Oil and Gas Properties

12 Months Ended

Dec. 31, 2023

Oil And Gas Properties

Oil and Gas Properties

6. Oil and Gas Properties

	SASB			Cendere			Total
Cost
As at December 31, 2021	$	1,398,676		$	2,453,485		$	3,852,161
Additions		44,369,191			-			44,369,191
JV Contribution		(6,656,785	)		-			(6,656,785	)
Change in ARO estimate		(3,865,772	)		(5,562	)		(3,871,334	)
Currency translation adjustment		(4,748,897	)		-			(4,748,897	)
Impact of hyperinflation		837,908			110,090			947,998
As at December 31, 2022		31,334,321			2,558,013			33,892,334
Additions		56,381,768			-			56,381,768
JV Contribution		(29,623,835	)		-			(29,623,835	)
Change in ARO estimate and additions		706,159			102			706,261
Currency translation adjustment		(17,696,392	)		(948,518	)		(18,644,910	)
Impact of hyperinflation		21,039,584			1,042,395			22,081,979
Reclassified as assets held for sale (Note 5)		(3,036,216	)		-			(3,036,216	)
As at December 31, 2023	$	59,105,389		$	2,651,992		$	61,757,381
Accumulated depletion
As at December 31, 2021	$	743,647		$	1,687,901		$	2,431,548
Depletion		1,263,556			187,476			1,451,032
Impact of hyperinflation		(34,215	)		(5,825	)		(40,040	)
As at December 31, 2022		1,972,988			1,869,552			3,842,540
Depletion		5,038,009			81,165			5,119,174
Currency translation adjustment		(731,475	)		(693,127	)		(1,424,602	)
Impact of hyperinflation		804,164			762,005			1,566,169
As at December 31, 2023	$	7,083,686		$	2,019,595		$	9,103,281
Net book value
As at December 31, 2022	$	29,361,333		$	688,461		$	30,049,794
As at December 31, 2023	$	52,021,703		$	632,397		$	52,654,100

Cendere oil field

The Cendere onshore oil field, which is located in South East Turkey has a total of 25 wells. The operator of the Cendere Field is Türkiye Petrolleri Anonim Ortaklığı (“TPAO”). The Company’s interest is 19.6% for all wells except for wells C-13, C-15 and C-16, for which its interest is 9.8%. As at December 31, 2023, the depletion calculation includes future development costs of $65,000 (2022 - $65,000) based on the most recent reserve report.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

(Expressed in U.S. dollars)

6. Oil and Gas Properties (continued)

The South Akcakoca Sub-Basin (“SASB”)

The Company owns offshore production licenses called the South Akcakoca Sub-Basin (“SASB”). The Company owns a 49% working interest in SASB in partnership with TPAO. SASB has four producing fields, each with a production platform plus subsea pipelines that connect the fields to an onshore gas plant. The four SASB fields are located off the north coast of Turkey towards the western end of the Black Sea.

Management assesses each field for impairment indicators at each reporting date. Impairment indicators considered include the following:

● Plans to discontinue or dispose of the asset before the previously expected date;

● Significant reductions in estimates or reserves;

● Significant cost overrun on a capital project;

● Significant increases in the expected cost of dismantling assets and restoring the site; and

● Production difficulties.

As at December 31, 2023, the Company performed an assessment of potential impairment indicators and noted that the Company’s net asset value was greater than its market capitalization. As a result of the impairment indicator noted, the Company performed an impairment test in accordance with IFRS using fair value less cost to sell. For the purposes of testing impairment and determining fair value less cost to sell, the Company used a 30 year forecast of net cash flows obtained from the annual reserve report discounted at 10% and 20% to estimate the fair value of the oil and gas properties. The resulting recoverable amount exceeded the book values of the oil and gas properties and as such, no impairment charge was recognized as at December 31, 2023. As at December 31, 2023, the depletion calculation includes future development costs of $35,144,000 (2022 - $49,960,000) based on the most recent reserve report.