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 March 31, 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 May 6, 2024, 154,779 shares of the Registrant’s $0.50 par value common stock were outstanding.

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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	11
	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	20
Item 4.	Controls and Procedures	20

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities , Use of Proceeds , and Purchases of Equity Securit ies	21
Item 3.	Defaults Upon Senior Securities	21
Item 4.	Mine Safety Disclosures	21
Item 5.	Other Information	21
Item 6.	Exhibits	21

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PART I – FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

THE RESERVE PETROLEUM COMPANY

CONSOLIDATED BALANCE SHEETS (1)

(Unaudited)

ASSETS


	March 31, 2024		December 31, 2023
Current Assets:
Cash and Cash Equivalents	$	5,813,110	$	5,218,474
Available-for-Sale Debt Securities	—		2,220,901
Equity Securities	2,764,073		2,664,066
Refundable Income Taxes	614,025		317,755
Accounts Receivable	2,184,635		2,366,663
Total Current Assets	11,375,843		12,787,859

Investments:
Equity Method Investments	2,810,745		2,818,790
Other Investments	5,553,553		5,332,553
Total Investments	8,364,298		8,151,343

Property, Plant and Equipment:
Oil and Gas Properties, at Cost,
Based on the Successful Efforts Method of Accounting –
Unproved Properties	4,906,773		3,403,051
Proved Properties	70,976,987		69,152,923
Oil and Gas Properties, Gross	75,883,760		72,555,974
Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance	(58,070,746)		(57,622,564)
Oil and Gas Properties, Net	17,813,014		14,933,410
Other Property and Equipment, at Cost	833,681		820,965
Less – Accumulated Depreciation	(339,502)		(306,587)
Other Property and Equipment, Net	494,179		514,378
Total Property, Plant and Equipment, Net	18,307,193		15,447,788
Total Assets	$	38,047,334	$	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


	March 31, 2024		December 31, 2023

Current Liabilities:
Accounts Payable	$	1,182,001	$	537,796
Other Current Liabilities	59,147		12,839
Note Payable, Current Portion	143,704		142,136
Total Current Liabilities	1,384,852		692,771

Long-Term Liabilities:
Asset Retirement Obligation	2,220,023		2,566,368
Deferred Tax Liability, Net	1,966,506		1,219,511
Note Payable, Less Current Portion	1,122,104		1,158,736
Total Long-Term Liabilities	5,308,633		4,944,615
Total Liabilities	6,693,485		5,637,386

Equity:
Common Stock	92,368		92,368
Additional Paid-in Capital	65,000		65,000
Retained Earnings	32,949,074		32,212,066
Equity Before Treasury Stock	33,106,442		32,369,434
Less – Treasury Stock, at Cost	(1,946,547)		(1,820,527)
Total Equity Applicable to The Reserve Petroleum Company	31,159,895		30,548,907
Non-Controlling Interests	193,954		200,697
Total Equity	31,353,849		30,749,604
Total Liabilities and Equity	$	38,047,334	$	36,386,990

(1) At March 31, 2024 and December 31, 2023, includes approximately $3,130,642 and $2,768,756, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,310,615 and $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Operating Revenues:
Oil and Gas Sales	$	3,011,642	$	2,935,441
Water Well Drilling Services	615,480		164,200
Total Operating Revenues	3,627,122		3,099,641

Operating Costs and Expenses:
Production	966,151		1,056,749
Exploration	159,199		374,348
Water Well Drilling Services	378,589		184,727
Depreciation, Depletion, Amortization and Valuation Provision	509,169		934,733
General, Administrative and Other	674,136		595,435
Total Operating Costs and Expenses	2,687,244		3,145,992
Income/(Loss) from Operations	939,878		(46,351)
Equity Income in Investees	23,541		31,656
Interest Expense	(16,788)		(16,953)
Other Income, Net	219,609		568,833
Income Before Income Taxes and Non-Controlling Interests	1,166,240		537,185
Income Tax Provision/(Benefit):
Current	(307,271)		11,534
Deferred	746,995		121,913
Total Income Tax Provision	439,724		133,447
Net Income	$	726,516	$	403,738
Less: Net Loss Attributable to Non-Controlling Interests	(10,492)		(8,921)
Net Income Attributable to Common Stockholders	$	737,008	$	412,659

Per Share Data
Net Income Attributable to Common Stockholders, Basic	$	4.75	$	2.64
Cash Dividends Declared and/or Paid	$	—	$	—
Weighted Average Shares Outstanding, Basic	155,151		156,157

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 March 31, 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)	—		—		737,008		—		(10,492)		726,516
Purchase of Treasury Stock	—		—		—		(126,020)		—		(126,020)
Contributions	—		—		—		—		3,749		3,749
Balance as of March 31, 2024	$	92,368	$	65,000	$	32,949,074	$	(1,946,547)	$	193,954	$	31,353,849

Three Months Ended March 31, 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)	—		—		412,659		—		(8,921)		403,738
Contributions	—		—		—		—		23,298		23,298
Balance as of March 31, 2023	$	92,368	$	65,000	$	34,241,077	$	(1,749,858)	$	163,811	$	32,812,398

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2024		2023

Cash Provided by/(Applied to) Operating Activities:
Net Income	$	726,516	$	403,738
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion, Amortization and Valuation Provisions	509,169		934,733
Depreciation Attributable to TWS	18,973		18,154
Accretion of Asset Retirement Obligation	41,029		18,221
Expired Leases	6,265		(1,440)
Cash Distributions from Equity Method Investees	20,000		—
Gain on Equity Method and Other Investments	(6,905)		(256,966)
Net (Gain)/Loss on Equity Securities	(133,691)		(82,634)
Deferred Income Tax Expense	746,995		121,913
Change in Receivables	(114,242)		663,415
Change in Accounts Payable and Other Current Liabilities	(209,911)		(233,667)
Net Cash Provided by Operating Activities	$	1,604,198	$	1,585,467

Cash Provided by/(Applied to) Investing Activities:
Maturity of Available-for-Sale Debt Securities	$	2,534,727	$	1,151,965
Purchase of Available-for-Sale Debt Securities	(313,826)		(2,312,854)
Purchase of Property, Plant and Equipment	(2,880,762)		(847,636)
Purchase of Investments	(230,050)		(110,232)
Cash Distributions from Equity Method and Other Investments	4,000		320,998
Sale of Equity Securities	2,361,375		151,518
Purchase of Equity Securities	(2,327,691)		(556,029)
Net Cash Applied to Investing Activities	$	(852,227)	$	(2,202,270)

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Unaudited)


	Three Months Ended March 31,
	2024		2023

Cash Provided by/(Applied to) Financing Activities:
Purchase of Treasury Stock	(126,020)		—
Principal Payments on Note Payable	(35,064)		(33,835)
Capital Contributions from Non-Controlling Interests	3,749		23,298
Total Cash Applied to Financing Activities	(157,335)		(10,537)
Net Change in Cash and Cash Equivalents	594,636		(627,340)
Cash and Cash Equivalents, Beginning of Period	5,218,474		7,299,224
Cash and Cash Equivalents, End of Period	$	5,813,110	$	6,671,884

Supplemental Disclosures of Cash Flow Information:
Interest Paid	$	13,039	$	14,268
Income Taxes Paid (Net of Refunds Received)	$	(11,201)	$	100

Supplemental Schedule of Noncash Investing and Financing Activities:
Net Increase in Accounts Payable for Property, Plant and Equipment Additions	$	(900,424)	$	(102,166)
Net Decreases in Asset Retirement Obligation	$	387,374	$	5,763

See accompanying notes to unaudited consolidated financial statements

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THE RESERVE PETROLEUM COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 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 and joint ventures that are not significant business segments. The Company’s consolidated subsidiaries consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and wholly owned 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 subsidiaries.

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 its subsidiaries 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 Variable Interest Entities (“VIEs”) under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation.

In 2023, the Company changed its presentation method on the statement of cash flows from the direct method to the indirect method. The indirect method is predominantly used in practice, provides a useful link to income statements and balance sheets, is more familiar to financial statement users and is the less costly approach to prepare. The Company has recast the Consolidated Statements of Cash Flows and related disclosures for the period ended March 31, 2023, to conform to the indirect presentation method in the current period.

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 Securities and Exchange Commission (hereinafter 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 a VIE in accordance with applicable GAAP.

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Non-Controlling Interests

When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the subsidiary 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 subsidiary. 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 FASB issued 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 the Company beginning with our 2024 annual reporting 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 three months ended March 31, 2024 and 2023, that estimate represented $1,702,565 and $1,580,027, 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.

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


	Three Months Ended March 31,
	2024		2023
Oil Sales	$	2,450,164	$	2,344,037
Natural Gas Sales	514,345		535,401
Miscellaneous Oil and Gas Product Sales	47,133		56,003
	$	3,011,642	$	2,935,441

Note 3 – OTHER INCOME, NET

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


	Three Months Ended March 31,
	2024		2023
Net Realized and Unrealized Gain, Equity Securities	$	133,692	$	82,635
Interest Income	70,000		113,818
Dividend Income	23,358		10,300
Income from Other Investments	14,284		309,697
Miscellaneous Income/(Expenses)	(21,725)		52,383
Other Income, Net	$	219,609	$	568,833

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 $11,179 and $11,200 during the three months ended March 31, 2024 and 2023, respectively. The Company’s investment in Broadway 68 totaled $141,146 and $123,901 at March 31, 2024, and December 31, 2023, respectively.

Broadway Seventy-Two, LLC (“Broadway 72”), an Oklahoma limited liability company, with a 40% ownership, was acquired in 2022. Broadway 72 owns and operates a commercial building in Oklahoma City, Oklahoma. The Company’s investment in Broadway 72 totaled $1,071,571 and $1,075,782 at March 31, 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 July 25, 2024. The Company’s investment in QSN totaled $285,996 and $307,325 at March 31, 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 2023. 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 $708,429 and $708,179 at March 31, 2024, and December 31, 2023, respectively.

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Victorum BRH2 Investment, LLC (“BRH2”), with a 16.3% ownership, was acquired in August 2021. BRH2 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 BRH2 totaled $301,442 at March 31, 2024, and December 31, 2023.

Victorum BRH3 Investment, LLC (“BRH3”), with a 27.27% ownership, was acquired in November 2023. BRH3 serves as a special purpose investment vehicle to hold an investment in Berry-Rock. The Company receives quarterly distributions on an 11% annualized return on investment. The Company’s investment in BRH3 totaled $302,161 at March 31, 2024, and December 31, 2023.

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. The Company’s investment in Bailey totaled $73,377 and $77,377 at March 31, 2024, and December 31, 2023, respectively.

Cloudburst International, Inc. (“Cloudburst”), with a 12.99% ownership, was acquired in 2020. 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 March 31, 2024, and December 31, 2023.

Genlith, Inc. (“Genlith”), with a 5.15% ownership, was acquired in July 2021. Genlith identifies and structures investments in the new energy economy through corporate ventures, advisory and fund management. The Company’s investment in Genlith totaled $311,958 at March 31, 2024, and December 31, 2023.

Chilean Cobalt Corp. ("C3") is a publicly traded spin-off from Genlith. The Company owns 740,211 of S-1 Registered Shares of C3, representing less than 2% of outstanding shares, and entered into a twelve month lock-up agreement on May 11, 2023, whereby the Company agreed that it will not attempt to sell, transfer, or otherwise dispose of the Registered Shares, subject to a "trickle" into market, except at a rate not to exceed 30,000 shares per month on a non-cumulative basis. The Company's investment in C3 totaled $148,042 at March 31, 2024 and December 31, 2023.

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, and there is approximately 13 acres of land remaining. The Company’s investment in OKC totaled $67,482 at March 31, 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 March 31, 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. The Company’s investment in VCC special purpose investment vehicles totaled $357,259 at March 31, 2024, and December 31, 2023.

VCC Venture Fund I, LP (“VCC Venture”), with less than 2% ownership, acquired in 2022, 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 $93,750 at March 31, 2024, and December 31, 2023. The balance at March 31, 2024, represents 37.50% of the Company's capital commitment.

Cortado Ventures Fund II-A, LP (“Cortado II-A”), with less than 2% ownership, acquired in 2023, 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. The Company’s investment in Cortado II-A totaled $500,000 at March 31, 2024, and December 31, 2023, which represents 50.00% 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 March 31, 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 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.

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. The Company entered into a Joint Venture Agreement ("the Agreement") with TWS South, LLC, a Texas limited liability company, on March 19, 2021, to form a water well drilling company where the Company would provide funding for equipment and operations, with TWS South, LLC providing industry expertise for operations and securing customers in the central Texas region. Equipment and vehicles totaling $330,000 were purchased by the Company and operating cash of $70,000 was made available to begin operations. The Agreement provided that the Company 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 $1,160,000 toward the joint venture with losses totaling $315,269 as of March 31, 2024.

Subsequent Event:

The Agreement states that if net profits received by the Company do not reach $300,000 plus 1.2 times any additional funding within twelve months of the effective date, the Company has the right to terminate the Agreement. The Agreement also states that TWS South, LLC would devote substantially all time and attention to this joint venture. Following the discovery that TWS South, LLC breached the Agreement by assuming ownership and operating another drilling company, the Company terminated the Agreement on April 19, 2024. The Company is in the initial stages of determining treatment of the assets, and is evaluating all available information to determine the impact of the termination of the Agreement on the consolidated financial statements.

As of March 31, 2024, TWS South, LLC assets consisted of a drilling rig, various equipment and vehicles with net book value of $296,687 and accounts receivable of $536,568. The Company has contractual rights to those assets, or the proceeds from the sale of the assets per the Agreement. Management has performed an assessment of the assets and did not identify any indicators of impairment which would suggest that the recorded value of the TWS assets were potentially impaired.

The following table presents the summarized assets and liabilities of Grand Woods and TWS included in the consolidated balance sheets as of March 31, 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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The assets and liabilities in the table below include third party assets and liabilities only and exclude intercompany balances that eliminate in consolidation.


	March 31, 2024
	Grand Woods		TWS		Total
Assets:
Cash	$	69,276	$	56,283	$	125,559
Accounts Receivable	—		536,568		536,568
Total Current Assets	69,276		592,851		662,127
Other Investments (Land)	2,171,828		—		2,171,828
Other Property and Equipment, at Cost	—		483,934		483,934
Less – Accumulated Depreciation	—		(187,247)		(187,247)
Other Property and Equipment, Net	—		296,687		296,687
Total Assets	$	2,241,104	$	889,538	$	3,130,642

Liabilities:
Accounts Payable	$	—	$	44,807	$	44,807
Note Payable, Current Portion	143,704		—		143,704
Total Current Liabilities	143,704		44,807		188,511
Note Payable, Less Current Portion	1,122,104		—		1,122,104
Total Liabilities	$	1,265,808	$	44,807	$	1,310,615


	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 March 31, 2024, and December 31, 2023, is $1,265,808 and $1,300,872, respectively, of which $143,704 is classified as current at March 31, 2024. Interest paid on the Note, in the three months ended March 31, 2024, and 2023 totaled $13,039 and $14,268, 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 March 31, 2024:


Years Ending December 31,	Principal Payments
2024	107,072
2025	148,155
2026	1,010,581
Total	$	1,265,808

Note 7 – PROVISION FOR INCOME TAXES

In 2024 and 2023, the effective tax rate differed from the statutory rate, primarily as a result of allowable depletion for tax purposes in excess of the cost basis in oil and natural gas properties.

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%.

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	41,029
Balance at March 31, 2024	$	2,220,023

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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 – These assets include investments for which there is little, if any, market activity. These inputs require significant management judgement or estimation.

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 March 31, 2024, and December 31, 2023, the Company’s assets reported at fair value on a recurring basis using the three level valuation hierarchy are summarized as follows:


	March 31, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities	1,840,193		—		—
International Equities	83,082		—		—
Others	—		—		750,000
	$	1,923,275	$	—	$	750,000


	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		—		—
	$	2,664,066	$	2,220,901	$	—

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The fair value hierarchy tables do not include investments that 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 of is only attained through sales on the secondary market.

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


	March 31, 2024		December 31, 2023
Level 1 Assets	1,923,275		2,664,066
Level 2 Assets	—		2,220,901
Level 3 Assets	750,000		—
Assets using NAV as a practical expedient, with a remaining commitment of $204,424	90,798		—
Total	$	2,764,073	$	4,884,967

The $750,000 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
Three Months Ended March 31, 2024
Balance as of December 31, 2023	—
Purchases	750,000
Changes in unrealized gains included in Other Income, net	$	—
Balance as of March 31, 2024	$	750,000

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 three months ended March 31, 2024 or 2023. See Note 8 above for more information about this liability and the inputs used for calculating fair value.

There were no impairment losses recorded on oil and gas assets in the three months ended March 31, 2024. Impairment losses recorded on oil and gas assets in the three months ended March 31, 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 Financial Instruments

The Company’s other financial instruments consist primarily of cash and cash equivalents, trade receivables, and trade payables. At March 31, 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 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.

The risks and uncertainties that may affect the operations, performance, development and results of our business include, but are not limited to, the following:

• The Company’s future operating results will depend upon management’s ability to employ and retain quality employees, generate revenues and control expenses. Any decline in operating revenues, without a corresponding reduction in operating expenses, could have a material adverse effect on our business, results of operations and financial condition.

• The Company has no significant long-term sales contracts for either oil or gas. For the most part, the price we receive for our product is based upon the spot market price, which in the past has experienced significant fluctuations. Management anticipates price fluctuations will continue in the future, making any attempt at estimating future prices subject to significant uncertainty.

• Exploration costs have been a significant component of the Company’s capital expenditures in the past and are expected to remain so in the near term. Under the successful efforts method of accounting for oil and gas properties which the Company uses, these costs are capitalized if drilling is successful or charged to operating costs and expensed if unsuccessful. Estimating the amount of future costs which may relate to successful or unsuccessful drilling is extremely imprecise.

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 otherwise. 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 three 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 $1,604,198 in the three months ended March 31, 2024. The Company's cash provided by investing activities for the three months ended March 31, 2024 was $4,900,102 and consisted of sales of equity securities of $2,361,375, return on other investments of $4,000, and maturity of available-for-sale debt securities of $2,534,727. The Company's cash applied to investing activities for the three months ended March 31, 2024 was $5,752,329 and consisted of cash for the purchase of property of $2,880,762, cash for the purchase of equity securities of $2,327,691, cash for the purchase of equity method and other investments of $230,050, and cash for the purchase of available for sale debt securities of $313,826. The Company's cash applied to financing activities for the three months ended March 31, 2024 was $161,084 and consisted of cash paid of $126,020 for the purchase of treasury stock, and $35,064 in payments on the Grand Woods note payable. Cash provided by financing activities included Grand Woods Class C non-controlling interest contributions of $3,749. Cash and cash equivalents increased $594,636 (11%) to $5,813,110 at March 31, 2024, from $5,218,474 at December 31, 2023.

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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 $100,007 (4%) to $2,764,073 as of March 31, 2024, from $2,664,066 at December 31, 2023. The increase was the result of $33,684 in net purchases and a $133,691 net increase in market value.

Accounts receivable decreased $182,028 (8%) to $2,184,635 as of March 31, 2024, from $2,366,663 at December 31, 2023. This was primarily due to decreased oil and natural gas accruals as of March 31, 2024.

Refundable income taxes increased $296,270 (93%) to $614,025 as of March 31, 2024, from $317,755 at December 31, 2023, primarily resulting from an increase in deferred tax liabilities.

Accounts payable increased $644,205 (120%) to $1,182,001 as of March 31, 2024, from $537,796 at December 31, 2023, primarily due to increases of leasehold and intangible drilling costs for new wells.

Other current liabilities increased $46,308 (361%) to $59,147 as of March 31, 2024, from $12,839 at December 31, 2023, due to increases in accrued property taxes of $4,184, benefits payable of $26,591, and payroll taxes of $15,533.

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 $1,604,198 in the three months ended March 31, 2024, an increase of $18,731 (1%) from cash provided by operations in the comparable period in 2023 of $1,585,467. For more information see “Operating Revenues” and “Other Income/(Loss)” below.

Cash applied to the purchase of property, plant and equipment in the three months ended March 31, 2024, was $2,880,762, an increase of $2,033,126 (240%) from cash applied to the purchase of property, plant and equipment in the comparable period in 2023 of $847,636.

Cash applied to the purchase of available-for-sale debt securities in the three months ended March 31, 2024, was $313,826, with $2,312,854 in the comparable period in 2023. Cash provided by the maturity of available-for-sale debt securities in the three months ended March 31, 2024, was $2,534,727, with $1,151,965 in the comparable period in 2023. Cash applied to equity method and other investments in the three months ended March 31, 2024, was $230,050, an increase of $119,818 (109%) from cash applied in the comparable period of 2023 of $110,232.

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 July 25, 2024 held by QSN Office Park, LLC. The Company is committed to a $250,000 investment in VCC Venture Fund I, LP, of which $93,750 (37.50%) is invested at March 31, 2024. The Company is committed to a $1,000,000 investment in Cortado Ventures Fund II-A, of which $500,000 (50.00%) is invested at March 31, 2024. The Company is committed to a $750,000 investment in Cypress MWC, LLC, of which $225,000 (30.00%) is invested at March 31, 2024. For more information about these entities and the related off-balance sheet arrangements, see Note 4 and Note 5 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 – Three Months Ended March 31, 2024

Net income increased $322,778 (80%) to $726,516 in the three months ended March 31, 2024, from $403,738 in the comparable period in 2023. Net income per share attributable to common stockholders, basic, increased $2.11 to $4.75 in the three months ended March 31, 2024, from $2.64 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.

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Operating Revenues. Revenues from oil and natural gas sales increased $76,201 (3%) to $3,011,642 in the three months ended March 31, 2024, from $2,935,441 in the comparable period in 2023. The increase is due to an increase in oil sales of $106,127, a decrease in natural gas sales of $21,056, and a decrease in miscellaneous oil and natural gas product sales of $8,870. Revenues from water well drilling services increased $451,280 (275%) to $615,480 from $164,200 in the comparable period in 2023. The increase was due to the completion of a large commercial well project and several commercial and domestic water wells. On April 19, 2024, the Company terminated the joint venture agreement with TWS South, LLC due to a breach of the agreement. Due to the termination, there will be little if any future revenues from water well drilling operations. See Note 5 for details on the termination.

The $106,127 (5%) increase in oil sales to $2,450,164 in the three months ended March 31, 2024, from $2,344,037 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 612 Bbls to 33,290 Bbls in the three months ended March 31, 2024, resulting in a positive volume variance of $43,899. The average price per Bbl increased $1.87 to $73.60 per Bbl in the three months ended March 31, 2024, from $71.73 per Bbl in the comparable period in 2023, resulting in a positive price variance of $62,228.

The $21,056 (4%) decrease in natural gas sales to $514,345 in the three months ended March 31, 2024, from $535,401 in the comparable period in 2023 was the result of an increase in the volume sold and a decrease in the average price per thousand cubic feet ("MCF"). The volume of natural gas sold increased 45,075 MCF to 206,928 MCF in the three months ended March 31, 2024, from 161,853 MCF in the comparable period in 2023, resulting in a positive volume variance of $149,198. The average price per MCF decreased $0.82 to $2.49 per MCF in the three months ended March 31, 2024, from $3.31 per MCF in the comparable period in 2023, resulting in a negative price variance of $170,254.

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 $47,133 in the three months ended March 31, 2024, compared to $56,003 in the comparable period in 2023, primarily due to decreased prices.

The Company had water well drilling revenues of $615,480 in the three months ended March 31, 2024, related to water well drilling through TWS, with $164,200 in the comparable period in 2023. The increase was due to the completion of a large commercial well project and several commercial and domestic water wells completed in 2024.

Operating Costs and Expenses. Operating costs and expenses decreased $458,748 (15%) to $2,687,244 in the three months ended March 31, 2024, from $3,145,992 in the comparable period of 2023.

Production Costs. Production costs decreased $90,598 (9%) to $966,151 in the three months ended March 31, 2024, from $1,056,749 in the comparable period in 2023. Lease operating expenses decreased $109,512 (13%), due to higher workover costs in the comparable period in 2023. Gas deductions and other costs increased by $23,452 (35%). Gross production taxes decreased $4,538 (3%).

Exploration Costs. Exploration costs decreased $215,149 (57%) to $159,199 in the three months ended March 31, 2024, from $374,348 in the comparable period in 2023, primarily due to a decrease of $73,730 in geological and geophysical and other expenses, $146,244 in dry hole and plugging costs, and an increase of $4,825 in leasehold impairments.

Water Well Drilling Costs. Water well drilling costs increased $193,862 (105%) to $378,589 in the three months ended March 31, 2024, from $184,727 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 and increased due to a large commercial well completed in 2024.

Depreciation, Depletion, Amortization and Valuation Provision (DD&A). DD&A decreased $425,564 (46%) to $509,169 in the three months ended March 31, 2024, from $934,733 in the comparable period in 2023, primarily due to a decrease in long-lived assets impairments of $443,456 that occurred in 2023.

General, Administrative and Other (G&A). G&A increased $78,701 (13%) to $674,136 in the three months ended March 31, 2024, from $595,435 in the comparable period in 2023, primarily due to increases in salaries of $113,031, audit

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and tax fees of $32,867, and a net increase of $18,121 in all other G&A accounts, offset by decreases in consulting fees of $38,363 and information technology costs of $46,955.

Equity Income in Investees. Equity income in investees decreased $8,115 to $23,541 in the three months ended March 31, 2024, from $31,656 in the comparable period in 2023. Income was made up of income of $17,244 in Broadway Sixty-Eight, LLC (“Broadway 68”), income of $15,789 in Broadway Seventy-Two, LLC (“Broadway 72”), losses of $26,128 in QSN Office Park, LLC (“QSN”), and income of $16,636 from Victorum BRH2 Investment, LLC and Victorum BRH3 Investment, LLC. See Note 4 to the accompanying financial statements for additional information on equity method investments.

Other Income, Net. Other income, net decreased $349,224 (61%) to $219,609 in the three months ended March 31, 2024, from $568,833 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 $306,277 (230%) to $439,724 in the three months ended March 31, 2024, from $133,447 in the comparable period in 2023, primarily due to net increases in deferred tax liabilities of $646,749 and net decreases in deferred tax assets of $100,246. Of the 2024 tax provision, the estimated current tax benefit was $307,271 and the estimated deferred tax provision was $746,995. Of the 2023 income tax provision, the estimated current tax provision was $11,534 and the estimated deferred tax provision was $121,913. See Note 7 to the accompanying consolidated financial statements for additional information on 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 March 31, 2024.

Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 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).

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of March 31, 2024, the Company was not party to, and its properties were not subject to, any material legal proceedings.

ITEM 1A. RISK FACTORS

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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)
January 1 to January 31, 2024	434	$160	434	$2,303,928
February 1 to February 29, 2024	348	$160	348	$2,250,240
March 1 to March 31, 2024	6	$160	6	$2,249,280
Total	788	$160	788

(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 three months ended March 31, 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.

ITEM 6. EXHIBITS

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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)


						* Filed electronically herewith.

Table of Contents

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: May 15, 2024			/s/ Cameron R. McLain
			Cameron R. McLain
			Principal Executive Officer



Date: May 15, 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: May 15, 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: May 15, 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 March 31, 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 March 31, 2024.


May 15, 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	3 Months Ended
Cover Page - shares	Mar. 31, 2024	May 06, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	000-08157
Entity Registrant Name	RESERVE PETROLEUM CO
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		154,779
Entity Central Index Key	0000083350
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Balance Sheets - USD ($)

Mar. 31, 2024

Dec. 31, 2023

Current Assets:

Cash and Cash Equivalents

^[1]

$ 5,813,110

$ 5,218,474

Available-for-Sale Debt Securities

^[1]

2,220,901

Equity Securities

^[1]

2,764,073

2,664,066

Refundable Income Taxes

^[1]

614,025

317,755

Accounts Receivable

^[1]

2,184,635

2,366,663

Total Current Assets

^[1]

11,375,843

12,787,859

Investments:

Equity Method Investments

^[1]

2,810,745

2,818,790

Other Investments

^[1]

5,553,553

5,332,553

Total Investments

^[1]

8,364,298

8,151,343

Property, Plant and Equipment:

Unproved Properties

^[1]

4,906,773

3,403,051

Proved Properties

^[1]

70,976,987

69,152,923

Oil and Gas Properties, Gross

^[1]

75,883,760

72,555,974

Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance

^[1]

(58,070,746)

(57,622,564)

Oil and Gas Properties, Net

^[1]

17,813,014

14,933,410

Other Property and Equipment, at Cost

^[1]

833,681

820,965

Less – Accumulated Depreciation

^[1]

(339,502)

(306,587)

Other Property and Equipment, Net

^[1]

494,179

514,378

Total Property, Plant and Equipment, Net

^[1]

18,307,193

15,447,788

Total Assets

^[1]

38,047,334

36,386,990

Current Liabilities:

Accounts Payable

^[1]

1,182,001

537,796

Other Current Liabilities

^[1]

59,147

12,839

Note Payable, Current Portion

^[1]

143,704

142,136

Total Current Liabilities

^[1]

1,384,852

692,771

Long-Term Liabilities:

Asset Retirement Obligation

^[1]

2,220,023

2,566,368

Deferred Tax Liability, Net

^[1]

1,966,506

1,219,511

Note Payable, Less Current Portion

^[1]

1,122,104

1,158,736

Total Long-Term Liabilities

^[1]

5,308,633

4,944,615

Total Liabilities

^[1]

6,693,485

5,637,386

Equity:

Common Stock

^[1]

92,368

Additional Paid-in Capital

^[1]

65,000

Retained Earnings

^[1]

32,949,074

32,212,066

Equity Before Treasury Stock

^[1]

33,106,442

32,369,434

Less – Treasury Stock, at Cost

^[1]

(1,946,547)

(1,820,527)

Total Equity Applicable to The Reserve Petroleum Company

^[1]

31,159,895

30,548,907

Non-Controlling Interests

^[1]

193,954

200,697

Total Equity

^[1]

31,353,849

30,749,604

Total Liabilities and Equity

^[1]

$ 38,047,334

$ 36,386,990

[1]

At March 31, 2024 and December 31, 2023, includes approximately $3,130,642 and $2,768,756, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $1,310,615 and $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.

Consolidated Balance Sheets (Parenthetical) - USD ($)

Mar. 31, 2024

Dec. 31, 2023

Assets

^[1]

$ 38,047,334

$ 36,386,990

Liabilities

^[1]

6,693,485

5,637,386

Variable Interest Entity, Primary Beneficiary

Assets

3,130,642

2,768,756

Liabilities

$ 1,310,615

$ 1,301,270

[1]

Consolidated Statements of Income - USD ($)	3 Months Ended
Consolidated Statements of Income - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Operating Revenues:
Total Operating Revenues	$ 3,627,122	$ 3,099,641
Operating Costs and Expenses:
Depreciation, Depletion, Amortization and Valuation Provision	509,169	934,733
General, Administrative and Other	674,136	595,435
Total Operating Costs and Expenses	2,687,244	3,145,992
Income/(Loss) from Operations	939,878	(46,351)
Equity Income in Investees	23,541	31,656
Interest Expense	(16,788)	(16,953)
Other Income, Net	219,609	568,833
Income Before Income Taxes and Non-Controlling Interests	1,166,240	537,185
Income Tax Provision/(Benefit):
Current	(307,271)	11,534
Deferred	746,995	121,913
Total Income Tax Provision	439,724	133,447
Net Income	726,516	403,738
Less: Net Loss Attributable to Non-Controlling Interests	(10,492)	(8,921)
Net Income Attributable to Common Stockholders	$ 737,008	$ 412,659
Per Share Data
Net Income Attributable to Common Stockholders, Basic (in dollars per share)	$ 4.75	$ 2.64
Cash Dividends Declared and/or Paid (in dollars per share)	$ 0	$ 0
Weighted Average Shares Outstanding, Basic (in shares)	155,151	156,157
Oil and Gas Sales
Operating Revenues:
Total Operating Revenues	$ 3,011,642	$ 2,935,441
Water Well Drilling Services
Operating Revenues:
Total Operating Revenues	615,480	164,200
Operating Costs and Expenses:
Operating Costs and Expenses:	378,589	184,727
Production
Operating Costs and Expenses:
Operating Costs and Expenses:	966,151	1,056,749
Exploration
Operating Costs and Expenses:
Operating Costs and Expenses:	$ 159,199	$ 374,348

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)

403,738

412,659

(8,921)

Contributions

23,298

Ending balance at Mar. 31, 2023

32,812,398

92,368

65,000

34,241,077

(1,749,858)

163,811

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)

726,516

737,008

(10,492)

Purchase of Treasury Stock

(126,020)

Contributions

3,749

Ending balance at Mar. 31, 2024

$ 31,353,849

^[1]

$ 92,368

$ 65,000

$ 32,949,074

$ (1,946,547)

$ 193,954

[1]

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Cash Provided by/(Applied to) Operating Activities:
Net Income	$ 726,516	$ 403,738
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion, Amortization and Valuation Provision	509,169	934,733
Depreciation Attributable to TWS	18,973	18,154
Accretion of Asset Retirement Obligation	41,029	18,221
Expired Leases	6,265	(1,440)
Cash Distributions from Equity Method Investees	20,000	0
Gain on Equity Method and Other Investments	(6,905)	(256,966)
Net (Gain)/Loss on Equity Securities	(133,691)	(82,634)
Deferred Income Tax Expense	746,995	121,913
Change in Receivables	(114,242)	663,415
Change in Accounts Payable and Other Current Liabilities	(209,911)	(233,667)
Net Cash Provided by Operating Activities	1,604,198	1,585,467
Cash Provided by/(Applied to) Investing Activities:
Maturity of Available-for-Sale Debt Securities	2,534,727	1,151,965
Purchase of Available-for-Sale Debt Securities	(313,826)	(2,312,854)
Purchase of Property, Plant and Equipment	(2,880,762)	(847,636)
Purchase of Investments	(230,050)	(110,232)
Cash Distributions from Equity Method and Other Investments	4,000	320,998
Sale of Equity Securities	2,361,375	151,518
Purchase of Equity Securities	(2,327,691)	(556,029)
Net Cash Applied to Investing Activities	(852,227)	(2,202,270)
Cash Provided by/(Applied to) Financing Activities:
Purchase of Treasury Stock	(126,020)	0
Principal Payments on Note Payable	(35,064)	(33,835)
Capital Contributions from Non-Controlling Interests	3,749	23,298
Total Cash Applied to Financing Activities	(157,335)	(10,537)
Net Change in Cash and Cash Equivalents	594,636	(627,340)
Cash and Cash Equivalents, Beginning of Period	5,218,474	7,299,224
Cash and Cash Equivalents, End of Period	5,813,110	6,671,884
Supplemental Disclosures of Cash Flow Information:
Interest Paid	13,039	14,268
Income Taxes Paid (Net of Refunds Received)	(11,201)	100
Supplemental Schedule of Noncash Investing and Financing Activities:
Net Increase in Accounts Payable for Property, Plant and Equipment Additions	(900,424)	(102,166)
Net Decreases in Asset Retirement Obligation	$ 387,374	$ 5,763

Basis of Presentation	3 Months Ended
Basis of Presentation	Mar. 31, 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 and joint ventures that are not significant business segments. The Company’s consolidated subsidiaries consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and wholly owned 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 subsidiaries. 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 its subsidiaries 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 Variable Interest Entities (“VIEs”) under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. In 2023, the Company changed its presentation method on the statement of cash flows from the direct method to the indirect method. The indirect method is predominantly used in practice, provides a useful link to income statements and balance sheets, is more familiar to financial statement users and is the less costly approach to prepare. The Company has recast the Consolidated Statements of Cash Flows and related disclosures for the period ended March 31, 2023, to conform to the indirect presentation method in the current period. 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 Securities and Exchange Commission (hereinafter 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 a VIE in accordance with applicable GAAP. Non-Controlling Interests When the Company consolidates an entity, 100% of the assets, liabilities, revenues and expenses of the subsidiary 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 subsidiary. 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 FASB issued 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 the Company beginning with our 2024 annual reporting 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

3 Months Ended

Mar. 31, 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 March 31,
	2024		2023
Oil Sales	$	2,450,164	$	2,344,037
Natural Gas Sales	514,345		535,401
Miscellaneous Oil and Gas Product Sales	47,133		56,003
	$	3,011,642	$	2,935,441

Other Income, Net

3 Months Ended

Mar. 31, 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 March 31,
	2024		2023
Net Realized and Unrealized Gain, Equity Securities	$	133,692	$	82,635
Interest Income	70,000		113,818
Dividend Income	23,358		10,300
Income from Other Investments	14,284		309,697
Miscellaneous Income/(Expenses)	(21,725)		52,383
Other Income, Net	$	219,609	$	568,833

Investments and Related Commitments and Contingent Liabilities, Including Guaranties	3 Months Ended
	Mar. 31, 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 $11,179 and $11,200 during the three months ended March 31, 2024 and 2023, respectively. The Company’s investment in Broadway 68 totaled $141,146 and $123,901 at March 31, 2024, and December 31, 2023, respectively. Broadway Seventy-Two, LLC (“Broadway 72”), an Oklahoma limited liability company, with a 40% ownership, was acquired in 2022. Broadway 72 owns and operates a commercial building in Oklahoma City, Oklahoma. The Company’s investment in Broadway 72 totaled $1,071,571 and $1,075,782 at March 31, 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 July 25, 2024. The Company’s investment in QSN totaled $285,996 and $307,325 at March 31, 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 2023. 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 $708,429 and $708,179 at March 31, 2024, and December 31, 2023, respectively. Victorum BRH2 Investment, LLC (“BRH2”), with a 16.3% ownership, was acquired in August 2021. BRH2 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 BRH2 totaled $301,442 at March 31, 2024, and December 31, 2023. Victorum BRH3 Investment, LLC (“BRH3”), with a 27.27% ownership, was acquired in November 2023. BRH3 serves as a special purpose investment vehicle to hold an investment in Berry-Rock. The Company receives quarterly distributions on an 11% annualized return on investment. The Company’s investment in BRH3 totaled $302,161 at March 31, 2024, and December 31, 2023. 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. The Company’s investment in Bailey totaled $73,377 and $77,377 at March 31, 2024, and December 31, 2023, respectively. Cloudburst International, Inc. (“Cloudburst”), with a 12.99% ownership, was acquired in 2020. 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 March 31, 2024, and December 31, 2023. Genlith, Inc. (“Genlith”), with a 5.15% ownership, was acquired in July 2021. Genlith identifies and structures investments in the new energy economy through corporate ventures, advisory and fund management. The Company’s investment in Genlith totaled $311,958 at March 31, 2024, and December 31, 2023. Chilean Cobalt Corp. ("C3") is a publicly traded spin-off from Genlith. The Company owns 740,211 of S-1 Registered Shares of C3, representing less than 2% of outstanding shares, and entered into a twelve month lock-up agreement on May 11, 2023, whereby the Company agreed that it will not attempt to sell, transfer, or otherwise dispose of the Registered Shares, subject to a "trickle" into market, except at a rate not to exceed 30,000 shares per month on a non-cumulative basis. The Company's investment in C3 totaled $148,042 at March 31, 2024 and December 31, 2023. 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, and there is approximately 13 acres of land remaining. The Company’s investment in OKC totaled $67,482 at March 31, 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 March 31, 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. The Company’s investment in VCC special purpose investment vehicles totaled $357,259 at March 31, 2024, and December 31, 2023. VCC Venture Fund I, LP (“VCC Venture”), with less than 2% ownership, acquired in 2022, 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 $93,750 at March 31, 2024, and December 31, 2023. The balance at March 31, 2024, represents 37.50% of the Company's capital commitment. Cortado Ventures Fund II-A, LP (“Cortado II-A”), with less than 2% ownership, acquired in 2023, 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. The Company’s investment in Cortado II-A totaled $500,000 at March 31, 2024, and December 31, 2023, which represents 50.00% 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 March 31, 2024, which represents 30.00% of the Company's capital commitment.

Non-Controlling Interest and Variable Interest Entities

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

Note 5 – NON-CONTROLLING INTEREST AND VARIABLE INTEREST ENTITIES

Subsequent Event:

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


	March 31, 2024
	Grand Woods		TWS		Total
Assets:
Cash	$	69,276	$	56,283	$	125,559
Accounts Receivable	—		536,568		536,568
Total Current Assets	69,276		592,851		662,127
Other Investments (Land)	2,171,828		—		2,171,828
Other Property and Equipment, at Cost	—		483,934		483,934
Less – Accumulated Depreciation	—		(187,247)		(187,247)
Other Property and Equipment, Net	—		296,687		296,687
Total Assets	$	2,241,104	$	889,538	$	3,130,642

Liabilities:
Accounts Payable	$	—	$	44,807	$	44,807
Note Payable, Current Portion	143,704		—		143,704
Total Current Liabilities	143,704		44,807		188,511
Note Payable, Less Current Portion	1,122,104		—		1,122,104
Total Liabilities	$	1,265,808	$	44,807	$	1,310,615


	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

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

NOTE PAYABLE

Note 6 – NOTE PAYABLE

Below is a schedule of future principal payments on the outstanding Note at March 31, 2024:


Years Ending December 31,	Principal Payments
2024	107,072
2025	148,155
2026	1,010,581
Total	$	1,265,808

Provision for Income Taxes	3 Months Ended
Provision for Income Taxes	Mar. 31, 2024
Income Tax Disclosure [Abstract]
PRROVISION FOR INCOME TAXES	Note 7 – PROVISION FOR INCOME TAXES In 2024 and 2023, the effective tax rate differed from the statutory rate, primarily as a result of allowable depletion for tax purposes in excess of the cost basis in oil and natural gas properties. 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

3 Months Ended

Mar. 31, 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	41,029
Balance at March 31, 2024	$	2,220,023

Fair Value Measurements

3 Months Ended

Mar. 31, 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 – These assets include investments for which there is little, if any, market activity. These inputs require significant management judgement or estimation.

Recurring Fair Value Measurements

At March 31, 2024, and December 31, 2023, the Company’s assets reported at fair value on a recurring basis using the three level valuation hierarchy are summarized as follows:


	March 31, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities	1,840,193		—		—
International Equities	83,082		—		—
Others	—		—		750,000
	$	1,923,275	$	—	$	750,000


	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		—		—
	$	2,664,066	$	2,220,901	$	—

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


	March 31, 2024		December 31, 2023
Level 1 Assets	1,923,275		2,664,066
Level 2 Assets	—		2,220,901
Level 3 Assets	750,000		—
Assets using NAV as a practical expedient, with a remaining commitment of $204,424	90,798		—
Total	$	2,764,073	$	4,884,967

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


	Balance
Three Months Ended March 31, 2024
Balance as of December 31, 2023	—
Purchases	750,000
Changes in unrealized gains included in Other Income, net	$	—
Balance as of March 31, 2024	$	750,000

Remaining Unfunded Commitments	$	—

Non-Recurring Fair Value Measurements

Fair Value of Financial Instruments

Pay vs Performance Disclosure - USD ($)	3 Months Ended
Pay vs Performance Disclosure - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income/(Loss)	$ 726,516	$ 403,738

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 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)	3 Months Ended
Basis of Presentation (Policies)	Mar. 31, 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 and joint ventures that are not significant business segments. The Company’s consolidated subsidiaries consist of Grand Woods Development, LLC (“Grand Woods”), an Oklahoma limited liability company and wholly owned 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 subsidiaries. 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 its subsidiaries 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 Variable Interest Entities (“VIEs”) under certain criteria discussed further below. All intercompany accounts and transactions have been eliminated in consolidation. In 2023, the Company changed its presentation method on the statement of cash flows from the direct method to the indirect method. The indirect method is predominantly used in practice, provides a useful link to income statements and balance sheets, is more familiar to financial statement users and is the less costly approach to prepare. The Company has recast the Consolidated Statements of Cash Flows and related disclosures for the period ended March 31, 2023, to conform to the indirect presentation method in the current period. 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 Securities and Exchange Commission (hereinafter 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 a VIE 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 subsidiary 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 subsidiary. 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 FASB issued 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 the Company beginning with our 2024 annual reporting 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 Measuremens	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 – These assets include investments for which there is little, if any, market activity. These inputs require significant management judgement or estimation. 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 three months ended March 31, 2024 or 2023. See Note 8 above for more information about this liability and the inputs used for calculating fair value. There were no impairment losses recorded on oil and gas assets in the three months ended March 31, 2024. Impairment losses recorded on oil and gas assets in the three months ended March 31, 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 Financial Instruments The Company’s other financial instruments consist primarily of cash and cash equivalents, trade receivables, and trade payables. At March 31, 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 maturities of these items.

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 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 March 31,
	2024		2023
Oil Sales	$	2,450,164	$	2,344,037
Natural Gas Sales	514,345		535,401
Miscellaneous Oil and Gas Product Sales	47,133		56,003
	$	3,011,642	$	2,935,441

Other Income, Net (Tables)

3 Months Ended

Mar. 31, 2024

Other Income and Expenses [Abstract]

Schedule of Other Income, Net

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


	Three Months Ended March 31,
	2024		2023
Net Realized and Unrealized Gain, Equity Securities	$	133,692	$	82,635
Interest Income	70,000		113,818
Dividend Income	23,358		10,300
Income from Other Investments	14,284		309,697
Miscellaneous Income/(Expenses)	(21,725)		52,383
Other Income, Net	$	219,609	$	568,833

Non-Controlling Interest and Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

Schedule of Variable Interest Entities

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


	March 31, 2024
	Grand Woods		TWS		Total
Assets:
Cash	$	69,276	$	56,283	$	125,559
Accounts Receivable	—		536,568		536,568
Total Current Assets	69,276		592,851		662,127
Other Investments (Land)	2,171,828		—		2,171,828
Other Property and Equipment, at Cost	—		483,934		483,934
Less – Accumulated Depreciation	—		(187,247)		(187,247)
Other Property and Equipment, Net	—		296,687		296,687
Total Assets	$	2,241,104	$	889,538	$	3,130,642

Liabilities:
Accounts Payable	$	—	$	44,807	$	44,807
Note Payable, Current Portion	143,704		—		143,704
Total Current Liabilities	143,704		44,807		188,511
Note Payable, Less Current Portion	1,122,104		—		1,122,104
Total Liabilities	$	1,265,808	$	44,807	$	1,310,615


	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)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Schedule of Maturities of Note Payable

Below is a schedule of future principal payments on the outstanding Note at March 31, 2024:


Years Ending December 31,	Principal Payments
2024	107,072
2025	148,155
2026	1,010,581
Total	$	1,265,808

Asset Retirement Obligation (Tables)

3 Months Ended

Mar. 31, 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	41,029
Balance at March 31, 2024	$	2,220,023

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets Measured on Recurring Basis

At March 31, 2024, and December 31, 2023, the Company’s assets reported at fair value on a recurring basis using the three level valuation hierarchy are summarized as follows:


	March 31, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities	1,840,193		—		—
International Equities	83,082		—		—
Others	—		—		750,000
	$	1,923,275	$	—	$	750,000


	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		—		—
	$	2,664,066	$	2,220,901	$	—

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


	March 31, 2024		December 31, 2023
Level 1 Assets	1,923,275		2,664,066
Level 2 Assets	—		2,220,901
Level 3 Assets	750,000		—
Assets using NAV as a practical expedient, with a remaining commitment of $204,424	90,798		—
Total	$	2,764,073	$	4,884,967

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


	Balance
Three Months Ended March 31, 2024
Balance as of December 31, 2023	—
Purchases	750,000
Changes in unrealized gains included in Other Income, net	$	—
Balance as of March 31, 2024	$	750,000

Remaining Unfunded Commitments	$	—

Schedule of Fair Value, Liabilities Measured on Recurring Basis

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


	Balance
Three Months Ended March 31, 2024
Balance as of December 31, 2023	—
Purchases	750,000
Changes in unrealized gains included in Other Income, net	$	—
Balance as of March 31, 2024	$	750,000

Remaining Unfunded Commitments	$	—

Revenue Recognition - Narrative (Details)	Mar. 31, 2024 USD ($) source	Mar. 31, 2023 USD ($)
Revenue Recognition [Abstract]
Estimate of oil and natural gas payments not yet received \| $	$ 1,702,565	$ 1,580,027
Number of revenue sources \| source	2

Revenue Recognition - Disaggregated Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 3,011,642	$ 2,935,441
Oil Sales
Disaggregation of Revenue [Line Items]
Revenue	2,450,164	2,344,037
Natural Gas Sales
Disaggregation of Revenue [Line Items]
Revenue	514,345	535,401
Miscellaneous Oil and Gas Product Sales
Disaggregation of Revenue [Line Items]
Revenue	$ 47,133	$ 56,003

Other Income, Net - Schedule of Components of Other Income, Net (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Other Income and Expenses [Abstract]
Net Realized and Unrealized Gain, Equity Securities	$ 133,692	$ 82,635
Interest Income	70,000	113,818
Dividend Income	23,358	10,300
Income from Other Investments	14,284	309,697
Miscellaneous Income/(Expenses)	(21,725)	52,383
Other Income, Net	$ 219,609	$ 568,833

Investments and Related Commitments and Contingent Liabilities, Including Guaranties (Details)

1 Months Ended

3 Months Ended

12 Months Ended

Nov. 30, 2023

Aug. 31, 2021

Mar. 31, 2024

USD ($)

Mar. 31, 2023

USD ($)

Dec. 31, 2023

USD ($)

Dec. 31, 2022

USD ($)

May 31, 2023

property

May 11, 2023

Jul. 31, 2021

Dec. 31, 2020

Dec. 31, 2016

USD ($)

Dec. 31, 2008

Dec. 31, 1992

Schedule of Equity Method Investments [Line Items]

Equity method investments

^[1]

$ 2,810,745

$ 2,818,790

Other Investments

^[1]

5,553,553

5,332,553

Corporate Office from Broadway

Schedule of Equity Method Investments [Line Items]

Rent expense

11,179

$ 11,200

Equity method investments

$ 141,146

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

$ 1,071,571

1,075,782

QSN

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

20.00%

Equity method investments

285,996

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

708,429

708,179

BHR2

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

16.30%

Other Investments

301,442

Annual return on investment (as a percent)

11.00%

BRH3

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

27.27%

Other Investments

302,161

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

73,377

77,377

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

311,958

Schedule of Equity Method Investments [Line Items]

Investment owned (in shares) | shares

740,211

Percentage of shares owned (as a percent) (less than)

2.00%

Number of shares allowed to be sold, transferred, or disposed of per month (in shares) | shares

30,000

Value of investment owned

148,042

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

Grand Woods

Schedule of Equity Method Investments [Line Items]

Area of land (Acre) | a

26.56

Land

$ 2,171,828

2,171,828

VCC | Oil and Gas, Special Investment Vehicles

Schedule of Equity Method Investments [Line Items]

Special investment vehicles

357,259

VCC Venture

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

2.00%

Other Investments

$ 93,750

Committed investment

$ 250,000

Committed investment ratio (as a percent)

37.50%

Cortado II-A

Schedule of Equity Method Investments [Line Items]

Ownership percentage (as a percent)

2.00%

Other Investments

$ 500,000

Committed investment

$ 1,000,000

Committed investment ratio (as a percent)

50.00%

Cypress

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)

3 Months Ended

36 Months Ended

Mar. 19, 2021

USD ($)

Mar. 31, 2024

USD ($)

Mar. 31, 2023

USD ($)

Mar. 31, 2024

USD ($)

Dec. 31, 2023

USD ($)

Variable Interest Entity [Line Items]

Property, plant, and equipment, other, net

^[1]

$ 494,179

$ 514,378

Net Income/(Loss)

726,516

$ 403,738

Accounts Receivable

^[1]

$ 2,184,635

2,366,663

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]

Property, plant, and equipment, other, net

$ 330,000

$ 296,687

302,945

Cash

70,000

56,283

154,653

Total net profits from agreement

$ 300,000

Multiplier, net profits

1.2

Net Income/(Loss)

315,269

Contributions to joint ventures

1,160,000

Accounts Receivable

536,568

$ 640

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

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 Balance Sheet Information (Details) - USD ($)

Mar. 31, 2024

Dec. 31, 2023

Mar. 19, 2021

Assets:

Accounts Receivable

^[1]

$ 2,184,635

$ 2,366,663

Total Current Assets

^[1]

11,375,843

12,787,859

Other Property and Equipment, at Cost

^[1]

833,681

820,965

Less – Accumulated Depreciation

^[1]

(339,502)

(306,587)

Other Property and Equipment, Net

^[1]

494,179

514,378

Total Property, Plant and Equipment, Net

^[1]

18,307,193

15,447,788

Total Assets

^[1]

38,047,334

36,386,990

Liabilities:

Accounts Payable

^[1]

1,182,001

537,796

Note Payable, Current Portion

^[1]

143,704

142,136

Total Current Liabilities

^[1]

1,384,852

692,771

Note Payable, Less Current Portion

^[1]

1,122,104

1,158,736

Total Liabilities

^[1]

6,693,485

5,637,386

Variable Interest Entity, Primary Beneficiary

Assets:

Total Assets

3,130,642

2,768,756

Liabilities:

Total Liabilities

1,310,615

1,301,270

Variable Interest Entity, Primary Beneficiary | Total

Assets:

Cash

125,559

293,343

Accounts Receivable

536,568

640

Total Current Assets

662,127

293,983

Other Investments (Land)

2,171,828

Other Property and Equipment, at Cost

483,934

471,219

Less – Accumulated Depreciation

(187,247)

(168,274)

Other Property and Equipment, Net

296,687

302,945

Liabilities:

Accounts Payable

44,807

398

Note Payable, Current Portion

143,704

142,136

Total Current Liabilities

188,511

142,534

Note Payable, Less Current Portion

1,122,104

1,158,736

Variable Interest Entity, Primary Beneficiary | Grand Woods

Assets:

Cash

69,276

138,690

Accounts Receivable

Total Current Assets

69,276

138,690

Other Investments (Land)

2,171,828

Other Property and Equipment, at Cost

Less – Accumulated Depreciation

Other Property and Equipment, Net

Total Assets

2,241,104

2,310,518

Liabilities:

Accounts Payable

Note Payable, Current Portion

143,704

142,136

Total Current Liabilities

143,704

142,136

Note Payable, Less Current Portion

1,122,104

1,158,736

Total Liabilities

1,265,808

1,300,872

Variable Interest Entity, Primary Beneficiary | TWS

Assets:

Cash

56,283

154,653

$ 70,000

Accounts Receivable

536,568

640

Total Current Assets

592,851

155,293

Other Investments (Land)

Other Property and Equipment, at Cost

483,934

471,219

Less – Accumulated Depreciation

(187,247)

(168,274)

Other Property and Equipment, Net

296,687

302,945

$ 330,000

Total Assets

889,538

458,238

Liabilities:

Accounts Payable

44,807

398

Note Payable, Current Portion

Total Current Liabilities

44,807

398

Note Payable, Less Current Portion

Total Liabilities

$ 44,807

$ 398

[1]

Note Payable - Narrative (Details) - USD ($)

3 Months Ended

12 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Debt Instrument [Line Items]

Notes payable, current

^[1]

$ 143,704

$ 142,136

Notes Payable

Debt Instrument [Line Items]

Interest rate (as a percent)

4.00%

Monthly principal payment

$ 16,034

Note payable

1,265,808

1,300,872

Interest paid

$ 13,039

$ 14,268

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 ($)	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
2024	$ 107,072
2025	148,155
2026	1,010,581
Total	$ 1,265,808	$ 1,300,872

Asset Retirement Obligation - Narrative (Details)	3 Months Ended
Asset Retirement Obligation - Narrative (Details)	Mar. 31, 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 ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Beginning balance	$ 2,566,368
Revision to estimate	(387,374)	$ (5,763)
Accretion expense	41,029	$ 18,221
Ending balance	$ 2,220,023

Fair Value Measurements - Schedule of Fair Value Reported on a Recurring Basis (Details) - USD ($)

Mar. 31, 2024

Dec. 31, 2023

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

^[1]

$ 2,764,073

$ 2,664,066

Treasury Bills Maturing within 1 Year

^[1]

2,220,901

Total assets measured at fair value

2,764,073

4,884,967

Level 1 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

1,923,275

2,664,066

Level 2 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

2,220,901

Level 3 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

750,000

Fair Value, Recurring | Level 1 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

1,923,275

2,664,066

Fair Value, Recurring | Level 1 Inputs | Domestic Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

1,840,193

2,321,275

Fair Value, Recurring | Level 1 Inputs | International Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

83,082

130,005

Fair Value, Recurring | Level 1 Inputs | Others

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

212,786

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

Fair Value, Option, Quantitative Disclosures [Line Items]

Treasury Bills Maturing within 1 Year

Fair Value, Recurring | Level 2 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

2,220,901

Fair Value, Recurring | Level 2 Inputs | Domestic Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Fair Value, Recurring | Level 2 Inputs | International Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Fair Value, Recurring | Level 2 Inputs | Others

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

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

Fair Value, Option, Quantitative Disclosures [Line Items]

Treasury Bills Maturing within 1 Year

2,220,901

Fair Value, Recurring | Level 3 Inputs

Fair Value, Option, Quantitative Disclosures [Line Items]

Total assets measured at fair value

750,000

Fair Value, Recurring | Level 3 Inputs | Domestic Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Fair Value, Recurring | Level 3 Inputs | International Equities

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

Fair Value, Recurring | Level 3 Inputs | Others

Fair Value, Option, Quantitative Disclosures [Line Items]

Equity Securities

$ 750,000

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

Fair Value, Option, Quantitative Disclosures [Line Items]

Treasury Bills Maturing within 1 Year

$ 0

[1]

Fair Value Measurements - Schedule of Balance Sheet Equity Securities (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 2,764,073	$ 4,884,967
Level 1 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	1,923,275	2,664,066
Level 2 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	2,220,901
Level 3 Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	750,000	0
Fair Value Measured at Net Asset Value Per Share
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets using NAV as a practical expedient, with a remaining commitment of $204,424	204,424
Total	$ 90,798	$ 0

Fair Value Measurements - Narrative (Details)	3 Months Ended
Fair Value Measurements - Narrative (Details)	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Portion of shares authorized to be repurchased, limit	0.05
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

Fair Value Measurements - Level 3 Investments (Details)	3 Months Ended
Fair Value Measurements - Level 3 Investments (Details)	Mar. 31, 2024 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance as of December 31, 2023	$ 0
Purchases	750,000
Changes in unrealized gains included in Other Income, net	0
Balance as of March 31, 2024	750,000
Remaining Unfunded Commitments	$ 0

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