Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 266

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 1
Chunk 266
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the Blue Zone in September 2025, followed by the drilling of a new well each month thereafter through August 2026. Phase 2 begins with
receipt of the remaining (Full) Development Permits from Monterey County. Phase 2 also assumes that by September 2025 Trio should be
experiencing the timely approval of drilling permits from CALGEM. Of the 12 Phase 2 wells, four wells will target the Yellow Zone, seven
are planned for the Blue Zone, and one well is a horizontal well in the Vaqueros Zone. The capital requirement for Phase 2 well work
and facilities expansion is estimated to be $43.2 million.

Phase
3, also referred to as the Full Development Phase, is expected to begin October 2026 with the utilization of three rigs drilling continuously
for about four years. Two of the rigs will be used to drill 101 Blue Zone wells, while the third rig will be used to drill 20 Yellow
Zone wells and 16 horizontal Vaqueros wells. Phase 3 will require an estimated $467 million of capital. When combined with Phases 1 and
2 the South Salinas Project is then expected to generate positive cash flow by 2029. When considered alone Phases 1 and 2 are forecast
to generate positive cash flows in 2026 and 2027, respectively. These expectations assume the realization of the Probable (P2) reserves
that are based on the ‘most likely’ forecasts of production. The KLSP report also provides the incremental volumes and cash
flows associated with the realization of Possible (P3) reserves and are provided in the Table below. The BOE’s cited in the Table
use a conversion factor of 6 Mcf of gas per BOE.

The
combined Phases 1-3 (Total South Salinas Project) are estimated to recover 40.2 million stock tank barrels of oil (MMSTB) and 42.4 billion
standard cubic feet of gas (BCF). This represents 47.3 million BOE of Probable (P2) Undeveloped reserves. The estimated incremental reserves
associated with Possible (P3) reserves are 100.7 MMSTB of oil and 168.5 BCF of gas, or 128.7 million BOE (part “F” of the
Table below). The combined Phases 1-3 estimated net cash flow to the Company, discounted at