<TABLE>
<CAPTION>


                    SELECTED CONSOLIDATED FINANCIAL DATA

Years ended December 31          2001           2000           1999
                                 _____________  _____________  _____________
<S>                              <C>            <C>            <C>

Total operating revenue        $    769,099.00    741,489.00      615,875.00

Net Earnings                        246,296.00     856,581.00     651,010.00
Net Earnings per common share             0.49           1.58           0.92
Cash dividends per common share           0.88            .88           0.63
Total Assets                   $  8,039,160.00   8,584,503.00  12,272,117.00
</TABLE>
<TABLE>
<CAPTION
Years ended December 31          1998           1997
                                 _____________  _____________
<S>                              <C>            <C>

Total operating revenue        $    590,173.00   1,106,425.00

Net Earnings                        517,419.00     777,838.00
Net Earnings per common share             0.73           1.80
Cash dividends per common share           0.25           0.75
Total Assets                   $ 11,583,087.00  11,005,414.00
</TABLE>



<PAGE>

       MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION
                        & RESULTS OF OPERATIONS



Results of Operations

    Total operating revenue was up slightly in 2001 over 2000 and up
significantly in 2000 over 1999.  In both cases the increases were due
primarily to increased revenues from oil and gas royalties which, in
turn, were due to material increases in the price of oil and gas during
the current periods over the prior periods, coupled with increased
production.  Revenue from this source may be positively impacted in the
future, as a lessee has completed drilling operations and commenced
production of coal bed methane gas from certain of the Company's coal
properties located in Sebastian County, Arkansas.  Although results of
test drillings were apparently promising, production has only recently
begun.  Accordingly, the level of commercial production on an ongoing
basis is uncertain at this time, and should positive results be achieved
in the commercial production of coal bed methane gas under this lease,
it may very well be some time, perhaps even a number of years, before
the Company realizes material royalty income from this source.  Further,
the amount of revenue ultimately received from this source will be
subject to the uncertainties of price fluctuations in the market price
of natural gas.  Revenue from oil and other mineral lease rentals and
bonuses was down in 2001 from 2000, and was also down in 2000 from 1999,
because there were fewer new leases made in the current periods with
income recognizable in those periods.

    Nonoperating income was down substantially in 2001 from 2000,
while being up in 2000 over 1999.  The increases in 2000 over 1999 were
due primarily to increased investment income resulting from increased
capital gains realized on sales of equity securities during 2000, and
somewhat higher rates of return on temporary fixed income investments
during that year, partially offset by the reduced size of the portfolio
of fixed income investments during that year, due in part to the
expenditure of invested cash for a sizeable redemption of treasury stock
in early 2000 described below.  The decrease in nonoperating income in
2001 from 2000 resulted from lower capital gain income being realized on
the sale of equity securities in the current year, somewhat lower rates
of return on temporary fixed income investments, and the reduced size
of the portfolio of fixed income investments during the current year.
Additionally, as described in Note (2) to the accompanying consolidated
financial statements, the Company recognized impairment charges during
2001 reflecting a write down in the carrying value of certain securities
because decreases in current market values of those securities have been
deemed by Management to be other than temporary.  There is a deferred
tax benefit relative to such write downs which will be realized for
income tax purposes upon future sale or disposition of the securities.
There was also a decrease in the gain on sales of real estate in both
2001 and 2000 from 1999, because of less excess surface land being sold
in the current years.

<PAGE>

    General and administrative expenses were lower in 2001 than 2000,
and also lower in 2000 than in 1999. The decreases in both cases reflect
reduced fees paid to outside service providers during the current periods,
somewhat offset by increased compensation.  Also, expenses were higher in
1999 due to significant fees paid to outside service providers, particularly
legal fees in connection with litigation resulting in the stock redemption
referred to above which is described in more detail below and also fees
paid to financial advisers and appraisers of the Company's real estate
and mineral assets.

    As described in detail in Note (5) to the accompanying consolidated
financial statements, income taxes were lower in 2001 than in 2000, but
up significantly in 2000 over 1999.  The decrease in the current year
resulted primarily from reduced earnings before income taxes, while the
increase in 2000 over 1999 resulted from increased earnings before
income taxes in that year.

    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 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 revenue from oil and
gas royalties, changes in the price of oil do have an impact on the
income of the Company, and at times it can be dramatic.  The rise in
the price of oil in the years under comparison contributed to increased
revenue from that source, while a decrease in oil prices commencing in
2001 resulted in somewhat lower revenue from oil royalties in the most
recent quarters.

<PAGE>

Financial Condition - Liquidity and Capital Resources

    The financial condition of the Company continued very strong during
2001, as it was in 2000 and 1999.  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 is represented by liquid assets.  During the first
quarter of 2000, the Company consummated the resolution of litigation and
other disputes with a former director and other stockholders as has been
described in prior reports, pursuant to an Agreement of Settlement and
Release executed by all parties, including the Company, on February 29, 2000.
The terms of the settlement included the purchase by the Company of all stock
of the Company owned by the plaintiffs totaling 97,231 shares for a purchase
price of $33.50 per share (before giving effect to the stock dividend
described hereafter which was distributed on February 13, 2001 to stockholders
of record on January 29, 2001) or aggregate consideration of $3,257,238.50
which the Board of Directors of the Company, after careful consideration,
concluded was a fair price under the circumstances based upon a review of
the Company's financial condition and considering the costs and risks of
continued litigation.  The source of funds used 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 still being represented by
liquid assets.

    The Company has 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 has no significant amount
of accounts receivable or accounts payable and thus minimal working
capital needs, and has significant liquid assets, and there are no
current known demands, commitments, 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 as described
in Note (6) of the accompanying consolidated financial statements.

<PAGE>

    In addition to currently available liquid assets, the continued liquidity
of the Company is affected by cash flows as is illustrated on the consolidated
statement of cash flows in the accompanying consolidated financial statements,
which illustrate that there was a net decrease in cash and cash equivalents
in 2001 and 2000 and an increase in cash and cash equivalents in 1999.
The most significant component of the changes between the periods under
comparison was the difference in cash provided by or used in investment
activities; specifically, differences in the amount of proceeds from the sale
of equity securities and purchase of equity securities during each such year,
differences in the amount of proceeds from matured/called investment debt
securities which were reinvested, and the purchase of a greater amount of
other investments during the current years.  Also contributing to the
differences were reduced net earnings in 2001 compared to 2000, while net
earnings in 2000 increased over 1999, partially offset by reduced income
taxes in the current year.  The lower net earnings in 2001 include certain
impairment charges on equity securities described above which reduced
earnings but did not reduce cash.  Also, there were greater proceeds from
sales of land in 1999 than in the subsequent two years, and the fluctuation
in deferred oil lease bonus amounts also contributed to the variations in
cash flows during the years under comparison.  There was a significant cash
expenditure in 2000 with respect to the treasury stock purchase described
above, offset in that year by proceeds from the sale of investment debt
securities.  Cash used in the payment of dividends was approximately the
same in the three years under comparison, even though there were fewer
shares outstanding in 2000 and 2001 due to the redemption of treasury
stock described above because the per share dividends paid in 2000 and
2001 were greater than in 1999.  Additional cash was received by the
Company in 2000 as proceeds from the exercise of stock options by a member
of the Board of Directors who received options under the Director
Non-Qualified Stock Option Plan approved by the stockholders in April
of 1995.

<PAGE>

    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.
The Board has recently reviewed numerous possible acquisition
possibilities of operating businesses with three such potential
acquisitions being reviewed and declined in the past year as not suitable
at the present time from a stockholder prospective.  At this time
Management is focused on aggressively pursuing development of the
Company's oil and gas properties and to attempt to lease more of
its mineral properties in order to generate more rental, bonus and
royalty income, and is considering acquiring additional mineral properties
or perhaps working interests in selected oil and gas operations.  Two
new oil and gas leases were in fact made in 1999, one in Pittsburg County,
Oklahoma, and another in Sebastian County, Arkansas; three new oil and
gas leases were made in 2000-one in San Jacinto County, Texas, and one in
Sebastian County, Arkansas, and one in Craig County, Oklahoma; and one new
oil and gas lease was made in 2001 on Company property in Arkansas and
Oklahoma.  As yet there has been no production under any of these leases
but bonuses were received by the Company at the time each lease was entered
into.

<PAGE>

Accounting Policies, Recent Accounting Pronouncements, and Other
Accounting Matters

    A summary of significant accounting policies is contained in Note (1)
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 and
explained in detail in Note (1).  There would be materially different
reported results if different assumptions or conditions were to prevail.
However, in the judgment of Management and the Board of Directors, the
indicated charges were appropriate.

    A one share for one share stock dividend was distributed to
stockholders in February of 2001. All per share and share data in the
consolidated financial statements accompanying this report, and related
notes, have been restated to reflect the stock dividend for all periods
presented.  Cash dividends totaling $0.875 per share were paid in 2001
and 2000 compared to $0.625 per share paid in 1999.  While the Board of
Directors had expressed the intention early in 2001 to continue paying
the $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 re-evaluate the quarterly dividend policy in light of possible
needs to retain liquidity for potential acquisitions 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 recent material 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.

<PAGE>

    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 which
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 its
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 coal, oil and natural gas and the effect thereof on its royalties and
rentals relating to coal deposits and mineral rights as discussed above.
The Company does not use derivative commodity instruments to hedge its
commodity risk exposure.

    Statement of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Hedging Activities, was issued by the Financial
Accounting Standards Board (FASB) in June 1998. SFAS No. 133 standardizes the
accounting for derivative instruments.  Under that statement, entities are
required to carry all derivative instruments in the statement of financial
condition at fair value.  The Company was required to adopt SFAS No. 133, as
amended on January 1, 2001.  The adoption of SFAS No. 133 did not impact the
financial position or results of operation of the Company.

<PAGE>

    In July 2001, the FASB issued SFAS No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets.  SFAS No. 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001, as well as all purchase method business
combinations completed after June 30, 2001.  SFAS No. 141 also specifies
criteria intangible assets acquired in a purchase method business combination
must meet to be recognized and reported apart from goodwill, noting that any
purchase price allocable to an assembled work force may not be accounted for
separately. SFAS No. 142 will require that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead tested for
impairment at least annually in in accordance with the provisions of SFAS
No. 142.  SFAS No. 142 will also require that intangible assets with
definite useful lives be amortized over their respective estimated useful
lives to their estimated residual values, and reviewed for impairment.
The Company is required to adopt SFAS No. 142 effective January 1, 2002.
The Company currently has no goodwill or significant other intangible assets.

    On October 3, 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
While this statement supersedes, SFAS No. 121, Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, it retains
many of the fundamental provisions of that statement.  This statement also
supersedes the accounting and reporting provisions of APB Opinion No. 30,
Reporting the Results of Operations - Reporting the Effects of Disposal
of a Segment of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions, for the disposal of a segment of a
business.  However, it retains the requirement in Opinion No. 30 to report
separately discontinued operations and extends that reporting to a component
of an entity that either has been disposed of (by sale, abandonment, or
in a distribution to owners) or is classified as held for sale. This
statement is effective for fiscal years beginning after December 15,
2000, except in certain circumstances.  The Company is required to adopt
SFAS No. 144 on January 1, 2002.  The Company is currently reviewing what
impact the provisions of this statement will have, if any, on its
financial position and results of operations.

<PAGE>

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.  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.

<PAGE>

                Market for Registrant's Common Equity


    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 years are as follows:

<TABLE>
<CAPTION>


                                               2001
                           _____________________________________________
                               Bid              Asked          Dividends
                           Low     High      Low     High      Per Share
                           _____   _____     _____   _____     _________
<S>                        <C>     <C>       <C>     <C>       <C>
1st Quarter              $ 16.00  $17.50      .00     .00       .25
2nd Quarter                15.30   17.50      .00     .00       .25

1st Quarter              $ 16.00  $17.50      .00     .00       .25
2nd Quarter                15.30   17.50      .00     .00       .25
3rd Quarter                16.50   16.50      .00     .00       .25
4th Quarter                16.80   18.00      .00     .00       .125

For Year                 $ 15.30  $18.00      .00     .00       .875
</TABLE>
<TABLE>
<CAPTION>
                                               2000
                           _____________________________________________
                               Bid              Asked          Dividends
                           Low     High      Low     High      Per Share
                           _____   _____     _____   _____     _________
<S>                        <C>     <C>       <C>     <C>       <C>
1st Quarter              $ 14.50   17.00      .00     .00    $  .00
2nd Quarter                14.50   16.50      .00     .00       .25
3rd Quarter                13.63   15.50      .00     .00       .00
4th Quarter                14.00   16.00      .00     .00       .625

For Year                 $ 13.63   17.00      .00     .00    $  .875
</TABLE>