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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE A: BASIS OF PRESENTATION</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The accompanying unaudited consolidated financial statements
include the accounts of New Concept Energy, Inc. and its majority-owned subsidiaries (collectively, “NCE” or the “Company”).  All
significant intercompany transactions and accounts have been eliminated.  Certain reclassifications have been made to
the prior year revenue and operating expense amounts in the statement of operations to conform to the current year presentation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The unaudited financial statements included herein have been
prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The
financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All
such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, certain information and footnote disclosures, including a description of significant
accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted
in the United States of America, have been condensed or omitted pursuant to such rules and regulations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">These financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the
fiscal year ending December 31, 2017. Operating results for the three and nine month periods ended September 30, 2018
are not necessarily indicative of the results that may be expected for any subsequent quarter or for the fiscal year ending December
31, 2018.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE B: NATURE OF OPERATIONS</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The Company operates oil and gas wells and mineral leases
in Athens and Meigs Counties in Ohio and in Calhoun, Jackson and Roane Counties in West Virginia through its wholly owned subsidiaries
Mountaineer State Energy, Inc. and Mountaineer State Operations, LLC.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE C: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">We consider accounting policies related to our estimates
of depreciation amortization and depletion, segments, oil and gas properties, oil and gas reserves, gas gathering assets, office
and field equipment, revenue recognition and gas imbalances, leases, revenue recognition for real estate operations, impairment,
and sales of real estate as significant accounting policies. The policies include significant estimates made by management
using information available at the time the estimates are made. However, these estimates could change materially if
different information or assumptions were used. These policies are summarized in our Annual Report on Form 10-K for
the year ended December 31, 2017.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE D: OIL AND GAS RESERVES</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 properties (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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The full cost method requires the Company
to calculate quarterly, by cost center, a “ceiling,” or limitation on the amount of properties that can be capitalized
on the balance sheet. To the extent capitalized costs of oil and natural gas properties, less accumulated depletion
and related deferred taxes exceed the sum of the discounted future net revenues of proved oil and natural gas reserves, the lower
of cost or estimated fair value of unproved properties subject to amortization, the cost of properties not being amortized, and
the related tax amounts, such excess capitalized costs are charged to expense.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE E: CONTINGENCIES</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/115% New times roman,serif; margin: 0"><u>Carlton Litigation</u></p>
<p style="font: 10pt/115% New times roman,serif; margin: 0"> </p>
<p style="font: 10pt/115% New times roman,serif; margin: 0">Since December 2006, Carlton Energy Group, LLC (“Carlton”),
an individual, Eurenergy Resources Corporation (“Eurenergy”) and several other entities, including New Concept Energy,
Inc., which was then known as CabelTel International Corporation (the “Company”), have been involved in contentious
litigation alleging tortuous conduct, breach of contract and other matters and, as to the Company, that it was the alter ego of
Eurenergy. The Carlton claims were based upon an alleged tortuous interference with</p>
<p style="font: 10pt/115% New times roman,serif; margin: 0">a contract by the individual and Eurenergy related to the right to
explore a coal bed methane concession in Bulgaria which had never (and has not to this day) produced any hydrocarbons. At no time
during the pendency of this project or since did the Company or any of its officers or directors have any interest whatsoever in
the success or failure of the so-called “Bulgaria Project.” However, in the litigation Carlton alleged that the Company
was the alter ego of certain of the other defendants, including Eurenergy.</p>
<p style="font: 10pt/115% New times roman,serif; margin: 0"> </p>
<p style="font: 10pt/115% New times roman,serif; margin: 0">Following a jury trial in 2009, the Trial Court (295<sup>th</sup> District
Court of Harris County, Texas) cross appeals were filed by Carlton, the individual and Eurenergy to the Court of Appeals for the
First District of Texas (the “Court of Appeals”), which, in February 2012, rendered an opinion. The Company and the
other defendants filed a Petition for Review of the Court of Appeals’ Opinion with the Supreme Court of the State of Texas.
On May 8, 2015, the Supreme Court of Texas affirmed, in part, and reversed, in part, the Court of Appeals’ judgment, remanding
the case to the Court of Appeals for further proceedings. On remand, the Court of Appeals reinstated a verdict on damages in the
amount of $31.16 million against the individual and Eurenergy.</p>
<p style="font: 10pt/115% New times roman,serif; margin: 0"> </p>
<p style="font: 10pt/115% New times roman,serif; margin: 0">During August 2017, the parties to the litigation reached an arrangement,
the final terms of which will not be determined until the outcome of another appeal to the Supreme Court. Under the terms of the
arrangement, the Company should have no financial responsibility to Carlton, nor should any potential final outcome materially
adversely affect the Company, in management’s opinion.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Other</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has been named as a defendant
in other lawsuits in the ordinary course of business. Management is of the opinion that these lawsuits will not have
a material effect on the financial condition, results of operations or cash flows of the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE F: NEWLY ISSUED ACCOUNTING STANDARDS</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal New times roman,serif; margin: 0">We have considered all other newly issued accounting guidance that
is applicable to our operations and the preparation of our financial statements including that which we have not yet adopted. We
do not believe that any such guidance will have a material effect on our financial position or results of operations</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>NOTE G: SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">The Company has evaluated subsequent events through November
14, 2018, the date the financial statements were available to be issued, and determined that there are none to be reported.</p>
New Concept Energy, Inc.
0000105744
10-Q
2018-09-30
false
--12-31
No
No
Yes
Smaller Reporting Company
Q3
2018