RESERVE PETROLEUM CO
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0000083350-25-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0000083350-25-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 52 previous paragraphs and 51 current paragraphs.
12 unchanged; 36 reworded; 3 added; 3 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Cash applied to the purchase of investments in the nine months ended September 30, 2025, was $727,605, an increase of$342,440 (89%) from cash applied in the comparable period of 2024 of $385,165. Cash provided by the sale of investments was $1,102,432, an increase of $1,098,432 from cash provided in the comparable period of 2024 of $4,000. For more information related to investments, see Note 5 to the accompanying consolidated financial statements.
Current report
Results of Operations – Nine Months Ended September 30, 2025
Current report
General, Administrative and Other (G&A). G&A decreased $444,097 (43%) to $593,534 in the three months ended September 30, 2025, from $1,037,631 in the comparable period in 2024. This was primarily the result of bad debt expense of $465,977 recorded for TWS South accounts receivable in 2024. See Note 6 to the accompanying consolidated financial statements for an analysis of the circumstances of this line item.
Removed paragraphs (3)
Previous report
Cash applied to the purchase of available-for-sale debt securities in the six months ended June 30, 2025, was $0, a decrease of $313,826 (100%) from $313,826 in the comparable period in 2024. Cash applied to the maturity of available-for-sale debt securities in the six months ended June 30, 2025, was $0, a decrease of $2,534,727 (100%) from $2,534,727 in the comparable period in 2024. We are not currently utilizing available-for-sale debt securities as cash is being deployed in oil and gas operations. Excess cash not invested in long-term vehicles is invested in liquid securities. Cash applied to equity method and other investments in the six months ended June 30, 2025, was $668,885, an increase of $288,815 (76%) from cash applied in the comparable period of 2024 of $380,070. Current year activity was primarily for the call of capital committed to the investment in Cortado Ventures Fund II-A LP of $250,000 and for the call of capital committed to the investment in Cypress MWC, LLC of $375,000.
Previous report
Results of Operations – Six Months Ended June 30, 2025
Previous report
General, Administrative and Other (G&A). G&A decreased $5,270 (0.40%) to $1,304,254 in the six months ended June 30, 2025, from $1,309,524 in the comparable period in 2024.
Reworded paragraphs (36)
Previous wording
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.
Current wording
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 as required by law. 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.
Previous wording
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 six months of 2025, the Company continued to fund its business activity using internal sources of cash. The Company had net cash provided by operating activities of $5,012,279 in the six months ended June 30, 2025. The Company had sales of equity securities of $1,007,226, cash provided by property dispositions of $3,136,169, distributions from other investments of $466,000, for total cash provided by investing activities of $4,609,395. The Company utilized cash for the purchase of property of $6,090,663, the purchase of equity securities of $1,442,289, andpurchase of investments of $668,885, for cash applied to investing activities of $8,201,837. The Company paid $1,517,794 in stockholder dividends, $25,440 for the purchase of treasury stock, and $73,097 in payments on the Grand Woods note payable, for total cash applied to financing activities of $1,616,331. Cash provided by financing activities included Grand Woods Class C non-controlling interest contributions of $32,709. Cash and cash equivalents decreased $163,785 (4%) to $3,760,037 at June 30, 2025, from $3,923,822 at December 31, 2024.
Current wording
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 nine months of 2025, the Company continued to fund its business activity using internal sources of cash. The Company had net cash provided by operating activities of $7,380,584 in the nine months ended September 30, 2025. The Company had sales of equity securities of $1,400,709, cash provided by property dispositions of $3,200,752, distributions from other investments of $466,000, for total cash provided by investing activities of $5,703,893. The Company utilized cash for the purchase of property of $8,084,208, the purchase of equity securities of $1,773,954, purchase of investments of $727,605, for cash applied to investing activities of $10,585,767. The Company paid $1,517,794 in stockholder dividends, $51,626 for the purchase of treasury stock, and $110,232 in payments on the Grand Woods note payable, for total cash applied to financing activities of $1,679,652. Cash provided by financing activities included Grand Woods Class C non-controlling interest contributions of $48,824. Cash and cash equivalents increased $867,882 (22%) to $4,791,704 at September 30, 2025, from $3,923,822 at December 31, 2024.
Previous wording
Equity securities increased $646,213 (26%) to $3,147,407 as of June 30, 2025, from $2,501,194 at December 31, 2024. The increase resulted from $435,063 in net purchases and a $236,304 net increase in market value.
Current wording
Equity securities increased $399,878 (16%) to $2,901,072 as of September 30, 2025, from $2,501,194 at December 31, 2024. The increase resulted from $373,245 in net purchases and a $26,633 net increase in market value.
Previous wording
Accounts receivable decreased $736,620 (27%) to $2,037,867 as of June 30, 2025, from $2,774,487 at December 31, 2024, primarily related to a decrease in oil and gas receivables of $685,392 caused by a decrease in the price and volume of expected oil production..
Current wording
Accounts receivable decreased $442,560 (16%) to $2,331,927 as of September 30, 2025, from $2,774,487 at December 31, 2024, primarily related to a decrease in oil and gas receivables caused by a decrease in the price and volume of expected oil production.
Previous wording
Accounts payable decreased $309,197 (59%) to $210,985 as of June 30, 2025, from $520,182 at December 31, 2024, primarily due to the timing of activity and invoices.
Current wording
Accounts payable increased $705,739 (136%) to $1,225,921 as of September 30, 2025, from $520,182 at December 31, 2024, primarily due to timing of activity and invoices.
Previous wording
Other current liabilities increased $11,818 (26%) to $56,998 as of June 30, 2025, from $45,180 at December 31, 2024, due to a decrease of $24,661 in payroll taxes, offset by an increase in state income and accrued property taxes of $36,479.
Current wording
Other current liabilities increased $20,003 (44%) to $65,183 as of September 30, 2025, from $45,180 at December 31, 2024, due to a decrease of $51,700 in payroll taxes resulting from the timing of payroll tax remittance, and an increase in state income and accrued property taxes of $71,703.
Previous wording
Discussion of Significant Changes in the Consolidated Statements of Cash Flows. Net cash provided by operating activities was $5,012,279 in the six months ended June 30, 2025, an increase of $2,095,693 (72%) in net cash provided by operations in the comparable period in 2024 of $2,916,586. For more information see “Operating Revenues” and “Other Income, Net” below.
Current wording
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 $7,380,584 in the nine months ended September 30, 2025, an increase of $1,859,125 (34%) from cash provided by operations in the comparable period in 2024 of $5,521,459. For more information see “Operating Revenues” and “Other Income/(Loss), Net” below.
Previous wording
Cash applied to the purchase of property, plant and equipment in the six months ended June 30, 2025, was $6,090,663, an increase of $905,808 (17%) from cash applied to the purchase of property, plant and equipment in the comparable period in 2024 of $5,184,855. Of the $6,090,663 applied to the purchase of property, plant and equipment in the six months ended June 30, 2025, approximately 41% was for the purchase of unproved leasehold and minerals, approximately 49% for intangible drilling costs, and approximately 10% to purchase lease and well equipment. Cash provided by the disposal of oil and gas properties was $3,136,169, resulting from the sale of unproved, non-producing leasehold in western Oklahoma.
Current wording
Cash applied to the purchase of property, plant and equipment in the nine months ended September 30, 2025, was $8,084,208, an increase of $923,703 (13%) from cash applied to the purchase of property, plant and equipment in the comparable period in 2024 of $7,160,505.
Previous wording
Net income attributable to common stockholders increased $1,187,915 (66%) to $2,974,716 in the six months ended June 30, 2025, from $1,786,801 in the comparable period in 2024. Net income per share attributable to common stockholders, basic, increased $8.07 to $19.60 in the six months ended June 30, 2025, from $11.53 in the comparable period in 2024. A discussion of revenue from oil and natural gas sales and other significant line items in the Consolidated Statements of Income follows.
Current wording
Net income attributable to common stockholders increased $807,405 (23%) to $4,343,257 in the nine months ended September 30, 2025, from $3,535,852 in the comparable period in 2024. Net income per share attributable to common stockholders, basic, increased $5.73 to $28.62 in the nine months ended September 30, 2025, from $22.89 in the comparable period in 2024. A discussion of revenue from oil and natural gas sales and other significant line items in the Consolidated Statements of Income follows.
Previous wording
Operating Revenues. Revenues from oil and gas sales decreased $360,341 (9%) to $3,476,283 in the three months ended June 30, 2025, from $3,836,624 in the comparable period in 2024. The decrease is due to a decrease in oil sales of $689,813, an increase in natural gas sales of $306,604, and an increase in miscellaneous oil and gas product sales of $22,868.
Current wording
Operating Revenues. Revenues from oil and gas sales increased $1,071,511 (10%) to $11,794,573 in the nine months ended September 30, 2025, from $10,723,062 in the comparable period in 2024. The increase is due to a decrease in oil sales of $417,691, an increase in natural gas sales of $1,499,703, and a decrease in miscellaneous oil and natural gas product sales of $10,501.
Previous wording
The $497,276 (9%) decrease in oil sales to $5,089,607 in the six months ended June 30, 2025, from $5,586,883 in the comparable period in 2024 was the result of an increase in the volume sold and a decrease in the average price per barrel (Bbl). The volume of oil sold increased 10,724 Bbls to 83,398 Bbls in the six months ended June 30, 2025, resulting in a positive volume variance of $824,494. The average price per Bbl decreased $15.85 to $61.03 per Bbl in the six months ended June 30, 2025, from $76.88 per Bbl in the comparable period in 2024, resulting in a negative price variance of $1,321,770.
Current wording
The $417,691 (5%) decrease in oil sales to $8,323,128 in the nine months ended September 30, 2025, from $8,740,819 in the comparable period in 2024 was the result of an increase in the volume sold and a decrease in the average price per barrel (Bbl). The volume of oil sold increased 17,564 Bbls to 135,757 Bbls in the nine months ended September 30, 2025, resulting in a positive volume variance of $1,298,858. The average price per Bbl decreased $12.64 to $61.31 per Bbl in the nine months ended September 30, 2025, from $73.95 per Bbl in the comparable period in 2024, resulting in a negative price variance of $1,716,549.
Previous wording
The $915,975 (80%) increase in natural gas sales to $2,061,034 in the six months ended June 30, 2025, from $1,145,059 in the comparable period in 2024 was the result of an increase in the volume sold and an increase in the average price per thousand cubic feet ("MCF"). The volume of natural gas sold increased 156,679 MCF to 590,863 MCF in the six months ended June 30, 2025, from 434,184 MCF in the comparable period in 2024, resulting in a positive volume variance of $413,634. The average price per MCF increased $0.85 to $3.49 per MCF in the six months ended June 30, 2025, from $2.64 per MCF in the comparable period in 2024, resulting in a positive price variance of $502,341.
Current wording
The $1,499,703 (87%) increase in natural gas sales to $3,217,546 in the nine months ended September 30, 2025, from $1,717,843 in the comparable period in 2024 was the result of an increase in the volume sold, and an increase in the average price per thousand cubic feet ("MCF"). The volume of natural gas sold increased 230,759 MCF to 951,739 MCF in the nine months ended September 30, 2025, from 720,980 MCF in the comparable period in 2024, resulting in a positive volume variance of $549,206. The average price per MCF increased $1.00 to $3.38 per MCF in the nine months ended September 30, 2025, from $2.38 per MCF in the comparable period in 2024, resulting in a positive price variance of $950,497.
Previous wording
Sales of miscellaneous oil and natural gas products were $177,107 in the six months ended June 30, 2025, compared to $116,324 in the comparable period in 2024.
Current wording
Sales of miscellaneous oil and natural gas products were $253,899 in the nine months ended September 30, 2025, compared to $264,400 in the comparable period in 2024.
Previous wording
Water well drilling revenues decreased $660,975 (100%) to $0 in the six months ended June 30, 2025, related to water well drilling through TWS, with $660,975 in the comparable period in 2024. On April 19, 2024, we terminated the TWS Agreement with TWS South, LLC due to a breach of the agreement. Due to the termination, there will be no future revenues from water well drilling operations. See Note 6 for additional information on TWS.
Current wording
The Company had water well drilling revenues of $0 in the nine months ended September 30, 2025, related to water well drilling through TWS, with $660,978 in the comparable period in 2024. The decrease was due to the completion of a large commercial well project and several commercial and residential water wells completed in 2024. Water well drilling revenues ceased on the joint venture agreement termination date of April 19, 2024. See Note 6 for additional information on TWS.
Previous wording
Operating Costs and Expenses. Operating costs and expenses decreased $633,079 (11%) to $4,894,255 in the six months ended June 30, 2025, from $5,527,334 in the comparable period of 2024.
Current wording
Operating Costs and Expenses. Operating costs and expenses decreased $611,584 (7%) to $7,550,423 in the nine months ended September 30, 2025, from $8,162,007 in the comparable period of 2024.
Previous wording
Production Costs. Production costs increased $52,117 (3%) to $2,093,880 in the six months ended June 30, 2025, from $2,041,763 in the comparable period in 2024. Lease operating expenses increased $50,631 (4%), gas deductions and other costs increased by $26,186 (10%) and gross production taxes decreased $24,698 (6%) due to increased revenues from oil and natural gas sales.
Current wording
Production Costs. Production costs increased $219,824 (7%) to $3,303,281 in the nine months ended September 30, 2025, from $3,083,457 in the comparable period in 2024. Lease operating expenses increased $200,953 (10%), gas deductions and other costs decreased by $50,306 (10%), and gross production taxes increased $69,177 (13%) due to increased revenues from oil and natural gas sales.
Previous wording
Exploration Costs. Exploration costs decreased $109,375 (33%) to $218,700 in the six months ended June 30, 2025, from $328,075 in the comparable period in 2024, due to increases in leasehold impairments of $58,996 andgeological and geophysical and other expenses of$17,536, offset by decreasesin dry hole and plugging costs of $185,907.
Current wording
Exploration Costs. Exploration costs decreased $75,613 (20%) to $295,197 in the nine months ended September 30, 2025, from $370,810 in the comparable period in 2024, due to an increase of $22,511 in geological and geophysical and other expenses and an increase in $58,996 in leasehold impairments, offset by a decrease in $157,120 in dry hole and plugging costs.
Previous wording
Water Well Drilling Costs. Water well drilling costs decreased $410,178 (100%) to $0 in the six months ended June 30, 2025, from $410,178 in the comparable period in 2024. On April 19, 2024, we terminated the TWS Agreement with TWS South, LLC due to a breach of the agreement. Due to the termination, there will be no future expenses from water well drilling operations. See Note 6 for additional information on TWS.
Current wording
Water Well Drilling Costs. Water well drilling costs decreased $410,741 (100%) to $0 in the nine months ended September 30, 2025, from $410,741 in the comparable period in 2024. On April 19, 2024, we terminated the TWS Agreement with TWS South due to a breach of the agreement. Due to the termination, there will be no future expenses from water well drilling operations. See Note 6 for additional information on TWS.
Previous wording
Depreciation, Depletion, Amortization and Valuation Provision (DD&A). DD&A increased $450,252 (33%) to $1,805,404 in the six months ended June 30, 2025, from $1,355,152 in the comparable period in 2024, due to an increase in long-lived assets impairments of $113,326 and a $336,926 net increase in depletion, depreciation, and amortization due to an increase in completions and production.
Current wording
Depreciation, Depletion, Amortization and Valuation Provision (DD&A). DD&A increased $862,495 (47%) to $2,687,400 in the nine months ended September 30, 2025, from $1,824,905 in the comparable period in 2024, primarily due to an increase in long-lived assets impairments of $279,859 and a $583,167 net increase in depletion, depreciation, and amortization due to an increase in completions and production.
Previous wording
General, Administrative and Other (G&A). G&A decreased $2,570 (0.40%) to $632,818 in the three months ended June 30, 2025, from $635,388 in the comparable period in 2024.
Current wording
General, Administrative and Other (G&A). G&A decreased $449,368 (19%) to $1,897,786 in the nine months ended September 30, 2025, from $2,347,154 in the comparable period in 2024. The decrease was primarily the result of bad debt expense of $465,977 recorded for TWS South accounts receivable in 2024. See Note 6 for additional information on TWS.
Previous wording
Gain on Disposition of Oil and Gas Properties. We had a gain on the sale of unproved, non-producing leasehold of $615,375 in the six months ended June 30, 2025, with none in the the comparable period in 2024.
Current wording
Gain on Disposition of Oil and Gas Properties. We had a gain on the sale of unproved, non-producing leasehold of $764,805 in the nine months ended September 30, 2025, with none in the the comparable period in 2024.
Previous wording
Equity Income in Investees. Equity income in investees increased $5,095 (9%) to $62,453 in the six months ended June 30, 2025, from $57,358 in the comparable period in 2024. Income in the six months ended June 30, 2025, was made up of income of $17,687 in Broadway Sixty-Eight, LLC (“Broadway 68”), income of $32,813 in Broadway Seventy-Two, LLC (“Broadway 72”), income of $14,714 from Victorum BRH Investment, LLC, offset by losses of $2,611 in QSN Office Park, LLC (“QSN”), and $150 in Stott's Mill. See Note 5 to the accompanying financial statements for additional information on equity method investments.
Current wording
Equity Income/(Loss) in Investees. Equity income/(loss) in investees decreased $18,934 (29%) to $45,757 in the nine months ended September 30, 2025, from $64,691 in the comparable period in 2024. Income in the nine months ended September 30, 2025, was made up of income of $17,947 in Broadway Sixty-Eight, LLC (“Broadway 68”), income of $49,973 in Broadway Seventy-Two, LLC (“Broadway 72”), income of $23,122 from Victorum BRH Investment, LLC, loss of $5,214 in QSN Office Park, LLC (“QSN”), and loss of $40,071 in Stott's Mill. See Note 5 to the accompanying financial statements for additional information on equity method investments.
Previous wording
Other Income, Net. Other income, net was $829,809 in the six months ended June 30, 2025, as compared $481,894 in the comparable period in 2024. See Note 4 to the accompanying consolidated financial statements for an analysis of the components of this line item.
Current wording
Other Income/(Loss), Net. Other income, net was $710,066 in the nine months ended September 30, 2025, as compared $945,581 in the comparable period in 2024. See Note 4 to the accompanying consolidated financial statements for an analysis of the components of this line item.
Previous wording
Income Tax Provision. Income tax provision increased $96,565 (13%) to $815,816 in the six months ended June 30, 2025, from $719,251 in the comparable period in 2024. Of the 2025 tax provision, estimated current tax provision was $2,602 and estimated deferred tax provision was $813,214. Of the 2024 income tax provision, the estimated current tax provision was $799 and the estimated deferred tax provision was $718,452.
Current wording
Income Tax Provision. Income tax provision increased $145,686 (15%) to $1,115,432 in the nine months ended September 30, 2025, from $969,746 in the comparable period in 2024. Of the 2025 tax provision, estimated current tax provision was $23,399 and estimated deferred tax provision was $1,092,033. Of the 2024 income tax provision, the estimated current tax benefit was $68,639 and the estimated deferred tax provision was $1,038,385.
Previous wording
Net income attributable to common stockholders increased $146,762 (14%) to $1,196,555 in the three months ended June 30, 2025, from $1,049,793 in the comparable period in 2024. The significant changes in the Consolidated Statements of Income are discussed below. Net income per share attributable to common stockholders, basic increased $1.09 to $7.88 in the three months ended June 30, 2025, from $6.79 in the comparable period in 2024.
Current wording
Net income attributable to common stockholders decreased $380,510 (22%) to $1,368,541 in the three months ended September 30, 2025, from $1,749,051 in the comparable period in 2024. The significant changes in the Consolidated Statements of Income are discussed below. Net income per share attributable to common stockholders, basic decreased $2.36 to $9.02 in the three months ended September 30, 2025, from $11.38 in the comparable period in 2024.
Previous wording
Operating Revenues. Revenues from oil and natural gas sales increased $479,482 (7%) to $7,327,748 in the six months ended June 30, 2025, from $6,848,266 in the comparable period in 2024. The increase is due to a decrease in oil sales of $497,276, an increase in natural gas sales of $915,975, and an increase in miscellaneous oil and natural gas product sales of $60,783.
Current wording
Operating Revenues. Revenues from oil and gas sales increased $592,029 (15%) to $4,466,825 in the three months ended September 30, 2025, from $3,874,796 in the comparable period in 2024. The increase is due to an increase in oil sales of $79,585, an increase in natural gas sales of $583,728, and a decrease in miscellaneous oil and gas product sales of $71,284.
Previous wording
The $689,813 (22%) decrease in oil sales to $2,446,906 in the three months ended June 30, 2025, from $3,136,719 in the comparable period in 2024 was the result of an increase in the volume sold and a decrease in the average price per barrel (Bbl). The volume of oil sold increased 4,110 Bbls to 43,494 Bbls in the three months ended June 30, 2025, resulting in a positive volume variance of $327,320. The average price per Bbl decreased $23.38 to $56.26 per Bbl in the three months ended June 30, 2025, from $79.64 per Bbl in the comparable period in 2024, resulting in a negative price variance of $1,017,133.
Current wording
The $79,585 (3%) increase in oil sales to $3,233,521 in the three months ended September 30, 2025, from $3,153,936 in the comparable period in 2024 was the result of an increase in the volume sold and a decrease in the average price per barrel (Bbl). The volume of oil sold increased 6,840 Bbls to 52,358 Bbls in the three months ended September 30, 2025, resulting in a positive volume variance of $473,944. The average price per Bbl decreased $7.53 to $61.76 per Bbl in the three months ended September 30, 2025, from $69.29 per Bbl in the comparable period in 2024, resulting in a negative price variance of $394,359.
Previous wording
The $306,604 (49%) increase in natural gas sales to $937,318 in the three months ended June 30, 2025, from $630,714 in the comparable period in 2024 was the result of an increase in the volume sold and an increase in the average price per MCF. The volume of natural gas sold increased 99,670 MCF to 326,927 MCF in the three months ended June 30, 2025, from 227,257 MCF in the comparable period in 2024, resulting in a positive volume variance of $277,083. The average price per MCF increased $0.09 to $2.87 per MCF in the three months ended June 30, 2025, from $2.78 per MCF in the comparable period in 2024, resulting in a positive price variance of $29,521.
Current wording
The $583,728 (102%) increase in natural gas sales to $1,156,512 in the three months ended September 30, 2025, from $572,784 in the comparable period in 2024 was the result of an increase in the volume sold and an increase in the average price per MCF. The volume of natural gas sold increased 74,079 MCF to 360,875 MCF in the three months ended September 30, 2025, from 286,796 MCF in the comparable period in 2024, resulting in a positive volume variance of $148,158. The average price per MCF increased $1.20 to $3.20 per MCF in the three months ended September 30, 2025, from $2.00 per MCF in the comparable period in 2024, resulting in a positive price variance of $435,570.
Previous wording
Operating Costs and Expenses. Operating costs and expenses decreased $188,035 (7%) to $2,611,026 in the three months ended June 30, 2025, from $2,799,061 in the comparable period in 2024.
Current wording
Operating Costs and Expenses. Operating costs and expenses increased $21,497 (1%) to $2,656,170 in the three months ended September 30, 2025, from $2,634,673 in the comparable period in 2024.
Previous wording
Production Costs. Production costs decreased $30,093 (3%) to $1,045,519 in the three months ended June 30, 2025, from $1,075,612 in the comparable period in 2024. Lease operating expenses increased $58,396 (9%), gas deductions and other costs decreased by $22,575 (13%), and gross production taxes decreased $65,914 (26%).
Current wording
Production Costs. Production costs increased $167,707 (16%) to $1,209,401 in the three months ended September 30, 2025, from $1,041,694 in the comparable period in 2024. Lease operating expenses increased $150,321 (23%), gas deductions and other costs decreased by $76,491 (29%), and gross production taxes increased $93,877 (73%).
Previous wording
Exploration Costs. Exploration costs decreased $54,455 (32%) to $114,421 in the three months ended June 30, 2025, from $168,876 in the comparable period in 2024, due to decreased dry hole and plugging costs of $60,713, offset by an increase of $6,258 in geological and geophysical and other costs.
Current wording
Exploration Costs. Exploration costs increased $33,762 (79%) to $76,497 in the three months ended September 30, 2025, from $42,735 in the comparable period in 2024, due to increased dry hole and plugging costs of $29,386 and an increase of $4,376 in geological, geophysical, and other costs.
Previous wording
Water Well Drilling Costs. Water well drilling costs decreased $31,589 (100%) to $0 in the three months ended June 30, 2025, from $31,589 in the comparable period in 2024. On April 19, 2024, we terminated the TWS Agreement with TWS South, LLC due to a breach of the agreement. Due to the termination, there will be no future expenses from water well drilling operations. See Note 6 for additional information on TWS.
Current wording
Water Well Drilling Costs. Water well drilling costs decreased $563 (100%) to $0 in the three months ended September 30, 2025, from $563 in the comparable period in 2024. On April 19, 2024, we terminated the TWS Agreement with TWS South due to a breach of the agreement. Due to the termination, there will be no future expenses from water well drilling operations. See Note 6 for additional information on TWS.
Previous wording
Gain on Disposition of Oil and Gas Properties. We had a gain on the sale of unproved, non-producing leasehold of $123,093 in the three months ended June 30, 2025, with none in the the comparable period in 2024.
Current wording
Gain on Disposition of Oil and Gas Properties. We had a gain on the sale of unproved, non-producing leasehold of $149,430 in the three months ended September 30, 2025, with none in the the comparable period in 2024.
Previous wording
Equity Income in Investees. Equity income in investees decreased $10,544 (31%) to $23,273 in the three months ended June 30, 2025, from $33,817 in the comparable period in 2024. See Note 5 to the accompanying financial statements for additional information on equity method investments.
Current wording
Equity Income/(Loss) in Investees. Equity income/(loss) in investees decreased $24,029 to a loss of $16,696 in the three months ended September 30, 2025, from income of $7,333 in the comparable period in 2024. See Note 5 to the accompanying financial statements for additional information on equity method investments.
Previous wording
Other Income, Net. Other income, net increased $340,851 in the three months ended June 30, 2025, to $562,105 from $221,254 in the comparable period in 2024. See Note 4 to the accompanying consolidated financial statements for an analysis of the components of this item.
Current wording
Other Income/(Loss), Net. Other income/(Loss), net decreased $583,431 in the three months ended September 30, 2025, to a loss of $119,742 from income of $463,689 in the comparable period in 2024. See Note 4 to the accompanying consolidated financial statements for an analysis of the components of this item.
Previous wording
Income Tax Provision. Income tax provision decreased $11,247 (4%) to $268,280 in the three months ended June 30, 2025, from $279,527 in the comparable period in 2024. Of the 2025 tax provision, estimated current tax benefit was $9,632 and estimated deferred tax provision was $277,912. Of the 2024 income tax provision, the estimated current tax provision was $308,070 and the estimated deferred tax benefit was $28,543.
Current wording
Income Tax Provision. Income tax provision increased $49,121 (20%) to $299,616 in the three months ended September 30, 2025, from a provision of $250,495 in the comparable period in 2024. Of the 2025 tax provision, estimated current tax provision was $20,797 and estimated deferred tax provision was $278,819. Of the 2024 tax provision, the estimated current tax benefit was $69,438 and the estimated deferred tax provision was $319,933. See discussions above in “Results of Operations” section for additional explanation of the changes in the provision for income taxes.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Depreciation, Depletion, Amortization and Valuation Provision (DD&A). DD&A increased $51,543 (6%) to $897,526 in the three months ended June 30, 2025, from $845,983 in the comparable period in 2024, due to an increase in long-lived assets impairments of $94,819 and a $43,276 net decrease in depletion, depreciation, and amortization.