History of The Beard Company

Governance

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History

In October of 1921, J. G. Beard (the Chairman's father) completed the No. 1 Hall oil well in Stephens County, Oklahoma, marking the beginning of what became Beard Oil Company, and ultimately, The Beard Company. From 1921 to 1993 we were primarily an oil and gas exploration company.

During the late 1960's we made the decision to diversify. In 1968 we started a hazardous waste management company, USPCI, Inc. which was partially spun off to shareholders in 1984. It became so successful that it subsequently listed on the New York Stock Exchange in 1986. In 1987-88 Union Pacific Corporation acquired USPCI for $396 million. $111 million went to Beard Oil and its stockholders for their residual 28% interest, of which $58 million cash was distributed directly to Beard stockholders.

Following an IPO in 1974 Beard Oil shares started trading over-the-counter. In 1981 the shares commenced trading on the American Stock Exchange. The Company's shares traded on the AMEX® as either Beard Oil Company or The Beard Company until September 2000. Our shares now trade on the OTC Bulletin Board under the symbol BRCO.

Following the sale of USPCI in 1987 we formed Carbonic Reserves ("Carbonics") and diversified into the dry ice manufacturing and distribution business This became our principal business in 1993 when we left the oil and gas business. Carbonics grew and prospered. In early 1997 we lined up the financing for an aggressive acquisition program designed to make it the largest company in the dry ice business. Our goal was shattered when Airgas, Inc. (NYSE) acquired Carbonics' largest target company at a high P/E multiple for stock. In October 1997 we abandoned our acquisition strategy and sold Carbonics to Airgas instead.

In 1989 Beard Investment Company (now The Beard Company) was formed to build new businesses which Beard management believed to have either high growth potential or better-than-average profit potential. Our goal has been to nurture each investment to the point where it could sustain its growth through internal cash flow while cultivating its own outside funding sources to supplement its financing requirements.

The Beard Company creates, acquires, and/or invests in businesses that management believes have high growth and/or above-average profit potential and can enhance shareholder value. The Company is currently involved in carbon dioxide (CO2) gas production; oil and gas activities; coal reclamation activities; e-commerce activities conducted through its starpay™ subsidiary; and minerals exploration and development through its Geohedral investment. Recent Developments

On April 17, 2009, the Company’s subsidiary, Beard Dilworth, LLC, closed on the purchase of multiple properties comprising the Dilworth Field located on the Nemaha Ridge in Kay County, Oklahoma. Following acquisition of additional funding, the Company will initiate the contemplated development program for these properties.

On May 8, 2009, the Company closed on the sale of its remaining interest in the McElmo Dome CO2 Unit for $5,200,000. The sale, which was effective March 1, 2009, generated a financial gain of $4,909,000, which will be included in the Company’s financial results for the quarter ending June 30, 2009

Alden Project
BTI is currently developing a fine coal recovery operation with Alden Energy LLC (“Alden”), a subsidiary of Alden Energy, Inc. Alden, in conjunction with BTI and Ke/La Energy, LLC (“Ke/La”), began circulating an Offering Document on April 2, 2009, to secure capital funding of approximately $31 million to construct a new processing plant at Alden’s Gatliff Preparation Plant at the Bennett’s Branch impoundment located near Nevisdale in south central Kentucky. The refuse material from the impoundment will be integrated with the fine coal feed from the Alden’s existing preparation plant. The recovery system will be equipped with Ke/La’s binder technology to pelletize the fuel produced from the recovery plant. The project will be totally financed by Alden who will own the plant.

Under the proposed arrangement, BTI will receive an average royalty of 7.5% (approximately $1,800,000/year) for the first 11 years and 5% (approximately $1,400,000/year) for the last nine years during the 20-year life of the project (LOP). In addition, BTI will receive a $30,000/month overhead fee for managing the recovery operation during the LOP, commencing with the date construction starts.

The plant is expected to start construction as soon as financing has been consummated. Ramp up is targeted to commence approximately one year following construction start-up, with cash flow commencing approximately five months thereafter.

In addition to the Alden project, BTI has a number of other projects under development in 2009 for which it will be seeking financing once complete information on the projects becomes available. Two of these are in the advanced stage of development, and one of these, the TransAlta project, is far enough along that it could be at the startup stage prior to year-end. However, the timing of such projects is uncertain and their continuing development is subject to obtaining the necessary financing.

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