Trio to suspend operations at McCool Ranch

Rhea-AI Summary

Trio Petroleum Corp (NYSE American: TPET) has announced the suspension of operations at McCool Ranch and the termination of efforts to acquire a working interest in the project. The decision was driven by unfavorable economic conditions, specifically high water disposal costs in California and natural gas prices that make cyclic-steam operations cost-prohibitive and economically unfeasible in the long term.

The company plans to redirect its focus to other sites that offer better economic potential and higher profit prospects. Trio Petroleum Corp maintains operations across California, Saskatchewan, and Utah.

Positive

• Company demonstrates fiscal responsibility by avoiding unprofitable operations
• Strategic decision to focus resources on more economically viable sites

Negative

• Loss of potential revenue stream from McCool Ranch operations
• Abandonment of working interest acquisition indicates setback in growth strategy
• High operational costs in California market limiting company's expansion capabilities

Insights

Oil & Gas Operations Analyst

Trio's suspension of McCool Ranch operations signals strategic refocus due to California's prohibitive water disposal costs and unfavorable gas prices.

Trio Petroleum's decision to suspend operations at McCool Ranch represents a significant operational pivot. The company has determined that the economics simply don't work under current conditions. Two critical factors are driving this decision: natural gas prices and water disposal costs in California. These elements make cyclic-steam operations—a capital-intensive enhanced oil recovery technique that requires substantial water handling infrastructure—economically unfeasible at this location.

This move indicates Trio is implementing cost discipline rather than pursuing production at any cost. The McCool asset was apparently positioned to utilize cyclic-steam technology, which typically targets heavy oil deposits that don't flow easily through conventional methods. While abandoning an asset is never ideal, this decision demonstrates management's willingness to make difficult choices when project economics deteriorate.

The company's statement about focusing on "other sites which it believes will be more economically feasible" suggests a strategic reallocation of capital rather than a complete operational drawdown. Trio maintains assets across three jurisdictions—California, Saskatchewan, and Utah—providing geographic diversification that may offer better economics in regions with lower regulatory burdens and operational costs than California.

For context, California has some of North America's strictest environmental regulations regarding water disposal from oil operations, often making projects more expensive compared to other jurisdictions. The reference to focusing on potentially more profitable ventures indicates the company is prioritizing return on investment rather than pursuing volume growth through marginal assets.

California, May 23, 2025 (GLOBE NEWSWIRE) -- Trio Petroleum Corp (NYSE American: TPET) (“Trio” or the “Company”), a California-based oil and gas company, has decided to suspend operations at McCool Ranch and will terminate its efforts to acquire a working interest in the project. We have made this determination, because, under previously negotiated terms, natural gas prices and water disposal costs, particularly in California, where McCool Ranch is located, makes it cost prohibitive for the Company to employ cyclic-steam operations to increase production and will not be economically feasible in the long run. The Company has decided to focus its efforts on other sites which it believes will be more economically feasible, and hopefully generate greater profits for the Company.

About Trio Petroleum Corp

Trio Petroleum Corp is an oil and gas exploration and development company in California, Saskatchewan and Utah.

Cautionary Statement Regarding Forward-Looking Statements

All statements in this press release of Trio Petroleum Corp (“Trio”) and its representatives and partners that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Acts”). In particular, when used in the preceding discussion, the words "estimates," "believes," "hopes," "expects," "intends," “on-track”, "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Acts and are subject to the safe harbor created by the Acts. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of the Trio's control, that could cause actual results to materially and adversely differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth in the Risk Factors sections of the Trio reports filed with the Securities and Exchange Commission (SEC). Copies of such documents are available on the SEC's website, www.sec.gov. Trio undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Relations Contact:
Redwood Empire Financial Communications
Michael Bayes
(404) 809 4172
michael@redwoodefc.com

FAQ

Why did TPET suspend operations at McCool Ranch?

TPET suspended operations due to prohibitive water disposal costs in California and unfavorable natural gas prices that made cyclic-steam operations economically unfeasible.

What are Trio Petroleum's (TPET) alternative plans after suspending McCool Ranch operations?

TPET plans to focus its efforts on other sites in California, Saskatchewan, and Utah that the company believes will be more economically feasible and potentially generate greater profits.

What regions does Trio Petroleum (TPET) currently operate in?

Trio Petroleum operates in California, Saskatchewan, and Utah.

What specific operational challenges did TPET face at McCool Ranch?

The main challenges were high water disposal costs in California and natural gas prices that made cyclic-steam operations cost-prohibitive for increasing production.