Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 474

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 1B
Chunk 474
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 historical
cost-carrying value of an asset may no longer be appropriate. We assess the recoverability of the carrying value of the asset by estimating
the future net undiscounted cash flows expected to result from the asset, including eventual disposition. If the future net undiscounted
cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s
carrying value and estimated fair value. With regards to oil and gas properties, this assessment applies to proved properties; unproved
properties are assessed for impairment either at an individual property basis or a group basis.

42

Asset
Retirement Obligations

ARO
consists of future plugging and abandonment expenses on oil and natural gas properties. In connection with the South Salinas Project
acquisition described above, we acquired the plugging and abandonment liabilities associated with six temporarily shut-in, idle wells.
The fair value of the ARO was recorded as a liability in the period in which the wells were acquired with a corresponding increase in
the carrying amount of oil and natural gas properties. We plan to utilize the six wellbores acquired in the South Salinas Project acquisition
in future production, development and/or exploration activities. The liability is accreted for the change in its present value each period
based on the expected dates that the wellbores will be required to be plugged and abandoned. The capitalized cost of ARO is included
in oil and gas properties and is a component of oil and gas property costs for purposes of impairment and, if proved reserves are found,
such capitalized costs will be depreciated using the units-of-production method. The asset and liability are adjusted for changes resulting
from revisions to the timing or the amount of the original estimate when deemed necessary. If the liability is settled for an amount
other than the recorded amount, a gain or loss is recognized.

Recent
Accounting Pronouncements

All
recently issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to us.

ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Pursuant
to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as
it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA