（１）Explanation on Consolidated Financial Results

Regarding the Company’s consolidated financial results for the three months ended March 31, 2024, revenue increased by ¥18.7 billion, or 3.3%, to ¥596.8 billion from the corresponding period of the previous fiscal year due to the depreciation in the average exchange rate of the Japanese yen against the U.S. dollar during the period. Revenue of crude oil increased by ¥50.8 billion, or 12.7%, to ¥450.1 billion, and revenue of natural gas decreased by ¥32.5 billion, or 18.7%, to ¥141.1 billion. Sales volume of crude oil increased by 661 thousand barrels, or 1.8%, to 37,338 thousand barrels, and sales volume of natural gas increased by 2,735 million cf, or 2.1%, to 130,976 million cf. Sales volume of overseas natural gas increased by 1,847 million cf, or 1.8%, to 103,979 million cf, and sales volume of domestic natural gas increased by 24 million m3 , or 3.4%, to 721 million m3 (26,898 million cf). The average sales price of overseas crude oil decreased by US$1.08, or 1.3%, to US$81.12 per barrel. The average sales price of overseas natural gas decreased by US$1.37, or 20.4%, to US$5.36 per thousand cf, and the average sales price of domestic natural gas decreased by ¥33.60, or 30.4%, to ¥77.07 per m3 . The average exchange rate of the Japanese yen against the U.S. dollar on consolidated revenue depreciated by ¥16.13, or 12.2%, to ¥148.61 per U.S. dollar.

The increase of ¥18.7 billion in revenue was mainly derived from the following factors: regarding revenue of crude oil and natural gas, an increase in sales volume contributing ¥12.1 billion to the increase, a decrease in unit sales price contributing ¥52.2 billion to the decrease, the depreciation in the average exchange rate of the Japanese yen against the U.S. dollar contributing ¥58.4 billion to the increase, and an increase in revenue excluding crude oil and natural gas of ¥0.4 billion.

Meanwhile, cost of sales increased by ¥10.5 billion, or 4.6%, to ¥238.5 billion. Exploration expenses increased by ¥2.7 billion, or 143.0%, to ¥4.7 billion. Selling, general and administrative expenses increased by ¥6.2 billion, or 24.0%, to ¥32.3 billion. Other operating income increased by ¥0.9 billion, or 8.1%, to ¥12.1 billion. Other operating expenses decreased by ¥4.1 billion, or 52.1%, to ¥3.7 billion. Share of profit of investments accounted for using equity method increased by ¥1.0 billion, or 2.2%, to ¥50.4 billion. As a result, operating profit increased by ¥5.3 billion, or 1.4%, to ¥380.1 billion.

Finance income increased by ¥12.4 billion, or 57.2%, to ¥34.1 billion. Finance costs increased by ¥22.0 billion, or 114.5%, to ¥41.3 billion. As a result, profit before tax decreased by ¥4.3 billion, or 1.1%, to ¥372.9 billion. Income tax expense increased by ¥25.8 billion, or 11.6%, to ¥249.3 billion. Profit attributable to non-controlling interests decreased by ¥5.2 billion, or 74.8%, to ¥1.7 billion. As a result of the above effects, profit attributable to owners of parent decreased by ¥24.9 billion, or 17.0%, to ¥121.8 billion.

Financial results by segment are as follows:
　

1) Oil & Gas Japan
Revenue decreased by ¥21.8 billion, or 27.3%, to ¥58.1 billion due to a decrease in sales price of natural gas. Profit attributable to owners of parent decreased by ¥11.0 billion, or 64.8%, to ¥6.0 billion.

2) Oil & Gas Overseas - Ichthys Project
Revenue increased by ¥4.2 billion, or 4.3%, to ¥103.3 billion due to an increase in sales volume of crude oil and the depreciation of the Japanese yen against the U.S. dollar. Profit attributable to owners of parent decreased by ¥1.7 billion, or 1.9%, to ¥90.8 billion.

3) Oil & Gas Overseas - Other Projects
Although revenue increased by ¥36.6 billion, or 9.4%, to ¥427.0 billion due to an increase in sales volume of crude oil and the depreciation of the Japanese yen against the U.S. dollar, profit attributable to owners of parent decreased by ¥2.7 billion, or 9.7%, to ¥25.5 billion due to factors including an increase in income tax expense.

（２）Explanation on Consolidated Financial Position

Total assets as of March 31, 2024 increased by ¥561.7 billion to ¥7,301.2 billion, compared to December 31, 2023. Current assets increased by ¥108.9 billion to ¥947.3 billion due to an increase in trade and other receivables, and others. Non-current assets increased by ¥452.8 billion to ¥6,353.8 billion due to an increase in oil and gas assets, and others.

Meanwhile, total liabilities increased by ¥193.5 billion to ¥2,433.9 billion. Current liabilities increased by ¥143.7 billion to ¥715.9 billion and non-current liabilities increased by ¥49.8 billion to ¥1,718.0 billion.

Total equity increased by ¥368.2 billion to ¥4,867.2 billion. Equity attributable to owners of parent increased by ¥357.2 billion to ¥4,566.3 billion. Non-controlling interests increased by ¥10.9 billion to ¥300.9 billion.

（３） Explanation on Cash Flows

The Group’s cash and cash equivalents as of March 31, 2024 totaled ¥227.3 billion, reflecting a net increase of ¥17.7 billion from ¥201.1 billion as of December 31, 2023, with the effect of exchange rate changes of ¥8.3 billion added to it.

The status of cash flows from operating, investing, and financing activities and their factors during the three months ended March 31, 2024 are as follows:

1) Cash flows from operating activities
Net cash provided by operating activities amounted to ¥140.2 billion, down ¥94.5 billion from the corresponding period of the previous fiscal year, mainly due to an increase in trade and other receivables and an increase in income taxes paid (despite an increase in trade and other payables, and an increase in depreciation and amortization that are non-cash items).

2) Cash flows from investing activities
Net cash used in investing activities amounted to ¥123.4 billion, down ¥31.7 billion from the corresponding period of the previous fiscal year, mainly due to a decrease in payments for purchases of investments and an increase in proceeds from sale and redemption of investments.

3) Cash flows from financing activities
Net cash provided by financing activities amounted to ¥1.0 billion compared with ¥102.5 billion of net cash used in the corresponding period of the previous fiscal year. This was mainly due to a net increase in commercial papers and a decrease in repayments of long-term borrowings.

（4）Explanation Regarding Future Forecast Information Such as Forecasts for Consolidated Financial Results

The Company revised its consolidated financial forecasts for the six months ending June 30, 2024 and the fiscal year ending December 31, 2024 due to factors including higher-than-expected crude oil prices and the depreciation of the Japanese yen against the U.S. dollar in the three months ended March 31, 2024 as stable operations were carried out at the company’s key projects including Ichthys LNG. The revised forecasts also reflect the revision of crude oil price and exchange rate assumptions for the second quarter onwards.

1. Forecasts for consolidated financial results for the six months ending June 30, 2024 　

２．Forecasts for consolidated financial results for the year ending December 31, 2024 　

The above forecasts are calculated based on the following assumptions: 　

Crude oil prices at which the Company sells products vary depending on crude oil type and differ from Brent crude oil prices.

Crude oil price differences are determined by the quality of each crude oil type, etc., and are also affected by market conditions.