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


Form 10-Q



[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the period ended June 30, 2003

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 July 31, 2003.

Common Stock $.001333 par value - 2,178,845




THE BEARD COMPANY

INDEX




PART I. FINANCIAL INFORMATION Page

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

Balance Sheets - June 30, 2003 (Unaudited) and
December 31, 2002......................................................3

Statements of Operations - Three Months and Six Months
ended June 30, 2003 and 2002 (Unaudited)...............................4

Statements of Shareholders' Equity (Deficiency) -
Year ended December 31, 2002
and Six Months ended June 30, 2003 (Unaudited).........................5

Statements of Cash Flows - Six Months ended
June 30, 2003 and 2002 (Unaudited).....................................6

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

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations......................15

Item 3. Quantitative and Qualitative Disclosures
About Market Risk..................................................23

Item 4. Controls and Procedures............................................23


PART II. OTHER INFORMATION

Item 1. Legal Proceedings..................................................23

Item 2. Changes in Securities and Use of Proceeds..........................24

Item 6. Exhibits and Reports on Form 8-K...................................24

Signatures...................................................................26



THE BEARD COMPANY AND SUBSIDIARIES
Balance Sheets
(Unaudited)

June 30, December 31,
Assets 2003 2002
------ ---- ----

Current assets:
Cash and cash equivalents $ 76,000 $ 79,000
Accounts receivable, less allowance for doubtful
receivables of $80,000 in 2003 and 2002 152,000 133,000
Prepaid expenses and other assets 30,000 20,000
Assets of discontinued operations held for resale 200,000 343,000
-------------- --------------
Total current assets 458,000 575,000
-------------- --------------

Notes receivable 30,000 30,000

Investments and other assets 87,000 67,000

Property, plant and equipment, at cost 1,809,000 1,794,000
Less accumulated depreciation, depletion and amortization 1,297,000 1,259,000
-------------- --------------
Net property, plant and equipment 512,000 535,000
-------------- --------------

Intangible assets, at cost 181,000 114,000
Less accumulated amortization 116,000 57,000
-------------- --------------
Net intangible assets 65,000 57,000
-------------- --------------
$ 1,152,000 $ 1,264,000
============== ==============

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

Current liabilities:
Trade accounts payable $ 108,000 $ 138,000
Accrued expenses 192,000 177,000
Short-term debt 325,000 300,000
Short-term debt - related entities 245,000 111,000
Current maturities of long-term debt 8,000 8,000
Liabilities of discontinued operations held for resale 118,000 125,000
-------------- --------------
Total current liabilities 996,000 859,000
-------------- --------------

Long-term debt less current maturities 1,429,000 853,000

Long-term debt - related entities 3,589,000 3,388,000

Other long-term liabilities 103,000 108,000

Redeemable preferred stock of $100 stated value;
5,000,0000 shares authorized; 27,838 shares issued
and outstanding in 2002 (note 4) - 889,000

Shareholders' equity (deficiency):
Convertible preferred stock of $100 stated value;
5,000,000 shares authorized; 27,838 shares issued
and outstanding in 2003 (note 4) 889,000 -
Common stock of $.001333 par value per share; 7,500,000
shares authorized; 2,178,845 and 2,123,898 shares issued
and outstanding in 2003 and 2002, respectively 3,000 3,000
Capital in excess of par value 37,833,000 38,207,000
Accumulated deficit (43,675,000) (41,182,000)
Accumulated other comprehensive loss (15,000) (15,000)
Treasury stock, none in 2003; 295,053 shares, at cost, in 2002 - (1,846,000)
-------------- --------------
Total shareholders' equity (deficiency) (4,965,000) (4,833,000)
-------------- --------------
Commitments and contingencies (note 7)
$ 1,152,000 $ 1,264,000
============== ==============

See accompanying notes to financial statements.




THE BEARD COMPANY AND SUBSIDIARIES
Statements of Operations
(Unaudited)

For Three Months Ended For Six Months Ended
---------------------- --------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----

Revenues:
Coal reclamation $ - $ 11,000 $ 42,000 $ 12,000
Carbon dioxide 116,000 109,000 243,000 195,000
China - - - -
e-Commerce - - 25,000 -
Other 1,000 7,000 1,000 10,000
---------- ---------- ----------- -----------
117,000 127,000 311,000 217,000
---------- ---------- ----------- -----------
Expenses:
Coal reclamation 139,000 145,000 270,000 288,000
Carbon dioxide 31,000 19,000 64,000 50,000
China 137,000 - 298,000 -
e-Commerce 27,000 38,000 59,000 72,000
Other 3,000 4,000 18,000 20,000
Selling, general and administrative 239,000 238,000 448,000 432,000
Depreciation, depletion & amortization 52,000 36,000 98,000 59,000
---------- ---------- ----------- -----------
628,000 480,000 1,255,000 921,000
---------- ---------- ----------- -----------
Operating profit (loss):
Coal reclamation (139,000) (139,000) (228,000) (286,000)
Carbon dioxide 76,000 81,000 160,000 128,000
China (137,000) - (299,000) -
e-Commerce (29,000) (39,000) (37,000) (75,000)
Other, primarily corporate (282,000) (256,000) (540,000) (471,000)
---------- ---------- ----------- -----------
(511,000) (353,000) (944,000) (704,000)
Other income (expense):
Interest income 1,000 32,000 1,000 59,000
Interest expense (135,000) (95,000) (263,000) (162,000)
Equity in operations of unconsolidated affiliates 27,000 (89,000) 70,000 (120,000)
Gain on sale of assets 1,000 1,000 1,000 10,000
Other (5,000) (1,000) (5,000) (1,000)
---------- ---------- ----------- -----------
Loss from continuing operations before income taxes (622,000) (505,000) (1,140,000) (918,000)
Income taxes - - - -
---------- ---------- ----------- -----------
Loss from continuing operations (622,000) (505,000) (1,140,000) (918,000)

Earnings (loss) from discontinued operations (15,000) (55,000) 5,000 (103,000)
---------- ---------- ----------- -----------
Net loss $ (637,000) $ (560,000) $(1,135,000) $(1,021,000)
========== ========== =========== ===========

Net loss per average common share outstanding: Basic and diluted:
Loss from continuing operations $ (0.29) $ (0.28) $ (0.54) $ (0.50)
Loss from discontinued operations 0.00 (0.03) 0.00 (0.06)
---------- ---------- ----------- -----------
Net loss $ (0.29) $ (0.31) $ (0.54) $ (0.56)
========== ========== =========== ===========


Weighted average common shares outstanding -
basic and diluted 2,179,000 1,829,000 2,121,000 1,829,000
========== ========== =========== ===========


See accompanying notes to financial statements.




THE BEARD COMPANY AND SUBSIDIARIES
Statements of Shareholders' Equity (Deficiency)
(Unaudited)

Accumulated Total
Capital in Other Shareholders'
Preferred Common Excess of Accumulated Comprehensive Treasury Equity
Stock Stock Par Value Deficit Income Stock (Deficiency)
----- ----- --------- ------- ------ ----- ------------

Balance, December 31, 2001 $ - $ 3,000 $38,081,000 $(36,568,000) $(14,000) $(1,846,000) $( 344,000)

Net loss - - - (4,614,000) - - (4,614,000)
Comprehensive income:
Foreign currency translation
adjustment - - - - (1,000) - (1,000)

-----------
Comprehensive loss - - - - - - (4,615,000)
-----------


Issuance of stock warrants - - 11,000 - - - 11,000

Reservation of shares pursuant to deferred
compensation plan - - 115,000 - - - 115,000
--------- ------- ----------- ------------ -------- ----------- -----------
Balance, December 31, 2002 - 3,000 38,207,000 (41,182,000) (15,000) (1,846,000) (4,833,000)

Net loss, six months ended June 30, 2003 - - - (1,135,000) - - (1,135,000)
(unaudited) Comprehensive income:
Foreign currency translation
adjustment (unaudited) - - - - - - -
-----------
Comprehensive loss (unaudited) - - - - - - (1,135,000)
-----------

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

Issuance of stock warrants (unaudited) - - 18,000 - - - 18,000

Reservation of shares pursuant to deferred
compensation plan (unaudited) - - 96,000 - - - 96,000

Issuance of shares pursuant to termination
of deferred stock compensation plan - - (488,000) (1,358,000) - 1,846,000 -
--------- ------- ----------- ------------ -------- ----------- -----------
Balance, June 30, 2003 (unaudited) $ 889,000 $ 3,000 $37,833,000 $(43,675,000) $(15,000) $ - $(4,965,000)
========= ======= =========== ============ ======== =========== ===========

See accompanying notes to financial statements.




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

For the Six Months Ended
------------------------
June 30, 2003 June 30, 2002
------------- -------------

Operating activities:
Cash received from customers $ 283,000 $ 173,000
Cash paid to suppliers and employees (1,144,000) (727,000)
Interest received 1,000 57,000
Interest paid (72,000) (153,000)
Operating cash flows of discontinued operations (22,000) (252,000)
------------ ------------
Net cash used in operating activities (954,000) (902,000)
------------ ------------

Investing activities:
Acquisition of property, plant and equipment (18,000) (12,000)
Acquisition of intangibles - (1,000)
Proceeds from sale of assets 1,000 19,000
Proceeds from sale of assets of discontinued operations 216,000 58,000
Investment in and advances to fifty percent-owned
subsidiary in Mexico (1,000) (10,000)
Investment in and advances to fifty percent-owned
subsidiary in China (35,000) (403,000)
Advances for notes receivable (2,000) (7,000)
Payments on notes receivable 2,000 73,000
Other 99,000 63,000
------------ ------------
Net cash provided by (used in) investing activities 262,000 (220,000)
------------ ------------

Financing activities:
Proceeds from term notes 874,000 1,189,000
Payments on line of credit and term notes (303,000) (354,000)
Proceeds from related party debt 376,000 493,000
Payments on related party debt (192,000) (100,000)
Capitalized costs associated with issuance of subordinated debt (66,000) (88,000)
------------ ------------
Net cash provided by financing activities 689,000 1,140,000
------------ ------------
Net increase in cash and cash equivalents (3,000) 18,000

Cash and cash equivalents at beginning of period 79,000 55,000
------------ ------------
Cash and cash equivalents at end of period $ 76,000 $ 73,000
============ ============


Continued


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

Reconciliation of Net loss to Net Cash Used in Operating Activities

For the Six Months Ended
------------------------
June 30, 2003 June 30, 2002
------------- -------------

Net loss $ (1,135,000) $ (1,021,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization 98,000 57,000
Depreciation, depletion and amortization on assets of
discontinued operations - 2,000
Gain on sale of assets (1,000) (9,000)
Gain on sale of assets of discontinued operations (51,000) (49,000)
Equity in operations of unconsolidated affiliates (70,000) 115,000
Equity in operations of unconsolidated affiliates in
discontinued operations - 9,000
Noncash compensation expense 80,000 -
Net cash used by discontinued operations offsetting
accrued impairment loss (7,000) (6,000)
Other 1,000 -
(Increase) decrease in accounts receivable, prepaid expenses and
and other current assets 16,000 (27,000)
Decrease in inventories - 69,000
Increase (decrease) in accounts payable, accrued
expenses and other liabilities 115,000 (42,000)
------------ ------------
Net cash used in operating activities $ (954,000) $ (902,000)
============ ============

See accompanying notes to financial statements.


THE BEARD COMPANY AND SUBSIDIARIES
Notes to Financial Statements

June 30, 2003 and 2002
(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 2002
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 and six-month periods ended June
30, 2003, 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 2002 balances have been reclassified to conform to the 2003
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 have declined in
each of the last four years and the Company has incurred operating losses
and negative cash flows from operations during each of the last five years,
the Company is of the belief that it will commence a project in both its
Coal Segment and its China Segment during 2003. Moreover, the long-awaited
Settlement in the McElmo Dome litigation is now a certainty. The first
installment, totaling $1,162,000 was received on July 31, and the second
installment, totaling approximately $2,814,000 is expected to be received
on or about October 1 of this year. Receipt of the Settlement ensures that
2003 will be a profitable year while at the same time materially enhancing
the Company's liquidity and bolstering its balance sheet ratios. Meanwhile,
negotiations are currently in progress on a major coal project, including
the financing thereof, which would enable its Coal Segment to become
profitable beginning in early 2004. (See Additional Details below).
Negotiations are also underway for two new fertilizer projects in China and
the financing therefor. 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
this year, the Company believes the arrangement has the potential to make
the segment profitable in 2004 or 2005.

During the 18 months from January 1, 2002 through June 30, 2003, the
Company took a number of steps to reduce its negative cash flow. The
Company's Chairman and President deferred a portion of their base salary
into (i) the Company's Deferred Stock Compensation Plan (the "DSC Plan")
which terminated on January 31, 2003 and (ii) the Company's 2003 Deferred
Stock Compensation Plan (the "2003 Plan") which became effective on such
date. The Company's outside directors have deferred all of their directors'
fees into such Plans. The President of Beard Technologies has deferred a
portion of his salary until the full amount of the Settlement has been
received. The Company has suspended its 100% matching contribution (up to a
cap of 5% of gross salary) under its 401(k) Plan. In addition, three
private debt placements raised gross proceeds of $1,825,000 during such
period. All of these measures have helped and will continue to help until
the Settlement has been finalized. The negative result has been a
substantial amount of dilution to the Company's common equity. During such
period 285,000 warrants were issued in connection with two of the private
debt placements, and 215,000 Stock Units were accrued in the participants'
accounts as a result of deferrals of salary into the DSC Plan and the 2003
Plan. 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 the DSC Plan resulted in
the issuance of 350,000 common shares effective January 31, 2003.

Meanwhile, despite the recent poor financial results and the deterioration
of its financial condition, the Company has demonstrated the ability to
maintain its viability as a going concern. During the 12 months ended
December 31, 2002 and through June 30, 2003, the Company has successfully
completed three private debt placements totaling $1,825,000 while
increasing its lines of credit from a total of $2,650,000 to a total of
$3,600,000. During such period it has remained in compliance on all of its
debt obligations. The Company believes that the proceeds from the first
installment of the Settlement will be adequate to carry it until the second
installment of $2,814,000 is received. Receipt of the Settlement has
ensured that the Company will remain viable as a going concern at least
through December 31, 2003.

Additional Details
------------------
Despite continuing operating losses during the past twelve months, the
Company's cash and cash equivalents increased slightly from $73,000 at June
30, 2002 to $76,000 at June 30, 2003. To mitigate potential liquidity
problems, the Company's lines of credit from an affiliate of the Company's
chairman were increased from $2,250,000 in September of 2001 to $2,500,000
in January of 2002, to $2,625,000 in February of 2002, to $3,000,000 in
October of 2002, to $3,150,000 in November of 2002 and to $3,300,000 in
June of 2003. As a result of the private debt placements completed in
February and July of 2003, the Company has obtained a net additional
$569,000 in working capital. The funding of operations, however, has
resulted in a $254,000 reduction in the Company's working capital position
during 2003.

The Company's principal business is coal reclamation, and this is where
management's operating attention is primarily focused. The Coal Segment
currently has several projects in various stages of development which,
subject to arranging necessary financing, are ultimately expected to mature
into operating projects. One of these projects, on which the segment had
entered into a memorandum of understanding, was sold early this month to
another party. We have been advised that such party intends to move ahead
with the project, and are hopeful that negotiations to finalize a
definitive agreement will occur during the current quarter. Negotiations
are in progress with a third party to form a joint venture or limited
liability company that would provide the initial working capital and
guarantee the necessary equipment financing for the project. We are also
pursuing financing for this project separately through a third party in the
event the joint venture arrangement fails to materialize. The timing of the
project is uncertain but, subject to obtaining the necessary financing, it
is considered to have a high probability of activity. However, no
definitive contracts have as yet been signed, and there is no assurance
that the required financing will be obtained or that the project will
materialize.

In September of 2002 a controversy arose between the Company and its
technology partner concerning their legal rights and relationships in
conducting business in China. Lengthy negotiations and discussions were
unsuccessful in arriving at a mutually agreeable solution. In November of
2002 the Company filed suit to terminate the relationship. Our partner
filed a counterclaim to which the Company has subsequently responded. The
outcome of the litigation cannot presently be determined. On July 11, 2003,
the Company filed a Motion to Compel Arbitration. An impairment provision
in the amount of $759,000 was established in the fourth quarter of 2002 to
write down most of the Company's investment in China. Accordingly, all of
the projects which were under development in China are on indefinite hold
until the outcome of the litigation has been determined. The segment has
obtained an exclusive license agreement for another technology in China and
is now pursuing new projects. Negotiations are in progress on two such
projects, and there is ample room and an adequate market for a number of
such projects in the same area.

To further bolster working capital, the Company on May 31, 2002 completed
the private placement of $1,200,000 of 10% subordinated notes due September
30, 2003 (the "2002 Notes"), to "bridge the gap" until the settlement funds
are distributed or until the anticipated Coal and China projects achieve
positive cash flow. The Company has agreed to redeem the 2002 Notes within
10 days of receipt of the McElmo Dome Settlement. In the event the 2002
Notes have not been redeemed by the maturity date, they will be
automatically extended to March 31, 2005. An investment banking firm
received warrants to purchase 45,000 shares of Company common stock as part
of its sales compensation in connection with the offering. The note holders
have the contingent right to receive up to 240,000 additional warrants
depending upon the length of time their notes are held. As of July 31,
2003, a total of 195,250 of such warrants had been issued to the note
holders. Related parties purchased $320,000 of the offering, and had
received a total of 53,000 warrants as of such date. All of the warrants
issued in connection with the 2002 Notes have a 5-year term and have an
exercise price of $1.00 per share during the first three years and $1.25
per share thereafter.

On February 21, 2003, the Company completed the sale of $600,000 of
subordinated notes (the "2003A Notes") to accredited investors. A $550,000
note was sold by an investment banking firm which received a 5% commission
thereon. The purchaser received a 5% Loan Fee on this note, which bears a
5% coupon. A $50,000 note was sold by the Company to affiliates of the
Company and bears a 10% coupon. The 2003A Notes were accompanied by
warrants to purchase a total of 65,000 shares of Beard common stock at
$0.50 per share. The Company has agreed to redeem the 2003A Notes within 10
days of receipt of the second installment of the McElmo Dome Settlement.
The 2003A Notes will mature on April 1, 2004; however, if they have not
been redeemed by such date they will automatically be extended to January
1, 2005.

On July 10, 2003, the Company completed the sale of $29,000 of subordinated
notes (the "2003B Notes") to accredited investors. The $300,000 offering
was terminated early when the U. S. Supreme Court denied the appeal in the
McElmo Dome litigation, and it became clear the Company would receive the
first installment of the Settlement by August 1. The 2003B Notes bear
interest at 10% per anuum from the date of original issuance, payable at
maturity. The notes were subject to a 4% non-refundable loan fee, payable
upon issuance to the investors. The notes are due January 30, 2004;
however, they must be redeemed within 10 days of the receipt of the second
installment of proceeds of the McElmo Dome Settlement. A $4,000 note was
sold by an investment banking firm which received a 5% commission thereon.

In addition, the Company expects to generate cash from the disposition of
the remaining assets from the discontinued ITF, BE/IM and WS Segments, and
can sell certain other assets to generate cash if necessary.

The Company believes that the cash generated from the Settlement will be
sufficient to enable the Company to continue operations through 2003 and
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.

(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 and recorded
losses totaling $2,419,000 from discontinuing the segment in 1998. ITF
disposed of all of its assets in 1999 except two convenience stores
("C-stores"), including their remaining equipment and inventory, and was
relieved of all outstanding indebtedness related to the assets. Additional
losses of $434,000, $591,000, and $121,000 were recorded by the
discontinued segment in 1999, 2000 and 2001, respectively. The 2001 loss
included a $100,000 impairment in the carrying value of the facilities and
$14,000 for anticipated operating losses through the expected disposal date
of the remaining assets. In 2002, the Company recorded losses totaling
$85,000, including a $1,000 gain on the sale of assets and an additional
charge of $77,000 to impair the carrying value of the remaining facilities.
The Company sold one of the C-stores with related property, plant and
equipment in November of 2002 for $169,000. The remaining C-store and
related property, plant and equipment were sold on April 17, 2003, with net
proceeds to the Company totaling $158,000.

ITF recorded no revenues for the first half of 2002 and incurred $2,000 and
$6,000 of losses for the three and six-month periods ending June 30, 2002,
respectively, which were charged against the loss accrual recorded in 2001.
Included in the losses was a $2,000 gain on the sale of equipment. ITF also
recorded no revenues for the first six months ended June 30, 2003 and
incurred $3,000 of income and $5,000 of losses for the three and six-month
periods, respectively. This activity was recorded in operations. Included
in the results of operations was a gain of $5,000 on the sale of the
remaining C-store and associated equipment.

As of June 30, 2003, the ITF Segment had no significant assets or
liabilities.

BE/IM Segment
-------------
In 1999 the Management Committee of North American Brine Resources ("NABR")
adopted a formal plan to discontinue the business and dispose of its
assets. Beard had a 40% ownership in NABR, which was accounted for under
the equity method. As a result, Beard's share of NABR's operating results
has been reported as discontinued for all periods presented in the
accompanying statements of operations. The joint venture was dissolved in
September 2000 and the Japanese partners received their final distribution
of cash in December 2000, with the Company taking over the remaining assets
and liabilities.

In 1999 Beard recorded a $540,000 loss, which represented its share of
NABR's $1,350,000 estimated loss from the discontinuation of operations.
NABR's loss included $572,000 of anticipated operating losses through April
2000 (the date operations ceased for the larger of its two plants) and
costs of ceasing operations. NABR recorded no revenues for either the three
or six-month periods ended June 30, 2003. The net losses for the three and
six-month periods ended thereon were $4,000 and $7,000, respectively, and
were charged against the loss accrual. Revenues for the smaller of the two
plants were $43,000 and $120,000 for the three and six-month periods ended
June 30, 2002, respectively. The net losses for the three and six-months
ended June 30, 2002 were $30,000 and $67,000, respectively, and were not
anticipated in the loss accruals recorded in 1999. The Company charged
$5,000 and $7,000 for the three and six-month periods ended June 30, 2002,
respectively, against the accrual for anticipated expenses related to the
shutdown of the larger of its two plants.

As of June 30, 2003, the significant assets related to NABR's operations
consisted primarily of equipment with an estimated net realizable value of
$31,000. The significant liabilities related to NABR's operations consisted
primarily of accrued expenses totaling $57,000 related to the shutdown of
operations. The Company is actively pursuing opportunities to sell NABR's
assets and expects the disposition to be completed by December 31, 2003.

WS Segment
----------
In May 2001 the fixed assets of the 50%-owned company (accounted for as an
equity investment) involved in natural gas well testing operations for the
Natural Gas Well Servicing ("WS") Segment were sold for $1,550,000, subject
to a holdback of $150,000. The Company received $86,000 of the holdback
later that year. In May 2002 the Company received $35,000, net of
attorney's fees of $29,000, representing the remainder of the holdback. As
a result of the sale all debt of the 50%-owned company was retired and the
Company was relieved of contingent liabilities totaling $512,000. 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 half of 2003 or 2002.
Beard recorded a loss of $17,000 and income of $11,000 for the three and
six-month periods ended June 30, 2003, respectively. Included in these
results was a $45,000 gain on the sale of equipment recorded in the first
quarter of 2003. Beard's share of operating losses from the discontinued
segment was $25,000 and $36,000 for the three and six-month periods ended
June 30, 2002, respectively. For the first half of 2002, Beard's share of
operating losses from the 50%-owned company was $9,000. $10,000 of losses
incurred in the six months ended June 30, 2002 were associated with the
operations of the wholly-owned company and were not anticipated in the loss
accrual. All of the $11,000 income in 2003 and the remaining $17,000 of
losses for the six months ended June 30, 2002 were associated with the
subsidiary holding interests in these entities and were also not
anticipated in the loss accrual.

As of June 30, 2003, the significant assets of the WS Segment consisted of
accounts receivable totaling $17,000 and fixed assets with a recorded value
of $144,000. The significant liabilities of the entity consisted of trade
accounts payable and accrued expenses totaling $59,000. It is anticipated
that all liabilities of the segment will be paid prior to December 31,
2003.

(4) Convertible (formerly Redeemable) Preferred Stock
-------------------------------------------------
The Company's preferred stock was mandatorily redeemable through December
31, 2002, from one-third of Beard's "consolidated net income" as defined.
Each share of Beard preferred stock ceased to be redeemable and became
convertible into Beard common stock on January 1, 2003. Each preferred
share was convertible into 4.59839154 (128,010) shares on June 30, 2003.
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 Deferred Stock Compensation
Plan. Fractional shares will not be issued, and cash will be paid in
redemption thereof.

(5) Loss Per Share
--------------
Basic loss per share data is computed by dividing loss attributable to
common shareholders by the weighted average number of common shares
outstanding for the period.

Diluted loss per share in the statements of operations exclude potential
common shares issuable upon conversion of redeemable preferred stock or
exercise of warrants or stock options as a result of losses from continuing
operations for all periods presented.

(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 no provision for taxes for the
three or six-month periods ended June 30, 2003 or 2002.



At June 30, 2003, 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 2004-2009 $ 54,800

Tax depletion carryforward Indefinite $ 5,500



(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 corporate restructure which occurred in 1993
(collectively, the "Obligations"). Neither Beard nor Beard Oil is presently
aware of any material liabilities existing as a result of such Obligations.

In November of 2002, the Company filed suit in the Western District of
Oklahoma to terminate ABT-Beard and the Company's business relationship
with American Bio Tech, Inc. ("ABT"), the other party in ABT-Beard.
Additionally, the Company is seeking recovery of costs, expenses and
attorney's fees. In January of 2003, ABT filed its answer and asserted
counterclaims against the Company and third-party claims against Beard
Sino-American Resources, Co., Inc., Beijing Beard Biotech Engineering Co.,
Inc., Cambridge/ABT Beard Handan Venture, L.L.C., William M. Beard, Riza E.
Murteza, and Mark E. Voth. The Company and the other defendants have filed
an answer denying liability and intend to vigorously defend such claims.
Management feels that the claims of ABT are without merit and expect no
material liabilities as a result of ABT's suit against the Company and the
other defendants. On July 11, 2003, the Company filed a Motion to Compel
Arbitration.

(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 half of 2003 and
2002: 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.




Carbon
Coal Dioxide China e-Commerce Totals
---- ------- ----- ---------- ------

Three months ended
------------------
June 30, 2003
-------------
Revenues from
external customers $ - $ 116 $ - $ - $ 116
Segment profit (loss) (139) 76 (167) (29) (259)

Three months ended
------------------
June 30, 2002
-------------
Revenues from
external customers $ 11 $ 109 $ - $ - $ 120
Segment profit (loss) (139) 81 (243) (40) (341)

Six months ended
----------------
June 30, 2003
-------------
Revenues from
external customers $ 42 $ 243 $ - $ 25 $ 310
Segment profit (loss) (228) 160 (338) (38) (444)
Segment assets 27 479 57 13 576

Six months ended
----------------
June 30, 2002
-------------
Revenues from
external customers $ 12 $ 195 $ - $ - $ 207
Segment profit (loss) (277) 128 (390) (76) (615)
Segment assets 1,582 467 429 62 2,540



Reconciliation of total reportable segment loss to consolidated loss from
continuing operations before income taxes is as follows for the three and
six-months ended June 30, 2003 and 2002 in thousands):



For the Three Months Ended For the Six Months Ended
------------------------------ -----------------------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----

Total loss for reportable segments $ (259) $ (341) $ (444) $ (615)
Eliminate loss from China operations accounted
for as an equity investment - 243 - 390
Equity in loss from China operations accounted
for as an equity investment - (122) - (195)
Net corporate costs not allocated to segments (363) (285) (696) (498)
--------- ------- --------- -------
Total consolidated loss for continuing
operations $ (622) $ (505) $ (1,140) $ (918)
========= ======= ========= =======



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, 2002 and results of operations for the
quarter ended June 30, 2003, compared to the prior year second quarter and the
six months ended June 30, 2003 compared to the prior year six months. 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 2002 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 fertilizer production facilities which utilize the proprietary
composting technology of Real Earth United States Enterprises, Inc ("REUSE").
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.

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 Company is
pursuing the sale of the remaining assets. 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 - June 30, 2003 as compared with
- --------------------------------------------------------------------------------
December 31, 2002.
- ------------------

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



June 30, December 31, Increase
2003 2002 (Decrease)
---- ---- ----------

Cash and cash equivalents $ 76,000 $ 79,000 $ (3,000)

Working capital $ (538,000) $ (284,000) $ (254,000)

Current ratio 0.46 to 1 0.67 to 1



During the first six months of 2003, the Company decreased its working
capital by $254,000 from $(284,000) as of December 31, 2002. The placement of
the second and third issues of 10% Subordinated Debt infused over $569,000 in
working capital in the first half of 2003. Net advances, including purchases of
the 10% Subordinated Debt, from related entities of the Chairman of the Board
totaled $184,000. Proceeds from the sale of assets totaled $217,000 during the
first half of 2003. Net revenue from the Company's interest in its CO2 producing
properties provided $160,000 of working capital for the first half of 2003.
$228,000 of working capital were used to help fund the operations of the Coal
Segment. The China Segment, including the joint venture involved in the pursuit
of environmental opportunities, utilized over $338,000 of working capital.
$37,000 were used to fund the startup activities of the e-Commerce Segment. The
Company received distributions of $99,000 from other investments, including
Cibola. The remainder of the working capital was utilized to fund other
operations.

The Company's principal business is coal reclamation, and this is where
management's operating attention is primarily focused. The Coal Segment
currently has several projects in various stages of development which, subject
to arranging necessary financing, are ultimately expected to mature into
operating projects. One of these projects, on which the segment had entered into
a memorandum of understanding, was sold early this month to another party. We
have been advised that such party intends to move ahead with the project, and
are hopeful that negotiations to finalize a definitive agreement will occur
during the current quarter. Negotiations are in progress with a third party to
form a joint venture or limited liability company that would provide the initial
working capital and guarantee the necessary equipment financing for the project.
We are also pursuing financing for this project separately through a third party
in the event the joint venture arrangement fails to materialize. The timing of
the project is uncertain but, subject to obtaining the necessary financing, it
is considered to have a high probability of activity. However, no definitive
contracts have as yet been signed, and there is no assurance that the required
financing will be obtained or that the project will materialize.

In September of 2002 a controversy arose between the Company and its
technology partner concerning their legal rights and relationships in conducting
business in China. In November of 2002 the Company filed suit to terminate the
relationship. Accordingly, all of the projects which were under development in
China are on indefinite hold. The segment has obtained an exclusive license
agreement for another technology in China and is now pursuing new projects.
Negotiations are in progress on two such projects, and there is ample room and
an adequate market for a number of such projects in the same area.

The long-awaited Settlement in the McElmo Dome litigation is now a
certainty. The first installment, totaling $1,162,000 was received on July 31,
and the second installment, totaling approximately $2,814,000 is expected to be
received on or about October 1 of this year. These installments do not include
an additional $100,000 to $125,000 which the Company expects to receive from a
litigation reserve which has been established in connection with a lawsuit
against the managers of the Coalition. (See Part II - Item 1. Legal
Proceedings). Receipt of the Settlement ensures that 2003 will be a profitable
year while at the same time materially enhancing the Company's liquidity and
bolstering its balance sheet ratios.

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 $2,500,000 in January of 2002,
to $2,625,000 in February of 2002, and to $3,000,000 in October of 2002 to
provide additional working capital. This line was supplemented by a $150,000
short-term line of credit from the same party in November of 2002, which was
increased to $300,000 in June of 2003. The Company recently completed the
private placement of $600,000 of subordinated notes due April 1, 2004, with
warrants, and another private placement of $29,000 of subordinated notes due
January 30, 2004, to provide additional working capital and improve liquidity
until the settlement funds have all been distributed. In addition, the Company
will be disposing of the remaining assets from the discontinued ITF, BE/IM and
WS Segments and can sell certain other assets to generate cash if necessary.

The Company believes that cash from the Settlement will be sufficient to
enable the Company to continue operations through 2003 and 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.

Material changes in results of operations - Quarter ended June 30, 2003 as
- --------------------------------------------------------------------------------
compared with the Quarter ended June 30, 2002.
- ---------------------------------------------

The net loss for the second quarter of 2003 was $637,000 compared to
$560,000 for the 2002 second quarter. Continuing operations posted a net loss of
$622,000 compared to a loss from continuing operations of $505,000 for the same
period in 2002. In addition, the Company had a loss of $15,000 from discontinued
operations for the second quarter of 2003 compared to a loss of $55,000 for the
comparable quarter of 2002.

The operating loss in the Coal Segment remained static at $139,000 for both
the second quarters of 2003 and 2002 as decreases in revenue were offset by
corresponding reductions in expenses. The operating profit in the CO2 Segment
decreased $5,000. The China Segment's loss for the second quarter of 2003
totaled $137,000 compared to none for the same period in 2002. The e-Commerce
Segment incurred operating losses of $29,000 for the second quarter of 2003
compared to $39,000 in the second quarter of 2002. The operating loss in Other
activities for the second quarter of 2003 increased $26,000 compared to the same
period in 2002. As a result, the operating loss for the current quarter
increased $158,000 to $511,000 versus $353,000 in the corresponding quarter of
the prior year.

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



2003 2002
---- ----

Operating profit (loss):
Coal reclamation $(139,000) $(139,000)
Carbon dioxide 76,000 81,000
China (137,000) -
e-Commerce (29,000) (39,000)
--------------- --------------
Subtotal (229,000) (97,000)
Other (282,000) (256,000)
--------------- --------------
$(511,000) $(353,000)
=============== ==============


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

Coal reclamation

The segment's revenues decreased $11,000 to none for the second quarter of
2003 compared to the same period in 2002 as a result of performing fewer
consulting and coring jobs in the year 2003. Operating costs decreased $6,000 to
$139,000 for the second quarter of 2003 compared to $145,000 for the same period
in 2002. The decrease was primarily attributable to significantly lower labor
costs related to the drilling work performed in 2003 versus 2002 as a result of
a reduction in staffing and the reduction in the number of jobs. SG&A costs
increased $4,000 for the second quarter of 2003 compared to the same period in
2002. DD&A costs decreased $5,000 for the second quarter of 2003 compared to the
same period in 2002 as the assets of the segment were fully impaired in the
fourth quarter of 2002. As a result, there was no change in the operating loss
of $139,000 for the second quarter of 2003 compared to the second quarter of
2002.

Carbon dioxide

Second quarter 2003 operations reflected an operating profit of $76,000
compared to $81,000 for the 2002 second 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 $7,000 to $116,000 for
the second quarter of 2003 compared to $109,000 for the same period in 2002. The
increase in revenue for the current quarter was primarily due to increased
pricing, with the Company receiving an average of $0.33 per mcf sold in the 2003
quarter versus $0.30 per mcf in the year earlier quarter.

China

The China Segment incurred an operating loss of $137,000 for the second
quarter of 2003 compared to none for the same period in 2002. In the prior year
quarter and through November of 2002, the operations of this segment were
conducted through an unconsolidated affiliate. As a result of the controversy
which arose in the latter part of 2002 and the lawsuit which followed, the
Company is now conducting its operations in China through wholly-owned
affiliates. The loss in 2003 is attributable to operating expenses incurred
while the Company seeks to develop projects to utilize the proprietary
composting technology of REUSE. The Company is still charging some expenses to
the unconsolidated affiliate while the controversy is being settled. For the
second quarter of 2002, the Company recorded a $122,000 loss as its 50% share of
the equity in operating results of the unconsolidated affiliate.

e-Commerce

The e-Commerce Segment incurred an operating loss of $29,000 for the second
quarter of 2003 versus an operating loss of $39,000 in the prior year quarter.
An $11,000 reduction in operating expenses accounted for most of the difference.
The segment had no revenues in either the second quarter of 2003 or 2002 while
attempting to develop business opportunities to leverage its intellectual
property portfolio of Internet payment methods and security technologies.

Other corporate activities

Other corporate activities include general and corporate operations, as
well as assets unrelated to the Company's operating segments or held for
investment. These activities generated operating losses of $282,000 for the
second quarter of 2003 as compared to $256,000 for the same period of 2002. This
increase in operating losses was due primarily to increased amortization expense
associated with the capitalized cost of issuing the 10% subordinated debt.

Selling, general and administrative expenses

The Company's selling, general and administrative expenses ("SG&A") in the
current quarter increased slightly to $239,000 from $238,000 in the 2002 second
quarter.

Depreciation, depletion and amortization expenses

DD&A expense increased $16,000 from $36,000 in the second quarter of 2002
to $52,000 in the same period of 2003. The increase was due to increased
amortization expense associated with the capitalized costs of issuing the 10%
subordinated debt.

Other income and expenses

The other income and expenses for the second quarter of 2003 netted to a
loss of $111,000 compared to a loss of $152,000 for the same period in 2002.
Interest income was down $31,000 for the second quarter of 2003 compared to the
same period in 2002. Interest expense was $40,000 higher as a result of the
increase in debt, primarily to related parties and the issuance of the
subordinated debt.

The Company's equity in operations of unconsolidated affiliates reflected
income of $27,000 for the second quarter of 2003 compared to a loss of $89,000
for the same period in 2002. The Company reflected a loss of $30,000 associated
with the affiliate in China for the second quarter of 2003 compared to a loss of
$122,000 for the same period in 2002. The losses represent 100% and 50%,
respectively, of the losses recorded by the affiliate in China. As discussed,
the Company is involved in litigation with its former partner in this entity and
is seeking dissolution of the entity and recovery of certain costs associated
with its operation. In the interim and starting in 2003, the Company is
recording 100% of costs associated with leased office space and a computer that
the Company is paying for on behalf of the affiliate, along with those legal
expenses directly attributable to the affiliate. Offsetting the Company's share
of losses of the affiliate in China was the Company's share of the earnings of
Cibola Corporation ("Cibola"). Cibola contributed $56,000 in income for the
second quarter of 2003 compared to $33,000 for the same period in 2002.

Income taxes

The Company made no provision for income taxes in the second quarter of
2003 or 2002. 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 and recorded losses
totaling $2,419,000 from discontinuing the segment in 1998. ITF disposed of a
majority of its assets in 1999, retaining two convenience stores ("C-stores"),
including their equipment and inventory, and Beard became 100% owner of ITF.
Beard recorded additional losses of $420,000 in 2000 and $114,000 in 2001
related to the segment.

ITF recorded no revenues for either the second quarter of 2003 or 2002. ITF
recorded $3,000 in income for the second quarter of 2003. Included in this loss
was a gain of $5,000 on the sale of the last C-store and associated equipment.
ITF incurred $2,000 in losses for the three months ended June 30, 2002 which
were charged against a loss accrual recorded in 2001. Included in this loss was
a $2,000 gain on the sale of equipment.

The ITF Segment had no significant assets or liabilities as of June 30,
2003.

BE/IM Segment
- -------------
In 1999 the Management Committee of North American Brine Resources ("NABR")
adopted a formal plan to discontinue the business and dispose of its assets.
Beard had a 40% ownership in NABR, which was accounted for under the equity
method. As a result, Beard's share of NABR'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 with the Japanese partners
receiving a final distribution of cash and the Company taking over the remaining
assets and liabilities.

In 1999 Beard recorded a $540,000 loss, which represented its share of
NABR's $1,350,000 estimated loss from the discontinuation of operations. NABR's
loss included a loss accrual to cover the costs of ceasing operations and
shutting down the larger of its two plants. The smaller plant was sold in August
of 2002. NABR's revenues for the smaller of the two plants were none and $43,000
for the three months ended June 30, 2003 and 2002, respectively. NABR's
operating losses for the three months ended June 30, 2003 were $3,000 and were
charged against the loss accrual. NABR's operating loss for the three months
ended June 30, 2002 was $30,000 and was not anticipated in the loss accrual
recorded in 1999. NABR charged $5,000 for the three months ended June 30, 2002,
against the accrual for anticipated expenses related to the shutdown of the
larger of its two plants.

As of June 30, 2003, the significant assets related to NABR's operations
consisted primarily of equipment with an estimated net realizable value of
$31,000. The significant liabilities related to NABR's operations consisted
primarily of accrued expenses related to the shutdown of operations totaling
$57,000. The Company is actively pursuing opportunities to sell NABR's assets
and expects the disposition to be completed by December 31, 2003.

WS Segment
- ----------
In May 2001 the fixed assets of the 50%-owned company (accounted for as an
equity investment) involved in natural gas well testing operations for the
Natural Gas Well Servicing ("WS") Segment were sold for $1,550,000, subject to a
holdback of $150,000. The Company received $86,000 of the holdback later that
year. In May 2002 the Company received $35,000, net of attorney's fees of
$29,000, representing the remainder of the holdback. As a result of the sale all
debt of the 50%-owned company was retired and the Company was relieved of
contingent liabilities totaling $512,000. 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 second quarter of 2003 or
2002. Beard's share of operating losses from the discontinued segment were
$17,000 and $25,000 for the three months ended June 30, 2003 and 2002,
respectively. For the second quarter of 2002, Beard's share of operating losses
from the 50%-owned company were $5,000. The remaining $20,000 of losses incurred
in the three months ended June 30, 2002 were associated with the operations of
the subsidiary holding interests in these entities and were not anticipated in
the loss accrual.

As of June 30, 2003, the significant assets of the WS Segment consisted of
accounts receivable totaling $17,000 and fixed assets with a recorded value of
$144,000. The significant liabilities of the segment consisted of trade accounts
payable and accrued expenses totaling $59,000. It is anticipated that all
liabilities of the segment will be paid prior to December 31, 2003.


Material changes in results of operations - Six months ended June 30, 2003 as
- --------------------------------------------------------------------------------
compared with the Six months ended June 30, 2002.
- ------------------------------------------------

The net loss for the six months ended June 30, 2003 was $1,135,000,
compared to a net loss of $1,021,000 for the first six months of the prior year.
Continuing operations posted a net loss of $1,140,000 compared to a net loss of
$918,000 for the same period in 2002. In addition, the Company had income of
$5,000 and losses of $103,000 from discontinued operations for the first half of
2003 and 2002, respectively.

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



2003 2002
---------------- ----------------

Operating profit (loss):
Coal reclamation $ (228,000) $ (286,000)
Carbon dioxide 160,000 128,000
China (299,000) -
e-Commerce (37,000) (75,000)
---------------- ----------------
Subtotal (404,000) (233,000)
Other (540,000) (471,000)
---------------- ----------------
Total $ (944,000) $ (704,000)
================ ================


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

Coal reclamation

The Company's coal reclamation revenues increased $30,000 to $42,000 for
the first six months of 2003 compared to $12,000 for the same period in 2002 as
the result of additional small consulting and coring jobs in the year 2003.
Operating costs decreased $18,000 to $215,000 for the first six months of 2003
compared to $233,000 for the same period in 2002 as a result of a reduction in
lab-related labor expenses. SG&A costs remained static at $55,000 for the first
six months of 2003 and the same period in 2002. DD&A expenses decreased $10,000
for the first half of 2003 compared to the first half of 2002 as the depreciable
assets of the segment were fully impaired in the fourth quarter of 2002. As a
result, the operating loss for the first six months of 2003 decreased $58,000 to
$228,000 compared to $286,000 in the first six months of 2002.

Carbon dioxide

Operations for the first six months of 2003 resulted in an operating profit
of $160,000 compared to a $128,000 operating profit for the 2002 first half. 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 $48,000 or 25% to $243,000 for the first six months of 2003 compared
to $195,000 for the same period in 2002. The Company recorded $14,000 more in
operating costs associated with the properties in the first half of 2003
compared to the same period in 2002. Production volumes for the McElmo Dome
field decreased for the first six months of 2003 compared to the same period in
2002. The increase in revenue for the current six months was entirely due to
higher pricing, with the Company receiving an average of $0.35 per mcf sold in
the first six months of 2003 versus $0.26 per mcf in the year earlier period.
Paid volumes were down 47,000 mcf in the current six months versus a year ago
due to makeup of underproduction in the prior year.

China

The China Segment incurred an operating loss of $299,000 for the first half
months of 2003 compared to none for the same period in 2002. Another $39,000 of
loss for the first half of 2003 is included in equity in operations of
unconsolidated affiliates relating to China. In the prior year six months, the
operations of this segment were conducted through an unconsolidated affiliate.
As a result of the controversy which arose in the latter part of 2002 and the
lawsuit which followed, the Company is now conducting its operations in China
through wholly-owned affiliates. The loss in 2003 is attributable to SG&A
expenses as the Company seeks projects to utilize the proprietary composting
technology of REUSE. For the first six months of 2002, the Company recorded a
$195,000 loss as its 50% share of the equity in operating results of the
unconsolidated affiliate.

e-Commerce

The e-Commerce Segment incurred an operating loss of $37,000 for the first
half of 2003 versus an operating loss of $75,000 in the prior year period. A
$13,000 reduction in operating expenses accounted for part of the difference; a
$25,000 license fee recorded in the first half of 2003 accounted for the
balance.

Other corporate activities

Other corporate activities include general and corporate operations, as
well as assets unrelated to the Company's operating segments or held for
investment. These activities generated operating losses of $540,000 for the
first half of 2003 as compared to $471,000 in the same period of 2002.
Reductions of $17,000 in employee benefit costs and reductions in professional
fees of $2,000 were more than offset by increases totaling $49,000 in DD&A and
other types of SG&A costs, including higher insurance costs.

Selling, general and administrative expenses

The Company's selling, general and administrative expenses ("SG&A") in the
first half of 2003 increased to $448,000 from $432,000 for the 2002 six months.
Other operations incurred approximately $14,000 more in SG&A for the six months
of 2003 compared to the same period in 2002 as a result of a net increase in
numerous types of expenses, none of which were large individually.

Depreciation, depletion and amortization expenses

DD&A expense increased $39,000 from $59,000 for the six months ended June
30, 2002 to $98,000 for the same period in 2003. The increase was due primarily
to increased amortization expense associated with the capitalized costs of
issuing the 10% subordinated debt.

Other income and expense

The other income and expenses for the first six months of 2003 netted to a
loss of $196,000 compared to a loss of $214,000 for the same period in 2002.
Interest income was down $58,000 for the first half of 2003 compared to the same
period in 2002. Interest expense was up $101,000 as a result of the increase in
debt to related parties and the issuance of the 10% subordinated debt. The
Company realized gains on sale of assets for the first six months of 2002
totaling $10,000 versus $1,000 in the current year period.

The Company's equity in the operations of unconsolidated affiliates netted
to income of $70,000 for the first six months of 2003 compared to a loss of
$120,000 for the same period in 2002. The Company's equity in the earnings of
Cibola increased $34,000 from $75,000 for the first six months of 2002 to
$109,000 for the same period in 2003. The Company reflected a loss of $39,000
associated with the affiliate in China for the first half of 2003 compared to a
loss of $195,000 for the same period in 2002. The losses represent 100% and 50%,
respectively, of the losses recorded by the Chinese affiliate. As discussed, the
Company is involved in litigation with its former partner in this entity and is
seeking dissolution of the entity and recovery of certain costs associated with
its operation. In the interim and starting in 2003, the Company is recording
100% of costs associated with leased office space and a computer that the
Company is paying for on behalf of the affiliate, along with those legal
expenses directly attributable to the affiliate.

Income taxes

The Company recorded no provision for taxes in the either first half of
2003 or 2002. 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
------------
Complete details concerning the discontinuance of the interstate travel
facilities ("ITF") Segment are contained in "Material changes in results of
operations - Quarter ended June 30, 2003 as compared with the Quarter ended June
30, 2002" under the "Discontinued Operations - ITF Segment" heading.

ITF's revenues and actual operating losses were none and $5,000,
respectively, for the six months ended June 30, 2003. The actual losses for the
six months ended June 30, 2003 were charged to operations.

ITF's revenues and actual operating losses were none and $6,000,
respectively, for the six months ended June 30, 2002. The actual losses for the
six months ended June 30, 2002 were charged against the loss accrual recorded in
the fourth quarter of 2001.

BE/IM Segment
-------------
Complete details concerning the discontinuance of NABR are contained in
"Material changes in results of operations - Quarter ended June 30, 2003 as
compared with the Quarter ended June 30, 2002" under the "Discontinued
Operations - BE/IM Segment" heading.

The revenues and actual loss for the six months ended June 30, 2003 were
none and $7,000, respectively. These losses were charged against the loss
accrual recorded in 1999. The revenues and actual loss for the six months ended
June 30, 2002 were $120,000 and $67,000, respectively. These losses were not
anticipated in the loss accrual recorded in 1999. The Company charged $7,000 in
losses against the accrual for anticipated expenses related to the shutdown of
the larger of its two plants.

WS Segment
----------
Complete details concerning the discontinuance of the Company's natural gas
well testing operations in Mexico are contained in "Material changes in results
of operations - Quarter ended June 30, 2003 as compared with the Quarter ended
June 30, 2002" under the "Discontinued Operations - WS Segment" heading.

The segment recorded no revenues for the first six months of 2003 or 2002.
Beard recorded income of $11,000 for the first six months of 2003 compared to
operating losses of $36,000 for the six-month period ended June 30, 2002. The
income for 2003 included $45,000 from the sale of assets.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

At June 30, 2003, the Company had notes receivable of $30,000 and long-term
debt of $5,039,000, including accrued interest to related entities of $225,000.
The notes receivable and $4,814,000 of the long-term debt have fixed interest
rates; therefore, the Company's interest income and expense and operating
results would not be affected by an increase in market interest rates for these
items. The Company's outstanding bank debt totaling $300,000 floats with the
prime rate, and a 10% increase in market interest rates would have increased the
Company's interest expense by approximately $1,000. At June 30, 2003, a 10%
increase in market interest rates would have reduced the fair value of the
Company's notes receivable by $3,000 and reduced the fair value of its long-term
debt by $56,000.

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
- ----------------------
The long-awaited Settlement in the McElmo Dome litigation is now a
certainty. The first installment, totaling approximately $1,162,000 was received
by the Company on July 31, 2003. The second installment, totaling approximately
$2,814,000 is expected to be received on or about October 1, 2003.

In a separate suit, in which the Company is not a defendant, the parties
who objected to the Settlement have sued the managers of the Coalition alleging
all sorts of ridiculous claims which defendants have denied. The Coalition has
held back approximately $800,000 as a litigation reserve until this matter is
resolved to pay for defense of the case and winding up costs of the Coalition.
The Company expects that this matter will be resolved in favor of the
defendants, and that the Company will ultimately receive an additional $100,000
to $125,000 from the holdback in addition to the two installments described
above.

ABT Beard Litigation
- --------------------
In September of 2002 a controversy arose between the Company and its
technology partner concerning their legal rights and relationships. Lengthy
negotiations and discussions were unsuccessful in arriving at a mutually
agreeable solution. In November of 2002, the Company filed suit against American
Bio-Tech, Inc. ("ABT") seeking judicial termination of the partnership between
the Company and ABT. In January of 2003, ABT filed its answer and asserted
counterclaims against the Company and third-party claims against various Company
affiliates seeking an unspecified amount of damages plus attorneys' fees and
costs. The Company and the third-party defendants have filed an answer denying
liability and stating their intention to vigorously defend the claims. The
outcome of the litigation cannot presently be determined. On July 11, 2003, the
Company filed a Motion to Compel Arbitration.

Visa Litigation
- ---------------
On May 8, 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 willful
infringement of the VIMachine Patent; (ii) 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; and (iii) related to
Visa's breach of certain confidentiality agreements expressed or implied. In
addition, Plaintiffs are seeking attorney fees and costs related to the
foregoing claims.

During the first quarter of 2000 starpay's technology was relayed to Visa
verbally, in face-to-face conferences, telephone calls, in e-mails and in
regular correspondence. The suit alleges that, after receiving starpay's
technology and ideas, Visa filed a provisional patent application in April of
2000 using information supplied by starpay. The suit also alleges that Visa's
payer authentication service ("VPAS") infringes the VIMachine Patent. From early
2000 until recently, starpay tried on several occasions to enter into meaningful
negotiations with Visa to resolve their intellectual property concerns. Visa has
continually denied their infringement of the VIMachine Patent and starpay's
assertion that Visa has appropriated starpay's technology.

In November of 2000 Visa publicly announced that it was testing VPAS. In
September of 2001 Visa stated that, once rolled out globally, it expected VPAS
to reduce Internet payment disputes by at least 50%. Plaintiffs allege in the
suit that, based upon Visa's transaction volume of about $2 trillion per year,
this could easily result in savings of $100 million or more per year. VPAS is
the payment system currently being widely advertised as "Verified by Visa" with
Emmitt Smith as a spokesperson.

Item 2. Changes in Securities.

The Company's preferred stock was mandatorily redeemable through December
31, 2002, from one-third of Beard's "consolidated net income" as defined. On
January 1, 2003 each share of Beard preferred stock ceased to be redeemable and
became convertible into Beard common stock. Each preferred share was convertible
into 4.59839154 (128,010) common shares on June 30, 2003. 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 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:

2 Plan of acquisition, reorganization, arrangement, liquidation or
succession:

2(a) Agreement and Plan of Reorganization by and among Registrant, Beard Oil
Company ("Beard Oil") and New Beard, Inc., dated as of July 12, 1993 (see
Addendum A to Part I, which is incorporated herein by reference;
schedules to the Agreement have been omitted). (This Exhibit has been
previously filed as Exhibit 3(b), filed on July 27, 1993 to Registrant's
Registration Statement on Form S-4, File No. 33-66598, and same is
incorporated herein by reference).

2(b) Agreement and Plan of Merger by and between The Beard Company and The New
Beard Company, dated as of September 16, 1997. (This Exhibit has been
previously filed as Exhibit B to Registrant's Proxy Statement filed on
September 12, 1997, and same is incorporated herein by reference).

2(c) Certificate of Merger merging The Beard Company into The New Beard
Company as filed with the Secretary of State of Oklahoma on November 26,
1997. (This Exhibit has been previously filed as Exhibit 2.1 to
Registrant's Form 8-K, filed on December 8, 1997, and same is
incorporated herein by reference).

3(i) Certificate of Incorporation of The New Beard Company as filed with the
Secretary of State of Oklahoma on September 11, 1997. (This Exhibit has
been previously filed as Exhibit C to Registrant's Proxy Statement filed
on September 12, 1997, and same is incorporated herein by reference).

3(ii) 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(a) 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(b) 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, 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).

10 Material contracts:

10(a) The Beard Company 2003 Deferred Stock Compensation Plan, adopted by the
Board of Directors effective January 31, 2003 and approved by the
stockholders on July 31, 2003. (This Exhibit has been previously filed as
Exhibit "A" to Registrant's Proxy Statement filed on June 17, 2003, and
same is incorporated herein by reference).*

10(b) Supplemental Letter Loan Agreement by and between Registrant and the
William M. Beard and Lu Beard 1988 Charitable Unitrust (the "Unitrust")
dated June 6, 2003.

10(c) Supplemental Promissory Note from Registrant to the Trustees of the
Unitrust dated June 6, 2003.

10(d) Extension Promissory Note from Registrant to Bank of Oklahoma, N.A.
("BOK") dated May 15, 2003.

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

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

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

32 Section 1350 Certifications:

32(a) Chief Executive Officer Certification required by Rule 13a-14(b) or Rule
15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States
Code.

32(b) Chief Financial Officer Certification required by Rule 13a-14(b) or Rule
15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States
Code.

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) Five reports on Form 8-K were filed by the Company during the quarter
for which this report is filed. An 8-K filed on April 15, 2003 included a news
release setting forth fiscal year 2002 financial results. An 8-K filed on May 7,
2003 included a news release announcing the finalization of a patent license
agreement by the Company's e-Commerce Segment. An 8-K filed on May 12, 2003
included a news release concerning the filing of litigation by Registrant's
e-Commerce subsidiary against Visa USA. An 8-K filed on May 16, 2003 included a
news release setting forth the Company's first quarter financial results and
contained a status report concerning the Company's litigation at McElmo Dome. An
8-K filed on June 16, 2003 contained an additional update concerning the status
of the McElmo Dome litigation.



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) August 13, 2003
Herb Mee, Jr., President and
Chief Financial Officer

/s/Jack A. Martine
(Date) August 13, 2003
Jack A. Martine, Controller and
Chief Accounting Officer

EXHIBIT INDEX

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

2(a) Agreement and Plan of Reorganization by Incorporated herein by reference
and among Registrant, Beard Oil Company
("Beard Oil") and New Beard, Inc.,
dated as of July 12, 1993 (see Addendum
A to Part I, which is incorporated
herein by reference; schedules to the
Agreement have been omitted).

2(b) Agreement and Plan of Merger by and Incorporated herein by reference
between The Beard Company and The New
Beard Company, dated as of September
16, 1997.

2(c) Certificate of Merger merging The Beard Incorporated herein by reference
Company into The New Beard Company as
filed with the Secretary of State of
Oklahoma on November 26, 1997.

3(i) Certificate of Incorporation of The New Incorporated herein by reference
Beard Company as filed with the
Secretary of State of Oklahoma on
September 11, 1997.

3(ii) Registrant's By-Laws as currently in Incorporated herein by reference
effect.

4(a) Certificate of Designations, Powers, Incorporated herein by reference
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(b) Settlement Agreement, with Certificate Incorporated herein by reference
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, dated
as of April 13, 1995.

10(a) The Beard Company 2003 Deferred Stock Incorporated herein by reference
Compensation Plan, adopted by the Board
of Directors effective January 31, 2003
and approved by the stockholders on
July 31, 2003.

10(b) Supplemental Letter Loan Agreement by Filed herewith electronically
and between Registrant and the William
M. Beard and Lu Beard 1988 Charitable
Unitrust (the "Unitrust") dated June 6,
2003.

10(c) Supplemental Promissory Note from Filed herewith electronically
Registrant to the Trustees of the
Unitrust dated June 6, 2003.

10(d) Extension Promissory Note from Filed herewith electronically
Registrant to Bank of Oklahoma, N.A.
("BOK") dated May 15, 2003.

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

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

32(a) Chief Executive Officer Certification Filed herewith electronically
required by Rule 13a-14(b) or Rule
15d-14(b) and Section 1350 of Chapter
63 of Title 18 of the United States
Code.

32(b) Chief Financial Officer Certification Filed herewith electronically
required by Rule 13a-14(b) or Rule
15d-14(b) and Section 1350 of Chapter
63 of Title 18 of the United States
Code.