Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 114

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 14
Chunk 114
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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 October 31, 2024 and 2023, the Company recorded $259,903
and $350,320 in debt issuance costs.

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 are capitalized. Acquisition costs of unproved leaseholds are assessed for impairment during the
holding period and transferred to proven crude oil and/or natural gas properties to the extent associated with successful exploration
activities. Significant undeveloped leases are assessed individually for impairment, based on the Company’s current exploration
plans, and a valuation allowance is provided if impairment is indicated. Capitalized costs from successful exploration and development
activities associated with producing crude oil and/or natural gas leases, along with capitalized costs for support equipment and facilities,
are amortized to expense using the unit-of-production method based on proved crude oil and/or natural gas reserves on a field-by-field
basis, as estimated by qualified petroleum engineers. The Company currently has four wells that are producing (one well in President’s
Field in the South Salinas Project and three wells at the McCool Ranch Oil Field) and is evaluating the