Exhibit 10.1

                                  March 3, 2006

                              RESTATED AND AMENDED
                              LETTER LOAN AGREEMENT


The Beard Company
5600 N. May Avenue, Suite 320
Oklahoma City, Oklahoma 73112

Gentlemen:

This Restated and Amended Letter Loan Agreement supersedes and replaces the
previous Restated and Amended Letter Loan Agreement between the parties hereto
dated March 26, 2004, as amended by the parties on June 25, 2004, and as further
restated and amended by the parties on April 1, 2005.

This Restated and Amended Letter Loan Agreement sets forth the terms and
conditions under which we have agreed to continue $2,782,900.59 of the loan
previously made to you in the principal amount of $3,000,000.00 (the "Loan"),
which is no longer a revolving loan. Accordingly, as payments are made on the
Loan, additional advances will no longer be permitted.

1. LENDER:        The William M. Beard and Lu Beard 1988 Charitable
                  Unitrust (the "Unitrust").

2. BORROWER:      The Beard Company.

3. AMOUNT:        $2,782,900.59. The Loan shall be evidenced by a
                  promissory note in the amount of $2,782,900.59 dated February
                  14, 2005* (the "Note"). The Borrower shall be permitted to
                  make prepayments without penalty up to the amount of the
                  Note.
_______________

*     The Note (which has been styled as the "SECOND REPLACEMENT RENEWAL AND
      EXTENSION PROMISSORY NOTE") has been dated February 14, 2005 because it
      was on that date that all accrued interest on a former note was paid and a
      principal repayment was made which reduced the principal balance under the
      Loan Agreement from $2,785,000.00 down to $2,782,900.59.

4. INTEREST RATE: A fixed rate of 10.00%.

5. REPAYMENT:     The outstanding principal balance (the "Indebtedness")
                  plus unpaid accrued interest shall be due
                  and payable on April 1, 2008.

6. COLLATERAL:    The Lender, together with certain Note Holders, has
                  previously filed a Deed of Trust, Assignment of Production,
                  and Financing Statement of record (a "Lien") on Borrower's
                  working and overriding royalty interests in the McElmo Dome
                  Unit in Montezuma and Dolores Counties of Colorado (the
                  "Interests"). Although the other Note Holders have been
                  repaid in full as of this date, the Lien has not been released
                  even though such Note Holders no longer have an interest
                  therein. Moreover, on May 21, 2004, Boatright Family LLC
                  ("Boatright") made a loan to the Lender, and a new Deed
                  of Trust, Assignment of Production, and Financing Statement
                  has been placed of record which has placed a Lien on both
                  Lender's and Borrower's Interests in the McElmo Dome Unit and
                  will determine the relative rights as to proceeds under the
                  Deed of Trust as between Lender and Boatright.

7. COVENANT:      Until the Indebtedness has been paid in full, the Borrower
                  will not sell, transfer, convey or otherwise dispose of, all
                  or a substantial portion of its assets now owned or hereafter
                  acquired, whether pursuant to a single transaction or a
                  series of transactions, and the Borrower will not merge or
                  consolidate with any person or entity or permit any such
                  merger or consolidation with the Borrower. This paragraph
                  specifically excludes asset sales incurred in the normal
                  course of business.

8. EVENTS OF
   DEFAULT:       If any of the following conditions or events ("Events of
                  Default") shall occur and be continuing:

                  A.    Failure of the Borrower to pay when due any amounts,
                        including principal or interest on the Note (whether at
                        the stated maturity, upon acceleration or otherwise).

                  B.    Any Event of Default as specified in the Note

                  C.    Any default or breach in the performance of any
                        covenant, obligation, representation, warranty or
                        provision contained in this Letter Loan Agreement or in
                        the Note or in any other note or obligation of Borrower
                        to the Unitrust.

                  D.    The Borrower shall: (i) apply for or consent to the
                        appointment of a custodian, receiver, trustee or
                        liquidator of the Borrower or any of its properties,
                        (ii) admit in writing the inability to pay, or generally
                        fail to pay, its debts when they come due, (iii) make a
                        general assignment for the benefit of creditors, (iv)
                        commence any proceeding relating to the bankruptcy,
                        reorganization, liquidation, receivership,
                        conservatorship, insolvency, readjustment of debt,
                        dissolution or liquidation of the Borrower, or if
                        corporate action should be taken by the Borrower for the
                        purpose of effecting any of the foregoing, (v) suffer
                        any such appointment or commencement of a proceeding as
                        described in clause (i) or (iv) of this paragraph, which
                        appointment or proceeding is not terminated or
                        discharged within 60 days, or (vi) become insolvent.

      THEN upon the occurrence of any Event of Default described in the
      foregoing paragraphs the unpaid principal amount of and accrued interest
      on the Loan shall automatically become immediately due and payable,
      without presentment, demand, protest or other requirements of any kind,
      all of which are hereby expressly waived by Borrower.

If the foregoing terms and conditions are acceptable to you, please acknowledge
your agreement by signing below and returning one copy of this Letter Loan
Agreement to us.

Sincerely,

LENDER:

THE WILLIAM M. BEARD AND LU BEARD
1988 CHARITABLE UNITRUST

   /s/William M. Beard                            /s/Lu Beard
----------------------------                -------------------------
William M. Beard, Trustee                   Lu Beard, Trustee


Accepted effective this 3rd day of March, 2006.

BORROWER:

THE BEARD COMPANY

    /s/Herb Mee, Jr.
---------------------------
Herb Mee, Jr., President