Japan Petroleum Exploration (1662): FY2025 Results Summary — Profit Falls on Lower Oil Prices While U.S. Tight Oil Drives the Next-Year Outlook

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: This site classifies the fiscal year ended March 31, 2026 as FY2025; JAPEX labels the same period “FY3/26” in its financial tables (and “FY2025” in its management-plan slides), and all figures and labels below follow the company’s own presentation. For the fiscal year ended March 31, 2026, Japan Petroleum Exploration Co., Ltd. (JAPEX) posted net sales of 340,336 million yen, down (48,745) million yen or (13)% year on year, and operating profit of 38,915 million yen, down (23,097) million yen or (37)%. Ordinary profit was 61,556 million yen, (2,664) million yen or (4)% lower, while profit attributable to owners of parent was 53,427 million yen, down (27,725) million yen or (34)%. For the fiscal year ending March 31, 2027 the company forecasts operating profit of 41,000 million yen and profit attributable to owners of parent of 60,000 million yen.

Consolidated Results (Full-Year Actual)

JAPEX attributes the year-on-year movement in operating profit to an increase in crude oil and natural gas sales volume in the U.S. (positive) offset by the impact of the Strait of Hormuz blockade (negative). Ordinary profit was held back by the absence of 8.2 billion yen in foreign exchange gains and 7.6 billion yen in derivative gains recorded in the previous year. Profit attributable to owners of parent included a gain on the sale of the Hokkaido gas business, which the company shows as an extraordinary gain of 31.0 billion yen with an impact on net income of 22.0 billion yen. On a reference basis, profit attributable to owners of parent used to calculate the consolidated dividend payout ratio of 30% was 53.4 billion yen against 47.6 billion yen a year earlier, an increase of 5.8 billion yen.

Item (Million Yen)	FY3/25(a)	FY3/26(a)	Change
Net sales	389,082	340,336	(48,745) / (13)%
Gross profit	99,157	76,741	(22,416) / (23)%
Operating profit	62,012	38,915	(23,097) / (37)%
Ordinary profit	64,221	61,556	(2,664) / (4)%
Profit attributable to owners of parent	81,153	53,427	(27,725) / (34)%

Market assumptions moved against the company during the year. WTI averaged USD 64.90/bbl versus USD 75.83/bbl, a change of (10.93); the crude oil price (CIF) averaged USD 71.89/bbl versus USD 82.66/bbl, a change of (10.77); and the exchange rate averaged 149.85 JPY/USD versus 152.83 JPY/USD, a change of (2.98).

Segment Results

E&P Business net sales were 109,257 million yen, down (19,755) million yen or (15)%, on lower sales volume and lower sales prices, with overseas volume also reduced by the divestment of the Seagull project in the U.K. North Sea. I/U Business net sales were 172,349 million yen, down (16,829) million yen or (9)%, with LNG sales falling to 23,112 million yen from 43,990 million yen as volume dropped to 231 thousand tons from 422 thousand tons, partly offset by higher biomass fuel sales within Others, which rose to 27,430 million yen from 16,254 million yen (+11,175 million yen, +69%). On the company’s internal management basis, E&P-Overseas operating profit declined 9.4 billion yen and E&P-Japan declined 8.7 billion yen, while I/U fell 3.2 billion yen on lower LNG sales volume and Others deteriorated 1.6 billion yen on higher general and administrative expenses.

Business	Metric	FY3/25(a)	FY3/26(a)
E&P Business	Net sales (Million Yen)	129,012	109,257
I/U Business	Net sales (Million Yen)	189,178	172,349
Other Businesses	Net sales (Million Yen)	70,891	58,730
Total	Net sales (Million Yen)	389,082	340,336
E&P-Overseas	Operating profit (Billion Yen)	29.4	19.9
E&P-Japan	Operating profit (Billion Yen)	22.8	14.0
I/U	Operating profit (Billion Yen)	19.6	16.4
Others	Operating profit (Billion Yen)	(9.9)	(11.6)
OP total	Operating profit (Billion Yen)	62.0	38.9

JAPEX notes that the operating profit breakdown by business unit is prepared for the Group’s internal management. On the reported geographic segment basis, operating profit was 30,869 million yen in Japan, 17,082 million yen in North America, 1,626 million yen in Europe and 2,968 million yen in the Middle East, with adjustments and eliminations of (13,632) million yen.

Full-Year Forecast (FY3/27)

For the year ending March 31, 2027, JAPEX guides to net sales of 303,000 million yen, down (37,336) million yen or (11)%, but gross profit of 87,000 million yen, up +10,258 million yen or +13%, and operating profit of 41,000 million yen, up +2,084 million yen or +5%. Ordinary profit is guided at 45,000 million yen, down (16,556) million yen or (27)%, reflecting the absence of foreign exchange gains, while profit attributable to owners of parent is guided at 60,000 million yen, up +6,572 million yen or +12%, helped by a gain on transfer of business of 31.0 billion yen. Assumptions are WTI of USD 73.00/bbl (+8.10), crude oil price (CIF) of USD 74.91/bbl (+3.02) and an exchange rate of 152.90 JPY/USD (+3.05).

Item (Million Yen)	FY3/26(a)	FY3/27(f)	Change
Net sales	340,336	303,000	(37,336) / (11)%
Gross profit	76,741	87,000	+10,258 / +13%
Operating profit	38,915	41,000	+2,084 / +5%
Ordinary profit	61,556	45,000	(16,556) / (27)%
Profit attributable to owners of parent	53,427	60,000	+6,572 / +12%

By business unit, E&P-Overseas operating profit is forecast to rise 18.2 billion yen from 19.9 billion yen to 38.2 billion yen on higher tight oil sales volume in the U.S., partly offset by the assumed full-year suspension of production and shipments at the Garraf oil field in Iraq. E&P-Japan is forecast at 13.8 billion yen from 14.0 billion yen, I/U is forecast to fall 15.2 billion yen from 16.4 billion yen to 1.2 billion yen on higher LNG procurement costs from alternative procurement, and Others is forecast at (12.2) billion yen from (11.6) billion yen.

JAPEX quantifies the effect of escalating Middle East tensions on the forecast as a total negative impact of 7.2 billion yen (E&P-Japan: +3.5 billion yen, E&P-Overseas: +1.4 billion yen, I/U: -12.1 billion yen). Its assumptions include a Q1 oil price of USD 90/bbl and an exchange rate of 158 yen/USD with stabilization from Q2 onwards, continued high JKM and JLC prices in the first half, and no foreseeable timing for resuming operations at the Garraf oil field, with production and shipments suspended for the full year.

Shareholder Returns

The company states a consolidated dividend payout ratio of 30% as the basis for calculating returns. For FY3/26 the dividend per share is an interim dividend of 20 yen and a year-end dividend of 45 yen. For FY3/27 the dividend per share forecast is an interim dividend of 22.50 yen and a year-end dividend of 22.50 yen. Shareholder returns in FY2025 amounted to 12.8 billion yen, comprising a FY2024-end dividend of 7.7 billion yen and an interim dividend of 5.1 billion yen. Against a five-year assumed allocation of 25.0 billion yen for shareholder returns covering FY2022 through FY2026, cumulative actuals stand at 80.0 billion yen.

Item	FY3/26	FY3/27 (Forecast)
Interim dividend per share	20 yen	22.50 yen
Year-end dividend per share	45 yen	22.50 yen
Profit attributable to owners of parent, basis for calculating the consolidated dividend payout ratio of 30% (Billion Yen)	53.4	38.0

Medium-Term Plan / Topics

Against the management plan’s FY2026 quantitative targets of business profit of 30.0 Billion Yen, ROE of 5% and an E&P to non-E&P profit composition of 6:4 under assumptions of a JCC oil price of 50 USD/bbl and an exchange rate of 110 yen/USD, the FY2025 actuals were business profit of 42.3 Billion Yen, ROE of 9.2% and a profit composition of 7:3, under an actual JCC oil price of 71.89 USD/bbl and an exchange rate of 149.85 yen/USD. On fund allocation, cumulative growth investments reached 479.0 Billion Yen against an assumed allocation of 275.0 Billion Yen, with 200.0 billion yen invested in FY2025.

Operationally, JAPEX completed the acquisition of tight oil and gas assets from Verdad Resources in the U.S. and took over as operator in February 2026, commenced production at the Verdande oil and gas field in Norway in December, acquired interests in the Verdande and Alve Nord fields through an asset swap in Norway in July, divested from the Kangean Block and newly participated in gas field development in the Gebang Block in Indonesia in May, completed its exit from the U.K. through the sale of shares in JAPEX UK E&P LIMITED in July, and decided in December to transfer the gas manufacturing, sales and gas pipeline business in Hokkaido. In the carbon neutral field, it obtained permission for exploratory drilling for the Tomakomai area CCS project in September and commenced drilling of the first exploratory well in January.

For FY2026 the company expects U.S. after-tax profit to grow 2.3-fold from 13.5 billion yen in FY2025 to 31.0 billion yen, with U.S. production doubling to 35,000 boed from 17,000 boed as Verdad contributes 25,000 boed while existing U.S. assets decline to 10,000 boed. Planned growth investment is concentrated overseas, with 28.0 billion yen for Verdad development in the U.S., 12.0 billion yen in Norway and 9.0 billion yen for the Gebang Block in Indonesia. Proved reserves at the end of FY2025 were 225 MillionBOE (58 MillionBOE Japan, 197 MillionBOE Overseas) and production volume in FY2025 was 39,000 BOED (11,000 BOED Japan, 28,000 BOED overseas).

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.