Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 93

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 93
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 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; the Company is 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 total
expense recognized in connection with this abandonment totals $73,806 and is reflected in the Company’s statement of operations
for the period.

McCool
Ranch Oil Field

In
October 2023, the Company entered into the McCool Ranch Purchase Agreement with Trio LLC for the purchase of a 21.918315% working interest
in the McCool Ranch Oil Field, located in Monterey County near the Company’s flagship South Salinas Project. The Company initially
recorded a payment of $100,000 upon execution of the agreement, at which time Trio LLC began refurbishment operations on the San Ardo
WD-1 water disposal well to assess its ability to serve the produced water needs for the assets.

On May 27, 2025, the Company made the decision to
abandon the McCool Ranch Oil Field leases. Because the conditions leading to this decision existed as of April 30, 2025, this event qualifies
as a recognized subsequent event under ASC 855-10-25-1 and has been reflected in the financial statements for the period ended April 30,
2025. Accordingly, all capitalized costs related to the acquisition, refurbishment, and production restart—including costs for support
equipment and facilities—totaling $500,614 have been written off and expensed in the statement of operations for the period ended
April 30, 2025.

The
Company will not make any further payments under the McCool Ranch Purchase Agreement, and all previously recorded liabilities associated
with the project have been recognized as an expense. The Company no longer holds any interests in the McCool Ranch Oil Field, and the
abandonment decision will be reflected in the financial statements.