Japan Petroleum Exploration Co., Ltd. (JAPEX) announces the transition to stable bitumen (ultra heavy crude oil extracted from oil sands) production operations of 20,000 barrels per day scale at the Hangingstone leases in the Province of Alberta, Canada, where JAPEX, through its consolidated subsidiary, Japan Canada Oil Sands Limited (JACOS), has been proceeding with development work (the Hangingstone Oil Sands Project).

At the Hangingstone Oil Sands Project, JAPEX, through JACOS, commenced drilling of wells and construction of facilities in February 2013 aiming at production of bitumen with a daily volume of 20,000 barrel scale using the SAGD method. Construction of Central Processing Facility was completed in February 2017, injection of steam into the oil sand reservoir was started in late April 2017 as the final preparation step for start-up of production operations, and commenced production operations in August 2017.

Aiming for stable production in latter 2018, the start-up of the operation has gone well, and with the average of the daily production volume in the recent one month period exceeding 20,000 barrels per day, the Hangingstone Oil Sands Project has now shifted to the stable production phase.

With its extensive experience of approximately 40 years in the Canadian oil sands business, we will continue the stable production operations of bitumen for years to come. We will aim to strengthen the competitiveness and maximize the value of the project by reductions of operating expenses, general administrative expenses and future capital expenditures, as well as pursuing the possibility of further improvement of SAGD method including adoption of new technologies.

The consolidated financial forecasts for the fiscal year ending March 31, 2019, remain unchanged regardless of this matter.

About Japex

JAPEX is engaged in projects in Japan and overseas that span the E&P value chain, from exploration, development, production and transportation to supply for long-term stable supply of energy.

Recently JAPEX has been focusing on three main business areas; E&P Business as our core business, Domestic Natural Gas Supply Business as stable supply and growth its volume of natural gas for clients, and Environment and Innovative Technology Business as new energy development utilizing our accumulative technologies and insights through E&P business.

Furthermore, JAPEX is aiming to “Transform to an Integrated Energy Company with a Focus on E&P” to expand our business area wider related to oil and gas E&P.