Company: TPET
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001641172-25-014516
Chunk: 67

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 1
Chunk 67
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 extension, we paid the lessor a one-time, non-refundable payment
of $252,512; this amount was capitalized and reflected in the balance of the oil and gas property as of October 31, 2022. The extension
period commenced on June 19, 2022 and currently, the “force majeure” status has been extinguished by the drilling of the
HV-1 well. The ongoing operation and oil production at the HV-3A well maintain the validity of the lease.

The
second lease covers 160 acres of the South Salinas Project; it is currently held by delay rental and is renewed every three years. Until
drilling commences, we are required to make delay rental payments of $30/acre per year. We are currently in compliance with this requirement
and have paid in advance the delay rental payment for the period from October 2024 through October 2025.

32

During
February and March of 2023, we entered into additional leases related to the unproved properties of the South Salinas Project with two
groups of lessors. The first group of leases covers 360 acres and has a term of 20 years; we are required to make rental payments of
$25/acre per year. The second group of leases covers 307.75 acres and has a term of 20 years; we are required to make rental payments
of $30/acre per year. During the current reporting period, we made the strategic decision to abandon the additional oil and gas leases.
As a result, all associated costs related to exploration and development activities, including any capitalized costs for support equipment
and facilities, have been expensed in accordance with applicable accounting standards. This decision was based on a comprehensive evaluation
of the economic viability and future potential of the leases, considering market conditions, regulatory factors, and operational constraints.

We
hold interests in various leases related to the unproved properties of the McCool Ranch Oil Field. These leases occur in two parcels,
“Parcel 1” and “Parcel 2”. Parcel 1 comprises ten leases and approximately 480 acres, which are held by delay
rental payments that are paid-up and current. Parcel 2 comprises one lease and approximately 320 acres, which is held by production.
The total leasehold comprises approximately 800 gross and net acres. As of April 30, 2025, we made the decision to abandon all McCool
Ranch leases. Accordingly, these leases have