Presentation Meeting of Consolidated Financial Results for the Six Months Ended September 30, November 9, 2015

Transcription

1 Note: The following report is an English translation of the Japanese-language original. Presentation Meeting of Consolidated Financial Results for the Six Months Ended September 30, 2015 November 9, 2015 Japan Petroleum Exploration Co., Ltd.

2 Cautionary Statement Any information contained herein with respect to JAPEX s plans, estimates, strategies and other statements that are not historical facts are forward-looking statements about the future performance of JAPEX. Readers should be aware that actual results and events may differ substantially from these projections due to various factors. The provision of this document should not be construed as a solicitation for investment. Copyright : All information contained herein is protected by copyright, and may not be copied or reproduced without prior consent of JAPEX. Note: Abbreviations used herein are as follows: 1H = First half (1Q-2Q) 2H = Second half (3Q-4Q) (a) = Actual result (e) = Estimates FY = Fiscal Year (FY3/16, for instance, means 12 months ending March 31, 2016) Any inquiries about the information contained herein or other Investor Relations questions are requested to be directed to: Investor Relations Group, Media & Investor Relations Department, Japan Petroleum Exploration Co., Ltd. Tokyo, JAPAN TEL:

3 3 Contents 1.Business Overview President Osamu Watanabe 2.Consolidated Financial Results for the Six Months Ended September 30, 2015 Executive Officer Michiro Yamashita 3.Revised Full Year Estimates for the Fiscal Year Ending March 31, 2016 Executive Officer Michiro Yamashita

4 4 1. Business Overview President Osamu Watanabe

5 5 Trends in Crude Oil Prices and Foreign Exchange Rate [Crede Oil Price US$/bbl] $130 $120 $110 $100 $90 $80 $70 $60 $50 $40 Crude Oil price US$/bbl (Left axis) Exchange Rate JP /US$(Right axis) [Foreign Excahnge Rate JP /US$] Japan Crude Cocktail (JCC) Price in the first 10 days of October 2015 on a prompt report basis : US$ 47.81/bbl JP /US$

6 6 Revised Estimates for FY3/16 (Highlight) FY3/15 FY3/16 Change Billion Full (a) Initial estimate 1H(e) May12, 151 1H (a) 2 Initial estimate Full (e) May12, 153 Revised estimate Full (e) Nov.6, 154 1H (2-1) Full (4-3) Net sales Operating income Ordinary income Net income(loss) JCC price US$/bbl Exchange rate JP /bbl Bitumen price CA$/bbl Exchange rate JP /CA$ Revised estimates Full (e) Nov.6, 15 1Q (a) 2Q (a) 3Q (e) 4Q (e) JCC price US$/bbl Exchange rate JP /US$

7 Long-term business vision and Medium-term business plan Transformation to an Integrated Energy Company around Oil and Gas E&P Business Growth investing Stable dividend Improve revenue and profit Shareholder return Substantial Shareholder return FY 3/15 By the end of FY3/20 By the end of FY3/26 E&P business Production 7,4000boe/d Proved reserve 313million boe The steady execution of large-scale projects Production 100,000boe/d Establishment of a cycle of Proved reserve reinvestment 550 million boe RRR>1 Maintaining a longterm RRR of 1>1 Domestic gas business Business volume of natural gas (LNG equivalent) 1.2million tons Study of power generation business Diversifying both supply and procurement Business volume of natural gas (LNG equivalent) 1.5million tons Completion of Soma LNG terminal / FID of power generation business Expansion of diversity Business volume of natural gas (LNG equivalent) 2.5million tons Soma power generation business 1.2millionkW+α Environment and innovative technology Promotion of Geothermal, CCS, MH Establishment of technology Business Prospect CSR management The ratio of female managers 3.4% Promotion agenda SHINE The ratio of female managers 3 times Develop the diverse human resources

8 E&P Business 1 Domestic exploration: Result for 1H & Plan for 2H Drilling schedule for FY3/16 Total Depth 1Q 2Q 3Q 4Q Minami-Kashiwazaki SK-1D (Exploratory Well) 2,900m Geophysical prospecting survey work FY3/16 Nagaoka and Ojiya-city, Niigata pref. (82 point) Uonuma MT 3D Work planned from Sep. to Nov. (Electromagnetic survey: Investigate the electrical resistivity of the underground rock) Uonuma MT 3D (82 point) Drilling site in Minami- Kashiwazaki SK-1D 8 Minami-Kashiwazaki SK-1D (2,900m)

9 9 E&P Business 2 Current status of global business U.K./Norway U.K. North Sea Block (Exploration) Sakhalin Sakhalin 1 project (Production & Development) Canada Oil Sands project (Production & Development) Shale Gas/LNG project (Production of natural gas / planning of LNG plant) Middle East Iraq Garraf oil field (Production & Development) Southeast Asia Indonesia Kangean Block (Production & Development) Japex (U.S.) Corp. (Production) focus areas Blocks owned by our consolidated subsidiaries or equity-method affiliates

10 E&P Business 3 Indonesia: Kangean Block West Kangean gas field (Exploration) Pagerungan Utara oil field (Production suspended) Jakarta Java Island Bali Island Project Company Kangean Energy Indonesia Ltd. (KEI) + 2 other, Equity-method affiliate to Surabaya Terang gas field West Java Pipeline TSB gas field (Production-partly) Sirasun gas field Batur gas field Pagerungan gas field (Production) Sepanjang Island oil field (Production suspended) Interest 25% (Operator : KEI) production volume : approximately 50,000boe/d the TSB gas field (Phase1: Terang ) : Production started in end-may Maximum production 0.3billion cf/d (Approximately 50,000boe/d) (Phase2: Sirasun, Batur ) : Preparing for development South Saubi Structure : Preparing for prospecting in FPU (floating Production Unit) in the Terang gas field

11 11 E&P Business 4 Iraq : Garraf oil field Project company Japex Garraf Ltd. Interest 30% (cost share 40%) Operator : PETRONAS Field Garraf In Production Expected cumulative production : Around 1.3 billion bbl Baghdad Garraf oil field Samawah Nasiriyah Basrah Time Schedule 2013 First oil production on August 31 Average daily production : Approximately 64,000 bbl/d Average daily production Dec.31, 2014 : Approximately 84,000 bbl/d Oct. 31, 2015 : Approximately 100,000 bbl/d * Gradual increase of production volume Targeting Production of 230,000 bbl/d Garraf oil has been smoothly shipped from Basrah Steady crude oil production from Garraf oil field

12 E&P Business 5 Sakhalin 1 project Project Company Sakhalin Oil and Gas Development Co., Ltd. (SODECO) Equity-method affiliate Odoptu Interest Sakhalin 1 Consortium Exxon Neftegas Ltd. 30% Others 40% Block SODECO 30% Chayvo, Odoptu, Minister of Economy, Trade and Industry 50.00% SODECO JAPEX 15.29% Others 34.71% In Production at each fields * The Arkutun-Dagi field commenced oil production in January * The Chayvo field achieved a new world-record of extended reach drilling. Chayvo Arkutun-Dagi Arkutun- Dagi Total production volume of Crude Oil: Approximately 180,000 bbl/d* * Average production volume per day on 2015, based on JAPEX s estimates. 12 The Arkutun-Dagi offshore field Started commercial production of crude oil.

13 E&P Business 6 Canada Oil Sands project Project Company Block Canada Oil Sands Co., Ltd. (CANOS) Operator : Japan Canada Oil Sands Ltd. (JACOS) Hangingstone 3.75 section 100% Interests Approximately 5,000-6,000 bbl/d Expansion project of undeveloped part of Hangingstone area 75% Interests Additional production of 20,000 bbl/d at the maximum In production (Cumulative production:34.13m bbl as of end of Sep. 2015) In development Calgary Hangingstone 3.75 Section (In production) Hangingstone expansion developing area FORT McMURRAY Area Corner JV lease 12% Interests Other bitumen leases (include Corner, Chard & Thornbury) Schedule of Hangingstone Expansion In appraisal Considering future activities 2013 Feb. : Started early civil work for construction facilities Corner JV lease 2014 Aug. : Completed early civil work and started construction of facilities 2015 Feb. : Completed exploration of horizontal wells End of 2016 first half of 2017 Commencement of production (Planned) 13 Construction site of central facility for Hangingstone Expansion

14 E&P Business 7 Canada Shale Gas and LNG project Shale Gas development and Production project (Up-stream) LNG project (Middle-stream) Calgary Block / Proposed site North Montney Area, British Columbia, Canada Lelu Island, The Port of Prince Rupert, B.C. Interest 10% Interest 10% Equity Prince Rupert (Proposed LNG plant site) North Montney (Block) Operator Current status Project Schedule 2013 PETRONAS (Including subsidiaries) Production and sales of Natural Gas Conclusion of contract, Production and sales of Natural Gas PETRONAS (Including subsidiaries) FEED Pipeline Vancouver Calgary Export LNG to Japan June, 2015 July, 2015 Conditional Final Investment Decision Approval of the Project Development Agreement by the Legislative Assembly of B.C FID of LNG plant after Government Approval 2020 or later First LNG production (12MMtonnes/y) 14 Lelu Island, Proposed LNG plant site

15 Site Domestic supply business 1 Construction of Soma LNG terminal Soma LNG terminal Facilities Shinchi-Town, Fukushima Pref. (No.4 wharf area of Soma Port) Capacity Receiving capacity Vaporizers One LNG Tank of Aboveground Style/PC type containing 230,000kl LNG ocean-going vessel :Full set (maximum 210,000m3 class) LPG domestic vessel :Full set (maximum 2,500m3 class) Sending power : 7.0MPa 150t/h Shipping facilities Commencement of operation Connecting pipeline facilities Starting point / End point LNG domestic vessel :maximum 4,800 m3 class Tanker truck :5 lanes, 30t/h Mar (Planned) Starting point :Soma LNG terminal End point :Iwanuma brunch Valve station (Iwanuma city, Miyagi Pref.) Caliber 20B Pressure 7Mpa Length Commencement of operation Around 39km Mar (Planned) 15 Concrete placement construction work on the Soma LNG tank foundation (June 28-29) -The amount of concrete:9,778 m3, -Mixer truck:total 2,317 cars Construction of the connecting pipeline (Oct. 7)

16 Domestic supply business 2 Soma power generation Outline of the plan of Soma natural gas power plant (provisional name) Driving force Gas turbine and steam power (combined cycle system) Output power Approximately 1.2 million kw (approximately 600 thousand kw 2) Current status Schedule (Planned) Nov. 4, 2014 Jan. 5, 2015 Apr. 23, 2015 Establishment of Fukushima Gas Power Co., Ltd. / Proceeding environmental assessment Submission of the Document on Primary Environmental Impact Consideration to the METI Written opinion issued by the METI on the Document on Primary Environmental Impact Consideration Establishment of Fukushima Gas Power Co., Ltd. Rendering of the Soma LNG Terminal and Natural Gas Power Plants Targeting commercial operations to Tokyo metropolitan area in Revitalization of local area (Job creation, Enterprise attractions, etc.) May. 7, 2015 Oct.6, 2015 Mid 2016 Mid 2017 Jan Apr Submission of the Draft of the Assessment method to the METI Receipt of the recommendation of the Draft of the Assessment method from the METI Submission of the Draft Environmental Impact Statement to the METI Completion of procedures of the Environmental Impact Assessment / Commencement of construction Commencement of commercial operation of No.1 plant Commencement of commercial operation of No.2 plant 16

17 17 Environment and innovative technology Geothermal, MH, CCS, Solar power CCS Mt. Musa area (Shibetsu Town) Geothermal power Photo provided by Japan CCS Co., Ltd Facilities of CCS demonstration project in Tomakomai city Solar power Tomakomai City Mt. Bandai area Mt. Furebetsu south area (Kushiro City) * Ongoing local negotiation. Provisional jet test in Mt. Musa area Methane Hydrate Mega-solar power station at JAPEX Hokkaido district office Offshore Atsumi and Shima peninsulas Photo provided by JOGMEC The world s first offshore methane hydrate gas production tests

18 18 Timeline of major projects FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 Canada Oil Sands HE Exploration (Under construction) Commencement of production Iraq Garraf Operational expansion Pending approval Indonesia Kangean TSB Phase 2 (Production and sale, Preparing expanding development) (Development) Achieve the target production volume Commencement of production Canada LNG Upstream Gas Development (Production and sale) Gradual increase of production volume Canada LNG LNG project Soma LNG terminal / the connecting pipeline Soma Power generation Conditional FID Pre-FID FID after government approval (Under construction) FID (targeting 2016) (Proceeding the Environmental Impact Assessment) Completion of the LNG terminal Commencement of receiving LNG Commencement of LNG production Commencement of No.1 plant operation Commencement of No.2 plant operation JAPEX adopt the optimal financing mix for capital investment funds, through the use of own fund, operating cash flow, public investment / debt guarantee scheme and project finance.

19 19 CSR - Promotion priority agenda SHINE Pursue efforts to priority agendas SHINE in order to respond expectations and requests from all stakeholders and grow as a trusted global company S :Stable & Sustainable Energy Supply Development of New Technologies H :HSE as Our Culture I :Integrity & Governance N :Being a Good Neighbor E :The Employer of Choice HSE activities, Global Warming Countermeasures, etc. Corporate Governance, Regulatory compliance Coexistence and development with local communities Diversity, Human resource development Develop the diverse human resources The ratio of female managers 2014 :3.4% by 2020 :3 times Improve HR development Bring out the full potential or specialty of each individual employee.

20 20 1H Result 2. Consolidated Financial Results for the Six Months Ended September 30, 2015 Executive Officer Michiro Yamashita

21 21 Actual Financial Results for 1H FY3/16 (Summary) 1H Result Billion FY3/15 1H (a) FY3/16 1H (e) (May12, 15) FY3/161 H (a) Net Sales % Operating income % Ordinary income % Net income % JCC price US$/bbl Exchange rate JP /US$ Bitumen price CA$/bbl Exchange rate JP /CA$ Main points of difference with initial estimate and FY2016 Net Sales 19.8billion Re-schedule of crude oil sales of Garraf Oil Field, Iraq, into third quarter of fiscal year ending March 31, Operating income + 1.5billion Ordinary income + 2.3billion Equity in losses of affiliates billion Net income billion change vs Initial estimates Billion Net Sales (left axis) Billion % FY3/15 1H(a) FY3/16 1H(e) FY3/16 1H(a) right axis Operating income Ordinary income Net income

22 Actual Sales of Natural Gas in 1H FY3/16 (vs 1H FY3/15) 1H Result Sales volume : Million M3 Net sales : Million FY2015 1H(a) FY2016 1H (a) Change Natural gas Sales volume Net sales 37,458 33,031 4,427 Breakdown of equity natural gas Domestic gas Sales volume (Domestically produced gas) Sales volume (382) (361) ( 21) Overseas gas Sales volume Million M Sales volume of overseas gas Sales volume of domestic gas Increase of sales volume by Shale Gas project in Canada FY3/15 1H FY3/16 1H Sales volume of Overseas gas stated herein are amount of Japex (U.S.) Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries. 22

23 23 Actual Sales of Crude Oil in 1H FY3/16 ( vs 1H FY3/15 ) 1H Result Crude oil Sales volume : Thousand KL Net sales : Million Breakdown of equity oil sales FY3/15 1H(a) FY3/16 1H(a) Change Sales volume 1,107 1, Net sales 73,500 57,148 16,352 Domestic crude oil: Overseas crude oil: Bitumen: Sales volume Net sales 13,768 8,427 5,341 Sales volume Net sales 18,568 24,416 +5,847 Sales volume Net sales 5,382 2,927 2,454 Decline in sales prices Increase of sales of crude oil from Garraf oil field Decline in sales prices Oil price and Exchange rate assumptions JCC price US$/bbl Exchange rate JP / US$ Bitumen price CA$/bbl Exchange rate JP / CA$ Sales volume and net sales of Domestic crude oil stated herein do not include purchased crude oil. Royalty is excluded in the net sales and price of Bitumen. Sales volume and net sales of Overseas crude oil stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX Montney Ltd. and Japex Garraf Ltd.).

24 24 Actual Financial Results for 1H FY3/16 (vs 1H FY3/15) 1H Result [ Million ] FY3/15 1H(a) FY3/16 1H(a) Change Net sales 146, ,157 22,692 Gross profit 34,515 26,408 8,106 Exploration expenses 3,260 4,769 +1,509 SG&A expenses 16,143 16, Operating income 15,110 5,407 9,703 Non-operating income (expenses) 9,625 3,434 6,190 Ordinary income 24,736 8,842 15,894 Extraordinary income (losses) Causes of increase(+) or decrease( ) Gross profit Domestic crude oil and natural gas Overseas consolidated subsidiaries Exploration expenses Domestic exploration Overseas exploration 3.7billion 4.4billion +0.8billion 2.3billion Non-operating income (expenses) Share of profit of entities accounted for using equity method 4.8 billion Foreign currency translation differences 1.2 billion Income taxes 4,781 3,660 1,121 Minority interests in income 1,095 2,853 3,948 Net income 18,873 7,963 10,910

25 25 3. Revised Full Year Estimates for the Fiscal Year Ending March 31, 2016 Executive Officer Michiro Yamashita

26 26 Revised Full Year Estimates for FY3/16 Full Year Estimates [Assumption for Crude Oil Prices and Exchange Rate] Jan.-Mar. Apr.-Jun. Jul.-Sep. Oct.-Dec. Jan.-Mar. Full year W T I US$/bbl JCC price US$/bbl Exchange rate JP\/US$ Initial estimates Revised estimates Initial estimates Revised estimates Initial estimates Revised estimates JACOS Bitumen JML Gas CA$/bbl CA$/mcf Initial estimates Revised estimates Initial estimates Revised estimates JACOS Bitumen stated herein Bitumen selling price of Japan Canada Oil Sands Ltd. (Deduction of Royalty) 2. JML Gas stated herein Gas sales price of JAPEX Montney Ltd. (Deduction of Royalty)

27 27 Revised Estimates in FY3/16 (Summary) Revised Full Year Estimates [Billion ] Initial estimates Full(e) May12, 15 Revised estimates Full(e) Nov.6, 15 Change Net Sales Operating income Ordinary income Net income JCC price US$/bbl Exchange rate JP /US$ Bitumen price CA$/bbl Exchange rate JP /CA$ JCC price US$/bbl (Initial estimates) Change VS Initial Estimates(%) 4% 4% 58% 40% 1Q (a) 2Q (a) 3Q (e) 4Q (e) (Revised estimates) Bitumen price CA$/bbl (Initial estimates) (Revised estimates) Billion Net Sales (left axis) Initial estimates Revised estimates (e)mar.12, 15 (e)nov.6, 15 right axis Operating income Ordinary income Net income Billion

28 Revised Full Year Estimates Revised Estimated Natural Gas Sales in FY3/16 (vs Initial Estimates) Sales volume : Million M3 Net sales : Million Initial estimates Full(e) May12, 15 Revised estimates Full(e) Nov.6, 15 Change Natural gas Sales volume 1,773 1, Net sales 67,856 70,094 +2,239 Breakdown of natural gas sales Domestic gas Sales volume 1,265 1, (Domestically produced gas) Sales volume (757) (765) (+8) Overseas gas Sales volume Million M3 2,000 1,800 1,600 1,400 1,200 1, ,265 1,288 Initial estimates Revised estimates 28 Sales volume of overseas gas Sales volume of domestic gas Sales volume of Overseas gas stated herein are amount of Japex (U.S.) Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries.

29 29 Revised Estimated Crude Oil Sales in FY3/16 (vs Initial Estimates) Revised Full Year Estimates Sales volume : Thousand KL Net sales : Million Initial estimates Full(e) Revised estimates Full(e) Change May12, 15 Nov.6, 15 Crude Oil Sales volume 3,423 3, Net sales 135, ,837 16,004 Breakdown of equity oil sales Domestic crude oil Overseas crude oil Bitumen Sales volume Net sales 14,964 15, Sales volume 1,827 1, Net sales 72,103 59,893 12,209 Sales volume Net sales 5,710 4,599 1,111 Decline in sales prices Decline in sales prices Oil price and Exchange rate assumptions JCC price USD/bbl Exchange rate JP /US$ Bitumen price CAD/bbl Exchange rate JP /CA$ Sales volume and net sales of Domestic crude oil stated herein do not include purchased crude oil. Royalty is excluded in the net sales and price of Bitumen. Sales volume and net sales of Overseas crude oil stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX Montney Ltd. and Japex Garraf Ltd.).

30 30 Revised Full Year Estimates Revised Estimates for FY3/16 (vs Initial Estimates) Million Initial estimates Full(e) May12, 15 Revised estimates Full(e) Nov.6, 15 Change Net sales 271, ,724 13,394 Gross profit 49,475 49, Causes of increase(+) or decrease( ) Gross profit Domestic crude oil and natural gas + 2.7billion Overseas consolidated subsidiaries 2.6billion Exploration expenses 7,243 7, SG&A expenses 33,112 33, Operating income 9,120 8, Non-operating income 4,891 2,802 7,694 Ordinary income 14,012 5,877 8,135 Extraordinary income Non-operating income (losses) Foreign currency translation adjustments on debt 6.9billion Equity in earnings 0.3billion Income taxes 5,205 5, Minority interests in income 2,919 6,506 3,587 Net income 11,705 6,970 4,735

31 Revised Full Year Estimates Revised Estimated Natural Gas Sales in FY3/16 (vs FY3/15) Sales volume : Million M3 Net sales : Million FY3/15 Full (a) FY3/16 Revised estimates Full(e) Nov.6, 15 Change Natural gas Sales volume 1,710 1, Net sales 83,974 70,094 13,880 Breakdown of equity natural gas Domestic gas Sales volume 1,276 1, (Domestically produced gas) Sales volume (813) (765) ( 49) Overseas gas Sales volume Million M3 2,000 1,800 1,600 1,400 1,200 1, ,276 1,288 FY3/15 Full(a) FY3/16 Full(e) Sales volume of overseas gas Sales volume of domestic gas Increase of sales volume by Shale Gas project in Canada Sales volume of Overseas gas stated herein are amount of Japex (U.S.) Corp. and JAPEX Montney Ltd., overseas consolidated subsidiaries. 31

32 32 Revised Full Year Estimates Revised estimated crude oil sales in FY3/16 (vs FY3/15) FY3/15 FY3/16 Sales volume : Thousand KL Net sales : Million Full (a) Revised estimates Full(e) Nov.6, 15 Change Crude oil Sales volume 2,396 3,397 +1,001 Net sales 133, ,837 13,510 Breakdown of equity oil sales Domestic crude oil: Overseas crude oil: Bitumen Sales volume Net sales 23,857 15,181 8,676 Sales volume 830 1, Net sales 43,466 59, ,427 Sales volume Net sales 12,105 4,599 7,507 Decline in sales prices Increase of sales of crude oil from Garraf oil field Decline in sales price Oil price and Exchange rate assumptions JCC price US$/bbl Exchange rate JP /USD Bitumen CA$/bbl Exchange rate JP /CA$ Sales volume and net sales of Domestic crude oil stated herein do not include purchased crude oil. Royalty is excluded in the net sales and price of Bitumen. Sales volume and net sales of Overseas crude oil stated herein are amounts of 3 overseas subsidiaries (Japex (U.S.) Corp., JAPEX Montney Ltd. and Japex Garraf Ltd.).

33 33 Revised Full Year Estimates Revised Estimates for FY3/16 (vs FY3/15) Million FY3/15 Full(a) FY3/16 Revised estimates Full(e)Nov.6, 15 Change Net sales 304, ,724 47,188 Gross profit 70,262 49,055 21,207 Exploration expenses 4,489 7,338 +2,848 SG&A expenses 33,625 33, Causes of increase(+) or decrease( ) Gross profit Domestic crude oil and natural gas Overseas consolidated subsidiaries 7.6billion 12.5billion Exploration expenses Increase of Overseas exploration 2.7billion Operating income 32,146 8,679 23,468 Non-operating income 22,692 2,802 25,495 Ordinary income 54,839 5,877 48,962 Extraordinary income 4, ,518 Income taxes 17,644 5,466 12,178 Non-operating income (losses) Share of profit of entities accounted for using equity method 10.1 billion Foreign currency translation adjustments on debt 6.9 billion Other 6.4 billion Minority interests in income 3,161 6,506 9,668 Net income 29,567 6,970 22,598

34 Crude Oil Prices and Exchange Rate Assumptions and Impact on Profits [3Q-4Q] FY3/15 FY3/16 1Q-4Q(a) 1stQ(a) 2ndQ(a) 3rdQ(e) 4thQ(e) 1Q-4Q(e) JCC price US$/bbl Exchange rate JP /USD Bitumen CA$/bbl Exchange rate JP /CA$ Canadian gas CA$/mcf Assumption JCC price (3rdQ-4thQ) USD 50.00/bbl Exchange rate (3rdQ-4thQ) JP /US$ Bitumen (4thQ) CA$ 20.07/bbl (90.00 JP /CA$) Canadian gas (4thQ) CA$ 1.82/mcf Impact on Profits US$ 1 /bbl increase in crude oil prices would push profits up by A weakening in Yen 1/US$ would push profits up by CAD 1 /bbl increase in bitumen prices would push profits up by CAD 1 /mcf increase in Canadian gas prices would push profits up by Operating income 360 Million Yen 200 Million Yen 40 Million Yen 410 Million Yen Net income 250 Million Yen 120 Million Yen 30 Million Yen 170 Million Yen Note: In addition to the impact of exchange rate fluctuations shown on the above, translation adjustments of foreign-currency-denominated receivables and payables also occur. Actual profits are influenced by a variety of other factors besides crude oil prices and exchange rates. 34