March 26, 2001









Securities & Exchange Commission
Washington, D.C. 20549


Dear Sir:

Forwarded herewith is Form 10K-SB, Annual Report pursuant to Section 13 or 15(d)
of the Securities Act of 1934, for the year ended December 31, 2000.  No changes
were made from 1999 in accounting principles  or practices or in the  methods of
application of those principles or practices.



                                                 Very truly yours,

                                                 THE RESERVE PETROLEUM COMPANY




                                                 /s/Jerry L. Crow
                                                 -----------------
                                                 Jerry L. Crow
                                                 Vice President




<PAGE>



                       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 For the fiscal year
                             ended December 31, 2000
             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                          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, 2000 were  $2,385,069.
As of March 12, 2001,  there were  167,428.73  common  shares  outstanding.  The
aggregate market value of the voting stock held by non-affiliates was $3,920,017
as determined by the last reported sale which was January 11, 2001.

                       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 20, 2001, in connection with its annual stockholders'  meeting to
be held on May 22, 2001.  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...................................   8

      Item 3.  Legal Proceedings...........................................   9

      Item 4.  Submission of Matters to a Vote of Security Holders.........   9

PART II

      Item 5.  Market for Common Equity and Related Stockholder Matters....   10

      Item 6.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations.........................   10

      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


                                       2
<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,  generate  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
    in a material change in estimated  long-lived assets  impairment.  Depletion
    and depreciation of oil and gas properties are computed using the  units-of-
    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.

                                       3
<PAGE>

    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 information  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 2001 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  270,641 gross acres equivalent to 93,615 net acres. These mineral
interests  are  located in nine  states  with  56,925 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 2000 $1,238,501(53%) of oil and gas sales were
from royalty interests as compared to $869,757 (57%) in 1999. As a result of its
mineral  ownership,  in 2000 the Company had royalty  interests in 5 gross (.051
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 2000, 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.

                                       5
<PAGE>


      Exploratory  Wells Drilled in 2000 or Budgeted for 2001.  The remainder of
this section contains some forward-looking  information.  Please refer to page 3
for a summary of the risks and  uncertainties  that may affect  forward  looking
information.

The Company has fractional  interests in five  exploratory  prospects on which a
total of six test  wells  were  drilled  or in  process  at the end of 2000.  An
additional  nine test wells are budgeted for drilling in 2001. A summary of 2000
exploratory wells drilled and those budgeted for drilling in 2001 follows.

Two exploratory test wells were drilled on a McClain County, Oklahoma,  prospect
in which the Company has an 18% working  interest.  Both were  completed  as oil
producers,  but the wells have not performed as initially expected. The prospect
is under evaluation prior to additional drilling.

An exploratory test well on a second McClain County,  Oklahoma prospect in which
the Company has a 14% working  interest  condemned the  prospect.  No additional
drilling is planned.

A Cimarron County, Oklahoma,  prospect in which the  Company  has a 28%  working
interest in the initial test well was completed as a marginal gas producer.  The
prospect is a shallow, low cost prospect to drill, but has high operating costs.
Favorable  gas  prices  make this a  marginally  viable prospect.  An additional
exploratory test well in which the Company will have a 19.6% working interest is
scheduled  for  2001. The  prospect  will be evaluated for possible  development
drilling  after the  results of this second test well are known.

An exploratory  well was drilled on a Woods County,  Oklahoma  prospect on which
the  Company is a working  interest  owner in three  producing  gas  wells.  The
Company has a 15% working interest in the well which has been completed as a gas
producer.

A Garvin  County,  Oklahoma,  exploratory  well in which the Company has an 8.9%
working interest was in process at year end 2000. It was subsequently  completed
as a marginal oil well.

The  Company  has a 10%  working  interest  in an area  of  interest  along  the
Texas/Oklahoma border in southern Oklahoma covering  approximately thirty square
miles. A three dimensional  seismic program indicated ten possible  prospects in
the area.  Leasing  activity is ongoing and two test wells are  projected  to be
drilled in 2001.

Two  exploratory test wells  are scheduled  on a shallow  oil prospect in Carter
County, Oklahoma, as land problems are cleared and a rig becomes available.  The
Company has a 20.25% working interest in the prospect.

A Dewey County, Oklahoma, exploratory test well in which the Company has a 17.5%
working  interest,  was spudded in January,  2000. At March 6, 2001 the well was
awaiting a completion attempt.

In  February  2000,  the Company  purchased  a 20%  working  interest in a Woods
County,  Oklahoma prospect. The initial test well will be the re-entry of a well
previously  drilled.  Operations are scheduled to start as soon as a rig becomes
available.

The Company has a 21% working  interest in an oil  prospect in Cimarron  County,
Oklahoma. The first test well on this prospect is drilling at March 15, 2001.

A Coal County,  Oklahoma  prospect which was previously  deferred because of low
oil prices has a test well  scheduled  for 2001.  The Company has an 18% working
interest in the prospect.

In  addition to the  prospects  summarized  above,  the  Company  elected  under
Oklahoma  pooling  orders  to  participate  as a working  interest  owner in the
drilling  of wells on two  non-producing  mineral  interest  which it owns.  The
Company  has a 10.16%  interest  in one  well to be  drilled  in  Ellis  County,
Oklahoma and a 1.09%  interest in the other well to be drilled in Dewey  County,
Oklahoma. It is expected both wells will be drilled in the first half of 2001.

                                       6
<PAGE>

Management  is  always  looking  for  exploratory  prospects  that meet its risk
parameters.  As a result,  it is possible  the Company will  participate  in the
testing of additional prospects prior to year end 2001.

Customers.  In 2000,  the Company had two customers  whose total  purchases were
greater than 10% of revenues from oil and gas sales. The purchases were $327,699
or 14% of total oil and gas sales by one purchaser, and $274,832 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. There are numerous  circumstances within the industry and related market
place that are out of the Company's  control  including cost and availability of
alternative  fuels, the level of consumer  demand,  the extent of other domestic
production  of oil and gas, the price and extent of  importation  of foreign oil
and  gas,  the cost of and  proximity  of  pipelines  and  other  transportation
facilities,  the cost and availability of drilling rigs, 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.  The  Company's  ability  to  participate  in and/or  develop  viable
prospects,  and secure the financial participation of other persons or 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.

                                       7
<PAGE>

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

At  December  31, 2000 the Company had net equity of $196,187 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  (unaudited) for the land and building. The Company has its office in
the  building  under a lease with the  partnership.  At  December  31 2000,  the
partnership had assets in excess of liabilities of $594,503  (unaudited) and had
net income of $87,457 (unaudited) for the year then ended.

The Company has net equity of $137,760 at December 31, 2000,  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 $1,392,639 (unaudited) at December 31, 2000, and net
loss of $325,782 (unaudited) for the year then ended.

The Company has a net equity of $60,134 at December 31, 2000 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
$601,333   (unaudited)  at  December  31,  2000,  and  net  income  of  $451,270
(unaudited) for the year then ended.

In  December  2000,  the  Company  invested  $150,000  for a 25%  interest in an
Oklahoma  limited  liability   company  (LLC)  which  purchased   Oklahoma  City
metropolitan area real estate to be improved for sale and/or lease. The property
was purchased at a total cost of approximately $1,050,000. The LLC had assets in
excess of liabilities of $600,000 at December 31, 2000.

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, 2000, 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 2000.

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  32  for  working  interest  reserve  quantity
information.

Since  January 1,  2000,  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 1999  report on Form 10-KSB and Federal  income
tax return for the year ended  December 31, 1999.  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, 2000,  1999 and 1998.  Equivalent MCF was
developed using approximate relative energy content.

                                       8
<PAGE>

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

2000     $27.31           $3.26         $27.59     $ 3.27         $ 1.09
1999     $16.43           $1.94         $17.12     $ 2.12         $  .86
1998     $12.07           $1.86         $17.52     $ 1.91         $  .49



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.

At December  31, 2000,  the Company had working  interests in 67 gross (7.7 net)
wells producing  primarily gas and/or gas liquids  (condensates) and had working
interests in 65 gross (3.8 net) wells  producing  primarily oil. These interests
were in 21,025 gross (2,426 net) producing  acres.  These wells include 44 gross
(.32 net) wells associated with secondary recovery projects.

Thirty-four  percent,  or 7,844 barrels of the Company's oil  production  during
2000 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:

                                                        Acreage
                                             -----------------------------------
                                              Gross                Net
                                             -------             ------
Non-producing Mineral Interests              270,641             93,615
Undeveloped Leaseholds                        36,299              9,056

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, 1998 and thereafter, as to net productive and dry exploratory wells
drilled and net productive and dry development wells drilled.

                                Number of Net Working Interest Wells Drilled
                                -----------------------------------------------
                                   Exploratory                 Development
                               -------------------          -------------------
                               Productive      Dry          Productive     Dry
                               ----------     ----          ----------     ----
2000                              .79         .30                ---        ---
1999                              .30        1.37                ---        ---
1998                               ---        .62                .18        ---

Recent Activities. A Garvin County, Oklahoma,  exploratory oil well in which the
Company  has a 8.9%  working  interest  in process at  December  31,  2000,  was
subsequently  completed  as  a  marginal  producer.  A  Dewey  County,  Oklahoma
exploratory  gas well in which the  Company  has a 17.5%  working  interest  was
spudded in  January,  2001 and at March 6, 2001 was  awaiting a decision  on the
zones  to  perforate  in  a  completion  attempt.  A  Burleson  County,   Texas,
development  oil  well  was  spudded  in  February  2001,  and was  subsequently
abandoned as a dry hole.

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.

                                       9
<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 pink sheets OTC Market Data Service.  Prices do not include  retail  markup,
markdown or commission.

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

                      03/31/99                            32             30.0625
                      06/30/99                            32             30.0625
                      09/30/99                            36             32
                      12/31/99                            36             36
                      03/31/00                            36             36
                      06/30/00                            36             32.5625
                      09/30/00                            34.5           34
                      12/31/00                            34.25          32

There was limited public trading in the Company's common stock in 2000 and 1999.
In 2000,  there were 12 brokered  trades  appearing  in the  Company's  transfer
ledger, and in 1999, there were twenty.

At March 15,  2001,  the Company had  approximately  1472 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 2000 and 1999.  Management  intends to
review the amount of the  annual  dividend  to be paid in 2001 with the board of
directors;  however,  it intends to  recommend  a dividend of at least $1.00 per
share.

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.
-------------------------------
The Company had cash,  cash  equivalents  and available  for sale  securities at
December 31, 2000, totaling  $5,281,455,  an increase of $540,919 (11%) from the
1999 total of  $4,740,536.  As indicated by the  Statements  of Cash Flows,  the
increase  was the net  result  of  cash  provided  by  operating  activities  of
$1,169,062 less net cash applied to property  additions,  equity investments and
financing activities of $377,821, $80,000 and $170,322, respectively.

Operating Activities. Cash flows from operating activities increased $950,611 to
$1,169,062 in 2000 from  $218,451 in 1999.  To a great extent,  the increase was
the result of additional cash received from oil and gas sales of $670,696 plus a
reduction  in  cash  paid  for  income  taxes  of  $205,859.   See  "Results  of
Operations,"  below in this Item 6 for a  discussion  of the increase in oil and
gas sales.

                                       10
<PAGE>

Investing  Activities.  Net  cash  applied  to  investing  activities  increased
$1,015,034  to $1,036,525  in 2000 from $21,491 in 1999.  The increase  resulted
because of a net increase in funds applied to the purchase of available for sale
securities  of $744,904,  net property  additions of $99,785 and net increase in
equity investments of $170,345.

Available for sale  securities  are primarily US Treasury Bills or Notes and are
used as short-term investments of cash which is 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.

Substantially  all 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 2000  included  $580,211  classified  as investing  activities  and
$250,219 classified as operating  activities for a total of $830,430 as compared
to a total of $643,680 in 1999. In 2000, property dispositions included $184,141
received from the sale of Oklahoma farm land.

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 2000, cash dividends paid on common stock amounted to $166,582 as compared to
$165,932 in 1999.  Cash applied to the purchase of treasury  stock was $3,740 in
2000 as compared to $2,080 in 1999.

Forward-looking  Summary.  Refer  to  page  3 for a  summary  of the  risks  and
uncertainties that may affect this forward-looking  summary. The latest forecast
of business to be done in 2001 and beyond  indicates the projected  activity can
be funded from net working  capital plus estimated cash flow from operations and
other internal  sources.  As noted above,  the Company is engaged in exploratory
drilling. If this drilling is successful,  substantial  development drilling may
result.  Also,  should other  exploration  projects which fit the Company's risk
parameters become  available,  or other investment  opportunities  become known,
capital requirements may be more than the Company has available. If so, external
sources of financing could be required.

Results of Operations.
---------------------
Net income,  basic and diluted,  increased $2.69 per share to $4.63 per share in
2000 from $1.94 per share in 1999.  To a  significant  degree,  the  increase in
earnings  per share was the result of an increase in the price  received for the
sale of crude oil and natural gas. This price increase will be discussed further
in the following  paragraphs  along with the other material line item changes in
the Statements of Operations included in Item 7 of this 10-KSB.

Operating Revenues. Operating revenues increased $811,520 (52%) to $2,385,069 in
2000 from  $1,573,549 in 1999.  The increase was the result of a $822,299  (54%)
increase  in oil and gas sales as offset by a  $10,779  (26%)  decline  in lease
bonuses and other to $30,491.

The following  table  presents a price and volume  analysis of oil and gas sales
from 1999 to 2000.  Miscellaneous  oil and gas product  sales of $26,828 in 2000
and $15,677 in 1999 are not included in the analysis.

                                       11
<PAGE>


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

          Bbls (000 omitted)         23         ---        (4)       27

          $(000 omitted)        $   641        252        (57)   $   446
          Unit Price            $ 27.41      10.76        ---    $ 16.65
          Gas -
          MCF (000 omitted)         517         ---       (13)       530
          $(000 omitted)        $ 1,687        644        (27)   $ 1,070
          Unit Price            $  3.27       1.25        ---    $  2.02

Revenues from oil sales  increased  $194,580 (44%) to $640,677 as a result of an
increase in the average price per barrel (Bbl) as partially  offset by a decline
in Bbls produced.  The average unit price of oil sales increased  $10.76 per Bbl
to $27.41 per Bbl creating a positive  price  variance  totaling  $251,395.  The
volume of oil produced  declined  3,412 Bbls (13%) to 23,377 Bbls resulting in a
negative volume variance of $56,815.

Revenues from natural gas sales increased  $616,567  (58%) to $1,687,073 in 2000
from $1,070,506 in 1999.  A positive price variance of $643,964 resulted because
the average price per thousand cubic feet (MCF) increased $1.25 to $3.27 in 2000
from $2.02 in 1999. The positive price variance was offset $27,397 by a negative
volume variance as production  declined  13,563 MCF (3%)  to 516,574 MCF in 2000
from 530,137 MCF in 1999.

For both oil and gas,  the price  increase  was the result of an increase in the
spot market prices upon which most of the Company's oil and gas sales are based.
The decrease in volume of production  occurred because new production which came
on line in 2000 was not sufficient to replace the production  lost to the normal
decline of more mature producing properties.

Operating  Costs and Expenses.  Operating costs and expenses  increased  $79,304
(5%) to $1,682,660 in 2000,  from  $1,603,356 in 1999. The $79,304  increase was
the net result of an $81,757 (27%)  increase in  production  costs and a $67,961
(22%) increase in depreciation, depletion, amortization and valuation provisions
(DD&A) as  reduced  by a decline of  $39,291  (12%) in  exploration  costs and a
decline of $31,123 (5%) in general, administrative and other expenses (G&A). The
material components of these line items will be discussed below.

      Production  costs.  The  $81,757  additional  costs  were the  result of a
$45,474  (26%)  increase in lease  operating  expense to $223,131  and a $59,714
(87%) increase in gross  production tax to $128,380 as offset by a $23,437 (44%)
decline in transportation and compression costs to $29,346. The $45,474 increase
in lease operating  expense was, to a great extent,  the result of about $28,000
related  to new  working  interest  wells  which  first  produced  in 2000,  and
approximately   $17,000  of  additional   expense  on  older,  high  maintenance
properties.  Gross  production  taxes are state taxes which are  calculated as a
percentage  of gross  proceeds  from the sale of  products  from each  property.
Therefore,  they  tend to  fluctuate  with the  change in the  dollar  amount of
revenues  from oil and gas  sales.  Transportation  costs,  which  are  based on
volumes, declined in 2000 because of the reduced volumes of product transported.

                                       12

<PAGE>

      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 $829,633 in 2000 and $542,447 in 1999.
Cost charged to operations were $293,935 in 2000 and $333,226 in 1999, inclusive
of geological and geophysical costs of $149,719 in 2000 and $84,650 in 1999.

      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 $94,321 in
2000 and $198,047 in 1999.

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 2000 and 1999,
resulting  in the  recognition  of an  impairment  loss of $91,595  in 2000.  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,  a  change  in the rate of
production or a change in the basis of the assets.  The provisions for depletion
and  depreciation  totaled  $187,314 in 2000 and  $110,749 in 1999.  The $76,565
(69%)  increase  occurred  mostly because of  depreciation  and depletion on new
wells which first produced in 2000.

      General,  Administrative  and Other Expenses (G&A).  G&A declined  $31,123
(5%) to $624,787.  The most  significant  individual  change was a drop in Texas
franchise tax of $15,803 to $7,509 resulting from reduced Texas revenue in 1999,
the year upon which the tax is based.

Equity Earnings in Investees.  This line item declined $27,666 (48%) to $30,029.
To a  significant  degree,  the  decline  was  the  result  of  Millennium  Golf
Properties,  LLC's loan service  costs and  renovation  costs  related to a golf
course purchased in 1999. See Note 7, to the financial statements for additional
information.

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 $53,725 (16%) to $277,620 in 2000. The most
significant  items  contributing  to this  decrease  were a $270,790  decline in
realized  and  unrealized  gain/loss  from trading  securities  to a net loss of
$166,895 in 2000,  and decline in pipe-line  settlements  of $20,142.  The above
declines were offset by an increase in gain from asset sales  totaling  $195,265
($177,364  of which was gain from sale of  Oklahoma  farm land),  and  increased
interest  income of  $51,800  mostly  because  of an  increase  in the amount of
available  for sale  securities  as well as an increase  in the related  rate of
return.

                                       13
<PAGE>

Provisions for Income Taxes. In 2000, the Company had a calculated provision for
income tax of $233,696 as the current tax expense of $186,522 was increased by a
deferred tax expense of $47,174. In 1999, a calculated  provision for income tax
of $34,386  resulted  because  the  current  tax  expense of $72,622  exceeded a
deferred  tax  benefit  of  $38,236.  See Note 6 to the  accompanying  financial
statements  for an analysis of the various  components  of income taxes for both
2000 and 1999.

Factors Affecting Future Operations.  Refer to Page 3 for a summary of the risks
and uncertainties that may affect this forward-looking summary.

Revenues  from oil and gas sales in 2001 could range  upward as much as 20% from
sales in 2000.  March, 2001 prices suggest an increase in the average unit price
of natural  gas for 2001 will be negated  somewhat  by a decline in the  average
unit price of oil.  Also, the volumes of both crude oil and natural gas produced
should  continue  a  normal  decline  unless  supplemented  by  production  from
discoveries in 2001 thus further negating any increase in the average unit price
of gas.

Exclusive of exploration costs, operating costs and expenses for 2001 should not
change in excess of 10% (plus or minus) from 2000.  However, as discussed above,
operating costs can vary significantly with a change in oil and gas revenues and
the  quantity  and  quality  of  working  interest  wells.   Currently  budgeted
exploration costs for 2001 are about 17% less than actual expenditures for 2000,
but prospects may be added or deleted as the year progresses. Also, as discussed
above,  whether  exploration costs are expensed or capitalized is dependent upon
the results of prospect testing.

Several  factors  suggest a moderate to large decline in other  income,  net for
2001. A rural real estate sale which  produced  income of about $170,000 in 2000
is not likely to be  duplicated  in 2001.  Also,  interest  rates on  short-term
investments  have declined  since year end 2000,  and as of March 15, 2001,  the
markets for trading securities are down substantially.

                                       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, 2000 and 1999                         17

          Statements of Operations - Years Ended December 31, 2000 and 1999   19

          Statement of Stockholders' Equity - December 31, 2000 and 1999      20

          Statements of Cash Flows - Years Ended December 31, 2000 and 1999   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,  2000 and 1999,  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 auditing standards generally accepted
in the  United  States of  America.  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, 2000 and 1999, and the results of its operations and its cash
flows  for the  years  then  ended  in  conformity  with  accounting  principles
generally accepted in the United States of America.








GRANT THORNTON LLP

Oklahoma City, Oklahoma
March  9, 2001


                                       16

<PAGE>


                          THE RESERVE PETROLEUM COMPANY
                                 BALANCE SHEETS

                                     ASSETS
                                     ------

                                                                December 31,
                                                           ---------------------
                                                             2000         1999
                                                           --------      -------
Current Assets:
    Cash and Cash Equivalents (Note 2)                  $  330,178   $   367,963
    Available for Sale Securities  (Notes 2 & 5)         4,951,277     4,372,573
    Trading Securities (Notes 2 & 5)                       400,371       562,176
    Receivables                                            443,933       256,647
    Refundable Income Taxes                                   ----        75,964
    Prepayments & Deferred Income Taxes                      5,625        58,735
                                                         ---------    ----------
                                                         6,131,384     5,694,058
                                                         ---------    ----------
Investments:
   Partnership and Limited
     Liability Companies (Notes  2 & 7)                     544,081      430,302
   Other                                                     15,298       19,048
                                                         ----------   ----------
                                                            559,379      449,350
                                                         ----------   ----------
Property, Plant & Equipment (Notes 2 & 10):
   Oil & Gas Properties, at Cost Based on the
      Successful Efforts Method of Accounting
         Unproved Properties                                531,093      662,765
         Proved Properties                                4,561,075    4,157,016
                                                         ----------   ----------
                                                          5,092,168    4,819,781
      Less - Valuation Allowance and Accumulated
         Depreciation, Depletion & Amortization           3,959,762    3,896,557
                                                         ----------   ----------
                                                          1,132,406      923,224
                                                         ----------   ----------
    Other Property & Equipment, at Cost                     330,490      337,474
      Less - Accumulated Depreciation & Amortization        175,846      165,996
                                                         ----------   ----------
                                                            154,644      171,478
                                                         ----------   ----------
                                                          1,287,050    1,094,702
                                                         ----------   ----------
Other Assets                                                494,868      490,738
                                                         ----------   ----------
                                                         $8,472,681   $7,728,848
                                                         ==========   ==========
(continued)
See Accompanying Notes

                                       17
<PAGE>

                          THE RESERVE PETROLEUM COMPANY
                                 BALANCE SHEETS

(concluded)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                December 31,
                                                        ------------------------
                                                             2000         1999
                                                        ----------    ----------
Current Liabilities:
   Accounts Payable                                     $   41,321   $    28,504
   Income Taxes Payable                                    118,500          ----
   Other Current Liabilities -
      Gas Balancing Commitment                              35,111        38,839
      Deferred Income Taxes and Other                       30,641        20,439
                                                        ----------    ----------
                                                           225,573        87,782
                                                        ----------    ----------

Dividends Payable (Note 3)                                 128,037       127,008
                                                        ----------    ----------


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                                     8,154,158     7,545,405
                                                        ----------    ----------
                                                         8,311,526     7,702,773

   Less  - Treasury Stock, at Cost                         192,455       188,715
                                                        ----------    ----------
                                                         8,119,071     7,514,058
                                                        ----------    ----------
                                                       $ 8,472,681   $ 7,728,848
                                                        ==========    ==========


See Accompanying Notes

                                       18
<PAGE>

                          THE RESERVE PETROLEUM COMPANY
                            STATEMENTS OF OPERATIONS


                                                        Year Ended December 31,
                                                   -----------------------------
                                                       2000             1999
                                                   -----------      ------------
Operating Revenues:
   Oil & Gas Sales                                 $ 2,354,578      $ 1,532,279
   Lease Bonuses & Other                                30,491           41,270
                                                   -----------      ------------
                                                     2,385,069        1,573,549
                                                   -----------      ------------
Operating Costs and Expenses:
    Production                                         380,857          299,100
    Exploration                                        293,935          333,226
    Depreciation, Depletion, Amortization
        & Valuation Provisions                         383,081          315,120
    General, Administrative and Other                  624,787          655,910
                                                    ----------      ------------
                                                     1,682,660        1,603,356
                                                    ----------      ------------
Income (Loss)  from Operations                         702,409          (29,807)

Equity Earnings in Investees                            30,029           57,695

Other Income, Net                                      277,620          331,345
                                                    ----------      ------------
Income before Income Taxes                           1,010,058          359,233

Provisions for Income Taxes  (Notes 2 & 6)             233,696           34,386
                                                    ----------      ------------
Net Income                                         $   776,362      $   324,847
                                                    ==========      ============
Per Share Data (Note 2):

    Net Income, Basic and Diluted                  $      4.63      $      1.94
                                                    ==========      ============
    Cash Dividends                                 $      1.00      $      1.00
                                                    ==========      ============
Weighted Average Shares Outstanding,
  Basic and Diluted                                    167,551          167,693
                                                    ==========      ============
See Accompanying Notes

                                       19
<PAGE>

                          THE RESERVE PETROLEUM COMPANY
                        STATEMENT OF STOCKHOLDERS' EQUITY
                    FOR THE TWO YEARS ENDED DECEMBER 31, 2000





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

 Balance at    January 1, 1999        $ 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)

   Net Income                             ----      ----     776,362       ----

   Cash Dividends on Common Stock         ----      ----    (167,609)      ----

   Purchase of Treasury Stock             ----      ----        ----     (3,740)
                                      --------   -------   ----------  ---------

Balance at December 31, 2000          $ 92,368  $ 65,000  $8,154,158  $(192,455)
                                      ========   =======   =========   =========


See Accompanying Notes

                                       20
<PAGE>


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

                                                        Year Ended December 31,
                                                    ----------------------------
                                                        2000               1999
                                                    ----------       -----------
Cash Flows from Operating Activities:
  Cash Received-
    Oil and Gas Sales                              $ 2,158,134       $1,487,438
    Lease Bonuses and Rentals                           30,490           41,270
    Agricultural Rentals & Other                         1,620           24,407
  Cash Paid-
    Production Costs                                  (369,882)        (297,946)
    Exploration Costs                                 (250,219)        (323,080)
    General Suppliers, Employees and Taxes,
      Other than Income                               (669,493)        (679,742)
  Interest Received                                    267,639          174,901
  Interest Paid                                         (7,838)         (11,293)
  Dividends Received on Trading
    Securities                                           5,759            7,926
  Purchase of Trading Securities                    (1,171,151)      (2,133,596)
  Sale of Trading Securities                         1,166,061        2,126,083
  Income Taxes Refunded (Paid)                           7,942         (197,917)
                                                    ----------       -----------
    Net Cash Provided by Operating
      Activities                                     1,169,062          218,451
                                                    ----------       -----------

Cash Flows from Investing Activities:
  Sale and Maturity of Available for
      Sale Securities                                4,897,822        6,271,431
  Purchase of Available for Sale Securities         (5,476,526)      (6,105,231)
  Property Dispositions                                202,390           42,564
  Property Additions                                  (580,211)        (320,600)
  Cash Distributions from Equity Investment             70,000           90,345
  Cash Paid for Equity Investments                    (150,000)            ----
                                                    ----------       -----------
     Net Cash Applied to Investing Activities      $(1,036,525)      $  (21,491)
                                                    ----------       -----------


(Continued)

See Accompanying Notes

                                       21
<PAGE>


(Concluded)

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


                                                        Year Ended December 31,
                                                    ----------------------------
                                                      2000               1999
                                                    ---------         ----------
Cash Flows Applied to Financing Activities:
  Dividends Paid to Shareholders                   $ (166,582)       $ (165,932)
  Purchase of Treasury Stock                           (3,740)           (2,080)
                                                    ---------         ----------
    Total Cash Applied to Financing  Activities      (170,322)         (168,012)
                                                    ---------         ----------
Net Change in Cash and Cash Equivalents               (37,785)           28,948

Cash and Cash Equivalents at Beginning of Year        367,963           339,015
                                                    ---------         ----------
Cash and Cash Equivalents at End of Year           $  330,178        $  367,963
                                                    =========         ==========
Reconciliation of Net Income to Net
    Cash Provided by Operating Activities:
Net Income                                         $  776,362        $  324,847

Net Income Increased (Decreased) by -
    Net Change in -
      Unrealized Holding (Gains) Losses
            on Trading Securities                      97,404           (39,148)
      Accounts Receivable                            (191,570)          (45,279)
      Interest and Dividends Receivable                (6,807)          (47,745)
      Income Taxes Refundable/Payable                 194,464          (125,295)
      Accounts Payable                                  1,400             4,751
      Trading Securities                               64,400           (72,260)
      Cash Value of Officers' Life Insurance          (24,759)          (17,052)
      Prepayments                                      53,110           (53,110)
      Deferred Taxes                                   47,174           (38,236)
      Gas Balancing Liabilities                        (3,728)           (2,571)
    Equity Earnings in Investees                      (30,029)          (57,696)
    Disposition of Property & Equipment              (191,440)           72,125
    Depreciation, Depletion, Amortization
      and Valuation Provisions                        383,081           315,120
                                                    ---------         ----------
Net Cash Provided by Operating Activities          $1,169,062        $  218,451
                                                    =========         ==========
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
      operations.

      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 2000 and 1999 whose  purchases were in excess of 10% of
      total oil and gas sales.  In 2000,  the purchases  were $327,699 or 14% of
      total oil and gas sales by one purchaser, and $274,832 or 12% of total oil
      and gas sales by the other. In 1999, the purchases were $277,667,  or 18%,
      by one purchaser, and $177,582, or 12% 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:

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


     January 1, 1999, $.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

     Purchase of stock                   ----         187.00            (187.00)
                                   ----------      ---------         -----------

     December 31,  2000, $.50
     par value stock, 400,000
     Shares authorized             184,735.28      17,296.55         167,438.73
                                   ==========      =========         ==========


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

    At December 31, 2000 and 1999,  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                    $    4,951,277
                                                                  ==========

    In 2000 and 1999 there were no sales of securities prior to maturity.

    As to the  trading  securities  held at year  end,  trading  gains  (losses)
    included in earnings were ($93,290) in 2000 and $39,148 for 1999.

                                       25

<PAGE>

Note 6 - INCOME TAXES
         ------------
      Components of deferred taxes follow:

                                                               December 31,
                                                   -----------------------------
                                                      2000                1999
                                                   ---------            --------
      Assets
         Leasehold Costs                          $  192,880         $  197,533
         Gas Balancing Receivable                     52,379             52,379
         Equity Investments                            4,554               ----
         Long-Lived Asset Impairment                 105,984             94,870
         Marketable Securities                        27,199               ----
                                                   ---------            --------
                                                     382,996            344,782
         Valuation Allowance                            ----               ----
                                                   ---------            --------
                                                     382,996            344,782
                                                   ---------            --------
      Liabilities
         Receivables                                  42,840               ----
         Marketable Securities                          ----              5,440
         Intangible Development Costs                247,532            199,545
                                                   ---------            --------
                                                     290,372            204,985
                                                   ---------            --------

      Net Deferred Tax Asset                      $   92,624          $ 139,797
                                                   =========            ========
      Change in Valuation Allowance for the Year  $     ----          $    ----
                                                   =========            ========

      The following table summarizes the current and deferred portions of income
      tax expense.

                                                        Year Ended December 31,
                                                      --------------------------
                                                        2000              1999
                                                      -------           --------
      Current Tax Expense:
         Federal                                    $ 186,522         $  72,622
         State                                           ----              ----
                                                      -------           --------
                                                      186,522            72,622
      Deferred  Provision (Benefit)                    47,174           (38,236)
                                                      -------           --------
      Total Provision                               $ 233,696         $  34,386
                                                      =======           ========

                                       26

<PAGE>

    The total  provision  for income tax  expressed  as a  percentage  of income
    before income tax was 23% in 2000 and 10% in 1999. These amounts differ from
    the amounts computed by applying the statutory US Federal income tax rate of
    35% for 2000 and 1999 to  income  before  income  tax as  summarized  in the
    following reconciliation:


                                                        Year Ended December 31,
                                                    ----------------------------
                                                      2000                1999
                                                    ---------           --------
    Computed Federal Tax
        Provision                                   $ 353,520         $ 125,732
    Increase (Decrease) in Tax  From:
        Allowable Depletion in Excess of Basis       (103,681)          (78,477)

        Non-conventional Fuel Credit                   (7,861)           (6,453)
        Corporate Graduated Tax Rate
           Structure                                   (6,294)           (7,384)
        Dividend Received Deduction                    (1,411)           (1,207)
        Other                                            (577)            2,175
                                                    ----------          --------
        Provision for   Income Tax                  $ 233,696         $  34,386
                                                    ==========          ========
        Effective Tax Rate                                 23%               10%
                                                    ==========          ========

                                       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 $594,503 and $532,047,  at December
       31, 2000  and 1999, respectively, and its net income for the periods then
       ended was $87,457 and $79,066.

       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
       $461,776 at December 31, 2000.  The loan matures in 2002 with interest at
       New York prime rate.  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, 2000 and 1999.

       The  Company  has  a 9%  interest  in  Millennium  Golf  Properties,  LLC
       (Millennium),  an Oklahoma limited liability company. Millennium owns and
       operates two Oklahoma  City area golf  courses,  Coffee Creek Golf Course
       and  River  Oaks  Golf  Course.  It  is  also  involved  in  real  estate
       development around each golf course. River Oaks Golf Course, purchased in
       1999,  has  been   extensively   renovated.   The  River  Oaks  purchase,
       renovations  and related  real estate  development  are financed by loans
       collateralized  by the land and  buildings of both Coffee Creek and River
       Oaks. The loans totaled  $3,459,817 at December 31, 2000. At December 31,
       2000,  the Company's net equity in Millennium was $137,760 as compared to
       $166,177 at December 31, 1999.

       In December, 1992, the Company invested $90,000 for a 10% interest in OKC
       Industrial  Properties,  L.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, 2000,  the Company's
       net equity in the  limited  liability  company was  $60,134,  compared to
       $73,007 at December 31, 1999.

       In December,  2000, the Company  invested  $150,000 for a 25% interest in
       JAR  Investment,  LLC, an Oklahoma  limited  liability  company.  The LLC
       purchased  Oklahoma City metropolitan area real estate to be improved for
       sale and/or lease.  The purchase  price of  $1,050,000  was financed by a
       $550,000  variable  rate  mortgage loan with the initial rate at 8.5% and
       the LLC's initial capital  contributions  of $600,000 towards the initial
       purchase  price,  closing  costs and interest  maintenance  reserve.  The
       Company  signed a guaranty  agreement  limited to 25% of the  outstanding
       principal balance and interest owed on the loan.

                                       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:

                                                        Year Ended December 31,
                                                    ----------------------------
                                                       2000               1999
                                                    ---------          ---------
      Acquisition of Properties
           Unproved                                 $ 189,410          $ 197,993

           Proved                                   $    ----          $    ----

      Exploration Costs                             $ 640,223          $ 344,454

      Development Costs                             $   8,281          $  25,065


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

      The following table includes various  estimated fair value  information as
      of December 31, 2000 and 1999,  which pertains to the Company's  financial
      instruments 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.

                                       29
<PAGE>


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




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

                                           2000                      1999
                                     --------------------  ---------------------
                                     Carrying  Estimated   Carrying   Estimated
                                      Amount   Fair Value   Amount    Fair Value
                                     --------  ----------  --------   ----------

    Financial Assets
      Cash and Cash Equivalents     $  330,178 $  330,178 $  367,963  $  367,963
      Available for Sale Securities  4,951,277  4,951,277  4,372,573   4,372,573
      Trading Securities               400,371    400,371    562,176     562,176
    Financial Liabilities
      Dividends Payable for which
      it is not practicable to
      estimate fair value             (143,037)      N/A    (142,008)       N/A

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 $91,595 for the year ended December 31, 2000, are
    included in the  Statements of  Operations  in the line item,  Depreciation,
    Depletion,  Amortization and Valuation Provisions. No impairment losses were
    required for 1999.

                                       30
<PAGE>


                  UNAUDITED SUPPLEMENTAL FINANCIAL INFORMATION

                                       31

<PAGE>


                                                         SUPPLEMENTAL SCHEDULE 1


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

                                                       Years Ended December 31,
                                                    ---------------------------
                                                       2000              1999
                                                    ---------         ----------
Oil & Natural Gas Liquids (Bbls)

    Proved Developed and
      Undeveloped Reserves
        Beginning of Year                              29,021            37,803

        Revisions of Previous Estimates                   717              (221)

        Extensions and Discoveries                      8,318              ----

        Production                                     (7,877)           (8,561)

        Sale of Reserves in Place                        ----              ----
                                                    ---------         ----------
        End of Year                                    30,179            29,021
                                                    =========         ==========
    Proved Developed Reserves
        Beginning of Year                              29,021            37,803

        End of Year                                    30,179            29,021
Gas (MCF)
    Proved Developed and Undeveloped Reserves
        Beginning of Year                           1,404,458         1,567,726

        Revisions of Previous Estimates                75,445            38,719

        Extensions and Discoveries                    139,715            34,348

        Production                                   (266,491)         (236,335)

        Sale of Reserves in Place                        ----              ----
                                                    ---------         ----------
        End of Year                                 1,353,127         1,404,458
                                                    =========         ==========
    Proved Developed Reserves
        Beginning of Year                           1,404,458         1,567,726

        End of Year                                 1,353,127         1,404,458


(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 15,500 Bbls of oil and 250,082 MCF of
             gas for the year ended  December 31,  2000,  and 18,229 Bbls of oil
             and 293,739 MCF of gas for the year ended December 31, 1999.

         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, 2000 and 1999.  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.


                                       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)



                                                            At December 31,
                                                    ----------------------------
                                                       2000             1999
                                                    -----------    -------------

Future Cash Inflows                                 $ 8,672,165     $ 3,615,463

Future Production and
    Development Costs                                (1,812,991)     (1,231,489)

Future Income Tax Expense                            (2,003,370)       (661,948)
                                                    ------------    ------------
Future Net Cash Flows                                 4,855,804       1,722,026
    10% Annual Discount for
    Estimated Timing of Cash Flows                   (1,479,373)      (487,526)
                                                    ------------    ------------
Standardized Measure of Discounted
    Future Net Cash Flows                           $ 3,376,431     $ 1,234,500
                                                    ============    ============

     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)



                                                      Year Ended December 31,
                                                  ------------------------------
                                                       2000               1999
                                                  ------------      ------------
Standardized Measure,
    Beginning of Year                             $ 1,234,500       $ 1,186,328

    Sales and Transfers, Net of
      Production Costs                               (717,451)         (399,792)

    Net Change in Sales and Transfer
      Prices, Net of Production Costs               3,050,318           257,559

    Extensions, Discoveries and Improved
      Recoveries, Net of Future Production
      and Development Costs                           475,155            22,983

    Revisions of Quantity Estimates                   296,938            40,400

    Accretion of Discount                             170,912           167,537

    Net Change in Income Taxes                       (918,326)           14,425

    Changes in Production Rates
      (Timing) and Other                             (215,615)          (54,940)
                                                  ------------      ------------
Standardized Measure,
    End of Year                                   $ 3,376,431       $ 1,234,500
                                                  ============      ============


                                       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  20,  2001 in
connection with its annual stockholders' meeting to be held on May 22, 2001.

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      Amended as of November 14,
            2000By-Laws dated November 1,
            1988                          10-KSB (12/00)      3.2(a)         38

   3.2      Resolution Amending By-Laws   10-KSB (12/00)      3.2(b)         48
            November 14,  2000




 (b).   Reports on Form 8-K.

        A report  on Form 8-K  dated  November  14,  2000,  was  filed  with the
        Securities and Exchange  Commission  during the last quarter  covered by
        this Form 10-KSB.  Disclosures were reported under Item 5, Other Events.
        No financial statements were filed.

                                       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 26, 2001




        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. McLain                                /s/Jerry L. Crow
--------------------------                         -----------------------------
Mason W. McLain (Director)                         Jerry L. Crow (Director)
March 26,  2001                                    March 26, 2001



/s/ Robert L. Savage                              /s/  William M. Smith
--------------------------                        ------------------------------
Robert L. Savage (Director)                         William M. Smith  (Director)
March 26, 2001                                      March 26, 2001

                                       37
<PAGE>


                                   EXHIBIT 3.2(a)
                          THE RESERVE PETROLEUM COMPANY
                                 RESTATED BYLAWS

                          AS AMENDED NOVEMBER 14, 2000



               These  Restated  Bylaws  only  restate and  integrate  and do not
further  amend  the  Bylaws  of  this  corporation  as  heretofore   amended  or
supplemented  and  there is no  discrepancy  between  those  provisions  and the
provisions of these Restated Bylaws.

                                    ARTICLE I

                                     OFFICES

           Section 1. The registered  office shall be in the City of Wilmington,
County of New Castle, State of Delaware.

               Section 2. The  corporation  may also have  offices in such other
places both  within and without the State of Delaware as the board of  directors
may from time to time determine or the business of the corporation may require.

                                   ARTICLE II

                             MEETING OF STOCKHOLDERS

               Section 1. All meetings of the  stockholders  for the election of
directors or for the conduct of other  business  shall be held in the offices of
The Reserve Petroleum Company,  in the City of Oklahoma City, State of Oklahoma,
or at such other place either  .within or without the State of Delaware as shall
be  designated  from time to time by the board of  directors  and  stated in the
notice of the meeting.  Meetings of  stockholders  for any other  purpose may be
held at such time and place,  within or without the State of Delaware,  as shall
be stated in the notice of the  meeting or in a duly  executed  waiver of notice
thereof.

               Section 2. Annual meetings of stockholders,  shall be held on the
fourth Tuesday of May if not a legal holiday,  and if a  legal holiday,  then on
the next secular day following, at 3:00 p.m.,  or at such other date and time as
shall be  designated  from time to time by the board of directors  and stated in
the notice of the meeting, at which they shall elect by a plurality vote a board
of directors, and transact such other business as may properly be brought before
the meeting.

               Section 3.  Written  notice of the  annual  meeting  stating  the
place, date and hour of the meeting shall be given to each stockholder  entitled
to vote at such  meeting  not less than ten nor more than sixty days  before the
date of the meeting.

                                       38
<PAGE>

               Section 4. The officer who has charge of the stock  ledger if the
corporation  shall  prepare and make,  at least ten days before every meeting of
stockholders,  a  complete  list  of the  stockholders  entitled  to vote at the
meeting,  arranged  in  alphabetical  order,  and  showing  the  address of each
stockholder and the number of shares registered in the name of each stockholder.

               Such list shall be open to the  examination  of any  stockholder,
for any purpose  germane to the meeting,  during  ordinary  business hours for a
period of at least ten days prior to the meeting,  at the offices of The Reserve
Petroleum  Company,  in the City of Oklahoma City,  State of Oklahoma.  The list
shall also be produce and kept at the place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

               Section 5. Special meetings of the stockholders, for any purpose,
or purposes,  unless  otherwise  prescribed by statute or by the  certificate of
incorporation,  may be called by the chairman of the board or the  president and
shall be called by the  chairman of the board,  president  or  secretary  at the
request in writing of a majority of the board of directors, or at the request in
writing of stockholders  owning a majority in amount of the entire capital stock
of the  corporation  issued and  outstanding  and entitled to vote. Such request
shall state the purpose or purposes of the proposed meeting.

               Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting  and the purpose or purposes  for which the meeting
is called, shall be given not less than ten nor more than thirty days before the
date of the meeting to each stockholder entitled to vote at such meeting.

               Section  7. The  holders of a  majority  of the stock  issued and
outstanding  and entitled to vote thereat,  present in person or  represented by
proxy,  shall  constitute a quorum at all meetings of the  stockholders  for the
transaction  of  business  except as  otherwise  provided  by  statute or by the
certificate of incorporation.  If, however,  such quorum shall not be present or
represented at any meeting of the  stockholders,  the  stockholders  entitled to
vote thereat,  present in person or  represented  by proxy,  shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting,  until a quorum shall be present or represented.  At such adjourned
meeting, at which a quorum shall be present or represented,  any business may be
transacted which might have been transacted at the meeting as originally called.
If the  adjournment  is for more than  thirty  days,  or if a new record date is
fixed for the  adjourned  meeting,  a notice of the  adjourned  meeting shall be
given to each stockholder of record entitled to vote at the meeting

               Section 8. Upon adjournment of a meeting for lack of a quorum, if
notice of such adjourned meeting is sent to the stockholders entitled to receive
the same,  containing  a  statement  of the  purpose of the meeting and that the
previous  meeting  failed for lack of a quorum and  specifying  that pursuant to
this Section it is proposed to hold the adjourned meeting with a quorum of those
present,  then  any  number  of  stockholders,  in  person  or by  proxy,  shall
constitute a quorum at such meeting, unless otherwise provided by statute.

               Section 9. When a quorum is present at any  meeting,  the vote of
the holders of a majority of the stock having  voting power present in person or
represented  by proxy shall decide any  question  brought  before such  meeting,
unless the question is one upon which by express provision of the statutes or of
the  certificate  of  incorporation,  a different vote is required in which case
such express provision shall govern and control the decision of such question.

                                       39
<PAGE>

               Section 10. Each  stockholder  entitled to vote at every meeting,
as  provided  in Section 5 of Article VI of these  Bylaws,  shall be entitled to
vote in person or by proxy for each share of the  capital  stock  having  voting
power held by such  stockholder,  but no proxy  shall be voted on after one year
from its date, unless the proxy provides for a longer period.

               Section  11.  Whenever  the  vote of  stockholders  at a  meeting
thereof is  required  or  permitted  to be taken for or in  connection  with any
corporate  action,  by any  provision of the  statutes,  the meeting and vote of
stockholders  may be dispensed with if all the  stockholders who would have been
entitled  to vote upon the action if such  meeting  were held  shall  consent in
writing  to  such  corporate  action  being  taken;  or if  the  certificate  of
incorporation  authorizes the action to be taken with the written consent of the
holders of less than all of the stock who would have been  entitled to vote upon
the  action  if a  meeting  were  held,  then  on  the  written  consent  of the
stockholders  having not less than such percentage of the number of votes as may
be  authorized in the  certificate  of  incorporation;  provided that in no case
shall the  written  consent  be by the  holders  of stock  having  less than the
minimum  percentage of the vote  required by statute for the proposed  corporate
action, and provided that prompt notice must be given to all stockholders of the
taking of corporate action without a meeting and by less than unanimous  written
consent.

                                   ARTICLE III

                                    DIRECTORS

               Section 1. The number of  directors  which shall  constitute  the
whole board  shall be not less than three (3) nor more than  fifteen  (15).  The
number of directors shall be determined by resolution of the board of directors,
subject to change by the stockholders at the annual meeting. The directors shall
be elected at the annual  meeting of the  stockholders,  except as  provided  in
Section 2 of this Article, and each director elected shall hold office until his
successor  is  elected  and  qualified.  The board of  directors  by vote of the
majority of the whole  board,  may,  between  annual  meetings of  stockholders,
increase the  membership  of the board by not more than four members and by like
vote appoint qualified persons to fill the vacancies created thereby.  Directors
need not be stockholders.

               Section 2.  Vacancies and newly created  directorships  resulting
from any  increase  in the  authorized  number of  directors  may be filled by a
majority of the  directors  then in office,  though less than a quorum,  or by a
sole  remaining  director,  and  election  and until their  successors  are duly
elected and shall qualify, unless sooner displaced. If there are no directors in
office,  then an election  of  directors  may be held in the manner  provided by
statute.  If,  at  the  time  of  filling  any  vacancy  or  any  newly  created
directorship, the directors then in office shall constitute less than a majority
of the whole board (as constituted immediately prior to any such increase),  and
Court of  Chancery of Delaware  may,  upon  application  of any  stockholder  or
stockholders  holding at least ten percent of the total  number of the shares at
the time  outstanding  having  the right to vote for such  directors,  summarily
order  an  election  to be held to fill  any such  vacancies  or  newly  created
directorships,  or to replace  the  directors  chosen by the  directors  then in
office.

               Section 3. The  business of the  corporation  shall be managed by
its board of directors which may exercise all such powers of the corporation and
do all such lawful  acts and things as are not by statute or by the  certificate
of  incorporation  or by  these  Restated  Bylaws  directed  or  required  to be
exercised or done by the stockholders.

                                       40
<PAGE>

                       MEETINGS OF THE BOARD OF DIRECTORS

               Section 4. The board of  directors  of the  corporation  may hold
meetings,  both  regular  and  special,  either  within or without  the State of
Delaware.

               Section  5. The first  meeting  of each  newly  elected  board of
directors shall be held without notice  immediately after, and at the same place
as, the annual meeting of the  stockholders  for the purpose of  organization of
the board, the election of officers,  and the transaction of such other business
as may properly come before the meeting,  provided a quorum shall be present. In
the event  such  meeting  is not held at the time and  place  above  fixed,  the
meeting  may be held at such  time and place as shall be  specified  in a notice
given as hereinafter provided for special meetings of the board of directors, or
as shall be specified in a written waiver, signed by all of the directors.

               Section 6. Regular meetings of the board of directors may be held
without  notice  at such  time and at such  place as shall  from time to time be
determined  by the board.  Absent  action by the board of  directors,  a regular
meeting  of the  board of  directors  shall  be held on the  second  Tuesday  in
November at 3:00 p.m.

               Section  7.  Special  meetings  of the board may be called by the
chairman of the board or the  president on three days' notice to each  director,
either personally or by mail or by telegram; special meetings shall be called by
the chairman of the board, the president or secretary in like manner and on like
notice on the written request of two directors.

               Section 8. At all meetings of the board not less than one-half of
the total number of directors  shall  constitute a quorum for the transaction of
business  and the act of a majority of the  directors  present at any meeting at
which there is a quorum  shall be the act of the board of  directors,  except as
may be  otherwise  specifically  provided  by statute or by the  certificate  of
incorporation.  If a quorum  shall not be present at any meeting of the board of
directors  the  directors  present  thereat may adjourn the meeting from time to
time,  without  notice other than  announcement  at the meeting,  until a quorum
shall be present.

               Section 9. Unless  otherwise  restricted  by the  Certificate  of
incorporation or these Restated  Bylaws,  any action required or permitted to be
taken at any meeting of the board of directors or of any  committee  thereof may
be taken  without a meeting,  if all members of the board or  committee,  as the
case may be, consent thereto in writing,  and the writing or writings are filed,
with the minutes of proceedings of the board or committee.

                             COMMITTEES OF DIRECTORS

               Section 10. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of two or more directors of the corporation. The board may designate one
or more  directors as alternate  members of any  committee,  who may replace any
absent  or  disqualified  member  at any  meeting  of the  committee.  Any  such
committee, to the extent provided in the resolution, shall have and may exercise
the powers of the board of  directors  in the  management  of the  business  and
affairs of the corporation,  and may authorize the seal of the corporation to be
affixed to all papers  which may  require  it;  provided,  however,  that in the
absence or disqualification  of any member of such committee or committees,  the
member or members  thereof  present at any  meeting  and not  disqualified  from
voting,  whether or not he or they constitute a quorum, may unanimously  appoint
another  member of the board of  directors to act at the meeting in the place of
any such absent or disqualified  member. Such committee or committees shall have
such name or names as may be determined from time to time by resolution  adopted
by the board of directors.

                                       41
<PAGE>

               Section  11. Each  committee  shall keep  regular  minutes of its
meetings and report the same to the board of directors when required.

                            COMPENSATION OF DIRECTORS

               Section 12. The directors may be paid their expenses,  if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for  attendance  at each meeting of the board of directors or a stated salary as
director as determined by the board. No such payment shall preclude any director
from serving the  corporation in any other  capacity and receiving  compensation
therefor.  Members of special or standing committees may be allowed compensation
as determined by the board for attending committee meetings.

                                   ARTICLE IV

                                     NOTICES

               Section 1.  Whenever,  under the provisions of the statutes or of
the certificate of incorporation or of these Restated Bylaws, notice is required
to be given to any  director or  stockholder,  it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail,  addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be  deposited  in the United  States mail.
Notice to directors may also be given by telegram.

               Section 2.  Whenever any notice is required to be given Under the
provisions of the statutes or of the  certificate of  incorporation  or of these
Restated  Bylaws,  a waiver  thereof in writing  signed by the person or persons
entitled to said notice,  whether before or after the time stated therein, shall
be deemed equivalent thereto.

                                    ARTICLE V

                                    OFFICERS

               Section 1. The officers of the corporation shall be chosen by the
board of directors  and shall be a chairman of the board,  a  president,  a vice
president,  a secretary and a treasurer.  The board of directors may also choose
such additional vice presidents,  as in the opinion of the board the business of
the corporation  requires,  and one or more assistant  secretaries and assistant
treasurers.   The  chairman  of  the  board  and  the  president   need  not  be
stockholders,  but shall be directors of the  corporation.  The vice  president,
secretary,  treasurer,  and such other  officers as may be elected or  appointed
need not be stockholders or directors of the corporation.  Any number of offices
may be held by the same person, unless the certificate of incorporation or these
Restated Bylaws otherwise provide.

                                       42
<PAGE>

               Section 2. The board of directors at its first meeting after each
annual  meeting  of  stockholders  shall  choose  a  chairman,  a  president,  a
secretary, a treasurer and, at its option, one or more vice presidents.

               Section 3. The board of directors may appoint such other officers
and agents as it shall deem  necessary who shall hold offices for such terms and
shall  exercise such powers and perform such duties as shall be determined  from
time to time by the board.

               Section  4.  The  salaries  of all  officers  and  agents  of the
corporation shall be fixed by the board of directors.

               Section 5. The  officers  of the  corporation  shall hold  office
until their successors are chosen and qualify.  Any officer elected or appointed
by the board of directors may be removed at any time by the affirmative  vote of
a majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.

                            THE CHAIRMAN OF THE BOARD

               Section  6.  The  chairman  of the  board  shall  preside  at all
meetings of the board of directors and the  stockholders  and shall perform such
other duties as may be prescribed from time to time by the board of directors.

                                  THE PRESIDENT

               Section 7. The president shall be the chief executive  officer of
the corporation and shall have the general and active management of the business
of the corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.  He shall execute bonds,  mortgages and other
contracts  requiring a seal,  under the seal of the  corporation,  except  where
required or  permitted  by law to be  otherwise  signed and  executed and except
where the signing and  execution  thereof  shall be  expressly  delegated by the
board of directors  to some other  officer or agent of the  corporation.  In the
absence of the chairman,  or in the event of his inability or refusal to act, he
shall  perform the duties of chairman.  The  president  shall perform such other
duties and have such other powers as may be prescribed  from time to time by the
board of directors or these Restated Bylaws.

                               THE VICE PRESIDENTS

               Section 8. In the absence of the chairman and the  president,  or
in the event of their inability or refusal to act, the vice president (or in the
event there be more than one vice  president,  the vice  presidents in the order
designated, or in the absence of any designation, then in the order of election)
shall perform the duties of chairman and  president,  and when so acting,  shall
have all the powers of and be subject to all the restrictions upon such officer,
and shall  perform  such other duties and have such other powers as the board of
directors may from time to time prescribe.

                                       43
<PAGE>

                     THE SECRETARY AND ASSISTANT SECRETARIES

               Section 9. The  secretary  shall attend all meetings of the board
of directors and all meetings of the stockholders and record all the proceedings
of the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing  committees
when  required.  He shall give, or cause to be given,  notice of all meetings of
the  stockholders  and  special  meetings of the board of  directors,  and shall
perform such other duties as may be  prescribed by the board of directors or the
president,  under whose  supervise  on he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary,  shall have
authority to affix the same to any instrument  requiring it and when so affixed,
it may be  attested  by his  signature  or by the  signature  of such  assistant
secretary.  The  board of  directors  may give  general  authority  to any other
officer to affix the seal of the  corporation  and to attest the affixing of his
signature.

               Section  10. The  assistant  secretary,  or if there be more than
one, the assistant secretaries in the order determined by the board of directors
(or if there be no such  determination,  then in the  order of their  election),
shall,  in the  absence of the  secretary  or in the event of his  inability  or
refusal to act,  perform the duties and exercise the powers of the secretary and
shall  perform  such other  duties  and have such  other  powers as the board of
directors may from time to time prescribe.

                     THE TREASURER AND ASSISTANT TREASURERS

               Section 11. The treasurer shall have the custody of the corporate
funds and securities  and shall keep full and accurate  accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all monies
and other valuable  effects in the name and to the credit of the  corporation in
such depositories as may be designated by the board of directors.

               Section 12. He shall disburse the funds of the corporation as may
be  ordered  by  the  board  of  directors,  taking  proper  vouchers  for  such
disbursements,  and shall render to the president and the board of directors, at
its regular meetings,  or when the board of directors so requires, an account of
all his transactions as treasurer of the financial condition of the corporation.

               Section 14. The  assistant  treasurer,  or if there shall be more
than one,  the  assistant  treasurers  in the order  determined  by the board of
directors  (or if there  be no such  determination,  then in the  order of their
election),  shall,  in the  absence  of the  treasurer  or in the  event  of his
inability  or refusal to act,  perform the duties and exercise the powers of the
treasurer  and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.

                                   ARTICLE VI

                              CERTIFICATE OF STOCK

               Section  1.  Every  holder of stock in the  corporation  shall be
entitled to have a certificate, signed by, or in the name of the corporation by,
the president or vice  president and the secretary or an assistant  secretary of
the  corporation,   certifying  the  number  of  shares  owned  by  him  in  the
corporation. The corporation shall not issue fractions of shares of its stock.

               Section 2. Where a certificate is countersigned (1) by a transfer
agent other than the  corporation or its employee,  or (2) by a registrar  other
than the corporation or its employee, any other signature on the certificate may
be facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile  signature has been placed upon a certificate  shall have ceased
to be such  officer,  transfer  agent or registrar  before such  certificate  is
issued,  it may be issued by the corporation  with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.

                                       44
<PAGE>

                                LOST CERTIFICATES

               Section 3. The board of directors may direct a new certificate or
certificates   to  be  issued  in  place  of  any  certificate  or  certificates
theretofore  issued by the  corporation  alleged  to have been  lost,  stolen or
destroyed,  upon the making of an affidavit of that fact by the person  claiming
the  certificate of stock to be lost,  stolen or destroyed.  The officers of the
corporation  may require that any such person  furnish an  indemnity  bond in an
amount  not more  than  twice  the  value of the  stock on the date of said bond
indemnifying  the  corporation  against  any claim that may be made  against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.  Provided,  however,  the  board of  directors  may,  by  appropriate
resolution, waive any requirement for the furnishing of said indemnity bond.

                               TRANSFERS OF STOCK

               Section 4. Upon  surrender  to the  corporation  or the  transfer
agent  of  the  corporation  of  a  certificate  for  shares  duly  endorsed  or
accompanied  by proper  evidence  of  succession,  assignment  or  authority  to
transfer,  it shall be the duty of the corporation to issue a new certificate to
the  person  entitled  thereto,  cancel  the  old  certificate  and  record  the
transaction upon its books.

                               FIXING RECORD DATE

               Section  5. In  order  that the  corporation  may  determine  the
stockholder  entitled to notice of or to vote at any meeting of  stockholders or
any adjournment  thereof,  or to express consent to corporate  action in writing
without a meeting,  or  entitled  to receive  payment of any  dividend  or other
distribution  or allotment of any rights,  or entitled to exercise any rights in
respect'  of any change,  conversion  or exchange of stock or for the purpose of
any other lawful action, the record date for all of said dividends, payments and
actions shall be the close of business  thirty days in advance of the date fixed
for any  directors  or  stockholders  meeting at which any  dividend,  payments,
meeting  or  other  action  may be  decided;  provided,  however,  the  board of
directors  may  establish  any other record date by  appropriate  resolution.  A
determination  of  stockholders  of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.

                             REGISTERED STOCKHOLDERS

               Section 6. The  corporation  shall be entitled to  recognize  the
exclusive  right of a person  registered  on its books as the owner of shares to
receive  dividends,  and to vote as such owner, and to hold liable for calls and
assessments a person  registered on its books as the owner of shares,  and shall
not be bound to recognize any equitable or other claim to interest in such share
or shares on the part of any other person,  whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.

                                       45

<PAGE>


                                   ARTICLE VII

                               GENERAL PROVISIONS

                                    DIVIDENDS

               Section 1. Dividends  upon the capital stock of the  corporation,
subject to the provisions of. the certificate of  incorporation,  if any, may be
declared by the board of directors at any regular or special  meeting,  pursuant
to law.  Dividends  may be paid in cash,  in  property,  or in shares of capital
stock, subject to the provisions of the certificate of incorporation.

               Section 2. Before payment of any dividend, there may be set aside
out of any funds of the corporation available for divide such sum or sums as the
directors  from time to time,  in their a solute  discretion,  think proper as a
reserve or reserves to meet contingencies,  or for equalizing dividends,  or for
repairing  or  maintaining  any property of the  corporation,  or for such other
purpose  as  the  directors  shall  think  conducive  to  the  interest  of  the
corporation,  and the  directors  may modify or abolish any such  reserve in the
manner in which it was created.

                                ANNUAL STATEMENT

               Section 3. The board of  directors  shall  present at each annual
meeting,  and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the corporation.

                                     CHECKS

               Section  4. All  checks  or  demands  for  money and notes of the
corporation  shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.

                                   FISCAL YEAR

               Section 5. The fiscal year of the corporation shall begin January
1 and end December 31.

                                      SEAL

               Section 6. The corporate  seal shall have  inscribed  thereon the
name of the corporation and the words "Corporate Seal,  Delaware".  The seal may
be used by  causing it or a  facsimile  thereof  to be  impressed  or affixed or
reproduced or otherwise.

                                       46

<PAGE>

                                  ARTICLE VIII

                                   AMENDMENTS

               Section  1. These  Restated  Bylaws  may be  altered,  amended or
repealed  or new Bylaws may be  adopted by the  stockholders  or by the board of
directors,  when such  power is  conferred  upon the board of  directors  by the
certificate of  incorporation,  at any regular meeting of the stockholders or of
the board of  directors  or any special  meeting of the  stockholders  or of the
board of directors if notice of such alteration,  amendment,  repeal or adoption
of new Bylaws be contained in the notice of such special meeting.

               Adopted by the Board of Directors by unanimous written consent as
of the 1st day of  November,  1988,  pursuant to notice given on the 25th day of
October, 1988.

                                             MASON  W. MCLAIN
                                             -----------------------------------
                                             President

JERRY L. CROW
-------------------------
Secretary

                                       47
<PAGE>
                                 EXHIBIT 3.2(b)
                          THE RESERVE PETROLEUM COMPANY
                              AMENDMENT TO BY-LAWS





                                   RESOLUTION
                                   ----------


                WHEREAS,  Article  II,  Section 2 of the  Corporation's  By-Laws
adopted November 1, 1988 states, "Annual meetings of stockholders, shall be held
on the first Tuesday of May if not a legal holiday, and if a legal holiday, then
on the next secular day following,  at 3:00 p.m., or at such other date and time
as shall be designated from time to time by the board of directors and stated in
the notice of the meeting,  at which they shall elect by plurality  vote a board
of directors, and transact such other business as may properly be brought before
the meeting."

                WHERAS, it is desirable and in the  Corporation's  best interest
to change the meeting date of the annual  meetings of stockholders to the fourth
Tuesday of May.

                RESOLVED:  That  Article  II,  Section  2 of  the  Corporation's
By-Laws be changed in part by substituting the phrase "fourth Tuesday of May" to
replace the phrase "first Tuesday of May".

The undersigned hereby certifies that the above Resolution is a true and correct
copy of a Resolution  adopted by the Board of Directors of The Reserve Petroleum
Company at a meeting held on November 14, 2000,  in  accordance  with  corporate
By-Laws at which meeting a quorum was present;  and that said Resolution has not
been revoked or amended in any manner.

In Witness  Whereof,  I have  hereunto  set my hand and affixed the seal of said
Company this 22nd day of March, 2001.





/s/  Jerry L. Crow
------------------
Jerry L. Crow
Secretary

                                       48