Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 72

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 72
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 we entered into additional leases covering unproved properties in the South Salinas Project:

    ●
    Group
    1: Covers 360 acres with a 20-year term; annual rental payments of $25 per acre

    ●
    Group
    2: Covers 307.75 acres with a 20-year term; annual rental payments of $30 per acre

During
the second and third quarters of fiscal 2025, we strategically terminated all additional leases in the South Salinas Project. All associated
exploration and development costs, including capitalized expenditures for equipment and facilities, were expensed in accordance with
applicable accounting standards. This decision followed a comprehensive evaluation of the leases’ economic viability, market conditions,
regulatory factors, and operational constraints.

McCool
Ranch Oil Field

We
previously held interests in two parcels of unproved leases in the McCool Ranch Oil Field:

    ●
    Parcel
    1: Ten leases totaling approximately 480 acres, held by delay rental payments

    ●
    Parcel
    2: One lease totaling approximately 320 acres, held by production

As
of the second quarter of 2025, we elected to terminate all McCool Ranch leases. These leases have been written off and expensed in the
statement of operations. No further rental payments or development activities will be pursued.

Asphalt
Ridge Leases – ARLO Agreement

On
November 10, 2023, we entered into the ARLO Agreement with HSO, granting the exclusive right to acquire up to a 20% working interest
in a 960-acre drilling and production program in the Asphalt Ridge leases for $2,000,000. The agreement allowed for investment in tranches,
with an initial tranche of no less than $500,000 payable within seven days of HSO satisfying certain conditions.

On
December 29, 2023, we amended the ARLO Agreement and funded $200,000 of the initial $500,000 tranche in advance of HSO satisfying the
required conditions. In exchange, we acquired a 2% interest in the leases. These funds were designated for infrastructure development,
including road construction. As of July 31, 2025, we had paid a total of $225,000 to HSO and hold a 2.25% working interest in the leases.
These costs have been capitalized and are reflected in the oil and gas property balance as of July 31, 2025