The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited financial statements
and related notes included in this Quarterly Report on Form 10-Q and the audited
financial statements and notes thereto as of and for the year ended December 31,
2021 and the related Management's Discussion and Analysis of Financial Condition
and Results of Operations, both of which are contained in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2021, filed on March 28, 2022.



Cautionary Statement



This Management's Discussion and Analysis includes a number of forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like "believe," "expect," "plan," "estimate," "anticipate," "intend," "project,"
"will," "predicts," "seeks," "may," "would," "could," "potential," "continue,"
"ongoing," "should" and similar expressions, or words which, by their nature,
refer to future events. You should not place undue certainty on these
forward-looking statements, which apply only as of the date of this Form 10-Q.
These forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results or
from our predictions, including those risks described in our Annual Report on
Form 10-K, this Form 10-Q and in our other public filings. We undertake no
obligation to update or revise publicly any forward-looking statements, whether
because of new information, future events, or otherwise.



Overview



CKX Lands, Inc., a Louisiana corporation, began operations in 1930 under the
name Calcasieu Real Estate & Oil Co., Inc. It was originally organized as a
spin-off by a bank operating in southwest Louisiana. The purpose of the spin-off
was to form an entity to hold non-producing mineral interests which regulatory
authorities required the bank to charge off. Over the years, as some of the
mineral interests began producing, the Company used part of the proceeds to
acquire land. In 1990, the Company made its largest acquisition when it was one
of four purchasers who bought a fifty percent undivided interest in
approximately 35,575 acres in southwest Louisiana.



Today the Company's income is derived from mineral royalties, timber sales and
surface payments from its lands. CKX receives income from royalty interests and
mineral leases related to oil and gas production, timber sales, land sales and
surface rents. Although CKX is active in the management of its land and planting
and harvesting its timber, CKX is passive in the production of income from oil
and gas production in that CKX does not explore for oil and gas or operate
wells. These oil and gas activities are performed by unrelated third parties.



CKX leases its property to oil and gas operators and collects income through its
land ownership in the form of oil and gas royalties and lease rentals and
geophysical revenues. The Company's oil and gas income fluctuates as new oil and
gas production is discovered on Company land and then ultimately depletes or
becomes commercially uneconomical to produce. The volatility in the daily
commodity pricing of a barrel of oil or a thousand cubic feet, or "MCF," of gas
will also cause fluctuations in the Company's oil and gas income. These
commodity prices are affected by numerous factors and uncertainties external to
CKX's business and over which it has no control, including the global supply and
demand for oil and gas, the effect of the COVID-19 pandemic and government
responses to the pandemic on supply and demand, geopolitical conditions and
domestic and global economic conditions, among other factors.



CKX has small royalty interests in 20 different producing oil and gas fields.
The size of each royalty interest is determined by the Company's net ownership
in the acreage unit for the well. CKX's royalty interests range from 0.0045% for
the smallest to 7.62% for the largest. As the Company does not own or operate
the wells, it does not have access to any reserve information. Eventually, the
oil and gas reserves under the Company's current land holdings will be depleted.



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Timber income is derived from sales of timber on Company lands. The Company's
timber income will fluctuate depending on our ability to secure stumpage
agreements in the regional markets, timber stand age, and/or stumpage commodity
prices. Timber is a renewable resource that the Company actively manages.

Surface income is earned from various recurring and non-recurring sources. Recurring surface income is earned from lease arrangements for farming, recreational and commercial uses. Non-recurring surface income can include such activities as pipeline right of ways, and temporary worksite rentals.





In managing its lands, the Company relies on and has established relationships
with real estate, forestry, environmental and agriculture consultants as well as
attorneys with legal expertise in general corporate matters, real estate, and
minerals.



The Company actively searches for additional real estate for purchase in
Louisiana with a focus on southwest Louisiana and on timberland and agricultural
land. When evaluating unimproved real estate for purchase, the Company will
consider numerous characteristics including but not limited to, timber fitness,
agriculture fitness, future development opportunities and/or mineral potential.
When evaluating improved real estate for purchase, the Company will consider
characteristics including, but not limited to, geographic location, quality of
existing revenue streams, and/or quality of the improvements.



The Company's Board of Directors regularly evaluates a range of strategic
alternatives that could increase shareholder value, and the Board and management
conduct due diligence activities in connection with such alternatives. These
include opportunities for growth though the acquisitions of land or other
assets, business combinations, dispositions of assets and reinvestment of the
proceeds, and other alternatives. We cannot assure you that the Board's
evaluations or the Company's due diligence activities will result in any
transaction or other course of action.



Recent Developments



In the first quarter of 2019, the Company began developing several
ranchette-style subdivisions on certain of its lands in Calcasieu and Beauregard
Parishes using existing road rights of way.  The Company has identified demand
in those areas for ranchette-style lots, which consist of more than three acres
each, and the Board of Directors and management believe this project will allow
the Company to realize a return on its investment in the applicable lands after
payment of expenses.  The Company has completed and recorded plats for three
subdivisions.  The three subdivisions are located on approximately 415 acres in
Calcasieu Parish and approximately 160 acres in Beauregard Parish, and contain
an aggregate of 39 lots.  As of March 31, 2022, the Company has closed on the
sale of 21 of the 39 lots. As of the date of this report no sales were pending,
and the Company is actively marketing the remaining lots



The Company is working to identify additional undeveloped acres owned by the
Company in Southwest Louisiana that would likewise be suitable for residential
subdivisions.



Results of Operations



Summary of Results



The Company's results of operations for the three months ended March 31, 2022
were driven primarily by an increase in oil and gas and surface revenues
partially offset by a decrease in timber revenues and an increase in general and
administrative expenses. The increase in general and administrative expenses is
primarily due to an increase in audit fees, legal fees and commissions partially
offset by a decrease in property taxes and transfer agent fees.

Revenue - Three Months Ended March 31, 2022





Total revenues for the three months ended March 31, 2022 were $181,918, an
increase of approximately 17.5% when compared with the same period in 2021.
Total revenue consists of oil and gas, timber, and surface revenues. Components
of revenues for the three months ended March 31, 2022 as compared to 2021, are
as follows:



                                           Three Months Ended March 31,
                                                                                 Change from       Percent Change
                                             2022                 2021           Prior Year        from Prior Year
Revenues:
Oil and gas                             $       82,429       $       50,145     $      32,284                  64.4 %
Timber sales                                    21,743               53,527           (31,784 )               (59.4 )%
Surface revenue                                 77,746               51,204            26,542                  51.8 %
Total revenues                          $      181,918       $      154,876     $      27,042                  17.5 %




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Oil and Gas



Oil and gas revenues were 45% and 32% of total revenues for the three months
ended March 31, 2022 and 2021, respectively. A breakdown of oil and gas revenues
for the three months ended March 31, 2022 as compared to the three months ended
March 31, 2021 is as follows:



                                           Three Months Ended March 31,
                                                                                 Change from       Percent Change
                                             2022                 2021           Prior Year        from Prior Year
Oil                                     $       66,935       $       36,479     $      30,456                  83.5 %
Gas                                             13,782               12,921               861                   6.7 %
Lease and geophysical                            1,712                  745               967                 129.8 %
Total revenues                          $       82,429       $       50,145     $      32,284                  64.4 %

CKX received oil and/or gas revenues from 62 and 64 wells during the three months ended March 31, 2022 and 2021, respectively.

The following schedule summarizes barrels and MCF produced and average price per barrel and per MCF for the three months ended March 31, 2022 and 2021:





                                           Three Months Ended
                                                March 31,
                                            2022          2021
Net oil produced (Bbl)(2)                       847          753

Average oil sales price (per Bbl)(1,2) $ 79.00 $ 48.43 Net gas produced (MCF)

                        2,801        4,456

Average gas sales price (per MCF)(1) $ 4.92 $ 2.90

(1) Before deduction of production costs and severance taxes (2) Excludes plant products






Oil revenues increased for the three months ended March 31, 2022, as compared to
the three months ended March 31, 2021, by $30,456. Gas revenues increased for
the three months ended March 31, 2022, as compared to the same period in 2021,
by $861. As indicated from the schedule above, the increase in oil revenues was
due to an increase in the net oil produced and an increase in the average oil
sales price per barrel. The increase in gas revenues was due to an increase in
average gas sales price per MCF partially offset by a decrease net gas produced.



Lease and geophysical revenues increased for the three months ended March 31,
2022, as compared to the three months ended March 31, 2021, by $967. These
revenues are dependent on oil and gas producers' activities, are not predictable
and can vary significantly from year to year.



Timber

Timber revenue was $21,743 and $53,527 for the three months ended March 31, 2022 and 2021, respectively. The decrease in timber revenues was due to normal business variations in timber customers' harvesting.





Surface

Surface revenues increased for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, by $26,542. This increase is due a one-time oil and gas delay rental from an operator to postpose commencement of drilling operations during the primary term of the lease.

Costs and Expenses - Three months Ended March 31, 2022

Oil and gas costs decreased for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 by $2,485. This variance is due to the normal variations in year to year costs.

Timber costs decreased for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, by $724. Timber costs are related to timber revenue.





General and administrative expenses increased for the three months ended March
31, 2022, as compared to the three months ended March 31, 2021, by $69,266. This
is primarily due to an increase in audit fees, legal fees and commissions
partially offset by a decrease in property taxes and transfer agent fees.



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Gain on Sale of Land - Three months Ended March 31, 2022

Gain on sale of land was $0 and $406,220 for the three months ended March 31, 2022 and 2021, respectively.

Liquidity and Capital Resources





Sources of Liquidity

Current assets totaled $8,001,801 and current liabilities equaled $263,308 at March 31, 2022.

As of March 31, 2022 and December 31, 2021, the Company had no outstanding debt.

In the opinion of management, cash and cash equivalents are adequate for projected operations and possible land acquisitions.





The Company's Board of Directors regularly evaluates a range of strategic
alternatives that could increase shareholder value, and the Board and management
conduct due diligence activities in connection with such alternatives. These
include opportunities for growth though the acquisitions of land or other assets
or business combinations, dispositions of assets and reinvestment of the
proceeds, and other alternatives. The cost and terms of any financing to be
raised in conjunction with any growth opportunity, including the Company's
ability to raise debt or equity capital on terms and at costs satisfactory to
the Company, and the effect of such opportunities on the Company's balance
sheet, are critical considerations in any such evaluation.



Analysis of Cash Flows



Net cash used in operating activities was $48,127 and $150,975 for the three
months ended March 31, 2022 and March 31, 2021, respectively. The change was
attributable primarily to a decrease in net income attributable to a decrease in
gain on sale of land and increase in prepaid assets.



Net cash (used in) provided by investing activities was ($4,542) and $523,122
for the three months ended March 31, 2022 and 2021, respectively. For the three
months ended March 31, 2022, this primarily resulted from purchases of mutual
funds of $37 and costs of reforesting timber of $4,505. For the three months
ended March 31, 2021, this primarily resulted from proceeds from the sale of
fixed assets of $537,360, offset by purchases of mutual funds of $124 and costs
of reforesting timber of $14,114.

Significant Accounting Polices and Estimates

There were no changes in our significant accounting policies and estimates during the three months ended March 31, 2022 from those set forth in "Significant Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recent Accounting Pronouncements





See Note 1, Basis of Presentation and Recent Accounting Pronouncements, to our
condensed financial statements included in this report for information regarding
recently issued accounting pronouncements that may impact our financial
statements.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2022, we do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).

ITEM 3. NOT APPLICABLE

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