Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 11

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 in June 2024. Operations at
McCool Ranch were discontinued and all related leases were terminated in May 2025. Most recently, the Company recognized initial
revenues from its Saskatchewan assets during the fiscal quarter ended April 30, 2025. These revenues have been sustained and
improved during the fiscal quarter ended July 31, 2025, reflecting continued operational progress in the Saskatchewan
region.

Acquisition
of South Salinas Project

The
Company was initially formed to acquire from Trio LLC (“Trio LLC”) an approximate 82.75% working interest (which was subsequently
increased to an approximate 85.775% working interest in April 2023), in the large, approximately 9,300-acre South Salinas Project that
is located in Monterey County, California, and subsequently partner with certain members of Trio LLC’s management team to develop
and operate those assets. In September 2021, the Company entered into a Purchase and Sale Agreement (“Trio LLC PSA”) with
Trio LLC to acquire the purchased percentage of the South Salinas Project’s leases, wells and inventory in exchange for $300,000
cash, a non-interest-bearing note payable of $3,700,000 and 245,000 shares of the Company’s $0.0001 par value common stock (which
constituted 45% of the total number of issued shares of the Company at that time). The Company accounted for the purchase as an asset
acquisition, as prescribed in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
805 – Business Combinations. The assets and associated asset retirement obligations (“ARO”) were recorded based
on relative fair value at the estimated fair value of the consideration paid. The Company holds an approximate 68.62% interest after
the application of royalties (“net revenue interest”) in the South Salinas Project, while Trio LLC holds an approximate 3.8%
working interest in the South Salinas Project; the Company and Trio LLC are separate and distinct companies.

There
are two contiguous areas of notable oil/gas accumulations in the South Salinas Project; the first is the Humpback Area that occurs in
the northern part of the project and the second is the Presidents Area (“Presidents Oil Field”) that occurs in the southern
part of the project. As of July 31, 2025 and October 31, 2024, there were no proved reserves attributable to the approximate