SOURCE: Pyramid Oil Company

Pyramid Oil Company

November 16, 2009 09:00 ET

Pyramid Oil Company Reports Third Quarter Financial Results

BAKERSFIELD, CA--(Marketwire - November 16, 2009) - Pyramid Oil Company (NYSE Amex: PDO)

Selected Highlights:

--  Third quarter diluted EPS reported at $0.05
--  Cash and short-term investments increase to $4.6 million; current
    ratio at 12.9:1
--  Texas JV begins testing Pan Am #1 gas well; plans farmout agreement
--  Company targeting new oil well in California's Carneros Creek Field
    

Pyramid Oil Company today announced financial results for its third fiscal quarter ended September 30, 2009.

Pyramid reported net income of $221,000, or $0.05 per diluted share, on revenue of $945,000, representing a sequential improvement from a second quarter net loss of $39,000, or $0.01 per diluted share, on revenue of $802,000. Net income in the comparable third quarter last year was $704,000, or $0.15 per diluted share, on revenue of $2,000,000.

The quarter-to-quarter revenue improvement was largely due to an increase in average crude oil prices, which rose to $63.96 per barrel of oil equivalent (BOE) from $55.09 per BOE in the second quarter. Average price per BOE in the third quarter last year was $110.13.

Third quarter operating expenses were $347,000 versus $325,000 in this year's second quarter and $549,000 in the third quarter a year ago. Income from operations was $191,000 versus a second quarter loss from operations of $208,000, which included a non-recurring, non-cash charge of $210,000 associated with a board-authorized supplemental stock-based severance payment. Operating income in last year's third quarter was $860,000.

John Alexander, president and CEO, said, "Higher oil prices fueled another sequential improvement in our financial results, and helped reinforce our already strong balance sheet. At September 30, we had $4,602,000 in cash, cash equivalents and short-term investments, and a working capital position of $4,947,000. Our current ratio is 12.9:1 and we are free of any long-term debt. We believe we are well positioned to pursue a variety of near- and longer-range opportunities that could stimulate future growth."

Mr. Alexander said Pyramid and the Company's Texas joint venture partners have re-perforated and acid fraced the Pan Am #1 natural gas well, which is currently being flow tested prior to hooking it into a gas sales line. The JV group also is executing a Farmout Agreement under which the farmee will re-enter the existing Murray Franklin well and drill a 4,500-foot lateral hole through the Eagle Ford formation at a depth of approximately 9,500 feet. The farmee also will drill a new horizontal well into the Eagle Ford Formation and will have the right to drill additional wells subject to a 90-day continuous drilling obligation. The farmee will earn 100% of the working interest prior to payout and 70% after payout. Pyramid will own approximately 2.5% of the working interest after payout, with no out of pocket costs for the drilling and completion of any Eagle Ford wells.

Pyramid also announced plans to drill a new oil well in California's Carneros Creek field. The well is planned for Pyramid's Anderson property and will target a depth of approximately 3,400 feet. Management hopes to secure a contract-drilling rig for this well by late December.

Nine-month results

Through nine months, Pyramid reported revenue of $2,341,000 versus $5,713,000 in the same period a year ago. Operating loss was $235,000 versus operating income of $2,778,000 at the nine-month mark a year ago. Net loss was $7,000, or less than $0.01 per diluted share, versus net income of $2,447,000, or $0.52 per diluted share, in the same period last year.

About Pyramid Oil Company

Pyramid Oil Company has been in the oil and gas business continuously since incorporating in 1909. Pyramid acquires interests in land and producing properties through acquisition and lease, and then drills and/or operates crude or natural gas wells in an effort to discover or produce oil and/or natural gas. More information about the Company can be found at: http://www.pyramidoil.com.

Safe Harbor Statement

Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements regarding the completion and testing of wells. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Factors that could cause or contribute to such differences include, but are not limited to the value of crude oil or the performance of wells.

                            PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (Unaudited)


                              Three months ended      Nine months ended
                                September 30,           September 30,
                            ----------------------- -----------------------
                               2009        2008        2009        2008
                            ----------- ----------- ----------- -----------


REVENUES:
    Oil and gas sales       $   945,413 $ 1,999,119 $ 2,341,359 $ 5,712,201
    Gain on sale of fixed
     assets                           0         500           0         500
                            ----------- ----------- ----------- -----------

                                945,413   1,999,619   2,341,359   5,712,701
                            ----------- ----------- ----------- -----------

COSTS AND EXPENSES:
    Operating expenses          346,800     548,991   1,023,339   1,433,274
    Exploration costs                 0           0           0     -28,812
    General and
     administrative             198,703     298,759     653,805     740,359
    Severance award
     agreement                        0           0     209,935           0
    Taxes, other than
     income and payroll
     taxes                       33,809      42,481     114,593      99,091
    Provision for
     depletion,
     depreciation and
     amortization               150,209     169,185     468,665     523,244
    Accretion expense             5,898      54,847      17,696      66,468
    Other costs and
     expenses                    18,628      25,643      88,773     101,215
                            ----------- ----------- ----------- -----------

                                754,047   1,139,906   2,576,806   2,934,839
                            ----------- ----------- ----------- -----------

OPERATING INCOME (LOSS)         191,366     859,713    -235,447   2,777,862
                            ----------- ----------- ----------- -----------


OTHER INCOME (EXPENSE):
    Interest income              20,508      22,661      68,378      64,672
    Other income                  3,600       5,217      10,800      24,031
    Interest expense               -299        -529      -1,072      -1,763
                            ----------- ----------- ----------- -----------

                                 23,809      27,349      78,106      86,940
                            ----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
 INCOME TAX PROVISION
 (BENEFIT)                      215,175     887,062    -157,341   2,864,802
    Income tax provision
     (benefit)
      Current                   -43,499     -35,223    -181,082     239,252
      Deferred                   37,300     218,000      30,500     179,000
                            ----------- ----------- ----------- -----------
                                 -6,199     182,777    -150,582     418,252
                            ----------- ----------- ----------- -----------

NET INCOME (LOSS)           $   221,374 $   704,285 $    -6,759 $ 2,446,550
                            =========== =========== =========== ===========

EARNINGS  PER COMMON SHARE
    Basic and diluted
     income (loss)
     per common share       $      0.05 $      0.15 $      0.00 $      0.52
                            =========== =========== =========== ===========

Basic weighted average
 number of common shares
 outstanding                  4,677,728   4,677,728   4,677,728   4,677,728
                            =========== =========== =========== ===========

Diluted weighted average
 number of common shares
 outstanding                  4,719,004   4,677,728   4,677,728   4,677,728
                            =========== =========== =========== ===========



                            PYRAMID OIL COMPANY
                               BALANCE SHEETS

                                  ASSETS

                                                September 30, December 31,
                                                    2009          2008
                                                (Unaudited)     (Audited)
                                                ------------- -------------

CURRENT ASSETS:
  Cash and cash equivalents                     $   1,261,651 $   1,793,563
  Short-term investments                            3,340,743     2,789,099
  Trade accounts receivable                           315,865       213,588
  Income taxes receivable                             132,655             0
  Crude oil inventory                                  56,165        82,025
  Deferred income taxes                               195,800       108,000
  Prepaid expenses and other assets                    58,297       186,353
                                                ------------- -------------

         TOTAL CURRENT ASSETS                       5,361,176     5,172,628
                                                ------------- -------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
   (successful efforts method)                     15,999,336    15,755,472
  Capitalized asset retirement costs                  382,550       382,550
  Drilling and operating equipment                  2,109,993     2,109,993
  Land, buildings and improvements                  1,065,371     1,065,371
  Automotive, office and other
   property and equipment                           1,160,617     1,162,324
                                                ------------- -------------

                                                   20,717,867    20,475,710
  Less: accumulated depletion, depreciation,
   amortization and valuation allowance           -16,596,004   -16,147,157
                                                ------------- -------------

                                                    4,121,863     4,328,553
                                                ------------- -------------
OTHER ASSETS
  Deposits                                            250,000       250,000
  Deferred income taxes                               390,945       509,245
  Other Assets                                         17,013        17,013

                                                ------------- -------------

                                                $  10,140,997 $  10,277,439
                                                ============= =============



                            PYRAMID OIL COMPANY
                              BALANCE SHEETS

                   LIABILITIES AND STOCKHOLDERS' EQUITY



                                                September 30, December 31,
                                                    2009          2008
                                                (Unaudited)     (Audited)
                                                ------------- -------------

CURRENT LIABILITIES:
  Accounts payable                              $      28,997 $      40,820
  Accrued professional fees                           120,426       130,261
  Accrued taxes, other than income taxes               30,960        76,222
  Accrued payroll and related costs                    55,335        50,451
  Accrued royalties payable                           150,692       132,472
  Accrued insurance                                     3,250        59,096
  Accrued income taxes                                      0       239,815
  Current maturities of long-term debt                 24,610        23,901
                                                ------------- -------------

         TOTAL CURRENT LIABILITIES                    414,270       753,038
                                                ------------- -------------

LONG-TERM DEBT, net of current maturities               2,094        20,640
                                                ------------- -------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION           1,169,402     1,151,706
                                                ------------- -------------

COMMITMENTS

STOCKHOLDERS' EQUITY:
  Preferred stock-no par value; 10,000,000
   authorized shares; no shares issued or
   outstanding                                              0             0
  Common stock-no par value; 50,000,000
   authorized shares; 4,677,728 shares issued
   and outstanding                                  1,515,945     1,306,010
  Retained earnings                                 7,039,286     7,046,045
                                                ------------- -------------

                                                    8,555,231     8,352,055
                                                ------------- -------------


                                                $  10,140,997 $  10,277,439
                                                ============= =============

Contact Information

  • CONTACTS:
    John H. Alexander
    President and CEO
    Pyramid Oil Company
    661-325-1000

    Geoff High
    Principal
    Pfeiffer High Investor Relations, Inc.
    303-393-7044