Japan Petroleum Exploration Co., Ltd. · TSE:1662
Japan Petroleum Exploration — FY2017 Earnings Presentation
48 slides from Japan Petroleum Exploration's earnings presentation, May 14, 2018
Slide 1: Financial Results Fiscal Year Ended March 31, 2018
Note: The following report is an English translation of the Japanese-language original. Financial Results Fiscal Year Ended March 31, 2018 May 14 , 2018 Japan Petroleum Exploration Co., Ltd. 0
Slide 2: Cautionary Statement
Cautionary Statement This document contains future prospects such as plans, forecasts, strategies, and others which are not historical fact and these are made by the management’s judgement based on the obtainable information at the time of the disclosure. Actual results may significantly differ from
Slide 3: Contents
Contents Ⅰ. Financial Highlights, Long-term Vision 2030 and Mid-term Business Plan 2018-2022 Hideichi Okada, President Ⅱ. Actual Results for the FY3/18 Michiro Yamashita, Managing Executive Officer Ⅲ. Forecasts for the FY3/19 Michiro Yamashita, Managing Executive Officer 2
Slide 4: Financial Highlights, Long-Term Vision 2030 and Mid-term Business Plan 2018-2022
Ⅰ. Financial Highlights, Long-Term Vision 2030 and Mid-term Business Plan 2018-2022 Hideichi Okada President 3
Slide 5: Trends in Crude Oil Price and Foreign Exchange Rate
［Crude Oil Prices US$/bbl] $100 $110 $20 $30 $40 $50 $60 $70 $80 $90 Financial Highlights 2015-04 2015-05 2015-06 2015-07 2015-08 2015-09 2015-10 2015-11 2015-12 2016-01 2016-02 2016-03 2016-04 2016-05 2016-06 2016-07 2016-08 Crude Oil price US$/bbl 2016-09 4 2016-10 2016-11 2016-12 2017-01 2017-02
Slide 6: Actual Results for FY3/18 and Forecasts for FY3/19
Financial Highlights Actual Results for FY3/18 and Forecasts for FY3/19 ■ Actual Results for FY3/18 (vs FY3/17) Billion ¥ Billion ¥ FY3/17 FY3/18 270.0 18.0 Billion JPY Change (a) (a) 230.6 Net sales 207.1 230.6 +23.4 +11% 240.0 265.6 15.0 Operating profit 0.6 8.7 +8.0 -% 207.1 Net Sales (Left Axis)
Slide 7: Background
Long-term Vision 2030 Background Need to revise quantitative targets of Long-Term Business Vision and Medium-Term Business Plan (proved reserves, production Current Status volumes, natural gas handled volume) formulated in May 2015, due to deterioration in E&P* business profit caused by low oil and
Slide 8: Corporate Vision
Long-term Vision 2030 Corporate Vision Contribute to society through stable supply of energy, and solve social issues to realize sustainable development agendas. Explore, develop, Further enhance natural Contribute to solve problems gas supply chain, for sustainable society on produce and deliver en
Slide 9: What JAPEX Aims for by 2030
Long-term Vision 2030 What JAPEX Aims for by 2030 Growth to the Integrated Energy Company Utilizing Oil and Gas E&P and its Supply Base Meet the Local communities and clients’ demands for stable oil and Gas supply as well as play an active role to solve global issues such as low-carbonization and de
Slide 10: Profit Composition
Long-term Vision Profit Composition 2030 Business portfolio that enables sustainable growth • Global oil and gas demand in 2050 is considered as similar to the current level • It is necessary to develop both E&P and non-E&P business for future uncertainty By creating new environmentally-friendly b
Slide 11: Social Agendas JAPEX Address
Long-term Vision 2030 Social Agendas JAPEX Address Focus on solving three social agendas of sustainable development goals (SDGs)* leveraging oil and gas E&P and its supply base Agendas Social Stable supply to meet Contribute to the Play an active role to primary energy reconstruction of Fukushima so
Slide 12: Business Environment Surrounding JAPEX
Long-term Vision 2030 Business Environment Surrounding JAPEX Our Business Trends and Forecasts for International Opportunities Crude Oil Prices and US Gas Prices $/bbl $/MMbtu Decarbonization 120 20 ESG Crude Oil Price 90 15 CCS*, ** Renewable Energy 60 10 Liberalization of Electricity Oil & Gas Nat
Slide 13: Towards Integrated Energy Company
Long-term Vision 2030 Towards Integrated Energy Company Allocation of Management Resources to Realize the Target • Secure funds for new investment under financial discipline “Debt/EBITDA*< 2” • Allocate approximately half of new investment resources to non-E&P business in the medium to long term [Pr
Slide 14: [Priority Business] CCS
Long-term Vision 2030 [Priority Business] CCS According to the International Energy Agency (IEA), CCS is expected to contribute 14% of the total CO2 reductions by 2060 in order to achieve the "2 °C target" of the Paris Agreement If CCS is commercialized, there is the possibility of offsetting th
Slide 15: ESG Efforts for Sustainable Growth
Long-term Vision 2030 ESG Efforts for Sustainable Growth Relationship with SHINE* • Commercialization of CCS S Environment • Energy saving and diffusion of natural gas as a clean energy • Create environmentally friendly new business H • Safety first priority • Regional promotion through stable energ
Slide 16: Transformation of Corporate Culture
Long-term Vision Transformation of Corporate Culture 2030 - Transforming mindsets and Human Resource Development - While aiming to increasing the creativity and challenging spirit of each of the executives and employees, JAPEX aim to transform into a company with abundant mobility and diversity. Div
Slide 17: JAPEX's Integrated Energy Company
Long-term Vision 2030 JAPEX’s ”Integrated Energy Company” E&P Business • Review portfolio • Improve operation efficiency • Additional proved reserves (RRR>1) Social Environmentally Friendly Infrastructure / Utility Business Contribution New Business • Improvement of operating rate of through • Promo
Slide 18: Relationship Between Long-term Vision and Mid-term Business Plan
Mid-term Business Plan Relationship Between Long-term Vision and 2018-2022 Mid-term Business Plan Social Contribution through Sustainable Growth Long-term 2040-2050 Achieve Vision ROE=>5％ 2030 Mid-term Business Plan 2022 Building a sustainable growth portfolio 2018 • Review portfolio Compliance of s
Slide 19: Mid-Term Tactics and Targets
Mid-term Business Plan Mid-Term Tactics and Targets 2018-2022 Achieve “ROE => 5%” level in 2022 (crude oil prices US$60/bbl) Latter Half • Active Investment 1 : 1 of E&P to Non-E&P (Investment allocation) • Secure Investment Resources Own funds 30 to 60 billion yen + Reserve capacity of borrowing Ov
Slide 20: (1) E&P Business
Mid-term Business Plan (1) E&P Business 2018-2022 [Long-term Targets] Aim to achieve “RRR＞1”* Overseas E&P Domestic E&P • Maximize production rate / • Maximize the value of existing Additional development projects / contribution to earnings • Maintenance and improvement of • Appropriate portfolio in
Slide 21: (2) Infrastructure & Utility Business
Mid-term Business Plan (2) Infrastructure & Utility Business 2018-2022 [2022 Target] ・Domestic natural gas sales volume: 1.6 million ton (Including LNG for power generation) ・Electricity sales volume: 2.8 billion kWh (Equivalent to the annual electricity consumption of about 930,000 households in ge
Slide 22: (3) New Business Development
Mid-term Business Plan 2018-2022 (3) New Business Development [Target] Commercialization by "new business model" utilizing the competitive advantage of JAPEX Seafloor Energy Service Underground gas storage Methane Hydrate Hydrothermal Deposits LNG Rail Transport CO2-EOR Accumulate at overseas CCS te
Slide 23: Profit Target and Return to Shareholders
Mid-term Business Plan Profit Target and Return to Shareholders 2018-2022 Profit Target and Return to Shareholders for Medium Term Business Plan Period • JAPEX is aiming to achieve “ROE => 5%” as the minimum profit target corresponding to our business size under the oil price of US$60/bbl around FY2
Slide 24: Transition of Production Volume and Proved Reserves
Mid-term Business Plan Transition of Production Volume and Proved Reserves 2018-2022 • Both production volume and proved reserves decreased due to development delay of overseas projects and re-evaluation due to the decision of not to proceed the PNW LNG Project • For the time being, we will aim to a
Slide 25: Actual Results for the FY3/18
Ⅱ. Actual Results for the FY3/18 Michiro Yamashita Managing Executive Officer 24
Slide 26: Actual Results for FY3/18 (Summary)
Actual Results Actual Results for FY3/18 (Summary) FY3/18 Billion JPY FY3/17 (a) Initial Forecasts Revised Forecasts Revised Forecasts (f) (May 12, 2017) (f) (Aug.8, 2017) (f) (Feb.9, 2018) (a) Net sales 207.1 214.8 211.0 230.5 230.6 Operating profit 0.6 2.9 4.4 6.7 8.7 Ordinary profit 2.2 5.4 -0.9
Slide 27: Natural Gas sales for FY3/18 (year-on-year)
Actual Results Natural Gas sales for FY3/18 (year-on-year) Sales volume : Million M3 FY3/17 FY3/18 Change Net sales : Million JPY Full (a) Full (a) Full Sales volume 1,864 1,773 -91 Natural gas Net sales 55,329 60,431 +5,101 Increase in sales price Breakdown Domestic gas Sales volume 1,265 1,284 +19
Slide 28: Crude Oil sales for FY3/18 (year-on-year)
Actual Results Crude Oil sales for FY3/18 (year-on-year) Sales volume : Thousand KL FY3/17 FY3/18 Change Net sales : Million JPY Full (a) Full (a) Full Sales volume 2,762 2,506 -255 Crude oil Net sales 82,098 93,685 +11,587 Increase in sales price Breakdown Sales volume 301 291 -10 Domestic crude oi
Slide 29: Actual Results for FY3/18 (year-on-year)
Actual Results Actual Results for FY3/18 (year-on-year) FY3/17 FY3/18 Main factors for change Million JPY Change Increase factor (+) / Decreasing factor (-) (a) (a) Net sales 207,130 230,629 +23,499 Gross profit Domestic crude oil and natural gas + ¥3.9 billion Gross profit 32,172 39,263 +7,090 Over
Slide 30: Forecasts for the FY3/19
Ⅲ. Forecasts for the FY3/19 Managing Executive Officer Michiro Yamashita 29
Slide 31: Full Year Forecasts for FY3/19
Forecasts for FY3/19 Full Year Forecasts for FY3/19 [Assumptions for Crude Oil Price and Exchange Rate] Upper: from January 2017 to March 2018. Lower: from January 2018 to March 2019. Full year Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar. 2017(a) 54.63 49.88 54.49 64.89 56.20 JCC price US$/bbl
Slide 32: Natural Gas Sales Forecasts for FY3/19
Forecasts for FY3/19 Natural Gas Sales Forecasts for FY3/19 Sales volume : Million M3 FY3/18 FY3/19 Change Net sales : Million JPY Full (a) Full (f) Full Sales volume 1,773 1,780 +7 Natural gas ： Net sales 60,431 64,102 +3,670 Increase in selling price Breakdown Domestic gas Sales volume 1,284 1,270
Slide 33: Crude Oil Sales Forecasts for FY3/19
Forecasts for FY3/19 Crude Oil Sales Forecasts for FY3/19 Sales volume : Thousand KL FY3/18 FY3/19 Change Net sales : Million JPY Full (a) Full (f) Full Sales volume 2,506 3,368 +861 Crude oil Net sales 93,685 119,835 +26,149 Increase in sales price Breakdown Sales volume 291 265 -27 Domestic crude
Slide 34: Forecasts for FY3/19
Forecasts for FY3/19 Forecasts for FY3/19 FY3/18 FY3/19 Main factors for change Million JPY Change Increase factor (+) / Decreasing factor (-) (a) (f) Gross profit Net sales 230,629 265,649 +35,019 Domestic crude oil and natural gas - ¥1.5 billion Overseas consolidated subsidiaries + ¥2.0 billion Gr
Slide 35: Assumptions and Impact on Profits
Forecasts for FY3/19 Assumptions and Impact on Profits JCC price Exchange rate Canadian gas prices Assumptions C$2.00/mcf US$60.00/bbl JP¥110.00 / US$ (JPY88.00/C$) US$1/bbl increase in JCC A weakening in JPY1/US$ C$1/mcf increase in gas FY3/19 prices would push profits exchange rates would push pri
Slide 36: Appendix
IV. Appendix 35 JAREX
Slide 37: FY3/18 Overview of Key Projects in Progress
Appendix FY3/18 Overview of Key Projects in Progress E&P business Infrastructure・Utility Business Domestic Soma LNG Terminal Investment decision on commencement of oil development of a Commenced operation at Soma LNG Terminal in March 2018 shallow reservoir of the Yufutsu Oil and Gas Field i
Slide 38: E&P Business (1) Projects in Japan and Overseas
Appendix E&P Business (1) Projects in Japan and Overseas Oil Sands Project (Production) Shale Gas U.K. North Sea Offshore Block Sakhalin-1 Project (Planned to Development) Development and (Production &Development) Production Project (Production) Domestic Oil and Gas Fields Shale Oil Development (Pro
Slide 39: E&P Business (2) Domestic Activities
Appendix E&P Business (2) Domestic Activities Pursuing compensation of Operating 10 domestic oil and gas fields domestic reserves and maintenance of the production volume Plan for the FY3/19 • Domestic exploration (Geophysics, Exploration well) is not planned in Yurihara Yufutsu Oil and Gas Field Oi
Slide 40: E&P Business (3) Canada Shale Gas
Appendix E&P Business (3) Canada Shale Gas Development and Production Project Upstream: Shale gas project Midstream: LNG project Calgary Lelu Island, Block / North Montney Area, British Columbia, Canada The Port of Prince Rupert, Proposed site British Columbia, Canada The North Montney Region Intere
Slide 41: E&P Business (4) Canada Oil Sands Project
Appendix E&P Business (4) Canada Oil Sands Project Project Canada Oil Sands Co., Ltd. (CANOS) Company Operator ： Japan Canada Oil Sands Ltd. (JACOS) Calgary The Hangingstone area 75% interests Ongoing Production Gradual increase from 20,000 bbl/d FORT McMURRAY Area Corner JV Lease The Hangingstone U
Slide 42: E&P Business (5) Iraq Garraf Project
Appendix E&P Business (5) Iraq Garraf Project Project Japex Garraf Ltd. company Interest 30％ (cost share 40%) Baghdad Operator ： PETRONAS Garraf Oil Field Samawah Field Garraf Oil Field In Production Nasiriyah Basrah ■ Time Schedule First oil production on August 31 2013 Average daily production : A
Slide 43: E&P Business (6) Indonesia Kangean Project
Appendix E&P Business (6) Indonesia Kangean Project Kangean Energy Project Company Indonesia Ltd. (KEI) Pagerungan Utara Oil Field West Kangean Gas Field （Production suspended） + 2 others, Equity-method affiliate (Discovered/Undeveloped) Pagerungan Gas Field (Production) Interest 25％ (Operator : KEI
Slide 44: E&P Business (7) Sakhalin-1 Project
Appendix E&P Business (7) Sakhalin-1 Project Sakhalin Oil and Gas Development Odoptu Project Co., Ltd. (SODECO) Company Equity-method affiliate Interest Sakhalin 1 Consortium SODECO Arktun-Dagi JAPEX Exxon Neftegas Ltd. METI 30％ 15.29％ 50.00% SODECO Others Others 30％ 34.71% Chayvo 40% Chayvo, In Pro
Slide 45: Construction of the Soma LNG Terminal
Appendix Infrastructure・Utility Business (1) Construction of the Soma LNG Terminal ■Soma LNG Terminal Shinchi-Town, Fukushima Pref. (No.4 wharf area Site of Soma Port) Soma-Iwanuma One LNG Tank of Aboveground Style/PC type Gas Pipeline Capacity containing 230,000kl LNG ocean-going vessel ：Full set (
Slide 46: Natural Gas-Fired Power Generation Project
Appendix Infrastructure・Utility Business (2) Natural Gas-Fired Power Generation Project ■The overview of Fukushima Natural Gas Power Plant Head Office Fukushima Gas Power Co., Ltd.* (Founded April 2015) Method Gas Turbine and Steam Power (Combined Cycle) Capacity 1.18 million kW (2 units of 0.59 mil
Slide 47: Geothermal Power, Methane Hydrate, CCS, Solar Power
Appendix Geothermal Power, Methane Hydrate, CCS, Solar Power CCS Mt. Musa area Geothermal Power （Shibetsu Town） Tomakomai City ● ● ● ● Mt. Furebetsu south area （Kushiro City) Photo provided by Japan CCS Co., Ltd *Ongoing local negotiation Ground facilities of CCS demonstration project in Tomakomai S
Slide 48: Abbreviation
Appendix Abbreviation BOE(D) Barrels of Oil Equivalent (per Day) CCS Carbon dioxide Capture and Storage CIF Cost, Insurance and Freight COP Conference of the Parties CSR Corporate Social Responsibility E&P Exploration and Production FID Final Investment Decision GHG Greenhouse Gas
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