SOURCE: Pyramid Oil Company

August 13, 2008 09:00 ET

Pyramid Oil Company Reports 154% Increase in Second Quarter Net Income on 91% Increase in Q2 Revenue

Construction on Texas Gas Sales Line Complete

BAKERSFIELD, CA--(Marketwire - August 13, 2008) - Pyramid Oil Company (AMEX: PDO) today announced financial results for its second quarter and six-month period ended June 30, 2008.

Second quarter revenue increased 91% to $2.1 million from $1.1 million in last year's second quarter. Approximately 93% of the increase resulted from higher oil and gas prices, which increased by approximately $57.19 per equivalent barrel of oil versus last year's second quarter. Operating income increased by 226% to $1.2 million versus $362,000 in the second quarter a year ago. Net income improved by 154% to $908,000, or $0.24 per diluted share ($0.19 per diluted share after a 5-for-4 stock split that became effective July 7, 2008) from $357,000, or $0.10 per diluted share ($0.08 per diluted share, post split) in the second quarter last year.

Through six months, Pyramid reported revenue of $3.7 million, up 92% versus revenue of $1.9 million in the same period a year ago. Operating income increased 372% to $1.9 million from $406,000 in the six-month period last year. Net income increased 320% to $1.7 million, or $0.47 per diluted share ($0.37 per diluted share, post split) from $415,000, or $0.11 per diluted share ($0.09 per diluted share, post split) in the 2007 six-month period.

John Alexander, president and CEO, said, "Our strong second quarter performance helped fuel solid cash flow from operations, which through six months had increased 183% to $1.7 million versus the comparable period last year. We expect to elevate our oil and gas production rates during the second half of the year, and are therefore optimistic about our prospects for continued strong top- and bottom-line financial results."

Mr. Alexander said construction and hook up of a gas sales line at the Company's Texas natural gas joint venture was completed during the first week in August, and the well is scheduled to commence production in the coming days. A gas sales contract is in place, and the operator has plans for additional near-term drilling on the joint venture's 5,700-acre lease area in south-central Texas. Post-frac testing on the initial well indicated natural gas rates of more than 4 million cubic feet per day. Pyramid owns a gross 12.5% working interest (before payout) in the prospect.

Pyramid remained active in its Carneros Creek field in California, where it has been conducting enhancement efforts on several existing wells, and also has been executing a developmental drilling program. The Company is currently waiting on a drilling rig, which it will use on its Anderson property to penetrate the point-of-rocks formation at a depth of approximately 3,100 feet. Drilling is expected to commence late in the third quarter.

Cash and short-term investments at June 30, 2008, were $2.9 million, up from $2.1 million at December 31, 2007. Working capital at the end of the second quarter improved to $3.4 million from $2.3 million at the end of fiscal 2007. Stockholders' equity increased to $8.4 million from $6.6 million at the end of fiscal 2007.

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.

(Financial tables follow)

                            PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)


                            Three months ended         Six months ended
                                  June 30,                  June 30,
                         ------------------------  ------------------------
                            2008         2007         2008         2007
                         -----------  -----------  -----------  -----------

REVENUES:                $ 2,123,186  $ 1,110,413  $ 3,713,082  $ 1,936,593
                         -----------  -----------  -----------  -----------

COSTS AND EXPENSES:
  Operating expenses         461,477      408,650      884,283      771,313
  Exploration Costs                0          816      -28,812        5,651
  General and
   administrative            209,088      175,775      441,600      450,929
  Taxes, other than
   income and payroll
   taxes                      21,100       21,455       56,610       48,611
  Provision for
   depletion,
   depreciation and
   amortization              191,239      120,907      354,059      218,577
  Accretion expense            5,811        5,490       11,621       11,121
  Other costs and
   expenses                   56,020       15,360       75,572       24,052
                         -----------  -----------  -----------  -----------

                             944,735      748,453    1,794,933    1,530,254
                         -----------  -----------  -----------  -----------

OPERATING INCOME           1,178,451      361,960    1,918,149      406,339
                         -----------  -----------  -----------  -----------

OTHER INCOME (EXPENSE):
  Interest income             19,934       18,391       42,011       42,180
  Other income                 9,152        8,381       18,814       11,981
  Interest expense              -593       -1,783       -1,234       -1,797
                         -----------  -----------  -----------  -----------

                              28,493       24,989       59,591       52,364
                         -----------  -----------  -----------  -----------
INCOME BEFORE INCOME
 TAX PROVISION             1,206,944      386,949    1,977,740      458,703
  Income tax provision
    Current                  182,850       29,600      274,475       43,425
    Deferred                 116,100            0      -39,000            0
                         -----------  -----------  -----------  -----------

                             298,950       29,600      235,475       43,425
                         -----------  -----------  -----------  -----------

NET INCOME               $   907,994  $   357,349  $ 1,742,265  $   415,278
                         ===========  ===========  ===========  ===========

EARNINGS PER SHARE -
 Post Split
  Basic and diluted
   income per
   common share          $      0.19  $      0.08  $      0.37  $      0.09
                         ===========  ===========  ===========  ===========

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

EARNINGS PER SHARE -
 Pre Split
  Basic and diluted
   income per
   common share          $      0.24  $      0.10  $      0.47  $      0.11
                         ===========  ===========  ===========  ===========

Basic and diluted
 weighted average
 number of common
 shares outstanding        3,741,721    3,741,721    3,741,721    3,741,721
                         ===========  ===========  ===========  ===========




                            PYRAMID OIL COMPANY
                              BALANCE SHEETS

                                  ASSETS

                                                   June 30,    December 31,
                                                     2008          2007
                                                 (Unaudited)    (Audited)
                                                 ------------  ------------

CURRENT ASSETS:
  Cash                                           $  1,381,425  $    618,448
  Short-term investments                            1,505,325     1,478,979
  Trade accounts receivable                         1,059,244       643,340
  Employee loan receivable                                600             0
  Interest receivable                                   2,225         2,251
  Crude oil inventory                                  74,857        71,298
  Deferred taxes                                       64,000             0
  Prepaid expenses                                     84,393       170,913
                                                 ------------  ------------

         TOTAL CURRENT ASSETS                       4,172,069     2,985,229
                                                 ------------  ------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
   (successful efforts method)                     15,593,748    14,734,929
  Capitalized asset retirement costs                  310,579       310,579
  Drilling and operating equipment                  2,073,137     2,050,556
  Land, buildings and improvements                  1,045,649     1,010,847
  Automotive, office and other property
   and equipment                                    1,162,324     1,141,451
                                                 ------------  ------------

                                                   20,185,437    19,248,362
  Less: accumulated depletion, depreciation,
   amortization and valuation allowance           -14,394,669   -14,040,610
                                                 ------------  ------------

                                                    5,790,768     5,207,752
                                                 ------------  ------------
OTHER ASSETS
  Deposits                                            250,000       250,000
  Other Assets                                          7,380         7,380
  Assets held for resale                                9,633         9,633
                                                 ------------  ------------

                                                 $ 10,229,850  $  8,459,994
                                                 ============  ============




                            PYRAMID OIL COMPANY
                              BALANCE SHEETS

                   LIABILITIES AND STOCKHOLDERS' EQUITY


                                                   June, 30    December 31,
                                                     2008          2007
                                                 (Unaudited)    (Audited)
                                                 ------------  ------------

CURRENT LIABILITIES:
  Accounts payable                               $     98,350  $    108,500
  Accrued professional fees                            53,223        54,165
  Accrued taxes, other than income taxes                    0        61,684
  Accrued payroll and related costs                    64,444        57,647
  Accrued royalties payable                           280,643       212,916
  Accrued insurance                                    26,399        65,999
  Accrued income taxes                                190,206       145,815
  Current maturities of long-term debt                 24,734        26,868
                                                 ------------  ------------

         TOTAL CURRENT LIABILITIES                    737,999       733,594
                                                 ------------  ------------

LONG-TERM DEBT, net of current maturities              32,707        44,542
                                                 ------------  ------------

DEFERRED TAXES                                         25,000             0
                                                 ------------  ------------

LIABILITY FOR SHARE BASED COMPENSATION                      0        67,000
                                                 ------------  ------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION           1,022,524     1,010,903
                                                 ------------  ------------

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                           1,137,010     1,071,610
  Retained earnings                                 7,274,610     5,532,345
                                                 ------------  ------------

                                                    8,411,620     6,603,955
                                                 ------------  ------------

                                                 $ 10,229,850  $  8,459,994
                                                 ============  ============

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