[Explanatory Material] Financial Results for the Three Months Ended June 30, 2021 August 10, 2021 Japan Petroleum Exploration Co., Ltd. Note: This material is an English translation of the Japanese-language original Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. Contents Ⅰ. Financial Highlights Ⅱ. Financial Results for the Three Months Ended June 30, 2021 Ⅲ. Revised Financial Forecasts for the fiscal year ending March 31, 2022 Note) This material also serves as the presentation material for the financial results briefing for the institutional investors and analysts to be held on August 11, 2021. Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 2 Ⅰ. Financial Highlights Ⅱ. Financial Results for the Three Months Ended June 30, 2021 Ⅲ. Revised Financial Forecasts for the fiscal year ending March 31, 2022 Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 3 Financial Highlights ■ 1Q FY3/22 Results （Year-on-Year） (Billion Yen) FY3/21 1Q (a) FY3/22 1Q (a) Change Operating profit (5.2) 3.4 +8.6 - Ordinary profit (9.5) 10.4 +20.0 - Profit attributable to owners of parent (9.5) 7.1 +16.6 - • E&P business： Increase in profit of domestic sales and diluted bitumen sales due to a rise of crude oil prices • I/U Business： Increase in profit due to an increase of the sales volume of electricity by operating for the full reporting period in Fukushima Natural Gas Power Plant* and marginal gain on LNG procurement • Non-operating income： Increase in profit due to the recognition of foreign exchange gains and an increase in share of profit of entities accounted for using equity method ■ FY3/22 Forecast Revision （vs. May 13 Forecasts） (Billion Yen) May 13, 2021 (f) Aug 10, 2021 (f) Change Operating profit 8.2 11.8 +3.6 +45% Ordinary profit 15.7 26.1 ＋10.4 +66% Profit attributable to owners of parent (28.3) (114.0) (85.7) - • E&P business： Improvement in profit of domestic sales due to a rise in oil price assumption • I/U Business： Decrease in marginal gain on LNG procurement • Non-operating income： Increase in foreign exchange gains and share of profit of entities accounted for using equity method • Extraordinary losses： Recognition of losses on sale of subsidiary shares due to the exit from the oil sands project in Canada *Operated by Fukushima Gas Power Co., Ltd., which is invested by 5 companies as partners, including JAPEX Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 4 Impacts of the decision on Canada 2 projects Impact on financial results (recording of extraordinary losses) Shale gas project in Canada - Sale of interest Oil sand project in Canada - Sale of subsidiary shares Subsidiary: JAPEX Montney Ltd.（JML） Subsidiary: Japan Canada Oil Sands Limited（JACOS） Accounts period (Billion yen) Accounts period (Billion yen) Approx. Loss on sale of Approx. Loss on sale of interest 2Q FY3/22 Consolidated * 2Q FY3/22 Consolidated 43.7 subsidiary shares 90.0 Provision for allowance Non- Loss on valuation of Non- Approx. for doubtful accounts of FY3/21 17.1 2Q FY3/22 consolidated subsidiary shares consolidated 80.0 subsidiaries Provision for loss on Non- Provision for loss on Non- Approx. FY3/21 22.8 2Q FY3/22 guarantees consolidated guarantees consolidated 10.0 *Approx. 497 million Canadian dollars, valued at the exchange rate as of June 30, 2021 ■ Impact on Consolidated B/S and Reserves/Production Volume ⁃ At the end of FY2022, the following balances related to consolidated subsidiaries JML and JACOS are expected to decrease, and the following effects on reserves and production are also expected to occur. Reference data: Ending balances or volumes as of March 2021 JML JACOS JML JACOS PP&E 54.2 bn. 121.2 bn. Net Proved Reserves 70 MMBOE 83 MMBOE Long-term borrowings 55.7 bn. 55.6 bn. Net Production Volume 9 MBOED 17 MBOED incl. current portion BOE: Barrels of oil equivalent / BOED: Barrels of oil equivalent per day （Reference Disclosures） • “Ending our Promotion of the Oil Sands Project in Canada, the Change in Subsidiary, the Recognition of Extraordinary Losses, and the Voluntary Return of Executive Compensation”, on July 29, 2021 • “Sale of Shale Gas Project Interest in Canada and Recording of Extraordinary Loss Related to the Project” on May 13, 2021 • “Notice Regarding Recording of Provision of Allowance for Doubtful Accounts in Extraordinary Loss in Non-consolidated Financial Results”, on March 10, 2021 Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 5 Ⅰ. Financial Highlights Ⅱ. Financial Results for the Three Months Ended June 30, 2021 Ⅲ. Revised Financial Forecasts for the fiscal year ending March 31, 2022 Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 6 E&P Business (Year-on-Year) 1Q FY3/21 (a) 1Q FY3/22 (a) Change Net sales：Million Yen Sales volume Net sales Sales volume Net sales Sales volume Net sales E&P Business - - 22,904 - 16,796 - - (6,108) (27%) Breakdown Crude oil 687 15,936 114 5,556 (572) (83%) (10,380) (65%) Crude oil - Japan 60 1,800 85 3,927 [1] +25 +42% +2,127 +118% Thousand KL Crude oil - Overseas*1 168 4,393 22 1,312 [2] (146) (87%) (3,081) (70%) Purchased crude oil 458 9,742 6 316 [3] (451) (99%) (9,426) (97%) *2 Diluted bitumen 410 6,258 351 10,058 (59) (14%) [4] +3,800 +61% Natural Gas - Overseas*3 Million M3 111 709 128 1,181 +16 +15% [5] +471 +66% Main factors for change [1] Increase in sales price and volume [2] Decrease in sales volume of crude oil from Garraf Oil Field in Iraq [3] Decrease in sales volume of purchased crude oil from SODECO due to application of the “Accounting Standard for Revenue Recognition [4] Increase in sales price of diluted bitumen from the Hangingstone Lease in Canada [5] Increase in sales price of shale gas in Canada *1 Include the amounts of 3 overseas subsidiaries (Japex Garraf Ltd., JAPEX Montney Ltd. and Japex (U.S.) Corp.) *2 Royalty is excluded in the net sales and price of diluted bitumen *3 Include the volume of 2 overseas subsidiaries (JAPEX Montney Ltd., and Japex (U.S.) Corp.) Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 7 I/U Business Sales (Year-on-Year) 1Q FY3/21 (a) 1Q FY3/22 (a) Change Net sales：Million Yen Sales volume Net sales Sales volume Net sales Sales volume Net sales Infrastructure & Utility Business - - 20,997 - 23,009 - - +2,012 +10% Breakdown Natural Gas - Japan 248 12,798 233 10,709 [1] (15) (6%) (2,088) (16%) Million M3 - Produced in Japan 109 - 123 - +13 +13% - - Thousand LNG △0 (2%) +800 +22% Ton 53 3,597 52 4,397 Electricity Million kWh 448 3,493 765 7,163 [2] +316 +71% +3,670 +105% Other* - - 1,108 - 739 - - (369) (33%) Main factors for change [1] Decrease in sales volume and sales price [2] Increase in sales volume and price of electricity due to the Fukushima Natural Gas Power Plant operating for the full reporting period * Including net sales from commissioned regasification of LNG Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 8 FY3/22 Results (Year-on-Year) Million Yen 1Q FY3/21 (a) 1Q FY3/22 (a) Change Net sales 51,018 50,083 (935) (2%) Gross profit 2,399 11,179 +8,779 +366% Operating profit (5,250) 3,400 +8,650 - Ordinary profit (9,575) 10,491 +20,066 - Profit attributable to owners of parent (9,536) 7,106 +16,642 - Oil Price, Exchange Rate and Sales Price 1Q FY3/21 (a) 1Q FY3/22 (a) Change WTI USD/bbl 45.10 58.10 +13.00 Crude oil price (CIF) USD/bbl 44.41 64.25 +19.84 Exchange rate JPY/USD 108.04 108.43 +0.39 ＊1 JACOS Diluted bitumen USD/bbl 22.30 40.99 +18.69 *2 JML Natural gas CAD/mcf 2.36 2.96 +0.60 *1 Diluted bitumen sales price of Japan Canada Oil Sands Ltd. (Excl. Royalty) *2 Natural gas sales price of JAPEX Montney Ltd. (Excl. Royalty) Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 9 Operating Profit Result (Year-on-Year) (Billion Yen) E&P Business (5.2) OP total Overseas : + 3.3 bn. (4.3 bn.) → (1.0 bn.) 3.4 • Improvement in diluted bitumen sales due to a rise of crude oil prices (4.3) Domestic : + 1.5 bn. 2.3 bn. → 3.9 bn. E&P-Overseas • Increase in profit due to a rise of crude oil prices (1.0) 2.3 I/U Business E&P-Japan 3.9 +3.8 bn. (1.2 bn.) → 2.5 bn. • Increase in sales volume of electricity due to the Fukushima Natural Gas Power Plant operating for the full (1.2) I/U reporting period 2.5 • Increase in marginal gain on LNG procurement (2.0) Others (2.0) Others * （2.0 bn.) → (2.0 bn.） (8.0) (6.0) (4.0) (2.0) 0.0 2.0 4.0 6.0 ∗ Operating income (contracting, oil products and commodities, and others) not belonging to the above business units, less headquarters 1Q FY3/21 (a) 1Q FY3/22 (a) administrative expenses * The amounts in the operating income breakdown by business segment are the figures for the Group’s internal management Copyright © 2021 Japan Petroleum Exploration Co., Ltd. All rights reserved. 10 Net Income Result (Year-on-Year) (Billion Yen) JACOS +2.6 bn. JML +0.4 bn. Japex Garraf +0.2 bn. SODECO +1.3 bn. JML +6.1 bn.