The Reserve Petroleum Company Third Quarter Report

November 18, 2011

The Reserve Petroleum Company (OTCQB: RSRV.OB) reported revenues for the third quarter ended September 30, 2011 were up a modest 2.4% to $3.3 million.  Net income for the period was up 24% to $1.7 million or $10.39 per share.  The increase in net income for the quarter was driven primary by by a $806 thousand gain on sale of of non-producing leaseholds in Oklahoma and Kansas.  In addition, revenues from oil and gas sales increased 10% to $3.2 million driven by a 28% increase in oil sales which offset a 16% decrease in gas sales.

For the first nine months of 2011, revenues decreased 11% to $9 million.  The decrease in revenue is attributable to lease bonuses coming approximately $1 million lower.  Revenue from oil and gas sales were essentially flat for the period.  Net income was lower by 4.3% to $4.3 million or $26.70 per share.  The gain on sale recorded in the third quarter was offset in the nine month period by higher depreciation, depletion, amortization and valuation provisions and lower revenue from lease bonuses.

The balance sheet of Reserve Petroleum remain very strong.  The company has cash/cash equivalent and available-for-sale securities of $17 million, total assets of $32.1 million and total liabilities of only $5.2 million.

The company been actively participating in several exploration and development projects throughout 2011.  Most of the company’s activity is currently in Oklahoma and Kansas.

Source: The Reserve Petroleum Company

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