Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 8

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 13
Chunk 8
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November 10, 2023, the Company entered into a Leasehold Acquisition and Development Option Agreement (the “Asphalt Ridge Option
Agreement”) with Heavy Sweet Oil LLC (“HSO”). Pursuant to the Asphalt Ridge Option Agreement, the Company acquired
an option to purchase up to a 20% production share in certain leases at a long-recognized, major oil accumulation in northeastern Utah,
in Uintah County, southwest of the city of Vernal, totaling 960 acres. HSO holds the right to such leases below 500 feet depth from surface
(the “Asphalt Ridge Leases”) and the Company acquired the option to participate in HSO’s initial 960 acre drilling
and production program on such Asphalt Ridge Leases (the “Asphalt Ridge Option”).

The
Asphalt Ridge Option had an original term of nine months, through August 10, 2024, which has been extended through February 10, 2025.
Pursuant to the Asphalt Ridge Option, the Company has the exclusive right, but not the obligation, to acquire up to a 20% working interest
in the Asphalt Ridge Leases for $2,000,000 (the “Purchase Price”), which may be invested in tranches, provided that the initial
tranche closing occurs during the Asphalt Ridge Option period and subsequent tranches occurring as soon thereafter as practical within
the Asphalt Ridge Option period, with each tranche providing the Company a portion of the ownership of the Asphalt Ridge Leases equal
to 20% multiplied by a fraction, the numerator of which is the total consideration paid by the Company, and denominator of which is $2,000,000.
Upon receipt of any funding from the Company pursuant to the Asphalt Ridge Option, HSO is required to pay that amount to the named operator
of the properties, to pay for engineering, procurement, operations, sales, and logistics activities on the properties. The Asphalt Ridge
Option Agreement provides that additional development capital is expected to be secured by HSO, and made available for the Company’s
participation, by way of a reserve base lending facility (RBL), provided that if such RBL cannot be obtained or does not cover all subsequent
capital costs, HSO agreed to fund a maximum of $5,000,000 of the first funding required for the development program, with the parties
splitting any costs thereafter according to their ownership interests. The initial target is three wells, with an estimated cost of $5,000,000