Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 78

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 78
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 of Trio LLC’s management
team to develop and operate those assets. In September 2021, the Company entered into a Purchase and Sale Agreement (“Trio LLC
PSA”) with Trio LLC to acquire the purchased percentage of the South Salinas Project’s leases, wells and inventory in exchange
for $300,000 cash, a non-interest-bearing note payable of $3,700,000 and 245,000 shares of the Company’s $0.0001 par value common
stock (which constituted 45% of the total number of issued shares of the Company at that time). The Company accounted for the purchase
as an asset acquisition, as prescribed in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 805 – Business Combinations. The assets and associated asset retirement obligations (“ARO”)
were recorded based on relative fair value at the estimated fair value of the consideration paid. The Company holds an approximate 68.62%
interest after the application of royalties (“net revenue interest”) in the South Salinas Project, while Trio LLC holds an
approximate 3.8% working interest in the South Salinas Project; the Company and Trio LLC are separate and distinct companies.

There
are two contiguous areas of notable oil/gas accumulations in the South Salinas Project; the first is the Humpback Area that occurs in
the northern part of the project and the second is the Presidents Area (“Presidents Oil Field”) that occurs in the southern
part of the project. As of April 30, 2025 and October 31, 2024, there were no proved reserves attributable to the approximate 9,300 acres
of the property. Since it was returned to production in March 2024, the HV-3A well or discovery well at the South Salinas Project has
been producing oil with a generally favorable oil-water ratio but is currently idled pending an assessment of the viability of increasing
the well’s gross production rate.

Additional
Acquisitions - Novacor Acquisition

As
of April 4, 2025, the Company entered into an Asset Purchase Agreement (the “APA”) with Trio Petroleum Canada, Corp., an
Alberta, Canada corporation and a wholly owned subsidiary of the Company (“Trio Canada”), and Novacor Exploration Ltd., a
corporation incorporated under the Canada Business Corporations Act (“Novacor”), pursuant to which, subject to the terms
and conditions set forth in the APA,