June 25, 2004

                                  AMENDMENT TO
                              RESTATED AND AMENDED
                              LETTER LOAN AGREEMENT



The Beard Company
5600 N. May Avenue, Suite 320
Oklahoma City, Oklahoma 73112

Gentlemen:

On March 26, 2004 the parties  hereto entered into a Restated and Amended Letter
Loan  Agreement  (the  "March  26  Agreement")  which  superseded  the  previous
Supplemental Letter Loan Agreements between the parties.

Subsequent to the execution of the March 26 Agreement it was determined that the
actual  amount  of the Loan is  $2,785,000.00  and that  the  Borrower  has paid
$50,000.00  of the  accrued  interest  due  on the  Loan  to  the  date  hereof.
Accordingly, the parties have agreed that the March 26 Agreement be and the same
is  amended on the first  page  thereof  to  reflect  under Item 3 that the Loan
Amount is $2,785,000 and under Item 5 that the Indebtedness  plus unpaid accrued
interest  shall be due and payable on April 1, 2006.  The parties  have  further
agreed that a  Replacement  Renewal and  Extension  Promissory  Note dated as of
March 26, 2004 shall be issued to replace the original Note.

It is further  agreed  that Item 6 of the March 26  Agreement  is amended by (i)
changing the last sentence thereof to read as follows:  "Although the other Note
Holders have been repaid in full as of this date, the Lien has not been released
even though such Note Holders no longer have an interest  therein."  and (ii) by
adding the following  additional sentence thereto:  "Moreover,  on May 21, 2004,
Boatright Family LLC ("Boatright")  made a loan to the Lender, and a new Deed of
Trust,  Assignment of Production,  and Financing Statement is being prepared and
will be  placed of  record  which  will  place a new Lien on both  Lender's  and
Borrower's  Interests in the McElmo Dome Unit and determine the relative  rights
as to proceeds under the Deed of Trust as between the Lender and Boatright."

All other terms and conditions of the March 26 Agreement shall remain the same.

If the foregoing terms and conditions are acceptable to you, please  acknowledge
your agreement by signing below and returning one copy of this Amendment to us.

Sincerely,

LENDER:
THE WILLIAM M. BEARD AND LU BEARD
1988 CHARITABLE UNITRUST

/s/William M. Beard                         /s/Lu Beard
----------------------------                -------------------------
William M. Beard, Trustee                   Lu Beard, Trustee


Accepted on June 25, 2004, but effective as of March 26, 2004.

BORROWER:
THE BEARD COMPANY

/s/Herb Mee, Jr.
---------------------------
Herb Mee, Jr., President