Exhibit 99.1

Dune Oil Corp. (formerly Trillion Energy International Inc.)

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

(Unaudited - Stated in United States dollars)

NOTICE OF NO AUDITOR REVIEW OF

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements for Trillion Energy International Inc. (the “Company”) have been prepared by management in accordance with International Financing Reporting Standards (“IFRS”). These condensed consolidated interim financial statements, which are the responsibility of management, are unaudited and have not been reviewed by the Company’s auditors. The Company’s Audit Committee and Board of Directors have reviewed and approved these condensed consolidated interim financial statements. In accordance with the disclosure requirements of National Instrument 51-102 released by the Canadian Securities Administrators, the Company’s independent auditors have not performed a review of these condensed consolidated interim financial statements.

DUNE OIL CORP. (FORMERLY TRILLION ENERGY INTERNATIONAL INC.)

Index to the Condensed Consolidated Interim Financial Statements

	Page
Consolidated interim statements of financial position (unaudited)	2

Consolidated interim statements of income and comprehensive income (unaudited)	3

Consolidated interim statements of stockholders’ equity (unaudited)	4

Consolidated interim statements of cash flows (unaudited)	5-6

Notes to the condensed consolidated interim financial statements (unaudited)	7

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Consolidated Interim Statements of Financial Position

(Expressed in U.S. dollars)

	Notes		June 30, 2026 (Unaudited)			December 31, 2025 (Audited)
				$			$
ASSETS
Current assets
Cash and cash equivalents				323,658			430,313
Amounts receivable		4		217,905			737,753
Prepaid expenses and deposits		5		16,051			46,909
Total current assets				557,614			1,214,975

Oil and gas properties, net		6		-			721,403
Exploration and evaluation assets		8		507,842			-
Property and equipment, net		7		12,512			409,931
Long-term deposits		5		-			756,634
TOTAL ASSETS				1,077,968			3,102,943

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities		9,17		1,368,605			18,792,482
Loans payable		10,17		3,823,573			4,972,059
Convertible debt		11		4,231,161			11,823,815
Total current liabilities				9,423,339			35,588,356

Asset retirement obligation		12		-			6,412,057
TOTAL LIABILITIES				9,423,339			42,000,413

Stockholders’ deficiency
Share capital				81,412,463			79,611,590
Warrant and option reserve				7,256,544			7,228,089
Obligation to issue shares				155,195			54,042
Accumulated other comprehensive income (loss)				1,110,462			(22,560,802	)
Accumulated deficit				(98,280,035	)		(103,230,389	)
TOTAL STOCKHOLDERS’ DEFICIENCY				(8,345,371	)		(38,897,470	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY				1,077,968			3,102,943

Nature of operations (Note 1)

Commitments and Contingencies (Note 22)

Subsequent events (Note 23)

APPROVED BY THE BOARD OF DIRECTORS ON August 31, 2026

“Sean Stofer”		“David Thompson”
Director		Director

See accompanying notes to condensed consolidated interim financial statements.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Consolidated Statements of Income and Comprehensive Income

(Expressed in U.S. dollars)

(Unaudited)

			For the three months ended						For the six months ended
	Notes		June 30, 2026			(Re-presented) ⁽¹⁾ June 30, 2025			June 30, 2026			(Re-presented) ⁽¹⁾ June 30, 2025
Expenses
Depreciation		7	$	2,065			2,065		$	4,126			4,034
Stock-based compensation		13,14,15		1,028			16,959			4,466			16,959
General and administrative		18		873,969			443,707			1,417,280			843,284
Total expenses				877,062			462,731			1,425,872			864,277

Loss before other income (expenses)				(877,062	)		(462,731	)		(1,425,872	)		(864,277	)

Other income (expenses)
Interest (expense) income				(298	)		1,105			(309	)		2,635
Finance cost		10,11		(105,659	)		(689,940	)		(470,415	)		(1,301,045	)
Foreign exchange (loss) income				(115,975	)		190,047			(156,011	)		192,067
Gain on debt settlement		11		3,695			225,375			3,695			230,880
Gain on net monetary position				9,084			-			9,089			-
Gain (loss) on debt extinguishment		11		-			-			7,927,913			-
Fair value loss on remeasurement of convertible debenture		11		(190,327	)		-			(212,435	)		-
Total other income (expenses)				(399,480	)		(273,413	)		7,101,527			(875,463	)

Net income (loss) from continuing operations				(1,276,542	)		(736,144	)		5,675,655			(1,739,740	)
Net (loss) income from discontinued operations, net of tax		3		451,131			177,031			(725,301	)		3,376,309
Total net (loss) income				(825,411	)		(559,113	)		4,950,354			1,636,569

Other comprehensive income (loss) Items that may be reclassified subsequently to net income (loss):
Continuing operations:
Foreign currency translation				953,277			(761,507	)		1,126,784			(723,220	)
Discontinued operations:
Foreign currency translation – foreign subsidiary held for sale				21,583,905			(1,157,593	)		22,544,480			(2,972,415	)
Total other comprehensive income (loss)				22,537,182			(1,919,100	)		23,671,264			(3,695,635	)
Total comprehensive income (loss)				21,711,771			(2,478,213	)		28,621,618			(2,059,066	)

Total comprehensive income (loss) attributable to:
Continuing operations				(323,265	)		(1,497,651	)		6,802,439			(2,462,960	)
Discontinued operations				22,035,036			(980,562	)		21,819,179			403,894
Total comprehensive income (loss)				21,711,771			(2,478,213	)		28,621,618			(2,059,066	)

Earnings (loss) per share
Basic and diluted from continuing operations				(0.02	)		(0.01	)		0.13			(0.04	)
Basic and diluted from discontinued operations				0.01			0.00			(0.02	)		0.09

Weighted average shares outstanding
Basic and diluted				48,272,194			39,364,800			44,966,665			39,364,800

⁽¹⁾ The comparative information has been re-presented to account for a discontinued operation (Note 3).

See accompanying notes to condensed consolidated interim financial statements.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Consolidated Interim Statements of Stockholders’ Equity

(Expressed in U.S. dollars)

(Unaudited)

	Shares		Share capital		Warrant and option reserve		Receivables for equity issued			Obligation to issue shares			Shares to be cancelled		Accumulated other comprehensive income (loss)			Accumulated deficit			Total
				$		$		$			$			$		$			$			$
Balance, December 31, 2024		31,897,753		78,382,631		7,209,546		(90,425	)		6,000			7,645		(17,356,701	)		(54,009,488	)		14,149,208
Stock issued for debt settlement		1,031,232		140,301		–		–			–			–		–			–			140,301
Stock issued for services		466,483		73,857		–		–			6,000			–		–			–			79,857
Stock issued for convertible debentures		5,969,332		754,335		–		–			–			–		–			–			754,335
Stock-based compensation – RSUs		–		–		16,959		–			–			–		–			–			16,959
Net income and comprehensive income		–		–		–		–			–			–		(3,695,635	)		1,636,569			(2,059,066	)
Balance, June 30, 2025		39,364,800		79,351,124		7,226,505		(90,425	)		12,000			7,645		(21,052,336	)		(52,372,919	)		13,081,594

Balance, December 31, 2025		41,624,407		79,611,590		7,228,089		–			54,042			–		(22,560,802	)		(103,230,389	)		(38,897,470	)
Stock issued in private placements		10,012,668		1,028,866		23,989		–			105,728			–		–			–			1,158,583
Stock issued for debt settlement		6,996,943		754,452		–		–			(46,636	)		–		–			–			707,816
Stock issued for services		162,808		17,555		–		–			42,061			–		–			–			59,616
Stock-based compensation – RSUs		–		–		4,466		–			–			–		–			–			4,466
Net income and comprehensive income		–		–		–		–			–			–		23,671,264			4,950,354			28,621,618
Balance, June 30, 2026		58,796,826		81,412,463		7,256,544		–			155,195			–		1,110,462			(98,280,035	)		(8,345,371	)

See accompanying notes to condensed consolidated interim financial statements.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Consolidated Interim Statements of Cash Flows

(Expressed in U.S. dollars)

(Unaudited)

	Six months ended
	June 30, 2026			June 30, 2025
		$			$
OPERATING ACTIVITIES
Total net income		4,950,354			1,636,569

Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		4,466			16,959
Stock issued for services		59,616			79,857
Depletion		4,647			113,494
Depreciation		11,764			37,757
Accretion of asset retirement obligation		68,465			131,780
Accretion and accrued interest expense		478,696			1,310,291
Interest expense		-			7,932
Change in asset retirement obligation estimate		(80,467	)		-
Unrealized foreign exchange loss		1,238,178			1,124,049
Gain on revaluation for assets held for sale		-			(44,950	)
Gain on debt settlement		(3,695	)		(230,880	)
Gain on sale of subsidiary		(523,110	)		-
Loss (gain) on net monetary position		79,564			(7,142,605	)
Deferred tax expense		-			1,299,167
Gain on debt extinguishment		(7,927,913	)		-
Gain on modification of lease		-			(31,363	)
Gain on disposal of property and equipment		-			(61,676	)
Fair value loss on remeasurement of convertible debenture		212,435			-

Changes in non-cash working capital items:
Amounts receivable		583,756			385,022
Prepaid expenses and deposits		(37,999	)		199,125
Accounts payable and accrued liabilities		196,975			2,014,813
Net cash (used in) provided by operating activities		(684,268	)		845,341

INVESTING ACTIVITIES
Property and equipment expenditures		-			(3,975	)
Oil and gas properties expenditures		-			(557,669	)
Advances from JV Partners		-			290,821
Exploration and evaluation expenditures		(521,840	)		-
Cash and cash equivalents derecognized on sale of subsidiary		(48,404	)		-

Changes in non-cash working capital items:
Prepaid expenses and deposits		(28,235	)		(147,321	)
Accounts payable and accrued liabilities		476			32,715
Net cash used in investing activities		(598,003	)		(385,429	)

FINANCING ACTIVITIES
Proceeds from issuance of shares in private placements		1,158,583			-
Repayments of loans payable		-			(990,008	)
Lease payments		-			(7,593	)
Net cash provided by (used in) financing activities		1,158,583			(997,601	)

Effect of exchange rate changes on cash and cash equivalents		17,033			(32,654	)

Net decrease in cash and cash equivalents		(106,655	)		(570,343	)
Cash and cash equivalents, beginning of period		430,313			599,208
Cash and cash equivalents, end of period		323,658			28,865

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Consolidated Interim Statements of Cash Flows

(Expressed in U.S. dollars)

(Unaudited)

	Six months ended
	June 30, 2026		June 30, 2025
		$		$
Supplemental cash flow information
Interest paid on credit facilities		158,903		226,020
Interest paid on lease liability		–		7,862

Non-cash investing and financing activities:
Stock issued for debt settlement		707,816		140,301
Stock issued for services		59,616		79,857

Refer to Note 3 for disclosure of cash flows attributable to discontinued operations.

See accompanying notes to condensed consolidated interim financial statements.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

1.	Organization and Going Concern

Dune Oil Corp. (formerly Trillion Energy International Inc.) and its consolidated subsidiaries, (collectively referred to as the “Company”) is a Canadian based oil and gas exploration and production company. Effective January 2022, the corporate headquarters moved to Suite 700, 838 West Hastings Street, Vancouver, B.C., Canada from Turan Gunes Bulvari, Park Oran Ofis Plaza, 180-y, Daire:54, Kat:14, 06450, Oran, Cankaya, Anakara, Turkey. The Company also has a registered office in Canada. The Company is incorporated in British Columbia. The Company’s shares trade on the OTCQB under the symbol “TRLEF” and trade on the Canadian Securities Exchange (the “Exchange”) under the symbol “DUNE” (formerly “TCF”).

The Company meets the definition of a foreign private issuer, as defined under Rule 3b-4 of the Securities Exchange Act of 1934, as amended.

In April 2026, the Company consolidated its issued share capital on a ratio of five old common shares for every one new post-consolidated common share. All current and comparative references to the number of common shares, weighted average number of common shares, loss per share, stock options and warrants have been restated to give effect to this share consolidation.

Effective August 4, 2026, Trillion Energy International Inc. changed its name to Dune Oil Corp., to reflect its strategic focus on oil exploration and development, and its trading symbol on the Exchange changed from “TCF” to “DUNE”. The name change did not result in any consolidation of the Company’s share capital and did not affect the rights of shareholders. Existing share certificates remain valid and are not required to be exchanged.

Discontinued operations:

During the period, the Company committed to a plan to dispose of its wholly-owned subsidiary, Park Place Energy Turkey (“PPE Turkey”), which holds the Company’s license interests in the SASB natural gas project and the Cendere oil field. Accordingly, the assets and liabilities of PPE Turkey have been classified as held for sale, and the results of PPE Turkey have been presented as a discontinued operation in these condensed consolidated interim financial statements in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. The consolidated interim statements of income (loss) and comprehensive income (loss) and the related notes for the comparative period have been re-presented to show the discontinued operation separately from continuing operations. In accordance with IFRS 5, the consolidated statement of financial position for the comparative period has not been re-presented.

On April 7, 2026, the Company completed the sale of all of the issued and outstanding shares of PPE Turkey. Further information regarding the discontinued operation and the sale agreement is provided in Note 3.

Going concern:

These condensed consolidated interim financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. As at June 30, 2026, the Company’s current liabilities exceeded its current assets by $8,865,725 (December 31, 2025 – $34,373,381) and its accumulated deficit amounts to $98,280,035 (December 31, 2025 – $103,230,389). For the six months ended June 30, 2026, cash used in operating activities was $684,268 (2025 – $845,341 net cash provided in operating activities). The Company’s continuation as a going concern is dependent upon its ability to complete financing sufficient to meet current and future obligations, the successful results from its business activities, and its ability to operate profitably and generate funds. Although the Company raised capital in previous reporting periods, additional funding will be required to continue current operations and further advance its existing oil and gas assets in the upcoming 12 months. These factors indicate the existence of material uncertainty which raises substantial doubt about the Company’s ability to continue as a going concern.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

2.	Basis of Presentation and Material Accounting Policies

(a)	Statement of Compliance

These unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to the preparation of condensed interim financial statements, including International Accounting Standards (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”), and the Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). Accordingly, certain disclosures included in annual financial statements have been condensed or omitted and these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025.

(b)	Use of Estimates and Judgments

The Company’s management makes judgments in its process of applying the Company’s accounting policies in the preparation of its unaudited condensed consolidated interim financial statements. In addition, the preparation of the financial data requires that the Company’s management make assumptions and estimates of the effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively. The critical judgments and estimates applied in the preparation of the Company’s condensed consolidated interim financial statements are consistent with those applied and disclosed in the Company’s consolidated financial statements for the year ended December 31, 2025.

(c)	Basis of Consolidation

These condensed consolidated interim financial statements include the accounts of the Company and its wholly owned subsidiaries Park Place Energy Corp. (“PPE Corp.”), Park Place Energy Bermuda (“PPE Bermuda”), BG Exploration EOOD (“BG Exploration”), PPE Turkey (up to date of deconsolidation April 7, 2026 – Note 3) and Trillion Energy International Petrol Arama (“Trillion A.S.”).

The Company’s oil and gas operations are conducted jointly with its joint venture partner (Note 6). The joint arrangement meets the definition of a joint operation under IFRS 11, “Joint Arrangements” (“IFRS 11”); therefore, the Company’s share of the assets, liabilities, revenues and expenses are recorded in the consolidated financial statements. All intercompany balances and transactions are eliminated on consolidation.

Name of the joint

arrangement

Nature of the relationship

with the joint arrangement

Principal place of operation

of joint arrangement

Proportion of

participating share

South Akcakoca Sub-Basin (“SASB”)

Operator

Turkey

49%

Cendere

Participant

Turkey

19.6%

(d)	Functional and Presentation Currency

The condensed consolidated interim financial statements are expressed in U.S. dollars. The functional currency of BG Exploration is the Bulgarian Lev. The functional currency of the Company’s Turkish operations is the Turkish Lira (“₺”). The functional currency of the Company’s Bermuda subsidiary is the United States dollar (“USD”), and the function currency of PPE Corp is the USD.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

2.	Basis of Presentation and Material Accounting Policies (continued)

(e)	Basis of Measurement

These condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain derivative liabilities, which are measured at fair value.

(f)	Hyperinflation

Due to various qualitative factors and developments with respect to the economic environment in Turkey, including but not limited to, the acceleration of multiple local inflation indices, the three-year cumulative inflation rate of the local Turkish wholesale price index exceeding 100% at the end of February 2022 and the significant devaluation of the Turkish Lira, Turkey has been designated a hyper-inflationary economy as of April 1, 2022 for accounting purposes.

Accordingly, IAS 29, Financial Reporting in Hyper-Inflationary Economies was adopted by the Company in its consolidated financial statements and applied to these consolidated financial statements in relation to PPE Turkey and Trillion A.S. The condensed consolidated interim financial statements are based on the historical cost approach in IAS 29.

The application of hyperinflation accounting requires restatement of PPE Turkey and Trillion A.S’s non-monetary assets and liabilities, equity and comprehensive income (loss) items from the original transaction date when they were first recognized into the current purchasing power which reflects a general price index current at the end of the reporting period. To measure the impact of inflation on its financial statements and results, the Company has elected to use the consumer price index (“CPI”) as published by the Turkish Statistical Institute “TURKSTAT”.

IAS 29 also requires the restatement of comparative periods for the effects of hyperinflation unless the comparatives were previously presented in a different presentation currency of a non-hyperinflationary economy. The condensed consolidated interim financial statements of the Company are presented in US dollars, a stable currency, and as a result the comparative amounts do not require restatement.

On April 1, 2022, the Company recognized an adjustment of $473,907 for the impact of hyperinflation within accumulated other comprehensive loss related to the non-monetary assets held by PPE Turkey, which have been restated from the historic date when they were first recognized to the beginning of the reporting period (the “Opening Hyperinflation Adjustment”). On initial adoption of IAS 29, there is an accounting policy choice to recognize the Opening Hyperinflation Adjustment directly to opening equity or to other comprehensive income and the Company has elected to recognize this amount directly to opening equity.

The value of the CPI at June 30, 2026, was 130 (December 31, 2025 - 110) and the movement in the CPI for the six months ended June 30, 2026 was 20 (2025 – 14), an increase of approximately 20% (2025 – 17%). During FY2026 Turkstat updated the basis year for their CPI calculation from 2003 to 2025, the CPI figures have been updated to represent this change. As a result of the change in CPI, the Company recognized a gain on net monetary position of $9,089 in continuing operations for the six months ended June 30, 2026 (2025 – $Nil) to restate transactions into a measuring unit current as of each period end. In addition, the Company recognized a loss on net monetary position of $88,653 in discontinued operations for the six months ended June 30, 2026 (2025 – gain of $7,142,605) to restate transactions into a measuring unit current as of each period end.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

(g)	New Material Accounting Policies

The accounting policies applied in these condensed consolidated interim financial statements are consistent with those applied and disclosed in the Company’s audited financial statements for the year ended December 31, 2025 except for the following not previously disclosed:

2.	Basis of Presentation and Material Accounting Policies (continued)

Assets and liabilities held for sale and discontinued operations:

Assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is met when the sale is highly probable, the asset is available for immediate sale in its present condition and the sale is expected to be completed within one year from the date of classification.

Assets and disposal groups are classified and presented as discontinued operations if the assets or disposal groups are disposed of or classified as held for sale and:

●	The assets or disposal groups are a major line of business or geographical area of operations;

●	The assets or disposal groups are part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or,

●	The assets or disposal groups are a subsidiary acquired solely for the purpose of resale.

A component that is a separate major line of business or geographical area of operations and has been disposed of, closed, abandoned or terminated is also classified as a discontinued operation.

The assets or disposal groups that meet these criteria are measured at the lower of carrying amount and fair value less cost of disposal, with impairments recognized in the consolidated statements of income (loss) and comprehensive income (loss). An impairment loss is recognized for any initial or subsequent write-down of the asset or disposal group to fair value less cost to dispose. Non-current assets and liabilities held for sale are presented separately in current assets and liabilities within the consolidated statement of financial position. Assets held for sale are not depreciated, depleted or amortized. The comparative period consolidated statement of financial position is not re-presented.

The results of discontinued operations, net of tax, are shown separately in the consolidated statements of income (loss) and comprehensive income (loss) and comparative figures are re-presented.

Convertible debentures — modification and designation at fair value through profit or loss

During the six months ended June 30, 2026, the Company and the holders of its 12.0% convertible debentures agreed to amend the terms of the debentures pursuant to a fourth supplemental debenture indenture. The Company assessed the amendment under IFRS 9 and concluded that it resulted in terms substantially different from those of the original debentures. Accordingly, the original financial liability was derecognized and a new financial liability was recognized at its fair value on the date of modification, with the difference between the carrying amount of the original liability and the fair value of the new liability recognized in profit or loss as a gain on extinguishment.

The new financial liability is a hybrid instrument comprising a debt host and an embedded conversion feature that would otherwise require separation. As permitted under IFRS 9, the Company has irrevocably designated the entire instrument as at fair value through profit or loss on initial recognition, rather than separating the embedded derivative, as this eliminates the measurement inconsistency that would otherwise arise. The instrument is subsequently measured at fair value at each reporting date, with changes in fair value recognized in profit or loss, except for any change attributable to the Company’s own credit risk, which is recognized in other comprehensive income unless doing so would create or enlarge an accounting mismatch.

The fair value of the new instrument is determined using a probability-weighted expected present value technique and is classified within Level 3 of the fair value hierarchy, as the measurement relies on significant unobservable inputs, including the estimated probability of completing the related equity financing and the estimated recovery rate in the event the financing is not completed.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

2.	Basis of Presentation and Material Accounting Policies (continued)

Royalty receivable

On the sale of PPE Turkey (Note 3), the Company retained a 7% gross overriding royalty on future production revenues from the underlying licenses. The royalty represents a contractual right to receive cash from a third party and is accounted for as a financial asset under IFRS 9. Because the amount and timing of the cash flows vary with future production volumes, commodity prices and the purchaser’s continued operation or disposition of the licenses, the royalty does not give rise to cash flows that are solely payments of principal and interest. Accordingly, the royalty receivable is classified and subsequently measured at fair value through profit or loss.

The royalty receivable was recognized initially at its fair value of $164,115 on April 7, 2026 as part of the consideration received on the sale of PPE Turkey, and is remeasured at fair value at each reporting date, with changes in fair value recognized in profit or loss. Fair value is determined using a discounted cash flow technique incorporating management’s estimates of future production revenue from the SASB gas field and the Cendere oil field, the probability and timing of cumulative gross revenues following closing exceeding the $7.5 million royalty threshold, a risk-adjusted discount rate, and the amount of proved oil reserves for the properties. The measurement relies on significant unobservable inputs and is classified within Level 3 of the fair value hierarchy. The royalty receivable is presented within amounts receivable (Note 4).

3.	Sale of Subsidiary and Discontinued Operations

On April 7, 2026, the Company, through a subsidiary, closed a sale agreement (the “SPA”) to sell all of the issued and outstanding shares of PPE Turkey, which holds the Company’s license interests in the SASB natural gas project and the Cendere oil field.

Under the terms of the SPA, the purchaser will assume the assets and liabilities associated with PPE Turkey. In connection with the transaction, the Company will retain a 7% gross overriding royalty on future production revenues from the underlying licenses. The royalty becomes payable once cumulative gross revenues from the licenses following closing exceed $7.5 million and may also be realized upon any future disposition of the licenses by the purchaser.

From the date of closing, the Company does not hold any shareholding, voting rights, board representation or management role in PPE Turkey, and the Company has no power to direct or control the activities of PPE Turkey. All directors and officers of PPE Turkey affiliated with the Company resigned effective on or before the closing date.

The Company’s continuing involvement with PPE Turkey following the disposal is limited to the following:

(a)	Gross overriding royalty. The Company retained a 7% gross overriding royalty on production revenue from the SASB gas field and the Cendere oil field, together with related audit and information rights, including the receipt of monthly cumulative production revenue statements.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

3.	Sale of Subsidiary and Discontinued Operations (continued)

(b)

Transition services agreement. Effective April 7, 2026, the Company entered into an agreement (the “Transition Agreement”) with the purchaser under which the purchaser is responsible for the post-closing transition of PPE Turkey, including retaining Turkish legal counsel, notifying the General Directorate of Mining and Petroleum Affairs of the Republic of Türkiye (“MAPEG”) of the change in ownership of PPE Turkey, completing the regulatory steps required for PPE Turkey’s continued operation of its petroleum licences, and maintaining professional working relationships with the Turkish Petroleum Corporation (“TPAO”), MAPEG and other Turkish governmental authorities. The purchaser has agreed not to act in a manner adverse to the business, operations or regulatory standing of the Company or its subsidiaries operating in Türkiye, and the purchaser’s liability under the Transition Agreement is uncapped.

In consideration, the Company agreed to pay (i) a service fee of CAD $25,000, which was earned upon execution of the agreement and is non-refundable, and (ii) CAD $25,000 on account of anticipated legal fees in connection with the regulatory filings described above, with the purchaser responsible for funding all legal fees and related costs incurred. The agreement has a term of six months from the effective date and may be terminated by the Company for convenience on 30 days’ written notice.

(c)

Transition assistance. Under the SPA and the Transition Agreement, the Company will provide reasonable commercial assistance with licence-transfer requirements, including joint applications to MAPEG and/or TPAO as required, and, during the six-month transition period, limited handover support on a question-and-answer basis, including referrals of PPE Turkey’s counterparties, creditors and contacts to PPE Turkey’s new management, the provision of certain historical information and presentations, and the provision of information relevant to existing PPE Turkey litigation. No additional consideration is receivable or payable by the Company in respect of this assistance.

	$
Total consideration received
Cash		1
Royalty receivable		164,115
		164,116
Carrying value of net assets sold
Cash and cash equivalents		48,404
Amounts receivable		66,419
Long-term deposits		756,634
Prepaid expenses and deposits		66,859
Oil and gas properties, net		759,188
Property and equipment, net		408,488
Intercompany balances receivable		243,544
Loans payable		(1,295,852	)
Accounts payable and accrued liabilities		(17,085,282	)
Asset retirement obligation		(6,381,048	)
		(22,412,646	)
Excess of net liabilities over consideration		(22,248,530	)
Cumulative translation adjustment reclassified to profit and loss		21,725,420
Gain on sale of subsidiary		523,110

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

3.	Sale of Subsidiary and Discontinued Operations (continued)

The following table summarizes the major line items for PPE Turkey that are included in loss (income) from discontinued operations, in the consolidated statements income (loss) and comprehensive income (loss):

	Three months ended						Six months ended
	June 30, 2026			June 30, 2025			June 30, 2026			June 30, 2025
	$			$			$			$
Revenue
Oil and gas revenue, net		-			636,530			609,245			1,575,466

Cost and expenses
Production		-			731,235			453,142			1,322,803
Depletion		-			13,997			4,647			113,494
Depreciation		-			19,956			7,638			33,723
Accretion of asset retirement obligation		-			66,974			68,465			131,780
Geological and geophysical expenses		-			3,498			-			30,819
General and administrative		34,128			493,189			405,027			858,745
Total expenses		34,128			1,328,849			938,919			2,491,364
Loss before other income (expenses)		(34,128	)		(692,319	)		(329,674	)		(915,898	)

Other income (expenses)
Interest expense		-			(37,914	)		-			(134,280	)
Finance cost		-			(5,214	)		(192,818	)		(9,246	)
Foreign exchange loss		(38,215	)		(542,727	)		(717,733	)		(1,545,694	)
Gain on revaluation for assets held for sale		-			18,518			-			44,950
Gain (loss) on net monetary position		364			2,504,987			(88,653	)		7,142,605
Change in estimate of asset retirement obligation		-			-			80,467			-
Gain on modification of lease		-			31,363			-			31,363
Gain on disposal of property plant and equipment		-			61,676			-			61,676
Gain on sale of subsidiary		523,110			-			523,110			-
Total other income (expenses)		485,259			2,030,689			(395,627	)		5,591,374
Deferred tax expense		-			(1,161,339	)		-			(1,299,167	)
Income (Loss) from discontinued operations		451,131			177,031			(725,301	)		3,376,309

The following represents the cash flows from operating, investing and financing activities of discontinued operations for the six months ended June 30, 2026 and 2025.

	June 30, 2026			June 30, 2025
		$			$
Net cash provided by operating activities		280,476			845,341
Net cash used in investing activities		(76,163	)		(385,429	)
Net cash used in financing activities		-			(997,601	)

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

4.	Amounts Receivable

	June 30, 2026		December 31, 2025
		$		$
Accounts receivable		–		711,984
GST receivable		53,816		20,610
Royalty receivable (Note 3)		159,076		–
Other		5,013		5,159
		217,905		737,753

5.	Prepaid Expenses and Deposits

	June 30, 2026		December 31, 2025
		$		$
Exploration and production advances		–		39,924
Prepaid expenses		16,051		6,985
Close-Out Fund		–		756,634
		16,051		803,543

Prepaid expenses and deposits – Current		16,051		46,909
Long-term deposits		–		756,634

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

6.	Oil and Gas Properties

	SASB			Cendere			Total
		$			$			$
Cost
As at December 31, 2024		69,851,749			3,218,873			73,070,622
Additions		721,672			–			721,672
Sale of O&G assets		(38,273	)		–			(38,273	)
JV Contribution		(379,450	)		–			(379,450	)
Change in ARO estimate and additions		239,061			1,728			240,789
Currency translation adjustment		(12,361,503	)		(567,487	)		(12,928,990	)
Impact of hyperinflation		17,841,448			819,360			18,660,808
As at December 31, 2025		75,874,704			3,472,474			79,347,178
Change in ARO estimate and additions		–			(376	)		(376	)
Currency translation adjustment		(2,852,516	)		(130,540	)		(2,983,056	)
Impact of hyperinflation		7,352,625			336,499			7,689,124
Transfer to assets held for sale		(80,374,813	)		(3,678,057	)		(84,052,870	)
As at June 30, 2026		–			–			–

Accumulated depletion and impairment
As at December 31, 2024		19,727,803			2,519,635			22,247,438
Depletion		105,227			34,323			139,550
Impairment		54,498,394			–			54,498,394
Currency translation adjustment		(3,476,986	)		(444,076	)		(3,921,062	)
Impact of hyperinflation		5,020,266			641,189			5,661,455
As at December 31, 2025		75,874,704			2,751,071			78,625,775
Depletion		–			4,647			4,647
Currency translation adjustment		(2,852,516	)		(103,440	)		(2,955,956	)
Impact of hyperinflation		7,352,625			266,592			7,619,217
Transfer to assets held for sale		(80,374,813	)		(2,918,870	)		(83,293,683	)
As at June 30, 2026		–			–			–

Net book value
As at December 31, 2025		–			721,403			721,403
As at June 30, 2026		–			–			–

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

7.	Property and Equipment

	Right-of-use assets			Leasehold improvements			Other Equipment			Motor Vehicles			Furniture			Total
		$			$			$			$			$			$
Cost
As at December 31, 2024		194,642			246,028			435,035			439,832			92,814			1,408,351
Additions		–			12,401			–			–			275			12,676
Disposals		(228,480	)		–			–			(516,297	)		–			(744,777	)
Currency translation adjustment		(4,298	)		(39,411	)		(76,814	)		(35,462	)		(13,606	)		(169,591	)
Impact of hyperinflation		50,920			55,746			110,910			111,927			19,344			348,847
As at December 31, 2025		12,784			274,764			469,131			–			98,827			855,506
Currency translation adjustment		–			(9,888	)		(17,670	)		–			(3,416	)		(30,974	)
Impact of hyperinflation		–			23,752			45,539			–			7,966			77,257
Transfer to assets held for sale		(12,784	)		(260,442	)		(497,000	)		–			(87,082	)		(857,308	)
As at June 30, 2026		–			28,186			–			–			16,295			44,481

Accumulated depreciation
As at December 31, 2024		97,746			184,611			149,280			202,263			32,768			666,668
Depreciation		15,216			10,947			21,382			8,860			8,384			64,789
Disposals		(107,824	)		-			-			(226,946	)		-			(334,770	)
Currency translation adjustment		(17,228	)		(30,495	)		(26,309	)		(35,648	)		(5,556	)		(115,236	)
Impact of hyperinflation		24,874			43,562			37,988			51,471			6,229			164,124
As at December 31, 2025		12,784			208,625			182,341			–			41,825			445,575
Depreciation		–			4,244			4,727			–			2,793			11,764
Currency translation adjustment		–			(7,863	)		(6,855	)		–			(1,021	)		(15,739	)
Impact of hyperinflation		–			18,472			17,670			–			3,049			39,191
Transfer to assets held for sale		(12,784	)		(203,678	)		(197,883	)		–			(34,477	)		(448,822	)
As at June 30, 2026		–			19,800			–			–			12,169			31,969

Net Book Value
As at December 31, 2025		–			66,139			286,790			–			57,002			409,931
As at June 30, 2026		–			8,386			–			–			4,126			12,512

8.	Exploration and Evaluation Assets

	$
As at December 31, 2025	-
Additions	521,840
Currency translation adjustment	(22,958	)
Impact of hyperinflation	8,960
As at June 30, 2026	507,842

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

8.	Exploration and Evaluation Assets (continued)

Turkey – M47 Block

During the six months ended June 30, 2026, the Company, through a wholly owned subsidiary, entered into an agreement to earn a 29% working interest in the M47 Block located in southeast Turkey in exchange for a total investment of $15,000,000. The earn-in is conditional on the Company funding certain work program costs as they fall due. The work program comprises exploration drilling and the acquisition of seismic data.

Under the earn-in, the Company is required to bear 80% of the cost of the next two exploration wells and certain seismic costs, and to advance two funding tranches of $9,500,000 in respect of the 2026 work program and $5,500,000 in respect of the 2027 work program. The Company’s entitlement to the 29% working interest is conditional on it meeting these funding commitments (Note 22).

Exploration and evaluation assets are not subject to depletion and are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed the recoverable amount. As at June 30, 2026, no such indicators were identified and no impairment was recognized.

9.	Accounts Payable and Accrued Liabilities

	June 30, 2026		December 31, 2025
		$		$
Accounts payable		963,701		16,310,709
Accrued liabilities		404,458		2,371,047
Payroll, withholding and sales tax liabilities		446		110,726
		1,368,605		18,792,482

10.

Loans Payable

	June 30, 2026			December 31, 2025
		$			$
Unsecured, interest-bearing loan at 6% per annum²		34,162			34,415
Unsecured, interest-bearing loan at 1% per month¹		3,621,000			3,461,250
Unsecured, interest-bearing loan at 12% per annum³		168,411			147,391
Unsecured, interest-bearing loan at a variable interest rate⁴		–			1,329,003
Total loans payable		3,823,573			4,972,059
Current portion of loans payable		(3,823,573	)		(4,972,059	)
Long-term portion of loans payable		–			–

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

10.

Loans Payable (continued)

The Company is in compliance with all debt covenants on loans payable, other than as noted below, and has not received any waivers from lenders:

	(1)	On July 1, 2023, the Company entered into agreements with TR1 Master Fund to borrow $1,065,000 and $1,597,500. The loans were issued with a $65,000 and $97,500 discount, respectively, and bear an interest rate of 1% per month. The maturity date was December 31, 2023, and the Company is claiming that the principal of TR1 Master Fund agreed to extend the loans to December 31, 2024. In the event that the loan is repaid in full prior to the maturity date, the minimum interest payments on the loans are $40,000 and $60,000, respectively. If, during the period that any amount of the loan remains outstanding, the Company issues any equity, the Lender may demand repayment of all or part of the principal amount of the loan in an amount equal to the aggregate subscription price of the equity offering. Accrued interest in excess of the minimum interest payments of $63,900 and $95,850, respectively, were recorded during the six months ended June 30, 2026 (June 30, 2025 - $63,900 and $95,850, respectively). The Company is currently in default on these loans, however, the Company has filed claims in connection with the ongoing receivership proceedings of the lender and related entities, and is seeking to offset any amounts outstanding against damages claimed by the Company (Note 22).

	(2)	On July 20, 2023, the Company entered into a promissory note for CAD$300,000 (USD$228,023) with a company controlled by a related party. The promissory note bears an interest rate of 6% per annum. The principal plus all accrued unpaid interest is to be repaid on demand but no later than December 31, 2024, as a result the Company is currently in default on this loan. During the year ended December 31, 2025, CAD$8,000 (USD$5,536) of the principal balance was repaid and CAD$2,693 (USD$1,965) in interest was accrued. During the six months ended June 30, 2026, $Nil of the principal balance was repaid and CAD$1,394 (USD$981) in interest was accrued (June 30, 2025 - CAD$8,000 (USD$5,536) of the principal balance was repaid and CAD$1,317 (USD$965) in interest was accrued).

	(3)	On December 27, 2024, the Company entered into a loan agreement with an officer of the Company for CAD$200,000 (USD$138,782). The loan bears interest at 12% per annum and is due on demand. As at December 31, 2025, the loan accrued interest of CAD$2,031 (USD$1,617). During the six months ended June 30, 2026, the loan accrued interest of CAD$13,766 (USD$9,823) (June 30, 2025 - CAD$994 (USD$699)). The Company is not in default on this loan.

	(4)	On July 17, 2025, PPE Turkey drew down ₺50,000,000 (or approximately USD$1,202,380) from their overdraft facility with Ziraat Bankasi. This balance bears interest at a variable rate based on the banks effective interest rate (approximately 31%) payable at the end of each quarter. As at and for the year ended December 31, 2025, the loan accrued interest expense of $164,588. During the six months ended June 30, 2026, the loan accrued interest of $173,797 (June 30, 2025 - $Nil). The total amount payable was derecognized on the sale of the subsidiary during the six months ended June 30, 2026. The Company is not in default on this loan.

11.

Convertible Debentures

On April 20, 2023, the Company entered into an agreement to issue 15,000 units of the Company (the “Units”) at a price of CAD$1,000 per unit, for gross proceeds of CAD$15,000,000 (USD$11,135,145). Each Unit will consist of CAD$1,000 (approximately USD$742) principal amount secured convertible debenture (“Debenture”) and 333 common share purchase warrants of the Company (the “Warrants”). Each Warrant will be exercisable for one common share of the Company at an exercise price of CAD$2.50 (approximately USD$1.86 at initial recognition) and shall have an expiry date of June 29, 2025.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

11.

Convertible debentures (continued)

The Debentures matured on April 30, 2025 (the “Maturity Date”) and accrued interest at the rate of 12% per annum, payable semi-annually. The Company had the ability to redeem the Debentures at any time between the dates of April 30, 2024 and April 30, 2025 at a redemption price of 105% of the principal amount plus any accrued interest. At the holders’ option, the Debentures may be converted into common shares of the Company at any time, up to the earlier of the Maturity Date and the redemption of the Debentures, at a conversion price of CAD$3.00 (approximately USD$2.23 at initial recognition) per common share.

The convertible debentures were determined to be a financial instrument comprising a host debt component, a conversion feature classified as equity, and freestanding warrants classified as equity. The warrants and conversion features were determined to be equity components because the exercise prices are denominated in the functional currency of the Company. Thus, these components meet the criterion of an equity instrument.

During the year ended December 31, 2025, the Company signed a second and third supplemental debenture indenture with the debenture holders to make the following modifications to the original debenture:

Second Supplemental Debenture

	●	The semi-annual interest due as at April 30, 2025 will be payable in either cash or common shares of the Company;

	●	The convertible debentures’ maturity date was extended from April 30, 2025 to July 31, 2025; and

	●	The debenture holders received an extension fee in the aggregate amount of CAD$85,000 payable in common shares as compensation for the above modifications.

Third Supplemental Debenture

●

The convertible debentures’ maturity date was extended from July 31, 2025 to October 31, 2025.

These modifications were accounted for as an adjustment to the existing liability as the discounted present value of the cash-flows under the new terms did not exceed the quantitative threshold to be considered a substantial modification.

Fourth Supplemental Indenture

On March 20, 2026, the Company entered into a fourth supplemental debenture indenture (the “Fourth Supplemental Indenture”) related to the Company’s unsecured convertible debentures issued on April 20, 2023, bearing interest at 12% per annum.

The total amount owing under the convertible debentures will be comprised of the principal of CAD15.0 million and accrued interest to March 20, 2026 (the “Amount Due”). Pursuant to the Fourth Supplemental Indenture, and conditional upon the Company completing an equity financing of not less than CAD10.0 million on or before September 30, 2026, the following settlement terms will apply:

	(1)	approximately CAD11.0 million of the Amount Due will be converted into common shares of the Company at the same price as the equity financing; and,

	(2)	the remaining balance including accrued interest will be forgiven by the debenture holders.

If the Company does not complete the required financing by September 30, 2026, the Fourth Supplemental Indenture will terminate and the full Amount Due will remain payable in accordance with the original terms of the debentures.

The Company concluded that the amendment substantially modifies the terms of the debentures and accounted for it as an extinguishment of the original financial liability and recognition of a new financial liability. The new financial liability is a hybrid instrument containing an embedded contingent equity conversion feature. Rather than separate the embedded derivative, the Company has designated the entire instrument to be measured at fair value through profit and loss.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

11.

Convertible debentures (continued)

A continuity schedule of the Company’s convertible debt measured at amortized cost is as follows:

Balance as at December 31, 2024	$	10,364,993
Repayment through the issuance of shares		(649,851	)
Extension fee		(61,379	)
Gain on modification		(503,624	)
Accretion		858,838
Interest		1,288,067
Currency translation adjustment		526,771
Balance as at December 31, 2025	$	11,823,815
Interest		284,015
Currency translation adjustment		(7,760	)
Extinguishment of convertible debt		(12,100,070	)
Balance as at June 30, 2026	$	-

A continuity schedule of the Company’s convertible debt measured at fair value through profit or loss is as follows:

Balance as at December 31, 2025	$	-
Recognition at fair value		4,172,157
Fair value loss on remeasurement		212,435
Currency translation adjustment		(153,431	)
Balance as at June 30, 2026	$	4,231,161
Current	$	4,231,161
Long-term	$	–

The Company recorded a gain on extinguishment of $7,927,913 upon derecognition of the previous financial liability and recognition of the new financial liability under the modified terms of the Fourth Supplemental Indenture.

Fair value measurement

The new financial liability recognized on extinguishment is measured at fair value through profit or loss on a recurring basis and is classified within Level 3 of the fair value hierarchy, as its measurement relies on significant unobservable inputs. The fair value was determined using a probability-weighted expected present value technique that considers the two mutually exclusive outcomes contemplated by the Fourth Supplemental Indenture: completion of the equity financing, in which approximately CAD$11.0 million of the Amount Due converts into common shares at the financing price and the remaining balance is forgiven; and non-completion of the financing, in which the full Amount Due is reinstated and recovery is estimated on a distressed basis.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

11.

Convertible debentures (continued)

The significant unobservable inputs used in the fair value measurement as at March 20, 2026 (initial recognition) and June 30, 2026 were as follows:

Unobservable input	Input used	Relationship to fair value
Probability of completing the equity financing	50%	An increase raises fair value toward the value of shares issuable on conversion

Estimated recovery rate if the financing is not completed	9%	An increase raises the fair value of the liability in the non-completion scenario

Credit-adjusted discount rate	18%	An increase decreases fair value

Expected term to resolution	September 30, 2026	A longer term decreases fair value

The fair value measurement is most sensitive to the estimated probability of completing the equity financing and the estimated recovery rate in the event the financing is not completed. Holding all other inputs constant, an increase or decrease of 10% in the probability of completing the financing would change the fair value of the liability, and correspondingly change the gain recognized in profit or loss, by approximately $907,800. A change of 5% in the estimated recovery rate would change the fair value of the liability by approximately $410,200.

There were no transfers into or out of Level 3 during the period. The change in the fair value of the liability during the period is presented in the continuity schedule above.

12.

Asset Retirement Obligation

The following is a continuity of asset retirement obligations:

	June 30, 2026			December 31, 2025
		$			$
Beginning balance		6,412,057			5,895,209
Accretion expense		68,465			269,386
Impact of hyperinflation		–			(133,603	)
Currency translation adjustment		(17,208	)		140,276
Change in estimate		(82,266	)		240,789
Transfer to liabilities held for sale (Note 3)		(6,381,048	)		–
Ending balance		–			6,412,057

The Company’s asset retirement obligations (“ARO”) result from its interest in oil and gas assets including well sites. The total ARO is estimated based on the Company’s net ownership interest in all sites, estimated costs to reclaim and abandon these wells and the estimated timing of the costs to be included in future years. The Company estimated the total undiscounted amount required to settle the ARO as at April 7, 2026 is $8 million (December 31, 2025 – $8 million). The ARO is calculated using an inflation rate of 2.5% (December 31, 2025 – 2.5%) and discounted using a risk-free rate of 4.58% (December 31, 2025 – 4.49%) between 10 and 20 years.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

12.

Asset Retirement Obligation (continued)

During 2023, the Company and TPAO agreed to establish a close out-fund (the “Close-Out Fund”) in a US dollar bank account. The amounts accumulated in the Close-Out Fund will not be used for any purpose other than to cover the cost of close-out of the SASB project. The US dollar bank account is held by TPAO. Starting with the July 2023 natural gas revenue, each party agreed to transfer 10% of its revenue into the Close-Out Fund on a monthly basis, until an amount agreed to by both parties is attained. The Company accounted for its share in the Close-Out Fund as a long-term deposit. The Company’s share of the Close-Out Fund amounted to $756,634 (December 31, 2025 – $756,634). The $756,634 deposit was reclassified to assets held for sale (Note 3).

13.

Common Stock

The Company has an unlimited number of common shares authorized with no par value. As at June 30, 2026, 58,796,826 common shares were issued and outstanding (December 31, 2025 – 41,624,407).

For the six months ended June 30, 2026

During the six months ended June 30, 2026, the Company issued 10,012,668 units at CAD$0.15 for gross proceeds of CAD$1,501,943 (USD$1,196,227) pursuant to the closing of non-brokered private placements. Each unit comprises one common share and one half share purchase warrant. Each warrant entitles the holder to purchase one common share for CAD$0.25 for one year from the date of the closing of the offering. As the fair value of the common shares on the same date exceeded the issuance price, no residual value was assigned to the warrants. Cash finder’s fee of CAD$53,520 (USD$37,644) were paid and 286,134 finder’s warrants were issued with a fair value of $23,989. The finders warrants are exercisable into one common share at CAD$0.25 for one year from the closing of the offering.

During the six months ended June 30, 2026, the Company issued 6,996,943 units with a fair value of $754,452 to settle debt of $758,147 and recognized a gain on the settlement of $3,695. Each unit comprises one common share and one half share purchase warrant. Each warrant entitles the holder to purchase one common share for CAD$0.25 for one year from the date of the debt settlement.

During the six months ended June 30, 2026 , the Company issued 162,808 units with a fair value of $17,555 for services rendered. Each unit comprises one common share and one half share purchase warrant. Each warrant entitles the holder to purchase one common share for CAD$0.25 for one year from the date of the debt settlement.

For the six months ended June 30, 2025

During the six months ended June 30, 2025, the Company issued 1,031,232 shares with a fair value of $140,301 to settle debt of $150,522 and recognized a gain on the settlement of $10,221.

During the six months ended June 30, 2025, the Company issued 466,483 shares valued at $73,857 for services rendered and to settle $6,000 in obligation to issue shares. The Company recognized a gain on the settlement of $2,045.

During the six months ended June 30, 2025, the Company issued 5,454,181 shares valued at $689,236 to settle interest payable of $649,851 on convertible debentures and recognized a loss on the settlement of $39,385.

During the six months ended June 30, 2025, the Company issued 515,151 shares valued at $65,099 to settle an extension fee of CAD$85,000 (USD$61,379) related to the extension of the maturity date of the convertible debenture from April 30, 2025 to July 31, 2025. The Company recognized a loss on the settlement of $3,720.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

14.

Stock Options

The Board of Directors adopted the Dune Oil Corp. 2022 Long-Term Incentive Equity Plan (the “2022 Plan”) effective as of December 1, 2022. The 2022 Plan permits grants of stock options and restricted stock awards and other stock-based awards.

Under the 2022 Plan, the maximum number of shares of authorized stock that may be delivered is 10% of the total number of shares of common stock issued and outstanding of the Company as determined on the applicable date of grant of an award under the 2022 Plan. Under the 2022 Plan, the exercise price of each option shall be determined by the Board of Directors, subject to any applicable Exchange approval or rules, at the time any option or other stock-based award is granted. In no event shall such exercise price be lower than the exercise price permitted by the Exchange. The vesting schedule for each option or other stock-based award shall be specified by the Board of Directors at the time of grant, subject to any applicable Exchange approval or rules.

A continuity of the Company’s outstanding stock options for the six months ended June 30, 2026 and the year ended December 31, 2025 is presented below:

	Number of options			Weighted average exercise price (CAD)
					$
Outstanding and Exercisable, December 31, 2024		2,402,800			1.05
Expired		(62,800	)		8.61
Cancelled		(40,000	)		1.00
Outstanding and Exercisable, December 31, 2025		2,300,000			0.85
Expired		(10,000	)		9.50
Outstanding and Exercisable, June 30, 2026		2,290,000			0.81

At June 30, 2026 the Company had the following outstanding stock options:

Outstanding		Exercise Price		Expiry Date		Vested
	40,000		1.50 CAD		January 2, 2027		40,000
	50,000		1.00 CAD		February 15, 2027		50,000
	100,000		1.25 CAD		February 28, 2027		100,000
	490,000		1.00 CAD		March 8, 2027		490,000
	1,610,000		0.70 CAD		August 12, 2029		1,610,000
	2,290,000						2,290,000

As at June 30, 2026, the weighted average remaining contractual life of outstanding stock options is 2.39 years (December 31, 2025 – 2.84 years).

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

15.

Warrants

A continuity of the Company’s outstanding share purchase warrants for the six months ended June 30, 2026 and the year ended December 31, 2025 is presented below:

	Number of warrants			Weighted average exercise price (CAD)
					$
Outstanding, December 31, 2024		10,003,454			3.93
Expired		(3,046,340	)		10.89
Outstanding, December 31, 2025		6,957,114			0.89
Issued		8,872,350			0.25
Expired		(196,522	)		0.45
Outstanding, June 30, 2026		15,632,942			0.53

At June 30, 2026, the Company had the following outstanding share purchase warrants:

Outstanding		Exercise Price		Expiry Date
	2,646,475		0.90 CAD	(1)May 28, 2027
	1,228,445		0.90 CAD	(1)May 31, 2027
	306,496		0.90 CAD	(1)June 10, 2027
	452,556		0.90 CAD	(1)June 19, 2027
	1,694,520		0.90 CAD	(2)June 28, 2027
	400,000		0.90 CAD	(2)July 3, 2027
	30,000		0.90 CAD	(2)July 5, 2027
	2,100		0.45 CAD	July 5, 2026
	1,000,000		0.25 CAD	April 27, 2027
	2,600,773		0.25 CAD	May 20, 2027
	330,500		0.25 CAD	May 29, 2027
	4,941,077		0.25 CAD	June 5, 2027
	15,632,942

As at June 30, 2026, the weighted average remaining contractual life of outstanding warrants is 1.17 years (December 31, 2025 – 0.44 years).

⁽¹⁾On May 21, 2026, the Company extended the expiry date by one year from the original expiry date.

⁽²⁾On June 8, 2026, the Company extended the expiry date by one year from the original expiry date.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

16.

Restricted Stock Units

During the six months ended June 30, 2026 and 2025, the Company granted RSUs as follows:

	●	On January 1, 2026, the Company granted 67,200 RSU’s which vest quarterly beginning January 1, 2026.

	●	On January 1, 2025, the Company granted 67,200 RSU’s which vest quarterly beginning January 1, 2025.

For the six months ended June 30, 2026, the Company recognized $4,466 (2025 – $16,959) in stock-based compensation expense for RSUs granted and vested.

	Number of unvested restricted stock units		Weighted average fair value per award
				$
Balance, December 31, 2024		207,700		0.15
Granted		67,200		0.09
Balance, December 31, 2025		274,900		0.14
Granted		67,200		0.10
Balance, June 30, 2026		342,100		0.13

As at June 30, 2026, the Company had 342,100 RSU’s (December 31, 2025 – 274,900) outstanding.

17.

Related Party Transactions

At June 30, 2026 accounts payable and accrued liabilities included $808,294 (December 31, 2025 – $1,121,180) due to related parties. The amounts are unsecured, non-interest bearing and due on demand.

During the six months ended June 30, 2026, management fees and salaries of $140,392 (2025 – $88,431), director fees of $43,200 (2025 – $30,600), consulting fees of $354,430 (2025 – $63,060), and stock-based compensation of $4,466 (2025 – $4,034) were incurred to related parties.

During the six months ended June 30, 2026, the Company issued Nil shares (2025 – 43,200) to directors for services performed.

During the six months ended June 30, 2026, the Company issued 162,808 shares (2025 – 198,682) to officers for services performed.

As at June 30, 2026, loans payable included CAD$287,994 (USD$203,573) (December 31, 2025 – CAD$248,189 (USD$181,806)) due to related parties. The loans payable are unsecured, bears interest ranging from 6% - 12% per annum and have maturity dates ranging from December 31, 2024 to December 27, 2026.

As at June 30, 2026 $43,541 (December 31, 2025 – $24,000) in shares were owed to an officer of the Company.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

18.

General and Administrative

	For the six months ended
	June 30, 2026		June 30, 2025
		$		$
Salaries, consulting and compensation		789,600		497,965
Professional fees		262,831		185,003
Investor relations		113,198		9,250
Office		128,324		64,154
Advertising		43,680		44,967
Filing and transfer fees		54,116		16,874
Travel		21,686		21,825
Bank charges and other		3,845		3,246
		1,417,280		843,284

19.

Segmented Information

During the six months ended June 30, 2026 and 2025, the Company’s operations were in the resource industry in Turkey with head offices in Canada and a satellite office in Sofia, Bulgaria.

	Canada			Turkey			Bulgaria		Total
		$			$			$		$
Six months ended June 30, 2026
Finance cost		(470,415	)		–			–		(470,415	)
Depreciation		(4,126	)		–			–		(4,126	)
Stock-based compensation		(4,466	)		–			–		(4,466	)
Gain on debt settlement		3,695			–			–		3,695
Gain on net monetary position		–			9,089			–		9,089
Gain on debt extinguishment		7,927,913			–			–		7,927,913
Fair value loss on remeasurement of convertible debenture		(212,435	)		–			–		(212,435	)
Net loss from discontinued operations		–			(725,301	)		–		(725,301	)
Net income (loss) from continuing operations		5,724,143			(48,488	)		–		5,675,655
As at June 30, 2026
Non-current assets		12,512			507,842			–		520,354

	Canada			Turkey		Bulgaria		Total
		$			$		$		$
Six months ended June 30, 2025
Finance cost		(1,301,045	)		–		–		(1,301,045	)
Depreciation		(4,034	)		–		–		(4,034	)
Stock-based compensation		(16,959	)		–		–		(16,959	)
Gain on debt settlement		230,880			–		–		230,880
Net income from discontinued operations		–			3,376,309		–		3,376,309
Net loss from continuing operations		(1,739,740	)		–		–		(1,739,740	)
As at December 31, 2025
Non-current assets		17,125			1,870,843		–		1,887,968

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

20.

Capital Management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern to support its business plan, as well as to ensure that the Company is able to meet its financial obligations as they become due. The Company considers its capital for this purpose to be its stockholders’ equity. As at June 30, 2026, the Company is in a stockholders’ deficiency position of $8,345,371 (December 31, 2025 – stockholders’ deficiency position of $38,897,470).

The basis for the Company’s capital structure is dependent on the Company’s expected business growth and changes in business environment. To maintain or adjust the capital structure, the Company may issue new shares through private placement, incur debt or return capital to members.

The Company is dependent upon external financings to fund activities. In order to carry future projects and pay administrative costs, the Company will utilize its existing working capital and raise additional funds as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to externally imposed capital requirements.

21.

Financial Instruments and Risk Management

The Company is exposed, through its operations, to the following financial risks:

a)	Market risk
b)	Credit risk
c)	Liquidity risk

The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies, and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these condensed consolidated interim financial statements.

There have been no substantive changes in the Company’s exposure to financial instrument risks, its objectives, polices and processes for managing those risks or the methods used to measure them from previous reported periods unless otherwise stated in the note. The overall objective of management is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. Further details regarding these policies are set out below.

a)	Market risk

Market risk is the risk of loss that may arise from changes in market factors such as foreign currency exchange, interest rates and equity price risk.

Foreign currency risk:

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company and its subsidiaries are exposed to currency risk as it has transactions denominated in currencies that are different from their functional currencies. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

21.

Financial Instruments and Risk Management (continued)

As at June 30, 2026 and December 31, 2025, significant foreign exchange currency exposure on its financial instruments, expressed in USD was as follows:

	June 30, 2026			December 31, 2025
		$			$
Cash and cash equivalents		316,018			396,859
Accounts receivable		–			21,558
Accounts payable		(349,097	)		(5,211,836	)
Loans payable		(3,621,000	)		(3,461,250	)
Total		(3,654,079	)		(8,254,669	)

If the CAD strengthened or weakened against the USD by 10% the exchange rate fluctuation would impact net loss from continuing operations by $366,618 at June 30, 2026. If the Turkish Lira strengthened or weakened against the USD by 10% the exchange rate fluctuation would impact net loss from continuing operations by $1,210, at June 30, 2026.

Interest rate risk:

Interest rate risk is the risk that future cash flows will fluctuate because of changes in market interest rates. The interest earned on cash is insignificant and the Company does not rely on interest income to fund its operations. The Company does not have significant debt facilities with variable interest rates and is therefore not exposed to interest rate risk.

Other price risk:

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company does not hold equity investments in other entities and therefore is not exposed to a significant risk.

b)	Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

The Company is subject to credit risk on its cash and cash equivalents and amounts receivable which consists primarily of trade receivables and notes and amounts receivable for equity issued. The Company limits its exposure to credit loss on cash and cash equivalents by placing its cash with a high-quality financial institution. Exposure to credit loss notes and amounts receivable for equity issued is limited by entering into these types of transactions with related parties and entities that are well known to the Company.

The Company only has two customers. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. One of the customers is the largest oil refinery in Turkey. The other customer provides letters of credit to be used by the Company in the event of default. As at June 30, 2026 all of the Company’s trade receivables are current (< 30 days outstanding).

The Company’s maximum credit exposure is $487,747 (December 31, 2025 – $1,147,456).

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

21.

Financial Instruments and Risk Management (continued)

c)	Liquidity risk

Liquidity risk arises from the Company’s general and capital financing needs. The Company continuously monitors and reviews both actual and forecasted cash flows, and also matches the maturity profile of financial assets and liabilities, when feasible. The Company anticipates increases in revenue in future periods resulting from the completion of an additional well subsequent to the period end. Historically, the Company’s sources of funding has been through equity and debt financings. The Company’s access to financing is uncertain. There can be no assurance of continued access to significant debt or equity funding.

The table below summarizes the maturity profile of the Company’s undiscounted contractual cashflows:

As at June 30, 2026

Less than 1 year

1 – 2 years

Later than 2 years

Total

Accounts payable and accrued liabilities

1,368,605

–

1,368,605

Loans payable

3,823,573

–

3,823,573

Convertible debt

12,027,799

–

12,027,799

17,219,977

–

17,219,977

As at December 31, 2025

Less than 1 year

1 – 2 years

Later than 2 years

Total

Accounts payable and accrued liabilities

18,792,482

–

18,792,482

Loans payable

4,972,059

–

4,972,059

Convertible debt

11,823,815

–

11,823,815

35,588,356

–

35,588,356

22.

Commitments and Contingencies

TR1 Master Fund loans

The Company has filed claims in connection with ongoing receivership proceedings against certain Traynor Ridge Capital entities (Note 10), alleging that improper and unlawful trading activities in the Company’s securities caused a significant decline in its share price and resulted in substantial financial losses, including impairment of a planned equity financing. The Company is seeking damages of up to $25 million per respondent on a joint and several basis. A threshold hearing is scheduled to determine whether the claims disclose a valid cause of action. At this stage, the outcome of the proceedings is uncertain, and no amounts have been recognized in the consolidated financial statements. The Company is seeking to offset any amounts outstanding under the TR1 Master Fund loans (Note 10) against damages claimed by the Company.

Close-out Fund

The Company’s subsidiary PPE Turkey, committed to contribute to the Close-Out Fund (Note 12) where it has deposited 10% of natural gas revenue from the SASB project into the Close-Out Fund until an amount agreed to by both parties is attained. PPE Turkey did not meet its commitment since the beginning of 2025 and as a result its contribution to the Close-Out Fund is short by approximately $33,000. PPE Turkey was disposed of in April 2026 (Note 3).

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

22.

Commitments and Contingencies (continued)

Arbitration

The Company through its’ former subsidiary PPE Turkey has advanced arbitration against an offshore drilling rig contractor for $20.3 million for gross negligent and breach of contact involving health and safety issues during the prior year drilling program resulting in loss and damages to Company (the “Trillion Losses”). Liability is not admitted, the litigation is at the inception, and thus, legal counsel has advised that it is too soon to predict the outcome or the quantum of damages that will be assessed. In accordance with guidance for contingent assets and liabilities, no provision for any potential recovery of the Trillion Losses will be made until recovery is virtually certain. If the Company’s claim is successful, the award will exceed the amount, if any, that is payable to the drilling contractor in its claim.

The Company’s former subsidiary PPE Turkey is defending an action brought by the same drilling contractor in Europe to which it has advanced an arbitration claim, for drilling services seeking $3 million. This amount has fully been recorded in accounts payable in accordance with guidance as there is significant uncertainty as to the outcome of the arbitration. PPE Turkey was disposed of in April 2026 (Note 3).

Third party liability claim

As at December 31, 2024, the Company included in accounts payable and accrued liabilities a potential liability for an invoice in the amount of $144,247, issued to a 3rd party with whom the Company previously had a farm-in arrangement. The vendor is claiming that the Company is liable given the previous relationship. As at December 31, 2025, the Company included in accounts payable and accrued liabilities an additional $1,880,855 related to additional claims for invoices issued to the 3rd party. The claims and related accruals were held within PPE Turkey that was disposed of in April 2026 (Note 3). The Company disputes the asserted claims, and the ultimate resolution of these matters remains uncertain.

Dispute with former employees

The Company has filed claims against, and has received counter claims from former employees of PPE Turkey which was disposed of in April 2026 (Note 3). Management believes the claims against the Company are without merit. Accordingly, no provision has been recognized as at period end. The ultimate outcome of the proceedings cannot presently be determined.

M47 Block work program

In connection with the earn-in for a 29% working interest in the M47 Block in Turkey (Note 8), the Company is committed to a total investment of $15,000,000, of which $9,500,000 is payable in respect of the 2026 work program and $5,500,000 in respect of the 2027 work program. The Company is also required to bear 80% of the cost of the next two exploration wells on the block and certain seismic costs. The Company’s entitlement to the working interest is conditional on it meeting these funding commitments.

DUNE OIL CORP. (formerly Trillion Energy International Inc.)

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended June 30, 2026 and 2025

(Expressed in U.S. dollars)

(Unaudited)

23.

Subsequent Events

Debt settlement

On August 25, 2026, the Company issued 133,333 units at CAD0.15 to settle CAD20,000 of debt. Each unit consists of one common share in the capital of the Company and one half of one common share purchase warrant. Each whole warrant is exercisable at CAD0.25 and shall be exercisable for a period of one (1) year from the date of issue.

Unit issuance

On August 25, 2026 the Company issued 1,266,667 units for gross proceeds of CAD190,000. Each unit consists of one common share in the capital of the Company and one half of one common share purchase warrant. Each whole warrant is exercisable at CAD0.25 and shall be exercisable for a period of one (1) year from the date of issue.