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

Consolidated Financial Results
for the Three Months Ended June 30, 2017
＜Supplementary Material＞
August 8, 2017

Japan Petroleum Exploration Co., Ltd.

Cautionary Statement
Any information contained herein with respect to JAPEX’s plans, forecasts, strategies
and other statements that are not historical facts are forward-looking statements about
the future performance of JAPEX. Readers should be aware that the actual results andevents may be different from these projections because of various factors that couldoccur in the future.
The provision of this document should not be construed as a solicitation for investment.
Copyright : All information contained herein is protected by copyright, and may not be
copied or reproduced without prior consent of JAPEX.
Note: Abbreviations used herein are as follows:(a) = Actual results(f) = Forecasts
FY = Fiscal Year (FY3/18, for instance, means 12 months ending March 31, 2018)
Any inquiries about the information contained herein or other Investor Relations questions
are requested to be directed to:Investor Relations Group, Media & Investor Relations Dept.
Japan Petroleum Exploration Co., Ltd.
Tokyo, JAPANTEL: +81-3-6268-7111

2

2014-06
2014-072014-08
2014-09
2014-10
2014-11
2014-12
2015-01
2015-022015-032015-04
2015-05
2015-06
2015-072015-08
2015-09
2015-10
2015-11
2015-12
2016-01
2016-02
2016-03
2016-04
2016-05
2016-06
2016-072016-08
2016-09
2016-10
2016-11
2016-122017-012017-022017-032017-04
2017-05
2017-06［Crude Oil Prices US$/bbl]
$120

$110

$90

Crude Oil Prices US$/bbl (Left axis)$100

Exchange Rate JP¥/US$(Right axis)

US$ 49.44/bbl JP¥ 111.33/US$

3

¥150

¥140

¥130

$80
¥120

$70
¥110

$60
¥100

$50
¥90

$40
¥80

$30
¥70

［Foreign Exchange Rate JP¥/US$］

Trends in Crude Oil Prices and Foreign Exchange Rate
¥160

Japan Crude Cocktail (JCC) Price in the first 10 days of July 2017 on a prompt report basis :Consolidated Financial Forecasts for FY3/18（Highlights）
FY3/17[Billion JP¥]FY3/18Full (f)1Q (a)①

Full (a)②

1Q (a)③Change
Full (f)Previous forecasts Revised forecasts(August 8, 2017)(May 12,2017)④⑤*

1Q(③-①)

Full(⑤-②)

Full(⑤-④)

Net sales

42.0

207.1

59.8

214.8

211.0

+1.7

+3.8

-3.8

Operating income(loss)

-0.9

0.6

2.2

2.9

4.4+3.2+3.8+1.5

Ordinary income(loss)

3.3

2.2

5.7

5.4

-0.9+2.4-3.1-6.3

Profit (loss)
attributable toowners of parent

1.9

3.4

5.4

5.5

1.2+3.5

-2.2

-4.3

37.17

45.60

54.63

50.00

51.27

17.46+5.67+1.27

110.71108.53112.12110.00110.62+1.41+2.09+0.62

Assumptions
JCC price(US$/bbl)
Exchange rate(JP¥/US$）* JAPEX announced the latest forecasts by “Notice of Financial Forecasts Revision” on August 8, 2017, regarding the consolidated
financial forecasts of the fiscal year ending March 31, 2018.

4Actual results

Actual Sales of Natural Gas in 1Q FY3/18 ( year-on-year )Sales volume : Million M3
Net sales : Million JP¥

FY3/17

FY3/181Q (a)

1Q (a)

ChangeSales volume436

435-0

Net sales

12,43913,769+1,329Domestic gas

Sales volume270

291+20(Domestically producedgas)

Sales volume（166）

（180）

（+13）

Overseas gas

Sales volume165

144-21Natural gas

Rising selling price

Breakdown

Million M3500
400

165

100-270

FY3/17 (a)Decrease in sales volume from
Shale Gas Project in Canada

Sales volume ofdomestic gas

Increase in demand for local
distribution companies andindustrial users

144300200

Sales volume ofoverseas gas

291

FY3/18 (a)Sales volume of “Overseas gas” stated herein are amounts of Japex(U.S.) Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

5

Actual results

Actual Sales of Crude Oil in 1Q FY3/18 ( year-on-year )Sales volume : Thousand KL
Net sales : Million JP¥

FY3/17

FY3/18

1Q(a)

1Q(a)

ChangeSales volume711

872

+161

Net sales

18,22629,530+11,303Domestic crude oil(*)

Sales volume

73

78+5Net sales

2,164

3,158+993

Overseas crude oil(**)

Sales volume326

442+115

Net sales

7,732

13,545+5,813

Sales volume

65－-65Net sales329－-329

JCC price

US$/bbl

37.17

54.63

+17.46

Bitumen price (***)

US$/bbl7.12－-7.12

Exchange rate

JP¥/US$110.71112.12+1.41

Crude Oil

Increase in sales volume , rising selling
price

Breakdown

Bitumen (***)
Assumptions

Increase in oil sales volume from Garraf
Oil Field in Iraq
Operation of bitumen production inthe 3.75 Section Area (DEMO Area) inCanada has been suspended from May
2016, and decided not to re-start
operation in August 2017(*) Sales volume and net sales of “Domestic crude oil” stated herein do not include purchased crude oil.
(**) Sales volume and net sales of “Overseas crude oil” stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX Montney Ltd.
and Japex Garraf Ltd.).
(***) Royalty is excluded in the net sales and price of Bitumen.

6Actual Results for 1Q FY3/18 ( year-on-year )FY3/17

FY3/181Q (a)1Q (a)Net sales

42,09659,803+17,706

Gross profit

6,446

9,649+3,202

125

367+241

SG&A expenses

7,295

7,011

-283

Operating income (loss)-974

2,270+3,244

Non-operating income(expenses)

4,287

3,464-822

Ordinary income (loss)

3,313

5,735+2,422[ Million JP¥]

Exploration expenses

ChangeExtraordinary income(loss)-253-5+247

Income taxes

471

634+162

Profit (loss) attributable tonon-controlling interests

678-397-1,076

Profit (loss) attributable toowners of parent

1,909

5,492

+3,583
7Actual results

Main factors for change
Increase factor (+) / Decrease factor (-)
Gross profit
Domestic crude oil and natural gas+ ¥1.1 billion
Overseas consolidated subsidiaries+ ¥2.0 billion
Non-operating income (expenses)
Equity in earnings of affiliates+ ¥3.1 billion
Foreign currency translation adjustments ondebt, foreign currency exchange gains andlosses
Gains ¥3.4 billion (FY3/17)→ Losses ¥0.4 billion (FY3/18)- ¥ 3.9 billion

Revised forecasts

Revised Forecasts for FY3/18
20172018
Full year
Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar.

[Assumptions]
JCC price

US$/bblExchange rate JP\/US$

2.
3.

Previous forecasts
Revised forecasts

US$/bblPrevious forecasts

JACOS

US$/bblPrevious forecasts

CA$/mcf

Previous forecasts

JML
Gas

50.00
50.00
50.00
50.00
50.00
54.63 50.00 50.00 50.00 51.27
110.00 110.00 110.00 110.00 110.00
112.12 110.00 110.00 110.00 110.62

Revised forecasts

JACOS
Bitumen
Diluted bitumen

1.

Previous forecasts

Revised forecasts
Revised forecasts
Revised forecasts

2.23
2.71

2.23
2.62

33.78
32.89
2.23
2.23

33.65
32.832.23
2.23

33.81
32.84
2.23
2.45

“JACOS Bitumen” stated herein bitumen selling price of Japan Canada Oil Sands Ltd. (Deduction of Royalty). Decided not to re-start
operation at the DEMO Area in August 2017 and not estimated FY3/18 sales.
“JACOS Diluted bitumen” stated herein diluted bitumen selling price of Japan Canada Oil Sands Ltd. (Deduction of Royalty). Started
production operation at the Hangingstone expansion area in August 2017, expected to start sales from the second half of FY3/18.
“JML Gas” stated herein gas selling price of JAPEX Montney Ltd. (Deduction of Royalty)

8

Revised full year forecasts

Revised Forecasts Natural Gas Sales for FY3/18(vs Previous Forecasts)

FY3/18

FY3/18ChangePrevious forecasts Full (f)May 12, 2017

Revised forecasts Full (f)August 8, 2017

Full

Sales volume

1,736

1,797+61

Net sales

56,572

59,128+2,557

Domestic gas

Sales volume

1,240

1,245+5(Domesticallyproduced gas)

Sales volume(713)

(722)

(+8)

Overseas gas

Sales volume496

552+55

Sales volume : Million M3
Net sales : Million JP¥Natural gas

Increase in sales volume,
rising selling price

Breakdown

Million M32,000
1,600496552

1,200

Sales volume ofoverseas gas

Increase in shale gas sales volumein Canada

Sales volume ofdomestic gas

Increase in demand for local
distribution companies andindustrial users

8004001,2401,245
Sales volume of “Overseas gas” stated herein are amounts of Japex (U.S.)
Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

Previous forecasts(f)Revised forecasts(f)9Revised full year forecasts

Revised Forecasts Crude Oil Sales for FY3/18(vs Previous Forecasts)

FY3/18

FY3/18ChangePrevious forecasts Full(f) May 12, 2017

Revised forecasts Full(f) August 8, 2017

Full

Sales volume

2,898

2,654-244

Net sales

93,23086,556-6,674

Sales volume271

285+15Net sales

9,993

10,792+800

Sales volume

1,329

1,160-168

Net sales

40,50135,654-4,848

Sales volume

―

―

―

Net sales―――

Sales volume339

254-85Net sales

7,929

5,768-2,162

JCC price

US$/bbl

50.00

51.27

+1.27

Bitumen price (***)

US$/bbl―――Diluted bitumen(****)

US$/bbl33.81

32.84-0.97

Exchange rateJP¥/US$

110.00110.62+0.62

Sales volume : Thousand KL
Net sales : Million JP¥

Crude Oil

Decrease of sales volumeBreakdown
Domestic crude oil (*)
Overseas crude oil(**)
Bitumen (***)
Diluted bitumen(****)
Assumptions

10

Decrease of sales volume from
Garraf Oil Field in Iraq
Decision not to re-start
operation of DEMO Area
Reduction of sales volume due
to revision of commencement
for the operation ofHangingstone Oil Sands Project(*) Sales volume and net sales of“Domestic crude oil” stated herein do notinclude purchased crude oil.
(**) Sales volume and net sales of“Overseas crude oil” stated herein areamounts of 3 overseas subsidiaries (Japex(U.S.) Corp., JAPEX Montney Ltd. andJapex Garraf Ltd.).
(***) ,(****) Royalty is excluded in thenet sales and price of both Bitumen and
Diluted bitumen.

Revised full year forecasts

Revised Forecasts for FY3/18 (vs Previous Forecasts)

Main factors for change
Increase factor(+) / Decrease factor (-)

FY3/18

FY3/18Previous forecasts
Full (f)May 12, 2017

Revised forecasts
Full (f)August 8, 2017

Net sales

214,878

211,025-3,853

Domestic crude oil and natural gas + ¥2.5 billion
Overseas consolidated subsidiaries + ¥0.7 billion

Gross profit

32,66035,804+3,144

SG&A expenses

Exploration expenses

1,373

1,329-44

SG&A expenses

28,30029,987+1,687

Operating income (loss)

2,988

4,489

+1,501Non-operating income(expenses)

2,437-5,399-7,836

Ordinary income (loss)

5,424-910-6,335Extraordinary income(loss)-31-5,564-5,533

2,301-1,361-3,661[Million JP¥]

Income taxes

ChangeGross profit

Review of cost classification- ¥1.7 billion

Non-operating income (expenses)
Not re-starting SAGD operations in DEMO Area
- ¥7.6 billion
Not proceeding PNW LNG Project- ¥3.2 billion
Other+ ¥3.0 billion

Extraordinary income (loss)
Not proceeding PNW LNG Project- ¥5.5 billion

Profit (loss) attributable
to non-controllinginterests-2,472

Profit (loss) attributableto owners of parent

5,564-6,333
1,219

11-3,861-4,345

Income tax adjustments
Tax effect accounting regarding DEMO Area+ ¥2.0 billion