Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 35

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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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 approximately 800 gross and net acres. As of April 30, 2025, the Company made the decision to abandon all
McCool Ranch leases. Accordingly, these leases have been written off and have been expensed on the statement of operations as of April
30, 2025. No further rental payments or development activities will be pursued.

On
November 10, 2023, the Company entered into the ARLO Agreement with HSO for a term of nine months which allows us the exclusive right
to acquire up to a 20% interest in a 960 acre drilling and production program in the Asphalt Ridge leases for $2,000,000, which may be
invested in tranches, with an initial tranche closing for an amount no less than $500,000 and paid within seven days subsequent to HSO
providing certain required items to it.

On
December 29, 2023, the Company entered into an amendment to the ARLO Agreement, whereby the Company funded $200,000 of the $500,000 payable
by it to H