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Trio Petroleum Corp. (NYSE American:TPET), a crude petroleum and natural gas company with a market capitalization of $8.5 million, announced on Monday an extension to its option agreement with Heavy Sweet Oil LLC for oil and gas leases in Utah. According to InvestingPro analysis, while the company maintains more cash than debt on its balance sheet, it faces significant challenges with rapid cash burn. The amendment, which is the sixth since the original agreement, extends the option expiration date to May 10, 2025.
The original Leasehold Acquisition and Development Option Agreement, as reported in January 2024, gave Trio Petroleum an option to purchase up to a 20% production share in 960 acres of oil and gas leases located southwest of Vernal, Utah, known as the Asphalt Ridge Leases. The agreement with Heavy Sweet Oil, the leaseholder below 500 feet from the surface, was part of Trio Petroleum’s strategic initiative to participate in a drilling and production program in this established area. With current revenue of just $220,000 in the last twelve months and negative EBITDA of $6 million, the company’s financial metrics highlight the importance of successful project execution.
Subsequent amendments, including the latest Amendment No. 6, have extended the option period, allowing Trio Petroleum additional time to finalize its participation in the project. The amendment was signed on April 9, 2025, and disclosed in a Form 8-K filing with the Securities and Exchange Commission.
This extension follows a series of previous amendments, with the most recent prior change occurring in January 2025, which also extended the option by two months. The company had previously advanced $200,000 of the total $2,000,000 purchase price to secure an immediate 2% interest in the Asphalt Ridge Leases, with the funds earmarked for the development of roads and related infrastructure.
The information presented here is based on a press release statement and the filings with the SEC. Trio Petroleum’s management has not provided any further details on the specific reasons for the extension or any updated timeline for the execution of the option. The company’s stock, TPET, is traded on the NYSE American exchange and has experienced significant volatility, with the share price declining over 80% in the past year. For detailed analysis and additional insights, including 8 more key financial tips, visit InvestingPro.
In other recent news, Trio Petroleum Corp. has entered into a significant convertible note financing agreement with an institutional investor. On April 11, 2025, the company issued an Unsecured Convertible Promissory Note with a principal amount of $321,176, which included a 15% original issue discount. The initial funding amounted to $273,000, with net proceeds of $247,985 after deductions for commissions and legal fees. On April 17, 2025, the note was amended and restated, increasing the funding amount to $606,000 and the principal to $712,941. The note, which matures on October 10, 2025, allows for prepayment without penalty if settled by July 10, 2025. The investor has the option to convert the note into Trio Petroleum’s common stock, with the conversion price set at 75% of the lowest closing bid price over the preceding 10 trading days, subject to a minimum floor price of $0.48. The maximum shares that could be issued upon conversion is 1,485,293. Additionally, the company has granted "piggyback" registration rights to the investor for future registration statements. This transaction was conducted as a private placement, exempt from registration under Section 4(a)(2) of the Securities Act of 1933.
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