Japan Petroleum Exploration Co., Ltd. · TSE:1662

Japan Petroleum Exploration — 1H FY3/17 Earnings Presentation

38 slides from Japan Petroleum Exploration's earnings presentation, Nov 9, 2016

  1. Slide 1: Presentation Meeting of Consolidated Financial Results

    Note: The following report is an English translation of the Japanese-language original. Presentation Meeting of Consolidated Financial Results for the Six Months Ended September 30, 2016 November 9 , 2016 Japan Petroleum Exploration Co .,Ltd.

  2. Slide 2: Cautionary Statement

    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 and events may be differ

  3. Slide 3: Contents

    Contents Ⅰ. Business Overview President Hideichi Okada Ⅱ. Consolidated Financial Results for the Six Months Ended September 30, 2016 Managing Executive Officer Michiro Yamashita Ⅲ. Revised Full Year Forecasts for FY3/17 Managing Executive Officer Michiro Yamashita 3

  4. Slide 4: Ⅰ. Business Overview

    Ⅰ. Business Overview President Hideichi Okada 4

  5. Slide 5: Long-Term Business Vision and Medium-Term Business Plan

    Long-Term Business Vision and Medium-Term Business Plan “Transformation to an Integrated Energy Company with a Focus on Oil and Gas E&P”  If we liken our business into a tree, E&P business will be “root” and “trunk”, and we will grow each business around E&P business as “the well-proportioned wood”

  6. Slide 6: Trends in Crude Oil Prices and Foreign Exchange Rate

    ［Crude Oil Prices US$/bbl] $30 $40 $50 $60 $70 $80 $90 $100 $110 $120 2013-09 2013-10 2013-11 2013-12 2014-01 2014-02 2014-03 2014-04 2014-05 Crude Oil prices 2014-06 2014-07 US$/bbl (Left axis) 2014-08 2014-09 2014-10 2014-11 2014-12 2015-01 2015-02 6 2015-03 2015-04 2015-05 2015-06 2015-07 2015-08

  7. Slide 7: Revised Forecasts for FY3/17 (Highlight)

    Revised Forecasts for FY3/17 (Highlight) FY3/16 FY3/17 Difference Billion ¥ Previous Previous Revised forecasts forecasts forecasts 1H Full 1H (f) 1H (a) ② Full (f) Full (f) Full (a) （②-①） （④-③） Aug.5, 2016 ① Aug.5, 2016 ③ Nov.8, 2016 ④ Net sales 240.3 90.1 91.4 198.0 189.5 +1.3 -8.5 Operating incom

  8. Slide 8: Current Status of Ongoing Projects (Highlight)

    Current Status of Ongoing Projects (Highlight)  E&P business  Domestic Natural Gas Supply Business <Highest Priority Challenges> <Highest Priority Challenges> Establish “Integrated Natural Gas Supply System” Stable execution of ongoing overseas projects Diversification in both "Supply“ and “Procur

  9. Slide 9: Current status of Canada Shale Gas and LNG project

    E&P Business Current status of Canada Shale Gas and LNG project 【Upstream】 【Midstream】 Measures in response to low crude oil prices Make a comprehensive judgment of FID Low gas price (Premise price 2016) environment after scrutiny of additional conditions of the CA$1.74/Mcf (After deduction of royal

  10. Slide 10: Hangingstone Oil Sands Project - Improved Business Plan

    E&P Business Hangingstone Oil Sands Project - Improved Business Plan - 【Current Status and Forecasts】 【Consider and Implement Improved Business Plan】 To maximize project value, steadily implement Step  Progress (as of Sep.): 96% 1 and pursue possibility to realize Step 2  Impact of temporary (Step

  11. Slide 11: Commercialization of Natural Gas-Fired Power Generation Project

    Domestic natural gas supply business Commercialization of Natural Gas-Fired Power Generation Project The Natural Gas-fired Power Generation Project at Soma Port in Fukushima  Stable supply of inexpensive and low-environmental load electricity to the wide area in Objective the electricity liberaliza

  12. Slide 12: Dividend Payout of FY17/3

    Dividend Payout of FY17/3 JAPEX’s Basic Policy  Maintain Long-term and Stable Dividends for shareholders  Set the Dividend based on Medium to Long Term Business Forecasts and Retained Earnings Interim Dividend Payout and Year-end Dividend Forecast Revision of FY3/17  Regrettably Revised the Inter

  13. Slide 13: E&P Business (1) Initiatives in Japan and Overseas

    ＜Appendix＞ E&P Business (1) Initiatives in Japan and Overseas Oil Sands project (Temporary suspension of Sakhalin production / Development) U.K./Norway Sakhalin 1 project Shale Gas/LNG project (Production of natural gas / U.K. North Sea Block (Production & Development) planning of LNG plant) (Explor

  14. Slide 14: E&P Business (2) Domestic Initiatives

    ＜Appendix＞ E&P Business (2) Domestic Initiatives Domestic exploration Operates 10 domestic oil and gas fields • Domestic exploration (Geophysics, Exploration well) is not scheduled in FY3/17 • Pursuing additional domestic E&P Yurihara Yufutsu potential by utilizing government oil and gas field oil a

  15. Slide 15: E&P Business (3) Canada Shale Gas and LNG Project

    ＜Appendix＞ E&P Business (3) Canada Shale Gas and LNG Project Shale Gas development LNG project and Production project (Upstream) (Midstream) Calgary Lelu Island, Block / North Montney Area, British Columbia, Canada The Port of Prince Rupert, Proposed site British Columbia, Canada Prince Rupert North

  16. Slide 16: 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 Hangingstone 3.75 section Temporary suspension of the production FORT McMURRAY Area 100％ Interests (Cumulative production： Approximately 5,00

  17. Slide 17: E&P Business (5) Iraq: Garraf Oil Field

    ＜Appendix＞ E&P Business (5) Iraq : Garraf Oil Field Project Japex Garraf Ltd. company Interest 30％ (cost share 40%) Operator ： PETRONAS Baghdad Garraf oil field Field Garraf In Production Samawah 2013 2030 Nasiriyah Expected cumulative production : Basrah Around 1.1 billion bbl ■ Time Schedule First

  18. Slide 18: E&P Business (6) Indonesia: Kangean Block

    ＜Appendix＞ E&P Business (6) Indonesia: Kangean Block Pagerungan Utara oil field West Kangean gas field （Production suspended） (Exploration) Jakarta Pagerungan gas field (Production) West Java Pipeline Sepanｊang Island oil field Java Island (Production suspended) TSB gas field Bali Island （Production

  19. Slide 19: E&P Business (7) Sakhalin 1 Project

    ＜Appendix＞ E&P Business (7) Sakhalin 1 Project Sakhalin Oil and Odoptu Project Gas Development Co., Ltd. Company (SODECO) Equity-method affiliate Interest Sakhalin 1 Consortium SODECO Minister of Arkutun-Dagi Economy, JAPEX Exxon Neftegas Ltd. Trade and 15.29% 30% Industry SODECO 50.00% Others 30% O

  20. Slide 20: Domestic Natural Gas Supply Business (1) Construction of Soma LNG Terminal

    ＜Appendix＞ Domestic Natural Gas Supply Business (1) Construction of Soma LNG Terminal ■Soma LNG Terminal Shinchi-Town, Fukushima Pref. (No.4 wharf area of Site Soma Port) One LNG Tank of Aboveground Style/PC type Capacity containing 230,000kl LNG ocean-going vessel ：Full set (maximum Receiving 210,0

  21. Slide 21: Domestic Natural Gas Supply Business (2) Gas-Fired Power Generation Project

    ＜Appendix＞ Domestic natural gas supply business (2) Natural Gas-Fired Power Generation Project ■Overview of the Electric Power Generation Plant (planned) Company name Fukushima Gas Power Co., Ltd.* Method Gas Turbine and Steam Power (Combined Cycle) Capacity 1.18 million kW (2 units of 0.59 million

  22. Slide 22: Environment and innovative technology

    ＜Appendix＞ Environment and innovative technology Geothermal, MH, CCS, Solar Power CCS Geothermal Power Mt. Musa area （Shibetsu Town） ● Tomakomai City ● ● ● Mt. Furebetsu south area （Kushiro City) Photo provided by Japan CCS Co., Ltd * Ongoing local negotiation. Facilities of CCS demonstration projec

  23. Slide 23: Ⅱ. Consolidated Financial Results

    Ⅱ. Consolidated Financial Results for the Six Months Ended September 30, 2016 Managing Executive Officer Michiro Yamashita 23

  24. Slide 24: Actual Financial Results for 1H FY3/17 (Summary)

    1H Result Actual Financial Results for 1H FY3/17 (Summary) FY3/16 FY3/17 FY3/17 Difference Billion ¥ 1H (f) Billion ￥ Net Sales (left axis) Billion ￥ % 1H (a) Aug. 5 , 2016 1H (a) 140.0 +1.5% 124.1 11.0 Net Sales 124.1 90.1 91.4 120.0 Operating + % 9.0 income (loss) 5.4 -3.3 -3.2 8.8 Ordinary income

  25. Slide 25: Actual Sales of Natural Gas in 1H FY3/17

    1H Result Actual Sales of Natural Gas in 1H FY3/17 (vs 1H FY3/16) Sales volume : Million M3 FY3/16 FY3/17 Difference Net sales : Million ￥ 1H(a) 1H (a) Sales volume 820 845 +24 Natural gas Net sales 33,031 23,184 -9,846 Breakdown Domestic gas Sales volume 579 531 -47 (Domestically produced gas) Sale

  26. Slide 26: Actual Sales of Crude Oil in 1H FY3/17

    1H Result Actual Sales of Crude Oil in 1H FY3/17 (vs 1H FY3/16) Sales volume : Thousand KL FY3/16 FY3/17 Difference Net sales : Million ¥ 1H (a) 1H (a) Sales volume 1,480 1,715 +235 Crude oil Net sales 57,148 43,792 -13,355 Decline in sales prices Breakdown *1 Sales volume and net sales of Sales vol

  27. Slide 27: Actual Results for 1H FY3/17 (year-on-year)

    1H Result Actual Results for 1H FY3/17 (year-on-year) FY3/16 FY3/17 Million ¥ Difference Causes of increase(+) or decrease(-) (a) (a) Gross profit Domestic crude oil and natural gas - ¥7.6 billion Net sales 124,157 91,494 -32,663 Overseas consolidated subsidiaries - ¥5.3 billion Reduction of consign

  28. Slide 28: Ⅲ. Revised Full Year Forecasts for FY3/17

    Ⅲ. Revised Full Year Forecasts for FY3/17 Managing Executive Officer Michiro Yamashita 28

  29. Slide 29: Assumptions of Revised Forecasts for FY3/17

    Revised Full Year Forecasts Assumptions of Revised Forecasts for FY3/17 [Assumptions] 2016 2017 Full year Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar. Previous forecasts 37.17 50.00 50.00 50.00 46.87 JCC price US$/bbl Revised forecasts 37.17 45.92 45.00 45.00 43.34 Previous forecasts 110.71 105

  30. Slide 30: Revised Full Year Forecasts for FY3/17 (Summary)

    Revised Full Year Forecasts Revised Full Year Forecasts for FY3/17 (Summary) Previous Revised Difference forecasts forecasts VS Previous Billion ¥ Full(f) Full(f) Difference Billion￥ Billion￥ Forecasts(%) Aug.5,2016 Nov.8,2016 Net Sales (left axis) 220.0 5.0 Net Sales 1,980 1,895 -85 -4.3% 198.0 Ope

  31. Slide 31: Revised Forecasts Natural Gas Sales in FY3/17 (vs Previous Forecasts)

    Revised Full Year Forecasts Revised Forecasts Natural Gas Sales in FY3/17 (vs Previous Forecasts) Previous forecasts Revised forecasts Sales volume : Million M3 Full(f) Full(f) Difference Net sales : Million ￥ Aug 5, 2016 Nov.8, 2016 Sales volume 1,816 1,828 +13 Natural gas Net sales 55,047 53,847 -

  32. Slide 32: Revised Forecasts Crude Oil Sales in FY3/17 (vs Previous Forecasts)

    Revised Full Year Forecasts Revised Forecasts Crude Oil Sales in FY3/17 (vs Previous Forecasts) Previous Revised Sales volume : Thousand KL forecasts forecasts Difference Net sales : Million ￥ Full(f) Full(f) Aug.5, 2016 Nov.8, 2016 Sales volume 2,725 2,852 +127 Crude Oil Net sales 79,506 75,000 -4,

  33. Slide 33: Revised Forecasts for FY3/17 (vs Previous Forecasts)

    Revised Full Year Forecasts Revised Forecasts for FY3/17 (vs Previous Forecasts) Previous forecasts Revised forecasts Causes of increase(+) or decrease(▲) Million ￥ Full(f) Full(f) Difference Aug. 5, 2016 Nov.8, 2016 Gross profit Domestic crude oil and natural gas Net sales 198,057 189,528 -8,529 -

  34. Slide 34: Revised Forecasts Natural Gas Sales in FY3/17 (vs FY3/16)

    Revised Full Year Forecasts Revised Forecasts Natural Gas Sales in FY3/17 (vs FY3/16) FY3/16 FY3/17 Sales volume : Million M3 Revised forecasts Difference Net sales : Million ￥ Full (a) Full(f) Nov.8,2016 Sales volume 1,780 1,828 +47 Natural gas Net sales 68,469 53,847 -14,622 Breakdown Domestic gas

  35. Slide 35: Revised Forecasts Crude Oil Sales in FY3/17 (vs FY3/16)

    Revised Full Year Forecasts Revised Forecasts Crude Oil Sales in FY3/17 (vs FY3/16) FY3/16 FY3/17 Sales volume : Thousand KL Revised forecasts Difference Net sales : Million ¥ Full (a) Full(e) Nov.8,2016 Sales volume 3,233 2,852 -381 Crude oil Decline in sales prices Net sales 102,918 75,000 -27,917

  36. Slide 36: Revised Forecasts for FY3/17 (vs FY3/16)

    Revised Full Year Forecasts Revised Forecasts for FY3/17 (vs FY3/16) Causes of increase(+) or decrease(-) FY3/16 FY3/17 Million ￥ Revised forecasts Difference Gross profit Full (a) Full(f)Nov.8, 2016 Domestic crude oil and natural gas - ¥8.7billion Overseas consolidated subsidiaries Net sales 240,30

  37. Slide 37: Assumptions and Impact on Profits [2H]

    Revised Full Year Forecasts Assumptions and Impact on Profits [2H] FY3/16 FY3/17 1Q-4Q(a) 1Q(a) 2Q(a) 3Q(f) 4Q(f) 1Q-4Q(f) JCC price US$/bbl 51.48 37.17 45.92 45.00 45.00 43.34 Exchange rate JP¥/US$ 121.06 110.71 105.32 100.00 100.00 103.63 Canadian gas CA$/mcf 2.11 1.58 1.36 2.14 1.94 1.74 JCC pric

  38. Slide 38: Abbreviation

    Abbreviation  BOE(D) Barrels of Oil Equivalent (per Day)  CCS Carbon dioxide Capture and Storage  COP Conference Of the Parties  CSR Corporate Social Responsibility  E&P Exploration and Production  FID Final Investment Decision  GHG Greenhouse Gas  HE Hangingstone Expansion  HSE Health, Saf

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