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


                                AMENDED FORM 10-Q



[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the period ended March 31, 2004

                                       or

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



                         Commission File Number 1-12396


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




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


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

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

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by a check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of April 14, 2004.


                   Common Stock $.001333 par value - 2,328,845

<PAGE>
                                THE BEARD COMPANY

                                      INDEX




PART I. FINANCIAL INFORMATION                                               Page
-----------------------------                                               ----

Item 1.   Financial Statements...............................................3

    Balance Sheets - March 31, 2004 (Unaudited) and
       December 31, 2003.....................................................3

    Statements of Operations - Three Months ended
       March 31, 2004 and 2003 (Unaudited)...................................4

    Statements of Shareholders' Equity (Deficiency) - Year ended
       December 31, 2003 and Three Months ended March 31, 2004 (Unaudited)...5

    Statements of Cash Flows - Three Months ended
       March 31, 2004 and 2003 (Unaudited)...................................6

    Notes to Financial Statements (Unaudited)................................8

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations.....................14

Item 3.   Quantitative and Qualitative Disclosures About Market Risk........19

Item 4.   Controls and Procedures...........................................19


PART II.  OTHER INFORMATION
--------  -----------------

Item 1.   Legal Proceedings.................................................19

Item 2.   Changes in Securities and Use of Proceeds.........................20

Item 6.   Exhibits and Reports on Form 8-K..................................20

Signatures..................................................................21
<PAGE>

PART I.  FINANCIAL INFORMATION.

Item 1.  Financial Statements

<TABLE>
                                       THE BEARD COMPANY AND SUBSIDIARIES
                                                 Balance Sheets
                                March 31, 2004 (Unaudited) and December 31, 2003
<CAPTION>
                                                                       March 31,             December 31,
                                    Assets                               2004                    2003
                                    ------                        --------------------   ---------------------
<S>                                                                     <C>                     <C>
Current assets:
     Cash and cash equivalents                                          $     156,000           $     216,000
     Accounts receivable, less allowance for doubtful
        receivables of $97,000 in 2004 and 2003                               119,000                  89,000
     Prepaid expenses and other assets                                         23,000                  34,000
     Assets of discontinued operations held for resale                         40,000                  55,000
                                                                  --------------------   ---------------------
             Total current assets                                             338,000                 394,000
                                                                  --------------------   ---------------------

Investments and other assets                                                   81,000                  81,000

Property, plant and equipment, at cost                                      1,849,000               1,843,000
     Less accumulated depreciation, depletion and amortization              1,406,000               1,392,000
                                                                  --------------------   ---------------------
             Net property, plant and equipment                                443,000                 451,000
                                                                  --------------------   ---------------------

Intangible assets, at cost                                                     95,000                 183,000
     Less accumulated amortization                                             91,000                 168,000
                                                                  --------------------   ---------------------
             Net intangible assets                                              4,000                  15,000
                                                                  --------------------   ---------------------

                                                                        $     866,000           $     941,000
                                                                  ====================   =====================


              Liabilities and Shareholders' Equity (Deficiency)
              -------------------------------------------------

Current liabilities:
     Trade accounts payable                                             $     116,000           $     133,000
     Accrued expenses                                                         348,000                 325,000
     Short-term debt                                                          125,000                  32,000
     Short-term debt - related entities                                       244,000                 661,000
     Current maturities of long-term debt                                       4,000                   5,000
     Liabilities of discontinued operations held for resale                   104,000                  92,000
                                                                  --------------------   ---------------------
             Total current liabilities                                        941,000               1,248,000
                                                                  --------------------   ---------------------

Long-term debt less current maturities                                          3,000               1,215,000

Long-term debt - related entities                                           2,789,000               3,668,000

Other long-term liabilities                                                   113,000                 143,000

Shareholders' equity (deficiency):
     Convertible preferred stock of $100 stated value;
        5,000,000 shares authorized; 27,838 shares, issued
        and outstanding                                                       889,000                 889,000
     Common stock of $.001333 par value per share; 7,500,000
        shares authorized; 2,328,845 shares issued and outstanding              3,000                   3,000
     Capital in excess of par value                                        37,991,000              37,941,000
     Accumulated deficit                                                  (41,848,000)            (44,151,000)
     Accumulated other comprehensive loss                                     (15,000)                (15,000)
                                                                  --------------------   ---------------------
             Total shareholders' equity (deficiency)                       (2,980,000)             (5,333,000)
                                                                  --------------------   ---------------------

Commitments and contingencies (note 7)
                                                                        $     866,000           $     941,000
                                                                  ====================   =====================
</TABLE>

See accompanying notes to financial statements.

<TABLE>
                                           THE BEARD COMPANY AND SUBSIDIARIES
                                                Statements of Operations
                                                      (Unaudited)
<CAPTION>
                                                                                     For the Three Months Ended
                                                                              ----------------------------------------
                                                                                  March 31,            March 31,
                                                                                     2004                 2003
                                                                              -------------------  -------------------
<S>                                                                                 <C>                   <C>
Revenues:
    Coal reclamation                                                                $          -          $    42,000
    Carbon dioxide                                                                       163,000              127,000
    China                                                                                      -                    -
    e-Commerce                                                                            25,000               25,000
    Other                                                                                      -                    -
                                                                              -------------------  -------------------
                                                                                         188,000              194,000
                                                                              -------------------  -------------------
Expenses:
    Coal reclamation                                                                     136,000              131,000
    Carbon dioxide                                                                        31,000               33,000
    China                                                                                134,000              161,000
    e-Commerce                                                                            28,000               32,000
    Selling, general and administrative                                                  199,000              209,000
    Depreciation, depletion and amortization                                              23,000               46,000
    Other                                                                                 10,000               15,000
                                                                              -------------------  -------------------
                                                                                         561,000              627,000
                                                                              -------------------  -------------------
Operating profit (loss):
    Coal reclamation                                                                    (135,000)             (89,000)
    Carbon dioxide                                                                       122,000               84,000
    China                                                                               (134,000)            (162,000)
    e-Commerce                                                                            (5,000)              (8,000)
    Other, primarily corporate                                                          (221,000)            (258,000)
                                                                              -------------------  -------------------
                                                                                        (373,000)            (433,000)
Other income (expense):
    Interest income                                                                        1,000                    -
    Interest expense                                                                    (121,000)            (128,000)
    Equity in net earnings of unconsolidated affiliates                                   68,000               43,000
    Gain on settlement                                                                 2,826,000                    -
    Gain on sale of assets                                                                 3,000                    -
    Other                                                                                 (7,000)                   -
                                                                              -------------------  -------------------

Earnings (loss) from continuing operations before income taxes                         2,397,000             (518,000)

Income tax benefit (expense) (note 6)                                                    (97,000)                   -

                                                                              -------------------  -------------------
Earnings (loss) from continuing operations                                             2,300,000             (518,000)

Earnings from discontinued operations (note 3)                                             3,000               20,000

                                                                              -------------------  -------------------
Net earnings (loss)                                                                 $  2,303,000          $  (498,000)
                                                                              ===================  ===================

Net earnings (loss) per average common share outstanding:
    Basic
       Earnings (loss) from continuing operations                                   $       0.91          $     (0.28)
       Earnings from discontinued operations                                                0.00                 0.01
                                                                              -------------------  -------------------
       Net earnings (loss)                                                          $       0.91          $     (0.27)
                                                                              ===================  ===================

Net earnings (loss) per average common share outstanding:
    Diluted
       Earnings (loss) from continuing operations                                   $       0.86          $     (0.28)
       Earnings from discontinued operations                                                0.00                 0.01
                                                                              -------------------  -------------------
       Net earnings (loss)                                                          $       0.86          $     (0.27)
                                                                              ===================  ===================

Weighted average common shares outstanding:
    Basic                                                                              2,543,000            1,829,000
                                                                              ===================  ===================
    Diluted                                                                            2,676,000            1,829,000
                                                                              ===================  ===================
</TABLE>

See accompanying notes to financial statements.

<TABLE>
                                                 THE BEARD COMPANY AND SUBSIDIARIES
                                           Statements of Shareholders' Equity (Deficiency)
<CAPTION>
                                                                                                                           Total
                                                                                            Accumulated                    Common
                                                                  Capital in                   Other                   Shareholders'
                                            Preferred   Common    Excess of  Accumulated   Comprehensive   Treasury        Equity
                                              Stock     Stock     Par Value    Deficit        Income         Stock     (Deficiency)
                                            ---------  ------- ------------ ------------- --------------  ------------ -------------
<S>                                         <C>        <C>     <C>          <C>           <C>            <C>           <C>
Balance, December 31, 2002                  $       -  $ 3,000 $38,207,000  $(41,182,000) $(   15,000)   $(1,846,000)  $(4,833,000)

       Net loss                                     -        -           -    (1,611,000)           -              -    (1,611,000)
       Comprehensive income:
         Foreign currency translation
         adjustment                                 -        -           -             -            -              -             -

                                                                                                                       -------------
    Comprehensive loss                              -        -           -             -            -              -    (1,611,000)
                                                                                                                       -------------

    Expiration of mandatory redemption
       option for preferred stock             889,000        -           -             -            -              -      889,000

    Issuance of stock warrants                      -        -      24,000             -            -              -       24,000

    Reservation of shares pursuant to
      deferred compensation plan                    -        -     198,000             -            -              -      198,000

    Issuance of shares pursuant to termination
         of deferred stock compensation plan        -        -    (488,000)   (1,358,000)           -      1,846,000            -

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

Balance, December 31, 2003                    889,000    3,000  37,941,000   (44,151,000)  (   15,000)             -    (5,333,000)

       Net earnings (unaudited)                     -        -           -     2,303,000            -              -     2,303,000
       Comprehensive income:
         Foreign currency translation
         adjustment (unaudited)                     -        -           -             -            -              -             -

                                                                                                                       -------------
    Comprehensive loss (unaudited)                  -        -           -             -            -              -     2,303,000
                                                                                                                       -------------

    Reservation of shares pursuant to deferred
         compensation plan (unaudited)              -        -      50,000             -            -             -         50,000

                                            ---------  ------- ------------ ------------- ------------  ------------   -------------
Balance, March 31, 2004 (unaudited)         $ 889,000  $ 3,000 $37,991,000  $(41,848,000) $(   15,000)   $        -    $(2,980,000)
                                            =========  ======= ============ ============= ============  ============   =============
</TABLE>

See accompanying notes to financial statements.

<TABLE>
                                           THE BEARD COMPANY AND SUBSIDIARIES
                                                Statements of Cash Flows
                                                       (Unaudited)
<CAPTION>
                                                                              For the Three Months Ended
                                                                       -----------------------------------------
                                                                        March 31, 2004         March 31, 2003
                                                                       -----------------------------------------
<S>                                                                          <C>                    <C>
Operating activities:
     Cash received from customers                                            $   159,000            $    69,000
     Gain on settlement                                                        2,826,000                      -
     Cash paid to suppliers and employees                                       (539,000)              (543,000)
     Interest received                                                             1,000                      -
     Interest paid                                                              (529,000)               (66,000)
     Operating cash flows of discontinued operations                             (38,000)                (5,000)
                                                                       ------------------    -------------------
          Net cash provided by (used in) operating activities                  1,880,000               (545,000)
                                                                       ------------------    -------------------

Investing activities:
     Acquisition of property, plant and equipment                                 (8,000)               (12,000)
     Proceeds from sale of assets                                                      -                  1,000
     Proceeds from sale of assets of discontinued operations                      43,000                 45,000
     Investment in and advances to fifty percent-owned
        subsidiary in Mexico                                                           -                 (1,000)
     Investment in and advances to fifty percent-owned
        subsidiary in China                                                            -                 (9,000)
     Other                                                                             -                 45,000
                                                                       ------------------    -------------------
          Net cash provided by investing activities                               35,000                 69,000
                                                                       ------------------    -------------------

Financing activities:
     Proceeds from term notes                                                    125,000                850,000
     Payments on line of credit and term notes                                (1,242,000)              (302,000)
     Proceeds from related party debt                                             15,000                157,000
     Payments on related party debt                                             (873,000)              (192,000)
     Capitalized costs associated with issuance of
       subordinated debt                                                               -                (66,000)
                                                                       ------------------    -------------------
     Net cash provided by (used in) financing activities                      (1,975,000)               447,000
                                                                       ------------------    -------------------

Net decrease in cash and cash equivalents                                        (60,000)               (29,000)

Cash and cash equivalents at beginning of period                                 216,000                 79,000
                                                                       ------------------    -------------------

Cash and cash equivalents at end of period                                   $   156,000            $    50,000
                                                                       ==================    ===================

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

Reconciliation of Net earnings (loss) to Net Cash Provided by (Used in) Operating Activities

                                                                              For the Three Months Ended
                                                                       -----------------------------------------
                                                                        March 31, 2004         March 31, 2003
                                                                       -----------------------------------------

Net earnings (loss)                                                          $ 2,303,000            $  (498,000)
Adjustments to reconcile net earnings (loss) to net cash
 provided by (used in) operating activities:
     Depreciation, depletion and amortization                                     24,000                 46,000
     Gain on sale of assets of discontinued operations                                 -                (45,000)
     Equity in operations of unconsolidated affiliates                           (68,000)               (43,000)
     Increase in impairment reserve                                               12,000                      -
     Non cash compensation expense                                                50,000                 57,000
     Net cash used by discontinued operations offsetting
       accrued impairment loss                                                    (2,000)                     -
     Increase in accounts receivable, prepaid expenses and
        other current assets                                                     (12,000)               (66,000)
     Increase (decrease) in accounts payable, accrued
        expenses and other liabilities                                          (427,000)                 4,000
                                                                       ------------------    -------------------
     Net cash provided by (used in) operating activities                     $ 1,880,000            $  (545,000)
                                                                       ==================    ===================
</TABLE>

See accompanying notes to financial statements.

<PAGE>

                       THE BEARD COMPANY AND SUBSIDIARIES
                          Notes to Financial Statements

                             March 31, 2004 and 2003
                                   (Unaudited)

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---  ------------------------------------------

     Basis of Presentation
     ---------------------
     The accompanying financial statements and notes thereto have been prepared
     pursuant to the rules and regulations of the Securities and Exchange
     Commission. Accordingly, certain disclosures normally prepared in
     accordance with accounting principles generally accepted in the United
     States have been omitted. The accompanying financial statements and notes
     thereto should be read in conjunction with the audited consolidated
     financial statements and notes thereto included in The Beard Company's 2003
     annual report on Form 10-K.

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

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

     The results of operations for the three-month period ended March 31, 2004,
     are not necessarily indicative of the results to be expected for the full
     year.

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

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

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

     Reclassifications
     -----------------
     Certain 2003 balances have been reclassified to conform to the 2004
     presentation.


(2)  ABILITY TO FUND OPERATIONS AND CONTINUE AS A GOING CONCERN
---  ----------------------------------------------------------

     Overview
     --------
     The accompanying financial statements have been prepared based upon the
     Company's belief that it will continue as a going concern. Despite the fact
     that the Company's revenues from continuing operations had declined in each
     of the four preceding years, they increased in 2003. The Company has
     incurred operating losses and negative cash flows from operations during
     each of the last five years. Meanwhile, the Coal Segment is currently
     pursuing six different projects, which are in various stages of
     negotiation. Due to the significant improvement in market conditions in the
     coal industry in recent months the Company now expects to commence at least
     two, and possibly three, of these projects by August 1 of this year. If
     such projects materialize as expected it will enable the segment to achieve
     profitability for the first time since 1998 and will position the segment
     to remain profitable for a number of years. The exact timing of the
     projects is uncertain but, subject to finalizing the definitive agreements,
     all three projects are considered to have a high probability of activity.
     (See "Additional Details" below).

     Moreover, the long-awaited Settlement in the McElmo Dome litigation has now
     been received. A total of $1,162,000 was received on July 31, 2003, and
     $2,826,000 was received on March 26, 2004. Receipt of the Settlement
     substantially increases the likelihood that 2004 will be a profitable year
     while at the same time enhancing the Company's liquidity and bolstering its
     balance sheet ratios. The Company is continuing to pursue financing for
     fertilizer projects in China. Such efforts have not been successful to
     date; accordingly, the Company has broadened its efforts to include the
     pursuit of funding for a mini-plant to serve as a demonstration plant for
     our licensed technology. In addition, the Company finalized its first
     licensing arrangement in its e-Commerce Segment in March of 2003. Although
     the e-Commerce licensing arrangement will not make the segment profitable
     in 2004, the Company believes the arrangement has the potential to make the
     segment profitable in 2005 and subsequent years.

     Beginning in January 2002 and continuing through March 31, 2004, the
     Company took a number of steps to reduce its negative cash flow. The
     Company's Chairman and President deferred a major portion of their base
     salary into the Company's deferred stock compensation plans (the "DSC
     Plans"), and the Company's outside directors deferred all of their
     directors' fees into such plans. The President of Beard Technologies has
     deferred a portion of his salary until the first coal project is generating
     positive cash flow. The Company has suspended its 100% matching
     contribution (up to a cap of 5% of gross salary) under its 401(k) Plan.
     Three private debt placements raised gross proceeds of $1,829,000 during
     such period. These borrowings were supplemented in November of 2003 by a
     loan of $200,000 from a related party, in December of 2003 by a loan of
     $103,000 from an unconsolidated subsidiary, and in February and March of
     2004 by a $125,000 loan from a local bank which was repaid in April. These
     measures enabled the Company to continue operating until the Settlement was
     finalized. As a result there has been a substantial amount of dilution to
     the Company's common equity. During such period 339,000 warrants were
     issued in connection with the private debt placements, and 489,000 Stock
     Units were accrued in the participants' accounts as a result of deferrals
     of salary into the DSC Plans. Additional dilution also occurred due to an
     adjustment to the Preferred Stock conversion ratio resulting from the
     issuance of the warrants and the salary deferrals. Termination of two of
     the DSC Plans resulted in the issuance of 500,000 common shares in 2003,
     leaving 214,000 Stock Units accrued in the remaining plan at March 31,
     2004.

     The Company has just commenced another private debt placement which is
     expected to raise a total of $1,200,000 if fully subscribed. An affiliate
     of the Company's Chairman has subscribed for $500,000 of the offering
     subject to finalization of a bank loan which is expected to be approved on
     May 19, 2004. This offering, if successfully concluded, will provide the
     working capital necessary to retire the Company's remaining short-term debt
     and to fund the Company's operations until the anticipated Coal projects
     have been commenced and are producing positive cash flow.

     Additional Details
     ------------------
     Following receipt of the second installment of the McElmo Dome Settlement,
     the Company paid down $2,635,000 of its indebtedness which totaled
     $5,581,000 at year-end 2003. Cash and cash equivalents decreased from
     $216,000 at December 31, 2003, to $156,000 at March 31, 2004.

     The Company's principal business is coal reclamation, and this is where
     management's operating attention is primarily focused. The Coal Segment is
     currently pursuing six different projects which collectively involve the
     recovery of five ponds and the operation of a fine coal preparation
     circuit. We expect to have the final draft of the definitive agreement on
     one of the projects by the end of May, and anticipate that the agreement
     will be concluded shortly thereafter and that we will commence this project
     by July 1. We have had lengthy discussions with a large private company
     that has indicated a desire to form a 50/50 joint venture with us on this
     project. We expect to reach a final agreement on a second project by
     mid-June and commence operations in late June. We expect to be able to
     finance this project through a loan from the U.S. Department of Agriculture
     with our equipment providing the equity needed to secure the loan. We have
     been advised by a large utility that they want us to take over their plant
     feed operations at a recovery pond we operated in 1998, and believe this
     agreement will be finalized by the end of June. This same operator has
     decided to team with us on a pond recovery project which is expected to be
     put out for the final stage of bidding later this year. The timing of the
     fifth project is uncertain, but it appears we are still very much in the
     running. We have submitted a proposal on the sixth project which has been
     temporarily delayed. Although the exact timing of the first three projects
     is uncertain, they are considered to have a high probability of occurrence.
     The last three projects are lower probability, although their economics are
     good. However, no definitive contracts have as yet been signed on any of
     the projects, and there is no assurance that the required financing will be
     obtained or that any of the projects will materialize.

     The China Segment has obtained exclusive license agreements for two
     composting technologies and has been pursuing financing for fertilizer
     projects in several different areas. The Company is of the opinion that
     there is an adequate market for a number of such projects in each of the
     areas involved.

     The Company has retained three different investment banking firms who are
     independently pursuing, on a non-exclusive basis, financing for the coal
     and China projects. It appears that the efforts of the first firm engaged
     have been unsuccessful. The second firm, which has been pursuing funding
     for China and for coal projects, is currently in touch with a party
     interested in pursuing the coal financing. The third firm, which is
     pursuing funding for China, has generated some interest and is still
     working. We are also pursuing financing for two plants in China utilizing a
     funding source that one of our technology partners has developed. To date
     no financing commitments have been received, and there is no assurance that
     any of the financing efforts will be successful.

     The Company has just commenced another private debt placement which is
     expected to raise a total of $1,200,000 if fully subscribed. An affiliate
     of the Company's Chairman has subscribed for $500,000 of the offering
     subject to finalization of a bank loan which is expected to be approved on
     May 19, 2004. This offering, if successfully concluded, will provide the
     working capital necessary to retire the Company's remaining short-term debt
     and to fund the Company's operations until the anticipated Coal projects
     have been commenced and are producing positive cash flow.

     In addition, in April of 2004, the Company received cash of approximately
     $122,000 from the sale of a portion of the property in a real estate
     limited partnership. The Company also generated cash of $44,000 from the
     sale of assets from two of its discontinued segments during the first
     quarter of 2004, and expects to generate at least $71,000 more from the
     disposition of the remaining assets by year-end. It also has certain other
     assets it can sell to generate cash if necessary.

     The Company believes that if the current financing efforts are successful,
     they will provide sufficient working capital to sustain the Company's
     activities until the operations of the projects under development in the
     Coal Segment have come on stream and the Company is generating positive
     cash flow from operations. If such efforts are not successful or are only
     partially successful, then a major restructuring of the Company's
     operations will become necessary in the near term in order that the Company
     can continue as a going concern.

(3)  DISCONTINUED OPERATIONS
---  -----------------------

     ITF Segment
     -----------
     In 1999 the Company's Board of Directors adopted a formal plan to
     discontinue its interstate travel facilities ("ITF") Segment. ITF recorded
     no revenues or losses for the three months ended March 31, 2004. ITF
     recorded no revenues for the three months ended March 31, 2003 and incurred
     $8,000 of losses for the same period. Such losses were charged to
     operations.

     As of March 31, 2004, the ITF Segment had no significant assets or
     liabilities.

     BE/IM Segment
     -------------
     In 1999 the Management Committee of a joint venture 40%-owned by the
     Company adopted a formal plan to discontinue the business and dispose of
     its assets. As a result, Beard's share of the venture's operating results
     has been reported as discontinued for all periods presented in the
     accompanying statements of operations. The joint venture was dissolved in
     2000 and the Company took over the remaining assets and liabilities.

     The Company recorded no revenues for either of the three-month periods
     ended March 31, 2004 or 2003. The Company recorded $15,000 in earnings for
     the first quarter of 2004 primarily as a result of the sale of equipment,
     and charged operating losses of $3,000 against an accrual for anticipated
     expenses related to the shutdown of one of its plants during the 2004 first
     quarter.

     As of March 31, 2004, the significant assets related to the operations
     consisted primarily of equipment with no estimated net realizable value.
     The significant liabilities related to remaining operations consisted
     primarily of accrued expenses totaling $60,000 related to the shutdown of
     operations. The Company is actively pursuing opportunities to sell the
     remaining assets and expects the disposition to be completed by December
     31, 2004.

     WS Segment
     ----------
     In August 2001 the Company made the decision to cease pursuing
     opportunities in Mexico and the WS Segment was discontinued. In December
     2001 all of the sand separators owned by the 100%-owned company in the WS
     Segment were sold for $100,000. The Company is now pursuing the sale of all
     remaining equipment owned by the segment.

     The segment recorded no revenues for either the first quarter of 2004 or
     2003. Beard's share of operating results from the discontinued segment were
     losses of $12,000 and income of $28,000 for the three months ended March
     31, 2004 and 2003, respectively. Results for the first quarter of 2003
     included gains on sales of equipment totaling $45,000.

     As of March 31, 2004, the significant assets of the WS Segment consisted of
     fixed assets with a recorded value of $39,000. The significant liabilities
     of the entity consisted of trade accounts payable and accrued expenses
     totaling $58,000. It is anticipated that all liabilities of the segment
     will be paid prior to December 31, 2004.

(4)  CONVERTIBLE PREFERRED STOCK
---  ---------------------------

     Effective January 1, 2003, the Company's preferred stock became convertible
     into Beard common stock. On April 14, 2004, each share of Beard preferred
     stock was convertible into 4.7936633788 (133,446) common shares. The
     conversion ratio will be adjusted as additional warrants are issued or as
     additional shares of stock are credited to the accounts of the Company's
     Chairman or President in the Company's Deferred Stock Compensation Plan.
     Fractional shares will not be issued, and cash will be paid in redemption
     thereof.

(5)  LOSS PER SHARE
---  --------------

     Basic earnings (loss) per share data is computed by dividing earnings
     (loss) attributable to common shareholders by the weighted average number
     of common shares outstanding for the period. Diluted earnings per share
     reflect the potential dilution that could occur if the Company's
     outstanding stock options and warrants were exercised (calculated using the
     treasury stock method) and if the Company's preferred stock were converted
     to common stock.

     Diluted loss per share from continuing operations in the statements of
     operations exclude potential common shares issuable upon conversion of
     convertible preferred stock as the effect would be anti-dilutive. Diluted
     earnings (loss) per share exclude potential common shares issuable upon
     exercise of stock options and warrants, as the effect would be
     anti-dilutive. Weighted average shares of 2,676,000 for the diluted
     earnings per share calculation for the three months ended March 31, 2004
     are composed of basic common shares of 2,543,000 and 133,000 shares of
     preferred stock converted to common shares.

(6)  INCOME TAXES
---  ------------

     In accordance with the provisions of the Statement of Financial Accounting
     Standard No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), the
     Company's net deferred tax asset is being carried at zero book value, which
     reflects the uncertainties of the Company's utilization of the future net
     deductible amounts. The Company recorded a provision of $97,000 for federal
     alternative minimum taxes for the three months ended March 31, 2004. The
     Company recorded no provision for taxes for the three months ended March
     31, 2003.

     At March 31, 2004, the Company estimates that it had the following income
     tax carryforwards available for both income tax and financial reporting
     purposes (in thousands):


                                                       Expiration
                                                          Date         Amount
                                                       ----------      ------

Federal regular tax operating loss carryforwards        2004-2008      $51,300

Tax depletion carryforward                              Indefinite     $ 3,400


(7)  COMMITMENTS AND CONTINGENCIES
---  -----------------------------

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

     The Company has an indemnity obligation to its institutional preferred
     stockholder and one of its assignees for certain losses (i) arising out of
     the ownership and/or operation of Beard Oil's former oil and gas assets,
     including environmental liabilities; (ii) arising under any employee
     benefit or severance plan; or (iii) relating to any misrepresentation or
     inaccuracy in any representation made by the Company or Beard Oil in
     connection with a restructure effected in 1993.

     The Company has no liability under the indemnity obligation unless the
     accumulated damage or loss incurred by the Buyer or its assignees in
     connection with such Claims exceeds $250,000 in the aggregate. The maximum
     amount of future payments that could be required under the indemnity has no
     limitation. The principal exposure under the obligation would have been for
     any environmental problems which existed, at the time of the sale, on the
     oil and gas properties sold. If any Claims were to be made at this point
     they would presumably need to be made first against any and all of the
     subsequent owners of the properties involved; if any liability was then
     determined to exist it would presumably be assigned first to such
     subsequent owners. In the event the Company should be required to pay an
     amount under this obligation, it does not believe any of such amount could
     be recovered from third parties. However, during the 10 years and seven
     months subsequent to the date of the Restructure there have been no Claims,
     and the Company has no reason to believe that there will be any. For these
     reasons, no reserve has ever been established for the liability, because
     none is believed to exist.

(8)  BUSINESS SEGMENT INFORMATION
---  ----------------------------

     The Company manages its business by products and services and by geographic
     location (by country). The Company evaluates its operating segments'
     performance based on earnings or loss from operations before income taxes.
     The Company had four reportable segments in the first quarter of 2004 and
     2003: Coal, Carbon Dioxide, China and e-Commerce.

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

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

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


<TABLE>
<CAPTION>
     Three months ended                           Carbon
       March 31, 2004                 Coal        Dioxide     China     e-Commerce     Totals
     ------------------               ----        -------     -----     ----------     ------
      <S>                             <C>         <C>         <C>         <C>         <C>
      Revenues from
        external  customers           $    -      $ 163       $   -       $  25       $  188
      Segment profit (loss)            (135)        122        (134)        (30)        (177)
      Segment assets                      36        460          57           9          562

     Three months ended
       March 31, 2003
     ------------------
      Revenues from
        external  customers           $   42      $ 127       $   -       $  25       $  194
      Segment profit (loss)              (89)        84        (171)         (9)        (185)
      Segment assets                      72        491         452          63        1,078
</TABLE>

     Reconciliation of total reportable segment loss to consolidated loss from
     continuing operations before income taxes is as follows for the three
     months ended March 31, 2004 and 2003 (in thousands):

<TABLE>
<CAPTION>
                                                                       2004              2003
                                                                     -------            -------
      <S>                                                            <C>                <C>
      Total loss for reportable segments                             $  (177)           $  (185)
      Eliminate loss from China operations accounted for
          as an equity investment                                          -                  -
      Equity in loss from China operations accounted for
          as an equity investment                                          -                 (9)
      Net corporate income (costs) not allocated to segments           2,574               (324)
                                                                     -------            -------
           Total consolidated earnings (loss) from continuing
               operations                                            $ 2,397            $  (518)
                                                                     =======            =======
</TABLE>
<PAGE>
                       THE BEARD COMPANY AND SUBSIDIARIES


                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

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

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

     The following discussion focuses on material changes in the Company's
financial condition since December 31, 2003 and results of operations for the
quarter ended March 31, 2004, compared to the prior year first quarter. Such
discussion should be read in conjunction with the Company's financial statements
including the related footnotes.

     In preparing the discussion and analysis, the Company has presumed readers
have read or have access to the discussion and analysis of the prior year's
results of operations, liquidity and capital resources as contained in the
Company's 2003 Form 10-K.

     The Coal Segment is in the business of operating coal fines reclamation
facilities in the U.S. and provides slurry pond core drilling services, fine
coal laboratory analytical services and consulting services. The CO2 Segment
consists of the production of CO2 gas. The China Segment is pursuing
environmental opportunities in China focusing on the installation and
construction of facilities which utilize proprietary composting technology
licensed from third parties. The e-Commerce Segment consists of a 71%-owned
subsidiary which is engaged in a strategy to develop licensing agreements and
other fee based arrangements with companies implementing technology in conflict
with our intellectual property.

     In 1999 the Company adopted a plan to discontinue its ITF Segment, and
those operations were reflected as discontinued operations in 1998. The majority
of the assets of the ITF Segment were disposed of in 1999 and the last remaining
assets were disposed of in 2003. In 1999 the Company adopted a plan to
discontinue its BE/IM Segment, and those operations have since been reflected as
discontinued. The Company is now in the process of liquidating those assets. In
May 2001 the fixed assets of the 50%-owned company (accounted for as an equity
investment) involved in the WS Segment were sold. In August 2001 the Company
ceased pursuing opportunities in Mexico related to the sand separator assets
previously operated in Mexico in the WS Segment, and the Company has since been
pursuing the sale of the segment's remaining assets. As a result, the operations
of the WS Segment have now been reflected as discontinued.


Material changes in financial condition - March 31, 2004 as compared with
December 31, 2003.

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

<TABLE>
<CAPTION>
                                    March 31,        December 31,     Increase
                                      2004              2003         (Decrease)
                                    --------         -----------     ----------
<S>                               <C>                <C>             <C>
Cash and cash equivalents         $  156,000         $  216,000      $ (60,000)

Working capital                   $ (603,000)        $ (854,000)     $ 251,000

Current ratio                      0.36 to 1          0.32 to 1
</TABLE>

     During the first quarter of 2004, the Company's working capital deficit
decreased by $251,000 from $(854,000) as of December 31, 2003. The Company
received $2,826,000 as the second installment of the McElmo Dome Settlement. The
Company's CO2 Segment provided cash of $164,000. The Company used $2,635,000 to
repay debt and accrued interest, including $1,348,000 to related parties.
$135,000 of working capital were used to help fund the operations of the Coal
Segment. A total of $134,000 was utilized in the pursuit of environmental
opportunities in China. $30,000 were used to fund the activities of the
e-Commerce Segment. The remainder of the working capital was utilized to fund
other operations.

     In 2002 the Company supplemented its $300,000 credit line with a commercial
bank by arranging for an increase in its credit line from an affiliate of the
Company's chairman. The long-term line of credit from the related party was
increased from $2,250,000 in September of 2001 to $3,000,000 in October of 2002
to provide additional working capital, and was supplemented by a $150,000
short-term line of credit from the same party in November of 2002, which was
increased to $375,000 in November of 2003. These lines were supplemented by (i)
three private placements of notes and warrants totaling $1,829,000 which were
completed in 2002 and February and July of 2003 and (ii) loans totaling $303,000
from a related party and an unconsolidated subsidiary in November and December
of 2003 and (iii) borrowings on a line of credit from a bank totaling $125,000
in February and March of 2004. Such funds were needed to provide additional
working capital, improve liquidity and to bridge the gap until the distribution
of the McElmo Dome settlement had been completed. In addition, the Company has
been disposing of the remaining assets from its discontinued segments as
opportunities have become available and is continuing to pursue the sale of the
few remaining assets.

     Receipt of the settlement from the McElmo Dome litigation has significantly
improved the Company's balance sheet, income statement, and debt ratios. The
Company received $1,162,000 of the settlement on July 31, 2003, and $2,826,000
on March 26, 2004. Upon receipt of the second installment of the settlement, the
Company was able to eliminate $2,635,000 of its total indebtedness and accrued
interest.

     The Company's principal business is coal reclamation, and this is where
management's operating attention is primarily focused. The Coal Segment is
currently pursuing six different projects which collectively involve the
recovery of five ponds and the operation of a fine coal preparation circuit. We
expect to have the final draft of the definitive agreement on one of the
projects by the end of May, and anticipate that the agreement will be concluded
shortly thereafter and that we will commence this project by July 1. We have had
lengthy discussions with a large private company that has indicated a desire to
form a 50/50 joint venture with us on this project. We expect to reach a final
agreement on a second project by mid-June and commence operations in late June.
We expect to be able to finance this project through a loan from the U.S.
Department of Agriculture with our equipment providing the equity needed to
secure the loan. We have been advised by a large utility that they want us to
take over their plant feed operations at a recovery pond we operated in 1998,
and believe this agreement will be finalized by the end of June. This same
operator has decided to team with us on a pond recovery project which is
expected to be put out for the final stage of bidding later this year. The
timing of the fifth project is uncertain, but it appears we are still very much
in the running. We have submitted a proposal on the sixth project which has been
temporarily delayed. Although the exact timing of the first three projects is
uncertain, they are considered to have a high probability of occurrence. The
last three projects are lower probability, although their economics are good.
However, no definitive contracts have as yet been signed on any of the projects,
and there is no assurance that the required financing will be obtained or that
any of the projects will materialize.

     The China Segment has obtained exclusive license agreements for two
composting technologies and has been pursuing financing for fertilizer projects
in several different areas. The Company is of the opinion that there is an
adequate market for a number of such projects in each of the areas involved.

     The Company has retained three different investment banking firms who are
independently pursuing, on a non-exclusive basis, financing for the coal and
China projects. It appears that the efforts of the first firm engaged have been
unsuccessful. The second firm, which has been pursuing funding for China and for
coal projects, is currently in touch with a party interested in pursuing the
coal financing. The third firm, which is pursuing funding for China, has
generated some interest and is still working. We are also pursuing financing for
two plants in China utilizing a funding source that one of our technology
partners has developed. To date no financing commitments have been received, and
there is no assurance that any of the financing efforts will be successful.

     The Company has just commenced another private debt placement which is
expected to raise a total of $1,200,000 if fully subscribed. An affiliate of the
Company's Chairman has subscribed for $500,000 of the offering subject to
finalization of a bank loan which is expected to be approved on May 19, 2004.
This offering, if successfully concluded, will provide the working capital
necessary to retire the Company's remaining short-term debt and to fund the
Company's operations until the anticipated Coal projects have been commenced and
are producing positive cash flow.

     The Company believes that if the current financing efforts are successful,
they will provide sufficient working capital to sustain the Company's activities
until the operations of the projects under development in the Coal and China
Segments have come on stream and the Company is generating positive cash flow
from operations. If such efforts are not successful or are only partially
successful, then a major restructuring of the Company's operations will become
necessary in the near term in order that the Company can continue as a going
concern.


Material changes in results of operations - Quarter ended March 31, 2004 as
compared with the Quarter ended March 31, 2003.

     The Company recorded $2,303,000 in income for the first quarter of 2004
compared to a loss for the first quarter of 2003 of $498,000. The operating loss
in the Coal Segment increased by $46,000. The China Segment incurred an
operating loss of $134,000 for the first quarter of 2004 compared to $162,000
for the same period in 2003. The operating profit in the CO2 Segment increased
$38,000. The e-Commerce Segment incurred operating losses of $5,000 for the
first quarter of 2004 compared to $8,000 in the first quarter of 2003. The
operating loss in Other activities for the first quarter of 2004 decreased
$37,000 compared to the same period in 2003. As a result, the operating loss for
the current quarter decreased $60,000 to $373,000 versus $433,000 in the
corresponding quarter of the prior year.

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

<TABLE>
<CAPTION>
                                              2004           2003
                                              ----           ----
<S>                                        <C>            <C>
     Operating profit (loss):
        Coal reclamation                   $(135,000)     $ (89,000)
        Carbon dioxide                       122,000         84,000
        China                               (134,000)      (162,000)
        e-Commerce                            (5,000)        (8,000)
                                           ---------      ---------
            Subtotal                        (152,000)      (175,000)
     Other                                  (221,000)      (258,000)
                                           ---------      ---------
                                           $(373,000)     $(433,000)
                                           =========      =========
</TABLE>

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


Coal reclamation

     The segment recorded no revenues for the first quarter of 2004 compared to
$42,000 for the first quarter of 2003. The segment's consulting and coring
business decreased sharply in the current quarter as the Company focused its
efforts on the projects mentioned above. Operating costs increased $5,000 to
$136,000 for the first quarter of 2004 compared to $131,000 for the same period
in 2003, primarily as a result of increased marketing efforts for the segment's
technology. As a result, the operating loss increased $46,000 to $135,000 for
the first quarter of 2004 compared to the first three months of 2003.


Carbon dioxide

     First quarter 2004 operations reflected an operating profit of $122,000
compared to $84,000 for the 2003 first quarter. The sole component of revenues
for this segment is the sale of CO2 gas from the working and overriding royalty
interests of the Company's two carbon dioxide producing units in Colorado and
New Mexico. Operating revenues in this segment increased $36,000 or 28% to
$163,000 for the first three months of 2004 compared to $127,000 for the same
period in 2003. The increase in revenue, which was primarily due to an increase
in the paid volumes to the Company's interest for CO2 gas during the quarter,
was helped slightly by a $1,000 decrease in lifting costs for the current
quarter.


China

     The China Segment incurred an operating loss of $134,000 for the first
three months of 2004 compared to $162,000 for the same period in 2003. The
smaller loss is attributable to lower SG&A expenses in 2004 compared to 2003 as
the Company seeks projects to utilize the proprietary composting technology of
REUSE.


e-Commerce

     The e-Commerce Segment incurred an operating loss of $5,000 for the first
quarter of 2004 versus an operating loss of $8,000 in the prior year quarter.
The segment finalized its initial patent license agreement in the first quarter
of 2003 and recorded revenues of $25,000 from a license fee in both the prior
and current year quarter. The segment also incurred $3,000 less in SG&A costs in
the quarter ended March 31, 2004 compared to the first quarter in 2003. The
reduced loss reflects starpay's shift in focus from the development of its
technology to concentrate on developing licensing arrangements and other fee
based arrangements with companies implementing technology in conflict with
starpay's intellectual property.


Other activities

     Other operations, consisting primarily of general and corporate activities,
generated a $37,000 smaller operating loss for the first quarter of 2004 as
compared to the same period last year. The decreased loss for the first quarter
of 2004 compared to the same period in 2003 was due primarily to a $19,000
decrease in amortization expense related to capitalized costs associated with
the three debt issues. Additionally, delay rental costs decreased approximately
$5,000 for the current quarter compared to the same period in the prior year.
Numerous other types of expenses also decreased, resulting in a $10,000 decrease
for the current quarter compared to the prior year quarter.


Selling, general and administrative expenses

     The Company's selling, general and administrative expenses ("SG&A") in the
current quarter decreased to $199,000 from $209,000 in the 2003 first quarter.
Other activities incurred $10,000 less in SG&A costs for the first quarter of
2004 compared to the same period in 2003 as a result of decreased expenses
associated with the issuance of the subordinated debt in the first quarter of
2003.


Depreciation, depletion and amortization expenses

     DD&A expense decreased $23,000 for the first quarter of 2004 compared to
the same period of 2003 primarily as a result of the amortization of capitalized
costs associated with the three debt issues completed since the close of the
first quarter of 2002. The capitalized costs associated with those issues were
almost completely amortized prior to the start of the first quarter of 2004.


Other income and expenses

     The other income and expenses for the first quarter of 2004 netted to
earnings of $2,770,000 compared to a loss of $85,000 for the same period in
2003. The Company received the second installment of the McElmo Dome settlement
totaling $2,826,000 in March of 2004 with no comparable receipt in the first
quarter of 2003. Interest income was $1,000 for the first quarter of 2004
compared to none for the same period in 2003. Interest expense was $7,000 lower
in the first quarter of 2004 compared to the first quarter of 2003 as a result
of the repayment of $2,635,000 in debt near the end of March 2004. The Company's
equity in earnings of unconsolidated affiliates reflected income of $68,000 for
the first quarter of 2004 compared to $43,000 for the same period in 2003. The
Company realized a gain on sale of assets for the three months ended March 31,
2004 of $3,000 compared to none for the same period in 2003.


Income taxes

     The Company recorded a provision of $97,000 for federal alternative minimum
taxes for the first quarter of 2004 compared to none for the same period in
2003. The Company has not recorded any financial benefit attributable to its
various tax carryforwards due to uncertainty regarding their utilization and
realization.


Discontinued operations

ITF Segment

     In 1999 the Company's Board of Directors adopted a formal plan to
discontinue its interstate travel facilities ("ITF") Segment. ITF recorded no
revenues or losses for the three months ended March 31, 2004. ITF recorded no
revenues for the three months ended March 31, 2003 and incurred $8,000 of losses
for the same period. Such losses were charged to operations.

     As of March 31, 2004, the ITF Segment had no significant assets or
liabilities.

BE/IM Segment

     In 1999 the Management Committee of a joint venture 40%-owned by the
Company adopted a formal plan to discontinue the business and dispose of its
assets. As a result, Beard's share of the venture's operating results has been
reported as discontinued for all periods presented in the accompanying
statements of operations. The joint venture was dissolved in 2000 and the
Company took over the remaining assets and liabilities.

     The Company recorded no revenues for either of the three-month periods
ended March 31, 2004 or 2003. The Company recorded $15,000 in earnings for the
first quarter of 2004 primarily as a result of the sale of equipment, and
charged operating losses of $3,000 against an accrual for anticipated expenses
related to the shutdown of one of its plants during the 2004 first quarter.

     As of March 31, 2004, the significant assets related to the operations
consisted primarily of equipment with no estimated net realizable value. The
significant liabilities related to remaining operations consisted primarily of
accrued expenses totaling $60,000 related to the shutdown of operations. The
Company is actively pursuing opportunities to sell the remaining assets and
expects the disposition to be completed by December 31, 2004.

WS Segment

     In August 2001 the Company made the decision to cease pursuing
opportunities in Mexico and the WS Segment was discontinued. In December 2001
all of the sand separators owned by the 100%-owned company in the WS Segment
were sold for $100,000. The Company is now pursuing the sale of all remaining
equipment owned by the segment.

     The segment recorded no revenues for either the first quarter of 2004 or
2003. Beard's share of operating results from the discontinued segment were
losses of $12,000 and income of $28,000 for the three months ended March 31,
2004 and 2003, respectively. Results for the first quarter of 2003 included
gains on sales of equipment totaling $45,000.

     As of March 31, 2004, the significant assets of the WS Segment consisted of
fixed assets with a recorded value of $39,000. The significant liabilities of
the entity consisted of trade accounts payable and accrued expenses totaling
$58,000. It is anticipated that all liabilities of the segment will be paid
prior to December 31, 2004.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

     At March 31, 2004, the Company had long-term debt of $2,796,000. The
long-term debt has fixed interest rates and therefore, the Company's interest
expense and operating results would not be affected by an increase in market
interest rates for this item. At March 31, 2004, a 10% increase in market
interest rates would have reduced the fair value of the Company's debt by
$33,000.

     The Company has no other market risk sensitive instruments.


Item 4.  Controls and Procedures.

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


PART II.     OTHER INFORMATION.

Item 1.  Legal Proceedings.

McElmo Dome Litigation
----------------------

     On December 24, 2002, the Tenth Circuit Court of Appeals issued an Opinion
affirming the May 2002 decision of the Colorado District Court which approved
the Settlement. In March of 2003, objectors to the Settlement filed a Petition
for Certiorari asking the U.S. Supreme Court for review. In early June the U.S.
Supreme Court denied the Petition and the Settlement became final in July of
2003. Funds were paid by the Defendants to the Settlement Administrator and the
Company received its $1,151,000 share of the first installment of the Settlement
in July. The Company received the second installment of $2,826,000 on March 26,
2004. The Company has expensed all of its share, totaling $450,000 from 1996
through March of 2004, of the costs of the litigation. Accordingly, the
Settlement proceeds have resulted in net income, except for alternative minimum
taxes presently estimated at $97,000.


VISA Litigation
---------------

     In May of 2003 the Company's 71%-owned subsidiary, starpay.com, l.l.c.,
joined with VIMachine, Inc. in filing a suit in the U.S. District Court for the
Northern District of Texas, Dallas Division against Visa International Service
Association and Visa USA, Inc., both d/b/a Visa (Case No. CIV:3-03-CV0976-L).
VIMachine is the holder of a U.S. Patent (the "VIMachine Patent") that covers,
among other things, an improved method of authenticating the cardholder involved
in an Internet payment transaction. On July 25, 2003, the Plaintiffs filed, with
the express written consent of the Defendants, an Amended Complaint. The suit as
amended seeks damages and injunctive relief (i) related to Visa's infringement
of the VIMachine Patent; (ii) related to Visa's breach of certain
confidentiality agreements express or implied; (iii) for alleged fraud on the
Patent Office based on Visa's pending patent application; and (iv) under
California's common law and statutory doctrines of unfair trade practices,
misappropriation and/or theft of starpay's intellectual property and/or trade
secrets. In addition, Plaintiffs are seeking attorney fees and costs related to
the foregoing claims.

     In August of 2003 the Defendants filed a motion to dismiss the second,
third and fourth claims. Despite objections to such motion by the Plaintiffs,
the Judge on February 11, 2004, granted Defendants' motion to dismiss the second
and third causes of action, and denied the motion insofar as it sought to
dismiss the fourth cause of action. Accordingly, Plaintiffs' fourth claim
(misappropriation and/or theft of intellectual property and/or trade secrets)
will continue to move forward.

     On February 23, 2004, Defendants filed an Answer to Plaintiffs' Amended
Complaint. In such filing Visa denied each allegation relevant to claim four.
Visa asked that the VIMachine Patent be declared invalid, and, even if it is
found valid, Visa asked that they be found not to infringe the VIMachine Patent.
Visa asked for other related relief based on these two allegations.


Item 2.  Changes in Securities.

     Effective January 1, 2003, each share of Beard preferred stock became
convertible into Beard common stock. Each share of Beard preferred was
convertible into 4.7936633788 (133,446) shares on April 14, 2004. The conversion
ratio will be adjusted as additional warrants are issued or as additional shares
of stock are credited to the accounts of the Company's Chairman or President in
the Company's 2003-2 Deferred Stock Compensation Plan. Fractional shares will
not be issued, and cash will be paid in redemption thereof.


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

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

3.1    Certificate of Incorporation of The New Beard Company as filed with the
       Secretary of State of Oklahoma on September 20, 2000. (This Exhibit has
       been previously filed as Exhibit 3(ii) to Registrant's Form 10-Q for the
       period ended September 30, 2000, filed on November 20, 2000, and same is
       incorporated herein by reference).

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

4      Instruments defining the rights of security holders:

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

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

31     Rule 13a-14(a)/15d-14(a) Certifications:

31.1   Chief Executive Officer Certification required by Rule 13a-14(a) or Rule
       15d-14(a).

31.2   Chief Financial Officer Certification required by Rule 13a-14(a) or Rule
       15d-14(a).


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

(b) No report on Form 8-K was filed during the period covered by this report.

Items 3, 4 and 5 are not applicable and have been omitted.


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                (Registrant) THE BEARD COMPANY

                                             /s/Herb Mee, Jr.
(Date)   May 14, 2004                           Herb Mee, Jr., President and
                                                   Chief Financial Officer

                                             /s/Jack A. Martine
(Date)   May 14, 2004                           Jack A. Martine, Controller and
                                                   Chief Accounting Officer


                                 EXHIBIT INDEX

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

3.1        Certificate of Incorporation of      Incorporated herein by reference
           The New Beard Company as filed
           with the Secretary of State of
           Oklahoma on September 20, 2000.

3.2        Registrant's By-Laws as currently    Incorporated herein by reference
           in effect.

4          Instruments defining the rights of
           security holders:

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

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

31.1       Chief Executive Officer              Filed herewith electronically
           Certification required by Rule
           13a-14(a) or Rule 15d-14(a).

31.2       Chief Financial Officer              Filed herewith electronically
           Certification required by Rule
           13a-14(a) or Rule 15d-14(a).