Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 26

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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.0 million and approximately $1.1 million for the nine months ended July 31,
2025 and 2024, respectively; these expenses were related to drilling exploratory wells and acquisition costs, both of which were capitalized
and are reflected in the balance of the oil and gas property as of July 31, 2025 and 2024, respectively.

Leases

South
Salinas Project

As
of July 31, 2025, the Company holds interests in various leases related to the unproved properties of the South Salinas Project (see
Note 7). Two of these leases are held with the same lessor:

    ●
    Lease
    1 – 8,417 acres; this lease was amended on May 27, 2022, to extend the then-active force majeure status for an uncontested
    twelve-month period, during which the Company was not required to demonstrate the existence of force majeure conditions. As consideration,
    the Company paid a one-time, non-refundable fee of $252,512, which was capitalized and included in the oil and gas property balance
    as of October 31, 2022. The extension period commenced on June 19, 2022. The force majeure status has since been extinguished by
    the drilling of the HV-1 well. The lease remains valid due to ongoing operations and oil production at the HV-3A well.

    ●
    Lease
    2 – 160 acres; this lease is held by delay rental and is renewed every three years. Until drilling commences, the Company is
    required to make annual delay rental payments of $30 per acre. The Company is in compliance and has prepaid the rental for the period
    October 2024 through October 2025.

During
February and March 2023, the Company entered into additional leases with two groups of lessors:

    ●
    Group
    1 – 360 acres; these leases have a 20-year term and require annual rental payments of $25 per acre.

    ●
    Group
    2 – 307.75 acres; these leases also have a 20-year term, with annual rental payments of $30 per acre.

    13

During
the current fiscal year, the Company made a strategic decision to abandon these additional leases. As a result, all associated exploration
and development costs—including capitalized costs for support equipment and facilities—have