Interim report
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Consolidated Financial Results for the Three Months Ended June 30 , 2026 < under Japanese GAAP > Note : The following is an English translation of the Japanese - language original . Company name : Japan Petroleum Exploration Co. , Ltd. ( JAPEX ) Listing : Securities code : 1662 URL : Prime Market , Tokyo Stock Exchange https://www.japex.co.jp/en/ Representative : YAMASHITA Michiro , Representative Director and President Inquiries : Telephone : MATSUMOTO Akinori , General Manager , Corporate Communication Office + 81-3-6268-7111 ( from overseas ) Scheduled date to commence dividend payments : Presentation of supplementary material on financial results : Yes Holding of financial results presentation meeting ( for institutional investors and analysts ) : Yes August 6 , 2026 ( Millions of yen with fractional amounts discarded , unless otherwise noted ) 1. Consolidated financial results for the three months ended June 30 , 2026 ( April 1 , 2026 - June 30 , 2026 ) ( 1 ) Consolidated operating results ( cumulative ) ( Percentages indicate year - on - year changes . ) Net sales Three months ended June 30 , 2026 June 30 , 2025 Millions of yen 65,114 ( 21.4 ) 82,844 ( 7.4 ) Operating profit Ordinary profit % Millions of yen % Millions of yen 6,202 ( 62.9 ) 16,699 29.0 Note : Comprehensive income : Three months ended June 30 , 2026 : Three months ended June 30 , 2025 : ( 23,753 ) million yen 3,627 million yen Profit attributable to owners of parent % Millions of yen 5,773 ( 72.3 ) 20,810 25.7 [ - % ] [ ( 76.6 ) % ] % 3,240 ( 79.4 ) 15,714 36.7 Basic earnings per share Diluted earnings per share Three months ended Yen Yen June 30 , 2026 12.66 June 30 , 2025 61.41 ( 2 ) Consolidated financial position Total assets Net assets Equity ratio As of June 30 , 2026 As of March 31 , 2026 Millions of yen 859,805 862,470 Millions of yen % 623,535 658,897 68.8 72.8 Reference : Equity As of June 30 , 2026 : 591,424 million yen As of March 31 , 2026 : 627,537 million yen -1-
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- 2 - 2. Cash dividends Annual dividends First quarter Second quarter Thir d quarter Fiscal year-end Annual Yen Yen Yen Yen Yen Fiscal year ended March 31, 2026 – 20.00 – 45.00 65.00 Fiscal year ending March 31, 2027 – Fiscal year ending March 31, 2027 (Forecast) 22.50 – 22.50 45.00 Note: Revisions to the latest for ecasts of cash dividends: None 3. Consolidated financial forecasts for the fiscal year ending March 31, 2027 (April 1, 2026–March 31, 2027) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Fiscal year ending March 31, 2027 314,000 (7.7) 46,000 18.2 46,000 (25.3) 65,000 21.7 253.91 Note: Revisions to the consolidated fina ncial forecasts most recently announced: Yes * Notes (1) Significant changes in the scope of consolidation during the three months under review: None (2) Application of specific accounting for preparing quarterly consolidated financial statements: Yes Note: For details, please refer to “(3) No tes to quarterly consolidated financial statements (Notes on specific accounting for preparing quarterly consolidated financial statements)” of “2. Quarterly consolidated financial statements and significant notes ” on page 9 of the attached material. (3) Changes in accounting policies, changes in accounting estimates, and restatement a. Changes in accounting policies due to revisions to accounting standards and other regulations: None b. Changes in accounting policies due to other reasons: None c. Changes in accounting estimates: None d. Restatement: None (4) Number of issued shares (common shares) a. Total number of issued sh ares at the end of the period (including treasury shares) As of June 30, 2026 257,000,380 shares As of March 31, 2026 257,000,380 shares b. Number of treasury shares at the end of the period As of June 30, 2026 1,001,089 shares As of March 31, 2026 1,000,978 shares c. Average number of shares outstanding during the period Three months ended June 30, 2026 255,999,378 shares Three months ended June 30, 2025 255,912,400 shares * Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit corporation: None * Proper use of financial forecasts, and other special matters The forward-looking statements, including the financial forecasts shown in this document are based on information currently available to our company and on certain assumptions deemed to be reasonable. As such, they do not constitute guarantees by our company of future performance. Actual performance and other results may differ materially from these forecasts due to various factors. For the suppositions that form the assumptions for financial forecasts and cautions concerning the use thereof, please refer to “(3) Explanation of consolidated financial forecasts and other forward-looking statements” of “1. Overview of operating results and others” on page 5 of the attached material to the quarterly financial results report.
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- 3 - (Attached Material) 1. Overview of operating results and others (1) Overview of operating results for the three months ended June 30, 2026 During the three months ended June 30, 2026, net sales was ¥65,114 million, a decrease of ¥17,729 million (−21.4%) year on year. Gross profit was ¥19,603 million, a decrease of ¥5,717 million (−22.6%) year on year. Main factors behind the year-on-year decreases in net sales and gross profit include lower crude oil sales volumes and an increase in LNG procurement costs due to the spot procurement of LNG cargoes from alternative sources following the closure of the Strait of Hormuz, in place of cargoes originally scheduled to be sourced from within the Persian Gulf. Exploration expenses were ¥3,929 million, an increase of ¥3,677 million year on year. Selling, general and administrative expenses were ¥9,472 million, an increase of ¥1,102 million (+13.2%) year on year. As a result, operating profit was ¥6,202 million, a decrease of ¥10,497 million (−62.9%) year on year. Ordinary profit was ¥5,773 million, a decrease of ¥15,037 million (−72.3%) year on year, mainly due to a decrease in share of profit of entities accounted for using the equity method and a reversal from a gain on valuation of derivatives to a loss. Profit before income taxes decreased by ¥15,033 million year on year to ¥5,773 million. Profit attributable to owners of parent decreased by ¥12,474 million year on year to ¥3,240 million. Below is a breakdown of net sales. (i) E&P Business Net sales from the E&P Business came to ¥24,126 million, a decrease of ¥3,183 million (−11.7%) year on year, mainly due to a decrease in crude oil sales volumes. (ii) Infrastructure/Utility Business Net sales from the Infrastructure/Utility Business came to ¥34,799 million, a decrease of ¥4,965 million (−12.5%) year on year, mainly due to decreases in sales volumes of natural gas and electricity. (iii) Other Businesses Net sales from other businesses, such as the contract services (drilling and geological surveys, etc.), sale of oil products, including liquefied petroleum gas (LPG), fuel oil and the like, as well as other subcontracted tasks, came to ¥6,188 million, a decrease of ¥9,580 million (−60.8%) year on year. (2) Overview of financial position as of June 30, 2026 Total assets as of June 30, 2026 decreased by ¥2,664 million from the previous fiscal year-end to ¥859,805 million. Current assets increased by ¥37,262 million from the previous fiscal year-end. This was mainly due to an increase in cash and deposits, despite a decrease in guarantee deposits included in other. Non-current assets decreased by ¥39,926 million from the previous fiscal year-end. This was mainly due to a decrease in investment securities resulting from the decline in market values. Total liabilities increased by ¥32,697 million from the previous fiscal year-end to ¥236,270 million. Current liabilities decreased by ¥11,631 million from the previous fiscal year-end. This was mainly due to a decrease in commercial paper included in other, despite an increase in accounts payable - other. Non- current liabilities increased by ¥44,329 million from the previous fiscal year-end. This was mainly due to an increase in long-term borrowings, despite a decrease in deferred tax liabilities resulting from the decline in the market values of investment securities. Net assets decreased by ¥35,361 million from the previous fiscal year-end to ¥623,535 million. This was mainly due to decreases in valuation difference on available-for-sale securities and deferred gains or losses on hedges.
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- 4 - (3) Explanation of consolidated financial forecasts and other forward-looking statements The consolidated financial forecasts for the fiscal year ending March 31, 2027 have been revised from the forecasts announced on May 13, 2026. Please refer to the “Notice of Financial Forecasts Revision” disclosed on August 6, 2026, the same day of this report.
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- 5 - 2. Quarterly consolidated financial statements and significant notes (1) Quarterly consolidated balance sheet (Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 54,259 96,178 Notes and accounts receivable - trade, and contract assets 40,280 43,175 Securities 3,000 3,000 Merchandise and finished goods 3,880 3,798 Work in process 27 221 Raw materials and supplies 14,073 15,478 Other 40,102 31,032 Allowance for doubtful accounts ሺ265) ሺ264) Total current assets 155,359 192,621 Non-current assets Property, plant and equipment Wells, net 105,025 103,661 Mineral resources, net 173,370 175,592 Other, net 94,994 93,316 Total property, plant and equipment 373,390 372,569 Intangible assets 5,537 5,551 Investments and other assets Investment securities 274,024 240,866 Other 54,197 48,235 Allowance for doubtful accounts ሺ38) ሺ38) Total investments and other assets 328,183 289,063 Total non-current assets 707,111 667,184 Total assets 862,470 859,805
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- 6 - (Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 3,398 2,283 Accounts payable - other 51,525 54,994 Provisions 484 213 Other 33,883 20,168 Total current liabilities 89,291 77,660 Non-current liabilities Long-term borrowings – 57,756 Deferred tax liabilities 60,292 47,015 Retirement benefit liability 3,315 3,338 Asset retirement obligations 40,139 38,015 Provisions 345 518 Other 10,187 11,965 Total non-current liabilities 114,280 158,609 Total liabilities 203,572 236,270 Net assets Shareholders’ equity Share capital 14,288 14,288 Retained earnings 486,089 477,774 Treasury shares (925) (925) Total shareholders’ equity 499,452 491,137 Accumulated other comprehensive income Valuation difference on available-for-sale securities 94,349 69,222 Deferred gains or losses on hedges 19,666 10,941 Foreign currency translation adjustment 11,418 17,566 Remeasurements of defined benefit plans 2,650 2,556 Total accumulated other comprehensive income 128,084 100,286 Non-controlling interests 31,359 32,111 Total net assets 658,897 623,535 Total liabilities and net assets 862,470 859,805
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- 7 - (2) Quarterly consolidated statement of inco me and Quarterly consolidated statement of comprehensive income Quarterly consolidated statement of income (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Net sales 82,844 65,114 Cost of sales 57,522 45,510 Gross profit 25,321 19,603 Exploration expenses 251 3,929 Selling, general and administrative expenses 8,369 9,472 Operating profit 16,699 6,202 Non-operating income Interest income 533 315 Dividend income 111 146 Share of profit of entities accounted for using equity method 1,766 307 Foreign exchange gains 318 921 Gain on valuation of derivatives 1,783 – Other 489 415 Total non-operating income 5,002 2,107 Non-operating expenses Interest expenses 410 549 Loss on valuation of derivatives 37 1,302 Loss on investments in silent partnerships 285 224 Other 157 459 Total non-operating expenses 892 2,536 Ordinary profit 20,810 5,773 Extraordinary income Gain on sale of non-current assets 0 0 Total extraordinary income 0 0 Extraordinary losses Loss on retirement of non-current assets 3 0 Total extraordinary losses 3 0 Profit before income taxes 20,807 5,773 Income taxes 5,067 1,722 Profit 15,740 4,050 Profit attributable to non-controlling interests 25 810 Profit attributable to owners of parent 15,714 3,240
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- 8 - Quarterly consolidated statement of comprehensive income (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Profit 15,740 4,050 Other comprehensive income Valuation difference on available-for-sale securities 302 (25,129) Deferred gains or losses on hedges (719) (9,247) Foreign currency translation adjustment (12,070) 6,117 Remeasurements of defined benefit plans, net of tax (61) (93) Share of other comprehensive income of entities accounted for using equity method 436 548 Total other comprehensive income (12,112) (27,804) Comprehensive income 3,627 (23,753) Comprehensive income attributable to: Owners of parent 3,602 (24,557) Non-controlling interests 25 803
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- 9 - (3) Notes to quarterly consolidated financial statements (Notes on specific accounting for preparing quarterly consolidated financial statements) Deferral accounting of cost variance Cost variance arising from seasonal changes in production level is deferred as current assets (other) because such variance is expected to be almost completely eliminated by the end of the cost accounting period. Calculation of taxes For the taxes, JAPEX and some of its consolidated subsidiaries compute first by reasonably estimating the effective tax rate after applying tax effect accounting against profit before income taxes for the fiscal year including the three months ended June 30, 2026, and next by multiplying the quarterly profit before income taxes by such estimated effective tax rate. However, in cases where the calculation of taxes using such estimated effective tax rate yields a result that is not reasonable to a significant extent, the effective statutory tax rate is used. Note that income taxes - deferred is included in income taxes. .
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- 10 - (Notes on segment information, etc.) I Three months ended June 30, 2025 Information regarding net sales and profit (loss) by reportable segment (Millions of yen) Reportable segment Others Total Adjustment (Note) 1 Amount on the quarterly consolidated statement of income (Note) 2 Japan North America Europe Middle East Total Net sales Net sales to external customers 59,441 16,303 6,249 849 82,844 – 82,844 – 82,844 Intersegment sales or transfers – – – – – – – – – Total 59,441 16,303 6,249 849 82,844 – 82,844 – 82,844 Segment profit 9,420 6,864 3,104 621 20,011 – 20,011 (3,312) 16,699 Notes: 1. The segment profit adjustment of ¥(3,312) million includes intersegment eliminations of ¥0 million and corporate expenses that are not allocated to any reportable segments of ¥(3,312) million. Corporate expenses are mainly general and administrative expenses and experimentation and research expenses, all of which are not attributable to the reportable segments. 2. Segment profit was adjusted to operating profit in the quarterly consolidated statement of income. II Three months ended June 30, 2026 Information regarding net sales and profit (loss) by reportable segment (Millions of yen) Reportable segment Others Total Adjustment (Note) 1 Amount on the quarterly consolidated statement of income (Note) 2 Japan North America Europe Middle East Total Net sales Net sales to external customers 46,655 15,633 2,794 31 65,114 – 65,114 – 65,114 Intersegment sales or transfers – – – – – – – – – Total 46,655 15,633 2,794 31 65,114 – 65,114 – 65,114 Segment profit (loss) 2,329 6,548 1,340 (109) 10,109 – 10,109 (3,906) 6,202 Notes: 1. The segment profit (loss) adjustment of ¥(3,906) million includes intersegment eliminations of ¥0 million and corporate expenses that are not allocated to any reportable segments of ¥(3,907) million. Corporate expenses are mainly general and administrative expenses and experimentation and research expenses, all of which are not attributable to the reportable segments. 2. Segment profit (loss) was adjusted to operating pr ofit in the quarterly consolidated statement of income.
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- 11 - (Notes on significant changes in the amount of shareholders’ equity) Not applicable. (Notes on premise of going concern) Not applicable. (Notes to quarterly consolidated statement of cash flows) Quarterly consolidated statement of cash flows for the three months ended June 30, 2026 is not prepared. Depreciation (including amortization related to intangible assets, etc. excluding goodwill) and amortization of goodwill for the three months ended June 30, 2025 and 2026 are as follows. (Millions of yen) Three months ended June 30, 2025 (April 1, 2025–June 30, 2025) Three months ended June 30, 2026 (April 1, 2026–June 30, 2026) Depreciation 12,121 8,647 Amortization of goodwill – 30 (Notes on significant subsequent events) Sale of investment securities At a meeting held on August 6, 2026, the Board of Directors of JAPEX resolved to sell a portion of the investment securities held by JAPEX. As a result, JAPEX expects to record a gain on sale of investment securities as extraordinary income for the fiscal year ending March 31, 2027. 1. Reason for sale of investment securities To use the proceeds as a source of funds for growth investments 2. Details of sale of investment securities (1) Type of asset to be sold One listed security held by JAPEX (2) Gain on sale of investment securities Approximately 6 billion yen Note: The gain on sale of investment securities is an estimated amount calculated based on the current market price of the relevant security and may fluctuate depending on future circumstances. Acquisition of U.S. Tight Oil and Gas Assets Through the Acquisition of the Fundare Companies At a meeting held on August 6, 2026, the Board of Directors of JAPEX resolved to acquire all equity interests in Fundare Resources Operating Company, LLC; Fundare Redtail, LLC; Rangeview Resources Operating Company, LLC; and Rangeview Green River, LLC (collectively, the “Fundare Companies”), which hold tight oil and gas assets in the United States, through Peoria Resources Acquisition Company, LLC, a subsidiary of Peoria Resources, LLC, a consolidated subsidiary (second-tier subsidiary) of JAPEX. The acquisition is scheduled to be completed in the third quarter of the fiscal year ending March 31, 2027, and the acquisition price is expected to be approximately US$320 million.
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- 12 - 3. Supplemental information Status of production and sales (1) Production Three months ended June 30, 2025 (April 1, 2025– June 30, 2025) Three months ended June 30, 2026 (April 1, 2026– June 30, 2026) (Reference) Fiscal year ended March 31, 2026 (April 1, 2025– March 31, 2026) E&P Business Domestic crude oil (thousand bbl) 351 350 1,428 Overseas crude oil (thousand bbl) 2,694 1,888 9,313 Domestic natural gas (million cf) 3,781 3,656 14,969 Overseas natural gas (million cf) 1,655 2,487 5,195 Infrastructure/ Utility Business Electricity (million kWh) 610 324 2,852
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- 13 - (2) Sales Three months ended June 30, 2025 (April 1, 2025– June 30, 2025) Three months ended June 30, 2026 (April 1, 2026– June 30, 2026) (Reference) Fiscal year ended March 31, 2026 (April 1, 2025– March 31, 2026) Sales volume Net sales (Millions of yen) Sales volume Net sales (Millions of yen) Sales volume Net sales (Millions of yen) E&P Business Crude oil (Japan) (thousand bbl) 343 3,906 323 5,666 1,542 17,114 Crude oil (overseas) (thousand bbl) 2,049 21,504 1,856 17,788 9,109 87,852 Natural gas (overseas) (million cf) 1,695 1,898 2,501 670 5,233 4,289 Subtotal 27,309 24,126 109,257 Infrastructure/ Utility Business Natural gas (Japan) (million cf) 7,104 17,079 6,658 14,964 32,770 73,345 LNG (t) 35,693 4,155 38, 183 4,912 231,386 23,112 Electricity (million kWh) 784 11,918 473 8,512 3,361 48,460 Biomass fuel (t) 184,790 5,310 157,665 5,192 732,870 21,625 Other 1,300 1,218 5,804 Subtotal 39,765 34,799 172,349 Other Businesses Contract services 1,046 4,097 10,807 Oil products/ merchandise 14,270 1,706 45,441 Other 452 384 2,481 Subtotal 15,769 6,188 58,730 Total 82,844 65,114 340,336 Notes: 1. “Crude oil (Japan)” and “Crude oil (overseas)” of the E&P Business include crude oil that the JAPEX Group produced in oil fields and the crude oil purchased from other companies. 2. “Natural gas (Japan)” of the Infrastructure/Utility Business refers to gas supplied in Japan via pipeline and comprises the total of natural gas produced in Japan and regasified LNG. Natural gas (Japan) is classified under the Infrastructure/Utility Business, since both natural gas produced in Japan and LNG vaporized gas are sold together by our company’s supply network, which consists of the natural gas fields in Japan and the LNG terminals that vaporize gas linked by pipeline networks. 3. “Other” of the Infrastructure/Utilit y Business includes commissioned transportation of natural gas and contracted vaporization of LNG used for power plant fuel, etc. 4. Under the Other Businesses, “Oil pr oducts/merchandise” includes liquefied petroleum gas (LPG), fuel oil, gas oil and kerosene, and “Other” includes other subcontracted tasks.