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 September 30, 2002
                                       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 the number of shares outstanding of each of the registrant's
classes of common stock as of October 31, 2002.


                   Common Stock $.001333 par value - 1,828,845


                                THE BEARD COMPANY

                                      INDEX


PART I. FINANCIAL INFORMATION                                              Page
                                                                           ----
Item 1.   Financial Statements..............................................

    Balance Sheets - September 30, 2002 (Unaudited) and
       December 31, 2001....................................................

    Statements of Operations - Three Months and Nine Months
       ended September 30, 2002 and 2001 (Unaudited)........................

    Statements of Shareholders' Equity - Year ended December 31, 2001
       and Nine Months ended September 30, 2002 (Unaudited).................

    Statements of Cash Flows - Nine Months ended
       September 30, 2002 and 2001 (Unaudited)..............................

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

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

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

PART II.  OTHER INFORMATION

Item 2.   Changes in Securities.............................................

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

Signatures..................................................................

Certifications for Form 10-Q ...............................................


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                                THE BEARD COMPANY AND SUBSIDIARIES
                                          Balance Sheets


                                                                   September 30,   December 31,
                            Assets                                       2002           2001
                            ------                                 -------------   ------------
                                                                             
Current assets:
       Cash and cash equivalents                                   $     22,000    $     55,000
       Accounts receivable, less allowance for doubtful
          receivables of $107,000 in 2002 and 2001                      146,000         175,000
       Inventory                                                          6,000          76,000
       Prepaid expenses and other assets                                 17,000          56,000
       Current portion of notes receivable                              154,000         180,000
                                                                   ------------    ------------
                  Total current assets                                  345,000         542,000
                                                                   ------------    ------------

Notes receivable                                                         54,000         108,000

Investments and other assets                                            911,000         652,000

Property, plant and equipment, at cost                                4,456,000       4,894,000
       Less accumulated depreciation, depletion and amortization      1,905,000       2,184,000
                                                                   ------------    ------------
                  Net property, plant and equipment                   2,551,000       2,710,000
                                                                   ------------    ------------
Intangible assets and other assets, at cost                             159,000          48,000
       Less accumulated amortization                                     33,000           2,000
                                                                   ------------    ------------
                  Net intangible assets                                 126,000          46,000
                                                                   ------------    ------------
                                                                   $  3,987,000    $  4,058,000
                                                                   ============    ============

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

Current liabilities:
       Trade accounts payable                                      $    230,000    $    156,000
       Accrued expenses                                                 267,000         429,000
       Short term debt                                                  300,000         300,000
       Current maturities of long-term debt                               8,000           7,000
                                                                   ------------    ------------
                  Total current liabilities                             805,000         892,000
                                                                   ------------    ------------
Long-term debt less current maturities                                  848,000          19,000

Long-term debt - related entities                                     3,161,000       2,494,000

Other long-term liabilities                                             108,000         108,000

Redeemable preferred stock of $100 stated value;
       5,000,000 shares authorized; 27,838 shares issued
       outstanding in 2002 and 2001 (note 4)                            889,000         889,000

Common shareholders' equity (deficiency):
       Common stock of $.001333 par value per share; 7,500,000
          shares authorized; 2,123,898 shares issued
          and outstanding in 2002 and 2001                                3,000           3,000
       Capital in excess of par value                                38,151,000      38,081,000
       Accumulated deficit                                          (38,117,000)    (36,568,000)
       Accumulated other comprehensive loss                             (15,000)        (14,000)
       Treasury stock, 295,053 shares, at cost, in 2002 and 2001     (1,846,000)     (1,846,000)
                                                                   ------------    ------------
                  Total common shareholders' equity (deficiency)     (1,824,000)       (344,000)
                                                                   ------------    ------------
Commitments and contingencies (note 7)
                                                                   $  3,987,000    $  4,058,000
                                                                   ============    ============


See accompanying notes to financial statements.



                                         THE BEARD COMPANY AND SUBSIDIARIES
                                              Statements of Operations
                                                     (Unaudited)

                                                           For Three Months Ended         For Nine Months Ended
                                                        -----------------------------  ----------------------------
                                                        September 30,   September 30,  September 30,  September 30,
                                                             2002           2001           2002           2001
                                                         -----------    -----------    -----------    -----------
                                                                                          
Revenues:
     Coal reclamation                                    $         -    $    23,000    $    12,000    $   120,000
     Carbon dioxide                                          129,000        100,000        324,000        342,000
     China                                                         -              -              -              -
     e-Commerce                                                    -              -              -              -
     Other                                                     2,000          6,000         12,000         18,000
                                                         -----------    -----------    -----------    -----------
                                                             131,000        129,000        348,000        480,000
                                                         -----------    -----------    -----------    -----------
Expenses:
     Coal reclamation                                        105,000        135,000        338,000        395,000
     Carbon dioxide                                           35,000         28,000         85,000         73,000
     China                                                         -              -              -              -
     e-Commerce                                                    -              -              -              -
     Selling, general and administrative                     270,000        288,000        830,000        904,000
     Depreciation, depletion & amortization                   41,000         24,000        100,000         68,000
     Other                                                     7,000          3,000         26,000         20,000
                                                         -----------    -----------    -----------    -----------
                                                             458,000        478,000      1,379,000      1,460,000
                                                         -----------    -----------    -----------    -----------
Operating profit (loss):
     Coal reclamation                                       (139,000)      (143,000)      (425,000)      (385,000)
     Carbon dioxide                                           85,000         64,000        213,000        244,000
     China                                                         -              -              -              -
     e-Commerce                                              (48,000)       (34,000)      (123,000)      (137,000)
     Other, primarily corporate                             (225,000)      (236,000)      (696,000)      (702,000)
                                                         -----------    -----------    -----------    -----------
                                                            (327,000)      (349,000)    (1,031,000)      (980,000)
Other income (expense):
     Interest income                                          36,000         54,000         95,000        130,000
     Interest expense                                       (114,000)       (56,000)      (276,000)      (144,000)
     Equity in operations of unconsolidated affiliates       (45,000)       (50,000)      (165,000)      (156,000)
     Gain on sale of assets                                        -         11,000         10,000         79,000
     Other                                                         -         (1,000)        (1,000)         5,000
                                                         -----------    -----------    -----------    -----------
Loss from continuing operations before income taxes         (450,000)      (391,000)    (1,368,000)    (1,066,000)
Income taxes (note 6)                                              -              -              -         60,000
                                                         -----------    -----------    -----------    -----------
Loss from continuing operations                             (450,000)      (391,000)    (1,368,000)    (1,006,000)

     Loss from discontinued operations                       (78,000)       (58,000)      (181,000)      (516,000)
                                                         -----------    -----------    -----------    -----------
Net loss                                                 $  (528,000)   $  (449,000)   $(1,549,000)   $(1,522,000)
                                                         ===========    ===========    ===========    ===========
Net loss per average common share outstanding:
     Basic and diluted:
        Loss from continuing operations                  $     (0.25)   $     (0.21)   $     (0.75)   $     (0.55)
        Loss from discontinued operations                      (0.04)         (0.03)         (0.10)         (0.28)
                                                         -----------    -----------    -----------    -----------
        Net loss                                         $     (0.29)   $     (0.24)   $     (0.85)   $     (0.83)
                                                         ===========    ===========    ===========    ===========
Weighted average common shares outstanding -
     basic and diluted                                     1,829,000      1,829,000      1,829,000      1,829,000
                                                         ===========    ===========    ===========    ===========


See accompanying notes to financial statements.



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

                                                                                                                           Total
                                                                                        Accumulated                       Common
                                                         Capital in                       Other                        Shareholders'
                                              Common     Excess of      Accumulated    Comprehensive     Treasury         Equity
                                               Stock     Par Value        Deficit         Income          Stock        (Deficiency)
                                            ----------- -------------  --------------  --------------  -------------  -------------
                                                                                                    
Balance, December 31, 2000                  $    3,000  $ 37,986,000   $( 34,247,000)  $(    13,000)   $( 1,846,000)  $  1,883,000

       Net loss                                      -             -      (2,321,000)             -               -     (2,321,000)
       Comprehensive income:
         Foreign currency translation
         adjustment                                  -             -               -         (1,000)              -         (1,000)

                                                                                                                      -------------
       Comprehensive loss                            -             -               -              -               -     (2,322,000)
                                                                                                                      -------------

       Reservation of shares pursuant to
         deferred compensation plan                  -        95,000               -              -               -         95,000

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

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

       Net loss, nine months ended September
         30, 2002 (unaudited)                        -             -      (1,549,000)              -              -     (1,549,000)
       Comprehensive income:
         Foreign currency translation
         adjustment (unaudited)                      -             -               -          (1,000)             -         (1,000)

                                                                                                                      -------------
       Comprehensive loss (unaudited)                -             -               -               -              -     (1,550,000)
                                                                                                                      -------------

       Issuance of stock warrants                    -         5,000               -               -              -          5,000

       Reservation of shares pursuant to
         deferred compensation plan
         (unaudited)                                 -        65,000               -               -              -         65,000

                                            ----------- -------------  --------------  --------------  -------------  -------------
Balance, September 30, 2002 (unaudited)     $    3,000  $ 38,151,000   $( 38,117,000)  $(     15,000)  $( 1,846,000)  $( 1,824,000)
                                            =========== =============  ==============  ==============  =============  =============


See accompanying notes to financial statements.


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

                                                                  For the Nine Months Ended
                                                                  -------------------------
                                                              September 30, 2002 September 30, 2001
                                                              ------------------ ------------------
                                                                           
Operating activities:
     Cash received from customers                                 $   561,000    $   646,000
     Cash paid to suppliers and employees                          (1,488,000)    (1,841,000)
     Interest received                                                 30,000        107,000
     Interest paid                                                   (201,000)       (98,000)
     Tax refunds                                                            -         60,000
                                                                  -----------    -----------
          Net cash used in operating activities                    (1,098,000)    (1,126,000)
                                                                  -----------    -----------

Investing activities:
     Acquisition of property, plant and equipment                     (17,000)       (71,000)
     Acquisition of intangibles                                        (2,000)             -
     Proceeds from sale of assets                                     129,000        162,000
     Investment in and advances to fifty percent-owned
        subsidiary in Mexico                                          (10,000)      (418,000)
     Investment in and advances to fifty percent-owned
        investment in China                                          (539,000)      (335,000)
     Advances for notes receivable                                     (7,000)      (372,000)
     Payments on notes receivable                                     109,000        979,000
     Other                                                            109,000          6,000
                                                                  -----------    -----------
          Net cash used in investing activities                      (228,000)       (49,000)
                                                                  -----------    -----------

Financing activities:
     Proceeds from term notes                                       1,858,000      1,563,000
     Payments on line of credit and term notes                       (456,000)      (387,000)
     Capitalized costs associated with issuance of subordinated debt (109,000)             -
                                                                  -----------    -----------
          Net cash provided by investing activities                 1,293,000      1,176,000
                                                                  -----------    -----------

Net increase (decrease) in cash and cash equivalents                  (33,000)         1,000

Cash and cash equivalents at beginning of period                       55,000         31,000
                                                                  -----------    -----------

Cash and cash equivalents at end of period                        $    22,000    $    32,000
                                                                  ===========    ===========


Continued

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

Reconciliation of Net loss to Net Cash Used in Operating Activities

                                                                  For the Nine Months Ended
                                                                  -------------------------
                                                              September 30, 2002 September 30, 2001
                                                              ------------------ ------------------
                                                                           
Net loss                                                          $(1,549,000)   $(1,522,000)
Adjustments to reconcile net loss to net cash
 used in operating activities:
     Depreciation, depletion and amortization                         100,000        107,000
     Gain on sale of assets                                           (97,000)       (96,000)
     Equity in net loss of unconsolidated affiliates                  175,000        468,000
     Impairment of fixed assets                                        77,000              -
     Net cash used by discontinued operations offsetting
       accrued impairment loss                                         (9,000)       (44,000)
     Noncash compensation expense                                       5,000              -
                                                                  -----------    -----------
       Net cash used in operations before
          changes in current assets and liabilities                (1,298,000)    (1,087,000)
     Decrease in accounts receivable, prepaid expenses and
        other current assets                                          103,000         47,000
     Decrease in inventories                                           70,000         51,000
     Increase (decrease) in accounts payable, accrued
        expenses and other liabilities                                 27,000       (137,000)
                                                                  -----------    -----------
     Net cash used in operating activities                        $(1,098,000)   $(1,126,000)
                                                                  ===========    ===========


See accompanying notes to financial statements.

                       THE BEARD COMPANY AND SUBSIDIARIES
                          Notes to Financial Statements

                           September 30, 2002 and 2001
                                   (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 2001
     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 nine month periods ended
     September 30, 2002, 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 through a
     50%-owned subsidiary ("ABT-Beard") which focuses on the installation and
     construction of composting facilities. The e-Commerce Segment consists of a
     71%-owned subsidiary which is pursuing the development of a virtually
     secure payment system to be used exclusively for Internet transactions. Its
     current focus is to develop licensing arrangements and other fee based
     arrangements with companies implementing technology in conflict with its
     intellectual property.

     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; (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;
     and (4) in March 2001 the Company ceased providing financial support to its
     environmental remediation ("ER") subsidiary, its exclusive marketing
     license was subsequently cancelled, and the ER Segment was discontinued.

     Investments
     -----------
     The Company owns a 50% interest in ABT-Beard, L.L.C., a company involved in
     pursuing environmental opportunities in China. ABT-Beard had no revenues
     for either the first nine months of 2002 or 2001. ABT-Beard incurred losses
     of $191,000 and $170,000 for the third quarter of 2002 and 2001,
     respectively. ABT-Beard incurred losses of $581,000 and $525,000 for the
     first nine months of 2002 and 2001, respectively.

     Impact of Recently Issued Accounting Standards Not Yet Adopted
     --------------------------------------------------------------
     In June 2001, the Financial Accounting Standards Board ("FASB") issued
     Statement No. 142, Goodwill and Other Intangible Assets. Statement No. 142
     applies to intangible assets acquired individually or with a group of other
     assets at acquisition and subsequent to acquisition. According to Statement
     No. 142, intangible assets are to be recorded at fair value and goodwill
     will not be amortized, but assessed annually for impairment.

     In September 2001, the FASB issued Statement No. 143, Accounting for Asset
     Retirement Obligations. Statement No. 143 applies to the initial
     measurement and subsequent accounting for obligations associated with the
     sale, abandonment, or other type of disposal of long-lived tangible assets.
     The statement requires that asset retirement obligations be recognized at
     fair value when the obligation is incurred.

     In October 2001, the FASB issued Statement No. 144, Accounting for the
     Impairment or Disposal of Long-Lived Assets. The assets covered by the
     statement include those to be held and used or to be disposed of, such as
     assets under capital leases of lessees, assets subject to operating leases
     of lessors, and prepaid assets. This statement provides guidance for the
     recognition and measurement of an impairment loss for certain types of
     long-lived assets and expands the scope of discontinued operations.

     The Company has adopted FASB Statements No. 142 and 144 effective January
     1, 2002 for the fiscal year ended December 31, 2002 and the impact is not
     material. The Company will be required to adopt FASB Statement 143
     effective January 1, 2003 for the fiscal year ended December 31, 2003. The
     Company has not evaluated the effects of Statement No. 143, but does not
     believe that adoption of this accounting standard will have a significant
     effect on the financial position or results of operations of the Company.

     Reclassifications
     -----------------
     Certain 2001 balances have been reclassified to conform to the 2002
     presentation. As described in note 3, the Company discontinued two of its
     segments. As a result the 2001 statement of operations has been
     reclassified to reflect the two segments' operations as discontinued.


(2)  Liquidity and Ability to Fund Operations
     ----------------------------------------
     As a result of continuing operating losses during the past nine months, the
     Company's cash and cash equivalents decreased slightly from $55,000 at
     December 31, 2001 to $22,000 at September 30, 2002. To mitigate potential
     liquidity problems, the Company obtained financing of $1.8 million in 2000,
     including $1.5 million from an affiliate of the Company's chairman. This
     credit line was increased to a total of $2,250,000 in September of 2001, to
     $2,625,000 in February of 2002 and to $3,000,000 in October of 2002. The
     line is secured by a pledge of approximately 89% of the Company's working
     and overriding royalty interests in the McElmo Dome Unit. Despite these
     actions and the private placement of $1,200,000 of 10% subordinated notes
     discussed below, working capital deteriorated $110,000 during the first
     nine months of 2002.

     The Company is focusing on replacing its Coal Segment's revenues and
     currently has two major projects in various stages of development, both of
     which are ultimately expected to mature into operating projects. In each
     case core holes have been drilled and sample analyses have been completed
     with favorable results. The projects are in two different states and
     involve two different parties. Negotiations are in progress with the pond
     owner of one of the projects concerning the installation of a preparation
     plant to recover clean coal. The installation of this project requires the
     arrangement of necessary financing. Negotiations are in progress with a
     third party to form a joint venture or limited liability company (the
     "LLC") that would provide the initial working capital and guarantee the
     necessary equipment financing on this project, and give the LLC the right
     of first refusal to participate in future recovery projects that require
     financing. The second project involves the transfer of a large amount of
     non-recoverable slurry to a new disposal area, and may ultimately result in
     the installation of a preparation plant. The initial phase of this project
     would require no financing. We now expect to start the first of these two
     projects in the first quarter of 2003. Although the exact timing of both
     projects is uncertain, they are both 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
     either or both of the projects will materialize.

     Development activity in the China Segment, meanwhile, has been hampered by
     delays. Although ABT-Beard had reached agreements and/or formed Cooperative
     Joint Ventures ("CJV's") with various Chinese participants which
     contemplated the construction of three compost manufacturing facilities in
     which ABT-Beard would own an interest and receive an operating fee, two of
     these projects (i.e., Baoding and Qihe City) are now on indefinite hold
     pending resolution of some of the financing terms applicable to those
     projects, and the third project, which contemplates the construction of a
     plant in the City of Handan and which had been on indefinite hold, has been
     reactivated but is still on hold pending finalization of the Handan CJV,
     working out certain required additional documents and obtaining required
     approvals. In addition, Beard and the other owner of ABT-Beard have been
     involved in ongoing discussions concerning certain misunderstandings
     between the two owners, and certain changes in the management and
     operational structure of ABT-Beard. Until those discussions have been
     concluded, the additional Handan CJV documentation agreed upon, and the
     requisite approvals obtained, the construction of the Handan project
     compost facility will not begin.

     Key to the Company's liquidity is the anticipated settlement of a lawsuit,
     in which the Company is a Plaintiff, which has been in progress since 1996.
     A Settlement Agreement was signed by the parties in September of 2001. On
     May 6, 2002, the federal judge issued the Final Judgment approving the
     Settlement and ordered that a settlement fund of $50.4 million in cash be
     established to settle the class action lawsuit. In companion rulings on the
     same date the Judge also approved the allocation of settlement funds among
     the class members in the lawsuit. In late May, 2002, objectors entitled to
     receive approximately $107,000 of the total settlement filed an appeal to
     the final approval of the settlement. Such parties will argue their appeal
     before the Tenth Circuit Court of Appeals on November 20, 2002, with a
     decision expected to be made by the Court in January or February 2003.
     Distribution of the proceeds will be delayed until all appeal periods have
     run. The Company anticipates its share of the proceeds will be in excess of
     $3.5 million. Distribution of the contemplated proceeds will have a
     significant impact upon the Company's liquidity. Although there is the
     possibility that the appeals process could delay the Settlement into late
     2003 or possibly early 2004 or that the objecting parties could ultimately
     cause the Settlement to be overturned, the Company believes it is unlikely
     that the Settlement will be overturned.

     To further bolster working capital, the Company was successful in the
     private placement of $1,200,000 of 10% subordinated notes due September 30,
     2003, to "bridge the gap" until the settlement funds are distributed or
     until the anticipated Coal and China projects achieve positive cash flow.
     In the event the 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
     November 11, 2002, a total of 21,500 of such warrants had been issued to
     the note holders. Related parties purchased $320,000 of the offering, and
     had received a total of 10,000 warrants as of such date.

     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
     from the pay down of notes receivable, and can sell certain other assets to
     generate cash if necessary.

     The Company believes that the cash generated from the private debt
     placement and the remaining portion of its credit lines, coupled with the
     cash generated from the sale of assets, will be adequate to enable the
     Company to continue operations until (i) the settlement funds have been
     received or (ii) 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 a
     $1,603,000 estimated loss for the discontinuance 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 an additional $420,000 loss in 2000; $60,000 represented
     operating losses expected to be incurred by the discontinued ITF Segment
     prior to the anticipated disposal date of the remaining assets; $360,000
     represented an additional reduction in the estimated realizable value of
     the remaining C-stores and related assets as of December 31, 2000. The
     discontinued ITF Segment had no revenues for the three months ended
     September 30, 2001 while recording revenues of $7,000 for the nine-month
     period ended September 30, 2001. ITF's actual operating losses for the
     three and nine-month periods ended September 30, 2001 were $7,000 and
     $44,000, respectively. Such losses were charged against the loss accrual
     recorded in the fourth quarter of 2000.

     In December 2001, Beard recorded an additional $100,000 impairment in the
     carrying value of the facilities and $14,000 for anticipated operating
     losses for the period from December 31, 2001 through the expected disposal
     date of the remaining assets. ITF recorded no revenues for the first nine
     months of 2002 and incurred $3,000 and $9,000 of losses for the three and
     nine-month periods ending September 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.

     As of September 30, 2002, the significant assets related to the ITF Segment
     consisted primarily of the two remaining C-stores and other assets with a
     total recorded value of $406,000. The significant liabilities of the
     segment consisted of trade accounts payable and accrued expenses totaling
     $8,000. On November 4, 2002, the segment sold the remaining C-stores at
     public auction, for which it anticipates receiving net proceeds of
     approximately $303,000 cash by December 4, 2002. The segment recorded an
     additional impairment of $77,000 in the carrying values of such facilities,
     and anticipates no further impairment will be required.

     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 had no revenues for the smaller of the
     two plants for the three and nine-month periods ended September 30, 2002,
     respectively. The net losses for the three and nine-months ended September
     30, 2002 were $17,000 and $84,000, respectively, and were not anticipated
     in the loss accruals recorded in 1999. The Company charged $10,000 and
     $17,000 for the three and nine-month periods ended September 30, 2002,
     respectively, against the accrual for anticipated expenses related to the
     shutdown of the larger of its two plants. Revenues for the three and
     nine-month periods ending September 30, 2001 were none and $116,000,
     respectively. The actual operating results for the three and nine-month
     periods ending September 30, 2001 were losses of $2,000 and $45,000,
     respectively, which were charged against the loss accrual recorded in 1999.
     In addition, the Company recorded losses of $22,000 and $48,000 for the
     three and nine-month periods ended September 30, 2001, respectively, for
     the operations of the smaller of the two plants distributed to Beard from
     NABR. These losses were not anticipated in the loss accrual of 1999.

     As of September 30, 2002, the significant assets related to NABR's
     operations consisted primarily of equipment and inventory with estimated
     net realizable values of $35,000 and $6,000, respectively. The significant
     liabilities related to NABR's operations consisted primarily of accounts
     payable of $4,000 and accrued expenses related to the shutdown of
     operations totaling $79,000. The smaller of the two plants was sold
     effective July 31, 2002, which will eliminate future operating losses after
     such date. The Company is actively pursuing opportunities to sell NABR's
     remaining assets and expects the disposition to be completed by June 30,
     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 $21,000 and $65,000 of the
     holdback in June and November, respectively, of 2001. 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 the first nine months of 2002 and
     $3,000 for the same period in 2001. Beard's share of operating losses from
     the discontinued segment was $20,000 for the nine months ended September
     30, 2002. Beard recorded income from this discontinued segment of $16,000
     for the three months ended September 30, 2002 as a portion of the assets
     were sold for a gain of $39,000. Beard's share of operating losses from the
     discontinued segment was $36,000 and $451,000, respectively, for the three
     and nine-month periods ending September 30, 2001. For the first nine months
     of 2001, Beard's share of operating losses from the 50%-owned company was
     $327,000. The remaining $124,000 of losses incurred in the nine months
     ended September 30, 2001 were associated with the operations of the
     wholly-owned company and were not anticipated in the loss accrual.

     As of September 30, 2002, the significant assets of the WS Segment
     consisted of fixed assets with a recorded value of $146,000 and cash and
     accounts receivable totaling of $18,000. The significant liabilities of the
     entity consisted of trade accounts payable and accrued expenses totaling
     $62,000. It is anticipated that all liabilities of the segment will be paid
     prior to December 31, 2002.

     ER Segment
     ----------
     In March of 2001 the Company determined that it would no longer provide
     financial support to ISITOP, Inc., an 80%-owned subsidiary specializing in
     the remediation of polycyclic aromatic hydrocarbon ("PAH") contamination.
     The operations of ISITOP had previously comprised the Company's
     environmental remediation ("ER") Segment. On May 31, 2001, ISITOP was
     notified by the Licensor that the segment's exclusive U.S. marketing
     license for the chemical used for such PAH remediation had been cancelled.
     ISITOP generated no revenues in 2002 or in 2001. ISITOP's operating losses
     for the nine months ended September 30, 2002 totaled less than $1,000 which
     was all incurred in the second quarter of the year. The operating losses
     totaled less than $1,000 and $17,000 for the three and nine-month periods
     ending September 30, 2001, respectively. ISITOP had no significant assets
     or liabilities at September 30, 2002.


(4)  Redeemable Preferred Stock
     --------------------------
     The Company's preferred stock is mandatorily redeemable through December
     31, 2002, from one-third of Beard's "consolidated net income" as defined.
     Accordingly, one-third of future "consolidated net income" will accrete
     directly to preferred stockholders and reduce earnings per common share.
     The Company's 2002 operations through September 30 were not sufficient to
     begin the sharing of the consolidated net income, and it is anticipated
     that no redemption will be required. To the extent that the preferred stock
     is not redeemed by December 31, 2002, the shares of preferred stock can be
     converted into shares of the Company's common stock.

(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 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 refunds of $41,000 and $19,000 for
     federal and state income taxes, respectively, for the nine months ended
     September 30, 2001. There were no provisions for income taxes for the three
     and nine-month periods ended September 30, 2002.

     At September 30, 2002, 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         $ 54,789

                Tax depletion carryforward        Indefinite        $  5,482

(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.

     In connection with the sale of the fixed assets of the Mexican well testing
     operations the Company and its 50% partner have each, as to 50%,
     indemnified the purchaser from and against any claims, demands, actions,
     damages, cause of action, cost, liability, penalties and expense (including
     reasonable legal fees) that purchaser or its successors or assigns may
     suffer arising from the Mexican subsidiary's failure to file any applicable
     tax returns or pay any and all of its taxes which had accrued prior to the
     sale date. As of September 30, 2002, the accrued tax liabilities were
     estimated to be $8,000, with the Company liable for one-half of such
     amount.

     In connection with a Restructure of the Company in 1993, 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 the Restructure
     (collectively, the "Obligations"). Neither Beard nor Beard Oil is presently
     aware of any material liabilities existing as a result of such Obligations.

(8)  Stock Option and Deferred Compensation Plans
     --------------------------------------------
     The Company has reserved 206,250 shares of its common stock for issuance to
     key management employees and directors under The Beard Company 1993 Stock
     Option Plan. As of September 30, 2002 and 2001, there were 40,871 options
     outstanding under the plan at a weighted average exercise price of $3.16.
     In addition, there were 93,750 additional shares available for grant under
     the plan.

     The Company also has a deferred compensation plan for certain key
     executives and directors which provide for payments in the form of the
     Company's common stock upon the death, disability or retirement of the
     participant. 350,000 shares have been reserved for issuance under the plan.
     As of September 30, 2002 and 2001, 277,286 and 201,764 of such shares,
     respectively, had been reserved for distribution under the plan.

(9)  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 nine months of 2002
     and 2001: Coal, Carbon Dioxide, China and e-Commerce.

     The Coal Segment is in the business of operating coal fines reclamation
     and/or briquetting facilities in the U.S. and is pursuing the development
     of advanced fine coal preparation processes. The Carbon Dioxide Segment
     consists of the production of CO2 gas. The China Segment is pursuing
     environmental opportunities and the sale of technical services. The
     e-Commerce Segment is pursuing the development of a proprietary
     Internet-only payment system.

     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
      ------------------
      September 30, 2002
      ------------------
     Revenues from
       external  customers        $    -      $  129        $   -       $   -     $  129
     Segment profit (loss)          (140)         85         (191)        (48)      (294)

      Three months ended
      ------------------
      September 30, 2001
      ------------------
     Revenues from
       external  customers        $   23      $  100        $   -       $   -     $  123
     Segment profit (loss)          (144)         63         (170)        (34)      (285)

      Nine months ended
      -----------------
      September 30, 2002
      ------------------
     Revenues from
       external  customers        $   12      $  324        $   -       $   -     $  336
     Segment profit (loss)          (417)        213         (581)       (124)      (909)
     Segment assets                1,561         443          434          61      2,499

      Nine months ended
      -----------------
      September 30, 2001
      ------------------
     Revenues from
       external  customers        $  120      $  342        $   -       $   -     $  462
     Segment profit (loss)          (387)        244         (525)       (139)      (807)
     Segment assets                1,647         432            6          61      2,146


     Reconciliation of total reportable segment loss to consolidated loss from
     continuing operations before income taxes is as follows for the three and
     nine months ended September 30, 2002 and 2001 (in thousands):



                                               For the Three Months  For the Nine Months
                                                      Ended                Ended
                                               --------------------  --------------------
                                               September  September  September  September
                                                30, 2002   30, 2001   30, 2002   30, 2001
                                                --------   --------   --------   --------
                                                                     
Total loss for reportable segments              $  (294)   $  (285)   $  (909)   $  (807)
Eliminate loss from China operations
   accounted for as an equity investment            191        170        581        525
Equity in loss from China operations
   accounted for as an equity investment            (95)       (85)      (290)      (262)
Net corporate costs not allocated to segments      (252)      (191)      (750)      (522)
                                                -------    -------    -------    -------
     Total consolidated loss from continuing
      operations before income taxes            $  (450)   $  (391)   $(1,368)   $(1,066)
                                                =======    =======    =======    =======


                       THE BEARD COMPANY AND SUBSIDIARIES

                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

     THE 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, 2001 and results of operations for the
quarter ended September 30, 2002 compared to the prior year third quarter and
the nine months ended September 30, 2002 compared to the prior year nine 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 2001 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 continuing to pursue
environmental opportunities in China through a 50%-owned subsidiary
("ABT-Beard") which focuses on the installation and construction of composting
facilities. The e-Commerce Segment consists of a 71%-owned subsidiary which is
pursuing the development of a virtually secure payment system to be used
exclusively for Internet transactions. Its current focus is to develop licensing
arrangements and other fee based arrangements with companies implementing
technology in conflict with its intellectual property.

     In 1999 the Company adopted a plan to discontinue its ITF Segment, and
those operations were reflected as discontinued operations in 1998. The majority
of the assets of the ITF Segment were disposed of in 1999 and the 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
March 2001 the Company ceased providing financial support to ISITOP, Inc. and
shortly thereafter its exclusive marketing license was terminated. Accordingly,
the operations of the ER Segment have been reflected as discontinued. 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 - September 30, 2002 as compared with
December 31, 2001.

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



                             September 30,      December 31,          Increase
                                 2002              2001              (Decrease)
                             -----------       -----------          -----------
                                                           
Cash and cash equivalents    $    22,000       $    55,000          $   (33,000)

Working capital              $  (460,000)      $  (350,000)         $  (110,000)

Current ratio                   0.43 to 1         0.61 to 1


     During the first nine months of 2002, the Company decreased its working
capital by $110,000 from $(350,000) as of December 31, 2001. The placement of
the 10% Subordinated Debt infused over $900,000 in working capital in the second
quarter of 2002. Net advances from affiliates of the Company totaled $300,000.
In addition, a related entity of the Chairman of the Board advanced $280,000 to
the Company. Proceeds from the sales of assets totaled $129,000 during the first
nine months of 2002. The Company received payments on notes receivable totaling
$109,000 during the nine months ended September 30, 2002. $417,000 of working
capital were used to help fund the operations of the Coal Segment. There were
net advances of $539,000 to the Company's joint venture involved in the pursuit
of environmental opportunities in China. $124,000 was used to fund the startup
activities of the e-Commerce Segment. 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 two major projects in various stages of development, both of which
are ultimately expected to mature into operating projects. In each case core
holes have been drilled and sample analyses have been completed with favorable
results. The projects are in two different states and involve two different
parties. Negotiations are in progress with the pond owner of one of the projects
concerning the installation of a preparation plant to recover clean coal. The
installation of this project requires the arrangement of necessary financing.
Negotiations are in progress with a third party to form a joint venture or
limited liability company (the "LLC") that would provide the initial working
capital and jointly guarantee the necessary equipment financing on this project,
and give the LLC the right of first refusal to participate in future recovery
projects that require financing. The second project involves the transfer of a
large amount of non-recoverable slurry to a new disposal area, and may
ultimately result in the installation of a preparation plant. The initial phase
of this project would require no financing. We now expect to start the first of
these two projects in the first quarter of 2003. Although the exact timing of
both projects is uncertain, they are both 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 either or
both of the projects will materialize.

     Development activity in the China Segment, meanwhile, has been hampered by
delays. Although ABT-Beard had reached agreements and/or formed Cooperative
Joint Ventures ("CJV's") with various Chinese participants which contemplated
the construction of three compost manufacturing facilities in which ABT-Beard
would own an interest and receive an operating fee, two of these projects (i.e.,
Baoding and Qihe City) are now on indefinite hold pending resolution of some of
the financing terms applicable to those projects, and the third project, which
contemplates the construction of a plant in the City of Handan and which had
been on indefinite hold, has been reactivated but is still on hold pending
finalization of the Handan CJV, working out certain required additional
documents and obtaining required approvals. In addition, Beard and the other
owner of ABT-Beard have been involved in ongoing discussions concerning certain
misunderstandings between the two owners, and certain changes in the management
and operational structure of ABT-Beard. Until those discussions have been
concluded, the additional Handan CJV documentation agreed upon, and the
requisite approvals obtained, the construction of the Handan project compost
facility will not begin.

     Key to the Company's liquidity is the anticipated settlement of a lawsuit,
in which the Company is a Plaintiff, which has been in progress since 1996. A
Settlement Agreement was signed by the parties in September of 2001. On May 6,
2002, the federal judge issued the Final Judgment approving the Settlement and
ordered that a settlement fund of $50.4 million in cash be established to settle
the class action lawsuit. In companion rulings on the same date the Judge also
approved the allocation of settlement funds among the class members in the
lawsuit. In late May, 2002, objectors entitled to receive approximately $107,000
of the total settlement filed an appeal to the final approval of the settlement.
Such parties will argue their appeal before the Tenth Circuit Court of Appeals
on November 20, 2002, with a decision expected to be made by the Court in
January or February 2003. Distribution of the proceeds will be delayed until all
appeal periods have run. The Company anticipates its share of the proceeds will
be in excess of $3.5 million. Distribution of the contemplated proceeds will
have a significant impact upon the Company's liquidity. Although there is the
possibility that the appeals process could delay the Settlement into late 2003
or possibly early 2004 or that objecting parties could ultimately cause the
Settlement to be overturned, the Company believes it is unlikely that the
Settlement will be overturned.

     To further bolster working capital, the Company was successful in the
private placement of $1,200,000 of 10% subordinated notes due September 30,
2003, to "bridge the gap" until the settlement funds are distributed or until
the anticipated Coal and China projects achieve positive cash flow. In the event
the 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 November 11, 2002, a total of 21,500
of such warrants had been issued to the note holders. Related parties purchased
$320,000 of the offering, and had received a total of 10,000 warrants as of such
date.

     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 from
the pay down of notes receivable, and can sell certain other assets to generate
cash if necessary.

     The Company believes that the cash generated from the private debt
placement, coupled with the cash generated from the sale of assets, will be
adequate to enable the Company to continue operations until (i) the settlement
funds have been received or (ii) 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 September 30, 2002 as
compared with the Quarter ended September 30, 2001.

     The net loss for the quarter ended September 30, 2002 was $528,000,
compared to a net loss of $449,000 for the third quarter of the prior year.
Discontinued operations accounted for $78,000 of the loss in the third quarter
of 2002 compared to $58,000 for the same period in 2001. The Coal Segment
reported a $4,000 decrease in operating loss for the quarter. The CO2 Segment
had a $21,000 increase in its operating margin due primarily to an increase in
revenue from its interests in the McElmo Dome field as a result of an increase
in price for CO2. The China Segment's operations are now conducted through an
affiliate and as such are reflected in equity in unconsolidated affiliates,
which posted a loss of $95,000 for the third quarter of 2002 compared to a loss
of $85,000 for the same period in 2001. The e-Commerce Segment incurred
operating losses of $48,000 for the third quarter of 2002 compared to $34,000 in
the third quarter of 2001. The operating loss in Other activities for the third
quarter of 2002 decreased $11,000 compared to the same period in 2001. As a
result, the operating loss in the third quarter of 2002 was $22,000 smaller than
in the same period of 2001.

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



                                               2002               2001
                                          ---------------    ---------------
                                                       
        Operating profit (loss):
          Coal reclamation                $     (139,000)    $     (143,000)
          Carbon dioxide                          85,000             64,000
          China                                        -                  -
          e-Commerce                             (48,000)           (34,000)
                                          ---------------    ---------------
                    Subtotal                    (102,000)          (113,000)
          Other                                 (225,000)          (236,000)
                                          ---------------    ---------------
                     Total                $     (327,000)    $     (349,000)
                                          ===============    ===============


     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 segment's revenues decreased $23,000 to none for the third quarter of
2002 compared to the same period in 2001. Operating costs decreased $30,000 to
$105,000 for the third quarter of 2002 compared to $135,000 for the same period
in 2001 due to the reduced level of activity. SG&A costs increased $1,000 for
the third quarter of 2002 compared to the same period in 2001 as personnel in
the segment increased their efforts to develop the market for the segment's
technology. As a result, the operating loss for the third quarter of 2002
decreased $4,000 to $139,000 compared to $143,000 in the third quarter of 2001.

Carbon dioxide

     Third quarter 2002 operations reflected an operating profit of $85,000
compared to $64,000 in the 2001 third 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 $29,000 or 29% to
$129,000 for the third quarter of 2002 compared to $100,000 for the same period
in 2001. The increase in revenue, which was primarily due to an increase in
price for the paid volumes to the Company's interest for CO2 gas during the
quarter, was partially offset by a $7,000 increase in lifting costs for the
current quarter.

China

     Since January 1, 2001, the operations of this segment have been conducted
through an affiliate. The third quarter of 2002 resulted in a loss of $95,000
compared to a loss of $85,000 for the third quarter of 2001 which is included in
equity in operations of unconsolidated affiliates discussed below. The segment
had no revenues in either the third quarter of 2002 or 2001.

e-Commerce

     The Company's startup company involved in the development of a secure
Internet payment system incurred an operating loss of $48,000 in the third
quarter of 2002 versus an operating loss of $34,000 in the prior year quarter as
it stepped up its pursuit of strategic alliances and its contacts with potential
infringers. The segment had no revenues in either the third quarter of 2002 or
2001 while pursuing the development of its technology.

Other activities

     Other operations, consisting principally of general and corporate
activities, generated a $11,000 smaller loss in the third quarter of 2002 than
in the same period in 2001. This decrease was due primarily to decreased
professional fees in 2002 compared to 2001.

Selling, general and administrative expenses

     The Company's selling, general and administrative expenses ("SG&A") were
$18,000 less in the third quarter of 2002 compared to the same period in 2001.
The Coal Segment had an increase in SG&A expenses of $1,000 due to increased
marketing expenses for the segment. The e-Commerce Segment incurred $14,000 more
in SG&A expenses as the segment incurred increased patent protection costs.
Other operations, primarily corporate, incurred approximately $33,000 less in
SG&A for the third quarter of 2002 compared to the same period in 2001,
primarily as a result of lower professional fees.

Depreciation, depletion and amortization expenses

     The third quarter of 2002 reported an increase in DD&A expense of $17,000,
reflecting increased amortization of the capitalized costs associated with the
subordinated debt incurred in the second quarter of 2002.

Other income and expense

     Other income and expenses netted to a loss of $123,000 for the third
quarter of 2002, up sharply from the $42,000 of loss recorded for such items in
the same period of 2001. Interest income was down $18,000 for the third quarter
of 2002 compared to the same period in 2001 primarily as a result of a decrease
in notes receivable. Interest expense was up $58,000 reflecting the Company's
increased level of indebtedness. The Company realized a decrease of $11,000 in
gain on sale of assets.

     The Company's equity in the operations of unconsolidated affiliates was a
loss of $45,000 for the third quarter of 2002 compared to a loss of $50,000 for
the same period in 2001. The Company's equity in the earnings of Cibola
increased $15,000 from $35,000 for the third quarter of 2001 to $50,000 for the
same period in 2002 reflecting gains on certain outside investments by Cibola.
Entities involved in the China Segment have signed contracts and formed
Cooperative Joint Ventures ("CJV's") or similar arrangements with various
Chinese partners for the construction of two facilities and the marketing and
sale of organic-chemical compound fertilizer ("OCCF") utilizing two types of
organic waste materials: sewage sludge and crop-residual agri-waste. The
personnel employed by the entities devote all their time and energies to the
development of the business related to the technology utilized by the CJV's. The
operations in China are now conducted through an affiliate and accordingly the
Company's share of the losses from these operations, which totaled $95,000 for
the quarter ended September 30, 2002 compared to $85,000 for the three months
ended September 30, 2001, are recorded as other expense for the period involved.

Income taxes

     The Company made no provision for income taxes in either the third quarter
of 2002 or the same period in 2001. 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 a
$1,603,000 estimated loss for the discontinuance 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 an additional $420,000 loss in 2000; $60,000 represented
operating losses expected to be incurred by the discontinued ITF Segment prior
to the anticipated disposal date of the remaining assets; $360,000 represented
an additional reduction in the estimated realizable value of the remaining
C-stores and related assets as of December 31, 2000. The discontinued ITF
Segment had no revenues for the three months ended September 30, 2001. ITF's
actual operating loss for the three months ended September 30, 2001 was $7,000
which was charged against the loss accrual recorded in the fourth quarter of
2000.

     In December 2001, Beard recorded an additional $100,000 impairment in the
carrying value of the facilities and $14,000 for anticipated operating losses
for the period from December 31, 2001 through the expected disposal date of the
remaining assets. ITF recorded no revenues for the third quarter of 2002 and
incurred $2,000 in losses for the three months ended September 30, 2002 which
were charged against the loss accrual recorded in 2001.

     As of September 30, 2002, the significant assets related to the ITF Segment
consisted primarily of the two remaining C-stores with a total recorded value of
$406,000. The significant liabilities of the segment consisted of trade accounts
payable and accrued expenses totaling $8,000. On November 4, 2002, the majority
of the ITF assets were sold at auction. Net proceeds totaling $303,000, after
estimated expenses of $34,000, are expected to be realized from the sale. The
Company recorded an impairment provision of $77,000 as of September 30, 2002
relating to this auction. Beard is actively seeking opportunities to sell the
segment's remaining equipment, which has a net recorded value of $15,000, and
expects it to be sold by December 31, 2002.

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 had no revenues for the smaller of the two plants for the three
months ended September 30, 2002 and 2001, respectively. NABR's operating losses
of $17,000 for the 2002 third quarter were not anticipated in the loss accruals
recorded in 1999. NABR charged $18,000 for the three months ended September 30,
2002, against the accrual for anticipated expenses related to the shutdown of
the larger of its two plants. NABR's actual operating losses for the 2001 third
quarter were $2,000 which were charged against the loss accrual recorded in
1999. In addition, NABR recorded a loss of $22,000 for the three month period
ending September 30, 2001 related to the operation of the smaller of the two
plants distributed to Beard from NABR. This loss was not anticipated in the loss
accrual of 1999.

     As of September 30, 2002, the significant assets related to NABR's
operations consisted primarily of equipment and inventory with estimated net
realizable values of $35,000 and $6,000 respectively. The significant
liabilities related to NABR's operations consisted primarily of accounts payable
of $4,000 and accrued expenses related to the shutdown of operations totaling
$79,000. The Company is actively pursuing opportunities to sell NABR's remaining
assets and expects the disposition to be completed by June 30, 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 $21,000 and $65,000 of the holdback
in June and November, respectively, of 2001. 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 the third quarter of 2002 or 2001.
Beard recorded income of $16,000 from this discontinued segment for the three
months ended September 30, 2002 as a portion of the segment's assets were sold
for a gain of $39,000 which more than offset the losses incurred during this
period. Beard recorded a loss of $36,000 for the three months ended September
30, 2001.

     As of September 30, 2002, the significant assets of the WS Segment
consisted of fixed assets with a recorded value of $146,000 and cash and
accounts receivable totaling of $18,000. The significant liabilities of the
segment consisted of trade accounts payable and accrued expenses totaling
$62,000. It is anticipated that all liabilities of the segment will be paid
prior to December 31, 2002.

ER Segment
- ----------
     In March of 2001 the Company determined that it would no longer provide
financial support to ISITOP, Inc., an 80%-owned subsidiary whose operations had
previously comprised the Company's environmental remediation ("ER") Segment. In
May 2001 ISITOP was notified that the segment's exclusive U.S. marketing license
for the chemical used for PAH remediation had been cancelled, and the segment
was discontinued. ISITOP generated no revenues in 2002 or in 2001. ISITOP's
operating losses for the three months ended September 30, 2002 and 2001, totaled
less than $1,000 for either quarter. ISITOP had no significant assets or
liabilities at September 30, 2002.


Material changes in results of operations - Nine months ended September 30, 2002
as compared with the Nine months ended September 30, 2001.

     The net loss for the nine months ended September 30, 2002 was $1,549,000
compared to a net loss of $1,522,000 for the first nine months of the prior
year. Continuing operations posted a net loss of $1,368,000 compared to a loss
from continuing operations of $1,006,000 after tax refunds of $60,000 for the
same period in 2001. Discontinued operations accounted for $181,000 of the net
loss for the 2002 period versus $516,000 in the 2001 period.

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



                                               2001                2000
                                          ----------------    ----------------
                                                        
        Operating profit (loss):
          Coal reclamation                $      (425,000)    $      (385,000)
          Carbon dioxide                          213,000             244,000
          China                                         -                   -
          e-Commerce                             (123,000)           (137,000)
                                          ----------------    ----------------
                    Subtotal                     (335,000)           (278,000)
          Other                                  (696,000)           (702,000)
                                          ----------------    ----------------
                     Total                $    (1,031,000)    $      (980,000)
                                          ================    ================


     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 decreased to $12,000 for the first
nine months of 2002 compared to $120,000 for the same period in 2001. The
segment performed more small consulting and coring jobs in the 2001 period than
in the 2002 period. Operating costs decreased $57,000 to $338,000 for the first
nine months of 2002 compared to $395,000 for the same period in 2001. The
decrease was primarily attributable to significant reductions in labor and other
overhead costs achieved in the interim period. SG&A costs also decreased,
dropping $12,000 to $83,000 for the first nine months of 2002 from $95,000 in
the same period of 2001. As a result, the operating loss for the first nine
months of 2002 increased $40,000 to $425,000 for the first nine months of 2002
compared to $385,000 in the first nine months of 2001.

Carbon dioxide

     Operations for the first nine months of 2002 resulted in an operating
profit of $213,000 compared to a $244,000 operating profit for the first nine
months of 2001. 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 decreased $18,000 to $324,000 for the first nine months of 2002
compared to $342,000 for the same period in 2001. The Company recorded $12,000
more in operating costs associated with the properties in the first nine months
of 2002 compared to the same period in 2001. While production volumes for the
McElmo Dome field increased slightly for the first nine months of 2002 compared
to the same period in 2001, paid volumes to the Company's interest decreased
even more as the Company reduced its overproduced status. The decrease in
revenue for the current nine months was due primarily to higher volumes to the
Company's paid interest offset by lower pricing, with the Company receiving an
average of $0.37 per mcf sold in the first nine months of 2001 versus $0.28 per
mcf in the year later period. Paid volumes were actually up 223,000 mcf in the
current nine months versus a year ago due to overproduction.

China

     Since January 1, 2001, the operations of this segment have been conducted
through an affiliate. The results of operations for the first three quarters of
2002 were a loss of $290,000 compared to a loss of $262,000 for the prior year
nine months. The segment had no revenues in either the first nine months of 2002
or 2001.

e-Commerce

     The Company's startup company involved in the development of a secure
Internet purchasing system incurred an operating loss of $123,000 for the first
three quarters of 2002 versus an operating loss of $137,000 in the prior year
period. The segment cut back its pursuit of strategic alliances pending the
issuance of pending patent claims during the first six months of the current
year before accelerating such efforts in the third quarter. The segment had no
revenues in either the first nine months of 2002 or 2001 while pursuing the
development of its technology.

Other activities

     Other operations, consisting principally of general and corporate
activities, generated a $6,000 smaller operating loss for the first nine months
of 2002 than in the same period last year. The Company experienced minor cost
reductions in numerous expense classifications.

Selling, general and administrative expenses

     The Company's selling, general and administrative expenses ("SG&A") in the
first nine months of 2002 decreased to $830,000 from $904,000 for the 2001 nine
months. The Coal Segment had a decrease in SG&A expenses of $12,000 due
primarily to reductions in staff and other expenses. The e-Commerce Segment
incurred $14,000 less in SG&A costs as the segment scaled back its pursuit of
strategic alliances. Other operations incurred approximately $48,000 less in
SG&A for the nine months of 2002 compared to the same period in 2001 primarily
as a result of decreased professional costs and by the reduction in other
expenses discussed above.

Depreciation, depletion and amortization expenses

     DD&A expense increased $32,000 to $100,000 from $68,000 for the nine months
of 2002 compared to the same period in 2001, primarily as a result of greater
amortization expense relating to the capitalized costs associated with the
issuance of the subordinated debt in the second quarter of 2002.

Other income and expenses

     The other income and expenses for the first nine months of 2002 netted to a
loss of $337,000 compared to a loss of $86,000 for the same period in 2001.
Interest income was down $35,000 for the first nine months of 2002 compared to
the same period in 2001. Interest expense was up $132,000 as a result of the
increase in debt, primarily as a result of the issuance of the 10% subordinated
debt and the debt to related parties. Gains on sale of assets for the first nine
months of 2002 decreased $69,000 to $10,000 compared to $79,000 in the prior
year period.

     The Company's equity in the operations of unconsolidated affiliates
reflected a loss of $165,000 for the first nine months of 2002 compared to a
loss of $156,000 for the same period in 2001. The Company's equity in the
earnings of Cibola increased $19,000 from $106,000 for the first nine months of
2001 to $125,000 for the same period in 2002 reflecting Cibola's slight
improvement in operating results. Entities involved in the China Segment have
signed contracts and formed Cooperative Joint Ventures ("CJV's") or similar
arrangements with various Chinese partners for the construction of two
facilities and the marketing and sale of organic-chemical compound fertilizer
("OCCF") utilizing two types of organic waste materials: sewage sludge and
crop-residual agri-waste. The personnel employed by the entities devote all
their time and energies to the development of the business related to the
technology utilized by the CJV's. The operations in China are now conducted
through an affiliate and accordingly the Company's share of the losses from
these operations, which amounted to a loss of $290,000 for the first nine months
of 2002 compared to a loss of $262,000 for the same period in 2001, are recorded
as other expense for the period involved. Prior to January 1, 2001, such
operations were conducted by a wholly-owned subsidiary and reported as operating
losses.

Income taxes

     The Company recorded refunds of $41,000 and $19,000 for federal and state
income taxes, respectively, in the first nine months of 2001. The Company
recorded no provision for taxes for the nine months ended September 30, 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 September 30, 2002 as compared with the Quarter ended
September 30, 2001" under the "Discontinued Operations - ITF Segment" heading.

     ITF's revenues and actual operating losses were none and $9,000,
respectively, for the nine months ended September 30, 2002. The actual losses
for the nine months ended September 30, 2002 were charged against the loss
accrual recorded in the fourth quarter of 2001. On November 4, 2002, the
majority of the ITF assets were sold at auction with net proceeds totaling
$303,000, after estimated expenses of $34,000. The Company recorded an
impairment provision of $77,000 as of September 30, 2002 relating to this
auction. Beard is actively seeking opportunities to sell the remaining
equipment, with a net recorded value of $15,000, and expects it to be sold by
December 31, 2002.

     ITF's revenues and actual operating losses were $7,000 and $44,000,
respectively, for the nine months ended September 30, 2001. The actual losses
for the nine months ended September 30, 2001 were charged against the loss
accrual recorded in the fourth quarter of 2000.

BE/IM Segment
- -------------
     Complete details concerning the discontinuance of NABR are contained in
"Material changes in results of operations - Quarter ended September 30, 2002 as
compared with the Quarter ended September 30, 2001 under the "Discontinued
Operations - BE/IM Segment" heading.

     The actual operating results for the nine-month periods ending September
30, 2002 and 2001, were losses of $25,000 and $45,000, respectively, which were
charged against the loss accrual recorded in 1999. In addition, the Company
recorded losses of $84,000 and $48,000 for the nine-month periods ended
September 30, 2002 and 2001, respectively, for the operations of the smaller of
the two plants distributed from NABR. These losses were not anticipated in the
loss accrual of 1999.

WS Segment
- ----------
     Complete details concerning the discontinuance of the Company's natural gas
well servicing operations are contained in "Material changes in results of
operations - Quarter ended September 30, 2002 as compared with the Quarter ended
September 30, 2001" under the "Discontinued Operations - WS Segment" heading.
Beard's share of operating losses from the discontinued segment was $20,000 for
the nine months ended September 30, 2002. Beard's share of operating losses from
the discontinued segment was $36,000 and $451,000, respectively for the three
and nine-month periods ending September 30, 2001. The nine month period included
a provision of $175,000 for estimated losses from the discontinuation of
operations. Actual operating losses of $25,000 for the three months ending
September 30, 2001 were charged against the impairment reserve established
above. The remaining $10,000 of losses for the three months ending September 30,
2001 were associated with the operations of the sand separator company and were
not anticipated in the loss accrual.

ER Segment
- ----------
     Complete details concerning the discontinuance of the Company's
environmental remediation ("ER") Segment are contained in "Material changes in
results of operations - Quarter ended September 30, 2002 as compared with the
Quarter ended September 30, 2001" under the "Discontinued Operations-ER
Segment" heading.

     ISITOP had no revenues for either of the nine-month periods ended September
30, 2002 or 2001, respectively. The segment's operating losses were less than
$1,000 and $17,000 for the nine months ended September 30, 2002 and 2001,
respectively.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

     At September 30, 2002, the Company had notes receivable of $208,000 and
long-term debt of $4,017,000. The notes receivable and the long-term debt have
fixed interest rates and 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. At September 30, 2002, 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 less than $47,000.
The remaining $300,000 of debt bears interest at a variable rate which is
one-half percent above Chase Manhattan prime rate. The Company's interest
expense would be increased by less than $1,000 as a result of a 10% increase in
interest rates on this variable rate debt.

     The Company has no other market risk sensitive instruments.


PART II.     OTHER INFORMATION.

Item 2. Changes in Securities.

     The Company's preferred stock is mandatorily redeemable through December
31, 2002 from one-third of Beard's "consolidated net income" as defined in the
instrument governing the rights of the preferred stockholders. Accordingly,
one-third of future "consolidated net income" will accrete directly to preferred
stockholders and reduce earnings per common share. As a result of these
redemption requirements, the payment of any dividends to the common stockholders
in the near future is very unlikely. See Note 4 to the accompanying financial
statements.

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)  Amended Letter Loan Agreement by and between Registrant and The William
       M. Beard and Lu Beard 1988 Charitable Unitrust (the "Unitrust") dated
       October 3, 2002.

10(b)  Renewal Promissory Note from Registrant to the Trustees of the Unitrust
       dated October 3, 2002.

10(c)  Form of Deed of Trust, Assignment of Production, Security Agreement and
       Financing Statement dated as of May 16, 2002.

99     Additional exhibits:

99(a)  Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350,
       as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99(b)  Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350,
       as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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

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


                                   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

                                      HERB MEE, JR.
(Date)   November 13, 2002           ___________________________________
                                      Herb Mee, Jr., President and
                                      Chief Financial Officer

                                      JACK A. MARTINE
(Date)   November 13, 2002           ___________________________________
                                      Jack A. Martine, Controller and
                                      Chief Accounting Officer


                          CERTIFICATIONS FOR FORM 10-Q

     I, William M. Beard, Chairman of the Board and Chief Executive Officer,
certify that:

     1. I have reviewed this quarterly report on Form 10-Q of The Beard Company
        (the "registrant");

     2. Based on my knowledge, this quarterly report does not contain any untrue
        statement of a material fact or omit to state a material fact necessary
        to make the statements made, in light of the circumstances under which
        such statements were made, not misleading with respect to the period
        covered by this quarterly report;

     3. Based on my knowledge, the financial statements, and other financial
        information included in this quarterly report, fairly present in all
        material respects the financial condition, results of operations and
        cash flows of the registrant as of, and for, the periods presented in
        this quarterly report;

     4. The registrant's other certifying officers and I are responsible for
        establishing and maintaining disclosure controls and procedures (as
        defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
        we have:

          (a) designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

          (b) evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

          (c) presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
        on our most recent evaluation, to the registrant's auditors and the
        audit committee of registrant's board of directors (or persons
        performing the equivalent function):

          (a) all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

          (b) any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

     6. The registrant's other certifying officers and I have indicated in this
        quarterly report whether or not there were significant changes in
        internal controls or in other factors that could significantly affect
        internal controls subsequent to the date of our most recent evaluation,
        including any corrective actions with regard to significant deficiencies
        and material weaknesses.

                                              The Beard Company

Date:  November 13, 2002                      By:  WILLIAM M. BEARD
                                                   William M. Beard
                                                   Chairman of the Board and
                                                   Chief Executive Officer

                          CERTIFICATIONS FOR FORM 10-Q

     I, Herb Mee, Jr., President and Chief Financial Officer, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of The Beard Company
        (the "registrant");

     2. Based on my knowledge, this quarterly report does not contain any untrue
        statement of a material fact or omit to state a material fact necessary
        to make the statements made, in light of the circumstances under which
        such statements were made, not misleading with respect to the period
        covered by this quarterly report;

     3. Based on my knowledge, the financial statements, and other financial
        information included in this quarterly report, fairly present in all
        material respects the financial condition, results of operations and
        cash flows of the registrant as of, and for, the periods presented in
        this quarterly report;

     4. The registrant's other certifying officers and I are responsible for
        establishing and maintaining disclosure controls and procedures (as
        defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
        we have:

          (a) designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

          (b) evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

          (c) presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
        on our most recent evaluation, to the registrant's auditors and the
        audit committee of registrant's board of directors (or persons
        performing the equivalent function):

          (a) all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

          (b) any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

     6. The registrant's other certifying officers and I have indicated in this
        quarterly report whether or not there were significant changes in
        internal controls or in other factors that could significantly affect
        internal controls subsequent to the date of our most recent evaluation,
        including any corrective actions with regard to significant deficiencies
        and material weaknesses.

                                       The Beard Company

Date:  November 12, 2002               By: HERB MEE, JR.
                                           Herb Mee, Jr.
                                           President and Chief Financial 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.

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)  Amended Letter Loan Agreement by and     Filed herewith electronically
       between Registrant and The William M.
       Beard and Lu Beard 1988 Charitable
       Unitrust (the "Unitrust") dated October
       3, 2002.

10(b)  Renewal Promissory Note from Registrant  Filed herewith electronically
       to the Trustees of the Unitrust dated
       October 3, 2002.

10(c)  Form of Deed of Trust, Assignment of     Filed herewith electronically
       Production, Security Agreement and
       Financing Statement dated as of May 16,
       2002.

99(a)  Chief Executive Officer Certification    Filed herewith electronically
       pursuant to 18 U.S.C. Section 1350, as
       adopted pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002.

99(b)  Chief Financial Officer Certification    Filed herewith electronically
       pursuant to 18 U.S.C. Section 1350, as
       adopted pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002.