Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-08157

THE RESERVE PETROLEUM COMPANY

(Exact Name of Registrant as Specified in Its Charter)


Delaware			73-0237060
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

6801 BROADWAY EXT., SUITE 300 OKLAHOMA CITY, OK 73116-9037 (405) 848-7551
(Address and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þYes oNo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þYes oNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company þ

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). oYes þNo

As of November 8, 2024, 154,615 shares of the Registrant’s $0.50 par value common stock were outstanding.

Table of Contents

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION


		Page

Item 1.	Consolidated Financial Statements (Unaudited)	2
	Consolidated Balance Sheets	2
	Consolidated Statements of Income	4
	Consolidated Statements of Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	8
	Note 1 - Basis of Presentation	8
	Note 2 - Revenue Recognition	9
	Note 3 - Other Income, Net	10
	Note 4 - Investments and Related Commitments and Contingent Liabilities, Including Guaranties	10
	Note 5 - Non-Controlling Interest and Variable Interest Entities	12
	Note 6 - Note Payable	14
	Note 7 - Provision for Income Taxes	14
	Note 8 - Asset Retirement Obligation	14
	Note 9 - Fair Value Measurements	15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	21

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Purchases of Equity Securities	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23

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PART I – FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

THE RESERVE PETROLEUM COMPANY

CONSOLIDATED BALANCE SHEETS (1)

(Unaudited)

ASSETS


	September 30, 2024		December 31, 2023
Current Assets:
Cash and Cash Equivalents	$	3,729,992	$	5,218,474
Available-for-Sale Debt Securities	—		2,220,901
Equity Securities	4,188,075		2,664,066
Refundable Income Taxes	370,006		317,755
Accounts Receivable, Net of Allowance for Credit Losses	2,342,087		2,366,663
Total Current Assets	10,630,160		12,787,859

Investments:
Equity Method Investments	2,769,164		2,818,790
Other Investments	5,227,657		5,332,553
Total Investments	7,996,821		8,151,343

Property, Plant and Equipment:
Oil and Gas Properties, at Cost,
Based on the Successful Efforts Method of Accounting –
Unproved Properties	4,935,013		3,403,051
Proved Properties	73,753,852		69,152,923
Oil and Gas Properties, Gross	78,688,865		72,555,974
Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance	(59,019,759)		(57,622,564)
Oil and Gas Properties, Net	19,669,106		14,933,410
Other Property and Equipment, at Cost	348,270		820,965
Less – Accumulated Depreciation	(179,876)		(306,587)
Other Property and Equipment, Net	168,394		514,378
Total Property, Plant and Equipment, Net	19,837,500		15,447,788
Total Assets	$	38,464,481	$	36,386,990

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED BALANCE SHEETS, CONTINUED (1)

(Unaudited)

LIABILITIES AND EQUITY


	September 30, 2024		December 31, 2023

Current Liabilities:
Accounts Payable	$	47,086	$	537,796
Other Current Liabilities	63,051		12,839
Note Payable, Current Portion	146,667		142,136
Total Current Liabilities	256,804		692,771

Long-Term Liabilities:
Asset Retirement Obligation	2,303,934		2,566,368
Deferred Tax Liability, Net	2,257,896		1,219,511
Note Payable, Less Current Portion	1,048,211		1,158,736
Total Long-Term Liabilities	5,610,041		4,944,615
Total Liabilities	5,866,845		5,637,386

Equity:
Common Stock	92,368		92,368
Additional Paid-in Capital	65,000		65,000
Retained Earnings	34,220,121		32,212,066
Equity Before Treasury Stock	34,377,489		32,369,434
Less – Treasury Stock, at Cost	(1,993,427)		(1,820,527)
Total Equity Applicable to The Reserve Petroleum Company	32,384,062		30,548,907
Non-Controlling Interests	213,574		200,697
Total Equity	32,597,636		30,749,604
Total Liabilities and Equity	$	38,464,481	$	36,386,990

(1) Amounts presented include balances held by our consolidated variable interest entities (“VIEs”), Grand Woods Development, LLC ("Grand Woods") and Trinity Water Services, LLC ("TWS"), as further discussed in Note 5 – Non-Controlling Interest and Variable Interest Entities. As of September 30, 2024, total assets and liabilities of Grand Woods, which are included in the consolidated balance sheets, were $2,270,134 and $1,194,878, respectively, including $98,306 of cash. Grand Woods' note holder has partial recourse against the Company. As of September 30, 2024, total assets of TWS, which are included in the consolidated balance sheets, were $85,410, all of which is cash. There were no TWS liabilities as of September 30, 2024.

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating Revenues:
Oil and Gas Sales	$	3,874,796	$	3,008,485	$	10,723,062	$	8,651,381
Lease Bonuses and Other	296,696		183,797		296,696		183,797
Water Well Drilling Services	—		109,424		660,978		385,006
Total Operating Revenues	4,171,492		3,301,706		11,680,736		9,220,184

Operating Costs and Expenses:
Production	1,041,694		1,094,178		3,083,457		3,160,518
Exploration	42,735		106,151		370,810		679,720
Water Well Drilling Services	563		373,657		410,741		688,227
Depreciation, Depletion, Amortization and Valuation Provision	469,753		483,731		1,824,905		1,799,061
General, Administrative and Other	1,037,631		578,135		2,347,154		1,893,893
Total Operating Costs and Expenses	2,592,376		2,635,852		8,037,067		8,221,419

Income from Operations	1,579,116		665,854		3,643,669		998,765
Equity Income in Investees	7,333		22,781		64,691		81,414
Interest Expense	(19,425)		(17,130)		(52,838)		(51,179)
Other Income, Net	433,378		92,479		839,718		850,021
Income Before Income Taxes and Non-Controlling Interest	2,000,402		763,984		4,495,240		1,879,021
Income Tax Provision/(Benefit):
Current	(69,438)		51,655		(68,639)		1,981
Deferred	319,933		94,820		1,038,385		376,259
Total Income Tax Provision	250,495		146,475		969,746		378,240
Net Income	$	1,749,907	$	617,509	$	3,525,494	$	1,500,781
Less: Net Loss Attributable to Non-Controlling Interest	(11,130)		(7,395)		(29,435)		(23,945)
Net Income Attributable to Common Stockholders	$	1,761,037	$	624,904	$	3,554,929	$	1,524,726

Per Share Data
Net Income Attributable to Common Stockholders, Basic	$	11.39	$	4.01	$	22.96	$	9.77
Cash Dividends Declared and/or Paid	$	—	$	—	$	10.00	$	10.00
Weighted Average Shares Outstanding, Basic	154,619		155,908		154,840		156,051

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Non- Controlling Interests		Total
Three Months Ended September 30, 2024
Balance as of June 30, 2024	$	92,368	$	65,000	$	32,459,084	$	(1,984,947)	$	189,943	$	30,821,448
Net Income/(Loss)	—		—		1,761,037		—		(11,130)		1,749,907
Purchase of Treasury Stock	—		—		—		(8,480)		—		(8,480)
Contributions	—		—		—		—		34,761		34,761
Balance as of September 30, 2024	$	92,368	$	65,000	$	34,220,121	$	(1,993,427)	$	213,574	$	32,597,636

Nine Months Ended September 30, 2024
Balance as of December 31, 2023	$	92,368	$	65,000	$	32,212,066	$	(1,820,527)	$	200,697	$	30,749,604
Net Income/(Loss)	—		—		3,554,929		—		(29,435)		3,525,494
Dividends Declared	—		—		(1,546,874)		—		—		(1,546,874)
Purchase of Treasury Stock	—		—		—		(172,900)		—		(172,900)
Contributions	—		—		—		—		42,312		42,312
Balance as of September 30, 2024	$	92,368	$	65,000	$	34,220,121	$	(1,993,427)	$	213,574	$	32,597,636

Three Months Ended September 30, 2023
Balance as of June 30, 2023	$	92,368	$	65,000	$	33,167,536	$	(1,762,887)	$	181,988	$	31,744,005
Net Income/(Loss)	—		—		624,904		—		(7,395)		617,509
Purchase of Treasury Stock	—		—		—		(33,000)		—		(33,000)
Contributions	—		—		—		—		3,245		3,245
Balance as of September 30, 2023	$	92,368	$	65,000	$	33,792,440	$	(1,795,887)	$	177,838	$	32,331,759

Nine Months Ended September 30, 2023
Balance as of December 31, 2022	$	92,368	$	65,000	$	33,828,418	$	(1,749,858)	$	149,434	$	32,385,362
Net Income/(Loss)	—		—		1,524,726		—		(23,945)		1,500,781
Dividends Declared	—		—		(1,560,704)		—		—		(1,560,704)
Purchase of Treasury Stock	—		—		—		(46,029)		—		(46,029)
Contributions	—		—		—		—		52,349		52,349
Balance as of September 30, 2023	$	92,368	$	65,000	$	33,792,440	$	(1,795,887)	$	177,838	$	32,331,759

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2024		2023

Cash Provided by/(Applied to) Operating Activities:
Net Income	$	3,525,494	$	1,500,781
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion, Amortization and Valuation Provisions	1,824,905		1,799,061
Depreciation Attributable to TWS	18,973		56,177
Accretion of Asset Retirement Obligation	124,940		54,664
Cash Distributions from Equity Method Investees	134,332		24,000
Net (Gain)/Loss on Equity Method and Other Investments	253,313		(217,236)
Loss on Deconsolidation of TWS South, LLC	296,717		—
Net Gain on Equity Securities	(1,227,170)		(97,151)
Deferred Income Tax Provision	1,038,385		376,259
Change in Receivables	(27,675)		(506,444)
Change in Accounts Payable and Other Current Liabilities	(440,755)		148,604
Net Cash Provided by Operating Activities	$	5,521,459	$	3,138,715


Cash Provided by/(Applied to) Investing Activities:
Maturity of Available-for-Sale Debt Securities	$	2,534,727	$	6,054,655
Purchase of Available-for-Sale Debt Securities	(313,826)		(6,130,718)
Proceeds from Disposal of Property, Plant and Equipment	243,081		37,678
Purchase of Property, Plant and Equipment	(7,160,505)		(3,709,631)
Purchase of Investments	(385,165)		(632,106)
Cash Distributions from Other Investments	4,000		361,316
Sale of Equity Securities	2,649,885		724,472
Purchase of Equity Securities	(2,798,682)		(858,394)
Net Cash Applied to Investing Activities	$	(5,226,485)	$	(4,152,728)

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)


	Nine Months Ended September 30,
	2024		2023

Cash Provided by/(Applied to) Financing Activities:
Dividends Paid to Stockholders	$	(1,546,874)	$	(1,560,704)
Purchase of Treasury Stock	(172,900)		(46,029)
Payments of Note Payable	(105,994)		(101,922)
Capital Contributions from Non-Controlling Interests	42,312		52,349
Total Cash Applied to Financing Activities	(1,783,456)		(1,656,306)
Net Change in Cash and Cash Equivalents	(1,488,482)		(2,670,319)
Cash and Cash Equivalents, Beginning of Period	5,218,474		7,299,224
Cash and Cash Equivalents, End of Period	$	3,729,992	$	4,628,905


Supplemental Disclosures of Cash Flow Information:
Interest Paid	$	38,314	$	42,386
Income Taxes Paid/(Refunded), Net	$	(11,201)	$	334,200

Supplemental Schedule of Noncash Investing and Financing Activities:
Net Increases in Accounts Payable for Property, Plant and Equipment Additions	$	(257)	$	(1,254,723)
Net Decreases in Asset Retirement Obligation	$	387,374	$	5,793

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

(Unaudited)

Note 1 – BASIS OF PRESENTATION

The Reserve Petroleum Company, a Delaware corporation, is an independent oil and gas company engaged in oil and natural gas exploration, development and minerals management with areas of concentration in Arkansas, Kansas, Oklahoma, South Dakota, Texas and Wyoming, a single business segment. The Company is also engaged in investments that are not significant business segments. The Company’s consolidated entities consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and Trinity Water Services, LLC ("TWS"), an Oklahoma limited liability company. Unless otherwise specified or the context otherwise requires, all references in these notes to “the Company,” “its,” “our,” and “we” are to The Reserve Petroleum Company and its consolidated entities.

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of The Reserve Petroleum Company and variable interest entities (“VIEs”) in which the Company holds a controlling interest, reflecting ownership of a majority of the voting interest, as of the financial statement date. Additionally, the Company consolidates VIEs under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. When necessary, reclassifications that are not material to the consolidated financial statements are made to prior period financial information to conform to the current year presentation. These reclassifications had no impact on net income or retained earnings.

The accompanying consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC (the “2023 Form 10-K”).

In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals), which are necessary for a fair statement of the results of the interim periods presented. The results of operations for the current interim periods are not necessarily indicative of the operating results for the full year.

Variable Interest Entities

The Company decides at the inception of each arrangement whether an entity in which an investment is made or in which we have other variable interests is considered a VIE. Generally, an entity is a VIE if (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity’s investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights. The Company consolidates VIEs when the Company is deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that both: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. If the Company is not deemed to be the primary beneficiary of a VIE, the Company accounts for the investment or other variable interests in such VIEs in accordance with applicable GAAP.

Non-Controlling Interests

When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the entity are included in the consolidated financial statements. For those consolidated entities in which the Company’s ownership is less than 100%, the Company records a non-controlling interest as a component of equity on the consolidated balance sheets, which represents the third-party ownership in the net assets of the respective consolidated entity. Additionally, the portion of the net income or loss attributable to the non-controlling interest is reported as net income (loss) attributable to non-controlling interest on the consolidated statements of income. Changes in ownership interests in an entity that do not result in deconsolidation are generally recognized within equity. See Note 5 for additional details on non-controlling interests.

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New Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 intends to provide investors with enhanced information about an entity’s income taxes by requiring disclosure of items such as disaggregation of the effective tax rate reconciliation as well as information regarding income taxes paid. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segments Disclosures. Under this ASU, the scope and frequency of segment disclosures is increased to provide investors with additional detail about information utilized by an entity’s “Chief Operating Decision Maker.” This ASU is effective for annual reporting periods beginning after December 15, 2024, and interim periods beginning in 2025. The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow.

In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. This ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting Standards Codification Master Glossary. While joint ventures are defined in the Master Glossary, there has been no specific guidance in the Codification that applies to the formation accounting by a joint venture in its separate financial statements. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow.

Note 2 – REVENUE RECOGNITION

A portion of oil and natural gas sales recorded in the consolidated statements of income are the result of estimated volumes and pricing for oil and natural gas payments not yet received for the period. For the nine months ended September 30, 2024 and 2023, that estimate represented $2,787,041 and $1,686,369, respectively, of oil and natural gas sales included in the consolidated statements of income.

The Company’s disaggregated revenue has two primary revenue sources, which are oil sales and natural gas sales. The following is an analysis of the components of oil and natural gas sales:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Oil Sales	$	3,153,936	$	2,484,260	$	8,740,819	$	7,023,759
Natural Gas Sales	572,784		459,963		1,717,843		1,431,795
Miscellaneous Oil and Gas Product Sales	148,076		64,262		264,400		195,827
Total	$	3,874,796	$	3,008,485	$	10,723,062	$	8,651,381

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Note 3 – OTHER INCOME, NET

The following is an analysis of the components of Other Income, Net:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Realized and Unrealized Gain/(Loss), Equity Securities	$	359,668	$	(40,080)	$	1,227,170	$	97,151
Gain on Other Asset Sales	37,924		—		37,924		—
Interest Income	38,101		112,568		166,826		348,133
Dividend Income	32,247		13,906		77,430		40,794
Loss on Deconsolidation of TWS South, LLC	—		—		(296,717)		—
Impairment of Other Investments	—		—		(318,894)		—
Income from Other Investments	12,165		20,917		38,695		350,014
Miscellaneous Income/(Expenses)	(46,727)		(14,832)		(92,716)		13,929
Other Income, Net	$	433,378	$	92,479	$	839,718	$	850,021

Note 4 – INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTIES

The Company’s Equity Method Investments include:

Broadway Sixty-Eight, LLC (“Broadway 68”), an Oklahoma limited liability company, with a 33% ownership, owns and operates an office building in Oklahoma City, Oklahoma. The Company leases its corporate office from Broadway 68 on a month-to-month basis under the terms of the modified lease agreement. Rent expense for lease of the corporate office from Broadway 68 was $33,537 and $35,606 during the nine months ended September 30, 2024 and 2023, respectively. The Company’s investment in Broadway 68 totaled $107,813 and $123,901 at September 30, 2024, and December 31, 2023, respectively.

Broadway Seventy-Two, LLC (“Broadway 72”), an Oklahoma limited liability company, with a 40% ownership, was acquired in 2021. Broadway 72 owns and operates a commercial building in Oklahoma City, Oklahoma. The Company’s investment in Broadway 72 totaled $1,064,351 and $1,075,782 at September 30, 2024, and December 31, 2023, respectively.

QSN Office Park, LLC (“QSN”), an Oklahoma limited liability company, with a 20% ownership, was acquired in 2016. QSN is constructing and selling office buildings in a new office park. The Company has guarantied 20% of a $860,000 development loan that matures July 15, 2025, and 20% of a construction loan of $585,000 that matures January 25, 2025. The Company’s investment in QSN totaled $308,632 and $307,325 at September 30, 2024, and December 31, 2023, respectively. The Company does not anticipate the need to perform on the guaranties of the loans.

Stott's Mill, with a 50% ownership, was acquired in May 2022. Stott's Mill consists of two residential lots in a developing subdivision located in Basalt, Colorado. The Company’s investment in Stott's Mill totaled $686,428 and $708,179 at September 30, 2024, and December 31, 2023, respectively.

Victorum BRH Investment, LLC (“BRH”), with a 15.06% ownership, was acquired in August 2021 and November 2022. BRH serves as a special purpose investment vehicle to hold an investment in Berry-Rock Capital, LP (“Berry-Rock”). Berry-Rock is a provider of a rent-to-own program for individuals unable to qualify for a mortgage. The Company receives quarterly distributions on an 11% annualized return on investment. The Company’s investment in BRH totaled $601,940 and $603,603 at September 30, 2024, and December 31, 2023, respectively.

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The Company’s Other Investments primarily include:

Bailey Hilltop Pipeline, LLC (“Bailey”), with a 10% ownership, was acquired in 2008. Bailey is a gas gathering system pipeline for the Bailey Hilltop Prospect oil and gas properties in Grady County, Oklahoma. Impairment losses based on a significant deterioration in the earnings performance and business prospects of the investee recorded in the nine months ended September 30, 2024 were $67,193. The Company’s investment in Bailey totaled $6,184 and $77,377 at September 30, 2024, and December 31, 2023, respectively.

Cloudburst International, Inc. (“Cloudburst”), with a 12.99% ownership, was acquired in 2019. Cloudburst owns exclusive rights to a water purification process technology that is being developed and currently tested. The Company’s investment in Cloudburst totaled $1,596,007 at September 30, 2024, and December 31, 2023.

Genlith, Inc. (“Genlith”), with a 5.15% ownership, was acquired in July 2020. Genlith identifies and structures investments in the new energy economy through corporate ventures, advisory and fund management. Impairment losses based on a significant deterioration in the earnings performance and business prospects of the investee recorded in the nine months ended September 30, 2024 were $111,958. The Company’s investment in Genlith totaled $200,000 and $311,958 at September 30, 2024, and December 31, 2023, respectively.

OKC Industrial Properties, LC (“OKC”), with a 10% ownership, was acquired in 1992. OKC originally owned approximately 260 acres of undeveloped land in north Oklahoma City. In March 2023, OKC sold 10 acres, resulting in a gain of $290,000 for the Company. There was no basis adjustment in accordance with the sale and there is approximately 13 acres of land remaining. The Company’s investment in OKC totaled $67,482 at September 30, 2024, and December 31, 2023.

Grand Woods holds approximately 26.56 acres of undeveloped real estate in northeast Oklahoma City. The accumulated costs of the land totaled $2,171,828 at September 30, 2024, and December 31, 2023. See Note 5 for information related to Grand Woods.

Victorum Capital Club (“VCC”) invests in and manages special purpose investment vehicles that hold investments in various startup companies. The Company participates with minority ownership in an assortment of investments held with VCC. Impairment losses based on a significant deterioration in the earnings performance and business prospects of the investee recorded in the nine months ended September 30, 2024 were $139,743. The Company’s investment in VCC special purpose investment vehicles totaled $227,306 and $357,259 at September 30, 2024, and December 31, 2023, respectively.

VCC Venture Fund I, LP (“VCC Venture”), with less than 2% ownership, serves as a limited partnership to be used for investments in start-up entities and is managed by Victorum Capital Club. The Company committed to a $250,000 investment in VCC Venture. The Company’s investment in VCC Venture totaled $125,000 and $93,750 at September 30, 2024, and December 31, 2023, respectively. The balance at September 30, 2024, represents 50.00% of the Company's capital commitment.

Cortado Ventures Fund II-A, LP (“Cortado II-A”), with less than 2% ownership, serves as a limited partnership to be used for investments in start-up entities and is managed by Cortado Capital II, LLC. The Company committed to a $1,000,000 investment in Cortado II-A on June 20, 2023. The Company’s investment in Cortado II-A totaled $600,000 and $500,000 at September 30, 2024, and December 31, 2023, respectively. The balance at September 30, 2024, represents 60.00% of the Company's capital commitment.

Cypress MWC, LLC ("Cypress"), with 15% ownership, acquired in 2024, is a town home development in Midwest City, Oklahoma. The Company committed to a $750,000 investment in Cypress. The Company’s investment in Cypress totaled $225,000 at September 30, 2024, which represents 30.00% of the Company's capital commitment.

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Note 5 – NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

Grand Woods is accounted for as a consolidated VIE. The Company owns an 80.37% interest in Grand Woods in the form of 47.08 Class A units and 546,735 Class C units, with the remaining non-controlling member interests held by other members, including 8.72% owned by executive officers of the Company. Grand Woods holds approximately 26.56 acres of undeveloped real estate in northeast Oklahoma City.

On September 15, 2022, Grand Woods entered into an agreement (“the 2022 Agreement”) with its members that resulted in the Company having the power to direct the activities significant to Grand Woods and becoming the primary beneficiary; therefore, consolidation of Grand Woods became required and effective for the period ended September 30, 2022. The Company is the only guarantor of $1,200,000 of a note payable held by Grand Woods. See Note 6 for terms and guaranty of debt held by Grand Woods, which is included in the consolidated balance sheets. As a result of the Company’s guaranty of $1,200,000 of Grand Woods debt, the note holder has partial recourse to the Company for the consolidated VIE’s liabilities.

TWS is accounted for as a consolidated VIE. TWS entered into a Joint Venture Agreement ("the Agreement") with TWS South, LLC ("TWS South"), a Texas limited liability company, on March 19, 2021, to form a water well drilling company where TWS would provide funding for equipment and operations, with TWS South providing industry expertise for operations and securing customers in the central Texas region. Equipment and vehicles totaling $330,000 were purchased by TWS South and operating cash of $70,000 was made available to begin operations. The Agreement provided that TWS receive all net profits until a total of $300,000 plus 1.2 times any additional funding was reached. Since the effective date of the Agreement, the Company has contributed $1,150,000 toward the joint venture with losses totaling $1,016,676 as of September 30, 2024. Due to the Agreement, TWS South was a consolidated VIE of TWS.

The Agreement stated that if net profits received by the Company did not reach $300,000 plus 1.2 times any additional funding within twelve months of the effective date, the Company had the right to terminate the Agreement. The Agreement also stated that TWS South would devote substantially all time and attention to the joint venture. Following the discovery that TWS South breached the Agreement by assuming ownership and operating another drilling company, the Company terminated the Agreement on April 19, 2024.

On the April 19, 2024 termination date, TWS South balance sheet items consisted of a drilling rig, various equipment and vehicles with net book value of $296,717, accounts receivable of $465,977, cash of $89,812, and no liabilities. TWS South paid its cash of $85,410 to TWS and agreed to pay TWS any additional funds collected from payments received on accounts receivable. TWS South holds title to each of the vehicles, with TWS as lienholder. TWS is also lienholder on the drilling rig, which is registered as machinery in Texas to TWS South. The equipment and vehicles are no longer consolidated as of the April 19, 2024 termination date. Deconsolidation of TWS South resulted in a loss of $296,717, which is recorded in Other Income, Net on the consolidated income statement.

In September 2024, the Company was notified of a breach of contract and negligence lawsuit filed July 23, 2024, in the district court of Bell County, Texas 169th Judicial District, by Victory Companies, LLC ("the Plaintiff"), a customer of TWS South. Defendants include Trinity Water Services, LLC, TWS South, LLC individually and d/b/a Trinity Water Solutions, LLC, and Gamblin Engineering Group, LLC, a third party engineering firm. The Plaintiff seeks relief in excess of $1,000,000 and intends for discovery to be conducted under Level 3 of Texas Rule of Civil Procedure 190.4 in Bell County, Texas. The facts of the case are in discovery and the Company does not have enough information to determine whether a contingent liability exists for TWS and there is no liability recorded. The lawsuit does, however, create significant uncertainty about the collectability of TWS South accounts receivable, therefore, an allowance for credit losses in the amount of $465,977 is recorded in Accounts Receivable on the Consolidated Balance Sheets, with a bad debt expense recorded in General, Administrative and Other on the Consolidated Income Statement. The Company will record additional consideration if received after any settlements are reached, which may reduce the loss recorded in future periods.

The following table presents the summarized assets and liabilities of Grand Woods and TWS included in the consolidated balance sheets as of September 30, 2024, and December 31, 2023. The assets of Grand Woods and TWS in the table below may only be used to settle obligations of Grand Woods or TWS, respectively.

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Assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation.


	September 30, 2024
	Grand Woods		TWS		Total
Assets:
Cash	$	98,306	$	85,410	$	183,716
Total Current Assets	98,306		85,410		183,716
Other Investments (Land)	2,171,828		—		2,171,828
Total Assets	$	2,270,134	$	85,410	$	2,355,544

Liabilities:
Note Payable, Current Portion	146,667		—		146,667
Total Current Liabilities	146,667		—		146,667
Note Payable, Less Current Portion	1,048,211		—		1,048,211
Total Liabilities	$	1,194,878	$	—	$	1,194,878


	December 31, 2023
	Grand Woods		TWS		Total
Assets:
Cash	$	138,690	$	154,653	$	293,343
Accounts Receivable	—		640		640
Total Current Assets	138,690		155,293		293,983
Other Investments (Land)	2,171,828		—		2,171,828
Other Property and Equipment, at Cost	—		471,219		471,219
Less – Accumulated Depreciation	—		(168,274)		(168,274)
Other Property and Equipment, Net	—		302,945		302,945
Total Assets	$	2,310,518	$	458,238	$	2,768,756

Liabilities:
Accounts Payable	$	—	$	398	$	398
Note Payable, Current Portion	142,136		—		142,136
Total Current Liabilities	142,136		398		142,534
Note Payable, Less Current Portion	1,158,736		—		1,158,736
Total Liabilities	$	1,300,872	$	398	$	1,301,270

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Note 6 – NOTE PAYABLE

Grand Woods has a note payable (“the Note”) that was used for the purchase and development of property. The Note has a 4% interest rate and matures November 23, 2026. The Note has scheduled payments of principal and interest in the amount of $16,034 per month, with a balloon payment of any unpaid principal balance due on November 23, 2026. The balance of the Note at September 30, 2024, and December 31, 2023, is $1,194,878 and $1,300,872, respectively, of which $146,667 is classified as current at September 30, 2024. Interest paid on the Note, in the nine months ended September 30, 2024 and 2023 totaled $38,314 and $42,386, respectively. The Note is secured by the underlying property and a $1,200,000 guaranty issued by the Company. Covenants of the Note include a pay down requirement that states that sales of parcels will require a pay down on the loan of 90% of the net proceeds received from the purchaser less capital gains tax obligation. The remaining 10% shall be held in an operating reserve account for operating expenses and the use in payment of taxes. No distributions to partners, except for taxes, are permitted throughout the term of the loan. The intent of the Grand Woods investment manager and members is that proceeds from the sale of all, or part of, the property will be used to reduce or eliminate the Note. The Company does not anticipate the need to perform on the guaranty of the Note.

Below is a schedule of future principal payments on the outstanding Note at September 30, 2024:


Years Ending December 31,	Principal Payments
2024	$	36,142
2025	148,155
2026	1,010,581
Total	$	1,194,878

Note 7 – PROVISION FOR INCOME TAXES

In 2024 and 2023, the effective tax rates differed from the statutory rate due to temporary differences in taxable and deductible items included in deferred taxes.

Excess federal percentage depletion, which is limited to certain production volumes and by certain income levels, reduces estimated taxable income projected for any year. The federal excess percentage depletion estimates will be updated throughout the year until finalized with the detail well-by-well calculations at year-end. When a provision for income taxes is recorded, federal excess percentage depletion benefits decrease the effective tax rate. When a benefit for income taxes is recorded, federal excess percentage depletion benefits increase the effective tax rate. The benefit of federal excess percentage depletion is not directly related to the amount of pre-tax income recorded in a period. Accordingly, in periods where a recorded pre-tax income is relatively small, the proportional effect of these items on the effective tax rate may be significant.

Note 8 – ASSET RETIREMENT OBLIGATION

The Company records the fair value of its estimated liability to retire its oil and natural gas producing properties in the period in which it is incurred (typically the date of first sale). The estimated liability is calculated by obtaining current estimated plugging costs from the well operators and inflating it over the life of the property. Current year inflation rate used is 2.50%. When the liability is first recorded, a corresponding increase in the carrying amount of the related long-lived asset is also recorded. Subsequently, the asset is amortized to expense over the life of the property and the liability is increased annually for the change in its present value which is currently 7.50%.

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A reconciliation of the Company’s asset retirement obligation liability is as follows:


Balance at December 31, 2023	$	2,566,368
Revision to estimate	(387,374)
Accretion expense	124,940
Balance at September 30, 2024	$	2,303,934

Note 9 – FAIR VALUE MEASUREMENTS

The Company uses a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable.

Level 3 – Unobservable inputs that reflect the Company’s own assumptions.

Recurring Fair Value Measurements

Certain assets of the Company are reported at fair value in the accompanying consolidated balance sheets on a recurring basis. The Company determined the fair value of equity securities and available-for-sale debt securities using quoted market prices, public Net Asset Values ("NAV") and where applicable, securities with similar maturity dates and interest rates. Level 3 assets use NAV as fair value. At September 30, 2024, and December 31, 2023, the Company’s assets reported at fair value on a recurring basis are summarized as follows:


	September 30, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities	$	3,175,973	$	—	$	—
International Equities	97,962		—		—
Others	—		—		763,134
Total	$	3,273,935	$	—	$	763,134


	December 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities – U.S.
Treasury Bills Maturing within 1 Year	$	—	$	2,220,901	$	—
Equity Securities:
Domestic Equities	2,321,275		—		—
International Equities	130,005		—		—
Others	212,786		—		—
Total	$	2,664,066	$	2,220,901	$	—

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The fair value hierarchy tables do not include investments where the Company has elected to use the NAV as a practical expedient to determine the fair value. These assets consist of a private business development fund classified under section 3(c)(7) of the Investment Company Act of 1940. Liquidity is only attained through sales on the secondary market.

A reconciliation to the balance sheet equity securities is as follows:


	September 30, 2024		December 31, 2023
Level 1 Assets	$	3,273,935	$	2,664,066
Level 2 Assets	—		2,220,901
Level 3 Assets	763,134		—
Assets using NAV as a practical expedient, with a remaining commitment of $175,924	151,006		—
Total	$	4,188,075	$	4,884,967

The $763,134 in Level 3 assets in the fair value hierarchy tables using NAV that is published and used for current transactions as fair value consist of a private perpetual business development fund. Redemption terms include expected quarterly repurchase offers pursuant to a unit repurchase program of up to 5% of outstanding units, either by number of units or aggregate net asset value as of such quarter end.

A roll forward of the Company’s level 3 investments is as follows:


	Balance
Nine Months Ended September 30, 2024
Balance as of December 31, 2023	$	—
Purchases	767,907
Changes in Unrealized Gain/(Loss) included in Other Income, net	(4,773)
Balance as of September 30, 2024	$	763,134

Remaining Unfunded Commitments	$	—

Non-Recurring Fair Value Measurements

The Company’s asset retirement obligation annually represents a non-recurring fair value liability, for which there were no liabilities incurred in the nine months ended September 30, 2024 or 2023. See Note 8 above for more information about this liability and the inputs used for calculating fair value. Equity method and other investments are evaluated for impairment at each reporting period. Please see Note 4 for information related to impairment of investments.

There were no Impairment losses recorded on oil and gas assets in the nine months ended September 30, 2024. Impairment losses recorded on oil and gas assets in the nine months ended September 30, 2023 were $443,456. This also relates to non-recurring fair value measurements calculated using Level 3 inputs. Certain oil and natural gas producing properties have been deemed to be impaired because the assets, evaluated on a property-by-property basis, are not expected to recover their entire carrying value through future cash flows. Impairment losses, when recorded, are included in the consolidated statements of income in the line-item Depreciation, Depletion, Amortization and Valuation Provision. Impairments are calculated by reducing the carrying value of the individual properties to an estimated fair value equal to the discounted present value of the future cash flow from these properties. Forward pricing is used for calculating future revenue and cash flow.

Fair Value of Other Financial Instruments

The Company’s other financial instruments consist primarily of cash and cash equivalents, trade receivables, and trade payables. At September 30, 2024, and December 31, 2023, the historical cost of cash and cash equivalents, trade receivables and trade payables are considered to be representative of their respective fair values due to the short-term liquidity or maturities of these items.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read with reference to ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the 2023 Form 10-K, as well as the consolidated financial statements included in this Form 10-Q.

Forward-Looking Statements

This discussion and analysis includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give the Company’s current expectations of future events. They include statements regarding the drilling of oil and natural gas wells, the production that may be obtained from oil and natural gas wells, cash flow and anticipated liquidity and expected future expenses.

Although management believes the expectations in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that would cause actual results to differ materially from expected results are described under “Forward-Looking Statements” on page 3 of the 2023 Form 10-K.

We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q, and we undertake no obligation to update this information because of new information, future developments, or except as required by law. You are urged to carefully review and consider the disclosures made in this and our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business.

LIQUIDITY AND CAPITAL RESOURCES

Please refer to the consolidated balance sheets and the consolidated statements of cash flows in this Form 10-Q to supplement the following discussion. In the first nine months of 2024, the Company continued to fund its business activity using internal sources of cash. The Company had net cash provided by operating activities of $5,521,459 in the nine months ended September 30, 2024. The Company had sales of equity securities of $2,649,885, cash provided by property dispositions of $243,081, distributions from other investments of $4,000, and maturity of available-for-sale debt securities of $2,534,727 for total cash provided by investing activities of $5,431,693. The Company utilized cash for the purchase of property of $7,160,505, the purchase of equity securities of $2,798,682, purchase of investments of $385,165, and purchase of available-for-sale debt securities of $313,826 for cash applied to investing activities of $10,658,178. The Company paid $1,546,874 in stockholder dividends, $172,900 for the purchase of treasury stock, and $105,994 in payments on the Grand Woods note payable, for total cash applied to financing activities of $1,825,768. Cash provided by financing activities included Grand Woods Class C non-controlling interest contributions of $42,312. Cash and cash equivalents decreased $1,488,482 (29%) to $3,729,992 at September 30, 2024, from $5,218,474 at December 31, 2023.

Discussion of Significant Changes in Working Capital. In addition to the changes in cash and cash equivalents discussed above, there were other changes in working capital line items from December 31, 2023. A discussion of these items follows.

Equity securities increased $1,524,009 (57%) to $4,188,075 as of September 30, 2024, from $2,664,066 at December 31, 2023. The increase resulted from $148,797 in net purchases, reclassification of $148,042 in cost basis for Chilean Cobalt Corp. ("C3") from Other Investments resulting from an Initial Public Offering on April 29, 2024, and net increases in market value $1,227,170, including a $962,275 unrealized gain on C3.

Accounts receivable decreased $24,576 (1%) to $2,342,087 as of September 30, 2024, from $2,366,663 at December 31, 2023, resulting from decreases in trade and other accounts receivable of $57,165, primarily related to the decrease in TWS water well drilling receivables, and an increase of in oil and gas receivables of $32,589, primarily due to increased volumes on expected production accrued.

Accounts payable decreased $490,710 (91%) to $47,086 as of September 30, 2024, from $537,796 at December 31, 2023, primarily due to timing differences in the processing of accounts payable.

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Other current liabilities increased $50,212 (391%) to $63,051 as of September 30, 2024, from $12,839 at December 31, 2023, due to an increase of $31,762 in payroll taxes resulting from the timing of payroll tax remittance, and an increase in state income and accrued property taxes of $18,450.

Discussion of Significant Changes in the Consolidated Statements of Cash Flows. As noted in the first paragraph above, net cash provided by operating activities was $5,521,459 in the nine months ended September 30, 2024, an increase of $2,382,744 (76%) from cash provided by operations in the comparable period in 2023 of $3,138,715. For more information see “Operating Revenues” and “Other Income, Net” below.

Cash applied to the purchase of property, plant and equipment in the nine months ended September 30, 2024, was $7,160,505, an increase of $3,450,874 (93%) from cash applied to the purchase of property, plant and equipment in the comparable period in 2023 of $3,709,631.

Cash applied to the purchase of available-for-sale debt securities in the nine months ended September 30, 2024, was $313,826, a decrease of $5,816,892 (95%) from $6,130,718 in the comparable period in 2023. Cash provided by the maturity of available-for-sale debt securities in the nine months ended September 30, 2024, was $2,534,727, a decrease of $3,519,928 (58%) from $6,054,655 in the comparable period in 2023. Cash applied to investments in the nine months ended September 30, 2024, was $385,165, a decrease of $246,941 (39%) from cash applied in the comparable period of 2023 of $632,106.

Off-Balance Sheet Arrangements. The Company is a guarantor of 20% of a $860,000 development loan that matures July 15, 2025, and 20% of a construction loan of $585,000 that matures January 25, 2025 held by QSN Office Park, LLC. The Company is committed to a $250,000 investment in VCC Venture Fund I, LP, of which $125,000 (50%) is invested at September 30, 2024. The Company is committed to a $1,000,000 investment in Cortado Ventures Fund II-A, of which $600,000 (60%) is invested at September 30, 2024. The Company is committed to a $750,000 investment in Cypress MWC, LLC, of which $225,000 (30%) is invested at September 30, 2024. The Company also has a commitment to purchase $175,924 of a private business development fund classified under section 3(c)(7) of the Investment Company Act of 1940 where the Company has elected to use the NAV as a practical expedient to determine the fair value. For more information about these entities and the related off-balance sheet arrangements, see Note 4, Note 5 and Note 9 to the accompanying consolidated financial statements.

Conclusion. Management is unaware of any additional material trends, demands, commitments, events or uncertainties, which would impact liquidity and capital resources to the extent that the discussion presented in the 2023 Form 10-K would not be representative of the Company’s current position.

RESULTS OF OPERATIONS

Results of Operations – Nine Months Ended September 30, 2024

Net income attributable to common stockholders increased $2,030,203 (133%) to $3,554,929 in the nine months ended September 30, 2024, from $1,524,726 in the comparable period in 2023. Net income per share attributable to common stockholders, basic, increased $13.19 to $22.96 in the nine months ended September 30, 2024, from $9.77 in the comparable period in 2023. A discussion of revenue from oil and natural gas sales and other significant line items in the consolidated statements of income follows.

Operating Revenues. Revenues from oil and natural gas sales increased $2,071,681 (24%) to $10,723,062 in the nine months ended September 30, 2024, from $8,651,381 in the comparable period in 2023. The increase is due to an increase in oil sales of $1,717,060, an increase in natural gas sales of $286,048, and an increase in miscellaneous oil and natural gas product sales of $68,573.

The $1,717,060 (24%) increase in oil sales to $8,740,819 in the nine months ended September 30, 2024, from $7,023,759 in the comparable period in 2023 was the result of an increase in the volume sold and an increase in the average price per barrel (Bbl). The volume of oil sold increased 13,048 Bbls to 107,948 Bbls in the nine months ended September 30, 2024, resulting in a positive volume variance of $965,682. The average price per Bbl increased $6.96 to $80.97 per Bbl in the nine months ended September 30, 2024, from $74.01 per Bbl in the comparable period in 2023, resulting in a positive price variance of $751,378.

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The $286,048 (20%) increase in natural gas sales to $1,717,843 in the nine months ended September 30, 2024, from $1,431,795 in the comparable period in 2023 was the result of an increase in the volume sold, partially offset by a decrease in the average price per thousand cubic feet ("MCF"). The volume of natural gas sold increased 161,618 MCF to 684,177 MCF in the nine months ended September 30, 2024, from 522,559 MCF in the comparable period in 2023, resulting in a positive volume variance of $442,833. The average price per MCF decreased $0.23 to $2.51 per MCF in the nine months ended September 30, 2024, from $2.74 per MCF in the comparable period in 2023, resulting in a negative price variance of $156,785.

For both oil and natural gas sales, the price change was mostly the result of a change in the spot market prices upon which most of the Company’s oil and natural gas sales are based. These spot market prices have had significant fluctuations in the past and these fluctuations are expected to continue.

Sales of miscellaneous oil and natural gas products were $264,400 in the nine months ended September 30, 2024, compared to $195,827 in the comparable period in 2023.

The Company had water well drilling revenues of $660,978 in the nine months ended September 30, 2024, related to water well drilling through TWS, with $385,006 in the comparable period in 2023. The increase was due to the completion of a large commercial well project and several commercial and residential water wells completed in 2024. Water well drilling revenues ceased on the joint venture agreement termination date of April 19, 2024. See Note 5 for additional information on TWS.

Operating Costs and Expenses. Operating costs and expenses decreased $184,352 (2%) to $8,037,067 in the nine months ended September 30, 2024, from $8,221,419 in the comparable period of 2023. The decrease was the net result of a decrease in production costs of $77,061; a decrease in exploration costs charged to expense of $308,910; a decrease in water well drilling costs of $277,486; an increase in DD&A of $25,844; and an increase in G&A of $453,261.

Production Costs. Production costs decreased $77,061 (2%) to $3,083,457 in the nine months ended September 30, 2024, from $3,160,518 in the comparable period in 2023. Lease operating expenses decreased $328,946 (14%), hauling, compression, and other costs increased by $216,766 (70%), and gross production taxes increased $35,119 (7%) due to increased revenues from oil and natural gas sales, offset by a previous period adjustment to GPT of $106,635.

Exploration Costs. Exploration costs decreased $308,910 (45%) to $370,810 in the nine months ended September 30, 2024, from $679,720 in the comparable period in 2023, due to a decrease of $92,963 in geological and geophysical and other expenses, and $222,212 in dry hole and plugging costs, partially offset by an increase of $6,265 in leasehold impairments.

Water Well Drilling Costs. Water well drilling costs decreased $277,486 (40%) to $410,741 in the nine months ended September 30, 2024, from $688,227 in the comparable period in 2023. These costs consist of contract labor, equipment rental and maintenance, fuel costs, and other operating supplies related to the drilling of water wells through TWS. Water well drilling costs ceased on the joint venture agreement termination date of April 19, 2024. See Note 5 for additional information on TWS.

Depreciation, Depletion, Amortization and Valuation Provision (DD&A). DD&A increased $25,844 (1%) to $1,824,905 in the nine months ended September 30, 2024, from $1,799,061 in the comparable period in 2023, due to a decrease in long-lived assets impairments of $443,456 offset by a $469,251 net increase in depletion, depreciation, and amortization due to an increase in completions and production.

General, Administrative and Other (G&A). G&A increased $453,261 (24%) to $2,347,154 in the three months ended September 30, 2024, from $1,893,893 in the comparable period in 2023. This was primarily the result of bad debt expense of $465,977 recorded for TWS South, LLC accounts receivable. See Note 5 to the accompanying consolidated financial statements for an analysis of the circumstances of this line item.

Equity Income in Investees. Equity income in investees decreased $16,723 (21%) to $64,691 in the nine months ended September 30, 2024, from $81,414 in the comparable period in 2023. Income in the nine months ended September 30, 2024, was made up of income of $8,661 in Broadway Sixty-Eight, LLC (“Broadway 68”), income of $48,569 in Broadway Seventy-Two, LLC (“Broadway 72”), income of $47,104 from Victorum BRH Investment, LLC, loss of $17,492 in QSN

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Office Park, LLC (“QSN”), and loss of $22,151 in Stott's Mill. See Note 4 to the accompanying financial statements for additional information on equity method investments.

Other Income, Net. Other income, net was $839,718 in the nine months ended September 30, 2024, as compared $850,021 in the comparable period in 2023. See Note 3 to the accompanying consolidated financial statements for an analysis of the components of this line item.

Income Tax Provision. Income tax provision increased $591,506 (156%) to $969,746 in the nine months ended September 30, 2024, from $378,240 in the comparable period in 2023. Of the 2024 tax provision, estimated current tax benefit was $68,639 and estimated deferred tax provision was $1,038,385. Of the 2023 income tax provision, the estimated current tax provision was $1,981 and the estimated deferred tax provision was $376,259. See Note 7 to the accompanying consolidated financial statements for additional information on income taxes.

Results of Operations – Three Months Ended September 30, 2024

Net income attributable to common stockholders increased $1,136,133 (182%) to $1,761,037 in the three months ended September 30, 2024, from $624,904 in the comparable period in 2023. The significant changes in the consolidated statements of income are discussed below. Net income per share attributable to common stockholders, basic increased $7.38 to $11.39 in the three months ended September 30, 2024, from $4.01 in the comparable period in 2023.

Operating Revenues. Revenues from oil and gas sales increased $866,311 (29%) to $3,874,796 in the three months ended September 30, 2024, from $3,008,485 in the comparable period in 2023. The increase is due to an increase in oil sales of $669,676, an increase in natural gas sales of $112,821, and an increase in miscellaneous oil and gas product sales of $83,814.

The $669,676 (27%) increase in oil sales to $3,153,936 in the three months ended September 30, 2024, from $2,484,260 in the comparable period in 2023 was the result of an increase in the volume sold and an increase in the average price per barrel (Bbl). The volume of oil sold increased 3,875 Bbls to 35,274 Bbls in the three months ended September 30, 2024, resulting in a positive volume variance of $306,590. The average price per Bbl increased $10.29 to $89.41 per Bbl in the three months ended September 30, 2024, from $79.12 per Bbl in the comparable period in 2023, resulting in a positive price variance of $363,086.

The $112,821 (25%) increase in natural gas sales to $572,784 in the three months ended September 30, 2024, from $459,963 in the comparable period in 2023 was the result of an increase in the volume sold and a decrease in the average price per MCF. The volume of natural gas sold increased 77,602 MCF to 249,993 MCF in the three months ended September 30, 2024, from 172,391 MCF in the comparable period in 2023, resulting in a positive volume variance of $207,197. The average price per MCF decreased $0.38 to $2.29 per MCF in the three months ended September 30, 2024, from $2.67 per MCF in the comparable period in 2023, resulting in a negative price variance of $94,376.

Operating Costs and Expenses. Operating costs and expenses decreased $43,476 (2%) to $2,592,376 in the three months ended September 30, 2024, from $2,635,852 in the comparable period in 2023. The decrease was the net result of a decrease in production costs of $52,484; a decrease in exploration costs charged to expense of $63,416; a decrease in water well drilling costs of $373,094; a decrease in DD&A of $13,978; and an increase in G&A of $459,496.

Production Costs. Production costs decreased $52,484 (5%) to $1,041,694 in the three months ended September 30, 2024, from $1,094,178 in the comparable period in 2023. Lease operating expenses decreased $120,866 (16%), hauling, compression, and other costs increased by $143,651 (122%), and gross production taxes decreased $75,269 (37%) due to an increase in GPT of $31,366 from increased oil and gas sales, offset by a previous period adjustment to GPT of $106,635.

Exploration Costs. Exploration costs decreased $63,416 (60%) to $42,735 in the three months ended September 30, 2024, from $106,151 in the comparable period in 2023, due to decreased dry hole and plugging costs of $64,856, offset by an increase of $1,440 in leasehold impairments.

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Water Well Drilling Costs. Water well drilling costs decreased $373,094 (100%) to $563 in the three months ended September 30, 2024, from $373,657 in the comparable period in 2023. These costs consist of contract labor, equipment rental and maintenance, fuel costs, and other operating supplies related to the drilling of water wells through TWS. Water well drilling costs ceased on the joint venture agreement termination date of April 19, 2024. See Note 5 for additional information on TWS.

General, Administrative and Other (G&A). G&A increased $459,496 (79%) to $1,037,631 in the three months ended September 30, 2024, from $578,135 in the comparable period in 2023. This was primarily the result of bad debt expense of $465,977 recorded for TWS South, LLC accounts receivable. See Note 5 to the accompanying consolidated financial statements for an analysis of the circumstances of this line item.

Equity Income in Investees. Equity income in investees decreased $15,448 to income of $7,333 in the three months ended September 30, 2024, from $22,781 in the comparable period in 2023. See Note 4 to the accompanying financial statements for additional information on equity method investments.

Other Income, Net. Other income, net increased $340,899 in the three months ended September 30, 2024, to $433,378 from $92,479 in the comparable period in 2023. See Note 3 to the accompanying consolidated financial statements for an analysis of the components of this item.

Income Tax Provision/(Benefit). Income tax provision increased $104,020 (71%) to $250,495 in the three months ended September 30, 2024, from a provision of $146,475 in the comparable period in 2023. Of the 2024 tax provision, estimated current tax benefit was $69,438 and estimated deferred tax provision was $319,933. Of the 2023 income tax provision, the estimated current tax provision was $51,655 and the estimated deferred tax provision was $94,820. See discussions above in “Results of Operations” section and Note 7 to the accompanying consolidated financial statements for additional explanation of the changes in the provision for income taxes.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

As defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, they concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2024.

Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act).

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our consolidated entity, Trinity Water Services, LLC ("TWS") entered into a Joint Venture Agreement ("the Agreement") with TWS South, on March 19, 2021, to form a water well drilling company. The Agreement was terminated on April 19, 2024, prior to the filing of the lawsuit. As of September 30, 2024, the Company was party to a negligence and breach of contract lawsuit filed July 23, 2024, in the district court of Bell County, Texas 169th Judicial District, by Victory Companies, LLC ("the Plaintiff"), a customer of TWS South, LLC ("TWS South"). Defendants include Trinity Water Services, LLC, TWS South, LLC individually and d/b/a Trinity Water Solutions, LLC, and Gamblin Engineering Group, LLC, a third party engineering firm. The Plaintiff seeks relief in excess of $1,000,000 and intends for discovery to be conducted under Level 3 of Texas Rule of Civil Procedure 190.4 in Bell County, Texas.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND PURCHASES OF EQUITY SECURITIES


Period	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1 to July 31, 2024	44	$160	44	$2,242,240
August 1 to August 31, 2024	5	$160	5	$2,241,440
September 1 to September 30, 2024	4	$160	4	$2,240,800
Total	53	$160	53

(1) Prior to September 1, 2023, the Company had no formal equity security purchase program or plan. Most purchases resulted from requests made by stockholders receiving small odd lot share quantities as the result of probate transfers. On September 22, 2023, the Board of Directors ("the Board") approved a formal stock repurchase program, effective September 1, 2023, wherein the Company may repurchase up to 15,000 shares of outstanding stock of The Reserve Petroleum Company.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the nine months ended September 30, 2024, none of our officers or directors adopted or terminated a Rule 105-1 trading arrangement or a Non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

The following documents are exhibits to this Form 10-Q. Each document marked by an asterisk is filed electronically herewith.


Exhibit Number						Description

31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32*						Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.INS*						Inline XBRL Instance Document
101.SCH*						Inline XBRL Taxonomy Extension Schema Document
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)

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 thereto duly authorized.


			THE RESERVE PETROLEUM COMPANY
			(Registrant)



Date: November 14, 2024			/s/ Cameron R. McLain
			Cameron R. McLain
			Principal Executive Officer



Date: November 14, 2024			/s/ Lawrence R. Francis
			Lawrence R. Francis
			Principal Financial Officer

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Cameron R. McLain, certify that:

1.I have reviewed this report on Form 10-Q of The Reserve Petroleum Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 14, 2024			/s/ Cameron R. McLain
			Cameron R. McLain
			Principal Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Lawrence R. Francis, certify that:

1.I have reviewed this report on Form 10-Q of The Reserve Petroleum Company;

3.Based on my knowledge, the consolidated financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

b)Any fraud, whether or not material that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 14, 2024			/s/ Lawrence R. Francis
			Lawrence R. Francis
			Principal Financial Officer

Exhibit 32

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL

FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of The Reserve Petroleum Company (the "Company") on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Cameron R. McLain and Lawrence R. Francis, Principal Executive Officer and Principal Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, that to our knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly present, in all material respects, the financial condition and results of operations of the Company for the quarter ended September 30, 2024.


November 14, 2024			/s/ Cameron R. McLain
			Cameron R. McLain, President
			(Principal Executive Officer)



			/s/ Lawrence R. Francis
			Lawrence R. Francis, 1st Vice President
			(Principal Financial Officer)

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2024	Nov. 08, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	000-08157
Entity Registrant Name	THE RESERVE PETROLEUM COMPANY
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	73-0237060
Entity Address, Address Line One	6801 BROADWAY EXT.,
Entity Address, Address Line Two	SUITE 300
Entity Address, City or Town	OKLAHOMA CITY
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	73116-9037
City Area Code	405
Local Phone Number	848-7551
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		154,615
Entity Central Index Key	0000083350
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($)

Sep. 30, 2024

Dec. 31, 2023

Current Assets:

Cash and Cash Equivalents

^[1]

$ 3,729,992

$ 5,218,474

Available-for-Sale Debt Securities

^[1]

2,220,901

Equity Securities

^[1]

4,188,075

2,664,066

Refundable Income Taxes

^[1]

370,006

317,755

Accounts Receivable, Net of Allowance for Credit Losses

^[1]

2,342,087

2,366,663

Total Current Assets

^[1]

10,630,160

12,787,859

Investments:

Equity Method Investments

^[1]

2,769,164

2,818,790

Other Investments

^[1]

5,227,657

5,332,553

Total Investments

^[1]

7,996,821

8,151,343

Property, Plant and Equipment:

Unproved Properties

^[1]

4,935,013

3,403,051

Proved Properties

^[1]

73,753,852

69,152,923

Oil and Gas Properties, Gross

^[1]

78,688,865

72,555,974

Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance

^[1]

(59,019,759)

(57,622,564)

Oil and Gas Properties, Net

^[1]

19,669,106

14,933,410

Other Property and Equipment, at Cost

^[1]

348,270

820,965

Less – Accumulated Depreciation

^[1]

(179,876)

(306,587)

Other Property and Equipment, Net

^[1]

168,394

514,378

Total Property, Plant and Equipment, Net

^[1]

19,837,500

15,447,788

Total Assets

^[1]

38,464,481

36,386,990

Current Liabilities:

Accounts Payable

^[1]

47,086

537,796

Other Current Liabilities

^[1]

63,051

12,839

Note Payable, Current Portion

^[1]

146,667

142,136

Total Current Liabilities

^[1]

256,804

692,771

Long-Term Liabilities:

Asset Retirement Obligation

^[1]

2,303,934

2,566,368

Deferred Tax Liability, Net

^[1]

2,257,896

1,219,511

Note Payable, Less Current Portion

^[1]

1,048,211

1,158,736

Total Long-Term Liabilities

^[1]

5,610,041

4,944,615

Total Liabilities

^[1]

5,866,845

5,637,386

Equity:

Common Stock

^[1]

92,368

Additional Paid-in Capital

^[1]

65,000

Retained Earnings

^[1]

34,220,121

32,212,066

Equity Before Treasury Stock

^[1]

34,377,489

32,369,434

Less – Treasury Stock, at Cost

^[1]

(1,993,427)

(1,820,527)

Total Equity Applicable to The Reserve Petroleum Company

^[1]

32,384,062

30,548,907

Non-Controlling Interests

^[1]

213,574

200,697

Total Equity

^[1]

32,597,636

30,749,604

Total Liabilities and Equity

^[1]

$ 38,464,481

$ 36,386,990

[1]

Amounts presented include balances held by our consolidated variable interest entities (“VIEs”), Grand Woods Development, LLC ("Grand Woods") and Trinity Water Services, LLC ("TWS"), as further discussed in Note 5 – Non-Controlling Interest and Variable Interest Entities. As of September 30, 2024, total assets and liabilities of Grand Woods, which are included in the consolidated balance sheets, were $2,270,134 and $1,194,878, respectively, including $98,306 of cash. Grand Woods' note holder has partial recourse against the Company. As of September 30, 2024, total assets of TWS, which are included in the consolidated balance sheets, were $85,410, all of which is cash. There were no TWS liabilities as of September 30, 2024.

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)

Sep. 30, 2024

Apr. 19, 2024

Dec. 31, 2023

Mar. 19, 2021

Total Assets

^[1]

$ 38,464,481

$ 36,386,990

Total Liabilities

^[1]

5,866,845

5,637,386

Variable Interest Entity, Primary Beneficiary | Grand Woods

Total Assets

2,270,134

2,310,518

Total Liabilities

1,194,878

1,300,872

Cash

98,306

138,690

Variable Interest Entity, Primary Beneficiary | TWS

Total Assets

458,238

Total Liabilities

$ 0

398

Cash

$ 85,410

$ 89,812

$ 154,653

$ 70,000

[1]

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		9 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Operating Revenues:
Total Operating Revenues	$ 4,171,492	$ 3,301,706	$ 11,680,736	$ 9,220,184
Operating Costs and Expenses:
Depreciation, Depletion, Amortization and Valuation Provision	469,753	483,731	1,824,905	1,799,061
General, Administrative and Other	1,037,631	578,135	2,347,154	1,893,893
Total Operating Costs and Expenses	2,592,376	2,635,852	8,037,067	8,221,419
Income from Operations	1,579,116	665,854	3,643,669	998,765
Equity Income in Investees	7,333	22,781	64,691	81,414
Interest Expense	(19,425)	(17,130)	(52,838)	(51,179)
Other Income, Net	433,378	92,479	839,718	850,021
Income Before Income Taxes and Non-Controlling Interest	2,000,402	763,984	4,495,240	1,879,021
Income Tax Provision/(Benefit):
Current	(69,438)	51,655	(68,639)	1,981
Deferred	319,933	94,820	1,038,385	376,259
Total Income Tax Provision	250,495	146,475	969,746	378,240
Net Income	1,749,907	617,509	3,525,494	1,500,781
Less: Net Loss Attributable to Non-Controlling Interest	(11,130)	(7,395)	(29,435)	(23,945)
Net Income Attributable to Common Stockholders	$ 1,761,037	$ 624,904	$ 3,554,929	$ 1,524,726
Per Share Data
Net Income Attributable to Common Stockholders, Basic (in dollars per share)	$ 11.39	$ 4.01	$ 22.96	$ 9.77
Cash Dividends Declared and/or Paid (in dollars per share)	$ 0	$ 0	$ 10.00	$ 10.00
Weighted Average Shares Outstanding, Basic (in shares)	154,619	155,908	154,840	156,051
Oil and Gas Sales
Operating Revenues:
Total Operating Revenues	$ 3,874,796	$ 3,008,485	$ 10,723,062	$ 8,651,381
Lease Bonuses and Other
Operating Revenues:
Total Operating Revenues	296,696	183,797	296,696	183,797
Water Well Drilling Services
Operating Revenues:
Total Operating Revenues	0	109,424	660,978	385,006
Operating Costs and Expenses:
Operating Costs and Expenses:	563	373,657	410,741	688,227
Production
Operating Costs and Expenses:
Operating Costs and Expenses:	1,041,694	1,094,178	3,083,457	3,160,518
Exploration
Operating Costs and Expenses:
Operating Costs and Expenses:	$ 42,735	$ 106,151	$ 370,810	$ 679,720

CONSOLIDATED STATEMENTS OF EQUITY - USD ($)

Total

Common Stock

Additional Paid-in Capital

Retained Earnings

Treasury Stock

Non- Controlling Interests

Beginning balance at Dec. 31, 2022

$ 32,385,362

$ 92,368

$ 65,000

$ 33,828,418

$ (1,749,858)

$ 149,434

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net Income/(Loss)

1,500,781

1,524,726

(23,945)

Dividends Declared

(1,560,704)

Purchase of Treasury Stock

(46,029)

Contributions

52,349

Ending balance at Sep. 30, 2023

32,331,759

92,368

65,000

33,792,440

(1,795,887)

177,838

Beginning balance at Jun. 30, 2023

31,744,005

92,368

65,000

33,167,536

(1,762,887)

181,988

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net Income/(Loss)

617,509

624,904

(7,395)

Purchase of Treasury Stock

(33,000)

Contributions

3,245

Ending balance at Sep. 30, 2023

32,331,759

92,368

65,000

33,792,440

(1,795,887)

177,838

Beginning balance at Dec. 31, 2023

30,749,604

^[1]

92,368

65,000

32,212,066

(1,820,527)

200,697

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net Income/(Loss)

3,525,494

3,554,929

(29,435)

Dividends Declared

(1,546,874)

Purchase of Treasury Stock

(172,900)

Contributions

42,312

Ending balance at Sep. 30, 2024

32,597,636

^[1]

92,368

65,000

34,220,121

(1,993,427)

213,574

Beginning balance at Jun. 30, 2024

30,821,448

92,368

65,000

32,459,084

(1,984,947)

189,943

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net Income/(Loss)

1,749,907

1,761,037

(11,130)

Purchase of Treasury Stock

(8,480)

Contributions

34,761

Ending balance at Sep. 30, 2024

$ 32,597,636

^[1]

$ 92,368

$ 65,000

$ 34,220,121

$ (1,993,427)

$ 213,574

[1]

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Cash Provided by/(Applied to) Operating Activities:
Net Income	$ 3,525,494	$ 1,500,781
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion, Amortization and Valuation Provisions	1,824,905	1,799,061
Depreciation Attributable to TWS	18,973	56,177
Accretion of Asset Retirement Obligation	124,940	54,664
Cash Distributions from Equity Method Investees	134,332	24,000
Net (Gain)/Loss on Equity Method and Other Investments	253,313	(217,236)
Loss on Deconsolidation of TWS South, LLC	296,717	0
Net Gain on Equity Securities	(1,227,170)	(97,151)
Deferred Income Tax Provision	1,038,385	376,259
Change in Receivables	(27,675)	(506,444)
Change in Accounts Payable and Other Current Liabilities	(440,755)	148,604
Net Cash Provided by Operating Activities	5,521,459	3,138,715
Cash Provided by/(Applied to) Investing Activities:
Maturity of Available-for-Sale Debt Securities	2,534,727	6,054,655
Purchase of Available-for-Sale Debt Securities	(313,826)	(6,130,718)
Proceeds from Disposal of Property, Plant and Equipment	243,081	37,678
Purchase of Property, Plant and Equipment	(7,160,505)	(3,709,631)
Purchase of Investments	(385,165)	(632,106)
Cash Distributions from Other Investments	4,000	361,316
Sale of Equity Securities	2,649,885	724,472
Purchase of Equity Securities	(2,798,682)	(858,394)
Net Cash Applied to Investing Activities	(5,226,485)	(4,152,728)
Cash Provided by/(Applied to) Financing Activities:
Dividends Paid to Stockholders	(1,546,874)	(1,560,704)
Purchase of Treasury Stock	(172,900)	(46,029)
Payments of Note Payable	(105,994)	(101,922)
Capital Contributions from Non-Controlling Interests	42,312	52,349
Total Cash Applied to Financing Activities	(1,783,456)	(1,656,306)
Net Change in Cash and Cash Equivalents	(1,488,482)	(2,670,319)
Cash and Cash Equivalents, Beginning of Period	5,218,474	7,299,224
Cash and Cash Equivalents, End of Period	3,729,992	4,628,905
Supplemental Disclosures of Cash Flow Information:
Interest Paid	38,314	42,386
Income Taxes Paid/(Refunded), Net	(11,201)	334,200
Supplemental Schedule of Noncash Investing and Financing Activities:
Net Increases in Accounts Payable for Property, Plant and Equipment Additions	(257)	(1,254,723)
Net Decreases in Asset Retirement Obligation	$ 387,374	$ 5,793

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	Note 1 – BASIS OF PRESENTATION The Reserve Petroleum Company, a Delaware corporation, is an independent oil and gas company engaged in oil and natural gas exploration, development and minerals management with areas of concentration in Arkansas, Kansas, Oklahoma, South Dakota, Texas and Wyoming, a single business segment. The Company is also engaged in investments that are not significant business segments. The Company’s consolidated entities consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and Trinity Water Services, LLC ("TWS"), an Oklahoma limited liability company. Unless otherwise specified or the context otherwise requires, all references in these notes to “the Company,” “its,” “our,” and “we” are to The Reserve Petroleum Company and its consolidated entities. The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of The Reserve Petroleum Company and variable interest entities (“VIEs”) in which the Company holds a controlling interest, reflecting ownership of a majority of the voting interest, as of the financial statement date. Additionally, the Company consolidates VIEs under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. When necessary, reclassifications that are not material to the consolidated financial statements are made to prior period financial information to conform to the current year presentation. These reclassifications had no impact on net income or retained earnings. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC (the “2023 Form 10-K”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals), which are necessary for a fair statement of the results of the interim periods presented. The results of operations for the current interim periods are not necessarily indicative of the operating results for the full year. Variable Interest Entities The Company decides at the inception of each arrangement whether an entity in which an investment is made or in which we have other variable interests is considered a VIE. Generally, an entity is a VIE if (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity’s investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights. The Company consolidates VIEs when the Company is deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that both: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. If the Company is not deemed to be the primary beneficiary of a VIE, the Company accounts for the investment or other variable interests in such VIEs in accordance with applicable GAAP. Non-Controlling Interests When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the entity are included in the consolidated financial statements. For those consolidated entities in which the Company’s ownership is less than 100%, the Company records a non-controlling interest as a component of equity on the consolidated balance sheets, which represents the third-party ownership in the net assets of the respective consolidated entity. Additionally, the portion of the net income or loss attributable to the non-controlling interest is reported as net income (loss) attributable to non-controlling interest on the consolidated statements of income. Changes in ownership interests in an entity that do not result in deconsolidation are generally recognized within equity. See Note 5 for additional details on non-controlling interests. New Accounting Pronouncements In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 intends to provide investors with enhanced information about an entity’s income taxes by requiring disclosure of items such as disaggregation of the effective tax rate reconciliation as well as information regarding income taxes paid. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow. In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segments Disclosures. Under this ASU, the scope and frequency of segment disclosures is increased to provide investors with additional detail about information utilized by an entity’s “Chief Operating Decision Maker.” This ASU is effective for annual reporting periods beginning after December 15, 2024, and interim periods beginning in 2025. The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow. In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. This ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting Standards Codification Master Glossary. While joint ventures are defined in the Master Glossary, there has been no specific guidance in the Codification that applies to the formation accounting by a joint venture in its separate financial statements. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow.

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2024

Revenue Recognition [Abstract]

REVENUE RECOGNITION

Note 2 – REVENUE RECOGNITION

The Company’s disaggregated revenue has two primary revenue sources, which are oil sales and natural gas sales. The following is an analysis of the components of oil and natural gas sales:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Oil Sales	$	3,153,936	$	2,484,260	$	8,740,819	$	7,023,759
Natural Gas Sales	572,784		459,963		1,717,843		1,431,795
Miscellaneous Oil and Gas Product Sales	148,076		64,262		264,400		195,827
Total	$	3,874,796	$	3,008,485	$	10,723,062	$	8,651,381

OTHER INCOME, NET

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

OTHER INCOME, NET

Note 3 – OTHER INCOME, NET

The following is an analysis of the components of Other Income, Net:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Realized and Unrealized Gain/(Loss), Equity Securities	$	359,668	$	(40,080)	$	1,227,170	$	97,151
Gain on Other Asset Sales	37,924		—		37,924		—
Interest Income	38,101		112,568		166,826		348,133
Dividend Income	32,247		13,906		77,430		40,794
Loss on Deconsolidation of TWS South, LLC	—		—		(296,717)		—
Impairment of Other Investments	—		—		(318,894)		—
Income from Other Investments	12,165		20,917		38,695		350,014
Miscellaneous Income/(Expenses)	(46,727)		(14,832)		(92,716)		13,929
Other Income, Net	$	433,378	$	92,479	$	839,718	$	850,021

INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTIES	9 Months Ended
	Sep. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]
INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTIES	Note 4 – INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTIES The Company’s Equity Method Investments include: Broadway Sixty-Eight, LLC (“Broadway 68”), an Oklahoma limited liability company, with a 33% ownership, owns and operates an office building in Oklahoma City, Oklahoma. The Company leases its corporate office from Broadway 68 on a month-to-month basis under the terms of the modified lease agreement. Rent expense for lease of the corporate office from Broadway 68 was $33,537 and $35,606 during the nine months ended September 30, 2024 and 2023, respectively. The Company’s investment in Broadway 68 totaled $107,813 and $123,901 at September 30, 2024, and December 31, 2023, respectively. Broadway Seventy-Two, LLC (“Broadway 72”), an Oklahoma limited liability company, with a 40% ownership, was acquired in 2021. Broadway 72 owns and operates a commercial building in Oklahoma City, Oklahoma. The Company’s investment in Broadway 72 totaled $1,064,351 and $1,075,782 at September 30, 2024, and December 31, 2023, respectively. QSN Office Park, LLC (“QSN”), an Oklahoma limited liability company, with a 20% ownership, was acquired in 2016. QSN is constructing and selling office buildings in a new office park. The Company has guarantied 20% of a $860,000 development loan that matures July 15, 2025, and 20% of a construction loan of $585,000 that matures January 25, 2025. The Company’s investment in QSN totaled $308,632 and $307,325 at September 30, 2024, and December 31, 2023, respectively. The Company does not anticipate the need to perform on the guaranties of the loans. Stott's Mill, with a 50% ownership, was acquired in May 2022. Stott's Mill consists of two residential lots in a developing subdivision located in Basalt, Colorado. The Company’s investment in Stott's Mill totaled $686,428 and $708,179 at September 30, 2024, and December 31, 2023, respectively. Victorum BRH Investment, LLC (“BRH”), with a 15.06% ownership, was acquired in August 2021 and November 2022. BRH serves as a special purpose investment vehicle to hold an investment in Berry-Rock Capital, LP (“Berry-Rock”). Berry-Rock is a provider of a rent-to-own program for individuals unable to qualify for a mortgage. The Company receives quarterly distributions on an 11% annualized return on investment. The Company’s investment in BRH totaled $601,940 and $603,603 at September 30, 2024, and December 31, 2023, respectively. The Company’s Other Investments primarily include: Bailey Hilltop Pipeline, LLC (“Bailey”), with a 10% ownership, was acquired in 2008. Bailey is a gas gathering system pipeline for the Bailey Hilltop Prospect oil and gas properties in Grady County, Oklahoma. Impairment losses based on a significant deterioration in the earnings performance and business prospects of the investee recorded in the nine months ended September 30, 2024 were $67,193. The Company’s investment in Bailey totaled $6,184 and $77,377 at September 30, 2024, and December 31, 2023, respectively. Cloudburst International, Inc. (“Cloudburst”), with a 12.99% ownership, was acquired in 2019. Cloudburst owns exclusive rights to a water purification process technology that is being developed and currently tested. The Company’s investment in Cloudburst totaled $1,596,007 at September 30, 2024, and December 31, 2023. Genlith, Inc. (“Genlith”), with a 5.15% ownership, was acquired in July 2020. Genlith identifies and structures investments in the new energy economy through corporate ventures, advisory and fund management. Impairment losses based on a significant deterioration in the earnings performance and business prospects of the investee recorded in the nine months ended September 30, 2024 were $111,958. The Company’s investment in Genlith totaled $200,000 and $311,958 at September 30, 2024, and December 31, 2023, respectively. OKC Industrial Properties, LC (“OKC”), with a 10% ownership, was acquired in 1992. OKC originally owned approximately 260 acres of undeveloped land in north Oklahoma City. In March 2023, OKC sold 10 acres, resulting in a gain of $290,000 for the Company. There was no basis adjustment in accordance with the sale and there is approximately 13 acres of land remaining. The Company’s investment in OKC totaled $67,482 at September 30, 2024, and December 31, 2023. Grand Woods holds approximately 26.56 acres of undeveloped real estate in northeast Oklahoma City. The accumulated costs of the land totaled $2,171,828 at September 30, 2024, and December 31, 2023. See Note 5 for information related to Grand Woods. Victorum Capital Club (“VCC”) invests in and manages special purpose investment vehicles that hold investments in various startup companies. The Company participates with minority ownership in an assortment of investments held with VCC. Impairment losses based on a significant deterioration in the earnings performance and business prospects of the investee recorded in the nine months ended September 30, 2024 were $139,743. The Company’s investment in VCC special purpose investment vehicles totaled $227,306 and $357,259 at September 30, 2024, and December 31, 2023, respectively. VCC Venture Fund I, LP (“VCC Venture”), with less than 2% ownership, serves as a limited partnership to be used for investments in start-up entities and is managed by Victorum Capital Club. The Company committed to a $250,000 investment in VCC Venture. The Company’s investment in VCC Venture totaled $125,000 and $93,750 at September 30, 2024, and December 31, 2023, respectively. The balance at September 30, 2024, represents 50.00% of the Company's capital commitment. Cortado Ventures Fund II-A, LP (“Cortado II-A”), with less than 2% ownership, serves as a limited partnership to be used for investments in start-up entities and is managed by Cortado Capital II, LLC. The Company committed to a $1,000,000 investment in Cortado II-A on June 20, 2023. The Company’s investment in Cortado II-A totaled $600,000 and $500,000 at September 30, 2024, and December 31, 2023, respectively. The balance at September 30, 2024, represents 60.00% of the Company's capital commitment. Cypress MWC, LLC ("Cypress"), with 15% ownership, acquired in 2024, is a town home development in Midwest City, Oklahoma. The Company committed to a $750,000 investment in Cypress. The Company’s investment in Cypress totaled $225,000 at September 30, 2024, which represents 30.00% of the Company's capital commitment.

NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2024

Noncontrolling Interest [Abstract]

NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

Note 5 – NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

Assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation.


	September 30, 2024
	Grand Woods		TWS		Total
Assets:
Cash	$	98,306	$	85,410	$	183,716
Total Current Assets	98,306		85,410		183,716
Other Investments (Land)	2,171,828		—		2,171,828
Total Assets	$	2,270,134	$	85,410	$	2,355,544

Liabilities:
Note Payable, Current Portion	146,667		—		146,667
Total Current Liabilities	146,667		—		146,667
Note Payable, Less Current Portion	1,048,211		—		1,048,211
Total Liabilities	$	1,194,878	$	—	$	1,194,878


	December 31, 2023
	Grand Woods		TWS		Total
Assets:
Cash	$	138,690	$	154,653	$	293,343
Accounts Receivable	—		640		640
Total Current Assets	138,690		155,293		293,983
Other Investments (Land)	2,171,828		—		2,171,828
Other Property and Equipment, at Cost	—		471,219		471,219
Less – Accumulated Depreciation	—		(168,274)		(168,274)
Other Property and Equipment, Net	—		302,945		302,945
Total Assets	$	2,310,518	$	458,238	$	2,768,756

Liabilities:
Accounts Payable	$	—	$	398	$	398
Note Payable, Current Portion	142,136		—		142,136
Total Current Liabilities	142,136		398		142,534
Note Payable, Less Current Portion	1,158,736		—		1,158,736
Total Liabilities	$	1,300,872	$	398	$	1,301,270

NOTE PAYABLE

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

NOTE PAYABLE

Note 6 – NOTE PAYABLE

Below is a schedule of future principal payments on the outstanding Note at September 30, 2024:


Years Ending December 31,	Principal Payments
2024	$	36,142
2025	148,155
2026	1,010,581
Total	$	1,194,878

PROVISION FOR INCOME TAXES	9 Months Ended
PROVISION FOR INCOME TAXES	Sep. 30, 2024
Income Tax Disclosure [Abstract]
PROVISION FOR INCOME TAXES	Note 7 – PROVISION FOR INCOME TAXES In 2024 and 2023, the effective tax rates differed from the statutory rate due to temporary differences in taxable and deductible items included in deferred taxes. Excess federal percentage depletion, which is limited to certain production volumes and by certain income levels, reduces estimated taxable income projected for any year. The federal excess percentage depletion estimates will be updated throughout the year until finalized with the detail well-by-well calculations at year-end. When a provision for income taxes is recorded, federal excess percentage depletion benefits decrease the effective tax rate. When a benefit for income taxes is recorded, federal excess percentage depletion benefits increase the effective tax rate. The benefit of federal excess percentage depletion is not directly related to the amount of pre-tax income recorded in a period. Accordingly, in periods where a recorded pre-tax income is relatively small, the proportional effect of these items on the effective tax rate may be significant.

ASSET RETIREMENT OBLIGATION

9 Months Ended

Sep. 30, 2024

Asset Retirement Obligation [Abstract]

ASSET RETIREMENT OBLIGATION

Note 8 – ASSET RETIREMENT OBLIGATION

A reconciliation of the Company’s asset retirement obligation liability is as follows:


Balance at December 31, 2023	$	2,566,368
Revision to estimate	(387,374)
Accretion expense	124,940
Balance at September 30, 2024	$	2,303,934

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Note 9 – FAIR VALUE MEASUREMENTS

Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

Level 3 – Unobservable inputs that reflect the Company’s own assumptions.

Recurring Fair Value Measurements


	September 30, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities	$	3,175,973	$	—	$	—
International Equities	97,962		—		—
Others	—		—		763,134
Total	$	3,273,935	$	—	$	763,134


	December 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities – U.S.
Treasury Bills Maturing within 1 Year	$	—	$	2,220,901	$	—
Equity Securities:
Domestic Equities	2,321,275		—		—
International Equities	130,005		—		—
Others	212,786		—		—
Total	$	2,664,066	$	2,220,901	$	—

A reconciliation to the balance sheet equity securities is as follows:


	September 30, 2024		December 31, 2023
Level 1 Assets	$	3,273,935	$	2,664,066
Level 2 Assets	—		2,220,901
Level 3 Assets	763,134		—
Assets using NAV as a practical expedient, with a remaining commitment of $175,924	151,006		—
Total	$	4,188,075	$	4,884,967

A roll forward of the Company’s level 3 investments is as follows:


	Balance
Nine Months Ended September 30, 2024
Balance as of December 31, 2023	$	—
Purchases	767,907
Changes in Unrealized Gain/(Loss) included in Other Income, net	(4,773)
Balance as of September 30, 2024	$	763,134

Remaining Unfunded Commitments	$	—

Non-Recurring Fair Value Measurements

Fair Value of Other Financial Instruments

Pay vs Performance Disclosure - USD ($)	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income/(Loss)	$ 1,749,907	$ 617,509	$ 3,525,494	$ 1,500,781

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

BASIS OF PRESENTATION (Policies)	9 Months Ended
BASIS OF PRESENTATION (Policies)	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The Reserve Petroleum Company, a Delaware corporation, is an independent oil and gas company engaged in oil and natural gas exploration, development and minerals management with areas of concentration in Arkansas, Kansas, Oklahoma, South Dakota, Texas and Wyoming, a single business segment. The Company is also engaged in investments that are not significant business segments. The Company’s consolidated entities consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and Trinity Water Services, LLC ("TWS"), an Oklahoma limited liability company. Unless otherwise specified or the context otherwise requires, all references in these notes to “the Company,” “its,” “our,” and “we” are to The Reserve Petroleum Company and its consolidated entities. The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of The Reserve Petroleum Company and variable interest entities (“VIEs”) in which the Company holds a controlling interest, reflecting ownership of a majority of the voting interest, as of the financial statement date. Additionally, the Company consolidates VIEs under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. When necessary, reclassifications that are not material to the consolidated financial statements are made to prior period financial information to conform to the current year presentation. These reclassifications had no impact on net income or retained earnings. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC (the “2023 Form 10-K”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals), which are necessary for a fair statement of the results of the interim periods presented. The results of operations for the current interim periods are not necessarily indicative of the operating results for the full year.
Variable Interest Entities	Variable Interest Entities The Company decides at the inception of each arrangement whether an entity in which an investment is made or in which we have other variable interests is considered a VIE. Generally, an entity is a VIE if (1) the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties, (2) the entity’s investors lack any characteristics of a controlling financial interest or (3) the entity was established with non-substantive voting rights. The Company consolidates VIEs when the Company is deemed to be the primary beneficiary. The primary beneficiary of a VIE is generally the party that both: (1) has the power to make decisions that most significantly affect the economic performance of the VIE and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. If the Company is not deemed to be the primary beneficiary of a VIE, the Company accounts for the investment or other variable interests in such VIEs in accordance with applicable GAAP.
Non-Controlling Interests	Non-Controlling Interests When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the entity are included in the consolidated financial statements. For those consolidated entities in which the Company’s ownership is less than 100%, the Company records a non-controlling interest as a component of equity on the consolidated balance sheets, which represents the third-party ownership in the net assets of the respective consolidated entity. Additionally, the portion of the net income or loss attributable to the non-controlling interest is reported as net income (loss) attributable to non-controlling interest on the consolidated statements of income. Changes in ownership interests in an entity that do not result in deconsolidation are generally recognized within equity. See Note 5 for additional details on non-controlling interests.
New Accounting Pronouncements	New Accounting Pronouncements In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 intends to provide investors with enhanced information about an entity’s income taxes by requiring disclosure of items such as disaggregation of the effective tax rate reconciliation as well as information regarding income taxes paid. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow. In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segments Disclosures. Under this ASU, the scope and frequency of segment disclosures is increased to provide investors with additional detail about information utilized by an entity’s “Chief Operating Decision Maker.” This ASU is effective for annual reporting periods beginning after December 15, 2024, and interim periods beginning in 2025. The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow. In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. This ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting Standards Codification Master Glossary. While joint ventures are defined in the Master Glossary, there has been no specific guidance in the Codification that applies to the formation accounting by a joint venture in its separate financial statements. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The Company does not anticipate the adoption of this update to have a material impact on the Company’s financial position, results of operations or cash flow.
Fair Value Measurements	The Company uses a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable. Level 3 – Unobservable inputs that reflect the Company’s own assumptions. Recurring Fair Value Measurements Certain assets of the Company are reported at fair value in the accompanying consolidated balance sheets on a recurring basis. The Company determined the fair value of equity securities and available-for-sale debt securities using quoted market prices, public Net Asset Values ("NAV") and where applicable, securities with similar maturity dates and interest rates. Level 3 assets use NAV as fair value. Non-Recurring Fair Value Measurements The Company’s asset retirement obligation annually represents a non-recurring fair value liability, for which there were no liabilities incurred in the nine months ended September 30, 2024 or 2023. See Note 8 above for more information about this liability and the inputs used for calculating fair value. Equity method and other investments are evaluated for impairment at each reporting period. Please see Note 4 for information related to impairment of investments. There were no Impairment losses recorded on oil and gas assets in the nine months ended September 30, 2024. Impairment losses recorded on oil and gas assets in the nine months ended September 30, 2023 were $443,456. This also relates to non-recurring fair value measurements calculated using Level 3 inputs. Certain oil and natural gas producing properties have been deemed to be impaired because the assets, evaluated on a property-by-property basis, are not expected to recover their entire carrying value through future cash flows. Impairment losses, when recorded, are included in the consolidated statements of income in the line-item Depreciation, Depletion, Amortization and Valuation Provision. Impairments are calculated by reducing the carrying value of the individual properties to an estimated fair value equal to the discounted present value of the future cash flow from these properties. Forward pricing is used for calculating future revenue and cash flow. Fair Value of Other Financial Instruments The Company’s other financial instruments consist primarily of cash and cash equivalents, trade receivables, and trade payables. At September 30, 2024, and December 31, 2023, the historical cost of cash and cash equivalents, trade receivables and trade payables are considered to be representative of their respective fair values due to the short-term liquidity or maturities of these items.

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2024

Revenue Recognition [Abstract]

Schedule of Disaggregation of Revenue

The following is an analysis of the components of oil and natural gas sales:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Oil Sales	$	3,153,936	$	2,484,260	$	8,740,819	$	7,023,759
Natural Gas Sales	572,784		459,963		1,717,843		1,431,795
Miscellaneous Oil and Gas Product Sales	148,076		64,262		264,400		195,827
Total	$	3,874,796	$	3,008,485	$	10,723,062	$	8,651,381

OTHER INCOME, NET (Tables)

9 Months Ended

Sep. 30, 2024

Other Income and Expenses [Abstract]

Schedule of Components of Other Income, Net

The following is an analysis of the components of Other Income, Net:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Realized and Unrealized Gain/(Loss), Equity Securities	$	359,668	$	(40,080)	$	1,227,170	$	97,151
Gain on Other Asset Sales	37,924		—		37,924		—
Interest Income	38,101		112,568		166,826		348,133
Dividend Income	32,247		13,906		77,430		40,794
Loss on Deconsolidation of TWS South, LLC	—		—		(296,717)		—
Impairment of Other Investments	—		—		(318,894)		—
Income from Other Investments	12,165		20,917		38,695		350,014
Miscellaneous Income/(Expenses)	(46,727)		(14,832)		(92,716)		13,929
Other Income, Net	$	433,378	$	92,479	$	839,718	$	850,021

NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2024

Noncontrolling Interest [Abstract]

Schedule of Variable Interest Entities

Assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation.


	September 30, 2024
	Grand Woods		TWS		Total
Assets:
Cash	$	98,306	$	85,410	$	183,716
Total Current Assets	98,306		85,410		183,716
Other Investments (Land)	2,171,828		—		2,171,828
Total Assets	$	2,270,134	$	85,410	$	2,355,544

Liabilities:
Note Payable, Current Portion	146,667		—		146,667
Total Current Liabilities	146,667		—		146,667
Note Payable, Less Current Portion	1,048,211		—		1,048,211
Total Liabilities	$	1,194,878	$	—	$	1,194,878


	December 31, 2023
	Grand Woods		TWS		Total
Assets:
Cash	$	138,690	$	154,653	$	293,343
Accounts Receivable	—		640		640
Total Current Assets	138,690		155,293		293,983
Other Investments (Land)	2,171,828		—		2,171,828
Other Property and Equipment, at Cost	—		471,219		471,219
Less – Accumulated Depreciation	—		(168,274)		(168,274)
Other Property and Equipment, Net	—		302,945		302,945
Total Assets	$	2,310,518	$	458,238	$	2,768,756

Liabilities:
Accounts Payable	$	—	$	398	$	398
Note Payable, Current Portion	142,136		—		142,136
Total Current Liabilities	142,136		398		142,534
Note Payable, Less Current Portion	1,158,736		—		1,158,736
Total Liabilities	$	1,300,872	$	398	$	1,301,270

NOTE PAYABLE (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Future Principal Payments

Below is a schedule of future principal payments on the outstanding Note at September 30, 2024:


Years Ending December 31,	Principal Payments
2024	$	36,142
2025	148,155
2026	1,010,581
Total	$	1,194,878

ASSET RETIREMENT OBLIGATION (Tables)

9 Months Ended

Sep. 30, 2024

Asset Retirement Obligation [Abstract]

Schedule of Asset Retirement Obligations

A reconciliation of the Company’s asset retirement obligation liability is as follows:


Balance at December 31, 2023	$	2,566,368
Revision to estimate	(387,374)
Accretion expense	124,940
Balance at September 30, 2024	$	2,303,934

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Reported on a Recurring Basis

At September 30, 2024, and December 31, 2023, the Company’s assets reported at fair value on a recurring basis are summarized as follows:


	September 30, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities	$	3,175,973	$	—	$	—
International Equities	97,962		—		—
Others	—		—		763,134
Total	$	3,273,935	$	—	$	763,134


	December 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities – U.S.
Treasury Bills Maturing within 1 Year	$	—	$	2,220,901	$	—
Equity Securities:
Domestic Equities	2,321,275		—		—
International Equities	130,005		—		—
Others	212,786		—		—
Total	$	2,664,066	$	2,220,901	$	—

A reconciliation to the balance sheet equity securities is as follows:


	September 30, 2024		December 31, 2023
Level 1 Assets	$	3,273,935	$	2,664,066
Level 2 Assets	—		2,220,901
Level 3 Assets	763,134		—
Assets using NAV as a practical expedient, with a remaining commitment of $175,924	151,006		—
Total	$	4,188,075	$	4,884,967

A roll forward of the Company’s level 3 investments is as follows:


	Balance
Nine Months Ended September 30, 2024
Balance as of December 31, 2023	$	—
Purchases	767,907
Changes in Unrealized Gain/(Loss) included in Other Income, net	(4,773)
Balance as of September 30, 2024	$	763,134

Remaining Unfunded Commitments	$	—

REVENUE RECOGNITION - Narrative (Details)	Sep. 30, 2024 USD ($) source	Sep. 30, 2023 USD ($)
Revenue Recognition [Abstract]
Estimate of oil and natural gas payments not yet received \| $	$ 2,787,041	$ 1,686,369
Number of revenue sources \| source	2

REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total	$ 3,874,796	$ 3,008,485	$ 10,723,062	$ 8,651,381
Oil Sales
Disaggregation of Revenue [Line Items]
Total	3,153,936	2,484,260	8,740,819	7,023,759
Natural Gas Sales
Disaggregation of Revenue [Line Items]
Total	572,784	459,963	1,717,843	1,431,795
Miscellaneous Oil and Gas Product Sales
Disaggregation of Revenue [Line Items]
Total	$ 148,076	$ 64,262	$ 264,400	$ 195,827

OTHER INCOME, NET (Details) - USD ($)	3 Months Ended		9 Months Ended
OTHER INCOME, NET (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Other Income and Expenses [Abstract]
Net Realized and Unrealized Gain/(Loss), Equity Securities	$ 359,668	$ (40,080)	$ 1,227,170	$ 97,151
Gain on Other Asset Sales	37,924	0	37,924	0
Interest Income	38,101	112,568	166,826	348,133
Dividend Income	32,247	13,906	77,430	40,794
Loss on Deconsolidation of TWS South, LLC	0	0	(296,717)	0
Impairment of Other Investments	0	0	(318,894)	0
Income from Other Investments	12,165	20,917	38,695	350,014
Miscellaneous Income/(Expenses)	(46,727)	(14,832)	(92,716)	13,929
Other Income, Net	$ 433,378	$ 92,479	$ 839,718	$ 850,021

INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTIES (Details)

1 Months Ended

3 Months Ended

9 Months Ended

Jun. 20, 2023

USD ($)

Nov. 30, 2023

Mar. 31, 2023

USD ($)

Aug. 31, 2021

Sep. 30, 2024

USD ($)

Sep. 30, 2024

USD ($)

Sep. 30, 2023

USD ($)

Dec. 31, 2023

USD ($)

May 31, 2022

Property

Dec. 31, 2021

Jul. 31, 2020

Dec. 31, 2019

Dec. 31, 2016

USD ($)

Dec. 31, 2008

Dec. 31, 1992

Schedule of Equity Method Investments [Line Items]

Equity method investments

^[1]

$ 2,769,164

$ 2,818,790

Other Investments

^[1]

5,227,657

5,332,553

Corporate Office from Broadway

Schedule of Equity Method Investments [Line Items]

Rent expense

33,537

$ 35,606

Equity method investments

$ 107,813

123,901

Broadway 68

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

33.00%

Broadway 72

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

40.00%

Equity method investments

$ 1,064,351

1,075,782

QSN

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

20.00%

Equity method investments

308,632

307,325

QSN | Development Loan

Schedule of Equity Method Investments [Line Items]

Value of guaranteed loans

$ 860,000

QSN | Construction Loan

Schedule of Equity Method Investments [Line Items]

Value of guaranteed loans

$ 585,000

Stott's Mill

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

50.00%

Number of residential lots | Property

Other Investments

686,428

708,179

BHR2

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

15.06%

Other Investments

601,940

603,603

Annual return on investment (as a percent)

11.00%

Bailey

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

10.00%

Other Investments

6,184

77,377

Impairment charges

67,193

Cloudburst

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

12.99%

Other Investments

1,596,007

Genlith

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

5.15%

Other Investments

200,000

311,958

Impairment charges

111,958

OKC

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

10.00%

Other Investments

$ 67,482

67,482

Area of land (acre) | a

260

OKC Industrial Properties Sold

Schedule of Equity Method Investments [Line Items]

Area of land (acre) | a

Proceeds from sale of land

$ 290,000

$ 0

Grand Woods

Schedule of Equity Method Investments [Line Items]

Area of land (acre) | a

26.56

Other Investments (Land)

$ 2,171,828

2,171,828

VCC | Oil and Gas, Special Investment Vehicles

Schedule of Equity Method Investments [Line Items]

Impairment charges

139,743

Special investment vehicles

$ 227,306

357,259

VCC Venture

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

2.00%

Other Investments

$ 125,000

93,750

Committed investment

$ 250,000

Committed investment ratio (as a percent)

50.00%

Cortado II-A

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

2.00%

Other Investments

$ 600,000

$ 500,000

Committed investment

$ 1,000,000

Committed investment ratio (as a percent)

60.00%

Cypress Member

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

15.00%

Other Investments

$ 225,000

Committed investment

$ 750,000

Committed investment ratio (as a percent)

30.00%

[1]

NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES - Narrative (Details)

1 Months Ended

3 Months Ended

9 Months Ended

Mar. 19, 2021

USD ($)

Sep. 30, 2024

USD ($)

Sep. 30, 2024

USD ($)

Sep. 30, 2023

USD ($)

Sep. 30, 2024

USD ($)

Sep. 30, 2023

USD ($)

Apr. 19, 2024

USD ($)

Dec. 31, 2023

USD ($)

Sep. 15, 2022

USD ($)

Variable Interest Entity [Line Items]

Other Property and Equipment, Net

^[1]

$ 168,394

$ 514,378

Net Income/(Loss)

1,749,907

$ 617,509

3,525,494

$ 1,500,781

Accounts Receivable, Net of Allowance for Credit Losses

^[1]

2,342,087

2,366,663

Liabilities

^[1]

$ 5,866,845

5,866,845

5,637,386

Deconsolidation, loss

$ 0

$ 296,717

$ 0

Common Class A

Variable Interest Entity [Line Items]

Units owned (in shares) | shares

47.08

Common Class C

Variable Interest Entity [Line Items]

Units owned (in shares) | shares

546,735

Grand Woods

Variable Interest Entity [Line Items]

Area of land (acre) | a

26.56

Variable Interest Entity, Primary Beneficiary | TWS

Variable Interest Entity [Line Items]

Other Property and Equipment, Net

$ 330,000

$ 296,717

302,945

Cash

70,000

$ 85,410

89,812

154,653

Net income agreement total

$ 300,000

Variable interest entity multiplier net profits

1.2

Investments in and advance to affiliates, subsidiaries, associates, and joint ventures

1,150,000

Net Income/(Loss)

1,016,676

Accounts Receivable, Net of Allowance for Credit Losses

465,977

640

Liabilities

$ 0

$ 398

Deconsolidation, loss

296,717

Loss contingency, damages sought, value

1,000,000

Accounts receivable, allowance for credit loss

465,977

Variable Interest Entity, Primary Beneficiary | Secured Debt | Partial recourse

Variable Interest Entity [Line Items]

Guaranty issued by company

$ 1,200,000

Variable Interest Entity, Primary Beneficiary | Grand Woods

Variable Interest Entity [Line Items]

Ownership (as a percent)

80.37%

Variable Interest Entity, Primary Beneficiary | Grand Woods | Executive Officer

Variable Interest Entity [Line Items]

Ownership (as a percent)

8.72%

[1]

NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES - Schedule of Variable Interest Entities (Details) - USD ($)

Sep. 30, 2024

Apr. 19, 2024

Dec. 31, 2023

Mar. 19, 2021

Assets:

Accounts Receivable

^[1]

$ 2,342,087

$ 2,366,663

Total Current Assets

^[1]

10,630,160

12,787,859

Other Property and Equipment, at Cost

^[1]

348,270

820,965

Other Property and Equipment, Net

^[1]

168,394

514,378

Total Assets

^[1]

38,464,481

36,386,990

Liabilities:

Accounts Payable

^[1]

47,086

537,796

Note Payable, Current Portion

^[1]

146,667

142,136

Total Current Liabilities

^[1]

256,804

692,771

Note Payable, Less Current Portion

^[1]

1,048,211

1,158,736

Liabilities

^[1]

5,866,845

5,637,386

Variable Interest Entity, Primary Beneficiary | Total

Assets:

Cash

183,716

293,343

Accounts Receivable

640

Total Current Assets

183,716

293,983

Other Investments (Land)

2,171,828

Other Property and Equipment, at Cost

471,219

Less – Accumulated Depreciation

(168,274)

Other Property and Equipment, Net

302,945

Total Assets

2,355,544

2,768,756

Liabilities:

Accounts Payable

398

Note Payable, Current Portion

146,667

142,136

Total Current Liabilities

146,667

142,534

Note Payable, Less Current Portion

1,048,211

1,158,736

Liabilities

1,194,878

1,301,270

Variable Interest Entity, Primary Beneficiary | Grand Woods

Assets:

Cash

98,306

138,690

Accounts Receivable

Total Current Assets

98,306

138,690

Other Investments (Land)

2,171,828

Other Property and Equipment, at Cost

Less – Accumulated Depreciation

Other Property and Equipment, Net

Total Assets

2,270,134

2,310,518

Liabilities:

Accounts Payable

Note Payable, Current Portion

146,667

142,136

Total Current Liabilities

146,667

142,136

Note Payable, Less Current Portion

1,048,211

1,158,736

Liabilities

1,194,878

1,300,872

Variable Interest Entity, Primary Beneficiary | TWS

Assets:

Cash

85,410

$ 89,812

154,653

$ 70,000

Accounts Receivable

465,977

640

Total Current Assets

85,410

155,293

Other Investments (Land)

Other Property and Equipment, at Cost

471,219

Less – Accumulated Depreciation

(168,274)

Other Property and Equipment, Net

296,717

302,945

$ 330,000

Total Assets

458,238

Liabilities:

Accounts Payable

398

Note Payable, Current Portion

Total Current Liabilities

398

Note Payable, Less Current Portion

Liabilities

$ 0

$ 398

[1]

NOTE PAYABLE - Narrative (Details) - USD ($)

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

Dec. 31, 2023

Sep. 15, 2022

Debt Instrument [Line Items]

Note Payable, Current Portion

^[1]

$ 146,667

$ 142,136

Notes Payable

Debt Instrument [Line Items]

Interest rate (as a percent)

4.00%

Monthly principal payment

$ 16,034

Note payable

1,194,878

$ 1,300,872

Interest paid

$ 38,314

$ 42,386

Pay down requirement included in covenant (as a percent)

90.00%

Remaining portion of pay down covenant (as a percent)

10.00%

Secured Debt | Variable Interest Entity, Primary Beneficiary | Partial recourse

Debt Instrument [Line Items]

Guaranty issued by company

$ 1,200,000

[1]

NOTE PAYABLE - Schedule of Future Principal Payments (Details) - Notes Payable - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
2024	$ 36,142
2025	148,155
2026	1,010,581
Total	$ 1,194,878	$ 1,300,872

ASSET RETIREMENT OBLIGATION - Narrative (Details)	9 Months Ended
ASSET RETIREMENT OBLIGATION - Narrative (Details)	Sep. 30, 2024
Asset Retirement Obligation [Abstract]
Current year inflation (as a percent)	2.50%
Change in net present value (as a percent)	7.50%

ASSET RETIREMENT OBLIGATION - Schedule of Asset Retirement Obligation (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Beginning balance	$ 2,566,368
Revision to estimate	(387,374)	$ (5,793)
Accretion expense	124,940	$ 54,664
Ending balance	$ 2,303,934

FAIR VALUE MEASUREMENTS - Schedule of Fair Value Reported on a Recurring Basis (Details) - USD ($)

Sep. 30, 2024

Dec. 31, 2023

Fair Value, Option, Quantitative Disclosures [Line Items]

Available-for-Sale Debt Securities

^[1]

$ 0

$ 2,220,901

Equity Securities

^[1]

4,188,075

2,664,066

Total assets measured at fair value

4,188,075

4,884,967

Level 1 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

3,273,935

2,664,066

Level 1 Inputs | Fair Value, Recurring

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

3,273,935

2,664,066

Level 1 Inputs | Fair Value, Recurring | Treasury Bills Maturing within 1 Year

Fair Value, Option, Quantitative Disclosures [Line Items]

Available-for-Sale Debt Securities

Level 1 Inputs | Fair Value, Recurring | Domestic Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

3,175,973

2,321,275

Level 1 Inputs | Fair Value, Recurring | International Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

97,962

130,005

Level 1 Inputs | Fair Value, Recurring | Others

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

212,786

Level 2 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

2,220,901

Level 2 Inputs | Fair Value, Recurring

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

2,220,901

Level 2 Inputs | Fair Value, Recurring | Treasury Bills Maturing within 1 Year

Fair Value, Option, Quantitative Disclosures [Line Items]

Available-for-Sale Debt Securities

2,220,901

Level 2 Inputs | Fair Value, Recurring | Domestic Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Level 2 Inputs | Fair Value, Recurring | International Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Level 2 Inputs | Fair Value, Recurring | Others

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Level 3 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

763,134

Level 3 Inputs | Fair Value, Recurring

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

763,134

Level 3 Inputs | Fair Value, Recurring | Treasury Bills Maturing within 1 Year

Fair Value, Option, Quantitative Disclosures [Line Items]

Available-for-Sale Debt Securities

Level 3 Inputs | Fair Value, Recurring | Domestic Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Level 3 Inputs | Fair Value, Recurring | International Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Level 3 Inputs | Fair Value, Recurring | Others

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

$ 763,134

$ 0

[1]

FAIR VALUE MEASUREMENTS - Schedule of Balance Sheet Equity Securities (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Fair Value, Option, Quantitative Disclosures [Line Items]
Total assets measured at fair value	$ 4,188,075	$ 4,884,967
Level 1 Inputs
Fair Value, Option, Quantitative Disclosures [Line Items]
Total assets measured at fair value	3,273,935	2,664,066
Level 2 Inputs
Fair Value, Option, Quantitative Disclosures [Line Items]
Total assets measured at fair value	0	2,220,901
Level 3 Inputs
Fair Value, Option, Quantitative Disclosures [Line Items]
Total assets measured at fair value	763,134	0
Assets using NAV as a practical expedient, with a remaining commitment of $175,924
Fair Value, Option, Quantitative Disclosures [Line Items]
Total assets measured at fair value	151,006	$ 0
Liabilities, fair value disclosure	$ 175,924

FAIR VALUE MEASUREMENTS - Narrative (Details)	9 Months Ended
FAIR VALUE MEASUREMENTS - Narrative (Details)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Total assets measured at fair value	$ 4,188,075		$ 4,884,967
Stock repurchase program, portion of shares authorized to be repurchased, limit	0.05
Asset retirement obligation, liabilities incurred	$ 0	$ 0
Fair Value, Nonrecurring
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Impairment of oil and natural gas producing properties	0	$ 443,456
Level 3 Inputs
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Total assets measured at fair value	$ 763,134		$ 0

FAIR VALUE MEASUREMENTS - Schedule of Level 3 Investments (Details)	9 Months Ended
	Sep. 30, 2024 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 0
Purchases	767,907
Changes in Unrealized Gain/(Loss) included in Other Income, net	(4,773)
Ending balance	763,134
Remaining Unfunded Commitments	$ 0

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