Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 85

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 85
---
     1,389 
  
    ARO, ending balance – April 30, 2025 
     55,258 
  
    Less: ARO – current 
     2,778 
  
    ARO, net of current portion – April 30, 2025 
    $52,480 

Revenue
Recognition

ASU
2014-09, “Revenue from Contracts with Customers” (“Topic 606”) requires an entity to recognize revenue
when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled
to in exchange for those goods or services; refer to Note 4 – Revenue from Contracts with Customers for additional information.

The
Company’s revenue is comprised of revenue from exploration and production activities to produce oil. The Company’s oil is
sold to one customer who is a marketer, and payment is received in the month following delivery.

The
Company recognizes sales revenues from oil when control transfers to the customer at the time of delivery. Revenue is measured based
on the contract price, which may include adjustments for market differentials and downstream costs incurred by the customer, including
gathering, transportation or short load fees.

Revenues
are recognized for the sale of the Company’s percentage of working interest, adjusted for any incoming and outstanding expenses
and oil and gas assessments.

Related
Parties

Related
parties are directly or indirectly related to the Company, through one or more intermediaries and are in control, controlled by, or under
common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might
be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. On September 14, 2021,
the Company acquired an 82.75% working interest (which was subsequently increased to an 85.775% working interest as of April 2023) in
the SSP from Trio LLC in exchange for cash, a note payable to Trio LLC and the issuance of 245,000 shares of common stock. As of the
date of the acquisition, Trio LLC owned 45% of the outstanding shares of the Company and was considered a related party. As of April
30,