Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 102

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 102
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 released from having to evidence to the lessor the existence
of force majeure conditions. As consideration for the granting of the lease extension, the Company paid the lessor a one-time, non-refundable
payment of $252,512; this amount was capitalized and reflected in the balance of the oil and gas property as of October 31, 2022. The
extension period commenced on June 19, 2022 and currently, the “force majeure” status has been extinguished by the drilling
of the HV-1 well. The ongoing operation and oil production at the HV-3A well maintain the validity of the lease.

The
second lease covers 160 acres of the South Salinas Project; it is currently held by delay rental and is renewed every three years. Until
drilling commences, the Company is required to make delay rental payments of $30/acre per year. The Company is currently in compliance
with this requirement and have paid in advance the delay rental payment for the period from October 2024 through October 2025.

During
February and March of 2023, the Company entered into additional leases related to the unproved properties of the South Salinas Project
with two groups of lessors. The first group of leases covers 360 acres and has a term of 20 years; the Company is required to make rental
payments of $25/acre per year. The second group of leases covers 307.75 acres and has a term of 20 years; we are required to make rental
payments of $30/acre per year. During the current reporting period, the Company made the strategic decision to abandon the additional
oil and gas leases. As a result, all associated costs related to exploration and development activities, including any capitalized costs
for support equipment and facilities, have been expensed in accordance with applicable accounting standards. This decision was based
on a comprehensive evaluation of the economic viability and future potential of the leases, considering market conditions, regulatory
factors, and operational constraints.

The
Company holds interests in various leases related to the unproved properties of the McCool Ranch Oil Field. These leases occur in two
parcels, “Parcel 1” and “Parcel 2”. Parcel 1 comprises ten leases and approximately 480 acres, which are held
by delay rental payments that are paid-up and current. Parcel 2 comprises one lease and approximately 320 acres, which is held by production.
The total leasehold comprises