Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 18

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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 values
of such fields to the Company’s reserve report; once this has been done, it will estimate the necessary DD&A for such wells.

Impairment
of Other Long-lived Assets

The
Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the
historical cost-carrying value of an asset may no longer be appropriate. The Company assesses 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.

Asset
Retirement Obligations

ARO
consists of future plugging and abandonment expenses on oil and natural gas properties. In connection with the South Salinas Project
(“SSP”) acquisition described above, the Company acquired the plugging and abandonment liabilities associated with six non-producing
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 not subject to impairment. The Company plans to utilize the six wellbores acquired
in the SSP acquisition in future exploration, production and/or disposal (i.e., disposal of produced water or CO2 by injection) 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.

    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 
     2,084