UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 20549

                             __________________


                                  FORM 10-K

          [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                 For the Fiscal Year Ended December 31, 2003

                         Commission File No. 0-1392

                       CENTRAL NATURAL RESOURCES, INC.

            (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                     <C>
    Delaware                                                     44-0196290
__________________                                       __________________
(State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                       Identification No.)

911 Main Street Suite 1710, Kansas City, Missouri                     64105
______________________________________________________                _____
(Address of Principal Executive Offices)                         (Zip Code)
</TABLE>

 Registrant's telephone number, including area code:           816/842-2430
                                                               ____________

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
<CAPTION>
                                                   NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS                                        WHICH REGISTERED
___________________                                ________________________
<S>                                                <C>
          None                                             None
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                       Common stock ($1 par value)
                       ___________________________
                            (Title of Class)

<PAGE>

    Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [   ]

    Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [ X ]

    Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act).  Yes  [   ]  No  [ X ]

    The aggregate market value of the voting stock held by
nonaffiliates of the registrant (201,770 shares), as of June 30, 2003
was $2,623,010.

    The number of shares outstanding of the issuer's only class of
common stock as of March 1, 2004 is as follows:

             Common Stock ($1.00 Par Value) . . . . . . 494,824

                    DOCUMENTS INCORPORATED BY REFERENCE

    Definitive Proxy Statement to be furnished to security holders and
the Securities and Exchange Commission on April 1, 2004, relative
to the Annual Meeting of Stockholders to be held on April 30, 2004.
(Part III)


           [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                  PART I

ITEM 1.  BUSINESS

     (a)   General  Development  of  Business. Central Natural
Resources,  Inc.  (hereinafter  "the  Company") is a  Delaware
corporation  and  the  general development  of  its current one
business  segment, the Energy Business Segment, is described  in
the  narrative description of the business contained in Section
1(c)  hereafter.   The  Company historically  has been involved
principally in that business.

     Since the beginning of the fiscal year there has been no
material change in the mode of conducting the business of the
Company. In addition, there have been no bankruptcy, receivership or
similar proceedings with respect  to the  Company; there has been no
material reclassification, merger or consolidation of the Company;
other than the acquisition of  a working  interest in properties
described in Item  2,  there  has been  no  acquisition or disposition
of any  material  amount  of assets other than in the ordinary course
of business.

     In  2003, a wholly-owned subsidiary of the Company, CNR Production,
LLC. (CNR), acquired certain working interests in oil and gas that CNR
intends  to  further develop and extend over time. These interests
substantially expanded the Company's prior involvement in the oil and
gas industry. (The Company and  CNR  and other consolidated subsidiaries
of the Company are herein  referred to collectively as "The Company").
The  Company considers  these  asset additions to be in  the  Energy
Business Segment  and intends to continue to expand its interests in
this area through both organic growth and, when opportunities present
themselves, future acquisitions.  Continued expansion in this area
will increase the amount of oil and gas  assets that the Company
records on its balance sheet and may result in increased expenses and
liabilities related to the exploration and production  of oil and gas.

     (b)  Financial Information about Industry Segments.  During
the  year  2003, the Company had one reportable segment that is
identified as the Energy Business Segment.

     (c)  Narrative Description of Business.  The activities of
the  Company  within the Energy Business Segment consist of the
management of its interests in real properties and the participation
in  working  interests  as  described  hereinafter. Certain real
property interests have been held and managed by the Company for
lease to others for their exploration and the extraction of coal
and  oil  and gas and for surface use.  From time  to time sales
of  portions  of such properties have been made. The properties
owned at the end of the fiscal year are described in Item 2.

     The Company's liquid assets are invested in a  portfolio  of
marketable securities, including United States government and
agency obligations.

     Other  than  as  described above, the  Company  produces  no
products  nor  renders  any  services;  however,  as  more  fully
explained  in Item 2, oil, gas and coal are extracted by  lessees
from properties owned by the Company, and oil and gas is produced
from  property  in  which the Company holds a  working  interest.

     Bethlehem  Steel  Corporation was the lessee  under  a  coal
lease from the Company for a term of 40 years commencing in June,
1969,  providing  for minimum royalties of $50,000  annually  for
each  of the first three years and $90,000 annually for the  next
36  years, together with provisions for royalties of 22-1/2 cents
per  ton  of  coal  mined and shipped against which  the  minimum
royalties are to be applied.  On October 1, 1984, this lease  was
amended  to increase the royalty to the greater of $1.00 per  ton
or  3% of the F.O.B. mine selling price for all coal paid for  by
actual  royalty or minimum royalty after that date, and Bethlehem
assigned  the lease to another.

     A portion of the leased property was subsequently subleased
by the assignee to another party, but Bethlehem  continues to
guarantee the total royalty payment. A small amount of mining
has been done on the lease. The Company believes that the assignee
will contine to make the $90,000 annual minimum royalty payments
until the lease termination in 2009.

     The Company does not posess certain attributes.  For example
there  have  been no new products or industry segments  requiring
the investment of a material amount of assets of the Company, and
there  have  been  no  public announcements nor has  information
otherwise  become  public  involving any  such  new  products or
industry segments.

     Raw materials are not essential to the Company's businesses.

     There  are no patents, trademarks, licenses, franchises  and
concessions held by the Company.

     No  business of any industry activity of the Company  is  or
may be seasonal.


                                     -2-
<PAGE>


     The Company has no significant practices relating to working
capital  since it carries no significant amount of inventory  and
does not provide extended payment terms to customers.

     The Company's business do not have any backlog of unfilled
orders.

     No material portions of the businesses of the Company may be
subject  to renegotiation of profits or termination of contracts
or subcontracts at the election of the Government.

     Except  as  shown on the table below, there are no customers
to  which sales are made in an amount which equals ten percent or
more of the Company's consolidated revenue in 2003.

<TABLE>
<CAPTION>

Customer    Relationship   Revenue        Amount      % of 2003
                           Category       Received     Revenue
_______     ____________   __________     ________    _________
<S>         <C>            <C>            <C>         <C>
Smith
Production  WI Operator    Oil & Gas
                           Production     $377,328    34.9%
Royal Oil   Lessee         Mineral
                           Royalties      $198,525    18.4%
CDX Gas     Lessee         Mineral
                           Royalties      $187,251    17.3%
SEECO       Lessee         Mineral
                           Royalties      $121,651    11.3%
                           Mineral
Wilkem,Inc  Assignee*      Royalties      $90,000      8.3%
</TABLE>

*The  Bethlehem lease referred to previously, was  assigned  to
Wilkem.

Competition

     The  Energy  Business Segment is extremely  competitive  and
cyclical.  The  Company competes for property  acquisitions  with
natural  gas  and  oil companies that range in size  from  small,
family  owned  operations to large independents to  multinational
corporations.   The Company also competes for the  equipment  and
labor required to operate and to develop these properties.   Many
competitors  have  substantially  greater  financial  and   other
resources  and  may be able to sustain wide fluctuations  in  the
economics  of  this industry more easily than  the  Company  can.
Since  certain  aspects  of  this  Energy  Business  Segment  are
regulated,  competitors may be able to absorb the burden  of  any
changes  in  federal, state and local laws and  regulations  more
easily  than the Company can. The ability of  the  Company to
acquire and develop additional properties  in the  future  will
depend upon its ability to evaluate and  select suitable
properties, to secure adequate financing, to consummate
transactions  and  to engage strategic partners  in  this  highly
competitive environment.

     The  Company  spent no money during any of  the  last  three
fiscal   years   on  material  company-sponsored   research   and
development activities as determined in accordance with generally
accepted  accounting principles.  In addition, the Company  spent
no   money  during  such  years  on  material  customer-sponsored
research  activities relating to the development of new products,
services  or techniques or the improvement of existing  products,
services or techniques.  It is anticipated that compliance with
Federal, State and local provisions  regulating  the  discharge
of  materials  into   the environment,  or  otherwise relating to
the  protection  of  the environment  will  have  no  material
effect  upon  the  capital expenditures, earnings and competitive
position of  the  Company. There   are  no  material  estimated
capital  expenditures  for environmental control facilities for
the remainder of the current fiscal  year  and the succeeding
fiscal year or for any further periods that the Company deems
material.

     As  to  future  business intended by the  Company,  it  has,
during  the  last five years, investigated several  new  business
opportunities, both in the Energy Business Segment and  in  other
reportable  business  segments. Management of  the Company
continues   to  seek  out  and  investigate  such  new   business
opportunities  or  expansion of existing  leasing  activities  or
working interests in oil and gas operations. Such investments could
result in a more productive deployment of the Company's assets in an
effort to generate  more operating, rental, bonus, and royalty income,
and  the Company is considering acquiring additional mineral properties
or additional working interests in selected oil and gas operations.
While  the  Company  has not limited itself  geographically  with
respect to future working interest opportunities, the Company has
focused primarily on properties in the continental United  States
that are located on or near areas with historic production.


     The total number of persons employed by the Company, as
of the end of the fiscal year, was 3.

     (d) Financial Information about Geographic Areas. The
Company  does not engage in operations in foreign countries,  nor
are  portions  of  sales or revenues derived  from  customers  in
foreign countries.


<PAGE>                             -3-


ITEM 2.  PROPERTIES
     (a)   The  Company  has  working interests  in primarily
natural gas producing properties  in a total  of approximately
28,000  acres in Texas in  addition  to  whole  or partial
interests in approximately 61,000 acres of real property
located  in  Arkansas,  Louisiana, Texas,  Kansas,  Oklahoma  and
Missouri.  Coal deposits that total approximately 84,000,000 tons
(of  which  50%  to 90% could be expected to be recoverable)  are
leased  under  the previously mentioned agreement with  Bethlehem
Steel  Corporation and its assignees.  Coal deposits  aggregating
approximately 92,000,000 tons in place with a net carrying  value
of  approximately $700,000 at December 31, 2003 are not presently
leased  or  producing  coal in commercial quantities.   In  later
parts  of  this  Item 2 references are made to the  ownership  of
"minerals."   The  Company is the owner of all  or  part  of  the
subsurface minerals on large portions of the properties involved,
but  the  only  minerals of primary interest to the  Company  are
coal, oil and gas. The Consolidated Properties of the Company are
detailed on the following table:

<TABLE>
<CAPTION>

Location    Description     Total Acreage     Utilization    Production
________    ___________     _____________     __________     __________

         <C>             <C>               C>             <C>

Liberty &   Oil & Gas       2% Working        Active
Hardin Co.  Working         Interest in       Exploration &
TX          Interest        25,769 acres      Production     Oil & Gas

Starr &     Oil & Gas       2% Working        Active
Hidalgo     Working         Interest in       Exploration &
Co., TX     Interest        2,619 acres       Production     Oil & Gas

Cherokee &
Crawford    Coal &          3 Fee Simple      0 acres under
Co., KS     Mineral Rights  2,518 Mineral     lease          No Activity

Craig Co.
OK &                        710 Fee
Labette     Coal, Mineral   9,904 Coal        0 acres under
Co., KS     and Fee Simple  Only              lease          No Activity

                                              Over 13,600
                                              acres leased
                                              or HBP for a
                                              combination
                                              of Coal, Coal-
                                              bed Methane
Sebastian   Coal, Mineral   1,759 Fee Simple  and Oil & Gas  Coalbed Methane
Co., AR     and Fee Simple  16,545 Mineral    Development    Oil & Gas

                            640 Fee Simple
Pittsburg   Coal, Mineral   80 Mineral       600 acres
Co., OK     and Fee Simple  1,200 Coal Only  under lease     No Activity

Macon &
Randolph    Coal, Mineral   2 Fee Simple     0 acres under
Co., MO     and Fee Simple  6,147 Mineral    lease           No Activity

Vernon &
Beauregard                                   1280 acres
Parish, LA  Mineral Rights  10,619 Mineral   HBP             Oil & Gas

Walker,
Montgomery
& San                                        4,017 acres
Jacinto,TX  Mineral Rights  11,880 Mineral   HBP             Oil & Gas

LeFlore     Coal &
Co., OK     Mineral Rights  90 Mineral       90 acres HBP    Coalbed Methane
</TABLE>

HBP  - Stands for "Held By Production" and refers to acreage that
is held by current oil or gas production.

     (b) In 2003, the Company produced oil and gas from properties
in  which  it  maintains  a  working  interest.  Through  the
acquisition  of certain producing properties as well  as  through
the exploration and development of unproved property in which the
Company  holds  a  working interest, these  activities  increased
substantially in 2003.  The Company's working interest  in  these
oil  and  gas  properties  entitles it  to  a  share  of  revenue
proportionate  to  its net revenue interest.   Additionally,  the
Company  is  responsible  for a share  of  the  operating  costs,
severance  taxes and additional expenses that are  applicable  to
the operation and development of these properties.

                                -4-

<PAGE>


     In  2002,  the Company did not participate in any  producing
oil  and  gas operations.  However, the Company is the  owner  of
certain properties (fully described above in this Item), part  of
which  are leased to outside interests for the production of  oil
and gas.  The Company receives bonuses, rentals and royalties for
the use of the land and mineral interests leased by it.

Acquisitions and Dispositions

     On  February  28, 2003 the Company, through its wholly-owned
subsidiary, CNR Production, L.L.C., (CNR) a Texas limited liability
company acquired  an  undivided  two percent (2%) interest in
certain properties  constituting working interests in  two oil and
gas fields known  as the Bass Flores Field and Total Tabasco Field
located in Hidalgo and Starr Counties in south Texas. This area of
Texas has been active in the production of gas and oil,and there
are a number of operating oil and gas wells located on the property
acquired.

     As consideration for this acquisition, CNR paid $1,080,000.
This amount  was paid by CNR from funds provided by the  Company
from   its  available  liquid  resources.  The purchase price was
allocated  to leasehold costs and lease and well equipment  based
upon proved reserve information available at the time of purchase.

Natural Gas Reserves

     The  following  table presents the Company's  estimated  net
proved  natural  gas reserves (unaudited) at  December  31,  2003
based on reserve reports prepared by T.J. Smith & Company, Inc..

<TABLE>
<CAPTION>

As of Dec. 31, 2003                      Proved Reserves
                          Developed       Undeveloped       Total
                          _________      _______________    _______
<S>                       <C>            <C>                <C>
Natural Gas Reserves,
  MMcf equiv.             1,409.0        785.2              2,194.2

</TABLE>

     Further information regarding natural gas and oil reserves is
contained in Note 10 to the consolidated financial statements, "Supplemental
Information - Natural Gas Reserves (Unaudited)"


Drilling Activity and Productive Well Count

<TABLE>
<CAPTION>
                                           Exploratory
                     Productive Wells       Dry Holes          Total
                     Gross      Net       Gross     Net    Gross   Net
                     ________________     _____________    ___________
<S>                  <C>                  <C>              <C>
2003                   2.00     0.04        2.00   0.04    4.00   0.08
2002                      0        0           0      0       0      0
2001                      0        0           0      0       0      0


                                          Developmental
                     Productive Wells       Dry Holes          Total
                     Gross      Net       Gross     Net    Gross   Net
                     ________________     _____________    ___________
2003                   5.00     0.11           0      0    5.00   0.11
2002                      0        0           0      0       0      0
2001                      0        0           0      0       0      0



Wells in Progress as of December 31, 2003

                                                           Gross   Net
Exploratory                                                   0      0
Development                                                1.00   0.02
___________                                                ___________
Total                                                      1.00   0.02
</TABLE>

                                    -5-

<PAGE>

     The following table presents the number of productive natural gas
wells in which the Company owned an interest as of December 31, 2003.

Natural Gas wells                                          Gross   Net

                                                          44.00  0.83
Production and Pricing

     In  2003  the  Company produced 57,443  Mcf  equivalents  of
natural   gas  from  the  working  interest  properties  detailed
previously  with  an average price per Mcf equivalent  of  $6.04.
The  bulk of the Company's production and proved reserves consists
of natural gas and natural  gas condensates with a very small amount
of oil produced from  certain gas wells.  The form with which the
Company reports production,  Mcf equivalents, takes oil production
into account. Additionally, the Company's producing properties have
gas with a relatively high Btu value. Since natural gas is generally
sold on a per Btu basis, on certain properties the Company will,
from time to time, receive a slight premium on a per Mcf basis.


ITEM 3.  LEGAL PROCEEDINGS

     (a)  Currently,  there  are  no  material  pending   legal
proceedings, other than ordinary routine litigation incidental to
the business, to which the Company or any of its subsidiaries  is
a party or of which any of its property is the subject, and there
are  no  material proceedings to which any director,  officer  of
affiliate of the Company, any owner of record or beneficially  of
more  than five percent of any class of voting securities of  the
Company,  or  any  associate  of any such  director,  officer  or
security holder is a party adverse to the Company or any  of  its
subsidiaries or has a material interest adverse to the Company or
any of its subsidiaries.  Further, there are no administrative or
judicial  proceedings  involving  the  Company  or  any  of   its
subsidiaries arising under any federal, state or local provisions
that  have  been enacted or adopted regulating the  discharge  of
materials  into the environment or primarily for the  purpose  of
protecting the environment.

     (b)  There were no such material legal proceedings that were
terminated  during the fourth quarter of the fiscal year  covered
by this report.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matters were submitted during the fourth quarter of the fiscal
year covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.

                                  PART  II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

(a)   The  common  stock of the Company is traded over the
counter. The  range  of  bid and  asked  quotations  and the
dividends  paid on such securities for each quarterly period
during the Company's two most recent fiscal years as required  by
Item 201 of Regulation S-K is set forth in the following table:

<TABLE>
<CAPTION>

Period      Low       High      Dividends/Share
______      ____      ____      _______________
<S>         <C>       <C>       <C>
4Q2003      13.10     15.50      $0.10

3Q2003      12.75     13.50      $0.10

2Q2003      12.87     13.10      $0.10

1Q2003      13.12     13.90      $0.10

4Q2002      13.20     14.25      $0.10

3Q2002      14.50     16.25      $0.10

2Q2002      16.00     17.00      $0.10

1Q2002      16.81     17.20      $0.10

</TABLE>


                                    -6-

<PAGE>


     (b)   The approximate number of stockholders as of March  1,
2004 was 311.

     There have been no sales of either registered or unregistered
securities by the Company during the past three years.


     (c) Dividends - The frequency and  amount  of  any  cash
dividends  declared  on each class of its common  equity  by  the
Company for the two most recent fiscal years is set forth in that
table included in Item (a) above.

     (d)  Securities  Authorized for Issuance Under  Compensation
Plans as of December 31, 2003:


<TABLE>
<CAPTION>

    Plan      (a) Number of  (b) Weighted-     (c) Number of
  Category    Securities to     average     securities remaining
                be issued      exercise     available for future
              upon exercise    price of        issuance under
                    of        outstanding   equity compensation
               outstanding     options,       plans (excluding
                 options,    warrants and   securities reflected
               warrants and     rights.        in column (a))
                 rights.
__________    _____________  ____________   ___________________
<S>           <C>            <C>            <C>
   Equity         33,500        $15.66             91,500
compensation
   plans
approved by
 securities
  holders

   Equity           0              0                 0
compensation
 plans not
approved by
 securities
  holders
   Total          33,500        $15.66             91,500

</TABLE>



     (e) Recent Sales of Unregistered Securities

     There have been no sales of either registered or unregistered
securities by the Company during the past three years.

     (f) Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

<TABLE>
<CAPTION>

Period  (a)      (b)         (c) Total Number  (d) Maximum
        Total    Average     of Shares         Number (or
        Number   Price       Purchased as      Approx. Dollar
        of       Paid per    Part of Publicly  Value) of Shares
        Shares   Share       Announced Plans   that May Yet Be
        Purchas              or Programs       Purchased Under
        ed                                     the Plans or
                                               Programs
_____   ______   _______     _______________   ________________
<S>     <C>      <C>         <C>               <C>
Month      0         0               0                N/A
#4
(Oct. 1
- Dec.
31,
2003)
Total      0         0               0                 0

</TABLE>


ITEM 6. SELECTED FINANCIAL DATA

     The information required by this item is set forth in the
table below:

<TABLE>
<CAPTION>

Years ended         2003        2002      2001      2000       1999
December
___________         __________  ________  ________  ________   ________
<S>                 <C>         <C>       <C>       <C>        <C>
Total Operating     $1,080,496  $613,391  $769,909  $741,489   $615,875
Revenue

Net Earnings           112,499  (301,754)  246,296   856,581    651,010

Net Earnings per          0.23     (0.60)     0.49      1.58       0.92
common share

Cash Dividends per        0.40      0.40      0.88      0.88       0.63
common share

Total Assets         7,523,380  7,502,008 8,039,160 8,584,503 12,272,117

</TABLE>

                                   -7-
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Overview

     In  2003  the  Company  accomplished  several  steps  toward
increasing its operating activities in the production of oil  and
gas.   Prior to 2003, the Company derived all its mineral revenue
from royalties and bonuses related to the leasing of its oil, gas
and  coal properties.  In 2003, with the acquisition of a working
interest in oil and gas producing properties in south Texas by  a
wholly  owned  subsidiary of the Company, CNR  Production  L.L.C.
(CNR),  as  well  as  through participation  in  exploration  and
development  of  properties in southern and  eastern  Texas,  the
Company initiated the first steps of what is a long term plan  to
expand  further  into  oil  and gas exploration  and  production.

     While the Company has historically been involved in oil and
gas, its  revenue  previously has been derived primarily from
royalty interests and lease bonus activity. As stated in prior
reports, Management believes that opportunities to increase
shareholder value  exist in oil and gas exploration and production
and is positioning the Company to take advantage of these
potential opportunities. Consequently, 2003 consolidated financial
statements  show substantial revenue, expenses and capital
expenditures incurred in this endeavor. Management believes these
factors should continue to impact the Company and its subsidiaries
in the future as it further develops its activities in this area.


Results of Operations

     Total  operating  revenue  on  a  consolidated  basis   rose
substantially in 2003 from 2002 and declined in 2002  from  2001.
The  increase  in  2003 was due primarily to the acquisition  of
working interests in gas producing properties and the revenue
derived  from this production. Additionally, in 2003 the Company
received increased  royalty  income  derived from the Company's
mineral properties under lease as a result of higher average
natural gas prices and expanded production. The decrease in 2002
compared to 2001 was due primarily to decreased revenues from
mineral gas royalties which,in turn, was due to decreased production
of oil and gas by lessees during the  current  periods  under
comparison, coupled  with  a  slight decrease in average energy
prices during the comparable periods.

     As  mentioned in prior reports, a lessee continues to expand
drilling  operations and production of coal bed methane gas  from
certain  of  the Company's properties located  in  Sebastian
County,  Arkansas, with revenue continuing to  be  received  from
royalties  from this operation during the current fiscal  periods
under   comparison.   Commercial  production  has  been  somewhat
consistent over the past two years, however, the Company has been
advised that the lessee plans to further  develop this property
over the next 12 months.  If  this development   is  successful,
it  could  result   in   increased production and a corresponding
increase in the amount of  royalty revenue that the Company
receives from this lessee.  Current  and future  revenue from this
source will continue to be  subject  to the  uncertainties of
volume of production and price fluctuations in  the market price
of natural gas.  For the twelve months ended December  31,  2003,
royalties from coal bed methane  production associated  with these
properties were $187,251 and are included in operating revenue
in mineral royalties.


     For the year ended 2003, the Company increased its oil  and
gas  reserves  through  the acquisition of  producing  properties
described in detail in Item 1 and Item 2 of this report as well
as  through  further exploration  and  development  of  its
working  interest  properties.  Detailed  reserve  estimates  are
provided in Note 10 - "Supplemental Information - Natural Gas
Reserves   (Unaudited)"  of  the   consolidated   financial
statements.

     The Company posted nonoperating income in 2003 versus a
nonoperating loss in 2002. This positive income is due to
gains   on  sales  of  securities  as  well  as  greatly  reduced
impairment charges in 2003 versus 2002.  In 2002 versus 2001,
nonoperating  income decreased substantially with nonoperating
losses  occurring in 2002 versus nonoperating  income  in  2001.
This  decrease resulted from lower rates of return  on  temporary
fixed  income  investments, reduced investment  income  resulting
from reduced capital gains on sales of securities and the reduced
size  of  the  portfolio of fixed income investments  during  the
current period. Additionally, as explained in detail in the Notes
to  the accompanying Financial Statements, the Company recognized
impairment  charges in 2003, 2002 and 2001 reflecting write-downs
in  the  carrying value of certain equity securities and  certain
other  investments because decreases in the then  current  market
values of those securities were deemed by Management to be  other
than temporary.  There were such write-downs in each of the years
ending  2003,  2002  and  2001,  although  the  write-downs  were
substantially lower in 2003 than in the prior periods.  There  is
a  deferred tax benefit relative to such write-downs recognizable
for  income tax purposes upon future sales or disposition of  the
securities.

     Expenses associated with the acquired producing properties
increased in 2003. Oil and gas operating expenses increased and
relate to the lease operating costs of managing the Company's
working interest properties. Exploration expenses also increased
and includes the cost of unsuccessful exploratory wells as well
as the amortization of associated leasehold costs.  Depreciation,
depletion and amortization also increased in 2003 due to the
increase of depreciable lease and well equipment and leasehold
costs associated with acquired working interest properties.
General and administrative expenses increased in each of the
years  2003, 2002 and 2001 due primarily to increased  auditing
and  insurance costs as well as compensation associated with  the
engagement of a full-time chief executive officer.



                                   -8-

<PAGE>

     As described in the Notes to the accompanying  consolidated
financial statements, the Company recorded an income tax  benefit
in  2003  and  2002 versus an income tax expense  in  2001. In
2003 the amount of percentage depletion in excess of tax basis
was almost the same as the pre-tax earnings resulting in a slight
income tax benefit on pre-tax earnings of $110,383. Income tax
benefits for 2002 includes receipt of a refund of state income
taxes for prior years amounting to $70,093 as well as percentage
depletion in excess of tax basis which increased the effective
tax benefit rate to 45.9%.  During 2001, the effective tax rate
was 29.1% primarily due to percentage depletion in excess of
tax basis.

     Net  cash provided by operating activities increased for the
year  2003  over  2002, and for 2002 over 2001.   Cash  and  cash
equivalents  decreased in 2003 from 2002, but increased  in  2002
over  2001.  Detailed cash flow analysis follows under  Financial
Condition - Liquidity and Capital Resources below.

     Because  of the nature of the Company's business,  inflation
has  little  impact on its expenses.  It is not anticipated  that
changes in the price of coal will have much impact on the total
income of the Company because of the continuing low activity of
coal extraction and because the Company's existing coal leases
have fixed prices per ton and are not affected by market changes.
Substantially  increased prices could cause an  increase  in  the
amount of coal mined, however.

     As  is indicated in the discussion above concerning oil  and
gas  revenue, changes in the price of oil and natural gas do have
an impact on the consolidated income of the Company, and at times
it  can be dramatic.  The fluctuation in the price of oil and gas
in  the  years under comparison contributed to increased  revenue
from  that  source when prices increased, while the  decrease  in
prices commencing in 2001 resulted in somewhat lower revenue from
mineral royalties in the latter quarters of 2001 and  early
quarters of 2002.  Sustained higher average oil and gas prices in
the  latter  part of 2002 through 2003 contributed  to  increased
revenue  from  oil  and gas during those periods.   Additionally,
changes  in  the prices of oil and gas tend to have a compounding
effect as increased prices generally drive added production, when
feasible, and lower prices often cause unprofitable wells  to  be
shut in, thus reducing overall production.

Financial Condition - Liquidity and Capital Resources

     The  financial  condition  of the Company  continued  to  be
strong during 2003, as it was in 2002 and 2001.  The liquidity of
the  Company continues to be high as is evidenced by a  favorable
ratio of current assets to current liabilities, and the fact that
a  significant portion of the Company's net worth continues to be
represented by liquid assets.  During the first quarter of  2003,
CNR  acquired  a  working  interest  in  oil  and  gas  producing
properties  in south Texas for $1,080,000 and acquired additional
undeveloped  property in south Texas in the  second  quarter  for
$80,000.   The  source of funds used for both  transactions  were
available  liquid  assets of the Company previously  invested  in
U.S. Government agency obligations.  The liquidity of the Company
was somewhat reduced as a result of this transaction, but overall
the  Company continues to enjoy very high liquidity, with current
assets  greatly exceeding current liabilities and  a  significant
portion of its net worth represented by liquid assets.

     Due  to the uncertain fixed income and equity market
conditions  in 2003 and 2002, the Company reduced its equity  and
longer-term fixed income positions in favor of shorter-term fixed
income  and cash positions. These activities resulted in a
current tax  benefit from the realization of losses on the sale
of equity securities, more favorable cash positions for the
company and  as described in Notes to the financial statements,
gross unrealized gains on investment securities at the end of both
2003 and 2002.

     Although  as  discussed above, the liquidity of the  Company
continues  to  be favorable, it is affected by cash  flows.   The
Consolidated   Statements  of  Cash  Flows  in  the  accompanying
Consolidated Financial Statements illustrate that there was a net
decrease in cash and cash equivalents in 2003, while there was  a
net  increase  in cash and cash equivalents in 2002.    In  2001,
there was a net decrease in cash and cash equivalents.  Cash from
operating activities increased in 2003 over 2002 and in 2002 over
2001.  There were net earnings in 2003 compared to a net loss  in
2002,  and  net earnings in 2001.  The net loss in 2002  included
certain  impairment charges on equity securities described  above
which  reduced earnings but did not reduce cash, while the amount
of such impairment charges was lower in both 2003 and 2001.

     A significant component contributing to the decrease in cash
in  2003  was a use of cash for investing purposes versus  a  net
increase  in  cash for investing purposes in 2002.  A substantial
factor  contributing to the increase in cash in 2002 was the  net
increase in cash provided by investing activities versus a use of
cash for these purposes in 2001; specifically, differences in the
amount  of  proceeds  from  the sale  of  equity  securities  and
purchase   of   equity  securities  during  each   such   period,
differences   in  the  amount  of  proceeds  from  matured/called
investment  debt  securities  which  were  reinvested,  and   the
purchase of a lesser amount of other investments in 2003 and 2002
from  2001.  Additionally, in 2003, the decrease in cash provided
by investing activities was due to the funding of the acquisition
of oil and gas properties with available cash.

                                -9-
<PAGE>

     Another  significant  component of the changes  between  the
periods  under  comparison was the difference  in  cash  used  in
financing activities; specifically, differences in the amount  of
cash used in the payment of dividends, which was less in 2003 and
2002  than  in  2001  due to a reduction in  the  amount  of  the
quarterly dividend.

Contractual  Obligations, Commitments and Off  Balance-Sheet
Arrangements

     The  Company continues to have no bank debt or other  lender
liability  outstanding  and  no  significant  other  liabilities.
There  are no off balance sheet arrangements.  In addition, since
the Company carries no inventory and has no significant amount of
accounts  receivable  or accounts payable,  its  working  capital
needs  are  minimal, and since it has significant liquid  assets,
and   there   are  no  current  known  demands,  commitments   or
contractual  obligations,  Management  believes  that   liquidity
should  continue to be favorable and the financial  condition  of
the Company strong.  The only continuing commercial commitment is
the operating lease for general office space of the Company. The
Company is presently located at 911 Main St., Suite 1710, Kansas
City, MO,  64105. The phone number is (816) 842-2430.

     With  respect to CNR's working interests in oil and gas,  it
will be called upon, from time to time, to pay its pro-rata share
of expenses and capital expenditures associated with both ongoing
operations  as  well  as exploratory and developmental  projects.
Prior to capital expenditures being incurred on these properties,
the  project operator issues CNR an Authorization for Expenditure
(AFE)  for  review and approval. Management believes that,  based
upon  the  CNR's current liquidity level and the expected  future
revenue from these ventures, sufficient financial resources should
be available to meet any and all capital requirements required by
these projects.

     A tabular presentation of contractual obligations is
presented below:

<TABLE>
<CAPTION>

                              Payments Due by Period
Contractual               < 1 Year   1-3       3-5       > 5
Obligations    Total                 Years     Years     Years
___________    _____       ______    _____     _____     _____
<S>            <C>         <C>       <C>       <C>       <C>
Long-Term          0           0         0         0         0
Debt
Obligations

Capital Lease      0           0         0         0         0
Obligations

Operating        6,686       6,686       0         0         0
Lease
Obligations

Purchase         23,281     23,281       0         0         0
Obligations*

Other Long-        0           0         0         0         0
Term
Liabilties

Total            29,967    29,967        0         0         0

</TABLE>

*The entire amount shown in Purchase Obligations is for an AFE that
was approved prior to Dec. 31, 2003.

     Other  than  these  projects, the Company  has  no  specific
commitment for material capital expenditures at the present time.
Management  does,  however, continue  to  actively  pursue  other
business  opportunities which may result  in  a  more  productive
deployment of its assets and ultimately increase earnings, and in
pursuit of that objective has focused on the possible acquisition
of additional mineral properties or working interests in selected
oil  and  gas  operations.  In addition, Management continues  to
aggressively  pursue development of its currently owned  mineral
properties and to attempt to lease  more  of its mineral properties
in order to generate additional rental,  bonus and royalty income.
There was one new oil and gas lease made  on Company property in
2003 in Sebastian County, Arkansas but as  of year-end no new
production had commenced. Three new oil  and  gas leases  were
made on Company property in 2002, two in  Sebastian County,
Arkansas  and  one in Pittsburg  County,  Oklahoma  with production
started  on one of the leases  in  Sebastian  County, Arkansas.
In 2001, one new oil and gas lease was made on Company property  in
Arkansas and Oklahoma.  As yet there  has  been  no production under
the lease made in 2001 but bonuses were received by  the  Company at
the time each lease was entered into, as  was the case for leases made
in 2002 and 2003.


Accounting  Policies, Recent Accounting  Pronouncements  and
Other Matters

     A summary of significant accounting policies is contained in
the Notes to the accompanying consolidated financial statements.
One  example of a judgment made in applying a critical accounting
policy  is the impairment charge made relative to the decline  in
market  value of certain securities that is deemed  to  be  other
than  temporary as is referred to above.  The impairment  of  the
value  of  securities  is  analyzed quarterly  on  an  individual
security  basis  based  on  the length  of  time  (generally  six
months), and the extent to which market value has been less  than
cost;  the  financial  condition and any  specific  events  which
affect the issuers; and the Company's intent and ability to  hold
the  security.  There  would  be  materially  different  reported
results  if different assumptions or conditions were to  prevail.
In  the  judgment of Management and the Board of  Directors,  the
indicated charges were appropriate. However, they have taken note
of  the  fact  that  the overall return of  the  portfolio  since
inception  is  positive.  Another example of a judgment  made  in
applying  a critical accounting policy is the periodic review  of
long-lived  assets for impairment whenever events or  changes  in
circumstances indicate that the carrying amount of an  asset  may
not  be recoverable.  This accounting policy has been applied  in
the  past,  for example, in downward adjustments to the  carrying
value  of the Company's coal properties.  This accounting  policy
does not permit an upward adjustment of book carrying values when
Management believes the current fair market value of an asset  is
greater  than  the carrying value on the balance  sheet  and,  in
fact,  Management believes that this may be the case with respect
to  the  carrying  value of certain assets on the  balance  sheet
carried at their historical cost.

                               -10-
<PAGE>

     Yet another example of judgment exercised in applying  a
critical accounting policy is the election, approved by the Board
of  Directors of the Company, to utilize the "Successful Efforts"
method of accounting with respect to the operation of the oil and
gas  working  interests  described above.   "Successful  Efforts"
typically  results  in  more  of the costs  of  operations  being
deducted  as  incurred  rather  than  those  expenditures   being
capitalized. The Company uses the units-of-production method to
amortize oil and gas properties. This method requires the Company
to amortize the capitalized costs incurred in developing a property
in proportion to the amount of oil and gas produced as a percentage
of the amount of proved reserves contained in the property.
Accordingly, any changes in reserve estimates as described above
will cause corresponding changes in depletion expense recognized
in periods subsequent to the reserve estimate revision.  Although
every reasonable effort is made to ensure that reserve estimates
reported represent the most accurate assessments possible, the
subjective decisions and variances in available data for various
fields make these estimates generally less precise than other
estimates included in the financial statement disclosures.
Data for a given fields may change substantially over time as a
result of numerous factors including, but not limited to,
additional development activity, evolving production history and
continual reassessment of the viability of  production under
varying economic conditions.  As a result, material revisions to
existing reserve estimates may occur from time to time.

     A  one share for one share stock dividend was distributed to
stockholders  in  February of 2001.  All per share  data  in  the
consolidated financial statements accompanying this  report,  and
related  notes, retroactively reflect the stock dividend for  all
periods  presented.  Cash dividends totaling of $0.40  per  share
were  paid in 2003 and 2002 compared to $0.875 per share paid  in
2001.   While the Board of Directors had expressed the  intention
early  in  2001  to continue paying a $0.25 per  share  quarterly
dividend if the operating results and financial condition of  the
Company continued to justify it, the Board subsequently expressed
a   consensus  that  in  subsequent  quarters  the  Board   might
reevaluate  the  quarterly dividend policy in light  of  possible
needs  to  retain liquidity for potential acquisitions  or  other
projects  under  consideration and for other  possible  areas  of
internal growth.

     In the fourth quarter of 2001, the Board declared a dividend
for  that  quarter of $0.125 per share and explained  that  since
total  year  to  date earnings for that year were somewhat  below
total net earnings for the same period of the previous year,  due
in substantial part to a then recent decrease in energy prices,
and in furtherance of the objective to retain liquidity for
potential acquisitions under consideration and for other possible
areas  of internal  growth, it would be advisable to reduce the
quarterly dividend payment accordingly. In the first quarter of
2002, the Board reduced the quarterly dividend to $0.10 per share
because earnings were again down due, in part, to a continuation
of lower energy  prices and reduced production and the decision
to acquire a  working  interest  in  oil  and gas  properties in
Texas  as described above.

Forward-Looking Statements

     This  report  contains forward-looking statements  that  are
based   on   current  expectations,  estimates,  forecasts,   and
projections  about  the business segment  in  which  the  Company
operates,   Management's  beliefs,  and   assumptions   made   by
Management.   These  and other written or  oral  statements  that
constitute forward-looking statements may be made by or on behalf
of  the  Company.  These statements are not guarantees of  future
performance  and  involve  assumptions  and  certain  risks   and
uncertainties  that  are  difficult to predict,  such  as  future
changes  in  energy prices, including fluctuations in  prevailing
prices  for oil and gas, the Company's ability to participate  in
or  co-venture  successful exploration or production  of  natural
resources (such as oil, gas, coal and other minerals), results of
drilling   and  other  exploration  and  development  activities,
uncertainties  regarding future political, economic,  regulatory,
fiscal,  and  tax policies and practices as well  as  assumptions
concerning a relatively stable national economy, and the  absence
of a major disruption such as a domestic act of terrorism and the
uncertainties of even routine litigation in which the Company  is
involved from time-to-time in the ordinary course of its business
operations.  In addition, the company relies on professional  and
management services provided by third parties in certain  of  its
operating activities.  Therefore, actual outcomes and results may
differ materially from what is expressed, implied, or forecast in
such  forward-looking  statements.   The  Company  does  not,  by
including  this  statement, assume any obligation  to  review  or
revise any particular forward-looking statement referenced herein
in light of future events.


                               -11-
<PAGE>


     ITEM  7A.   QUANTITATIVE AND QUALITATIVE  DISCLOSURES  ABOUT
MARKET RISK

     Concerning  quantitative and qualitative disclosures
concerning market risk, the primary market risk exposures of  the
Company  relate to changes in interest rates, changes  in  equity
security  prices  and changes in certain commodity  prices.   The
Company's  exposure to market risk for changes in interest  rates
relate solely to its fixed income portfolio that consists of U.S.
Government  Agency securities.  All such securities are  held  to
maturity and have original maturities of less than one year.  The
Company  does not use derivative financial instruments  to  hedge
interest  rates  on its fixed income investment securities.   The
Company's exposure to market risk for changes in equity  security
prices   relates  solely  to  it  marketable  equity   investment
portfolio  which consists primarily of common stocks of domestic,
publicly held enterprises.  The Company's exposure to market risk
for  changes in commodity prices relates to changes in the prices
of minerals, predominantly  natural gas and the effect thereof on
its royalties and rentals relating to coal  deposits  and  mineral
rights  as  discussed above in addition to its oil and gas working
interests which are subject to market rists for changes in
material gas prices. The Company has not entered into any futures
contract to hedge the prices of any commodities as of 12/31/03 or
during the year ended 12/31/03. The Company does not use derivative
commodity instruments to hedge its commodity risk exposure.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements and supplementary financial
information that are required to be included pursuant to this
Item 8 are listed in Item 15, "Exhibits, Financial Statement
Schedules, and Reports On Form 8-K", under the caption "Index to
Consolidated Financial Statements" in the Annual Report, together
with the respective pages in this Annual Report where such
information is located. The financial statements and supplementary
financial information specifically referenced in such list are
incorporated in this Item 8 by reference.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

     (a)  The only independent accountant who was engaged during
the Company's  two  most recent fiscal years or  any  subsequent
interim period as the principal accountant to audit the Company's
financial  statements  has not resigned  (nor  indicated  it  has
declined  to  stand for re-election after the completion  of  the
current audit) nor was dismissed.

     (b)  No new independent accountant has been engaged as the
principal accountant to audit the Company's financial statements
during the Company's  two  most recent fiscal years or any
subsequent interim period.

ITEM 9A. CONTROLS AND PROCEDURES

     As  of  the end of the period covered by this annual report,
the  Company conducted an evaluation of the effectiveness of  the
design  and  operation of its disclosure controls and  procedures
(as   defined  in  Rules  13a-15(e) and  15(d)-15(e) under  the
Securities Exchange Act of 1934). The evaluation was conducted
with the participation of Management and under the supervision of
the  Chief  Executive  Officer and the Chief  Financial Officer.
Based  on  the evaluation, the Company's Chief Executive Officer
and  Chief  Financial Officer  concluded  that the Company's
disclosure controls and procedures were effective.

     There  have  been  no significant changes in  the  Company's
internal controls over financial reporting or other factors  that
materially  affected,  or  is  reasonably  likely  to  materially
affect, these controls over financial reporting.


                                -12-
<PAGE>

                            PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     The  information  required by this  item  is  set  forth  on
pages 4 through 6 of the Company's definitive proxy statement to
befiledwith  the Securities and Exchange Commission pursuant to
Schedule 14A  promulgated under the Securities Exchange  Act  of
1934  on April  1, 2004, under the caption "ELECTION OF DIRECTORS",
which portion of said definitive proxy statement is incorporated
hereinby this reference.

     The  Board  of Directors has approved a Code of Ethics  that
applies to the Company's Chief Executive Officer, Chief Financial
Officer  and  other financial officers.  This Code of  Ethics  is
included as Exhibit 14 to this report.

     Based  on  a  review  of copies of forms  furnished  to  the
Company  by its directors, executive officers, and the beneficial
owners  of more than ten percent of the Company's stock  pursuant
to  Section  16(a) of the Securities Exchange Act  of  1934,  and
written  representations  from  the  individuals  concerned,  the
Company  believes  that  during 2003  all  Section  16(a)  filing
requirements applicable to such persons were complied with.

ITEM 11.  EXECUTIVE COMPENSATION

     The  information required by this item is set forth on pages
6 through 9 of the Company's definitive proxy statement  to be
filed  with  the Securities and Exchange Commission  pursuant to
Schedule  14A  promulgated under the Securities Exchange  Act of
1934  filed  April  1,  2004,  under  the  caption "ELECTION OF
DIRECTORS",  which portion of said definitive proxy statement is
incorporated herein by this reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is set forth on
pages 3 through  5 of  the  Company's  definitive proxy
statement  filed  with  the Securities  and  Exchange  Commission
pursuant   to  Schedule  14A  promulgated  under  the  Securities
Exchange  Act  of  1934,  under the captions   "VOTING  SECURITIES
OUTSTANDING AND VOTING RIGHTS " and  "ELECTION OF DIRECTORS", which
portions  of  said  definitive proxy statement  are  incorporated
herein by this reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required by this  item  is  set  forth  on
pages 4 through 6 of  the  Company's  definitive  proxy
statement filed  with  the Securities  and  Exchange  Commission
pursuant  to  Schedule  14A  promulgated  under  the  Securities
Exchange  Act of 1934, under the caption "ELECTION OF DIRECTORS,"
which  portion of said definitive proxy statement is incorporated
herein by this reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The  information required by this item is set forth on pages
11 through 12 of the Company's definitive  proxy  statement
filed  with  the securities and exchange commission  pursuant  to
schedule  14A  promulgated under the Securities Exchange  Act  of
1934,  under  the  captions "Ratification of  Independent  Public
Accountants," which portion of said definitive proxy statement is
incorporated herein by this reference.


                              -13-
<PAGE>

                              PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

    (a) The following documents are filed as a part of this report:

    1.  Index to Consolidated Financial Statements

        The following fincancial statements are included at the incicated
        page in this Annual Report on Form 10-K and incorporated in this
        Item 15 by reference:

                                                                         Page

        Independent Auditors' Report                                       35

        Consolidated Balance Sheets as of December 31, 2003 and 2002    36-37

        Consolidated Statements of Operations - years ended December 31,
          2003, 2002 and 2001                                              38

       Consolidated Statements of Stockholders' Equity - years ended
          December 31, 2003, 2002 and 2001                                 39

       Consolidated Statements of Comprehensive Income(Loss) - years
          ended December 31, 2003, 2002 and 2001                           40

       Consolidated Statements of Cash Flows - years ended December 31,
          2003, 2002 and 2001                                              41

       Notes to Consolidated Financial Statements                          42

  2. Consolidated Financial Statement Schedules:

     All   schedules  are  omitted  as  none   are currently required.

  3. Index to Exhibits

     The exhibits listed in the accompanying index to exhibits are
     incorporated by reference as part of this Annual Report on
     Form 10-K.                                                           54

     (b)   No  reports  on Form 8-K were filed  during  the  last
     quarter of the period covered by this report.


                                    -14-
<PAGE>


                        INDEPENDENT AUDITORS' REPORT



The Board of Directors
Central Natural Resources, Inc.:

We have audited the accompanying consolidated balance sheets of Central
Natural Resources, Inc. and subsidiaries (the Company) as of December
31, 2003 and 2002, and the related consolidated statements of
operations, stockholders' equity, comprehensive income (loss), and
cash flows for each of the years in the three year period ended
December 31, 2003. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Central Natural Resources, Inc. and subsidiaries as of December 31,
2003 and 2002, and the results of their operations and their cash flows
for each of the years in the three year period ended December 31, 2003,
in conformity with accounting principles generally accepted in the United
States of America.

KPMG LLP
Kansas City, Missouri
March 12, 2004


                                     -15-
<PAGE>

<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2003 and 2002

(amounts in unit dollars)
<CAPTION>
ASSETS                                          2003         2002
                                                __________   __________
<S>                                             <C>          <C>
Current assets:
  Cash and cash equivalents                   $    629,719    1,956,795
  Accounts receivable                              127,570       22,500
  Securities maturing within one year,
   at amortized cost                             2,999,314    2,994,347
  Note receivable, current                          21,651       65,221
  Income tax receivable                            110,289      206,867
  Deferred income taxes                                  -        4,204
  Other                                             23,630       11,416
                                                __________   __________
Total current assets                             3,912,173    5,261,350

Equity securities, at fair value                   603,481      642,637
Other investments                                  262,720      350,002
Deferred income taxes                                    -       13,200

Property, plant and equipment
  Oil and gas producing properties
    (successful efforts)                         1,707,419      150,135
  Mineral interest properties                    1,668,137    1,668,432
                                                __________    _________

                                                 3,375,556    1,818,567
                                                __________   __________
  Less accumulated depletion, depreciation
   and amortization                                630,550      583,748
                                                __________   __________

      Net property, plant and equipment          2,745,006    1,234,819
                                                __________   __________
     Total assets                             $  7,523,380    7,502,008

</TABLE>

                                     -16-

<PAGE>

<TABLE>

CENTRAL NATURAL RESOURCES, INC. SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2003 and 2002

(amounts in unit dollars)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY            2003         2002
                                                _________    _________
<S>                                             <C>          <C>
Current liabilities:
  Accounts payable and accrued expenses             44,066       20,279
  Deferred income-advance oil lease bonus                0       11,250
                                                __________   __________
Total current liabilities                           44,066       31,529


  Deferred income taxes                            137,788            0

Stockholders' equity:
  Preferred stock of $1 par value; 100,000
   shares authorized; no shares issued                   0            0
  Common stock of $1 par value. Authorized
   2,500,000 shares; issued 503,924 shares
     in 2003 and 2002                              503,924      503,924
  Treasury Stock-12,100 shares at December
   31, 2003, 5,000 shares at December 31, 2002    (161,775)     (71,250)
  Retained earnings                              6,856,047    6,941,699
  Accumulated other comprehensive income
   net of deferred taxes of $77,175 in 2003
   and $51,749 in 2002                             143,330       96,106
                                                __________   __________
Total stockholders' equity                       7,341,526    7,470,479

Commitments and contingencies
                                                __________   __________
Total liabilities and stockholders' equity    $  7,523,380    7,502,008
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

                                     -17-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES,INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Years ended December 31, 2003, 2002 and 2001

(amounts in unit dollars)
<CAPTION>
                                           2003      2002      2001
                                           _________ _________ _________
<S>                                        <C>       <C>       <C>
Operating revenue:
  Mineral royalties                      $   703,168   613,391   769,099
  Oil and gas production                     377,328         0         0
                                           _________ _________ _________
    Total operating revenue                1,080,496   613,391   769,099

  Oil and gas operating expenses             139,929         0         0
  Depreciation, depletion and
    amortization                              46,802     2,250     2,260
  Exploration expenses                       195,695         0         0
  General and administrative
    expenses                                 646,648   550,750   510,861
  Gain on sale of real estate                (16,002)        0    (1,106)
                                           _________ _________  ________
    Total expenses                         1,013,072   553,000   512,015
                                           _________ _________  ________
    Operating income                          67,424    60,391   257,084
                                           _________ _________  ________

Nonoperating income:
  Investment income (loss)                    42,291  (620,647)   85,124
  Other                                          668     2,446     5,048
                                           _________ _________ _________
    Total nonoperating income(loss)           42,959  (618,201)   90,172
                                           _________ _________ _________

    Earnings (loss) before income taxes      110,383  (557,810)  347,256

Income taxes                                  (2,116) (256,056)  100,960
                                           _________ _________ _________
    Net Earnings(loss)                   $   112,499  (301,754)  246,296
                                           _________ _________ _________

Earnings(loss)per share - basic
  and diluted                            $      0.23    (0.60)     0.49

Weighted average number of shares of
 common stock outstanding - basic
 and diluted                                 495,773   503,603   503,924

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

                                     -18-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

Years ended December 31, 2003, 2002 and 2001

(amounts in unit dollars)
<CAPTION>


                                                                     Accumulated
                                                                       other
                      Common    Additional  Retained     Treasury   comprehensive
                      stock      capital    earnings      stock        income       Total
                      _______   _________  _________     _________   ________   ___________
<S>                   <C>       <C>        <C>           <C>         <C>        <C>

Balance,
 December
  31, 2000          $ 503,924           0  7,639,660             0    217,455     8,361,039

Net earnings                0           0    246,296             0          0       246,296
Cash dividends
 ($0.88 per
 share)                     0           0   (440,934)            0          0      (440,934)
Net unrealized
 depreciation
 on investments
 available-for-
 sale                       0           0          0           0    (225,544)       (225,544)
                      _______   _________   _________   ________     ________       _________
<S>                   <C>       <C>         <C>         <C>          <C>            <C>
Balance,
 December
  31, 2001           503,924            0  7,445,022           0       (8,089)      7,940,857

Net loss                   0            0   (301,754)          0            0        (301,754)
Cash dividends
 ($0.40 per
 share)                    0            0   (201,569)          0            0        (201,569)
Purchase of
 $5,000 shares
 of common stock
 for treasury              0            0          0     (71,250)           0         (71,250)
Net unrealized
 depreciation
 on investments
 available-for-
 sale                      0            0          0           0      104,195         104,195
                     _______    _________ __________     ________    ________        ________
<S>                  <C>        <C>       <C>            <C>         <C>             <C>
Balance,
 December
  31, 2002         $ 503,924            0  6,941,699     (71,250)      96,106       7,470,479


Net earnings                0           0    112,499            0           0         112,499
Cash dividends
 ($0.40 per
 share)                     0           0   (198,151)           0           0       (198,151)
Purchase of
 7,100 shares of
 common stock for
 treasurey                  0           0          0      (90,525)          0        (90,525)
Net unrealized
 depreciation
 on investments
 available-for-
 sale                       0           0          0           0       47,224          47,224
                     ________   _________  _________    ________     ________       ________
<S>                  <C>        <C>        <C>          <C>          <C>            <C>
Balance,
 December
  31, 2003         $ 503,924            0  6,856,047    (161,775)     143,330       7,341,526
                     ________   _________  _________     _______     ________       _________


<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

                                     -19-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

Years ended December 31, 2003, 2002 and 2001


(amounts in unit dollars)
<CAPTION>
                                   2003         2002         2001
                                   ___________  ___________  ___________
<S>                                <C>          <C>          <C>

Net earnings (loss)            $       112,499     (301,754)     246,296
                                   ___________  ___________  ___________

Other comprehensive income:
 Realized gains and unrealized
  appreciation (depreciation)
  on investments                       145,860      134,062     (209,118)
 Income taxes                          (51,050)     (46,922)      73,191
                                   ___________  ___________   ___________

 Realized gains and unrealized
  appreciation on
  investments, net                      94,810       87,140     (135,927)
                                   ___________  ___________  ___________


Less:
 Realized investment(gains)
   losses included in net
   earnings                            (73,210)      26,238     (137,873)
Income taxes                            25,624       (9,183)      48,256
                                   ___________   __________  ___________
                                       (47,586)      17,055      (89,617)
                                   ___________   __________  ___________
                                        47,224      104,195     (225,544)
                                   ___________   __________  ___________
    Comprehensive (loss)
     income                     $      159,723     (197,559)      20,752


<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

                                     -20-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2003, 2002 and 2001


(amounts in unit dollars)
<CAPTION>
                                   2003         2002         2001
                                   ___________  ___________  ___________
<S>                                <C>          <C>          <C>
Cash flows from operating
 activities:
  Net earnings (loss)            $     112,499     (301,754)     246,296

  Adjustments to reconcile net
   earnings to net cash
   provided by operating
   activities:
    Depletion, depreciation
     and amortization                   46,802        2,250        2,260
    Amortization of premiums and
     discounts of securities net       (32,106)     (66,491)    (163,417)
    Amortization of unproved
      properties                        84,758            0            0
    Impairment charge on
      equity securities                      0      686,229      274,296
    Impairment charge on other
      investments                       87,282            0            0
    Gain on sales of real estate       (16,002)           0       (1,106)
    Loss (Gain) on sales of equity
     securities                        (73,210)      26,238     (137,873)
    Deferred income taxes              129,766       15,694     (117,749)
    Changes in assets and
     liabilities:
      Accounts receivables and
       other assets                   (117,284)      80,979      (82,331)
      Deferred oil lease bonus         (11,250)     (36,103)      47,353
      Accounts payable and accrued
       expenses                         23,787       15,441       (6,108)
      Federal and state income
       taxes                            96,578     (252,979)     (16,413)

                                   ___________  ___________  ___________
 Net cash provided by
   operating  activities               331,620      169,504       45,208
                                   ___________  ___________  ___________
Cash flows from investing
 activities:
  Proceeds from note receivable         43,570       18,084       16,702
  Proceeds from matured/called
   investment debt securities       15,000,000   24,000,000   20,000,000
  Purchases of investment debt
   securities                      (14,972,861) (22,928,535) (19,864,798)
  Proceeds from sales of land           16,297            0        1,125
  Purchases of equity securities       (16,882)    (449,827)    (478,972)
  Proceeds from sales of equity
   securities                          201,898      284,597      509,085
  Oil and gas capital expeniditures   (562,042)    (150,135)           0
  Acquisition of oil and gas
    producing properties            (1,080,000)           0            0
  Purchase of other investments              0            0     (250,000)
                                   ___________  ___________  ___________
Net cash (used in) provided by
 investing activities               (1,370,020)     774,184      (66,858)
                                   ___________  ___________  ___________

Cash flows from financing
 activities:
  Purchase of common stock for
   treasury                            (90,525)     (71,250)           0
  Dividends paid                      (198,151)    (201,569)    (440,934)
                                   ___________  ___________  ___________
   Net cash used in financing
    activities                        (288,676)    (272,819)    (440,934)
                                   ___________  ___________  ___________
   Net(decrease)increase in cash
    and cash equivalents            (1,327,076)     670,869     (462,584)

Cash and cash equivalents,
 beginning of year                   1,956,795    1,285,926    1,748,510
                                   ___________  ___________  ___________
Cash and cash equivalents,
 end of year                     $     629,719    1,956,795    1,285,926
                                   ___________  ___________  ___________
Income taxes (received)
   paid during year              $    (228,799)      51,348      235,630

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

                                     -21-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2003, 2002 and 2001

(1) Summary of Significant Accounting Policies

Basis of Consolidation

The  accompanying  consolidated financial statements  include  the
accounts of Central Natural Resources, Inc. (the Company) and its wholly
owned subsidiaries.  All significant intercompany accounts and transactions
have been eliminated in consolidation.

All operating data relating to the number of acres, tons and estimated
reserve volumes represent unaudited information.

Cash and Cash Equivalents

Cash  and  cash equivalents consist of demand deposit accounts  and  a
money  market deposit account. For purposes of the consolidated statements
of  cash  flows,  the Company considers all highly liquid debt  instruments
with original maturities of three months or less to be cash equivalents.

Investment Securities

Investments  in  debt  securities are classified  as  held-to-maturity
securities, which are carried at amortized cost. Investments in  marketable
equity  securities  are classified as available-for-sale securities,  which
are  carried at fair value, with unrealized gains and losses excluded  from
earnings and reported in other comprehensive income.

A   decline   in  the  market  value  of  any  available-for-sale   or
held-to-maturity  security  below cost that is  deemed  to  be  other  than
temporary  results  in a reduction in carrying amount to  fair  value.  The
impairment is charged to earnings and a new cost basis for the security  is
established.  Other than temporary impairment is analyzed quarterly  on  an
individual  security basis based on the length of time and  the  extent  to
which market value has been less than cost, the financial condition and any
specific  events  which  effect the issuer, and the  Company's  intent  and
ability  to hold the security. Other than temporary impairment is  measured
based on the individual security's quoted market price.

Premiums and discounts are amortized or accreted over the life of  the
related  held-to-maturity  security as an adjustment  to  yield  using  the
effective interest method. Dividend and interest income are recognized when
earned.   Realized   gains   and  losses  for  securities   classified   as
available-for-sale are included in net earnings and are derived  using  the
specific identification method for determining the cost of securities sold.

Purchases and sales of securities are recorded on a trade-date  basis.
Accounts receivable at December 31, 2003 included $39,338 due from a broker
for securities sold.

Coal Deposits, Real Estate, Equipment, and Leasehold Improvements

Coal deposits, mineral rights, surface land, and equipment are stated
at  cost. Maintenance  and repairs are charged  to expense as incurred.
Renewals  and  betterments which extend the useful life of  the asset are
capitalized.

Coal deposits with a net carrying value of approximately $700,000  at
December  31, 2003 are not presently leased or producing coal in commercial
quantities.

Depreciation, Depletion, and Amortization

Equipment, which is fully depreciated at December 31, 2003, is depreciated
using the straight-line method over its estimated useful life.

Depletion of coal deposits is computed at the rate of $0.025 per ton
of coal produced or purchased, which approximates depletion computed on a
wasting-asset basis.


                                     -22-
<PAGE>

Oil, and Gas Properties

Coal  royalties  are based on a percentage of the production  of  land
leased  from  the  Company  or, in the case of no production,  the  minimum
annual  royalty.  Oil and gas royalties are based on a  percentage  of  the
production  on  land leased from the Company. Oil and other  mineral  lease
rentals and bonuses are derived from the leasing of land and mineral rights
prior to production.

Oil  lease  bonuses which relate to future periods  are  deferred  and
recognized as income over the related future periods (generally one year).

The  Company  uses  the Successful Efforts method  of  accounting  for
revenue  and  expenses from oil and gas production.  Revenue  and  expenses
associated  with  oil  and gas production are accrued  in  the  period  the
revenue  or expenses are generated.  Revenue and expenses from oil and  gas
production in the period ended December 31, 2003 were generated by  working
interests  in gas properties acquired in February 2003 and working interests
in  unproved properties acquired in July  2002. No  revenue  or expenses
from  oil  and gas production was recorded in  the  period  ended
December 31, 2002 or December 31, 2001.

Exploration   and   Production  -  Exploration   expenses,   including
geological  and  geophysical costs, and exploratory dry  holes,  are
charged  against income as incurred.  Costs of successful wells and related
production  equipment  and  developmental dry  holes  are  capitalized  and
amortized by field using the unit-of-production method as gas is produced.

Undeveloped acreage costs are capitalized and amortized at rates  that
provide  full amortization on abandonment of unproductive leases. Costs  of
abandoned leases are charged to the accumulated amortization accounts,  and
costs  of  productive  leases are transferred  to  the  developed  property
accounts.

Other  - Property, plant and equipment is stated at cost less reserves
for  depreciation, depletion and amortization.  Maintenance and repairs are
expensed  as  incurred, except that costs of replacements or renewals  that
improve or extend the lives of existing properties are capitalized.

Oil and Gas Reserves

The  process  of estimating quantities of natural gas reserves is complex
and requires significant decisions in the evaluation of all  available
geological, geophysical, engineering and economic data. Data for  a
given  fields may change substantially over time  as  a  result of numerous
factors  including, but not limited  to,  additional  development activity,
evolving  production history and continual reassessment  of  the viability
of  production under varying economic conditions. As  a  result, material
revisions to existing reserve estimates may occur  from  time  to time.
Although  every  reasonable effort is made to  ensure  that  reserve
estimates  reported represent the most accurate assessments  possible,  the
subjective  decisions and variances in available data  for  various  fields
make  these estimates generally less precise than other estimates  included
in  the  financial  statement disclosures. The Company uses  the  units-of-
production method to amortize gas properties. This method  requires
the  Company  to  amortize the capitalized costs incurred in  developing  a
property  in  proportion  to  the amount of gas  produced  as  a
percentage  of  the amount of proved reserves contained  in  the  property.
Accordingly, any changes in reserve estimates as described  above  will
cause corresponding changes in depletion, depreciation and amortization
expense recognized in periods subsequent to  the  reserve  estimate  revision.
Reserve  information  (unaudited) is detailed  further in Note
10 - Supplemental Information of the consolidated financial statements.

Other Investments

Other  investments  represent  an equity interest in non-marketable
securities  for  which the Company does not possess significant influence.
These  investments  are  accounted for at cost. The  carrying amount is
periodically reviewed for other than temporary impairment.

Income Taxes

The  Company  and its subsidiaries file a consolidated federal  income
tax return.

Deferred tax assets and liabilities are recognized for the future  tax
consequences attributable to differences between the consolidated financial
statement  carrying  amounts of existing assets and liabilities  and  their
respective  tax  bases.  Deferred tax assets and liabilities  are  measured
using enacted tax rates expected to apply to taxable income in the years in
which  those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities for subsequent changes in
tax rates are recognized in income in the period that includes the tax rate
change.


                                    -23-
<PAGE>

Stock Option Plan

The  Company  applies the intrinsic value-based method  of  accounting
prescribed  by Accounting Principles Board (APB) Opinion No. 25, Accounting
for  Stock  Issued to Employees, and related interpretations in  accounting
for  its  fixed plan stock options. As such, compensation expense would  be
recorded on the date of grant only if the then current market price of  the
underlying  stock  exceeded  the  exercise price.  Statement  of  Financial
Accounting   Standards   (SFAS)  No.  123,   Accounting   for   Stock-Based
Compensation,  established accounting and disclosure requirements  using  a
fair value-based method of accounting for stock-based employee compensation
plans.  As allowed by SFAS No. 123, the Company has elected to continue  to
apply  the intrinsic value-based method of accounting described above,  and
has  adopted  the disclosure requirements of SFAS No. 123.   The  following
table  illustrates the effect on net income (loss) if the fair value  based
method  had  been applied to all outstanding and unvested  awards  in  each
period:



<TABLE>
<CAPTION>
                                  2003        2002        2001
                                  __________  __________  __________
         <S>                      <C>         <C>         <C>
         Net Earnings:
           As reported          $    112,499    (301,754)    246,296
           Stock Options             (13,688)    (19,760)    (13,100)
           Pro forma                  98,811    (321,514)    233,196

         Earnings per share (loss):
          Basic and diluted
           as reported                  0.23       (0.60)       0.49
           Pro forma            $       0.20       (0.64)       0.46

</TABLE>

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived  assets  are  reviewed for impairment  whenever  events  or
changes in circumstances indicate that the carrying amount of an asset  may
not  be  recoverable.  Recoverability of assets to  be  held  and  used  is
measured  by  a  comparison of the carrying amount  of  the  asset  to  the
estimated  future undiscounted net cash flows expected to be  generated  by
the  asset.  If  such assets are considered to be impaired, the  impairment
recognized  is measured by the amount by which the carrying amount  exceeds
the  fair value. Assets to be disposed of are reported at the lower of  the
carrying amount or fair value less costs to sell.

Proved  gas properties are reviewed for impairment on a field-by-field
basis  when facts and circumstances indicate that their  carrying
amounts  may  not be recoverable.  In performing this review,  future  cash
flows  are  estimated by applying estimated future gas  prices to estimated
future production, less estimated future expenditures to  develop and
produce the reserves.  If the sum of these estimated future cash flows
(undiscounted  and  without interest charges) is  less  than  the  carrying
amount of the property, an impairment loss is recognized for the excess  of
the carrying amount over the estimated fair value of the property based  on
estimated future cash flows.

Earnings and Dividends Per Share

Basic and diluted earnings per share are based on the weighted average
number of common  shares outstanding.

Dividends per share are based on the number of shares outstanding on the
dividend dates of record.

Comprehensive Income

Comprehensive  income consists of net income and net unrealized  gains
(losses)  on  available-for-sale securities and is presented  in  the
consolidated statements of comprehensive income.

Segment Information

The Company  operates  in  the  energy segment.  The  energy  segment
consists  of the exploration and production of oil and gas as well  as the
leasing  of  real  properties and mineral interests in the mid-western and
southern United States. The Company has no foreign revenues. Oil and gas
production revenue was received from a single customer in 2003.  During
2003, three mineral royalty customers accounted for 18%, 17% and 12% of
consolidated operating revenue.  During 2002 four mineral royalty customers
accounted for 27%, 22%, 15% and 12% of consolidated operating revenue.
During 2001, two mineral royalty customers accounted for 45% and 12% of
consolidated operating revenue.

                                    -24-

<PAGE>

Use of Estimates

Management  of  the  Company  has  made  a  number  of  estimates  and
assumptions relating to the reporting of assets, liabilities, revenues, and
expenses,  and  the  disclosure of contingent  assets and liabilities to
prepare   these  consolidated  financial  statements  in conformity  with
accounting  principles generally accepted in the United States of America.
Actual results could differ from those estimates.

2) Acquisition of producing properties

In February 2003, the Company, through a wholly-owned subsidiary, CNR
Production, L.L.C.. a Texas limited liability company (hereinafter "CNR),
executed and closed the acquisition of an undivided two percent (2%)
interest in certain property rights constituting working interests in
two fields known as the Bass Flores Field and Total Tabasco Field located
in Hidalgo and Starr Counties in south Texas.

As consideration for this acquisition, the Subsidiary paid $1,080,000.
This amount was paid by CNR from funds provided by the Company from
its available liquid resources.  Of  the total purchase price , $864,000
was allocated to leasehold costs and $216,000 was allocated to lease and
well equipment. CNR participated in additional developmental work on this
property in 2003.

(3)  Investment Securities

The  amortized cost, gross unrealized holding gains, gross  unrealized
holding  losses, and fair value for held-to-maturity and available-for-sale
securities  by  major  security type at December  31,  2003  and  2002  are
presented  below.  Substantially  all equity  securities  represent  common
stocks of domestic corporations.


<TABLE>
<CAPTION>
                                    Gross       Gross
                                    unrealized  unrealized
                        Amortized   holding     holding     Fair
2003                    cost        gains       losses      value
__________________      __________  __________  __________  __________
<S>                     <C>         <C>         <C>         <C>
Held-to-maturity-
  U. S. government
   agency securities  $ 2,999,314            0        (34)   2,999,280

Available-for-sale-
  Equity securities       382,975      220,506          0      603,481
</TABLE>

<TABLE>
<CAPTION>
2002
_________________
<S>                     <C>         <C>         <C>         <C>
Held-to-maturity-
  U. S. government
   agency securities  $ 2,994,347            0       (347)   2,994,000

Available-for-sale-
  Equity securities       494,782      153,461     (5,606)     642,637
</TABLE>

At December 31, 2003 and 2002, all U. S. government agency
securities mature within one year.

The  Company  recognized  impairment charges for  declines  in  market
values  of  equity  securities considered to be  other  than  temporary  of
$686,229  during 2002 and $274,296 during 2001.  The Company recognized  an
impairment charge on other investments in 2003 of $87,282.

                                  -25-

<PAGE>


Investment  income  consists of the following for each  of  the  years
ended December 31:


<TABLE>
<CAPTION>
                                    2003       2002        2001
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Interest                           $   48,797      81,346     213,386
Dividends                               7,566      10,474       8,161
Gross gains on sales of equity
 securities                            78,376      50,132     206,466
Gross losses on sales of equity
 securities                            (5,166)    (76,370)    (68,593)
Impairment charge on equity
 securities                                 0    (686,229)   (274,296)
Impairment charge on other
 investments                          (87,282)          0           0
                                    __________  __________  __________
                                   $   42,291    (620,647)     85,124
</TABLE>

(4) Income Taxes

Total  income taxes for the years ended December 31, 2003,  2002,  and
2001 were allocated as follows:

<TABLE>
<CAPTION>
                                    2003        2002        2001
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Statement of Operations             $   (2,116)   (256,056)    100,960
Stockholders' equity, for unrealized
 appreciation (depreciation) on
 equity securities                      25,426      56,105    (121,447)
                                    __________  __________  __________
                                    $   23,310    (199,951)    (20,487)
</TABLE>

The components of income tax expense from operations
are as follows:

<TABLE>
<CAPTION>
                                 2003      2002      2001
                                 ________  ________  ________
<S>                              <C>       <C>       <C>
Federal                        $   (2,116) (182,374)   87,280
State                                   0   (73,682)   13,680
                                 ________  ________  ________
Total                          $   (2,116) (256,056)  100,960
</TABLE>

Total  income  tax expense for 2003, 2002, and 2001 includes  deferred
income   tax  expense  (benefit)  of  $129,766,  $15,694,  and  $(117,749),
respectively.

Income  tax expense (benefit) relating to operations has been provided
at  effective  rates  of  (1.9)%, (45.9)% and 29.1%  for  the  years  ended
December  31,  2003,  2002, and 2001, respectively.  The  reasons  for  the
difference between the effective tax rates and the corporate federal income
tax rate of 34.0% are as follows:


<TABLE>
<CAPTION>
                                          2003   2002   2001
                                          _____  _____  _____
<S>                                       <C>    <C>    <C>
Expected statutory tax rate               34.0% (34.0)% 34.0%
State income taxes, net of federal
 income tax effect                           0   (8.6)   2.6
Percentage depletion in excess
 of tax basis                            (27.2)  (4.0)  (9.6)
Other, net                                (8.7)   0.7    2.1
                                          _____  _____  _____
Effective tax rate                        (1.9)%(45.9)% 29.1%
</TABLE>


                                   -26-

<PAGE>

State income taxes for 2002 include a refund relating to prior
years of $70,093.

The tax effects of temporary differences that give rise to significant
portions  of  the  deferred tax assets and deferred tax liabilities at
December 31, 2003 and 2002 are presented below:


<TABLE>
<CAPTION>
Deferred tax assets:                        2003      2002
                                            ________  ________
<S>                                         <C>       <C>
Equity securities
 and other investments                     $  84,830   103,020
Property plant
 & equipment*                                118,655    90,343
Deferred income-advance oil lease
 bonus                                             0     4,204
Other                                          6,535     6,635
                                            ________  ________
                                             210,020   204,202

Less valuation allowance                     (45,095)  (45,095)
                                            ________  ________
Deferred tax assets                          164,925   159,107
                                            ________  ________
</TABLE>
<TABLE>
<CAPTION>
Deferred tax liabilities:
<S>                                         <C>       <C>
Property, plant
 & equipment                                (225,538)  (89,954)
Equity securities and other investments      (77,175)  (51,749)
                                            ________  ________
Deferred tax liabilities                    (302,713) (141,703)
                                            ________  ________
Net deferred tax (liabilities) asset      $ (137,788)   17,404
                                            ________  ________
</TABLE>

 * "Property, plant & equipment" includes a deferred tax asset relating
to a 1993 writedown of coal properties. The resulting  deferred
tax asset relating to this writedown has been fully reserved through
the establishment of a $45,095 valuation allowance as the Company
believes it is more likely than not that the asset will not be realized

(5) Operating Leases

The  Company has a five-year operating lease for its office  space  in
Kansas  City, Missouri, which became effective September 1, 2002.  However,
the  Company  can  terminate the lease after 2 years. The  lease  agreement
provides for annual rental payments of approximately $10,000 through  2004.
Rent  expense amounted to $10,082, $9,934, and $13,182 for the years  ended
December 31, 2003, 2002, and 2001, respectively.

(6) Disclosures About Fair Value of Financial Instruments

        Cash, cash equivalents, trade receivables, and trade payables - The
carrying  amount approximates fair value because of the short  maturity  of
these financial instruments.

        Debt  and equity securities - The fair values of debt and equity
securities  are based on quoted market prices. The fair value of  debt  and
equity securities are disclosed in note 3.

(7)  Stock Option Plans

Nonqualified Stock Option Plan

In  April 1995, the Company adopted a nonqualified stock option  plan
(the  Plan) pursuant to which the Company's board of directors  may  grant
stock  options  to directors  in  lieu  of  cash  compensation.  The  Plan
authorizes  grants  of options to purchase up to 50,000  shares  of  common
stock.  Stock  options  are granted with an exercise  price  equal  to  the
stock's  fair market value at the date of grant. All stock options  have  a
term  of  ten years and vest and become fully exercisable six months  after
the  date of grant. In 2003, 7,500 nonqualified stock options were  granted
under this plan, while 6,000 shares were issued in both 2002 and 2001.


                                     -27-
<PAGE>

Stock Incentive Plan

In  February 2001, the Company adopted a stock incentive plan pursuant
to  which  the Company's board of directors may issue stock awards  to  key
employees and directors of the Company. This plan allows for stock options,
stock  appreciation  rights, restricted stock, stock  bonuses,  performance
share awards, dividend equivalents, or deferred payment rights.

The  maximum  number of shares of common stock that may  be  delivered
under  this  plan  shall not exceed 75,000 shares. The  maximum  number of
shares  of common stock that may be delivered pursuant to options qualified
as  incentive stock options granted under this plan is 45,000  shares. The
maximum  number  of  shares of common stock that may be delivered  to non-
employee  directors shall not exceed 20,000 shares. The maximum  number of
shares  subject to those options and stock appreciation  rights  that are
granted  during  any calendar year to any individual shall  be  limited to
15,000,  and  the maximum individual limit on the number of shares  in  the
aggregate  subject to all awards that during any calendar year are granted
under  this  plan  shall  be 25,000. Each of these limits is subject to
adjustment as set forth in the plan.

In  2003, 6,000 incentive stock options were granted under this plan
and in 2001, 2,000 incentive stock options were granted. No incentive
options  were issued in 2002. Incentive stock options are granted with  an
exercise price equal to the stock's fair market value at the date of grant,
or  110% of the fair market value of the date of grant in the case of a 10%
shareholder. Incentive stock options issued to date have a term of between
five  and  ten years and are exercisable in annual installments of between
three and four years.

     A summary of stock option activity, including incentive stock options,
during 2003, 2002, and 2001 is as follows:



                                           Year Ended
                       ____________________________________________________
                            2003              2002              2001
                       ________________ _________________ _________________

                               Weighted          Weighted          Weighted
                               average           average           average
                               exercise          exercise          exercise
                      Options  price    Options  price    Options  price

Options outstanding,
 beginning of period  20,000  $16.93    14,000   17.00     6,000   17.00
Granted               13,500   13.79     6,000   16.75     8,000   17.00
Exercised                  0       0         0       0         0       0
Forfeited                  0       0         0       0         0       0
                       _____  ______    ______   _____    ______   _____
Options outstanding,
  end of period       33,500   15.66    20,000   16.93    14,000   17.00
                      ______  ______    ______   _____    ______   _____
Options exercisable
  end of period       26,500   15.88    18,500   16.92    12,000   17.00

Exercise  prices for options outstanding as of December 31, 2003  were
$13.20  (7,500  shares), $14.52 (6,000 shares), $16.75 (6,000  shares)  and
$17.00  (14,000  shares).  Exercise prices for options  exercisable  as  of
December  31,  2003 were $13.20 (7,500 shares), $16.75 (6,000  shares)  and
$17.00 (13,000 shares).

Options  outstanding  of 33,500, 20,000, and 14,000  at  December  31,
2003, 2002, and 2001 are not considered dilutive as the exercise price  was
greater  than  the  market  price  at  the  close  of  each  period   under
consideration.  However, if the market price were to increase in  a  future
period  to  be greater than the exercise price, these options could  become
dilutive.

 The  per  share  weighted average fair value of stock options  granted
during 2003, 2002 and 2001 was $1.01, $1.50 and $1.65, respectively, on the
date  of  grant  using  the  Black Scholes option-pricing  model  with  the
following  weighted average assumptions: 2003-expected  dividend  yield  of
3.03%, expected volatility of 11.64%, risk-free interest rate of 2.97%, and
an  expected  life of five years; 2002-expected dividend  yield  of  2.53%,
expected  volatility of 11.64%, risk-free interest rate of  3.03%,  and  an
expected  life  of  five  years; 2001-expected  dividend  yield  of  5.26%,
expected  volatility of 17.63%, risk-free interest rate of 4.290%,  and  an
expected life of five years.

                                    -28-

<PAGE>

(8)  Related Party Transactions

The  Company  paid $20,834 in 2002 and $21,666 in 2001  to  a  company
affiliated  with one of its directors for its participation in a  strategic
planning project undertaken on behalf of the Company.

(9) Natural Gas Producing Activities

All  of the Company's gas and oil properties are located in the United
States.  The table below sets forth the results of operations from gas  and
oil producing activities:


<TABLE>
<CAPTION>
                                    2003       2002        2001
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Revenues                          $   377,328           0           0
Production Costs                     (118,049)          0           0
Depreciation, depletion and
 amortization                         (44,552)          0           0
Exploration expenses                 (195,695)          0           0
                                    __________  __________  __________
Operating income                  $    19,032           0           0

Total oil & gas property            1,707,419     150,135           0
Additions to oil & gas properties $ 1,557,284     150,135           0

</TABLE>

Costs Incurred

Costs   incurred   in  natural gas and oil property  acquisition,
exploration and development activities are summarized below:

<TABLE>
<CAPTION>
                                    2003       2002        2001
                                    __________  _________  __________
<S>                                 <C>         <C>         <C>
Property acquisition costs
  Unproved                         $  154,562     150,135           0
  Proved                            1,080,000           0           0
Unsuccessful exploratory wells        110,937           0           0
Development costs                     407,480           0           0
                                    _________   _________  __________
                                   $1,752,979     150,135           0

</TABLE>

Exploration  Expense  for 2003 includes $84,758 in  amortized unproved
property   costs  associated  with  two  unsuccessful  exploratory  wells,
resulting in total capitalized additions of oil and gas properties on the
balance sheet of $1,557,284.

(10) Supplemental Information - Natural Gas Reserves
(Unaudited)

Proved reserves are estimated quantities of natural gas which geological
and engineering data demonstrate with reasonable certainty to be recoverable
in future years from known reservoirs under existing economic and  operating
conditions. Proved developed reserves are proved reserves that can reasonably
be expected to be recovered through existing wells with existing equipment
and operating methods. Proved undeveloped reserves  are reserves  that  are
expected to be recovered from new wells  on undrilled acreage or from
existing wells where a relatively major expenditure  is required for
recompletion.

Reserve  quantities as well as certain information  regarding  future
production and discounted cash flows were prepared by independent petroleum
engineers  T.J.Smith & Company, Inc. for all years where reserve  estimates
are presented. These reserve quantities exclude the Company's mineral
interests.


                                   -29-
<PAGE>

The following table sets forth our net proved and proved developed gas
reserves stated in MMCF in equirements at December 31, 2001, 2002 and 2003
and the changes in net proved gas reserves for the years ended
December 31, 2001, 2002 and 2003.


<TABLE>
<CAPTION>
                                                      Natural Gas MMCF
                                                            Equiv.
                                                      ______________
<S>                                                   <C>

Revisions of previous estimates                                  0
Extensions and discoveries                                     1,256
Purchase of properties                                           995
Dispositions of properties                                       0
Production                                                       (57)
                                                      ______________

Proved Reserves at December 31, 2003                           2,194

Proved Developed Reserves at:
  December 31, 2001                                              0
  December 31, 2002                                              0
  December 31, 2003                                            1,409


</TABLE>

Standardized Measure

The standardized measure of discounted future net cash flows relating
to  proved natural gas reserves as of year-end is shown below (in
thousands):


<TABLE>
<CAPTION>
                                    2003       2002        2001
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Future cash inflows                $   13,932           0           0
Future operating expenses              (2,654)          0           0
Future development costs                 (995)
                                    _________   _________   __________
Future net cash flows                  10,283           0           0
Future income taxes	               (3,843)          0           0
                                    _________   _________   __________
Future net cash flows, after
 income taxes                           6,440           0           0

10% annual discount                    (3,051)          0           0
                                     _________  __________   __________
Standardize measure of discounted
  future net cash flows            $    3,389           0           0


</TABLE>

Future  cash inflows are computed by applying year-end prices  of  oil
and  gas to the year-end estimated future production of proved oil and  gas
reserves. The base prices used for the Pretax PV-10 calculation were public
market  prices  on December 31 adjusted by differentials  to  those  market
prices.  Appropriate price differentials were applied to these  prices  for
each   property  based  upon  its  respective  historical  product  pricing
experience  to  adjust  for  Btu content and marketing  and  transportation
costs.  The Henry Hub and West Texas/New Mexico Intermediate prices, before
adjustment for quality and transportation, utilized in the PV-10  value  at
December  31,  2003  were $5.965 per MMBtu of natural gas  and  $29.95  per
barrel  of  oil, respectively.  Forecasted operating costs were based  upon
the  average  of  the  actual monthly costs for 2003  as  provided  by  the
operator of the properties. Estimated capital expenditures were provided by
the  operator  of  the  properties and both  operating  costs  and  capital
expenditures were held constant throughout the life of the properties.  We
will  incur significant capital expenditures in the further development of
our  oil  and gas properties. We believe with reasonable certainty that we
will be able to obtain such capital in the normal course of business. A
Statutory tax rate of 37.4% is used to estimate the effect of future income
taxes. The estimated future net cash flows are then discounted using a rate
of 10 percent per year to reflect the estimated timing of the future cash
flows. The standardized measure of discounted cash flows is the future net
cash flows less the computed discount.


                                   -30-
<PAGE>

Changes in Standardized Measure

Changes in standardized measure of future net cash flows relating  to
proved natural gas reserves are summarized below (in thousands):


<TABLE>
<CAPTION>
                                    2003       2002        2001
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Beginning of year                 $         0           0           0

Revisions of previous estimates             0           0           0
Extensions and discoveries              4,183           0           0
Purchase of mineral-in-place            1,080           0           0
Development costs incurred                407           0           0
Disposition of properties                   0           0           0
Changes in cash flows due to
  income taxes                         (2,022)          0           0
Sales of oil & gas, net of
  production costs                       (259)          0           0
                                    _________   _________   __________
End of Year                        $    3,389           0           0
                                    _________   _________   __________

</TABLE>

Sales of natural gas, net of natural gas operating expenses, are based
on historical pre-tax results. Disposition of properties, extensions and
discoveries, purchases of minerals-in-place and the  changes due to
revisions in standardized variables are reported on a pre-tax discounted
basis.

(11)  Supplementary Quarterly Data (Unaudited)


                                                   2003
                                 ______________________________________
                                  First     Second     Third    Fourth
                                 quarter    quarter   quarter   quarter
                                 _______    _______   _______   _______

    Operating revenue        $   239,539    282,995   283,415   274,547
    Investment Income (loss)     (40,295)    12,365    30,587    39,634
    Net earnings (loss)           (3,421)    53,567   (34,570)   96,923
    Earnings per share
       basic and diluted           (0.01)      0.11     (0.07)     0.20
                                 _______    _______   _______   _______


                                                   2002
                                 ______________________________________
                                  First     Second     Third    Fourth
                                 quarter    quarter   quarter   quarter
                                 _______    _______   _______   _______

    Operating revenue         $   88,736    219,898   149,738   155,019
    Investment Income (loss)    (180,453)  (290,855) (193,671)   44,332
    Net earnings                (118,940)  (120,552) (102,269)   40,007
    (Loss) earnings per share
      basic and diluted            (0.24)     (0.24)    (0.20)     0.08
                                 _______    _______   _______   _______


Investment income for 2003 reflects an impairment charge in the  first
quarter of $87,282.  Investment income for 2002 reflects impairment charges
in  the  first,  second,  and  third quarters of  $212,127,  $323,006,  and
$151,096,  respectively.   Investment income for 2001  reflects  impairment
charges  in the second, third, and fourth quarters of $46,088, $66,414  and
$161,794, respectively.

                                   -31-
<PAGE>

                               INDEX TO EXHIBITS


     (3)(i)Amended and Restated Certificate of Incorporation is
     incorporated herein by reference to Exhibit (3)(i) to the Annual
     Report on Form 10-K for the Company for the fiscal year ended
     December 31, 2000.

     (3)(ii)  Bylaws  are incorporated  herein  by reference to Exhibit
     (3)(ii) to the Annual Report on Form 10-K for the Company for the
      fiscal year ended December 31, 2003.

     (10) Material Contracts:

     (i)  Agreement of Settlement and Release dated February  29, 2000
     is incorporated by reference to Exhibit 10(i)  to the Annual Report
     on Form 10-K for the Company for the fiscal year ended December 31,
     1999.

     (iii)(A) Central Coal & Coke Corporation's Directors Non-Qualified
     Stock Option Plan is incorporated herein by reference to Exhibit
    (10)(iii)(A) to the Annual Report on Form 10-K  for the Company for
     the fiscal year ended December 31, 1994. This Plan was approved
     by the  Company's stockholders at the Annual Meeting held April 19,
     1995, and is discussed in the Definitive Proxy Statement for  that
     meeting previously filed with the Commission.

     (iv)  Central  Natural Resources, Inc. 2001 Stock Incentive Plan
     approved by the Board of Directors February 7, 2001 and  approved
     by the Stockholders  at the Annual Meeting  of Stockholders held
     April 19, 2001. This  Plan is  discussed  in  the Definitive Proxy
     Statement for that meeting and was filed with the Commission with
     that Proxy Statement and is incorporated herein by this reference.

     (v)   Purchase  and Sale Agreement Between Smith Production,  Inc.
     as  Seller  and  CNR  Production, LLC  as  Purchaser,  dated
     February 28, 2003, by and between Smith Production,  Inc.  a Texas
     corporation, as "Seller," and CNR Production, LLC,  a Texas   limited
     liability  company  and   a   wholly-owned subsidiary  of the
     Company, as "Purchaser," is  incorporated herein by reference to
     Exhibit 10(D) of the Quarterly Report on Form 10-Q for the Company
     for the Quarter Ended March 31, 2003.

     (14)  Code of Ethics (attached as Exhibit 14 hereto)

     (21) Subsidiaries of the Company (attached as Exhibit 21 hereto)

     (23) Consent of Independent Petroleum Engineers (attached as
     Exhibit 23 hereto)

     (31.1) Certification required by Rule 13a-14(a) or Rule 15d-
     14(a)  for  Chief  Executive Officer (attached  as  Exhibit  31.1
     hereto).

     (31.2) Certification required by Rule 13a-14(a) or Rule 15d-
     14(a)  for  Chief  Financial Officer (attached  as  Exhibit  31.2
     hereto).

     (32.1) Section 1350 Certification for Chief Executive Officer
     (attached  as  Exhibit  31.1 hereto).

     (32.2) Section 1350 Certification for Chief  Financial Officer
     (attached as Exhibit 32.2 hereto).


                                 -32-
<PAGE>


                               SIGNATURES

    Pursuant to the requirements of Sections 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     CENTRAL NATURAL RESOURCES, INC.
                                     _______________________________
                                                Registrant

                                     By    /s/ Phelps C. Wood
                                         ________________________________
                                         Phelps C. Wood, President

Date: March 29, 2004


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

                                     By    /s/ Phelps C. Wood
                                         ________________________________
                                         Phelps C. Wood, President
                                         Principal Executive Officer
Date: March 29, 2004


                                     By    /s/ Leonard L. Noah
                                         ________________________________
                                         Leonard L. Noah
                                         Chief Financial Officer Principal
                                         Financial Officer, and
Date: March 29, 2004                     Principal Accounting Officer


                                     By    /s/ Bruce L. Franke
                                         ________________________________
                                         Bruce L Franke, Director
Date: March 29, 2004


                                     By    /s/ Ray A. Infantino
                                         ________________________________
                                         Ray A. Infantino, Director
Date: March 29, 2004


                                     By    /s/ Patrick J. Moran
                                         ________________________________
                                         Patrick J. Moran, Director

Date: March 29, 2004


                                     By    /s/ James R. Ukropina
                                         ________________________________
                                         James R. Ukropina, Director
Date: March 29, 2004


                                     By    /s/ Phelps C.Wood
                                         ________________________________
                                         Phelps C. Wood, Director
Date: March 29, 2004


                                     By    /s/ Phelps M. Wood
                                         ________________________________
                                         Phelps M. Wood, Director


                                     -33-

<PAGE>