Company: TPET
Filing Date: 2025-03-14
Form Type: 10-Q
Source: 0001493152-25-010362
Chunk: 13

Company: Trio Petroleum Corp.
Filing Date: 2025-03-14
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 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.

    9

Components
of the changes in ARO are shown below:

 SCHEDULE
OF COMPONENTS OF CHANGES IN ARO

    ARO, ending balance – October 31, 2024 
    $53,869 
  
    Accretion expense 
     695 
  
    ARO, ending balance – January 31, 2025 
     54,564 
  
    Less: ARO – current 
     2,778 
  
    ARO, net of current portion – January
    31, 2025 
    $51,786 

Revenue
Recognition

ASU
2014-09, “Revenue from Contracts with Customers” (“Topic 606”) requires an entity to recognize revenue
when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled
to in exchange for those goods or services; refer to Note 5 – Revenue from Contracts with Customers for additional information.

The
Company’s revenue is comprised of revenue from exploration and production activities to produce oil. The Company’s oil is
sold to one customer who is a marketer, and payment is received in the month following delivery.

The
Company recognizes sales revenues from oil when control transfers to the customer at the time of delivery. Revenue is measured based
on the contract price, which may include adjustments for market differentials and downstream costs incurred by the customer, including
gathering, transportation or short load fees.

Revenues
are recognized for the sale of the Company’s percentage of working interest, adjusted for any incoming and outstanding expenses
and oil and gas assessments.

Related
Parties

Related
parties are directly or indirectly related to the Company, through one or more intermediaries and are in control, controlled by, or under
common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the trans