Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 136

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 8
Chunk 136
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and amortization (“DD&A”) for such wells.

Proved
and 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 development plans. As of July 31, 2025 and October 31, 2024, such oil
and gas properties were classified as unproved properties and were not subject to DD&A.

Proved
oil and natural gas properties include developed and undeveloped reserves that have been confirmed through drilling and production activities.
These properties are subject to DD&A, which is calculated using the unit-of-production method based on total proved reserves.

    ●
    Proved
    developed reserves are amortized over the expected production life of the wells.

    ●
    Proved
    undeveloped reserves remain capitalized until development activities commence.

    ●
    The
    Company assesses impairment of proved properties periodically based on commodity prices, production forecasts, and reserve estimates.

As
of July 31, 2025, the Company has proved reserves in the newly acquired Saskatchewan properties and expects to add the reserves 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
(