United States securities and exchange commission logo
November 14, 2022
Frank Ingriselli
Chief Executive Officer
Trio Petroleum Corp.
5401 Business Park, Suite 115
Bakersfield, CA 93309
Re: Trio Petroleum
Corp.
Amendment No. 1 to
Registration Statement on Form S-1
Filed October 28,
2022
File No. 333-267380
Dear Frank Ingriselli:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
October 5, 2022 letter.
Amendment No. 1 to Registration Statement on Form S-1
Business Overview, page 1
1. We note your disclosure
that the registrant was formed to acquire Trio Petroleum LLC s
approximate 82.5%
working interest in the South Salinas Project. Please revise to also
disclose the net
revenue interest acquired by the registrant, and disclose any interest that
Trio Petroleum LLC
retained in the South Salinas Project.
Market Opportunity, page 4
2. We note your disclosure
that the South Salinas Project offers an opportunity to profitably
help supply California
s demanding oil and gas needs in a carefully-regulated,
environmentally-responsible project that will have minimal surface footprint.
Please
Frank Ingriselli
FirstName LastNameFrank Ingriselli
Trio Petroleum Corp.
Comapany 14,
November NameTrio
2022 Petroleum Corp.
November
Page 2 14, 2022 Page 2
FirstName LastName
revise to clarify what environmentally-responsible project means
in this context.
Trio LLC's Management Team as Experienced California Operator, page 4
3. We note that the Purchase and Sale Agreement with Trio Petroleum LLC
filed as Exhibit
10.5 refers to a joint operating agreement for the South Salinas Area,
and provides that
Trio Petroleum Corp. agrees to use commercially reasonable efforts to
support Trio
Petroleum LLC s continuance as operator and to maintain the joint
operating agreement in
full force and effect. Please revise to disclose all material terms of
the joint operating
agreement. In addition, file the joint operating agreement as an
exhibit or tell us why you
believe that such agreement is not required to be filed. Refer to Item
601(b)(10) of
Regulation S-K.
South Salinas Project Oil Rights, page 6
4. We note your disclosure that you have the opportunity to acquire a
portion of the
remaining 17.5% interest in the South Salinas Project. Please revise
to clarify the nature
of this opportunity and whether there are any written agreements with
respect to such
opportunity.
Risk Factors
A substantial portion of our total issued and outstanding shares may be sold
into the market at
any time, page 25
5. We note your response to prior comment 4. Please also revise your risk
factor to
disclose the number of shares of common stock that will be subject to
registration rights.
Use of Proceeds, page 29
6. We note your disclosure that you intend to use approximately $440,000
of the proceeds
from this offering to repay the OID Notes. Please describe the use of
the proceeds of such
indebtedness other than short-term borrowings used for working
capital. Refer to
Instruction 4 to Item 504 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
36
7. We note your response to prior comment 5. However, we could not locate
the disclosure
in this section stating that the Notes are currently in default, and
that the consequence of
this default is that 4,500,000 shares of the Company s common stock
were delivered to
the GPL Ventures, LLC investors. Please revise or advise.
8. We note your disclosure regarding the shares of common stock issuable
in connection
with the securities purchase agreement with GPL Ventures, LLC,
including upon
conversion of the January 2022 Notes, exercise of the warrants, and
issuance of the
commitment shares. We also note your disclosure regarding the shares
underlying the
pre-funded warrants issued in connection with the securities purchase
agreement entered
Frank Ingriselli
FirstName LastNameFrank Ingriselli
Trio Petroleum Corp.
Comapany 14,
November NameTrio
2022 Petroleum Corp.
November
Page 3 14, 2022 Page 3
FirstName LastName
into during September 2022. Please update your risk factor disclosure
regarding dilution
to reflect such issuances. In addition, please update your disclosure
in your Prospectus
Summary under The Offering on page 10 regarding common stock to
be outstanding
after this offering to clarify the extent to which such information
reflects the issuance of
such shares.
Business
Evaluation of Reserves and Net Revenue, page 46
9. We have reviewed your response to prior comment 11 and note your
reasonable
expectation of adequate funding is contingent upon an analysis of
future expected cash
flows from Probable P2 and Possible P3 reserves which appear to be
presented on an
unrisked basis. Please revise your cash flow analysis to incorporate
risk factors
appropriate to Probable P2 and Possible P3 reserves. Alternatively,
remove your
quantitative analysis and explain that your expectation, if true, is
based upon future project
operating revenues, net proceeds from this offering, and additional
capital raises, if
necessary. Also expand the Glossary of Terms in Exhibits 99.1 and 99.2
to include the
PRMS definition for a reasonable expectation.
Disclosure of Reserve Volumes and Reserve Values as of the End of October 31,
2021, page 47
10. We have reviewed your response to prior comment 12 and reissue our
comment in part
regarding revisions to Table 1 identifying the probable and possible
reserves associated
with the development phases as undeveloped to comply with the
disclosure requirements
in Items 1202(a)(1) and 1202(a)(2) of Regulation S-K.
11. We note your disclosure on page 48 of Amendment No. 1 describes the
reserve volumes
using the "P2 Probable" and "Incremental Possible P3" reserve
categories; however, Table
1 on page 49 does not present the reserve volumes using these same
reserve categories.
Based on PRMS definitions, Probable P2 reserves are an incremental
category of
estimated recoverable quantities represented by the difference between
the P90 and P50
reserve estimates. Since you disclose there are no Proved (P90)
reserves, it appears the
Probable reserves presented as Probable (P50) in Table 1 should be
categorized
as "Probable (P2)" reserves which correlates to and is consistent with
your disclosure of
incremental Possible (P3) reserves. Since Probable (P2) and Possible
(P3) reserves are by
definition the incremental recoverable quantities, please revise your
disclosures to use
terminology consistent with the PRMS and the definitions provided in
your Glossary of
Terms Used, e.g. Probable (P2) and Possible (P3) reserves. This
includes revisions to the
reserve categories in Table 1 to appropriately identify the reserve
volumes as "Probable
(P2) Undeveloped" and "Possible (P3) Undeveloped."
This comment also applies to similar references throughout your filing
and to the
summary table included on page 2 of the third party reserve reports
filed as Exhibits 99.1
and 99.2.
Frank Ingriselli
FirstName LastNameFrank Ingriselli
Trio Petroleum Corp.
Comapany 14,
November NameTrio
2022 Petroleum Corp.
November
Page 4 14, 2022 Page 4
FirstName LastName
12. We note the discussion on page 47 does not clearly relate the reserves
estimation
methodology based on probabilistic methods to the resulting Probable
P2 and Possible P3
reserves volumes. Please expand your discussion of Probable and
Possible reserves as
needed. For example, explain that Probable reserves are represented by
the difference
between the P90 and P50 estimates and since there are no Proved or P90
volumes, the
Probable reserves disclosed herein are incremental volumes and
presented as Probable
(P2) reserves.
Executive and Director Compensation, page 58
13. Please provide the disclosure required by Item 402 of Regulation S-K
for your fiscal year
ended October 31, 2022.
Exhibits
14. Please file as exhibits the September 2022 securities purchase
agreement, the related debt
instruments, and the pre-funded warrants, or tell us why you do not
believe they are
required to be filed. Refer to Item 601(b)(10) of Regulation S-K. In
addition, please file
the January 2022 Notes issued pursuant to the securities purchase
agreement with GPL
Ventures.
15. We have reviewed your response to prior comment 19 and note the third
party reserve
report filed as Exhibit 99.2 does not state the purpose for which the
report was prepared as
required by Item 1202(a)(8)(i) of Regulation S-K. Please obtain and
file a revised third
party reserve report.
16. We have reviewed your response to prior comment 20 and note the
glossary of terms
included with the third party reserve reports filed as Exhibits 99.1
and 99.2 contain
Petroleum Resources Management System (PRMS) definitions for probable
reserves and
possible reserves which appear to be incomplete. For example, your
definitions for
Probable P2 and Possible P3 Reserves do not clarify these reserves
represent "an
incremental category of estimated recoverable quantities associated
with a defined degree
of uncertainy." Please obtain and file revised third party reserve
reports which contain
definitions for probable and possible reserves consistent with the
disclosure of incremental
Probable P2 and incremental Possible P3 reserves in the reserve
reports and in the
Registration Statement on Form S-1.
Frank Ingriselli
Trio Petroleum Corp.
November 14, 2022
Page 5
You may contact Steve Lo, Staff Accountant, at (202) 551-3394 or Craig
Arakawa,
Accounting Branch Chief, at (202) 551-3650 if you have questions regarding
comments on the
financial statements and related matters. You may contact Sandra Wall,
Petroleum Engineer, at
(202) 551-4727 or John Hodgin, Petroleum Engineer, at (202) 551-3699 with
questions
regarding the engineering comments. Please contact Liz Packebusch, Staff
Attorney, at (202)
551-8749 or Laura Nicholson, Special Counsel, at (202) 551-3584 with any other
questions.
Sincerely,
FirstName LastNameFrank Ingriselli
Division of
Corporation Finance
Comapany NameTrio Petroleum Corp.
Office of Energy &
Transportation
November 14, 2022 Page 5
cc: Robert Cohen
FirstName LastName