印刷日時:04/11/18 19:34

Ⅵ Semiannual financial statements(1) Semiannual financial statements
1) Balance sheet(Millions of yen)
As of September 30,
2003

Accounts

Amounts

Ratio

As of September 30, Fluctuation As of March 31, 2004
2004 (A)(A) –(B) (B)Amounts％

Ratio

Amounts

Amounts

％

Ratio
％

(Assets)
Current assets
Cash and deposits*227,44930,432

1,272

29,160Accounts receivabletrade

6,679

11,028

1,219

9,809

Marketable securities

28,531

12,607(6,215)

18,822

Short-term loans to
subsidiaries and affiliates

2,943

6,340

3,192

3,148

543

427

104

322

Other
Total current assets

66,14722.6

60,837

15.6

(426)

61,263

20.3

10,125

3.5

9,780

2.5

(157)

9,937

3.3

29

0.0

16

(5)

21

0.0

62,17074,062

16,322

57,739135,062

220,926

67,381

153,544

73,88081,122

2,836

78,286

16,192

21,173

1,909

19,264

Fixed assets
Tangible fixed assets
Intangible assets*1

Investments and otherassetsInvestment securities
Investments in subsidiaries and affiliates
Recoverable accounts
under production
sharing
Other
Less allowance for
doubtful accounts
Less allowance forinvestments in exploration
Total investments andother assets

(130)

(656)

(396)

(260)

(70,950)(77,099)

1,323(78,422)

216,22373.9

319,528

81.9

89,375230,153

76.4

Total fixed assets

226,379

77.4

329,326

84.4

89,213

240,112

79.7

Total assets

292,526100.0

390,163

100.0

88,786

301,376

100.0― 45 ―

ファイル名:430-15

更新日時:2004/11/18 19:34 印刷日時:04/11/18 19:34(Millions of yen)
As of September 30, Fluctuation
As of March 31, 2004
As of September 30,(A) – (B)2004 (A)(B)
2003

Accounts

Amounts

Ratio

Amounts％

Ratio

Amounts

Amounts

％

Ratio
％

(Liabilities)
Current liabilities

19,410

6.6

23,6796.1

8,389

15,290

5.1

Long-term liabilities
Long -term debt

*2

11,125

11,105542

10,563

Allowance

1,093

1,196

41

1,154

Other

4,442

6,102

1,547

4,555

Total long-term liabilities

16,6605.7

18,4044.7

2,130

16,273

5.4

Total liabilities

36,071

12.3

42,083

10.8

10,52031,563

10.5

29,46010.1

29,4607.6―

29,4609.8―

62,40216.0

62,402

―

7,365

7,365

―

7,365

203,509

225,70922,200203,509

16,17322,898(6,441)

29,340(Shareholders’ equity)
Common stock
Additional paid-in capital
Retained earnings
Legal reserve
Voluntary reserves
Unappropriatedearnings

retained

Total retained earnings
Unrealized holding gain (loss)
on securities
Total shareholders’equityTotal liabilities andshareholders’ equity

227,04777.6

255,973

65.6

15,758240,214

79.7

(52)

(0.0)

244

0.0

105

138

0.0

256,455

87.7

348,079

89.2

78,266

269,81389.5

292,526100.0

390,163

100.0

88,786

301,376

100.0― 46 ―

ファイル名:430-16

更新日時:2004/11/18 19:36 印刷日時:04/11/18 19:36

2) Semiannual statements of income(Millions of yen)Accounts

For the six months For the six months
ended
ended
September 30, 2003 September 30, 2004
(A)
(B)

Fluctuation(B) – (A)For the year ended
March 31, 2004

Amounts

Amounts

Amounts

Ratio

Amounts

％

Ratio
％

Ratio
％

Net sales

84,112100.0

95,222100.0

11,109168,239

100.0

Cost of sales

35,27441.9

42,912

45.1

7,638

71,51742.5

48,83858.1

52,309

54.9

3,471

96,722

57.5

Selling, general and admin*1
istrative expenses

1,738

2.1

2,214

2.3

475

4,073

2.5

Operating income

47,09956.0

50,095

52.6

2,995

92,648

55.0

1,797

2.1

2,400

2.5

602

3,193

1.8

Gross profit

Other income
Interest income

227

115

(111)

353

Interest income on securities

173

101

(71)

295

Dividend income

940

1,735

795

1,619

Other

456

447

(9)

924

(8,073)

19,636

Other expenses
Interest expense

9,903

11.8

1,829

1.9

83

80

(3)

160

Provision for allowance forinvestments in exploration

8,229

576

(7,653)15,755

Foreign exchange loss

1,578

731

(847)

3,567

11

441

429

152

Other

11.6

Ordinary income

38,993

46.4

50,66653.2

11,672

76,205

45.2

Income before income
taxes

38,993

46.4

50,66653.2

11,672

76,205

45.2

Income taxes—current

23,66729,096

5,428

47,224

Income taxes—deferred

143

(171)

(315)

632

6,559

28,349Net income
Retained earnings brought
forward from previous
periodUnappropriated retained
earnings

15,18218.0

21,741

22.8

991

1,156

165

991

16,17322,8986,724

29,340― 47 ―

16.8

ファイル名:430-17

更新日

Significant accounting policies
For the six months ended
September 30, 2003
1. Valuation method of significant
assets(1) Securities
1) Investments in subsidiaries andaffiliates
Securities of Investments in
subsidiaries and affiliates arestated at cost determined by
the moving average method
2) Other securities

a. With a determinable market
value
Other securities with adeterminable market value
are stated at fair value withany changes in unrealized
holding gain or loss, net ofthe applicable income taxes,
included directly inshareholders’ equity. Cost of
securities sold is determinedby the moving averagemethod.
b. Without a determinable

market value
Other securities without adeterminable market value
are stated at cost
determined by the moving
average method.
2. Depreciation method of fixed assets(1) Tangible fixed assets
Depreciation of tangible
fixed assets is determined by
the declining-balancemethod, except for thebuildings (excluding
facilities annexed) acquired
on and after April 1, 1998,
on which depreciation iscomputed by the straight-line
method, at rates based on theuseful lives and residual
value of the respective assets
as prescribed by the
corporate tax law.

For the six months ended
September 30, 2004
1. Valuation method of significant
assets(1) Securities
1) Investments in subsidiaries andaffiliates
Same as on the left

2) Other securities
a. With a determinable

market value
Same as on the leftb. Without a determinable

market value

For the year ended
March 31, 2004
1. Valuation method of significant
assets(1) Securities
1) Investments in subsidiaries andaffiliates
Same as on the left

2) Other securities

a. With a determinable market
valueSame as on the leftb. Without a determinable

market value

Same as on the left

Same as on the left

2. Depreciation method of fixed assets(1) Tangible fixed assets
Same as on the left

2. Depreciation method of fixed assets(1) Tangible fixed assets
Same as on the left

― 48 ―

ファイル名:430-17

更新日

For the six months ended
September 30, 2003
(2) Intangible fixed assets

Intangible fixed assets areamortized by the straight-line
method at rates based on theuseful lives and residual valueof the respective assets asprescribed by the corporate tax
law. Capitalized computer
software costs are being
amortized over a period of five
years.
3. Basis for allowances(1) Allowanceforreceivable

doubtful

The allowance for doubtfulreceivables is provided at an
amount determined based on
the historical experience ofbad debt with respect toordinary receivables, plus anestimate of uncollectible
amounts determined byreference to specificdoubtful receivables from
customers which areexperiencing financial
difficulties.
(2) Allowance for investments in
exploration

The allowance forinvestments in exploration isprovided for future potential
losses on investments in
exploration companies at an
estimated amount based on
the net assets of theinvestees.

For the six months ended
September 30, 2004
(2) Intangible fixed assets
Same as on the left

3. Basis for allowances(1) Allowanceforreceivable
Same as on the left(2) Intangible fixed assets
Same as on the left

doubtful(2) Allowance for investments in
exploration
Same as on the left

― 49 ―For the year ended
March 31, 2004

3. Basis for allowances(1) Allowanceforreceivable
Same as on the left

doubtful(2) Allowance for investments in
exploration
Same as on the left

ファイル名:430-17

更新日

For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

(3) Accrued employees’ retirement
benefits
Accrued employees’ retirement
benefits are provided at theamount calculated based on theretirement benefit obligation at
end of the semiannual period.

(3) Accrued employees’ retirement
benefits
Same as on the left

Because the Company isclassified as small enterprises,
we employ a simplified method(at the amount which would be
required to be paid if all active
employees voluntarily
terminated their employment asof the balance sheet date) forthe calculation of the retirement
benefit obligation.

(4) Accrued officers’ retirement
benefits
Accrued officers’ retirement
benefits are stated at the amountwhich would be required to be
paid if all officers voluntarily
terminated their services as of
the balance sheet date based on
their respective internal rules.

For the year ended March 31, 2004
(3) Accrued employees’ retirement
benefits
Accrued employees’ retirement
benefits are provided at theamount calculated based on theretirement benefit obligation at
end of the year.
Because the Company isclassified as small enterprises,
we employ a simplified method(at the amount which would be
required to be paid if all active
employees voluntarily
terminated their employment asof the balance sheet date) forthe calculation of the retirement
benefit obligation.

(4) Directors’ retirement benefit
Same as on the left

4. Translation of assets and liabilities
4. Translation of assets and liabilities
denominated in foreign currencies into
denominated in foreign currencies intoyen
yen
Monetary assets and liabilities
Same as on the leftdenominated in foreign currencies
are translated into yen at theexchange rates prevailing at thebalance sheet date. The resulting
exchange gain or loss is credited or
charged to income.

― 50 ―(4) Accrued officers’ retirement
benefits
Same as on the left

4. Translation of assets and liabilities
denominated in foreign currencies intoyenSame as on the left

ファイル名:430-17

For the six months ended
September 30, 2003
5. Leases

更新日

For the six months ended
September 30, 2004

For the year ended March 31, 2004

5. Leases―――――――――――

5. Leases

6. Other significant matters for6. Other significant matters for6. Other significant matters for

preparation of semiannual financial
statements

preparation of semiannual financial
statements

preparation of financial statements

Non-cancelable leases areprimarily accounted for as
operating leases except that leaseagreements which stipulate thetransfer of ownership of theleased assets to the lessee areaccounted for as finance leases.

Consumption tax
Transactions subject toconsumption tax are recorded at
amounts exclusive ofconsumption tax.

Consumption tax
Same as on the left

― 51 ―

Non-cancelable leases areprimarily accounted for as
operating leases except that leaseagreements which stipulate thetransfer of ownership of theleased assets to the lessee areaccounted for as finance leases.

Consumption tax
Same as on the left

更新日時:2004/11/17 17:42

ファイル名:430-18

印刷日時:04/11/17 23:17

Notes(For the semiannual balance sheets)
As of September 30, 2003

As of September 30, 2004

As of March 31, 2004

*1. Accumulated depreciation
Accumulated depreciation of
tangible fixed assets was ¥2,596
million.

*1. Accumulated depreciation
Accumulated depreciation of
tangible fixed assets was ¥2,922
million.

*1. Accumulated depreciation
Accumulated depreciation of
tangible fixed assets was ¥2,761
million.

*2. Pledged assets*2. Pledged assets*2. Pledged assets

Cash and deposits of ¥16,500
million were pledged ascollateral for long-termborrowings of ¥8,900 million
and guarantee obligation of¥74,781 million.
3. Contingent liabilities

Cash and deposits of ¥8,560
million were pledged ascollateral for long-termborrowings of ¥8,884 million
and guarantee obligation of¥90,526 million.

Cash and deposits of ¥9,140
million were pledged ascollateral for long-termborrowings of ¥8,450 million
and guarantee obligation of¥81,904 million.

3. Contingent liabilities

3. Contingent liabilities

The Company was contingently
liable as guarantors ofindebtedness of the following
companies:

The Company was contingently
liable as guarantors ofindebtedness of the following
companies:

The Company was contingently
liable as guarantors ofindebtedness of the following
companies:

Millions of yen

Millions of yen

Millions of yen

INPEX Southwest CaspianSea, Ltd.
INPEX Natuna, Ltd.
ALBACORA JAPAOPETROLEO
LIMITADAJJI S&N B.V.
Sukhalin Oil and Gas
Development Co., Ltd.
INPEX ABK, Ltd

Total

54,816
15,743

4,071
4,064
1,378
489

80,565INPEX Southwest
Caspian Sea, Ltd.
INPEX Natuna, Ltd.
JJI S&N B.V.
ALBACORA JAPAOPETROLEO
LIMITADAINPEX BTC Pipeline,
LTD.
Sukhalin Oil and Gas
Development Co., Ltd.
INPEX ABK, Ltd.

66,28919,100
4,661

3,324
*

Total

2,578
2,728
366
99,048* The Company provided aguarantee to INPEX BTC
Pipeline, LTD that wascontingently liable as guarantor
of indebtedness of BTC Pipeline
Project Finance until its
completion (guarantee forcompletion).
4. Consumption tax
The suspense payments and thesuspense receipts for the
consumption tax were offset eachother. The amount, deemed not tobe significant, is included in“Other” in current liabilities.

４.Consumption tax
Same as on the left

INPEX Southwest
Caspian Sea, Ltd.
INPEX Natuna, Ltd.
JJI S&N B.V.
ALBACORA JAPAOPETROLEO
LIMITADAINPEX BTC Pipeline,
LTD.
Sukhalin Oil and Gas
Development Co., Ltd.
INPEX ABK, Ltd.
Total

58,431
19,752
4,028

3,514
*

2,208
1,918
406
90,261* The Company provided aguarantee to INPEX BTC
Pipeline, LTD that wascontingently liable as guarantor
of indebtedness of BTC Pipeline
Project Finance until its
completion (guarantee forcompletion).
―――――――――――(For the semiannual statements of income)For the six months ended
September 30, 2003

For the six months ended
September 30, 2004

For the year ended
March 31, 2004

*1. Depreciation expenses of:*1. Depreciation expenses of:*1. Depreciation expenses of:¥368 million
Tangible fixed assets¥183 million Tangible fixed assets¥161 million Tangible fixed assets¥16 million
Intangible fixed assets¥8 million Intangible fixed assets¥6 million Intangible fixed assets― 52 ―

ファイル名:430-19

更新日時:2004/11/17 15:07 印刷日時:04/11/18 19:28(Leases)
For the six months ended
September 30, 2003

For the six months end
September 30, 2004

Financing leases except for those which
stipulate the transfer of ownership ofthe leased assets to the lessees
1. The pro forma acquisition costs,
accumulated depreciation and net
book value of the leased assets at
end of the semiannual period wereas follows:――――――――――――――For the year ended March 31, 2004
Financing leases except for those which
stipulate the transfer of ownership ofthe leased assets to the lessees
1. The pro forma acquisition costs,
accumulated depreciation and net
book value of the leased assets at
end of the semiannual period wereas follows:(Millions of yen)

(Millions of yen)

AccumuAcquisilated
Net booktion costs
deprecia- value
tion
Tangible
fixed
assets
Total

19
19

19
19

AccumuAcquisi- lated
Net booktion costs depreciavalue
tion

―
―

2. Future minimum lease payments
subsequent to the end of the semiannual periodTangible
fixed
assets

19

19

―

Total

19

19

―

2. Future minimum lease payments
subsequent to the end of the fiscal
year(Millions of yen)

(Millions of yen)Less than one year―

Less than one year―

Over one year―

Over one year

―

Total

―

Total

―

3. Lease payments, depreciation ofleased assets and the interest portion
included in the lease payments during the semiannual period were as
follows:

2.

Lease payments, depreciation ofleased assets and the interest portion included in the lease payments during the year were as follows:(Millions of yen)

(Millions of yen)

Lease payments

1

Lease payments

1

Amortization1

Amortization

1

Interest expense―

Interest expense―

4. Method for calculation of depreciation and interest expense

4. Method for calculation of depreciation and interest expense

Method of calculation of depreciation… Straight-line method over the respective lease term with a residual
value of zero.

Method of calculation of depreciation… Straight-line method over the respective lease term with a residual valueof zero.

Calculation method of interest expense…The interest portion included in
the lease payments is calculated
as the difference between theaggregate lease payments overthe lease term and the relevant
pro forma acquisition costs.
Interest expense is allocated toeach period by the interest
method over each respective
lease term.

Calculation method of interest expense… The interest portion included in
the lease payments is calculated
as the difference between the aggregate lease payments over thelease term and the relevant pro
forma acquisition costs.
Interest expense is allocated to eachperiod by the interest method
over each respective lease term.

― 53 ―

ファイル名:430-20

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56(Securities)
At the end of semiannual period of FY2004 (As of September 30, 2003)
No marketable investments in subsidiaries and affiliates
At the end of semiannual period of FY2005 semi-annual (As of September 30, 2004)
No marketable investments in subsidiaries and affiliates
At the end of FY2004 (As of March 31, 2004)
No marketable investments in subsidiaries and affiliates― 54 ―

ファイル名:430-20

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56(Information for per share)
For the six months ended September For the six months ended September
30, 2003
30, 2004

For the year ended March 31, 2004

Net assets per share¥435,260.58

Net assets per share¥181,307.39

Net assets per share¥457,776.99

Net income pershare for thesemiannual period¥25,767.66

Net income per sharefor the semiannual
period¥11,587.35

Net income pershare¥47,959.97

The Company made a 3-for-1 stock
split on May 18, 2004. The
following table shows the amounts
per share information if this stock
split had been made at the
beginning of the previous year.
For the six
months ended
September 30,
2003
Net assets per
share¥145,086.86

For the year
ended March
31, 2004

Net income pershare for thesemiannual
period¥8,589.22

Net income pershare¥15,986.65

Net assets per
share¥152,592.33(Notes) 1. Diluted income per share is not presented because there are no dilutive potential of shares of common
stock.
2. Net income per share information is calculated based on the following:
For the six months
ended September
30, 2003
Net income for the period (Millions ofyen)Amount not attributable to common
stockholders (Millions of yen)
(Directors’ bonuses as appropriation of
profit)
Net income attributable to common
stockholders (Millions of yen)
Average number of shares in the period(Thousand shares)― 55 ―For the six months
For the year ended March
ended September
31, 2004
30, 2004

15,182

21,741

28,349

-

-

91

(-)

(-)

(91)

15,182

21,741

28,258

589

1,876

589

ファイル名:430-20

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56(Significant subsequent events)
FY2004 semiannual
April 1, 2003 throughSeptember 30, 2003
1.

At the 315th regular meeting ofBoard of Directors held on
November 28, 2003, it was
resolved that the Company
would enter into a Payment
Guarantee Agreement and related
contracts with an agent bank,Societe Generale, and relevant
third parties. Under the Payment
Guarantee Agreement, we plan toguarantee the maximum of$33.15 million debt. We expected
to enter into the contract inJanuary 2004.

FY2005 semiannual
April 1, 2004 throughSeptember 30, 2004
1. Issuance of special class share and theresulting capital increase

FY2004
April 1, 2003 throughMarch 31, 2003
1. Share exchange with Japan Oil
Development Co., Ltd.

At the extraordinary general meeting
At the meeting of the Board ofof shareholders held on May 10, 2004,
Directors held on March 29, 2004, it
it was resolved that the content of thewas resolved that Japan Oil
special class share and issuance of theDevelopment Co., Ltd., would
share in conformity with Article 280become our wholly owned subsidiary
2, Section 2, of the Commercial Codethrough a share exchange. The share
was approved.
exchange contract was signed on the
At the meeting of the Board ofsame day. The share exchange
Directors held on October 12, 2004, it
contract was approved at thewas resolved that the Company would
extraordinary general meeting of theissue one special class share to Japan
shareholders held on April 15, 2004.
National Oil Corporation, andpayment for the share was made on(1) Outline of the share exchange
November 17, 2004.
As a result, capital became ¥29,460① Purpose of the share exchange
million and the number of shares
As we intend to become a core
issued and outstanding totaled
company to promote the oil
1,919,833.75, comprisingdevelopment business in Japan, we
1,919,832.75 common shares and 1
are seeking to diversify in our
special class share.
business operations. It was deemed
desirable for our group to have(1) Outline for issuing the special class
Japan Oil Development Co., Ltd., toshare
be our wholly owned subsidiary in① Class of shareterms of diversifying our regions,
Special class share of the Company
balancing between crude oil and② Number of shares issued
natural gas, balancing betweenOne
operators and non-operators, and③ Issuing priceensuring current stable production¥465,000 per shareand future increases of production;
the Company had been producing④ Method of issue
and selling crude oil in the United
One special class share was issued
Arab Emirates for many years as an
to Japan National Oil Corporation
operator.
by allocation method to a third
party.
② Content of the share exchange
The Company acquired from Japan⑤ Date of issue
Oil Development Co., Ltd., in
November 17, 2004
accordance with Articles 352 or 363
There is no plan to list the specialof the Commercial Code.
class share.
③ Date of the share exchange(2) Description of the Special Class ShareMay 17, 2004
① Matters to be resolved at meetings④ Number of the shares issued andof the Special Class Shareholder
exchanged under the share exchange
The Articles of Incorporation ofcontract
the Company provides that
The Company issued 50,744.25 newdecisions on the following material
shares of common stock andmatters concerning theexchanged them for 2 shares ofmanagement of the Company
Japan Oil Development Co., Ltd.’srequire a resolution of a meeting ofcommon stock held by Japanthe Special Class Shareholder in
National Oil Corporation.
addition to a resolution of a
⑤ Incremental common stock andmeeting of common shareholders
additional paid-in capitalof the Company or a meeting of
No increase in common stock was
the Board of Directors.
required due to the share exchange,
but additional paid-in capital was
required to be increased by ¥62,402
million.
⑥ Effective date for dividend
April 1, 2004

― 56 ―

ファイル名:430-20

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56

For the six months ended September For the six months ended September
30, 2003
30, 2004(a) Election or removal of Directors
A resolution of a meeting of theSpecial Class Shareholder isrequired for the election or removalof a Director of the Company if, at
the time of a resolution of ameeting of the commonshareholders of the Company forthe election or removal of such
Director, 20% or more of the voting
rights of such shareholders ofcommon shares is held by a single
shareholder other than the
Government of Japan, JNOC or an
independent administrative bodythat is fully funded by theGovernment of Japan (“Public
Entity”) or jointly held by suchsingle shareholder and a “Joint
Shareholder” as defined in the
Articles of Incorporation of theCompany (such independent
shareholder and Joint Shareholder
shall be referred to as a “NonPublic Entity”) (provided, however,
that, in accordance with (d) below,
this does not apply to any election
or removal of a Director stipulated
in a contract concerning a merger,
share exchange or share transfer set
out in (d) below).
The Articles of Incorporation of theCompany contains provisions that
stipulate whether, in a given
instance, a Non-Public Entity isdeemed to hold or not hold 20% ormore of the voting rights of theshareholders of common shares of
the Company.
(b) Disposition of material assets
A resolution of a meeting of theSpecial Class Shareholder isrequired for the disposition of any
material assets of the Company or
the Company’s subsidiaries(“disposition of material assets”
means any disposition whose
consideration is 20% or more of
the total assets set out in the mostrecent audited consolidated
financial statements of theCompany or where a sale of such
assets is 20% or more of the total
consolidated sales set out in themost recent consolidated financial
statements of the Company).

― 57 ―For the year ended March 31, 2004
(2) Brief summary of Japan Oil
Development Co., Ltd.
Representative Shigeru Usui,
President
Capital: ¥18,800 million
Address: 5-6-6, Hiroo, Shibuya-ku,
Tokyo
Major business:
Exploration and development of crude
oil and selling crude oil① Operating income and net income(year ended December 31, 2003)
Operating income ¥259,696
millionNet loss¥58,602
million
The above amounts reflect civil
rehabilitation-related gain of ¥124,545
million and civil rehabilitation-related
loss of ¥192,396 million.

② Assets, liabilities and shareholders’equity (as of December 31, 2003)（Millions of yen）
Current
assetsFixed
assetsTotal
assetsCurrent
liabilities
Long48,264 term
liabilities
Total
153,041
liabilities
Shareholders’ equity(Capital
104,777

Total
liabilities
andshareholders’ equity

154,647
23,770178,417(25,375)
365,200 ）153,041

As of December 31, 2003, Japan Oil
Development Co., Ltd. was in theprocessofcivilrehabilitation
proceedings and the civil rehabilitation
plan was completed on January 31,
2004.
A summary of Japan Oil
Development Co., Ltd.’s financial
position as of March 31, 2004 is asfollows:（Millions of yen）
Current
assetsFixed
assetsTotal
assetsCurrent
liabilities
Long-term
47,595liabilities
Total
121,225
liabilities
Shareholders’equity(Capital
73,629Total
liabilities andshareholders’equity42,592
22,77365,36555,85918,800 ）121,225）

ファイル名:430-20

For the six months ended September
30, 2003

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56

For the six months ended September
30, 2004(c) Amendment to the Articles ofIncorporation(i) the objectives of the Company(ii) granting voting rights to any shares
other than the common shares of theCompany (except for the voting
rights at meetings of the Special
Class Shareholder already granted to
the Special Class Share).
(d) Integration
A resolution of a meeting of the Special
Class Shareholder is required for(i) any merger where the Company
becomes the dissolved company, or
any merger where the Company
becomes the surviving company and
20% or more of the voting rights ofall the shareholders of commonshares of the Company are held by a
Non-Public Entity at the time suchmerger is complete,(ii) any share exchange where theCompany becomes a wholly-owned
subsidiary, or any share exchange
where the Company becomes aparent company owning 100% of
the shares of and 20% or more of
the voting rights of all theshareholders of common shares of
the Company are held by a NonPublic Entity at the time such shareexchange is complete, or(iii) any share transfer where specialclass shares of the new holding
company with the same rights as
those held by the Special Class
Shareholder of the Company underthe Articles of Incorporation of theCompany are not granted to theSpecial Class Shareholder of theCompany, or any share transfer
approved and resolved by a meetingof the common shareholders of theCompany where special class sharesof the new holding company withthe same rights as those held by theSpecial Class Shareholder of theCompany under the Articles ofIncorporation of the Company are
granted to the Special Class
Shareholder of the Company but
20% or more of the voting rights ofall the shareholders of commonshares of such new holding
company are held by a Non-Public
Entity at the time such share transfer
is complete.

― 58 ―For the year ended March 31, 2004
2. Stock split
At the meeting of the Board of
Directors
held on April 15, 2004, it
was resolved that the Company issued
new shares for a stock split in thefollowing manner.
(1) The Company made a 3-for-1 stock
split effective May 18, 2004
① Increase in common shares as aresult of the stock split
1,279,888.50 shares② Details of stock split
We made a 3-for-1 stock split of thecommon stock whose stockholders arelisted on the final shareholder list as of
May 1, 2004. Shares and odd sharesfor the stock split included in
50,744.25 new shares issued throughthe share exchange with Japan Oil
Development Co., Ltd., on May 17,
2004.
(2) Effective date for dividend
April 1, 2004
Had this stock split been made as ofApril 1, 2002, amounts per share
information for the years ended March
31, 2003 and 2004 would have been as
follows:
FY2003

FY2004

Net assets per share

Net assets per share¥140,039.65¥152,592.33

Net earnings per share¥15,259.73

Net earnings per share¥15,986.65

ファイル名:430-20

For the six months ended September
30, 2003

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56

For the six months ended September
30, 2004
With respect to (i) through (iii) above,
the Articles of Incorporation of theCompany contains provisions that
stipulate whether, in a given
instance, a Non-Public Entity isdeemed to hold or not hold 20% ormore of the voting rights of all theshareholders of common shares of
the Company or the new holding
company.
(e) Capital Reduction
A resolution of a meeting of theSpecial Class Shareholder isrequired for any reduction of theCompany’s capital in order to repay
funds to shareholders of theCompany.
(f) Dissolution
A resolution of a meeting of theSpecial Class Shareholder isrequired for dissolution of theCompany by resolution of a meetingof the common shareholders.
② Voting rights of meetings ofcommon shareholders, dividends,
distribution of residual assets,
redemption
Unless otherwise provided by laws
or ordinances, the Special Class
Share does not have any voting
rights at meetings of commonshareholders of the Company. The
Special Class Share will receive thesame amount of dividends, interim
dividends and distributions ofresidual assets as common shares.
The Special Class Share will be
redeemed if the Special Class
Shareholder requests redemption,or by resolution of the Board of
Directors of the Company if theSpecial Class Share is transferred toa party other than the Governmentof Japan or an independentadministrative body that is fully
funded by the Government of Japan.

― 59 ―For the year ended March 31, 2004
3. Issuance of special class share
At the meeting of the Board of
Directors held on April 15, 2004, it
was resolved that the Company amend
its Articles of Incorporation and issue
one special class share, and theresolution was approved by the
extraordinary general meeting of theshareholders held on May 10, 2004.
The category of shares, number ofshares to be issued and issuing pricewere designated as follows.
Special class share(1) Method of subscription
All shares were issued to Japan
National Oil Corporation by
allocation to a third party.
(2) Number of new shares issued
One share(3) Issue PriceSame price as the offer price of theoffering of the Company’scommon stock on condition of theresolution under the Article 280-2,
Section 2, of the Commercial Code(4) Total issue value
Number of shares issued
multiplied by the issuing price(5) Due date for payment
To be determined(6) Voting rights
A special class share has no voting
rights at the general shareholders
meeting(7)Provisions for matters requiring
resolution at the general meeting of
the special class shareholder

ファイル名:430-20

For the six months ended September
30, 2003

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56

For the six months ended September
30, 2004(3) Guidelines regarding exercising
voting rights at meetings of theSpecial Class Shareholder by the
Allottee
Guidelines have been established in(a) the Statement of Business
Operations (the statement which has
been authorized by the Minister of
Economy, Trade and Industry
pursuant to Article 20 of the Japan
National Oil Corporation Law) of
JNOC, which will subscribe for theSpecial Class Share and (b) the“Criteria for Exercising Voting
Rights of the Special Class Share of
INPEX” formulated with theapproval of the Minister of
Economy, Trade and Industry
pursuant to the Statement of
Business Operations, and theseguidelines stipulate that matters may
be rejected at meeting of the Special
Class Shareholder in only certain
cases, and that the prior approval of
the Minister of Economy, Trade andIndustry must be obtained if any
action is to be taken at a meeting of
the Special Class Shareholder.
(4) Handling of the Special Class Shareand Guidelines after dissolution of
JNOC
JNOC, which will subscribe for theSpecial Class Share, is scheduled tobe dissolved on or before July 25,
2005, after which the Special Class
Share is scheduled to be assumed by
the Government of Japan or another
Public Entity. JNOC has stipulated apolicy, with respect to the handlingof the Guidelines if the Special
Class Share is assumed by a Public
Entity, that the Special Class Sharewill be assumed under the sameterms as those set out in the
Guidelines of JNOC at the time ofits dissolution, provided there is nochange in the energy policy ofJapan. This policy has also been
acknowledged by the Agency for
Natural Resources and Energy.

― 60 ―For the year ended March 31, 2004
The following matters require
resolution of the general shareholders
meeting of the special class stock
shareholder.
①

②
③

④

At the time of a resolution for theappointment or removal of
directors at a general meeting ofshareholders, 20% or more of thevoting rights attached to shares ofour common stock are held by asingle non-public entity or asingle non-public entity and its
joint shareholders
Disposition of all or part of thematerial assets
In the case of the Company’s
subsidiary disposing of important
assets, the Company exercises
voting rights at the generalshareholders meeting of its
subsidiary.
Amendment to the Article of
Incorporation with respect to (i)the objectives of the Company or(ii) granting voting rights to any
shares other than the commonshares of the Company (except
for the voting rights at meetingsof the Special Class Shareholder
already granted to the Special
Class Share).

ファイル名:430-20

For the six months ended September
30, 2003

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56

For the six months ended September
30, 2004(5) Brief summary of subscriber
NameJapan National Oil Corporation
Number of shares
One share
Amount paid
¥465,000
Address
2-2-2, Uchisaiwaicho, Chiyodaku, Tokyo
Name of representative
Makoto Saito, President
Established by Japan National Oil
Corporation Law (Law No. 99, July29, 1967)
Description of business
Administration of Japan National
Oil Corporation’s assets
Relationship with the Company
Equity relations
Number of shares of subscriber
held by the Company
None
Business relations (For the year
ended March 31, 2004)
Acquisition of securities
Personnel relations
None― 61 ―For the year ended March 31, 2004
⑤ Mergers, share exchanges andshare transfers except for thefollowing cases;(a) Mergers where the Company
become the surviving company,
unless 20% or more of thevoting rights attached to sharesof the Company’s common
stock are held by a single nonpublic entity or a single nonpublic entity and its joint
shareholders at the time of thecompletion of such merger.
(b) Share exchanges where theCompany becomes a whollyowning parent company, unless
20% or more of the voting
rights attached to shares of theCompany’s common stock areheld by a single non-public
entity or a single non-public
entity and its joint shareholders
at the time of the completion ofsuch share exchange.
(c) Share transfers where a new
holding company is establishedand the granting of class sharesof such new holding company
to the holder of our special classshare with rights that are thesame as those of our specialclass share under the newholding company’s articles ofincorporation is approved byresolution of the general
meeting of shareholders forsuch share transfer, unless 20%
or more of the voting rights
attached to shares of common
stock of the new holding
company are held by a single
non-public entity or a single
non-public entity and its joint
shareholders at the time of thecompletion of such sharetransfer.
⑥ Reduction of the Company’s
stated capital that results in aredemption of funds toshareholders.
⑦ Dissolution by resolution of thegeneral shareholders meetingファイル名:430-20

更新日時:2004/11/18 19:56 印刷日時:04/11/18 19:56

For the six months ended September For the six months ended September
30, 2003
30, 2004

For the year ended March 31, 2004
(8) Redemption① Redemption of a special classshare requires its shareholder’swritten request to the Company.
② If the special class share istransferred to a party other than thegovernment of Japan, theCompany may redeem such specialclass share by resolution of theBoard of Directors regardless of
the wishes of the special classshareholder.
③ The redemption price will be themarket price on the day of request
for ①, and for ②, the market
price on the day before theredemption date (both the day ofrequest and the day before theredemption date are referred to as“effective day”). If the commonshare is listed on the Tokyo Stock
Exchange, the closing price of acommon share on the effective day
will be the market price ofredemption. If a closing price does
not exist on a effective day, thenthe redemption price will be theclosing price on the day closest to
the effective day.

― 62 ―