Inpex : Consolidated financial statements 2025 Open a PDF

Consolidated Financial Statements

For the year ended December 31, 2025

INPEX CORPORATION

Independent Auditor's Report

The Board of Directors INPEX CORPORATION

We have audited the accompanying consolidated financial statements of INPEX CORPORATION and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at December 31, 2025, and the consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for the year then ended, and notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards.

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan, including those applicable to audits of financial statements of public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor's opinion thereon, and we do not provide a separate opinion on these matters.

The other information comprises the information included in the disclosure document that contains audited consolidated financial statements but does not include the consolidated financial statements and our auditor's report thereon.

We have concluded that the other information does not exist. Accordingly, we have not performed any work related to the other information

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern and disclosing, as required by IFRS Accounting Standards, matters related to going concern.

Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Group's financial reporting process.

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

• Consider internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements is not expressing an opinion on the effectiveness of the Group's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation in accordance with IFRS Accounting Standards.

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the group audit. We remain solely responsible for our audit opinion.

We communicate with Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that we have complied with the ethical requirements regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an acceptable level.

From the matters communicated with Audit & Supervisory Board Members and the Audit & Supervisory Board, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended December 31, 2025 are presented solely for convenience. Our audit also included the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 2 to the consolidated financial statements.

The fees for the audits of the financial statements of INPEX CORPORATION and its subsidiaries and other services provided by us and other EY member firms for the year ended December 31, 2025 are 608 million yen and 200 million yen, respectively.

Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Ernst & Young ShinNihon LLC Tokyo, Japan

April 21, 2026

Kazuhiko Yamazaki

Designated Engagement Partner Certified Public Accountant

Satoshi Takahashi

Designated Engagement Partner Certified Public Accountant

Mikio Shimizu

Designated Engagement Partner Certified Public Accountant

Kentaro Moronuki

Designated Engagement Partner Certified Public Accountant

Consolidated Financial Statements

(1) Consolidated Financial Statements

1. Consolidated Statement of Financial Position

   (Millions of yen)

   (Millions of U.S. dollars)

   Notes As of

   As of

   As of

   Assets

   Current assets

   December 31, 2024 December 31, 2025 December 31, 2025

   Cash and cash equivalents	8, 31	241,675	168,407	1,075
   Trade and other receivables	6, 9, 31	267,476	263,055	1,680
   Inventories	10	67,241	68,389	436
   Income taxes receivable		6,982	19,397	123
   Loans receivable	31	45,659	54,305	346
   Other financial assets	31	166,400	477,393	3,049
   Other current assets		57,430	58,145	371
   Subtotal		852,865	1,109,093	7,085
   Assets held for sale	11	17,341	-	-
   Total current assets		870,206	1,109,093	7,085
   Non-current assets Oil and gas assets	6, 12, 15, 16	3,855,226	3,888,982	24,843
   Other property, plant and equipment	13, 15	28,864	25,576	163
   Goodwill	6, 14, 16	20,515	46,551	297
   Intangible assets	14	17,015	31,360	200
   Investments accounted for using equity method	16, 34	948,075	1,024,925	6,547
   Loans receivable	31	1,433,298	1,409,382	9,003
   Other financial assets	31	123,557	116,765	745
   Asset for retirement benefits	20	904	980	6
   Deferred tax assets	17	64,555	62,145	396
   Other non-current assets		18,644	19,434	124
   Total non-current assets		6,510,656	6,626,104	42,328
   Total assets		7,380,863	7,735,198	49,413

   (Millions of yen)

   (Millions of U.S. dollars)

   Notes As of

   As of

   As of

   Liabilities and equity Liabilities

   Current liabilities

   December 31, 2024 December 31, 2025 December 31, 2025

   Trade and other payables	6, 18, 31	192,576	217,690	1,390
   Bonds and borrowings	19, 31, 36	193,847	541,482	3,459
   Other financial liabilities	15, 31, 36	54,951	37,183	237
   Income taxes payable		63,960	13,040	83
   Asset retirement obligations	21	15,277	15,885	101
   Other current liabilities		13,050	14,381	91
   Total current liabilities		533,663	839,663	5,363
   Non-current liabilities Bonds and borrowings	19, 31, 36	870,064	703,264	4,492
   Other financial liabilities	15, 31, 36	62,950	46,589	297
   Liability for retirement benefits	20	1,321	1,358	8
   Asset retirement obligations	6, 21	381,660	477,817	3,052
   Deferred tax liabilities	6, 17	388,217	628,151	4,012
   Other non-current liabilities		5,151	15,448	98
   Total non-current liabilities		1,709,366	1,872,631	11,962
   Total liabilities		2,243,029	2,712,295	17,326
   Equity Common stock	22	290,809	290,809	1,857
   Capital surplus	22	458,254	454,020	2,900
   Retained earnings	22	3,073,530	3,345,830	21,373
   Treasury stock	22	(131,235)	(221,629)	(1,415)
   Other components of equity	22	1,130,446	878,127	5,609
   Total equity attributable to owners of parent		4,821,805	4,747,158	30,325
   Non-controlling interests		316,027	275,745	1,761
   Total equity		5,137,833	5,022,903	32,087
   Total liabilities and equity		7,380,863	7,735,198	49,413

2. Consolidated Statement of Profit or Loss

   (Millions of yen)

   (Millions of U.S. dollars)

   Notes For the year ended December 31, 2024

   For the year ended December 31, 2025

   For the year ended December 31, 2025

   Revenue	7, 25	2,265,837	2,011,351	12,848
   Cost of sales		(915,310)	(864,515)	(5,522)
   Gross profit		1,350,527	1,146,836	7,326
   Exploration expenses	7	(53,350)	(16,733)	(106)
   Selling, general and administrative expenses	26	(134,512)	(118,032)	(754)
   Other operating income	27	35,832	84,100	537
   Other operating expenses	27	(31,537)	(32,829)	(209)
   Share of profit (loss) of investments accounted for using equity method	7, 34	104,831	72,099	460
   Operating profit		1,271,789	1,135,440	7,253
   Finance income	7, 28	149,491	120,194	767
   Finance costs	7, 28	(122,469)	(82,161)	(524)
   Profit before tax		1,298,811	1,173,473	7,496
   Income tax expense	7, 17	(864,573)	(743,835)	(4,751)
   Profit		434,238	429,638	2,744
   Profit (loss) attributable to
   Owners of parent	7	427,344	393,836	2,515
   Non-controlling interests		6,894	35,801	228
   Profit		434,238	429,638	2,744
   Earnings per share				(U.S. dollars)
   Basic earnings per share (Yen)	30	345.31	330.82	2.11
   Diluted earnings per share (Yen)	30	345.07	330.56	2.11

3. Consolidated Statement of Comprehensive Income

   (Millions of yen)

   (Millions of U.S. dollars)

   Notes For the year ended December 31, 2024

   For the year ended December 31, 2025

   For the year ended December 31, 2025

   Profit 434,238 429,638 2,744

   Other comprehensive income

   Items that will not be reclassified to profit or loss

   29	(17,709)	(93,567)	(597)
   29	(2,309)	26	0
   29	(183)	(411)	(2)
   	(20,201)	(93,952)	(600)

   Exchange differences on translation of foreign operations

   Financial assets measured at fair value through other comprehensive income Remeasurement gains (losses) on defined benefit plans

   Total items that will not be reclassified to profit or loss

   Items that may be reclassified subsequently to profit or loss

   29	(2,376)	4,670	29
   29	477,352	(166,537)	(1,063)
   29	(130)	2,641	16
   29, 34	(10,785)	(10,261)	(65)
   	464,059	(169,486)	(1,082)
   	443,857	(263,438)	(1,682)
   	878,096	166,199	1,061

   Cash flow hedges

   Exchange differences on translation of foreign operations

   Financial assets measured at fair value through other comprehensive income Share of other comprehensive income of investments accounted for using equity method

   Total items that may be reclassified subsequently to profit or loss

   Total other comprehensive income Comprehensive income

   Comprehensive income attributable to
   Owners of parent	842,911	129,448	826
   Non-controlling interests	35,184	36,751	234
   Comprehensive income	878,096	166,199	1,061

4. Consolidated Statement of Changes in Equity

   Equity attributable to owners of parent

   (Millions of yen) Other components of equity

   Notes

   Common stock

   Capital surplus

   Retained earnings

   Treasury stock

   Exchange differences on translation of foreign operations

   Cash flow hedges

   As of January 1, 2024		290,809	679,131	2,746,530	(221,330)	694,996	30,224
   Profit		-	-	427,344	-	-	-
   Other comprehensive income		-	-	-	-	431,352	(13,162)
   Total comprehensive income		-	-	427,344	-	431,352	(13,162)
   Purchase of treasury stock	22	-	-	-	(130,000)	-	-
   Disposal of treasury stock	22	-	(95)	-	95	-	-
   Cancellation of treasury stock	22	-	(219,999)	-	219,999	-	-
   Dividends	23	-	-	(100,278)	-	-	-
   Changes in ownership interest
   -			(983)	-	-	855	-
   in subsidiaries
   Disposal of subsidiaries		-	-	-	-	-	-
   Share-based payment transactions	24	-	200	-	-	-	-
   Transfer from other components of
   		-	-	(64)	-	-	-
   equity to retained earnings
   Total transactions with owners		-	(220,877)	(100,343)	90,094	855	-
   As of December 31, 2024		290,809	458,254	3,073,530	(131,235)	1,127,203	17,062

   Equity attributable to owners of parent Other components of equity

   Financial

   Non-

   Notes

   assets measured at fair value through other comprehensive income

   Remeasurement gains (losses) on defined benefit plans

   Total

   Total

   controlling interests

   Total

   As of January 1, 2024		(11,261)	-	713,959	4,209,101	289,932	4,499,033
   Profit		-	-	-	427,344	6,894	434,238
   Other comprehensive income		(2,440)	(183)	415,566	415,566	28,290	443,857
   Total comprehensive income		(2,440)	(183)	415,566	842,911	35,184	878,096
   Purchase of treasury stock	22	-	-	-	(130,000)	-	(130,000)
   Disposal of treasury stock	22	-	-	-	-	-	-
   Cancellation of treasury stock	22	-	-	-	-	-	-
   Dividends	23	-	-	-	(100,278)	(16,087)	(116,365)
   Changes in ownership interest in subsidiaries		-	-	855	(128)	7,266	7,138
   Disposal of subsidiaries		-	-	-	-	(268)	(268)
   Share-based payment transactions	24	-	-	-	200	-	200
   Transfer from other components of		(118)	183	64	-	-	-
   equity to retained earnings
   Total transactions with owners		(118)	183	919	(230,206)	(9,089)	(239,295)
   As of December 31, 2024		(13,820)	-	1,130,446	4,821,805	316,027	5,137,833

   Equity attributable to owners of parent

   (Millions of yen)

   Other components of equity

   Notes

   Common stock

   Capital surplus

   Retained earnings

   Treasury stock

   Exchange differences on translation of foreign operations

   Cash flow hedges

   As of January 1, 2025		290,809	458,254	3,073,530	(131,235)	1,127,203	17,062
   Profit		-	-	393,836	-	-	-
   Other comprehensive income		-	-	-	-	(261,053)	(5,590)
   Total comprehensive income		-	-	393,836	-	(261,053)	(5,590)
   Purchase of treasury stock	22	-	-	-	(90,411)	-	-
   Disposal of treasury stock	22	-	(17)	-	17	-	-
   Dividends	23	-	-	(111,453)	-	-	-
   Changes in ownership interest in subsidiaries		-	(4,460)	-	-	1,985	-
   Disposal of subsidiaries		-	-	-	-	-	-
   Share-based payment transactions	24	-	243	-	-	-	-
   Transfer from other components of		-	-	(10,083)	-	8,275	-
   equity to retained earnings
   Total transactions with owners		-	(4,233)	(121,537)	(90,393)	10,260	-
   As of December 31, 2025		290,809	454,020	3,345,830	(221,629)	876,410	11,471

   Equity attributable to owners of parent Other components of equity

   Financial

   Non-

   Notes

   assets measured at fair value through other comprehensive income

   Remeasurement gains (losses) on defined benefit plans

   Total

   Total

   controlling interests

   Total

   As of January 1, 2025		(13,820)	-	1,130,446	4,821,805	316,027	5,137,833
   Profit		-	-	-	393,836	35,801	429,638
   Other comprehensive income		2,668	(411)	(264,388)	(264,388)	949	(263,438)
   Total comprehensive income		2,668	(411)	(264,388)	129,448	36,751	166,199
   Purchase of treasury stock	22	-	-	-	(90,411)	-	(90,411)
   Disposal of treasury stock	22	-	-	-	0	-	0
   Dividends	23	-	-	-	(111,453)	(81,181)	(192,635)
   Changes in ownership interest in subsidiaries		-	-	1,985	(2,475)	4,205	1,729
   Disposal of subsidiaries		-	-	-	-	(56)	(56)
   Share-based payment transactions	24	-	-	-	243	-	243
   Transfer from other components of		1,396	411	10,083	-	-	-
   equity to retained earnings
   Total transactions with owners		1,396	411	12,069	(204,096)	(77,033)	(281,129)
   As of December 31, 2025		(9,755)	-	878,127	4,747,158	275,745	5,022,903

   Equity attributable to owners of parent

   (Millions of U.S. dollars)

   Other components of equity

   Notes

   Common stock

   Capital surplus

   Retained earnings

   Treasury stock

   Exchange differences on translation of foreign operations

   Cash flow hedges

   As of January 1, 2025		1,857	2,927	19,634	(838)	7,200	108
   Profit		-	-	2,515	-	-	-
   Other comprehensive income		-	-	-	-	(1,667)	(35)
   Total comprehensive income		-	-	2,515	-	(1,667)	(35)
   Purchase of treasury stock	22	-	-	-	(577)	-	-
   Disposal of treasury stock	22	-	(0)	-	0	-	-
   Dividends	23	-	-	(711)	-	-	-
   Changes in ownership interest
   -			(28)	-	-	12	-
   in subsidiaries
   Disposal of subsidiaries		-	-	-	-	-	-
   Share-based payment transactions	24	-	1	-	-	-	-
   Transfer from other components of
   equity to retained earnings		-	-	(64)	-	52	-
   Total transactions with owners		-	(27)	(776)	(577)	65	-
   As of December 31, 2025		1,857	2,900	21,373	(1,415)	5,598	73

   Equity attributable to owners of parent Other components of equity

   Financial

   Non-

   Notes

   assets measured at fair value through other comprehensive income

   Remeasurement gains (losses) on defined benefit plans

   Total

   Total

   controlling interests

   Total

   As of January 1, 2025		(88)	-	7,221	30,802	2,018	32,821
   Profit		-	-	-	2,515	228	2,744
   Other comprehensive income		17	(2)	(1,688)	(1,688)	6	(1,682)
   Total comprehensive income		17	(2)	(1,688)	826	234	1,061
   Purchase of treasury stock	22	-	-	-	(577)	-	(577)
   Disposal of treasury stock	22	-	-	-	0	-	0
   Dividends	23	-	-	-	(711)	(518)	(1,230)
   Changes in ownership interest in subsidiaries		-	-	12	(15)	26	11
   Disposal of subsidiaries		-	-	-	-	(0)	(0)
   Share-based payment transactions	24	-	-	-	1	-	1
   Transfer from other components of
   equity to retained earnings		8	2	64	-	-	-
   Total transactions with owners		8	2	77	(1,303)	(492)	(1,795)
   As of December 31, 2025		(62)	-	5,609	30,325	1,761	32,087

5. Consolidated Statement of Cash Flows

(Millions of yen)

(Millions of U.S. dollars)

Cash flows from operating activities

Notes For the year ended

December 31, 2024

For the year ended December 31, 2025

For the year ended December 31, 2025

Cash flows from investing activities

(Millions of yen)

(Millions of U.S. dollars)

(2) Notes to Consolidated Financial Statements

1. Reporting entity

   INPEX CORPORATION (hereinafter the "Company") is a corporation domiciled in Japan. The location of the Company's registered head office and principal place of business is disclosed on the Company's website (https://www.inpex.com/). The consolidated financial statements, with the balance sheet date of December 31, 2025, comprise the financial statements of the Company and its subsidiaries (hereinafter the "Group") as well as its interests in affiliates, joint operations and joint ventures. The principal businesses of the Group are the survey, exploration, development, production, and sale of oil, natural gas, and other mineral resources as well as business incidental and related to this business and investments and loans to companies engaged in these businesses.

2. Basis of preparation

   1. Compliance with IFRS Accounting Standards (hereinafter "IFRS")

      The consolidated financial statements of the Group have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The Group meets the requirements for a "specified company complying with designated international accounting standards" as set forth in Article 1-2 of the Regulation on Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Order No. 28 of 1976), and accordingly the Group has adopted the provisions of Article 312 of the same Regulation.

      The Japanese language consolidated financial statements were authorized for issue by the Company's Representative Director, President & CEO, Takayuki Ueda, on March 26, 2026. These English language consolidated financial statements were approved by him subsequent on April 21, 2026. There were no material events subsequent to the date of the Japanese language Consolidated Financial Statements, which required adjustment the reported amounts or additional disclosures in these English language Consolidated Financial Statements, except for disclosure of "38. Contingent Liabilities."

   2. Functional currency and presentation currency

   The consolidated financial statements of the Group have been presented in Japanese yen, which is also the Company's functional currency, and amounts have been rounded down to the nearest million yen, except where otherwise indicated.

   The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as a matter of arithmetic computation only, at ¥156.54=U.S.$1.00, the exchange rate in effect as of December 31, 2025. This translation should not be construed as a representation that yen have been, could have been, or could in the future be, converted into U.S. dollars at the above or any other rate.

3. Material accounting policies

   The material accounting policies adopted in the preparation of the consolidated financial statements are shown below. These policies will continue to apply to all fiscal years presented unless otherwise indicated.

   1. Basis of consolidation

      1. Subsidiaries

         Subsidiaries are all entities that are controlled by the Company. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of a subsidiary are adjusted as necessary when the accounting policies of a subsidiary differ from those adopted by the Group.

         Comprehensive income of subsidiaries is attributed to the owners of the parent company and the non-controlling interest, even if the non-controlling interest results in a negative balance.

         Transactions involving changes in the parent company's interest in a subsidiary that do not involve a loss of control are accounted for as equity transactions. The difference between adjustments for non-controlling interests and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the parent company.

         When the Company loses control over a subsidiary, the gain or loss on disposal is calculated as the difference between the sum of the fair value of the consideration received and the fair value of the residual interest and the carrying amount of the assets (including goodwill), liabilities, and non-controlling interests of the subsidiary at the time control is lost, and it is recognized in profit or loss.

      2. Affiliates

         Affiliates are entities over which the Group has significant influence, but not control or joint control, over their financial and operating policies.

         Investments in interests in affiliates are accounted for using equity method and initially are recognized at acquisition cost at the time of acquisition. Thereafter, the Group's interest in the profit or loss and other comprehensive income of the affiliates is recognized and the investment amount is adjusted.

         The financial statements of affiliates are adjusted as necessary when the accounting policies of an affiliate differ from those adopted by the Group.

      3. Joint arrangements

         Joint arrangements are arrangements that require the unanimous consent of the parties sharing control over decisions regarding relevant activities. Joint arrangements are classified as either joint ventures or joint operations based on the rights and obligations of parties having joint control.

         Joint ventures are joint arrangements where the parties with joint control of the arrangement have the rights to the net assets of the arrangement. Joint ventures are accounted for using equity method. The accounting policies of joint ventures are adjusted as necessary to be consistent with those adopted by the Group.

         Joint operations are joint arrangements whereby the parties who have joint control of the arrangement have rights to the assets and obligations to the liabilities relating to the contractual arrangement. For investments in joint operations, only the Group's share of the assets, liabilities, revenue, and expenses of such joint operations is recognized. Significant intercompany transactions and receivables and payables are eliminated in proportion to the Group's ownership percentage.

      4. Business combinations and goodwill

      Business combinations are accounted for using the acquisition method.

      If the initial accounting is not completed by the end of the period in which the business combination occurred, the business combination is accounted for using provisional amounts, and the provisional amounts are adjusted in the measurement period within one year of the acquisition date.

      Acquisition cost is measured as the sum of the consideration transferred and measured at fair value at the acquisition date, and the amount of any non-controlling interest in the acquiree.

      The non-controlling interest in the acquiree is measured for each business combination at either fair value or an amount equal to the non-controlling interest's share of the fair value of the acquiree's identifiable net assets.

      When the Group acquires a business, it classifies and designates the assets acquired and liabilities assumed based on terms of the contract, economic conditions, and related terms and conditions at the acquisition date. In addition, acquired identifiable assets and assumed liabilities are, in principle, measured at fair value at the acquisition date.

      Goodwill is measured as the excess of the aggregate of the consideration transferred and the amount recognized as non-controlling interest over the net amount of identifiable assets acquired and liabilities assumed.

      For the purpose of impairment testing, goodwill is allocated to each of the cash-generating units, or group of cash-generating units expected to benefit from synergies of the business combination.

      After initial recognition, goodwill acquired in a business combination is not amortized but is carried at acquisition cost less accumulated impairment losses. Impairment testing is performed at the end of the fiscal year and whenever there is an indication of impairment.

      Goodwill relating to affiliates and joint ventures included in the carrying amount of the investments accounted for using equity method is tested for impairment as a single asset without separating the goodwill from those investments. The Group assesses whether there is any objective evidence that an investment in an affiliate or joint venture is impaired. If any objective evidence of impairment exists, the Company performs an impairment test by comparing the recoverable amount (the higher of value in use and the fair value less costs of disposal, or FVLCD) of the investment to its carrying amount. Any impairment losses recognized in prior periods are reversed to the extent that the recoverable amount of the investment subsequently increases only when there has been a change in the estimates used for determining the recoverable amount of the investment, since the last impairment losses were recorded.

   2. Foreign currency translation

      1. Translation of foreign currency transactions

         Transactions in currencies other than the functional currency (foreign currencies) are converted into the functional currency at the exchange rate on the transaction date.

         Monetary items denominated in foreign currencies are retranslated into the functional currency at the exchange rate at the end of the fiscal year. Non-monetary items denominated in foreign currencies are translated into the functional currency using the exchange rate at the transaction date for those measured at acquisition cost, and using the exchange rate at the date of calculation of the relevant fair value for those measured at fair value.

         Exchange differences arising from translation or settlement are recognized in profit or loss. However, exchange differences arising from financial assets measured through other comprehensive income and cash flow hedges are recognized in other comprehensive income.

      2. Translation of foreign operations

      Assets and liabilities of foreign operations are translated into Japanese yen at the exchange rate at the end of the fiscal year. Revenue and expenses are translated into Japanese yen using the average exchange rate for the fiscal year, unless the exchange rate has fluctuated significantly during the fiscal year. Translation differences arising from the translation of financial statements of foreign operations are recognized in other comprehensive income. As described in "(18)Income taxes," income tax expenses related to items recognized in other comprehensive income are also recognized in other comprehensive income. Accordingly, income tax expenses related to translation differences arising from the translation of financial statements of foreign operations are recognized in other comprehensive income.

      These amounts recognized in other comprehensive income are recognized in profit or loss when all or part of a foreign operation is disposed of. However, for the portion of income tax expenses recognized in other comprehensive income that relates to exchange differences on translation of foreign operations that were deemed to be zero on the transition date to IFRS, these amounts remain in other comprehensive income and are directly transferred to retained earnings upon the disposal of all or part of the foreign operation.

      When a paid-in capital reduction results in a decrease of total absolute investment amount that constitutes a partial disposal of equity interests in a foreign operation, cumulative exchange differences associated with common stock and capital surplus in the foreign operation are proportionately reclassified to profit or loss. In oil and natural gas development projects, exploration and development activities typically require more than 10 years during which no product sales are generated, while substantial capital expenditures are required to discover prospective resources and construct production facilities. Accordingly, overseas projects are necessarily financed for exploration and development phases through equity investments and loans. After exploration and development activities have been successfully completed and production and sales of oil and natural gas have commenced, significant revenues are generated, while the level of invested capital decreases substantially compared with the exploration and development phases. As a result, ample cash flows are generated, and under the Group's business model, such cash flows are expected to be allocated to the return of equity investments and the repayment of loans originally funded for the exploration and development activities. A paid-in capital reduction is therefore assessed to constitute a partial disposal of equity interests in a foreign operation, including in cases where it is implemented during the phase in which cash flows generated from production and sales activities are used to return equity investments and repay loans originally funded for the related exploration and development activities. Under such circumstances, even if common stock and capital surplus are reduced through a paid-in capital reduction, future funding needs of the project are expected to be sufficiently covered by cash flows generated from the project's operating activities, and no additional funding is expected, whether through further equity issuance or additional borrowings, including intercompany financing. Accordingly, the Group judges that such a paid-in capital reduction has the economic substance of a partial disposal of equity interests in a foreign operation.

      For transactions involving changes in ownership interest in a subsidiary that do not result in a loss of control, the exchange differences of the subsidiary are reallocated through equity between the equity attributable to owners of parent and the non-controlling interest in the subsidiary.

   3. Cash and cash equivalents

      Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments with a maturity of three months or less from the acquisition date that are readily convertible to cash and subject to an insignificant risk of changes in value.

   4. Financial instruments

      1. Financial assets (excluding derivatives)

         1. Initial recognition and measurement

            The Group recognizes financial assets on the contract date when it has become a party to the contractual provisions of the financial instruments.

            At the time of initial recognition, all financial assets are measured at fair value, or if not classified as financial assets measured at fair value through profit or loss, at such fair value plus transaction costs directly attributable to the acquisition of the financial asset. Transaction costs directly attributable to the acquisition of financial assets measured at fair value through profit or loss are recognized in profit or loss.

         2. Classification

            1. Debt financial assets

               Financial assets measured at amortized cost

               Financial assets are classified as financial assets measured at amortized cost when both of the following conditions are met:

               • The financial asset is held within a business model whose objective is to hold the asset in order to collect the contractual cash flows.

               • The contractual terms of the financial asset give rise on given dates to cash flows that are solely payments of principal and interest on principal amounts outstanding.

                 Financial assets measured at FVOCI

                 Financial assets are classified as financial assets measured at fair value through other comprehensive income (FVOCI) when both of the following conditions are met:

               • The financial asset is held within a business model whose objective is achieved by both collecting and selling the contractual cash flows.

               • The contractual terms of the financial asset give rise on given dates to cash flows that are solely payments of principal and interest on principal amounts outstanding.

                 Financial assets measured at FVPL

                 Financial assets that are not classified as any of the above are classified as financial assets measured at fair value through profit or loss (FVPL).

            2. Equity financial assets

               Financial assets measured at FVOCI

               Financial assets designated at initial recognition as those for which changes in fair value are recognized through other comprehensive income are classified as financial assets measured at FVOCI.

               Financial assets measured at FVPL

               Financial assets other than financial assets measured at FVOCI are classified as financial assets measured at FVPL.

         3. Subsequent measurement

            1. Financial assets measured at amortized cost

               Financial assets measured at amortized cost are measured at amortized cost using the effective interest method.

            2. Financial assets measured at FVOCI Debt financial assets measured at FVOCI

               Changes in the fair value of debt financial assets measured at FVOCI are recognized in other comprehensive income until the financial assets are derecognized, except for reversals of impairment losses or impairment losses and foreign exchange gains and losses. When the financial assets are derecognized, previously recognized other comprehensive income is reclassified to profit or loss.

               Equity financial assets measured at FVOCI

               Changes in fair value of equity financial instruments measured at FVOCI are recognized in other comprehensive income. When the financial assets are derecognized, previously recognized other comprehensive income is reclassified directly to retained earnings. Dividends from the financial assets are recognized as profit or loss unless they are clearly a partial recovery of investment cost.

            3. Financial assets measured at FVPL

               Financial assets measured at FVPL are measured at fair value after initial recognition, and changes in fair value are recognized in profit or loss.

         4. Impairment of financial assets

            The Group recognizes allowance for doubtful accounts for expected credit losses on debt financial assets measured at FVOCI and financial assets measured at amortized cost.

            The Group assesses at the end of each fiscal year whether the credit risk of the financial assets has significantly increased since initial recognition. If it is determined that the credit risk of the financial instruments has not significantly increased since initial recognition, the allowance for doubtful accounts for financial instruments is measured at an amount equal to the expected credit loss for 12 months. If it is determined that the credit risk of the financial instruments has significantly increased since initial recognition, the allowance for doubtful accounts for financial instruments is measured at an amount equal to the expected credit loss for the entire period.

            However, for trade receivables, the allowance for doubtful accounts is always measured at an amount equal to the expected credit loss for the entire period, notwithstanding the above. Furthermore, when there is an evidence of credit impairment of financial assets, such as a significant deterioration in the financial condition of the debtor or a breach of contract, including payment default or delinquency by the debtor, the effective interest method is applied to the amortized cost less the allowance for doubtful accounts calculated.

            Expected credit losses are estimated using the method that reflects the following:

            • An unbiased, probability-weighted amount calculated by evaluating a range of possible outcomes

            • Time value of money

            • Reasonable and supportable information about past events, current conditions, and projected future economic conditions that is available without undue expense or effort at the reporting date

            The provision of allowance for doubtful accounts for financial assets or reversal of allowance for doubtful accounts when reducing allowance for doubtful accounts is included in "Finance costs" or "Finance income" in the consolidated statement of profit or loss and recognized in profit or loss.

         5. Derecognition

            The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or when the Group transfers the financial asset and transfers almost all the risks and economic value of ownership of the financial asset.

      2. Financial liabilities (excluding derivatives)

         1. Initial recognition and measurement

            The Group recognizes financial liabilities on the contract date when it has become a party to the contractual provisions of the financial instruments.

            All financial liabilities are measured at fair value at initial recognition, except for financial liabilities measured at amortized cost, which are measured at fair value less directly attributable transaction costs.

         2. Classification

            Financial liabilities measured at amortized cost

            Financial liabilities other than financial liabilities measured at FVPL are classified as financial liabilities measured at amortized cost.

         3. Subsequent measurement

            Financial liabilities measured at amortized cost are measured using the effective interest method.

            Financial liabilities measured at FVPL are measured at fair value, and changes in fair value are recognized in profit or loss.

         4. Derecognition

            Financial liabilities are derecognized when contractual obligations are discharged, cancelled or expired.

      3. Derivatives and hedge accounting

         The Group uses foreign exchange forward contracts, interest rate and currency swaps, commodity swaps, and commodity options to hedge foreign currency risk, interest rate risk, and commodity price fluctuation risk. As described in "(15)Provisions" and "31. Financial instruments (1)Financial risk management [3]Market risk (ii)Interest rate risk," the Group uses derivative transactions, such as interest rate swaps, to mitigate the impact of changes in asset retirement obligations on the consolidated statement of profit or loss.

         These derivatives are initially recognized at fair value on the date the derivative contract is entered into, and related transaction costs are recognized as expenses incurred. Remeasurements after initial recognition are also made at fair value, with changes in fair value recognized in profit or loss, except when designated as hedging instruments for cash flow hedges (hedges against exposure to changes in cash flows attributable to specific risks associated with recognized assets or liabilities or highly probably forecast transactions and that could affect profit or loss).

         The Group supplies LNG through a portfolio comprising LNG produced from projects in which the Group participates and LNG procured from third parties. With respect to long-term LNG purchase contracts entered into with third parties, the Group does not have a practice of settling such contracts net in cash or another financial instrument, or by exchanging financial instruments.

         Accordingly, these contracts are accounted for as executory contracts and are not measured at fair value. Transactions that meet the criteria for hedge accounting are classified and accounted for as follows:

         1. Fair value hedges

            Changes in the fair value of derivatives that are hedging instruments are recognized in profit or loss. Changes in the fair value of the hedged item attributable to the hedged risk are adjusted to the carrying amount of the hedged item and recognized in profit or loss.

         2. Cash flow hedges

            The effective portion of gain or loss on the hedging instrument is recognized in other comprehensive income, and the ineffective portion is recognized immediately in profit or loss. Amounts related to hedging instruments recorded in other comprehensive income are reclassified to profit or loss when the hedged transaction affects profit or loss. When the hedged item results in the recognition of a non-financial asset or non-financial liability, the amounts recognized in other comprehensive income are treated as an adjustment to the original carrying amount of the non-financial asset or non-financial liability.

            The Group discontinues the application of hedge accounting prospectively when the hedging instrument no longer meets the criteria for hedge accounting, is expired, sold, terminated or exercised, or when the hedge designation is no longer appropriate.

      4. Fair value of financial instruments

         Financial instruments measured at fair value are calculated using various valuation techniques and inputs. The calculated fair value is classified into the following three levels according to the observability of the inputs to the valuation techniques used to measure fair value.

         Level 1: Market value of identical assets or liabilities in active markets

         Level 2: Fair value measured using directly or indirectly observable inputs other than Level 1 Level 3: Fair value measured using valuation techniques that include unobservable inputs

      5. Finance income and finance costs

      Finance income consists of interest income, dividend income, gains on derivatives (excluding gains on hedging instruments recognized in other comprehensive income), etc. Interest income is recognized as incurred using the effective interest method. Finance costs consist of interest expenses, losses on derivatives (excluding losses on hedging instruments recognized in other comprehensive income), etc.

   5. Inventories

      Inventories are stated at the lower of acquisition cost and net realizable value. Acquisition cost is primarily calculated based on the weighted average cost method and includes purchase cost, fabrication costs, and all costs incurred to bring the property to its current location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

   6. Oil and gas assets

      1. Exploration, evaluation and development costs

         The Group accounts for oil and natural gas exploration and evaluation payments using the successful efforts method. All expenditures directly related to concession acquisition costs, exploration wells, and appraisal wells are recognized as oil and gas assets (exploration and evaluation assets) and charged to exploration expenses if subsequently determined to be dry holes and to impairment losses if the prospect of commercial profitability is impaired. In addition, other exploration project costs incurred during the exploration stage, such as geological and geophysical costs and other than the exploration and evaluation wells, are charged to exploration expenses as incurred.

         When the technical feasibility and viability of oil and natural gas extraction can be demonstrated, impairment tests are performed, and assets are transferred from oil and gas assets (exploration and evaluation assets) to oil and gas assets (development and production assets). The technical feasibility and viability of extraction is established when the final investment decision is made or when the development plan is approved by the government of the oil-producing country, whichever is later.

         Development wells and related production equipment are recognized as oil and gas assets (development and production assets). These capitalized costs are depreciated using the unit-of-production method based on the total quantity of proved and probable reserves, from the inception of production. Reserves used in the unit-of-production method are calculated based on the Petroleum Resource Management System (PRMS), and the acquisition cost of qualifying oil and gas assets when calculating the depreciation rate using the unit-of-production method includes the capital expenditures planned to access proved undeveloped reserves or probable reserves. The future oil price forecasts used in calculating the reserves are based on the average price of oil and gas at the beginning of the month during the period, similar to the average price in the U.S. Securities and Exchange Commission's Regulation S-X, Rule 4-10(a).

         The acquisition cost of property, plant and equipment comprises costs directly attributable to the acquisition of an item, costs of dismantling and removing the item and restoring the site on which it is located, and capitalized borrowing costs for long-term projects if capitalization criteria are met.

         Expenditures relating to major maintenance and repair include the cost of replacing an asset or part of an asset, inspection costs and overhaul (detailed inspection) costs. Among the major inspection costs, the expenditures that qualify for recognition as property, plant and equipment are capitalized and depreciated over the period until the next inspection.

      2. Sales and distribution related assets

      Oil and gas assets (sales and distribution related assets) recognized are primarily domestic pipelines used to deliver natural gas to customers, which are depreciated on a straight-line basis over their estimated useful lives.

      The useful lives of major assets depreciated on a straight-line basis are as follows:

      - Natural gas pipeline: 30 years

      The depreciation method, estimated useful lives and residual values of oil and gas assets (sales and distribution related assets) are reviewed at the end of each fiscal year.

   7. Other property, plant and equipment

      For property, plant and equipment, the cost model is applied for measurement after initial recognition, and property, plant and equipment are presented at cost less any accumulated depreciation and accumulated impairment losses.

      Subsequent expenditures incurred after acquisition are accounted for either by including them in the asset's carrying amount or by recognizing them as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the Group and the amount can be measured reliably. Subsequent expenditures not included in cost are recognized in profit or loss as incurred.

      Depreciation of property, plant and equipment other than land is calculated based on the depreciable amount, which is the cost of each part of an item of property, plant and equipment, less its residual value, over the estimated useful life of each item, mainly using the straight-line method.

      The estimated useful lives of property, plant and equipment are summarized below:

      • Buildings and structures: 2-50 years

      • Machinery, equipment and vehicles: 2-17 years

      The depreciation method, estimated useful lives and residual values of property, plant and equipment are reviewed at the end of each fiscal year.

   8. Goodwill and intangible assets

      1. Goodwill

         The measurement of goodwill at initial recognition is described in "(1) Basis of consolidation, [4] Business combinations and goodwill." Goodwill is carried at cost less accumulated impairment losses.

      2. Intangible assets

      For intangible assets, the cost model is applied for measurement, and the amount is carried at cost less any accumulated amortization and accumulated impairment losses.

      Intangible assets with finite useful lives are primarily amortized using the straight-line method over their respective estimated useful lives.

      The estimated useful lives of major intangible assets are summarized below:

      - Software: 2-10 years

      Estimated useful lives and amortization methods are reviewed at the end of each fiscal year.

   9. Leases

      The Group leases mainly drilling rigs for the development, production, and sale of oil and gas, fixed-term land leases for field and business offices, land leases for domestic trunk pipelines, fixed-term charter vessels for transportation of raw materials and products, and offices.

      Lease liabilities under lease transactions are measured as the discounted present value of total lease payments outstanding as of the commencement date of the lease. Variable lease payment amounts except for the amount that are determined in accordance with an index or rate do not constitute lease payments included in the measurement of the lease liability, but variable lease payments that are determined to be substantially fixed are included in the measurement of the lease liability.

      Right-of-use assets are initially measured in the amount calculated by adjusting the initially measured amount of lease liabilities with initial direct costs, advance lease payments, etc. and adding any costs incurred to fulfill restoration obligations arising from the lease contract. Right-of-use assets are depreciated by the straight-line method over the lease term. The lease term is determined as the non-cancelable term of the lease plus the period during which it is reasonably certain that the option to extend the lease will be exercised or the option to terminate the lease will not be exercised.

      Lease payments are allocated to finance costs and the repayment portion of the outstanding lease liabilities in a way that the constant rate of interest is applied to the outstanding lease liability. Finance costs are presented separately from depreciation associated with the right-of-use assets in the consolidated statement of profit or loss.

      The determination of whether a contract is a lease or contains a lease, even if it does not legally take the form of a lease, is based on the judgement as to whether the substance of the contract at the date of commencement of the lease, i.e., performance of the contract is dependent on the use of a specific asset or group of assets and whether the contract transfers the right to use such assets.

      The Group recognizes 100% of the right-of-use assets and lease liabilities if the Group is the operator and is deemed to have the sole right to direct the manner and purpose of use of the underlying asset. The Group recognizes right-of-use assets and lease liabilities in proportion to its share of equity interest if the Group is the operator and the joint operation (including all parties to the joint operation agreement) is deemed to have the right to control the use of specific assets and all parties to the agreement have a legal obligation to make payments to third-party suppliers. If the Group is not the operator, the right-of-use assets and lease liabilities are recognized based on the specific relationship to the liability as primary obligor in each joint operation agreement and in accordance with the situation.

      Lease payments related to leases with a lease term of 12 months or less are recognized as expenses on a straight-line basis over the lease term or another regular basis. Regarding the components of the contract, for certain leases the Group applies the practical expedient of accounting for each lease component and related non-lease components as a single lease component, without distinguishing the non-lease component from the lease component. Applicable leases are those where the underlying assets are other than buildings, vessels (for transportation purposes), facilities (FPSO*1, FSO*2), and drilling rigs.

      *1 Floating production storage and offloading (FPSO) facility. A ship-type facility that produces crude oil and natural gas offshore, stores the produced crude oil in tanks in the FPSO, and directly offloads the crude oil to crude oil tankers.

      *2 Floating storage and offloading (FSO) facility. A facility that only stores and offloads oil and natural gas offshore without having production facilities.

   10. Impairment of non-financial assets

       For the Group's non-financial assets excluding inventories and deferred tax assets, the Group determines at the end of each fiscal year whether there is any indication that an asset or cash-generating unit (or group of units) to which the asset belongs may be impaired. If any such indication of impairment exists, an impairment test is performed. Goodwill impairment testing is performed at the end of the fiscal year and whenever there is an indication of impairment.

       The recoverable amount is the higher of the value in use or the fair value less costs of disposal. In calculating value in use, estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects the time value of money and the inherent risks of the asset. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

       The cash-generating unit for assets other than goodwill is the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The cash-generating unit or group of cash-generating units for goodwill is determined based on the unit by which the goodwill is managed for internal reporting purposes.

       If the carrying amount of an asset or a cash-generating unit exceeds the recoverable amount, an impairment loss is recognized in profit or loss.

       For previously recognized impairment losses on assets other than goodwill, the Group determines at the end of each fiscal year whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there is an indication of impairment reversal, there has been a change in the estimates used to determine the recoverable amount, and the recoverable amount exceeds the carrying amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Impairment losses related to goodwill are not reversible.

   11. Determination of estimate of oil and natural gas reserves

       Oil and natural gas reserves, used for depreciation and the consideration of impairment as well as the estimation of the timing of payment period for restoration costs and purification costs to be incurred on the cessation of operations, are estimated based on information obtained from qualified professionals. Details of such estimation are described in "4. Critical accounting estimates and judgments: (Reserves)".

   12. Non-current assets or disposal groups held for sale and discontinued operations

       A non-current asset or disposal group is classified as held for sale when: its carrying amount is expected to be recovered principally through a sale transaction rather than through continuing use; management of the Group is committed to sell the asset; the sale is highly probable, will occur within one year; and the asset is available for immediate sale.

       A non-current asset or disposal group held for sale is measured at the lower of the carrying amount and FVLCD and is not depreciated or amortized.

       Non-current assets and disposal groups that have already been disposed of or that are classified as held for sale are recognized as discontinued operations when they meet any of the following: - separate major line of business or geographical area of operations; part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; and subsidiary acquired exclusively with a view to resale.

   13. Employee benefits

       1. Post-employment benefits

          1. Defined benefit plans

             Defined benefit plans are post-employment benefit plans other than defined contribution plans. The Group's net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their services in the current and prior periods and by discounting that amount to present value. The fair value of any plan assets is then deducted from that amount.

             Net interest expense on the net defined benefit liability (asset) is calculated by multiplying the net defined benefit liability (asset) by the discount rate and recorded as employee benefit expenses. The discount rate is the market yield at the end of the fiscal year for high quality corporate bonds with maturity dates approximating the terms of the Group's obligations.

             When a plan is changed or curtailed, the change in the present value of the defined benefit obligation due to a change in benefit that relates to past service of employees is recognized immediately in profit or loss.

             The Group immediately recognizes all adjustments by remeasurements arising from defined benefit plans in other comprehensive income and immediately transfers them to retained earnings.

          2. Defined contribution plans

             Defined contribution plans are post-employment benefit plans in which the employer contributes a certain amount of contributions to an independent entity and the Group has no legal or constructive obligation to pay further contributions. Contributions to defined contribution plans are recognized in profit or loss in the period in which the employee renders service.

       2. Short-term employee benefits

          Short-term employee benefits are not discounted, but are recognized in profit or loss when the related services are rendered. Bonuses and paid leave costs are recognized as liabilities in the amount estimated to be paid under those plans when the Group has a legal or constructive obligation to pay such amounts and a reliable estimate can be made.

   14. Stock-based compensation

       The Company has adopted a Board Incentive Plan (BIP) Trust for equity-settled executive compensation as a stock-based remuneration system for its Directors and Executive Officers (excluding Outside Directors and non-residents of Japan; hereinafter referred to as "Directors, etc."). The compensation for received services is measured at the fair value of the Company shares as of the grant date, and is considered as expenses during the right vesting period. The same amount thereof is considered as an increase in equity.

   15. Provisions

       Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and reliable estimates can be made of the amount of the obligation.

       Provisions are measured at the present value of the expenditures expected to be required to settle the obligations using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligations. The increase in the provision due to the passage of time is recognized as interest expense.

       If the carrying amount of the corresponding asset retirement costs is zero in the increase (decrease) in asset retirement obligations that occurs at the end of the fiscal year due to a change in the discount rate, etc., the increase or decrease is recognized immediately in profit or loss and presented as cost of sales in the consolidated statement of profit or loss. As described in "(4)Financial instruments, [3] Derivatives and hedge accounting" and "31. Financial instruments (1)Financial risk management

       1. Market risk (ii)Interest rate risk," the Group uses derivative transactions, such as interest rate swaps, to mitigate the impact of changes in asset retirement obligations on the consolidated statement of profit or loss.

       In addition, when the Group can expect to be reimbursed for part or all of the expenditure required to settle the provision, such compensation is recognized as a separate asset only if it is virtually certain that the compensation will be received.

       When a provision and a reimbursement from an external party are recognized in the same fiscal year, they are presented net in the consolidated statement of profit or loss.

       Asset retirement obligations related to domestic oil and natural gas production facilities, etc. are recognized when the Group is obligated to prevent mining pollution of well sites after the end of mining as stipulated by the Mine Safety Act and when costs to be borne at the end of operations can be reasonably estimated. Asset retirement obligations related to overseas oil and natural gas production facilities, etc. are recognized when the Group is obligated to abandon the production facilities, etc. such as removal of such production facilities, etc. in accordance with oil contracts with the governments of oil-producing countries, local laws and regulations, etc., and when costs to be borne at the end of operations can be reasonably estimated.

       Obligations that are probable at the end of the fiscal year, but cannot be confirmed whether or not they are obligations as of the end of the fiscal year or do not meet the recognition criteria of provisions are disclosed as contingent liabilities in "21. Asset retirement obligations" and "38. Contingent liabilities."

   16. Equity

       The issue price of common stock issued by the Company is recorded in common stock capital and capital surplus, and costs directly attributable to the issuance (net of tax) are deducted from capital surplus.

       When treasury stock is reacquired, the consideration paid including any direct transaction costs, net of tax, is recognized as a deduction from equity. When treasury stock is sold, the difference between the carrying amount and the consideration received is recognized as capital surplus.

   17. Revenue recognition

       The Group recognizes revenue based on the following five steps related to contracts with customers, excluding interest and dividend income, etc. recognized in accordance with IFRS 9 "Financial Instruments."

       Step 1: Identify the contracts with a customer

       Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price

       Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

       The Group conducts exploration, development, production and marketing of crude oil and natural gas (including LPG; the same applies hereinafter).

       For sales of these products, it is concluded that the legal ownership rights and physical rights of possession, as well as material risks and economic value associated with ownership of the products, are transferred to the customer, and the Company obtains the right to receive consideration for the products from the customer, primarily at the time when control of the products is transferred to the customer, namely in the case of crude oil and natural gas the time of delivery of the products to the customer or the time when control is transferred to the customer based on trade terms prescribed in Incoterms or other materials. Revenue is recognized at this time. Revenue is recognized based on the transaction price prescribed in the contract with the customer. Because the transaction price is received within one year following delivery of the products, it does not contain significant financing components.

       In revenue from the production of crude oil and natural gas, for which the Group shares a participating interest with other companies, there are cases when the quantity actually delivered does not match the quantity which corresponds to the participating interest held by the Group due to circumstances of vessel assignments or other matters. In such cases, the Group recognizes revenue based on the quantity that was actually delivered, and any significant difference between the quantity actually delivered and the quantity which corresponds to the participating interest held by the Group is adjusted with the other company that shares participating interest by means of the actual crude oil and natural gas that is delivered in or after the following fiscal year. In the event that the Group has received a delivery that exceeds the participating interest held by the Group, the cost of sales for the quantity that is above the quantity equivalent to the participating interest is also included in the fiscal year when the related revenue is recognized, and at the same time a liability to the other company which shares a participating interest is recorded. In the event that the Group has received a delivery that is less than the participating interest held by the Group, the cost of sales for the quantity that is below the quantity equivalent to the participating interest is recorded in the fiscal year when delivery and the related revenue is recognized, and at the same time an asset due from the other company which shares a participating interest is recorded.

   18. Income taxes

       The Group's income tax expense includes, in addition to income taxes, taxes levied on current year profits calculated according to the rules established by the taxation authorities, such as petroleum resources taxes. Royalty payments based on production volume are not included in income tax expense.

       Income tax expense consists of current income tax expense and deferred income tax expense. These are recognized in profit or loss, except for the taxes which arise from business combinations or recognized in either other comprehensive income or directly in equity.

       Current income tax expense is calculated at the amount paid to or refunded from tax authorities using the tax rates enacted or substantively enacted as of the end of the fiscal year.

       Deferred income tax expense is calculated based on temporary differences arising from the difference between the carrying amount of assets and liabilities for accounting purposes and the related tax basis amounts at the end of the fiscal year.

       Deferred tax assets are recognized for deductible temporary differences, net operating loss carryforwards, and tax credit carryforwards, to the extent that it is probably that taxable income will be available against which they can be recovered. Deferred tax assets are recognized for deductible temporary differences on investments in subsidiaries, affiliates, and joint ventures only if it is probable that sufficient taxable income will be available against which the benefits of the temporary differences can be utilized and it is probable that the temporary differences will reverse in the foreseeable future.

       Deferred tax assets are reviewed each fiscal year and reduced to the extent that it is no longer probable that the tax benefits will be realized.

       Deferred tax liabilities are recognized for all taxable temporary differences with the following exceptions:

       • Taxable temporary differences arising from initial recognition of goodwill

       • Temporary differences arising from initial recognition of an asset or liability in a transaction that is not a business combination and neither affects accounting profit nor taxable income for tax purposes, and that do not give rise at the time of transaction to taxable and deductible temporary differences in equal amounts.

       • Taxable temporary differences related to investments in subsidiaries, affiliates, and joint ventures where the timing of reversal is controllable and it is more likely than not that the temporary differences will not reverse within a foreseeable period of time

       Deferred tax assets and liabilities are measured at the tax rates expected to be applied in the period in which the asset is realized or the liability is settled based on the tax rates enacted or substantively enacted at the end of the fiscal year.

       Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and current tax liabilities and when they are levied by the same tax authority on the same taxable entity, or when intending to settle the net amount of current tax liabilities and current tax assets of separate taxable entities or simultaneously realize assets and settle liabilities. In addition, for particular transactions recognizing the same amount of assets and liabilities from a single transaction, the Company recognizes deferred tax liabilities and deferred tax assets for the taxable temporary differences pertaining to recognized assets and the deductible temporary differences pertaining to recognized liabilities, respectively.

       The Company and some subsidiaries apply the Japanese Group Relief System.

   19. Borrowing cost

       Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets, that is, assets requiring a substantial period of time to get ready for their intended use or sale, are added to the acquisition cost of those assets until such time as the assets are substantively ready for their intended use or sale.

       All borrowing costs other than the above are recognized in profit or loss in the period in which they are incurred.

   20. Earnings per share

   Basic earnings per share is calculated by dividing profit (loss) attributable to common shareholders of the parent company by the weighted-average number of shares of common stock outstanding adjusted for treasury stock during the period. Diluted earnings per share is calculated by adjusting for the effect of dilutive potential shares.

4. Critical accounting estimates and judgments

   The preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the amounts of assets, liabilities, revenues, and expenses. Actual results may differ from these estimates.

   Estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a revision of an accounting estimate is recognized in the accounting period in which the estimate is revised and in future periods thereafter. Estimates and underlying assumptions that involve significant risks that could lead to material adjustments to the carrying amounts of assets and liabilities in the next fiscal year are as follows:

   (Impacts of climate change)

   The Group takes into account the impacts of climate change and the transition to net zero when preparing the consolidated financial statements. The Group has set a goal to achieve net-zero emissions by 2050 in line with the Paris Agreement objectives, contributing to the realization of a low-carbon society. On the other hand, oil and natural gas continue to be indispensable energy sources for economic and social activities, and its mission is to ensure their stable supply primarily in Japan and the Asian region. The Group is promoting the oil and natural gas business, lower-carbon solutions, and power-related business fields as core business areas to achieve both the net-zero emissions target and the mission of ensuring a stable supply.

   The impacts of climate change and the transition to net zero are significant across all of the Group's core business areas - oil and natural gas business, lower-carbon solutions, and power-related business fields. To assess these impacts, the Group is analyzing the business environment of long-term future energy demand and customer trends, etc., by referring to multiple scenarios such as the Stated Policies Scenario (IEA-STEPS) of the International Energy Agency's (IEA) World Energy Outlook (WEO), and we use this information to formulate management strategies and decisions.

   The purposes of scenario analysis are to quickly identify future policy trends and the possibility of changes in the business environment based on the assumption that these scenarios will be realized, and to reflect these in management strategies and plans. It differs from judgments and assumptions based on the latest available reliable information reflected in accounting estimates.

   Therefore, even if scenario analysis shows indications of impairment or increased provisions for assets of each project of the Group, the Group does not believe these indications should be immediately reflected in the consolidated financial statements. In addition to the scenario analysis results, accounting estimates are reasonably estimated based on comprehensive consideration of the Group's strategy, the policies of each country, the analysis results of external organizations, and the unique circumstances of each project, etc. However, changes to the Group's strategy for future climate change risks and changes in the global decarbonization trend may have a significant impact on these.

   (Future oil price forecasts and internal carbon pricing)

   Future crude oil and natural gas prices are mainly determined by international market conditions and are subject to significant fluctuations due to the influence of various factors such as international and regional supply and demand and the global economy. Oil prices used in accounting estimates are determined by management's best estimates and judgments based on reports issued by several external organizations. In very long-term forecasts for oil prices, the Group considers scenarios issued by the IEA and other sources, while in the medium- to long-term, the Group's estimates are based on the assumption that oil prices will rise, reflecting higher break-even points in the crude oil and natural gas business, driven mainly by cost inflation and the continuation of a certain level of energy demand. The outlook for medium- to long-term oil prices as of December 31, 2025 is estimated to be U.S.$70 per barrel (Brent crude oil price, excluding the impact of inflation) for fiscal year 2028 and beyond. Since the sales price of natural gas handled by the Group is also largely linked to crude oil prices, emphasis is placed on this oil price outlook in the determination of indications of impairment and impairment testing of the Group's non-financial assets. In addition, estimated future cash flows used to calculate value in use of non-financial assets for each project incorporate internal carbon pricing (hereinafter "ICP"), and in Australian projects where a carbon pricing system exists, the Group refers to price forecasts of several outside experts, etc. and uses AU$85/tCO2e for 2030, AU$98/tCO2e for 2040, and AU$122/tCO2e for 2050 (excluding the impact of inflation). In other countries and regions, where a carbon pricing system exists, the Group refers to its estimated price based on price forecasts of several outside experts, etc., and in areas where a carbon pricing system does not exist, the Group refers to the variable price linked to the South Korea price of IEA-STEPS in World Energy Outlook 2025 (WEO 2025). Although the Japan price for IEA-STEPS has been added from WEO 2025, the Japan policy referenced in IEA-STEPS is predicated on the 7th Strategic Energy Plan, and since the figures based on Japan's Nationally Determined Contribution (NDC) 3.0 were deemed to be ambitious, the Company continued to reference the South Korea price in the previous fiscal year. Now, a draft notification has been published, setting a reference upper price limit and adjusted standard transaction price for the Green Transformation Emissions Trading System (GX-ETS). Once the revision of the Act on Promoting the Transition to a Decarbonized Growth Economic Structure (GX Promotion Act) has been enacted, the Company plans to formulate ICPs to be applied to its domestic operations. With the transition to net zero, the increased

   preference for low-carbon energy will necessitate a review of key assumptions, such as a decline in crude oil and natural gas prices, or an increase in ICP, and impairment losses may be recorded for oil and gas assets, goodwill, and investments accounted for using equity method.

   (Reserves)

   The Group's oil and gas assets (development and production assets) are depreciated using the unit-of-production method based on the total quantity of proved and probable reserves, and the reserves used in the unit-of-production method are calculated based on the Petroleum Resource Management System (PRMS). The future oil price forecasts used in calculating the reserves are based on the average price of oil and gas at the beginning of the month during the period, similar to the average price in the U.S. Securities and Exchange Commission's Regulation S-X, Rule 4-10(a). Estimates of the reserves depend on the available geological and engineering data from oil and gas reservoirs, the maturity of development plans and a considerable number of assumptions, factors and variables including economic conditions as of the date such estimates are made. These estimates may be revised in the future on the basis of geological and engineering data as well as development plans and information relating to changes in economic and other conditions made newly available through progress in production and operations. As a result, there is a possibility that reserves will be restated upwards or downwards. As to the reserves under a production sharing contract, not only production, but also oil and gas prices, invested capital, recovery of invested capital due to contractual conditions and remuneration fees may affect the economic entitlement. This may cause reserves to increase or decrease. The presuppositions related to these assumptions, factors and variables are determined based on management's best estimates and judgments.

   Estimates of these reserves also impact impairment testing for oil and gas assets (development and production assets) totaling

   ¥3,567,123 million recognized as of December 31, 2025 and impairment testing in (1)"Impairment of non-financial assets." Assumptions used in the estimates of reserves are impacted by economic conditions such as the transition to net zero, and if risks materialize that could lead to a downward revision of reserves, such as a decline in oil prices or a rise in ICP, depreciation may accelerate or impairment losses may occur.

   The estimates made by management based on the above analysis that have significant impact on the amounts reported in the consolidated financial statements are as follows:

   1. Impairment of non-financial assets

      The Group uses future crude oil prices, reserves, operating expenses, development expenses, ICP and discount rates as major assumptions for the determination of indications of impairment of non-financial assets and impairment testing.

      During the year ended December 31, 2025, an impairment loss of ¥28,428 million was recorded on oil and gas assets, and investments accounted for using equity method, while a gain on reversal of impairment losses of ¥41,253 million was recorded for the Offshore North Caspian Sea Contract Area Project.

      In addition, significant non-financial assets recorded in the consolidated statement of financial position include those related to the Ichthys LNG Project, with oil and gas assets (development and production assets) amounting to ¥1,772,903 million, and investments accounted for using equity method amounting to ¥751,515 million as of December 31, 2025. Investments accounted for using equity method represent the balance of investment in Ichthys LNG Pty Ltd, in which the Group holds a 67.82% interest. The major assets held by Ichthys LNG Pty Ltd. are oil and gas assets related to the downstream business of the Ichthys LNG Project, and the balance of oil and gas assets for Ichthys LNG Pty Ltd as of December 31, 2025 (amount obtained by multiplying by the Group's share) is ¥3,036,401 million. As of December 31, 2025, the Group performed an assessment of indicators of impairment, taking into account key assumptions and operating status of the Ichthys LNG Project, etc. As a result, no indicators of impairment were identified for non-financial assets related to the Ichthys LNG Project.

      This item is related to "12. Oil and gas assets," "16. Impairment of non-financial assets," and "34. Investments accounted for using equity method."

   2. Asset retirement obligations

   Asset retirement obligations for future removal and abandonment of domestic and overseas oil and natural gas production facilities, etc. are recorded in the amount of ¥493,703 million as of December 31, 2025, based on reasonable estimates of the number of productive years or the number of years until completion of the contract period and the cost of removal and abandonment at the end of operations. As of December 31, 2025, the Group does not recognize a reduction in the number of productive years due to stricter regulations in various countries concerning climate change, etc. However, depending on future policies and laws and regulations of various governments concerning climate change, the Group's asset retirement obligations may increase in the future due to early production shutdowns of its oil and gas assets, increase in assets to be removed, changes in abandonment methods, and revision of the discount rate, etc. Asset retirement obligations have not been recognized for the natural gas pipeline, which serves as a domestic

   gas sales and distribution related facility, because reliable estimates could not be made as of December 31, 2025 (Please refer to "21. Asset retirement obligations"). However, asset retirement obligations may be recorded if changes in the business environment, etc. are identified that would make it possible to determine a business termination date.

   This item is related to "21. Asset retirement obligations."

5. Standards and interpretations that have been issued but not yet adopted by the Group

   Among the newly established or amended standards and interpretations issued by the date of approval of the consolidated financial statements, the main ones that have not been early adopted by the Group are as follows.

   The impact of the application of these standards on the consolidated financial statements is still under review.

   Standards and interpretations	Mandatory application period (effective date)	Scheduled date of application by the Group	Summary of new standards, interpretations and amendments
   IFRS 18 Presentation and Disclosure in Financial Statements	January 1, 2027	FY2027	A new standard that replaces IAS 1, which is the current accounting standard on presentation and disclosure in financial statements

6. Business combination

   For the year ended December 31, 2024

   The Group is involved in the upstream business of the Ichthys LNG Project via its wholly-owned subsidiary, INPEX Ichthys Pty Ltd, and conducts the joint operations in which it holds a 66.245% interest in the Ichthys Gas-Condensate Field (WA-50-L/WA-51-L) in Western Australia, Australia as an operator. In addition, the Group is involved in the downstream business of the same project via its joint venture, Ichthys LNG Pty Ltd, and owns gas pipelines and liquefication facilities, and conducts the liquefication and marketing business.

   The Group acquired the participating interests (1.575%) held by Tokyo Gas Co., Ltd. (hereinafter "Tokyo Gas") in the Ichthys LNG Project, etc. (hereinafter "the Projects") through Tokyo Gas Australian project subsidiaries on March 28, 2024. Of the total consideration paid, ¥40,907 million pertains to the upstream business interest classified as a business combination. In addition, regarding the downstream business, the Group acquired shares of Ichthys LNG Pty Ltd and assumed loans receivables to the same company. Please refer to "31. Financial instruments" for the loans receivable.

   This agreement results from the October 2022 decision by Tokyo Gas to sell the shares in its Australian project subsidiary that holds participating interests in the Projects, to MidOcean Energy Holdings Pty Ltd. In accordance with the relevant Joint Operating Agreements and Shareholders' Agreement, Tokyo Gas notified the proposed sale to the Projects' participating interest holders whereupon the Group exercised its pre-emptive rights under the respective Joint Operating Agreements and Shareholders' Agreement to acquire Tokyo Gas's participating interest in the Projects.

   The Ichthys LNG Project is a highly competitive one that is expected to generate stable revenue over the long term. This acquisition of an additional participating interest in the Projects is aligned to the pursuit of its business targets and pathways outlined in "Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022)", and will contribute to energy security in Japan and Asia-Pacific region.

   The consideration paid and fair value of main assets acquired at the time of acquisition are shown below. Note that no goodwill or negative goodwill has been generated.

   The Group had applied provisional accounting treatment, as the adjustment and allocation of consideration paid had not been completed as of June 30, 2024, but the amounts have been finalized as of December 31, 2024. There is no change from the initial provisional amounts.

   (Millions of yen)

   Assets acquired

   Oil and gas assets (Development and production assets) 40,907

   Fair value of assets acquired 40,907

   Fair value of the consideration paid (Cash and cash equivalents) 40,907

   For the year ended December 31, 2025

   The Group is involved in oil and natural gas production and exploration in Norway via its local Norwegian entity INPEX Idemitsu Norge AS (hereinafter "IIN"), which is a 100% subsidiary of INPEX Norway Co., Ltd. Through IIN, the Group holds numerous licenses in the northern North Sea, the northern Norwegian Sea and the Barents Sea, and has engaged in steady production operations from fields in the northern North Sea including the Snorre and Fram fields.

   The Group, through IIN, acquired from Pandion Energy AS a 10 percent participating interest each in the Valhall and Hod oil and gas fields currently in production and a 20 percent participating interest each in the Mistral and Slagugle oil and gas discoveries, which are yet to be developed, on October 31, 2025. The consideration paid amounted to ¥43,017 million in cash and cash equivalents.

   With the acquisition of these new interests, IIN's oil and gas production volume will increase from approximately 23,000 barrels per day to approximately 27,000 barrels per day. Additionally, these acquisitions are expected to further expand the Group's business portfolio through future production from the Mistral and Slagugle oil and gas discoveries and the potential for exploration and development in the surrounding areas.

   The consideration paid and fair value of the assets acquired and liabilities assumed at the time of acquisition are as follows. As the adjustment and allocation of the consideration paid had not been completed as of December 31, 2025, provisional accounting treatment has been applied.

   (Millions of yen)

   Assets acquired

   Trade and other receivables *1 11,088

   Oil and gas assets (Exploration and evaluation assets) 1,230

   Oil and gas assets (Development and production assets) 62,991

   Liabilities assumed

   Trade and other payables (290)

   Assets retirement obligations (non-current) (32,460)

   Deferred tax liabilities (22,757)

   Fair value of assets acquired and liabilities assumed, net 19,802

   Goodwill *2 23,215

   Fair value of the consideration paid (Cash and cash equivalents) 43,017

   Notes: 1. The fair value of the trade and other receivables acquired are ¥11,088 million and the gross contractual amounts receivable are ¥11,088 million. No amounts are expected to be uncollectible.

   1. Goodwill is recorded in the "Oil & Gas Overseas - Other Projects" segment and consists of as follows. No portion is expected to be deductible for tax purposes.

      1. Goodwill arising from the deferred tax

         This goodwill arises from the recognition, in accordance with IAS 12 Income Taxes, of a deferred tax liability, for the difference between the fair value and the tax base of the acquired participating interests in oil and gas fields. The corresponding offsetting entry is recognized as goodwill.

      2. Goodwill arising from expected future excess earning power resulting from subsequent business developments

         This goodwill represents the portion of the consideration paid that cannot be allocated to identifiable assets or liabilities and reflects the value of expected synergies contributing to the further expansion of the business portfolio in Norway.

   2. Acquisition-related expenses for this business combination are ¥ 196 million and recorded in "Selling, general and administrative expenses" in the consolidated statement of profit or loss.

   3. Information on profit or loss after the acquisition date related to this business combination as well as information on profit or loss under the assumption that the business combination was conducted at the beginning of the fiscal year is omitted because the impact on the consolidated statement of profit or loss is immaterial. In addition, information on profit or loss under the assumption that the business combination was conducted at the beginning of the fiscal year is unaudited.

7. Operating segments

   1. Overview of reportable segments

      The operating segments of the Group are components of the Group for which discrete financial information is available and regularly reviewed by the Board of Directors to make decisions about allocation of managerial resources and to assess their performance. Operating segments are not aggregated in determining reportable segments.

      In addition, as the main business of the Group is the global exploration, development, production and sales of oil and natural gas, and loans and investments in companies engaged in such activities, namely the oil and natural gas business (hereinafter "Oil & Gas"), the Group classifies the reportable segments as "Oil & Gas Japan" and "Oil & Gas Overseas," and the "Oil & Gas Overseas" segment is further classified as "Ichthys Project," which is a major operator project of the Group, and "Other Projects," which is comprised of other overseas projects. The "Other" category consists of businesses that are not included in the reportable segments, including renewable energy & power-related business and CCS & hydrogen business, etc.

      The reportable segments and other category are as follows:

      Reportable segments, etc.		Main business and project name
      Oil & Gas Japan		Minami-Nagaoka Gas Field, Naoetsu LNG Terminal, etc.
      Oil & Gas Overseas	Ichthys Project	Ichthys LNG Project in Australia and exploration of surrounding area
      	Other Projects	Projects in Australia (excluding the Ichthys LNG Project), Southeast Asia, Europe, Abu Dhabi, and other areas
      Other		Renewable energy & power-related business, CCS & hydrogen business, crude oil sales agency and brokerage business, etc.

   2. Revenue and performance by segment

      Accounting policies for the reportable segments are substantially the same as those described in "3. Material accounting policies." The Group's foreign exchange gains and losses are not allocated to reportable segments, certain exceptions aside, because they are managed on a Group-wide basis.

      Reportable segment profit is presented in profit attributable to owners of parent of the consolidated statement of profit or loss. Intersegment transactions are carried out at arm's length price.

      Revenue, profit and other items of the Group by reportable segment are as follows:

      For the year ended December 31, 2024

      Oil & Gas

      Reportable segments

      Oil & Gas Overseas

      Other

      Total Adjustments

      (Millions of yen)

      Consolidated

      Revenue

      Japan

      Ichthys Project

      Other *1 *2

      Projects

      Revenue from external customers 216,953	373,263	1,657,921	17,699	2,265,837	-	2,265,837
      Intersegment revenue －	21,924	-	7,026	28,951	(28,951)	-
      Total 216,953	395,187	1,657,921	24,726	2,294,789	(28,951)	2,265,837
      Exploration expenses (1,803)	(42,790)	(8,756)	-	(53,350)	-	(53,350)
      Share of profit (loss) of investments -	93,257	14,213	(2,639)	104,831	-	104,831
      Finance income 3	116,745	26,220	2,524	145,493	3,997	149,491
      Finance costs (893)	(58,600)	(54,689)	(4,785)	(118,969)	(3,499)	(122,469)
      Income tax expense (5,365)	(46,982)	(810,736)	2,574	(860,509)	(4,063)	(864,573)
      Segment profit (loss) 13,663 (Other items) Depreciation and amortization 18,920	248,239 130,331	165,711 206,619	(14,545) 490	413,069 356,361	14,274 2,868	427,344 359,230
      Impairment loss *3 －	1,954	19,749	-	21,704	-	21,704
      Investments for exploration and 14,325	210,262	177,777	8,314	410,680	-	410,680

      accounted for using equity method

      development, etc. *4

      Notes: 1. The "Other" category consists of the operating segments that are not included in the reportable segments, and includes renewable energy & power-related business and CCS & hydrogen business, etc.

      1. "Adjustments" are as follows:

         1. Adjustments of segment profit (loss) include corporate profit (loss) of ¥14,311 million that is not allocated to reportable segments or the "Other" category and elimination of intersegment transactions of ¥(36) million. Corporate profit (loss) mainly consists of foreign exchange gains (losses) of ¥13,968 million managed on a Group-wide basis and ¥(4,063) million as the portion of the amount of the income tax expense of the parent and the financial subsidiary attributable to all companies.

         2. Adjustments of depreciation and amortization are depreciation and amortization that are not allocated to any reportable segment or the "Other" category.

      2. "Impairment loss" consists of impairment loss on oil and gas assets. Please refer to "16. Impairment of non-financial assets" for details.

      3. "Investments for exploration and development, etc." consists of mainly the total amount of payments for acquisition of exploration and evaluation assets and development and production assets within oil and gas assets and payments incurred during the fiscal year for acquiring shares to participate and make additional investments in projects such as oil, natural gas, and renewable energy. The amount corresponding to the Group's investment stake in Ichthys LNG Pty Ltd, which is a joint venture, is included in this amount.

         For the year ended December 31, 2025

         Oil & Gas

         Reportable segments

         Oil & Gas Overseas

         Other

         Total Adjustments

         (Millions of yen)

         Consolidated

         Japan

         Ichthys Project

         Other *1 *2

         Projects

         Revenue
         Revenue from external customers	192,176	315,069	1,486,928	17,176	2,011,351	-	2,011,351
         Intersegment revenue	-	19,784	-	7,206	26,990	(26,990)	-
         Total	192,176	334,854	1,486,928	24,383	2,038,342	(26,990)	2,011,351
         Exploration expenses	(971)	(62)	(15,699)	-	(16,733)	-	(16,733)
         Share of profit (loss) of investments accounted for using equity method *3	-	60,501	17,117	(5,520)	72,099	-	72,099
         Finance income	13	90,166	23,941	2,550	116,672	3,521	120,194
         Finance costs	(1,148)	(35,157)	(32,341)	(8,134)	(76,781)	(5,379)	(82,161)
         Income tax expense	(6,095)	(35,503)	(702,992)	2,619	(741,972)	(1,862)	(743,835)
         Segment profit (loss)	22,452	270,801	131,790	(28,795)	396,249	(2,412)	393,836
         (Other items)
         Depreciation and amortization	19,892	109,040	218,949	707	348,590	2,781	351,372
         Impairment loss *4	-	-	21,405	-	21,405	-	21,405
         Gain on reversal of impairment loss *4	-	-	41,253	-	41,253	-	41,253
         Investments for exploration and	15,460	64,360	283,717	26,502	390,041	-	390,041
         development, etc. *5

         Notes: 1. The "Other" category consists of the operating segments that are not included in the reportable segments, and includes renewable energy & power-related business and CCS & hydrogen business, etc.

         1. "Adjustments" are as follows:

            1. Adjustments of segment profit (loss) include corporate profit (loss) of ¥(2,412) million that is not allocated to reportable segments or the "Other" category. Corporate profit (loss) mainly consists of foreign exchange gains (losses) of ¥(1,013) million managed on a Group-wide basis and

               ¥(1,862) million as the portion of the amount of the income tax expense of the parent and the financial subsidiary attributable to all companies.

            2. Adjustments of depreciation and amortization are depreciation and amortization that are not allocated to any reportable segment or the "Other" category.

         2. Impairment loss on investments accounted for using equity method is included in "Share of profit (loss) of investments accounted for using equity method." Please refer to "16. Impairment of non-financial assets" for details.

         3. "Impairment loss" consists of impairment loss on oil and gas assets and "Gain on reversal of impairment loss" consists of gain on reversal of impairment loss on oil and gas assets. Please refer to "16. Impairment of non-financial assets" for details.

         4. "Investments for exploration and development, etc." consists of mainly the total amount of payments for acquisition of exploration and evaluation assets and development and production assets within oil and gas assets and payments incurred during the fiscal year for acquiring shares to participate and make additional investments in projects such as oil, natural gas, and renewable energy. The amount corresponding to the Group's investment stake in Ichthys LNG Pty Ltd, which is a joint venture, is included in this amount.

   3. Information on products and services

      Revenue to external customers by product and service is in "25. Revenue."

   4. Information by region

      The breakdown of revenue from external customers by region is as follows:

      (Millions of yen)

      		For the year ended	For the year ended
      		December 31, 2024	December 31, 2025
      Japan		722,010	625,880
      China		452,507	341,261
      Asia		685,418	704,108
      Europe		274,691	233,951
      Other		131,210	106,150
      	Total	2,265,837	2,011,351

      Notes: 1. Revenues are classified by country or region based on the final destination and customer.

      1. The main countries and regions associated with the regional classifications other than Japan and China are as follows:

         1. Asia: Korea, Singapore, Thailand and others

         2. Europe: Italy and others

         3. Other: Australia and others

            The breakdown of non-current assets by region is as follows:		(Millions of yen)
            	As of December 31, 2024	As of December 31, 2025
            Japan	296,188	299,109
            Australia	2,088,258	2,003,420
            Europe & NIS region	700,598	804,900
            United Arab Emirates	660,697	704,043
            Other	194,521	200,433
            Total	3,940,265	4,011,905

            Notes: 1. Non-current assets are based on the location of the assets and consist of oil and gas assets, other property, plant and equipment, goodwill, intangible assets and other non-current assets.

            1. The main countries and regions associated with the regional classifications other than Japan, Australia and United Arab Emirates are as follows:

               1. Europe & NIS region: Kazakhstan, Norway, Azerbaijan and others

               2. Other: Indonesia, Vietnam and others

            2. In Kazakhstan in the European and NIS region, non-current assets were ¥475,712 million as of December 31, 2024 and ¥483,859 million as of December 31, 2025.

   5. Information on major customers

   This information is omitted since there is no single external customer that makes up 10% or more of the revenue recorded in the consolidated statement of profit or loss.

8. Cash and cash equivalents

   The breakdown of cash and cash equivalents is as follows:

   (Millions of yen)

   	As of December 31, 2024	As of December 31, 2025
   Cash and demand deposits	139,754	131,769
   Short-term investments	78,195	10,699
   Time deposits with deposit terms of three months or less	23,725	25,937

   Cash and cash equivalents in the consolidated statement of financial position

   241,675 168,407

   Short-term investments held by the Group mainly consist of money market funds. Money market funds constitute highly liquid investments in the short term and are subject to insignificant value fluctuation risk.

   The balance of "Cash and cash equivalents" in the consolidated statement of financial position and the balance of "Cash and cash equivalents" in the consolidated statement of cash flows as of December 31, 2024 and December 31, 2025 are the same.

9. Trade and other receivables

   The breakdown of trade and other receivables is as follows:		(Millions of yen)
   	As of December 31, 2024	As of December 31, 2025
   Notes and accounts receivable-trade	244,755	212,584
   Accounts receivable-other	38,240	65,810
   Allowance for doubtful accounts	(15,519)	(15,339)
   Total	267,476	263,055

   Trade and other receivables are categorized as financial assets measured at amortized cost.

10. Inventories

    The breakdown of inventories is as follows:		(Millions of yen)
    	As of December 31, 2024	As of December 31, 2025
    Merchandise and finished goods	24,994	25,509
    Work in process	808	1,874
    Raw materials and supplies	41,439	41,005
    Total	67,241	68,389

    Inventories recognized as expenses during the period amounted to ¥917,051 million and ¥850,395 million for the years ended December 31, 2024 and December 31, 2025, respectively.

11. Disposal group held for sale

    The breakdown of assets classified as a disposal group held for sale is as follows:

    As of December 31, 2024

    (Millions of yen) As of

    December 31, 2025

    Investments accounted for using equity method 17,341 －

    Total assets 17,341 －

    As of December 31, 2024

    The investment accounted for using equity method in Japan South Sakha Oil Co., Ltd., an affiliate in the "Oil & Gas Overseas -Other Projects" segment, was classified as a disposal group held for sale due to the decision to sell shares of that company and because the potential to sell the shares was determined to be highly probable. The disposal group is measured at its carrying amount, as the fair value less costs of disposal exceeds the carrying amount. The Company has completed the sales of a portion of the shares held as of December 31, 2024 by the approval date of the consolidated financial statements for the year ended December 31,2024, in accordance with the stock transfer agreement. The remaining shares are scheduled to be sold in the future.

    As of December 31, 2025

    Regarding the investment in Japan South Sakha Oil Co., Ltd., which was classified as a disposal group held for sale as of December 31, 2024, the Company completed the sale of the investment in the year ended December 31, 2025.

12. Oil and gas assets

Changes in acquisition cost, accumulated depreciation and impairment losses of oil and gas assets are as follows:

(Millions of yen)

Acquisition cost Exploration and evaluation assets

Development and production assets

Sales and distribution related assets

Total

combination

expenses

translation of foreign operations

combination

Development and production

expenses

translation of foreign operations

Notes: 1. "Other" includes the impact of changes in estimates of asset retirement obligations and lease liabilities.

2. "Disposals" include a decrease of ¥(16,997) million resulting from a farm-out transaction relating to development and production assets.

(Millions of yen)

Accumulated depreciation and impairment losses

Exploration and evaluation assets

Development and production assets

Sales and distribution related assets

Total

Notes: 1. "Depreciation" is included in "Cost of sales" and "Selling, general and administrative expenses" in the consolidated statement of profit or loss.

2. Please refer to "16. Impairment of non-financial assets" for details of impairment loss and gain on reversal of impairment loss.

Carrying amount of oil and gas assets is as follows:

Carrying amount Exploration and evaluation assets

Development and production assets

Sales and distribution related assets

(Millions of yen) Total

Amounts of oil and gas assets under construction included and recognized in the carrying amounts above were ¥445,854 million as of December 31, 2024 and ¥547,739 million as of December 31, 2025.

Please refer to "37. Commitments" for commitments related to acquisition of oil and gas assets.