Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 937

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 3
Chunk 937
---
 a 21.918315%
working interest in the McCool Ranch Oil Field located in Monterey County near the Company’s flagship South Salinas Project. As
Trio LLC is partly owned and controlled by members of TPET’s management, this was a related party transaction, and the aforementioned
Trio Special Committee was involved in the evaluation and negotiation of the terms of the acquisition. TPET engaged KLSP to conduct a
comprehensive analysis and valuation of the asset, which in-progress, preliminary results were delivered to TPET and evaluated by the
Trio Special Committee. The Company initially recorded a payment of $100,000 upon execution of the McCool Ranch Purchase Agreement, at
which time Trio LLC began refurbishment operations with respect to the San Ardo WD-1 water disposal well (the “WD-1”) to
determine if it was mechanically capable of reasonably serving the produced water needs for the assets. With refurbishment successfully
accomplished, the Company will pay an additional $400,000 per the McCool Ranch Purchase Agreement. TPET has paid approximately
$284,000 to date for restarting production operations on the assets and has recorded a liability of $116,000 to Trio LLC as of October
31, 2024.

Asphalt
Ridge Asset Purchase

On
November 10, 2023, TPET entered into a Leasehold Acquisition and Development Option Agreement (the “Asphalt Ridge Option Agreement”)
with Heavy Sweet Oil LLC (“HSO”). Pursuant to the Asphalt Ridge Option Agreement, the Company acquired an option to purchase
up to a 20% working interest in certain leases at a long-recognized, major oil accumulation in northeastern Utah, in Uintah County, southwest
of the city of Vernal. LEC also have a working interest in the Asphalt Ridge Asset. Since LEC is partly owned and controlled by current
and former members of our management, transactions including acquisitions between TPET and LEC relating to the Asphalt Ridge Asset and/or
to other assets constitute related party transactions and, therefore, a special committee of our board of directors, comprised of Mr.
Pernice, Mr. Randall and Mr. Hunter (the “Lafayette Special Committee”) has been formed to evaluate and negotiate the terms
of any such future transactions. In addition, in accordance with our Related Person Transaction Policy, we will have any such future
transactions reviewed and approved by our Board’s Audit Committee. TPET will engage KLS Petroleum Consulting LLC (“KLSP”