Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 134

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 134
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 time period in which we are able to ramp up the operation of wells and the acquisition of additional
properties. To the extent that existing capital and revenue growth are not sufficient to fund future activities, we will need to raise
capital through additional equity or debt financings. Additional funds may not be available on terms favorable to us or at all. Failure
to raise additional capital, if needed, could have a material adverse effect on our financial position, results of operations and cash
flows.

Contractual
Obligations and Commitments

Unproved
Property Leases

We
hold various leases related to the unproved properties of the South Salinas Project; two of the leases are held with the same lessor.
The first lease, which covers 8,417 acres, was amended on May 27, 2022 to provide for an extension of then-current force majeure status
for an additional, uncontested twelve months, during which we would be released from having to evidence to the lessor the existence of
force majeure conditions. As consideration for the granting of the lease extension, we paid the lessor a one-time, non-refundable payment
of $252,512; this amount was capitalized and reflected in the balance of the oil and gas property as of October 31, 2022. The extension
period commenced on June 19, 2022 and currently, the “force majeure” status has been extinguished by the drilling of the
HV-1 well. The ongoing operation and oil production at the HV-3A well maintain the validity of the lease.

The
second lease covers 160 acres of the South Salinas Project; it is currently held by delay rental and is renewed every three years. Until
drilling commences, we are required to make delay rental payments of $30/acre per year. We are currently in compliance with this requirement
and have paid in advance the delay rental payment for the period from October 2024 through October 2025.

32

During
February and March of 2023, we entered into additional leases related to the unproved properties of the South Salinas Project with two
groups of lessors. The first group of leases covers 360 acres and has a term of 20 years; we are required to make rental payments of
$25/acre per year. The second group of leases covers 307.75 acres and has a term of 20 years; we are required to make rental payments