Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 82

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 8
Chunk 82
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 recorded at their outstanding
principal balance, net of any allowance for credit losses. The Company evaluates the collectability of loan receivables based on historical
experience, current economic conditions, and the creditworthiness of borrowers. The Company maintains an allowance for credit losses to
cover estimated losses; the allowance is determined based on historical loss experience, current economic conditions and specific borrower
risk assessments. Adjustments to the allowance are recorded through provision for credit losses in the statement of operations. Interest
income on loan receivables is recognized using the effective interest method. Loans are placed on nonaccrual status when collection of
principal or interest is uncertain. Loan receivables are reviewed periodically for impairment. If a loan is deemed uncollectible, the
Company records a charge-off against the allowance for credit losses.

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 April 30, 2025 and October 31, 2024, the Company recorded
$43,330 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
to acquire mineral interests in crude oil and/or natural gas properties, drill and equip exploratory wells that find proved reserves
and drill and equip development wells