Supplemental Schedules of Oil and Gas Information

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Oil and Gas Exploration and Production Industries Disclosures [Text Block]

THE RESERVE PETROLEUM COMPANY

WORKING INTEREST RESERVE QUANTITY INFORMATION

(Unaudited)

	Year Ended December 31,
	2018			2017
Oil and Condensate (Bbls)
Proved Developed and Undeveloped Reserves:
Beginning of Year		376,396			401,584
Revisions of Previous Estimates		26,063			18,951
Extensions and Discoveries		13,699			16,405
Purchase of Reserves		------			---
Production		(52,960	)		(60,544	)
End of Year		363,198			376,396
Proved Developed Reserves:
Beginning of Year		341,152			358,822
End of Year		326,752			341,152
Gas (MCF)
Proved Developed and Undeveloped Reserves:
Beginning of Year		3,191,511			3,023,754
Revisions of Previous Estimates		75,610			494,665
Extensions and Discoveries		8,094			190,923
Purchase of Reserves		---			---
Production		(443,354	)		(517,831	)
End of Year		2,831,861			3,191,511
Proved Developed Reserves:
Beginning of Year		2,944,804			2,809,944
End of Year		2,576,738			2,944,804

See notes on next page.

SUPPLEMENTAL SCHEDULE

1

THE RESERVE PETROLEUM COMPANY

WORKING INTEREST RESERVE QUANTITY INFORMATION

(Unaudited)

Notes:

1. Estimates of royalty interests’ reserves, on properties in which the Company does not own a working interest, have not been included because the information required for the estimation of such reserves is not available. The Company’s share of production from its net royalty interests was 30,191 Bbls of oil and 393,584 MCF of gas for 2018 and 16,421 Bbls of oil and 288,743 MCF of gas for 2017.

2. The preceding table sets forth estimates of the Company’s proved oil and gas reserves, together with the changes in those reserves, as prepared by the Company’s engineer for 2018 and 2017. The Company engineer’s qualifications set forth in the Proxy Statement and as incorporated into Item 10 of this Form 10 -K, are incorporated herein by reference. All reserves are located within the United States.

3. The Company emphasizes that the reserve volumes shown are estimates, which by their nature are subject to revision in the near term. The estimates have been made by utilizing geological and reservoir data, as well as actual production performance data available to the Company. These estimates are reviewed annually and are revised upward or downward as warranted by additional performance data. The Company’s engineer is not independent, but strives to use an objective approach in calculating the Company’s working interest reserve estimates.

4. The Company’s internal controls relating to the calculation of its working interests’ reserve estimates include review and testing of the accounting data flowing into the calculation of the reserve estimates. In addition, the average oil and natural gas product prices calculated in the engineer’s 2018 summary reserve report was tested by comparison to 2018 average sales price information from the accounting records.

SUPPLEMENTAL SCHEDULE

2

THE RESERVE PETROLEUM COMPANY

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS

RELATING TO PROVED WORKING INTEREST

OIL AND GAS RESERVES

(Unaudited)

	At December 31,
	2018			2017
Future Cash Inflows	$	28,398,588		$	25,418,030
Future Production and Development Costs		(14,212,906	)		(12,989,835	)
Future Asset Retirement Obligation		(1,873,939	)		(1,881,972	)
Future Income Tax Expense		(701,106	)		(362,534	)
Future Net Cash Flows		11,610,637			10,183,689
10% Annual Discount for Estimated Timing of Cash Flows		(3,749,911	)		(3,121,751	)
Standardized Measure of Discounted Future Net Cash Flows	$	7,860,726		$	7,061,938

Estimates of future net cash flows from the Company’s proved working interests in oil and gas reserves are shown in the table above. These estimates, which by their nature are subject to revision in the near term, were based on an average monthly product price received by the Company for

2017

and

2018,

with

no

escalation. The development and production costs are based on year-end cost levels, assuming the continuation of existing economic conditions. Cash flows are further reduced by estimated future asset retirement obligations and estimated future income tax expense calculated by applying the current statutory income tax rates to the pretax net cash flows, less depreciation of the tax basis of the properties and depletion applicable to oil and gas production.

SUPPLEMENTAL SCHEDULE

3

THE RESERVE PETROLEUM COMPANY

CHANGES IN STANDARDIZED MEASURE OF

DISCOUNTED FUTURE NET CASH FLOWS FROM

PROVED WORKING INTEREST RESERVE QUANTITIES

(Unaudited)

	Year Ended December 31,
	2018			2017
Standardized Measure, Beginning of Year	$	7,061,938		$	5,254,075
Sales and Transfers, Net of Production Costs		(2,430,324	)		(2,343,561	)
Net Change in Sales and Transfer Prices, Net of Production Costs		2,156,124			2,394,155
Extensions, Discoveries and Improved Recoveries, Net of Future Production and Development Costs		332,441			710,294
Revisions of Quantity Estimates		442,030			929,958
Accretion of Discount		923,952			689,080
Purchases of Reserves in Place		---			---
Net Change in Income Taxes		(225,892	)		(517,818	)
Net Change in Asset Retirement Obligation		(47,659	)		17,383
Changes in Production Rates (Timing) and Other		(351,884	)		(71,628	)
Standardized Measure, End of Year	$	7,860,726		$	7,061,938