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, 2002

                         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.  [   ]

     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 (203,020 shares), as of March 15, 2003
was $2,821,978.

     The number of shares outstanding of the issuer's only class of
common stock as of March 15, 2003 is as follows:

             Common Stock ($1.00 Par Value) . . . . . . 498,924

                    DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Annual Report to security holders for fiscal
year ended December 31, 2002, captioned "Selected Consolidated
Financial Data," "Management's Discussion and Analysis of Financial
Condition & Results of Operations" and range of bid and asked
questions and dividends paid on common stock.  (Part II)

     Definitive Proxy Statement furnished to security holders and
the Securities and Exchange Commission on March 24, 2003, relative
to the Annual Meeting of Stockholders to be held on April 22, 2003.
(Part III)


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                                    -2-

<PAGE>


                                  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
segment.

Since the beginning of the fiscal year, 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; there has been no acquisition or disposition of any
material amount of assets otherwise than in the ordinary course of
business.  Other than the hiring of a full time President, effective
July, 2002, there has been no material change in the mode of
conducting the business of the Company.

    (b) Financial Information about Industry Segments. During
the year 2002, the Company had one reportable segment which
is identified as the Energy Business Segment.

    (c) Narrative Description of Business. The one current
business activity of the Company consists of the management of
its interests in real properties as well as the ownership
of its working interests and as discussed above are now identified
as the Energy Business Segment. Certain real property interests
have been held and managed by the Company for lease
to others for 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.


<PAGE>                               -3-


    During 1993 the Company commenced a voluntary program of
reforestation on reclaimed open pit coal mining property located
in Arkansas and Oklahoma. The program was not federally or state
mandated, but was undertaken to enhance the value of its real
property and in furtherance of its concept of social responsibility.
Some additional reforestation on its properties in Arkansas took
place in 1997 on which the Company spent approximately $1,100 during
that year, and there was no additional reforestation expense after
that year. The financial impact upon the Company, both in terms
of short-term expenditures and future income should not be material.

    Another activity of the Company consists of the ownership and
management of its investment portfolio of marketable securities
and United States government and agency obligations.

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

    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.

<PAGE>                               -4-


    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.

    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 to another
party, but Bethlehem continues to guarantee the total royalty payment.
A small amount of mining has been done on the lease. The loss of the
revenues from this lease would result in a material diminution in the
income of the Company, but the Company has no reason to believe that
the lessee has either the legal right or intention to cease making
the required payments thereunder.

 <PAGE>                               -5-


    Royal Oil Company of Corpus Christi, Texas ("Royal Oil") is the
lessee of a number of oil and gas leases covering properties of the
Company located in San Jacinto County, Texas. During 2002 Royal Oil
paid to the Company royalties on production under those leases
aggregating approximately $167,487 which exceeds ten percent of the
Company's consolidated revenue.

    SEECO, Inc. of Fayetteville, Arkansas is the lessee of a number of
oil and gas leases covering properties of the Company located in
Sebastian County, Arkansas. During 2002 SEECO paid the Company royalties
on production under those leases aggregating approximately $76,602.

    CDX Gas, of Dallas, Texas is the lessee of a number of oil and gas
leases covering properties of the Company located in Sebastian County,
Arkansas, and Pittsburg, County Oklahoma. During 2002 CDX Gas paid the
Company royalties on production under those leases aggregating
approximately $137,076.

    Except as discussed above, there are no customers to which
sales are made in an amount which equals ten percent or more of the
Company's consolidated revenue.

    The Company's businesses 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.

    There are no competitive conditions in the businesses in the
Company's Energy Business Segment which have a material impact on its
operations.

    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


<PAGE>                             -6-


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.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 which the Company deems material.

    As to business intended to be done 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.  After review of those new business opportunities, some were
either rejected as not suitable for the Company at the present
time or taken off the market and others continue to be investigated by
the Company for possible acquisition. 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 which 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 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.


                                     -7-
<PAGE>

    The total number of persons employed by the Company itself, 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.


ITEM 2.  PROPERTIES

    (a) The principal physical properties of the Company are whole
or partial interests in approximately 64,000 acres of real property
located in Arkansas, Louisiana, Texas, Kansas, Oklahoma and Missouri.
Certain of the Company's mineral reservations under the Sam Houston
National Forest in Texas have expired, leaving the Company's rights in
4,017 remaining acres, which were due to expire January 1, 2000, unless
extended by production. These properties were evaluated by the
appropriate United States government agency to determine what portion
of the acreage was in fact extended by production as of that date and
what portion did expire and no material portion of that acreage failed
to be extended by production. 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.

    A wholly owned subsidiary of the Company is participating in an
exploratory seismic shoot on approximately 64,000 acres of property
in Liberty and Hardin Counties in east Texas.  As a participant in
this seismic shoot, the Company has an opportunity to participate
in a 2% undivided working interest the aforementioned acreage.

                                 -8-

<PAGE>

    Subsequent to the 2002 fiscal year end, a wholly owned
subsidiary of the Company purchased a working interest in certain
oil and gas properties in the Tabasco field located in Hidalgo County,
Texas and in the Flores and Flores West fields in Starr County and
Hidalgo County, Texas.  A two percent working interest was purchased
for $1,080,000.  This transaction gives the subsidiary a fee
determinable interest in the property and allows the subsidiary to
be a joint interest party for as long as there is production.

     (1) REAL PROPERTY INTERESTS IN THE STATE OF ARKANSAS.

    The Company is the owner of approximately 1,658 acres in fee
simple, of minerals underlying approximately 16,447 additional acres,
and of a number of town lots in three small towns, all in Sebastian
County, Arkansas.

    Mineral interests underlying approximately 13,600 acres are under
a coal lease to the assignee of Bethlehem Steel Corporation under the
coal lease described in Item l(c). Another 586 acres were leased in
1993 under two separate oil and gas leases (both to the same lessee)
for 5-year terms, one of which expired in 1998 without any production,
but the other of which commenced production during that year. In 1997
another 120 acres were leased for a 3-year term. Production
commenced on this lease during 1999.  In 1998 another 250 acres were
leased under three separate oil and gas leases, each for a 3 year
term. Production commenced on all three leases during 1999. In 2000,
another 119 acres were leased for a 5-year term. As yet there is no
production under this lease.

    Of the 13,600 acres currently under a coal lease to the
assignee of Bethlehem Steel Corporation as described in the
preceding paragraph, 10,537.23 acres were leased to C.D. Exploration,
Inc. in 1995 under an Oil & Gas Lease for a term of five years, for
which the lessee paid a bonus of approximately $105,000. This lease
was subsequently extended by contract for a period


                                   -9-

<PAGE>

of one year, and now production has commenced and the lease is
continued by production. An additional 2,346.26 acres were leased to
the same lessee in 2001 for a three year term, and as yet there is no
production under this lease. An additional 414 acres were leased
in 1994 under three separate oil and gas leases (two to the same
lessee), one for a three year term and the other two for five year
terms, one of which expired in 1997 with no production, one of which
expired in 1999 with no production, and one of which commenced
production in 1998. Two new leases were made during 2002. One covers
122.27 acres, for a term of  three years, and as yet there is no
production on this lease.  The other lease covers 3.37 acres, for a
term of 3 years and production commenced on this lease in 2002. In
addition, the Company has fractional royalty interests in 10 small
producing gas wells which are located on an approximately 3,840 acre
tract of which the Company owns 2,286 acres.

    (2)  REAL PROPERTY INTERESTS IN THE STATE OF TEXAS.

    The Company was the owner of practically all of the mineral
interests in approximately 90,551 acres located in the Texas counties
of San Jacinto, Walker and Montgomery, of which approximately 82,674
acres were under a reservation (in a deed of December, 1935) which
covered all oil, gas, sulphur and other minerals on, in, under or
that may be produced from the lands for a period commencing with the
date of the deed and ending on January 1, 1985, and provided further
that if on said latter date minerals were being produced in paying
quantities then the reservation would be extended for a five-year
period as to an area of one square mile of which the well is the center
and for subsequent extensions for additional five-year periods so long
as paying operations are being conducted on the premises. The right to
prospect for and mine and remove

                                     -10-

<PAGE>

minerals was further limited by various requirements of the United
States.  As described in Item 2(a) above, this reservation expired
on January 1, 1985, and the wells then producing on such properties
permitted the Company to retain until January 1, 1990, about 6,280
acres in the Mercy Field, West Mercy Field and Moroil Field and as of
January 1, 1995, the Company continued to retain approximately 4,017 of
such acres, while production continues.  The reservation was extended
for an additional five-year term which ended January 1, 2000. As discussed
in Item 2(a) above, the property was evaluated to determine what portion
thereof the Company is entitled to retain by production, and what portion
thereof has expired, and no material portion thereof expired.

    In addition to the wells still under production from the earlier
leases, in 1997 one additional lease was made on 241.73 acres of the
Company's Walker County, Texas property, and a producing well was
drilled on this property during 1999.  An additional producing well
was drilled on this property in 2002. In year 2000 10 acres were
leased for a 3-year term.  As yet there is no production under this
lease.

    The Company's mineral interests in its remaining acreages of
approximately 7,788.55 acres in Texas are reservations of perpetual
mineral rights.  In the case of approximately 7,600 of those acres,
one-thirty-second of the minerals are vested in the owner of the
surface of said properties but with the right in the Company to make
all leases on the acreage and to keep all bonuses and rentals
received under such leases.  Additionally, a wholly owned subsidiary
of the Company acquired those working interests in oil and gas
properties in Texas as detailed in Subparagraph (a) above.


                                     -11-

<PAGE>

    (3)  REAL PROPERTY INTERESTS IN THE STATE OF LOUISIANA.

    In January, 1967, the Company sold approximately 35,000 acres
of Louisiana real property reserving mineral servitudes thereon.
Under Louisiana law the ownership of mineral servitudes not exercised
through production or drilling to a depth at which production
reasonably can be expected to be found expires by liberative
prescription after a period of such nonuser of ten years. No
production or drilling occurred on approximately 14,000 of the acres
sold in 1967 within the ten-year period and, hence, the Company's
ownership of the mineral servitudes under such approximately 14,000
acres was extinguished as of January 26, 1977.  During 1978, the
Company's ownership of the mineral servitudes under 1,243 additional
acres was extinguished because production hadbeen exhausted for ten
years.  Mineral servitudes under the remaining acres sold in 1967 have
been extended by drilling or production for various periods expiring
after January 26, 1977. The Company's rights to approximately 8,530
additional acres of these servitudes expired during 1994, and its
rights to an additional approximate 600 acres expired in 2001.

    In the Hurricane Creek Field, Beauregard Parish, Louisiana,
880 acres are held by production which commenced in 1947. The
leases of the Company in the Hurricane Creek Field provide for
one-eighth gross royalties except as to 160 acres for which the gross
royalty is one-fourth.  In 1964, a Unitization Agreement covering one
producing sand was executed by various interested parties in the
Hurricane Creek Field so as to permit a secondary recovery program,
and a second Unitization Agreement was executed in March, 1994.

                                    -12-

<PAGE>

    Approximately 400 additional acres in Beauregard Parish,
Louisiana, are held under production pursuant to a lease, the
original term of which expired many years ago but which continues
by production.

    The Company leased approximately 9,339 acres of its real property
in Vernon Parish, Louisiana, for a term of four years, pursuant to
the exercise of a geo-option made in early 1991. This property is
currently available for lease and if there is no further attempted
production by December, 2006, the Company's rights in this property
will expire.


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                                    -13-

<PAGE>


    (4)  REAL PROPERTY INTERESTS IN OKLAHOMA AND KANSAS.

    The Company is the owner of interests in real property in three
counties in eastern Oklahoma and three counties in southeast Kansas,
which ownership consists of approximately 1,350 acres in fee simple
and approximately 13,546 additional acres of underlying minerals.
A substantial part of such 13,546 acres of mineral ownership is
described in the conveyances or reservations giving rise to such
ownership as "coal" or "coal and asphaltic minerals."

    In the year 2000, 710 acres were leased for a 3-year term, this
lease was terminated in 2002. An additional 90.24 acres were leased
in 2001 for a three year term. In 2002  another 600 acres were leased
for a term of 3 years, with one option to renew for an additional two
years.  As yet there is no production from either of these leases. The
Company in the past has also rented the surface of portions of its
lands in Kansas and Oklahoma, largely for agricultural purposes, under
leases of not to exceed one year.

    (5)  REAL PROPERTY INTERESTS IN THE STATE OF MISSOURI.

    In Randolph and Macon Counties, Missouri, the Company is currently
the owner of approximately 44 acres in fee simple, (having sold
approximately 3 acres of surface land in 2000) and of the minerals
underlying 6,147 acres.  Substantially all of the mineral ownership is
described in the conveyances from which it arose as "coal" or "coal and
other minerals."  The properties involved were acquired by predecessor
companies for the principal purpose of mining coal therefrom, and
extensive mining was conducted thereon by the predecessors.


                                      -14-

<PAGE>

    The Company has previously rented the surface of portions of its
lands in Missouri, largely for agricultural purposes, under leases of
not to exceed one year, but no such leases are in effect at this time.

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                                      -15-

<PAGE>

    (b) 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.

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
provisionswhich 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 which 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.


                                     -16-

<PAGE>


                                  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 approximate number of stockholders as of March 15, 2003 was 400.
The range of bid and asked quotations and the dividends paid on such
securities for each annual period during the Company's two most recent
fiscal years as required by Item 201 of Regulation S-K is set forth on
the inside back cover of the Annual Report as of December 31, 2002,
furnished to the stockholders of the Company, and attached as an exhibit
hereto, which portion of the Annual Report is incorporated herein by
this reference.

    Cash dividends totaling $0.875 per share were paid in 2001 and
$0.40 per share in 2002. The Board of Directors had expressed the
intentions 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. Subsequently, the Board expressed a consensus
that in subsequent quarters it might re-evaluate the annual 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
earnings for the same period of the previous year, due in substantial
part to recent material decreases in energy prices, and in furtherance
of the objective to retain liquidity for potential acquisitions and
other possible areas of internal growth it would be advisable to reduce
the annual dividend payment. In the first quarter of 2002, the Board
reduced the quarterly dividend to $.0.10. A $0.10 dividend was
declared for each of

                                    -17-

<PAGE>

the three following quarters in 2002. A dividend of $0.10 per share
has been declared for the first quarter of 2003, and no change in
quarterly dividend policy was expressed, and the Board will continue
to evaluate the operating results and financial condition of the
Company and the other objectives expressed in fixing the quarterly
dividend.

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

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

ITEM 6.  SELECTED FINANCIAL DATA

    The information required by this item is set forth under the
caption "SELECTED CONSOLIDATED FINANCIAL DATA" in the Annual Report as
of  December 31, 2002, furnished to the stockholders of the Company,
and attached as an exhibit hereto, which portion of the Annual Report
is incorporated herein by this reference.

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

    The information required by this item is set forth under the
caption "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION & RESULTS OF OPERATIONS" in the Annual Report as of
December 31, 2002, furnished to the stockholders of the Company, and
attached as an exhibit hereto, which portion of the Annual Report
is incorporated herein by this reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                                    -18-

<PAGE>

    The information concerning quantitative and qualitative
disclosures concerning market risk required by Item 305 of Regulation
S-K is contained in Management's Discussion and Analysis of
Financial Condition and Results of Operations set forth in Item 7 above
of this report which is incorporated herein by this reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The consolidated financial statements required by this item are as
follows:Consolidated Balance Sheets as of December 31, 2002 and 2001;

    The consolidated financial statements required by this item are as
follows:

     Consolidated Balance Sheets as of December 31, 2002 and 2001;

     Consolidated Statements of Operations - Years ended December 31,
     2002, 2001 and 2000;

     Consolidated Statements of Comprehensive Income(Loss)- Years Ended
     December 31, 2002, 2001 and 2000;

     Consolidated Statements of Stockholders' Equity - Years ended
     December 31, 2002, 2001 and 2000.

     Consolidated Statements of Cash Flows - Years ended
     December 31, 2002, 2001 and 2000;

     Notes to Consolidated Financial Statements

These financial statements are filed as a part of this report,
and are ncorporated herein by this 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.

                                 -19-

<PAGE>

(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.

	                        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 filed with the
Securities and Exchange Commission pursuant to Schedule 14A
promulgated under the Securities Exchange Act of 1934 on March 24,
2003, under the caption "ELECTION OF DIRECTORS", which portion of
said definitive proxy statement is incorporated herein by this
reference.

    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 2002 all Section 16(a) filing requirements applicable to
such persons were compliedwith, except with respect to Leonard L.
Noah, who became a reporting person pursuant to Section 16(a) in
August, 2002. Mr. Noah was 14 days late in filing his Form 3 after
becoming a reporting person.


                                   -20-

<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

    The information required by this item is set forth on pages 6
through 8 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 filed March 24, 2003, under the
caption "ELECTION OF DIRECTORS", which portion of said definitive proxy
statement is incorporated herein by this reference.

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                                     -21-

<PAGE>

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 incorporatedherein by this reference.


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                                 -22-

<PAGE>

ITEM 14. CONTROLS AND PROCEDURES

    Within 90 days of the filing of this annual report, the Company
conducted an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures. Disclosure
controls and procedures mean controls and other procedures that are
designed to ensure that the financial and non-financial information
required to be disclosed in the Company's periodic filings with the
Securities and Exchange Commission is recorded, processed, summarized
and reported in a timely manner. The evaluation was conducted with the
participation of Management and under the supervision of the President
and the Chief Financial Officer. Based on the evaluation, the Company's
Management concluded that the Company's disclosure controls and
procedures were effective.

    There have been no significant changes in the Company's internal
controls or other factors that could significantly affect these controls
subsequent to the date of the evaluation.

                              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.  Independent Auditors' Report

    2.  Consolidated Financial Statements:

        Consolidated Balance Sheets as of December 31, 2002 and 2001;

                                  -23-

<PAGE>


        Consolidated Statements of Operations - Years ended December
        31, 2002, 2001 and 2000;

        Consolidated Statements of Comprehensive Income(Loss)- Years
        Ended December 31, 2002, 2001 and 2000;

        Consolidated Statements of Stockholders' Equity - Years ended
        December 31, 2002, 2001 and 2000.

        Consolidated Statements of Cash Flows - Years ended
        December 31, 2002, 2001 and 2000;

        Notes to Consolidated Financial Statements


    3.  Consolidated Financial Statement Schedules:

        All schedules are omitted as none are currently required.

    4.  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.

       (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 and in the
       Definitive Proxy Statement for the Annual Meeting of
       Stockholders to be held April 22, 2003 previously filed with
       the Commission.


                                  -24-

<PAGE>

       (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.

       (13) Portions of the Annual Report to security holders for year
       ended December 31, 2002 captioned "Selected Consolidated Financial
       Data," "Management's Discussion and Analysis of Financial Condition
       & Results of Operations" and range of bid and asked quotations and
       dividends paid on common stock.

       (21)  Subsidiaries of the Company

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

                                    -25-

<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 28, 2003

                                     -26-

<PAGE>

     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 28, 2003


                                     By    /s/ Leonard L. Noah
                                         ________________________________
                                         Leonard L. Noah
                                         Chief Financial Officer Principal
                                         Financial Officer, and
Date: March 28, 2003                     Principal Accounting Officer


                                     By    /s/ Bruce L. Franke
                                         ________________________________
                                         Bruce L Franke, Director
Date: March 28, 2003


                                     By    /s/ Ray A. Infantino
                                         ________________________________
                                         Ray A. Infantino, Director
Date: March 28, 2003


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

Date: March 28, 2003


                                     By    /s/ James R. Ukropina
                                         ________________________________
                                         James R. Ukropina, Director
Date: March 28, 2003


                                     By    /s/ Phelps C.Wood
                                         ________________________________
                                         Phelps C. Wood, Director
Date: March 28, 2003


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


                                     -27-
<PAGE>

                               CERTIFICATIONS


I, Phelps C. Wood, President and chief executive officer of Central
Natural Resources, Inc. certify that:

 1. I have reviewed this annual report on Form 10-K of Central Natural
    Resources, Inc.

 2. Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period
    covered by this annual report;

 3. Based on my knowledge, the financial statements, and other
    financial information included in this annual report, fairly
    present in all material respects the financial condition, results
    of operations and cash flows of the registrant as of, and for,
    the periods presented in this annual report;

 4. The registrant's other certifying officers and I are responsible
    for establishing and maintaining disclosure controls and
    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
    the registrant and we have:

    a) designed such disclosure controls and procedures to ensure that
    material information relating to the registrant, including its
    consolidated subsidiaries, is made known to us by others within
    those entities, particularly during the period in which this
    annual report is being prepared;

    b) evaluated the effectiveness of the registrant's disclosure
    controls and procedures as of a date within 90 days prior to the
    filing date of this annual report ("Evaluation Date"); and

    c) presented in this annual report our conclusions about the
    effectiveness of the disclosure controls and procedures based on
    our evaluation as of the Evaluation Date;

 5. The registrant's other certifying officers and I have disclosed,
    based on our most recent evaluation, to the registrant's auditors
    and the audit committee of registrant's board of directors (or
    persons performing the equivalent functions):

    a) all significant deficiencies in the design or operation of
    internal controls which could adversely affect the registrant's
    ability to record, process, summarize and report financial data
    and have identified for the registrant's auditors any material
    weaknesses in internal controls; and

    b) any fraud, whether or not material, that involves management
    or other employees who have a significant role in the registrant's
    internal controls; and

 6. The registrant's other certifying officers and I have indicated in
    this annual report whether  there were significant changes in
    internal controls or in other factors that could significantly affect
    internal controls subsequent to the date of our most recent
    evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.

Dated:   March 28, 2003

/s/ Phelps C. Wood
____________________________________
Phelps C. Wood
President

                                     -28-
<PAGE>



                               CERTIFICATIONS


I, Leonard L. Noah, Chief Financial Officer of Central Natural Resources,
Inc. certify that:

 1. I have reviewed this annual report on Form 10-K of Central Natural
    Resources, Inc.

 2. Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which
    such statements were made, not misleading with respect to the period
    covered by this annual report;

 3. Based on my knowledge, the financial statements, and other
    financial information included in this annual report, fairly
    present in all material respects the financial condition, results
    of operations and cash flows of the registrant as of, and for,
    the periods presented in this annual report;

 4. The registrant's other certifying officers and I are responsible
    for establishing and maintaining disclosure controls and
    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
    the registrant and we have:

    a) designed such disclosure controls and procedures to ensure that
    material information relating to the registrant, including its
    consolidated subsidiaries, is made known to us by others within
    those entities, particularly during the period in which this
    annual report is being prepared;

    b) evaluated the effectiveness of the registrant's disclosure
    controls and procedures as of a date within 90 days prior to the
    filing date of this annual report ("Evaluation Date"); and

    c) presented in this annual report our conclusions about the
    effectiveness of the disclosure controls and procedures based on
    our evaluation as of the Evaluation Date;

 5. The registrant's other certifying officers and I have disclosed,
    based on our most recent evaluation, to the registrant's auditors
    and the audit committee of registrant's board of directors (or
    persons performing the equivalent functions):

    a) all significant deficiencies in the design or operation of
    internal controls which could adversely affect the registrant's
    ability to record, process, summarize and report financial data
    and have identified for the registrant's auditors any material
    weaknesses in internal controls; and

    b) any fraud, whether or not material, that involves management
    or other employees who have a significant role in the registrant's
    internal controls; and

 6. The registrant's other certifying officers and I have indicated in
    this annual report whether  there were significant changes in
    internal controls or in other factors that could significantly affect
    internal controls subsequent to the date of our most recent
    evaluation, including any corrective actions with regard to
    significant deficiencies and material weaknesses.

Dated:  March 28, 2003

/s/ Leonard L. Noah
____________________________________
Leonard L. Noah
Chief Financial Officer

                                     -29-
<PAGE>


                          CERTIFICATION PURSUANT TO
                           18 U.S.C. SECTION 1350,
                           AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


With respect to the Annual Report of Central Natural Resources, Inc., a
Delaware corporation (the "Company"), on Form 10-K for the year ended
December 31, 2002 as filed with the Securities and Exchange Commission
on the date hereof (the "Report"), I, Phelps C. Wood, President and chief
executive officer of the Company, certify, pursuant to 18 U.S.C.
Sections 1350, as adopted pursuant to Sections 906 of the Sarbanes-Oxley Act
of 2002, that:

  (1) The Report fully complies with the requirements of section 13(a)
  or 15(d) of the Securities Exchange Act of 1934; and

  (2) The information contained in the Report fairly presents, in all
  material respects, the financial condition and result of operations
  of the Company.

Dated:   March 28, 2003.

/s/ Phelps C. Wood
____________________________________
Phelps C. Wood
President & Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Sections 1350 and is not being filed as a part of the Report or as a
separate disclosure document.




                                     -30-
<PAGE>

                              CERTIFICATION PURSUANT TO
                                18 U.S.C. SECTION 1350,
                              AS ADOPTED PURSUANT TO
                      SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


With respect to the Annual Report of Central Natural Resources, Inc.,
a Delaware corporation (the "Company"), on Form 10-K for the year ended
December 31, 2002 as filed with the Securities and Exchange Commission
on the date hereof (the "Report"), I, Leonard L. Noah, Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. Sections 1350,
as adopted pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002,
that:

  (1) The Report fully complies with the requirements of section 13(a)
  or 15(d) of the Securities Exchange Act of 1934; and

  (2) The information contained in the Report fairly presents, in all
  material respects, the financial condition and result of operations
  of the Company.

Dated:   March 28, 2003.

/s/ Leonard L. Noah
____________________________________
Leonard L. Noah
Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Sections 1350 and is not being filed as a part of the Report or as a
separate disclosure document.


                                     -31-
<PAGE>


              CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
                            KANSAS CITY, MISSOURI


                              Table of Contents


                                                                         Page

Independent Auditors' Report                                               33

Consolidated Financial Statements:

    Consolidated Balance Sheets as of December 31, 2002 and 2001        34-35

    Consolidated Statements of Operations - years ended December 31,
       2002, 2001 and 2000                                                 36

    Consolidated Statements of Stockholders' Equity - years ended
       December 31, 2002, 2001 and 2000                                    37

    Consolidated Statements of Comprehensive Income(Loss) - years
       ended December 31, 2002, 2001 and 2000                              38

    Consolidated Statements of Cash Flows - years ended December 31,
       2002, 2001 and 2000                                                 39

    Notes to Consolidated Financial Statements                          40-48

                                     -32-

<PAGE>

                        INDEPENDENT AUDITORS' REPORT


The Board of Directors
Central Natural Resources, Inc. and Subsidiaries:

We have audited the consolidated financial statements of Central Natural
Resources, Inc. and subsidiaries, as listed in the accompanying table of
contents. 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, 2002 and 2001,
and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.


                                                       KPMG  LLP

Kansas City, Missouri
March 10, 2003,


                                     -33-

<PAGE>

<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Consolidated Balance Sheets

December 31, 2002 and 2001

(amounts in unit dollars)
<CAPTION>
ASSETS                                          2002         2001
                                                __________   __________
<S>                                             <C>          <C>
Current assets:
  Cash and cash equivalents                   $  1,956,795    1,285,926
  Accounts receivable                               22,500      104,882
  Securities maturing within one year,
   at amortized cost (note 2)                    2,994,347    3,998,404
  Notes receivable, current                         65,221       18,084
  Income tax receivable                            206,867            0
  Deferred income taxes (note 5)                     4,204       17,709
  Other                                             11,416       10,013
                                                __________   __________
Total current assets                             5,261,350    5,435,018

Equity securities, at fair value (note 2)          642,637    1,030,491
Notes receivable, noncurrent                             0       65,221
Investment in oil and gas lease                    150,135            0
Other investments                                  350,002      350,002
Deferred income taxes (note 5)                      13,200       71,494

Coal deposits, real estate, equipment
 and leasehold improvements (notes 3 and 4):
  Coal deposits                                  1,602,882    1,602,882
  Mineral rights                                    39,988       39,988
  Surface land                                      25,562       25,562
                                                __________   __________
                                                 1,668,432    1,668,432
  Less accumulated depletion, depreciation
   and amortization                                583,748      581,498
     Net coal deposits, real estate,            __________   __________
      equipment and leasehold improvements       1,084,684    1,086,934
                                                __________   __________
     Total assets                             $  7,502,008    8,039,160

</TABLE>

                                     -34-

<PAGE>

<TABLE>

CENTRAL NATURAL RESOURCES, INC. SUBSIDIARIES
KANSAS CITY, MISSOURI

Consolidated Balance Sheets

December 31, 2002 and 2001

(amounts in unit dollars)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY            2002         2001
                                                _________    _________
<S>                                             <C>          <C>
Current liabilities:
  Accounts payable and accrued expenses             20,279        4,838
  Deferred income-advance oil lease bonus           11,250       47,535
  Federal and state income taxes                         0       46,112
                                                __________   __________
Total current liabilities                           31,529       98,303


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 2001 and 2001                              503,924      503,924
  Treasury Stock-5,000 shares at December
   31, 2002                                        (71,250)           0
  Retained earnings                              6,941,699    7,445,022
  Accumulated other comprehensive income (loss),
   net of deferred taxes of $51,749 in 2002
   and $(4,356) in 2001                             96,106       (8,089)
                                                __________   __________
Total stockholders' equity                       7,470,479    7,940,857

Commitments and contingencies (notes 3,6 and 9)
                                                __________   __________
Total liabilities and stockholders' equity    $  7,502,008    8,039,160
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

                                     -35-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES,INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Consolidated Statements of Operations

Years ended December 31, 2002, 2001 and 2000


(amounts in unit dollars)
<CAPTION>
                                           2002      2001      2000
                                           _________ _________ _________
<S>                                        <C>       <C>       <C>
Operating revenue:
  Coal royalties (note 3)                $    90,000    90,800    94,628
  Oil and gas royalties                      434,227   626,441   592,229
  Oil and other mineral lease rentals
   and bonuses                                89,164    51,858    54,632
                                           _________ _________ _________
    Total operating revenue                  613,391   769,099   741,489

General and administrative
   expenses                                  553,000   513,121   522,082

    Operating income                          60,391   255,978   219,407

Nonoperating income:
  Investment(loss) income (note 2)          (620,647)   85,124 1,063,379
  Gain on sales of real estate                     0     1,106     3,385
  Other                                        2,446     5,048     5,700
                                           _________ _________ _________
    Total nonoperating(loss)income          (618,201)   91,278 1,072,464

    (Loss) earnings before income taxes     (557,810)  347,256 1,291,871

Income taxes (note 5)                       (256,056)  100,960   435,290
                                           _________ _________ _________

    Net(loss)Earnings                    $  (301,754)  246,296   856,581
                                           _________ _________ _________

Earnings(loss)per share - basic
  and diluted                            $     (0.60)     0.49      1.58

Weighted average number of shares of
 common stock outstanding - basic
 and diluted                                 503,603   503,924   543,528

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

                                     -36-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Consolidated Statements of Stockholders' Equity

Years ended December 31, 2002, 2001 and 2000


(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, 1999          $ 753,376   1,631,200  9,423,243      (716,166)   703,946    11,795,599


Net earnings                0           0    856,581             0          0       856,581
Cash dividends
 ($0.88 per
 share)                     0           0   (442,753)            0          0      (442,753)
Purchase of
 205,642 shares
 of common
 stock for
 treasury                   0           0          0    (3,422,085)         0    (3,422,085)

Proceeds from
 options
 exercised on
 4,000 shares               0           0          0       60,188           0        60,188
Net unrealized
 depreciation
 on investments
 available-for-
 sale                       0           0          0           0    (486,491)       (486,491)
Cancellation of
 249,452 shares
 of common
 stock for
 Treasury            (249,452) (1,631,200) (2,197,411) 4,078,063           0               0
                      _______   _________   _________   ________     ________       _________
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
 ($.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)
                    ________   __________ __________    ________      _______        ________
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
                     _______    _________ __________     ________    ________        ________
Balance,
 December
  31, 2002         $ 503,924            0  6,941,699     (71,250)      96,106       7,470,479

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

                                     -37-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Consolidated Statements of Comprehensive Income (Loss)

Years ended December 31, 2002, 2001 and 2000


(amounts in unit dollars)
<CAPTION>
                                   2002         2001         2000
                                   ___________  ___________  ___________
<S>                                <C>          <C>          <C>

Net(loss) earnings             $      (301,754)     246,296      856,581
                                   ___________  ___________  ___________

Other comprehensive income:
 Realized gains and unrealized
  appreciation (depreciation)
  on investments                       134,062     (209,118)     (76,857)
 Income taxes                          (46,922)      73,191       26,900
                                       _______      _______       ______

 Realized gains and unrealized
  appreciation(depreciation) on
  investments, net                      87,140     (135,927)     (49,957)
                                   ___________  ___________  ___________


Less:
 Realized investment(gains)
   losses included in net
   earnings                             26,238     (137,873)    (671,590)
Income taxes                            (9,183)      48,256      235,056
                                   ___________   __________  ___________

                                        17,055      (89,617)    (436,534)
                                   ___________   __________  ___________

                                       104,195     (255,544)    (486,491)
                                   ___________   __________  ___________

    Comprehensive (loss)
     income                     $     (197,559)      20,752      370,090


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

                                     -38-

<PAGE>
<TABLE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Consolidated Statements of Cash Flows

Years ended December 31, 2002, 2001 and 2000


(amounts in unit dollars)
<CAPTION>
                                   2002         2001         2000
                                   ___________  ___________  ___________
<S>                                <C>          <C>          <C>
Cash flows from operating
 activities:
  Net(loss) earnings             $    (301,754)     246,296      856,581

  Adjustments to reconcile net
   earnings(loss)to net cash
   provided by(used in)operating
   activities:
    Depletion, depreciation
     and amortization                    2,250        2,260        2,316
    Gain on sales of real estate             0       (1,106)      (3,385)
    Loss (Gain) on sales of equity
     securities                         26,238     (137,873)    (671,590)
    Impairment charge on
     equity securities                 686,229      274,296            0
    Amortization of premiums and
     discounts of securities, net      (66,491)    (163,417)    (277,727)
    Deferred income taxes               15,694     (117,749)       3,505
    Changes in assets and
     liabilities:
      Accounts receivables and
       other assets                     80,979      (82,331)      19,779
      Accounts payable and accrued
       expenses                         15,441       (6,108)     (15,116)
      Deferred oil lease bonus         (36,103)      47,353            0
      Federal and state income
       taxes                          (252,979)     (16,413)      20,514

                                   ___________  ___________  ___________
 Net cash provided by
  (used in)operating
    activities                         169,504       45,208      (65,123)
                                   ___________  ___________  ___________
Cash flows from investing
 activities:
  Proceeds from note receivable         18,084       16,702       15,402
  Proceeds from matured/called
   investment debt securities       24,000,000   20,000,000   26,972,217
  Purchases of investment debt
   securities                      (22,928,535) (19,864,798) (23,194,798)
  Proceeds from sales of land                0        1,125        3,424
  Purchases of equity securities      (449,827)    (478,972)  (1,314,348)
  Proceeds from sales of equity
   securities                          284,597      509,085    1,342,367
  Purchases of other investments      (150,135)    (250,000)     100,002
                                   ___________  ___________  ___________
Net cash provided by (used in)
 investing activities                  774,184      (66,858)   3,724,262
                                   ___________  ___________  ___________

Cash flows from financing
 activities:
  Dividends paid                      (201,569)    (440,934)    (442,753)
  Purchase of common stock for
   treasury                            (71,250)           0   (3,422,085)
  Proceeds from exercised options            0            0       60,188
                                   ___________  ___________  ___________
   Net cash used in financing
    activities                        (272,819)    (440,934)  (3,804,650)
                                   ___________  ___________  ___________

   Net increase (decrease) in cash
    and cash equivalents               670,869     (462,584)    (145,511)

Cash and cash equivalents,
 beginning of year                   1,285,926    1,748,510    1,894,021
                                   ___________  ___________  ___________
Cash and cash equivalents,
 end of year                     $   1,956,795    1,285,926    1,784,510
                                   ___________  ___________  ___________

Income taxes paid during year    $      51,348      235,630      375,700

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

                                     -39-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001 and 2000

(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.

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. Investment 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, 2001 included $82,382 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.

                                     -40-
<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000

Depreciation, Depletion, and Amortization

Equipment, which is fully depreciated at December 31, 2002,
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.

Coal, Oil, and Gas Income

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 (see note 3). 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).

Oil and Gas Investments

The Company's Board of Directors adopted the use of the the successful
efforts method of accounting for oil and gas exploration activities.

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 is recognized in
income in the period that includes the tax rate change.

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>
                                  2002        2001        2000
                                  __________  __________  __________
         <S>                      <C>         <C>         <C>
         Net Earnings:
           As reported          $   (301,754)    246,296     856,581

           Pro forma                (321,514)    233,196     849,784

         Earnings per share:
          Basic and diluted
           as reported                 (0.60)       0.49        1.58

           Pro forma            $      (0.64)       0.46        1.56
</TABLE>


                                     -41-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000

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 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.

Earnings and Dividends Per Share

Effective December 31, 2000, the authorized number of shares were
increased to a total of 2,600,000 shares-2,500,000 shares of common
stock of $1.00 par value, and 100,000 shares of preferred stock of
$1.00 par value.

The preferred stock authorization does not explicitly
dictate the dividend amounts or preferences, liquidation preferences,
voting rights, participation features, or other characteristics typical
of preferred stock. This authorization is referred to as a blank check
preferred, which at a later date the board of directors can approve the
issuance of and, at that time, determine the specific characteristics of
the preferred stock.

Basic earnings per share are based on the weighted average number of
common shares outstanding. Dilutive earnings per share are based on
the weighted average number of common shares and dilutive common
equivalent shares outstanding during the year.

Stock options are the only common stock equivalents, however, their
effect was not dilutive in the calculation of earnings (loss) per
share for the years ended December 31, 2002, 2001, and 2000. 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 only one segment-energy. The energy
segment consists of the leasing of real properties and mineral
interests in the midwestern and southern United States. The Company
has no foreign revenues. Coal royalties in 2002 were received from a
single customer, and in 2001 and 2000 were received from two
customers, with 99%, and 95%, being received from the largest customer,
respectively. Oil and mineral lease bonuses and rentals were received
from six, three, and four customers in 2002, 2001, and 2000, with
96%, 91%, and 56% being recognized from the largest customer,
respectively. Oil and gas royalties were received from fifteen,
fourteen, and twelve customers in 2002, 2001, and 2000, with 89% being
received from three customers in 2002 and, 55%, and 62% being received
from one customer, in 2001 and 2000, respectively.

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.


                                     -42-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000

(2) 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, 2002 and 2001 are presented below. Substantially
all equity securities represent common stocks of domestic
corporations.

<TABLE>
<CAPTION>
                                    Gross       Gross
                                    unrealized  unrealized
                        Amortized   holding     holding     Fair
2002                    cost        gains       losses      value
__________________      __________  __________  __________  __________
<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>

<TABLE>
<CAPTION>
2001
_________________
<S>                     <C>         <C>         <C>         <C>
Held-to-maturity-
  U. S. government
   agency securities  $ 3,998,404            0        (44)   3,998,360

Available-for-sale-
  Equity securities   $ 1,042,936       52,497    (64,942)   1,030,491
</TABLE>


                                     -43-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000

At December 31, 2002 and 2001, 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.

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


<TABLE>
<CAPTION>
                                    2002       2001        2000
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Interest                           $   81,346     213,386     375,156
Dividends                              10,474       8,161      16,633
Gross gains on sales of equity
 securities                            50,132     206,466     773,868
Gross losses on sales of equity
 securities                           (76,370)    (68,593)   (102,278)
Impairment charge on equity
 securities                          (686,229)    (274,296)         0
                                    __________  __________  __________
                                   $ (620,647)     85,124   1,063,379
</TABLE>

(3) Coal Deposits

The rights to 14,000 acres of coal deposits totaling
approximately 84,000,000 tons of coal in place (of which from
50% to 90% could be expected to be recoverable) are leased under
an agreement which extends through 2009. The agreement provides
for minimum annual royalties of $90,000. Coal deposits
aggregating approximately 92,000,000 tons in place with a net
carrying value of approximately $710,000 at December 31, 2002
are not presently leased or producing coal in commercial
quantities.

(4) Mineral Rights

At December 31, 2002 and 2001, the Company owned approximately
64,000 acres of mineral rights in Missouri, Kansas, Oklahoma,
Arkansas, Louisiana, and Texas.

(5) Income Taxes

Total income taxes for the years ended December 31, 2002, 2001,
and 2000 were allocated as follows:


<TABLE>
<CAPTION>
                                    2002        2001        2000
                                    __________  __________  __________
<S>                                 <C>         <C>         <C>
Operations                          $ (256,056)    100,960     435,290
Stockholders' equity, for unrealized
 appreciation (depreciation) on
 equity securities                      56,105    (121,447)   (261,958)
                                    __________  __________  __________
                                    $ (199,951)    (20,487)    173,332
</TABLE>

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

<TABLE>
<CAPTION>
                                 2002      2001      2000
                                 ________  ________  ________
<S>                              <C>       <C>       <C>
Federal                        $ (182,374)   87,280   376,481
State                             (73,682)   13,680    58,809
                                 ________  ________  ________
Total                          $ (256,056)  100,960   435,290
</TABLE>

                                     -44-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000

Total income tax expense for 2002, 2001, and 2000 includes
deferred income tax expense (benefit) of $15,694, $(117,749),
and $3,505, respectively.

Income tax expense (benefit) relating to operations has
been provided at effective rates of (45.9)%, 29.1%, and 33.7% for
the years ended December 31, 2002, 2001, and 2000, 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>
                                          2002   2001   2000
                                          _____  _____  _____
<S>                                       <C>    <C>    <C>
Expected statutory tax rate               34.0%  34.0%  34.0%
State income taxes, net of federal
 income tax effect                        (8.6)   2.6    2.9
Depletion                                 (4.0)  (9.6)  (2.5)
Other, net                                 0.7    2.1   (0.7)
                                          _____  _____  _____
Effective tax rate                       (45.9)% 29.1%  33.7%
</TABLE>


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, 2002 and 2001 are presented below:

<TABLE>
<CAPTION>
Deferred tax assets:                        2002      2001
                                            ________  ________
<S>                                         <C>       <C>
Impairment charge on equity securities     $ 103,020   102,493
Write-down of coal deposits                   45,095    45,095
Coal development costs                        31,929    31,929
Deferred income-advance oil lease
 bonus                                         4,204    17,709
Land sales                                    13,319    13,319
Other                                          6,635     6,828
Unrealized depreciation on available-
 for-sale securities                               0     4,356
                                            ________  ________
                                             204,202   221,729

Less valuation allowance                     (45,095)  (45,095)
                                            ________  ________
Deferred tax assets                          159,107   176,634
                                            ________  ________
</TABLE>
<TABLE>
<CAPTION>
Deferred tax  liabilities:
<S>                                         <C>       <C>
Depletion                                    (89,954)  (87,431)
Unrealized appreciation  on available-
 for-sale securities                         (51,749)        0
                                            ________  ________
Deferred tax liabilities                    (141,703)  (87,431)

Net deferred tax asset (liability)        $   17,404    89,203
</TABLE>

(6) 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 $9,934, $13,182, and $13,182 for
the years ended December 31, 2002, 2001, and 2000,
respectively.

                                     -45-

<PAGE>

CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000

(7) 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 2.

(8) 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 both 2002 and 2001, 6,000 nonqualified stock
options were granted under this plan.

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
nonemployee 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 April 2001, 2,000 incentive stock options were granted under
this plan. 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. All incentive
stock options have a term of ten years and shall become
exercisable in four annual installments.

A summary of stock option activity, including incentive stock
options, during 2002, 2001, and 2000 is as follows:


                                     -46-
<PAGE>


CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI

Notes to Consolidated Financial Statements

December 31, 2002, 2001, and 2000



                                           Year Ended
                       ____________________________________________________
                            2002              2001              2000
                       ________________ _________________ _________________
                               Weighted          Weighted          Weighted
                               average           average           average
                               exercise          exercise          exercise
                      Options  price    Options  price    Options  price

Options outstanding,
 beginning of period  14,000  $17.00     6,000   17.00     4,000   15.05
Granted                6,000   16.75     8,000   17.00     6,000   17.00
Exercised                                    0       0    (4,000)  15.05
Forfeited                                    0       0         0       0
                       _____             _____            ______

Options outstanding,
  end of period       20,000   16.93    14,000   17.00     6,000   17.00

Options exercisable
  end of period       18,500   16.92    12,000   17.00     6,000   17.00


Exercise prices for options outstanding as of December 31, 2002
were $16.75 (6,000 shares) and $17.00 (14,000 shares). Exercise
prices for options exercisable as of December 31, 2001 were
$17.00 (14,000 shares).

The per share weighted average fair value of stock options
granted during 2002, 2001 and 2000 was $1.50, $1.65 and $1.74
respectively, on the date of grant using the Black Scholes
option-pricing model with the following weighted average
assumptions: 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;
and 2000-expected dividend yield of 6.08%, expected volatility
of 20.07%, risk-free interest rate of 5.75%, and anexpected life
of five years.

(9)	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.

On March 6, 2000, the Company consummated the resolution of
litigation and other disputes with a former director and other
stockholders, which arose in connection with the election of
directors at the Company's 1999 Annual Meeting, 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 in
the Company owned by the plaintiffs, totaling 194,462 sharesfor
a purchase price of $16.75 per share, or aggregate consideration
of $3,257,238. The source of the funds used was available liquid
assets of the Company previously invested in U. S. government agency
obligations.


                                     -47-


(10) Supplementary Quarterly Data (Unaudited)

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

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


                                                   2001
                                 ______________________________________
                                  First     Second     Third    Fourth
                                 quarter    quarter   quarter   quarter
                                 _______    _______   _______   _______

          Operating revenue   $  203,528    244,994   176,221   144,356
          Investment Income       79,046     60,066   (64,231)   10,243
          Net earnings            85,677    125,871    17,946    16,802
          Earnings per share
           basic and diluted        0.17       0.25      0.04      0.03
                                 _______    _______   _______   _______


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.

(11) Subsequent Event

On February 28, 2003, a wholly owned subsidiary of the Company
purchased a working interest in certain oil and gas operating fields
in south Texas.  A two percent working interest was purchased for
$1,080,000. This transaction gives the subsidiary a fee interest in
the property and allows the subsidiary to be an operating party for
as long as there is production.


                                      -48-