Note

Oil and Gas Leases

Results of oil and gas

leasing activities for the year ending

December 31, 2017

and

2016

are as follows:

	2017		2016
Gross revenues
Royalty interests	$	588,121	$	488,947
Lease fees		21,001		21,909
		609,122		510,856
Production costs		62,315		47,212
Results before income tax expense		546,807		463,644
Estimated income tax expense		169,510		97,365
Results of operations from producing activities excluding corporate overhead	$	377,297	$	366,279

There were

major costs, with the exception of severance taxes, incurred in connection

the Company's oil and gas leasing activities, which are located entirely within the United States, during the years ended

December 31, 2017

and

2016.

Reserve quantities (unaudited):

Reserve information relating to estimated quantities of the Company's interest in proved reserves of natural gas and crude including condensate and natural gas liquids is

not

available. Such reserves are located entirely within the United States. A schedule indicating such reserve quantities is, therefore,

not

presented. All oil and gas royalties come from Company owned properties that were developed and

produced by producers, unrelated to Company, under oil and gas mineral lease agreements.

Company

’s royalty and working interests share of oil and gas, exclusive of plant products, produced from leased properties:

	2017		2016

Net gas produced (MCF)		42,927		48,758
Net oil produced (Bbl)		8,169		8,412