SOURCE: Pyramid Oil Company

Pyramid Oil Company

August 15, 2011 09:00 ET

Pyramid Oil Company Reports 26% Increase in Second Quarter Revenue

BAKERSFIELD, CA--(Marketwire - Aug 15, 2011) - Pyramid Oil Company (NYSE Amex: PDO)

Highlights:

  • Second quarter net income improves to $427,000 vs. net loss of $302,000 in 2010 Q2
  • EPS of $0.09 versus loss of $0.06 in Q2 last year
  • Six-month operating cash flow up 65% to $1.2 million vs. same period in 2010
  • Balance sheet includes cash, cash equivalents and short-term investments of $4.7 million, and nominal long-term debt

Pyramid Oil Company (NYSE Amex: PDO) today announced continued revenue and earnings growth for its second quarter and six-month period ended June 30, 2011.

Second quarter revenue increased 26% to $1.5 million from $1.2 million in the same quarter last year. The increase was due to higher average crude oil prices, which increased $34.76 per barrel of oil equivalent (BOE) to $108.79 from $74.03 per average BOE in the 2010 second quarter.

Operating income was $512,000, a positive swing of $1.1 million when compared with a loss from operations of $583,000 in last year's second quarter. The 2010 second quarter was negatively impacted by a non-cash valuation allowance of $842,000 associated with an unsuccessful well. Net income in this year's second quarter was $427,000, or $0.09 per share, an improvement of $729,000, when compared with a net loss of $302,000, or $0.06 per share, in the year-ago second quarter.

For the six-month period, revenue increased 29% to $2.9 million from $2.2 million in the same period last year. Operating income was $888,000, an improvement of $1.2 million when compared with an operating loss of $354,000 during the 2010 six-month period. Net income improved by $868,000 to $747,000, or $0.16 per share, from a net loss of $121,000, or $0.03 per share, during the same period last year.

Cash flow from operations at June 30 was $1.2 million, up 65% from $706,000 during the first six months of fiscal 2010. The Company's balance at June 30, 2011, included $4.7 million in cash, cash equivalents and short-term investments; total current assets of $5.8 million, and working capital of $5.3 million. Long-term debt was a nominal $52,000.

"Our second quarter and year-to-date financial results reflect both solid industry fundamentals and the benefits of our efficient business model," said John Alexander, president and CEO. "A 34% increase in the average price per barrel of oil versus last year's second quarter combined with our lean expense structure fueled strong bottom-line results."

"Despite recent market volatility, the oil sector remains healthy, and we therefore continue to focus on opportunities to increase our production volumes," Mr. Alexander added. "We are currently targeting up to four wells on our Kern County, California leases. Two would be re-entries of existing wells on our Mountain View property, and two would be shallow, heavy oil test wells on our Chico Martinez property. Of course contract rig availability remains very tight, and consequently, the timing of initiating these wells is challenging to pinpoint."

Mr. Alexander said the Company is continuing work on the production challenges associated with the Pike 1-H, a horizontal joint-venture well the Company drilled in March with Victory Oil Company. As previously reported, initial tests were encouraging, but the well has subsequently been generating significant volumes of water, which is believed to be inhibiting the flow of oil. The companies are consulting with outside industry experts and pursuing a variety of technical options to address this production issue.

"In the meantime, we have strong cash and working capital positions, and are free of long-term debt," Mr. Alexander said. "Given current market conditions, our priorities are to maintain the Company's financial strength, while also being mindful of opportunities to enhance shareholder value."

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 June 30, Six months ended

June 30,
2011 2010 2011 2010
REVENUES:
Oil and gas sales $ 1,549,029 $ 1,228,391 $ 2,875,327 $ 2,230,130
Gain on sale of fixed assets 0 0 1,012 0
$ 1,549,029 $ 1,228,391 $ 2,876,339 $ 2,230,130
COSTS AND EXPENSES:
Operating expenses 447,889 438,392 861,545 778,312
General and administrative 219,072 250,588 443,792 457,955
Stock based compensation 43,743 0 43,743 0
Taxes, other than income and payroll taxes
27,104

29,839

63,959

57,659
Provision for depletion, depreciation and amortization
225,895

196,873

411,423

346,260
Valuation allowances 5,851 842,327 54,384 867,468
Accretion expense 5,229 5,898 21,564 12,111
Other costs and expenses 62,197 47,303 87,684 64,543
1,036,980 1,811,220 1,988,094 2,584,308
OPERATING INCOME (LOSS) 512,049 -582,829 888,245 -354,178
OTHER INCOME (EXPENSE):
Interest income 13,159 8,430 26,511 16,383
Other income 0 3,600 500 6,397
Interest expense -385 -122 -1,891 -303
12,774 11,908 25,120 22,477
INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT)
524,823

-570,921

913,365

-331,701
Income tax provision (benefit)
Current 64,400 24,900 110,600 44,900
Deferred 33,400 -293,950 56,100 -255,400
97,800 -269,050 166,700 -210,500
NET INCOME (LOSS) $ 427,023 -$301,871 $ 746,665 -$121,201
BASIC INCOME (LOSS) PER COMMON SHARE
$0.09

-$0.06

$0.16

-$0.03
DILUTED INCOME (LOSS) PER COMMON SHARE
$0.09

-$0.06

$0.16

-$0.03
Weighted average number of common shares outstanding
4,683,853

4,677,728

4,681,811

4,677,728
Diluted average number of common shares outstanding
4,725,992

4,677,728

4,723,536

4,677,728
PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
June 30, December 31,
2011 2010
(Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,617,207 $ 1,535,532
Short-term investments 3,080,185 3,058,528
Trade accounts receivable 599,410 508,457
Joint interest billing receivable 68,674 0
Crude oil inventory 86,205 86,361
Prepaid expenses and other assets 112,604 230,876
Deferred income taxes 262,500 245,100
TOTAL CURRENT ASSETS 5,826,785 5,664,854
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment (successful efforts method)
19,102,006

18,101,529
Capitalized asset retirement costs 401,242 389,463
Drilling and operating equipment 1,953,683 1,946,805
Land, buildings and improvements 1,073,918 1,066,571
Automotive, office and other property and equipment
1,226,301

1,182,613
23,757,150 22,686,981
Less: accumulated depletion, depreciation, amortization and valuation allowances
-19,118,315

-18,687,908
TOTAL PROPERTY AND EQUIPMENT 4,638,835 3,999,073
OTHER ASSETS
Deferred income taxes 635,000 708,500
Deposits 250,000 250,000
Other Assets 17,380 7,380
TOTAL OTHER ASSETS 902,380 965,880
TOTAL ASSETS $ 11,368,000 $ 10,629,807
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
2011 2010
(Unaudited) (Audited)
CURRENT LIABILITIES:
Accounts payable $ 90,486 $ 73,374
Accrued professional fees 88,049 122,506
Accrued taxes, other than income taxes 0 63,361
Accrued payroll and related costs 67,880 60,365
Accrued royalties payable 213,969 193,052
Accrued insurance 11,484 86,888
Accrued income taxes 11,600 12,800
Current maturities of long-term debt 31,793 13,473
TOTAL CURRENT LIABILITIES 515,261 625,819
LONG TERM DEBT, net of current maturites 51,946 26,946
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS 1,268,536 1,235,193
TOTAL LIABILITIES 1,835,743 1,887,958
COMMITMENTS AND CONTINGENCIES
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; 4,683,853 shares issued and outstanding 1,682,971 1,639,228
Retained earnings 7,849,286 7,102,621
TOTAL STOCKHOLDERS' EQUITY 9,532,257 8,741,849
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,368,000 $ 10,629,807

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