Supplemental Schedules of Oil and Gas Information

12 Months Ended

Dec. 31, 2021

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,
	2021			2020
Oil and Condensate (Bbls)
Proved Developed and Undeveloped Reserves:
Beginning of Year		221,795			331,162
Revisions of Previous Estimates		101,338			(65,821	)
Extensions and Discoveries		60,609			---
Purchase of Reserves		38,079			---
Production		(64,547	)		(43,546	)
End of Year		357,274			221,795
Proved Developed Reserves:
Beginning of Year		221,795			314,932
End of Year		357,274			221,795
Gas (MCF)
Proved Developed and Undeveloped Reserves:
Beginning of Year		1,534,311			2,460,433
Revisions of Previous Estimates		772,913			(524,260	)
Extensions and Discoveries		463,536			---
Purchase of Reserves		273,660			---
Production		(376,338	)		(401,862	)
End of Year		2,668,082			1,534,311
Proved Developed Reserves:
Beginning of Year		1,534,311			2,298,135
End of Year		2,668,082			1,534,311

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 25,618 Bbls of oil and 307,986 MCF of gas for 2021 and 28,425 Bbls of oil and 304,749 MCF of gas for 2020.

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 2021 and 2020. 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 2021 summary reserve report was tested by comparison to 2021 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,
	2021			2020
Future Cash Inflows	$	32,293,498		$	9,701,762
Future Production and Development Costs		(16,056,240	)		(5,910,324	)
Future Asset Retirement Obligation		(2,456,290	)		(1,551,502	)
Future Income Tax Expense		(1,048,986	)		602,785
Future Net Cash Flows		12,731,982			2,842,721
10% Annual Discount for Estimated Timing of Cash Flows		(3,892,523	)		(911,074	)
Standardized Measure of Discounted Future Net Cash Flows	$	8,839,459		$	1,931,647

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 2020 and 2021, 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,
	2021			2020
Standardized Measure, Beginning of Year	$	1,931,647		$	5,479,471
Sales and Transfers, Net of Production Costs		(3,476,703	)		(652,984	)
Net Change in Sales and Transfer Prices, Net of Production Costs		3,787,887			(3,294,788	)
Extensions, Discoveries and Improved Recoveries,
Net of Future Production and Development Costs		4,294,966			---
Revisions of Quantity Estimates		2,934,172			(499,405	)
Accretion of Discount		326,800			1,020,164
Purchases of Reserves in Place		844,340			---
Net Change in Income Taxes		(1,188,405	)		655,408
Net Change in Asset Retirement Obligation		505,283			(56,447	)
Changes in Production Rates (Timing) and Other		(1,120,528	)		(719,772	)
Standardized Measure, End of Year	$	8,839,459		$	1,931,647