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<SEC-DOCUMENT>0000950123-10-067379.txt : 20110104
<SEC-HEADER>0000950123-10-067379.hdr.sgml : 20110104
<ACCEPTANCE-DATETIME>20100722180359
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-10-067379
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100722

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			New Concept Energy, Inc.
		CENTRAL INDEX KEY:			0000105744
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				752399477
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1755 WITTINGTON PLACE
		STREET 2:		SUITE 340
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		9724078400

	MAIL ADDRESS:	
		STREET 1:		1755 WITTINGTON PLACE
		STREET 2:		SUITE 340
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CabelTel International Corp
		DATE OF NAME CHANGE:	20050211

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GREENBRIAR CORP
		DATE OF NAME CHANGE:	19960514

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDICAL RESOURCE COMPANIES OF AMERICA
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
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<TYPE>CORRESP
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>METZGER &#038; McDONALD PLLC</B><BR>
<FONT style="FONT-variant: SMALL-CAPS">a professional limited liability company<BR>
attorneys, mediators &#038; counselors</FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="FONT-variant: SMALL-CAPS">Steven C. Metzger</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="FONT-variant: SMALL-CAPS">3626 N. Hall Street, Suite&nbsp;800</FONT></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
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    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="FONT-variant: SMALL-CAPS">Direct Dial 214-740-5030</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="FONT-variant: SMALL-CAPS">Dallas, Texas 75219 5133</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="3" align="right" valign="top">Facsimile
214-224-7555
</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><FONT style="FONT-variant: SMALL-CAPS">smetzger@pmklaw.com</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">214-969-7600
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" colspan="2">214-523-3838</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="FONT-variant: SMALL-CAPS"><u>www.pmklaw.com</u></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" colspan="2">214-969-7635</TD>
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</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">July&nbsp;22, 2010
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Via EDGAR
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Securities and Exchange Commission<BR>
100 F Street, N.E., Mail Stop 3010<BR>
Washington, D.C. 20549<BR>
Attn: Karl Hiller, Branch Chief<BR>
Joanna Lam, Staff Accountant

</DIV>

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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">Re:&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>New Concept Energy, Inc. (Commission File No.&nbsp;000-08187;
CIK No.&nbsp;0000105744) &#151;Form 10&#151;K for
the fiscal year ended December&nbsp;31, 2009, Form&nbsp;10- Q for the fiscal quarter ended March&nbsp;31, 2010</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On behalf of New Concept Energy, Inc., a Nevada corporation (&#147;GBR&#148;) this letter is being filed
as correspondence uploaded on the EDGAR system on behalf of GBR in response to a letter of comment
from the Staff of the Securities and Exchange Commission dated June&nbsp;22, 2010. Schedule&nbsp;1 annexed
to this letter contains the responses to the comments of the Staff. In each instance on such
Schedule, for convenience, each comment of the Staff is repeated, followed in each instance by the
applicable response to such comment or explanation. Also included in such response, where
appropriate, is a letter/page reference to the text to the applicable document or instrument
referred to in the comment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This letter is being filed under the EDGAR system in direct response to the comments of the
Staff. If you would like to discuss any item concerning the referenced matter included in this
letter or Schedule&nbsp;1, please do not hesitate to contact the undersigned at any time at 214-740-5030
direct or Gene S. Bertcher, President of GBR at 469-522-4238 direct.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Steven C. Metzger
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Steven C. Metzger&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV style="margin-top: 6pt">
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">cc:&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Gene S. Bertcher, President<br>
New Concept Energy, Inc.<br>
1755 Wittington Place, Suite&nbsp;340<br>
Dallas, Texas 75234</TD>
</TR>

</TABLE>
</DIV>
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE 1</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Response to Comments of the Staff of<BR>
The Securities and Exchange Commission<BR>
by letter dated June&nbsp;22, 2010 with respect to<BR>
Form 10-K for the fiscal year ended December&nbsp;31, 2009 and<BR>
Forms 10-Q for the fiscal quarter ended March&nbsp;31, 2010 of<BR>
New Concept Energy, Inc.<BR>
Commission File No.&nbsp;000-08187</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following information is to provide a response to comments of the Staff of the Securities
and Exchange Commission rendered by letter dated June&nbsp;22, 2010 with respect to Form 10-K Annual
Report to the Securities and Exchange Commission for the fiscal year ended December&nbsp;31, 2009 of New
Concept Energy, Inc. (the &#147;Company&#148; or &#147;GBR&#148;) as well as Forms 10-Q for the quarter ended March&nbsp;31,
2010 of the Company. For convenience, each comment of the Staff is restated below, with our
response noted immediately following the comment. Also included in such response is a letter/page
reference to the text of each instrument where applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Form&nbsp;10-K for the Fiscal Year Ended December&nbsp;31, 2009</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>General</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;1. </B>Please number all pages in your filing when amending your report.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;1. </B>All pages in the filing when amending any report will
be appropriately numbered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Properties</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;2. </B>We have read your response to prior comment 4, noting that you did
not provide all of the required information in the proposed amendment: Please further expand your
disclosure to describe progress made during each year to convert proved undeveloped reserves to
proved developed reserves to comply with Item 1203(c) of Regulation&nbsp;S-K. In addition, as proved
undeveloped reserves should generally be developed within five years of initially booking them as
proved, to qualify as proved reserves, please tell us how you plan to accomplish this.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;2. </B>We have further revised our response to the prior
comment 4. The italicized disclosure below consists of the changes in our previous response and the
<B>italicized bold </B>changes are in response to the Comment/Observation 2 above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Item&nbsp;2. Properties </FONT>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><B>&#149;</B> <B>&#149;</B> <B>&#149;</B></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Development plan</I>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The oil and gas properties owned and operated by the Company consist of 215 wells
located on 20,000 acres in Ohio and West Virginia</I><B><I>. The Company&#146;s proved developed and proved
undeveloped reserves are interwoven throughout the 20,000 acres </I></B><I>These wells were drilled
over 20&nbsp;years ago when the science and technology of the oil and gas industry was not as
sophisticated as it is today. In addition the company&#146;s wells are located in an area where
a number of wells, other than ours, have been drilling and the results of those efforts are
available.</I>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The company&#146;s plan is to </I><B><I>initially </I></B><I>use the current knowledge of the area and the new
technologies available to rework its existing wells. This represents the most economic way
to increase production. Once this is accomplished the company will begin the process of
identifying locations throughout its acreage to drill new wells. </I><B><I>The new wells will include
areas that are currently designated as both proved developed and proved undeveloped</I></B><I>.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Management&#146;s Discussion and Analysis</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Critical Accounting Policies</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Oil and Gas Property Accounting</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;3. </B>We have read your response to prior comment 1, regarding your
application of the ceiling test under the full cost rules. Please further revise your disclosure
to clarify your handling of unproved property costs in determining the ceiling, with details
sufficient to understand how your approach compares to that described in points (B)&nbsp;and (C)&nbsp;of Rule
4-10(c)(4)(i) of Regulation&nbsp;S-X. The ceiling must include discounted future cash flows associated
with proved reserves, costs of unproved properties subject to amortization, costs of unproved
properties not subject to amortization, and the related tax amounts. As presently stated, your
accounting policy does not conform with the ceiling test requirements.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The disclosure that you have proposed for this section and the corresponding accounting policy note
in your financial statements includes many statements that are not consistent with the full cost
rules. For example, you indicate that your policy only applies to costs associated with <I>reserves</I>
rather than all property costs, you indicate that your ceiling is only being compared to <I>evaluated</I>
oil and natural gas property costs rather than all property costs, and you indicate that you do not
regard unevaluated property costs as part of the full cost pool.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The general expectation is that when impairment of unproved properties is found to have occurred,
that portion of total unproved property costs not subject to amortization and representing the
impairment would become part of the costs of unproved properties which are subject to amortization,
without differentiation based on the type of unproved property costs, i.e. we do not regard as
appropriate your policy of treating drilling and leasehold costs differently in this exercise.
Please also understand that the
cost of unproved properties that are <I>not </I>subject to amortization and the costs of unproved
properties that are subject to amortization are both part of the full cost pool, along with costs
of proved properties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please further revise your accounting and disclosure as necessary to comply with the requirements
of Rule&nbsp;4-10(c) of Regulation&nbsp;S-X.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;3. </B>All reserves currently held by the Company have been
classified as proven by our independent petroleum engineers. Also while we incorrectly used the
word reserves when discussing our policy regarding our approach to the ceiling test the
calculations used by the Company properly considered all property costs in its evaluation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As reflected below we will revise portions of Item: 7 and Footnote B to include a discussion
of how we would handle an investment in unproved property and to properly reflect the fact that we
considered all property costs when applying the ceiling test (new language underlined and old
deleted language lined through).
</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="FONT-variant: SMALL-CAPS">Item&nbsp;7.</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT style="FONT-variant: SMALL-CAPS">Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operation</FONT></TD>
</TR>
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><B>&#149;</B> <B>&#149;</B> <B>&#149;</B></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Oil and Gas Property Accounting</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Company uses the full cost method of accounting for its investment in oil and natural
gas properties. Under this method of accounting, all costs of acquisition, exploration and
development of oil and natural gas <U>properties</U> <strike>reserves</strike> (including such costs as
leasehold acquisition costs, geological expenditures, dry hole costs, tangible and
intangible development costs and direct internal costs) are capitalized as the cost of oil
and natural gas properties when incurred. To the extent capitalized costs of <strike>evaluated</strike> oil
and natural gas properties, less <strike>net of </strike>accumulated depletion <U>and related deferred
taxes</U> exceed the <U>sum of the</U> discounted future net revenues of proved oil and
natural gas reserves, <U>the lower of cost or estimated value of unimproved properties, the
cost of properties not being amortized, and the related tax amounts</U> <strike>net of deferred
taxes</strike>, such excess capitalized costs are charged to expense. Beginning December&nbsp;31, 2009,
full cost companies use the unweighted arithmetic average first day of the month price for
oil and natural gas for the 12-month period preceding the calculation date to calculate the
future net revenues of proved reserves. Prior to December&nbsp;31, 2009, companies used the
price in effect at the calculation date and had the option, under certain circumstances, to
elect to use subsequent commodity prices if they increased after the calculation date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The
Company assesses <U>its oil and gas properties, by cost center </U><strike>all items classified
as unevaluated property, </strike>on a quarterly basis for possible impairment or reduction in value.
The Company assesses properties on an individual basis or as a group if properties are
individually insignificant. The assessment includes consideration of the following factors,
among others: intent to drill; remaining lease term; geological and geophysical evaluations;
drilling results and activity; the assignment of proved reserves; and the economic viability
of development if proved reserves are assigned. During any period in which these factors
indicate an impairment <U>of unimproved properties not subject to amortization</U>, the
<U>associated</U> <strike>cumulative drilling</strike> costs incurred to date for such propert<U>ies</U><strike>y</strike>
<strike>and all or a portion of the associated leasehold costs</strike> are then <U>included in unproved
properties</U> <strike>transferred to the full cost pool and are then</strike> subject to amortization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At December&nbsp;31, 2009, the Company&#146;s net book value of oil and natural gas properties
exceeded the ceiling amount based on the unweighted arithmetic average of the first day of
each month for the 12-month period ended December&nbsp;31, 2009. As a result, the Company
recorded a full cost ceiling adjustment before income taxes of approximately $1.7&nbsp;million.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOTE B &#151; SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Full cost ceiling test</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Company uses the full cost method of accounting for its investment in oil and natural
gas properties. Under this method of accounting, all costs of acquisition, exploration and
development of oil and natural gas <U>properties</U> <strike>reserves</strike> (including such costs as
leasehold acquisition costs, geological expenditures, dry hole costs, tangible and
intangible development costs and direct internal costs) are capitalized as the cost of oil
and natural gas properties when incurred. To the extent capitalized costs of <strike>evaluated</strike> oil
and natural gas properties, <U>less</U> <strike>net of</strike> accumulated depletion <U>and related
deferred taxes</U> exceed the <U>sum of the</U> discounted future net revenues of proved
oil and natural gas reserves, <U>the lower of cost or estimated fair value of unproved
properties, the cost of properties not being amortized, and related tax amounts</U> <strike>net of
deferred taxes</strike>, such excess capitalized costs are charged to expense. Beginning December
31, 2009, full cost companies use the unweighted arithmetic average first day of the month
price for oil and natural gas for the 12-month period preceding the calculation date to
calculate the future net revenues of proved reserves. Prior to December&nbsp;31, 2009, companies
used the price in effect at the calculation date and had the option, under certain
circumstances, to elect to use subsequent commodity prices if they increased after the
calculation date.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">The Company assesses its oil and gas properties, <U>by each cost center</U>, on a quarterly
basis for possible impairment or reduction in value. The Company assesses properties on an
individual basis or as a group if properties are individually insignificant. The assessment
includes consideration of the following factors, among others: intent to drill; remaining
lease term; geological and geophysical evaluations; drilling results and activity; the
assignment of proved reserves; and the economic viability of development if proved reserves
are assigned. During any period in which these factors indicate an impairment <U>of
unproved properties not subject to amortization</U>, the <U>associated</U> <strike>cumulative
drilling</strike> costs incurred to date for such propert<U>ies</U><strike>y</strike> <strike>and all of or a portion of the
associated leasehold costs</strike> are <U>then included in unproved properties</U> <strike>transferred to
the full cost pool and are then</strike> subject to amortization.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">As of December&nbsp;31, 2009, the ceiling test computation resulted in the carrying costs of our
unamortized proved oil and natural gas properties, net of deferred taxes, exceeding the
December&nbsp;31, 2009 present value of future net revenues by approximately $1.7&nbsp;million.
Accordingly, a non-cash charge of $1.7&nbsp;million was recognized for the year ended December
31, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;4. </B>Please further expand your disclosure to clarify that the full
cost ceiling test is computed for each cost center and on a quarterly basis to comply with Rule
4-10(c)(4)(i) of Regulation&nbsp;S-X.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;4. </B>Please note that as of December&nbsp;31, 2009 and today the
Company only has one cost center; however we have revised our disclosure of our policy to reflect
that we apply the full cost ceiling test to each cost center on a quarterly basis (see revised
disclosures outlined in Comment 3 above).
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>



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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Financial Statements</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note P &#151; Supplemental Financial Information on Oil and Natural Gas Exploration,</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Development and Production Activities, page 58</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;5. </B>We have read your response to prior comment 9, noting that you did
not identify and discuss important economic factors and uncertainties affecting reserves. Please
refer to FASB ASC paragraph 932-235-50-10 for guidance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;5. </B>FASB ASC paragraph 932-235-50-10 provides that if
important factors or significant uncertainties affect particular components of an entities proved
reserves an explanation shall be provided. The FASB then provides examples of significant factors
and uncertainties. Our operation are relatively simple and we believe that none of the examples
outlined in the FASB or similar factors exist for us that would require such disclosure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;6. </B>The disclosure you proposed in response to prior comment 9
includes an estimate of reserves for undeveloped properties as of December&nbsp;31, 2008 which if added
to your estimate of reserves for developed properties foes not agree with the figure your report
for total reserves as of that date. Please resolve this inconsistency.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;6. </B>We have resolved the inconsistency as indicated below
in the revised Note P. In the future we would propose to revise Note P as set forth below (old
information lined through).
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>NOTE P</B>&nbsp;</TD>
    <TD width="2%"><B>&#151;</B></TD>
    <TD><B>SUPPLEMENTARY FINANCIAL INFORMATION ON OIL AND NATURAL GAS EXPLORATION, DEVELOPMENT AND
PRODUCTION ACTIVITIES (UNAUDITED)</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><B>&#149;</B> <B>&#149;</B> <B>&#149;</B></B>
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s net ownership interests in estimated quantities of proved oil and natural gas
reserves and changes in net proved reserves, all of which are located in the continental United
States, are summarized below:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><U>Gas</U></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Oil</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(MMCF)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(MBBLS)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved developed and undeveloped reserves &#151;
January&nbsp;1, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><STRIKE>5,997</STRIKE><U>7,397</U></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase of oil and natural gas properties in
place</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discoveries and extensions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Revisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><STRIKE>18</STRIKE><U>4</U>00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales of oil and gas properties in place</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Production</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(236</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">End of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved developed reserves at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved developed reserves at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,867</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><U>Gas</U></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Oil</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(MMCF)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(MBBLS)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved developed and undeveloped reserves &#151;
September&nbsp;15, 2008 (pre-acquisition)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase of oil and natural gas properties in
place</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,080</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Discoveries and extensions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Revisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><U>1,400</U></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales of oil and gas properties in place</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Production</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(83</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">End of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><STRIKE>5,997</STRIKE><U>7,397</U></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved developed reserves at acquisition</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved developed reserves at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the changes in our total proved undeveloped reserves.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Gas</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Oil</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(MMCF)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(MBBLS)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved undeveloped reserves as of December&nbsp;31, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchase of reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Conversion to proved developed reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved undeveloped reserves as of December&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Conversion to proved developed reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proved undeveloped reserves as of December&nbsp;31, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table reflects the capitalized costs relating to oil and gas producing activities.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property acquisition costs:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proved
properties (<STRIKE>2009 </STRIKE>reflects an adjustment to the 2008 acquisition costs)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right" nowrap><U>11,782</U><STRIKE>(343</STRIKE></TD>
    <TD nowrap><STRIKE>)</STRIKE></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,134</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Unproved properties</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated depreciation, depletion and amortization
and valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right" nowrap>(410)<STRIKE>(1,993</STRIKE></TD>
    <TD nowrap><STRIKE>)</STRIKE></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><U>(112</U></TD>
    <TD nowrap><U>)</U></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net capitalized costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right" nowrap>11,372<STRIKE>(2,336</STRIKE></TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,022</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Form&nbsp;10-Q for the Fiscal Quarter Ended March&nbsp;31, 2010</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Controls and Procedures, page 14</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Comment/Observation No.&nbsp;7. </B>We note your officers concluded that your disclosure controls and
procedures were &#147;...effective in timely alerting them to material information relating to the
Company...which is required to be included in the Company&#146;s periodic SEC filings.&#148; This
representation implies a limitation on the scope of your conclusion as it does not address other
aspects of the definition.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you are going to include a representation about <I>how </I>the disclosure controls and procedures are
effective, rather than conclude only on whether they were effective or not effective, then you
should use the appropriate language, as expressed in Rule&nbsp;13a-15(e) of Regulation&nbsp;13A, i.e.
&#147;...controls and other procedures of an issuer that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits under the Act...is
recorded, processed, summarized and reported, within the time periods specified in the Commission&#146;s
rules and forms.&#148;
</DIV>

 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Response to Comment/Observation No.&nbsp;7. </B>The language did omit a line which may have been
dropped in typing. The Company did not intend to imply any limitation on the scope of the
conclusion. In future filings, the following language will appear as applicable:
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Item&nbsp;4.T Controls and Procedures</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on an evaluation by our management (with the participation of our Principal
Executive Officer and Principal Financial Officer), as of the end of the period covered by
this report, our Principal Executive Officer and Principal Financial Officer concluded that
our disclosure controls and procedures (as defined in Rules&nbsp;13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;)), were effective to
provide reasonable assurance that information required to be disclosed by us in reports that
we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms and that such information is
accumulated and communicated to our management, including our Principal Executive Officer
and Principal Financial Officer, to allow timely decisions regarding required disclosures.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">There has been no change in our internal control over financial reporting (as defined in
Exchange Act Rule&nbsp;13a-15(f)) during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control over financial
reporting.&#148;
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NEW CONCEPT ENERGY, INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ACKNOWLEDGMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned, on behalf of New Concept Energy, Inc., a Nevada corporation (the
&#147;Company&#148;),
in connection with a response to a comment letter from the Staff of the Securities and Exchange
Commission dated June&nbsp;22, 2010, do hereby acknowledge on behalf of the Company that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company is responsible for the adequacy and accuracy of the
disclosure in
filings with the Securities and Exchange Commission (the &#147;Commission&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Staff comments or changes to disclosure in response to Staff
comments do not
foreclose the Commission from taking any action with respect to the filings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Company may not assert Staff comments as a defense in any
proceeding
initiated by the Commission or any person under the federal securities laws of the United
States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned have executed this Acknowledgment on
and as of the 22nd day
of July, 2010.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">NEW CONCEPT ENERGY, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Gene S. Bertcher
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Gene S. Bertcher, President&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>




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