November 5, 2005

Name of the Company:

INPEX CORPORATIONName of the Representative: Naoki Kuroda, President
Code No.:

1604, The First Section of the Tokyo Stock Exchange

Contact:

Seiya Ito, PR Unit General Manager

Phone number:

03-5448-1205

Name of the Company:

Teikoku Oil Co., Ltd.

Name of the Representative: Masatoshi Sugioka, President
Code No.:

1601, The First Section of the Tokyo Stock Exchange/Osaka
Stock Exchange

Contact:

Shuhei Miyamoto, Senior General Manager, Corporate
Management Department

Phone number:

03-3466-1233

INPEX CORPORATION and Teikoku Oil Co., Ltd. to Sign a Stock Transfer Agreement on
Establishment of a Joint-Holding Company
INPEX CORPORATION (President Naoki Kuroda, hereinafter “INPEX”) and Teikoku OilCo., Ltd. (President Masatoshi Sugioka, hereinafter “Teikoku”) have reached a final agreementon the integration of the two companies, and resolved at the meetings of respective Boards ofDirectors held today to sign a “Stock Transfer Agreement”. The two companies will establish ajoint-holding company, “Kokusai Sekiyu Kaihatsu Teiseki Holdings Kabushiki Kaisha” as of April
3, 2006, by transferring their respective stock to such holding company, subject to approval at
extraordinary shareholders’ meetings scheduled for January 31, 2006.

1.

Background and purpose of integration
While the demand of oil and natural gas is growing rapidly due to economic growth led by
the United States and China, historical restraint of development investment under the low
oil price environment and the unstable situation in the Middle East have resulted in acontinuous rise in oil and gas prices.
Competition for acquiring resources has become more intense than ever, as countries
such as China and India are striving to secure upstream assets in the Middle East, Africa,
Latin America and the Caspian Sea area, and major oil development companies arestrengthening competitiveness through mergers and acquisitions. As both companies
target enhanced corporate value through acquisitions of overseas upstream assets, theimmediate establishment of an operational foundation with global competitiveness is
crucial in order to ensure sustainable growth in such a competitive environment.
Based on this recognition, INPEX and Teikoku have decided to integrate the twocompanies in order to establish a firm position in the global market, by establishing adiversified asset portfolio, reinforcing a solid financial base, concentrating technologicalcapabilities for resource development, and acquiring interests in promising projects.

2.

Expected effects of the integration(1) Well-balanced asset portfolio— As there is no overlap between INPEX (operating mainly in Asia/Oceania, Middle East,and Caspian Sea) and Teikoku (with a domestic gas development base, operating
overseas mainly in Central/South America and Africa), the upstream assets of each arehighly complementary, and will bring expansion in operating areas and diversify countryrisk. In addition, the integration will lead to reduction in business risk by a diversified
combination of projects with differing risk profiles, such as exploration, development, andservice operations.
— Domestic assets such as producing gas fields and undeveloped licensed areas as wellas the gas pipeline network are free from country risk and foreign exchange risk,
establishing a stronger, regionally balanced portfolio and contributing to long-term
stability to business operations.
— In addition to domestic and overseas upstream operations, we intend to lay the path forestablishing an LNG supply chain by combining the 1,300 km domestic gas pipeline
network and vertical operational development of refining, power generation, etc. withoverseas gas assets.
(2) Strengthened presence as a global independent company— We will be able to stabilize the operational foundation through the combination ofdomestic operations, which are free from country risk and foreign exchange risk, and thehighly profitable overseas operations with high growth potential.
— The combined total oil and gas reserves of the two companies will be, proved reserves1of 1,805 million BOE (equivalent in oil, as of the end of March 2005), and probablereserves of 2,152 million BOE (as of the end of March 2005). Net production will be 372
thousand BOE per day.
1:

Proved reserves are based on the standard of the Securities and Exchange Commission(SEC) and probable reserves are based on the standard of the Society of Petroleum
Engineers (SPE) and World Petroleum Congress (WPC). However, Teikoku’s reserves
include the proved and probable reserves of a project that is currently in the government
approval process of the interests transfer.

— We will achieve a strengthened operational foundation based on existing projects andexpanded overseas assets through increasing opportunities to access new projects
leveraging the government resource diplomacy.
(3) Enhanced capability as an operator— By consolidation of advanced, practical technical capabilities with ample experiences inmanaging domestic/overseas operator projects and by evaluating and acquiringpromising overseas assets, we will greatly expand technical capabilities as an upstream
company. As a result of integration, the new company will have 700 technical staffs. In
addition, we will have an advantage of effectively utilizing such operator capabilities andknow-how as well as the technical research center to support operating activities.
— By gathering human resources who have developed good business relationships with themajor overseas oil companies and national oil companies in oil producing countries, andhave gained experiences and negotiation capabilities through acquisition of promisingassets and co-operation with overseas partners, we believe we will not only expand theopportunities of acquiring promising assets in the future, but also will be able to improve
our capacity for operating projects.
— The expanded operator capabilities will be a stronger drive force to implement large
projects such as Iran (Azadegan), Australia (Ichthys), and Indonesia (Abadi).

(4) Establishment of an efficient and flexible management system— We believe that we will be able to make speedy and efficient realization of integration
effects due to the combination of healthy financial positions, efficiency-oriented
management policies, and corporate cultures of simplicity and fortitude that already exist
commonly in the both companies. In addition, the companies plan to transit to an
operational holding company through a merger of the joint-holding company, INPEX andTeikoku at the timing of the general shareholders’ meeting of the second fiscal year of thejoint-holding company after the stock transfer, which will further secure an efficient andproactive management structure.
3.

Summary of the integration(1) Stock transfer timetable
November 5, 2005

Respective Meeting of Board of Directors to approve
the signing of the Stock Transfer Agreement

January 31, 2006 (expected) Respective extraordinary shareholders’ meeting toapprove the stock transfer
March 28, 2006 (expected)Delisting of INPEX and Teikoku shares

April 3, 2006 (expected)

Date of stock transfer/ joint-holding company
establishment and listing of the joint-holdingcompany

June, 2008 (expected)

Transition to an operational holding company bycombining the joint-holding company, INPEX andTeikoku

Should unavoidable circumstances requiring a change in schedule arise, thistimetable will be subject to change following consultation between the twocompanies.
The delivery date of the shares of the joint-holding company is scheduled for May
26, 2006. However, should unavoidable circumstances requiring a change inschedule arises as above, the delivery date will be subject to change following
consultation between the two companies.

(2) Stock transfer ratio

Stock transfer ratio

INPEX

Teikoku10.00144

Note: INPEX employs the odd lot share method, and Teikoku employs the stockunit method at 1,000 shares per unit.

1) Share allocation to shareholders
Based on the above stock transfer ratio, 1 share of the joint-holding company’scommon shares will be allotted in exchange for 1 share of INPEX’s commonshare, and 0.00144 share of the joint-holding company’s common share will beallotted in exchange for 1 share of Teikoku’s common share. In addition, 1
share of the joint-holding company’s “special class share” will be allocated for 1
share of INPEX’s special class share. The joint-holding company’s specialclass share shall have equal rights with the special class share of INPEX
provided for in its articles of incorporation.

2) Type and number of shares to be issued by the joint-holding company
With the stock transfer, the joint-holding company will issue 2,360,659.95
common shares and 1 special class share. However, if INPEX and Teikokuretire their own shares prior to the date of stock transfer, the number ofcommon shares to be issued will be reduced by the number of the shares to beallotted in exchange for the shares retired by both INPEX and Teikoku. Inaddition, the joint-holding company will employ the odd lot share method.

3) Retirement of the treasury stocks
Both INPEX and Teikoku will retire all of their then existing treasury stock at anappropriate day pursuant to the Japanese Commercial Code prior to the date ofstock transfer.

4) Calculation of the stock transfer ratio
INPEX retained J.P.Morgan Securities Asia Pte. Limited, and Teikoku retained
Goldman Sachs (Japan) Ltd. as their financial advisors in relation to thistransaction. The financial advisors analyzed the share price movements of theboth companies, discounted cash flow (DCF) / net asset value (NAV) analysis
and contribution analysis etc. in considering the stock transfer ratio. The stocktransfer ratio was determined through discussion and negotiation by bothcompanies taking into consideration the analysis and advice of their financialadvisors and other various factors. In addition, 1 share of the joint-holding
company’s special class share having an equal right with the special classshare of INPEX provided in its articles of incorporation was determined to be
allotted for 1 share of INPEX’s special class share, through discussion andnegotiation by both companies.

(3) Stock transfer payments
Shareholders and registered pledges listed or recorded in the final shareholders’register of Teikoku on the day before the stock transfer date will receive a stocktransfer payment of ￥3 for each common share in Teikoku within three months ofthe stock transfer date, in place of a dividend.
However, the amounts of stock transfer payments may be changed upon
consultation between INPEX and Teikoku in light of the circumstances, including
the condition of assets and liabilities of Teikoku, changes in general economic
conditions and others.
(4) Dividend limits until the stock transfer date1) INPEX will be able to pay dividends on profits up to ￥5,500 per common shareand per special class share, or to a total of ￥10,559,081,000 to shareholders
and registered pledgees listed or recorded in the final shareholders’ register on
March 31, 2006
2) Teikoku will be able to pay dividends on profits up to ￥4.50 per common share,or to a total of ￥1,372,504,000 to shareholders and registered pledgees listed
or recorded in the final shareholders’ register on December 31, 2005
(5) Application for the listing of the new company
INPEX and Teikoku plan to file applications to list the shares of the newly
established joint-holding company on the first section of the Tokyo Stock
Exchange.

4. Profile of the joint-holding company(1)Company name
Kokusai Sekiyu Kaihatsu Teiseki Holdings Kabushiki Kaisha(English name: INPEX Holdings Inc.)(2)

Business description
Kokusai Sekiyu Kaihatsu Teiseki Holdings Kabushiki Kaisha will be engaged in themanagement of the new corporate group and its subsidiaries.

(3)

Company headquarters
4-1-18 Ebisu, Shibuya-ku, Tokyo, Japan (current INPEX headquarters)(4)

Board of Directors and Auditors(expected）
Representative Director and Chairman Kunihiko Matsuo
Representative Director
Akira Isono
Representative Director
Masatoshi Sugioka
Representative Director and President Naoki Kuroda
The other Directors and Auditors are expected to be decided prior to assembly ofthe extraordinary shareholders’ meeting of both companies.

(5)

Capital￥30 billion(6)

Number of shares to be issued
2,360,659.95 common shares and 1 special class share. However, if bothcompanies retire their own shares prior to the date of the stock transfer, the numberof common shares to be issued will be reduced by the number of shares to be
allotted in exchange for the shares by both companies.

(7)

Fiscal year end
March 31(8)

Account Auditors
Ernst & Young ShinNihon will be the account auditors at the establishment of thejoint-holding company.

(9)

Estimated business results
Estimated business results are not concrete at this moment, and will be disclosed
as they are confirmed.

(Reference) Company profiles at the time of the stock transfer(1) Trading name

INPEX CORPORATION

Teikoku Oil Co., Ltd.

(2) Main Business

Exploration, development,production, distribution of crude
oil and natural gas andinvestment in such company

Exploration, development,production, distribution of crude
oil and natural gas(3) EstablishedFebruary 1966

September 1941

(4) Headquarters

4-1-18 Ebisu, Shibuya-ku, Tokyo, 1-31-10, Hatagaya, Shibuya-ku,
JapanTokyo, Japan(5) RepresentativeNaoki Kuroda,President & Representive Director(6) Capital

Masatoshi Sugioka,President & Representive Director

29,460 million yen(As of March 31,2005)

19,579 million yen(As of December 31, 2004)

Common Stock: 1,919,832.75 shares

306,130,000 shares(As of December 31, 2004)(7) Shares outstanding Special Class Share: 1 share(As of March 31,2005)(8) Shareholders’equity411,295 million yen
165,936 million yen(As of March 31,2005, consolidated basis） (As of December 31,2004, consolidated basis）(9) Total assets

779,227 million yen
240,513 million yen(As of March 31,2005, consolidated basis） (As of December 31,2004, consolidated basis）(10) Fiscal year end(11) Employees

March 31387
1,331(As of March 31,2005, consolidated basis） (As of December 31,2004, consolidated basis）
Major domestic utility/gas
companies1(12) Principal business
Major domestic oil wholesale
partners
companies and refining
companies, etc.

Tokyo Gas Co., Ltd.
Idemitsu Kosan Co., Ltd.
Japan Energy Corporation

Minister of Economy,
Trade and Industry2

36.06%

Japan Petroleum
Exploration Co., Ltd.

12.93%

Japan Trustee
Services Bank, Ltd.

10.93%

9.88%

Japan Energy
Corporation

5.11%

9.21%

Sumitomo MitsuiBanking Corporation

4.89%

2.89%

The Master Trust Bankof Japan, Ltd.

4.22%

(13) Major shareholders Mitsubishi Corporationand shareholding ratios
Mitsui Oil Exploration
Co.,Ltd.
The Master Trust Bank ofJapan, Ltd. (Trust Account)(As of March 31, 2005)(14) Main banks

December 31

Nippon Oil Corporation

16.48%(As of December 31, 2004)

Development Bank of Japan,
Sumitomo Mitsui Banking
Corporation, Mizuho Corporate
Mizuho Corporate Bank, Ltd.
Bank, Ltd., The Bank of TokyoThe Bank of Tokyo-Mitsubishi, Ltd. Mitsubishi, Ltd., UFJ Bank, Ltd.
Japan Bank for International
Cooperation,

(15) Relationships
between the twocompanies

CapitalINPEX holds 49,000 common shares of Teikoku.

Personnel

None

Trading
None
1. Supplied as LNG through Pertamina to major domestic utility/gas companies.
2. Shares were held by Japan National Oil Corporation as of March 31, 2005.
However, following the dissolution of Japan National Oil Corporation on April 1,2005, all common shares held by Japan National Oil Corporation were transferredto the Minister of Economy, Trade and Industry effective from the date of Japan
National Oil Corporation’s dissolution.

Consolidated business results for the three most recent business years
INPEX CORPORATION
Teikoku Co., Ltd.
Fiscal year ending

March2003

March2004

March2005

Net sales(millions of yen）

201,533

218,831478,586

73,63078,49884,032

Operating income(millions of yen)

97,27093,876

268,662

7,296

8,739

13,533

Ordinary income(millions of yen)

70,05094,773

258,631

10,744

11,158

16,523

Net income(millions of yen)

27,911

34,781

76,493

5,233

6,796

9,276

47,178.51

58,838.76 40,255.921

17.11

22.09

30.22

10,000166

7.5

EPS (yen)
Dividend per share(yen)10,0004,000

December December December
2002
2003
2004

Shareholders’ equity
430,169.19 471,826.00 214,163.981
444.90512.18per share (yen)
1. INPEX split each share of its common stock into three shares on May 18, 2004.

543.62- END -Disclaimer
This press release includes forward-looking statements that reflect the plans andexpectations of INPEX and Teikoku in relation to the integration described above and thebenefits resulting from it. These forward-looking statements are based on the current
assumptions and beliefs of INPEX and Teikoku in light of the information currently available tothem, and involve known and unknown risks, uncertainties and other factors, and may beaffected by such risks, uncertainties and other factors. Such risks, uncertainties and otherfactors include, without limitation, the following:
Changes in the relationship between the post-integration INPEX/Teikoku group (the"Group") with the governments of the countries or regions in which it will conduct businessChanges in the Japanese government's energy policy and the Group's role within it
Changes in prices or demand for crude oil and natural gas the Group will produce
The risks of increased costs to develop and apply exploration, development, production andrelated technologies, and the uncertainty of such technologies producing expected results
INPEX and Teikoku have no obligation to update publicly any forward-looking statements after
the date of this press release.

Rule 802 Legend“This business combination is made for the securities of a foreign company. The offer issubject to disclosure requirements of a foreign country that are different from those of the UnitedStates. Financial statements included in the document, if any, have been prepared inaccordance with foreign accounting standards that may not be comparable to the financial
statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under
the federal securities laws, since the issuer of the securities is located in a foreign country, andsome or all of its officers and directors may be residents of a foreign country. You may not beable to sue a foreign company or its officers or directors in a foreign court for violations of theU.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject
themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than under thisbusiness combination, such as in open market or privately negotiated purchases.”