Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 74

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 74
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asis
of Presentation

We
prepare our condensed consolidated financial statements in conformity with GAAP, which requires management to make certain estimates
and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that
management believes to be important at the time the condensed consolidated financial statements are prepared, and actual results could
differ from our estimates and such differences could be material. Due to the need to make estimates about the effect of matters that
are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On
a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed consolidated
financial statements, as well as the sufficiency of the disclosures pertaining to our accounting policies in the footnotes accompanying
our condensed consolidated financial statements. Described below are the most significant policies we apply in preparing our condensed
consolidated financial statements, some of which are subject to alternative treatments under GAAP. We also describe the most significant
estimates and assumptions we make in applying these policies. See “Note 2 - Summary of Significant Accounting Policies” to
our condensed consolidated financial statements.

Oil
and Gas Assets and Exploration Costs – Successful Efforts

Our
projects are in exploration and/or early production stages and we began generating revenue from its operations during the quarterly period
ended April 30, 2024. We apply the successful efforts method of accounting for crude oil and natural gas properties. Under this method,
exploration costs such as exploratory, geological, and geophysical costs, delay rentals and exploratory overhead are expensed as incurred.
If an exploratory property provides evidence to justify potential development of reserves, drilling costs associated with the property
are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient quantity of proved reserves
can be attributed to the area as a result of drilling. At the end of each quarter, management reviews the status of all suspended exploratory
property costs considering ongoing exploration activities; in particular, whether we are making sufficient progress in our ongoing exploration
and appraisal efforts. If management determines that future appraisal drilling or development activities are unlikely to occur, associated
exploratory well costs are expensed.

Costs
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