Reserve Petroleum Co. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Reserve Petroleum Co. has filed its 2023 10-K, detailing its operations in oil and gas production and exploration, alongside its financial standing.</b>

AI Summary

RESERVE PETROLEUM CO (RSRV) filed a Annual Report (10-K) with the SEC on March 28, 2024. Reserve Petroleum Co. filed its 2023 Form 10-K on March 28, 2024, reporting on its fiscal year ending December 31, 2023. The company is engaged in the Crude Petroleum & Natural Gas industry, SIC code 1311. The filing covers operations including Oil and Gas Production, Oil and Gas Exploration, Lease Bonuses and Other, and Water Well Drilling Services. Financial data includes reporting for Common Stock, Additional Paid-In Capital, Retained Earnings, Treasury Stock, and Noncontrolling Interest for fiscal years 2021, 2022, and 2023. The company was formerly known as Farmers Royalty Holding Co. and changed its name on October 15, 1975.

Why It Matters

For investors and stakeholders tracking RESERVE PETROLEUM CO, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Reserve Petroleum Co.'s financial performance and operational activities for the fiscal year 2023, crucial for investors and stakeholders to assess the company's health and future prospects. The detailed breakdown of revenue segments and financial instruments offers insights into the company's business model and its position within the volatile oil and gas market.

Risk Assessment

Risk Level: low — RESERVE PETROLEUM CO shows low risk based on this filing. The filing is a standard annual report (10-K) and does not contain immediate red flags, indicating a routine disclosure of financial and operational information.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 10-K to understand Reserve Petroleum Co.'s performance and potential challenges in the oil and gas sector.

Revenue Breakdown

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-03-28 — Filing Date (Filed as of date)
• 1975-10-15 — Name Change Date (Former company name change)

Key Players & Entities

• RESERVE PETROLEUM CO (company) — Filer name
• RSRV (company) — Ticker symbol
• 20231231 (date) — Conformed period of report
• 20240328 (date) — Filed as of date
• 0000083350 (company) — Central Index Key
• 1311 (industry) — Standard Industrial Classification
• DE (jurisdiction) — State of incorporation
• 4058487551 (phone) — Business phone

FAQ

Key Dates

• 2024-03-28: 10-K Filing — Annual report for fiscal year 2023
• 2023-12-31: Fiscal Year End — End date for the reporting period
• 1975-10-15: Name Change — Date Reserve Petroleum Co. changed from Farmers Royalty Holding Co.

Key Financial Figures

• $0.50 — (g) of the Exchange Act: COMMON STOCK ($0.50 PAR VALUE) (Title of Class) Indicate
• $3,259,786 — d mineral property management. In 2023, $3,259,786 (26%) of oil and gas sales was from roy
• $5,060,545 — sales was from royalty interests versus $5,060,545 (34%) in 2022. As a result of our miner
• $1,414,199 — Redland Resources, LLC's purchases were $1,414,199 or 11% of total oil and gas sales. The

Filing Documents

• rsrv-20231231.htm (10-K) — 1007KB
• rsrv-20231231xexx311.htm (EX-31.1) — 10KB
• rsrv-20231231xexx312.htm (EX-31.2) — 10KB
• rsrv-20231231xexx32.htm (EX-32) — 7KB
• rsrv-20231231_g1.jpg (GRAPHIC) — 1KB
• 0000083350-24-000005.txt (&nbsp;) — 6097KB
• rsrv-20231231.xsd (EX-101.SCH) — 46KB
• rsrv-20231231_cal.xml (EX-101.CAL) — 85KB
• rsrv-20231231_def.xml (EX-101.DEF) — 177KB
• rsrv-20231231_lab.xml (EX-101.LAB) — 507KB
• rsrv-20231231_pre.xml (EX-101.PRE) — 355KB
• rsrv-20231231_htm.xml (XML) — 870KB

Forward-Looking Statements

Forward-Looking Statements 3 PART I Item 1.

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 6 Item 1B. Unresolved Staff Comments 7 I tem 1C . C ybersecurity 7 Item 2.

Properties

Properties 8 Item 3.

Legal Proceedings

Legal Proceedings 9 Item 4. Mine Safety Disclosures 9 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 9 Item 6. [Reserved] 10 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 15 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 16 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 44 Item 9A.

Controls and Procedures

Controls and Procedures 44 Item 9B. Other Information 45 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 45 PART III Item 10. Directors, Executive Officers and Corporate Governance 45 Item 11.

Executive Compensation

Executive Compensation 45 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 45 Item 13. Certain Relationships and Related Transactions and Director Independence 45 Item 14. Principal Accountant Fees and Services 45 PART IV Item 15. Exhibits and Financial Statement Schedules 46 Item 16. Form 10-K Summary 46 2 Table of Contents

Forward-Looking Statements

Forward-Looking Statements In addition to historical information, from time to time the Company may publish 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 provide the reader with management's current expectations of future events. They include statements relating to such matters as anticipated financial performance, business prospects such as drilling of oil and gas wells, technological development and similar matters. Although management believes that the expectations reflected in forward-looking statements are based on reasonable assumptions, a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. 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 an

BUSINESS

ITEM 1. BUSINESS Overview The Reserve Petroleum Company (the "Company," "we," "our" or "us") is engaged principally in managing its owned mineral properties and the exploration for and the development of oil and natural gas properties. Other business segments are not significant factors in our operations. The Company is a corporation organized under the laws of the State of Delaware in 1931. Oil and Natural Gas Properties For a summary of certain data relating to the Company's oil and gas properties, including production, undeveloped acreage, producing and dry wells drilled and recent activity, see Item 2, "Properties." For a discussion and analysis of current and prior years' revenue and related costs of oil and gas operations and a discussion of liquidity and capital resource requirements, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations." 3 Table of Contents Owned Mineral Property Management The Company owns non-producing mineral interests of 88,214 net acres out of 256,534 gross acres. These mineral interests are in twelve different states in the north and south-central United States. A total of 81,080 (92%) net acres are in the states of Arkansas, Kansas, Oklahoma, South Dakota, Texas and Wyoming, the areas of concentration for the Company in our exploration and development programs. The Company has several options relating to the exploration and/or development of our owned mineral interests. Management continually reviews various industry reports and other sources for activity (leasing, drilling, significant discoveries, etc.) in areas where the Company has mineral ownership. Based on our analysis of any activity and assessment of the potential risk relative to the area, management may negotiate a lease or farmout agreement and accept a royalty interest, or we may choose to participate as a working interest owner and pay our proportionate share of any exploration or development drilling costs. A

RISK FACTORS

ITEM 1A. RISK FACTORS Not applicable. 6 Table of Contents

UNRESOLVED STAFF COMMENTS

ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.

CYBERSECURITY

ITEM 1C. CYBERSECURITY Governance While the Company does not employ a Chief Information Officer or consider cybersecurity threats to be a material risk to the business strategy, results of operations or financial position of the Company, the Audit Committee discusses risks and threats most applicable to the Company and inquires of management regarding design and effectiveness of controls in place to address the prevention, detection, mitigation and remediation of cybersecurity incidents. The Audit Committee provides regular reports to the full Board of Directors. Risk Management and Strategy Due to the size of the Company, our information technology ("IT") environment does not utilize overly complicated systems or processes. The Company does not sell products or conduct business in an online environment and our primary transactional activity is done through partnerships with oil and gas operators and other investment managers. We utilize a third party managed services provider ("Provider") for security applications, monitoring, and updates to our information technology environment. The Chief Financial Officer serves as the relationship manager for and has regularly scheduled meetings with the Provider to evaluate whether the services provided meet the Company's needs, review hardware and software obsolescence, and identify any new threats that need to be addressed. The Company uses multi-factor authentication for applications wherever possible to provide access security and we maintain a secure physical environment. We also engage a separate third-party vendor to provide staff IT security education, testing for social engineering vulnerabilities, and reporting on employee training. Through the Provider, automated security tools are used to monitor all Windows-based systems and provide defense against cyberattacks perpetrated on or against these systems and to protect internal systems from known and unknown cybersecurity threats. These security tools include:

PROPERTIES

ITEM 2. PROPERTIES The Company's principal properties are oil and natural gas properties. We have interests in approximately 879 producing properties with 76% of them being working interest properties and the remaining 24% being royalty interest properties. About 80% of all properties are in Oklahoma and Texas and account for approximately 74% of our annual oil and gas sales. About 14% of the properties are in Arkansas, Kansas and South Dakota and account for approximately 15% of our annual oil and gas sales. The remaining 6% of these properties are in Colorado, Montana, Nebraska, New Mexico, Utah, West Virginia and Wyoming and account for about 11% of our annual oil and gas sales. No individual property provides more than 10% of our annual oil and gas sales. OIL AND NATURAL GAS OPERATIONS Oil and Gas Reserves Reference is made to the Unaudited Supplemental Financial Information beginning on Page 37 for working interest reserve quantity information. Since January 1, 2023, the Company has not filed any reports with any federal authority or agency, which included estimates of total proved net oil or gas reserves, except for its 2022 Annual Report on Form 10-K and federal income tax return for the year ended December 31, 2022. Those reserve estimates were identical. Production The average sales price of oil and gas production for the Company's royalty and working interests as well as the average working interest production cost (lifting cost) per equivalent thousand cubic feet (MCF) of gas are presented in the table below for the years ended December 31, 2023, 2022, and 2021. Equivalent MCF was calculated using approximate relative energy content. Royalties Working Interests Sales Price Sales Price Oil Per Bbl Gas Per MCF Oil Per Bbl Gas Per MCF Average Production Cost per Equivalent MCF 2023 $ 76.44 $ 2.51 $ 74.38 $ 2.96 $ 3.63 2022 $ 97.03 $ 5.98 $ 91.42 $ 6.20 $ 3.57 2021 $ 66.73 $ 3.84 $ 65.00 $ 3.84 $ 3.08 At December 31, 2023, the Company had

LEGAL PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS There are no material legal proceedings pending affecting the Company or any of its properties.

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART

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View this 10-K filing on SEC EDGAR