Japex increased net profit forecast for the year ending in March 2024 by 32% to 45 billion yen ($297.2 million) from its August prediction and raised annual dividend forecast to 250 yen per share from 200 yen.
"We now expect stronger earnings as firmer-than-expected oil prices and the yen's depreciation will boost our sales prices of oil and natural gas," Michiro Yamashita, senior managing executive officer, told a press conference.
Its half-year net profit was down 12% to 27.8 billion yen due to a fall in oil prices from a year earlier and smaller gains from its equity holdings in some overseas energy projects.
An absence of profit contribution from Russia's Sakhalin 1 oil and gas project where Japex holds a stake via Sakhalin Oil and Gas Development Co (SODECO) reduced non-operating profit by about 3 billion yen for the first-half, Yamashita said.
SODECO, the Japanese consortium, owns a 30% stake in the Sakhalin-1 project.
Russian President Vladimir Putin signed a decree last year, establishing a new operator for the Exxon-led Sakhalin-1, after the U.S. company decided to leave following Russia's invasion of Ukraine.
Japan's SODECO, Russia's Rosneft and India's ONGC Videsh continue operations there.
"SODECO's participation was granted, but discussions are still ongoing with the new operator on how the shareholders should get involved in the business and operations," Yamashita said, adding that Japex has not factored in any profit contribution from Sakhalin-1 for the current business year.
($1 = 151.4100 yen)
(Reporting Yuka Obayashi and Katya Golubkova; Editing by Tomasz Janowski)