20-F: Trillion Energy International Inc. Reports Financial Results for Fiscal Year Ended December 31, 2024

Trillion Energy International Inc. reports a net loss for the year ended December 31, 2024, driven by decreased revenue and an impairment on oil and gas assets.

Summary

• Trillion Energy International Inc. reported a net loss of $9,128,642 for the year ended December 31, 2024, compared to a net loss of $43,842 for the previous year.
• Operating revenue decreased to $7,000,836 in 2024 from $16,797,366 in 2023, primarily due to water loading of wells.
• The company recognized an impairment on oil and gas assets of $9,892,000 in 2024.
• General and administrative expenses decreased to $6,182,893 in 2024 from $7,294,972 in 2023, mainly due to reduced staffing levels.
• The company is focused on increasing production from the SASB field through artificial lift and smaller production tubing.
• The company plans to renegotiate maturing convertible debt and seek additional opportunities in the oil and gas industry.
• The company had unrestricted cash of $599,208 and a working capital deficit of $27,931,650 as of December 31, 2024.
• The company is planning to drill several well extensions of older wells to recover missed pay at SASB, if and when cash is available.

Sentiment

Score: 3

Explanation: The document presents a negative financial picture with increased losses and decreased revenue, offset by some cost-cutting measures. The company's future depends on successful production increases and further financing.

Positives

• General and administrative expenses decreased to $6,182,893 in 2024 from $7,294,972 in 2023.
• The company is focused on increasing production from the SASB field through artificial lift and smaller production tubing to ramp up cashflow to use cashflow to improve working capital.
• Renegotiation of maturing convertible debt was finalized on April 17, 2025, and includes the extension of the maturity date by three months as well as interest payments to be made through share issuances.

Negatives

• The company reported a net loss of $9,128,642 for the year ended December 31, 2024.
• Operating revenue decreased to $7,000,836 in 2024.
• An impairment on oil and gas assets of $9,892,000 was recognized in 2024.
• The company's working capital deficit was $27,931,650 as of December 31, 2024.

Risks

• The company's ability to continue as a going concern is dependent on obtaining additional financing.
• The company had unrestricted cash of $599,208 and current liabilities of $30,545,192 as of December 31, 2024, which is not sufficient to cover its plan of operations over the next 12 months.
• The company anticipates selling inventory, renegotiating convertible debentures and to raise further funds in the short term.
• The company is looking for additional opportunities both in Turkey and internationally to develop the Companys asset base.

Future Outlook

The company will continue to develop the SASB wells to enhance production through artificial lift, renegotiate terms on the maturing debentures in April 2025 and look for new oil and gas opportunities to develop more revenue producing assets.

Industry Context

The renewed focus in Europe and Turkey is on development of domestic production for petroleum in an effort to shift away from Russian imports, which currently dominate the energy markets in Europe and Turkey.

Management Changes

Legal Proceedings

• The Company through its subsidiary PPE Turkey has advanced arbitration against an offshore drilling rig contractor for $ 20.3 million for gross negligent and breach of contact involving health and safety issues during the prior year drilling program resulting in loss and damages to Company (the Trillion Losses).
• The Companys subsidiary PPE Turkey is defending an action brought by the same drilling contractor in Europe to which it has advanced an arbitration claim, for drilling services seeking $ 3 million.
• The Company has filed claims against, and has received counter claims from, former employees.

Related Party Transactions

• At December 31, 2024, notes receivable included $37,172 (December 31, 2023 $nil) to related parties.
• At December 31, 2024, accounts payable and accrued liabilities included $422,564 (December 31, 2023 $115,526) due to related parties.
• During the year ended December 31, 2024, management fees and salaries of $735,661 (2023 $924,083 and 2022 $711,766), director fees of $118,200 (2023 $145,500 and 2022 $92,000), consulting fees of $609,485 (2023 $52,313 and 2022 $Nil), and stock-based compensation of $913,163 (2023 $1,294,051 and 2022 $926,119) were incurred to related parties.
• During the year ended December 31, 2024, the Company granted 438,000 RSUs to directors pursuant to the Companys director compensation plan, 645,968 RSUs pursuant to certain anniversary terms in the employment agreement of a member of management and accrued for 1,038,500 RSUs valued at $54,197 as an annual bonus to a member of management.
• During the year ended December 31, 2024, the Company issued 2,155,578 shares for RSUs which were granted and vested during the year and during previous periods.
• During the year ended December 31, 2024, the Company issued 4,906,847 shares (2023 80,000) and 4,076,302 units (2023 Nil) with a fair value of $836,921 (2023 $115,304) and $327,388 (2023 $Nil), respectively, to related parties of the Company to settle accounts payable of $800,958 (2023 $118,261) and obligation to issue shares of $146,401 (2023 $Nil) and recognized a loss on settlement of $216,951 (2023 gain of $2,957).
• As at December 31, 2024, loans payable included CAD$252,743 (USD$191,811) (December 31, 2023 CAD$402,115 (USD$420,281)) due to related parties.
• As at December 31, 2024, $6,000 (2023 $Nil) in shares were owed to an officer of the Company.

Stakeholder Impact

• Shareholders may experience dilution as a result of the issuance of additional common stock.
• The company's ability to meet its financial commitments is dependent on its ability to generate sufficient cash flow from operations and secure additional financing.
• Employees may be affected by changes in staffing levels and compensation.

Next Steps

• The Company will continue to develop the SASB wells to enhance production through artificial lift.
• The Company will renegotiate terms on the maturing debentures in April 2025.
• The Company will look for new oil and gas opportunities to develop more revenue producing assets.
• The Company plans to drill several well extensions of older wells to recover missed pay at SASB, if and when cash is available.

Key Dates

Keywords

Trillion Energy, oil and gas, SASB, Cendere, production, reserves, financial results, impairment, Turkey, drilling