UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the period ended March 31, 2003

                                       or

    [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934


                         Commission File Number 1-12396

                                THE BEARD COMPANY
             (Exact name of registrant as specified in its charter)


           Oklahoma                                         73-0970298
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

                           Enterprise Plaza, Suite 320
                              5600 North May Avenue
                          Oklahoma City, Oklahoma         73112
               (Address of principal executive offices) (Zip Code)



Registrant's telephone number, including area code:  (405) 842-2333

     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  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock as of April 30, 2003.


                   Common Stock $.001333 par value - 1,828,845

<PAGE>
                                THE BEARD COMPANY

                                      INDEX


PART I.  FINANCIAL INFORMATION                                             Page

Item 1. Financial Statements...............................................   3
      Balance Sheets - March 31, 2003 (Unaudited) and
           December 31, 2002...............................................   3
      Statements of Operations - Three Months
           ended March 31, 2003 and 2002 (Unaudited).......................   4
      Statements of Shareholders' Equity - Year ended December 31, 2002
           and Three Months ended March 31, 2003 (Unaudited)...............   5
      Statements of Cash Flows - Three Months ended
           March 31, 2003 and 2002 (Unaudited).............................   6
      Notes to Financial Statements (Unaudited)............................   8
Item 2. Management's  Discussion and Analysis of Financial Condition and
           Results of Operations...........................................  15
Item 3. Quantitative and Qualitative Disclosures About Market Risk.........  21
Item 4. Controls and Procedures............................................  22

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings..................................................  22
Item 2. Changes in Securities and Use of Proceeds..........................  22
Item 6. Exhibits and Reports on Form 8-K...................................  23
Signatures.................................................................  24
Certifications.............................................................  25

<PAGE>

<TABLE>
                               THE BEARD COMPANY AND SUBSIDIARIES
                                         Balance Sheets
<CAPTION>
                                                                     March 31,      December 31,
                                 Assets                                 2003            2002
                                 ------                             ------------    ------------
<S>                                                                 <C>             <C>
Current assets:
       Cash and cash equivalents                                    $    50,000     $    79,000
       Accounts receivable, less allowance for doubtful
          receivables of $80,000 in 2003 and 2002                       239,000         133,000
       Prepaid expenses and other assets                                 21,000          20,000
       Assets of discontinued operations held for resale                341,000         343,000
                                                                    ------------    ------------
                     Total current assets                               651,000         575,000
                                                                    ------------    ------------
Notes receivable                                                         30,000          30,000

Investments and other assets                                             74,000          67,000

Property, plant and equipment, at cost                                1,801,000       1,794,000
       Less accumulated depreciation, depletion and amortization      1,278,000       1,259,000
                                                                    ------------    ------------
                     Net property, plant and equipment                  523,000         535,000
                                                                    ------------    ------------
Intangible assets, at cost                                              180,000         114,000
       Less accumulated amortization                                     83,000          57,000
                                                                    ------------    ------------
                     Net intangible assets                               97,000          57,000
                                                                    ------------    ------------
                                                                    $ 1,375,000     $ 1,264,000
                                                                    ============    ============

                        Liabilities and Shareholders' Equity (Deficiency)

Current liabilities:
       Trade accounts payable                                       $    85,000     $   138,000
       Accrued expenses                                                 184,000         177,000
       Short-term debt                                                  300,000         300,000
       Short-term debt - related entities                                25,000         111,000
       Current maturities of long-term debt                               8,000           8,000
       Liabilities of discontinued operations held for resale           124,000         125,000
                                                                    ------------    ------------
                     Total current liabilities                          726,000         859,000
                                                                    ------------    ------------
Long-term debt less current maturities                                1,416,000         853,000

Long-term debt - related entities                                     3,511,000       3,388,000

Other long-term liabilities                                             108,000         108,000

Redeemable preferred stock of $100 stated value;
       5,000,0000 shares authorized;
       27,838 shares issued and
       outstanding in 2002 (note 4)                                           -         889,000

Shareholders' equity (deficiency):
       Convertible preferred stock of $100 stated value;
         5,000,000 shares authorized; 27,838 shares issued
         and outstanding 2003 (note 4)                                  889,000               -
       Common stock of $.001333 par value per share; 7,500,000
          shares authorized; 2,123,898 shares issued
          and outstanding in 2003 and 2002                                3,000           3,000
       Capital in excess of par value                                38,263,000      38,207,000
       Accumulated deficit                                          (41,680,000)    (41,182,000)
       Accumulated other comprehensive loss                             (15,000)        (15,000)
       Treasury stock, 295,053 shares, at cost, in 2003 and 2002     (1,846,000)     (1,846,000)
                                                                    ------------    ------------
                     Total shareholders' equity (deficiency)         (4,386,000)     (4,833,000)
                                                                    ------------    ------------
Commitments and contingencies (note 7)
                                                                    $ 1,375,000     $ 1,264,000
                                                                    ============    ============
</TABLE>

See accompanying notes to financial statements.

<TABLE>
                               THE BEARD COMPANY AND SUBSIDIARIES
                                    Statements of Operations
                                           (Unaudited)
<CAPTION>
                                                                    For the Three Months Ended
                                                                    --------------------------
                                                                     March 31,       March 31,
                                                                       2003            2002
                                                                    ------------    ----------
<S>                                                                 <C>             <C>
Revenues:
      Coal reclamation                                              $   42,000      $    1,000
      Carbon dioxide                                                   127,000          86,000
      China                                                                  -               -
      e-Commerce                                                        25,000               -
      Other                                                                  -           3,000
                                                                    -----------     -----------
                                                                       194,000          90,000
                                                                    -----------     -----------
Expenses:
      Coal reclamation                                                 110,000         119,000
      Carbon dioxide                                                    33,000          31,000
      China                                                                  -               -
      e-Commerce                                                             -               -
      Selling, general and administrative                              423,000         253,000
      Depreciation, depletion and amortization                          46,000          23,000
      Other                                                             15,000          15,000
                                                                    -----------     -----------
                                                                       627,000         441,000
                                                                    -----------     -----------
Operating profit (loss):
      Coal reclamation                                                 (89,000)       (147,000)
      Carbon dioxide                                                    84,000          47,000
      China                                                           (162,000)              -
      e-Commerce                                                        (8,000)        (36,000)
      Other, primarily corporate                                      (258,000)       (215,000)
                                                                    -----------     -----------
                                                                      (433,000)       (351,000)
Other income (expense):
      Interest income                                                        -          27,000
      Interest expense                                                (128,000)        (67,000)
      Equity in net earnings (loss) of unconsolidated affiliates        43,000         (31,000)
      Gain on sale of assets                                                 -           9,000
                                                                    -----------     -----------
Loss from continuing operations before income taxes                   (518,000)       (413,000)

Income tax benefit (expense) (note 6)                                        -               -
                                                                    -----------     -----------
Loss from continuing operations                                       (518,000)       (413,000)

Earnings (loss) from discontinued operations (note 3)                   20,000         (48,000)
                                                                    -----------     -----------
Net loss                                                            $ (498,000)     $ (461,000)
                                                                    ===========     ===========

Net earnings (loss) per average common share outstanding:
    Basic and diluted:
         Loss from continuing operations                            $    (0.28)     $    (0.22)
         Earnings (loss) from discontinued operations                     0.01           (0.03)
                                                                    -----------     -----------
         Net loss                                                   $    (0.27)     $    (0.25)
                                                                    ===========     ===========

Weighted average common shares outstanding - basic and diluted       1,829,000       1,829,000
                                                                    ===========     ===========
</TABLE>

See accompanying notes to financial statements.

<TABLE>
                                                 THE BEARD COMPANY AND SUBSIDIARIES
                                           Statements of Shareholders' Equity (Deficiency)
<CAPTION>
                                                                                              Accumulated                 Total
                                                                   Capital in                    Other                 Shareholders'
                                              Preferred  Common    Excess of    Accumulated  Comprehensive  Treasury      Equity
                                                Stock     Stock    Par Value      Deficit       Income       Stock     (Deficiency)
                                                -----     -----    ---------      -------       ------       -----     ------------
<S>                                           <C>        <C>      <C>           <C>            <C>        <C>           <C>
Balance, December 31, 2001                    $       -  $ 3,000  $ 38,081,000  $(36,568,000)  $(14,000)  $(1,846,000)  $(  344,000)

     Net loss                                         -        -             -    (4,614,000)         -             -    (4,614,000)
     Comprehensive income:
       Foreign currency translation
       adjustment                                     -        -             -             -     (1,000)            -        (1,000)
                                                                                                                        -----------
  Comprehensive loss                                  -        -             -             -          -             -    (4,615,000)
                                                                                                                        -----------
  Issuance of stock warrants                          -        -        11,000             -          -             -        11,000

  Reservation of shares pursuant to deferred
       compensation plan                              -        -       115,000             -          -             -       115,000
                                              ---------  -------  ------------  ------------   --------    ----------   -----------

Balance, December 31, 2002                            -    3,000    38,207,000   (41,182,000)   (15,000)   (1,846,000)   (4,833,000)

     Net loss, three months ended March 31, 2003
     (unaudited)                                      -        -             -      (498,000)         -             -      (498,000)
     Comprehensive income:
       Foreign currency translation
       adjustment (unaudited)                         -        -             -             -          -             -             -
                                                                                                                        -----------
  Comprehensive loss (unaudited)                      -        -             -             -          -             -      (498,000)
                                                                                                                        -----------
  Expiration of mandatory redemption
       option for preferred stock (unaudited)   889,000        -             -             -          -             -       889,000

  Issuance of stock warrants (unaudited)              -        -        12,000             -          -             -        12,000

  Reservation of shares pursuant to deferred
       compensation plan (unaudited)                  -        -        44,000             -          -             -        44,000
                                              ---------  -------  ------------  ------------   --------   -----------   -----------
Balance, March 31, 2003 (unaudited)           $ 889,000  $ 3,000  $ 38,263,000  $(41,680,000)  $(15,000)  $(1,846,000)  $(4,386,000)
                                              =========  =======  ============  ============   ========   ===========   ===========
</TABLE>

See accompanying notes to financial statements.

<TABLE>
                       THE BEARD COMPANY AND SUBSIDIARIES
                            Statements of Cash Flows
                                   (Unaudited)
<CAPTION>
                                                            For the Three Months Ended
                                                            --------------------------
                                                           March 31, 2003 March 31, 2002
                                                           -------------- --------------
<S>                                                          <C>           <C>
Operating activities:
     Cash received from customers                            $  69,000     $ 150,000
     Cash paid to suppliers and employees                     (543,000)     (317,000)
     Interest received                                               -        22,000
     Interest paid                                             (66,000)       (5,000)
     Operating cash flows of discontinued operations            (5,000)     (158,000)
                                                             ----------    ----------
          Net cash used in operating activities               (545,000)     (308,000)
                                                             ----------    ----------

Investing activities:
     Acquisition of property, plant and equipment              (12,000)       (5,000)
     Acquisition of intangibles                                      -       (11,000)
     Proceeds from sale of assets                                1,000        18,000
     Proceeds from sale of assets of discontinued operations    45,000        44,000
     Investment in and advances to fifty percent-owned
        subsidiary in Mexico                                    (1,000)       (4,000)
     Investment in and advances to fifty percent-owned
        subsidiary in China                                     (9,000)     (169,000)
     Advances for notes receivable                                   -        (2,000)
     Payments on notes receivable                                    -        20,000
     Other                                                      45,000        36,000
                                                             ----------    ----------
          Net cash provided by (used in) investing activities   69,000       (73,000)
                                                             ----------    ----------

Financing activities:
     Proceeds from term notes                                  850,000             -
     Payments on line of credit and term notes                (302,000)       (2,000)
     Proceeds from related party debt                          157,000       370,000
     Payments on related party debt                           (192,000)       (5,000)
     Capitalized costs associated with issuance of
       subordinated debt                                       (66,000)            -
                                                             ----------    ----------
          Net cash provided by financing activities            447,000       363,000
                                                             ----------    ----------

Net decrease in cash and cash equivalents                      (29,000)      (18,000)

Cash and cash equivalents at beginning of period                79,000        55,000
                                                              ---------    ----------

Cash and cash equivalents at end of period                   $  50,000     $  37,000
                                                             ==========    ==========
</TABLE>

Continued

<TABLE>
                       THE BEARD COMPANY AND SUBSIDIARIES
                            Statements of Cash Flows
                                   (Unaudited)

Reconciliation of Net loss to Net Cash Used in Operating Activities
<CAPTION>
                                                            For the Three Months Ended
                                                           -----------------------------
                                                           March 31, 2003 March 31, 2002
                                                           -------------- --------------
<S>                                                          <C>           <C>
Net loss                                                     $(498,000)    $(461,000)
Adjustments to reconcile net loss to net cash
 used in operating activities:
     Depreciation, depletion and amortization                   46,000        23,000
     Depreciation, depletion and amortization of
       discontinued operations                                       -         1,000
     Gain on sale of assets                                          -       (11,000)
     Gain on sale of assets of discontinued operations         (45,000)      (36,000)
     Equity in operations of unconsolidated affiliates         (43,000)       36,000
     Non cash compensation expense                              57,000             -
     Net cash used by discontinued operations offsetting
       accrued impairment loss                                       -        (4,000)
     (Increase) decrease in accounts receivable, prepaid
        expenses andother current assets                       (66,000)        6,000
     Decrease in inventories                                         -        56,000
     Increase in accounts payable, accrued
        expenses and other liabilities                           4,000        82,000
                                                             ----------    ----------
     Net cash used in operating activities                   $(545,000)    $(308,000)
                                                             ==========    ==========
</TABLE>

See accompanying notes to financial statements.


                       THE BEARD COMPANY AND SUBSIDIARIES
                          Notes to Financial Statements

                             March 31, 2003 and 2002
                                   (Unaudited)

(1)  Summary of Significant Accounting Policies
---  ------------------------------------------
     Basis of Presentation
     ---------------------
     The accompanying  financial statements and notes thereto have been prepared
     pursuant  to the rules  and  regulations  of the  Securities  and  Exchange
     Commission.   Accordingly,   certain   disclosures   normally  prepared  in
     accordance  with  accounting  principles  generally  accepted in the United
     States have been omitted.  The accompanying  financial statements and notes
     thereto  should  be read  in  conjunction  with  the  audited  consolidated
     financial statements and notes thereto included in The Beard Company's 2002
     annual report on Form 10-K.

     The  accompanying  financial  statements  include the accounts of The Beard
     Company and its wholly and  majority-owned  subsidiaries in which The Beard
     Company has a controlling  financial  interest  ("Beard" or the "Company").
     Subsidiaries  and  investees in which Beard does not  exercise  control are
     accounted  for  using  the  equity  method.  All  significant  intercompany
     transactions have been eliminated in the accompanying financial statements.

     The  financial  information  included  herein is unaudited;  however,  such
     information reflects solely normal recurring  adjustments which are, in the
     opinion of management, necessary for a fair presentation of the results for
     the interim periods presented.

     The results of operations for the three-month  period ended March 31, 2003,
     are not  necessarily  indicative of the results to be expected for the full
     year.

     The  Company's  current  significant  operations  are within the  following
     segments: (1) the Coal Reclamation ("Coal") Segment, (2) the Carbon Dioxide
     ("CO2") Segment,  (3) the China ("China")  Segment,  and (4) the e-Commerce
     ("e-Commerce") Segment.

     The Coal  Segment is in the business of  operating  coal fines  reclamation
     facilities  in the U.S. and provides  slurry pond core  drilling  services,
     fine coal laboratory  analytical services and consulting services.  The CO2
     Segment  consists  of the  production  of CO2 gas.  The  China  Segment  is
     continuing to pursue  environmental  opportunities in China focusing on the
     installation  and  construction of facilities which utilize the proprietary
     composting  technology  of Real Earth United States  Enterprises,  Inc. The
     e-Commerce Segment consists of a 71%-owned  subsidiary whose activities are
     aimed  at  developing  business   opportunities  to  leverage  starpay.com,
     l.l.c.'s  intellectual  property  portfolio of Internet payment methods and
     security technologies.

     As  discussed  in note 3: (1) In 1999,  the  Company's  Board of  Directors
     adopted a formal  plan to  discontinue  its  interstate  travel  facilities
     business (the "ITF" Segment); (2) in 1999 the Management Committee of North
     American Brine Resources  ("NABR")  adopted a plan to discontinue its brine
     extraction/iodine  manufacturing  business  which  comprised  the Company's
     ("BE/IM")  Segment;  and (3) in May 2001 the fixed assets of the  50%-owned
     company (accounted for as an equity investment) involved in the Natural Gas
     Well  Servicing  ("WS")  Segment were sold and in August 2001,  the Company
     ceased pursuing opportunities in Mexico and the segment was discontinued.

     Investments
     -----------
     The Company owns a 50% interest in ABT-Beard, L.L.C.  ("ABT-Beard"),  which
     was  pursuing  environmental  opportunities  in  China.  ABT-Beard  had  no
     revenues for either the first quarter of 2003 or 2002.  ABT-Beard  incurred
     losses of $9,000  and  $146,000  for the  first  quarter  of 2003 and 2002,
     respectively.  As a result of a  controversy  which  developed  between the
     Company  and its  partner in  ABT-Beard  and the  inability  to resolve the
     differences, the Company filed suit against its partner in November of 2002
     to terminate the business relationship. Due to the uncertainties associated
     with this  litigation,  the Company fully  impaired its  investment and all
     receivables  associated with the partnership in the fourth quarter of 2002.
     See notes 2 and 7 below.

     Impact of Recently Issued Accounting Standards Not Yet Adopted
     --------------------------------------------------------------
     In September 2001, the FASB issued Statement No. 143,  Accounting for Asset
     Retirement   Obligations.   Statement   No.  143  applies  to  the  initial
     measurement and subsequent  accounting for obligations  associated with the
     sale, abandonment, or other type of disposal of long-lived tangible assets.
     The statement  requires that asset retirement  obligations be recognized at
     fair value when the obligation is incurred.

     The Company has adopted FASB  Statements No. 143 effective  January 1, 2003
     for the fiscal year ended December 31, 2003 and the impact is not material.

     Reclassifications
     -----------------
     Certain  2002  balances  have  been  reclassified  to  conform  to the 2003
     presentation. As described in note 3, the Company discontinued three of its
     segments.   As  a  result  the  2002   statement  of  operations  has  been
     reclassified to reflect the segments' operations as discontinued.

(2)  Ability to Fund Operations and Continue as a Going Concern
---  ----------------------------------------------------------
     Overview
     --------
     The  accompanying  financial  statements  have been prepared based upon the
     Company's belief that it will continue as a going concern. Despite the fact
     that the Company's  revenues from  continuing  operations  have declined in
     each of the last four years and the Company has incurred  operating  losses
     and negative cash flows from operations during each of the last five years,
     the  Company is of the  belief (i) that it will  commence a project in both
     its Coal  Segment  and its  China  Segment  during  2003 and (ii)  that the
     long-awaited  Settlement in the McElmo Dome  litigation will be received in
     the  May-July  time frame of this year.  Receipt of the  Settlement  in the
     expected time frame would ensure that 2003 will be a profitable  year while
     at  the  same  time  materially   enhancing  the  Company's  liquidity  and
     bolstering  its balance sheet  ratios.  Meanwhile,  the Company  expects to
     finalize  negotiations  currently  in  progress  on a major  coal  project,
     including the financing  thereof,  which would ensure that its Coal Segment
     will  become  profitable  beginning  in  late  2003  or  early  2004.  (See
     Additional  Details  below).  Negotiations  are  also  underway  for  a new
     composting project in China and the financing  therefor.  In addition,  the
     Company finalized its first licensing arrangement in its e-Commerce Segment
     in March of 2003.  Although the e-Commerce  licensing  arrangement will not
     make the segment profitable this year, the Company believes the arrangement
     has the potential to make the segment profitable in 2004 or 2005.

     During the 12 months ended  December  31, 2002 and through  March 31, 2003,
     the Company has taken a number of steps to reduce its  negative  cash flow.
     The Company's  Chairman and President have deferred a portion of their base
     salary  into the  Company's  Deferred  Stock  Compensation  Plan  (the "DSC
     Plan").  The  Company's  outside  directors  have  deferred  all  of  their
     directors'  fees into such Plan.  The President of Beard  Technologies  has
     deferred a portion of his salary until the  Settlement  has  occurred.  The
     Company has suspended its 100% matching  contribution (up to a cap of 5% of
     gross salary) under its 401(k) Plan.  All of these measures have helped and
     will  continue to help until the  Settlement  has  occurred.  The  negative
     result has been a substantial  amount of dilution to the  Company's  common
     equity.  During such period 225,000 warrants were issued in connection with
     the two private debt  placements,  and 169,000  Stock Units were accrued in
     the participants'  accounts as a result of deferrals of salary into the DSC
     Plan. A minor amount of dilution has also  occurred due to an adjustment to
     the Preferred  Stock  conversion  ratio  resulting from the issuance of the
     warrants and the salary deferrals.

     Meanwhile,  despite the recent poor financial results and the deterioration
     of its financial  condition,  the Company has  demonstrated  the ability to
     maintain  its  viability  as a going  concern.  During the 12 months  ended
     December 31, 2002 and through March 31, 2003, the Company has  successfully
     completed two private debt placements totaling $1,800,000 while at the same
     time  increasing  its lines of credit from a total of $2,925,000 to a total
     of  $3,450,000.  During such period it has remained in compliance on all of
     its debt  obligations.  On March 31,  2003,  the Company  made the required
     semi-annual  $61,000  interest  payment on its 10%  subordinated  notes due
     September 30, 2003,  and still had $125,000  available on its existing line
     of credit from the Unitrust which,  coupled with anticipated  proceeds from
     the sale of assets,  it  believes  will be  adequate  to carry it until the
     anticipated Settlement of more than $3,900,000 is received.  Receipt of the
     Settlement in the  indicated  time frame would ensure that the Company will
     remain viable as a going concern at least through December 31, 2003.

     Distribution of the Settlement  proceeds will be delayed until the petition
     to the U.  S.  Supreme  Court  has  been  decided.  Although  there  is the
     possibility  that the appeal process would delay the  Settlement  into late
     2003 or that the objecting parties could ultimately cause the Settlement to
     be overturned, the Company believes it is unlikely that the Settlement will
     be overturned. A delay in receiving the funds until late 2003 would require
     that the Company seek additional financing,  and there is no assurance this
     would be accomplished.  In such event the Company might need to take severe
     measures,  including  further reduction of overhead  expenses,  in order to
     ensure the Company's ability to continue as a going concern.

     Additional Details
     ------------------
     Despite  continuing  operating  losses during the past twelve  months,  the
     Company's  cash and cash  equivalents  increased  slightly  from $37,000 at
     March  31,  2002 to  $50,000  at March  31,  2003.  To  mitigate  potential
     liquidity problems,  the Company's lines of credit from an affiliate of the
     Company's  chairman were increased from  $2,350,000 in September of 2001 to
     $2,500,000  in January of 2002,  to  $2,625,000  in  February  of 2002,  to
     $3,000,000 in October of 2002,  and to $3,150,000 in November of 2002. As a
     result of the  private  debt  placement  completed  in February of 2003 and
     increased availability of credit from these lines, working capital improved
     $209,000 during 2003.

     The Company's  principal  business is coal  reclamation,  and this is where
     management's  operating  attention is primarily  focused.  The Coal Segment
     currently  has several  projects in various  stages of  development  which,
     subject to arranging necessary financing, are ultimately expected to mature
     into  operating  projects.  The segment has entered  into a  memorandum  of
     understanding  on one of these  projects  and expects to reach a definitive
     agreement on the project  during the second  quarter of 2003.  Negotiations
     are in  progress  with a third  party to form a joint  venture  or  limited
     liability  company  that would  provide  the  initial  working  capital and
     guarantee the necessary equipment financing for the project.  The timing of
     the project is uncertain but, subject to obtaining the necessary financing,
     it is  considered  to have a high  probability  of  activity.  However,  no
     definitive  contracts  have as yet been  signed,  and there is no assurance
     that the  required  financing  will be obtained  or that the  project  will
     materialize.

     After more than four years of  development  activity by the China  Segment,
     and just when it appeared  that its efforts were  finally  starting to bear
     fruit, a controversy  arose between the Company and its technology  partner
     concerning their legal rights and relationships.  Lengthy  negotiations and
     discussions were unsuccessful in arriving at a mutually agreeable solution.
     In November of 2002 the Company filed suit to terminate  the  relationship.
     Our partner  filed a  counterclaim  to which the  Company has  subsequently
     responded. The outcome of the litigation cannot presently be determined. An
     impairment  provision  in the amount of  $759,000  was  established  in the
     fourth  quarter of 2002 to write down most of the  Company's  investment in
     China.  Accordingly,  all of the projects  which were under  development in
     China are on indefinite  hold until the outcome of the  litigation has been
     determined.  The segment has obtained an exclusive  license  agreement  for
     another technology in China and is now pursuing new projects.  Negotiations
     are in  progress  on the  first of these,  and  there is ample  room and an
     adequate market for a number of such projects in the same area.

     Key to the Company's liquidity is the anticipated  settlement of a lawsuit,
     in which the Company is a Plaintiff, which has been in progress since 1996.
     A Settlement  Agreement was signed among the  attorneys for the  Plaintiffs
     and the  Defendants in September of 2001. On May 6, 2002, the federal judge
     issued  a final  judgment  approving  the  Settlement  and  ordered  that a
     settlement  fund of $50.4  million  in cash be  established  to settle  the
     litigation. In late May, 2002, 11 parties (the "Objectors") who objected to
     the  Settlement  and who were  entitled to receive  approximately  $107,000
     thereof filed appeals to the final approval of the Settlement.  On December
     24, 2002,  the Tenth Circuit Court of Appeals  issued an opinion  affirming
     the May 6, 2002 decision.  On March 24, 2003 the Objectors filed a Petition
     for a Writ of Certiorari asking the U.S. Supreme Court for review. On April
     1 Plaintiff's  counsel  advised the Court that they do not intend to file a
     response to the Petition unless one is requested by the Court.  Counsel has
     also  advised  that the vast  majority of  petitions  are ruled upon within
     three to 12 weeks,  and that most  petitions  are  disposed of within 2-1/2
     weeks.  If the U.S.  Supreme Court denies the Petition,  the  Settlement is
     expected to be final between  early May and late June of 2003,  meaning the
     distribution  of Settlement  funds can begin at that time  according to the
     terms of the  Settlement  Agreement.  Distribution  of the proceeds will be
     delayed until the petition to the U.S. Supreme Court has been decided.  The
     Company  believes the  Settlement  will be concluded  within the time frame
     indicated  with  anticipated  proceeds  to the  Company  in  excess of $3.9
     million.  Distribution of the contemplated proceeds will have a significant
     impact upon the Company's liquidity. Although there is the possibility that
     the appeals  process could delay the Settlement  into late 2003 or that the
     objecting  parties could  ultimately cause the Settlement to be overturned,
     the Company believes it is unlikely that the Settlement will be overturned.

     To further bolster working  capital,  the Company on May 31, 2002 completed
     the private placement of $1,200,000 of 10% subordinated notes due September
     30, 2003 (the "2002 Notes"), to "bridge the gap" until the settlement funds
     are  distributed or until the anticipated  Coal and China projects  achieve
     positive cash flow.  The Company has agreed to redeem the 2002 Notes within
     10 days of  receipt of the McElmo  Dome  Settlement.  In the event the 2002
     Notes  have  not  been  redeemed  by  the  maturity  date,   they  will  be
     automatically  extended  to March 31,  2005.  An  investment  banking  firm
     received warrants to purchase 45,000 shares of Company common stock as part
     of its sales compensation in connection with the offering. The note holders
     have the  contingent  right to receive up to  240,000  additional  warrants
     depending upon the length of time their notes are held. As of May 13, 2003,
     a total of 186,500 of such  warrants  had been issued to the note  holders.
     Related  parties  purchased  $320,000 of the  offering,  and had received a
     total of 42,000  warrants as of such date.  All of the  warrants  issued in
     connection  with the 2002  Notes  have a 5-year  term and have an  exercise
     price of $1.00 per share  during the first  three years and $1.25 per share
     thereafter.

     On  February  21,  2003,  the  Company  completed  the sale of  $600,000 of
     subordinated notes (the "2003 Notes") to accredited  investors.  A $550,000
     note was sold by an investment  banking firm which received a 5% commission
     thereon.  The purchaser  received a 5% Loan Fee on this note, which bears a
     5% coupon.  A $50,000  note was sold by the  Company to  affiliates  of the
     Company and bears a 10% coupon. The 2003 Notes were accompanied by warrants
     to  purchase a total of 60,000  shares of Beard  common  stock at $0.50 per
     share.  The Company  has agreed to redeem the 2003 Notes  within 10 days of
     receipt of the second  installment of the McElmo Dome Settlement.  The 2003
     Notes will mature on April 1, 2004; however, if they have not been redeemed
     by such date they will automatically be extended to January 1, 2005.

     In addition,  the Company  expects to generate cash from the disposition of
     the remaining assets from the discontinued ITF, BE/IM and WS Segments,  and
     can sell certain other assets to generate cash if necessary.

     The  Company  believes  that  the cash  generated  from  the  private  debt
     placement  just  completed,  coupled with the cash expected to be generated
     from the sale of assets and the anticipated  distribution of the settlement
     funds will be  sufficient  to enable the  Company  to  continue  operations
     through 2003 and until the operations of the projects under  development in
     the  Coal and  China  Segments  have  come on  stream  and the  Company  is
     generating positive cash flow.

(3)  Discontinued Operations
---  -----------------------
     ITF Segment
     -----------
     In  1999  the  Company's  Board  of  Directors  adopted  a  formal  plan to
     discontinue its interstate travel  facilities  ("ITF") Segment and recorded
     losses  totaling  $2,419,000  from  discontinuing  the segment in 1998. ITF
     disposed  of all of its  assets  in  1999  except  two  convenience  stores
     ("C-stores"),  including their remaining  equipment and inventory,  and was
     relieved of all outstanding indebtedness related to the assets.  Additional
     losses  of  $214,000,   $420,000,   and  $114,000   were  recorded  by  the
     discontinued  segment in 1999, 2000 and 2001,  respectively.  The 2001 loss
     included a $100,000  impairment in the carrying value of the facilities and
     $14,000 for anticipated operating losses through the expected disposal date
     of the remaining  assets.  In 2002, the Company  recorded  losses  totaling
     $85,000,  including a $1,000  gain on the sale of assets and an  additional
     charge of $77,000 to impair the carrying value of the remaining facilities.
     The Company  sold one of the  C-stores  with  related  property,  plant and
     equipment in November of 2002 for $169,000.

     ITF  recorded no  revenues  for the three  months  ended March 31, 2002 and
     incurred  $4,000 of losses for the same period which were  charged  against
     the loss accrual recorded in 2001. Included in the losses was a $2,000 gain
     on the sale of  equipment.  ITF  recorded no revenues  for the three months
     ended March 31,  2003 and  incurred  $8,000 of losses for the same  period.
     Such losses were charged to operations.

     As of March 31, 2003,  the  significant  assets  related to the ITF Segment
     consisted  primarily of the remaining C-store and other assets with a total
     recorded  value of $147,000.  The  significant  liabilities  of the segment
     consisted of trade accounts payable and accrued  expenses  totaling $3,000.
     The remaining  C-store and related  assets were sold on April 17, 2003. Net
     proceeds to the Company were $158,000.

     BE/IM Segment
     -------------
     In 1999 the Management Committee of North American Brine Resources ("NABR")
     adopted a formal  plan to  discontinue  the  business  and  dispose  of its
     assets.  Beard had a 40%  ownership in NABR,  which was accounted for under
     the equity method.  As a result,  Beard's share of NABR's operating results
     has  been  reported  as  discontinued  for  all  periods  presented  in the
     accompanying  statements of operations.  The joint venture was dissolved in
     September 2000 and the Japanese partners received their final  distribution
     of cash in December 2000, with the Company taking over the remaining assets
     and liabilities.

     In 1999 Beard  recorded a $540,000  loss,  which  represented  its share of
     NABR's $1,350,000  estimated loss from the  discontinuation  of operations.
     NABR's loss included $572,000 of anticipated operating losses through April
     2000 (the date  operations  ceased  for the larger of its two  plants)  and
     costs of ceasing  operations.  NABR's  revenues  for the smaller of the two
     plants were none and $77,000 for the three  months ended March 31, 2003 and
     2002,  respectively.  NABR's  operating  losses for the three  months ended
     March 31, 2003 and 2002 were none and $37,000,  respectively,  and were not
     anticipated in the loss accruals  recorded in 1999. NABR charged $3,000 and
     $2,000 for the three  months  ended March 31, 2003 and 2002,  respectively,
     against the accrual for anticipated expenses related to the shutdown of the
     larger of its two plants.

     As of March 31, 2003, the significant  assets related to NABR's  operations
     consisted  primarily of equipment with an estimated net realizable value of
     $31,000. The significant liabilities related to NABR's operations consisted
     primarily of accrued  expenses  totaling $62,000 related to the shutdown of
     operations.  The Company is actively pursuing  opportunities to sell NABR's
     assets and expects the disposition to be completed by December 31, 2003.

     WS Segment
     ----------
     In May 2001 the fixed assets of the 50%-owned company  (accounted for as an
     equity investment)  involved in natural gas well testing operations for the
     Natural Gas Well Servicing ("WS") Segment were sold for $1,550,000, subject
     to a holdback of $150,000.  The Company received $21,000 and $65,000 of the
     holdback in June and  November,  respectively,  of 2001. As a result of the
     sale all debt of the  50%-owned  company  was  retired  and the Company was
     relieved of contingent  liabilities  totaling $512,000.  In August 2001 the
     Company made the decision to cease pursuing opportunities in Mexico and the
     WS Segment was  discontinued.  In December 2001 all of the sand  separators
     owned by the  100%-owned  company in the WS Segment were sold for $100,000.
     The Company is now pursuing the sale of all  remaining  equipment  owned by
     the segment.

     The segment  recorded no revenues  for either the first  quarter of 2003 or
     2002. Beard's share of operating results from the discontinued segment were
     income of $28,000  and losses of $11,000 for the three  months  ended March
     31, 2003 and 2002,  respectively.  These  results for the first  quarter of
     2003 and 2002  included  gains on sales of equipment  totaling  $45,000 and
     $36,000,  respectively.  For the first  quarter of 2002,  Beard's  share of
     operating  losses from the  50%-owned  company was  $4,000.  The  remaining
     $7,000 of losses  incurred  in the three  months  ended March 31, 2002 were
     associated  with the  operations of the  wholly-owned  company and were not
     anticipated in the loss accrual.

     As of March 31, 2003, the significant assets of the WS Segment consisted of
     accounts receivable totaling $17,000 and fixed assets with a recorded value
     of $144,000.  The significant  liabilities of the entity consisted of trade
     accounts payable and accrued expenses totaling  $58,000.  It is anticipated
     that all  liabilities  of the segment  will be paid prior to  December  31,
     2003.

(4)  Redeemable Preferred Stock
---  --------------------------
     The Company's  preferred stock was mandatorily  redeemable through December
     31, 2002, from one-third of Beard's  "consolidated  net income" as defined.
     Each share of Beard  preferred stock became  convertible  into Beard common
     stock on January 1, 2003, and was  convertible  into  4.40641266  (122,665)
     shares  on March  31,  2003.  The  conversion  ratio  will be  adjusted  as
     additional  warrants  are  issued  or as  additional  shares  of stock  are
     credited to the  accounts of the  Company's  Chairman or  President  in the
     Company's Deferred Stock  Compensation Plan.  Fractional shares will not be
     issued, and cash will be paid in redemption thereof.

(5)  Loss Per Share
---  --------------
     Basic loss per share data is  computed  by dividing  loss  attributable  to
     common  shareholders  by the  weighted  average  number  of  common  shares
     outstanding for the period.

     Diluted loss per share in the  statements of operations  exclude  potential
     common shares  issuable upon  conversion of redeemable  preferred  stock or
     exercise of stock options as a result of losses from continuing  operations
     for all periods presented.

(6)  Income Taxes
---  ------------
     In accordance with the provisions of the Statement of Financial  Accounting
     Standard No. 109,  "Accounting  for Income  Taxes"  ("SFAS No.  109"),  the
     Company's net deferred tax asset is being carried at zero book value, which
     reflects the  uncertainties of the Company's  utilization of the future net
     deductible  amounts.  The Company  recorded no provision  for taxes for the
     three months ended March 31, 2003 or 2002.

     At March 31, 2003, the Company  estimates that it had the following  income
     tax  carryforwards  available for both income tax and  financial  reporting
     purposes (in thousands):

       <TABLE>
       <CAPTION>
                                                           Expiration
                                                              Date          Amount
                                                              ----          ------
       <S>                                                 <C>             <C>
       Federal regular tax operating loss carryforwards     2004-2009      $ 55,100
       Tax depletion carryforward                          Indefinite      $  5,500
       </TABLE>


(7)  Commitments and Contingencies
---  -----------------------------
     In the normal  course of  business  various  actions  and claims  have been
     brought or asserted against the Company.  Management does not consider them
     to be material to the Company's financial position, liquidity or results of
     operations.

     The Company has an  indemnity  obligation  to its  institutional  preferred
     stockholder  and one of its assignees for certain losses (i) arising out of
     the  ownership  and/or  operation of Beard Oil's former oil and gas assets,
     including  environmental  liabilities;  (ii)  arising  under  any  employee
     benefit or severance  plan; or (iii) relating to any  misrepresentation  or
     inaccuracy  in any  representation  made by the  Company  or  Beard  Oil in
     connection with the Restructure (collectively, the "Obligations").  Neither
     Beard nor Beard Oil is presently aware of any material liabilities existing
     as a result of such Obligations.

     In November  of 2002,  the  Company  filed suit in the Western  District of
     Oklahoma to terminate  ABT-Beard  and the Company's  business  relationship
     with  American  Bio  Tech,  Inc.  ("ABT"),  the other  party in  ABT-Beard.
     Additionally,  the  Company  is seeking  recovery  of costs,  expenses  and
     attorney's  fees.  In  January of 2003,  ABT filed its answer and  asserted
     counterclaims  against the Company and  third-party  claims  against  Beard
     Sino-American Resources,  Co., Inc., Beijing Beard Biotech Engineering Co.,
     Inc., Cambridge/ABT Beard Handan Venture, L.L.C., William M. Beard, Riza E.
     Murteza,  and Mark E. Voth. The Company and the other defendants have filed
     an answer  denying  liability and intend to vigorously  defend such claims.
     Management  feels  that the claims of ABT are  without  merit and expect no
     material  liabilities as a result of ABT's suit against the Company and the
     other defendants.

(8)  Business Segment Information
---  ----------------------------
     The Company manages its business by products and services and by geographic
     location  (by  country).  The Company  evaluates  its  operating  segments'
     performance  based on earnings or loss from operations before income taxes.
     The Company had four  reportable  segments in the first quarter of 2003 and
     2002: Coal, Carbon Dioxide, China and e-Commerce.

     The Coal  Segment is in the business of  operating  coal fines  reclamation
     facilities  in the U.S. and provides  slurry pond core  drilling  services,
     fine coal laboratory  analytical services and consulting services.  The CO2
     Segment  consists  of the  production  of CO2 gas.  The  China  Segment  is
     pursuing environmental  opportunities in China focusing on the installation
     and  construction of facilities  which utilize the  proprietary  composting
     technology of Real Earth United  States  Enterprises,  Inc. The  e-Commerce
     Segment  consists of a 71%-owned  subsidiary  whose activities are aimed at
     developing  business   opportunities  to  leverage  starpay.com,   l.l.c.'s
     intellectual  property  portfolio of Internet  payment methods and security
     technologies.

     The  following is certain  financial  information  regarding  the Company's
     reportable segments (presented in thousands of dollars).

     General  corporate  assets and  expenses  are not  allocated  to any of the
     Company's operating segments; therefore, they are included as a reconciling
     item to  consolidated  total  assets  and loss from  continuing  operations
     before  income  taxes  reported  in the  Company's  accompanying  financial
     statements.


<TABLE>
<CAPTION>
                                            Carbon
                                  Coal      Dioxide       China      e-Commerce        Totals
                                  ----      -------       -----      ----------        ------
<S>                            <C>         <C>          <C>           <C>              <C>
      Three months ended
      ------------------
        March 31, 2003
        --------------
     Revenues from
       external  customers     $    42     $   127      $     -       $     25         $   194
     Segment profit (loss)         (89)         84         (171)            (9)           (185)
     Segment assets                 72         491          452             38           1,053

      Three months ended
      ------------------
        March 31, 2002
        --------------
     Revenues from
       external  customers     $     1     $    86      $     -       $     -          $    87
     Segment profit (loss)        (138)         47         (146)           (36)           (273)
     Segment assets              1,580         404          463             63           2,510
</TABLE>


     Reconciliation  of total reportable  segment loss to consolidated loss from
     continuing  operations  before  income  taxes is as  follows  for the three
     months ended March 31, 2003 and 2002 in thousands):

<TABLE>
<CAPTION>
                                                                 2003             2002
                                                            ------------        ------------
<S>                                                         <C>                 <C>
       Total loss for reportable segments                   $      (185)        $      (273)
       Eliminate loss from China operations accounted for
           as an equity investment                                    -                 146
       Equity in loss from China operations accounted for
           as an equity investment                                   (9)                (73)
       Net corporate costs not allocated to segments               (324)               (213)
                                                            ------------        -----------
            Total consolidated loss from continuing
                operations                                  $      (518)        $      (413)
                                                            ============        ============
</TABLE>

                       THE BEARD COMPANY AND SUBSIDIARIES


                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     THIS REPORT  INCLUDES  "FORWARD-LOOKING  STATEMENTS"  WITHIN THE MEANING OF
SECTION 27A OF THE  SECURITIES  ACT OF 1933, AS AMENDED,  AND SECTION 21E OF THE
SECURITIES  EXCHANGE  ACT  OF  1934,  AS  AMENDED.  ALL  STATEMENTS  OTHER  THAN
STATEMENTS OF HISTORICAL  FACTS  INCLUDED OR  INCORPORATED  BY REFERENCE IN THIS
REPORT, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S FUTURE
FINANCIAL POSITION,  BUSINESS STRATEGY,  BUDGETS,  PROJECTED COSTS AND PLANS AND
OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, ARE FORWARD-LOOKING  STATEMENTS.
IN ADDITION,  FORWARD-LOOKING  STATEMENTS GENERALLY CAN BE IDENTIFIED BY THE USE
OF  FORWARD-LOOKING  TERMINOLOGY  SUCH AS  "MAY,"  "WILL,"  "EXPECT,"  "INTEND,"
"PROJECT,"  "ESTIMATE,"  "ANTICIPATE,"  "BELIEVE," OR "CONTINUE" OR THE NEGATIVE
THEREOF OR  VARIATIONS  THEREON OR SIMILAR  TERMINOLOGY.  ALTHOUGH  THE  COMPANY
BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING  STATEMENTS ARE
REASONABLE,  IT CAN GIVE NO ASSURANCE THAT SUCH  EXPECTATIONS WILL PROVE TO HAVE
BEEN  CORRECT.  IMPORTANT  FACTORS  THAT COULD  CAUSE  ACTUAL  RESULTS TO DIFFER
MATERIALLY  FROM  THE  COMPANY'S  EXPECTATIONS   ("CAUTIONARY  STATEMENTS")  ARE
DISCLOSED  UNDER "ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL
CONDITION  AND  RESULTS  OF  OPERATIONS"  AND  ELSEWHERE  IN  THIS  REPORT.  ALL
SUBSEQUENT  WRITTEN  AND ORAL  FORWARD-LOOKING  STATEMENTS  ATTRIBUTABLE  TO THE
COMPANY,  OR PERSONS  ACTING ON ITS BEHALF,  ARE  EXPRESSLY  QUALIFIED  IN THEIR
ENTIRETY BY THE CAUTIONARY STATEMENTS.  THE COMPANY ASSUMES NO DUTY TO UPDATE OR
REVISE ITS FORWARD-LOOKING  STATEMENTS BASED ON CHANGES IN INTERNAL ESTIMATES OR
EXPECTATIONS OR OTHERWISE.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

     The  following  discussion  focuses on  material  changes in the  Company's
financial  condition  since  December 31, 2002 and results of operations for the
quarter  ended March 31, 2003,  compared to the prior year first  quarter.  Such
discussion should be read in conjunction with the Company's financial statements
including the related footnotes.

     In preparing the discussion and analysis,  the Company has presumed readers
have read or have access to the  discussion  and  analysis  of the prior  year's
results of  operations,  liquidity  and capital  resources  as  contained in the
Company's 2002 Form 10-K.

     The Coal  Segment is in the business of  operating  coal fines  reclamation
facilities  in the U.S. and provides  slurry pond core drilling  services,  fine
coal laboratory  analytical  services and consulting  services.  The CO2 Segment
consists  of  the   production  of  CO2  gas.  The  China  Segment  is  pursuing
environmental   opportunities   in  China  focusing  on  the   installation  and
construction of facilities which utilize the proprietary  composting  technology
of Real Earth United States Enterprises,  Inc ("REUSE").  The e-Commerce Segment
consists of a 71%-owned  subsidiary  whose  activities  are aimed at  developing
business  opportunities to leverage starpay.com,  l.l.c.'s intellectual property
portfolio of Internet payment methods and security technologies.

     In 1999 the Company  adopted a plan to  discontinue  its ITF  Segment,  and
those operations were reflected as discontinued operations in 1998. The majority
of the assets of the ITF  Segment  were  disposed  of in 1999 and the Company is
pursuing the sale of the remaining assets. In 1999 the Company adopted a plan to
discontinue its BE/IM Segment, and those operations have since been reflected as
discontinued.  The Company is now in the process of liquidating those assets. In
May 2001 the fixed assets of the 50%-owned  company  (accounted for as an equity
investment)  involved  in the WS Segment  were sold.  In August 2001 the Company
ceased  pursuing  opportunities  in Mexico related to the sand separator  assets
previously operated in Mexico in the WS Segment,  and the Company has since been
pursuing the sale of the segment's remaining assets. As a result, the operations
of the WS Segment have now been reflected as discontinued.


Material  changes in  financial  condition  - March 31,  2003 as  compared  with
December 31, 2002.

     The following table reflects changes in the Company's  financial  condition
during the periods indicated:

<TABLE>
<CAPTION>
                            March 31,            December 31,         Increase
                              2003                  2002             (Decrease)
                              ----                  ----             ----------
<S>                        <C>                  <C>                 <C>
Cash and cash equivalents  $    50,000          $    79,000         $   (29,000)

Working capital            $   (75,000)         $  (284,000)        $   209,000

Current ratio                0.90 to 1            0.67 to 1
</TABLE>

     During the first quarter of 2003, the Company's  working capital  increased
by $209,000  from  $(284,000) as of December 31, 2002.  Related  entities of the
Chairman of the Board made net advances of $25,000 to the  Company.  The Company
obtained  $600,000  through  the  private  placement  of  another  issue  of 10%
Subordinated  Debt.  $50,000  of this  amount were to a  related  entity  of the
Company's  Chairman and President.  $89,000 of working capital were used to help
fund the operations of the Coal Segment. A total of $162,000 was utilized in the
pursuit of environmental  opportunities in China.  $32,000 were used to fund the
activities of the e-Commerce  Segment.  The remainder of the working capital was
utilized to fund other operations.

     The Company's  principal  business is coal  reclamation,  and this is where
management's   operating  attention  is  primarily  focused.  The  Coal  Segment
currently has several projects in various stages of development  which,  subject
to  arranging  necessary  financing,  are  ultimately  expected  to mature  into
operating  projects.  The segment has entered into a memorandum of understanding
on one of these  projects  and  expects,  despite  repeated  delays,  to reach a
definitive  agreement  on  the  project  during  the  second  quarter  of  2003.
Negotiations  are in  progress  with a third  party to form a joint  venture  or
limited  liability  company that would provide the initial  working  capital and
guarantee the necessary equipment  financing for the project.  The timing of the
project is uncertain but,  subject to obtaining the necessary  financing,  it is
considered  to have a high  probability  of  activity.  However,  no  definitive
contracts  have as yet been signed,  and there is no assurance that the required
financing will be obtained or that the project will materialize.

     After more than four years of  development  activity by the China  Segment,
and just when it appeared that its efforts were finally  starting to bear fruit,
we had a  "falling  out" with our  technology  partner  and have  filed  suit to
terminate our business relationship. Accordingly, all of the projects which were
under  development in China are on indefinite  hold. The segment has obtained an
exclusive license agreement for another  technology in China and is now pursuing
new projects.  Negotiations  are in progress on the first of these, and there is
ample  room and an  adequate  market for a number of such  projects  in the same
area.

     Key to the Company's liquidity is the anticipated  settlement of a lawsuit,
in which the Company is a  Plaintiff,  which has been in progress  since 1996. A
Settlement Agreement was signed by the parties in September of 2001. On December
24,  2002 the Tenth  Circuit  Court of  Appeals  affirmed  the  decision  of the
Colorado District Court which approved the Settlement. On March 24, 2003 parties
who objected to the Settlement  filed a petition with the U.S. Supreme Court. If
the Supreme  Court denies the  petition,  the  Settlement  is expected to become
final between early May and late June of this year with anticipated  proceeds to
the Company in excess of $3.9  million.  Although it is possible the Court could
overturn the Settlement, our counsel believe such possibility is remote.

     In 2002 the Company supplemented its $300,000 credit line with a commercial
bank by  arranging  for an increase in its credit line from an  affiliate of the
Company's  chairman.  The  long-term  line of credit from the related  party was
increased from $2,250,000 in September of 2001 to $2,500,000 in January of 2002,
to  $2,625,000  in February  of 2002,  and to  $3,000,000  in October of 2002 to
provide  additional  working  capital,   and  was  supplemented  by  a  $150,000
short-term  line of credit from the same party in November of 2002.  The Company
recently  completed the private placement of $600,000 of subordinated  notes due
April 1, 2004, with warrants,  to provide additional working capital and improve
liquidity  in  order  to  "bridge  the  gap"  until  the  settlement  funds  are
distributed or until  contemplated Coal and China projects achieve positive cash
flow. In addition,  the Company will be disposing of the  remaining  assets from
the discontinued ITF, BE/IM and WS Segments and can sell certain other assets to
generate cash if necessary.

     The Company believes that cash and available credit, together with proceeds
from the sale of assets,  will be  adequate  to enable the  Company to  continue
operations  until  (i) the  settlement  funds  have  been  received  or (ii) the
operations of the projects under development in the Coal and China Segments have
come on stream and the Company is generating positive cash flow.

Material  changes in results of  operations  - Quarter  ended  March 31, 2003 as
compared with the Quarter ended March 31, 2002.

     The loss for the first  quarter of 2003 was  $498,000  compared to $461,000
for the 2002 first quarter.  The operating loss in the Coal Segment decreased by
$58,000.  The China Segment incurred  operating losses of $162,000 for the first
quarter of 2003  compared to none for the same period in 2002,  as a result of a
change in the manner of accounting  presentation for the segment's operations in
China. The operating profit in the CO2 Segment increased $37,000. The e-Commerce
Segment  incurred  operating  losses of $8,000  for the  first  quarter  of 2003
compared to $36,000 in the first quarter of 2002.  The  operating  loss in Other
activities for the first quarter of 2003 inreased  $43,000  compared to the same
period  in  2002.  As a  result,  the  operating  loss for the  current  quarter
increased  $82,000 to $433,000 versus $351,000 in the  corresponding  quarter of
the prior year.

     Operating results of the Company's primary operating Segments are reflected
below:

<TABLE>
<CAPTION>

                                              2003           2002
                                              ----           ----
<S>                                         <C>           <C>
     Operating profit (loss):
        Coal reclamation                    $(89,000)     $(147,000)
        Carbon dioxide                        84,000         47,000
        China                               (162,000)             -
        e-Commerce                            (8,000)       (36,000)
                                       --------------- --------------
                 Subtotal                   (175,000)      (136,000)
     Other                                  (258,000)      (215,000)
                                       --------------- --------------
                                           $(433,000)     $(351,000)
                                       =============== ==============
</TABLE>

     The "Other" in the above table  reflects  primarily  general and  corporate
activities, as well as other activities of the Company.

Coal reclamation

     The segment's  revenues for the first quarter of 2003 increased  $41,000 to
$42,000  compared  to  $1,000  for the  first  quarter  of 2002.  The  segment's
consulting and coring business  increased  sharply in the current quarter as the
Company  focused on the four major projects  mentioned  above.  Operating  costs
decreased  $9,000 to $109,000 for the first quarter of 2003 compared to $119,000
for the same  period  in 2002,  primarily  as a result  of  decreased  staffing.
Selling,  general and  administrative  ("SG&A") costs  decreased  $3,000 for the
three  months  ended  March  31,  2003  compared  to the  same  period  in 2002.
Depreciation  expense  decreased  $5,000 to none for the first  quarter  of 2003
compared to the same period for the prior year. As a result,  the operating loss
decreased $58,000 to $89,000 for the first quarter of 2003 compared to the first
three months of 2002.

Carbon dioxide

     First  quarter 2003  operations  reflected  an operating  profit of $84,000
compared to $47,000 for the 2002 first  quarter.  The sole component of revenues
for this segment is the sale of CO2 gas from the working and overriding  royalty
interests of the Company's two carbon  dioxide  producing  units in Colorado and
New Mexico.  Operating  revenues  in this  segment  increased  $41,000 or 47% to
$127,000  for the first  three  months of 2003  compared to $86,000 for the same
period in 2002.  CO2 gas is often used as an injectant in secondary and tertiary
recovery processes in the oil and gas industry.  The increase in revenue,  which
was  primarily due to an increase in price for the paid volumes to the Company's
interest  for CO2 gas  during  the  quarter,  was  partially  offset by a $2,000
increase in lifting costs for the current quarter.

China

     The China  Segment  incurred an  operating  loss of $162,000  for the first
three months of 2003  compared to none for the same period in 2002. In the prior
year quarter and through  November of 2002,  the operations of this segment were
conducted  through an unconsolidated  affiliate.  As a result of the controversy
which  arose in the latter  part of 2002 and the  lawsuit  which  followed,  the
Company  is  now  conducting  its  operations  in  China  through   wholly-owned
affiliates.  The loss in 2003 is  attributable  to SG&A  expenses as the Company
seeks projects to utilize the proprietary  composting  technology of REUSE.  For
the first quarter of 2002, the Company  recorded a $73,000 loss as its 50% share
of the equity in operating results of the unconsolidated affiliate.

e-Commerce

     The e-Commerce  Segment  incurred an operating loss of $8,000 for the first
quarter of 2003 versus an operating  loss of $36,000 in the prior year  quarter.
The segment  finalized its initial patent license agreement in the first quarter
of 2003 and recorded  revenues of $25,000 from a license fee compared to none in
the prior year quarter.  The segment also incurred  $2,000 less in SG&A costs in
the  quarter  ended March 31, 2003  compared to the first  quarter in 2002.  The
reduced  loss  reflects  starpay's  shift in focus from the  development  of its
technology to concentrate  on developing  licensing  arrangements  and other fee
based  arrangements  with  companies  implementing  technology  in conflict with
starpay's intellectual property.

Other activities

     Other operations, consisting primarily of general and corporate activities,
generated  a $43,000  larger  operating  loss for the first  quarter  of 2003 as
compared to the same period last year.  The increased loss for the first quarter
of 2003  compared  to the same  period  in 2002 was due  primarily  to a $27,000
increase in amortization  expense related to capitalized  costs  associated with
the two debt issues.  Additionally,  SG&A costs increased  approximately $14,000
for the current quarter  compared to the same period in the prior year primarily
as a result of expensed costs associated with the issuance of the new debt.

Selling, general and administrative expenses

     The Company's selling,  general and administrative expenses ("SG&A") in the
current  quarter  increased to $423,000 from $253,000 in the 2002 first quarter.
The  primary  reason for the large  increase is the change in  treatment  of the
operations  in China.  In 2002,  these  operations  were  conducted  through  an
unconsolidated  affiliate  and  were  presented  as  such  in the  statement  of
operations.  In 2003,  the  China  Segment's  operations  are  being  conducted,
principally,  through wholly-owned subsidiaries.  For the first quarter of 2003,
$162,000  of SG&A and  depreciation  expenses  were  recorded  as segment  costs
compared to $73,000 of expenses recorded as equity in earnings of unconsolidated
affiliates for the same period in 2002.  This $73,000  represented the Company's
50%-share of the expenses  associated with the operations in China.  The Company
had  funded  the  entire  amount  and  this was  included  as a  portion  of the
impairment  recorded  in the fourth  quarter  of 2002.  The  e-Commerce  Segment
recorded  $2,000 less in SG&A  expenses in the first quarter of 2003 compared to
the same period in 2002 as starpay shifted its focus from the development of its
technology to concentrate on developing licensing agreements and other fee based
arrangements  with  companies  implementing  technology  in  conflict  with  its
intellectual  property.  In addition,  the Coal Segment  incurred $3,000 less in
SG&A costs in the first  quarter of 2003  compared to the same period in 2002 as
the segment  reduced  expenditures  in several  accounts,  primarily  insurance,
vehicle maintenance and subscription expenses. Other activities incurred $14,000
more in SG&A costs for the first  quarter of 2003 compared to the same period in
2002 as a result of  increased  expenses  associated  with the  issuance  of the
subordinated debt.

Depreciation, depletion and amortization expenses

     DD&A expense  increased  $23,000 for the first  quarter of 2003 compared to
the same period of 2002 primarily as a result of the amortization of capitalized
costs associated with the two debt issues completed since the close of the first
quarter of 2002.  The Coal Segment had no DD&A  expense in the first  quarter of
2003 compared to $5,000 for the prior year quarter as the segment's  assets were
fully impaired in the fourth quarter of 2002.

Other income and expenses

     The other  income and  expenses  for the first  quarter of 2003 netted to a
loss of  $84,000  compared  to a loss of  $62,000  for the same  period in 2002.
Interest  income was down $27,000 for the first  quarter of 2003 compared to the
same period in 2002.  Interest  expense  was  $61,000  higher as a result of the
increase in debt,  primarily the two debt issues completed in the second quarter
of 2002 and the first quarter of 2003 totaling $1,800,000.  The Company's equity
in earnings of  unconsolidated  affiliates  reflected  income of $43,000 for the
first quarter of 2003 compared to a loss of $31,000 for the same period in 2002.
The Company  reflected a loss of $9,000  associated  with the affiliate in China
for the first  quarter of 2003 compared to a loss of $73,000 for the same period
in 2002. The losses represent 100% and 50%, respectively, of the losses recorded
by the affiliate in China.  As discussed,  the Company is involved in litigation
with its former partner in this entity and is seeking  dissolution of the entity
and recovery of certain costs associated with its operation.  In the interim and
starting in 2003, the Company is recording 100% of costs  associated with leased
office  space and a  computer  that the  Company  is paying for on behalf of the
affiliate.  Offsetting  the Company's  share of losses of the affiliate in China
was the Company's share of the earnings of Cibola Corporation ("Cibola"). Cibola
contributed  $53,000 in income for the first quarter of 2003 compared to $42,000
for the same period in 2002.  The Company  realized a gain on sale of assets for
the three  months  ended March 31, 2002 of $9,000  compared to none for the same
period in 2003.

Income taxes

     The Company recorded no provision for taxes in the first quarter of 2003 or
2002.  The Company has not recorded any financial  benefit  attributable  to its
various tax  carryforwards  due to uncertainty  regarding their  utilization and
realization.

Discontinued operations

ITF Segment
-----------
     In  1999  the  Company's  Board  of  Directors  adopted  a  formal  plan to
discontinue its interstate travel facilities ("ITF") Segment and recorded losses
totaling  $2,419,000 from discontinuing the segment in 1998. ITF disposed of all
of its assets in 1999  except two  convenience  stores  ("C-stores"),  including
their  remaining  equipment and inventory,  and was relieved of all  outstanding
indebtedness related to the assets. Additional losses of $214,000, $420,000, and
$114,000  were  recorded  by the  discontinued  segment in 1999,  2000 and 2001,
respectively. The 2001 loss included a $100,000 impairment in the carrying value
of the  facilities  and $14,000 for  anticipated  operating  losses  through the
expected  disposal date of the remaining  assets.  In 2002, the Company recorded
losses  totaling  $85,000,  including a $1,000 gain on the sale of assets and an
additional  charge of  $77,000  to impair the  carrying  value of the  remaining
facilities.  The Company sold one of the C-stores with related  property,  plant
and equipment in November of 2002 for $169,000.

     ITF  recorded no  revenues  for the three  months  ended March 31, 2002 and
incurred  $4,000 of losses for the same period  which were  charged  against the
loss accrual  recorded in 2001.  Included in the losses was a $2,000 gain on the
sale of equipment. ITF recorded no revenues for the three months ended March 31,
2003 and incurred $8,000 of losses for the same period. Such losses were charged
to operations.

     As of March 31, 2003,  the  significant  assets  related to the ITF Segment
consisted  primarily  of the  remaining  C-store  and other  assets with a total
recorded value of $147,000. The significant liabilities of the segment consisted
of trade accounts  payable and accrued expenses  totaling $3,000.  The remaining
C-store and  related  assets were sold on April 17,  2003.  Net  proceeds to the
Company were $158,000.

BE/IM Segment
-------------
     In 1999 the Management Committee of North American Brine Resources ("NABR")
adopted a formal plan to  discontinue  the  business  and dispose of its assets.
Beard had a 40%  ownership  in NABR,  which was  accounted  for under the equity
method. As a result, Beard's share of NABR's operating results has been reported
as  discontinued  for all periods  presented in the  accompanying  statements of
operations.  The joint venture was dissolved in September  2000 and the Japanese
partners  received their final  distribution  of cash in December 2000, with the
Company taking over the remaining assets and liabilities.

     In 1999 Beard  recorded a $540,000  loss,  which  represented  its share of
NABR's $1,350,000 estimated loss from the discontinuation of operations.  NABR's
loss included  $572,000 of anticipated  operating losses through April 2000 (the
date  operations  ceased for the larger of its two  plants) and costs of ceasing
operations.  NABR's  revenues  for the  smaller of the two plants  were none and
$77,000 for the three months ended March 31, 2003 and 2002, respectively. NABR's
operating  losses for the three  months  ended March 31, 2003 and 2002 were none
and  $37,000,  respectively,  and were  not  anticipated  in the  loss  accruals
recorded in 1999.  NABR  charged  $3,000 and $2,000 for the three  months  ended
March 31, 2003 and 2002,  respectively,  against  the  accrual  for  anticipated
expenses related to the shutdown of the larger of its two plants.

     As of March 31, 2003, the significant  assets related to NABR's  operations
consisted  primarily of  equipment  with an estimated  net  realizable  value of
$31,000.  The significant  liabilities  related to NABR's  operations  consisted
primarily  of accrued  expenses  totaling  $62,000  related to the  shutdown  of
operations. The Company is actively pursuing opportunities to sell NABR's assets
and expects the disposition to be completed by December 31, 2003.

WS Segment
----------
     In May 2001 the fixed assets of the 50%-owned company  (accounted for as an
equity  investment)  involved in natural  gas well  testing  operations  for the
Natural Gas Well Servicing ("WS") Segment were sold for $1,550,000, subject to a
holdback of $150,000.  The Company  received $21,000 and $65,000 of the holdback
in June and November, respectively, of 2001. As a result of the sale all debt of
the  50%-owned  company was retired and the Company was  relieved of  contingent
liabilities  totaling $512,000.  In August 2001 the Company made the decision to
cease pursuing  opportunities in Mexico and the WS Segment was discontinued.  In
December 2001 all of the sand separators owned by the 100%-owned  company in the
WS Segment were sold for  $100,000.  The Company is now pursuing the sale of all
remaining equipment owned by the segment.

     The segment  recorded no revenues  for either the first  quarter of 2003 or
2002.  Beard's  share of operating  results from the  discontinued  segment were
income of $28,000 and losses  $11,000 for the three  months ended March 31, 2003
and 2002  respectively.  These  results  for the first  quarter of 2003 and 2002
included gains on sales of equipment totaling $45,000 and $36,000, respectively.
For the first  quarter  of 2002,  Beard's  share of  operating  losses  from the
50%-owned  company was $4,000.  The remaining  $7,000 of losses  incurred in the
three months ended March 31, 2002 were  associated  with the  operations  of the
wholly-owned company and were not anticipated in the loss accrual.

     As of March 31, 2003, the significant assets of the WS Segment consisted of
accounts  receivable  totaling $17,000 and fixed assets with a recorded value of
$144,000. The significant liabilities of the segment consisted of trade accounts
payable  and accrued  expenses  totaling  $58,000.  It is  anticipated  that all
liabilities of the segment will be paid prior to December 31, 2003.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

     At March  31,  2003,  the  Company  had notes  receivable  of  $30,000  and
long-term  debt of  $4,935,000.  The notes  receivable and long-term debt with a
principal  balance of $4,786,000  have fixed interest  rates and therefore,  the
Company's  interest  income  and  expense  and  operating  results  would not be
affected by an increase in market interest rates for these items.  The Company's
outstanding  bank debt totaling  $300,000  floats with the prime rate, and a 10%
increase in market  interest rates would have  increased the Company's  interest
expense by  approximately  $1,000.  At March 31,  2003, a 10% increase in market
interest  rates  would  have  reduced  the  fair  value of the  Company's  notes
receivable by $1,000 and reduced the fair value of its debt by $56,000.

     The Company has no other market risk sensitive instruments.

Item 4. Controls and Procedures.

     Our  principal  executive  officer and  principal  financial  officer  have
participated in and supervised the evaluation of The Beard Company's  disclosure
controls and procedures that are designed to ensure that information required to
be  disclosed  by the  issuer in the  reports it files is  recorded,  processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include controls and procedures designed to ensure that the information required
to be disclosed in the reports that it files is accumulated and  communicated to
our  management,  including  our  principal  executive  officer or officers  and
principal  financial  officer  to  allow  timely  decisions  regarding  required
disclosure.  Based on their  evaluation of those controls and procedures as of a
date within 90 days of the date of this filing,  our CEO and CFO determined that
the controls and procedures are adequate and effective.  The evaluation resulted
in no  significant  changes in those  controls  or in other  factors  that could
significantly  affect the  controls,  and no  corrective  actions with regard to
significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION.

Item 1. Legal Proceedings.

McElmo Dome Litigation
----------------------
     On December 24, 2002,  the Tenth Circuit Court of Appeals issued an Opinion
affirming the May 6, 2002 decision of the Colorado District Court which approved
the Settlement,  the allocation  thereof,  attorneys' fees and other matters. On
March 24,  2003,  parties  objecting  to the  Settlement  filed a  Petition  for
Certiorari  asking the U.S. Supreme Court for review.  If the U.S. Supreme Court
denies the  Petition,  the  Settlement is expected to be final between early May
and late June of 2003, meaning the distribution of Settlement funds can begin at
that time according to the terms of the Settlement  Agreement.  Distribution  of
the proceeds  will be delayed  until the  petition to the U.S Supreme  Court has
been decided.  The Company  believes the Settlement will be concluded within the
time frame indicated with anticipated  proceeds to the Company in excess of $3.9
million.  Although there is the possibility that the appeals process could delay
the  Settlement  into late 2003 or that the objecting  parties could  ultimately
cause the Settlement to be overturned,  the Company  believes it is unlikely the
Settlement will be overturned.

ABT Beard Litigation
--------------------
     In November of 2002, the Company filed suit against American Bio-Tech, Inc.
("ABT") seeking judicial  termination of the partnership between the Company and
ABT. In January of 2003, ABT filed its answer and asserted counterclaims against
the Company and third-party claims against various Company affiliates seeking an
unspecified  amount of damages plus attorneys'  fees and costs.  The Company and
the third-party  defendants  have filed an answer denying  liability and stating
their intention to vigorously defend the claims.

Item 2. Changes in Securities.

     The Company's  preferred stock was mandatorily  redeemable through December
31, 2002, from one-third of Beard's  "consolidated net income" as defined.  Each
share of Beard  preferred  stock became  convertible  into Beard common stock on
January 1, 2003, and was convertible  into 4.40641266  (122,665) shares on March
31,  2003.  The  conversion  ratio will be adjusted as  additional  warrants are
issued or as  additional  shares of stock are  credited  to the  accounts of the
Company's  Chairman or President in the Company's  Deferred  Stock  Compensation
Plan.  Fractional shares will not be issued, and cash will be paid in redemption
thereof.

Item 6. Exhibits and Reports on Form 8-K.

(a)  The following  exhibits are filed with this Form 10-Q and are identified by
     the numbers indicated:

2      Plan  of  acquisition,   reorganization,   arrangement,   liquidation  or
       succession:

2(a)   Agreement and Plan of Reorganization  by and among Registrant,  Beard Oil
       Company ("Beard Oil") and New Beard, Inc., dated as of July 12, 1993 (see
       Addendum  A to  Part  I,  which  is  incorporated  herein  by  reference;
       schedules to the  Agreement  have been  omitted).  (This Exhibit has been
       previously  filed as Exhibit 3(b), filed on July 27, 1993 to Registrant's
       Registration  Statement  on Form  S-4,  File  No.  33-66598,  and same is
       incorporated herein by reference).

2(b)   Agreement and Plan of Merger by and between The Beard Company and The New
       Beard  Company,  dated as of September  16, 1997.  (This Exhibit has been
       previously  filed as Exhibit B to  Registrant's  Proxy Statement filed on
       September 12, 1997, and same is incorporated  herein by reference).  2(c)
       Certificate  of  Merger  merging  The  Beard  Company  into The New Beard
       Company as filed with the  Secretary of State of Oklahoma on November 26,
       1997.  (This  Exhibit  has  been  previously  filed  as  Exhibit  2.1  to
       Registrant's   Form  8-K,   filed  on  December  8,  1997,  and  same  is
       incorporated herein by reference).

3(i)   Certificate of  Incorporation  of The New Beard Company as filed with the
       Secretary of State of Oklahoma on September  11, 1997.  (This Exhibit has
       been previously filed as Exhibit C to Registrant's  Proxy Statement filed
       on September 12, 1997, and same is incorporated herein by reference).

3(ii)  Registrant's  By-Laws as  currently  in effect.  (This  Exhibit  has been
       previously  filed as  Exhibit  3(ii) to  Registrant's  Form  10-K for the
       period  ended  December 31,  1997,  filed on March 31, 1998,  and same is
       incorporated herein by reference).

4      Instruments defining the rights of security holders:

4(a)   Certificate   of   Designations,   Powers,   Preferences   and  Relative,
       Participating,  Option and Other Special Rights, and the  Qualifications,
       Limitations or  Restrictions  Thereof of the Series A Convertible  Voting
       Preferred  Stock of the  Registrant.  (This  Exhibit has been  previously
       filed as Exhibit 3(c) to Amendment  No. 2, filed on September 17, 1993 to
       Registrant's  Registration  Statement on Form S-4, File No. 33-66598, and
       same is incorporated herein by reference).

4(b)   Settlement Agreement,  with Certificate of Amendment attached thereto, by
       and among  Registrant,  Beard Oil, New York Life Insurance  Company,  New
       York Life  Insurance  and  Annuity  Company,  John  Hancock  Mutual  Life
       Insurance Company, Memorial Drive Trust and Sensor, dated as of April 13,
       1995.  (This  Exhibit  has  been  previously  filed  as  Exhibit  4(g) to
       Registrant's Form 10-K for the period ended December 31, 1994 and same is
       incorporated herein by reference).

10     Material contracts:

10(a)  Promissory  Note from  Registrant to B & M Limited,  a Partnership  dated
       February 7, 2003.


10(b)  Promissory  Note  from  Registrant  to  Boatright  Family,  L.L.C.  dated
       February 21, 2003.

10(c)  Form of 2003 Warrant.

10(d)  Form of Deed of Trust,  Assignment of Production,  Security Agreement and
       Financing Statement dated as of February 21, 2003.

99     Additional exhibits:

99(a)  Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350,
       as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

99(b)  Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350,
       as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

The Company will furnish to any  shareholder a copy of any of the above exhibits
upon the  payment  of $.25 per  page.  Any  request  should be sent to The Beard
Company,  Enterprise  Plaza,  Suite 320, 5600 North May Avenue,  Oklahoma  City,
Oklahoma 73112.

(b)    Three  reports on Form 8-K were filed  during the period  covered by this
       report.

       On January 10, 2003, the Company  reported that on December 24, 2002, the
Tenth  Circuit  Court of  Appeals  issued an Opinion  affirming  the May 6, 2002
decision of Judge  Weinshienk of the Colorado  District Court which approved the
McElmo Dome  Settlement,  the  allocation  thereof,  attorney's  fees, and other
matters.

       On February 25, 2003, the Company reported that it had completed the sale
of  $600,000  of  Subordinated  Notes due  April 1,  2004 to a group of  private
investors. A $550,000 note was sold by an investment banking firm which received
a 5%  commission  thereon.  The  purchaser  received a 5% loan fee on this note,
which bears a 5% coupon. A $50,000 note was sold by the Company to affiliates of
the Company and bears a 10% coupon.  The notes were  accompanied  by warrants to
purchase a total of 60,000 shares of Beard common stock at an exercise  price of
$0.50 per share.  Proceeds of the notes will be used for  working  capital or to
pay down the Company's lines of credit.  The primary purpose of the offering was
to provide funds to enable the Company to "bridge the gap" until it receives its
anticipated $3.9 million share of the Settlement from the McElmo Dome litigation
or until its Coal and China Segments have achieved profitability.

       On March 27, 2003,  the Company  reported that on March 24, 2003,  the 11
parties  who had  previously  objected  to the McElmo  Dome  Settlement  filed a
Petition for Certiorari with the U.S. Supreme Court.

                                   SIGNATURES

       Pursuant to the requirements 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.

                                    (Registrant) THE BEARD COMPANY

                                               HERB MEE, JR.
     (Date)   May 13, 2003              Herb Mee, Jr., President and
                                          Chief Financial Officer

                                              JACK A. MARTINE
     (Date)   May 13, 2003            Jack A. Martine, Controller and
                                          Chief Accounting Officer
<PAGE>

                               INDEX TO EXHIBITS

Exhibit
 No.         Description                      Method of Filing
 ---         -----------                      ----------------

2(a)   Agreement and Plan of Reorganization by  Incorporated herein by reference
       and among Registrant, Beard Oil Company
       ("Beard  Oil")  and  New  Beard,  Inc.,
       dated as of July 12, 1993.

2(b)   Agreement  and  Plan of  Merger  by and  Incorporated herein by reference
       between  The Beard  Company and The New
       Beard  Company,  dated as of  September
       16, 1997.

3(i)   Certificate of Incorporation of The New  Incorporated herein by reference
       Beard   Company   as  filed   with  the
       Secretary   of  State  of  Oklahoma  on
       September 11, 1997.

3(ii)  Registrant's  By-Laws as  currently  in  Incorporated herein by reference
       effect.

4(a)   Certificate  of  Designations,  Powers,  Incorporated herein by reference
       Preferences        and        Relative,
       Participating, Option and Other Special
       Rights,    and   the    Qualifications,
       Limitations or Restrictions  Thereof of
       the   Series   A   Convertible   Voting
       Preferred Stock of the Registrant.

4(b)   Settlement Agreement,  with Certificate  Incorporated herein by reference
       of Amendment  attached thereto,  by and
       among  Registrant,  Beard Oil, New York
       Life Insurance  Company,  New York Life
       Insurance  and  Annuity  Company,  John
       Hancock Mutual Life Insurance  Company,
       Memorial Drive Trust and Sensor,  dated
       as of April 13, 1995.

10(a)  Promissory  Note from Registrant to B &  Filed herewith electronically
       M Limited, a Partnership dated February
       7, 2003.

10(b)  Promissory   Note  from  Registrant  to  Filed herewith electronically
       Boatright Family, L.L.C. dated February
       21, 2003.

10(c)  Form of 2003 Warrant.                    Filed herewith electronically

10(d)  Form of Deed of  Trust,  Assignment  of  Filed herewith electronically
       Production,   Security   Agreement  and
       Financing   Statement   dated   as   of
       February 21, 2003.

99(a)  Chief Executive  Officer  Certification  Filed herewith electronically
       pursuant to 18 U.S.C.  Section 1350, as
       adopted  pursuant to Section 906 of the
       Sarbanes Oxley Act of 2002.

99(b)  Chief Financial  Officer  Certification  Filed herewith electronically
       pursuant to 18 U.S.C.  Section 1350, as
       adopted  pursuant to Section 906 of the
       Sarbanes Oxley Act of 2002.
<PAGE>


                          CERTIFICATIONS FOR FORM 10-Q

       I, William M. Beard,  Chairman of the Board and Chief Executive  Officer,
certify that:

       1.     I have  reviewed this  quarterly  report on Form 10-Q of The Beard
              Company (the "registrant");

       2.     Based on my knowledge,  this quarterly 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  quarterly
              report;

       3.     Based  on  my  knowledge,  the  financial  statements,  and  other
              financial  information  included in this quarterly 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 quarterly 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 quarterly 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   quarterly   report  (the
                     "Evaluation Date"); and

              (c)    presented in this quarterly  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 function):

              (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  quarterly  report  whether  or not  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.

                                        THE BEARD COMPANY

                                             WILLIAM M. BEARD
     (Date)   May 13, 2003              William M. Beard, Chairman of the Board
                                        and Chief Executive Officer

<PAGE>
                          CERTIFICATIONS FOR FORM 10-Q

       I, Herb Mee, Jr., President and Chief Financial Officer, certify that:

       1.     I have  reviewed this  quarterly  report on Form 10-Q of The Beard
              Company (the "registrant");

       2.     Based on my knowledge,  this quarterly 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  quarterly
              report;

       3.     Based  on  my  knowledge,  the  financial  statements,  and  other
              financial  information  included in this quarterly 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 quarterly 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 quarterly 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   quarterly   report  (the
                     "Evaluation Date"); and

              (c)    presented in this quarterly  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 function):

              (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  quarterly  report  whether  or not  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.

                                     THE BEARD COMPANY

                                                 HERB MEE, JR.
     (Date)   May 13, 2003               Herb Mee, Jr., President and
                                           Chief Financial Officer