| Home to Meta, Salesforce, and Uber, Northern California is known for its tech companies. Yet, less than 100 miles to the south, a little-known company claims to have struck black gold. The company's discovery of a major oil and gas accumulation could be the turning point. For a state at the forefront of climate change and high gas prices, this could be one of the more politically sensitive stocks I've covered. Unlike most penny stocks, this one could actually grow to become a profitable company in short order. Shocking, right? I examine this recent IPO and share my thoughts on this newly promoted stock. Trio Petroleum Corp (AMEX: TPET) - 1-month trading range: $1.76- $3.00
- Typical average daily volume: 304,000
- Float: ~ 18.9 million
Trio Petroleum Corp's Business Based in Bakersfield, California, Trio Petroleum Corp is an independent oil and gas exploration and production (E&P) company focused on acquiring, developing, and operating oil and gas properties in the United States. About an hour and a half south of Palo Alto, California, sits a large piece of land called the South Salinas Project. It's massive, spanning 8,600 acres, in which Trio owns an 85.75% interest. Most folks probably don't know this, but the South Salinas area is a major energy-producing region. The company commenced trilling with its HV-1 well just days ago and plans to start a second conveniently named HV-2. In fact, on May 16th, the company confirmed there's major oil and gas accumulation in the South Salinas Project. Trio Petroleum Corp. found a lot of oil and gas in a place called the President's Field. HV-1 is two miles away from another well called HV-3A. HV-3A found high-quality, mid-gravity oil at depths between 3,750 to 5,100 feet. HV-1 drilled through approximately 1,800 feet of the Monterey Formation, where oil and gas are often found, reaching a total depth of 6,500 feet before it drilling stopped. The company is excited about the find. They think it could be a major source of oil and gas for them. They are planning to do more drilling in the area to see how much oil and gas is there 
Source: Trio Petroleum Capital On April 19, 2023, Trio signed a drilling-rig contract with Ensign Drilling, securing a fully equipped ADR 350 rig that can drill to a depth of about 10,000 feet. If the well is successful, Trio should be able to begin production within about 30 days of completion. The company estimates its property could hold as much as 2.12 billion barrels of oil and 1.18 trillion cubic feet of gas. The project's current probably and possible recoverable oil and gas is estimated at 131 million barrels of oil and 189 billion cubic feet of gas. Financials 
Source: Stockanalysis.com Trio began trading on the NYSE under the ticker symbol TPET on April 18, 2023. Unfortunately, we don't have a lot of historical financial data on the company. It was incorporated on July 19, 2021. However, I can tell you that its net income is negative. TPET lost $2.3 million in its most recent fiscal year. In addition, the company has a high debt-to-equity ratio of 2.5x. Generally speaking, a high debt load could make the company more vulnerable to financial distress. The company's free cash flow is negative. A negative free cash flow indicates the company is not generating enough cash to cover its operating expenses and debt payments. While the fundamentals don't appear to be strong, we know that catalysts are what will drive the stock in the short term. Promoter Activity I learned about this stock from an email I received from a promoter. The promoter mentions that TPET is - Recent IPO
- Trading under $2
- Geopolitical tensions may push oil prices higher
- TPET CEO is a former president at Texaco International
- South Salinas project is strategically located
- TPET is ready to drill
- Potential to be a big oil discovery in California
The promoter focused on the catalysts and fundamentals since there's only been about a month of trading activity in the symbol. In that aspect, they failed to create a high degree of FOMO. Nonetheless, they did present some well-thought arguments. The promoter was paid $25,000 to deliver a one-day awareness campaign, which went live on May 12th. Straight to the Facts If nothing else, the sub-20 million float should put this on your watchlist. However, and I don't say this often with penny stocks, this one actually has a shot at becoming a viable company. It may not make a ton from its pull on the reserves it can reach. But there's a good chance it can turn a profit long before it runs out of cash, making it a diamond in the…oil field. Always at your service, Baron Von Stocks | 
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