UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549
                                
                           FORM 10-K/A
                                
   [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
            For the fiscal year ended December 31, 1996
                               OR
   [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     For the transition period from ______________ to ________________
                                
                 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
                                
    Securities registered pursuant to Section 12(b) of the Act:
                                
                                                           (Name of each 
                                                            exchange on
   (Title of each class)                                    which registered)
Common Stock, $.001 par value                            American Stock Exchange
Redeemable Preferred Stock, $1.00 par value                       None

Securities registered pursuant to Section 12(g) of the Act:  None
                                
     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 requirement for the past 90 days.  Yes [X]    No [  ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form l0-K or any amendment to this
Form 10-K.  [ X ]

     The aggregate market value of the voting common stock held by non-
affiliates of the registrant, computed by using the closing price of 
registrant's common stock on the American Stock Exchange as of the close of 
business on February 28, 1997 was $6,739,000.

     The number of shares outstanding of each of  the registrant's classes of
common stock as of February 28, 1997 was
            Common Stock $.001 par value - 2,799,074
                                
           DOCUMENTS INCORPORATED BY REFERENCE:  None
<PAGE>
                                
                                
                       THE BEARD COMPANY
                           FORM 10-K
                                
          For the Fiscal Year Ended December 31, 1996
                                
                       TABLE OF CONTENTS
                                
PART I

Item 1.   Business    

Item 2.   Properties     

Item 3.   Legal Proceedings   

Item 4.   Submission of Matters to a Vote of Security Holders    


PART II

Item 5.   Market for the Company's Common Equity and Related Stockholder
          Matters   

Item 6.   Selected Financial Data                                

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations    

Item 8.   Financial Statements and Supplementary Data            

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure     


PART III

Item 10.  Directors, Executive Officers and Significant Employees of the
          Registrant

Item 11.  Executive Compensation                                 
      
Item 12.  Security Ownership of Certain Beneficial Owners and Management   

Item 13.  Certain Relationships and Related Transactions         


PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K 

SIGNATURES               
<PAGE>
                       THE BEARD COMPANY
                                
                           FORM 10-K
                                
                   FORWARD LOOKING STATEMENTS
                                
     This document contains "forward looking statements" as defined by the
Securities Litigation Reform Act of 1995.  These statements should be read in
conjunction with the cautionary statements included in this document, including
those found under "Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations."
                                
                             PART I

Item 1.  Business.

(a)   General development of business.

   General. The name of a wholly-owned subsidiary formed in Oklahoma by Beard 
Oil Company ("Beard Oil") in 1974 was changed to Beard Investment Company in 
November of 1989 and to The Beard Company ("Beard" or the "Company") in 
August of 1993.  Beard conducts various non-oil and gas operations which may be 
categorized into two industry segments: (1) the carbon dioxide segment (the "CO2
Segment"), comprised of (a) the manufacture and distribution of dry ice (solid 
CO2) and (b) the production of CO2; and (2) the environmental/resource recovery 
segment (the "E/RR" Segment"), consisting of environmental services and resource
recovery. Beard also holds a minority interest in a joint venture involved in 
the extraction, production and sale of crude iodine.  
   
   As a result of the 1993 Reorganization (the "Reorganization" - see below)
Beard has more than $66.9 million of unused net operating losses ("NOL's")
available for carryforward.  Unless the context otherwise requires, references
to Beard and the Company herein include Beard and its consolidated subsidiaries,
including Beard Oil.
   
                    THE 1993 REORGANIZATION
   
   The 1993 Reorganization.  As a result of a reorganization (the
"Reorganization"), effective in October 1993, and a settlement agreement in 
April 1995 (the "Settlement") with four institutional lenders (the "Lenders"): 
(a) Beard divested substantially all of its oil and gas assets; (b) $101,498,000
of long-term debt and other obligations were effectively eliminated; and (c) the
Lenders received 25% of Beard's then outstanding common stock and $9,125,000
stated value (91,250 shares, or 100%) of Beard's then outstanding preferred
stock.
   
   Subsequent Sale of Stock by Certain Lenders; Current Stock Ownership by the
Lenders.  On January 2, 1997 three of the four Lenders sold their common and
preferred shares to five parties, one of whom owns more than 5% of the Company's
outstanding common and preferred stock. As a result of the Reorganization, and
after giving effect to (i) the redemption of 1,094.14 preferred shares in April
of 1995; (ii) the sale by three of the Lenders of 351,044 common shares and
47,728.76 preferred shares in January of 1997; and (iii) the 2,799,074 common
shares outstanding as of February 28, 1997, the other Lender holds 9.57% of the
voting power of Beard through its ownership of common stock and an additional
6.67% through its holdings of preferred stock, for a total of 16.24% of the 
total outstanding voting stock of the Company.  The preferred holders have 
elected a director to serve on Beard's six-member Board of Directors.
   
   Mandatory Redemptions on Beard Preferred Stock.  The Company's preferred 
stock is mandatorily redeemable through December 31, 2002 from one-third of 
Beard's "consolidated net income" as defined.  Accordingly, one-third of future
"consolidated net income" will accrete directly to preferred stockholders and
reduce earnings per common share.  
   
   Conversion of Beard Preferred Stock. Each share of Beard preferred stock 
which has not previously been redeemed may be converted into 5.129421 shares of 
Beard common stock after December 31, 2002.  Fractional shares will not be 
issued, and cash will be paid in redemption thereof.
   
   Preservation of NOL's.  The Company estimates that at year-end 1996, Beard 
and its consolidated subsidiaries had NOL's of approximately $66.9 million.  
Beard considers such NOL's, which expire between 2001 and 2010, to be one of its
most valuable assets and that loss of the NOL's would have a severe negative 
impact on the Company's future value. Beard is currently considering action to 
protect the assets and prevent the triggering of an "ownership change" as 
defined in Section 382 of the Code (which would severely limit the use of 
the NOL's) by re-imposing restrictions (to replace those restrictions which 
expired October 26, 1996) on all of its shares to prevent transfer without 
the Board of Directors' consent to any person if that person was, or would 
thereby become, a holder of 5% or more of the fair market value of Beard's 
outstanding capital stock.
   
   Indemnification Obligations.  As a result of the Reorganization, the Company
has indemnified Sensor and the Lenders 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
Reorganization (collectively, the "Obligations").  Neither Beard nor Beard Oil
is presently aware of any material liabilities existing as a result of such
Obligations.
   
   Discontinued Operations.  In January of 1997 the Company made the decision to
discontinue its real estate construction and development activities.  As a
result, Beard's continuing operations consist primarily of the CO2 Segment and
other activities which include the E/RR Segment and other unrelated activities. 
Accordingly, the net operating results of the Company's real estate segment have
been presented as discontinued operations in 1996 and for all periods presented
in the consolidated statements of operations.  As of March 13, 1997, the Company
had sold all of the real estate construction and development assets with the
exception of three speculative homes.  One of these is under contract for 
closing on March 21, 1997, and another is under contract for closing on May 30, 
1997, leaving one home remaining for sale.


                     CONTINUING OPERATIONS

   Carbon Dioxide Operations.  The Company's carbon dioxide ("CO2") operations
are now concentrated on the manufacturing and distribution of dry ice (solid 
CO2) which are conducted by an 85%-owned subsidiary, Carbonic Reserves ("Car-
bonics"), and the production of CO2 gas which is conducted through Beard.  The 
Company owns working interests in two producing CO2 gas units in Colorado and 
New Mexico.
   
   As the result of two significant acquisitions in 1990 and subsequent expan-
sion in 1991 and 1995, the Company's dry ice manufacturing and distribution 
activities now consist of six plants and 13 distribution centers as compared
with one plant and three distribution centers at year-end 1989.  As a result
of this growth, the size and scope of its dry ice manufacturing and distribu-
tion operations have expanded to the point where management believes it is 
one of the largest producers of dry ice in the continental United States.
   
   Environmental/Resource Recovery Activities.  When Beard divested itself of
Beard Oil's oil and gas assets in 1993, it redirected the focus of its oilfield
services subsidiaries to environmental services activities.  The Company and its
management have considerable expertise in the environmental field stemming from
previous experience as the founder, as officers and directors, and as the
principal shareholder of USPCI, Inc. (NYSE) from 1968 until its acquisition by
Union Pacific Corporation in 1987-88.  
   
   In 1993 Whitetail Services, Inc. ("Whitetail") terminated its oilfield
construction activities and converted its operations to focus upon environmental
services, including soil and groundwater treatment system installations, site
remediation, bioremediation, waste stabilization and solidification, underground
storage tank removal, heavy equipment operations and emergency spill response. 
Whitetail's environmental service capabilities were expanded in 1995 by the
addition of environmental drilling, wastewater storage tank rentals, waste
transportation and storage, and CO2 blaster cleaning services, all of which had
previously been conducted by separate subsidiaries. 
   
   In 1990 the Company acquired more than 80% of Energy International Corpora-
tion ("EI"), a research and development firm specializing in coal-related
technologies.  During the four years that Beard owned EI, EI developed a new
patented technology know as Mulled Coal Technology (the "M/C Technology").  In
May of 1994 Beard sold EI to a subsidiary of The Williams Companies, Inc. for
$2,199,000, but retained the M/C Technology which was contributed to a wholly-
owned subsidiary, Beard Technologies, Inc. ("BTI").  BTI has continued to pursue
the commercial development of the M/C Technology.  In 1995 BTI served as the
principal subcontractor to EI on a contract which EI had entered into with the
United States Department of Energy (the "DOE") to demonstrate the storage,
handling and transportation characteristics of Mulled Coal under commercial
conditions.  The final report on this project was delivered to the DOE in March
of 1996, with the results and conclusions far surpassing BTI's original
expectations.  (See "Resource Recovery Activities - Department of Energy
Contract").
   
   In May of 1996 the Company acquired 80% of Horizontal Drilling Technologies,
Inc. ("HDT"),  a company specializing in trenchless technology.  As part of the
purchase consideration the seller received 20% of the common stock of 
Whitetail.  HDT specializes in directional drilling and has completed various 
aspects of utility and environmental remediation projects in 12 states.  It 
has focused much of its attention since the acquisition on cable and fiber 
optics installations.
    
   Collectively, the E/RR Segment can provide environmental related services to
industry and government on a nationwide scale utilizing the newest emerging
technologies and state of the art assessment-to-remediation techniques.  Now 
that BTI has successfully demonstrated the commercial feasibility of its M/C
Technology, it is focusing its current efforts on marketing such technology in
the coal producing states, where it hopes to set up several coal recovery
projects for the larger coal companies operating there.
   
   Other Activities.  In addition to the above, Beard's other activities include
(i) a minority-owned investment in a joint venture for the extraction, produc-
tion and sale of crude iodine; and (ii) various assets and investments which the
Company intends to liquidate as opportunities materialize. Such assets consist
primarily of the residue of its discontinued real estate operations (see
"Discontinued Operations" above); drilling rigs, yards and equipment; real 
estate limited partnerships; and miscellaneous other investments. See 
"Business -- Other Activities."  As excess funds become available from such 
liquidations they will be utilized for working capital, reinvested in Beard's
ongoing business activities or re-deployed into newly targeted opportunities.
   
   Oil and Gas Assets and Related Liabilities Retained by Beard Oil.  Pursuant
to the Reorganization, Beard Oil retained 18 oil and gas leases on which near
term sale or plugging and remediation work was contemplated. Any liabilities
incurred by Beard Oil will be considered as a redemption of an equivalent amount
of the mandatorily redeemable preferred stock by Beard, subject to specified
limitations. As of December 31, 1996, plugging had been completed on 15 leases,
at a cost of approximately $81,000. It is possible that further remediation work
may be required, but no material liability is anticipated.

(b)   Financial information about industry segments.
   
   Financial information about industry segments is contained in the Statements
of Operations and Note (16) of Notes to the Company's Financial Statements.  See
Part II, Item 8---Financial Statements and Supplementary Data.

(c)   Narrative description of business segments.

   The Company operates within two major industry segments: CO2 and E/RR.  All
of such activities, with the exception of Beard's CO2 production activities, are
conducted through subsidiaries.  Beard, through its corporate staff, performs
management, financial, consultative, administrative and other services for its
subsidiaries.
   
                   CARBON DIOXIDE OPERATIONS
   
   General.  The Company's CO2 operations are conducted directly and through a
subsidiary.  Such activities include the operations of (1) the Company's 85%-
owned subsidiary, Carbonic Reserves ("Carbonics"), which operates six dry ice
(solid CO2) producing plants and 13 sales and distribution centers, and (2)
Beard's directly owned working interests in (i) two carbon dioxide producing
units and (ii) a shut-in CO2 gas well in south central Utah.
   
Carbonic Reserves

   History.  Carbonics was founded in 1987 by Beard Oil and Clifford H. Collen,
Jr. ("Collen"), its President, to enter the liquid CO2 business.  It is
headquartered in San Antonio, Texas.  The original concept was to build a 
liquids business based upon Collen's expertise involving many years of 
experience in the CO2 industry and Beard Oil's large CO2 gas reserves which were
subsequently transferred to Beard.  The common stock of Carbonics is presently
owned 85% by Beard and 15% by Collen.  In addition Beard owns $14,358,000 of
Carbonics preferred stock which is mandatorily redeemable out of one-third of
Carbonics' consolidated pre-tax net income.
   
   Evolution of Current Strategy.  In 1987, Carbonics built a liquid CO2 plant
at Clayton, New Mexico (the "Bravo Plant") and entered the liquid CO2 business
by distributing its product in New Mexico, Texas, Kansas and Oklahoma.  This
proved to be a very commodity-oriented business which generated unacceptably low
margins.  In 1989, Carbonics changed its basic strategy, virtually withdrawing
from the sale of liquid CO2 and CO2 gas, in order to concentrate its efforts on
the manufacturing and distribution of dry ice.
   
   1990-1991 Expansion Activities.  At year-end 1989, Carbonics owned one dry 
ice plant at Clayton, New Mexico and operated three sales and distribution 
centers located in Amarillo and Lubbock, Texas and Denver, Colorado.  In 1990, 
it acquired three dry ice manufacturing plants and a distribution center from a
major competitor and also acquired a dry ice manufacturing plant and eight
distribution centers from two affiliated parties in Denver.  Carbonics opened 
two additional distribution centers in late 1990 and added three additional
distribution centers in 1991.
   
   Dry Ice Manufacturing and Distribution.  Carbonics is a dry ice manufacturer
and distributor with its principal offices located in San Antonio, Texas. 
Following its 1990 and 1991 expansion activities, Carbonics had five
manufacturing plants located in Cortez, Colorado; the Bravo Plant at Clayton, 
New Mexico; Enid, Oklahoma; Corpus Christi, Texas; and Cheyenne, Wyoming.  In 
1995 it began operating a sixth manufacturing plant under contract in Dallas, 
Texas.  These six plants supply Carbonics' sales and distribution warehouses 
located in Denver and Longmont, Colorado; Wichita, Kansas; Albuquerque, 
New Mexico; Tulsa, Oklahoma and Amarillo, Austin, Corpus Christi, Dallas, 
Harlingen, Houston, Lubbock and San Antonio, Texas.  The Bravo plant has a 
90 ton/day capacity, the Cortez plant has a 60 ton/day capacity and the other
four plants have a 50 ton/day capacity.  All of Carbonics' facilities are in 
leased premises except (i) the Wichita warehouse; (ii) the Denver warehouse 
where Carbonics owns a building on leased land; and (iii) the Dallas and 
Amarillo warehouse which are under lease/purchase options.
   
   Bravo Plant.  The Bravo plant is a 240 ton/day CO2 liquification and
purification plant and a 90 ton/day dry ice plant.  The liquification and
purification portion of the Bravo plant is currently being upgraded to produce
a higher quality CO2 and to increase the efficiency of the plant.  Liquid CO2
from this leased facility is used as a raw material at Carbonics' adjoining dry
ice plant, and is also available for sale to third parties.  
   
   Take-or-Pay Contract.  Until February of 1996, Carbonics was selling liquid
CO2 exclusively to a customer on a take-or-pay basis under a 10-year contract
expiring in 1999. Pursuant to a settlement agreement executed in February of
1996, the customer terminated its obligation at such time by the payment of
$539,000 in cash and the transfer of liquid CO2  processing equipment valued at
$400,000 to Carbonics.  The settlement added $939,000 of pre-tax income to the
Company's financial results for 1996 and for the first quarter thereof.   
   
   Principal Products.  The principal product produced through Beard's CO2
operations is dry ice which accounted for the following percentage of the
Company's consolidated revenues from continuing operations and Segment revenues
for each of the last three years:
<TABLE>
<CAPTION>
                          Percent of        
        Fiscal Year   Consolidated Revenues          Percent of
           Ended      from Continuing Operations  Segment Revenues     
        -----------   --------------------------  ----------------
         <C>                <C>                       <C>  
         12/31/96           73.2%                     89.7%
         12/31/95           69.3%                     87.3%
         12/31/94           68.7%                     89.9%
</TABLE>
                                         
   Market Demand and Competition.  Dry ice is marketed directly to meat packing
plants, food processing plants and wholesale grocery companies. Health science
centers are an emerging market for the product.  It is used extensively by
commercial airlines to keep their food and drinks cold prior to and during
service to passengers.  Additionally, Carbonics is focusing its efforts on
developing sales of dry ice to retail customers through grocery and convenience
store outlets.  The principal retail use is for keeping foods and beverages cold
in containers for hunters, fishermen, travelers, etc.
   
   The dry ice business is highly competitive in that portion of the continental
United States outside of Carbonics' present market area, which may limit
Carbonics' ability for further expansion.
   
   Availability of Raw Materials.  Carbonics believes that it has adequate CO2
available to handle its present and foreseeable manufacturing requirements.  In
addition, by virtue of Beard's ownership of CO2 reserves in the McElmo Dome and
Bravo Dome fields, it has the ability to trade a portion of such reserves for
needed product at its various supply points.
   
   Trademarks.  Carbonics is the sole manufacturer of Penguin BrandTM dry ice. 
Carbonics has developed a program to market its dry ice in individual plastic
bags bearing the Penguin BrandTM trademark to the general public.  By placing 
one of Penguin's dry ice dispensers--an insulated chest freezer requiring no
electrical hookup--in a retail store next to a wet ice dispenser, the public is
given the choice of either wet or dry ice.
   
   Carbonics' marketing efforts have been focused on sales through corporate
chains of grocery stores such as Kroger, Randalls, Albertsons and King Soopers. 
As a result, Penguin BrandTM dry ice is currently being marketed through more
than 1,800 grocery stores in Arizona, Arkansas, Colorado, Kansas, Missouri,
Nevada, New Mexico, Oklahoma, Texas, Utah and Wyoming. 
   
   In 1993 Carbonics decided to concentrate its marketing efforts on increasing
sales of Penguin BrandTM dry ice, which has resulted in steady improvement in 
the ratio of Penguin ice sales to total dry ice sales, to consolidated 
revenues from continuing operations and to CO2 Segment revenues, as illustra-
ted by the following table:
<TABLE>
<CAPTION>
                                        Percent of
                        Percent    Consolidated Revenues  Percent of   Total
Fiscal Year   Penguin   of Dry        from Continuing     Segment      Dry Ice
Ended        Ice Sales   Sales          Operations        Revenues     Sales
-----------  ---------  -------    ---------------------  ----------   -------
<C>         <C>          <C>              <C>              <C>       <C>
12/31/96    $2,598,000   21.3%            15.6%            19.1%     $12,206,000
12/31/95    $2,038,000   19.6%            13.6%            17.1%     $10,407,000
12/31/94    $1,674,000   17.3%            11.9%            15.5%     $ 9,697,000
</TABLE>
   
   Equipment and Process Technology Development; Patents.  Carbonics has
developed and continues to develop dry ice freezing equipment for the food
processing industry.  Such developments include tunnel freezers, cabinet 
freezers and dry ice handling equipment.  The primary markets for this 
equipment are mid-sized food processing or meat packing facilities. 
   
   In March of 1992, Carbonics filed a patent application with the U.S. Patent
Office for the patent rights to a "Fluidized Bed Air Cooling System."  This
patent was issued in June, 1993.  A patent was issued to Carbonics in March of
1993 for an "Apparatus for Cutting Blocks of Ice."  Carbonics currently has a
patent application pending for an "Enhanced Method of Producing Dry Ice 
Pellets."
   
   It is possible that some of the other equipment and process technology being
developed by Carbonics may be patentable; if so, patent protection will be 
sought and pursued.
   
   ECO2 Solutions.  Through its ECO2 Solutions Division, Carbonics is a licensed
distributor of a dry ice pellet blaster which is a substitute for sand blast
cleaning in the foundry and food processing industries.  In 1996 Whitetail took
over the CO2 blaster cleaning service operations previously conducted by
Carbonics.  (See "Environmental Services Activities---Whitetail Services, 
Inc.").
   
   ECO2 Solutions is also the sole licensee in Texas for the patented AQUA FREED
process, which offers an environmentally safe, chemical-free alternative to 
water well stimulation and new well stimulation operations.  The process 
utilizes liquid CO2 injected under pressure to fracture and energize the 
target formation and increase production capacity.
   
   Seasonality.  To the extent dry ice is sold at the retail level for
recreational purposes, the product is considered highly seasonal to the summer
months and the month of October.
   
Carbon Dioxide (CO2) Properties
   
   McElmo Dome.  During 1983, the McElmo Dome Field in Montezuma and Dolores
Counties of Western Colorado was formed into a field-wide unit (the "Unit")
covering a 240,000-acre area which is producing CO2 gas.  Beard owns a 0.545610%
working interest (0.471926% net revenue interest) and an overriding royalty
interest equivalent to a 0.092190% net revenue interest in the Unit, giving it
a total 0.564116% net revenue interest in the Unit.
   
   Deliveries of CO2 gas from the Unit are transported through a 502-mile
pipeline (the Cortez pipeline) to the Permian Basin oilfields in West Texas 
where such gas is utilized primarily for tertiary oil recovery.  Shell Western 
E&P, Inc. ("SWEPI") is the operator of the Unit.  There are 41 producing wells 
in the Unit, ranging from 7,634 feet to 8,026 feet in depth.  McElmo Dome and 
Bravo Dome (see below) are believed to be the two largest producing CO2 fields
in the world. The gas from McElmo is estimated to be approximately 97% pure 
CO2. 
   
   In 1996 Beard sold 1,695,000 Mcf (thousand cubic feet) attributable to its
working and overriding royalty interest at an average price of $.17 per Mcf.  In
1995, Beard sold 1,095,000 Mcf attributable to its working and overriding 
royalty interest at an average price of $.20 per Mcf.  In 1994 the Company 
sold 701,000 Mcf attributable to its working and overriding royalty interest
at an average price of $.19 per Mcf. Beard was underproduced by 604,000 Mcf 
on the sale of its share of McElmo Dome gas at year-end 1996.
   
   In July of 1996 SWEPI advised the working interest owners that current demand
for McElmo Dome CO2 had increased from less than 600 million cubic feet per day
in 1995 to over 700 million cubic feet per day, and is expected to increase to
one billion cubic feet per day beginning in July of 1997.  In order to meet such
demand SWEPI commenced a $29.7 million development program in July of 1996 which
is targeted for completion in July of 1997.  Beard's share of the estimated
development cost amounts to approximately $162,000, of which $69,000 was 
incurred in 1996.
   
   Bravo Dome.  In addition to its reserves in the McElmo Dome Unit, Beard also
owns a very small working interest in the 1,000,000-acre Bravo Dome CO2 Gas Unit
which is situated in Union, Harding and Quay Counties of northeastern 
New Mexico.  Beard acquired a 0.05863% working interest in this unit in 1987.
Beard takes its share of the unit CO2 production in kind and sells it to 
Carbonics.  Beard is currently underproduced by 47,000 Mcf on the sale of its
share of Bravo Dome gas.  The CO2 gas purchased by Carbonics from Beard, 
which amounted to $9,000 in 1996, $9,000 in 1995, and $8,000 in 1994, is 
used in the manufacturing of dry ice at its Bravo plant. 
   
   Amoco Production Company operates a CO2 production plant in the middle of the
Bravo Dome Unit which was formed in 1979.  There are 265 producing wells in the
Bravo Dome Unit, each being approximately 2,500 feet in depth.  The gas is
extremely pure, being approximately 98% CO2.
   
   Net CO2 Production.  The following table sets forth Beard's net CO2 produc-
tion for each of the last three fiscal years:
<TABLE>
<CAPTION>
                              
                                      Net CO2
                  Fiscal Year        Production
                     Ended             (Mcf)
                  -----------        ----------                      
                    <C>               <C>
                    12/31/96          1,723,000
                    12/31/95          1,123,000
                    12/31/94            726,000
</TABLE>
   
   Average Sales Price and Production Cost.  The following table sets forth
Beard's average sales price per unit of CO2 produced and the average lifting
cost, lease operating expenses and production taxes, per unit of production for
the last three fiscal years:
<TABLE>
<CAPTION>
                    Average Sales      Average Lifting                         
     Fiscal Year    Price Per Mcf       Cost Per Mcf  
       Ended           of CO2               of CO2
    ------------    -------------      ----------------
      <C>               <C>               <C>
      12/31/96          $0.18             $0.06
      12/31/95          $0.20             $0.09
      12/31/94          $0.19             $0.14
</TABLE>
   
   Productive Wells and Acreage.  Beard's principal CO2 properties are held
through its ownership of working interests in oil and gas leases which produce
CO2 gas.  As of December 31, 1996, Beard held a working interest in a total of
307 gross (1.25 net) CO2 wells located in the continental United States.  The
table below is a summary of such developed properties by state:
<TABLE>
<CAPTION>
                              Number of Wells
                              ---------------
   State                      Gross       Net
   -----                      -----       ---
   <C>                        <C>        <C>
   Colorado................    41        0.224
   New Mexico..............   265        0.029
   Utah (a)................     1        1.000
                              ----       -----
                              307        1.253
                              ====       =====
________
(a) Includes the Tanner #1-27 shut-in CO2 well in Wayne County, Utah.
</TABLE>
   
   Employees.  As of December 31, 1996 the CO2 Segment employed 110 full time 
and eight part time employees.  All such employees were employed by Carbonics.
   
   Financial Information.  Financial information about the Company's CO2
operations is contained in the Company's Financial Statements.  See Part II, 
Item 8---Financial Statements and Supplementary Data.
                                
                                
           ENVIRONMENTAL/RESOURCE RECOVERY ACTIVITIES
   
   General.  Following the 1993 Reorganization, the operations of several of
Beard Oil's oilfield services subsidiaries were redirected to focus upon
environmental services activities, and another subsidiary was formed to assist
in the marketing effort for such activities. Following the sale of the Company's
research and development company in 1994 another subsidiary has continued to
pursue the commercial development of the patented coal technology developed by
its R&D predecessor.  In 1996 a company was acquired which utilizes trenchless
technology for its environmental remediation projects.  In January of 1997
another subsidiary became the exclusive U.S. licensee for the use of a chemical
process for the remediation of creosote and PAH contamination.
   
      The Company and its management have considerable expertise in the
environmental area stemming from previous experience as the founder, as officers
and directors, and as the principal shareholder of USPCI, Inc. (NYSE) from 1968
until its takeover by Union Pacific Corporation in 1987-88. 
   
   Environmental Services Activities
   
   Whitetail Services, Inc.  In 1990 Beard Oil took over the operations of a
small oilfield construction business operating in central Oklahoma. Beard Oil
operated the business through a wholly-owned subsidiary named Whitetail 
Services, Inc. ("Whitetail") which started to expand the business.  With 
the deterioration in oil and gas drilling activities in early 1991, 
Whitetail's services were broadened to include environmental cleanup of non-
hazardous material.
   
   In 1993 Beard Oil made the decision to discontinue Whitetail's oilfield
construction activities and Whitetail's outstanding construction contracts were
concluded.  The employees involved with such contracts were terminated. Beard 
Oil transferred the corporate shell of Whitetail and part of its equipment to 
Beard. Whitetail retained 12 employees who were involved in its environmental 
cleanup activities. 
   
   Whitetail handles a wide range of environmental services, including soil and
groundwater treatment system installations, site remediation, bioremediation,
waste stabilization and solidification, underground storage tank ("UST") 
removal, heavy equipment operations and emergency spill response.  Recently 
Whitetail has diversified its capabilities to include the replacement of old
water lines with new lines in order to upgrade municipal water distribution 
systems. 

   In early 1993 Beard changed the name of a wholly-owned, inactive subsidiary
to SQG Services, Inc. ("SQG"), which commenced operations on April 1.  In 1995
SQG was merged into Whitetail and became the SQG Services Division of Whitetail
("SQG Services"). SQG Services provides consulting services to generators of
small quantities of hazardous and non-hazardous industrial waste and handles the
removal and disposal of same.  SQG Services also provides services for removal
and disposal of waste products, and handles all related documentation, ensuring
compliance with government regulations and reducing future liability.  One of 
SQG Services' unique features is its characterization services which sample and
identify the customer's waste, ensuring that it is properly analyzed and safely
handled from that point forward.
   
   All of SQG Services' personnel must undergo rigorous training, including OSHA
required 40 Hour Hazardous Waste Operations and Emergency Response training
("HAZWOPER"), CPR/First Aid, Confined Space and other specialized training
certifications that apply to their work.
   
   In 1995 Whitetail also took over most of the wastewater storage tank rental
operations of another Beard's environmental service companies, Incorporated Tank
Systems.  As a result, Whitetail has 36 wastewater storage tanks available for
rental.  As of March 24, 1997, two tanks were rented.  
   
   In addition, Whitetail has taken over the CO2 blaster cleaning service
operations previously conducted by Carbonic Reserves.  Dry ice pellet blasting
is a substitute for sand blast cleaning in the foundry and food processing
industries.  In this environmentally safe cleaning system, extremely dense dry
ice pellets shatter, blasting away contaminants from most all surfaces, and
instantaneously returning to gas upon impact with a surface.  The system
eliminates the use of chemical solvents, and is non-hazardous and non-toxic.
   
   In late 1996 Whitetail shifted its marketing focus, placing increased 
emphasis on the development of private sector accounts while continuing to 
service current governmental, public sector clients.  While it has handled 
jobs in several other states, Whitetail has operated primarily to date in 
Oklahoma, Texas, Kansas, Arkansas, and Missouri.  As a result of the HDT 
acquisition (see below), Beard's ownership in Whitetail was reduced to 80%.
   
   Since the takeover of Whitetail's operations by Beard the number of
Whitetail's employees has increased from 12 to 32 (29 full time and three part
time) as of December 31, 1996. 
   
   Horizontal Drilling Technologies, Inc.  In May of 1996 the Company acquired
80% of the common stock of Horizontal Drilling Technologies, Inc. ("HDT").  The
seller received 20% of the common stock of Whitetail as part of the considera-
tion for the purchase of HDT.  HDT specializes in directional horizontal 
drilling and in the installation of horizontal wells for soil and ground-
water remediation.  HDT has completed a broad range of projects for utili-
ies, municipalities, pipeline companies, environmental service companies and
others in 12 states.  Because of the tremendous growth currently being 
enjoyed by the telecommunications industry, HDT is concentrating much of its
present marketing efforts on cable and fiber optic installations. 
   
   Currently HDT and Whitetail, in a joint marketing effort, are diversifying
into several phases of utility construction utilizing directional drilling
capabilities and other trenchless technologies.
   
   BSK, Inc.  In 1994 Beard organized BSK, Inc. ("BSK") which is 90%-owned by
Beard and 10%-owned by BSK management.  BSK was formed to provide marketing
assistance for the other subsidiaries in the E/RR Segment.  
   
Subsequent Event
   
   ISITOP, Inc.  In January of 1997 Beard changed the name of a wholly-owned,
inactive subsidiary to ISITOP, Inc. ("ISITOP"). ISITOP has obtained an exclusive
license for the United States from a company which has developed a chemical
(54GOTM 101) and has tested a process which utilizes such chemical for the
remediation of creosote and PAH contamination. A process and composition patent
has been applied for and issuance of the patent is expected in the near future. 
ISITOP is 80%-owned by Beard and 20%-owned by two members of ISITOP's management
team, who are also the principals of the company from which the license was
obtained.  Pursuant to employment agreements and other related agreements these
two parties also have options to acquire an additional 30% of ISITOP following
payout of all sums owed by ISITOP to Beard.
   
   Creosote is a very complex mixture of hydrocarbons and hydrocarbon
derivatives. It revolutionized the use of wood and wood products in wet
environments by preventing rapid decomposition. Creosote compounds are still in
use today, primarily to treat telephone poles, railroad ties, bridge timbers and
similar construction materials and to a lesser extent as medicinal agents. 
   
   Creosote mixtures contain many compounds that are known to cause several 
forms of cancer in animals and have been linked to several types of cancer 
(skin, etc.) in humans. The specific chemical family of cancer producing agents 
found in creosote are a group of molecules that are made up of several connected
ring structures known as polycyclic aromatic hydrocarbons ("PAH's").  These com-
pounds are in families of chemicals known by names like "anthracene", "fluorene"
and "benzo-pyrenes".  These mixtures make up the preparations known as 
"creosote" and are related by their poly ring structure.  Because of this 
biological structure, many are either known carcinogens or cancer suspect 
agents.
   
   Even though the use of creosote was "restricted" in the mid-1960's, it and
many of its sister mixtures are still in wide use both in the U.S. and through-
out the world.  The U.S. alone has over 700 wood preserving plants which are
estimated to use or produce more than 495,000 tons of creosote and creosote
byproducts per year.
   
   The very nature of creosote, as a preservation agent, works against the
environmental remediation of creosote materials that are or were spilled or
otherwise made their way into the soil at manufacturing and storage sites.  Past
attempts to clean up such sites have been only about 90% effective.   However,
a recent test utilizing the 54GOTM 101 chemical product in a bench test on an
age-hardened (more than 25 years old) sample of creosote indicated that the
creosote and PAH's had been remediated to near background levels, or a reduction
of nearly 100%.
   
   In the three-step licensed process used by ISITOP, the contaminated soils are
placed into on-site containers for processing using a proprietary chemical wash
(54GOTM 101---solvent specific) followed by bioremediation and perhaps some air
drying.  The process can take place at the contaminated area, eliminating the
high costs and exposure of disposal and trucking.
   
   Currently ISITOP is conducting the first test of the chemical process in the
field.  The site selected is the storage yard of an old narrow gauge railroad
near Durango, Colorado, where railroad ties have been stored for many years. 
Preliminary indications are that the test is proceeding in accordance with
expectations, but it is too early to draw any final conclusions.  Negotiations
are currently underway to determine the location for a larger, second test which
will be conducted upon completion of the test now in progress. 

Resource Recovery Activities
   
   History/Formation of Beard Technologies, Inc.  In early 1990, the Company
acquired more than 80% of Energy International Corporation ("EI"), a research 
and development firm specializing in coal-related technologies.   During the 
four years that Beard owned EI, EI developed a new technology known as Mulled 
Coal Technology (the "M/C Technology").
   
   In May 1994 Beard sold EI to a subsidiary of The Williams Companies, Inc. for
$2,199,000, retaining certain assets and the patent rights to the M/C Technology
which Beard contributed to a wholly-owned subsidiary which was renamed Beard
Technologies, Inc. ("BTI").  BTI has continued to pursue the commercial
development of the M/C Technology.  BTI has one full time employee.
   
   The M/C Technology.  Underground coal mines have always produced a certain
amount of fine coal which is difficult to clean and to market due to handling
problems.  Existing washing processes used to deal with this problem are all wet
processes, and the end product must be dewatered to make it acceptable in the
market place, which is difficult and usually expensive.  The Mulled Coal process
is an innovative and inexpensive solution to fine coal handling problems.  It is
a process which involves the addition of a low cost specifically formulated
reagent to wet fine coal in a simple mixing step to produce a material ("Mulled
Coal") that handles, stores and transports like dry coal.  But, unlike thermally
dried fine coal, Mulled Coal is not dusty, will not rewet, will not freeze, and
causes no environmental or safety hazards related to fugitive coal dust.
   
    Patent Protection.  The U.S. patent for the M/C Technology was issued in
1993.  Since then patents have been issued for Australia, Europe (enforceable in
Germany, Great Britain, Italy and Spain), Poland and South Africa. Patent
applications are pending in a number of other nations.
   
   Department of Energy Contract.  Prior to 1994 the M/C Technology had only 
been successfully demonstrated in the laboratory.  In March 1994 the 
United States Department of Energy (the "DOE") awarded a contract to 
EI under which the DOE agreed to fund a majority of the cost of demon-
strating the feasibility of the M/C Technology at a near commercial scale.  
Since the M/C Technology was transferred to BTI within a month of the 
contract award, BTI, EI and the DOE entered into agreements whereby 
EI remained as the prime contractor with BTI providing technical and 
on-site management for the project.
   
   The project was located at a large coal preparation plant near Birmingham,
Alabama, which is owned and operated by a major coal producer.  At the comple-
tion of the production phase of the project, the Mulled Coal was shipped to an 
Alabama power company.  The 23-month program was completed in February of 1996 
and the final project reports were delivered to the DOE in March of 1996.
   
   BTI is very encouraged by the results of the demonstration project.  The
design of process equipment and controls worked very well.  Excellent quality
Mulled Coal was produced on a continuous basis, in a commercial environment and
at a production rate which was 50 times higher than production rates for 
previous pilot plant tests.  Actual operating costs at the near commercial scale
were far lower than costs which had been projected from laboratory and pilot 
plant tests.  And, most importantly, the Mulled Coal caused no problems with 
storage, handling and shipping.
   
   Commercial Development Activities.  As a result of the demonstration project,
BTI considers the M/C Technology to be fully ready for commercialization. 
Efforts have been made to make producers in the U.S. and other coal producing
nations aware of the technology and its advantages.  BTI has called and will
continue to call on selected coal producers, preparation plant builders and coal
preparation engineering firms to acquaint them with the technology and to ex-
plore licensing arrangements related to the M/C Technology.  It also plans to 
call on utilities that burn large quantities of coal.
   
   Millions of tons of fine wet coal have been discarded to large coal slurry
impoundments throughout the eastern coal producing states, representing an
enormous potential source of low cost fuel.  BTI will pursue entering into
selected slurry impoundment recovery projects as a venture partner with an
experienced coal producer, preparation plant operator or allied service 
company. 
   
   Negotiations are currently in progress with a large coal producing company
headquartered in the midwest which owns several potential slurry pond recovery
sites.  The initial site selected for evaluation by BTI contains two ponds which
collectively are estimated to contain 3.1 million tons of raw coal.  If
negotiations are successfully concluded and financing is secured, it is
anticipated that construction of a recovery facility will commence prior to year
end. 
   
   Facilities.  Whitetail, its SQG Services Division and HDT utilize an office
and related facilities owned by Whitetail in Oklahoma City.  HDT also rents a
small office in Wichita.  BTI leases an office and laboratory facilities from 
the Applied Research Center at the University of Pittsburgh ("UPARC").  The 
UPARC facilities give BTI access to a wide range of coal and mineral testing
capabilities.  BSK occupies a portion of Beard's leased space at its Oklahoma
City office.  ISITOP is furnished office space in Farmington, New Mexico as part
of its arrangement with the company from which it obtained its license.
   
   Principal Products and Services.  The principal services rendered by Beard's
E/RR Segment are:  (1) Soil and groundwater treatment sysem installations; site
remediation; UST removal; construction; drilling and emergency response 
services; and consulting and safety training services for the handling of 
hazardous and non-hazardous materials and the removal and disposal of same.   
Such services are furnished through Whitetail and its SQG Services Division.  
(2) Through HDT the segment offers directional horizontal drilling services 
which have numerous environmental applications and also provides a broad 
range of services for utilities, municipalities, pipeline companies, environ-
mental service companies and telecommunication companies.  (3) Through ISITOP
the segment believes it can demonstrate the capability to clean up manufac-
turing and storage sites which have been contaminated by creosote materials.
(4) Through BTI the segment offers proprietary consulting technology and has
the capability to undertake large reclamation projects and the cleanup of 
slurry pond recovery sites.
   
   The E/RR Segment accounted for the following percentages of the Company's
consolidated revenues for each of the last three years. 
<TABLE>
<CAPTION>
                                  Percent of
              Fiscal Year    Consolidated Revenues
                Ended        from Continuing Operations
              -----------    --------------------------
               <C>                  <C>
               12/31/96             18.0%
               12/31/95             20.2%
               12/31/94             22.7%
</TABLE>
                                
   Market demand and competition.  The environmental services industry is highly
competitive, and in such activities the E/RR Segment must compete against major
services companies, as well as a number of small independent concerns. 
Competition is largely on the basis of customer service.  Beard's approach has
been to seek out niches of opportunity where it perceives that customers are not
being adequately served, and then to provide services using well-trained
personnel at reasonable rates.  The regulatory environment is rapidly changing,
at times creating new markets which the larger companies in the industry do not
recognize or have no desire to pursue, and thus creating opportunities for
smaller, aggressive entities such as Beard.  
   
   The environmental services entities provided their services to 179 customers
in 1996. Environmental services activities performed under subcontracts for 32
customers who were working for the State of Oklahoma Indemnity Fund (the 
"Fund"), primarily for UST removal, accounted for 72% of the E/RR Segment's 
1996 revenues.  However, the Company does not feel that the loss of any 
single customer would have a material adverse effect on the Company and 
its subsidiaries as a whole.  The Fund normally pays for such work in 90 
to 120 days, and the primary contractors normally pay the subcontractors 
in 120 to 150 days for such billings, resulting in extended payment terms 
for this type of activity.
   
   The resource recovery business is also highly competitive and the E/RR Seg-
ment is competing against much larger and better financed companies.  Beard's 
approach has been to develop lower cost technology that will create a market 
opportunity.
   
   Availability of raw materials.  Materials used in the E/RR Segment, as well
as products purchased for resale, are available from a number of competitive
manufacturers.
   
   Seasonality.  The environmental services and resource recovery businesses are
both seasonal, as there is a tendency for field operations to be reduced in bad
weather.  Seasonality normally affects the first quarter of the year, and this
tendency is compounded by the public sector's propensity to delay the startup of
environmental services contracts during such period. 
   
   Employees.  As of December 31, 1996 the E/RR Segment employed 42 full time 
and three part time employees.
   
   Financial information.  Financial information about the E/RR Segment is set
forth in the Company's Financial Statements.  See Part II, Item 8---Financial
Statements and Supplementary Data.
   
   
                        OTHER ACTIVITIES
                                
   Iodine.  Beard is involved in the extraction, production and sale of crude
iodine through its 40% ownership of North American Brine Resources ("NABR"), a
joint venture with two Japanese partners.  Beard is the managing partner.  In
Kingfisher County, Oklahoma, the Company collects waste brine from wells opera-
ted by third parties (the "Berkenbile Plant").  The Company receives a payment 
for furnishing the brine to NABR for iodine extraction at the Berkenbile Plant 
and for the subsequent disposal of the brine.
   
   In Woodward County, Oklahoma, NABR operates a second iodine extraction plant
(the "Woodward Plant") which has roughly six times the production capacity of 
the Berkenbile Plant.  Brine is produced from wells owned by NABR and iodine is
extracted using the blowing-out process.  The waste brine is then reinjected 
into NABR-owned wells.  The Woodward Plant is located in the Woodward Trench,
a narrow geologic formation found 6,000 to 10,000 feet below the surface, 
which contains the world's highest concentration of iodine-bearing brine water.
   
   Iodine is used in animal feed supplements, catalysts, inks and colorants,
pharmaceuticals, photographic equipment, sanitary and industrial disinfectants,
stabilizers and radiopaque media.  
   
   From 1990 to 1994 the worldwide price received for iodine decreased more than
50% from its peak of approximately $18 per kilogram as a result of increased
production capacity in the United States and Chile.  The price bottomed out in
mid-1994 at $7 per kilogram and is currently expected to be in the $17 to $18 
per kilogram range for the coming months.
   
   Because of the severely depressed industry pricing conditions, NABR 
determined to shut down the operations of the Woodward Plant for an indefinite 
period of time until the oversupply situation was rectified.  Accordingly, the 
Woodward Plant shut down in June of 1993.  By the third quarter of 1996 the 
oversupply situation appeared to have corrected itself and the decision was made
to reactivate the Woodward Plant, which came back on stream in October of 1996.
In January of 1997 NABR shipped the first 8,000 kilograms produced at the plant
since its reactivation.  The total cost of reactivating the plant, including the
cost of drilling a new production well plus the additional working capital
required, was approximately $1.1 million.  Such funds were loaned to NABR by our
Japanese partners.  No capital distributions will be made from the joint venture
until the loan by the Japanese partners has been fully repaid with interest.
   
   Other Assets.  Beard also has a number of other assets and investments which
it intends to liquidate as opportunities materialize.  Such assets consist
primarily of drilling rigs and equipment, land and improvements, real estate
limited partnerships in which the Company is a limited partner and miscellaneous
other investments.  As excess funds become available from such liquidations they
will be utilized for working capital, reinvested in Beard's ongoing business
activities or redeployed into newly targeted opportunities.
   
   Office and Other Leases.  Beard leases office space in Oklahoma City,
Oklahoma, aggregating 5,817 square feet under a lease expiring September 30,
2000, at a current annual rental of $53,807.  In addition, Beard's subsidiaries
lease space at a number of locations as required to serve their respective 
needs. 
   
   Employees.  As of December 31, 1996, Beard employed 161 full time and 11 part
time employees in all of its operations, including nine full time employees on
the corporate staff.

(d)   Financial information about foreign and domestic operations and export
sales.

   See Item 1(c) for a description of foreign and domestic operations and export
sales.

Item 2.  Properties.

  See Item 1(c) for a description of properties.

Item 3.   Legal Proceedings.
   
   Neither Beard nor any of its subsidiaries are engaged in any litigation or
governmental proceedings which Beard believes will have a material adverse 
effect upon the results of operations or financial condition of any of such 
companies.
   
Item 4.   Submission of Matters to a Vote of Security Holders.
   
   No matters were submitted during the fourth quarter of the fiscal year 
covered by this report to a vote of security holders, through the solicita-
tion of proxies or otherwise.

                              PART II
                                
Item 5.   Market for the Registrant's Common Equity and Related Stockholder
          Matters.
   
(a)   Market information.  
   
   The Company's common stock trades on the American Stock Exchange ("ASE") 
under the ticker symbol BOC.  The following table sets forth the high and 
low sales price for the Company's common stock, as reflected in the ASE 
monthly detail reports, for each full quarterly period within the two most 
recent fiscal years. 
<TABLE>
<CAPTION>
                   1996                 High            Low
                   ----                 ----            ---
               <C>                     <C>            <C> 
               Fourth quarter          $2-7/8         $2-1/2
               Third quarter            3-1/4          2-3/4
               Second quarter           3-1/4          2-1/4
               First quarter            2-3/8          2-1/8


                  1995                 High            Low
                  ----                 ----            ---
               <C>                    <C>             <C> 
               Fourth quarter         $2-1/2          $2
               Third quarter           2-3/4           2-1/4
               Second quarter          2-1/2           2-1/8
               First quarter           2-3/16          1-5/8
</TABLE>
                                                       
(b)   Holders.

As of February 28, 1997 the Company had 555 record holders of common stock.

(c)   Dividends.

   To date, the Company has not paid any cash dividends.  The payment of cash
dividends in the future will be subject to the financial condition, capital
requirements and earnings of the Company.  The Company intends to employ its
earnings, if any, in its CO2 and E/RR activities and does not expect to pay cash
dividends for the foreseeable future.  The redemption provisions of the Beard
preferred stock limit the Company's ability to pay cash dividends. (See
"Business-General development of business").

Item 6.  Selected Financial Data.

   The following financial data are an integral part of, and should be read in
conjunction with, the financial statements and notes thereto.  Information
concerning significant trends in the financial condition and results of
operations is contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations on pages 19 through 25 of this report.
<TABLE>
<CAPTION>

                             1996      1995      1994      1993     1992
                             ----      ----      ----      ----     ----
                                 (in thousands, except per share data)
<S>                        <C>       <C>       <C>       <C>      <C>
                               
Statement of operations data:                                               
 Operating revenues from
    continuing operations  $ 16,683  $ 15,012  $ 14,123  $ 13,281 $ 10,849
Interest income                  18        25        20        21      110
Interest expense               (259)     (166)     (116)      (92)    (210)
 Earnings (loss) from
    continuing operations      (140)     (478)      508      (893)  (6,622)
 Earnings (loss) from 
    discontinued operations    (175)       75       214   (11,183) (25,871)
Gain on debt restructuring        -         -         -    46,928        -
Net earnings (loss)            (315)     (403)      717    34,852  (32,493)
 Net earnings (loss) from continuing
    operations per share:
       (primary EPS)           (0.05)    (0.20)     0.17    (0.42)   (3.33)
       (fully diluted EPS)     (0.05)    (0.20)     0.14    (0.41)   (3.33)
                
 Net earnings (loss) per share:
       (primary EPS)           (0.11)    (0.17)     0.25    16.51   (16.34)
       (fully diluted EPS)     (0.11)    (0.17)     0.21    15.86   (16.34)

Balance sheet data:                                            
Working capital             $  1,745   $  1,989   $  2,427  $ 1,765  $  1,830
Total assets                  16,473     14,615     13,856   14,966    15,441
 Long-term debt (excluding
    current maturities)        2,911      1,454        982    1,137       947
 Redeemable preferred stock    1,200      1,200      1,200    1,200         -
 Total common shareholders' 
      equity (deficit)      $  8,656   $  8,788   $  9,066  $ 8,407  $(27,743)
</TABLE>
                                                              

Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations.
   
   The following discussion addresses the significant factors affecting the
results of operations, financial condition, liquidity and capital resources of
the Company.  Such discussion should be read in conjunction with the Company's
financial statements including the related footnotes and the Company's selected
financial information.

Overview
   
   General.  The Company operates within two major industry segments: (1) the
carbon dioxide segment (the "CO2 Segment"), comprised of (a) the manufacture and
distribution of dry ice (solid CO2) and (b) the production of CO2; and (2) the
environmental/resource recovery segment (the "E/RR Segment"), consisting of
environmental services and resource recovery activities.  The Company also has
other operations, including (i) a minority-owned investment in a joint venture
for the extraction, production and sale of crude iodine and (ii) various assets
and investments which the Company has been liquidating as opportunities have
materialized.
   
   The Company's continuing operations reflect a loss of $140,000 in 1996, a 
loss of $478,000 in 1995 and earnings of $503,000 in 1994.  The Company made the
decision to discontinue its real estate construction and development activities
in January of 1997 in order to focus its attention on the CO2 and E/RR Segments
which are considered to have greater potential for growth and profitability. The
results from continuing operations exclude a loss of $175,000 in 1996 and 
profits of $75,000 and $214,000, respectively in 1995 and 1994 from such 
discontinued operations.
   
   1996 results of operations reflected continuing improvement in the operating
margins of the CO2 Segment, which is the Company's largest segment.  This
improvement was largely offset by disappointing results in the E/RR Segment 
where a significant decline in revenues in the first half of the year resulted 
in a sharp decline in operating margins for 1996 compared to 1995.  The 
acquisition of Horizontal Drilling Technologies, Inc. ("HDT") in May of 1996 
partially ameliorated the revenue decline but was of little assistance in making
up the decline in margins.  1996 benefited from the settlement of a take-or-pay 
contract (the "1996 Settlement") by the Company's dry ice subsidiary, Carbonic 
Reserves ("Carbonics"), which resulted in the addition of $939,000 of pre-tax 
income. 
   
   1995 results of operations reflected significant improvement in the operating
margins of the CO2 Segment.  This improvement was partially offset by dis-
appointing results in the E/RR Segment where an increase in overhead costs due
to business expansion contributed to a higher operating loss in 1995 than in 
the previous year.  1995 benefited from a $423,000 gain on the sales of various
assets, principally drilling rigs and related equipment, and from the sale of a
branch operation by the dry ice company.
   
   1994 results benefited from the sale of Energy International Corporation
("EI"), which resulted in a gain of $1.94 million.  This gain was partially
offset by $441,000 of impairment provisions on certain long-term investments. 
The Company's continuing operations generated an operating loss of $916,000,
despite significant operating improvement in the CO2 Segment.  These gains were
offset in part by administrative overhead formerly shared with oil and gas
operations discontinued in 1993.
   
Liquidity and capital resources

     Capital investments.  The Company's capital investment programs have
required more cash than has been generated from operations during the past three
years.  Cash flows provided by (used by) operations during 1996, 1995 and 1994
were $924,000, $(414,000) and $(185,000), respectively, while capital additions
were $3,131,000, $1,626,000, and $1,650,000, respectively, as indicated in the
table on the following page:

<TABLE>
<CAPTION>
                                   1996              1995         1994
                                   ----              ----         ----
<S>                             <C>               <C>          <C>
Carbon dioxide                  $1,978,000        $1,265,000   $1,252,000
Environmental/resource recovery  1,138,000           339,000      352,000
Other                               15,000            22,000       46,000
                                ----------        ----------   ----------
Total                           $3,131,000        $1,626,000   $1,650,000
                                ==========        ==========   ==========
</TABLE>

Seller-provided financing and other debt obligations provided $889,000, $487,000
and $435,000 of the funds for such capital investments in 1996, 1995, and 1994,
respectively.
   
   Capital investments over the three year period totaled $6,475,000 of which
$4,495,000 was invested in the CO2 Segment where it was utilized in the dry ice
operations of Carbonics.  Investments made in this segment replaced equipment
acquired during the expansion of activities in the early 1990's.  This equipment
was partially depreciated at the time of acquisition and had reached a fully-
depreciated status.  Additional investments were made to upgrade Carbonics'
production capacity and quality specifications, and increase production
efficiencies and revenue capabilities in order to facilitate its strategy of
increasing its market share.
   
   The Company's 1997 capital expenditure budget has preliminarily been set at
$5,568,000.  Presently anticipated capital expenditures include (i) $885,000 for
dry ice operations, (ii) $4,663,000 for the E/RR Segment, and  (iii) $20,000 of
additional investment for other activities.  $4,195,000 of the estimated total
is speculative since it is targeted for expenditure on a mulled coal recovery
plant on which negotiations are currently in progress.
   
   Liquidity.  To date the Company has been able to satisfy its liquidity needs
through its working capital, borrowing arrangements and cash flows.  Future cash
flows and availability of credit are subject to a number of variables, including
the price and demand for dry ice, a continuing source of economical CO2 and
continuing private and governmental demand for environmental services.  Despite
these uncertainties, the Company anticipates that its cash flows and continued
availability of credit on a basis similar to that experienced to date will be
sufficient to meet its planned operating costs and capital spending 
requirements. 

   Working capital for 1996 decreased from 1995.  All categories of current
assets, except inventories, increased over the prior year with a total net
increase of $136,000.  The increase in current assets was offset by a larger
increase in accrued expenses and other liabilities which was attributable to the
Company's increased level of business.
   
   Liquidity should improve in 1997 as a result of the reduction in debt as 
sales occur from the Company's real estate construction and development 
segment's assets (the "Assets").  As of March 13, 1997, all of the Assets 
except three speculative homes have been sold for a total of $955,000.  
$647,000 of the funds from such sales have been used to reduce debt.

   Selected liquidity highlights for the Company for the past three years are
summarized below:
<TABLE>
<CAPTION>
                                1996            1995              1994
                                ----            ----              ----
<S>                         <C>            <C>              <C>

Cash and cash equivalents   $   375,000    $    220,000     $    566,000
Accounts receivable, net      2,405,000       2,259,000        2,041,000
Inventories                   2,003,000       2,282,000        1,964,000
Trade accounts payable        1,395,000       1,354,000        1,502,000
Short-term debt                 639,000         957,000           79,000
Current maturities of 
 long-term debt                 910,000         520,000          539,000
Long-term debt                2,911,000       1,454,000          982,000
Working capital               1,745,000       1,989,000        2,427,000
Current ratio                 1.49 to 1       1.63 to 1        1.93 to 1
Net cash provided by 
  operations before changes              
  in current assets and 
  liabilities                   688,000         315,000          291,000
Net cash provided by 
  (used in) operations          924,000        (414,000)        (185,000)
</TABLE>

   In total, the Company's operations provided cash of $924,000 in 1996. 
Currently the Company's cash flows from operations are heavily dependent on its
CO2 Segment.  Improved operating results in this segment have significantly
increased the Company's operating cash flow.  The dry ice operations of the CO2
Segment provided $1,986,000 of cash flow in 1996.  This cash flow was offset by
(i) higher levels of selling, general and administrative expenses in the E/RR
Segment as the segment expanded into new lines of business and (ii) higher 
levels of general and administrative at the corporate level as the Company 
pursued additional business opportunities.  The E/RR Segment and other 
corporate activities generated net operating cash outflows of $37,000 and 
$1,025,000, respectively.  (See "Results of operations---Other activities" 
below). 
   
   The 1996 Settlement significantly enhanced the Company's overall liquidity
through the infusion of $539,000 cash into Carbonics.  The infusion of this 
cash plus $400,000 of equipment resulted in the addition of $939,000 of pre-tax
income.  Cash received from the 1996 Settlement enabled Carbonics to cover more
than 25% of Carbonics' capital expenditures for 1996.
   
   The Company's investing activities used cash of $1,203,000 in 1996.  Capital
expenditures and investments in various activities more than offset proceeds 
from the sale of assets.
   
   The Company's financing activities generated a positive cash flow of $434,000
in 1996.  This resulted mainly from increased borrowings to fund capital
expenditures, to develop real estate inventory, and to fund working capital for
general corporate purposes.
   
   During the fourth quarter of 1996 the Company (i) increased the long-term 
line of credit which funds Carbonics' working capital requirements from 
$750,000 to $1,250,000 in order satisfy its continuing growth requirements, 
and (ii) added a new $500,000 line of credit at the parent Company level to 
provide the capital needed for the development drilling currently underway at 
McElmo Dome and to fund working capital for general corporate purposes.  In 
addition, credit lines obtained by the Company from three trusts were extended 
to become long-term, and the limits thereof were increased. 

   At year-end 1996 the Company had $295,000 of credit available under the
parent Company's new $500,000 bank line of credit, and had $45,000 of credit
available under its line of credit with the William M. Beard and Lu Beard 1988
Charitable Unitrust.  In addition, Carbonics had $150,000 of unused credit 
under its $1,250,000 bank line of credit, although such funds were not avail-
able at the time since Carbonics was already at its borrowing base limitation 
(December being a low month due to the seasonality of the dry ice business).
   
   Effect of Reorganization on Liquidity.  Through the period ending December
31, 2002, the Company's liquidity will be reduced to the extent it is required 
to redeem any of the Beard preferred stock pursuant to the mandatory redemption
provisions.  See "The 1993 Reorganization---Mandatory Redemptions of Beard
Preferred Stock."
   
Results of operations

   General.  The period of 1994-1996 was a time of transition for the Company. 
Following the Reorganization in 1993, the Company shifted its focus to the
management of its non-oil and gas investments.  During this period the Company
divested itself of its alternative fuels research and development activities and
in January 1997 decided to discontinue its real estate construction and
development activities.  As a result, the corporate staff has devoted more
attention to the CO2 Segment and the E/RR Segment, which are considered to have
the greatest potential for growth and profitability, while liquidating assets no
longer in line with the Company's strategic objectives.  Operating profit (loss)
for the Company's remaining principal segments for the three years was as set
forth below:
   
<TABLE>
<CAPTION>
                                      1996       1995       1994
                                      ----       ----       ----
<S>                                 <C>        <C>        <C>
Operating profit (loss):                       
Carbon dioxide                      $887,000   $502,000   $300,000
Environmental/resource recovery     (757,000)  (325,000)  (254,000)
                                    --------   --------   --------
         Subtotal                    130,000    177,000     46,000
Other - principally corporate     (1,032,000)  (992,000)  (961,000)
                                  ----------   --------   --------
         Total                     $(902,000) $(815,000) $(915,000)
                                  ==========  =========  =========
</TABLE>

   Following is a discussion of results of operations for the three year period
ended December 31, 1996.  

   Carbon dioxide.  The primary component of revenues for this segment is the
sale of dry ice by Carbonics.  A period of business acquisition and expansion in
1990 and 1991 led to a dramatic growth in market share in the following years,
which management believes made this segment the third largest producer of dry 
ice in the United States.  Subsequent to this expansion Carbonics divested 
certain operations and focused its efforts on increasing its market share 
within a more manageable geographic area.  A core part of its strategy has been 
the move from standard industry commodity-type sales into application niche 
marketing.  The resulting increase in market share is reflected in Carbonics' 
revenues in the table below:

<TABLE>
<CAPTION>
                              1996          1995          1994
                              ----          ----          ----
<S>                       <C>           <C>            <C>
Dry ice sales             $12,209,000   $10,407,000     $9,697,000
Other sales and income      1,098,000     1,299,000        957,000
                          -----------   -----------     ----------
Total sales               $13,307,000   $11,706,000    $10,654,000
                          ===========   ===========    ===========
   
   The success of Carbonics' niche marketing is reflected in the results of its
retail marketing division.  The retail division, which markets Penguin BrandTM
dry ice, generates higher operating margins than Carbonics' overall margin and
has experienced rapid growth, with revenues increasing (i) 86% to $1.7 million
in 1994, (ii) 18% to $2.0 million in 1995 and (iii) 27% to $2.6 million in 1996.

   A big contributor to increased sales in 1995 was revenue generated from a
take-or-pay contract.  The large increase in 1995 was attributable to the
resolution in 1994 of a take-or-pay contract that had been in dispute during 
1992 and 1993.  In February 1996, Carbonics and the other party to the 
agreement reached a settlement of the take-or-pay contract.  Carbonics received 
cash and assets totaling approximately $939,000 which the Company recorded as 
a gain and is reflected in the 1996 Statement of Operations as other income.  
The settlement terminated the take-or-pay contract.
   
   Results of operations for the CO2 Segment reflected an operating profit of
$887,000 for 1996, $502,000 for 1995 and $300,000 for 1994.  In addition to the
increased revenues, cost-cutting measures implemented since 1994 contributed to
the improved operating margins.  Carbonics' operating margin has improved from
3.2% in 1994 to 3.4% in 1995 and 5.3% in 1996.  
   
   The other component of revenues from this segment is the sale of CO2 gas from
the Company's working interests in two producing CO2 gas units in Colorado and
New Mexico. CO2 sales in 1996 increased 43% from 1995, which was caused by
production gains offset by a slight decrease in CO2 prices. CO2 sales in 1995
increased 58% over 1994's level, reflecting a slight increase in price and an
increase in production due to a change in allocation of sales from one of the
units to make up the Company's underproduced status.  Operating margins for 
these activities have improved, going from a loss of $46,000 in 1994 to 
earnings of $108,000 in 1995 and earnings of $184,000 in 1996.  
   
   Environmental/resource recovery.  Following the 1993 Reorganization the
Company redirected the activities of its oilfield services subsidiaries to focus
upon environmental services activities.  Another subsidiary was activated in 
1994 to assist in the marketing effort for such activities.  An additional 
subsidiary focuses on the commercial development of the Company's proprietary 
coal technology. HDT, which utilizes trenchless technology for environmental
remediation purposes, was acquired in 1996.  Another subsidiary has been added
in 1997 which utilizes a chemical for which it is the sole U.S. licensee of a
process for the remediation of creosote.
   
   Collectively, this group of companies provides a wide range of environmental
services and resource recovery activities.  Revenues for this segment have
decreased, falling from $3,212,000 in 1994 to $3,026,000 in 1995 and $3,009,000
in 1996.  The 1995 decline resulted from the sale in May of 1994 of certain
technologies in this segment.  The 1996 decline was caused primarily by a severe
decline in revenues during the first half of the year resulting from the
suspension of several jobs by a state agency.  The first half decline was 
largely offset by revenues generated by HDT during the last half of the year.
   
   The proprietary Mulled Coal technology retained by Beard Technologies, Inc.
("BTI") at the time of the EI sale generated $139,000 in revenue and $13,000 of
the segment's operating loss during 1995.  Following the completion of the DOE
contract in the first quarter of 1996 BTI spent the remainder of the year
determining the best way to market its new technology.  As a result, BTI
generated operating losses for the remainder of the year which adversely 
affected the E/RR Segment's operating results.
   
   Other activities.  Other activities include general and corporate operations,
as well as assets unrelated to the Company's principal lines of business or held
for investment.  These activities generated an operating loss of $1,032,000 in
1996, as compared to losses of $992,000 in 1995 and $961,000 in 1994.  A 
decrease in revenues generated by the corporate group and an increase in legal 
expenses associated with negotiating a settlement with preferred stockholders 
were the main factors contributing to the increased loss in 1995.  A higher 
level of general and administrative expenses also impacted the bottom line in 
1996 as the Company continued to pursue additional business opportunities.

   The Company has an equity investment (40%) in North American Brine Resources
("NABR"), a joint venture for the extraction, production and sale of crude 
iodine.  In the second half of 1996 NABR determined to reactivate its Woodward
Plant (with iodine priced in the $17-18/kilogram range), which had been shut
down since mid-1993 due to severely depressed iodine prices (bottomed at $7/
kilogram in mid-1994).  Beard's share of NABR's 1996 operating loss was approxi-
mately $43,000 compared to $13,000 in 1995.

   Although the Company owns 80% of the common stock of Cibola Corporation
("Cibola"), it does not have financial control of this gas marketing subsidiary.
Cibola, formed in May of 1996, contributed $99,000 of pre-tax net income to the
Company for fiscal year 1996 pursuant to a tax sharing agreement.

   Depreciation, depletion and amortization.  The Company's depreciation,
depletion and amortization expenses increased 13.7% in 1996 over 1995's expense
and 4.9% in 1995 over 1994's expense.  These increases were a consequence of the
higher depreciable base which resulted from the expansions and capital
expenditures made within the CO2 and E/RR Segments.  The acquisition of HDT in
May of 1996 also contributed to the increased DD&A in 1996.

   Other expenses, including impairment.  The 1996 Settlement resulted in
$939,000 of other income to the Company.  In 1996 and 1995, the Company
recognized other expenses of $78,000 and $152,000, respectively, consisting of
impairment of the carrying value of certain assets held for investment, as well
as expenses incurred in evaluating investments that did not materialize.  In
1995, these expenses were offset by the recognition of $220,000 of income
received from an escrow related to a previous reorganization.  In 1994, the
Company recorded a $426,000 impairment provision of the carrying value of 
certain long-term investments outside of the Company's three Segments.  The 
provision primarily resulted from the expectation at that time of continued low 
iodine prices.  
   
   Selling, general and administrative expenses.  Selling, general and
administrative expenses ("SG&A") increased to $4.1 million in 1996 from $3.6
million in 1995 and $3.5 million in 1994.  SG&A expense incurred by the CO2
Segment during 1996, which represents 54% of SG&A costs, increased by $354,000
over 1995's expense and increased by $123,000 in 1995 over 1994's costs. 
However, as a percentage of the CO2 Segment's revenues, these expenses fell from
16.1% in 1994 to 15.6% in 1995 and increased to 16.2% in 1996.  Within the
remaining segments, reductions in SG&A resulting from the sale of EI in 1994 
were offset by expansions in the E/RR Segment and the heavier corporate and 
other overhead burden after the 1993 Reorganization.
   
   Interest  expense.  Net interest expense has increased steadily from $93,000
in 1994 to  $138,000 in 1995 and to $241,000 in  1996.  Such increases reflect
the higher level of debt incurred by the CO2 and E/RR Segments as they have 
added additional equipment.
   
   Gain on sale of assets.  In 1996, the gain on the sale of assets reflected
proceeds from the sale of certain assets which are in the process of being
liquidated, principally drilling rigs and related equipment.  These activities
generated gains of $171,000 in 1996, $423,000 in 1995 and $63,000 in 1994.  1995
also benefited from a $188,000 gain from the sale of a branch operation by
Carbonics, while 1994 recorded a gain of $1.94 million from the sale of
technologies from the E/RR Segment.
   
   Income taxes.  The Company has approximately $73.1 million of net operating
loss carryforwards, investment tax credits, and depletion carryforwards to 
reduce future income taxes.  Based on the Company's historical results of 
operations, it is not likely that the Company will be able to realize the 
benefit of its net operating loss carryforwards and investment tax credit 
carryforwards before they begin to expire in 2001 and 1997, respectively.  At 
December 31, 1996 and 1995, the Company has not reflected as a deferred tax 
asset any future benefit it may realize as a result of its tax credits and 
loss carryforwards.  Future regular taxable income of the Company will be 
effectively sheltered from tax as a result of the Company's substantial tax 
credits and loss carryforwards.  The Company paid $5,000 in alternative minimum 
tax as the result of operations for 1994.  It is anticipated that the Company 
will continue to incur minor alternative minimum tax in the future, despite 
the Company's carryforwards and credits.
   
   Discontinued operations.  As previously noted, the Company discontinued its
real estate construction and development activities in January of 1997 in order
to focus its attention on other segments which are considered to have greater
potential for growth and profitability.  During 1996 the Company sold three 
homes in The Oaks development adjacent to the Oak Tree Golf Club in Edmond, 
Oklahoma, compared to six and eleven homes sold in 1995 and 1994, respectively. 
As of March 13, 1997, the Company had sold all of the real estate construction 
and development assets (the "Assets") with the exception of three speculative 
homes. One of these is under contract for closing on March 21, 1997, and 
another is under contract for closing on May 30, 1997, leaving one home 
remaining to be sold. 
   
   The Company estimated and accrued $180,000 at December 31, 1996, representing
the difference in the estimated amounts to be received from disposing of the
Assets and the Assets' recorded value at December 31, 1996.  Operating results
of the discontinued operations through the date of sale of all remaining assets
are not expected to be significant.
   
   Forward looking statements.  The previous discussions include statements that
are not purely historical and are "forward-looking statements" within the 
meaning of Section 27A of the Securities Act and Section 21E of the Exchange 
Act, including statements regarding the Company's expectations, hopes, beliefs,
intentions and strategies regarding the future.  The Company's actual results
could differ materially from its expectations discussed herein.
   
Impact of Recently Issued Accounting Standards

   In June 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities ("SFAS No. 125").  SFAS
No. 125 is effective for certain transfers and servicing of financial assets and
extinguishment of liabilities occurring after December 31, 1996.  It is 
effective for other transfers of financial assets occurring after December 31, 
1997.  It is to be applied prospectively.  SFAS No. 125 provides accounting and 
reporting standards for transfers and servicing of financial-components 
approach that focuses on control.  It distinguishes transfers of financial 
assets that are sales from transfers that are secured borrowings.  Management 
of the Company does not expect that adoption of SFAS No. 125 will have a 
material impact on the Company's financial position or results of operations.

   In October 1996, the American Institute of Certified Public Accountants 
issued Statement of Position (SOP) 96-1, "Environmental Remediation Lia-
bilities."  SOP 96-1 was adopted by the Company on January 1, 1997.  It 
requires, among other things, that environmental remediation liabilities be 
accrued when the criteria of SFAS No. 5, "Accounting for Contingencies," have 
been met.  SOP 96-1 also provides guidance with respect to the measurement of 
the remediation liabilities. Such accounting is consistent with the Company's 
current method of accounting for environmental remediation costs.  Therefore, 
adoption of SOP 96-1 will not have a material impact on the Company's 
financial position or results of operations.

Item 8.  Financial Statements and Supplementary Data



               The Beard Company and Subsidiaries
                 Index to Financial Statements
           Forming a Part of Form 10-K Annual Report
           to the Securities and Exchange Commission

                                                             Page Number

Independent Auditors' Report 

Financial Statements:

 Balance Sheets, December 31, 1996 and 1995                      

 Statements of Operations, Years ended December 31, 1996, 1995 and 1994   

 Statements of Shareholders' Equity, Years ended December 31, 1996, 
    1995 and 1994

 Statements of Cash Flows, Years ended December 31, 1996, 1995 and 1994

 Notes to Financial Statements, December 31, 1996, 1995 and 1994


Financial statement schedules are omitted as inapplicable or not required, 
or the required information is shown in the financial statements or in the 
notes thereto.

<PAGE>


                  INDEPENDENT AUDITORS' REPORT





The Board of Directors and Stockholders
The Beard Company:


We have audited the financial statements of The Beard Company and 
subsidiaries as listed in the accompanying index.  These financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements 
based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are 
free of material misstatement.  An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing the accounting principles 
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation.  We believe that our audits 
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, 
in all material respects, the financial position of The Beard Company and 
subsidiaries at December 31, 1996 and 1995, and the results of their operations 
and their cash flows for each of the years in the three-year period ended 
December 31, 1996 in conformity with generally accepted accounting principles. 


                                 
                                        KPMG PEAT MARWICK LLP
                                        KPMG Peat Marwick LLP



Oklahoma City, Oklahoma
March 19, 1997
<PAGE>

</TABLE>
<TABLE>
                      THE BEARD COMPANY AND SUBSIDIARIES
                                Balance Sheets
<CAPTION>
                                                December 31,              December 31,
                  Assets                            1996                       1995 
                                              ---------------------  --------------------
<S>                                                <C>               <C>
Current assets:  
 Cash and cash equivalents                    $         375,000      $       220,000
 Accounts receivable, less allowance 
   for doubtful receivables of $71,000 
   in 1996 and $43,000 in 1995                        2,405,000            2,259,000
 Inventories                                          2,003,000            2,282,000
 Prepaid expense                                        442,000              329,000
 Other assets                                            73,000               72,000
                                              ---------------------  --------------------
      Total current assets (notes 8 and 9)            5,298,000            5,162,000
 
Investments and other assets                          1,710,000            1,935,000

Property, plant and equipment, at cost               16,793,000           14,291,000
 Less accumulated depreciation, depletion 
 and amortization                                     8,094,000            7,133,000
                                              ---------------------  --------------------
      Net property, plant and equipment 
       (notes 6 and 9)                                8,699,000            7,158,000
        
Intangible assets, at cost                            4,305,000            3,795,000
 Less accumulated amortization                        3,539,000            3,435,000
                                              ---------------------  ---------------------
      Net intangible assets (notes 7 and 9)             766,000              360,000
                                              ---------------------  ---------------------
                                              $      16,473,000       $   14,615,000
                                              =====================  =====================

           Liabilities and Shareholders' Equity

Current liabilities:                            
 Trade accounts payable                       $       1,395,000      $     1,354,000
 Accrued expense and other liabilities                  609,000              342,000
 Short-term debt (note 8)                               639,000              957,000
 Current maturities of long-term debt (note 9)          910,000              520,000
                                              ---------------------  --------------------
      Total current liabilities                       3,553,000             3,173,000
                                              ---------------------  --------------------  

Long-term debt less current maturities (note 9)       2,911,000             1,454,000

Minority interest in consolidated subsidiaries          153,000                 -

Redeemable preferred stock of $100 stated value;
 5,000,000 shares authorized; 90,156 shares issued 
 and outstanding in 1996 and 995, respectively 
 (notes 1 and 4)                                      1,200,000             1,200,000

Common shareholders' equity:
 Common stock of $.001 par value per share; 
 10,000 shares authorized; 2,799,074 and 
 2,730,830 shares issued and outstanding in 
 1996 and 1995, respectively                              3,000                 3,000
 Capital in excess of par value                      41,629,000            41,446,000
 Accumulated deficit                                (32,976,000)          (32,661,000)
                                              -----------------------  ---------------------
      Total common shareholders' equity               8,656,000             8,788,000
                                              -----------------------  ---------------------
Commitments and contingencies (notes 4, 
  11, and 15)
                                              $      16,473,000        $   14,615,000
                                              =======================  =====================
</TABLE>
                                                

               See accompanying notes to financial statements.
<PAGE>
<TABLE>
                    THE BEARD COMPANY AND SUBSIDIARIES
                         Statements of Operations
<CAPTION>

                                             Year Ended December 31,
                                   --------------------------------------------
                                        1996           1995           1994
                                   -------------  -------------  -------------
<S>                              <C>            <C>            <C>
Revenues:
   Carbon dioxide                $  13,608,000  $  11,915,000  $  10,787,000
   Environmental/resource
     recovery                        3,009,000      3,026,000      3,212,000
   Other                                66,000         71,000         124,000
                                 -------------  -------------  -------------
                                    16,683,000     15,012,000     14,123,000

Expenses:
   Carbon dioxide (exclusive of
     depreciation, depletion and
     amortization shown separately
     below)                          9,478,000      8,598,000      7,822,000
   Environmental/resource
     recovery (exclusive of 
     depreciation, depletion and
     amortization shown separately
     below)                          2,642,000      2,420,000      2,562,000
   Selling, general and 
     administrative                  4,079,000      3,560,000      3,486,000
   Depreciation, depletion, and
     amortization                    1,309,000      1,151,000      1,097,000
   Other                                77,000         98,000         71,000
                                 -------------  -------------  -------------
                                    17,585,000     15,827,000     15,038,000

Operating profit (loss):
   Carbon dioxide                      887,000        502,000        300,000
   Environmental/resource 
     recovery                         (757,000)      (325,000)      (254,000)
   Other, principally corporate     (1,032,000)      (992,000)      (961,000)
                                  -------------  -------------  -------------
                                      (902,000)      (815,000)      (915,000)

Other income (expense):
   Interest income                     18,000          25,000        20,000
   Interest expense                  (259,000)       (166,000)     (116,000)
   Equity in net loss of 
     unconsolidated affiliates        (42,000)        (13,000)      (41,000)
   Gain on sale of assets (note 5)    171,000         423,000     2,001,000
   Gain on take-or-pay contract
     settlement (note 10)             939,000            -             -
   Other, including impairment of 
     investments                      (78,000)         68,000      (441,000)
   Minority interest in operations of
     consolidated subsidiaries         13,000            -             -
                                   -------------  -------------  -------------
Earnings (loss) from continuing operations
  before income taxes                (140,000)      (478,000)       508,000

Income taxes from continuing operations
  (note 12)                              -              -            (5,000)
                                   -------------  -------------  -------------
Earnings (loss) from continuing
  operations                         (140,000)      (478,000)       503,000

Discontinued operations (notes 1 and 2):
   Earnings from operations of 
     discontinued real estate 
     construction and development
     activities                         5,000         75,000        214,000
   Loss from discontinuing real estate
     construction and development 
     activities                      (180,000)          -              -
                                   -------------  -------------  -------------
     Earnings (loss) from discontinued
       operations                    (175,000)        75,000        214,000
                                   -------------  -------------  -------------
Net earnings (loss)                $ (315,000)    $ (403,000)    $  717,000
                                   =============  =============  =============
Net earnings (loss) attributable to
  common shareholders              $ (315,000)    $  (454,000)   $  659,000
                                   =============  =============  =============
Net earnings (loss) per common share
  (primary EPS) (note 1):
   Earnings (loss) from continuing
     operations                    $    (0.05)    $    (0.20)    $    0.17
   Earnings (loss) from discontinued
     operations                         (0.06)          0.03          0.08
   Net earnings (loss)                  (0.11)         (0.17)         0.25

Net earnings (loss) per common share
  assuming maximum dilution (fully
  diluted EPS) (note 1):
   Earnings (loss) from continuing
     operations                    $    (0.05)    $    (0.20)    $    0.14
   Earnings (loss) from discontinued
     operations                         (0.06)          0.03          0.07
     Net earnings (loss)                (0.11)         (0.17)         0.21
</TABLE>

              See accompanying notes to financial statements.
<PAGE>
<TABLE>
                     THE BEARD COMPANY AND SUBSIDIARIES
                     Statements of Shareholders' Equity
<CAPTION>
                                                                          Total
                                            Capital in                   Common
                                  Common    Excess of    Accumulated     Shareholders'
                                   Stock     Par Value      Deficit      Equity   
                                   --------  ----------  ------------ ------------ 
<S>                               <C>       <C>           <C>             <C>

Balance, December 31, 1993        $3,000    $41,379,000   ($32,975,000)   $8,407,000

  Net earnings, year ended 
  December 31, 1994                  -           -             717,000       717,000

  Accretion of discount on 
  preferred stock                    -          (58,000)          -          (58,000)

                                 --------   -------------  ------------- -------------

Balance, December 31, 1994         3,000     41,321,000    (32,258,000)    9,066,000

  Net loss, year ended 
  December 31, 1995                  -           -            (403,000)     (403,000)

  Accretion of discount on 
  preferred stock                    -         (51,000)           -          (51,000)

  Issuance of 78,700 shares 
  of common stock                    -         176,000            -          176,000
                                --------   -------------  -------------  ------------

Balance, December 31, 1995         3,000     41,446,000    (32,661,000)    8,788,000
                                   
  Net loss, year ended 
  December 31, 1996                  -            -           (315,000)     (315,000)

  Issuance of 68,244 
  shares of common stock             -          183,000           -          183,000
                                --------   -------------  -------------  ------------

Balance, December 31, 1996        $3,000    $41,629,000   ($32,976,000)  $ 8,656,000
                                ========   =============  =============  ============
</TABLE>
                           
              See accompanying notes to financial statements.

<PAGE>

<TABLE>
                    THE BEARD COMPANY AND SUBSIDIARIES
                          Statement of Cash Flows

<CAPTION>


                                                  Year Ended December 31,
                                   ---------------------------------------------------------
                                              1996           1995          1994        
<S>                                   <C>              <C>             <C>                    

Operating activities:
  Cash received from customers        $   17,763,000    $  16,564,000  $  17,136,000 
  Cash paid to suppliers and 
   employees                             (17,045,000)     (16,741,000)   (17,129,000)
  Cash received from settlement 
   of take-or-pay contract                   539,000          -               -     
  Interest received                           15,000           28,000         23,000 
  Interest paid                             (348,000)        (265,000)      (215,000)
    Net cash provided by (used in)  -----------------   ---------------- ---------------
     activities                              924,000         (414,000)      (185,000)
                                    -----------------   ---------------- ---------------

Investing activities:
  Acquisition of property, plant 
   and equipment                          (1,765,000)      (1,035,000)    (1,145,000)
  Proceeds from sale of assets               434,000          317,000      2,428,000 
  Proceeds from escrowed or restricted cash     -             220,000          -    
  Other investments                          128,000         (397,000)       (65,000)
    Net cash provided by (used in)  ------------------  ---------------- --------------
     investing activities                 (1,203,000)        (895,000)     1,218,000
                                    ------------------  ---------------- --------------


Financing activities:
  Proceeds from line of credit 
   and term notes                          3,728,000        3,195,000        898,000
  Payments on line of credit and 
   term notes                             (3,331,000)      (2,351,000)    (2,109,000)
  Other                                       37,000          119,000          -
                                   ------------------  ------------------ --------------   
     Net cash provided by (used in)
     financing activities                    434,000          963,000     (1,211,000)
                                   ------------------  ------------------  -------------
Net increase (decrease) in cash 
 and cash equivalents                        155,000         (346,000)      (178,000)

Cash and cash equivalents at 
 beginning of year                           220,000          566,000        744,000
                                   ------------------  ------------------  -------------
Cash and cash equivalents at 
 end of year                            $    375,000   $      220,000       $ 566,000
                                   ==================  ==================  =============
</TABLE>
<PAGE>
<TABLE>
        
                    THE BEARD COMPANY AND SUBSIDIARIES
                          Statement of Cash Flows


Reconciliation of Net earnings (loss) to Net cash provided by (used in) 
operating activities

                                                  Year Ended December 31,
                                   ---------------------------------------------------------
                                         1996           1995          1994        


<S>                               <C>               <C>             <C>
Net earnings (loss)               $     (315,000)    $   (403,000)  $   717,000
Adjustments to reconcile net 
 earnings (loss) to net cash 
 provided by (used in) operating 
 activities:
  Loss from discontinuing operations     180,000             -             -    
  Depreciation, depletion and amor-
   tization                            1,313,000        1,158,000     1,102,000
  Gain on sale of assets                (171,000)        (423,000)   (2,001,000)
  Provision for uncollectible 
   accounts and notes                     28,000           54,000        27,000
  Provision for impairment of 
   other assets and investments          180,000          102,000       441,000 
  Interest capitalized on real 
   estate project                        (94,000)         (81,000)      (88,000)
  Gain on take-or-pay contract
   settlement                           (400,000)            -             -    
  Equity in net loss of unconsoli-
   dated affiliates                       42,000           13,000        41,000
  Other                                  (75,000)        (105,000)       52,000
 Increase in accounts receivable, 
  prepaid expenses and other current 
  assets                                (114,000)        (266,000)     (285,000)
 (Increase) decrease in inventories      134,000         (221,000)      501,000
 Increase (decrease) in trade accounts 
  payables, accrued expenses and other 
  liabilities                            216,000         (242,000)     (692,000)
                                   ---------------  ---------------  ------------
    Net cash provided by (used in) 
     operating activities          $     924,000     $   (414,000)    $(185,000)
                                   ===============  ===============  ============

Supplemental Schedule of Noncash Investing and Financing Activities

Purchase of property, plant and 
 equipment and intangible assets 
 through issuance of debt obli-
 gations                           $     889,000     $    487,000     $ 435,000
                                  ================  ===============  ============

Purchase of business for note 
 payable subsequently converted 
 to common stock                   $     138,000     $      -         $      - 
                                  ================  ===============  ============
</TABLE>
        
              See accompanying notes to financial statements.
<PAGE>

 
(1)  Summary of Significant Accounting Policies
The Beard Company's ("Beard" or the "Company") accounting policies reflect
industry practices and conform to generally accepted accounting principles.  The
more significant of such policies are briefly described below.

Nature of Business
The Company currently operates within two major industry segments:  (1)  the
carbon dioxide ("CO2") segment, comprised of (a) the manufacture and distribu-
tion of dry ice (solid CO2) and (b) the exploration for and production of CO2; 
and (2) the environmental/resource recovery ("E/RR") segment, consisting of 
environmental services and resource recovery activities.  The Company also 
operated in the real estate construction and development segment which was 
discontinued in January 1997.  The Company also has other operations, 
including a minority-owned investment in a joint venture for the extraction,
production and sale of crude iodine.  Prior to the 1993 Reorganization 
discussed in note 4, the Company also operated in the oil and gas explora-
tion and production and oilfield services industries.

Principles of Consolidation and Basis of Presentation
The accompanying financial statements include the accounts of the Company and 
its wholly and majority owned subsidiaries and those subsidiaries in which the
Company has a controlling financial interest. All significant intercompany
transactions have been eliminated in the accompanying financial statements.

Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers investments
in securities whose remaining terms at date of purchase are less than 90 days to
be cash equivalents.

Inventories
Inventories represent primarily the costs associated with the residential real
estate construction and development project which was discontinued by the
Company (see note 2 below) and CO2 tunnel freezers constructed by a subsidiary
of the Company in the carbon dioxide segment.  On December 31, 1996, the real
estate inventory is carried at net realizable value. See note 2 below.  Prior
to 1996, the inventory was carried at cost on a specific cost basis, not
exceeding net realizable value.  The costs associated with the acquisition,
development and construction of the real estate project were capitalized in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 67,
"Accounting for Costs and Initial Rental Operations of Real Estate Projects." 
Accordingly, during 1996, 1995, and 1994, general and administrative costs that
relate directly to the project of $30,000, $162,000, and $169,000, respectively,
were capitalized as inventory costs, and at December 31, 1996, and 1995,
inventories included approximately $209,000 and $239,000 respectively, of such
costs.  The Company also capitalizes interest costs during the construction
phase of the project and in 1996, 1995, and 1994, capitalized interest costs of
$94,000, $81,000 and $88,000, respectively.

The CO2 tunnel freezers are carried on a specific cost basis, not exceeding net
realizable value.  Net realizable value of the CO2 tunnel freezers has been
established by recent sales which are in excess of costs.

Investments
Investments are accounted for principally by the use of the equity method, and
consist primarily of a 40% interest in North American Brine Resources ("NABR"),
a joint venture which extracts iodine from saltwater brine, notes receivable 
from companies involved in the environmental/resource recovery industry, and 10%
to 32% interests in certain real estate limited partnerships for which the 
Company does not serve as general partner.  The summarized financial position 
and operating results of NABR for each of the three years ended December 31, 
are as follows (unaudited):

<TABLE>
<CAPTION>
                                1996           1995           1994
                                ----           ----           ----
      <S>                   <C>             <C>            <C>
      Current assets        $  778,000      $  245,000     $  308,000
                                                          
      Noncurrent assets      3,746,000       3,749,000      3,915,000
                                                          
      Current liabilities      580,000         122,000         88,000
                                                          
      Noncurrent liabilities   540,000           -              -  
                           -----------     -----------    -----------          
      Venture equity        $3,404,000      $3,872,000     $4,135,000
                           ===========     ===========    ===========
                                                          
      Net sales                263,000         282,000        211,000
                                                          
      Gross margin (deficit)   102,000         102,000        (48,000)
                                                          
      Net loss               ($468,000)      ($264,000)     ($377,000)
                           ===========      ==========     ==========
</TABLE>

The Company's carrying value of its investment in NABR on December 31, 1996 was
approximately $1,059,000, or $288,000 less than its 40% ownership in the
underlying equity of NABR.  In 1992 and 1994, the Company recorded $529,000
and $408,000, respectively, of economic impairment of its investment in NABR
due to the closure of NABR's larger iodine plant and low iodine prices.  NABR
did not record economic impairment of its assets at the venture level.  Beard
is amortizing the difference between the carrying amount of its investment in
NABR and its share of NABR's recorded equity based on the expected useful life
of the iodine plant and certain maintenance costs incurred by NABR during the
closure period.  As a result of higher iodine prices, the closed iodine plant
was reopened in late 1996.  Beard amortized $144,000, $92,000 and $109,000 of
the difference between the carrying amount of its investment in NABR and its
share of NABR's recorded equity in 1996, 1995 and 1994, respectively.

The Company's equity in other investees' operations and net assets is not
material to the Company's results of operations or financial position.  In 1996,
the Company recorded a provision of $180,000 for economic impairment of an
unsecured note held by the Company in a research and development entity.

Property, Plant and Equipment
Property, plant and equipment are depreciated by use of the straight-line method
using estimated asset lives of 3 to 20 years.  Depreciation, depletion and
amortization of properties producing CO2 are computed by the units-of-production
method using estimates of unrecovered proved developed CO2 reserves.  

The Company charges maintenance and repairs directly to expense as incurred 
while betterments and renewals are generally capitalized.  When property is 
retired or otherwise disposed of, the cost and applicable accumulated deprecia-
tion, depletion and amortization are removed from the respective accounts and 
the resulting gain or loss is reflected in operations.

Intangible Assets 
Identifiable intangible assets, comprised primarily of acquired customer lists,
covenants not to compete, and patents, are amortized on a straight-line basis
over their respective estimated useful lives, ranging from five to 17 years.  
The excess of acquisition cost over the fair value of net assets acquired 
(goodwill) is amortized on a straight-line basis over the expected periods to be
benefited, generally, ten years.  Intangible assets are evaluated periodically, 
and if conditions warrant, an impairment valuation allowance is provided.  
The Company assesses recoverability of its intangible assets under the 
provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets 
and Long-Lived Assets to be Disposed Of."

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of
The Company adopted the provisions of SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Assets to be Disposed Of," on January 1,
1996.  This Statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.  Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset.  If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceed the fair value of the assets.  Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell.  Adoption of this statement did not have a material impact on the 
Company's financial position, results of operations, or liquidity.

Fair value of financial instruments
The carrying amounts of the Company's cash and cash equivalents, accounts
receivable, other current assets, trade accounts payables, accrued expenses and
short-term debt approximate fair value because of the short maturity of those
instruments.  At December 31, 1996 and 1995, the fair value of the long-term 
debt was not significantly different than the carrying value of that debt.

Use of estimates
Management of the Company has made a number of estimates and assumptions 
relating to the reporting of assets and liabilities and the disclosure of 
contingent assets and liabilities to prepare these financial statements in 
conformity with generally accepted accounting principles.  Actual results 
could differ from those estimates.

Income Taxes
Income taxes are accounted for under the asset and liability method.  Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating 
loss and tax credit carryforwards.  Deferred tax assets and liabilities are 
measured using enacted tax rates expected to apply to taxable income in the 
years in which those temporary differences are expected to be recovered or 
settled.  The effect on deferred tax assets and liabilities of a change in 
tax rates is recognized in income in the period that includes the enactment 
date.

Stock Option Plan
Prior to January 1, 1996, the Company accounted for its stock option plan in
accordance with the provisions of Accounting Principles Board ("APB") Opinion 
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
As such, compensation expense was recorded on the date of grant only if the 
current market price of the underlying stock exceeded the exercise price.  
On January 1, 1996, the Company adopted SFAS No. 123, "Accounting for 
Stock-Based Compensation," which permits entities to recognize as expense over 
the vesting period the fair value of all stock-based awards on the date of 
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net earnings and pro 
forma earnings per share disclosures for employee stock option grants made in 
1995 and future years as if the fair-value-based method defined in SFAS No. 123 
had been applied.  The Company has elected to continue to apply the provisions 
of APB Opinion No. 25 and provide the pro forma disclosure provisions of SFAS 
No. 123.

Mandatorily Redeemable Preferred Stock
The Company's preferred stock is accounted for at fair value at the date of
issuance as determined by independent appraisal.  The excess of the estimated
redeemable value over the fair value at the date of issuance is accreted over 
the redemption term.  The carrying value of the preferred stock is increased 
annually for the estimated accretion with a corresponding reduction of 
capital in excess of par value of common stock.  The accretion of carrying 
value decreases net income or increases net loss for purposes of calculating
net income (loss) attributable to common shareholders.

Earnings (Loss) Per Share
Loss per common share for 1996 and 1995 was determined by dividing the net loss
attributable to common shareholders by the weighted average number of shares of
common stock outstanding (2,756,094 and 2,662,048 shares in 1996 and 1995,
respectively) during the periods.  The calculations do not include common
equivalent shares or potentially dilutive securities outstanding, as the effect
would be antidilutive.

Earnings per common share calculations for 1994 were based on the earnings
attributable to common shareholders and include the potential dilution resulting
from the conversion of the preferred stock to common stock.  The number of 
common shares used in calculating fully diluted earnings per share for 1994 
includes both the average common shares outstanding and the common shares that 
would result from the assumed beginning of year conversion of the preferred 
shares excluding those preferred shares redeemable from earnings through the 
year ended December 31, 1994.  

Shares entering into the 1994 computation were:
<TABLE>
<CAPTION>
                                             1994
                                             ----
<S>                                        <C>
Average common shares outstanding          2,652,000
Assumed preferred stock conversion           465,000
                                           ---------
Shares used in fully diluted computation   3,117,000
                                           =========
</TABLE>

Research and Development
The Company develops dry ice freezing equipment for the food processing industry
and also develops machinery for the efficient handling of dry ice products.  The
Company expensed $116,000, $186,000, and $45,000 in 1996, 1995 and 1994,
respectively, related to such development efforts which included the costs of
materials, personnel expense, facilities rental, and other direct expenses.

Reclassifications
Certain 1995 and 1994 balances have been reclassified to conform with the 1996
presentation.

(2)  Discontinued Real Estate Construction and Development Operations
As a result of the Company's plan to dispose of the assets of its real estate
construction and development segment, results of the real estate construction
and development segment have been reported as discontinued operations in the
accompanying statements of operations.  Prior year financial statements have
been reclassified to present the real estate construction and development
segment as discontinued operations.  Revenues applicable to discontinued
operations were $1,083,000, $1,949,000 and $3,358,000 in 1996, 1995 and 1994,
respectively.

As of December 31, 1996, the significant assets of the real estate construction
and development segment include 19 undeveloped lots, a business office and four
completed speculative homes and other real estate construction and development
assets valued at approximately $1,739,000.  The significant liabilities of the
real estate construction and development segment consisted of short-term
obligations, accounts payable and accrued expenses of $710,000.

The 1996 statement of operations includes a loss from discontinuing real estate
construction and development activities of $180,000 which represents the
difference in the estimated amounts to be received from disposing of the real
estate construction and development assets and the assets' recorded values as
of December 31, 1996.  Operating results of the discontinued operations through
the date of sale of all remaining assets are not expected to be significant.

Subsequent to December 31, 1996, the Company sold one completed speculative home
for $336,000, which approximated the estimated value of the home.  Also, on
March 13, 1997, the Company sold the 19 undeveloped lots, the business office
and other real estate construction and development assets for $619,000, which
approximated the Company's estimated disposition values of these assets. 

The Company expects to dispose of the three remaining completed speculative
homes by December 31, 1997 at their recorded values as of December 31, 1996.

(3)  Acquisition
On May 21, 1996, the Company acquired 80% of the outstanding common stock of
Horizontal Drilling Technologies, Inc. ("HDT") for $482,000.  HDT utilizes
trenchless technology and specializes in directional drilling for utility,
underground cable and environmental remediation projects.  The purchase price
consisted of a non-interest bearing contingent payment obligation valued at
$301,000, a non-interest bearing $150,000 note, convertible at the option of 
the holder into common stock of the Company, and 20% of the Company's ownership,
valued at $44,000, in an existing subsidiary involved in environmental/resource 
recovery operations.  The contingent payment obligation is payable only from 80%
of specified cash flows of HDT and the existing environmental/resource recovery 
subsidiary and was recorded based upon its estimated present value.  The non-
interest bearing note was also recorded at its present value and was converted
into 50,000 shares of the Company's common stock on July 1, 1996.  The con-
version rate used was the Company's  July 1, 1996 closing stock price of 
$3.00.  The fair value of the net identifiable assets of HDT approximated  
$143,000 on the acquisition date.  The excess of the purchase price over the
 fair value of the net identifiable assets acquired has been recorded as good-
will and is being amortized on a straight-line basis over ten years.  The 
acquisition has been accounted for by the purchase method and accordingly, 
the results of operations of HDT have been included in the Company's financial
statements from May 21, 1996.

Had the Company acquired HDT as of January 1, 1995, revenues, loss from
continuing operations, net loss and related per share amounts on a pro forma
basis for 1996 and 1995 would not have been materially different than 1996 and
1995 amounts reported in the accompanying statements of operations.

(4)  Redeemable Preferred Stock
In 1992, Beard Oil Company ("Beard Oil"), which was then the Company's parent,
defaulted on two interest payments and on several restrictive financial 
covenants in connection with its senior debt, and the Lenders declared $85 
million of debt, together with accrued and deferred interest, immediately 
due and payable.  After lengthy negotiations, various agreements (the 
"Agreements") were signed in July 1993 and consummated in October 1993 
(the Reorganization).  As a result: (i) a company (Sensor Oil & Gas, Inc. 
("Sensor")) owned by the Lenders purchased substantially all of Beard Oil's 
oil and gas assets and assumed a portion of Beard Oil's indebtedness; (ii) 
Beard Oil was released from any remaining obligations thereunder; (iii) the 
Company replaced Beard Oil as the publicly held company and the owner of the
former assets of Beard Oil not transferred to Sensor; (iv) Beard Oil became 
a wholly-owned subsidiary of the Company; (v) the former shareholders of 
Beard Oil received 75% of the Company's common stock; (vi) the Lenders 
received 25% of the Company's outstanding common stock and $9,125,000 
stated value, or 100%, of the Company's outstanding Series A redeemable 
convertible zero coupon preferred stock.

Under the terms of a Settlement Agreement executed in April, 1995 (the
"Settlement"), the Company released Sensor from certain obligations under the
Agreements, and the Company was relieved from some of the mandatory redemption
obligations in connection with (i) certain asset sales or the issuance of equity
securities and (ii) future acquisitions financed by debt or preferred stock. 

The Agreements, as modified by the Settlement, result in the Company's preferred
stock being convertible by the Lenders into as much as 14.18% of the Company's
common stock on a fully diluted basis.  Such preferred stock is mandatorily
redeemable through December 31, 2002 by the Company from one-third of the
Company's consolidated net income, as defined in the Agreements, payable within
90 days of the end of the Company's fiscal year.  To the extent not redeemed, 
the preferred stock may be convertible by the Lenders after December 31, 2002 
into as much as 14.18% of the Company's common stock on a fully diluted basis. 
The common stock held by the Lenders gives them 20.33% of the voting power of 
Beard and an additional 14.18% through their preferred stock ownership, for a 
total of 34.51% of the total outstanding voting stock of the Company.  As of 
the Reorganization date and at December 31, 1996 and 1995, the fair value of 
the mandatorily redeemable preferred stock was estimated to be approximately
$1,200,000.  The redemption value of the mandatorily redeemable preferred
stock was $9,015,600 at December 31, 1996 and 1995.

As of December 31, 1994, Sensor owed the Company $51,000 for plugging work
completed on retained oil and gas leases as previously discussed.  As a result
of the Settlement, the amount owed by Sensor was canceled and an equivalent
amount of preferred stock was redeemed.  Any additional payments made by the
Company for certain other contingent liabilities related to the Reorganization,
up to $250,000, will be treated as redemptions of shares of preferred stock.

(5)  Sale of Assets
On May 5, 1994, the Company sold certain technologies of the
environmental/resource recovery segment for cash and also received repayment of
advances made to the alternative fuels research and development segment.  The
transaction resulted in a gain of approximately $1,936,000.  The Company 
retained other research and development technology within the segment which the 
Company is continuing to develop.  During 1996, 1995, and 1994, the Company also
sold drilling rigs and related equipment and in 1995 sold a dry ice branch.

(6)  Property, Plant and Equipment
Property, plant and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                            December 31,    
                                  ---------------------------------
                                       1996            1995
                                  ---------------  ---------------- 
  <S>                                <C>             <C>
 Carbon dioxide:
  Buildings, machinery and equipment $ 9,639,000     $ 8,182,000
  Proved properties, projects in 
   progress, and unproved properties   2,811,000       2,742,000
  Other depreciable assets               942,000         958,000
  Land                                    64,000          14,000
                                     -----------     -----------
                                      13,456,000      11,896,000
                                     -----------     -----------
                                     
 Other operating segment and 
  corporate assets:                    
  Other depreciable assets             2,912,000       1,970,000
  Land                                   425,000         425,000
                                     -----------     -----------
                                       3,337,000       2,395,000
                                     -----------     -----------
                                     $16,793,000     $14,291,000
                                     ===========     ===========
</TABLE>
              
Accumulated depreciation, depletion and amortization and valuation allowances 
are summarized as follows:

<TABLE>
<CAPTION>
                                              December 31,    
                                      ---------------------------
                                         1996            1995
                                      ------------  -------------
  <S>                                  <C>            <C>
  Carbon dioxide:                                
   Buildings, machinery and equipment  $3,637,000     $2,976,000
   Proved properties, projects in 
   progress, and unproved properties    2,476,000      2,452,000
   Other depreciable assets               595,000        535,000
                                       -----------    ----------
                                        6,708,000      5,963,000
   Other operating segment and
   corporate depreciable assets         1,386,000      1,170,000
                                       ----------     ----------          
                                       $8,094,000     $7,133,000
                                       ==========     ==========               
</TABLE>
                         
(7)  Intangible Assets
Intangible assets are summarized as follows:

<TABLE>
<CAPTION>
                                                December 31,
                                       --------------------------  
                                          1996            1995
                                          ----            ----
  <S>                                  <C>             <C>
  Carbon dioxide:                                        
   Covenants not to compete            $1,728,000      $1,728,000
   Acquired customer lists                943,000         943,000
   Costs in excess of fair value 
    of net assets acquired                561,000         561,000
   Other intangible assets, including
    patents                               397,000         369,000
                                       ----------      ----------
                                        3,629,000       3,601,000

  Other intangible assets, principally
   goodwill                               676,000         194,000
                                       ----------      ----------
                                       $4,305,000      $3,795,000
                                       ==========      ==========
</TABLE>
Accumulated amortization is as follows:

<TABLE>
<CAPTION>
                                               December 31,   
                                       --------------------------
                                           1996            1995
                                           ----            ----
  <S>                                  <C>             <C>
  Carbon dioxide:                                        
   Covenants not to compete            $1,728,000      $1,726,000
   Acquired customer lists                921,000         907,000
   Costs in excess of fair value 
    of net assets acquired                351,000         295,000
   Other intangible assets, including
    patents                               354,000         352,000
                                       ----------      ----------
                                        3,354,000       3,280,000
   Other intangible assets, 
    principally goodwill                  185,000         155,000
                                       ----------      ----------
                                       $3,539,000      $3,435,000
                                       ==========      ==========
</TABLE>

(8)  Short-term Debt
Short-term debt is as follows:

<TABLE>
<CAPTION>
                                             December 31,   
                                         ----------------------
                                           1996           1995
                                           ----           ----
  <S>                                    <C>             <C>
  Real estate construction and 
   development (a)                       $639,000        $782,000
  Other (b)                                     -         175,000
                                         --------        --------
                                         $639,000        $957,000
                                         ========        ========
</TABLE>
_______________

(a) Secured short-term notes payable to banks in connection with the Company's
real estate construction and development project are collateralized by
approximately $1,739,000 of inventory.  Interest rates were 10.0% and 9.75% as
of December 31, 1996 and 1995, respectively.

(b) In 1995, three affiliates of the Company's Chairman of the Board of the
Directors entered into loan agreements with the Company.  In 1996, the loans 
were converted to long-term and the maturities were extended.  In February 1997 
the maturities were extended to February 1999.  Therefore, in 1996 the debt 
balance is included in long-term debt.

(9)  Long-term Debt 
Long-term debt is as follows:

<TABLE>
<CAPTION>
                                                   December 31,   
                                             ----------------------
                                                1996        1995
                                                ----        ----
  <S>                                        <C>         <C>
  Carbon dioxide (a)                         $1,479,000  $1,537,000
  Environmental/resource recovery (b)         1,457,000     437,000
  Corporate and other (c)                       885,000           -
                                             ----------  ----------
                                             $3,821,000  $1,974,000
                                             ==========  ==========
</TABLE>
----------------

(a) Borrowings outstanding in the Company's CO2 segment include various notes
payable of $379,000 and $569,000, at December 31, 1996 and 1995, respectively, 
which are collateralized by property, plant and equipment with an approximate 
net book value of $347,000 at December 31, 1996.  Payments are generally due 
monthly with interest rates ranging from 6.75% to 14.5%, with approximate 
weighted average interest rates of 8.5% and 10.0% as of December 31, 1996 and
1995, respectively.  The various notes payable mature through May 2000.

Also, included in the carbon dioxide segment's long-term debt are $1,100,000 and
$750,000 at December 31, 1996 and 1995, respectively, of borrowings under a line
of credit.  $250,000 of the line of credit is due December 31, 1997 with the
remainder due April 30, 1998.  The line of credit is secured by accounts
receivable and intangible assets and bears interest at 1% above the national
prime lending rate which approximated 8.25% at December 31, 1996.

Included in the long-term debt of the CO2 segment at December 31, 1995, was
approximately $218,000 of secured long-term debt due in 1996 with an affiliate
of an owner of Sensor.  Such affiliate owns 11.15% of the Company's common and
47.06% of the Company's preferred stock, and thus holds 16.24% of the total
outstanding voting stock of the Company.  The debt was paid by the Company in
1996.

(b) Borrowings outstanding in the Company's E/RR segment include $874,000 and
$137,000 at December 31, 1996 and 1995, respectively, of various notes payable
which are collateralized by property, plant and equipment with an approximate 
net book value of $964,000 at December 31, 1996.  Payments are generally due 
monthly with interest rates ranging from 4.9% to 16.6%, with approximate 
weighted average interest rates of 9.5% and 9.0% as of December 31, 1996 and 
1995, respectively.  The various notes payable mature through July 2011.

Included in the E/RR segment's long-term debt are $282,000 and $300,000 at
December 31, 1996 and 1995, respectively, of borrowings under a line of credit. 
The line of credit is due on April 30, 1997, and is secured by accounts
receivable and bears interest at 1/2% above the national prime lending rate,
which was 8.25% at December 31, 1996.

Long-term debt of the E/RR segment also includes a discounted $301,000 con-
tingent payment obligation payable to the former sole shareholder of HDT, 
resulting from the Company's acquisition of 80% of HDT's outstanding common 
stock.  The contingent payment obligation is payable only from 80% of the 
cash flows (prescribed under the contingent payment obligation agreement) of 
HDT and another subsidiary of the Company in the environmental/resources 
recovery segment.  The maximum amount payable under the contingent payment 
obligation is $483,000.  The Company discounted the maximum contingent 
payment obligation over its estimated repayment term of ten years using a 
10% interest rate.

(c) Borrowings outstanding for corporate and other operations include $680,000 
due to affiliates of the Company's Chairman of the Board of Directors.  The 
loans were originally made in 1995, were extended in 1996, and extended again in
February 1997 to February 1999.  In 1995, the obligation were recorded as short-
term debt.  All of the loans are unsecured and bear interest at a rate of 10% 
per annum.

Included in corporate and other operations long-term debt are $205,000 of
borrowings under a line of credit.  The line of credit is due on April 30, 1998,
is secured by the Company's working and overriding royalty interests in certain
CO2 producing properties, is guaranteed by the Company's Chairman of the Board
of Directors and bears interest at 1% above the national prime lending rate 
which was 8.25% at December 31, 1996.

The annual maturities of long-term debt at December 31, 1996 are $910,000 for
1997, $1,409,000 for 1998, $1,005,000 for 1999, $140,000 for 2000, and $107,000
in 2001.

(10)  Settlement of Take-or-Pay Contract
During 1996, the Company negotiated a settlement of a take-or-pay contract under
which a customer was obligated to purchase certain volumes of liquid CO2. As a
result of the settlement, the Company received cash of $539,000 and a CO2
vapor recovery system with an estimated fair value of $400,000 and the Company 
released the party of its contractual obligation to purchase the contracted 
liquid CO2 volumes.  The Company realized a gain of $939,000 in 1996 relating 
to this settlement.

(11)  Operating Leases
Noncancelable operating leases relate principally to distribution facilities,
warehouse and office space, vehicles and operating equipment.  Future minimum
payments under such leases as of December 31, 1996 are summarized as follows:


          1997           $555,000
          1998            468,000
          1999            231,000
          2000            111,000
          2001             29,000
                         --------
                       $1,394,000
                       ==========

The $1,394,000 in future minimum payments consists primarily of $1,096,000 from
the CO2 segment.  

Rent expense under operating leases aggregated $594,000 in 1996, $644,000 in 
1995 and $506,000 in 1994.

(12)  Income Taxes
The primary differences between the carrying values of the Company's assets for
financial and tax purposes result from the accounting methods used for impair-
ment of assets, depletion, depreciation and amortization of property and 
equipment and debt restructuring.

As of December 31, 1996 and 1995, the Company's net deferred tax assets, before
valuation allowances, approximated $28,182,000 and $32,939,000, respectively. 
Based on the results of the Company's operations, management does not believe
that it is more likely than not that the Company will be able to realize the
benefit of the net operating loss carryforwards and other deductions and credits
before expiration.  The Company has fully allowed for the tax deferred assets
through a valuation allowance.  In order to fully realize the net deferred tax
assets, before consideration of the valuation allowance, the Company would need
to generate future taxable income of approximately $76,000,000 prior to
expiration of the net operating loss carryforwards which will begin to expire in
2001 and investment tax credits which will expire from 1997 through 2000.

The 1994 income tax expense resulted from federal alternative minimum income 
taxes.  No regular current income tax expense was provided in any of the three 
years ended December 31, 1996 due to the availability for regular income tax 
reporting of net operating loss and depletion and investment tax credit 
carryforwards.

The changes in the net deferred tax assets and valuation allowance were as
follows (in thousands):

<TABLE>
<CAPTION>
                                        1995                   1996      
                                      Deferred               Deferred  
                            January 1, Expense  December     Expense   December
                            1995      (Benefit) 31, 1995    (Benefit)  31, 1996
                            ---------------------------------------------------
  <S>                       <C>        <C>      <C>         <C>        <C>
                                                          
  Deferred tax liability    $     -    $   60   $   (60)    $    130   $  (190)
                                                          
  Deferred tax asset         33,551       552    32,999        4,627    28,372
                            -------    ------   -------     --------   -------
                                                          
  Net deferred tax asset    $33,551    $  612   $32,939     $  4,757   $28,182
                                                          
  Less valuation allowance   33,551       612    32,939        4,757    28,182
                            -------    ------   -------     --------   -------
  Deferred tax asset less                                   
  valuation allowance       $     -    $    -   $     -     $      -   $     -
                            =======    ======   =======     ========   =======
</TABLE>
                    

At December 31, 1996, the Company had Federal regular tax operating loss
carryforwards of approximately $66.9 million that expire from 2001 to 2010,
investment tax credit carryforwards of approximately $679,000 that expire from
1997 to 2000, and tax depletion carryforwards of approximately $5.5 million. 
These carryforwards may be limited if the Company undergoes a significant
ownership change.

(13)  Employee Benefit Plan
Employees of the Company participate in a defined contribution plan with 
features under Section 401(k) of the Internal Revenue Code.  The purpose of the 
Plan is to provide retirement, disability and death benefits for all full-time 
employees of the Company who meet certain service requirements.  The Plan 
allows voluntary "savings" contributions up to a maximum of 15%, and the 
employer matches 100% of each employee's contribution up to 5% of such 
employee's compensation.  Benefits payable under the plan are limited to 
the amount of plan assets allocable to the account of each plan participant. 
The Company retains the right to modify, amend or terminate the plan at any 
time.  During 1996, 1995 and 1994, the Company and its eligible subsidiaries 
made matching contributions of $134,000, $116,000, and $100,000, respectively,
to the plan.

(14)  Stock Option Plans
The Company has reserved 175,000 shares of its common stock for issuance to key
management, professional employees and directors under The Beard Company 1993
Stock Option Plan (the "1993 Plan") adopted in August 1993.  The 1993 Plan is
administered by the Compensation and Stock Option Committee (the "Committee") of
the Board of Directors.  The option price is determined by the Committee but
cannot be less than the fair market value of the common stock of the Company at
the date of grant for incentive stock options and 75% of fair market value of 
the common stock for non-qualified options.  All options have ten-year terms and
become exercisable one year after the date of grant at the rate of 25% each year
until fully exercisable.  Directors who are not key management employees of the
Company or subsidiaries of the Company shall only be eligible to be granted 
non-qualified stock options.  At December 31, 1996, there were 22,500 additional
shares available for grant under the Plan.

The per share weighted-average fair value of stock options granted during 1996
was $1.66 on the date of grant using the Black Scholes option pricing model with
the following assumptions: no expected dividend yield, risk-free interest rate
of 6.73%, expected life of ten years, and expected volatility of 38.89%.  No
options were granted in 1995.

The Company applies APB Opinion No. 25 in accounting for its stock options and,
accordingly, no compensation cost has been recognized for its stock options in
the financial statements.  Had the Company determined compensation cost based on
the fair value at the grant date for its stock options under SFAS No. 123, the
net loss and net loss per common share would not have been materially different
than the 1996 amounts reflected in the accompanying statements of operations.

Stock option activity during the periods indicated is as follows:

<TABLE>
<CAPTION>
                                  Number of Weighted-Average
                                   Shares   Exercise Price
                                  --------- ----------------
<S>                                 <C>       <C>
                                  
Balance at December 31, 1993          -       $ -     
     Granted                        145,000    2.01
     Exercised                        -         -
     Forfeited                        -         -
     Expired                          -         -
                                    -------   -----
                                  
Balance at December 31, 1994        145,000   $2.01
     Granted                          -         -
     Exercised                        -         -
     Forfeited                        -         -
     Expired                          -         -
                                    -------   -----
Balance at December 31, 1995        145,000   $2.01
     Granted                         12,500    2.63
     Exercised                       (5,000)   2.00
     Forfeited                       (5,000)   2.00
     Expired                          -        -
                                    -------   -----
Balance at December 31, 1996        147,500   $2.06
                                    =======   =====
</TABLE>

At December 31, 1996, the range of exercise prices and weighted-average 
remaining contractual life of outstanding options was $2.00 - $2.63 and eight 
years, respectively.

At December 31, 1996 and 1995, the number of options exercisable was 67,500 and
36,250 respectively, and the weighted-average exercise price of those options 
was $2.01 for both years.

(15)  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 contracts, which expire in April 2000, to purchase liquid CO2. 
The contracts require that the Company purchase the lesser of 46,000 tons of
liquid CO2 or 50% of the Company's combined liquid CO2 requirements for certain
plants.  The purchase price of the liquid CO2 is based on the contracts' base
year price adjusted annually for inflation.  As of December 31, 1996, the 
Company has estimated it will be required to purchase a minimum of $3,488,000 
of liquid CO2 through the expiration date of the contracts.  The Company's 
required purchases under such contracts during each of the years ended December 
31, 1996, 1995, and 1994 totaled $1,194,000, $801,000, and $856,000, 
respectively.

(16)  Business Segment Information
The Company operates principally within two industry segments: (1) the
manufacture and distribution of dry ice (solid CO2) and the production of 
carbon dioxide ("CO2"); and (2) environmental/resource recovery.

The Company's carbon dioxide operations are comprised of its 85% owned
subsidiary, Carbonic Reserves, which owns a carbon dioxide liquification and
purification plant, five dry ice plants, 13 distribution centers, and operates
a sixth dry ice plant under a contractual arrangement.  Carbon dioxide 
operations are conducted in Arkansas, Colorado, Kansas, Missouri, New Mexico, 
Oklahoma, Texas and Wyoming.  Many of these operations are conducted in leased 
premises. Also included in carbon dioxide operations is the ownership of 
interests in two carbon dioxide producing units.  The operations of the 
environmental/resource recovery segment are conducted through two 80%-owned 
subsidiaries, a 90%-owned subsidiary and a financially controlled subsidiary 
headquartered in Oklahoma City, Oklahoma, as well as a wholly-owned sub-
sidiary headquartered in Pittsburgh, Pennsylvania.  

The Company operates principally in only one geographic area, the United 
States.  Thus, all of its segment operations are domestic and it has no 
significant export sales.

The Company and its subsidiaries grant credit, in the normal course of business,
to various entities within the industries they serve.  Generally, no collateral
or other security is required of its customers.  The Company and its sub-
sidiaries perform ongoing credit evaluations of its customers and maintain 
allowances for potential bad debt losses.

Sales to unaffiliated customers, identifiable assets, depreciation, depletion 
and amortization and additions to property, plant and equipment by industry 
segment are presented in thousands of dollars:

<TABLE>
<CAPTION>
                                           Environmental/ Corporate
                                    Carbon     Resource     and    Consolidated
                                    Dioxide    Recovery    Other      Company
                                    -------    --------   -------- ------------
<S>                                  <C>         <C>      <C>         <C>
          1996                
Sales to unaffiliated customers      $13,608     $3,009   $    66     $16,683 
Operating profit (loss)                  887       (757)   (1,032)       (902)
Depreciation, depletion and                  
       amortization                    1,008        267        34       1,309 
Identifiable assets                    9,475      3,268     3,730      16,473 
Additions to property, plant and                  
  equipment                            1,978      1,138        15       3,131 
                    
          1995                
Sales to unaffiliated customers       11,915      3,026        71      15,012
Operating profit (loss)                  502       (325)     (992)       (815)
Depreciation, depletion and                  
       amortization                      960        170        21       1,151
Identifiable assets                    8,127      1,790     4,698      14,615
Additions to property, plant and                  
  equipment                            1,265        339        22       1,626
                    
          1994                
Sales to unaffiliated customers       10,787      3,212       124      14,123
Operating profit (loss)                  300       (254)     (961)       (915)
Depreciation, depletion and                  
       amortization                      933        147        17       1,097
Identifiable assets                    7,708      1,218     4,930      13,856
Additions to property, plant and                  
  equipment                            1,252        352        46       1,650
</TABLE>
<PAGE>


Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
     
  Not applicable
                                
                            PART III
                                
Item 10.  Directors, Executive Officers and Significant Employees of the
Registrant.

  The directors, executive officers and significant employees of the Company
are identified below.  The table sets forth the age, positions with the
Company and the year in which each person became a director, executive officer
or significant employee.  All positions are held with the Company unless
otherwise indicated.

<TABLE>
<CAPTION>
                                          Director, Executive
                                          Officer or Significant             
                                          Employee of Beard 
Name               Position               or Beard Oil Since         Age
----               --------               ----------------------     ---
<S>                <C>                    <C>                        <C>
W. M. Beard        Chairman of the Board, 
                   Chief Executive Officer 
                   and Director (a)         June 1969                 68
Herb Mee, Jr.      President, 
                   Chief Financial Officer
                   and Director (a)         November 1973             68
Allan R. Hallock   Director                 December 1986             67
W. R. Plugge       Director                 September 1986            72
Ford C. Price      Director                 March 1988                59
Michael E. Carr    Director (b)             February 1994             61
Clifford H. 
  Collen, Jr.      President - Carbonic
                   Reserves (c,f)           August 1987               40
Marc A. Messner    President - Whitetail 
                   Services, Inc. (d,f) &
                   Horizontal Drilling 
                   Technologies, Inc. (d,f) February 1997             34
Philip R. Jamison  President - Beard 
                   Technologies, Inc. (e,f) February 1997             58
Philip W. Stack    Vice President - 
                   Corporate Development 
                   and Treasurer (a)        January 1982              50
Jack A. Martine    Controller and Chief 
                   Accounting Officer       October 1996              47
_______________
</TABLE>

(a) Director of the Company.
(b) Trustee of certain assets of the Company's 401(k) Trust.
(c) Devotes all of his time to Carbonic Reserves.
(d) Devotes all of his time to these two subsidiaries.
(e) Devotes all of his time to Beard Technologies, Inc.
(f) Indicated entities are subsidiaries of the Registrant.

  The executive officers and other officers of the Company serve at the pleasure
of the Board of Directors. 
  
  W. M. Beard has served Beard as its Chairman of the Board and Chief Executive
Officer since December 1992.  He previously served as Beard's President and 
Chief Executive Officer from the Company's incorporation in October 1974 until 
January 1985.  He has served Beard Oil as its Chairman of the Board and Chief 
Executive Officer since its incorporation.  He has also served as a director of 
Beard and Beard Oil since their incorporation.  Mr. Beard has been actively 
involved since 1952 in all management phases of Beard and Beard Oil from their 
inception, and as a partner of their predecessor company.
  
  Herb Mee, Jr. has served as Beard's President since October 1989 and as its
Chief Financial Officer since June 1993.  He has served as Beard Oil's President
since its incorporation, and as its Chief Financial Officer since June 1993. He
has also served as a director of Beard and Beard Oil since their incorporation. 
Mr. Mee served as President of Woods Corporation, a New York Stock Exchange
diversified holding company, from 1968 to 1972 and as its Chief Executive 
Officer from 1970 to 1972.  He serves as a director of Liberty Bancorp, Inc. 
("LBNA") and of its two principal banking subsidiaries.  LBNA is a publicly-
held company (OTC).
  
  Allan R. Hallock was elected a director of Beard in July 1993.  He served as
a director of Beard Oil from December 1986 until October 1993.  Mr. Hallock is
currently an independent consulting geologist.  He served as Vice President  and
Exploration Manager of Gemini Corporation from 1970 until December 1986.
  
  W. R. Plugge was elected a director of Beard in July 1993.  He served as a
director of Beard Oil from September 1986 until October 1993.  Mr. Plugge was
with Stanford Research Institute, a non-profit research corporation, from 1976
until his retirement in 1988, last serving as Vice President-International
Operations.  He is a private investor, and also serves as a director of Computer
Horizons Inc., a publicly-held company (OTC).
  
  Ford C. Price was elected a director of Beard in July 1993.  He served as a
director of Beard Oil from June 1987 until October 1993.  From 1961 until 1986
Mr. Price served in various capacities with The Economy Company, a privately-
held schoolbook publishing company, last serving as its Chairman of the Board 
and Chief Executive Officer.  Mr. Price is a private investor.
  
  Michael E. Carr was elected by the preferred stockholders to serve as their
representative on the Board of Directors of Beard in February 1994.  Mr. Carr
served as Senior Vice President of Beard Oil from December 1986 until October
1993.  He served as President and Chief Executive Officer of Sensor Oil & Gas,
Inc. ("Sensor") from October 1993 until August 1996.  He presently serves as
President of Mica Energy Corp.  
  
  Philip W. Stack has served as Vice President - Corporate Development of Beard
since October 1993, and has served in such capacity for Beard Oil since August
1989.  He had previously served in varying positions as an officer of Beard Oil
since its incorporation. 
  
  Jack A. Martine was elected as Controller, Chief Accounting Officer and Tax
Manager of Beard in October 1996.  Mr. Martine served as tax manager for Beard 
from June 1989 until October 1993 at which time he joined Sensor in a similar
capacity.  Mr. Martine is a certified public accountant.
  
  Clifford H. Collen, Jr. has served as President of Carbonic Reserves since he
and Beard Oil founded the company in August 1987. Mr. Collen has been associated
with the CO2 industry since 1979, working in various positions in the liquid
carbon dioxide business and also serving as president of an engineering and
consulting company in the industrial and carbon dioxide gas plant industry. 
  
  Marc A. Messner has served as President of HDT since he and another person
founded the company in July 1993.  He was elected President of Whitetail in
November 1996. Mr. Messner has been associated with the environmental services
industry since 1989, last serving as a project manager for a large national
environmental consulting firm before leaving to start HDT.
  
  Philip R. Jamison has served as President of BTI since August 1994.  Mr.
Jamison has been associated with the coal industry since 1960, working in 
various positions. From 1972 to 1977 he served as Vice President Operations for
International Carbon and Minerals and as President and CEO of all its coal
producing subsidiaries.  From 1979 to 1988 he served as CEO of four small
companies which were engaged in the production and sales of coal.  From 1993 to
1995 he served as a consultant to EI in connection with its development of the
Mulled Coal process, and installed and operated the process at the Alabama coal
preparation plant in connection with the DOE contract.
  
  The directors of the Company have been elected to serve until the annual
stockholders' meeting to be held in the year indicated opposite their respective
names or until their successors are duly elected and qualified:

           Director              Term
           --------              ----
           Allan R. Hallock      1997
           Ford C. Price         1997
           Herb Mee, Jr.         1998
           W. M. Beard           1999
           W. R. Plugge          1999
           Michael E. Carr       (a)
__________
(a) Will serve until his successor has been duly elected and qualified.
  
  There is no family relationship between any of the directors or executive
officers of the Company.  All executive officers hold office until the first
meeting of the Board of Directors following the next annual meeting of
stockholders or until their prior resignation or removal.
  
  Compliance with Section 16(a) of the Securities Exchange Act of 1934.  Section
16(a) of the Securities Exchange Act of 1934 requires the Company's directors 
and executive officers, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities (collectively "reporting
persons"), to file with the Securities and Exchange Commission and the American
Stock Exchange initial reports of ownership and reports of changes in ownership
of common stock and other equity securities of the Company.  Reporting persons
are required by the SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
  
To the Company's knowledge, based solely on information received from each
reporting person which includes written representations that no other reports
were required during the fiscal year ended December 31, 1996, all Section 16(a)
filing requirements applicable to its reporting persons were complied with.

Item 11.  Executive Compensation.

  The table on the next page sets forth sets forth the compensation paid or
accrued during each of the last three fiscal years by the Company and its
subsidiaries to the Company's Chief Executive Officer and each of the Company's
other most highly compensated executive officers (hereafter referred to as the
named executive officers), whose aggregate salary and bonus exceeded $100,000,
for any of the fiscal years ended December 31, 1996, 1995 or 1994:

<TABLE>
<CAPTION>
                   SUMMARY COMPENSATION TABLE
 
                                                                Long Term 
                                                               Compensation
                                                        ---------------------------
               Annual Compensation                        Awards         Payouts
-----------------------------------------------------     ------         -------
       (a)           (b)       (c)           (d)           (g)              (h)        (i)
                                                        Securities              
                                                        Underlying                   All Other
                                                         Options/         LTIP        Compen-
Name and                    Salary (A)     Bonus (B)       SAR's        Payouts      sation (C)
Principal Position  Year       ($)            ($)           (#)           ($)           ($)
------------------  ----       ---            ---           ---           ---           ---
<S>                 <C>     <C>              <C>           <C>       <C>             <C>

W. M. Beard         1996     99,000(D)       -0-(D)         -0-      $35,150(D)         5,031(D)
Chairman & CEO      1995    129,250(D)       -0-(D)         -0-       $4,850(D)         6,462(D)
                    1994    132,000          2,050         50,000        -0-            6,703
Herb Mee, Jr.       1996    132,000          1,150          -0-          -0-            6,658
President & CFO     1995    132,000          1,100          -0-          -0-            6,655
                    1994    132,000          1,050         50,000        -0-            6,653
C. H. Collen, Jr.   1996    100,000         13,750          -0-          -0-            5,688
President-Carbonic  1995    103,134            633          -0-          -0-            5,179
      Reserves      1994     72,184            581          -0-          -0-            3,600
</TABLE>
______________

(A)  Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred pursuant to the Company's 401(k)
Plan at the election of those officers.
(B)  Bonus for length of service with Beard, Beard Oil or Carbonics.
(C)  Consists of the Company's contribution to the Company's 401(k) Plan.
(D)  In 1996 Mr. Beard deferred one-fourth ($33,000) of his salary and all 
($2,150) of his bonus for the year; in 1995 he deferred one-fourth ($2,750) of 
his December salary and all ($2,100) of his bonus for the year pursuant to the
Company's Deferred Stock Compensation Plan.


                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR 
                      AND FISCAL YEAR-END OPTION VALUES

     The following table provides information, with respect to the
named executive officers, concerning the exercise of options during the
Company's last fiscal year and unexercised options held as of the end of
the last fiscal year:

<TABLE>
<CAPTION>
(a)                 (b)             (c)             (d)               (e)
                                                  Number of
                                                 Securities         Value of
                                                Unexercised      In-the-Money
                                                 Options at        Options at
                                                  FY-END(#)        FY-End ($)
              Shares Acquired    Value          Exercisable/      Exercisable/
Name          on Exercise (#)   Realized ($)   Unexercisable     Unexercisable
----          ---------------   ------------   -------------  ----------------
<S>                 <S>           <C>          <C>            <C>

W. M. Beard         -0-           $   -0-      25,000/25,000  $21,094/$21,094
Herb Mee, Jr.       -0-           $   -0-      25,000/25,000  $21,875/$21,875
C. H. Collen, Jr.   -0-           $   -0-         -0-/-0-         $-0-/$-0-

</TABLE>

Compensation of Directors
  
   Messrs. Hallock, Plugge, Price and Carr received compensation of $4,927, $86,
$1,909 and $8,450, respectively, for services rendered during 1996 as directors
of Beard, excluding $8,500, $8,850 and $8,750 of fees deferred by Messrs.
Hallock, Price and Plugge, respectively, under the Company's Deferred Stock
Compensation Plan.   Currently, the non-management directors each receive $500
per month for their services, and also receive the following fees for directors'
meetings which they attend:  annual and 1-1/2 day meetings -- $750; regular
meeting -- $500; telephone meeting -- $100 to $300 depending upon length of
meeting.  The non-management directors also receive a small year-end bonus
depending upon their length of service as directors of Beard and Beard Oil. 
Accordingly, Messrs. Plugge, Hallock, Price and Carr received $500, $400, $400,
and $100, respectively, in 1996. All of the directors except Mr. Carr elected to
defer such bonuses pursuant to the Plan.  Beard also provides health and 
accident insurance benefits for its non-management directors who are not 
otherwise covered and the value of these benefits is included in the above 
compensation amounts.  None of the directors received additional compensation 
in 1996 for their committee participation.
  
  The three eligible non-management directors (Messrs. Hallock, Plugge, and
Price) were each granted 5,000 phantom stock units (the "Units") under the
Company's 1994 Phantom Stock Units Plan on November 1, 1994.  Mr. Carr was
awarded 5,000 Units when he became eligible on February 22, 1995.  All awards
were based on an award price of $2.00* per share and vest over a five year 
period at the rate of 20% per year.  Each participant has the option of 
receiving payment for his award: (i) as it vests; (ii) at the conclusion of 
the award period; or (iii) 50% as it vests, with the other 50% deferred to the 
conclusion of the award period.  Payments are based upon appreciation in the 
market value of the Company's common stock during the appropriate time interval
selected. 
_______________

  *The market value on November 1, 1994 was $1.875 per share; on February 22,
1995 it was $1.75 per share.
  
Compensation Committee Interlocks and Insider Participation
  
  Michael E. Carr, who has been elected by the preferred shareholders to serve
as their representative on the Board of Directors, was elected to serve as a
member of the Compensation Committee on April 26, 1994.  Mr. Carr served as
Senior Vice President of Beard Oil from December 1986 until October 1993.
  
Item 12.  Security Ownership of Certain Beneficial Owners and Management.

  The table on the next page sets forth the name and address of each shareholder
who is known to the Company to own beneficially more than 5% of Beard's
outstanding common stock or preferred stock, the number of shares beneficially
owned by each and the percentage of outstanding common or preferred stock so
owned as of February 28, 1997.  Unless otherwise noted, the person named has 
sole voting and investment powers over the shares reflected opposite his name.

<TABLE>
<CAPTION>
                                                                                  Combined
                               Number of             Number of                     Common
                               Preferred             Common                          and
                               Shares and            Shares and                   Preferred
                               Nature of   Percent   Nature of       Percent       Voting
    Name and Address           Ownership   of Class  Ownership       of Class     Percentage
    ----------------           ---------   --------  ---------       --------     ----------
<S>                            <C>         <C>       <C>             <C>          <C>
John Hancock Mutual Life       42,427.10   47.06%    312,040(1)(2)   11.15%(2)    16.24%(3)
Insurance Company ("Hancock")
57th Floor
200 Clarendon Street
Boston, Massachusetts 02117        
                                                               
The Beard Group 401(k) Plan ("Plan")
c/o The Liberty Bank and Trust
Company, Trustee               None        0.00%     301,605(4)      10.78%        9.25%
100 N. Broadway Avenue
Oklahoma City, OK 73102        
                                
W. M. Beard                    None        0.00%     809,672(5)      28.67%       24.64%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112

Lu Beard                       None        0.00%     233,998(6)      8.36%         7.17%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112

Warren B. Kanders              25,188.76  27.94%     174,274(2)      6.23%(2)      9.30%(3)
2100 South Ocean Boulevard
Suite 302 North
Palm Beach, FL 33480
                                                               
Herb Mee, Jr.                  None       0.00%      233,079(7)      8.25%         7.09%
Enterprise Plaza, Suite 320
5600 North May Avenue
Oklahoma City, OK 73112
</TABLE>
_________________

(1)  Shares are held by Hancock on behalf of itself and affiliated entities.
  
(2)  Excludes the Beard preferred shares which will collectively become 
convertible into 14.18% of the outstanding common stock (after conversion) on 
January 1, 2003 to the extent not previously redeemed or converted.

(3)  The preferred shareholders collectively own 663,084 common shares and
1,125,528 common equivalent shares (34.51%), after giving effect to the
conversion of their 90,155.86 preferred shares.

(4)  Shares held by the Plan are owned by the participating employees, each
of whom has sole voting and investment power over the shares held in his or her
account.  Includes 96,867.00, 121,631.70 and 25,552.18 shares held for the
accounts of Messrs. Beard, Mee and Collen, respectively, and 573.23 shares held
for the accounts of other executive officers.

(5)  Includes 368,685 shares owned directly by Mr. Beard as to which he has
sole voting and investment power; 232,319 shares (or 8.30%) owned by the William
M. Beard and Lu Beard 1988 Charitable Unitrust (the "1988 Unitrust"), of which
Mr. Beard and his wife, Lu Beard, serve as co-trustees and share voting and
investment power;  16,666 shares each held by the William M. Beard Irrevocable
Trust "A," the William M. Beard Irrevocable Trust "B," and the William M. Beard
Irrevocable Trust "C" (collectively, the "Beard Irrevocable Trusts") of which
Messrs. Beard and Herb Mee, Jr. are trustees and share voting and investment
power; 6,738 shares each held by the John Mason Beard II Trust, the Joseph G.
Beard Trust and the Rebecca Banner Beard Trust as to which Mr. Beard is the
trustee and has sole voting and investment power; 3,256 shares held by the
Rebecca Banner Beard Lilly Living Trust as to which Mr. Beard is a co-trustee 
and shares voting and investment power with his daughter; 96,867.00 shares 
held by The Beard Group 401(k) Trust (the "401(k) Trust") for the account of 
Mr. Beard as to which he has sole voting and investment power; and 13,333 
shares held by B & M Limited, a general partnership, of which Mr. Beard is a 
general partner and shares voting and investment power with Mr. Mee.  Also 
includes 25,000 shares subject to presently exercisable options.  Excludes 
1,679 shares owned by his wife as to which Mr. Beard disclaims beneficial 
ownership.  Also excludes 41,228 shares held by four separate trusts for the 
benefit of Mr. Beard's children.
  
(6)  Represents 232,319 shares owned by the 1988 Unitrust, of which Mr. Beard
and Mrs. Beard serve as co-trustees and share voting and investment power.  Also
includes 1,679 shares owned directly by Mrs. Beard as to which she has sole
voting and investment power.

(7)  Includes 16,450 shares owned directly by Mr. Mee as to which he has
sole voting and investment power; 6,666 shares held by Mee Investments, Inc., as
to which Mr. Mee has sole voting and investment power; 13,333 shares held by B
& M Limited as to which Mr. Mee shares voting and investment power with Mr. 
Beard but as to which Mr. Mee has no present economic interest; and 121,631.70 
shares held by the 401(k) Trust for the account of Mr. Mee as to which he has 
sole voting and investment power.  Also includes 16,666 shares each held by the 
Beard Irrevocable Trusts as to which Mr. Mee is a co-trustee and shares voting 
and investment power with Mr. Beard but as to which Mr. Mee has no pecuniary 
interest and disclaims beneficial ownership. Also includes 25,000 shares 
subject to presently exercisable options.  Excludes 45 shares owned by his wife,
Marlene W. Mee, as to which Mr. Mee disclaims beneficial ownership.

Security Ownership of Management
                                
  The following table sets forth certain information regarding the number of
shares of Beard common stock beneficially owned by each director and nominee, 
the Chief Executive Officer ("CEO"), each named executive officer and by all
directors and executive officers as a group and the percentage of outstanding
common stock so owned as of February 28, 1997.
  
<TABLE>
<CAPTION>
                                                  Amount and 
                                                  Nature of  
                                                  Beneficial    Percent 
     Name and Address                              Ownership    of Class
     ----------------                             ----------    --------
<S>                                               <C>            <C>
W. M. Beard                                         809,672(1)   28.67%
Herb Mee, Jr.                                       233,079(2)    8.25%
Allan R. Hallock                                     40,458(3)    1.45%
Michael E. Carr                                      28,643       1.02%
Ford C. Price                                         8,665(4)    ---(8)
W. R. Plugge                                          2,000       ---(8)
C. H. Collen, Jr                                     42,602(5)    1.52%
Marc A. Messner                                      50,000       1.79%
Philip R. Jamison                                       240(6)    ---(8)
All directors and executive
     officers as a group (11 in number)           1,165,291(7)   40.76%

</TABLE>
_________________
(1) See footnote (5) to table "Security Ownership of Certain Beneficial Owners."
(2) See footnote (7) to table "Security Ownership of Certain Beneficial Owners."
(3) Reflects shares owned by A. R. Hallock & Co., a partnership, as to which Mr.
Hallock shares voting and investment power with his wife.
(4) Includes 5,399 shares owned directly by Mr. Price as to which he has sole 
voting and investment power and 3,266 shares held by an IRA for the benefit of 
Mr. Price as to which he has sole voting and investment power.
(5) Includes 17,050 shares owned directly by Mr. Collen as to which he has sole
voting and investment power and 25,552.18 shares held by the 401(k) Trust for 
the account of Mr. Collen as to which he has sole voting and investment power.
(6) Represents Mr. Jamison's 20% vested interest in the 1,203 shares owned for 
his account in the 401(k) Trust; Mr. Jamison has sole voting and investment 
power as to such shares.
(7) Includes 825,927 shares as to which directors and executive officers have 
sole voting and investment power and 339,364 shares as to which they share 
voting and investment power with others.
(8) Reflects ownership of less than one (1) percent.

Item 13.  Certain Relationships and Related Transactions.
  
  In September 1995, William M. Beard and Lu Beard, as trustees of the William
M. Beard and Lu Beard 1988 Charitable Unitrust (the "Unitrust") agreed to loan
the Company up to $250,000 under a revolving loan arrangement for a period of 
one year.  In March 1996, the Unitrust extended the maturity of such note to 
October 1997; in October 1996 the credit line was increased to $500,000 and the 
maturity was extended to March 1998.  In February 1997 the maturity was 
extended to February 1999.  Various advances and repayments have been made 
under such arrangement, and at year-end 1996 the principal balance due was 
$455,000.  The loan is unsecured and bears interest at the rate of 10% per 
annum. 
  
  In December 1995 the William M. Beard Irrevocable Trust "B" and the William
M. Beard Irrevocable Trust "C" agreed to loan $130,000 and $95,000, respec-
tively, to the Company for a period of one year.  In March 1996, the Trusts 
extended the maturity of such notes to October 1997.  In February 1997 the 
maturity was extended to February 1999 and the principal amount of the loans 
were increased to $140,000 and $105,000, respectively.  Loans of $130,000 and 
$95,000, respectively, were outstanding pursuant to such arrangement as of 
year-end 1996.  The loans are unsecured and bear interest at the rate of 10% 
per annum.

                            PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

  (a)  The following documents are filed as part of this report:

        1.  Financial Statements.  Reference is made to the Index to Financial
            Statements and Financial Statement Schedules appearing at 
            Item 8 on Page 26 of the report.

        2.  Financial Statement Schedules.  Financial Statement Schedules are
            omitted as inapplicable or not required, or the required 
            information is shown in the financial statements or in the notes 
            thereto.  The financial statements of North American Brine 
            Resources, a 40% owned investor of Beard, as of December 31, 1996,
            and 1995 and for each of the years in the three-year period ended
            December 31, 1996, and for the year then ended are filed as a 
            financial statement schedule.
   
        3.  Exhibits.  The following exhibits are filed with this Form 10-K and
            are identified by the numbers indicated:

2     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 by 
      reference).

3(i)  Amended and Restated Certificate of Incorporation of Registrant as filed
      with the Secretary of State of Oklahoma on August 25, 1993.  (This Exhibit
      has been previously filed as Exhibit 3(a) to Amendment No. 1, filed on 
      September 3, 1993 to Registrant's Registration Statement on Form S-4, 
      File No. 33-66598, and same is incorporated by reference).

3(ii) Registrant's Restated By-Laws (as amended January 11, 1996).  (This 
      Exhibit has been previously filed as Exhibit 3(ii) to Registrant's Form 
      10-K for the period ended December 31, 1995, filed on April 1, 1996, and 
      same is incorporated by reference).

4     Instruments defining the rights of security holders:

4(a)  Agreement of Sale and Purchase by and among Beard Oil and Sensor Oil & 
      Gas, Inc. ("Sensor").  (This Exhibit has been previously filed as 
      Addendum B to Amendment No. 1, filed on September 3, 1993 to Registrant's 
      Registration Statement on Form S-4, File No. 33-66598, and same is 
      incorporated by reference).

4(b)  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 by reference).

4(c)  Stock Purchase Agreement by and among Registrant, Beard Oil, New York 
      Life Insurance Company ("NYL"), New York Life Insurance and Annuity 
      Company ("NYLIAC"), John Hancock Mutual Life Insurance Company ("Hancock")
      and Memorial Drive Trust ("MDT"), dated July 12, 1993 (see Addendum C to 
      Part I which is incorporated herein by reference; schedules to the 
      Agreement have been omitted).  (This Exhibit has been previously 
      filed as Exhibit 10(g) to Amendment No. 1, filed on September 3, 
      1993 to Registrant's Registration Statement on Form S-4,
      File No. 33-66598, and same is incorporated by reference).

4(d)  Settlement Agreement, with Certificate of Amendment attached thereto, by
      and among Registrant, Beard Oil, NYL, NYLIAC, Hancock, MDT 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 by reference).

4(e)  Promissory Note from Carbonics to John Hancock Leasing Corporation 
      ("JHLC") dated July 1, 1991. (This Exhibit has been previously filed 
      as Exhibit 4(f) to Registrant's Form 10-K for the period ended 
      December 31, 1993 and same is incorporated by reference).

4(f)  Security Agreement from Carbonics to JHLC dated June 11, 1991.  (This
      Exhibit has been previously filed as Exhibit 4(g) to Registrant's 
      Form 10-K for the period ended December 31, 1993 and same is 
      incorporated by reference).

4(g)  Guarantee from Registrant to JHLC dated July 1, 1991.  (This Exhibit 
      has been previously filed as Exhibit 4(h) to Registrant's Form 10-K 
      for the period ended December 31, 1993 and same is incorporated by 
      reference).

4(h)  Loan Agreement by and among Registrant, Carbonics and Liberty Bank &
      Trust Company of Oklahoma City, N.A. ("Liberty"), effective May 19, 1995.
      (This Exhibit has been previously filed as Exhibit 4(n) to Registrant's 
      Form 10-Q for the period ended June 30, 1995, filed on August 7, 1995, 
      and same is incorporated by reference). 
     
4(i)  First Amendment to Loan Agreement by and among Registrant, Carbonics and
      Liberty, dated November 13, 1995. (This Exhibit has been previously 
      filed as Exhibit 4(r) to Registrant's Form 10-Q for the period ended 
      March 31, 1996, filed on May 3, 1996, and same is incorporated by 
      reference). 
 
4(j)  Second Amendment to Loan Agreement by and among Registrant, Carbonics and
      Liberty, dated effective March 12, 1996. (This Exhibit has been previously
      filed as Exhibit 4(s) to Registrant's Form 10-Q for the period ended 
      March 31, 1996, filed on May 3, 1996,  and same is incorporated by 
      reference). 

4(k)  Third Amendment to Loan Agreement by and among Registrant, Carbonics and 
      Liberty, dated effective April 30, 1996. (This Exhibit has been 
      previously filed as Exhibit 4.1 to Registrant's Form 10-Q for the period 
      ended June 30, 1996, filed on August 14, 1996, and same is incorporated 
      by reference). 
    
4(l)  Amended and Restated Loan Agreement by and among Registrant, Carbonics and
      Liberty, dated as of October 31, 1996.

4(m)  Letter Agreement for Construction Guidance Line of Credit between
      Registrant d/b/a The Oaks Venture and Liberty, dated July 17, 1995. 
      (This Exhibit has been previously filed as Exhibit 4(o) to Registrant's 
      Form 10-Q for the period ended June 30, 1995, filed on August 7, 1995, 
      and same is incorporated by reference).
      
4(n)  Letter Agreement for Construction Guidance Line of Credit between
      Registrant d/b/a The Oaks Venture and Liberty, dated effective March 
      21, 1996. (This Exhibit has been previously filed as Exhibit 4(t) to 
      Registrant's Form 10-Q for the period ended March 31, 1996, filed on 
      May 3, 1996, and same is incorporated by reference).

4(o)  Promissory Note from Registrant to the Trustees of the William M. Beard
      and Lu Beard 1988 Charitable Unitrust (the "Trustees") dated September 20,
      1995.  (This Exhibit has been previously filed as Exhibit 4(o) to 
      Registrant's Form 10-K for the period ended December 31, 1995, filed on 
      April 1, 1996, and same is incorporated by reference).
     
4(p)  Extension and Renewal Promissory Note from Registrant to the Trustees 
      dated March 31, 1996. (This Exhibit has been previously filed as Exhibit 
      4(u) to Registrant's Form 10-Q for the period ended March 31, 1996, 
      filed on May 3, 1996, and same is incorporated by reference).
 
4(q)  Amended and Restated Renewal Promissory Note from Registrant to the
      Trustees dated October 11, 1996.

4(r)  Amended and Restated Renewal Promissory Note from Registrant to the
      Trustees dated February 17, 1997.

4(s)  Promissory Note from Registrant to the Trustee of the William M. Beard
      Irrevocable Trust "B" (the "B Trust") dated December 27, 1995.  (This 
      Exhibit has been previously filed as Exhibit 4(p) to Registrant's 
      Form 10-K for the period ended December 31, 1995, filed on April 1, 
      1996, and same is incorporated by reference).

4(t)  Extension and Renewal Promissory Note from Registrant to the B Trust 
      dated March 31, 1996. (This Exhibit has been previously filed as 
      Exhibit 4(v) to Registrant's Form 10-Q for the period ended March 31, 
      1996, filed on May 3, 1996, and same is incorporated by reference).

4(u)  Amended and Restated Renewal Promissory Note from Registrant to the B
      Trust dated February 17, 1997.

4(v)  Promissory Note from Registrant to the Trustee of the William M. Beard
      Irrevocable Trust "C" (the "C" Trust") dated December 27, 1995.  (This 
      Exhibit has been previously filed as Exhibit 4(q) to Registrant's Form 
      10-K for the period ended December 31, 1995, filed on April 1, 1996, and 
      same is incorporated by reference).

4(w)  Extension and Renewal Promissory Note from Registrant to the C Trust
      dated March 31, 1996. (This Exhibit has been previously filed as Exhibit 
      4(w) to Registrant's Form 10-Q for the period ended March 31, 1996, filed 
      on May 3, 1996, and same is incorporated by reference). 

4(x)  Amended and Restated Renewal Promissory Note from Registrant to the C 
      Trust dated February 17, 1997.
     
10    Material contracts:

10(a) The Beard Company 1993 Stock Option Plan dated August 27, 1993.  (This
      Exhibit has previously been filed as Exhibit 10(f) to Amendment No. 1, 
      filed on September 3, 1993 to Registrant's Registration Statement on 
      Form S-4, File No. 33-66598, and same is incorporated by reference).*

10(b) The Beard Company 1994 Phantom Stock Units Plan adopted November 1, 1994.
      (This Exhibit has been previously filed as Exhibit 10(h) to Registrant's 
      Form 10-K for the period ended December 31, 1994, filed on April 17, 1995,
      and same is incorporated by reference).*

10(c) Stockholders' Agreement made as of January 27, 1993 by and among
      Registrant, Carbonics and Clifford Collen, Jr. ("Collen").  (This 
      Exhibit has been previously filed as Exhibit 10(i) to Registrant's 
      Form 10-K for the period ended December 31, 1994, filed on April 17, 
      1995, and same is incorporated by reference).*

10(d) Stock Purchase Agreement dated as of December 15, 1991 by and among
      Registrant (formerly known as Beard Investment Company), Carbonics and 
      Collen.  (This Exhibit has been previously filed as Exhibit 10.9 of 
      Item 14(a) to Beard Oil's Form 8, Amendment No. 1, Form 10-K for the 
      fiscal year ended December 31, 1991 and same is incorporated herein by 
      reference).*

10(e) Conversion Agreement dated as of January 31, 1995 by and among Registrant,
      Carbonics and Collen.  (This Exhibit has been previously filed as 
      Exhibit 10(k) to Registrant's Form 10-K for the period ended December 
      31, 1994, filed on April 17, 1995, and same is incorporated herein by 
      reference).*

10(f) Employment Agreement dated April 3, 1995 by and among Registrant,
      Carbonics, Collen and Beard Oil. (This Exhibit has been previously 
      filed as Exhibit 10(l) to Registrant's Form 10-K for the period ended 
      December 31, 1994, filed on April 17, 1995, and same is incorporated 
      herein by reference).*

10(g) The Beard Company Deferred Stock Compensation Plan. (This Exhibit has been
      previously filed as Exhibit 10(k) to Registrant's Form 10-K for the 
      period ended December 31, 1995, filed on April 1, 1996, and same is 
      incorporated by reference).*

------------------
  
* Compensatory plan or arrangement.

10(h) Subscription Agreement by and between Cibola Corporation ("Cibola") and
      Registrant, dated April 10, 1996. (This Exhibit has been previously 
      filed as Exhibit 10.1 to Registrant's Form 10-Q for the period ended 
      June 30, 1996, filed on August 14, 1996, and same is incorporated by 
      reference).

10(i) Nonrecourse Secured Promissory Note from Registrant to Cibola, dated 
      April 10, 1996. (This Exhibit has been previously filed as Exhibit 10.2 
      to Registrant's Form 10-Q for the period ended June 30, 1996, filed on 
      August 14, 1996, and same is incorporated by reference).

10(j) Security Agreement by and among Registrant, Cibola and the Cibola
      shareholders, dated April 10, 1996. (This Exhibit has been previously 
      filed as Exhibit 10.3 to Registrant's Form 10-Q for the period ended 
      June 30, 1996, filed on August 14, 1996, and same is incorporated by 
      reference). 

10(k) Tax Sharing Agreement by and among Registrant, Cibola and the Cibola
      shareholders, dated April 10, 1996. (This Exhibit has been previously 
      filed as Exhibit 10.4 to Registrant's Form 10-Q for the period ended 
      June 30, 1996, filed on August 14, 1996, and same is incorporated by 
      reference). 
 
21    Subsidiaries of the Registrant.
     
23    Consent of KPMG Peat Marwick LLP.

27    Financial Data Schedules
     

  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)  No reports on Form 8-K were filed by the Company during the three months
       ended December 31, 1996.

<PAGE>
                                
                           SIGNATURES
                                
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
                                                
                                                                               
                                             THE BEARD COMPANY
                                                                               
                                             (Registrant)

                                                                               
                                             HERB MEE, JR.   
                 
DATE:  August 29, 1997                       Herb Mee, Jr.

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated below.

  Signature                   Title                   Date
  ---------                   -----                   ----
 
  W.M. BEARD                       
  W.M. Beard                  Chief Executive Officer  August 29, 1997

  HERB MEE, JR.
  Herb Mee, Jr.               President and Chief      August 29, 1997
                              Financial Officer

  JACK A. MARTINE
  Jack A. Martine             Controller and Chief     August 29, 1997
                              Accounting Officer

  W.M. BEARD
  W.M. Beard                  Chairman of the Board    August 29, 1997

  HERB MEE, JR.
  Herb Mee, Jr.               Director                 August 29, 1997

  ALLAN R. HALLOCK
  Allan R. Hallock            Director                 August 29, 1997

  FORD C. PRICE
  Ford C. Price               Director                 August 29, 1997

  MICHAEL E. CARR
  Michael E. Carr             Director                 August 29, 1997


<PAGE>
                                                FINANCIAL STATEMENT SCHEDULE 1


                        NORTH AMERICAN BRINE RESOURCES
                             FINANCIAL STATEMENTS
                       DECEMBER 31, 1996, 1995 AND 1994


                  (WITH INDEPENDENT AUDITORS' REPORT ON 1996)

<PAGE>

                         INDEPENDENT AUDITORS' REPORT



The Partners
North American Brine Resources:


We  have  audited  the  accompanying  balance  sheet  of  North  American Brine
Resources  as  of  December 31, 1996, and the related statements of operations,
partners' equity, and  cash  flows  for  the  year then ended.  These financial
statements   are  the  responsibility  of  North  American   Brine   Resources'
management.  Our  responsibility  is  to  express an opinion on these financial
statements based on our audit.

We  conducted  our  audit  in  accordance  with  generally   accepted  auditing
standards.   Those  standards  require  that we plan and perform the  audit  to
obtain reasonable assurance about whether  the financial statements are free of
material misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and disclosures in the financial  statements.   An audit
also   includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well  as evaluating the overall financial
statement presentation.  We believe that our  audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred  to  above present fairly, in
all material respects, the financial position of North American Brine Resources
as of December 31, 1996, and the results of its operations  and  its cash flows
for  the  year  then  ended  in  conformity  with generally accepted accounting
principles.


                                      KPMG Peat Marwick LLP

Oklahoma City, Oklahoma
April 22, 1997
<PAGE>

<TABLE>
<CAPTION>
                        NORTH AMERICAN BRINE RESOURCES

                                BALANCE SHEETS
                                                                           December 31,
                                                                   -------------------------------
                                                                      1996               1995
                                                                      ----               ----  
<S>                                                                <C>                <C>
                Assets
                ------
Current assets:
   Cash and cash equivalents                                       $  208,205         $   64,263
   Accounts receivable                                                  2,978                539
   Inventory:
     Raw materials                                                     10,171             13,854
     Work-in-process                                                   70,594              4,691
     Finished goods                                                   383,864             21,857
                                                                    ---------         ----------
                                                                      464,629             40,402
   Supplies                                                            58,200             84,700
   Prepaid expenses                                                    40,022             50,788
   Other current assets                                                 4,177              4,177
                                                                    ---------         ----------
      Total current assets                                            778,211            244,869

Property, plant and equipment                                       7,863,304          7,590,142
   Less accumulated depletion, depreciation, and amortization       4,116,866          3,841,482
                                                                    ---------         ----------
      Net property, plant and equipment                             3,746,438          3,748,660
                                                                    ---------         ----------
                                                                   $4,524,649         $3,993,529
                                                                    =========          =========
        Liabilities and Partners' Equity
        --------------------------------
Current liabilities:
   Accounts payable and accrued expenses                           $  390,637         $  121,861
   Deferred revenue                                                   100,000               -
   Current maturities of long-term debt                                90,000               -   
                                                                    ---------          ---------
      Total current liabilities                                       580,637            121,861
                                                                    ---------          ---------
Long-term debt less current maturities                                540,000               -
Partners' equity:
   Partners' contributions                                          7,062,610          7,062,610
   Accumulated deficit                                             (3,658,598)        (3,190,942)
                                                                    ---------          ---------
      Net partners' equity                                          3,404,012          3,871,668
                                                                    ---------          ---------
                                                                   $4,524,649         $3,993,529
                                                                    =========          =========
</TABLE>
                See accompanying notes to financial statements.
<PAGE>


                        NORTH AMERICAN BRINE RESOURCES

                           STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                              Years Ended December 31,
                                                   ---------------------------------------------
                                                        1996            1995          1994
                                                        ----            ----          ----
                                                                    (Unaudited)    (Unaudited)
<S>                                                  <C>               <C>            <C>
Iodine sales                                         $  271,080        $299,550       $218,250
   Less sales discounts and commissions                   8,208          17,227          7,712
                                                     ----------         -------        -------
      Net iodine sales                                  262,872         282,323        210,538

Cost of iodine sales                                    160,960         179,912        162,962
                                                     ----------         -------        -------
      Gross margin                                      101,912         102,411         47,576
Operating expense                                       (30,478)        (14,236)       (22,124)
General and administrative expense                     (171,974)       (122,263)      (132,276)
Interest expense                                         (7,063)           -              -           
Idled plant costs                                      (119,631)       (230,762)      (273,624)
Plant re-opening costs                                 (213,970)           -              -
Reduction of supplies' carrying value to net
   replacement cost                                     (26,500)           -              -
Other income                                                 48           1,119          3,754
                                                     ----------         -------        -------     
                                                       (569,568)       (366,142)      (424,270)
                                                     ----------         -------        -------
      Net loss                                       $ (467,656)      $(263,731)     $(376,694)
                                                     ==========         =======        ======= 
</TABLE>

See accompanying notes to financial statements.
<PAGE>

<TABLE>
                        NORTH AMERICAN BRINE RESOURCES

                        STATEMENTS OF PARTNERS' EQUITY
<CAPTION>
                                           GODOE           The           Inorgchem
                                           (USA),          Beard        Developments
                                           Inc.           Company           Inc.          Total
                                        -----------     ----------      ------------      -----
<S>                                     <C>            <C>             <C>               <C>   
Balance, December 31, 1993              $ 2,274,853    $1,789,792      $447,448          $4,512,093
  (Unaudited)
Net loss                                   (188,347)     (150,678)      (37,669)           (376,694)
                                        -----------    ----------      --------          ----------
Balance, December 31, 1994                2,086,506     1,639,114       409,779           4,135,399
  (Unaudited)
Net loss                                   (131,867)     (105,491)      (26,373)           (263,731)
                                        -----------     ---------       --------          ---------
Balance, December 31, 1995                1,954,639     1,533,623       383,406           3,871,668
  (Unaudited)
Net loss                                   (233,828)     (187,062)      (46,766)           (467,656)         
                                        -----------     ---------       -------           ---------
Balance, December 31, 1996              $ 1,720,811    $1,346,561      $336,640          $3,404,012
                                        ===========     =========       =======           =========
</TABLE>

                See accompanying notes to financial statements.
<PAGE>
<TABLE>
                        NORTH AMERICAN BRINE RESOURCES

                           STATEMENTS OF CASH FLOWS
<CAPTION>
                                                        Years ended December 31,
                                                 ------------------------------------------   
                                                   1996               1995              1994
                                                                  (Unaudited)        (Unaudited)
<S>                                              <S>               <C>              <C> 
Cash flows from operating activities:            
 Net loss                                        $(467,656)        $(263,731)       $(376,694)
 Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:
   Depletion,  depreciation,  and  amor-          
   tization expense                                293,806           166,601          174.231
   Reduction in carrying value of supplies          26,500              -                -
   Decrease (increase) in accounts receivable       (2,439)           70,191            4,212
   Increase in accounts payable and
    accrued expenses                               268,776            34,253           38,396
   Increase in deferred revenue                    100,000              -                -
   Increase in inventory                          (424,227)           (4,283)          (3,193)
   Decrease (increase) in prepaid expenses and
     other current assets                           10,766              (826)         (12,477)
                                                ----------          --------          -------
      Net cash provided by (used in) operating
        activities                                (194,474)            2,305         (175,525)
                                                ----------          --------         --------                        
Cash flows from investing activities:
  Purchase of plant and equipment                  (54,722)             -                -
  Development of producing properties             (236,862)             -                -
                                                ----------          --------         --------
      Net cash used in investing activities       (291,584)             -                -

Cash flows from financing activities:     
 Proceeds from credit agreements                   630,000              -                -     
                                                ----------          --------         --------
      Net cash provided by financing activities    630,000              -                -
Ne increase (decrease) in cash and cash
  equivalents                                      143,942            2,305          (175,525)
Cash and cash equivalents at beginning of year      64,263           61,958           237,483
                                                ----------          --------         -------- 
Cash and cash equivalents at end of year        $  208,205          $64,263          $ 61,958
                                                ==========          ========         ========
</TABLE>

See accompanying notes to financial statements.
<PAGE>
                        NORTH AMERICAN BRINE RESOURCES

                         NOTES TO FINANCIAL STATEMENTS

                       DECEMBER 31, 1996, 1995, AND 1994
               (INFORMATION AS OF DECEMBER 31, 1995 AND 1994 AND
                    FOR THE YEARS THEN ENDED IS UNAUDITED)


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      North  American  Brine  Resources (NABR) was formed on June 5, 1981, as a
      joint venture of GODOE (USA),  Inc.,  The  Beard  Company,  and Inorgchem
      Developments, Inc.  The participants make capital contributions and share
      in the profits and losses of NABR as follows:

<TABLE>
<CAPTION>
              <S>                                       <C>
              GODOE (USA), Inc.                         50%
              The Beard Company                         40%
              Inorgchem Developments, Inc.              10%
</TABLE>

      NABR operates  two crude iodine extraction and processing plants in
      Dover and Woodward,  Oklahoma.   All  of NABR's revenues consist of
      sales of crude iodine to Mitsui and Co. (USA), Inc. (see note 5).

      In 1993, the Management Committee of NABR  approved  an  indefinite
      suspension  of  the  Woodward,  Oklahoma  plant's operations.   The
      suspension was in response to a world oversupply  of  iodine  which
      resulted in a decline of iodine prices to unprofitable levels.

      In  June 1996, the Management Committee of NABR approved a plan  to
      resume  operations  at  the Woodward, Oklahoma plant based on their
      assessment of world supply  and demand of iodine which has resulted
      in increased prices.

      In the opinion of management,  the accompanying unaudited financial
      statements as of December 31, 1995 and 1994, and for the years then
      ended, reflect adjustments (all of which were normal and recurring)
      which,  in the opinion of management,  are  necessary  for  a  fair
      statement  of  the financial position and the results of operations
      and cash flows for the periods mentioned above.

      CASH AND CASH EQUIVALENTS

      NABR  considers  certificates   of   deposit   and   other  similar
      securities, whose remaining terms at date of purchase are less than
      90 days, to be cash equivalents.

      INVENTORIES

      Raw materials, work in process, and finished goods inventories  are
      valued at the lower of cost (on average cost basis) or market.  Raw
      materials  consist  of  chemicals used in the extraction of iodine.
      At December 31, 1996 and  1995,  finished goods inventory consisted
      of approximately 27,000 and 2,800 kilograms, respectively, of crude
      iodine.

      SUPPLIES

      Supplies represent various replacement  parts  for NABR's producing
      properties and plant equipment.  Supplies are carried  at the lower
      of cost or net replacement cost.

      PROPERTY, PLANT AND EQUIPMENT

      Plant   and   equipment  are  stated  at  cost.   Expenditures  for
      acquisition, renewals  and  betterments  are  capitalized,  whereas
      maintenance  and  repair  costs  are  expensed  as  incurred.  When
      properties  are  retired or otherwise disposed of, the  appropriate
      accounts are relieved of costs and accumulated depreciation and any
      resulting gain or loss is credited or charged to operations.

      Depreciation is provided on the straight-line method over periods of
      three to ten years.

      Producing  properties   represent  NABR's  cost  of  drilling  and
      equipping wells producing  salt  water for the extraction of brine
      and salt water disposal wells, and  the  leasehold  costs  of such
      properties.    Depreciation,   depletion,   and   amortization  of
      producing properties is computed by the straight-line method using
      an estimated recoverable period of ten years for salt  water brine
      reserves.
  
      During  the  suspended operations of the Woodward, Oklahoma  plant
      (1995, 1994, and  1993),  NABR  recorded  25%  of  the  depletion,
      depreciation  and amortization of the salt water wells' leasehold,
      development, and equipment costs and the plant's capitalized costs
      using the straight-line  method  and  a 10 year useful life.  Upon
      the approval to resume the Woodward, Oklahoma  plant's  operations
      in  June  1996,  NABR  resumed  recording  100%  of the depletion,
      depreciation and amortization.

      NABR  adopted the provisions of Statement of Financial  Accounting
      Standards  (SFAS) No. 121, "Accounting for the Impairment of Long-
      Lived Assets  and  for  Long-Lived  Assets  to Be Disposed Of," on
      January 1, 1996.  This Statement requires that  long-lived  assets
      and  certain  identifiable  intangibles be reviewed for impairment
      whenever  events or changes in  circumstances  indicate  that  the
      carrying  amount   of   an   asset   may   not   be   recoverable.
      Recoverability  of  assets  to be held and used is measured  by  a
      comparison of the carrying amount  of  an asset to future net cash
      flows expected to be generated by the asset.   If  such assets are
      considered  to  be  impaired,  the impairment to be recognized  is
      measured by the amount by which  the carrying amount of the assets
      exceed the fair value of the assets.   Adoption  of this Statement
      did  not  have a material impact on NABR's financial  position  or
      results of operations.

       DEFERRED REVENUE

       Deferred revenue  represents  amounts  received  from  Mitsui  for
       future deliveries of crude iodine (see note 5).

       INCOME TAXES

       No  provision  for  income  taxes  is  required  in  the financial
       statements since the partners pay income taxes on, or receive as a
       deduction,  their distributive share of NABR's taxable  income  or
       losses.

       IDLED PLANT COSTS

       As previously  noted,  NABR  suspended operations of the Woodward,
       Oklahoma iodine extraction and processing plant in 1993.  Included
       in  idled  plant  costs  are  the  depreciation,   depletion   and
       amortization  costs  as  well  as  other costs incurred during the
       plant's suspended operations through  October  1996,  the date the
       plant's operations resumed.

       PLANT RE-OPENING COSTS

       Plant  re-opening costs represent costs incurred for readying  the
       Woodward,  Oklahoma  producing  salt  water  wells  and  plant for
       resumed operations.

       USE OF ESTIMATES

       Management  of NABR has made a number of estimates and assumptions
       relating to the  reporting  of  assets  and liabilities to prepare
       these financial statements in conformity with generally acceptable
       accounting  principles.  Actual results could  differ  from  those
       estimates.

(2)   PROPERTY, PLANT AND EQUIPMENT

      Property, plant  and  equipment  at  December  31  is  summarized as
      follows:

<TABLE>
<CAPTION>
                                                   1996            1995
                                                   ----            ----
                                                                 (Unaudited)
<S>                                                 <C>           <C>
     Plant and equipment                            $ 4,322,72    $4,316,617
     Autos and trucks                                   89,399        88,210
     Furniture and fixtures                             16,848        14,432
     Producing properties                            3,434,334     3,170,883
                                                   -----------     ---------   
                                                   $ 7,863,304    $7,590,142
                                                   ===========     =========
</TABLE>

(3)  LONG-TERM DEBT

     Long-term debt consists of the following at December 31, 1996:

<TABLE>
<CAPTION>
     <S>                                                          <C>
     Borrowings under credit agreement <F1>                       $ 450,000

      Term note payable <F2>                                        180,000
                                                                  ---------
        Total long-term debt                                        630,000

        Less current maturities                                      90,000
                                                                  ---------
         Long-term debt, less current maturities                  $ 540,000
                                                                  =========

<FN>
<F1>  Amount  represents   unsecured   borrowings  under  a  credit agreement
      with GODOE (USA),  Inc.,  a  50% partner of NABR.  The credit agreement 
      allows NABR to borrow up to a maximum  amount of $896,000.  Borrowings 
      under the credit  agreement  are  due  on December  31,  1998.   Interest
      is  paid quarterly  and is based on the  floating  three  month  London  
      Interbank Offered Rate (LIBOR) interest rate, plus .38% which approximated
      5.94% at December 31,  1996.   Subsequent  to  December 31, 1996, NABR 
      borrowed an additional $446,000 under the credit agreement.

<F2>  On December 31, 1996, NABR entered  into  a  term note agreement
      with Inorgchem Developments, Inc., a 10% partner of NABR.   The term note
      is  unsecured  and is payable in two installments of $90,000 on  December
      31, 1997 and 1998.   Interest  is  paid  quarterly  and  is  based on the
      floating  three  month LIBOR interest rate, plus .38%, which approximated
      5.94% at December 31, 1996.
</FN>
</TABLE>

(4)  PROFIT SHARING PLAN

     All eligible employees  of  NABR  are eligible to participate in the
     North American Brine Resources Salary  Deferral  Plan and Trust (the
     Plan).   Participant  contributions  up  to 5% of the  participant's
     total  compensation are matched 50% by NABR.   The  participant  can
     make additional  contributions,  which  are  not  matched  by  NABR.
     During  1996,  1995,  and 1994, NABR contributed $3,500, $3,300, and
     $3,300, respectively, under  the  Plan.   Benefits payable under the
     Plan  are  limited  to the amount of plan assets  allocable  to  the
     account of each Plan participant.  NABR retains the right to modify,
     amend, or terminate the Plan at any time.

(5)  RELATED PARTY TRANSACTIONS

     In  connection with the  formation  of  NABR,  the  partners  execu-
     ted  a technical  assistance  agreement,  an  operating  agreement
     and  a  distributorship agreement.

     The technical  assistance agreement specifies that GODOE (USA), Inc.
     will provide assistance  in  the  development  of  the  process  for
     extracting  iodine  and  other  minerals from brine and will provide
     other support services for NABR's plants.  As compensation for these
     support services GODOE (USA), Inc.  is  to receive reimbursement for
     the  salary,  travel, and other costs of its  personnel  who  assist
     NABR.  No such  costs  were  incurred by NABR during 1996, 1995, and
     1994.

     The  operating  agreement specifies  that  The  Beard  Company  will
     provide assistance  in  obtaining necessary licenses and permits for
     the conduct of business,  locating appropriate plant sites and brine
     supplies, and providing office  space  and  clerical  and accounting
     assistance.   For  these  services,  The  Beard Company is paid  its
     actual  cost  plus  10%.   Included  in general  and  administrative
     expense  in  1996,  1995,  and  1994 are professional  and  clerical
     assistance charges by The Beard Company  of  approximately  $30,000,
     $12,400, and $7,800, respectively.

     The distributorship agreement provides that Mitsui & Co. (USA), Inc.
     will  purchase all of NABR's output of iodine and other products  at
     fair  market  values.   The  distributorship  agreement  is  renewed
     annually  subject  to  termination  by either party upon six months'
     notice.   Mitsui  &  Co.  (USA), Inc. is,  in  return,  granted  the
     exclusive worldwide marketing  rights for NABR's products.  Mitsui &
     Co.  (USA), Inc. is the parent company  of  Inorgchem  Developments,
     Inc.   All of NABR's sales in 1996, 1995, and 1994, were to Mitsui &
     Co. (USA), Inc. pursuant to this agreement.

     Pursuant  to  a waste brine processing agreement, NABR purchases all
     of required waste brine used for extracting iodine at its Berkenbile
     Facility from The  Beard Company.  During 1996, 1995, and 1994, NABR
     purchased $29,000, $33,000,  and  $35,000,  respectively,  of  waste
     brine from The Beard Company.