Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 1779

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 8
Chunk 1779
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 for the years ended October
31, 2024 and 2023; these expenses were related to drilling exploratory wells and acquisition costs, both of which were capitalized and
reflected in the balance of the oil and gas property as of the respective period ends.

Leases

South
Salinas Project

As
of October 31, 2024, the Company holds interests in various leases related to the unproved properties of the South Salinas Project (see
Note 8); two of the leases are held with the same lessor. The first lease, which covers 8,417 acres, was amended on May 27, 2022 to provide
for an extension of then-current force majeure status for an additional, uncontested twelve months, during which the Company would be
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 operations and oil production at the HV-3A
well maintains 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 has paid in advance the delay rental payment for the period from October 2023 through October 2024.

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 Company is currently in compliance with this requirement and has paid in advance the rental payment
for the period February 2024 through February 2025. The second group of leases covers 307.75 acres and has a term of 20 years; the Company
is required