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

Japan Petroleum Exploration — H1 FY3/18 Earnings Presentation

39 slides from Japan Petroleum Exploration's earnings presentation, Nov 13, 2017

  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, 2017 November 13 , 2017 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, 2017 Managing Executive Officer Michiro Yamashita Ⅲ. Revised Full Year Forecasts for FY3/18 Managing Executive Officer Michiro Yamashita 3

  4. Slide 4: Ⅰ. Business Overview

    Ⅰ. Business Overview President Hideichi Okada 4

  5. Slide 5: Trends in Crude Oil Price and Foreign Exchange Rate

    ［Crude Oil Price US$/bbl] $100 $110 $120 $30 $40 $50 $60 $70 $80 $90 2014-09 2014-10 2014-11 2014-12 2015-01 2015-02 2015-03 2015-04 2015-05 2015-06 2015-07 2015-08 2015-09 2015-10 2015-11 2015-12 2016-01 2016-02 5 2016-03 2016-04 2016-05 2016-06 Crude Oil Price US$/bbl (Left axis) 2016-07 2016-08 2

  6. Slide 6: Actual Results for 2Q and Forecasts for FY3/18

    Actual Results for 2Q and Forecasts for FY3/18 ＜Highlight＞ FY3/17 FY3/18 Change Full (f) Full (f) [Billion JP¥] Previous Revised 2Q (a) Full (a) 2Q (a) forecasts forecasts 2Q Full Full ① ② ③ (August 8, (November （③-①） （⑤-②） （⑤-④） 2017) 10, 2017) ④ ⑤* Net sales 91.4 207.1 112.3 211.0 213.8 +20.8 +6.6

  7. Slide 7: Long-Term Business Vision and Medium-Term Business Plan

    Long-Term Business Vision and Medium-Term Business Plan (2015-) “Transformation to an Integrated Energy Company with a Focus on Oil and Gas E&P”  Regarding our business as the tree, E&P will be “root” and “trunk” and the JAPEX group is pursuing to become a well-balanced integrated company like “the

  8. Slide 8: Outlook of Business Environment: Assumptions of Oil Price and Exchange Rate

    Outlook of Business Environment Assumptions of Oil Price and Exchange Rate Although assuming a gentle recovery in the market, range of higher oil price is assumed to be limited (US$/bbl) 120 WTI JCC 100 Assumptions as of 2015 Mid-Term Business Plan 80 60 40 Assumptions as 20 of May 2017 0 2014 2015

  9. Slide 9: FY3/18 Overview of Key Projects in Progress

    FY3/18 Overview of Key Projects in Progress ＜Highlights＞  E&P business  Domestic Natural Gas Supply Business Hokkaido: Yufutsu Oil and Gas Field The Soma LNG Terminal  Investment decision on commencement of oil development of a  Under construction toward the commercial commencement in shallow re

  10. Slide 10: Commencement of Oil Development of a Shallow Reservoir of Yufutsu Oil and Gas Field

    Commencement of Oil Development of a Shallow Reservoir of Yufutsu Oil and Gas Field Investment decision of commencement of oil development of a shallow reservoir (June 2017) • Decision to commence oil development of a shallow reservoir named the Takinoue Formation (Shallow reservoir around vertical

  11. Slide 11: E&P Business: Canada Shale Gas Development and Production Project

    E&P Business Current status of Canada Shale Gas Development and Production Project 【Shale Gas Development and Production Project】 【Pacific NorthWest LNG Project】 Production & sales Decided not to proceed • Ongoing shale gas production and sales • In July 2017, decided not to proceed with the project

  12. Slide 12: Canada Oil Sands Project ①: Operator Skills and Experiences

    Canada Oil Sands Project ① Operator Skills and Experiences for Overseas Business JACOS （Japan Canada Oil Sands Limited） • Long experience to the oil sands business in Canada since 1970`s Pioneer of producing bitumen using SAGD (steam heating to reduce oil viscosity) process • Building a good relatio

  13. Slide 13: Canada Oil Sands Project ②: Overview of Business

    Canada Oil Sands Project ② Overview of Business 【the Hangingstone Demonstration area】 【the Hangingstone Joint Venture area】 Decision not to re-start production using SAGD process Commencement of production operations using SAGD process • 1999: Commencement of test production by SAGD • August 2017: C

  14. Slide 14: Canada Oil Sands Project ③: Commencement of Production

    Canada Oil Sands Project ③ Commencement of Production Commencement of production in August 2017  Diluted to heavy oil equivalency and transported via pipeline for sales December 2012 Final Investment Decision  Sufficient to ensure positive operating February 2015 Completion of drilling of horizont

  15. Slide 15: Progress of Soma Project

    Progress of Soma Project Soma LNG Terminal, Fukushima Natural Gas Power Plant Progress of Soma Project July 2017 Started work at the Soma District Office Building October 2017 Commencement of construction on the Fukushima Natural Gas Power Plant November 2017 Commencement of operation on the Soma-Iw

  16. Slide 16: Ⅱ. Consolidated Financial Results

    Ⅱ. Consolidated Financial Results for the Six Months Ended September 30, 2017 Managing Executive Officer Michiro Yamashita 16

  17. Slide 17: Actual Sales of Natural Gas in 2Q FY3/18

    Actual results Actual Sales of Natural Gas in 2Q FY3/18 ( year-on-year ) Sales volume : Million M3 FY3/17 FY3/18 Change Net sales : Million JP¥ 2Q (a) 2Q (a) Sales volume 845 833 -11 Natural gas Net sales 23,184 26,839 +3,654 Rising selling price Breakdown Domestic gas Sales volume 531 569 +37 (Dome

  18. Slide 18: Actual Sales of Crude Oil in 2Q FY3/18

    Actual results Actual Sales of Crude Oil in 2Q FY3/18 ( year-on-year ) FY3/17 FY3/18 Sales volume : Thousand KL Change Net sales : Million JP¥ 2Q(a) 2Q(a) Sales volume 1,715 1,548 -167 Crude Oil Rising selling price Net sales 43,792 53,086 +9,294 Breakdown Domestic crude oil Sales volume 149 146 -3

  19. Slide 19: Actual Results for 2Q FY3/18 (year-on-year)

    Actual results Actual Results for 2Q FY3/18 ( year-on-year ) FY3/17 FY3/18 Main factors for change [ Million JP¥] Change Increase factor (+) / Decrease factor (-) 2Q (a) 2Q (a) Net sales 91,494 112,382 +20,887 Gross profit Gross profit 11,675 17,884 +6,209 Domestic crude oil and natural gas + ¥2.0 b

  20. Slide 20: Ⅲ. Revised Full Year Forecasts for FY3/18

    Ⅲ. Revised Full Year Forecasts for FY3/18 Managing Executive Officer Michiro Yamashita 20

  21. Slide 21: Revised Forecasts for FY3/18

    Revised forecasts Revised Forecasts for FY3/18 2017 2018 Full year [Assumptions] Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar. Previous forecasts 54.63 50.00 50.00 50.00 51.27 JCC price US$/bbl Revised forecasts 54.63 49.88 50.00 50.00 51.25 Previous forecasts 112.12 110.00 110.00 110.00 110.62

  22. Slide 22: Revised Forecasts Natural Gas Sales for FY3/18 (vs Previous)

    Revised forecasts Revised Forecasts Natural Gas Sales for FY3/18 (vs Previous Forecasts) FY3/18 FY3/18 Change Sales volume : Million M3 Net sales : Million JP¥ Previous forecasts Full (f) Revised forecasts Full (f) Full August 8, 2017 November 10, 2017 Sales volume 1,797 1,757 -40 Natural gas Decrea

  23. Slide 23: Revised Forecasts Crude Oil Sales for FY3/18 (vs Previous)

    Revised forecasts Revised Forecasts Crude Oil Sales for FY3/18 (vs Previous Forecasts) FY3/18 FY3/18 Change Sales volume : Thousand KL Previous forecasts Revised forecasts Net sales : Million JP¥ Full (f) August 8, Full (f) November 10, Full 2017 2017 Sales volume 2,654 2,603 -51 Crude Oil Net sales

  24. Slide 24: Revised Forecasts for FY3/18 (vs Previous Forecasts)

    Revised forecasts Revised Forecasts for FY3/18 (vs Previous Forecasts) Previous forecasts Revised forecasts Main factors for change Increase factor (+) / Decrease factor (-) Million JP¥ Full(f) Full(f) Change August 8, 2017 November 10, 2017 Gross profit Net sales 211,025 213,802 +2,777 Domestic cru

  25. Slide 25: Revised Forecasts Natural Gas Sales for FY3/18 (year-on-year)

    Revised forecasts Revised Forecasts Natural Gas Sales for FY3/18 (year-on-year) FY3/17 FY3/18 Change Sales volume : Million M3 Net sales : Million JP¥ Revised forecasts Full (f) Full (a) Full November 10, 2017 Sales volume 1,864 1,757 -108 Natural gas Net sales 55,329 58,333 +3,003 Rising selling pr

  26. Slide 26: Revised Forecasts Crude Oil Sales for FY3/18 (year-on-year)

    Revised forecasts Revised Forecasts Crude Oil Sales for FY3/18 (year-on-year) FY3/17 FY3/18 Change Sales volume : Thousand KL Revised forecasts Net sales : Million JP¥ Full (a) Full (f) November 10, Full 2017 Sales volume 2,762 2,603 -159 Crude Oil Net sales 82,098 87,104 +5,006 Rising selling price

  27. Slide 27: Revised Forecasts for FY3/18 (year-on-year)

    Revised forecasts Revised Forecasts for FY3/18 (year-on-year) FY3/17 FY3/18 Main factors for change Revised forecasts Increase factor(+) / Decrease factor (-) [Million JP¥] Full (f) Change Full (a) November 10, Gross profit 2017 Domestic crude oil and natural gas + ¥0.3 billion Overseas consolidated

  28. Slide 28: Assumptions and Impact on Profits [3Q-4Q]

    Revised forecasts Assumptions and Impact on Profits [3Q-4Q] FY3/17 FY3/18 Full(a) 1Q(a) 2Q(a) 3Q(f) 4Q(f) Full(f) JCC price US$/bbl 45.60 54.63 49.88 50.00 50.00 51.25 Exchange rate JP¥/US$ 108.53 112.12 111.38 110.00 110.00 110.94 Canadian gas C$/mcf 1.95 2.71 2.67 1.29 1.94 2.21 JCC price Exchange

  29. Slide 29: 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 Development and (Planned to Development) (Production & Development) Production Project (Production) Domestic Oil and Gas Fields (Production) Shale Oil

  30. Slide 30: E&P Business (2) Domestic Activities

    ＜Appendix＞ E&P Business (2) Domestic Activities Domestic exploration Operating 10 domestic oil and gas fields • Domestic exploration (Geophysics, Exploration well) is not planned in FY3/18 • Pursuing additional domestic E&P potential including utilizing government basic surveys Yurihara Yufutsu Oil

  31. Slide 31: E&P Business (3) Canada Shale Gas Development and Production Project

    ＜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 Interest 10% Interest 10% Equ

  32. Slide 32: 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 Demonstration area FORT McMURRAY Area Not to re-start operation of 100% interests SAGD production (Cumulative production：35.

  33. Slide 33: 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%) Operator ： PETRONAS Baghdad Field Garraf Oil Field In Production Garraf Oil Field Samawah 2013 2030 Nasiriyah Expected Cumulative Production Basrah approximately 1.1 billion bbl ■ Time S

  34. Slide 34: E&P Business (6) Indonesia: Kangean Project

    ＜Appendix＞ E&P Business (6) Indonesia: Kangean Project Pagerungan Utara Oil Field West Kangean Gas Field （Production suspended） (Exploration) Jakarta Pagerungan Gas Field (Production) West Java Pipeline Java Island Sepanｊang Island Oil Field (Production suspended) TSB Gas Field Bali Island （Producti

  35. Slide 35: 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 Arkutun-Dagi JAPEX Exxon Neftegas Ltd. METI 15.29% 30% 50.00% SODECO Others 30% Others 40% 34.71% Chayvo In Producti

  36. Slide 36: Domestic Natural Gas Supply Business (1) Construction of the Soma LNG Terminal

    ＜Appendix＞ Domestic Natural Gas Supply Business (1) Construction of the 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 2

  37. Slide 37: Domestic Natural Gas Supply Business (2) Natural Gas-Fired Power Generation Project

    ＜Appendix＞ Domestic Natural Gas Supply 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

  38. Slide 38: Environment and Innovative Technology Business

    ＜Appendix＞ Environment and Innovative Technology Business Geothermal Power, Methane Hydrate, CCS, Solar Power Geothermal Power CCS Mt. Musa area （Shibetsu Town） ● Tomakomai City ● ● ● Mt. Furebetsu south area （Kushiro City) Photo provided by Japan CCS Co., Ltd *Ongoing local negotiation Ground facil

  39. Slide 39: Abbreviation

    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  HE Hangi

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