Business Description

Overview The Reserve Petroleum Company (the “Company,” “we,” “our” or “us”) is engaged principally in managing its owned mineral properties and the exploration for and the development of oil and natural gas properties. Other business segments are not significant factors in our operations. The Company is a corporation organized under the laws of the State of Delaware in 1931. 3 Table of Contents Oil and Natural Gas Properties For a summary of certain data relating to our oil and gas properties, including production, undeveloped acreage, producing and dry wells drilled and recent activity, see Item 2, “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 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Owned Mineral Property Management We have non-producing mineral interests of 88,868 net acres. These mineral interests are in 12 different states in the north-central and south-central United States. A total of 81,504 (92%) net acres are in the states of Arkansas, Kansas, Oklahoma, South Dakota and Texas, the areas of concentration in our exploration and development programs. We have several options relating to the exploration and/or development of our owned mineral interests. Management continually reviews various industry reports and other sources for activity (leasing, drilling, significant discoveries, etc.) in areas where we have mineral ownership. Based on our analysis of any activity and assessment of the potential risk relative to the area, management may negotiate a lease or farmout agreement and accept a royalty interest, or we may choose to participate as a working interest owner and pay our proportionate share of any exploration or development drilling costs. A substantial amount of our oil and gas revenue resulted from our owned mineral property management. In 2025, $3,425,011 (21%) of oil and gas sales was from royalty and other interests versus $3,460,997 (23%) in 2024. As a result of our mineral ownership, we had royalty interests in 7 gross (0.03 net) wells, which were drilled and completed as producing wells in 2025. This resulted in an average royalty interest of 0.50% for these 7 new wells. We have very little control over the timing or extent of the operations conducted on our royalty interest properties. Development Program Development drilling by the Company is usually initiated by participating as a working interest owner with a third-party operator in the development of non-producing mineral interests, which it owns; by participating with a joint interest operator in drilling additional wells on our producing leaseholds; or if our exploration program, discussed below, results in a successful exploratory well, by participating in the drilling of additional wells on the exploratory prospect. In 2025, we participated in the drilling of 39 development wells, including 4 (0.05 net) in progress at the end of 2024 with 33 (0.7 net) completed as producers and 6 (0.08 net) in progress at the end of 2025. Exploration Program Our 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 our own exploratory prospects; or a combination of these. We normally acquire interests in exploratory prospects from someone in the industry with whom management has conducted business in the past and/or if management has confidence in the quality of the geological and geophysical information presented for evaluation to our personnel. If evaluation indicates the prospect is within our risk limits, we may negotiate to acquire an interest in the prospect and participate in a non-operating capacity. We develop exploratory drilling prospects by identification of an area of interest, development of geological and geophysical information and purchase of leaseholds in the area. We 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.…