Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

May 2024

Commission File Number: 000-55539

TRILLION ENERGY INTERNATIONAL INC.

Suite 700, 838 W. Hastings Street, Vancouver, BC V6C 0A6

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

☒ Form 20-F ☐ Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Explanatory Note

Trillion Energy International Inc. (the “Company”) is furnishing this Form 6-K to provide its consolidated interim financial statements for the three months ended March 31, 2024, and 2023 and Management Discussion and Analysis related thereto as filed in the SEDAR filing system.

Exhibits:

99.1	CONSOLIDATED INTERIM FINANCIAL STATEMENTs FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

99.2	MANAGEMENT DISCUSSION AND ANALYSIS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRILLION ENERGY INTERNATIONAL INC.
	(Registrant)

Date: May 29, 2024	By:	/s/ David Thompson
		David Thompson
		Chief Financial Officer

Exhibit 99.1

Trillion Energy International Inc.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited - Stated in United States dollars)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements for Trillion Energy International Inc. (the “Company”) have been prepared by management in accordance with International Financing Reporting Standards (“IFRS”). These condensed consolidated interim financial statements, which are the responsibility of management, are unaudited and have not been reviewed by the Company’s auditors. The Company’s Audit Committee and Board of Directors have reviewed and approved these condensed consolidated interim financial statements. In accordance with the disclosure requirements of National Instrument 51-102 released by the Canadian Securities Administrators, the Company’s independent auditors have not performed a review of these condensed consolidated interim financial statements.

TRILLION ENERGY INTERNATIONAL INC.

Index to Condensed Consolidated Interim Financial Statements

	Page
Consolidated interim statements of financial position (unaudited)	2

Consolidated interim statements of income (loss) and comprehensive income (loss) (unaudited)	3

Consolidated interim statements of stockholders’ equity(unaudited)	4

Consolidated interim statements of cash flows (unaudited)	5-6

Notes to the consolidated interim financial statements (unaudited)	7 - 28

TRILLION ENERGY INTERNATIONAL INC.

Consolidated Interim Statements of Stockholders’ Equity

(Expressed in U.S. dollars)

(Unaudited)

	Notes		March 31, 2024 (Unaudited)			December 31, 2023

ASSETS
Current assets:
Cash and cash equivalents			$	435,846		$	1,188,445
Amounts receivable		3		958,894			1,593,345
Prepaid expenses and deposits		4		175,440			603,435
Assets held for sale		5		1,479,429			1,479,429
Total current assets				3,049,609			4,864,654
Oil and gas properties, net		6		55,085,464			52,654,100
Property and equipment, net		8		693,957			720,550
Long-term deposits		4		454,395			371,124
Total assets			$	59,283,425		$	58,610,428
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		9,19	$	14,784,024		$	14,065,019
RSU obligation		18		-			18,398
Loans payable		10,19		3,113,176			3,464,450
Convertible debt – accrued interest		12		553,623			227,092
Lease liability		11		10,021			19,637
Total current liabilities				18,460,844			17,794,596
Asset retirement obligation		13		6,047,836			6,247,027
Convertible debt		12		10,097,846			10,102,627
Lease liabilities		11		43,105			122,058
Deferred tax liability		24		2,808,712			2,131,548
Total liabilities				37,458,343			36,397,856
Stockholders’ equity:
Share capital				75,980,781			74,586,724
Notes and amounts receivable for equity issued		14,19		(113,309	)		(113,309	)
Warrant and option reserve				6,525,966			6,239,370
Shares to be cancelled				7,645			7,645
Obligation to issue shares				-			396,177
Accumulated other comprehensive loss				(15,956,659	)		(12,964,837	)
Accumulated deficit				(44,619,342	)		(45,939,198	)
Total stockholders’ equity				21,825,082			22,212,572
Total liabilities and stockholders’ equity			$	59,283,425		$	58,610,428

Nature of operations (Note 1)

Subsequent events (Note 26)

APPROVED BY THE BOARD OF DIRECTORS ON MAY 29, 2024:

“Arthur Halleran”		“David Thompson”
Director		Director

See accompanying notes to condensed consolidated interim financial statements.

TRILLION ENERGY INTERNATIONAL INC.

Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)

(Expressed in U.S. dollars)

(Unaudited)

			For the three months ended March 31,
	Notes		2024			2023

Revenue
Oil and gas revenue, net		21	$	1,321,945		$	6,145,939
Cost and expenses
Production				1,320,648			1,361,361
Depletion		6		177,477			1,959,153
Depreciation		8		23,244			173,839
Accretion of asset retirement obligation		13		60,051			52,732
Stock-based compensation		16,18		329,574			153,922
General and administrative		20		1,576,814			2,184,679
Geological and geophysical expenses		7		705,184			90,579
Total expenses				4,192,992			5,976,265
Loss before other income (expenses)				(2,871,047	)		169,674

Other income (expense)
Interest income				32,079			24,947
Finance cost		10,12		(641,343	)		(228,363	)
Foreign exchange loss				(565,913	)		(403,693	)
Loss on extinguishment of accounts payable and loan payable		10		(155,861	)		-
Change in fair value of derivative liability		17		-			3,840
Loss on settlement agreement		15		-			(3,439	)
Loss on write-off of notes and other receivables		14		(7,810	)		-
Loss on issuance of shares		15		(5,135	)		-
Gain on net monetary position		2		6,349,365			2,708,433
Gain on modification of lease		11		40,473			-
Total other income (expense)				5,045,855			2,101,725
Net income (loss) before taxes				2,174,808			2,271,399
Deferred tax expense				(854,952	)		-
Net income				1,319,856			2,271,399
Other comprehensive loss
Foreign currency translation				(2,991,822	)		697,788
Comprehensive loss			$	(1,671,966	)	$	2,969,187

Earnings per share – Basic and diluted			$	0.01		$	0.03
Weighted average shares outstanding – Basic and Diluted				120,106,509			76,898,473

See accompanying notes to condensed consolidated interim financial statements.

TRILLION ENERGY INTERNATIONAL INC.

Consolidated Interim Statements of Stockholders’ Equity

(Expressed in U.S. dollars)

(Unaudited)

	Shares		Share capital		Warrant and option reserve			Receivables for equity issued			Obligation to issue shares			Shares to be cancelled		Accumulated other comprehensive income (loss)			Accumulated deficit			Total
Balance, December 31, 2022		76,775,071	$	64,750,270	$	5,682,869		$	(1,062,062	)	$	94,210		$	7,645	$	(4,009,997	)	$	(44,837,004	)	$	20,625,931
Issuance of common stock		5,000		2,215		-			-			-			-		-			-			2,215
Options exercised		110,000		226,116		(90,524	)		-			-			-		-			-			135,592
Stock issued for RSUs		202,000		149,390		-			-			-			-		-			-			149,390
Stock issued for debt settlement		100,000		142,626		-			-			-			-		-			-			142,626
Stock-based compensation - options		-		-		51,206			-			-			-		-			-			51,206
Stock-based compensation – RSU’s		-		-		102,417			-			-			-		-			-			102,417
RSU’s repurchased		-		-		(16,563	)		-			-			-		-			-			(16,563	)
Repayment of notes receivable		-		-		-			41,365			-			-		-			-			41,365
Comprehensive income		-		-		-			-			-			-		697,788			2,271,399			2,969,187
Balance, March 31, 2023		77,192,071	$	65,270,617	$	5,729,405		$	(1,020,697	)	$	94,210		$	7,645	$	(3,312,209	)	$	(42,565,605	)	$	24,203,366
Balance, December 31, 2023		115,250,810	$	74,586,724	$	6,239,370		$	(113,309	)	$	396,177		$	7,645	$	(12,964,837	)	$	(45,939,198	)	$	22,212,572
Stock issued for RSUs		1,509,610		344,470		(42,977	)		-			(283,095	)		-		-			-			18,398
Stock issued for debt settlement		5,370,297		898,341		-			-			(94,210	)		-		-			-			804,131
Stock-based compensation - options		-		-		272,395			-			-			-		-			-			272,395
Stock-based compensation – RSU’s		-		-		57,178			-			-			-		-			-			57,178
Stock issued for services		1,099,625		151,246		-			-			(18,872	)		-		-			-			132,374
Comprehensive income		-		-		-			-			-			-		(2,991,822	)		1,319,856			(1,671,966	)
Balance, March 31, 2024		123,230,342	$	75,980,781	$	6,525,966		$	(113,309	)	$	-		$	7,645	$	(15,956,659	)	$	(44,619,342	)	$	21,825,082

See accompanying notes to condensed consolidated interim financial statements

TRILLION ENERGY INTERNATIONAL INC.

Consolidated Interim Statements of Cash Flows

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

	Three months ended March 31,
	2024			2023
Operating activities:
Net income (loss) for the period	$	1,319,856		$	2,271,399
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		329,574			153,922
Stock issued for services		132,374			-
Depletion		177,477			1,959,153
Depreciation		23,244			173,839
Accretion of asset retirement obligation		60,051			52,732
Accretion and accrued interest expense		641,343			177,419
Interest income		(1,113	)		(11,776	)
Change in fair value of derivative liability		-			(3,840	)
Unrealized foreign exchange (gain) loss		(808,616	)		-
Loss on debt settlement		155,861			3,439
Loss on issuance of shares		5,135			-
Loss on write-off of notes and other receivables		7,810			-
Gain on net monetary position		(6,349,365	)		(2,708,433	)
Gain on termination of lease		(40,473	)		-
Deferred tax expense		854,952			-
Changes in non-cash working capital items:
Amounts receivable		528,385			1,598,408
Prepaid expenses and deposits		400,901			(491,561	)
Accounts payable and accrued liabilities		2,550,007			2,076,982
Net cash (used in) provided by operating activities		(12,597	)		5,251,683
Investing activities:
Property and equipment expenditures		(4,860	)		(47,344	)
Oil and gas properties expenditures		(210,869	)		(19,927,785	)
Advances from JV Partners		-			14,033,375
Changes in non-cash working capital items:
Prepaid expenses and deposits		(116,636	)		-
Accounts payable and accrued liabilities		(370,650	)		-
Net cash used in investing activities		(703,015	)		(5,941,754	)
Financing activities:
Proceeds from exercise of options		-			135,592
Proceeds from exercise of warrants		-			2,215
Proceeds from loans payable		-			2,105,386
Repayments of loans payable		(18,614	)		(33,806	)
Repayment of notes receivable		-			41,365
Lease payments		(8,503	)		(76,251	)
Net cash (used in) provided by financing activities		(27,117	)		2,174,501
Effect of exchange rate changes on cash and cash equivalents		(9,870	)		(21,575	)
Net increase (decrease) in cash and cash equivalents		(752,599	)		1,462,855
Cash and cash equivalents, beginning of period		1,188,445			926,061
Cash and cash equivalents, end of period	$	435,846		$	2,388,916

TRILLION ENERGY INTERNATIONAL INC.

Consolidated Interim Statements of Cash Flows

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

	Three months ended March 31,
	2024		2023
Supplemental information:
Interest paid on credit facilities	$	1,216	$	16,883
Non-cash investing and financing activities:
Stock issued for debt settlement	$	804,131	$	142,626
Stock issued for services	$	132,374	$	-
Right-of-use asset additions	$	-	$	236,201

See accompanying notes to condensed consolidated interim financial statements.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

1.	Organization

Trillion Energy International Inc. and its consolidated subsidiaries, (collectively referred to as the “Company”) is a Canadian based oil and gas exploration and production company. Effective January 2022, the corporate headquarters moved to Suite 700, 838 West Hastings Street, Vancouver, B.C., Canada from Turan Gunes Bulvari, Park Oran Ofis Plaza, 180-y, Daire:54, Kat:14, 06450, Oran, Cankaya, Anakara, Turkey. The Company also has a registered office in Canada and Bulgaria. The Company was incorporated in Delaware in 2015. The Company’s shares trade on the OTCQB under the symbol “TRLEF” and trade on the Canadian Securities Exchange (the “Exchange”) under the symbol “TCF”.

On January 21, 2022, the Company redomiciled from Delaware to a British Columbia corporation by way of an amalgamation transaction with the Company’s British Columbian subsidiary, Trillion Energy Inc. (the “Repatriation Transaction”). Pursuant to the Repatriation Transaction, for every one common stock of Trillion Energy International Inc., the shareholders will receive one common stock of Trillion Energy Inc. The Company will continue to operate and report under the name of Trillion Energy International Inc.

As a result of the Repatriation Transaction, the Company meets the definition of a foreign private issuer, as defined under Rule 3b-4 of the Securities Exchange Act of 1934, as amended.

On September 18, 2023, the Company consolidated its issued share capital on a ratio of five old common shares for every one new post-consolidated common share. All current and comparative references to the number of common shares, weighted average number of common shares, loss per share, stock options and warrants have been restated to give effect to this share consolidation (the “Share Consolidation”).

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. At March 31, 2024, the Company’s current liabilities exceeded its current assets by $15,411,235 (December 31, 2023 - $12,929,942) and its accumulated deficit amounts to $44,619,342 (December 31, 2023 - $45,939,198). In addition, for the three months ended March 31, 2024, cash used by operating activities was $12,597. The Company’s continuation as a going concern is dependent upon its ability to complete financings sufficient to meet current and future obligations, the successful results from its business activities, and its ability to operate profitably and generate funds. Although the Company raised capital in current and previous reporting periods, additional funding will be required to continue current operations and further advance its existing oil and gas assets in the upcoming 12 months. These factors indicate the existence of material uncertainty which raises substantial doubt about the Company’s ability to continue as a going concern.

2.	Material Accounting Policies

(a)	Statement of Compliance

The unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) applicable to the preparation of condensed interim financial statements, including International Accounting Standards (“IAS”) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”), and the Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). Accordingly, certain disclosures included in annual financial statements have been condensed or omitted and these unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2023.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

2.	Material Accounting Policies (continued)

The Company’s management makes judgments in its process of applying the Company’s accounting policies in the preparation of its naudited condensed consolidated interim financial statements. In addition, the preparation of the financial data requires that the Company’s management make assumptions and estimates of the effects of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively. The critical judgments and estimates applied in the preparation of the Company’s condensed consolidated interim financial statements are consistent with those applied and disclosed in the Company’s consolidated financial statements for the year ended December 31, 2023. In addition, the accounting policies applied in these condensed consolidated interim financial statements are consistent with those applied and disclosed in the Company’s audited financial statements for the year ended December 31, 2023.

These condensed consolidated interim financial statements were authorized for issue by the board of directors of the Company (the “Board of Directors”) on May 29, 2024.

(b)	Basis of Presentation

The condensed consolidated interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”), effective as at January 1, 2024. The consolidated financial statements are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Park Place Energy Corp. (“PPE Corp.”), Park Place Energy Bermuda (“PPE Bermuda”), BG Exploration EOOD (“BG Exploration”), and Park Place Energy Turkey (“PPE Turkey”). The Company’s oil and gas operations are conducted jointly with its joint venture partner (Note 6). The joint arrangement meets the definition of a joint operation under IFRS 11, “Joint Arrangements” (“IFRS 11”); therefore, the Company’s share of the assets, liabilities, revenues and expenses are recorded in the consolidated financial statements. All intercompany balances and transactions are eliminated on consolidation.

The functional currency of BG Exploration is the Bulgarian Lev. The functional currency of the Company’s Turkish operations is the Turkish Lira (“₺”). The functional currency of the Company’s Bermuda subsidiary is the United States dollar (“USD”), and the function currency of PPE Corp is the USD.

A portion of the Company’s exploration and development activities are conducted jointly with others. The joint interests are accounted for on a proportionate consolidation basis and as a result the financial statements reflect only the Company’s proportionate share of the assets, liabilities, revenues, expenses and cash flows from these activities.

Name of the joint

arrangement

Nature of the relationship

with the joint arrangement

Principal place of operation

of joint arrangement

Proportion of

participating share

South Akcakoca Sub-Basin (“SASB”)

Operator

Turkey

49%

Cendere

Participant

Turkey

19.6%

Basis of Measurement

These consolidated financial statements have been prepared on a historical cost basis except for certain derivative liabilities, which are measured at fair value.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

2.	Material Accounting Policies (continued)

Hyperinflation

Due to various qualitative factors and developments with respect to the economic environment in Turkey, including but not limited to, the acceleration of multiple local inflation indices, the three-year cumulative inflation rate of the local Turkish wholesale price index exceeding 100% at the end of February 2022 and the significant devaluation of the Turkish Lira, Turkey has been designated a hyper-inflationary economy as of April 1, 2022 for accounting purposes.

Accordingly, IAS 29, Financial Reporting in Hyper-Inflationary Economies was adopted by the Company in its consolidated financial statements and applied to these consolidated financial statements in relation to PPE Turkey. The consolidated financial statements are based on the historical cost approach in IAS 29.

The application of hyperinflation accounting requires restatement of PPE Turkey’s non-monetary assets and liabilities, equity and comprehensive income (loss) items from the original transaction date when they were first recognized into the current purchasing power which reflects a general price index current at the end of the reporting period. To measure the impact of inflation on its financial statements and results, the Company has elected to use the consumer price index (“CPI”) as published by the Turkish Statistical Institute “TURKSTAT”.

IAS 29 also requires the restatement of comparative periods for the effects of hyperinflation unless the comparatives were previously presented in a different presentation currency of a non-hyperinflationary economy. The consolidated financial statements of the Company are presented in US dollars, a stable currency, and as a result the comparative amounts do not require restatement.

On April 1, 2022, the Company recognized an adjustment of $473,907 for the impact of hyperinflation within accumulated other comprehensive loss related to the non-monetary assets held by PPE Turkey, which have been restated from the historic date when they were first recognized to the beginning of the reporting period (the “Opening Hyperinflation Adjustment”). On initial adoption of IAS 29, there is an accounting policy choice to recognize the Opening Hyperinflation Adjustment directly to opening equity or to other comprehensive income and the Company has elected to recognize this amount directly to opening equity.

The value of the CPI at December 31, 2023, was 2,139 (December 31, 2023 - 1,859) and the movement in the CPI for the three months ended March 31, 2024 was 280 (2023 - 141), an increase of approximately 15% (2023 – 13%). As a result, the Company recognized a net monetary gain of $6,349,365 for the three months ended March 31, 2024 (2023 - $2,708,433) to restate transactions into a measuring unit current as of each period end.

3.	Amounts Receivable

	March 31, 2024		December 31, 2023
Accounts receivable	$	751,878	$	1,403,781
GST receivable		72,416		46,642
Interest receivable		36,637		44,339
Due from related parties		35,230		35,295
Other		62,733		63,288
	$	958,894	$	1,593,345

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

4.	Prepaid expenses and deposits

	March 31, 2024		December 31, 2023
Exploration and production advances	$	101,739	$	174,031
Prepaid expenses		55,889		426,487
Prepaid taxes		17,812		2,917
Close-Out Fund (Note 13)		454,395		371,124
	$	629,835	$	974,559

Prepaid expenses and deposits – Current	$	175,440	$	603,435
Long-term deposits	$	454,395	$	371,124

5.	Assets held for sale

In 2023, management committed to a plan to sell left-over field equipment with a carrying amount of $3,036,216. Accordingly, the equipment is presented as assets held for sale.

During the year ended December 31, 2023, impairment losses of $1,556,787 (2022 - $Nil) were recognized for the write-down of the assets held for sale to the lower of its carrying amount and its fair value less costs to sell. As at March 31, 2024, the value of the Company’s assets held for sale are $1,479,429 (December 31, 2023 - $1,479,429).

The non-recurring fair value measurement for the assets held for sale has been categorized as a Level 3 fair value and is based on management’s best estimate of the fair value of similar products in similar conditions in the marketplace. The key inputs used by management to estimate the fair value of the assets-held-for sale is based on offers received from third parties for a large portion of the equipment and extrapolation of the discount to similar items in the assets listing.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

6.	Oil and Gas Properties

	SASB			Cendere			Total
Cost
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
Additions		210,869			-			210,869
JV Contribution		-			-			-
Change in ARO estimate and additions		(261,192	)		(940	)		(262,132	)
Currency translation adjustment		(4,939,529	)		(221,197	)		(5,160,726	)
Impact of hyperinflation		7,952,289			366,166			8,318,455
As at March 31, 2024	$	62,067,826		$	2,796,021		$	64,863,847

Accumulated depletion
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
Depletion		160,474			17,003			177,477
Currency translation adjustment		(590,834	)		(168,450	)		(759,284	)
Impact of hyperinflation		978,059			278,850			1,256,909
As at March 31, 2024	$	7,631,385		$	2,146,998		$	9,778,383

Net book value
As at December 31, 2023	$	52,021,703		$	632,397		$	52,654,100
As at March 31, 2024	$	54,436,441		$	649,023		$	55,085,464

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 March 31, 2024, the depletion calculation includes future development costs of $65,000 (December 31, 2023 - $65,000) based on the most recent reserve report.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

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 March 31, 2024, 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 March 31, 2024. As at March 31, 2024, the depletion calculation includes future development costs of $35,144,000 (December 31, 2023 - $35,144,000) based on the most recent reserve report.

7.	Exploration & Evaluation Assets

Turkey

Effective July 25, 2023, the Company entered into a farm-in agreement (the “Farm-in Agreement”) with a company existing under the laws of the Republic of Turkey (the “Farmor”). The Farmor holds a 100% undivided interest in three exploration licenses and is willing to assign and transfer a 50% undivided interest in the licenses to the Company in accordance with the terms of Farm-in Agreement. The Company has committed to the following terms to earn its interest (the “Farm-in Obligations”):

(1)

2D Seismic Data Acquisition and Data Processing: Conduct (through contractors) a minimum of 351km 2D seismic data acquisition in the licensed area within 2023 (not completed - see below). Until the determination of exploration well locations, all seismic survey expenses (including all costs related to seismic crews, land damages, processing, interpretation, reporting, procurement, and reprocessing of previously acquired seismic lines in the license area, gravity surveys, etc.) will be covered by the Company. All reports and results of the conducted work, along with potential structures identified as a result of these activities, will be shared with Farmor. After joint evaluations and decisions, exploration wells will be drilled at the most suitable structures.

(2)

Exploration Well Drilling Obligation: Conduct (through contractors) drilling of 4 (four) exploration wells in the license area within the year 2024. Drilling of those four exploration wells shall be fully funded by the Company (including location, infrastructure development, land usage, and any other expenses). After the drilling and testing of the four exploration wells, the restoration of well locations to their original state, mud-pit clean-up, and any damage compensation costs, if applicable, will be borne by the Company

(3)

Cash Consideration Payment Obligation. In addition to the obligations stated in (1) and (2) above, the Company agreed to pay the Farmor a monthly fee of USD15,000, starting from the date of contract signing until the completion date of all obligations specified in (1) and (2) above, or until December 31, 2024 (whichever occurs earlier).

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

7.	Exploration & Evaluation Assets (continued)

The Company and the Farmor will notify each other of their intent to enter into a joint exploration period. After the Company’s fulfillment of the Farm-in Obligations, the costs and liabilities of operations within the licenses will be shared equally based on a 50-50 principle. During the joint exploration period, there will be no Cash Consideration Payment Obligation as specified in (3) above.

Under the terms of the Farm-in Agreement, the Company had to complete a minimum of 351km 2D seismic data acquisition within 2023, which could not be completed due to unfavorable weather conditions. In addition, the Farm-in Agreement specifies that the parties have agreed to enter into a joint operating agreement (“JOA”) and that if the JOA is not signed within 2 months (i.e. September 25, 2023), the Farm-in Agreement shall automatically terminate without the need for any additional notice, unless otherwise agreed by the parties. Although the deadline has passed, the Company and the Farmor continue to operate in good faith towards the completion of the Farm-in Obligations and towards the signing of a JOA, although no amending agreements or notices of understanding have been executed.

During the three months ended March 31, 2024, the Company expensed $705,184 (2023 - $nil) in relation to the Farm-in Agreement in accordance with its pre-license exploration accounting policy. The amount is included in geological and geophysical expenses.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

8.	Property and Equipment

	Right-of-use assets			Leasehold improvements			Other Equipment			Motor Vehicles			Furniture			Total
Cost
As at December 31, 2022	$	50,449		$	186,362		$	333,337		$	458,784		$	44,917		$	1,073,849
Additions		236,202			14,498			11,076			15,644			18,958			296,378
Disposals		(47,685	)		-			-			(97,028	)		-			(144,713	)
Currency translation adjustment		(105,792	)		(60,555	)		(126,062	)		(151,880	)		(14,291	)		(458,580	)
Impact of hyperinflation		69,616			68,608			140,538			136,661			17,538			432,961
As at December 31, 2023	$	202,790		$	208,913		$	358,889		$	362,181		$	67,122		$	1,199,895
Additions		-			-			-			-			4,860			4,860
Modification		(45,687	)		-			-			-			-			(45,687	)
Currency translation adjustment		(15,624	)		(14,804	)		(29,934	)		(30,209	)		(4,354	)		(94,925	)
Impact of hyperinflation		26,753			24,563			49,553			50,007			7,000			157,876
As at March 31, 2024	$	168,232		$	218,672		$	378,508		$	381,979		$	74,628		$	1,222,019

Accumulated depreciation
As at December 31, 2022		40,167			126,995			45,422			111,264			8,274			332,122
Depreciation		37,457			13,135			52,084			62,920			10,168			175,764
Disposals		(10,332	)		-			-			(30,267	)		-			(40,599	)
Currency translation adjustment		(14,892	)		(45,848	)		(16,840	)		(41,251	)		(2,513	)		(121,344	)
Impact of hyperinflation		16,372			50,404			18,513			45,350			2,763			133,402
As at December 31, 2023	$	68,772		$	144,686		$	99,179		$	148,016		$	18,692		$	479,345
Depreciation		5,201			2,653			7,022			5,482			2,886			23,244
Currency translation adjustment		(5,738	)		(11,367	)		(8,272	)		(12,346	)		(1,149	)		(38,872	)
Impact of hyperinflation		9,496			18,816			13,694			20,437			1,902			64,345
As at March 31, 2024	$	77,731		$	154,788		$	111,623		$	161,589		$	22,331		$	528,062

Net Book Value
As at December 31, 2023	$	134,018		$	64,227		$	259,710		$	214,165		$	48,430		$	720,550
As at March 31, 2024	$	90,501		$	63,884		$	266,885		$	220,390		$	52,297		$	693,957

9.	Accounts Payable and Accrued Liabilities

	March 31, 2024		December 31, 2023
Accounts payable	$	14,687,542	$	13,567,262
Accrued liabilities		41,534		77,078
Payroll, withholding and sales tax liabilities		54,948		420,679
	$	14,784,024	$	14,065,019

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

10.

Loans Payable

As at	March 31, 2024			December 31, 2023
Unsecured, interest-bearing loan at 37.7% per annum¹		-			19,461
Unsecured, interest-bearing loan at 6% per annum^3,4		203,304			614,899
Unsecured, interest-bearing loan at 1% per month²		2,902,125			2,822,250
Unsecured, non- interest-bearing loan⁵		7,747			7,840
Total loans payable		3,113,176			3,464,450
Current portion of loans payable		(3,113,176	)		(3,464,450	)
Long-term portion of loans payable	$	-		$	-

(1)

On March 13, 2023, Garanti Bank extended a long-term loan to Park Place Turkey Limited in the amount of ₺2,000,000 (or approximately USD$105,386). The loan matures on March 12, 2024, and bears interest at 37.67% per annum. Principal and accrued interest are paid monthly. During the year ended December 31, 2023, the Company made $61,627 (2022 - $nil) in principal payments and $18,676 (2022 - $nil) in interest payments. During the three months ended March 31, 2024, the Company made $18,614 in principal payments and $1,216 in interest payments.

(2)

On July 1, 2023, the Company entered into agreements with TR1 Master Fund to borrow $1,065,000 and $1,597,500. The loans were issued with a $65,000 and $97,500 discount, respectively, and bear an interest rate of 1% per month. The maturity date was December 31, 2023, and the Company is claiming that the principal of TR1 Master Fund agreed to extend the loans to December 31, 2024. In the event that the loan is repaid in full prior to the maturity date, the minimum interest payments on the loans are $40,000 and $60,000, respectively. The minimum interest payments have been recorded on the consolidated statements of income (loss) and comprehensive income (loss) as finance costs. Accrued interest in excess of the minimum interest payments of $23,900 and $35,850, respectively were recorded during the year ended December 31, 2023. Accretion of the discount recognized on the loans during the period were $63,916 and $96,138, respectively. If, during the period that any amount of the loan remains outstanding, the Company issues any equity, the Lender may demand repayment of all or part of the principal amount of the loan in an amount equal to the aggregate subscription price of the equity offering. Accrued interest in excess of the minimum interest payments of $31,950 and $47,925, respectively were recorded during the three months ended March 31, 2024. The Company is currently in discussions with the lender and has not made any repayments as at the date of these condensed consolidated interim financial statements (Note 25).

(3)

On July 20, 2023, the Company entered into a promissory note with 1324025 BC Ltd for CAD$300,000 (USD$228,023). The promissory note bears an interest rate of 6% per annum. The principal plus all accrued unpaid interest is to be repaid on demand but no later than December 31, 2024. During the year ended December 31, 2023, CAD$50,000 (USD$37,717) of the principal balance was repaid and CAD$7,917 (USD$5,867) in interest was accrued. During the three months ended March 31, 2024, CAD$3,804 (USD$2,822) in interest was accrued.

(4)

On September 1, 2023, the Company entered into a promissory note with 2476393 Alberta Ltd for CAD$546,000 (USD$402,115). The promissory note bears an interest rate of 6% per annum. The principal plus all accrued unpaid interest is to be repaid on demand but no later than December 31, 2024. As at December 31, 2023, no repayments had been made. During the year ended December 31, 2023, CAD$10,734 (USD$7,954) in interest was accrued. During the three months ended March 31, 2024, the Company entered into a debt settlement agreement to settle the CAD$546,000 (USD$397,948) principal amount. The Company issued 2,730,000 shares at a deemed price of $0.20 per share resulting in a CAD$109,200 (USD$81,417) loss on extinguishment of loan payable.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

10.

Loans Payable (continued)

(5)

On November 23, 2023, the Company entered into a short-term non-interest-bearing promissory note with 1647020 Alberta Ltd. for CAD$12,000 (USD$8,766). During the year ended December 31, 2023, CAD$1,614 (USD $1,179) of the principal had been applied against amounts owed by the note holder.

11.

Leases

The Company leases certain assets under lease agreements. During the year ended December 31, 2023, the Company entered into three new office leases in Turkey, commencing January 1, 2023, February 15, 2023 and March 1, 2023, respectively. The leases all have a five-year term.

The Company used an incremental borrowing rate (“IBR”) of 35% in determining its lease liabilities. The IBR was derived from the Company’s assessment of its borrowings in Turkey.

Lease liability	March 31, 2024			December 31, 2023
Beginning balance	$	141,695		$	8,609
Additions, cost		-			236,201
Interest expense		9,185			53,831
Lease payments		(8,503	)		(85,271	)
Currency translation adjustment		(8,830	)		(2,458	)
Modification of lease		(80,421	)		-
Termination of lease		-			(69,217	)
Ending balance	$	53,126		$	141,695

As at March 31, 2024 and December 31, 2023, the Company’s lease liability is as follows:

Lease liability	March 31, 2024		December 31, 2023
Current portion of lease liability	$	10,021	$	19,637
Long-term portion of lease liability		43,105		122,058
	$	53,126	$	141,695

Future minimum lease payments to be paid by the Company as a lessee as of March 31, 2024 are as follows:

Operating lease commitments and lease liability
2024	$	20,979
2025		25,200
2026		25,200
2027		25,200
Total future minimum lease payments		96,579
Discount		(43,453	)
Total	$	53,126

During the three months ended March 31, 2024, the terms of the leases commencing February 1, 2023 and March 1, 2023 were modified and the Company recorded a modification to the lease liability and right-of-use asset of $80,421 and $45,687, respectively, and a gain on lease modification of $40,473.

During the three months ended March 31, 2024, $23,427 (2023 - $23,427) of short-term leases were expensed to the condensed consolidated interim statements of income (loss) and comprehensive income (loss).

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

12.

Convertible debentures

On April 20, 2023, the Company entered into an agreement to issue 15,000 units of the Company (the “Units”) at a price of CAD$1,000 per unit, for gross proceeds of CAD$15,000,000 (USD$11,135,145). Each Unit will consist of CAD$1,000 (approximately USD$742) principal amount secured convertible debenture (“Debenture”) and 333 common share purchase warrants of the Company (the “Warrants”). Each Warrant will be exercisable for one common share of the Company at an exercise price of CAD$2.50 (approximately USD$1.86) and shall have an expiry date of June 29, 2025.

The Debentures will mature on April 30, 2025 (the “Maturity Date”) and will accrue interest at the rate of 12% per annum, payable semi-annually. The Company has the ability to redeem the Debentures at any time between the dates of April 30, 2024 and April 30, 2025 at a redemption price of 105% of the principal amount plus any accrued interest. At the holders’ option, the Debentures may be converted into common shares of the Company at any time, up to the earlier of the Maturity Date and the redemption of the Debentures, at a conversion price of CAD$3.00 (approximately USD$2.23) per common share.

The convertible debentures were determined to be a financial instrument comprising a host debt component, a conversion feature classified as equity, and freestanding warrants classified as equity. The warrants and conversion features were determined to be equity components because the exercise prices are denominated in the functional currency of the Company. Thus, these components the criterion of an equity instrument.

The Company paid an underwriting fee of CAD$1,045,000 (USD$775,748) and issued 300,000 broker warrants (the “Broker Warrants”) in conjunction with the financing. The Broker Warrants are exercisable for one common share of the Company at an exercise price of CAD$2.50 and shall have an expiry date of April 20, 2025. The fair value of the Broker Warrants was estimated to be $216,777 and was determined using the Black-Scholes Option Pricing Model using the following assumptions: risk-free interest rate: 3.77%, expected volatility: 100.96%, dividend yield: 0% and expected life: 2 years.

On initial recognition, the proceeds were first allocated to the fair value of the host debt component, calculated using a market interest rate of 16%, which is the market interest rate of a debt instrument with similar terms but without the equity conversion feature. The residual proceeds were then allocated to the conversion feature and warrant equity components using the relative fair value method.

The relative fair value of the warrants and conversion features were determined using the Black-Scholes Option Pricing Model using the assumptions set out as follows:

	April 20, 2023
Risk-free interest rate		3.86	%
Expected volatility		101.71 – 119.94	%
Dividend yield		0	%
Expected life		2.03–- 2.19 years

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

12.

Convertible debentures (continued)

A continuity schedule of the Company’s convertible debt is as follows:

Balance as at January 1, 2023	$	-
Issued		11,135,145
Transaction costs		(992,525	)
Transaction costs allocated to equity		77,086
Relative fair value of conversion feature		(369,181	)
Relative fair value of Warrants		(495,653	)
Repayment		(709,022	)
Accretion		578,675
Interest		931,962
Currency translation adjustment		173,232
Balance as at December 31, 2023	$	10,329,719
Accretion		214,789
Interest		332,916
Currency translation adjustment		(225,955	)
Balance as at March 31, 2024	$	10,651,469
Current	$	553,623
Long-term	$	10,097,846

13.

Asset Retirement Obligation

The following is a continuity of the Company’s asset retirement obligations:

	March 31, 2024			December 31, 2023
Beginning balance	$	6,247,027		$	5,316,470
Additions		-			797,102
Accretion expense		60,051			219,536
Impact of hyperinflation		-			(599,096	)
Currency translation adjustment		2,890			603,856
Change in estimate		(262,132	)		(90,841	)
Ending balance	$	6,047,836		$	6,247,027

The Company’s asset retirement obligations (“ARO”) result from its interest in oil and gas assets including well sites. The total ARO is estimated based on the Company’s net ownership interest in all sites, estimated costs to reclaim and abandon these wells and the estimated timing of the costs to be included in future years. The Company estimated the total undiscounted amount required to settle the ARO as at March 31, 2024 is $16.5 million (December 31, 2023 - $16.5 million). The ARO is calculated using an inflation rate of 2.5% (December 31, 2023 – 2.5%) and discounted using a risk free rate of 4.37% (December 31, 2023 – 4%) between 10 and 20 years.

During 2023, the Company and TPAO agreed to establish a close out-fund (the “Close-Out Fund”) in a US dollar bank account. The amounts accumulated in the Close-Out Fund will not be used for any purpose other than to cover the cost of close-out of the SASB project. The US dollar bank account is held by TPAO. Starting with the July 2023 natural gas revenue, each party agreed to transfer 10% of its revenue into the Close-Out Fund on a monthly basis, until an amount agreed to by both parties is attained. The Company accounted for its share in the Close-Out Fund as a long-term deposit (Note 4). As at March 31, 2024, December 31, 2023, the Company share of the Close-Out Fund amounted to $454,395 (December 31, 2023 – $371,124).

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

14.

Notes and Amounts Receivable for Equity Issued

	March 31, 2024		December 31, 2023
Notes receivable	$	97,907	$	97,907
Amounts receivable		15,402		15,402
	$	113,309	$	113,309

The notes receivable bear interest at 5% and are due between September 30, 2021, and July 31, 2023.

The amounts receivable are non-interest bearing and due on demand.

The following is a continuity of the Company’s notes and other receivables:

	Notes receivable			Amounts receivable			Total
Balance, December 31, 2022	$	1,000,122		$	61,940		$	1,062,062
Repayments		(297,678	)		(36,228	)		(333,906	)
Settled through RSU repurchase (Note 18)		(604,537	)		-			(604,537	)
Write-off		-			(10,310	)		(10,310	)
Balance, December 31, 2023 and March 31, 2024	$	97,907		$	15,402		$	113,309

During the three months ended March 31, 2024, the interest income totaled $1,113 (2023 - $11,776). During the three months ended March 31, 2024, the Company recorded a $7,810 loss on the write-off of accrued interest on notes and other receivables. As at March 31, 2024, accrued interest of $36,636 (December 31, 2023 – $44,262) was included in amounts receivable (Note 3).

15.

Common Stock

The Company has an unlimited number of common shares authorized with no par value. As at March 31, 2024, 123,230,342 common shares were issued and outstanding (December 31, 2023 – 115,250,810).

For the three months ended March 31, 2024

During the three months ended March 31, 2024, the Company issued 1,509,610 shares for RSU’s which were granted and vested in previous periods.

During the three months ended March 31, 2024, the Company issued 5,370,297 shares with a fair value of $898,341 to settle debt of $742,480 and recognized a loss on the settlement of $155,861.

During the three months ended March 31, 2024, the Company issued 1,099,625 shares valued at $151,246 for services rendered.

For the three months ended March 31, 2023

During the three months ended March 31, 2023, the Company issued 100,000 shares with a fair value of $142,626 to settle debt of $139,195 and recognized a loss on the settlement of $3,439.

During the three months ended March 31, 2023, the Company issued 202,000 shares for RSU’s which were granted and vested in previous periods and recognized the value of the shares of $149,390.

During the three months ended March 31, 2023, 5,000 warrants with an exercise price of $0.60 CAD (approximately US$0.44) were exercised for gross proceeds of $3,000 CAD (US$2,215).

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

15.

Common Stock (continued)

During the three months ended March 31, 2023, the Company issued shares for the exercise of options as follows:

	●	40,000 common shares for the exercise of 40,000 options at $0.75 CAD (approximately US$0.55) for cash proceeds of $30,000 CAD (US$21,872). As a result, $18,475 was transferred from option reserves to share capital; and
	●	70,000 common shares for the exercise of 700,000 options at $2.20 CAD (approximately US$1.62) for cash proceeds of $154,000 CAD (US$113,717). As a result, $72,050 was transferred from option reserves to share capital.

16.

Stock Options

The Board of Directors adopted the Trillion Energy International Inc. 2022 Long-Term Incentive Equity Plan (the “2022 Plan”) effective as of December 1, 2022. The 2022 Plan permits grants of stock options and restricted stock awards and other stock-based awards.

Under the 2022 Plan, the maximum number of shares of authorized stock that may be delivered is 10% of the total number of shares of common stock issued and outstanding of the Company as determined on the applicable date of grant of an award under the 2022 Plan. Under the 2022 Plan, the exercise price of each option shall be determined by the Board of Directors, subject to any applicable Exchange approval or rules, at the time any option or other stock-based award is granted. In no event shall such exercise price be lower than the exercise price permitted by the Exchange. The vesting schedule for each option or other stock-based award shall be specified by the Board of Directors at the time of grant, subject to any applicable Exchange approval or rules.

A continuity of the Company’s outstanding stock options for the three months ended March 31, 2024 and the year ended December 31, 2023 is presented below:

	Number of options			Weighted average exercise price (CAD)
Outstanding, December 31, 2022		2,300,000		$	1.27
Exercised		(440,000	)		1.65
Expired		(240,000	)		0.79
Outstanding, December 31, 2023		1,620,000		$	1.24
Granted		3,600,000			0.21
Forfeited		(566,000	)		1.32
Outstanding, March 31, 2024		4,654,000		$	0.43
Exercisable, March 31, 2024		4,129,000		$	0.46

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

16.

Stock Options (continued)

At March 31, 2024 the Company had the following outstanding stock options:

Outstanding		Exercise Price	Expiry Date	Vested
	620,000	0.75 CAD	September 19, 2024		620,000
	64,000	0.40 CAD	July 31, 2025		64,000
	50,000	1.50 CAD	July 26, 2025		50,000
	50,000	1.90 CAD	June 6, 2026		50,000
	150,000	2.20 CAD	October 27, 2025		150,000
	70,000	2.20 CAD	December 9, 2024		70,000
	50,000	2.20 CAD	December 9, 2025		50,000
	200,000	0.30 CAD	January 2, 2027		50,000
	200,000	0.20 CAD	February 12, 2027		200,000
	250,000	0.20 CAD	February 15, 2027		250,000
	500,000	0.25 CAD	February 28, 2027		125,000
	2,450,000	0.20 CAD	March 8, 2027		2,450,000
	4,654,000				4,129,000

As at March 31, 2024, the weighted average remaining contractual life of outstanding stock options is 2.45 years (December 31, 2023 – 1.26 years).

For the three months ended March 31, 2024, the Company recognized $272,395 (2023 - $51,206) in stock-based compensation expense for options granted and vested. At March 31, 2024, the Company has $40,705 (December 31, 2023 - $Nil) in unrecognized compensation expense related to stock options.

The fair values for stock options granted during the three months ended March 31, 2024 have been estimated using the Black-Scholes option pricing model using the following weighted average assumptions:

	2024
Risk-free interest rate		3.43 – 3.84	%
Expected life (years)		3
Expected volatility		111 – 118	%
Dividend yield		0	%

17.

Warrants

A continuity of the Company’s outstanding share purchase warrants for the three months ended March 31, 2024 and the year ended December 31, 2023 is presented below:

	Number of warrants			Weighted average exercise price (CAD)
Outstanding, December 31, 2022		20,387,538		$	2.33
Issued		7,402,726			1.88
Expired		(10,000	)		2.17
Outstanding, December 31, 2023		27,780,264		$	2.21
Expired		(12,548,559	)		2.25
Outstanding, March 31, 2024		15,231,705		$	2.18

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

17.

Warrants (continued)

At March 31, 2024, the Company had the following outstanding share purchase warrants:

Outstanding		Exercise Price	Expiry Date
	12,529,690	2.50 CAD	June 29, 2025
	300,288	1.55 CAD	June 29, 2025
	300,000	2.50 CAD	April 20, 2025
	2,101,727	0.30 CAD	November 28, 2025
	15,231,705

As at March 31, 2024, the weighted average remaining contractual life of outstanding warrants is 1.30 years (December 31, 2023 – 0.95 years).

The Company had previously issued warrants in connection with private placements, or debt settlements where the exercise price of such warrants was denominated in USD. As such the warrants were classified as derivate liabilities. As at December 31, 2023, the fair value of the warrants were remeasured at $Nil as all the warrants had expired. The Company recognized a gain on the fair value change of $3,840 for the three months ended March 31, 2023.

18.

Restricted Stock Units

During the three months ended March 31, 2024, the Company granted RSUs as follows:

●

On January 1, 2024, the Company granted 438,000 RSU’s which vest quarterly beginning January 1, 2024.

For the three months ended March 31, 2024, the Company recognized $57,178 (2023 - $102,417) in stock-based compensation expense for RSUs granted and vested.

	Number of unvested restricted stock units			Weighted average fair value per award
Balance, December 31, 2022		–		$	–
Granted		3,476,659			0.81
Canceled		(30,000	)		2.00
Vested		(3,446,659	)		0.80
Balance, December 31, 2023		–			–
Granted		438,000			0.25
Vested		(114,000	)		0.25
Balance, March 31, 2024		324,000			0.25

The Company previously granted certain RSU’s whereby the holder has the right and option to require the Company to withhold up to one third of the RSU shares awarded to pay the cash equivalent of the market price of the shares on the date of vesting. As a result, a portion of the value of the RSU’s is recorded as a RSU obligation liability. During the three months ended March 31, 2024, the Company issued 250,000 shares to settle the RSU obligation liability of $18,398. As at March 31, 2024, the balance of the RSU obligation was $Nil (December 31, 2023 - $18,398).

During the three months ended March 31, 2024, the Company issued 1,509,610 shares for RSU’s which were granted and vested in previous periods. As at March 31, 2024, the Company had 122,400 RSU’s (December 31, 2023 – 1,518,010) outstanding.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

19.

Related Party Transactions

At March 31, 2024, accounts payable and accrued liabilities included $173,243 (December 31, 2023 - $115,526) due to related parties. The amounts are unsecured, non-interest bearing and due on demand.

During the three months ended March 31, 2024, management fees and salaries of $194,705 (2023 - $76,500), director fees of $34,200 (2023 - $40,800), consulting fees of $105,668 (2023 - $153,922), and stock-based compensation of $272,768 (2023 - $153,922) were incurred to related parties.

During the three months ended March 31, 2024, the Company issued 1,509,610 shares to directors for services performed and for RSU’s which were granted and vested in previous periods.

During the three months ended March 31, 2024, the Company issued 4,906,847 shares with a fair value of $836,921 to directors of the Company to settle accounts payable of $538,420 and obligation to issue shares of $146,401 and recognized a loss on settlement of $152,101.

As at March 31, 2024, loans payable included CAD$13,649 (USD$10,081) (December 31, 2023 - CAD$402,115 (USD$420,281)) due to related parties. The note payable is unsecured, bears interest at 6% per annum and matures on December 31, 2024.

On September 2, 2020, the CEO signed an employment agreement with the Company in which the CEO shall receive:

●	20,000 fully vested RSUs upon the first anniversary of the agreement. The amount of RSUs shall be indexed pro-rata to account for any dilution incurred by subsequent share issuances by the Company;
●	If during the term of the Agreement, the Company completes any cash financing of $5,000,000, the Company shall issue 50,000 fully vested RSUs and $25,000 for each $5,000,000 raised.
●	Upon spudding of the first well by the Company, the Company shall grant 50,000 fully vested RSUs and 50,000 fully vested RSUs every anniversary of the spud date (condition was met on September 15, 2022). This amount is indexed pro-rata to account for any dilution incurred by subsequent share issuances by the Company; and
●	If during the term of the Agreement, the Company enters into any non-financing transaction, a cash bonus of USD$100,000 is owed upon the successful closing.

The value of these RSUs and the stock-based compensation recognized is $295,818. As at December 31, 2023, the shares for these RSUs have either been issued or the underlying RSUs were repurchased by the Company.

On July 15, 2022, the former COO signed an employment agreement with the Company in which the COO shall receive:

●	25,000 fully vested RSUs upon the first anniversary of the agreement;
●	30,000 fully vested RSUs upon the second anniversary of the agreement;
●	For each subsequent year, the number of RSUs is determined in context of the market price of the shares and in respect to the performance of the Company;
●	A bonus of 20,000 RSUs plus the sum of $15,000 cash paid upon the successful completion of the company’s phase A drilling program at the SASB gas field; and
●	A bonus of 25,000 RSUs plus the sum of $20,000 cash paid upon the successful completion of at least an additional seven wells as part of the Company’s phase B drilling program at the SASB gas field;

As the agreement can be terminated at any time, the RSU’s are recognized only upon the conditions above being met. As at December 31, 2023, 25,000 shares valued at $33,111 were owed pursuant to the RSUs granted on the first anniversary of the agreement. During the three months ended March 31, 2024, the agreement was terminated and no more RSUs were owed.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

20.

General and Administrative

	For the three months ended
	March 31, 2024		March 31, 2023
Salaries and compensation	$	1,293,585	$	1,807,723
Professional fees		58,630		157,385
Investor relations		70,934		31,199
Office		48,071		62,923
Advertising		26,425		17,387
Filing and transfer fees		15,645		38,538
Travel		62,827		48,765
Penalties		-		19,723
Bank charges and other		697		1,036
	$	1,576,814	$	2,184,679

21.

Segmented Information

During the three months ended March 31, 2024, and 2023, the Company’s operations were in the resource industry in Turkey with head offices in Canada and a satellite office in Sofia, Bulgaria.

	Canada			Turkey		Bulgaria		Total
Three months ended March 31, 2024
Revenue	$	-		$	1,321,945	$	-	$	1,321,945
Finance cost		632,580			8,763		-		641,343
Depletion		-			177,477		-		177,477
Depreciation		2,121			21,123		-		23,244
Accretion of asset retirement obligation		-			60,051		-		60,051
Stock-based compensation		329,574			-		-		329,574
Loss on debt extinguishment		155,861			-		-		155,861
Gain on net monetary position		-			6,349,365		-		6,349,365
Net income (loss)		(1,172,555	)		2,492,411		-		1,319,856
As at March 31, 2024
Non-current assets	$	32,150		$	56,201,666	$	-	$	56,233,816

	Canada			Turkey		Bulgaria			Total
Three months ended March 31, 2023
Revenue	$	-		$	6,145,939	$	-		$	6,145,939
Finance cost		228,363			-		-			228,363
Depletion		-			1,959,153		-			1,959,153
Depreciation		2,091			171,748		-			173,839
Accretion of asset retirement obligation		-			52,732		-			52,732
Stock-based compensation		153,922			-		-			153,922
Loss on debt extinguishment		3,439			-		-			3,439
Gain on net monetary position		-			2,708,433		-			2,708,433
Net income (loss)		(1,439,192	)		3,711,473		(882	)		2,271,399
As at December 31, 2023
Non-current assets	$	35,021		$	53,710,753	$	-		$	53,745,774

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

21.

Segmented Information (continued)

The Company’s breakdown of net revenue by product segment is as follows:

	For the three months ended
	March 31, 2024		March 31, 2023
Oil	$	838,115	$	626,774
Gas		483,830		5,519,165
	$	1,321,945	$	6,145,939

The Company incurs royalties of 12.5%. During the year ended December 31, 2023, the Company paid royalties totaling $228,085 (2023 - $746,390).

22.

Capital Management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern to support its business plan, as well as to ensure that the Company is able to meet its financial obligations as they become due.

The basis for the Company’s capital structure is dependent on the Company’s expected business growth and changes in business environment. To maintain or adjust the capital structure, the Company may issue new shares through private placement, incur debt or return capital to members.

The Company is dependent upon external financings to fund activities. In order to carry future projects and pay administrative costs, the Company will utilize its existing working capital and raise additional funds as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to externally imposed capital requirements.

23.

Financial Instruments and Risk Management

The Company is exposed, through its operations, to the following financial risks:

a)	Market risk
b)	Credit risk
c)	Liquidity risk

The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company’s objectives, policies, and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these consolidated financial statements.

There have been no substantive changes in the Company’s exposure to financial instrument risks, its objectives, polices and processes for managing those risks or the methods used to measure them from previous reported periods unless otherwise stated in the note. The overall objective of management is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. Further details regarding these policies are set out below.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as foreign currency exchange, interest rates and equity price risk.

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

23.

Financial Instruments and Risk Management (continued)

Foreign currency risk:

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company and its subsidiaries are exposed to currency risk as it has transactions denominated in currencies that are different from their functional currencies. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

As at March 31, 2024, the Company’s significant foreign exchange currency exposure on its financial instruments, expressed in USD was as follows:

If the CAD strengthened or weakened against the USD by 10% the exchange rate fluctuation would impact net loss by $1,234,173 at March 31, 2024 (December 31, 2023 - $954,252).

Interest rate risk:

Interest rate risk is the risk that future cash flows will fluctuate because of changes in market interest rates. The interest earned on cash is insignificant and the Company does not rely on interest income to fund its operations. The Company does not have significant debt facilities with variable interest rates and is therefore not exposed to interest rate risk.

Other price risk:

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company does not hold equity investments in other entities and therefore is not exposed to a significant risk.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

The Company is subject to credit risk on its cash and cash equivalents and amounts receivable which consists primarily of trade receivables and notes and amounts receivable for equity issued. The Company limits its exposure to credit loss on cash and cash equivalents by placing its cash with a high-quality financial institution. Exposure to credit loss notes and amounts receivable for equity issued is limited by entering into these types of transactions with related parties and entities that are well known to the Company.

The Company only has two customers. The Company mitigates credit risk by evaluating the creditworthiness of customers prior to conducting business with them and monitoring its exposure for credit losses with existing customers. One of the customers is the largest oil refinery in Turkey. The other customer provides letters of credit to be used by the Company in the event of default. As at March 31, 2024, all of the Company’s trade receivables are current (< 30 days outstanding).

The Company’s maximum credit exposure is $1,394,740 (December 31, 2023 - $2,848,457).

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

23.

Financial Instruments and Risk Management (continued)

Liquidity risk

Liquidity risk arises from the Company’s general and capital financing needs. The Company continuously monitors and reviews both actual and forecasted cash flows, and also matches the maturity profile of financial assets and liabilities, when feasible. The Company anticipates increases in revenue in future periods resulting from the completion of an additional well subsequent to the period end. Historically, the Company’s sources of funding has been through equity and debt financings. The Company’s access to financing is uncertain. There can be no assurance of continued access to significant debt or equity funding.

The table below summarizes the maturity profile of the Company’s contractual cashflows.

As at March 31, 2024	Less than 1 year		1 – 2 years		Later than 2 years		Total
Accounts payable and accrued liabilities	$	14,784,024	$		$	-	$	14,784,024
Loans payable		3,113,176		-		-		3,113,176
Lease liability		20,979		50,400		25,200		96,579
Convertible debt		1,332,547		11,733,207		-		13,065,754
Total liabilities	$	19,250,726	$	11,783,607	$	25,200	$	31,059,533

As at December 31, 2023	Less than 1 year		1 – 2 years		Later than 2 years		Total
Accounts payable and accrued liabilities	$	14,065,019	$		$	-	$	14,065,019
Loans payable		3,464,450		-		-		3,464,450
Lease liability		58,919		116,651		60,921		236,491
RSU obligation		18,398		-		-		18,398
Convertible debt		1,361,525		11,988,362		-		13,349,887
Total liabilities	$	18,968,311	$	12,105,013	$	60,921	$	31,134,245

24.

Income Tax

The Company calculated the period income tax expense using the tax rate that would be applicable to the expected total annual earnings. During the three months ended March 31, 2024, the Company recognized deferred income taxes of $854,952 (2023 - $Nil).

TRILLION ENERGY INTERNATIONAL INC.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2024 and 2023

(Expressed in U.S. dollars) (Unaudited)

25.

Commitments and Contingencies

Close-out Fund

The Company has committed to contribute to the Close-Out Fund (Note 13) and is required to deposit 10% of natural gas revenue from the SASB project into the Close-Out Fund until an amount agreed to by both parties is attained. The amount accumulated in the Close-Out Fund will not be used for any purpose other than to cover the cost of close-out of the SASB project.

Arbitration

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”). Liability is not admitted, the litigation is at the inception, and thus, legal counsel has advised that is it too soon to predict the outcome or the quantum of damages that will be assessed. The Company is confident that its case has merit.

The Company and its 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 and lost profits seeking $5 million. As no document disclosure has occurred at this time, and the litigation is at its inception, legal counsel has been unable to provide an opinion on the merits of the action or defenses.

In accordance with guidance for contingent assets and liabilities, no provision for any potential recovery of the Trillion Losses will be made until recovery is virtually certain. If the Company’s claim is successful, the award will exceed the amount, if any, that is payable to the drilling contractor in its claim, notwithstanding the same, the Company has evaluated the two competing actions separately. As such, the Company has recorded an amount in accounts payable and accrued liabilities for the disputed drilling services for $3 million, and has not yet recorded, due to the status of its arbitration claim, any asset amount for its $20.3 million claim against the drilling contractor. Once legal opinion as to the likely outcome has been obtained, the Company intends to revise the contingent amounts.

Maturity date of TR1 Master Fund loans

The Company has two loan agreements dated July 1, 2023 with TR1 Master Fund whereby the Company owes $2,902,125 in principal and accrued interest as at March 31, 2024 (Note 10). An agent for the receiver of TR1 Master Fund has demanded payment of the loans as the loans indicate that they were due on December 31, 2023. The Company is claiming that the principal of TR1 Master Fund agreed to extend the loans to December 31, 2024. Negotiations on repayment of the loans with the agent of the receiver for TR1 Master Fund are ongoing.

26.

Subsequent events

On April 2, 2024, the Company issued 333 common shares pursuant to the conversion of CAD$1,000 of principal convertible debentures.

The Company announced a non-brokered private placement of up to 20,000,000 units at a price of CAD$0.09 per unit (the “Units”), for aggregate gross proceeds of up to a maximum of CAD$1,800,000 (the “Offering”), with each Unit comprised of one common share of the Company and one share purchase warrant (“Warrant”), each Warrant is exercisable at a price of CAD$0.18 per share for a period of two years from issuance. The Warrants will include an acceleration provision whereby if the Company's common shares trade at a price equal to or greater than CAD$0.35 for a period of seven (7) consecutive trading days, the Company may accelerate the expiry of the Warrants.

The Company may pay a cash finder's fee to qualified non-related parties of up to 7% of the gross proceeds of the Offering and issue a number of broker warrants ("Broker Warrants") that is up to 7% of the number of Units sold pursuant to the Offering. Each Broker Warrant will entitle the holder to one (1) common share and is exercisable at a price of CAD$0.09 per share for a period of two (2) years from the date of issuance.

On May 28, 2024, the Company closed the first tranche of the Offering and raised gross proceeds of CAD$1,190,914 through sale of 13,232,373 Units. Net proceeds amounted to CAD$1,141,050 after cash finder’s fees of $49,864. In addition, the Company issued 540,041 Broker Warrants in connection with the first tranche of the Offering.

Exhibit 99.2

TRILLION ENERGY INTERNATIONAL INC.

MANAGEMENT DISCUSSION & ANALYSIS

For the three months ended March 31, 2024 and 2023

(Stated in United States dollars)

TABLE OF CONTENTS

Caution Regarding Forward-Looking Statements	3
Management’s Responsibility for Financial Statements	4
Overview	4
Overall Performance	8
Results of Operations	8
Reconciliation of Use of Proceeds from Financing Activities:	9
Summary of Quarterly Results	10
Liquidity and Capital Resources	11
Transactions with Related Parties	14
Risk Management	14
Off-Balance Sheet Arrangements	16
Disclosure of Outstanding Share Data	16
Critical Accounting Policies and Estimates	17
Commitments and Contingencies	20
Subsequent Events	21

TRILLION ENERGY INTERNATIONAL INC.

MANAGEMENT DISCUSSION & ANALYSIS

For the three months ended March 31, 2024 and 2023

(Expressed in United States Dollars)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide readers of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. This MD&A was prepared effective May 29, 2024.

Our MD&A should be read in conjunction with our unaudited condensed interim consolidated financial statements of Trillion Energy International Inc., (“Trillion Energy”, the “Company”, “we”, and “our”) and the related notes thereto for the three months ended March 31, 2024 and 2023, and the audited consolidated financial statements for the years ended December 31, 2023 and 2022 and the related notes thereto. Unless otherwise noted, all currency amounts are in US dollars.

The unaudited condensed interim consolidated financial statements for the quarter ended March 31, 2024, are prepared in accordance with IFRS.

Caution Regarding Forward-Looking Statements

Certain statements in this report are forward-looking statements which reflect management’s expectations regarding future growth, results of operations, performance, business prospects and opportunities, the Company’s ability to meet financial commitments and its ability to raise funds when required. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance, or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain assumptions and speak only as of the date of this report. These assumptions, which include management’s current expectations, the global economic environment, and the Company’s ability to manage its operating costs, may prove to be incorrect. Several risks and uncertainties could cause actual results to differ materially from those expressed or implied by the forward-looking statements.

There is a significant risk that such forward-looking statements will not prove to be accurate. Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Actual performance, achievement or other realities could differ materially from those expressed in, or implied by, any forward-looking statements or information in this MD&A and, accordingly, investors should not place undue reliance on any such forward-looking statements or information. Further, any forward-looking statement or information speaks only as of the date on which such statement is made, and the Company does not undertake any obligation to update any forward-looking statements or information to reflect information, events, results, circumstances, realities or otherwise after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by law, including securities laws. All forward-looking statements and information contained in this MD&A and other documents of the Company are qualified by such cautionary statements. New factors emerge from time to time, and it is not possible for management to predict all such factors and to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual realities to differ materially from those contained in any forward-looking statements.

In addition, forward-looking statements, and information herein, including financial information, is based on certain assumptions relating to the business and operations of the Company. Although the Company has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements and forward-looking information in this MD&A, and the documents incorporated by reference herein, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There is no assurance that such statements and information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information contained in this MD&A.

Management’s Responsibility for Financial Statements

The information provided in this MD&A, including the audited consolidated financial statements, are the responsibility of management. In the preparation of these consolidated financial statements, estimates are sometimes necessary to make a determination of the future values for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying condensed interim consolidated financial statements. Management maintains a system of internal controls to provide reasonable assurance that the Company’s assets are safeguarded and to facilitate the preparation of relevant and timely information.

Overview

Trillion Energy International Inc. and its consolidated subsidiaries, (collectively referred to as the “Company”) is a Canadian based oil and gas exploration and production company with operations primarily in Turkiye. The Company’s shares trade on the Canadian Securities Exchange under the symbol “TCF” where it was added to the CSE 25 Index. The Company also trades on the OTCQB under the symbol “TRLEF” and the Frankfurt exchange under the symbol Z620. A class of the Company’s warrants trade on the CSE under the symbol TCF.WT.

The Company is focused on oil and gas exploration in Turkiye. The Company has drilled six successful development gas wells (two in 2022 and four in 2023) at its conventional natural gas project, the SASB gas field located in the Black Sea, Turkiye, where it has initiated a multi-well development program. Trillion has a 49% interest in the SASB gas field. In addition, the Company produces oil from the Cendere field in Turkiye, a long-term low decline oil field where it holds a 19.6% (except three wells with 9.8%) interest.

The Company recently entered into a farm-in agreement on three oil exploration blocks (M47, M46c,d) (the “Oil Blocks”) totalling acres 374,325 within the newly defined Cudi-Gabar petroleum province, Southeastern Turkiye. The Company is currently negotiating a joint operating agreement in respect of the Oil Blocks.

Strategic Focus

Trillion’s strategy is to increase production and reserves at its 12,385 hectare SASB natural gas field and capitalize on high regional gas prices to generate cash flow and build shareholder value through a multi-well drilling program.

After drilling five successful long reach directional wells and one re-completion at SASB, Trillion will continue to perform several new perforations of existing wells and install velocity string production tubing, pumps, gas lift to optimize production and reduce well downtime. Trillion is currently undertaking work programs to optimize production and reduce downtime on the SASB Field to ensure all 6 previously drilled and completed wells are able to produce concurrently and with less than 90% downtime on a managed basis.

Trillions short term focus is on increasing production on eight wells at the SASB gas field. As in most oil and gas fields, the past production history is a useful analog for predicting future production trends and results, and as such, our focus is on repeating the production rates previously achieved from legacy wells drilled over 10 years ago.

For the 2024-2025 SASB drilling program, several sidetrack wells have been engineered and are drill ready. These wells are expected to be drilled first, followed by several stratigraphic exploration prospects. New re-processing of 3D seismic is expected to be completed during 2024. The new 3D seismic re-processing is expected to define stratigraphic exploration targets as well as to delineate reserves in structural traps.

In addition, the Company has entered into a farm-in agreement with Derkim Poliüretan Sanayi ve Ticaret A.S. to earn a 50% working & revenue interest in three oil exploration blocks (the “Oil Blocks”) comprised of 151,484 hectares (374,325 acres) within the newly defined Cudi-Gabar petroleum province, Southeastern Turkiye. The Company is currently negotiating the Joint Operating Agreement, will trigger certain work commitments to Trillion over a three year period. To earn the 50% the Company must acquire 351 km of 2D seismic in 2023 and drill several wells in 2024.

Developments of the Business

Trillion Energy International Inc. an oil and gas producer in Europe. The Company’s current focus is on increasing conventional natural gas production at its SASB field located in the Black Sea, Turkey where it has initiated a multi-well development drilling program “the SASB Development Program”. In addition, it produces oil from the Cendere field, a long-term low decline oil field. It also has an exploration license in Bulgaria which is currently inactive, which is a coal bed methane generated natural gas prospect. Late 2023 the Company entered into a farm-in agreement to earn into an exploration oil block in SE Turkiye.

In April 2023, the Company raised gross proceeds of CAD $15 million (US$11.1 million) under a bought deal for further development of the SASB field. Each Unit will consist of CAD$1,000 principal amount secured convertible debenture (“Debenture”) and 333 common share purchase warrants of the Company (the “Warrants”). Each Warrant will be exercisable for one common share of the Company at an exercise price of CAD$2.50 and shall have an expiry date of June 29, 2025.

On 31^st July the Company announced a farm-in agreement to earn a 50% working and revenue interest in three new exploration block in South East Turkey called Cudi-Gabar. The Company has commenced seismic work on block M-47

By August 2023 the Company announced the completion of its drilling programme having drilled five new wells and recompleted one well. The Company then commenced installing new wellheads. To address the water loading issues the Company has engaged outside consultants and is in the process of installing artificial lift pumps. GLJ have reviewed their reserve report which is included in the MD&A.

On September 15, 2023 the Company announced a Consolidation of its shares on a 5 to 1 basis, therefore 5 pre-consolidation shares was equivalent to 1 post consolidation share. On that date 389,677,325 shares were outstanding and following the consolidation 77,935,465 shares were outstanding.

During October 2023, additional perforations to existing wells were made and a booster compressor was added to the field to reduce back pressure for gas entering the Cayagzi gas processing facility. During November, 2023, the Company received a report from a third party consulting firm on how to increase production on the six wells. The Company is evaluating the report and intends to put many of the recommendations into action plans.

On November 28, 2023 the Company announced a closing for a CAD$10.8 million public offering. Proceeds (net of costs and commissions) were for further development of the SASB field; payment of certain debts related to the drilling programme and general working capital.

In December 2023 the Company announced completion of its 3D seismic reprocessing of the SASB field which is now being interpreted.

The Company obtained a third-party report update to its natural gas reserves effective December 31, 2023 “the Update Report”, which estimated the Company’s proved and probable conventional natural gas reserves to have increased to 63.7 BCF compared 48.6 BCF as at December 31 2022. The below table summarizes the reserves estimates contained in the Update Report together with comparative figures:

	Conventional
	Natural Gas
	(Bcf)		(Bcf)
	Dec. 31		Dec. 31		%
	2023*		2022*		Change
Proved
Producing		1.44		2.7		-46.46	%
Developed Non-Producing		9.56		0.0		-
Undeveloped		.9.53		8.8		7.4	%
Total Proved		20.53		11.6		76.98	%
Total Probable		43.17		37.1		16,36	%
Total Proved Plus Probable		63.70		48.6		31.07	%
Total Possible		46.68		35.7		30.75	%
Total PPP		110.38		84.3		30.84	%

* Trillion 49% interest, before income taxes and royalties

The Company’s reserves were evaluated by GLJ, Ltd. (“GLJ”), in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter) (“COGEH”) and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and are based on the Company’s reserves as evaluated by GLJ in their report with an effective date of December 31, 2023 (the “Reserve Report”). GLJ is an independent qualified reserves evaluator as defined in NI 51-101. Additional reserves information as required under NI 51-101 is included in the Company’s statement of reserves data and other oil and gas information on Form 51-101F1 filed on SEDAR 25 April 2024.

Turkey

The Company primarily operates in Turkey, where it owns two key production assets; an interest in the producing Cendere oil field (“Cendere”) and a natural gas field located in the South Akcakoca Sub-Basin (“SASB” or the “SASB Gas Field”). Cendere is a mature long-term low decline oil field. The second asset is the SASB natural gas field, a producing shallow water development to which the Company is currently focused on increasing production by drilling new wells. Additionally the Company has entered into a farm-in agreement to develop a 50% working and revenue interest in a new exploration block in Cudi-Gabar area, and is currently negotiating a joint operating agreement for.

Cendere

The Company has a 19.6% interest in the Cendere oil field located in Southeast Turkey all except certain wells. At March 31, 2023, the gross oil production rate for the producing wells in Cendere was 570 bbls/day (barrels per day); the average daily 2023 Q1 gross production rate for the field was 517 bbls/day. At the end of March 2024, oil was sold at a price of approximately US$82 per barrel (“bbl”).At March 31, 2024, the Cendere field was producing 109 barrels of oil per day net to the Company; and averaged 101 barrels per day during 2024 Q1 net to the Company. On October 13, 2022, the joint production lease the Company holds in the region was extended to July 6, 2031.

SASB

The Company’s interest in SASB is 49%. SASB has several natural gas fields, four production platforms plus 18 kilometers of subsea pipelines connecting the gas fields to an onshore gas processing facility. SASB is located off the North West coast of Turkey in the Black Sea. Total gross production to date from the four fields is over 43 billion cubic feet (“Bcf”).

The Company commenced the SASB Development Program during September 2022, at which time the Uranus Rig mobilized to the license block from Romania. The drilling rig was then positioned at the Akcakoca platform upon which it drilled South Akcakoca, re-completed Akcakoca-3, drilled Akcakoca West 1 and Guluc 2. In addition, Bayhanli 2 and Alapli 2 were drilled off different tripods. Those 5 new wells and one recompletion were put on production, thus generating revenue for the company. The wells experienced water loading due to the large production tubing size and currently all gas pay in the wells will be perforated and production tubing changed to a smaller diameter .

As at March 31, 2024 the gross gas production rate for SASB was 11.47 MMcfd, net to Company was 5.62 Currently natural gas is currently being sold at about US$10/mcf domestically in Turkey. The average monthly natural gas sale price year to date for 2024 was approximately US$11 .01/ mcf.

The Company also plans to evaluate exploration opportunities around the SASB development license area, which is currently 12,385 hectares. The Company is currently 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. Such new technology is expected to improve the resolution of the data, define new exploration targets and delineate new reserves and resources on SASB.

Oil Exploration Licences M46c,d and M47

In addition, the Company has entered into a farm-in agreement with Derkim Poliüretan Sanayi ve Ticaret A.S. to earn a 50% working & revenue interest in three oil exploration blocks (the “Oil Blocks”) comprised of 151,484 hectares (374,325 acres) within the newly defined Cudi-Gabar petroleum province, Southeastern Turkiye. To earn the 50% the Company must acquire 351 km of 2D seismic in 2023 and drill 4 wells in 2024.

To date, roughly 50% of the required seismic has been acquired, before a pause had to be taken due to winter weather.

Bulgaria Coal bed methane license

In October of 2010, the Company was awarded an exploration permit for the “Vranino 1-11 Block”, a 98,205 acre oil and gas exploration land located in Dobrudja Basin, Bulgaria, by the Bulgarian Counsel of Ministers. On April 1, 2014, the Company entered into an Agreement for Crude Oil and Natural Gas Prospecting and Exploration in the Vranino 1-11 Block with the Ministry of Economy and Energy of Bulgaria (the “License Agreement”). The initial term of the License Agreement is five years. This five-year period will commence once the Bulgarian regulatory authorities approve of the Company’s work programs for the permit area and the Company completes an environmental impact assessment (“EIA”). The License Agreement (or applicable legislation) provides for possible extension periods for up to five additional years during the exploration phase, as well as the conversion of the License Agreement to an exploitation concession, which can last for up to 35 years. Under the License Agreement, the Company will submit a yearly work program that is subject to the approval of the Bulgarian regulatory authorities.

During the fall of 2022, the Company consulted with local counsel and an environmental consultant but was unable to determine whether it would be able to obtain the license. In October and November 2022, management made repeated efforts to obtain a visa to visit Bulgaria and seek clarification on the status of the license, however the visa applications were declined. The Company thus determined it would dispose of the Bulgaria property and that it would obtain the options to do so.

Overall Performance

Revenues significantly decreased for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 as a result of the water logging issues and reduced commodity prices. During the three months ended March 31, 2024, the Company recognized net income of $1,319,856 compared to a net income of $2,271,399 during the three months ended March 31, 2023. The change is primarily due to the reduced gas production from the water logging issue which has been addressed by management and lower commodity sales prices.

The Company’s cash flow for the three months ended March 31, 2024 yielded a net decrease of cash for $752,599, primarily due to the reduced revenues from Gas Production.

The Company’s oil and gas assets increased as a result of the continued investment into operations during the three months ended March 31, 2024 The Company also reduced its operating costs during the Quarter.

The following table sets forth selected financial information for the Company for the three-month period ended March 31, 2024 and 2023 and should be read in conjunction with the Company’s condensed consolidated interim financial statements and related notes thereto for such periods.

The condensed consolidated interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and are expressed in United States dollars.

Results of Operations

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

The net income for the three months ended March 31, 2024 decreased by $951,543 to $1,319,856 compared to the net income of $2,271,399 recognized during the three months ended March 31, 2023.

Factors contributing to the net income (loss) for the three-month periods included the following:

Revenue

Revenues decreased by $4,823,994 from $6,145,939 for the three months ended March 31, 2023 to $1,321,945 for the three months ended March 31, 2024. The decrease is primarily due to a decline in the natural gas revenues due to reduced production from SASB gas field due to waterlogging issues, and reduced gas prices during the period.

Expenses

For the three months ended March 31, 2024, the Company incurred production expenses related to its Turkey operations of $1,320,648 (2023 - $1,361,361), depletion charges of $177,477 (2023 - $1,959,153), depreciation expense of $23,244 (2023 - $173,839) and asset retirement obligation accretion expense of $60,051 (2023 – $52,732). Production expenses showed a modest reduction. Depletion decreased by $1,781,676 as a result of the decrease in production levels and increase in carrying value on the SASB property, while depreciation expenses decreased due to the sale of equipment and reduction in office premises and equipment. The modest increase in accretion of asset retirement costs is due to new wells added during 2023.

For the three months ended March 31, 2024, the Company had general and administrative expenses of $1,576,814, compared to $2,184,679 for the three months ended March 31, 2023. The decrease is primarily due to a reduction in the staffing after the drilling program ended plus a reorganization of the Turkish offices and reduction in office premises.

Geological and geophysical expenses increased to $705,184 for the three months ended March 31, 2024 from $90,579 during the same period in 2023. This was due to increased activity to develop a plan for the water-logging issues and seismic work performed on the new Oil Block.

For the three months ended March 31, 2024, the Company recorded stock-based compensation of $329,574 compared to $153,922 for the three months ended March 31, 2023, related to the vesting of stock options and RSU’s.

Other Income (Expense)

For the three months ended March 31, 2024, the Company had other income of $5,045,855 compared to other income of $2,101,725 for the three months ended March 31, 2023. Other income for the three months ended March 31, 2024 consists mainly of a gain on net monetary position of $6,349,365 (2023 - $2,708,433). This is partially offset by a foreign exchange loss of $565,913 (2023 - $403,693) and a finance cost of $641,343 (2023 – $228,363). The increase in finance cost incurred in Q1 2024 is primarily related to interest and accretion recognized on debentures issued during Q2 2023. The foreign exchange loss is due to the further devaluation of the Turkish Lira during Q1 2024. The net monetary gain is a result of Turkey being designated a hyper-inflationary economy as of April 1, 2022 for accounting purposes. There was a small gain recognized on the modification of a lease.

Total Assets

As at March 31, 2024, total assets increased by $672,997 from $58,610,428 as at December 31, 2023 to $59,283,425 as at March 31, 2024. The increase in total assets was primarily a result of an increase in oil and gas properties of $2,431,364 offset by a reduction in prepaid expenses and amounts receivable. The increase in oil and gas reflect continued work performed in the Company’s SASB fields in Turkey and the effect of hyperinflation.

Total Non-current Liabilities

Total non-current liabilities as at March 31, 2024 increased by $394,239 from $18,603,260 as at December 31, 2023 to $18,997,499 as at March 31, 2024. The increase in total non-current financial liabilities was primarily due to an increase in deferred tax liability of $677,164, offset by reductions in lease liabilities, convertible debt and asset retirement obligations.

Reconciliation of Use of Proceeds from Financing Activities:

In November 2023, the Company raised approximately CAD$10.1 million (or US$7.1 million), net of commissions and fees, under a short form prospectus. Below is a reconciliation of the use of proceeds, which did not materially differ from the Company’s budgeted use of proceeds.

Expenditure	Amount(1)
	$
SASB Gas Field well workovers and further development	$	1,600,000
Repayment of the Loans	$	3,567,750
Working capital and reduction of payables	$	4,906,696
Total	$	10,074,446

(1) Net proceeds after commissions and fees, expenses in respect to the offering

Summary of Quarterly Results

The financial information in the following tables summarizes selected financial information for the Company for the last eight quarters which was derived from annual financial statements prepared in accordance with IFRS and are expressed in United States dollars.

	March 31, 2024 ($)			December 31, 2023 ($)			September 30, 2023 ($)		June 30, 2023 ($)
Revenue		1,321,945			2,722,489			5,028,124		2,992,142
Net Income (Loss)		1,319,856			(8,434,326	)		7,387,866		(2,280,386	)
Net Income (Loss) per share (basic and diluted)		(0.01	)		(0.11	)		0.09		(0.03	)
Net and comprehensive income (Loss)		(1,671,966	)		(5,925,933	)		6,528,318		(13,628,606	)

	March 31, 2023 ($)		December 31, 2022 ($)			September 30 2022 ($)			June 30, 2022 ($)
Revenue		6,145,939		5,785,661			1,077,770			1,497,973
Net Income (Loss)		2,271,399		(1,771,950	)		(2,464,875	)		46,246
Net Income (Loss) per share (basic and diluted)		0.03		(0.02	)		(0.03	)		0.00
Net and comprehensive income (Loss)		2,969,187		(3,051,624	)		(4,096,807	)		(820,751	)

Summary of Results During Prior Eight Quarters

Net income increased for the three months ended March 31, 2024, by $9,754,182 compared to the three months ended December 31, 2023, from a net loss of $8,434,326 to a net income of $1,319,856. The increase is primarily due to a gain of $6,349,365 recognized in Q1 2024 as a result of hyperinflationary accounting compared to a gain of $1,845,256 in the three months ended December 31, 2023. Furthermore, a foreign exchange loss of $565,913 was recorded for the three months ended December 31, 2023 compared to a loss of $4,225,230 in the prior quarter. Furthermore, the Company earned $1,321,945 in revenues during the current quarter compared to $2,722,489 in the prior quarter. Additionally, the Company recorded deferred income tax expense of $854,952 in Q1 2024 compared to $1,860,326 in Q4 2023.

Net loss increased for the three months ended December 31, 2023, by $15,822,192 compared to the three months ended September 30, 2023, from a net income of $7,387,866 to a net loss of $8,434,326. The increase is primarily due to a gain of $10,625,159 recognized in Q3 as a result of hyperinflationary accounting compared to a gain of $1,845,256 in the three months ended December 31, 2023. Furthermore, a foreign exchange loss of $4,225,230 was recorded for the three months ended December 31, 2023 compared to a loss of $1,892,112 in the prior quarter. Furthermore, the Company earned $2,722,489 in revenues during the current quarter compared to $5,028,124 in the prior quarter. Additionally, the Company recorded deferred income tax expense of $1,860,326 in Q4 2023; no tax expense was recognized for Q3 2023.

Net loss increased for the three months ended September 30, 2023, by $9,668,252 compared to the three months ended June 30, 2023, from a net loss of $2,280,386 to a net income of $7,387,866. The change is primarily due to a foreign exchange loss $1,892,112 recognized in Q3 of as a result of the weakening Turkish currency compared to the US dollar. Further, a gain of $10,625,159 was recognized during Q3 as a result of hyperinflationary accounting compared to a gain of $3,804,714 for the three months ended June 30, 2023.

Net loss increased for the three months ended June 30, 2023, by $4,551,785 compared to the three months ended March 31, 2023, from a net income of $2,271,399 to a net loss of $2,280,386. The change is primarily due a foreign exchange loss of $4,475,689 recognized in Q2 of as a result of the weakening Turkish currency compared to the US dollar.

Net income increased for the three months ended March 31, 2023, by $4,043,349 compared to the three months ended December 31, 2022, from a net loss of $1,771,950 to a net income of $2,271,399. The change is primarily due an impairment charge of $3,101,343 recognized in Q4 of 2022 on the Bulgaria license due to inactivity and to an increase in revenues during the quarter due to production increases at the SASB gas fields.

Net loss decreased for the three months ended December 31, 2022, by $692,925 compared to the three months ended September 30, 2022, from a net loss of $2,464,875 to a net loss of $1,771,950. The increase is primarily due to an increase in revenues during the quarter due to an increase in the price of oil and gas in 2022 compared to 2021 coupled with production increases at the SASB gas fields.

Net loss increased for the three months ended September 30, 2022, by $2,511,121 compared to the three months ended June 30, 2022, from a net income of $46,246 to a net loss of $2,464,875. The increase is primarily due to $1,410,291 in stock-based compensation recognized in the three months ended September 30, 2022 as a result of the grant of options and accrual of RSUs compared to $Nil for the three months ended June 30, 2022. This is coupled with a decrease of $420,203 in revenue as a result of reduced gas production in the month of September.

Net loss decreased for the three months ended June 30, 2022 by $1,977,421 compared to the three months ended March 31, 2022 from a net loss of $1,931,175 to a net income of $46,246. The decrease is primarily due to a loss from the change in fair value of derivative liabilities of $568,773 recognized for the three months ended March 31, 2022 compared to a gain of $207,603 from the change in fair value of derivative liabilities recognized for the three months ended June 30, 2022, representing a total change of $776,376. Foreign exchange rates also fluctuated such that a gain of $449,745 was recognized for the three months ended June 30, 2022 compared to a loss of $121,125 was recognized for the three months ended March 31, 2022. Revenues increased by $484,348 primarily as a result of fluctuating oil sales prices between Q1 2022 and Q2 2022.

Liquidity and Capital Resources

The following table summarizes our liquidity position in USD:

	March 31, 2024			December 31, 2023
Cash		435,846			1,188,445
Working capital (deficit)		(15,411,235	)		(12,929,942	)
Total assets		59,283,425			58,610,428
Total liabilities		37,458,343			36,397,856
Stockholders’ equity (deficiency)		21,825,082			22,212,572

As at March 31, 2024, working capital deficit was $15,411,235 in comparison to a working capital deficit of $12,929,942 as at December 31, 2023. The $2,481,293 increase in working capital deficit is primarily attributable to a decrease in cash of $752,599, increase in accrued interest payable on convertible debt of $326,531 and a reduction in accounts receivable by $634,451. The Company also saw an increase in accounts payable and accrued liabilities of $719,005.

The Company estimates that it will be required to raise further funds to cover its plan of operations over the next 12 months through debt or equity or a combination of both. See – “Subsequent Events” below.

Operating, Investing and Financing Activities

The chart below highlights the Company’s cash flows:

	March 31, 2024			March 31, 2023
Net cash provided by (used in):
Operating activities		(12,597	)		5,251,683
Investing activities		(703,015	)		(5,941,754	)
Financing activities		(27,117	)		2,174,501
Effect of exchange rate on cash and cash equivalents		(9,870	)		(21,575	)
Increase in cash, cash equivalents, and restricted cash		(752,599	)		1,462,855

Cash Used in Operating Activities

Net cash used in operating activities for the three months ended March 31, 2024, was $12,597, compared to $5,251,683 cash provided by operating activities for three months ended March 31, 2023. The current period net income of $1,321,856 was coupled with $3,479,293 in changes in working capital items and offset by $4,811,746 in net non-cash items for the three months ended March 31, 2024. This compares to a net income of $2,271,399, partially offset by $3,183,829 in changes in working capital items for the three months ended March 31, 2023 and $203,545 in net non-cash items.

Cash Used in Investing Activities

Net cash used in investing activities for the three months ended March 31, 2024, was $703,015, compared to $5,941,754 used for the three months ended March 31, 2023. Oil and gas properties expenditures decreased to $210,869 from $19,927,785 in the comparative period and property and equipment expenditures decreased to $4,860 from $47,344 in the comparative period. In the prior period, the Company also had $14,033,375 in advances from JV Partners compared to nil in the current period.

Cash Provided by Financing Activities

We have funded our business to date from sales of our common stock through private placements and loans from shareholders.

Net cash used by financing activities for the three months ended March 31, 2024, was $27,117, compared to cash provided by financing activities of $2,174,501 for the three months ended March 31, 2023. In the comparative period cash from financing activities was primarily related to $2,105,386 in proceeds, of loans payable

Future Operating Requirements

Our current plan of operation is to increase production from the SASB field through artificial lift and smaller production tubing to ramp up cashflow to use cashflow to improve working capital. The funding for this plan and to pay down accounts payable will come from existing revenues streams,, proceeds from sale of excess inventory from the previous drilling program and proceeds from sale of Cendere field. Through the same of inventory and Cendere oil field sale, the Company believes this will be sufficient to improve working capital to a management level. The Company currently is open to receiving a bank loan or other long-term debt instruments to improve cashflow.

Once we have brought production levels up to the anticipated levels we shall plan the continuation of drilling production wells extensions at SASB to increase gas production, if and when cash is available. Each sidetrack well is expected to cost US $2.5 -$4 million net to Trillon. Up to 10 sidetracks will be drilled, if and when cash is available from operations. As each of the wells is expected to generate cashflow as they are brought online and as cash receipts from production are obtained on a monthly basis, our cash position will be enhanced and capital outlays will be covered, such that increasing sales revenue will contribute positively to the Company’s working capital and future anticipated capital expenditures.

We also plan to continue to develop our 50% working and revenue interest in Cudi-Gabar Oil Block in South-eastern Turkey and commence drilling later this year. There has been a number of discoveries in the close vicinity of our block and the preliminary results of our seismic studies indicate some promising areas. The Company is currently seeking a farm-in partner to pay for 100% of the expenditures.

As of March 31, 2024, the Company had unrestricted cash of $435,846 and current liabilities of $18,460,844 which is not sufficient to cover its plan of operations over the next 12 months and accordingly, the Company anticipates selling Cendere, and inventory to raise further funds in the short term.

See – “Subsequent Events” below.

Transactions with Related Parties

Name	Relationship	Share based (‘000)		Salary, bonuses & directors fees (‘000)		Total (‘000)
Arthur Halleran	Chief Executive Officer (“CEO”) and director		44		66		110
Ozge Karalli	Former Chief Financial Officer (“CFO”) – Terminated March 2024		-		3		3
David M. Thompson	Director and Interim CFO		61		26		87
Burak Terzi	Chief Commercial Officer – Appointed February 2024		21		54		75
Allen Thorsen	Chief Operating Officer (“COO”) – Appointed January 2024		19		56		75
Scott Lower	President of PPE Turkey – Appointed Q1 2024		32		54		86
Kubilay Yildirim	Former COO (Terminated December 2023) and Former Director (Terminated March 2024)		-		7		7
Sean Stofer	Director		47		8		55
Jay Park	Director		47		8		55
Other	Close family members		-		51		51

At March 31, 2024, accounts payable and accrued liabilities included $173,243 (December 31, 2023 - $115,526) due to related parties. The amounts are unsecured, non-interest bearing and due on demand.

During the three months ended March 31, 2024, the Company issued 1,509,610 shares to directors for services performed and for RSU’s which were granted and vested in previous periods.

Risk Management

The Company is exposed to varying degrees to a variety of financial instrument and other risks:

Foreign currency risk

As at March 31, 2024, the Company’s significant foreign exchange currency exposure on its financial instruments, expressed in USD was as follows:

If the CAD strengthened or weakened against the USD by 10% the exchange rate fluctuation would impact net loss by $1,234,173 at March 31, 2024 (December 31, 2023 - $954,252).

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

The Company’s maximum credit exposure is $1,394,740 (December 31, 2023 - $2,848,457).

Interest rate risk

Liquidity risk

General risks

Petroleum and natural gas exploration and production can involve environmental risks such as litigation, physical and regulatory risks. Physical risks include the pollution of the environment, climate change and destruction of natural habitat, as well as safety risks such as personal injury. The Company works hard to identify the potential environmental impacts of its new projects in the planning stage and during operations. The Company conducts its operations with high standards in order to protect the environment, its employees and consultants, and the general public. We maintain current insurance coverage for comprehensive and general liability as well as limited pollution liability. The amount and terms of this insurance are reviewed on an ongoing basis and adjusted as necessary to reflect current corporate requirements, as well as industry standards and government regulations. Without such insurance, and if the Company becomes subject to environmental liabilities, the payment of such liabilities could reduce or eliminate its available funds or could exceed the funds the Company has available and result in financial distress.

Climate change risks

Our exploration and production infrastructure and other operations and activities emit greenhouse gasses (“GHG”) which may require us to comply with federal and/or provincial GHG emissions legislation. Climate change policy is evolving at regional, national and international levels, and political and economic events may significantly affect the scope and timing of climate change measures that are ultimately put in place to prevent climate change or mitigate our effects. The direct or indirect costs of compliance with GHG-related regulations may have a material adverse effect on our business, financial condition, results of operations and prospects. Some of our significant facilities may ultimately be subject to future regional, provincial and/or federal climate change regulations to manage GHG emissions. In addition, climate change has been linked to long-term shifts in climate patterns and extreme weather conditions both of which pose the risk of causing operational difficulties.

Off-Balance Sheet Arrangements

During 2018 the Company entered into an agreement to grant to a consultant of the Company a 2% (two percent) gross overriding royalty on petroleum substances produced from certain of its currently undeveloped exploration properties, namely: Block 1-11 Vranino situated in Dobrich District, Bulgaria. The Grant of the royalty agreement was for services involving technical and corporate advisory services

Disclosure of Outstanding Share Data

The Company’s authorized share capital consists of an unlimited number of common shares of which 123,230,342 were issued and outstanding as of March 31, 2024. As of the date of this MD&A, the total number of outstanding common shares was 136,463,048.

As at March 31, 2024, the following stock options were outstanding, entitling the holders thereof the right to purchase one common share for each option held as follows:

Outstanding		Exercise Price		Expiry Date	Vested
	620,000		0.75 CAD	September 19, 2024		620,000
	64,000		0.40 CAD	July 31, 2025		64,000
	50,000		1.50 CAD	July 26, 2025		50,000
	50,000		1.90 CAD	June 6, 2026		50,000
	150,000		2.20 CAD	October 27, 2025		150,000
	70,000		2.20 CAD	December 9, 2024		70,000
	50,000		2.20 CAD	December 9, 2025		50,000
	200,000		0.30 CAD	January 2, 2027		50,000
	200,000		0.20 CAD	February 12, 2027		200,000
	250,000		0.20 CAD	February 15, 2027		250,000
	500,000		0.25 CAD	February 28, 2027		125,000
	2,450,000		0.20 CAD	March 8, 2027		2,450,000
	4,654,000					4,129,000

As of the date of this MD&A, the following stock options were outstanding, entitling the holders thereof the right to purchase one common share for each option held as follows:

Outstanding		Exercise Price		Expiry Date	Vested
	620,000		0.75 CAD	September 19, 2024		620,000
	64,000		0.40 CAD	July 31, 2025		64,000
	50,000		1.50 CAD	July 26, 2025		50,000
	50,000		1.90 CAD	June 6, 2026		50,000
	150,000		2.20 CAD	October 27, 2025		150,000
	70,000		2.20 CAD	December 9, 2024		70,000
	50,000		2.20 CAD	December 9, 2025		50,000
	200,000		0.30 CAD	January 2, 2027		50,000
	200,000		0.20 CAD	February 12, 2027		200,000
	250,000		0.20 CAD	February 15, 2027		250,000
	500,000		0.25 CAD	February 28, 2027		125,000
	2,450,000		0.20 CAD	March 8, 2027		2,450,000
	4,654,000					4,129,000

As at March 31, 2024, the following warrants were outstanding, entitling the holders thereof the right to purchase one common share for each warrant held as follows:

Outstanding		Exercise Price		Expiry Date
	12,529,690		2.50 CAD	June 29, 2025
	300,288		1.55 CAD	June 29, 2025
	300,000		2.50 CAD	April 20, 2025
	2,101,727		0.30 CAD	November 28, 2025
	15,231,705

As of the date of this MD&A, the following warrants were outstanding, entitling the holders thereof the right to purchase one common share for each warrant held as follows:

Outstanding		Exercise Price		Expiry Date
	12,529,690		2.50 CAD	June 29, 2025
	300,288		1.55 CAD	June 29, 2025
	300,000		2.50 CAD	April 20, 2025
	2,101,727		0.30 CAD	November 28, 2025
	13,232,373		0.18 CAD	May 28, 2026
	540,041		0.09 CAD	May 28, 2026
	29,004,119

Critical Accounting Policies and Estimates

Our condensed consolidated interim financial statements and accompanying notes have been prepared in accordance with IFRS. The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

We believe that our critical accounting policies and estimates include the following:

Revenue Recognition

Revenue from Contracts with Customers

The Company recognizes revenue when it satisfies its performance obligation(s) by transferring control over a product to a customer. Revenue is measured based on the consideration the Company expects to receive in exchange for those products.

Performance Obligations and Significant Judgments

The Company sells oil and natural gas products in Turkey. The Company enters into contracts that generally include one type of distinct product in variable quantities and priced based on a specific index related to the type of product.

The oil and natural gas are typically sold in an unprocessed state to processors and other third parties for processing and sale to customers. The Company recognizes revenue at a point in time when control of the oil is transferred. For oil sales, control is typically transferred to the customer upon receipt at the wellhead or a contractually agreed upon delivery point. Under the Company’s natural gas contracts with processors, control transfers upon delivery at the wellhead or the inlet of the processing entity’s system. For the Company’s other natural gas contracts, control transfers upon delivery to the inlet or to a contractually agreed upon delivery point. In the cases where the Company sells to a processor, the Company has determined that the Company is the principal in the arrangement and the processors are the Company’s customers. The Company recognizes the revenue in these contracts based on the net proceeds received from the processor.

For the Company’s product sales that have a contract term greater than one year, the Company uses the practical expedient in IFRS 15 Paragraph 121(a) which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to an unsatisfied performance obligation. Under these sales contracts, each unit of product represents a separate performance obligation; therefore, future volumes are unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. The Company has no unsatisfied performance obligations at the end of each reporting period.

The Company does not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. There is a low level of uncertainty due to the precision of measurement and use of index-based pricing with predictable differentials. Additionally, any variable consideration identified is not constrained.

Amounts Receivable

Amounts receivable consist of oil and gas receivables. The Company has classified these as short-term assets in the balance sheet because the Company expects repayment or recovery within the next 12 months. The Company evaluates these accounts receivable for collectability and, when necessary, records allowances for expected unrecoverable amounts. The Company deems all accounts receivable to be collectable and has not recorded any allowance for doubtful accounts.

Exploration and Evaluation Assets

Pre-license exploration costs are recognized in the consolidated statement of operations and comprehensive loss as incurred.

The costs to acquire non-producing oil and gas properties or licenses to explore, drill exploratory wells and the costs to evaluate the commercial potential of underlying resources, including related borrowing costs, are initially capitalized as exploration and evaluation assets.

Exploration and evaluation assets are subject to technical, commercial and management review to confirm the continued intent to develop and extract the underlying resources. If an area or exploration well is no longer considered commercially viable, the related capitalized costs are charged to exploration expense.

Exploration and evaluation assets are not subject to depreciation, depletion and amortization.

When management determines with reasonable certainty that an exploration and evaluation asset will be developed, as evidenced by the classification of proved or probable reserves and the appropriate internal and external approvals, the asset is transferred to oil and gas properties.

Oil and gas properties

Oil and gas properties (“O&G”) include development and productions costs, less accumulated depletion and depreciation and accumulated impairment loss. O&G are grouped into cash generating units for impairment testing. The Company has grouped its O&G into two CGUs: the Cendere Oil Field and SASB Gas Field.

When significant parts of an item of O&G have different useful lives, they are accounted for as separate items (major components).

Costs incurred subsequent to the determination of technical feasibility and commercial viability and the costs of replacing parts of O&G are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred. Such capitalized items generally represent costs incurred in developing proved and/or probable reserves and bringing on or enhancing production from such reserves and are accumulated on a field or geotechnical area basis. The carrying amount of any replaced or sold component is derecognized. The costs of the day-to-day servicing of oil ang gas properties are recognized in profit or loss as incurred.

The net carrying value of oil and gas properties is depleted using the unit-of-production method by reference to the ratio of production in the year to the related proved reserves, taking into account estimated future development costs necessary to bring those reserves into production. These estimates are reviewed by independent reservoir engineers at least annually.

Stock-based compensation

Under the company’s share-based compensation plans, share-based awards may be granted to executives, employees and non-employee directors. The Company grants restricted share units (“RSUs”) and stock options to directors, officers, employees, and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes or provides services like those performed by an employee.

The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted, using the Black Scholes valuation model. The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the “vesting date”). For cash settled share-based compensation, the expense is determined based on the fair value of the liability at the end of the reporting period until the award is settled.

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment.

The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period, and the corresponding amount is represented in contributed surplus. At the end of each reporting period, the Company re-assesses its estimates of the number of awards that are expected to vest and recognizes the impact of the revisions in the consolidated statements of loss.

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense or its reduction is recognized for any modification which increases or decreases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the Company or the counterparty, any remaining element of the fair value of the award is expensed immediately or reversed through profit or loss, depending on the type of cancellation. The dilutive effect of outstanding options is reflected as additional dilution in the computation of earnings per share whereas anti-dilutive options are ignored.

Consideration paid to the Company on exercise of hare-based awards is credited to share capital and the associated amount in option reserve is reclassified to share capital.

Unit Offerings

Common shares are classified as equity. Proceeds from unit placements are allocated between shares and warrants issued using the residual method. The residual method first allocates fair value to the component with the best evidence of fair value and then the residual value, if any, to the less easily measurable component. The fair value of the common shares, measured on date of issue, was determined to be the component with the best evidence of fair value. The balance, if any, was allocated to the attached warrants. Costs directly identifiable with share capital financing are charged against share capital. If the subscription is not funded upon issuance, the Company records a receivable as a contra account to shareholders’ equity.

Hyperinflation in a subsidiary’s functional currency

IAS 29 provides guidance on when a hyperinflation economic environment exists. When hyperinflation is deemed to exist, the subsidiary’s financial statements are first restated before being translated into the consolidated financial statements. Comparative amounts are excluded from the restatement requirement when the presentation currency of the ultimate financial statements into which they will be included (USD) is non-hyperinflationary.

Monetary items are not restated because they are already expressed in terms of the monetary unit current at the end of the reporting period. Certain non-monetary items are carried at amounts current at the end of the reporting period, such as net realizable value and fair value, so they also are not restated. All other non-monetary assets and liabilities are restated in their functional currency so that all the items presented are equivalent to their current purchasing power at the end of the current reporting period. A non-monetary item once restated, in accordance with the appropriate IFRS’s, cannot exceed its recoverable amount.

Assets Held For Sale

Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is met when the sale is highly probable, the asset is available for immediate sale in its present condition and the sale is expected to be completed within one year from the date of classification.

Non-current assets held for sale are presented separately in current assets within the consolidated statements of financial position. Assets held for sale are measured at the lower of carrying amount and fair value less cost to sell, and are not depreciated, depleted or amortized. An impairment loss is recognized for any initial or subsequent write-down of the assets held for sale to fair value less costs to dispose. The comparative period consolidated statement of financial position is not restated.

Commitments and Contingencies

Close-out Fund:

During 2023, the Company and TPAO agreed to establish a close out-fund (the “Close-Out Fund”) in a US dollar bank account. The company has committed to contribute to the Close-Out Fund and is required to deposit 10% of natural gas revenue from the SASB project into the Close-Out Fund until an amount agreed to by both parties is attained. The amount accumulated in the Close-Out Fund will not be used for any purpose other than to cover the cost of close-out of the SASB project. As at March 31, 2024, the Company share of the Close-Out Fund amounted to $454,395 (December 31, 2023 - $371,124).

Arbitration

Maturity date of TR1 Master Fund loans

The Company has two loan agreements dated July 1, 2023 with TR1 Master Fund whereby the Company owes $2,902,125 in principal and accrued interest as at March 31, 2024. An agent for the receiver of TR1 Master Fund has demanded payment of the loans as the loans indicate that they were due on December 31, 2023. The Company is claiming that the principal of TR1 Master Fund agreed to extend the loans to December 31, 2024. Negotiations on repayment of the loans with the agent of the receiver for TR1 Master Fund are ongoing.

Subsequent Events

On April 8, 2024 Trillion Energy confirmed the initiation of the SASB revitalization project which was previously intended to begin from end of 1st Quarter 2024 to start of 2nd Quarter 2024. All relevant equipment and supplies for the SASB revitalization project expected to arrive by mid April 2024. A total of 49 metres of new gas pay would be perforated in Guluc-2, South Akcakoca-2, West Akcakoca-3 prior to the installation of the artificial gas lift (AL).

Previously, the SASB AL program consisted of PCP pumps, ESP pumps, and velocity strings. However, with new skilled personnel hired this had changed to predominantly velocity strings for step one and years down the road a water pump installed to prevent future water loading. A velocity string is just a smaller diameter production tubing, as currently the new wells have 4 ½ production tubing and the company will just thread 2 3/8” production tubing inside of the 4 ½” tubing.

On April 2, 2024, the Company issued 333 common shares pursuant to the conversion of CAD$1,000 of principal convertible debentures.

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