20-F/A: 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 year ended December 31, 2023.
• 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.
• As of December 31, 2024, the company's total assets were $54,864,568 and total liabilities were $40,715,360.
• The company's working capital deficit increased to $27,931,650 as of December 31, 2024.
• The company is focused on increasing production and reserves at its SASB natural gas field and capitalizing on high regional gas prices.
• The company is working to resolve water loading issues on up to nine wells at the SASB gas field.
• The company is planning to drill several well extensions of older wells to recover missed pay.
• The company is evaluating exploration opportunities around the SASB development license area.
• The company is reprocessing the existing 3D seismic with new technology and gathering additional data to determine and propose new exploration work programs in and around the SASB block.

Sentiment

Score: 3

Explanation: The document presents a negative financial picture with increased losses and decreased revenue, offset by some positive developments in production optimization. The going concern uncertainty adds to the negative sentiment.

Positives

• The company is actively working to resolve water loading issues at the SASB gas field.
• The company is planning to drill several well extensions to increase gas production.
• The company is evaluating exploration opportunities around the SASB development license area.
• The company is reprocessing seismic data to improve resolution and identify new exploration targets.
• The company has a 19.6% interest in the Cendere oil field, a long-term low decline oil reserve.

Negatives

• The company experienced a significant increase in net loss for the year ended December 31, 2024.
• The company experienced a significant decrease in revenue for the year ended December 31, 2024.
• The company recognized a significant impairment on oil and gas assets in 2024.
• The company's working capital deficit increased significantly as of December 31, 2024.
• Year end production rates were significantly lower due to waterloading issues impacting gas flow.

Risks

• The company's ability to continue as a going concern is dependent on obtaining additional financing.
• The company's working capital deficit raises substantial doubt about its ability to continue as a going concern.
• The company's future success depends on the success of its exploration, development and production activities in its prospects.
• The company is subject to political, economic and other risks and uncertainties in the foreign countries in which it operates.
• The company is subject to foreign currency risks.

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

Corporate Governance

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 Company's 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 due to related parties.
• At December 31, 2024, accounts payable and accrued liabilities included $422,564 due to related parties.
• During the year ended December 31, 2024, management fees and salaries of $735,661, director fees of $118,200, consulting fees of $609,485, and stock-based compensation of $913,163 were incurred to related parties.
• During the year ended December 31, 2024, the Company granted 438,000 RSUs to directors pursuant to the Company's 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 4,906,847 shares and 4,076,302 units with a fair value of $836,921 and $327,388, respectively, to related parties of the Company to settle accounts payable of $800,958 and obligation to issue shares of $146,401 and recognized a loss on settlement of $216,951.
• As at December 31, 2024, loans payable included CAD$252,743 (USD$191,811) due to related parties.
• As at December 31, 2024, $6,000 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 or the exercise of outstanding options and warrants.
• The company's financial performance may impact employee compensation and job security.
• The company's ability to meet its financial obligations may impact suppliers and creditors.
• The company's operations may impact the environment and local communities.

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.
• The Company plans to evaluate exploration opportunities around the SASB development license area.

Key Dates

Keywords

Trillion Energy, SASB, Cendere, Oil and Gas, Production, Reserves, Exploration, Turkey, Financial Results, Impairment, Water Loading