NOTE 5 – OIL AND NATURAL GAS PROPERTIES

The following tables summarize the Company’s oil and gas activities.

SCHEDULE OF OIL AND NATURAL GAS PROPERTIES

The Company applies the successful efforts method of accounting for its oil and natural gas properties. Costs of geological and geophysical activities, delay rentals (i.e., a yearly payment an oil and gas company makes to a landowner to keep a lease active without starting to drill), and exploratory activities are expensed as incurred. Costs of exploratory wells are capitalized pending the determination of whether proved reserves have been found; if proved reserves are not established, the related costs are expensed. Costs to acquire mineral interests and to drill and equip exploratory and development wells that find proved reserves are capitalized. Unproved properties are not amortized and are assessed periodically for impairment based on remaining lease terms, drilling results, and future development plans. Proved properties are depleted using the unit-of-production method based on estimated proved reserves. The Company evaluates its long-lived assets, including proved oil and natural gas properties, for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

South Salinas Project

Trio Petroleum LLC (“Trio LLC”) operates the South Salinas Project on behalf of the Company and other working interest owners under a Joint Operating Agreement. The Company holds an approximate 85.775% working interest in the project and Trio LLC holds an approximate 3.9% working interest. The Company advances funds to Trio LLC to conduct development and operating activities, which are recorded as Advance to Operators or Due to Operators. As of July 31, 2026, the balance of Due to Operators was $21,620; as of October 31, 2025, the balance was $5,668.

The Company’s transactions with Trio LLC were presented as related party transactions in prior periods. No officer or director of the Company holds an interest in or position with Trio LLC, and Trio LLC does not hold a significant ownership interest in the Company. Accordingly, these transactions are no longer presented as related party transactions.

McCool Ranch Oil Field Asset Purchase

On May 27, 2025, the Company terminated the McCool Ranch Oil Field leases previously acquired from Trio LLC. All capitalized costs totaling $500,614 were written off during fiscal 2025. No additional activity occurred during the nine months ended July 31, 2026.

Canadian Asset Acquisitions

During the first quarter of fiscal 2026, the Company completed two asset acquisitions in Canada that were accounted for as asset acquisitions under ASC 805-50. On November 3, 2025, the Company acquired certain unproved petroleum and natural gas lease rights located in Alberta, Canada from Capital Land Services Ltd. Total consideration consisted of CAD $150,000 in cash and CAD $150,000 in common stock. The equity consideration was measured at fair value on the acquisition date in accordance with ASC 805-50 and ASC 820. The acquired mineral lease was recorded as an unproved oil and gas property and is not subject to amortization. The agreement includes a contingent 1% gross overriding royalty, but because it was not probable that a liability had been incurred and the amount could not be reasonably estimated, no liability was recognized under ASC 450. The assets acquired also included two wells that had been purchased out of receivership, in which the Company holds a 99% working interest and for which Novacor holds the licenses issued by the Alberta Energy Regulator pending the transfer of those licenses to the Company. The wells were non-producing at acquisition, and the CAD $10,000 cost of acquiring them was carried as a deposit. The wells commenced production in May 2026, and during the three months ended July 31, 2026 the deposit was reclassified into the carrying value of the wells within oil and natural gas properties.

On December 30, 2025, the Company acquired additional oil and gas assets in the Lloydminster, Saskatchewan heavy oil region from Novacor for total consideration of CAD $1,000,000, payable in restricted common shares. The number of shares issued was determined using the five-day volume-weighted average price prior to closing, translated into Canadian dollars using the Bank of Canada exchange rate. In accordance with ASC 820, the equity consideration was measured at the fair value of the Company’s unrestricted common stock on the acquisition date. The acquired assets include working interests in petroleum and natural gas rights, mineral leases, wells, surface rights, and related equipment. The assets were recorded as unproved oil and gas properties and are subject to periodic impairment evaluation. The Accounting Adjustment Date of April 1, 2026 governs settlement of pre- and post-closing revenues and expenses but does not affect the acquisition date for accounting purposes. The Seller will continue to act as operator until the Buyer satisfies regulatory requirements; this arrangement represents a service contract and does not affect the recognition or measurement of the acquired assets.

In connection with the December 2025 Novacor asset acquisition (the “Novacor Acquisition”), the Company recognized an initial asset retirement obligation (“ARO”) of approximately CAD $169,125 (US $124,201) related to the abandonment and reclamation of the acquired wells. The ARO was measured using abandonment cost estimates included in the independent Petrotech reserve and economics report, which was prepared in accordance with COGE Handbook standards and served as an input in the valuation of the acquired petroleum assets.

During the three months ended July 31, 2026, in connection with the commencement of production at the two Alberta wells described above, the Company recognized an asset retirement obligation of CAD $53,478 (US $38,120) representing the present value of the estimated costs of abandonment and reclamation of those wells, with an equal asset retirement cost capitalized into the carrying amount of the related properties. The obligation was not recognized at the November 2025 acquisition date because the wells were non-producing unproved property and a reasonable estimate of the abandonment and reclamation cost was not then available. The obligation was measured using an undiscounted abandonment and reclamation cost estimate of CAD $138,708 obtained from the Alberta Energy Regulator liability assessment for the two wells, discounted at 10% over an estimated remaining productive life of ten years. These are Level 3 inputs. Although the licenses for the wells remain in the name of the operator pending transfer, the Company bears the costs and liabilities associated with the wells in accordance with its working interest under the applicable operating agreement.

The Company recognizes accretion expense each period to increase its asset retirement obligations to their estimated settlement amounts. Accretion expense on all of the Company’s asset retirement obligations, comprising the South Salinas Project wellbores, the wells acquired in the December 2025 Novacor Acquisition, and the two Alberta wells, was approximately $4,694 and $10,257 for the three and nine months ended July 31, 2026, respectively. No revisions to the estimated obligations were recorded during the period.

The following table reconciles the Company’s asset retirement obligations for the nine months ended July 31, 2026:

 SCHEDULE OF ASSET RETIREMENT OBLIGATIONS

As of July 31, 2026, the Canadian properties acquired during the period were classified as unproved oil and gas properties, other than the tangible field equipment presented as property, plant and equipment described below. No impairment indicators were identified during the nine months ended July 31, 2026.

Tangible oil and gas field equipment acquired in the December 2025 Novacor Acquisition is presented separately as property, plant and equipment and is depreciated on a straight-line basis over an estimated useful life of ten years. Property, plant and equipment, net of accumulated depreciation, was $84,821 at July 31, 2026.

Depreciation expense, comprising depreciation of the tangible field equipment and of the capitalized asset retirement cost, was $13,521 for the nine months ended July 31, 2026, and is included in general and administrative expense in the unaudited condensed consolidated statements of operations.