Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 399

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 1
Chunk 399
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    F-8

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 plans to develop acreage. The Company currently has four wells that
are producing (one well in President’s Field in the South Salinas Project and three wells at the McCool Ranch Oil Field) and is
evaluating the impact of production on the reserve determination for those wells and fields. The Company expects to add the reserve value
of such fields to the Company’s reserve report after a further period of observation and review of the oil production. As of October
31, 2024 and 2023, all of the Company’s oil and gas properties were classified as unproved properties and were not subject to depreciation,
depletion and amortization; see further discussion in Note 6.

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.

As
of October 31, 2024 and 2023, the Company had no impairment of long-lived assets.

Asset
Retirement Obligations

ARO
consists of future plugging and abandonment expenses on oil and natural gas properties. In connection with the South Salinas Project
(“SSP”) acquisition described above, the Company acquired the plugging and abandonment liabilities associated with six non-producing
wells. The fair value of the ARO was recorded as a liability in the period in which the wells were acquired with a corresponding increase
in the carrying amount of