Japan Petroleum Exploration Co., Ltd. (JAPEX, TSE: 1662), the Tokyo-listed oil and gas explorer and producer, reported consolidated results for the fiscal year ended March 31, 2026 on May 13. Under Japanese GAAP, revenue fell 12.5% to ¥340,336 million, operating profit dropped 37.2% to ¥38,915 million, ordinary profit slipped 4.1% to ¥61,556 million and net profit attributable to owners fell 34.2% to ¥53,427 million. EPS was ¥208.74, down from ¥314.91 a year earlier. Lower crude and natural-gas selling prices and reduced LNG sales volumes cut gross profit 22.6% to ¥76.74 billion, and a revision to asset-retirement-obligation estimates for domestic oil and gas fields shaved a further ¥5.8 billion off operating profit. Ordinary profit held up better as equity-method investments swung to a ¥4.1 billion gain and foreign-exchange losses turned to gains, while net profit fell sharply against a prior year that included large gains on sales of investment securities.
All four regional segments post lower profit
The Japan segment, which spans domestic E&P, natural gas and LNG sales, power and contract services, saw revenue fall 11.3% to ¥248.19 billion and segment profit drop 31.4% to ¥30.87 billion on lower LNG sales volumes and a weaker crude and gas sales balance. North America revenue slipped 6.0% to ¥52.38 billion with segment profit down 19.0% to ¥17.08 billion on lower crude prices. Europe revenue plunged 57.9% to ¥8.07 billion and segment profit fell 70.9% to ¥1.63 billion after JAPEX sold its entire stake in JAPEX UK E&P (the Seagull field) to Ithaca Energy in July 2025, booking an ¥862 million gain; the segment also absorbed a ¥2.19 billion impairment on Norwegian offshore assets. Middle East revenue fell 7.6% to ¥31.69 billion with profit down 28.6% to ¥2.97 billion. By business line, E&P sales fell 15.3% to ¥109.26 billion, infrastructure/utility sales fell 8.9% to ¥172.35 billion and other sales fell 17.2% to ¥58.73 billion.
Verdad acquisition reshapes the balance sheet
On February 26, 2026 JAPEX completed the acquisition of 100% of Verdad Resources Intermediate Holdings, which holds tight oil and gas assets in Colorado and Wyoming, for an adjusted purchase price of $1,040 million (contracted at $1,260 million in December 2025). The deal was part-funded by a $361 million reserve-based lending facility agented by Wells Fargo, drawn the same day and maturing in February 2030; only Verdad's balance sheet was consolidated this year. Total assets jumped ¥180.9 billion to ¥862.47 billion and the equity ratio eased to 72.8% from 77.4%. Operating cash flow was ¥102.98 billion, investing activities used ¥200.49 billion — including ¥157.71 billion for the acquisition — and year-end cash stood at ¥49.95 billion, down ¥90.98 billion.
Dividend of ¥65 as payout reaches 31%
JAPEX plans a year-end dividend of ¥45 per share, bringing the annual dividend to ¥65 (including a ¥20 interim payment) for a consolidated payout ratio of 31.1%, in line with its policy of returning around 30% of profit. For FY3/2027 the company plans an annual dividend of ¥45 (¥22.50 interim), a 19.2% payout on higher forecast earnings. In April 2026 JAPEX unveiled a new medium-term plan, "JAPEX Management Plan 2026-2035 — Building Core Assets toward 2035," aimed at building a more resilient portfolio.
FY3/27 outlook: profit growth despite Iraq halt
For the year to March 2027 JAPEX guides revenue of ¥303.0 billion, down 11.0%, mainly because the Garraf oil field in Iraq — operated through consolidated subsidiary JAPEX Garraf — has suspended production and shipments under a force-majeure declaration by the Iraqi government, and no sales from the project are assumed. Operating profit is nonetheless forecast up 5.4% to ¥41.0 billion, as Verdad substantially lifts North American oil and gas volumes and crude is assumed at $74.91/bbl with the yen at ¥152.90/$ (versus FY3/26 actuals of $71.89 and ¥149.85). Ordinary profit is seen down 26.9% at ¥45.0 billion on the absence of this year's FX gains, while net profit is forecast up 12.3% at ¥60.0 billion, helped by an expected gain on the ¥31 billion transfer of the Hokkaido gas manufacturing, sales and pipeline businesses to Hokkaido Electric Power. Forecast EPS is ¥234.38.
| Metric | FY3/26 | FY3/25 | YoY |
|---|---|---|---|
| Revenue (¥m) | 340,336 | 389,082 | −12.5% |
| Operating profit (¥m) | 38,915 | 62,012 | −37.2% |
| Ordinary profit (¥m) | 61,556 | 64,221 | −4.1% |
| Net profit attrib. (¥m) | 53,427 | 81,153 | −34.2% |
| EPS (¥) | 208.74 | 314.91 | −33.7% |
| Equity ratio | 72.8% | 77.4% | −4.6pp |
| Annual dividend (¥) | 65.00 | — | — |
| FY3/27 OP guidance (¥m) | 41,000 | 38,915 | +5.4% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.