UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q
 
(Mark One)

 xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the Quarterly Period Ended JuneSeptember 30, 2013
 
 oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-8157
 
THE RESERVE PETROLEUM COMPANY
(Exact Name of Registrant as Specified in Its Charter)
 
DELAWARE73-0237060
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
 
6801 BROADWAY EXT., SUITE 300
OKLAHOMA CITY, OKLAHOMA  73116-9037
(405) 848-7551
 
(Address and telephone number, including area code, of registrant’s principal executive offices)
 
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.Yesdays.   Yes xþ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes   xþ No o

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

Large accelerated filer
o
 Accelerated filero Non-accelerated filero Smaller reporting companyxþ

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

As of August 9,November 8, 2013, 159,609.306159,441 shares of the Registrant’s $.50 par value common stock were outstanding.

 
 
 

PART I – FINANCIAL INFORMATION
 
ITEM 1.FINANCIAL STATEMENTS
 
THE RESERVE PETROLEUM COMPANY 
BALANCE SHEETS 
ASSETS 
  
  June 30,  December 31, 
  
2013
  
2012
 
  (Unaudited)  (Derived from 
     audited financial 
     statements) 
       
Current Assets:      
Cash and Cash Equivalents $11,110,007  $10,842,311 
Available-for-Sale Securities  6,653,721   6,652,590 
Trading Securities  469,769   389,335 
Refundable Income Taxes  191,756   518,077 
Receivables  2,526,807   1,736,169 
Prepaid Expenses  12,213   — 
         
   20,964,273   20,138,482 
         
Investments:        
Equity Investment  599,114   594,855 
Other  151,839   151,839 
         
   750,953   746,694 
         
Property, Plant and Equipment:        
Oil and Gas Properties, at Cost, Based on the Successful Efforts Method of Accounting –
        
Unproved Properties  1,057,623   874,367 
Proved Properties  42,503,901   39,329,747 
         
   43,561,524   40,204,114 
         
Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance
  27,242,184   25,726,672 
         
   16,319,340   14,477,442 
         
Other Property and Equipment, at Cost  426,553   425,024 
         
Less – Accumulated Depreciation  286,929   268,095 
         
   139,624   156,929 
         
Total Property, Plant and Equipment  16,458,964   14,634,371 
       - 
Other Assets  365,824   363,722 
         
Total Assets $38,540,014  $35,883,269 
THE RESERVE PETROLEUM COMPANY
BALANCE SHEETS
ASSETS
 
See Accompanying Notes
       
       
  September 30,  December 31, 
  2013  2012 
  (Unaudited)  (Derived from 
     audited financial 
     statements) 
       
Current Assets:      
Cash and Cash Equivalents
 $13,172,411  $10,842,311 
Available-for-Sale Securities
  6,653,721   6,652,590 
Trading Securities
  570,388   389,335 
Refundable Income Taxes
  —   518,077 
Receivables
  2,443,874   1,736,169 
Prepaid Expenses
  8,287   — 
   22,848,681   20,138,482 
Investments:        
Equity Investment
  610,853   594,855 
Other
  151,839   151,839 
   762,692   746,694 
         
Property, Plant and Equipment:        
Oil and Gas Properties, at Cost, Based on the Successful Efforts Method of Accounting –
        
Unproved Properties
  1,111,132   874,367 
Proved Properties
  43,545,985   39,329,747 
   44,657,117   40,204,114 
         
Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance
  28,637,061   25,726,672 
   16,020,056   14,477,442 
Other Property and Equipment, at Cost  426,712   425,024 
         
Less – Accumulated Depreciation  295,173   268,095 
   131,539   156,929 
Total Property, Plant and Equipment  16,151,595   14,634,371 
Other Assets  365,904   363,722 
Total Assets
 $40,128,872  $35,883,269 
         
See Accompanying Notes        

 
1
 

THE RESERVE PETROLEUM COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
THE RESERVE PETROLEUM COMPANY 
BALANCE SHEETS 
LIABILITIES AND STOCKHOLDERS’ EQUITY 
  
  June 30,  December 31, 
  
2013
  
2012
 
  (Unaudited)  (Derived from 
     audited financial 
     statements) 
       
Current Liabilities:      
Accounts Payable $523,094  $519,654 
Other Current Liabilities – Deferred Income Taxes and Other  442,037   207,430 
         
   965,131   727,084 
         
Long-Term Liabilities:        
Asset Retirement Obligation  1,240,996   1,162,078 
Dividends Payable  1,608,352   1,535,568 
Deferred Tax Liability, Net  3,815,842   3,274,807 
         
   6,665,190   5,972,453 
         
Total Liabilities  7,630,321   6,699,537 
         
Stockholders’ Equity:        
Common Stock  92,368   92,368 
Additional Paid-in Capital  65,000   65,000 
Retained Earnings  31,791,907   29,898,866 
         
   31,949,275   30,056,234 
         
Less – Treasury Stock, at Cost  1,039,582   872,502 
         
Total Stockholders’ Equity  30,909,693   29,183,732 
         
Total Liabilities and Stockholders’ Equity $38,540,014  $35,883,269 
See Accompanying Notes
  September 30,  December 31, 
  2013  2012 
  (Unaudited)  (Derived from 
     audited financial 
     statements) 
       
Current Liabilities:      
Accounts Payable
 $366,547  $519,654 
Income Taxes Payable
  453,132   — 
Other Current Liabilities – Deferred Income Taxes and Other
  450,945   207,430 
   1,270,624   727,084 
         
Long-Term Liabilities:        
Asset Retirement Obligation
  1,268,454   1,162,078 
Dividends Payable
  1,490,912   1,535,568 
Deferred Tax Liability, Net
  3,679,849   3,274,807 
   6,439,215   5,972,453 
Total Liabilities
  7,709,839   6,699,537 
         
Stockholders’ Equity:        
Common Stock
  92,368   92,368 
Additional Paid-in Capital
  65,000   65,000 
Retained Earnings
  33,437,319   29,898,866 
   33,594,687   30,056,234 
         
Less – Treasury Stock, at Cost  1,175,654   872,502 
Total Stockholders’ Equity
  32,419,033   29,183,732 
Total Liabilities and Stockholders’ Equity
 $40,128,872  $35,883,269 
         
See Accompanying Notes        

 
2
 

THE RESERVE PETROLEUM COMPANY
STATEMENTS OF INCOME
(Unaudited)
 
THE RESERVE PETROLEUM COMPANY 
STATEMENTS OF INCOME 
(Unaudited) 
             
  Three Months Ended  Six Months Ended 
  
June 30,
  
June 30,
 
  
2013
  
2012
  
2013
  
2012
 
Operating Revenues:            
Oil and Gas Sales $4,956,399  $2,964,869  $8,780,715  $6,346,602 
Lease Bonuses and Other  135,604   99,811   157,673   232,312 
                 
   5,092,003   3,064,680   8,938,388   6,578,914 
                 
Operating Costs and Expenses:                
Production  681,933   521,389   1,409,438   1,141,537 
Exploration  53,677   81,340   295,480   98,954 
Depreciation, Depletion, Amortization and Valuation Provisions
  923,338   879,793   1,796,293   1,612,925 
General, Administrative and Other  408,941   388,831   840,912   830,931 
                 
   2,067,889   1,871,353   4,342,123   3,684,347 
                 
Income from Operations  3,024,114   1,193,327   4,596,265   2,894,567 
                 
Other Income, Net  108,004   413,844   162,369   494,195 
                 
Income Before Provision for Income Taxes  3,132,118   1,607,171   4,758,634   3,388,762 
                 
Provision for Income Taxes:                
Current  328,624   288,829   556,334   613,595 
Deferred  549,847   206,243   705,642   318,180 
                 
Total Provision for Income Taxes  878,471   495,072   1,261,976   931,775 
                 
Net Income $2,253,647  $1,112,099  $3,496,658  $2,456,987 
                 
Per Share Data                
Net Income, Basic and Diluted $14.04  $6.91  $21.77  $15.26 
                 
                 
Cash Dividends Declared and / or Paid $10.00  $10.00  $10.00  $10.00 
                 
Weighted Average Shares Outstanding,                
Basic and Diluted  160,532   160,937   160,639   160,959 
See Accompanying Notes
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2013  2012  2013  2012 
Operating Revenues:            
Oil and Gas Sales
 $4,679,450  $3,061,322  $13,460,165  $9,407,923 
Lease Bonuses and Other
  16,016   167,063   173,689   399,375 
   4,695,466   3,228,385   13,633,854   9,807,298 
                 
Operating Costs and Expenses:                
Production
  725,910   595,196   2,135,349   1,736,733 
Exploration
  52,864   86,141   348,344   185,095 
Depreciation, Depletion, Amortization and Valuation Provisions
  1,547,272   717,724   3,343,565   2,330,648 
General, Administrative and Other
  351,456   366,790   1,192,367   1,197,722 
   2,677,502   1,765,851   7,019,625   5,450,198 
                 
Income from Operations  2,017,964   1,462,534   6,614,229   4,357,100 
                 
Other Income, Net  116,256   19,933   278,625   514,128 
Income Before Provision for Income Taxes  2,134,220   1,482,467   6,892,854   4,871,228 
                 
Income Tax Provision / (Benefit):                
Current
  650,894   14,009   1,207,228   627,604 
Deferred
  (162,085)  316,727   543,557   634,907 
Total Provision for Income Taxes  488,809   330,736   1,750,785   1,262,511 
                 
Net Income $1,645,411  $1,151,731  $5,142,069  $3,608,717 
                 
Per Share Data                
Net Income, Basic and Diluted
 $10.30  $7.16  $32.07  $22.42 
                 
Cash Dividends Declared and/or Paid $—  $—  $10.00  $10.00 
                 
Weighted Average Shares Outstanding,                
Basic and Diluted
  159,695   160,920   160,321   160,946 
                 
See Accompanying Notes                

 
3
 

THE RESERVE PETROLEUM COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
THE RESERVE PETROLEUM COMPANY 
CONDENSED STATEMENTS OF CASH FLOWS 
(Unaudited) 
       
  Six Months Ended 
  
June 30,
 
  
2013
  
2012
 
       
Net Cash Provided by Operating Activities $5,457,450  $4,721,443 
         
Cash Flows Applied to Investing Activities:        
Purchases of Available-for-Sale Securities  (6,653,721)  (6,652,196)
Maturity of Available-for-Sale Securities  6,652,589   6,654,837 
Proceeds from Disposal of Property, Plant and Equipment  43,007   35,795 
Purchase of Property, Plant and Equipment  (3,550,216)  (3,283,882)
Cash Distribution from Equity Investee  16,500   — 
         
Net Cash Applied to Investing Activities  (3,491,841)  (3,245,446)
         
Cash Flows Applied to Financing Activities:        
Dividends Paid to Stockholders  (1,530,833)  (1,573,116)
Purchase of Treasury Stock  (167,080)  (15,640)
         
Total Cash Applied to Financing Activities  (1,697,913)  (1,588,756)
         
Net Change in Cash and Cash Equivalents  267,696   (112,759)
         
Cash and Cash Equivalents, Beginning of Period  10,842,311   10,150,742 
         
Cash and Cash Equivalents, End of Period $11,110,007  $10,037,983 
See Accompanying Notes
  Nine Months Ended 
  September 30, 
  2013  2012 
       
Net Cash Provided by Operating Activities $9,173,877  $6,698,435 
         
Cash Flows Applied to Investing Activities:        
Purchases of Available-for-Sale Securities
  (6,653,721)  (6,652,196)
Maturity of Available-for-Sale Securities
  6,652,590   6,654,838 
Proceeds from Disposal of Property, Plant and Equipment
  42,640   493,763 
Purchase of Property, Plant and Equipment
  (4,950,362)  (5,504,763)
Cash Distribution from Equity Investee
  16,500   — 
Net Cash Applied to Investing Activities  (4,892,353)  (5,008,358)
         
Cash Flows Applied to Financing Activities:        
Dividends Paid to Stockholders
  (1,648,272)  (1,602,073)
Purchase of Treasury Stock
  (303,152)  (17,080)
Total Cash Applied to Financing Activities  (1,951,424)  (1,619,153)
Net Change in Cash and Cash Equivalents  2,330,100   70,924 
         
Cash and Cash Equivalents, Beginning of Period  10,842,311   10,150,742 
Cash and Cash Equivalents, End of Period $13,172,411  $10,221,666 
         
See Accompanying Notes        

 
4
 

THE RESERVE PETROLEUM COMPANY
NOTES TO FINANCIAL STATEMENTS

JuneSeptember 30, 2013
(Unaudited)
 
Note 1 – BASIS OF PRESENTATION

The accompanying balance sheet as of December 31, 2012, which has been derived from audited financial statements, the unaudited interim financial statements and these notes, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain disclosures normally included in financial statements prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) have been omitted. The accompanying 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 fiscal year ended December 31, 2012.

In the opinion of Management, the accompanying 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.
 
Note 2 – OTHER INCOME, NET

The following is an analysis of the components of Other Income, Net for the three months and sixnine months ended JuneSeptember 30, 2013 and 2012:

 Three Months Ended  Six Months Ended  Three Months Ended  Nine Months Ended 
 
June 30,
  
June 30,
  September 30,  September 30, 
 
2013
  
2012
  
2013
  
2012
  2013  2012  2013  2012 
                        
Net Realized and Unrealized Gain (Loss) on Trading Securities
 $44,720  $(54,053) $79,794  $8,824  $100,173  $(12,102) $179,967  $(3,278)
Gain on Asset Sales  28,789   431,643   32,472   434,573   766   12,682   33,238   447,255 
Interest Income  7,240   8,766   13,084   16,116   4,171   8,479   17,255   24,595 
Equity Earnings in Investee  5,492   19,866   20,759   38,160   11,739   11,799   32,498   49,959 
Other Income  30,419   15,599   33,638   15,873   8,142   6,604   41,780   22,477 
Interest and Other Expenses  (8,656)  (7,977)  (17,378)  (19,351)  (8,735)  (7,529)  (26,113)  (26,880)
                                
Other Income, Net $108,004  $413,844  $162,369  $494,195  $116,256  $19,933  $278,625  $514,128 
 
Note 3 – INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES, INCLUDING GUARANTEES

Equity Investment consists of a 33% ownership interest in Broadway Sixty-Eight, Ltd. (the “Partnership”), an Oklahoma limited partnership, which owns and operates an office building in Oklahoma City, Oklahoma. Although the Company invested as a limited partner, it agreed, jointly and severally, with all other limited partners to reimburse the general partner for any losses suffered from operating the Partnership. The indemnity agreement provides no limitation to the maximum potential future payments. To date, no monies have been paid with respect to this agreement.
 
Note 4 – PROVISION FOR INCOME TAXES

In 2013 and 2012, the effective tax rate was less than the statutory rate, primarily as a result of allowable depletion for tax purposes in excess of the cost basis in oil and gas properties and the corporate graduated tax rate structure.

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 arewill 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. 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.

 
5
 

Note 5 – 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 4.08%. 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 3.25%.

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

Balance at December 31, 2012 $1,162,078  $1,162,078 
Liabilities incurred for new wells  61,726   80,588 
Accretion expense  17,192   25,788 
Balance at June 30, 2013 $1,240,996 
Balance at September 30, 2013 $1,268,454 
 
Note 6 – FAIR VALUE MEASUREMENTS

Inputs used to measure fair value are organized into a fair value hierarchy based on the observability of the inputs. Level 1 inputs consist of quoted prices in active markets for identical assets. Level 2 inputs are inputs, other than quoted prices, for similar assets that are observable. Level 3 inputs are unobservable inputs.

Recurring Fair Value Measurements

Certain of the Company’s assets are reported at fair value in the accompanying balance sheets on a recurring basis. The Company determined the fair value of the available-for-sale securities using quoted market prices for securities with similar maturity dates and interest rates. At JuneSeptember 30, 2013 and December 31, 2012, the Company’s assets reported at fair value on a recurring basis are summarized as follows:

 
June 30, 2013
  
September 30, 2013
 
 Level 1 Inputs  Level 2 Inputs  Level 3 Inputs  Level 1 Inputs  Level 2 Inputs  Level 3 Inputs 
Financial Assets:                  
Available-for Sale Securities –                  
U.S. Treasury Bills Maturing in 2013 $—  $6,653,721  $—  $—  $6,653,721  $— 
Trading Securities:                        
Domestic Equities  274,835   —   —   418,613   —   — 
International Equities  132,638   —   —   128,830   —   — 
Others  62,296   —   —   22,945   —   — 
 
  
December 31, 2012
 
  Level 1 Inputs  Level 2 Inputs  Level 3 Inputs 
Financial Assets:         
Available-for Sale Securities –
         
U.S. Treasury Bills Maturing in 2013 $—  $6,652,590  $— 
Trading Securities:
            
Domestic Equities
  211,103   —   — 
International Equities
  115,106   —   — 
Others
  63,126   —   — 
 
 
6
 

Non-Recurring Fair Value Measurements

The Company’s asset retirement obligation annually represents a non-recurring fair value liability. The fair value of the non-financial liability incurred in the sixnine months ended JuneSeptember 30, was $61,726$80,588 in 2013 and $48,465$113,204 in 2012 and was calculated using Level 3 inputs. See Note 5 above for more information about this liability and the inputs used for calculating fair value.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, marketable securities, trade payables and dividends payable. At JuneSeptember 30, 2013 and December 31, 2012, the historical cost of cash and cash equivalents, trade receivables, trade payables and dividends payable are considered to be representative of their respective fair values due to the short-term maturities of these items.
 
Note 7 – NEW ACCOUNTING PRONOUNCEMENTS

There were no accounting pronouncements issued and none that became effective since December 31, 2012 that were directly applicable to the Company.
 
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis should be read with reference to a similar discussion in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission (hereinafter, the “2012 Form 10-K”), as well as the 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 gas wells, the production that may be obtained from oil and gas wells, cash flow and anticipated liquidity and expected future expenses.

Although management believes the expectations in these and other forward looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that would cause actual results to differ materially from expected results are described under “Forward Looking Statements” on page 8 of the 2012 Form 10-K.

We caution you not to place undue reliance on these forward looking statements, which speak only as of the date of this Form 10-Q, and we undertake no obligation to update this information. 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.

 
Financial Conditions and Results of Operations

Liquidity and Capital Resources

Please refer to the Balance Sheets and the Condensed Statements of Cash Flows in this Form 10-Q to supplement the following discussion. In the first halfnine months of 2013, the Company continued to fund its business activity through the use of internal sources of cash. The Company had cash provided by operations of $5,457,450$9,173,877 and cash provided by the maturities of available-for-sale securities of $6,652,589.$6,652,590. Additional cash of $59,507$59,140 was provided by property dispositions and an investment distribution for total cash provided of $12,169,546.$15,885,607. The Company utilized cash for the purchase of available-for-sale securities of $6,653,721,$6,653,721; property additions of $3,550,216$4,950,362 and financing activities of $1,697,913$1,951,424 for total cash applied of $11,901,850.$13,555,507. Cash and cash equivalents increased $267,676 (2%)$2,330,100 to $11,110,007.$13,172,411.

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, 2012. A discussion of these items follows.
 
 
7
 
Trading securities increased $80,434 (21%$181,053 (47%) from $389,335 to $469,769.$570,388. The increase was the net result of an $83,826a $140,089 increase in the trading securitiessecurities’ market value offset by $3,392plus $40,964 of net lossesincome from these securities.

Refundable income taxes decreased $326,321 (63%) to $191,756declined $971,209 from $518,077 to a $453,132 payable. This decrease was due mostlyprimarily to the first half 2013 current income tax provision for the nine months ended September 30, 2013 of $556,334, net of a $250,000$1,207,228, offset by estimated tax payment in June 2013.payments of $250,000 for the same period.

Receivables increased $790,638 (46%$707,705 (41%) to $2,526,807$2,443,874 from $1,736,169. This increase was due almost entirely to an increase in sales receivable. Sales variances are discussed in the "Results“Results of Operations"Operations” section below.

Accounts payable decreased $153,107 (29%) to $366,547 from $519,654. This decrease was due primarily to a decline in drilling activity at September 30, 2013 versus December 31, 2012.

Deferred income taxes and other liabilities increased $234,607 (113%$243,515 (117%) to $442,037$450,945 from $207,430$207,430. The increase is partly due to an increase of $70,000$105,000 in ad valorem tax accruals and an increase of $136,106 in current deferred income taxes.accruals. Ad valorem (property) taxes are primarily for Texas properties and are accrued for the first three quarters each year to be paid in the fourth quarter. The currentCurrent deferred income tax liability increase is related totaxes accounted for the increased sales receivable.remaining $138,515 increase.

Discussion of Significant Changes in the Condensed Statements of Cash Flows. As noted in the first paragraph above, net cash provided by operating activities was $5,455,997$9,173,877 in 2013, an increase of $734,554 (16%$2,475,442 (37%) from the comparable period in 2012. The increase was primarily due to increased oil and gas sales revenue, partiallypartly offset by increased operating costs.production, exploration and current income tax expense for 2013 compared to 2012. For more information see "Operating Revenues"“Operating Revenues” and "Operating“Operating Costs and Expenses"Expenses” below.

Property disposal proceeds in 2013 were $42,640, a decrease of $451,123 from the comparable period in 2012. The decrease was primarily due to 2012 sales of non-producing leaseholds in Oklahoma and Kansas with no similar sales in 2013.

Cash applied to the purchase of property, additionsplant and equipment in 2013 was $3,550,216, an increase$4,950,362, a decrease of $266,334 (8%$554,401 (10%) from cash applied in 2012 of $3,283,882.$5,504,763. In both 2013 and 2012, cash applied to property, plant and equipment additions was mostly related to oil and gas exploration and development activity. The change is due to decreased drilling activity in 2013 compared to 2012. See the subheading "Exploration Costs"“Exploration Costs” in the "Results“Results of Operations"Operations” section below for additional information.

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 2012 Form 10-K would not be representative of the Company'sCompany’s current position.

Material Changes in Results of Operations SixNine Months Ended JuneSeptember 30, 2013, Compared with SixNine Months Ended JuneSeptember 30, 2012

Net income increased $1,039,671$1,533,352 (42%) to 3,496,658$5,142,069 in 2013 from $2,456,987$3,608,717 in 2012. Net income per share, basic and diluted, increased $6.51$9.65 to $21.77$32.07 in 2013 from $15.26$22.42 in 2012.

A discussion of revenue from oil and gas sales and other significant line items in the statements of income follows.

Operating RevenuesRevenues.. Revenues from oil and gas sales increased $2,434,113 (38%$4,052,242 (43%) to $8,780,715$13,460,165 in 2013 from $6,346,602$9,407,923 in 2012. The $2,434,113Of the $4,052,242 increase, is a combination of highercrude oil sales increased $2,432,978; natural gas sales of $1,208,746increased $1,643,652; and higher crude oil sales of $1,257,108, offset by a decrease in miscellaneous oil and gas product sales of $31,741.decreased $24,388.

The $1,257,108 (26%$2,432,978 (35%) increase in oil sales to $6,046,131$9,465,205 in 2013 from $4,789,023$7,032,227 in 2012 was the net result of an increaseincreases in the volume sold and a decrease in the average price per barrel (Bbl). The volume of oil sold increased 17,36425,415 Bbls to 70,202104,803 Bbls in 2013, resulting in a positive volume variance of $1,573,811. This volume increase was the net result of an increase of about 29,000 Bbls for production that began after June 30, 2012, offset by a decline of about 11,600 Bbls from older properties.$2,251,261. The average price per Bbl decreased $4.51increased $1.73 to $86.13$90.31 per Bbl in 2013, resulting in a negativepositive price variance of $316,703.$181,717. The increase in oil volumes sold was mostly due to production of 36,324 Bbls from new wells in Oklahoma, Texas and Kansas, offset partially by production declines from older wells.

The $1,208,746 (87%$1,643,652 (77%) increase in gas sales to $2,601,076$3,772,088 in 2013 from $1,392,330$2,128,436 in 2012 was the result of an increaseincreases in boththe volume sold and the average price per thousand cubic feet (MCF) and the volume sold.. The volume of gas sold increased 237,389295,633 MCF to 745,5501,079,197 MCF from 508,160783,564 MCF in 2012, for a positive volume variance of $650,432. This volume increase was the net result of an increase of about 330,000 MCF for production from wells that began producing after June 30, 2012, offset by a decline of about 93,000 MCF from older properties.$804,122. The average price per MCF increased $0.75$0.78 to $3.49$3.50 per MCF from $2.74$2.72 per MCF in 2012, resulting in a positive price variance of $558,314. Of$839,531. The net increase in gas volumes sold was due to 385,000 MCF of production from several new working and royalty interest wells, offset by a decline in sales from older properties. Robertson County, Texas royalty interest properties and Arkansas working interest wells accounted for 281,000 MCF (73%) of the increased gasincrease in sales volumes fromfor the new wells, about 202,000 MCF were from Arkansas properties.wells.

8
Sales from the Robertson County, Texas royalty interest properties provided approximately 27%23% of the Company'sCompany’s first halfnine months 2013 gas sales volumes and about 33% of the first half 2012 gas sales volumes. See discussion on page 12 of the 2012 Form 10-K, under the subheading "Operating Revenues"“Operating Revenues,” for more information about these properties.

8
For both oil and gas sales, the price change was mostly the result of a change in the spot market prices, upon which most of the Company'sCompany’s oil and 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 gas products were $133,508$222,872 in 2013 as compared to $165,249$247,260 in 2012.

The Company received lease bonuses of $157,033$172,246 in the first half of 2013 for leases on its owned minerals. Lease bonuses for the first half of 2012 were $20,209.minerals compared to $179,245 in 2012.

Coal royalties were $640$1,443 for the first halfnine months of 2013 compared to $212,103$220,130 for 2012 for coal mined during these periods on North Dakota leases. No coal has been mined in 2013 from the Company's mineral leases. See subheading "Operating Revenues"“Operating Revenues” on page 12 of the 2012 Form 10-K for more information about this property.

Operating Costs and ExpensesExpenses.. Operating costs and expenses increased $657,776 (18%)$1,569,427 to $4,342,123$7,019,625 in 2013 from $3,684,347$5,450,198 in 2012. Material line item changes are discussed and analyzed in the following paragraphs.

Production Costs. Production costs increased $267,901$398,616 (23%) in 2013 to $1,409,438$2,135,349 from $1,141,537$1,736,733 in 2012. Lease operating expense and transportation and compression expense increased $221,557 (26%)$341,886 in 2013 to $1,075,725$1,642,207 from $854,168$1,300,321 in 20122012. This increase was due to lease operating expense on wells that first produced after JuneSeptember 30, 2012. Production taxes increased $46,344 (16%)$56,729 to $333,713$493,141 in 2013 from $287,369$436,412 in 20122012. This increase was due to the increasedhigher oil and natural gas sales revenues described above in the "Operating Revenues" section.revenue.

Exploration Costs. Total exploration expense increased $196,526 (199%$163,249 (88%) to $295,480$348,344 in 2013 from $98,954$185,095 in 2012. Dry hole costs decreased $96,017 (97%) in 2013The increase is due to $2,937 from $98,954 in 2012. This decrease was offset by an increase in geological and geophysical expense, of $292,543offset by a decline in dry hole costs. Geological and geophysical expenses totaled $293,495 in 2013 as compared to none in 2012. Dry hole costs declined $130,246 in 2013 to $54,849 from zero$185,095 in 2012.

The following is a summary as of July 26,November 1, 2013, updating both exploration and development activity from December 31, 2012, for the period ended JuneSeptember 30, 2013.

The Company participated with its 18% working interest in the drilling of fourseven development wells on a Barber County, Kansas prospect. Two of these wells were completed as commercial gas producers, one as a commercial oil and completionsgas producer and one as a marginal oil producer. Completions are in progress on the other two. Three additional development wells are planned for the remainder of 2013.three wells. Capitalized costs for the period were $288,633,$521,079, including $152,444$184,250 in prepaid drilling costs.

The Company participated with a14%, 14% and 8% working interestinterests in the drilling of twothree step-out wells on a Woods County, Oklahoma prospect. BothThe first two wells have beenwere completed as commercial oil and are being tested.gas producers and the third is awaiting completion. The Company will participate with 8%, 8%, 15% and 15% working interests in the drilling of fourthree additional step-out wells starting in August 2013.January 2014. Capitalized costs for the period were $179,900,$240,843, including $130,366$39,049 in prepaid drilling costs.

The Company participated with a 13.7% working interests in the drilling of three development wells and with a 17.9% interest in the drilling of two development wellsa fourth on a Woods County, Oklahoma prospect. BothTwo of these wells were completed as commercial oil and gas producers. The Company will participate with 13.7%producers and 17.9% working interestscompletions are in progress on the drilling of two additional development wells starting in September 2013.other two. Capitalized costs for the period were $190,265,$349,689, including $1,767$152,120 in prepaid drilling costs.

The Company participated with its 16% working interest in the drilling of a step-out well on a Woods County, Oklahoma prospect. The well was completed as a marginal oil and gas producer. Capitalized costs were $71,118$74,772 for the period.

The Company participated with its 16% working interest in the drilling of two step-out wells on a Hodgeman County, Kansas prospect. Both wells were completed as commercial oil producers. Capitalized costs for the period were $176,000, including $58,629 in prepaid drilling costs.$121,954.

The Company is participatingparticipated with its 8.3% interest in the drilling of two additional horizontal wells in a Harding County, South Dakota waterflood unit. Both wells have been drilled and are awaiting completion.were completed as commercial oil producers. Capitalized costs for the period were $228,465.$417,126.

9
The Company participated with its 10.5% working interest in the drilling of a step-out horizontal well on a Garfield County, Oklahoma prospect. The well was completed as a commercial oil and gas producer. Capitalized costs for the period were $121,786.$123,090.

9
The Company participated with its 7% working interest in the drilling of two exploratory wells on a Grayson County, Texas prospect. The first well was drilled and completed as a horizontal well. For geologic reasons, the planned horizontal section of the second well was not drilled and it was completed as a vertical well. Both wells are producing oil. They appear to be marginal wells, but are still being tested. Capitalized costs for the period were $888,914,$954,176, including $268,708$217,530 in prepaid drilling costs. A $300,000 impairment loss was recorded for the horizontal well in the third quarter operating results.

The Company participated with fee mineral interests in completion operations on two exploratory horizontal wells in Beaver County, Oklahoma (the wells were drilled in 2012). The Company has interests of 12.6% and 10.2% in the wells, which were both completed as commercial oil producers. Capitalized costs for the period were $582,525.$592,251.

The Company participated with a 5.7% working interest in the drilling of a horizontal development well on a Dewey County, Oklahoma prospect. The well was completed as a commercial oil and gas producer. Capitalized costs for the period were $263,163.$268,653.

The Company participated with its 16% interest in a 3-D seismic survey on a Hodgeman County, Kansas prospect. An exploratory well was drilled and completed as a marginal oil producer. Capitalized costs for the period were $88,000, including $45,824$29,400 in prepaid drilling costs. Seismic costs of $15,533 were expensed.

The Company participated with its 10.5% interest in a 3-D seismic survey on a Cimarron County, Oklahoma prospect. An exploratory well has been drilled and completed, testing oil. It is under evaluation for the installation of pumping equipment and surface facilities. A second exploratory well will be drilled starting in AugustNovember 2013. Seismic costs of $91,822 were expensed for the period. Capitalized costs were $117,138, including $97,628 in prepaid drilling costs.

InStarting in January 2013, the Company has purchased a 14% interest in 11,647.6112,404 net acres of leasehold on a Ford and Gray Counties, Kansas prospect for $154,913.$167,097. A 3-D seismic survey was conducted on the prospect. The Company is participatingparticipated in the drilling of an exploratory well that is currently drilling. Prepaid drillingwas completed as a dry hole. A second exploratory well will be drilled in November 2013. Dry hole costs for the period were $39,481.$36,691. Seismic costs of $185,187 were expensed.

In April 2013, the Company agreed to participate in the development of a prospect in Grayson County, Texas with an 8.75% interest. Acreage acquisition is in progress. Prospect costs for the period were $29,750.$77,000.

In July 2013, the Company purchased an 18% interest in 1440 net acres of leasehold on a Meade County, Kansas prospect for $24,624. AnThe Company participated in the drilling of an exploratory well will be drilled in August 2013.that was completed as a dry hole. The leasehold cost was written off to impairment expense. Dry hole costs for the period were $12,808.

The Company will participateparticipated with a 7.5% working interest in the drilling of a step-out horizontal well on a Woods County, Oklahoma prospect inprospect. The well was completed as a commercial oil and gas producer. Capitalized costs for the second half of 2013.period were $295,252.

The Company will participateparticipated with a 9% working interest in the drilling of a step-out horizontal well on a Roger Mills County, Oklahoma prospectprospect. A completion is in progress.

In September 2013, the Company paid $4,320 to renew and extend its 18% interest in 320 net acres of leasehold on a Kiowa County, Kansas prospect. The Company participated in the drilling of an exploratory well that is awaiting completion. A second half ofexploratory well will be drilled in November 2013. Prepaid drilling costs for the period were $51,750.

Depreciation, Depletion, Amortization and Valuation Provision (DD&A). DD&A increased $183,368 (11%$1,012,917 (44%) in 2013 to $1,796,293$3,343,565 from $1,612,925$2,330,648 in 2012. The increasechange was mostly due toprimarily the combinationresult of an increase of approximately $397,000$694,702 in current year depreciation expense on oil and gas properties offset by a 2012due to increased production volumes and well investment costs. In addition, impairment loss of $200,000 with no similar amountslosses on long-lived assets increased $300,000 for some marginal horizontal wells completed in 2013.

Other Income, NetNet.. This line item decreased $331,826$235,503 (46%) to $162,369$278,625 in 2013 from $494,195$514,128 in 2012. See Note 2 to the accompanying financial statements for thean analysis of the various components of this line item. Components withExplanations for variances of the more significant changes are discussed in the following paragraphs.components follow.

Gains on trading
10
Trading securities gains in 2013 were $79,794$179,967 as compared to gainlosses of $8,824$3,278 in 2012, an increase of $70,970.$183,245. In 2013, the Company had realized losses of $4,032 and unrealized gains of $83,826$140,089 from adjusting the securities, held at September 30, to estimated fair market value.value and net realized trading gains of $39,878. In 2012, the Company had realizedunrealized losses of $8,525$8,681 and unrealizednet realized trading gains of $17,349.$5,404.

Gain on asset sales decreased $402,101$414,017 to $32,472$33,238 in 2013 from $434,573$447,255 in 2012. The decrease was due mostly to a $406,000 gain fromfewer sales of the Company'sCompany’s interest in some non-producing leaseholds in Oklahoma and Kansas in 2012 with no similar sales in 2013.leaseholds.

Provision for Income TaxesTaxes.. The provision for income taxes increased $330,201$488,274 (39%) to $1,261,976$1,750,785 in 2013 from $931,775$1,262,511 in 2012. TheThis increase was due primarily to the higher$2,021,626 (42%) increase in pretax income before income taxes of $1,369,872 to $4,758,634$6,892,854 in 2013 from $3,388,762$4,871,228 in 2012. Of the 2013 income tax provision, the estimated current tax expense was $556,334$1,207,228 and the estimated deferred tax expense was $705,642.$543,557. Of the 2012 income tax provision, the estimated current and deferred tax expenses were $613,595$627,604 and $318,180,$634,907, respectively. See Note 4 to the accompanying financial statements for additional information ona discussion of the provision for income taxes.

10
Material Changes in Results of Operations Three Months Ended JuneSeptember 30, 2013 Compared with Three Months Ended JuneSeptember 30, 2012.

Net income increased $1,141,548$493,680 (43%) to $2,253,647$1,645,411 in 2013 from $1,112,099$1,151,731 in 2012. The materialsignificant changes in the resultsstatements of operations, which caused the increase in net income are discussed below.

Operating Revenues. Revenues from oil and gas sales increased $1,991,530$1,618,128 (53%) to $4,956,399$4,679,450 in 2013 from $2,964,869$3,061,322 in 2012. The increase was the result of an increase in gas sales of $434,907 (59%) to $1,171,012; an increase in oil sales of $1,175,870 (52%) to $3,419,074; and an increase in miscellaneous oil and gas product sales of $7,352 to $89,364.

The increase in gas sales was the result of an increase in the average price of $0.84 per MCF to $3.51, for a positive price variance of $279,396, and an increase in the volume of gas sold of 58,244 MCF to 333,647 MCF, for a positive volume variance of $155,511. See the “Results of Operations” section above for the nine for additional discussion of gas sales variances.

The increase in oil sales was the result of an increase in the average price received of $14.32 per Bbl to $98.81, for a positive price variance of $495,641, and an increase in the volume of oil sold of 8,051 Bbls to 34,601 Bbls, for a positive volume variance of $680,229. See the “Results of Operations” section above for the nine months for additional discussion of the oil sales increase.

Other operating revenues declined $151,047 to $16,016, primarily due to a decrease in lease bonuses of $143,825 to $15,213 for 2013.

Operating Costs and Expenses. Operating costs and expenses increased $911,651 (52%) to $2,677,502 in 2013 from $1,765,851 in 2012. The increase was the net result of an increase in oil salesproduction costs of $1,219,575 (53%)$130,714; a decrease in exploration costs charged to $3,540,837;expense of $33,277; an increase in gas salesdepreciation, depletion, amortization and valuation provisions (DD&A) of $792,820 (141%) to $1,355,871;$829,548; and a decrease in salesgeneral administrative and other expense (G&A) of miscellaneous products of $20,865 to $59,691.

$15,334. The $1,219,575 increasesignificant changes in oil sales was the result of an increase in the volume of oil sold of 13,752 Bbls to 40,482 Bbls, for a positive volume variance of $1,194,255, and an increase in the average price received of $0.63 per Bbl to $87.47, for a positive price variance of $25,320.
The $792,820 increase in gas sales was the result of an increase in the volume of gas sold of 114,576 MCF, for a positive volume variance of $285,427, and an increase in the average price of $1.49 per MCF to $3.98, for a positive price variance of $507,393.

Other operating revenues increased $35,793 to $135,604 in 2013 from $99,811 in 2012. This increase was the net result of an increase in lease bonuses for minerals in various Oklahoma and Texas Counties of $132,745 to $134,963 in 2013 from $2,219 in 2012, offset by a decline in coal royalties of $96,952 to $640 in 2013 from $97,592 in 2012.these line items are discussed below.

Production Expense.Costs. Production expensecosts increased $160,544$130,714 to $681,933$725,910 in 2013 from $521,389$595,196 in 2012. LeaseMost of the increase is due to higher lease operating expense and transportation and compression expense increased $113,493expenses for 2013 versus 2012, related primarily to $510,652the new wells that first produced after September 30, 2012. For more information about these changes, see the production costs discussion in the “Results of Operations” section above for the nine months.
Exploration Costs. Exploration costs charged to operations decreased $33,277 to $52,864 in 2013 from $397,159$86,141 in 2012 as a result of lower dry hole costs. See the exploration costs discussion in the “Results of Operations” section above for the nine months.

Depreciation, Depletion & Amortization (DD&A). DD&A increased $829,548 to $1,547,272 from $717,724 in 2012. Production taxes increased $47,051The primary reason for the increase was an impairment loss of $500,000 charged to $171,281operations in the quarter ending September 30, 2013 from $124,230with no similar loss in 2012. See DD&A discussion in the “Results of Operations” section above for the nine months for more explanation of the increase.

Other Income, Net. This line item decreased $305,840 to $108,004 in 2013 from $413,844 in 2012. See Note 2 to the accompanying financial statements for an analysis of the components of other income, net. Components withIn 2013, this line item increased $96,323 to income of $116,256 from $19,933 in 2012. Explanations for variances of the more significant changes are discussed in the following paragraphs.components follow.

Trading securities gains in 2013 were $44,720$100,173 compared to losses of $54,053 in 2012; primarily unrealized gains in 2013 and unrealized losses in 2012.

Gain on asset sales decreased $402,854 to $28,789 in 2013 from a gain of $431,643$12,102 in 2012. The decrease was due to the gain from sales of the Company's interest in some non-producing leaseholds in Oklahomagains and Kansas in 2012 discussed in "Item 2." above, for the six months ended June 30, 2013, with no similar sales in 2013.losses were primarily unrealized.

11
Provision for Income Taxes. ProvisionThe provision for income taxes increased $383,399$158,073 to $878,471$488,809 in 2013 from $495,072$330,736 in 2012 due to the $651,753 increase in pretax income in 2013 from 2012. See discussiondiscussions above in "Item 2."the “Results of Operations” section and Note 4 to the accompanying financial statements for a discussionadditional explanation of the changes in the provision for income taxes.

There were no additional material changes between the quarters, which were not covered in the discussion in "Item 2."the “Results of Operations” section above for the sixnine months ended JuneSeptember 30, 2013.

Off-Balance Sheet ArrangementArrangements

The Company'sCompany’s off-balance sheet arrangement relates to Broadway Sixty-Eight, Ltd., an Oklahoma limited partnership. The Company does not have actual or effective control of this entity. Management of this entity could at any time make decisions in its own best interest, which could materially affect the Company'sCompany’s net income or the value of the Company'sCompany’s investment.

For more information about this entity, see Note 3 to the accompanying financial statements.

ITEM 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

 
11
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"“Exchange Act”), the term "disclosure“disclosure controls and procedures"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'sSEC’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'sissuer’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'sCompany’s Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the Company'sCompany’s disclosure controls and procedures. Based on this evaluation, they concluded that the Company'sCompany’s disclosure controls and procedures were effective as of JuneSeptember 30, 2013.

Internal Control over Financial Reporting

As defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act, the term "internal“internal control over financial reporting"reporting” means a process designed by, or under the supervision of, the issuer'sissuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer'sissuer’s board of directors, management and other personnel, 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 and includes those policies and procedures that:

 (1)Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

 (2)Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

 (3)Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer'sissuer’s assets that could have a material adverse effect on the financial statements.

The Company'sCompany’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. There were no changes in the Company'sCompany’s internal control over financial reporting during the quarter ended JuneSeptember 30, 2013 that have materially affected, or are reasonably likely to materially affect, the Company'sCompany’s internal control over financial reporting.

 
12
 
PART II – OTHER INFORMATION
 
ITEM ITEM 1.
LEGAL PROCEEDINGS

During the quarter ended JuneSeptember 30, 2013, the Company did not have any material legal proceedings brought against it or its properties.

ITEM ITEM 1A.
RISK FACTORS

Not applicable.

ITEM ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
ISSUER PURCHASES OF EQUITY SECURITIES
PeriodTotal Number
of Shares
Purchased		Average
Price Paid
Per Share
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs1
Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the Plans
or Programs1
July 1 to July 31, 2013188 $   230.00——
August 1 to August 31, 2013323 $   230.00——
September 1 to September 30, 201381 $   230.00——
Total 592 $   230.00——
 
Period 
Total Number
of Shares
Purchased
  
Average
Price Paid
Per Share
  
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs1
  
Approximate Dollar Value
of Shares that May Yet Be Purchased Under the Plans
or Programs1
 
April 1 to April 30, 2013  16   $180.00   —   — 
May 1 to May 31, 2013  307   $230.00   —   — 
June 1 to June 30, 2013  349   $230.00   —   — 
Total  672   $229.00   —   — 
1The Company has no formal equity security purchase program or plan. The Company acts as its own transfer agent, and most purchases result from requests made by stockholders receiving small odd lot share quantities as the result of probate transfers.

ITEM ITEM 3.
DEFAULTS UPON SENIOR SECURITIES

None.

ITEM ITEM 4.
MINE SAFETY DISCLOSURES

Not applicable.

ITEM ITEM 5.
OTHER INFORMATION

None.

 
13
 
ITEM 6.EXHIBITS

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

Exhibit

Number
 
 
Description
   
31.1*
 
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) or 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) or 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*
101.INS*
 XBRL Instance Document
   
101.SCH*
101.SCH*
 XBRL Taxonomy Extension Schema Document
   
101.CAL*
101.CAL*
 XBRL Taxonomy Calculation Linkbase Document
   
101.LAB*
101.LAB*
 XBRL Taxonomy Label Linkbase Document
   
101.PRE*
101.PRE*
 XBRL Taxonomy Presentation Linkbase Document
* Filed electronically herewith.
 
* Filed electronically herewith.
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: August 14, 2013 /s/ Cameron R. McLain(Registrant) 
  
Date:  November 14, 2013 /s/ Cameron R. McLain
  Principal Executive Officer
Date: August 14, 2013 /s/ James L. Tyler
Cameron R. McLain,
 
  James L. Tyler
Principal Executive Officer
  
Date:  November 14, 2013 /s/ James L. Tyler
James L. Tyler
Principal Financial Officer
 
14