SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
(Mark One)
           [ 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, 1999
  [    ]  TRANSITION REPORT UNDER  SECTION 13 OR 15 (d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]

                          Commission file number 0-8157

                          THE RESERVE PETROLEUM COMPANY
                 (Name of small business issuer in its charter)

           Delaware                                            73-0237060
  -------------------------------                         ----------------------
  (State or other jurisdiction of                             (IRS Employer
  incorporation or organization)                          identification number)

                          6801 N. Broadway, Suite 300,
                       Oklahoma City, Oklahoma 73116-9092
               --------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Issuer's telephone number:                                         (405)848-7551
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act:
  Common stock $.50 Par Value                                   (Title of Class)

Check whether the issuer (1) filed all reports  required  to be filed by Section
13 or 15(d) of  the Securities  Exchange Act  during the past  12 months (or for
such  shorter  period that the  registrant  was required  to file such reports),
and  (2) has  been subject  to such  filing  requirements for  the past 90 days.
YES X   NO
   ---    ---

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ X ]

Issuer's  revenues for the fiscal year ended December 31, 1999 were  $1,573,549.
As of March 21, 2000,  there were  167,609.73  common  shares  outstanding.  The
aggregate market value of the voting stock held by non-affiliates was $3,975,110
as determined by the last reported sale which was February 11, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE
Items  9, 10,  11 and 12  required  by Part  III,  are  incorporated  herein  by
reference to the Company's proxy  statement to be mailed to security  holders on
or about April 4, 2000, in connection with its annual  stockholders'  meeting to
be held on May 2, 2000.  Transitional  Small Business  Disclosure  Format (check
one) Yes    No X
        ---   ---

See Exhibit Index on Page 36.

<PAGE>


                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----


Forward Looking Statements.................................................  3
PART I
    Item 1.  Description of Business.......................................  4
    Item 2.  Description of Properties.....................................  7
    Item 3.  Legal Proceedings.............................................  8
    Item 4.  Submission of Matters to a Vote of Security Holders...........  8

PART II
    Item 5.  Market for Common Equity and Related Stockholder Matters......  9
    Item 6.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations...........................  9
    Item 7.  Financial Statements.......................................... 15
    Item 8.  Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure........................... 36

PART III
    Item 9.  Directors, Executive Officers, Promoters and Control
             Persons Compliance with Section 16(a) of the Exchange Act..... 36
    Item 10. Executive Compensation........................................ 36
    Item 11. Security Ownership of Certain Beneficial Owners and
             Management.................................................... 36
    Item 12. Certain Relationships and Related Transactions................ 36
    Item 13. Exhibits and Reports on Form 8-K.............................. 36


<PAGE>

Forward Looking Statements.
--------------------------

In addition to historical information, from time to time the Company may publish
forward-looking  statements  relating to such matters as  anticipated  financial
performance,  business  prospects,  technological  developments,  new  products,
research and development activities, and similar matters. The Private Securities
Litigation  Reform  Act of  1995  provides  a safe  harbor  for  forward-looking
statements. Although management believes that the expectations reflected in such
forward  looking  statements are based on reasonable  assumptions,  a variety of
factors  could  cause the  Company's  actual  results and  experience  to differ
materially from the anticipated  results or other expectations  expressed in the
Company's  forward-looking  statements.  The  risks and  uncertainties  that may
affect the  operations,  performance,  development  and results of the Company's
business include, but are not limited to, the following:

    The Company's future operating results will depend upon management's ability
    to employ  and retain  quality  employees,  forecast  revenues  and  control
    expenses. Any decline in operating revenues without corresponding  reduction
    in operating  expenses could have a material adverse effect on the Company's
    business, results of operations and financial condition.

    Estimates  of future  revenues  from oil and gas sales  are  derived  from a
    combination of factors which are subject to significant fluctuation over any
    given  period of time.  Reserve  estimates  by their  nature are  subject to
    revision in the short-term.  The evaluating engineers consider all available
    production  performance data, reservoir data and geological data, as well as
    make  estimates  of  production  costs,  sale prices and the time period the
    property can be produced at a profit.  A change in any of the above  factors
    can  significantly  change  the timing  and  amount of net  revenues  from a
    property.

    The Company has no significant  long-term  sales contracts for either oil or
    gas.  For the most part,  the price the Company  receives for its product is
    based  upon  the  spot  market  price  which  in the  past  has  experienced
    significant  fluctuations.  Management  anticipates such price  fluctuations
    will continue in the future,  making any attempt at estimating future prices
    subject to significant error.

    Exploration and development  costs have been the most significant  component
    of the  Company's  capital  expenditures  and are  expected to remain so, at
    least in the near term.  Under the  successful  efforts method of accounting
    for  oil and  gas  properties  which  the  Company  uses,  these  costs  are
    capitalized if the prospect is successful, or charged to operating costs and
    expenses if  unsuccessful.  Estimating the amount of such future costs which
    may relate to successful or unsuccessful  prospects is extremely  imprecise,
    at best.

    The provisions for  depreciation,  depletion and amortization of oil and gas
    properties   constitute  a  particularly   sensitive   accounting  estimate.
    Non-producing  leaseholds are amortized over the life of the leasehold using
    a straight line method;  however, when a leasehold is impaired or condemned,
    an  appropriate  adjustment to the  provision is made at that time.  Forward
    looking estimates of such adjustments are very imprecise.  The provision for
    impairment  of  long-lived  assets is  determined by review of the estimated
    future cash flows from the individual  properties.  A significant unforeseen
    downward  adjustment in future prices and/or potential reserves could result

                                       3
<PAGE>

    in a material change in estimated  long-lived assets  impairment.  Depletion
    and   depreciation  of  oil  and  gas  properties  are  computed  using  the
    unitsof-production  method. A significant  unanticipated change in volume of
    production  or  estimated  reserves  would  result in a material  unforecast
    change in the estimated depletion and depreciation provisions.

    In prior  years,  income  from  available  for sale  securities  and trading
    securities have made substantial  contributions to net income. Available for
    sale securities and trading securities are used to invest funds until needed
    in the Company's  capital  investing and  financing  activities.  When those
    funds are utilized, net income will be materially reduced.

    The Company's trading  securities  consist  primarily of equity  securities.
    These  securities are carried at fair value with unrealized gains and losses
    included in  earnings.  The equity  securities  are traded on various  stock
    exchanges and/or the NASDAQ and over the counter markets.  Therefore,  these
    securities  are  market-risk  sensitive  instruments.  The  stock  market is
    subject to wide  price  swings in short  periods  of time.  Should the stock
    market experience a significant down-turn, the Company could have a material
    loss from its equity securities.

    The Company has equity  investments in organizations  over which the Company
    has  limited  or no  control.  These  equity  investments  make  substantial
    contributions to the Company's net income.  The management of these entities
    could at any time make  decisions  in their own best  interests  which could
    materially  affect the Company's  net income,  or the value of the Company's
    investments.  See Item 1  "Description  of Business - Other  Business",  for
    information regarding these equity investments.

The Reserve  Petroleum  Company  undertakes  no  obligation  to publicly  revise
forward-looking  statements to reflect events or circumstances  that arise after
the date hereof.  Readers should carefully review the risk factors  described in
other  documents  the Company  files from time to time with the  Securities  and
Exchange Commission,  including the Quarterly Reports on Form 10-QSB to be filed
by the Company in 2000 and any Current Reports on Form 8-K filed by the Company.


                                     PART I
                                     ------

Item 1.  Description of Business.

The Reserve  Petroleum  Company (the  "Company") is engaged  principally  in the
exploration  for and the  development of oil and natural gas  properties.  Other
business segments are not significant factors in the Company's  operations.  The
Company is a  corporation  organized  under the laws of the State of Delaware in
1931.

Oil and Natural Gas Properties.
------------------------------

For a summary of certain data relating to the  Company's oil and gas  properties
including production,  undeveloped acreage,  producing and dry wells drilled and
recent activity see Item 2,  "Description  of Properties".  For a discussion and
analysis of current and prior  years'  revenue and related  costs of oil and gas
operations, and a discussion of liquidity and capital resource requirements, see
Item 6, "Management's Discussion and Analysis of Financial Condition and Results
of Operations".

                                       4
<PAGE>


Mineral Property Management. The Company owns non-producing mineral interests in
approximately  270,894 gross acres equivalent to 93,718 net acres. These mineral
interests  are  located in nine  states  with  57,028 net acres in the states of
Oklahoma  and Texas,  the area of  concentration  for the Company in its present
development programs.

A substantial  amount of the Company's oil and gas revenue has resulted from its
mineral  property  management.  In 1999 $869,757 (57%) of oil and gas sales were
from royalty interests as compared to $1,017,891 (38%) in 1998. For a discussion
and  analysis  of the  decrease  in royalty  interests  production,  see Item 6,
subheading,  "Operating Revenues". As a result of its mineral ownership, in 1999
the  Company  had  royalty  interests  in 10 gross  (.176 net) wells  which were
drilled and completed as producing  wells.  See the following  paragraphs  for a
discussion of mineral interests in which the Company chooses to participate as a
working interest owner.

Development  Program. The development of a drilling program is usually initiated
in one of three ways. The Company may  participate  as a working  interest owner
with  a  third  party  operator  in the  development  of  non-producing  mineral
interests  which it  owns;  along  with  the  joint  interest  operator,  it may
participate in drilling additional wells on its producing leaseholds;  or if its
exploration program discussed below results in a successful exploratory well, it
may  participate  in the  development  of  additional  wells on the  exploratory
prospect. In 1999, the Company drilled no development wells.

Exploration Program. The Company's  exploration program is normally conducted by
purchasing  interests  in  prospects  developed by  independent  third  parties,
participating  in  third  party  exploration  of  Company  owned   non-producing
minerals,  developing  its own  exploratory  prospects or a  combination  of the
above.

The Company normally acquires interests in exploratory prospects from someone in
the industry with whom management has conducted  business in the past and/or has
confidence  in  the  quality  of  the  geological  and  geophysical  information
presented for  evaluation  by Company  personnel.  If  evaluation  indicates the
prospect is within the  Company's  risk  limits,  the Company may  negotiate  to
acquire an interest in the prospect and participate in a non-operating capacity.

The Company develops exploratory drilling prospects by identification of an area
of interest,  development of geological and geophysical information and purchase
of leaseholds  in the area.  The Company may then attempt to sell an interest in
the prospect to one or more companies in the petroleum  industry with one of the
purchasing companies functioning as operator.

In 1999,  the Company had  fractional  interests in eight  prospects  which were
tested, including two prospects which were in process at December 31, 1998.

One test well on each of two exploratory  prospects in which the Company had 27%
working interests in Woodward County,  Oklahoma, were in process at December 31,
1998. Subsequent production testing proved the wells were not economic, and both
wells were sold for salvage.

An exploratory  well in which the Company had a 30% working interest was drilled
in Major County, Oklahoma, resulting in a marginal gas producer. The prospect is
under evaluation for possible development drilling.

Four Oklahoma  exploratory  prospects  were tested and condemned by drilling one
well on each prospect. The prospects were located in Pontotoc County (5% working
interest),  Dewey County (12% working  interest),  Logan County (29.25%  working

                                       5
<PAGE>

interest),  and Lincoln  County (30%  working  interest) A Gray  County,  Texas,
prospect in which the Company has a 5% working  interest was tested resulting in
a dry hole. The prospect is under evaluation for possible additional testing.

Customers.  In 1999,  the Company had two customers  whose total  purchases were
greater than 10% of revenues from oil and gas sales. The purchases were $277,667
or 18% of total oil and gas sales by one purchaser, and $177,582 or 12% of total
oil and gas sales by the other.

The  Company  sells  most of its oil and gas on the  spot  market  or has  sales
contracts  that are based on the spot market  price.  A very minor amount of oil
and gas sales are made under fixed price contracts having terms of more than one
year.

Competition.  The oil and  gas  industry  is  highly  competitive  in all of its
phases.  The  availability  of a  ready  market  for the  Company's  oil and gas
production  depends on numerous  factors beyond its control,  including the cost
and availability of alternative  fuels, the level of consumer demand, the extent
of other  domestic  production  of oil and gas,  the  extent of  importation  of
foreign  oil  and  gas,  the  cost  of and  proximity  of  pipelines  and  other
transportation  facilities,  regulation by state and Federal authorities and the
cost of complying with applicable  environmental  regulations.  The Company is a
very minor  factor in the  industry  and must  compete  with other  persons  and
companies  having far greater  financial  and other  resources;  therefore,  the
Company's ability to develop prospects which are viable,  given current economic
conditions,  and  secure  the  financial  participation  of  other  persons  and
companies in exploratory drilling on these prospects is limited.

Regulation.  The  Company's  operations  are  affected  in  varying  degrees  by
political  developments  and  Federal and state laws and  regulations.  Although
released  from  Federal  price  controls,  interstate  sales of natural  gas are
subject to regulation by the Federal Energy Regulatory  Commission  (FERC).  Oil
and gas operations are affected by environmental laws and other laws relating to
the   petroleum   industry  and  both  are  affected  by   constantly   changing
administrative  regulations.  Rates of  production  of oil and gas have for many
years been subject to a variety of conservation  laws and  regulations,  and the
petroleum industry is frequently affected by changes in the Federal tax laws.

Generally,  the respective  state  regulatory  agencies will  supervise  various
aspects of oil and gas operations within the state and transportation of oil and
gas sold intrastate.

Environmental  Protection.  The operation of the various producing properties in
which the  Company  has an  interest  is  subject  to  Federal,  state and local
provisions  regulating discharge of materials into the environment,  the storage
of oil and gas products as well as the  contamination of subsurface  formations.
The  Company's  lease  operations  and  exploratory  activity have been and will
continue to be affected by  regulation  in future  periods.  However,  the known
effect to date has not been  material  as to capital  expenditures,  earnings or
industry competitive  position nor are estimated  expenditures for environmental
compliance expected to be material in the coming year. Such expenditures produce
no increase in productive  capacity or revenue and require more of  management's
time and  attention,  a cost which  cannot be  estimated  with any  assurance of
certainty.

Other Business.
--------------

The Company has net equity of $175,577  (unaudited) in its 33% limited partner's
interest in an Oklahoma limited partnership which was formed in 1978 principally
to invest in Oklahoma  City real estate.  The  partnership  has  constructed  an
office  building in Oklahoma  City at a total cost of  approximately  $2,300,000

                                        6
<PAGE>


(unaudited)  for the  land and  building.  The  Company  has its  office  in the
building  under  a lease  with  the  partnership.  At  December  31,  1999,  the
partnership had assets in excess of liabilities of $532,047  (unaudited) and had
net income of $79,066 (unaudited) for the year then ended.

The Company has net equity of $166,177  (unaudited) at December 31, 1999, in its
9% interest in an Oklahoma  limited  liability  company  (LLC) which owns and is
operating two golf courses in the Oklahoma City  metropolitan  area.  The LLC is
participating  in the development of real estate  surrounding both golf courses.
The LLC had  assets  in excess  of  liabilities  of  $1,709,264  (unaudited)  at
December  31,  1999,  and net  income of $23,700  (unaudited)  for the year then
ended.

The Company has a net equity of $ 73,007 (unaudited) at December 31, 1999 in its
10%  interest  in an  Oklahoma  limited  liability  company  which was formed in
December 1992 to purchase and hold certain Oklahoma City  metropolitan area real
estate as an investment.  The limited  liability company had assets in excess of
liabilities  of $730,070  (unaudited)  at December 31,  1999,  and net income of
$405,740 (unaudited) for the year then ended.

Reference is made to Note 7 of the  accompanying  financial  statements for more
information about the partnership and limited liability companies.

Employees.
---------
At December 31, 1999, the Company had eight employees,  including officers.  All
the  Company's  employees  devoted  a  portion  of  their  time to  duties  with
affiliated  companies and received  compensation  directly from those  companies
during 1999.

Item 2.  Description of Properties.

The  Company's  principal  properties  are oil  and natural  gas  properties  as
described below.

Oil and Natural Gas Operations.
------------------------------
Oil and Gas Reserves. Reference is made to the unaudited supplemental  financial
information  beginning  on  Page  31  for  working   interest  reserve  quantity
information.

Since  January 1,  1999,  the  Company  has filed no  reports  with any  Federal
authority  or agency  which  included  estimates  of total proved net oil or gas
reserves,  except for its annual 1998  report on Form 10-KSB and Federal  income
tax return for the year ended  December 31, 1998.  Those reserve  estimates were
identical.

Production.  The  average  sales  price  of oil and gas  produced  and,  for the
Company's  working  interests,  the average  production  cost (lifting cost) per
equivalent thousand cubic feet (MCF) of gas production is presented in the table
below for the years ended December 31, 1999,  1998 and 1997.  Equivalent MCF was
developed using approximate relative energy content.
<TABLE>
<CAPTION>

               Royalties                         Working Interests
         -------------------
              Sales Price               Sales Price           Average Production
         -------------------        ---------------------     ------------------
            Oil        Gas            Oil           Gas            Cost per
          Per Bbl    Per MCF        Per Bbl       Per MCF       Equivalent MCF
          -------    -------        -------       -------       --------------

<S>      <C>         <C>             <C>           <C>              <C>
1999     $16.43      $  1.94         $17.12        $2.12            $ .86

1998     $12.07      $  1.86         $17.52        $1.91            $ .49

1997     $19.33      $  2.32         $20.41        $2.59            $ .76
</TABLE>


                                       7
<PAGE>

The sales price and average  production  cost per equivalent MCF as shown in the
above  schedule are skewed as the result of the 1998  receipt of suspended  runs
upon the final judgment in favor of the Company in a Texas quiet title action as
discussed in Note 11, to the accompanying  financial statements.  Also, see Item
6, under the  subheading  "Results  of  Operations  - Operating  Revenues",  for
further analysis.

At December  31, 1999,  the Company had working  interests in 65 gross (7.2 net)
wells producing  primarily gas and/or gas liquids  (condensates) and had working
interests in 62 gross (3.4 net) wells  producing  primarily oil. These interests
were in 19,626 gross (2,137 net) producing  acres.  These wells include 44 gross
(.32 net) wells associated with secondary recovery projects.

Thirty-two percent, or 8,472 barrels of the Company's oil production during 1999
was derived from royalty interests in mature West Texas water-floods.

Undeveloped   Acreage.    The  Company's   undeveloped   acreage   consists   of
non-producing  mineral interests  and undeveloped   leaseholds.   The  following
table  summarizes the Company's gross and net acres in each:
<TABLE>
<CAPTION>

                                                            Acreage
                                                -------------------------------
                                                 Gross                    Net
                                                -------                  ------
<S>                                             <C>                      <C>
Non-producing Mineral Interests                 270,894                  93,718
Undeveloped Leaseholds                           35,735                   9,503
</TABLE>

Net  Productive and Dry Wells Drilled.  The following  table  summarizes the net
wells  drilled in which the Company had a working  interest  for the years ended
December 31, 1997 and thereafter, as to net productive and dry exploratory wells
drilled and net productive and dry development wells drilled.
<TABLE>
<CAPTION>

                                 Number of Net Working Interest Wells Drilled
                                ----------------------------------------------
                                    Exploratory                 Development
                                -------------------         ------------------
                                Productive      Dry         Productive     Dry
                                ----------     ----         ----------     ---
<S>                                <C>         <C>             <C>         <C>
1999                               .30         1.37            ---         ---
1998                               ---          .62            .18         ---
1997                               .66          .74            .24         .17
</TABLE>


Recent Activities.  In January,  2000, a McClain County,  Oklahoma,  exploratory
well in which the Company has an 18% working interest was spudded.  At March 15,
2000, the well was awaiting final testing. A Cimarron County,  Oklahoma, well in
which the Company has a 28% interest was spudded in February, 2000, and at March
15, 2000, was awaiting a completion attempt.

Item 3.  Legal Proceedings.
    There are no material pending legal proceedings affecting the Company or any
of its properties.

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

           Not Applicable.

                                       8
<PAGE>


                                     PART II
                                     -------


Item 5.  Market for Common Equity  and Related Stockholder Matters.

The  Company's  stock is traded  over the  counter  in the  United  States.  The
following  high and low bid  information is quoted on the OTC Bulletin Board and
the  National  Quotation  Bureau's  pink  sheets.  Prices do not include  retail
markup, markdown or commission.
<TABLE>
<CAPTION>

                                                            Quarterly Ranges
                                                        ------------------------
         Quarter Ending                                 High Bid        Low Bid
         --------------                                 --------        --------

<S>                                                       <C>            <C>
            03/31/98                                      36             35.50
            06/30/98                                      36.25          36
            09/30/98                                      36.25          36.25
            12/31/98                                      36.25          31
            03/31/99                                      32             30.0625
            06/30/99                                      32             30.0625
            09/30/99                                      36             32
            12/31/99                                      36             36
</TABLE>

There was limited public trading in the Company's common stock in 1999 and 1998.
In 1999, there were twenty brokered trades  appearing in the Company's  transfer
ledger, and in 1998, there were twenty-five.

At March 15,  2000,  the Company had  approximately  1478 record  holders of its
common  stock.  The Company paid  dividends on its common stock in the amount of
$1.00 per share in the second  quarter of 1999 and 1998.  Management  intends to
recommend to the board of directors that the annual dividend remain at $1.00 per
share in 2000.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.

Please refer to the  financial  statements  and related  notes in Item 7 of this
Form 10-KSB to supplement this discussion and analysis.

Liquidity and Capital Resources.
-------------------------------

At December 31, 1999, the Company had cash,  cash  equivalents and available for
sale securities  totaling  $4,740,536,  a $137,251 (2.8%) decline from 1998. The
decrease  happened  because net cash provided from operations and other sources,
(property  dispositions  and  distributions  from  equity  investments)  was not
adequate to fund property additions and financing activities.

Operating Activities.  Net cash provided by operating activities was $218,451 in
1999 as  compared  to  $1,780,522  in 1998.  Cash flows for 1998 were  increased
$1,088,853  by a favorable  final  judgment  in a Texas  quiet  title  action as
discussed below under "Results of Operations" and in Note 11 to the accompanying
financial statements.  Most of the remaining  approximately  $473,000 decline in
cash flows from 1998 was the result of  decreased  oil and gas sales of $384,000
from  properties  other than  those involved  in  the  above  noted quiet  title
judgment,  and  increased  income  taxes paid of $78,000.

                                       9
<PAGE>


Investing  Activities.  Net cash  applied to  investing  activities  in 1999 was
$21,491.  This net application  resulted  because net cash provided by available
for sale  securities  of  $166,200,  property  dispositions  of $42,564 and cash
distributions from equity investments of $90,345 was less than the $320,600 cash
applied to property additions.

Available for sale  securities  are primarily US Treasury Bills or Notes used to
store cash flows which are not needed immediately. For the most part, cash flows
with which these securities are purchased are generated by operating activities.
When  current  cash  requirements  are greater than the balance of cash and cash
equivalents,  the  additional  required  cash is drawn from  available  for sale
securities.  As discussed at the beginning of this Item 6,  additional  cash was
drawn from available for sale securities  because cash flows from operations did
not meet 1999 requirements.

Property and equipment  additions are directly  related to the Company's oil and
gas exploration and development drilling activity. Expenditures for unsuccessful
exploratory drilling as well as geological and geophysical costs are included in
operating  activities.  Cash  applied to  property  additions  in 1999  included
$320,600 classified as investing activities and $323,080 classified as operating
activities for a total of $643,680 as compared to a total of $659,770 in 1998.

Total net cash  applied to investing  activities  noted above of $21,491 in 1999
decreased  $1,481,252  from the net  application in 1998.  The most  significant
contribution  to the  difference  was the 1998  purchase of  available  for sale
securities  with the  $1,088,853  proceeds from the quiet title  judgment  noted
above under "Operating Activities".

Financing Activities.  Net cash flows applied to financing activities consist of
cash dividends on common stock and cash used for the purchase of treasury stock.
In 1999, cash dividends paid on common stock amounted to $165,932 as compared to
$169,793 in 1998.  Cash applied to the purchase of treasury  stock was $2,080 in
1999 as compared to $11,660 in 1998.

Forward-looking  Summary.  Refer  to  page  3 for a  summary  of the  risks  and
uncertainties that may affect this forward-looking summary. The Company's latest
forecast for 2000  projects cash flow from  operations  of $363,000.  Cash to be
applied to investing  activities for property additions is estimated at $340,000
and cash to be applied to  financing  activities  is  estimated  to be $170,000.
Therefore, given the projected level of activity, operating cash flows will have
to be  supplemented  by funds from other  sources,  probably  available for sale
securities, to provide the necessary funds to meet 2000 cash requirements.

Because of the recent price  increase for crude oil and to a much lessor  degree
for natural  gas,  Company  personnel  are  re-evaluating  prospects  which were
deferred  because  of  depressed  prices in much of 1998 and  1999.  Some of the
deferred  prospects  are  scheduled  for testing in 2000 and others may be added
later  in the  year if risk  analysis  is  positive.  Also,  should  exploratory
drilling result in a significant discovery that requires substantial development
drilling,  or should other investment  opportunities  become available,  capital
requirements  could  be far  more  than  the  Company  has  available.  If  such
circumstances occur, the Company may require external sources of financing.

                                       10
<PAGE>


Results of Operations.
---------------------
Net  income,  both  basic and  diluted,  was $1.94 per share for the year  ended
December  31,  1999,  as compared  to net income of $5.11 per share for 1998,  a
decline of $3.17 per share. The most  significant  reason for the decline in net
income was the 1998  receipt of  proceeds  of prior years oil and gas sales plus
interest  thereon  related to a favorable  final judgment in a Texas quiet title
action ("AFNU"  Judgment).  As a result, the Company's 1998 after tax net income
was increased by approximately  $655,000, or $3.90 per share. See Note 11 to the
accompanying  financial statements for additional  information.  The above noted
receipt will be discussed  further in the following  paragraphs along with other
material line item changes in the statements of operations.

Operating Revenues.  Operating revenues decreased $1,140,545 (42%) to $1,573,549
in 1999 from  $2,714,094  in 1998.  The  decrease was the result of a $1,147,152
(43%)  decline in oil and gas sales to  $1,532,279,  as offset by an increase in
lease bonuses and other miscellaneous  revenues of $6,607 (19%) to $41,270.  The
following table reflects volume and price variances from 1998 to 1999:
<TABLE>
<CAPTION>

                                                                   1998
                                                          ----------------------
                                         Variance                Excluding
                                    -------------------
        Production          1999     Price      Volume    Actual    AFNU    AFNU
        ----------         ------   ------      -------   ------    ----    ----
        Oil -

<S>                         <C>        <C>       <C>      <C>       <C>    <C>
        Bbls (000 omitted)     27                 (43)       70        34     36
        $(000 omitted)     $  446       21       (695)    1,120       431    689
        Unit Price         $16.65      .79                15.86     12.71  18.75

        Gas -

        MCF (000 omitted)     530                (291)      821       683    138
        $(000 omitted)     $1,070       70       (549)    1,549     1,323    226
        Unit Price         $ 2.02      .13                 1.89      1.94   1.64
</TABLE>

Revenues from oil sales fell $673,599  (60%) to $446,096  from  $1,119,695.  The
volume of oil sales  decreased  43,828 barrels (Bbls) to 26,790 Bbls from 70,618
Bbls in 1998, resulting in a negative volume variance of $695,113. Of the 43,828
Bbls  decrease in volume,  36,737 Bbls was a result of the 1998 receipt of prior
years oil sales related to the AFNU Judgment discussed above. Exclusive of these
prior  years  receipts,  1998 sales  volumes  would have been  33,881 Bbls at an
average  price of $12.71 for total sales of $430,719,  and the decrease in sales
volume to 1999 would have been 7,091  Bbls for a  negative  volume  variance  of
$112,463.  The 7,091  Bbls  decrease  was the  result of normal  decline of more
mature producing properties.

The unit price of oil sales  increased  $.79 per Bbl to $16.65 per Bbl resulting
in a positive  price variance of $21,164.  Exclusive of receipts  related to the
AFNU  Judgment  which  averaged  $18.75 per Bbl, the average price per Bbl would
have  increased  $3.94  to  $16.65  per Bbl for a  positive  price  variance  of
$105,504.  The price  received for oil sales is based upon the spot market price
over which the Company has no control.

Revenues from natural gas sales  decreased  $478,150 (31%) to $1,070,506 in 1999
from $1,548,656 in 1998. The volume of gas sold declined  291,092 thousand cubic
feet (MCF) to  530,137  MCF in 1999 from  821,229  MCF in 1998,  resulting  in a
negative volume variance of $548,914.  Exclusive of the 1998 AFNU Judgment,  the
volume of gas sales would have  decreased  152,683 MCF from 1998  production  of
682,820 MCF with a negative volume variance of $296,205 based on an average unit
price of $1.94 per MCF for 1998.  Of the  152,683  volume  decline,  108,447 MCF
(71%) resulted from the normal decline in production from the #1 Brounkowski,  a

                                       11
<PAGE>

Robertson  County,  Texas,  royalty  interest  which  came on line in 1995.  The
average price of gas sales  increased $.13 per MCF to $2.02 in 1999 resulting in
a positive price variance of $70,764.  Exclusive of 1998 sales  attributable  to
the AFNU  Judgment  which had an average  unit price of $1.64 per MCF, the price
increase to 1999 would have been $.08 per MCF and the  positive  price  variance
would have been $43,607. The Company sells most of its gas on the spot market or
has contracts  which are based on the spot market.  Sales made under fixed price
contracts are insignificant.

Operating Costs and Expenses.  Operating costs and expenses  decreased  $420,513
(21%) to $1,603,356 in 1999,  from $2,023,869 in 1998, as declines in production
cost of $111,241, depreciation,  depletion, amortization and valuation provision
of  $420,336  and  general,  administrative  and other  expense of $53,907  were
partially  offset by an  increase  in  exploration  costs  charged to expense of
$164,971.  Material  components  of the above  noted line item  changes  will be
discussed below.

      Production costs. A significant  amount of the $111,241 (27%) decrease was
the result of a $60,677  (47%)  decline in gross  production  taxes.  Generally,
these state taxes are calculated as a percentage of gross proceeds from the sale
of products from each producing property. Therefore, they tend to fluctuate with
the change in the dollar amount of revenues from oil and gas sales.  Also, lease
operating  expenses  fell  $24,872  (12%)  because of a  reduction  of down hole
maintenance  and repair,  and prior and current year sale or  retirement of some
older high  maintenance  properties.  Hauling,  compression  and other  expenses
declined $25,692 (32%) generally, because of reduced product sales.

      Exploration Expense.  Under  the successful  efforts method  of accounting
used by the Company, geological and geophysical  costs are expensed as incurred,
as are the costs of unsuccessful exploratory drilling.  The costs of  successful
exploratory drilling are capitalized.  Total costs of exploration,  inclusive of
geological and  geophysical  costs,  were $542,447 in 1999 and $549,528 in 1998.
Cost charged to operations were $333,226 in 1999 and $168,255 in 1998, inclusive
of geological and geophysical expense of $84,650 in 1999 and $94,070 in 1998.

      Depreciation,  Depletion,  Amortization and Valuation  Provisions  (DD&A).
Major components are the provision for impairment of  non-producing  leaseholds,
provision for impairment of long-lived assets, depletion of producing leaseholds
and depreciation of tangible and intangible lease and well costs.  Non-producing
leaseholds  are amortized  over the life of the leasehold  using a straight line
method  except when the  leasehold is impaired or  condemned by drilling  and/or
geological interpretation of seismic data; if so, an adjustment to the provision
is made at the time of impairment.  The provision for impairment was $198,047 in
1999 and $122,204 in 1998.

As discussed in Note 10, to the accompanying  financial  statements,  accounting
principles  require the recognition of an impairment  loss on long-lived  assets
used  in  operations   when   indicators  of  impairment  are  present  and  the
undiscounted  cash flows estimated to be generated by those assets are less than
the  assets  carrying  amount.  Reviews  were  performed  in both 1999 and 1998,
resulting  in the  recognition  of an  impairment  loss of $184,835 in 1998.  No
impairment loss was required in 1999.

The depletion and  depreciation  of oil and gas  properties  are computed by the
units-of-production  method. The amount expensed in any year will fluctuate with
the  change  in  estimated  reserves  of oil and gas or a change  in the rate of
production.  The provisions for depletion and  depreciation  totaled $110,749 in
1999 and $418,420 in 1998. The $307,671 (74%)  decrease  resulted  because prior
years  long-lived asset  impairments  reduced the asset basis and because of the
current year reduced volumes sold.

                                       12
<PAGE>


      General,  Administrative  and  Other  Expenses  (G&A).  The  $53,907  (8%)
decrease  in G&A was  mostly  caused by a $47,429  drop in legal fees as a final
judgment in the  Company's  favor was  rendered in a Texas quiet title action in
1998.

Other  Income,  Net.  This line item  consists of interest and other  investment
income as offset by investment losses and various other non-operating income and
expense.  Other income,  net decreased $82,994 (20%) in 1999. To a great extent,
the decrease was the net result of a $204,460  decline in interest income less a
$113,423  increase in trading  securities  gain.  As discussed in Note 11 to the
accompanying  financial  statements,  in 1998, the Company received  interest of
$234,811 as part of the AFNU Judgment. That interest income was recorded in this
line item. In 1999, trading securities gain included additional realized gain of
$41,823 and additional unrealized gain of $71,600.

Provisions for Income Taxes. In 1999, the Company had a calculated provision for
income tax of $34,386 as the current tax expense of $72,622  exceeded a deferred
tax  benefit of  $38,236.  In 1998,  a  calculated  provision  for income tax of
$320,937 resulted because the current tax expense of $244,811 was increased by a
deferred tax  provision  of $76,126.  See Note 6 to the  accompanying  financial
statements  for an analysis of the various  components  of income taxes for both
1999 and 1998.

Forward-looking  Summary.  Refer  to  page  3 for a  summary  of the  risks  and
uncertainties  that may affect  this  forward-looking  statements.  Management's
latest  projection  of the  results of  operations  for 2000 as compared to 1999
actual results follows:

<TABLE>
<CAPTION>
                                                       (000 Omitted)
                                              --------------------------------
                                                                    Net Income
                                              Estimate    Actual     Increase
                                                2000       1999     (Decrease)
                                              --------    ------    ----------

<S>                                           <C>         <C>            <C>
          Operating Revenues                  $ 1,509     $ 1,574        (65)
                                              -------     -------   ---------

          Operating Costs & Expenses:
             Production                           300         299         (1)
             Exploration                          526         333       (193)
             DD&A                                 350         315        (35)
             G&A                                  660         656         (4)
                                              -------     -------   ---------
                                                1,836       1,603       (233)
                                              -------     -------   ---------

          Operating Income (Loss)                (327)        (29)      (298)
          Equity Earnings in Investees             30          57        (27)
          Other Income, Net                       310         331        (21)
                                              -------     -------   ---------
          Income Before Taxes                      13         359       (346)
          Provision for Income Tax                  4          34         30
                                              -------     -------   ---------

          Net Income                          $     9     $   325   $   (316)
                                              =======     =======   =========
</TABLE>
                                       13
<PAGE>


      Operating  Revenues.  Revenues  from oil and gas  sales are  estimated  at
$1,509,000 for 2000, or a $65,000 (4%) decrease from 1999.  The following  price
and volume  analysis of 2000 forecast sales as compared with 1999 actual oil and
gas sales provides a breakout of the various components and projected  variances
from 1999.
<TABLE>
<CAPTION>

                                Forecast             Variance          Actual
                                              ---------------------
          Production              2000          Price      Volume       1999
          ----------            --------      ---------   ---------   --------
          Oil -

<S>                             <C>             <C>          <C>       <C>
          Bbls (000 omitted)        22           ---           (5)         27
          $(000 omitted)        $  541           178          (83)     $  446
          Unit Price            $24.75          8.10           ---     $16.65
          Gas -
          MCF (000 omitted)        450           ---           (80)       530
          $(000 omitted)        $  928            19          (161)    $1,070
          Unit Price            $ 2.06           .04           ---     $ 2.02
</TABLE>

The  projected  decline  in oil and gas  volumes  assumes a normal  decline  for
properties which produced in 1999 and no new production  coming on line in 2000.
The average  price used for the 2000  projections  of revenues  from oil and gas
sales is  management's  most recent estimate of the average price to be received
for the year 2000. It should be noted that March 14, 2000 spot market prices for
oil were $31.98 per Bbl and lower, and spot market prices for gas were $2.80 per
MCF and lower.

      Operating Costs and Expenses. Operating cost and expenses are projected at
$1,836,000 for 2000, a $233,000 (15%) increase from 1999.  Production  costs are
estimated  to  remain  at  around  the 1999  amount  as  reduction  in  hauling,
compression and other expense is offset by additional lease operation expense.

Management's  current estimate of total  exploration costs for 2000 is $766,000,
of which  $526,000 is estimated to be charges  against  operations  and $240,000
capitalized  as  proven  properties.  Of the  $766,000  total  estimated  costs,
$126,000 is geological and geophysical  expense.  All of the remaining  $640,000
could be capitalized or expensed  depending upon the results of drilling.  Also,
if the Company's exploration is successful,  significant  additional costs could
be incurred for development drilling and lease acquisition.

DD&A is  projected  to  increase  $35,000  (11%) as testing of  exploratory  oil
prospects  deferred  in prior  years may  result  in  additional  impairment  of
undeveloped leaseholds.

G&A is estimated to remain at about the 1999 level exclusive of a small increase
in employee compensation.

      Equity  Earnings in  Investees.  This item is expected to decrease as real
estate sales decline and start up costs related to a second golf course  further
reduce profit.

      Other  Income,  Net.  Other income,  net is estimated to decrease  $21,000
(6%) from a decline in interest income and miscellaneous income.

                                       14
<PAGE>


Item 7. Financial Statements.


        Index to Financial Statements.

                                                                           Page
                                                                           ----

        Report of Independent Certified Public
          Accountants - Grant Thornton LLP                                  16

        Balance Sheets - December 31, 1999 and 1998                         17

        Statements of Operations - Years Ended December 31,
          1999 and 1998                                                     19

        Statement of Stockholders' Equity - December 31,
          1999 and 1998                                                     20

        Statements of Cash Flows - Years Ended December 31,
          1999 and 1998                                                     21

        Notes to Financial Statements                                       23

        Unaudited Supplemental Financial Information                        31

                                       15
<PAGE>


               Report of Independent Certified Public Accountants
               --------------------------------------------------





Board of Directors
The Reserve Petroleum Company

We have audited the accompanying balance sheets of The Reserve Petroleum Company
(a  Delaware  corporation)  as of December  31,  1999 and 1998,  and the related
statements of  operations,  stockholders'  equity,  and cash flows for the years
then ended.  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 Reserve Petroleum Company
as of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted  accounting
principles.








GRANT THORNTON LLP

Oklahoma City, Oklahoma
March 16, 2000

                                       16
<PAGE>


                          THE RESERVE PETROLEUM COMPANY
                                 BALANCE SHEETS

                                     ASSETS
                                     ------
<TABLE>
<CAPTION>

                                                             December 31,
                                                    ---------------------------
                                                        1999            1998
                                                     ----------      ----------
Current Assets:
<S>                                                  <C>             <C>
    Cash and Cash Equivalents (Note 2)               $  367,963      $  339,015
    Available for Sale Securities  (Notes 2 & 5)      4,372,573       4,538,772
    Trading Securities (Notes 2 & 5)                    562,176         450,768
    Receivables                                         256,647         152,460
    Refundable Income Taxes                              75,964            ----
    Prepayments & Deferred Income Taxes                  58,735          13,127
                                                     ----------      ----------
                                                      5,694,058       5,494,142
                                                     ----------      ----------
Investments:
   Partnership and Limited
     Liability Companies (Notes  2 & 7)                 430,302         462,951
   Other                                                 19,048          19,048
                                                     ----------      ----------
                                                        449,350         481,999
                                                     ----------      ----------
Property, Plant & Equipment (Notes 2 & 10):
   Oil & Gas Properties, at Cost Based on the
      Successful Efforts Method of Accounting
         Unproved Properties                            662,765         668,332
         Proved Properties                            4,157,016       4,189,787
                                                     ----------      ----------
                                                      4,819,781       4,858,119
      Less - Valuation Allowance and Accumulated
         Depreciation, Depletion & Amortization       3,896,557       3,751,113
                                                     ----------      ----------
                                                        923,224       1,107,006
                                                     ----------      ----------
    Other Property & Equipment, at Cost                 337,474         324,104
      Less - Accumulated Depreciation & Amortization    165,996         179,192
                                                     ----------      ----------
                                                        171,478         144,912
                                                     ----------      ----------
                                                      1,094,702       1,251,918
                                                     ----------      ----------
Other Assets                                            490,738         407,569
                                                     ----------      ----------
                                                     $7,728,848      $7,635,628
                                                     ==========      ==========
</TABLE>

(continued)
See Accompanying Notes

                                       17
<PAGE>

                          THE RESERVE PETROLEUM COMPANY
                                 BALANCE SHEETS

(concluded)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
<TABLE>
<CAPTION>

                                                             December 31,
                                                    ---------------------------
                                                        1999            1998
                                                    -----------      ----------
Current Liabilities:
<S>                                                  <C>             <C>
   Accounts Payable                                  $   28,504      $   45,656
   Income Taxes Payable                                    ----          49,331
   Other Current Liabilities
      Gas Balancing Commitment                           38,839          41,410
      Other                                              20,439          15,000
                                                     ----------      ----------
                                                         87,782         151,397
                                                     ----------      ----------

Dividends Payable (Note 3)                              127,008         125,210
                                                     ----------      ----------


Commitments & Contingencies (Note 7)

Stockholders' Equity (Notes 3 & 4)
   Common Stock                                          92,368          92,368
   Additional Paid-in Capital                            65,000          65,000
   Retained Earnings                                  7,545,405       7,388,288
                                                     ----------      ----------
                                                      7,702,773       7,545,656

   Less  - Treasury Stock, at Cost                      188,715         186,635
                                                     ----------      ----------
                                                      7,514,058       7,359,021
                                                     ----------      ----------
                                                     $7,728,848      $7,635,628
</TABLE>
                                                     ==========      ==========
See Accompanying Notes

                                       18

<PAGE>


                          THE RESERVE PETROLEUM COMPANY
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                     Year Ended December 31,
                                                -------------------------------
                                                     1999              1998
                                                -------------      ------------
Operating Revenues:
<S>                                             <C>                <C>
   Oil & Gas Sales (Note 11)                    $   1,532,279      $  2,679,431
   Lease Bonuses & Other                               41,270            34,663
                                                -------------      ------------
                                                    1,573,549         2,714,094
                                                -------------      ------------
Operating Costs and Expenses:
    Production                                        299,100           410,341
    Exploration                                       333,226           168,255
    Depreciation, Depletion, Amortization
        & Valuation Provisions                        315,120           735,456
    General, Administrative and Other                 655,910           709,817
                                                -------------     -------------
                                                    1,603,356         2,023,869
                                                -------------     -------------
Income (Loss)  from Operations                        (29,807)          690,225
Equity Earnings in Investees                           57,695            73,796
Other Income, Net (Note 11)                           331,345           414,339
                                                 ------------     -------------
Income before Income Taxes                            359,233         1,178,360
Provisions for Income Taxes (Notes 2 & 6)              34,386           320,937
                                                 ------------     -------------
Net Income                                       $    324,847     $     857,423
                                                 ============     =============
Per Share Data (Notes 2 & 11):
    Net Income, Basic and Diluted                $       1.94     $        5.11
                                                 ============     =============
    Cash Dividends                               $       1.00     $        1.00
                                                 ============     =============
Weighted Average Shares Outstanding,
  Basic and Diluted                                   167,693           167,947
                                                 ============     =============
</TABLE>

See Accompanying Notes

                                       19
<PAGE>


                          THE RESERVE PETROLEUM COMPANY
                        STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE TWO YEARS ENDED DECEMBER 31, 1999




<TABLE>
<CAPTION>

                                            Additional
                                  Common     Paid-in      Retained    Treasury
                                   Stock     Capital      Earnings      Stock
                                  -------   ----------   ----------   ----------

<S>                               <C>        <C>         <C>          <C>
Balance at January 1, 1998        $92,368    $65,000     $6,698,773   $(174,975)

  Net Income                         ----       ----        857,423        ----

  Cash Dividends on Common Stock     ----       ----       (167,908)       ----

  Purchase of Treasury Stock         ----       ----           ----     (11,660)
                                  -------    --------     ----------  ---------
Balance at December 31, 1998       92,368      65,000      7,388,288   (186,635)

  Net Income                         ----        ----        324,847       ----

  Cash Dividends on Common Stock     ----        ----       (167,730)      ----

  Purchase of Treasury Stock         ----        ----           ----     (2,080)
                                  -------     -------    ----------   ---------

Balance at December 31, 1999      $92,368     $65,000    $7,545,405   $(188,715)
                                  =======     =======    ==========   =========
</TABLE>



See Accompanying Notes

                                       20
<PAGE>


                          THE RESERVE PETROLEUM COMPANY
                            STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>

                                                     Year Ended December 31,
                                                 ------------------------------
                                                     1999               1998
                                                 ------------      ------------
Cash Flows from Operating Activities:
  Cash Received-
<S>                                              <C>               <C>
    Oil and Gas Sales                            $  1,487,438      $  2,785,843
    Lease Bonuses and Rentals                          41,270            34,663
    Agricultural Rentals & Other                       24,407            11,188
  Cash Paid-
    Production Costs                                 (297,946)         (415,556)
    Exploration Costs                                (323,080)         (200,850)
    General Suppliers, Employees and Taxes,
      Other than Income                              (679,742)         (737,918)
  Interest Received                                   174,901           437,753
  Interest Paid                                       (11,293)          (11,250)
  Dividends Received on Trading
    Securities                                          7,926             9,735
  Purchase of Trading Securities                   (2,133,596)       (2,856,372)
  Sale of Trading Securities                        2,126,083         2,843,342
  Income Taxes Paid                                  (197,917)         (120,056)
                                                  -----------       -----------
    Net Cash Provided by Operating
      Activities                                      218,451         1,780,522
                                                  -----------       -----------

Cash Flows from Investing Activities:
  Sale and Maturity of Available for
  Sale Securities                                   6,271,431         1,353,669
  Purchase of Available for Sale Securities        (6,105,231)       (2,585,701)
  Property Dispositions                                42,564            15,358
  Property Additions                                 (320,600)         (458,920)
  Cash Distributions from Equity Investments           90,345           102,000
                                                  -----------       -----------
     Net Cash Applied to Investing Activities     $   (21,491)      $(1,573,594)
                                                  -----------       -----------
</TABLE>


(Continued)

See Accompanying Notes

                                       21
<PAGE>

(Concluded)
                          THE RESERVE PETROLEUM COMPANY
                            STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                                    ----------------------------
                                                       1999              1998
                                                    ----------       -----------
Cash Flows Applied to Financing Activities:
<S>                                                 <C>              <C>
  Dividends Paid to Shareholders                    $(165,932)       $ (169,793)
  Purchase of Treasury Stock                           (2,080)          (11,660)
                                                    ---------        ----------
    Total Cash Applied to Financing  Activities      (168,012)         (181,453)
                                                    ---------        ----------
Net Change in Cash and Cash Equivalents                28,948            25,475

Cash and Cash Equivalents at Beginning of Year        339,015           313,540
                                                    ---------        ----------
Cash and Cash Equivalents at End of Year            $ 367,963        $  339,015
                                                    =========        ==========
Reconciliation of Net Income to Net
    Cash Provided by Operating Activities:
Net Income                                          $ 324,847         $ 857,423

Net Income Increased (Decreased) by -
    Net Change in -
      Unrealized Holding (Gains) Losses
            on Trading Securities                     (39,148)           32,451
      Accounts Receivable                             (45,279)          107,351
      Interest and Dividends Receivable               (47,745)           18,505
      Income Taxes Refundable/Payable                (125,295)          124,755
      Accounts Payable                                  4,751           (27,616)
      Trading Securities                              (72,260)          (35,953)
    Equity Earnings in Investees                      (57,696)          (73,796)
    Disposition of Property & Equipment                72,125           (13,445)
    Depreciation, Depletion, Amortization
      and Valuation Provisions                        315,120           735,456
    Change in Cash Value of Officers'
      Life Insurance                                  (17,052)          (16,801)
    Change in Prepayments                             (53,110)             ----
    Change in Deferred Taxes                          (38,236)           76,126
    Gas Balancing Liabilities                          (2,571)           (3,934)
                                                    ---------        ----------
Net Cash Provided by Operating Activities           $ 218,451        $1,780,522
                                                    =========        ==========
</TABLE>

See Accompanying Notes

                                       22
<PAGE>


                          THE RESERVE PETROLEUM COMPANY
                          NOTES TO FINANCIAL STATEMENTS

Note 1 - NATURE OF OPERATIONS
         --------------------

      The Company is principally  engaged in oil and natural gas exploration and
      development with an area of concentration in Texas and Oklahoma.

Note 2 - SUMMARY OF ACCOUNTING POLICIES
         ------------------------------

      Property and Equipment
      ----------------------
      Oil and gas properties are accounted for on the successful efforts method.
      The acquisition, exploration and development costs of producing properties
      are   capitalized.   All  costs  relating  to  unsuccessful   exploration,
      geological and geophysical costs,  delay rentals and abandoned  properties
      are  expensed.  Lease costs related to unproved  properties  are amortized
      over the life of the lease and are assessed  periodically.  Any impairment
      of value is charged to expense.

      Depreciation,  depletion  and  amortization  of  producing  properties  is
      computed  on  the  units-of-production  method  on a  property-by-property
      basis. The  units-of-production  method is based primarily on estimates of
      proved  reserve  quantities.   Due  to  uncertainties   inherent  in  this
      estimation  process,  it is at  least  reasonably  possible  that  reserve
      quantities will be revised in the near term.

      Other  property  and  equipment  is  depreciated  on  the   straight-line,
      declining-balance or other accelerated methods.

      The following  estimated  useful lives are used for the different types of
      property:

               Buildings and improvements          10 to 20 years
               Office furniture & fixtures          5 to 10 years
               Automotive equipment                 5 to  8 years

      Impairment  losses are recorded on  long-lived  assets used in  operations
      when indicators of impairment are present and the undiscounted  cash flows
      estimated  to be  generated  by those  assets  are less  than the  assets'
      carrying amount. See Note 10 for discussion of impairment losses.

      Investments
      -----------
      The Company  accounts for its  investments  in a  partnership  and limited
      liability companies on the equity basis and adjusts the investment balance
      to agree with its equity in the  underlying  assets of the  entities.  See
      Note 7 for additional information.

      Trading  securities,  which consist  primarily of equity  securities,  are
      carried  at fair  value  with  unrealized  gains and  losses  included  in
      earnings.

      Available for sale  securities,  which consist  primarily of US Government
      securities,  are  carried at fair value with  unrealized  gains and losses
      reported as a component of other comprehensive income, when material.

                                       23
<PAGE>



      Cash & Cash Equivalents
      -----------------------
      The Company considers all highly liquid debt instruments  purchased with a
      maturity  of three  months  or less to be cash  equivalents.  The  Company
      maintains  its cash in bank  deposit  accounts  which at times may  exceed
      federally  insured limits.  The Company  believes it is not exposed to any
      significant credit risk on such accounts.

      Income Taxes
      ------------
      Deferred  income  taxes are  provided for  significant  carryforwards  and
      temporary differences using the liability method.

      Net Income Per Share
      --------------------
      Net Income per share is  calculated  based on the weighted  average of the
      number of shares outstanding during the year.

      Concentrations of Credit Risk and Major Customers
      -------------------------------------------------
      The Company's receivables relate primarily to sales of oil and natural gas
      to purchasers with  operations in Texas and Oklahoma.  The Company had two
      purchasers in both 1999 and 1998 whose  purchases were in excess of 10% of
      total oil and gas sales.  In 1999,  the purchases  were $277,667 or 18% of
      total oil and gas sales by one purchaser, and $177,582 or 12% of total oil
      and gas sales by the other. In 1998, the purchases were $455,208,  or 17%,
      by one purchaser, and $914,552, or 34% by the other.


      Use of Estimates
      ----------------
      The  preparation of the financial  statements in conformity with generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the amounts  reported in the financial  statements
      and accompanying notes. Actual results could differ from those estimates.

 Note 3 - DIVIDENDS PAYABLE
          -----------------
      Dividends  payable include  amounts that are due to stockholders  whom the
      Company has been unable to locate and  uncashed  dividend  checks of other
      stockholders.

                                       24
<PAGE>



Note 4 - COMMON STOCK
         ------------
      The  following  table  summarizes the  changes in  common stock issued and
outstanding:
<TABLE>
<CAPTION>

                                                        Shares of
                                           Shares       Treasury       Shares
                                           Issued         Stock      Outstanding
                                         ----------     ----------   -----------


        January 1, 1998, $.50
        par value stock, 400,000
<S>                                      <C>            <C>          <C>
        shares authorized                184,735.28     16,422.55    168,312.73

        Purchase of stock                      ----        583.00       (583.00)
                                         ----------     ---------    ----------

        December 31, 1998, $.50
        par value stock, 400,000
        shares authorized                184,735.28     17,005.55    167,729.73

        Purchase of stock                      ----        104.00       (104.00)
                                         ----------     ---------    ----------

        December 31, 1999, $.50
        Par value stock, 400,000
        shares authorized                184,735.28     17,109.55    167,625.73
                                         ==========     =========    ==========
</TABLE>


Note 5 - INVESTMENTS IN DEBT AND EQUITY SECURITIES
         -----------------------------------------

    At December 31, 1999 and 1998,  the  difference  between the aggregate  fair
    value  and  amortized  cost  basis  of  available  for sale  securities  was
    immaterial;  therefore,  reporting of comprehensive  income is not required.
    The available for sale securities by contractual maturity are as follows:

          Due within one year or less                           $    3,973,198
          Due after one year through five years                        399,375
                                                                --------------
                                                                $    4,372,573
                                                                ==============

    In 1999 there was no sale of securities prior to maturity.  In 1998 proceeds
    from  sales  of  securities  prior  to  maturity  totaled  $255,383  with no
    significant realized gains or losses.

    As to the trading securities,  unrealized holding gains (losses) included in
    earnings were $39,148 in 1999 and ($32,451) for 1998.

                                       25
<PAGE>



Note 6 - INCOME TAXES
         ------------
      Components of deferred taxes follow:
<TABLE>
<CAPTION>
                                                           December 31,
                                                 ------------------------------
                                                     1999               1998
                                                 ----------          ----------
      Assets
<S>                                              <C>                 <C>
         Leasehold Costs                         $  197,533          $  174,479
         Gas Balancing Receivable                    52,379              52,379
         Lease and Well Equipment                      ----                  85
         Long-Lived Asset Impairment                 94,870             131,173
         Marketable Securities                         ----               7,501
                                                 ----------          ----------
                                                    344,782             365,617
         Valuation Allowance                           ----                ----
                                                 ----------          ----------
                                                    344,782             365,617
                                                 ----------          ----------
      Liabilities
         Equity Investments                            ----               6,212
         Marketable Securities                        5,440                ----
         Intangible Development Costs               199,545             257,846
                                                 ----------          ----------
                                                    204,985             264,058
                                                 ----------          ----------

      Net Deferred Tax Asset                     $  139,797          $  101,559
                                                 ==========          ==========

      Change in Valuation Allowance
        for the Year                             $     ----          $     ----
                                                 ==========          ==========
</TABLE>


      The following table summarizes the current and deferred portions of income
tax expense.
<TABLE>
<CAPTION>

                                                     Year Ended December 31,
                                                 ------------------------------
                                                     1999               1998
                                                 ----------          ----------
      Current Tax Expense:
<S>                                              <C>                 <C>
         Federal                                 $   72,622          $  244,811
         State                                         ----                ----
                                                 ----------          ----------
                                                     72,622             244,811
      Deferred  Provision (Benefit)                 (38,236)             76,126
                                                 ----------          ----------
      Total Provision                            $   34,386          $  320,937
                                                 ==========          ==========
</TABLE>

                                       26
<PAGE>


    The total  provision  for income tax  expressed  as a  percentage  of income
    before income tax was 10% in 1999 and 27% in 1998. These amounts differ from
    the amounts computed by applying the statutory US Federal income tax rate of
    35% for 1999 and 1998 to  income  before  income  tax as  summarized  in the
    following reconciliation:

<TABLE>
<CAPTION>

                                                     Year Ended December 31,
                                                 ------------------------------
                                                     1999               1998
                                                 ---------           ----------
    Computed Federal Tax
<S>                                              <C>                 <C>
        Provision                                $ 125,732           $  412,426
    Increase (Decrease) in Tax  From:
        Allowable Depletion in Excess of
           Depletion for Financial Statements      (78,477)             (77,223)
        Non-conventional Fuel Credit                (6,453)              (7,849)
        Corporate Graduated Tax Rate
           Structure                                (7,384)              (7,840)
        Dividend Received Deduction                 (1,207)              (2,385)
        Other                                        2,175                3,808
                                                 ---------           ----------
        Provision for Income Tax                 $  34,386           $  320,937
                                                 =========           ==========
        Effective Tax Rate                              10%                  27%

</TABLE>

                                       27
<PAGE>


Note 7 - INVESTMENTS AND RELATED COMMITMENTS AND CONTINGENT LIABILITIES
         --------------------------------------------------------------

       The Company has a 33% interest in Broadway Sixty-Eight, Ltd., an Oklahoma
       limited  partnership  (the  Partnership).  The  Partnership had assets in
       excess of liabilities of $532,047 and $474,480,  at December 31, 1999 and
       1998,  respectively,  and its net income for the periods  then ended were
       $79,066 and $53,520.

       The  Partnership was organized for the purpose of owning and operating an
       office  building which was constructed in Oklahoma City,  Oklahoma,  at a
       total  cost  for the  land  and  building  of  approximately  $2,300,000.
       Although the Company invested as a limited partner,  along with the other
       limited partners,  it has signed an indemnity  agreement to reimburse the
       general partner for any losses suffered from operating the Partnership.

       The office  building  is  financed  by a mortgage  loan with a balance of
       $549,546 at December 31, 1999.  The loan matures in 2002 with interest at
       New York prime rate which was capped at 8 1/2% until  December  1999. The
       loan is collateralized by a first mortgage on the land and building,  and
       the assignment of leases and rents.

       The  Company  leases  its  corporate  office  from the  Partnership.  The
       operating  lease under which the space was rented  expired  December  31,
       1994, and the space is currently rented on a year-to-year basis under the
       terms of the  expired  lease.  Rent  expense  was $26,353 for each of the
       years ended December 31, 1999 and 1998.

       The  Company  had a 9% interest  in the Coffee  Creek  Limited  Liability
       Company (Coffee Creek),  an Oklahoma limited  liability  company.  Coffee
       Creek  owns and  operates  Coffee  Creek  Golf  Course,  and  through  an
       investment in a  partnership,  participates  in the  development  of real
       property  surrounding  the golf  course.  In April,  1999,  the owners of
       Coffee Creek formed Millennium Golf Properties, L.L.C. , another Oklahoma
       limited  liability  company  (Millennium) and assigned their ownership in
       Coffee Creek to Millennium.  Also, Millennium purchased a second Oklahoma
       City area golf  course,  River  Oaks,  along with a related  real  estate
       development.  Millennium is now engaged in the ownership and operation of
       Coffee Creek, River Oaks and their related real estate developments.  The
       River Oaks purchase,  renovations and real estate development is financed
       by loans  collateralized  by the land and  buildings of both Coffee Creek
       and River Oaks. The loan balance at December 31, 1999, was $2,800,000. At
       December 31, 1999,  the Company's net equity in Millennium  was $166,177,
       as compared to $192,778 for Coffee Creek at December 31, 1998.

       In December, 1992, the Company invested $90,000 for a 10% interest in OKC
       Industrial Properties, L.C., an Oklahoma limited liability company, which
       was formed to purchase and hold certain Oklahoma City  metropolitan  area
       real estate as an  investment.  At December 31, 1999,  the  Company's net
       equity in the limited liability company was $73,007,  compared to $95,904
       at December 31, 1998.

                                       28
<PAGE>


Note 8 - COSTS INCURRED IN OIL AND GAS PROPERTY ACQUISITION,
         ---------------------------------------------------
         EXPLORATION, AND DEVELOPMENT ACTIVITIES
         ---------------------------------------

      All of the Company's  oil and gas  operations  are within the  continental
      United  States.  In  connection  with  its  oil and  gas  operations,  the
      following costs were incurred:
<TABLE>
<CAPTION>

                                                        Year Ended December 31,
                                                 ------------------------------
                                                     1999               1998
                                                 ---------            ---------

      Acquisition of Properties
<S>                                              <C>                  <C>
           Unproved                              $ 197,993            $ 380,592
           Proved                                $    ----            $   -----

      Exploration Costs                          $ 344,454            $ 168,936
      Development Costs                          $  25,065            $  58,382
</TABLE>

Note 9 - FINANCIAL INSTRUMENTS
         ---------------------

      The following table includes various  estimated fair value  information as
      of  December  31,  1999 and 1998 as required  by  Statement  of  Financial
      Accounting  Standards No. 107,  "Disclosures about Fair Value of Financial
      Instruments" (SFAS 107). Such information, which pertains to the Company's
      financial instruments,  is based on the requirements set forth in SFAS 107
      and does not  purport to  represent  the  aggregate  net fair value of the
      Company.  The carrying amounts in the table below are the amounts at which
      the financial instruments are reported in the financial statements.

      All of the Company's  financial  instruments  are held for purposes  other
      than trading, except for trading securities.

      The following methods and assumptions were used to estimate the fair value
      of each class of  financial  instruments  for which it is  practicable  to
      estimate that value:

      1.       Cash and Cash Equivalents
               -------------------------
      The carrying amount  approximates fair value because of the short maturity
      and highly liquid nature of those instruments.

      2.       Available for Sale Securities
               -----------------------------
      The estimated fair values are based upon quoted market prices.

      3.       Trading Securities
               ------------------
      The estimated fair values are based upon quoted market prices.

      4.       Dividends Payable
               -----------------
      Due to the uncertainty regarding when such amounts will be paid, it is not
      practicable to estimate fair value.

                                       29
<PAGE>


    The carrying  amounts and estimated  fair values of the Company's  financial
    instruments are as follows:
<TABLE>
<CAPTION>

                                          1999                    1998
                                 ----------------------   ----------------------
                                  Carrying   Estimated    Carrying   Estimated
                                   Amount    Fair Value    Amount    Fair Value
                                 ----------  ----------  ----------  ----------

    Financial Assets
<S>                              <C>         <C>         <C>         <C>
      Cash and Cash Equivalents  $  367,963  $  367,963  $  339,015  $  339,015
      Available for Sale
        Securities                4,372,573   4,372,573    4,538,772  4,538,772
      Trading Securities            562,176     562,176      450,768    450,768
    Financial Liabilities
      Dividends Payable for which
        it is not practicable to
        estimate fair value        (142,008)        N/A     (140,210)       N/A
</TABLE>

Note 10 -  LONG-LIVED ASSETS IMPAIRMENT LOSS
           ----------------------------------

    Certain  oil and gas  producing  properties  have been deemed to be impaired
    because the  assets,  evaluated  on a  property-by-property  basis,  are not
    expected to recover their entire  carrying  value through future cash flows.
    Impairment  losses  totaling  $184,835 for the year ended December 31, 1998,
    are included in the Statements of Operations in the line item, Depreciation,
    Depletion,  Amortization and Valuation Provisions. No impairment losses were
    required for 1999, based on December 31, 1999 reserve studies.

Note 11 - LEGAL PROCEEDINGS
          -----------------

    In December  1998, the Company  received  proceeds from oil and gas sales as
    the result of a favorable  final  judgment  in a Texas  quiet title  action.
    Because the Company had no assurance  the judgment  would be rendered in its
    favor, oil and gas revenues of $914,552 less $60,511 operating costs related
    thereto plus  interest  income  thereon of $234,811 were not recorded in the
    Statement of  Operations  until the proceeds  were released from suspense by
    the unit operator.  As a result,  for the year ending December 31, 1998, the
    Company's net income after the related  provision for income taxes increased
    by approximately $655,000, or $3.90 per common share outstanding.


                                       30
<PAGE>




                  UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

                                       31
<PAGE>


                                                        SUPPLEMENTAL SCHEDULE 1


                          THE RESERVE PETROLEUM COMPANY
                 WORKING INTERESTS RESERVE QUANTITY INFORMATION
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      Years Ended December 31,
                                                     --------------------------
                                                        1999             1998
                                                     ----------      ----------
Oil & Natural Gas Liquids (Bbls)

    Proved Developed and
      Undeveloped Reserves
<S>                                                      <C>             <C>
        Beginning of Year                                37,803          53,590
        Revisions of Previous Estimates                    (221)         25,908
        Extensions and Discoveries                         ----           7,387
        Production                                       (8,561)        (49,082)
        Sale of Reserves in Place                          ----            ----
                                                       --------       ---------
        End of Year                                      29,021          37,803
                                                       ========       =========
    Proved Developed Reserves
        Beginning of Year                                37,803          53,590
        End of Year                                      29,021          37,803
Gas (MCF)
    Proved Developed and Undeveloped
        Reserves Beginning of Year                    1,567,726       1,921,324
        Revisions of Previous Estimates                  38,719          49,799
        Extensions and Discoveries                       34,348          10,727
        Production                                     (236,335)       (414,124)
        Sale of Reserves in Place                          ----            ----
                                                      ---------       ---------

        End of Year                                   1,404,458       1,567,726
                                                      =========       =========
    Proved Developed Reserves
        Beginning of Year                             1,567,726       1,921,324
        End of Year                                   1,404,458       1,567,726
</TABLE>


(continued)

 See notes on next page

                                       32
<PAGE>

                                                        SUPPLEMENTAL SCHEDULE 1


                          THE RESERVE PETROLEUM COMPANY
                 WORKING INTERESTS RESERVE QUANTITY INFORMATION
                                   (Unaudited)


(Concluded)


Notes    1.  Estimates of  royalty  interests  reserves  have  not been included
             because  the  information  required  for  the  estimation  of  said
             reserves is not available.  The Company's  share of production from
             its net royalty interests was 18,229 Bbls of oil and 293,739 MCF of
             gas for the year ended  December 31,  1999,  and 21,537 Bbls of oil
             and 407,106 MCF of gas for the year ended December 31, 1998.

         2.  The preceding  table sets forth  estimates of the Company's  proved
             developed oil and gas reserves,  together with the changes in those
             reserves as prepared by the Company's  engineer for the years ended
             December 31, 1999 and 1998.  All  reserves  are located  within the
             United States.

         3.  The Company emphasizes that the reserve volumes shown are estimates
             which by their nature are subject to revision in the near term. The
             estimates have been made by utilizing all available  geological and
             reservoir  data,  as well as actual  production  performance  data.
             These  estimates  are reviewed  annually and are revised  upward or
             downward, as warranted by additional performance data.

         4.  In December 1998, the Company  received  proceeds  from oil and gas
             sales upon the final judgment in its favor of a Texas  quiet  title
             action.  Because the Company had no assurance the judgment would be
             rendered in its favor,  the oil and gas  reserves  related  thereto
             were not included in proved developed  reserves  until the proceeds
             were released from suspense by  the  unit  operator.  As a  result,
             both the Revisions of Previous Estimates and Production  line items
             for 1998 include 36,737 barrels of oil and 138,409 MCF of gas which
             were produced in prior years,  but received in 1998.

                                       33
<PAGE>

                                                        SUPPLEMENTAL SCHEDULE 2




                          THE RESERVE PETROLEUM COMPANY
            STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
                      RELATING TO PROVED WORKING INTERESTS
                              OIL AND GAS RESERVES
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                         At December 31,
                                              ---------------------------------
                                                    1999                1998
                                              --------------      -------------

<S>                                           <C>                 <C>
Future Cash Inflows                           $    3,615,463      $   3,517,878
Future Production and
    Development Costs                             (1,231,489)        (1,172,954)
Future Income Tax Expense                           (661,948)          (683,975)
                                              --------------      -------------
Future Net Cash Flows                              1,722,026          1,660,949
    10% Annual Discount for
    Estimated Timing of Cash Flows                  (487,526)          (474,621)
                                              --------------      -------------
Standardized Measure of Discounted
    Future Net Cash Flows                     $    1,234,500      $   1,186,328
                                              ==============      =============
</TABLE>


     Estimates  of future  net cash  flows  from the  Company's  proved  working
     interests  oil and  gas  reserves  are  shown  in the  table  above.  These
     estimates,  which by their nature are subject to revision in the near term,
     are based on prices in effect at year end, with no  escalation,  except for
     fixed and determinable  amounts attributable to gas under provisions of the
     Natural Gas Policy Act (NGPA).  The  development  and production  costs are
     based on  year-end  cost  levels,  assuming  the  continuation  of existing
     economic  conditions.  Cash flows are further  reduced by estimated  future
     income tax expense  calculated by applying the current statutory income tax
     rates to the pretax net cash  flows less  depreciation  of the tax basis of
     the properties and depletion applicable to oil and gas production.

                                       34
<PAGE>

                                                        SUPPLEMENTAL SCHEDULE 3


                          THE RESERVE PETROLEUM COMPANY
              CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE
         NET CASH FLOW FROM PROVED WORKING INTERESTS RESERVE QUANTITIES
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                    Year Ended December 31,
                                              ---------------------------------
                                                    1999                1998
                                              --------------      -------------
Standardized Measure,
<S>                                           <C>                 <C>
    Beginning of Year                         $    1,186,328      $   1,975,421

    Sales and Transfers, Net of
      Production Costs                              (399,792)        (1,301,791)

    Net Change in Sales and Transfer
      Prices, Net of Production Costs                257,559           (436,455)

    Extensions, Discoveries and Improved
      Recoveries, Net of Future Production
      and Development Costs                           22,983             38,687
    Revisions of Quantity Estimates                   40,400            207,508
    Accretion of Discount                            167,537            275,430
    Net Change in Income Taxes                        14,425            289,835
    Changes in Production Rates
    (Timing) and Other                               (54,940)           137,693
                                              --------------      -------------
Standardized Measure,
    End of Year                               $    1,234,500      $   1,186,328
                                              ==============      =============
</TABLE>

                                       35
<PAGE>


Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

Not Applicable


                                    PART III
                                    --------

Items 9, 10, 11, and 12 are  incorporated  by reference to the  Company's  proxy
statement  to be  mailed  to  security  holders  on or about  April  4,  2000 in
connection with its annual stockholders' meeting to be held on May 2, 2000.

Item 13.   Exhibits and Reports on Form 8-K.

(a)     Exhibits

      The following  documents  are exhibits to this Form 10-KSB.  Each document
marked by an asterisk is hereby  incorporated  herein by  reference  to the same
document previously filed with the Securities and Exchange Commission.

Exhibit                                      S.E.C.         Exhibit
Reference   Description                   Report(Date)      Number         Page
---------   -----------                   ------------      -------        ----

  3.1       *Restated Certificate of
              Incorporation dated
              November 1, 1988            10-KSB (12/96)      3.1            39

  3.2       *By-Laws
              dated November 1, 1988      10-KSB (12/96)      3.2            48

  27        Financial Data Schedule       10-KSB (12/99)      27             38

 (b).       Reports on Form 8-K.

      No  reports on  Form 8-K have  been filed with the Securities and Exchange
      Commission during the last quarter of the period covered  by this report.


                                       36
<PAGE>


                                   SIGNATURES


In  accordance  with  Section  13 or 15(d) of the  Securities  Exchange  Act the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                    THE RESERVE PETROLEUM COMPANY
                                             (Registrant)



                                        /s/ Mason W. McLain
                                    --------------------------------------------
                                    By:  Mason W. McLain, President
                                    (Principal Executive Officer)




                                        /s/ Jerry L. Crow
                                    --------------------------------------------
                                    By:  Jerry L. Crow, 2nd Vice President
                                    (Principal Financial and Accounting Officer)


Date: March 23, 2000




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



   /s/ Mason W. McLai  n                              /s/Jerry L. Crow
----------------------------                      -----------------------------
Mason W. McLain (Director)                         Jerry L. Crow (Director)
March  23,  2000                                   March  23, 2000



  /s/ Robert L. Savage                               /s/ R.T. McLain
----------------------------                      -----------------------------
Robert L. Savage (Director)                         R.T. McLain  (Director)
March  23, 2000                                     March  23, 2000




                                       37