Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 190

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 8
Chunk 190
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a material adverse effect on our financial position, results of operations and cash flows. See Going Consideration Concerns above in which we raise substantial doubt about our ability to continue as
a going concern.

Contractual
Obligations and Commitments

Unproved
Property Leases

South
Salinas Project

We
hold various leases related to unproved properties in the South Salinas Project, including two leases with the same lessor:

    ●
    Lease
    1 (8,417 acres): Such lease was amended on May 27, 2022 to extend force majeure status for an additional uncontested twelve months,
    releasing us from evidencing force majeure conditions during that period. A one-time, non-refundable payment of $252,512 was made
    and capitalized as part of oil and gas property as of October 31, 2022. The force majeure status was extinguished following the drilling
    of the HV-1 well. Continued operations and oil production at the HV-3A well maintain the lease’s validity.

    ●
    Lease
    2 (160 acres): Such lease is held by delay rental, renewed every three years. We are required to pay $30 per acre annually until
    drilling commences. The delay rental payment for October 2024 through October 2025 has been paid in advance, and we remain in compliance.

33

In
February and March 2023, we entered into additional leases covering unproved properties in the South Salinas Project:

    ●
    Group
    1: Covers 360 acres with a 20-year term; annual rental payments of $25 per acre

    ●
    Group
    2: Covers 307.75 acres with a 20-year term; annual rental payments of $30 per acre

During
the second and third quarters of fiscal 2025, we strategically terminated all additional leases in the South Salinas Project. All associated
exploration and development costs, including capitalized expenditures for equipment and facilities, were expensed in accordance with
applicable accounting standards. This decision followed a comprehensive evaluation of the leases’ economic viability, market conditions,
regulatory factors, and operational constraints.

McCool
Ranch Oil Field

We
previously held interests in two parcels of unproved leases in the McCool Ranch Oil Field:

    ●
    Parcel
    1: Ten leases totaling approximately 480 acres, held by delay rental payments