Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation and Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had

effect on the reported results of operations.

Risks and Uncertainties [Policy Text Block]

Risks and Uncertainties

December 2019,

a novel coronavirus disease (“COVID-

19”

) was reported and in

January 2020,

the World Health Organization (“WHO”) declared it a Public Health Emergency of International Concern. On

February 28, 2020,

the WHO raised its assessment of the COVID-

threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on

March 11, 2020,

the WHO characterized COVID-

as a pandemic. While the Company did

not

incur significant disruptions to its operations during

2020

from COVID-

19,

it is unable at this time to predict the impact that COVID-

will have on its business, financial position and operating results in future periods due to numerous uncertainties and is closely monitoring the impact of the pandemic on all aspects of its business.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk

The Company maintains its cash balances in

seven

financial institutions. At times, cash balances

may

be in excess of the Federal Deposit Insurance Corporation's insured limit of

$250,000.

The Company has

not

experienced any losses in such accounts and management believes the Company is

not

exposed to any significant credit risk on its cash balances.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

Cash equivalents are highly liquid debt instruments with original maturities of

three

months or less when purchased.

Certificates of Deposit [Policy Text Block]

Certificate of Deposits

Certificates of deposit have maturities greater than

three

months when purchased, in amounts

not

greater than

$250,000.

All certificates of deposit are held until maturity and recorded at cost which approximates fair value. Certificates of deposit matured through the

fourth

quarter of

2020.

Certificates of deposit with a maturity of

one

year or less are classified as short-term. Certificates of deposit with a maturity of more than

one

year are classified as long-term.

Investment, Policy [Policy Text Block]

Equity Investment

January 2016,

the FASB issued ASU

2016

01,

“

Financial Instruments

–

Overall (Subtopic

825

): Recognition of Financial Assets and Financial Liabilities,

”

(ASU

2016

which makes targeted amendments to the guidance for recognition, measurement, presentation and disclosure of financial instruments. The guidance under ASU

2016

requires equity investments, other than equity method investments, to be measured at fair value with changes in fair value recognized in net income. As of

December 31, 2020

and

2019,

the Company classified

$502,595

and

$500,642,

respectively, of mutual funds as equity securities. The Company invests in ultra-short, high quality U.S. dollar money market funds, foreign funds, and obligations issued by the U.S. Government. The Company did

not

hold any equity investments until the

fourth

quarter of

2018,

accordingly, there are

effects on the Company's investments from the adoption of ASU

2016

01.

Receivable [Policy Text Block]

Accounts Receivable

The Company's accounts receivable consists of incomes received after quarter-end for royalties produced prior to quarter-end. When there are royalties that have

not

been received at the time of the preparation of the financial statements for months in the prior quarter, the Company estimates the amount to be received based on the average of the most recent

month's royalties that were received from that particular well. The Company does

not

maintain an allowance for doubtful accounts because other than the accrual for earned but

not

received royalties, it has

accounts receivable.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Building and Equipment

Property, building, and equipment is stated at cost. Major additions are capitalized. Maintenance and repairs are charged to income as incurred. Depreciation is computed on the straight-line and accelerated methods over the following estimated useful lives of the assets:

Furniture and equipment (years)			5	-	7
Land improvements (years)				15

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-lived Assets

Long-lived assets, such as land, timber and property, buildings, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset

may

not

be recoverable. If events or circumstances arise that require a long-lived asset to be tested for potential impairment, the Company

first

compares undiscounted cash flows expected to be generated by the asset to its carrying value. If the carrying amount of the long-lived asset is

not

recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying value exceeds the fair value. Fair value

may

be determined through various valuation techniques including quoted market prices,

third

-party independent appraisals and discounted cash flow models. During the year ended

December 31, 2020,

the Company performed a step

zero

impairment analysis on furniture and fixtures and land improvements and determined there were

qualitative factors that would indicate impairment.

impairment charges were recorded during the years ended

December 31, 2020

and

2019.

August 27, 2020,

Hurricane Laura made landfall in Cameron, Louisiana as a major Category

hurricane. The hurricane caused widespread property damage, flooding, power outages, and water and communication service interruptions. The Company holds

13,941

acres of land in Southwest Louisiana across

parishes, with

10,495

acres classified as timber lands. Ten of these parishes are included in the Federal Emergency Management Agency's disaster declaration related to Hurricane Laura. A percentage of the Company's timber assets were damaged during the storm. The Company performed an impairment analysis by comparing the undiscounted cash flow of the assets and the carrying value of the fixed assets and determined there was

impairment to its timber.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

Effective

January 1, 2018,

we adopted ASU

2014

09,

Revenue from Contracts with Customers (Topic

606

). Under the new standard, we recognize revenues when the following criteria are met: (i) persuasive evidence of a contract with a customer exists, (ii) identifiable performance obligations under the contract exist, (iii) the transaction price is determinable for each performance obligation, (iv) the transaction price is allocated to each performance obligation, and (v) the performance obligations are satisfied. We derive a majority of our revenues from oil and gas royalties, timber sales, and surface leases. Surface leases are

not

within the scope of ASC

606

and are accounted for under ASC

842.

See Note

for more detailed information about the Company's reportable segments.

Oil and Gas

Oil and gas revenue is generated through customer contracts, where we provide the customer access to a designated tract of land upon which the customer performs exploration, extraction, production and ultimate sale of the oil and gas. The Company receives royalties on all oil and gas produced by the customer. The performance obligation identified in oil and gas related contracts is the oil and gas produced on the designated tract of land. The performance obligation is satisfied at a point in time, which is when the customer produces oil and gas. The transaction price is comprised of fixed fees (royalties) on all oil and gas produced. The Company accrues monthly royalty revenues based upon estimates and adjusts to actual as the Company receives payments. Net accrued royalty income was

$49,113

and

$84,880

as of

December 31, 2020

and

2019,

respectively. There are

capitalized contract costs associated with oil and gas contracts. The accounting for royalty income remains largely unchanged upon implementation of ASC

606.

Timber

Timber revenue is generated through customer contracts executed as a pay-as-cut arrangement, where the customer acquires the right to harvest specified timber on a designated tract for a set period of time at agreed-upon unit prices. The performance obligation identified in timber related contracts is the severing of a single tree.

We satisfy our performance obligation when timber is severed, at which time revenue is recognized. The transaction price for timber sales is determined using contractual rates applied to harvest volumes. The Company

may

receive a deposit at the time of entering into a stumpage agreement and this deposit is recorded in unearned revenue until earned. The Company held stumpage agreement deposits of

$87,300

as of

December 31, 2020

and

2019.

There are

capitalized contract costs associated with timber contracts.

revenue has been recognized on the stumpage agreements held by the Company and they are still open. The amount deposited by the customer is recognized as revenue against the

first

timber harvested. If

timber is harvested by the end of the contract the deposit is retained and recognized as income at contract end. The accounting of timber revenue remains largely unchanged upon implementation of ASC

606.

Surface

Surface revenue is earned through annual leases for agricultural and hunting activities and the Company records revenues evenly over the term of these leases. Surface revenues from these sources are recurring on an annual basis.

Surface revenue is also earned through right of way and related temporary work-space leases, both of which are

not

unusual in occurrence and are

not

recurring sources of revenue. Generally, a right of way lease relates to either a utility or pipeline right of way that is a permanent servitude or exists for fixed periods of time greater than

thirty

years. The Company retains ownership of the land and the servitude is limited to the use of the surface. Revenue is recorded at the time of the agreement's execution date. For income tax purposes, these types of agreements are treated as sales of business assets.

Other sources of surface revenue can be commercial activities leases and sales of surface minerals, such as dirt.

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Earnings per share

Net earnings per share is provided in accordance with FASB ASC

260

10,

"Earnings per Share". Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive income per share excludes all potential common shares if their effect is anti-dilutive. As of

December 31, 2020,

and

2019

there were

dilutive shares outstanding.

Stockholders' Equity, Policy [Policy Text Block]

Dividends

The Company does

not

currently pay dividends on a regular basis. In determining whether to declare a dividend, the Board of Directors takes into account the Company's prior fiscal year's cash flows from operations and the current economic conditions, among other information deemed relevant. Dividends paid per common stock are based on the weighted average number of common stock shares outstanding during the period.

dividends were declared during the years ended

December 31, 2020

and

2019.

Pursuant to a dividend reversion clause in the Company's Articles of Incorporation, dividends

not

claimed within

one

year after the dividend becomes payable will expire and revert in full ownership to the Company and the Company's obligation to pay such dividend will cease. Any dividend reversions are recorded in equity upon receipt.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic

740,

Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities.

Deferred income tax assets and liabilities are determined using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws.

In accordance with generally accepted accounting principles, the Company has analyzed its filing positions in federal and state income tax returns for the tax returns that remain subject to examination. Generally, returns are subject to examination for

three

years after filing. The Company believes that all filing positions are highly certain and that all income tax filing positions and deductions would be sustained upon a taxing jurisdiction's audit. Therefore,

reserve for uncertain tax positions is required.

interest or penalties have been levied against the Company and

none

are anticipated.

Other Taxes

Taxes, other than income taxes, which consisted of property, payroll, franchise and oil and gas production taxes were

$125,124

and

$151,204,

for the years ended

December 31, 2020

and

2019,

respectively.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

February 2016,

the FASB issued ASU

2016

02,

which amended the accounting treatment for leases. Lessees (for capital and operating leases) and lessors (for sales-type leases, direct financing leases and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would

not

require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors

may

not

apply a full retrospective transition approach. In

July 2018,

the FASB issued ASU

2018

and ASU

2018

11.

ASU

2018

provides certain areas for improvement in ASU

2016

and ASU

2018

provides an additional optional transition method by allowing entities to initially apply the new leasing standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The new leasing standard is effective for fiscal years beginning after

December

15,

2018,

including interim periods within those fiscal years. The Company adopted this standard as of

January 1, 2019.

The Company reviewed its service agreements and other arrangements and evaluated whether they met the definition of a lease under ASU

2016

02.

The adoption of this standard had

impact on its financial statements.

There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are

not

expected to have a material impact on the Company's financial position, results of operations or cash flows.