Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 35

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 legal proceedings arising in the ordinary course of business. Management currently
believes that any potential liabilities arising from such matters will not have a material adverse effect on the Company’s financial
position, results of operations, or cash flows.

Unproved
Property Leases

South
Salinas Project

The
Company holds various leases related to unproved properties in the South Salinas Project, including two leases with the same lessor:

    ●
    Lease
    1 (8,417 acres): Amended on May 27, 2022 to extend force majeure status for an additional uncontested twelve months, releasing the
    Company from evidencing force majeure conditions during that period. A one-time, non-refundable payment of $252,512 was made and
    capitalized as part of oil and gas property as of October 31, 2022. The force majeure status was extinguished following the drilling
    of the HV-1 well. Continued operations and oil production at the HV-3A well maintain the lease’s validity.

    ●
    Lease
    2 (160 acres): Held by delay rental, renewed every three years. The Company is required to pay $30 per acre annually until drilling
    commences. The delay rental payment for October 2024 through October 2025 has been paid in advance, and the Company remains in compliance.

In
February and March 2023, the Company 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, the Company strategically abandoned 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

The
Company 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