PROMISSORY NOTE

$200,000.00                                           Dated: December 1, 2004
                                                      Oklahoma City, Oklahoma

     FOR VALUE  RECEIVED,  The  Beard  Company,  an  Oklahoma  corporation  (the
"Borrower"),  unconditionally promises to pay to the order of Cibola Corporation
(together  with any  assignees or  successors-in-interest,  the  "Lender"),  the
principal  sum of Two Hundred  Thousand  Dollars  ($200,000.00),  plus  interest
accruing on the  principal  amount  outstanding  hereunder  from time to time as
further set forth below.

1.   Payment Terms/Interest Rate.

     (a)  Interest  Rate.  The Borrower  shall pay interest to the Lender on the
          outstanding and unpaid  principal amount due hereunder at a rate equal
          to fifteen percent (15%) per annum.

     (b)  Maturity Date Payment.  Any unpaid  principal and all accrued,  unpaid
          interest thereon shall be due and payable in full to the Lender on the
          Maturity  Date. The Maturity Date of this Note shall be the earlier of
          (i) July 31, 2005, or (ii) the date this Note is accelerated  pursuant
          to the terms hereof.

     (c)  Prepayment. This Note may be prepaid at any time, in whole or in part,
          without premium or penalty,  and any such prepayment  shall be applied
          first to accrued  interest and then to  principal in inverse  order of
          payments due.

2.   Payments.  Payments of principal  and interest are to be made at the office
     of the Lender located at 1131 13th Street,  Suite 206, Cody, Wyoming 82414,
     in lawful money of the United  States of America.  All  payments  hereunder
     shall be applied  first to interest  due and the balance  shall  reduce the
     principal balance.

3.   Default.  Each of the following shall  constitute a default under this Note
     (individually, a "Default"):

     (a)  Nonpayment.  The  Borrower  fails to pay when due any  principal of or
          interest on this Note.

     (b)  Breach of  Representations.  If any  representation or warranty of the
          undersigned herein is false or misleading in any material respect.

     (c)  Bankruptcy,   Insolvency,  Etc.  The  Borrower  becomes  insolvent  or
          generally  fails to pay,  or admits in writing  its  inability  to pay
          debts as they become due; or applies for,  consents to, or  acquiesces
          in the  appointment of a trustee,  receiver or other custodian for the
          Borrower or any of its property, or makes a general assignment for the
          benefit of creditors or, in the absence of such  application,  consent
          or acquiescence,  a trustee,  receiver or other custodian is appointed
          for the Borrower or for a  substantial  part of its  property;  or any
          bankruptcy,  reorganization  or debt  arrangement,  or  other  case or
          proceeding  under any bankruptcy or insolvency law, or any dissolution
          or liquidation proceeding is commenced in respect of the Borrower and,
          if such case or proceeding  is not  commenced by the  Borrower,  it is
          consented to or acquiesced in by the Borrower;  or the Borrower  takes
          any action to authorize, or in furtherance of, any of the foregoing.

     (d)  Adverse  Judgments.  Entry  by  any  court  of a  final  nonappealable
          judgment against the Borrower in an amount of $10,000 or greater which
          is not  satisfied  within  thirty (30) days,  or an  attachment of any
          material part of the Borrower's assets.

4.   Effect of  Default.  If any Default  shall  occur,  this Note shall  become
     immediately  due and  payable at the option of the  Lender,  and the Lender
     shall have all rights and remedies to which it is entitled  under this Note
     or applicable  law.  While any Default  exists  hereunder,  all sums herein
     promised  to be paid shall  bear  interest  at the rate  equal to  eighteen
     percent  (18%) per annum,  accrued  from the date of Default to the date on
     which such Default is cured to the  satisfaction of the holder hereof.  All
     past due sums will be paid at the time of and as a condition  precedent  to
     the  curing of any  Default  hereunder.  During the  existence  of any such
     Default,  the holder of this Note may apply payments received on any amount
     due  hereunder  or under  the  terms  of any  instrument  now or  hereafter
     evidencing or securing any said indebtedness as said holder may determine.

5.   Remedies  Separate.  The Lender may  pursue any rights or  remedies  as the
     holder of this Note independently or concurrently. All rights, remedies, or
     powers herein conferred upon the Lender shall, to the extent not prohibited
     by law, be deemed cumulative and not exclusive of any others thereof, or of
     any other rights,  remedies, or powers available to the Lender. No delay or
     omission of the Lender to exercise any right, remedy, or power shall impair
     the same or be construed  to be a waiver of any Default or an  acquiescence
     thereto.  No waiver of any Default shall extend to or affect any subsequent
     Default or impair any rights,  remedies, or powers available to the Lender.
     No single or partial exercise of any right, remedy, or power shall preclude
     other or future exercise thereof by the Lender.

6.   Collection Expenses. In addition to and not in limitation of the foregoing,
     the Borrower further agrees to pay all expenses,  including but not limited
     to reasonable attorneys' fees and legal expenses, incurred by the Lender in
     endeavoring to collect any amounts payable hereunder that are not paid when
     due, whether by acceleration or otherwise.

7.   Waivers.  The  Borrower,  endorsers,  sureties,  guarantors  and all  other
     persons  who  may  become  liable  for all or any  part of the  obligations
     referenced herein, whether primarily or secondarily, severally waive notice
     of default,  notice of dishonor,  notice of  acceleration,  presentment for
     payment,  protest and notice of  nonpayment.  Said  parties  consent to any
     extension of time (whether one or more) for payment hereof,  any release of
     all or any part of the  security  for the  payment  hereof,  if any, or any
     release  of any party  liable  for  payment  of this  obligation.  Any such
     extension  or  release  may be made  without  notice to any such  party and
     without discharging said party's liability hereunder.

8.   Lawful Rate.  Nothing contained in this Note shall be deemed to require the
     payment of  interest  by the  Borrower  in excess of the  amount  which the
     Lender may lawfully  charge under the  applicable  usury laws. In the event
     that the interest provided herein shall exceed such lawful charge, then the
     amount of interest payable hereunder by the undersigned shall be reduced to
     the maximum amount of such lawful charge.

9.   Representations   of  the  Borrower.   The  Borrower  hereby  warrants  and
     represents as follows:

     (a)  This Note is the legal,  valid and binding  obligation of the Borrower
          enforceable in accordance with its terms.

     (b)  The Borrower is not a party to or otherwise subject to any contract or
          agreement that restricts or otherwise  affects its right or ability to
          execute  this  Note  or to  perform  any of  its  terms.  Neither  the
          execution nor delivery of this Note, nor fulfillment of nor compliance
          with its terms  and  provisions  will  conflict  with,  or result in a
          breach of the terms,  conditions  or  provisions  of, or result in the
          creation  of any lien  upon any of the  properties  or  assets  of the
          Borrower pursuant to, or require any consent, approval or other action
          pursuant to any agreement, instrument or laws to which the Borrower is
          subject.

10.  Governing  Law.  This Note shall be governed by and construed in accordance
     with the laws of the State of Oklahoma.

11.  Right of  Offset.  Either  before  or after  the  occurrence  of a  Default
     hereunder, any amounts due from the Lender to the Borrower such as, but not
     limited to, those certain  quarterly  estimated  tax payments  historically
     made by the Lender to the Borrower,  are pledged to secure  payment of this
     Note and any other obligation to the Lender by the Borrower, and may at any
     time  while  the  whole or any  part of the  obligations  hereunder  remain
     unpaid,  either  before or after the  Maturity  Date,  and with or  without
     notice, be appropriated, held or applied toward the payment of this Note or
     any other obligation to the Lender by the Borrower.

     IN WITNESS WHEREOF,  the undersigned has executed this Note effective as of
the date first above written.

                                     THE BEARD COMPANY

                                     By:   /s/ Herb Mee, Jr.
                                           Herb Mee, Jr., President