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

Japan Petroleum Exploration — FY3/15 Earnings Presentation

52 slides from Japan Petroleum Exploration's earnings presentation, May 13, 2015

  1. Slide 1: Presentation Meeting of Consolidated Financial Results for FY Ended March 31, 2015

    Note: The following report is an English translation of the Japanese-language original. Presentation Meeting of Consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (FY3/15) May 13 , 2015 Japan Petroleum Exploration Co .,Ltd.

  2. Slide 2: Cautionary Statement

    Cautionary Statement Any information contained herein with respect to JAPEX’s plans, estimates, strategies and other statements that are not historical facts are forward-looking statements about the future performance of JAPEX. Readers should be aware that actual results and events may differ substa

  3. Slide 3: Contents

    Contents 1. Business Overview President Osamu Watanabe 2. Actual Results for FY3/15 Executive Officer Michiro Yamashita 3. Estimates for FY3/16 Executive Officer Michiro Yamashita 4. Long-Term Business Vision President Osamu Watanabe 2

  4. Slide 4: 1. Business Overview

    1. Business Overview President Osamu Watanabe 3

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

    [Crude Oil Price: US$/bbl] $40 $50 $60 $70 $80 $90 $100 $110 $120 $130 2012-03 2012-04 2012-05 2012-06 2012-07 2012-08 2012-09 2012-10 2012-11 2012-12 2013-01 2013-02 2013-03 2013-04 2013-05 2013-06 2013-07 2013-08 4 2013-09 2013-10 2013-11 2013-12 2014-01 2014-02 2014-03 Exchange Rate ¥/$ (Right Ax

  6. Slide 6: Actual Results for FY3/15 and Estimate for FY3/16 (Highlight)

    Actual Results for FY3/15 and Estimate for FY3/16 (Highlight) Billion ￥ Billion ￥ ■ Actual Results for FY3/15 （vs FY3/14） 3,500 Net Sales (Left Axis) 700 350.0 70.0 [Billion ￥] FY3/14 FY3/15 Difference (a) (a) 304.9 Net Sales 276.5 304.9 +28.3 +10% 300.0 3,000 276.5 60.0 600 271.1 Operating Income 2

  7. Slide 7: 2. Actual Results for FY3/15

    2. Actual Results for FY3/15 Executive Officer Michiro Yamashita 6

  8. Slide 8: Actual Results for FY3/15 (Highlight)

    Actual Result Actual Results for FY3/15 (Highlight) FY3/15 FY3/14 Revised [Million ￥] Initial Estimate (e) Actual (a) Estimate (e) Actual (a) (May 2014) (Nov. 2014) Net Sales 276,588 323,633 324,378 304,911 Operating Income 24,634 33,077 34,681 32,146 Ordinary Income 43,889 41,469 48,819 54,839 Net

  9. Slide 9: Actual Results for FY3/15 (vs Revised Estimate for FY3/15)

    Actual Result Actual Results for FY3/15 (vs Revised Estimate for FY3/15) [ Million ￥] FY3/15(e) FY3/15(a) Change ≪Causes of increase(+) or decrease(-) ≫ Net sales 324,378 304,911 （19,467） Gross profit Gross profit 72,981 70,262 （2,719） Domestic crude oil and natural gas - ¥2.0 billion Exploration No

  10. Slide 10: Actual sales of Natural gas for FY3/15 (vs FY3/14)

    Actual Result Actual sales of Natural gas for FY3/15 (vs FY3/14) FY3/14 FY3/15 change Sales volume : Million M3 Net sales : Million ￥ 1H (a) Full (a) 1H (a) Full (a) 1H Full Sales volume 614 1,418 775 1,710 +160 +291 Natural gas Net sales 31,883 71,584 37,458 83,974 +5,575 +12,390 Breakdown of equit

  11. Slide 11: Actual Sales of Crude Oil for FY3/15 (vs FY3/14)

    Actual Result Actual Sales of Crude Oil for FY3/15 (vs FY3/14) Sales volume : Thousand KL FY3/14 FY3/15 change Net sales : Million ￥ 1H (a) Full (a) 1H (a) Full (a) 1H Full Sales volume 877 1,902 1,107 2,396 +229 +494 Crude oil: Net sales 53,919 119,370 73,500 133,346 +19,581 +13,975 Breakdown of eq

  12. Slide 12: Actual Results for FY3/15 (vs FY3/14)

    Actual Result Actual Results for FY3/15 (vs FY3/14) ≪Causes of increase(+) or decrease(-) ≫ FY3/14 FY3/15 [ Million ￥] Change Gross profit (a) (a) Domestic crude oil and natural gas - ¥0.3 billion Net sales 276,588 304,911 +28,322 Overseas consolidated subsidiaries + ¥5.3 billion Exploration expense

  13. Slide 13: 3. Estimates for FY3/16

    3. Estimates for FY3/16 Executive Officer Michiro Yamashita 12

  14. Slide 14: Estimates for FY3/16 【Assumptions】

    Estimates for FY3/16 Estimates for FY3/16 【Assumptions】 [Assumptions of oil/gas price and foreign exchange rate] FY3/16 FY3/15 FY3/15 FY3/16 FY3/16 FY3/16 FY3/16 Estimate Actual 4Q 1Q 2Q 3Q 4Q (e) (a) CIF price 55.00 60.00 60.00 65.00 60.00 96.48 (US$/bbl) Exchange rate 115.00 115.00 115.00 115.00 1

  15. Slide 15: Estimated Sales of Natural Gas for FY3/16 (vs FY3/15)

    Estimates for FY3/16 Estimated Sales of Natural Gas for FY3/16 (vs FY3/15) FY3/15 FY3/16 change Sales volume : Million M3 Net sales : Million ￥ 1H (a) Full (a) 1H (e) Full (e) 1H Full Sales volume 775 1,710 817 1,773 +42 +63 Natural gas ： Net sales 37,458 83,974 31,965 67,856 （5,494） （16,119） Breakd

  16. Slide 16: Estimated Sales of Crude Oil for FY3/16 (vs FY3/15)

    Estimates for FY3/16 Estimated Sales of Crude Oil for FY3/16 (vs FY3/15) Sales volume : Thousand KL FY3/15 FY3/16 change Net sales : Million ￥ 1H (a) Full (a) 1H (e) Full (e) 1H Full Sales volume 1,107 2,396 2,069 3,423 +962 +1,026 Crude oil: Net sales 73,500 133,346 79,233 135,841 +5,733 +2,494 Bre

  17. Slide 17: Estimates for FY3/16 (vs FY3/15)

    Estimates for FY3/16 Estimates for FY3/16 (vs FY3/15) ≪Causes of increase(+) or decrease(-) ≫ FY3/15 FY3/16 [ Million ￥] Change (a) (e) Gross profit Net sales 304,911 271,118 （33,794） Domestic crude oil and natural gas - ¥11.8billion Overseas consolidated subsidiaries - ¥ 9.8 billion Gross profit 70

  18. Slide 18: Oil Price and Exchange Rate Assumptions and Impact on Profits

    Estimates for FY3/16 Oil Price and Exchange Rate Assumptions and Impact on Profits JCC price Exchange rate Bitumen price Assumption 32.52CA$/bbl 60 US$/bbl 115.00 JP¥ / US$ （95.00 JP¥ /CA$ ） US$ 1/bbl increase in JP¥ 1/US$ weakening in CA$ 1/bbl increase in FY3/16 JCC prices would push exchange rate

  19. Slide 19: 4. Long-Term Business Vision

    4. Long-Term Business Vision President Osamu Watanabe 18

  20. Slide 20: Long-Term Business Vision: Transformation to Integrated Energy Company

    Long-Term Business Vision Long-Term Business Vision ～Towards the Leap to 2025～ “Transformation to Integrated Energy Company Around Oil and Gas E&P business” Introduction Ⅰ. Progress of the previous Medium-Term Business Plan Ⅱ. Perception of the business environment Ⅲ. Long-Term Business Vision ~ Ima

  21. Slide 21: Introduction

    Long-Term Business Vision Introduction  JAPEX announced Medium-Term Business Plan from FY3/12 to FY3/16 (hereafter “the previous plan”) setting 3 quantitive targets of E&P (Exploration and Production) business, domestic gas business, and environment and innovative technology on May, 2011.  By our

  22. Slide 22: Progress of the previous plan (1)

    Long-Term Business Vision Ⅰ. Progress of the previous plan (1) ~ 3 quantitive targets of our business Major achievement of the previous plan * E&P：Exploration and Production Shift business Expanding Expanding overseas production proved reserve Joined Canada Shale Gas/LNG Upstream Project (FY3/14) E&

  23. Slide 23: Progress of the previous plan (2): Shifting businesses overseas

    Long-Term Business Vision Ⅰ. Progress of the previous plan (2) ~ Shifting businesses overseas  Executed drastic commitment to shifting businesses overseas Target : shifting businesses overseas (FY3/12～FY3/16) Target on the previous plan Actual of FY3/2012～FY3/15 Overseas Ratio: Overseas Ratio: Arou

  24. Slide 24: Progress of the previous plan (3): Production and proved reserve

    Long-Term Business Vision Ⅰ. Progress of the previous plan (3) ~ Target of production and proved reserve  The Latest actual on FY3/2015; 74,000 BOED of daily production / 313 MMBOE of proved reserve  54% increase in production and achieved the target of production on the previous plan a year ahead

  25. Slide 25: Recognition of business environment (1): Transition of oil price

    Long-Term Business Vision Ⅱ. Recognition of business environment (1) ~ Transition of oil price (actual)  Oil prices has plunged from the middle of 2014. Its fluctuation range tend to be large in recent years and also unforeseeable how change in feet.  However, in the longer terms, the major view i

  26. Slide 26: Recognition of business environment (2): External environment

    Long-Term Business Vision Ⅱ. Recognition of business environment (2) ~ External environment Actualized fluctuation risk of Geopolitical risk international crude oil price  Destabilization of the situation in Iraq and neighboring  Rapid decline of oil price from 2014 summer countries by IS  Excess

  27. Slide 27: Recognition of business environment (3): Premise of oil price and exchange rate

    Long-Term Business Vision Ⅱ. Recognition of business environment (3) ~ Premise of oil price and exchange rate  Assumption future oil price and foreign exchange rate as below based on current rends and feeling of rising future price  Also supposing low oil price case to correspond oil price fluctua

  28. Slide 28: Long-Term Business Vision (1): Towards the Leap to 2025

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (1) ~ Towards the Leap to 2025 “Transformation to Integrated Energy Company around oil and gas E&P business” Domestic customers are the most important for our business even though decline proved reserve is fated to E&P business companies Expansi

  29. Slide 29: Long-Term Business Vision (2): E&P business

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (2) ~ E&P business Medium-Term actions 【Target】 RRR ＞ 1 【Overseas】 Stable execution of ongoing big projects 【Domestic】  Pursuing additional E&P potentials  Maximization of production volume 【Add to high-profitable  Increasing production and r

  30. Slide 30: Long-Term Business Vision (3): Soma LNG terminal

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (3) ~ Domestic supply business① - Soma LNG terminal Supply Canadian LNG for domestic customers ~ Establishment of comprehensive supply system of natural gas ~ Canada Shale Gas/LNG project Yufutsu LNG receiving terminal North Montney Block Prince

  31. Slide 31: Long-Term Business Vision (4): Soma power generation

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (4) ~ Domestic supply business② - Soma power generation  Now studying the business of thermal power generation using vapor gas from Soma LNG terminal  Installation of power generation facilities which is high-efficiency gas turbine combined cy

  32. Slide 32: Long-Term Business Vision (5): Domestic supply business

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (5) ~ Domestic supply business③  Maintain stable supply by practical using and expanding our supply infrastructure even though declining amount of domestic natural gas  Diversifying both “supply” and “procurement” and expanding scale of supply

  33. Slide 33: Long-Term Business Vision (6): Environment and innovative technology

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (6) ~ Environment and innovative technology①  Pursuing adaptation technologies which has affinity with E&P business  Accelerating renewable energy business Geothermal energy CCS Southern area of Mt. Furebetsu ● Musadake area （Shibetsu Town） (K

  34. Slide 34: Long-Term Business Vision (7): Present actions

    Long-Term Business Vision Ⅲ. Long-Term Business Vision (7) ~ Environment and innovative technology② - Present actions Methane Hydrate  Japan government has a plan of mid-long term offshore production tests 2015 2016 2017 2018 2019 2020 concerning sand layer type methane hydrate. JAPEX is aiming to

  35. Slide 35: Actions in short and medium-term (1)

    Long-Term Business Vision Ⅳ. Actions in short and medium-term (1) ~ E&P business / Domestic gas business  Pursuing the best optimal financing mix through practical use of Public Investment/Debt Guarantee Scheme, Project Finance, and others  Expecting Total amount of required finance on FY3/17-3/21

  36. Slide 36: Outlook of revenue and profits and shareholder profits

    Long-Term Business Vision Ⅴ. Outlook of revenue and profits and shareholder profits  Even though keeping the trend of recovery until FY3/15, consolidated profit and Loss of FY3/16) is prospecting to decrease significantly.  Keeping stable dividend even during oil prices declined by planning to sec

  37. Slide 37: CSR (Corporate Social Responsibility): Priority agenda SHINE

    Long-Term Business Vision Ⅵ. CSR (Corporate Social Responsibility) ~ Promotion priority agenda “SHINE” Pursue efforts to priority agendas “SHINE” in order to respond expectations and requests from all stakeholders and grow as a trusted global company S ：Stable & Sustainable Energy Supply ⇒ Developme

  38. Slide 38: Summary: Image of Leap on 2025

    Long-Term Business Vision Ⅶ. Summary ~ Image of Leap on 2025 “Transformation to Integrated Energy Company around Oil and Gas E&P Business”  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 woo

  39. Slide 39: Appendix: Current status of business

    Long-Term Business Vision <Appendix> Current status of business 38

  40. Slide 40: Current status of business (1)

    Long-Term Business Vision Ⅷ. Current status of business (1) Shale Gas/LNG project (Production of natural gas/planning of LNG plant) Sakhalin Oil Sands development U.K. / Norway Sakhalin 1 project (Production & Development) (Production & Development) UK North Sea Block (Exploration) Canada Iraq Middl

  41. Slide 41: Current status of business (2): Indonesia Kangean Block

    Long-Term Business Vision Ⅷ. Current status of business (2) ~ Indonesia: Kangean Block Pagerungan Utara oil field West Kangean gas field （Production (Exploration) suspended） Jacarta Pagerungan gas field West Java Pipeline (Production) Sepanｊang Island oil field （Production suspended) Bali Island To

  42. Slide 42: Current status of business (3): Iraq Garraf Oil Field

    Long-Term Business Vision Ⅷ. Current status of business (3) ~ Iraq: Garraf Oil Field Project company Japex Garraf Ltd. Interest 30％ （ cost share 40％ ） Operator ： PETRONAS Baghdad Garraf oil field Field Garraf Production Samawah 2013 2030 Nasiriyah Basrah Expected cumulative production : Around 1.3 b

  43. Slide 43: Current status of business (4): Sakhalin project

    Long-Term Business Vision Ⅷ. Current status of business (4) ~ Sakhalin 1 project Project Sakhalin Oil and Company Odoptu Gas Development Co., Ltd. (SODECO) Interest Sakhalin 1 Consortium SODECO Minister of Arkutun-Dagi Economy, JAPEX Exxon Neftegas Ltd. Trade and 15.29％ 30％ Industry SODECO 50.00％ Ot

  44. Slide 44: Current Status of Business (5): Canada Oil Sands project

    Long-Term Business Vision Ⅷ. Current Status of Business (5) ~ Canada Oil Sands project Project Canada Oil Sands Co., Ltd. (CANOS) Company Operator : Japan Canada Oil Sands Ltd. (JACOS) Calgary Block Hangingstone 3.75 section In production (Cumulative FORT McMURRAY Area 100％Interests production：33.23

  45. Slide 45: Current status of business (6): Canada Shale Gas and LNG project

    Long-Term Business Vision Ⅷ. Current status of business（6） ～Canada Shale Gas and LNG project Shale Gas development LNG project and production project (Middle-stream) (Up-stream) Calgary Block/ Lelu Island, the Port of North Montney, British Candidate Prince Rupert, British Columbia, Canada site Colu

  46. Slide 46: Current status of business (7): Domestic E&P business

    Long-Term Business Vision Ⅷ. Current status of business (7) ~ Domestic E&P business Aiming to strengthen profitability of domestic business  Maximization of asset values of existing oil and gas fields  Compensation of production volume and recovery of proved reserve availability ⇒ Examination and

  47. Slide 47: Current status of business (8): Soma LNG terminal and power generation

    Long-Term Business Vision Ⅷ. Current status of business (8) ~ Soma LNG terminal and power generation business ■Soma LNG terminal facilities ■Schedule of Soma LNG terminal Shinchi-Town, Fukushima Pref. Final Investment Decision Site Nov. 2013 (No.4 wharf area of Soma Port) (FID) One LNG Tank of Above

  48. Slide 48: Current status of business (9): Environment and innovative technology

    Long-Term Business Vision Ⅷ. Current status of business (9) ~ Environment and innovative technology ① Solar power business Geothermal energy ● Musadake area ● ● （Shibetsu Tomakomai Town） Mega-solar power station at JAPEX Hokkaido district office Drilling operation of Musadake area CCS Methane Hydrat

  49. Slide 49: Environment and innovative technology: Methane Hydrate

    Long-Term Business Vision Ⅷ. Current status of business (9) ~ Environment and innovative technology ② - Methane Hydrate  Japanese Government is planning Medium-to-Long-Term Offshore Production test of Methane Hydrate in 2016-2018.  JAPEX will aim for becoming contractor of the project through Japa

  50. Slide 50: Environment and innovative technology: CCS

    Long-Term Business Vision Ⅷ. Current status of business (9) ~ Environment and innovative technology ③ - CCS  Japan CCS Co., Ltd has been established in 2008, and project started by both public and private.  JCCS has been assigned as a contractor of verification test from the government, and planni

  51. Slide 51: Environment and innovative technology: Geothermal

    Long-Term Business Vision Ⅷ. Current status of business (9) ~ Environment and innovative technology ④ - Geothermal  For Musadake and Bandaisan area, planning to commence operation around Mid-2020th.  Will work on other high potential areas including southern region of Furebetsu Mountain, with the

  52. Slide 52: Acronyms

    Long-Term Business Vision Acronyms  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 Expan

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