Company: TPET
Filing Date: 2025-03-14
Form Type: 10-Q
Source: 0001493152-25-010362
Chunk: 72

Company: Trio Petroleum Corp.
Filing Date: 2025-03-14
Form: 10-Q
Item: Part I, Item 8
Chunk 72
---
 significant estimates required
to be made by management include estimates of oil and natural gas reserves (when and if assigned) and related present value estimates
of future net cash flows therefrom, the carrying value of oil and natural gas properties, accounts receivable, bad debt expense, ARO
and the valuation of equity-based transactions. Accordingly, actual results could differ significantly from those estimates.

Cash
and cash equivalents

The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had no cash equivalents as of January 31, 2025 and October 31, 2024.

Prepaid
Expenses

Prepaid
expenses consist primarily of prepaid services which will be expensed as the services are provided within twelve months. As of January
31, 2025 and October 31, 2024, the balances of the prepaids account were $53,818 and $279,274, respectively.

Debt
Issuance Costs

Costs
incurred in connection with the issuance of the Company’s debt have been recorded as a direct reduction against the debt and amortized
over the life of the associated debt as a component of interest expense. As of January 31, 2025 and October 31, 2024, the Company recorded
zero and $259,903 in debt issuance costs, respectively.

    8

Oil
and Gas Assets and Exploration Costs – Successful Efforts

The
Company’s projects are in exploration and/or early production stages and the Company began generating revenue from its operations
during the quarterly period ended April 30, 2024. It applies the successful efforts method of accounting for crude oil and natural gas
properties. Under this method, exploration costs such as exploratory, geological, and geophysical costs, delay rentals and exploratory
overhead are expensed as incurred. If an exploratory property provides evidence to justify potential development of reserves, drilling
costs associated with the property are initially capitalized, or suspended, pending a determination as to whether a commercially sufficient
quantity of proved reserves can be attributed to the area as a result of drilling. At the end of each quarter, management reviews the
status of all suspended exploratory property costs considering ongoing exploration activities; in particular, whether the Company is
making sufficient progress in its ongoing exploration and appraisal efforts. If management determines that future appraisal drilling
or development activities are unlikely to occur, associated exploratory well costs are expensed.

Costs