Company: TPET
Filing Date: 2025-09-12
Form Type: 10-Q
Source: 0001493152-25-013189
Chunk: 145

Company: Trio Petroleum Corp.
Filing Date: 2025-09-12
Form: 10-Q
Item: Part I, Item 8
Chunk 145
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-time, non-refundable fee of $252,512, which was capitalized and included in the oil and gas property balance
    as of October 31, 2022. The extension period commenced on June 19, 2022. The force majeure status has since been extinguished by
    the drilling of the HV-1 well. The lease remains valid due to ongoing operations and oil production at the HV-3A well.

    ●
    Lease
    2 – 160 acres; this lease is held by delay rental and is renewed every three years. Until drilling commences, the Company is
    required to make annual delay rental payments of $30 per acre. The Company is in compliance and has prepaid the rental for the period
    October 2024 through October 2025.

During
February and March 2023, the Company entered into additional leases with two groups of lessors:

    ●
    Group
    1 – 360 acres; these leases have a 20-year term and require annual rental payments of $25 per acre.

    ●
    Group
    2 – 307.75 acres; these leases also have a 20-year term, with annual rental payments of $30 per acre.

    13

During
the current fiscal year, the Company made a strategic decision to abandon these additional leases. As a result, all associated exploration
and development costs—including capitalized costs for support equipment and facilities—have been expensed in accordance with
applicable accounting standards. The total expense recognized in connection with this abandonment was $111,149 and is reflected in the
Company’s statement of operations for the year-to-date period.

McCool
Ranch Oil Field

In
October 2023, the Company entered into the McCool Ranch Purchase Agreement with Trio LLC for the purchase of a 21.918315% working interest
in the McCool Ranch Oil Field, located in Monterey County near the Company’s flagship South Salinas Project. The Company initially
recorded a payment of $100,000 upon execution of the agreement, at which time Trio LLC began refurbishment operations on the San Ardo
WD-1 water disposal well to assess its ability to serve the produced water needs for the assets.

On
May 27, 2025, the Company made the decision to terminate the McCool Ranch Oil Field leases; accordingly, all capitalized costs related
to the acquisition, refurbishment, and production restart—including costs for support equipment