Trio Petroleum Corp Announces an Option to Acquire a 20% Interest in the Asphalt Ridge Development Project in Utah - Seite 2

Two development phases are currently envisioned. Phase 1 contemplates the development of 240 acres with an estimated 119 wells in the Northwest Asphalt Ridge Area. Phase 2 contemplates the development of approximately 30,000 acres with potentially thousands of new wells, extending about 20 miles along the trend to the southeast. The Company has entered into the Option to acquire up to 20% working interest in Phase 1 with the payment of $2,000,000 (i.e. 1% working interest for each $100,000 option exercised) as well as an option to acquire a 20% working interest in Phase 2. On December 29, 2023, the Company funded the first $200,000 payment.

Phase 1 is commencing this month (January, 2024) by a third party operator, with upgrades to existing roads and well pads, with the drilling of the first of three initial wells also planned to commence as early as this month. One of the initial goals is to produce the required amount of oil requested by interested parties to analyze and test the oil to confirm suitability for potential high value off-take agreements. With the completion of the three initial wells, the operator believes it will be able to execute reserve based lending agreements in order to fund all future development of Phase 1, although there is no guarantee that the operators will be able to secure such reserve based funding on acceptable terms and conditions.

The plan is to develop Phase 1 using advanced cyclic-steam production techniques, including initial CO2 injection and, subsequently, to similarly expand development across the 240 acres by drilling seventeen 7-spot hexagonal well patterns on 2 ½ acre spacing (a 7-spot has a central steam/CO2 injection well that is surrounded by six producing oil wells).

Two oil-saturated Cretaceous sandstones are planned to be developed in Phase 1: the Rimrock Sandstone and the underlying Asphalt Ridge Sandstone. An internationally regarded reserve auditing firm (the “Reserve Auditor”), in a November, 2023 report issued to the operator, for the Northwest Asphalt Ridge Area (i.e., Phase 1), estimated gross (100%) contingent resources in these two sandstones to range from a low estimate (1C) of about 42 million barrels of oil (BO) to a high estimate (3C) of about 92 million BO, with the Best Estimate (2C) being about 66 million BO. The Reserve Auditor estimated the 2C net contingent cash flow, discounted at 10%, at about $1 billion US dollars.