Generally, major oil companies dominate stock market headlines, but Trio Petroleum (TPET) is one micro-cap energy stock that has caught the attention of aggressive growth investors in late 2024. Valued at a market cap of less than $3 million, Trio Petroleum is an oil and gas exploration company that saw its price more than triple in a single trading session last week.
Despite the recent uptick in share prices, Trio Petroleum stock trades 90% below its all-time highs and has significantly underperformed the broader market since going public in April 2023.
So, let’s see if the penny oil stock can sustain this momentum in 2025 or if investors have missed the boat on this one.
Penny Stock Unveils Expansion Plans
Trio Petroleum is a California-based company that operates the South Salinas project in Monterey and holds an option on the Union Avenue Field in Bakersfield. The penny stock gained pace after announcing plans to expand into Canada’s heavy oil region through a strategic acquisition. It revealed a non-binding letter of intent to acquire oil and gas properties from Novacor Exploration in Saskatchewan’s Lloydminster region – an area renowned for its cost-effective heavy oil production.
The $1.4 million acquisition would provide Trio Petroleum with a full working interest in assets currently producing 70 barrels per day from seven active wells. Moreover, a research report indicates that the properties hold 91.5 million barrels of proven and probable oil reserves.
Trio Petroleum CEO Robin Ross stated “This acquisition represents a transformative opportunity to establish our presence in one of North America’s premier heavy oil regions. We’re particularly excited about the multi-lateral drilling opportunities identified in the Sparky formation, which could significantly boost production.”
The company’s bold move into Saskatchewan’s oil patch indicates an ambition to expand beyond California and into regions with proven production history and substantial growth potential. An overenthusiastic response from investors means that they are optimistic about Trio’s ability to execute on its expansion strategy and capitalize on a favorable operating environment.
Is the Penny Oil Stock a Good Buy?
A pre-revenue company, Trio Petroleum reported an operating loss of $6.2 million in the last 12 months, up from $4.6 million in fiscal 2023 (ended in October). With just about $300,000 in available cash, Trio Petroleum would have to raise additional equity capital to support its cash burn rate and the acquisition mentioned above.
Investing in the penny stock is an extremely risky proposition, given shareholders have no revenue or operational visibility. I would want the company first to showcase an ability to generate consistent profits at a reasonable scale before making any investment decision.
