Company: TPET
Filing Date: 2025-03-14
Form Type: 10-Q
Source: 0001493152-25-010362
Chunk: 73

Company: Trio Petroleum Corp.
Filing Date: 2025-03-14
Form: 10-Q
Item: Part I, Item 8
Chunk 73
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to acquire mineral interests in crude oil and/or natural gas properties, drill and equip exploratory wells that find proved reserves
and drill and equip development wells are capitalized. Acquisition costs of unproved leaseholds are assessed for impairment during the
holding period and transferred to proven crude oil and/or natural gas properties to the extent associated with successful exploration
activities. Significant undeveloped leases are assessed individually for impairment, based on the Company’s current exploration
plans, and a valuation allowance is provided if impairment is indicated. Capitalized costs from successful exploration and development
activities associated with producing crude oil and/or natural gas leases, along with capitalized costs for support equipment and facilities,
are amortized to expense using the unit-of-production method based on proved crude oil and/or natural gas reserves on a field-by-field
basis, as estimated by qualified petroleum engineers. The Company currently has four wells that are producing (one well in President’s
Field in the South Salinas Project and three wells at the McCool Ranch Oil Field) and is evaluating the impact of production on the reserve
determination for those wells and fields. The Company expects to add the reserve value of such fields to the Company’s reserve
report after a further period of observation and review of the oil production. As of January 31, 2025 and October 31, 2024, all of the
Company’s oil and gas properties were classified as unproved properties and were not subject to depreciation, depletion and amortization.

Unproved
oil and natural gas properties

Unproved
oil and natural gas properties have unproved lease acquisition costs, which are capitalized until the lease expires or otherwise until
the Company specifically identifies a lease that will revert to the lessor, at which time the Company charges the associated unproved
lease acquisition costs to exploration costs.

Unproved
oil and natural gas properties are not subject to amortization and are assessed periodically for impairment on a property-by-property
basis based on remaining lease terms, drilling results or future plans to develop acreage. The Company currently has four wells that
are producing (one well in President’s Field in the South Salinas Project and three wells at the McCool Ranch Oil Field) and is
evaluating the impact of production on the reserve determination for those wells and fields. The Company expects to add the reserve value
of such fields to the Company’s reserve report after a further period of observation and review of the oil production. As of January
31, 2025 and October 31, 2024,