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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2024
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 000-08157
a01.jpg
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, 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 classTrading Symbol(s)Name of each exchange on which registered
NoneNoneNone
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.


TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Page
1
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 Securities2,764,073 2,664,066 
Refundable Income Taxes614,025 317,755 
Accounts Receivable2,184,635 2,366,663 
Total Current Assets11,375,843 12,787,859 
Investments:
Equity Method Investments2,810,745 2,818,790 
Other Investments5,553,553 5,332,553 
Total Investments8,364,298 8,151,343 
Property, Plant and Equipment:
Oil and Gas Properties, at Cost,
Based on the Successful Efforts Method of Accounting –
Unproved Properties4,906,773 3,403,051 
Proved Properties70,976,987 69,152,923 
Oil and Gas Properties, Gross75,883,760 72,555,974 
Less – Accumulated Depreciation, Depletion, Amortization and Valuation Allowance(58,070,746)(57,622,564)
Oil and Gas Properties, Net17,813,014 14,933,410 
Other Property and Equipment, at Cost833,681 820,965 
Less – Accumulated Depreciation(339,502)(306,587)
Other Property and Equipment, Net494,179 514,378 
Total Property, Plant and Equipment, Net18,307,193 15,447,788 
Total Assets$38,047,334 $36,386,990 




See accompanying notes to unaudited consolidated financial statements
2
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 Liabilities59,147 12,839 
Note Payable, Current Portion143,704 142,136 
Total Current Liabilities1,384,852 692,771 
Long-Term Liabilities:
Asset Retirement Obligation2,220,023 2,566,368 
Deferred Tax Liability, Net1,966,506 1,219,511 
Note Payable, Less Current Portion1,122,104 1,158,736 
Total Long-Term Liabilities5,308,633 4,944,615 
Total Liabilities6,693,485 5,637,386 
Equity:
Common Stock92,368 92,368 
Additional Paid-in Capital65,000 65,000 
Retained Earnings32,949,074 32,212,066 
Equity Before Treasury Stock33,106,442 32,369,434 
Less – Treasury Stock, at Cost(1,946,547)(1,820,527)
Total Equity Applicable to The Reserve Petroleum Company31,159,895 30,548,907 
Non-Controlling Interests193,954 200,697 
Total Equity31,353,849 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
3
THE RESERVE PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
20242023
Operating Revenues:  
Oil and Gas Sales$3,011,642 $2,935,441 
Water Well Drilling Services615,480 164,200 
Total Operating Revenues3,627,122 3,099,641 
  
Operating Costs and Expenses:  
Production966,151 1,056,749 
Exploration159,199 374,348 
Water Well Drilling Services378,589 184,727 
Depreciation, Depletion, Amortization and Valuation Provision509,169 934,733 
General, Administrative and Other674,136 595,435 
Total Operating Costs and Expenses2,687,244 3,145,992 
Income/(Loss) from Operations939,878 (46,351)
Equity Income in Investees23,541 31,656 
Interest Expense(16,788)(16,953)
Other Income, Net219,609 568,833 
Income Before Income Taxes and Non-Controlling Interests1,166,240 537,185 
Income Tax Provision/(Benefit):
Current(307,271)11,534 
Deferred746,995 121,913 
Total Income Tax Provision439,724 133,447 
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, Basic155,151156,157

See accompanying notes to unaudited consolidated financial statements
4
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
5
THE RESERVE PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Three Months Ended
March 31,
20242023
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 Obligation41,029 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 $1,151,965 
Purchase of Available-for-Sale Debt Securities(313,826)(2,312,854)
Purchase of Property, Plant and Equipment(2,880,762)(847,636)
Purchase of Investments(230,050)(110,232)
Cash Distributions from Equity Method and Other Investments4,000 320,998 
Sale of Equity Securities2,361,375 151,518 
Purchase of Equity Securities(2,327,691)(556,029)
Net Cash Applied to Investing Activities$(852,227)$(2,202,270)









See accompanying notes to unaudited consolidated financial statements
6
THE RESERVE PETROLEUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(Unaudited)

Three Months Ended
March 31,
20242023
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 Interests3,749 23,298 
Total Cash Applied to Financing Activities(157,335)(10,537)
Net Change in Cash and Cash Equivalents594,636 (627,340)
Cash and Cash Equivalents, Beginning of Period5,218,474 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
7
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.


8
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.
9

The following is an analysis of the components of oil and natural gas sales:
Three Months Ended
March 31,
20242023
Oil Sales$2,450,164 $2,344,037 
Natural Gas Sales514,345 535,401 
Miscellaneous Oil and Gas Product Sales47,133 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,
20242023
Net Realized and Unrealized Gain, Equity Securities
$133,692 $82,635 
Interest Income70,000 113,818 
Dividend Income23,358 10,300 
Income from Other Investments14,284 309,697 
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 Assets69,276 592,851 662,127 
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 Portion143,704 — 143,704 
Total Current Liabilities143,704 44,807 188,511 
Note Payable, Less Current Portion1,122,104 — 1,122,104 
Total Liabilities$1,265,808 $44,807 $1,310,615 
December 31, 2023
Grand WoodsTWSTotal
Assets:
Cash$138,690 $154,653 $293,343 
Accounts Receivable— 640 640 
Total Current Assets138,690 155,293 293,983 
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 Portion142,136 — 142,136 
Total Current Liabilities142,136 398 142,534 
Note Payable, Less Current Portion1,158,736 — 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
2024107,072 
2025148,155 
20261,010,581 
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 expense41,029 
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 InputsLevel 2 InputsLevel 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities1,840,193 — — 
International Equities83,082 — — 
Others— — 750,000 
$1,923,275 $— $750,000 
December 31, 2023
Level 1 InputsLevel 2 InputsLevel 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities – U.S.
Treasury Bills Maturing within 1 Year$— $2,220,901 $— 
Equity Securities:
Domestic Equities2,321,275 — — 
International Equities130,005 — — 
Others212,786 — — 
 $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, 2024December 31, 2023
Level 1 Assets1,923,275 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— 
Purchases750,000 
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.

18
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
19
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
20

Not applicable.

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

PeriodTotal Number of Shares PurchasedAverage 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, 2024434$160434$2,303,928
February 1 to February 29, 2024348$160348$2,250,240
March 1 to March 31, 20246$1606$2,249,280
Total788$160788
(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

21
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*
31.2*
32*
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
104Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)
* Filed electronically herewith.
22
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
23

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;

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/ 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)

v3.24.1.1.u2
Cover Page - shares
 3 Months Ended
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  
v3.24.1.1.u2
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] 0 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 92,368
Additional Paid-in Capital [1] 65,000 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Consolidated Balance Sheets (Parenthetical) - USD ($)
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] 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Consolidated Statements of Income - USD ($)
 3 Months Ended
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
v3.24.1.1.u2
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         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)       (126,020)  
Contributions 3,749         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] 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Consolidated Statements of Cash Flows - USD ($)
 3 Months Ended
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
v3.24.1.1.u2
Basis of Presentation
 3 Months Ended
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.
v3.24.1.1.u2
Revenue Recognition
 3 Months Ended
Mar. 31, 2024
Revenue Recognition [Abstract]  
REVENUE RECOGNITION
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.
The following is an analysis of the components of oil and natural gas sales:
Three Months Ended
March 31,
20242023
Oil Sales$2,450,164 $2,344,037 
Natural Gas Sales514,345 535,401 
Miscellaneous Oil and Gas Product Sales47,133 56,003 
$3,011,642 $2,935,441 
v3.24.1.1.u2
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,
20242023
Net Realized and Unrealized Gain, Equity Securities
$133,692 $82,635 
Interest Income70,000 113,818 
Dividend Income23,358 10,300 
Income from Other Investments14,284 309,697 
Miscellaneous Income/(Expenses)(21,725)52,383 
Other Income, Net
$219,609 $568,833 
v3.24.1.1.u2
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.
v3.24.1.1.u2
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

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.
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 Assets69,276 592,851 662,127 
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 Portion143,704 — 143,704 
Total Current Liabilities143,704 44,807 188,511 
Note Payable, Less Current Portion1,122,104 — 1,122,104 
Total Liabilities$1,265,808 $44,807 $1,310,615 
December 31, 2023
Grand WoodsTWSTotal
Assets:
Cash$138,690 $154,653 $293,343 
Accounts Receivable— 640 640 
Total Current Assets138,690 155,293 293,983 
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 Portion142,136 — 142,136 
Total Current Liabilities142,136 398 142,534 
Note Payable, Less Current Portion1,158,736 — 1,158,736 
Total Liabilities$1,300,872 $398 $1,301,270 
v3.24.1.1.u2
Note Payable
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
NOTE PAYABLE
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
2024107,072 
2025148,155 
20261,010,581 
Total$1,265,808 
v3.24.1.1.u2
Provision for Income Taxes
 3 Months Ended
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.
v3.24.1.1.u2
Asset Retirement Obligation
 3 Months Ended
Mar. 31, 2024
Asset Retirement Obligation [Abstract]  
ASSET RETIREMENT OBLIGATION
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 expense41,029 
Balance at March 31, 2024$2,220,023 
v3.24.1.1.u2
Fair Value Measurements
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
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 InputsLevel 2 InputsLevel 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities1,840,193 — — 
International Equities83,082 — — 
Others— — 750,000 
$1,923,275 $— $750,000 
December 31, 2023
Level 1 InputsLevel 2 InputsLevel 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities – U.S.
Treasury Bills Maturing within 1 Year$— $2,220,901 $— 
Equity Securities:
Domestic Equities2,321,275 — — 
International Equities130,005 — — 
Others212,786 — — 
 $2,664,066 $2,220,901 $— 
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, 2024December 31, 2023
Level 1 Assets1,923,275 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— 
Purchases750,000 
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.
v3.24.1.1.u2
Pay vs Performance Disclosure - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure    
Net Income/(Loss) $ 726,516 $ 403,738
v3.24.1.1.u2
Insider Trading Arrangements
 3 Months Ended
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
v3.24.1.1.u2
Basis of Presentation (Policies)
 3 Months Ended
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.
v3.24.1.1.u2
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,
20242023
Oil Sales$2,450,164 $2,344,037 
Natural Gas Sales514,345 535,401 
Miscellaneous Oil and Gas Product Sales47,133 56,003 
$3,011,642 $2,935,441 
v3.24.1.1.u2
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,
20242023
Net Realized and Unrealized Gain, Equity Securities
$133,692 $82,635 
Interest Income70,000 113,818 
Dividend Income23,358 10,300 
Income from Other Investments14,284 309,697 
Miscellaneous Income/(Expenses)(21,725)52,383 
Other Income, Net
$219,609 $568,833 
v3.24.1.1.u2
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 Assets69,276 592,851 662,127 
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 Portion143,704 — 143,704 
Total Current Liabilities143,704 44,807 188,511 
Note Payable, Less Current Portion1,122,104 — 1,122,104 
Total Liabilities$1,265,808 $44,807 $1,310,615 
December 31, 2023
Grand WoodsTWSTotal
Assets:
Cash$138,690 $154,653 $293,343 
Accounts Receivable— 640 640 
Total Current Assets138,690 155,293 293,983 
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 Portion142,136 — 142,136 
Total Current Liabilities142,136 398 142,534 
Note Payable, Less Current Portion1,158,736 — 1,158,736 
Total Liabilities$1,300,872 $398 $1,301,270 
v3.24.1.1.u2
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
2024107,072 
2025148,155 
20261,010,581 
Total$1,265,808 
v3.24.1.1.u2
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 expense41,029 
Balance at March 31, 2024$2,220,023 
v3.24.1.1.u2
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 InputsLevel 2 InputsLevel 3 Inputs
Financial Assets:
Equity Securities:
Domestic Equities1,840,193 — — 
International Equities83,082 — — 
Others— — 750,000 
$1,923,275 $— $750,000 
December 31, 2023
Level 1 InputsLevel 2 InputsLevel 3 Inputs
Financial Assets:
Available-for-Sale Debt Securities – U.S.
Treasury Bills Maturing within 1 Year$— $2,220,901 $— 
Equity Securities:
Domestic Equities2,321,275 — — 
International Equities130,005 — — 
Others212,786 — — 
 $2,664,066 $2,220,901 $— 
A reconciliation to the balance sheet equity securities is as follows:
March 31, 2024December 31, 2023
Level 1 Assets1,923,275 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 $4,884,967 
A roll forward of the Company’s level 3 investments is as follows:
Balance
Three Months Ended March 31, 2024
Balance as of December 31, 2023— 
Purchases750,000 
Changes in unrealized gains included in Other Income, net$— 
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— 
Purchases750,000 
Changes in unrealized gains included in Other Income, net$— 
Balance as of March 31, 2024$750,000 
Remaining Unfunded Commitments$— 
v3.24.1.1.u2
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  
v3.24.1.1.u2
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
v3.24.1.1.u2
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
v3.24.1.1.u2
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 ($)
a
Mar. 31, 2023
USD ($)
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
May 31, 2023
property
May 11, 2023
shares
Jul. 31, 2021
Dec. 31, 2020
Dec. 31, 2016
USD ($)
Dec. 31, 2008
Dec. 31, 1992
a
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             2            
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   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   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   1,596,007                
Genlith                          
Schedule of Equity Method Investments [Line Items]                          
Ownership percentage (as a percent)                 5.15%        
Other Investments     311,958   311,958                
C3                          
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   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     13                   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   357,259                
VCC Venture                          
Schedule of Equity Method Investments [Line Items]                          
Ownership percentage (as a percent)           2.00%              
Other Investments     $ 93,750   $ 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   $ 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] 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Non-Controlling Interest and Variable Interest Entities - Narrative (Details)
 3 Months Ended 36 Months Ended
Mar. 19, 2021
USD ($)
Mar. 31, 2024
USD ($)
a
shares
Mar. 31, 2023
USD ($)
Mar. 31, 2024
USD ($)
a
shares
Dec. 31, 2023
USD ($)
Variable Interest Entity [Line Items]          
Property, plant, and equipment, other, net [1]   $ 494,179   $ 494,179 $ 514,378
Net Income/(Loss)   726,516 $ 403,738    
Accounts Receivable [1]   $ 2,184,635   $ 2,184,635 2,366,663
Common Class A          
Variable Interest Entity [Line Items]          
Units owned (in shares) | shares   47.08   47.08  
Common Class C          
Variable Interest Entity [Line Items]          
Units owned (in shares) | shares   546,735   546,735  
Grand Woods          
Variable Interest Entity [Line Items]          
Area of land (Acre) | a   26.56   26.56  
Variable Interest Entity, Primary Beneficiary | TWS          
Variable Interest Entity [Line Items]          
Property, plant, and equipment, other, net $ 330,000 $ 296,687   $ 296,687 302,945
Cash 70,000 56,283   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   1,160,000  
Accounts Receivable   536,568   536,568 $ 640
Variable Interest Entity, Primary Beneficiary | Partial recourse | Secured Debt          
Variable Interest Entity [Line Items]          
Guaranty issued by company   $ 1,200,000   $ 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] 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Non-Controlling Interest and Variable Interest Entities - Schedule of Balance Sheet Information (Details) - USD ($)
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 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 0 0  
Total Current Assets 69,276 138,690  
Other Investments (Land) 2,171,828 2,171,828  
Other Property and Equipment, at Cost 0 0  
Less – Accumulated Depreciation 0 0  
Other Property and Equipment, Net 0 0  
Total Assets 2,241,104 2,310,518  
Liabilities:      
Accounts Payable 0 0  
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) 0 0  
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 0 0  
Total Current Liabilities 44,807 398  
Note Payable, Less Current Portion 0 0  
Total Liabilities $ 44,807 $ 398  
[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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Note Payable - Narrative (Details) - USD ($)
 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] 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Note Payable - Schedule of Future Principal Payments (Details) - Notes Payable - USD ($)
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
v3.24.1.1.u2
Asset Retirement Obligation - Narrative (Details)
 3 Months Ended
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%
v3.24.1.1.u2
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  
v3.24.1.1.u2
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] 0 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 0 2,220,901
Level 3 Inputs    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Total assets measured at fair value 750,000 0
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 0 212,786
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   0
Fair Value, Recurring | Level 2 Inputs    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Total assets measured at fair value 0 2,220,901
Fair Value, Recurring | Level 2 Inputs | Domestic Equities    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Equity Securities 0 0
Fair Value, Recurring | Level 2 Inputs | International Equities    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Equity Securities 0 0
Fair Value, Recurring | Level 2 Inputs | Others    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Equity Securities 0 0
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 0
Fair Value, Recurring | Level 3 Inputs | Domestic Equities    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Equity Securities 0 0
Fair Value, Recurring | Level 3 Inputs | International Equities    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Equity Securities 0 0
Fair Value, Recurring | Level 3 Inputs | Others    
Fair Value, Option, Quantitative Disclosures [Line Items]    
Equity Securities $ 750,000 0
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] 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 $1,301,270, respectively, of liabilities of consolidated variable interest entities for which creditors do have partial recourse to the general credit of the Company. For more information, see Note 5 – Non-Controlling Interest and Variable Interest Entities.
v3.24.1.1.u2
Fair Value Measurements - Schedule of Balance Sheet Equity Securities (Details) - USD ($)
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
v3.24.1.1.u2
Fair Value Measurements - Narrative (Details)
 3 Months Ended
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
v3.24.1.1.u2
Fair Value Measurements - Level 3 Investments (Details)
 3 Months Ended
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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