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

Company: Trio Petroleum Corp.
Filing Date: 2025-06-10
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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for an extension of then-current force majeure status for an additional, uncontested twelve months, during which the Company would be
released from having to evidence to the lessor the existence of force majeure conditions. As consideration for the granting of the lease
extension, the Company 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 operations and oil production at the HV-3A
well maintains the validity of the lease.

    12

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, the Company is required to make delay rental payments of $30/acre per year. The Company is currently in compliance
with this requirement and has paid in advance the delay rental payment for the period from October 2024 through October 2025.

During
February and March of 2023, the Company 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; the Company is 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; the Company is required to
make rental payments of $30/acre per year.

During
the current reporting period, the Company 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. The total
expense recognized in connection with this abandonment totals $73,806 and is reflected in the Company’s statement of operations
for the period.

McCool
Ranch Oil Field

In
October 2023, the Company entered into the McCool Ranch Purchase Agreement with Trio LLC for the purchase