Pyramid Oil Company Reports 69% Increase in First Quarter Revenue


BAKERSFIELD, CA--(Marketwire - May 17, 2010) - Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its first quarter ended March 31, 2010.

Revenue increased 69% to $1.0 million from $594,000 in the first quarter last year. The increase resulted from higher average crude oil prices, which increased $36.73 per barrel of oil equivalent (BOE) to $75.55 from $38.82 per average BOE in the first quarter a year ago. The increase in average price received per BOE was partially offset by a 13% decline in production volumes.

Operating income was $229,000, a positive swing of $448,000 when compared with an operating loss of $219,000 in last year's first quarter. Total costs and expenses declined 5% to $773,000 from $813,000 in the first quarter last year. Net income was $181,000, or $0.04 per share, an improvement of $370,000 versus the net loss of $189,000, or $0.04 per share, reported in the comparable year-ago quarter.

Pyramid generated operating cash flow of $176,000 during the first three months of fiscal 2010. By comparison, the Company used cash of $218,000 during the same period of fiscal 2009. At March 31, 2010, the Company's balance sheet included $4.4 million in cash, cash equivalents and short-term investments; total current assets of $5.5 million; working capital of $5.0 million and no long-term debt.

Subsequent to the close of the quarter, the Company drilled a horizontal well on one of its Mountain View properties in Kern County, Calif. Results of the well did not warrant its completion, and the Company is projecting it will make a second quarter valuation allowance associated with the well of approximately $830,000.

"Our first quarter financial performance reflects the strong rebound in crude prices during the past year," said John Alexander, president and CEO. "We are working to capitalize on the improved price environment and have increased drilling activity on our California leases. A new well in our Carneros Creek field was put into production during the first quarter, and we are currently reviewing additional prospects on our Kern County properties. We expect to commence drilling one of these prospects during the next fiscal quarter. For the foreseeable future, we will fund our exploration efforts utilizing our strong cash position."

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 
                                                          March 31,
                                                      2010         2009
                                                  ------------ ------------

REVENUES:                                         $  1,001,739 $    594,045
                                                  ------------ ------------

COSTS AND EXPENSES:
  Operating expenses                                   339,920      351,350
  General and administrative                           207,367      225,304
  Taxes, other than income and payroll taxes            27,820       48,298
  Provision for depletion,
   depreciation and amortization                       149,387      158,314
  Valuation allowances                                  25,141            0
  Accretion expense                                      6,213        5,866
  Other costs and expenses                              17,240       24,171
                                                  ------------ ------------

                                                       773,088      813,303
                                                  ------------ ------------

OPERATING INCOME (LOSS)                                228,651     -219,258
                                                  ------------ ------------

OTHER INCOME (EXPENSE):
  Interest income                                        7,953       26,475
  Other income                                           2,797        3,600
  Interest expense                                        -181         -415
                                                  ------------ ------------

                                                        10,569       29,660
                                                  ------------ ------------
INCOME (LOSS) BEFORE INCOME TAX PROVISION 
 (BENEFIT)                                             239,220     -189,598
  Income tax provision (benefit)
    Current                                             20,000     -103,383
    Deferred                                            38,550      103,000
                                                  ------------ ------------
                                                        58,550         -383
                                                  ------------ ------------

NET INCOME (LOSS)                                 $    180,670 $   -189,215
                                                  ============ ============

BASIC INCOME (LOSS) PER COMMON SHARE              $       0.04 $      -0.04
                                                  ============ ============

DILUTED INCOME (LOSS) PER COMMON SHARE            $       0.04 $      -0.04
                                                  ============ ============

Weighted average number of
 common shares outstanding                           4,677,728    4,677,728
                                                  ============ ============

Diluted average number of
 common shares outstanding                           4,686,018    4,677,728
                                                  ============ ============




                            PYRAMID OIL COMPANY                            
                              BALANCE SHEETS                               
                                                                           
                                  ASSETS                                   

                                                   March 31,   December 31,
                                                      2010         2009
                                                  (Unaudited)   (Audited)
                                                  ------------ ------------

CURRENT ASSETS:
  Cash and cash equivalents                       $  1,083,551 $  1,438,825
  Short-term investments                             3,348,487    3,344,061
  Trade accounts receivable                            585,980      375,954
  Income taxes receivable                              104,281      124,281
  Crude oil inventory                                   89,177       62,760
  Deferred income taxes                                196,200      196,200
  Prepaid expenses and other assets                    141,837      169,595
                                                  ------------ ------------

    TOTAL CURRENT ASSETS                             5,549,513    5,711,676
                                                  ------------ ------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
   (successful efforts method)                      16,596,418   16,085,228
  Capitalized asset retirement costs                   389,463      382,550
  Drilling and operating equipment                   2,109,993    2,109,993
  Land, buildings and improvements                   1,066,571    1,065,371
  Automotive, office and other
    property and equipment                           1,164,035    1,160,617
                                                  ------------ ------------

                                                    21,326,480   20,803,759
  Less: accumulated depletion, depreciation,
   amortization and valuation allowance            -17,296,047  -17,125,834
                                                  ------------ ------------

                                                     4,030,433    3,677,925
                                                  ------------ ------------
OTHER ASSETS
  Deposits                                             250,000      250,000
  Deferred income taxes                                446,850      485,400
  Other Assets                                          17,013       17,013

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

    TOTAL ASSETS                                  $ 10,293,809 $ 10,142,014
                                                  ============ ============


                            PYRAMID OIL COMPANY                            
                              BALANCE SHEETS                               
                                                                           
                   LIABILITIES AND STOCKHOLDERS' EQUITY                    

                   
                   
                                                   March 31,   December 31,
                                                      2010         2009
                                                  (Unaudited)   (Audited)
                                                  ------------ ------------

CURRENT LIABILITIES:
  Accounts payable                                $     49,029 $     88,170
  Accrued professional fees                            108,739      138,381
  Accrued taxes, other than income taxes                62,310       62,310
  Accrued payroll and related costs                     65,108       51,606
  Accrued royalties payable                            197,955      159,933
  Accrued insurance                                     36,326       54,947
  Current maturities of long-term debt                  14,518       20,640
                                                  ------------ ------------

    TOTAL CURRENT LIABILITIES                          533,985      575,987
                                                  ------------ ------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION            1,206,451    1,193,324
                                                  ------------ ------------

    TOTAL LIABILITIES                                1,740,436    1,769,311
                                                  ------------ ------------

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    1,515,945
  Retained earnings                                  7,037,428    6,856,758
                                                  ------------ ------------

    TOTAL STOCKHOLDERS' EQUITY                       8,553,373    8,372,703
                                                  ------------ ------------


  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 10,293,809 $ 10,142,014
                                                  ============ ============

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