Inpex Forecasts 61% Drop in Net on Oil-Price Outlook

By Shigeru Sato and Yuji Okada

May 13 (Bloomberg) -- Inpex Corp., Japan’s largest energy explorer, said profit may drop 61 percent this year as the global recession reduces oil prices, which peaked in 2008.

Net income may fall to 56 billion yen ($580 million) in the year ending March 2010, from 145.1 billion yen in the previous period, the Tokyo-based company said in a statement to the stock exchange today. That compares with the 80 billion yen profit median estimate of 16 analysts surveyed by Bloomberg. Revenue may decline 38 percent to 669 billion yen.

Inpex expects Brent crude oil, a benchmark for Europe, to average $52.50 a barrel this financial year. Brent has retreated 60 percent from a record $147.50 in London on July 11, leading investors including Japanese trading house Itochu Corp. to withdraw from overseas energy projects. Inpex and partner Total SA are moving ahead with their proposed $20 billion Ichthys natural gas venture in Australia.

“With a slew of distressed oil and gas project assets abroad because of the recession, the question now is whether Inpex will take advantage of the opportunity to buy out some of those stakes before their major Australian project comes on stream,” Futoshi Usui, an analyst at Credit Suisse in Tokyo, said before the announcement. Usui has a “neutral” rating on Inpex’s stock.

Inpex’s profit fell 16 percent in the year ended March 31 and missed the 150 billion yen median estimate of 16 analysts. Revenue decreased 11 percent.

Shares Gain

The shares have gained 59 percent over the last six months compared with a 3.3 percent rise in the benchmark Topix index. They rose 0.8 percent to 726,000 yen on the Tokyo Stock Exchange before the earnings announcement as oil in New York rose for a second day.

Brent, the benchmark for the Caspian Sea oil Inpex produces, averaged $86.22 a barrel on London’s ICE Futures Europe Exchange last year, according to Bloomberg data. It traded at $58.83, up 1.5 percent, at 3:11 p.m. in Tokyo.

Inpex and partner Total SA are moving ahead with the proposed $20 billion Ichthys natural gas venture in Australia. Gas from the project will be transported to Darwin through a proposed 850-kilometer (528-mile) pipeline, with the first shipment of liquefied natural gas scheduled in 2015.

To contact the reporters on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net.