REPLACEMENT RENEWAL AND EXTENSION PROMISSORY NOTE

                                   REPLACEMENT
                              RENEWAL AND EXTENSION
                                 PROMISSORY NOTE



$2,782,900.59                                             Oklahoma City, Oklahoma
                                                                February 14, 2005


     For value received, the undersigned, The Beard Company, an Oklahoma
corporation (the "Maker"), agrees to all of the terms of this Promissory Note
(this "Note") and promises to pay to the order of William M. Beard and Lu Beard
as Trustees of the William M. Beard and Lu Beard 1988 Charitable Unitrust
(individually and collectively called the "Holder"), at Enterprise Plaza, Suite
320, 5600 N. May, Oklahoma City, Oklahoma 73112, or at such other place as may
be designated in writing by the Holder of this Note, the principal sum of Two
Million Seven Hundred Eighty-Two Thousand Nine Hundred and 59/100ths Dollars
($2,782,900.59) plus all interest accruing thereon. This Note will be payable as
follows:

         Prior to Default the unpaid principal balance of this Note will bear
         interest at the rate of ten percent (10%) (the "Applicable Rate").
         Interest will commence to accrue on the unpaid principal balance of
         this Note on the date hereof and thereafter until this Note is paid in
         full. Interest will be computed for the actual number of days elapsed
         at a per diem charge based on a year consisting of three hundred sixty
         (360) days. All payments will be applied first to any accrued interest
         on this Note and the remainder to the principal balance of the Note.
         The outstanding principal balance plus unpaid accrued interest are due
         and payable on April 1, 2007.

         Except as otherwise defined herein, all terms defined in the Restated
and Amended Letter Loan Agreement dated April 1, 2005, between the Maker and the
Holder (the "Loan Agreement") will have the same meanings as therein, and the
Holder recognizes that it is subject to all of the provisions set forth in the
Amendment to Restated and Amended Letter Loan Agreement dated June 25, 2004 (the
"Amended Loan Agreement). Both principal and interest owing pursuant to the
terms of this Note are payable in the lawful currency of the United States of
America and in immediately available funds. All payments made on this Note will
be applied to this Note when received by the Holder hereof in collected funds.
Any sum not paid when due will bear interest at the rate equal to the Applicable
Rate plus five percent (5.0%) and will be paid at the time of, and as a
condition precedent to, the curing of any Event of Default. During the existence
of any Event of Default, the Holder of this Note may apply p