Inpex : Financial Results for for the Six Months ended September 30, 2019 Presentation Material (Appendix) (PDF 1.57MB)

Financial results for the six months ended September 30, 2019

Appendix

INPEX CORPORATION

November 7, 2019

Supplementary material concerning change in accounting period

(Closing date of accounting period)

• INPEX's accounting period is scheduled to change to the January to December period from the April to March period
• The fiscal year ending December 31, 2019 (FY2019) is scheduled to be a transitional, nine‐month accounting period from April 1, 2019 to December 31, 2019.
• "FY2018 adjusted actual figures" are reference data based on adjusted figures for the nine‐month period (April 1 ‐ December 31, 2018) for the Company and subsidiaries with provisional settlements of accounts, and the twelve‐month period (January 1 ‐ December 31, 2018) for subsidiaries with a December 31 fiscal year‐end. Periods covered in the financial reporting figures (figures stated in the earnings reports, etc.) and adjusted actual figures(Note 1) are as follows.
• Financial reporting figures (figures stated in the earnings reports, etc.) >

		2018				2019
	Jan‐Mar	Apr‐Jun	Jul‐Sep	Oct‐Dec	Jan‐Mar	Apr‐Jun	Jul‐Sep	Oct‐Dec
INPEX and subsidiaries with provisional			FY2019/03				FY2019/12
settlements of accounts(Note 2)		(FY2018)			(FY2019)
Subsidiaries with a December 31 fiscal year‐
end(Note 3)

< Adjusted actual figures (Note 2) >

2018

2019

Jan‐Mar

Apr‐Jun

Jul‐Sep

Oct‐Dec

Jan‐Mar

Apr‐Jun

Jul‐Sep

Oct‐Dec

INPEX and subsidiaries with provisional

FY2018

FY2019/12

settlements of accounts(Note 2)

Adjusted actual

(FY2019)

Subsidiaries with a December 31 fiscal year‐

end(Note 2)

Note 1

Adjusted actual figures are unaudited figures for reference purposes only

Note 2

INPEX, major domestic subsidiaries and overseas subsidiaries with provisional settlements of accounts. Subsidiaries with a December 31 fiscal year‐end that provisionally

settled their accounts on March 31 due to the relatively large impact of their performance on the Company's consolidated financial accounts.

Note 3

Subsidiaries adopting an accounting period from January to December. The accounting periods of subsidiaries with a December 31 fiscal year‐end will remain unchanged

(January 1 ‐ December 31, 2019 will be settled to FY2019/12 period) while FY2019 is scheduled to be a nine‐month accounting period. See slide 2 "Subsidiaries and

Affiliates" of the appendix for examples of subsidiaries with provisional settlements of accounts and subsidiaries with a December 31 fiscal year‐end.

1

Subsidiaries and Affiliates

64 consolidated subsidiaries

Major subsidiaries	Country/region	Ownership	Stage	Accounting term
Japan Oil Development Co., Ltd.	UAE	100%	Production	March (provisional
settlement of account)
JODCO Onshore Limited	UAE	51 %	Production	December
JODCO Lower Zakum Limited	UAE	100%	Production	December
INPEX Sahul, Ltd.	Timor‐Leste	100%	Production	December
INPEX Ichthys Pty Ltd	Australia	100%	Production	March (provisional
settlement of account)
INPEX Southwest Caspian Sea, Ltd.	Azerbaijan	51%	Production	March (provisional
settlement of account)
INPEX North Caspian Sea, Ltd.	Kazakhstan	51%	Production	March (provisional
settlement of account)
INPEX Oil & Gas Australia Pty Ltd	Australia	100%	Production	December

21 equity method affiliates

Major affiliates	Country/region	Ownership	Stage	Accounting term
MI Berau B.V.	Indonesia	44%	Production	December
Angola Block 14 B.V.	Angola	49.99%	Production	December
Ichthys LNG Pty Ltd	Australia	66.245%	Production	March (provisional
settlement of account)

2

Segment information

For the six months ended September 30, 2019 (April 1, 2019 through September 30, 2019)

(Millions of yen)

			Reportable segments
	Japan	Asia &	Eurasia	Middle East			Adjustments *1	Consolidated *2
	(Europe &	Americas	Total
		Oceania	NIS)	& Africa
Net sales	62,828	149,059	43,736	314,761	6,545	576,930	(1,661)	575,269
Segment income	12,158	72,657	10,846	200,686	(6,888)	289,461	(8,745)	280,715
(loss)

Note:

1. Adjustments of segment income of ¥(8,745) million are corporate expenses. Corporate expenses are mainly amortization of goodwill that are not allocated to a reportable segment and general administrative expenses.

2. Segment income is reconciled with operating income on the consolidated statement of income.

3

LPG Sales

	Apr. ‐ Sep. '18	Apr. ‐ Sep. '19	Change	%Change
Net sales (Billions of yen)	0.4	1.5	1.1	263.2%
Sales volume (thousand bbl)	76	151	75	99.2%
Average unit price of overseas	50.40	44.86	(5.54)	(11.0%)
production ($/bbl)
Average unit price of domestic	74.76	67.89	(6.87)	(9.2%)
production (¥/kg)
Average exchange rate (¥/$)	108.53	109.15	0.62yen	0.6%
depreciation	depreciation
Sales volume by region	Apr. ‐ Sep. '18	Apr. ‐ Sep. '19	Change	%Change
(thousand bbl)
Japan	2	1	(0)	(25.8%)
(0.1 thousand ton)	(0.1 thousand ton)	(‐0.0 thousand ton)
Asia & Oceania	74	150	76	101.8%
Eurasia (Europe & NIS)	‐	‐	‐	‐
Middle East & Africa	‐	‐	‐	‐
Americas	‐	‐	‐	‐
Total	76	151	75	99.2%

4

Other Income/Expenses

	(Billions of Yen)	Apr. ‐ Sep. '18	Apr. ‐ Sep. '19	Change	%Change
	Other income	33.6	12.0	(21.5)	(64.1%)
	Interest income	4.1	1.7	(2.3)	(56.7%)
	Dividend income	1.4	2.2	0.8	58.7%
	Equity in earnings of affiliates	10.5	4.2	(6.2)	(59.6%)
	Compensation income	7.4	‐	(7.4)	‐
	Foreign exchange gain	5.2	‐	(5.2)	‐
	Other	4.7	3.7	(0.9)	(20.9%)
	Other expenses	13.0	21.6	8.5	65.8%
	Interest expense	4.7	14.3	9.5	200.1%
	Provision for allowance for recoverable	1.6	1.9	0.2	12.9%
	accounts under production sharing
	Foreign exchange loss	‐	0.6	0.6	‐
	Other	6.5	4.7	(1.8)	(27.9%)

5

EBIDAX

(Millions of yen)	Apr.-Sep. '18	Apr. -Sep. '19	Change	Note
Net income attributable to owners of parent	34,034	69,487	35,453	P/L
Net income (loss) attributable to non‐controlling	7,010	1,911	(5,099)	P/L
interests
Depreciation equivalent amount	55,097	105,770	50,673
Depreciation and amortization	41,710	83,047	41,337	C/F Depreciation under concession agreements and G&A
Amortization of goodwill	3,380	3,380	‐	C/F
Recovery of recoverable accounts under	10,007	19,343	9,336	C/F Depreciation under PS contracts
production sharing (capital expenditures)
Exploration cost equivalent amount	2,697	13,551	10,854
Exploration expenses	1,007	11,642	10,635	P/L Exploration expense under concession agreements
Provision for allowance for recoverable	1,690	1,909	219	P/L Exploration expense under PS contracts
accounts under production sharing
Material non‐cash items	855	496	(359)
Income taxes‐deferred	5,210	(1,156)	(6,366)	P/L
Foreign exchange loss (gain)	(4,355)	1,652	6,007	C/F
Net interest expense after tax	479	9,070	8,591	P/L After‐tax interest expense minus interest income
EBIDAX	100,172	200,285	100,113

6

Analysis of Recoverable Accounts

under Production Sharing

(Millions of yen)		Apr. -	Apr. ‐	Note
	Sep. '18	Sep. '19
Balance at beginning of the period	589,098	568,059
Add:	Exploration costs	1,613	1,950	Mainly Iraq Block10
	Development costs	11,590	15,893	Mainly ACG, Kashagan and Con Son
	Operating expenses	7,719	9,138	Mainly ACG and Kashagan
	Other	5,647	5,396
Less:	Cost recovery (CAPEX)	10,007	19,343	Mainly ACG and Kashagan
	Cost recovery (non‐CAPEX)	20,301	7,853	Mainly ACG and Kashagan
	Other	‐	2,177
Balance at end of the period	585,361	571,063	Mainly Kashagan
Less allowance for recoverable accounts under	83,345	69,765
production sharing at end of the period

7

Oil Price and Foreign Exchange Sensitivities

• Sensitivities of crude oil price and foreign exchange fluctuation on consolidated net income attributable to owners of parent for the year ending
  December 31, 2019 (nine‐month accounting period) (Note 1) (Billions of yen)

 Brent Crude Oil Price;	At Beginning of 1Q : +3.8 (‐3.8)
Sensitivities will change during the course of FY2019 as follows;
$1/bbl increase (decrease) (Note 2)	At beginning of 2Q : +1.9 (‐1.9)
	At beginning of 3Q : +0.7 (‐0.7)
 Exchange Rate; ¥1 depreciation
(appreciation) against the U.S.	+1.8 (‐1.8)
dollar (Note 3)

(Note1) The sensitivities represent the impact on net income for the year ending December 31, 2019 (nine‐month accounting period) against a $1 /bbl increase (decrease) in the Brent crude oil price on average and a ¥ 1 depreciation (appreciation) against the U.S. dollar. These are based on the financial situation mainly of existing production projects at the beginning of the fiscal year. These are for reference purposes only and the actual impact may change due to fluctuations in production volumes, capital expenditures and cost recoveries, and may not be constant, depending on crude oil prices and exchange rates.

(Note2) This is a sensitivity on net income determined by fluctuations in the oil price and is subject to the average price of crude oil (Brent). As part of the sales price has been finalized at the beginning of each quarter, the sensitivity breakdown for each quarter is estimated taking into account the percentage of the finalized sales price as follows;

• At the beginning of the 1Q : +3.8 billions of yen (1Q : +0.7 billions of yen, 2Q : +1.2 billions of yen, 3Q : +1.9 billions of yen)
• At the beginning of the 2Q : +1.9 billions of yen (1Q : －－－－－－－－, 2Q : +0.7 billions of yen, 3Q : +1.2 billions of yen)
• At the beginning of the 3Q : +0.7 billions of yen (1Q : －－－－－－－－, 2Q : －－－－－－－－, 3Q : +0.7 billions of yen)

(Note3) This is a sensitivity on net income determined by fluctuation of the yen against the U.S. dollar and is subject to the average exchange rate. On the other
	hand, a sensitivity related to valuation for assets and liabilities denominated in the U.S. dollar on net income incurred by foreign exchange differences
8	between the exchange rate at the end of the fiscal year and the end of the previous fiscal year is almost neutralized.

Sales and investment forecasts

for the year ending December 31, 2019 (nine‐month accounting period)

												【Reference】
		Forecasts for the year
			ending Dec 31, 2019		As of May 13, 2019	As of Nov 6, 2019	Change		Apr.‐Sep. '19
	(Nine‐month accounting			(Actual)
					Period)
			Crude oil (Mbbl)1		102,695		106,489	3,794			58,868
	Sales	Natural gas (MMcf)2		345,2037		365,940	20,737			222,170
			Overseas		285,8767		308,569	22,693
						186,345
	Volume						(1,589 million m3)	(1,537 million m3)	((52 million m3))		(959 million m3)
					Japan			59,327			57,371	(1,956)			35,825
			LPG （Mbbl）3			435			476	41
									151
	（Billions of yen）
	Development expenditure4				263.0			230.0	(33.0)			155.0
	Other capital expenditure			18.0			18.0	0			13.8
	Exploration expenditure			4.0			3.0	(1.0)			1.3
	Exploration expenses and			Explorationexpenses 13.7	19.3		Explorationexpenses 14.7	18.9	(0.4)		Explorationexpenses 11.6	13.5
	Provision for explorations5		5.6				1.9
	(Non‐controlling interest portion)6			5.3			3.1	(2.2)			2.5
	Note	1	CF for domestic crude oil sales and	petroleum products : 1kl=6.29bbl
				2	CF for domestic natural gas sales : 1m3=37.32cf
				3	CF for domestic LPG sales : 1t=10.5bbl
				4	Development expenditure includes investment in Ichthys downstream and acquisition costs
	9		5	"Provision for allowance for recoverable accounts under production sharing" + "Provision for exploration projects", related to exploration activities
		6	Capital increase from Non‐controlling interests, etc.
				7 Updated from figures announced on May 13, 2019 (Total: 366,752 MMcf , Overseas: 307,425 MMcf ) due to a change in CF for natural gas sales of certain overseas segments.