SOURCE: Pyramid Oil Company

Pyramid Oil Company

November 15, 2010 09:00 ET

Pyramid Oil Company Reports Continued Financial Growth in Third Fiscal Quarter

BAKERSFIELD, CA--(Marketwire - November 15, 2010) - Pyramid Oil Company (NYSE Amex: PDO)

Selected Highlights:

--  Operating income and net income up 161% and 78%, respectively, vs. Q3
    '09 
--  Operating cash flow at Sept. 30 reaches $1.4 million 
--  Two new wells drilled in Mountain View Field
--  Pyramid and Victory Oil Company agree in principle on California JV 
    program

Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its third quarter and nine-month period ended September 30, 2010.

Third quarter revenue increased 50% to $1.4 million from $945,000 in the comparable year-ago quarter. The increase is attributable to a $321,000 gain on the sale of a portion of Pyramid's interest in a Texas natural gas joint venture, as well as higher oil and gas revenue. Operating income increased 161% to $499,000 from $191,000 in last year's third quarter. Net income advanced 78% to $394,000, or $0.08 per diluted share, from $221,000, or $0.05 per diluted share, in the third quarter a year ago.

Average crude oil prices during the third quarter increased by $9.30 to $73.26 per barrel of oil equivalent (BOE) from $63.96 per BOE in last year's third quarter.

Operating cash flow through the first nine months of fiscal 2010 was $1.4 million versus $298,000 at the nine-month mark last year. Pyramid ended the third quarter with cash and short-term investments of $4.8 million, up from $4.0 million at the end of the second quarter. At Sept. 30, the Company's balance sheet was free of long-term debt and included working capital of $5.1 million and a current ratio of 10.1:1.

"By monetizing a small portion of our joint venture in Texas, we have reinforced our already strong financial position," said John H. Alexander, president and CEO. "We also have maintained our exposure to opportunities in the increasingly productive Eagle Ford shale formation. In addition to the interest we continue to hold in our original Texas JV, we own a 30% interest in an 876-acre joint venture in Menard County, and expect the first well on this prospect will be drilled before the end of the year."

"Closer to home, we have been exploring a joint venture opportunity with Victory Oil Company, a highly regarded, 75-year-old business with producing properties in close proximity to our leases in Kern County, Calif.," Mr. Alexander added. "We have agreed in principal to jointly participate in an approximately 4,000-foot test well in the Taft area of the county, and also are working to finalize the terms of a drilling program that could involve up to four wells during the next 12 months.

"Meantime, we successfully re-entered two previously drilled wells in our Mountain View field as part of our effort to increase production from our core California properties. We have completed the first well and are conducting a down-hole survey to identify and terminate an area of water entry. The second well has been completed and perforated, and we are currently conducting initial testing. We plan to initiate an additional re-drill in the Mountain View field shortly after the first of the year, depending on rig availability."

Mr. Alexander concluded, "Given the diverse range of opportunities we have established to ramp up production, coupled with the strong price environment for crude, we are optimistic about our prospects for continued growth."

Nine-month results

Through nine months, Pyramid reported revenue of $3.7 million, up 55% from $2.3 million reported in the same period a year ago. Operating income was $145,000 versus an operating loss of $235,000 at the nine-month mark a year ago. Net income was $273,000, or $0.06 per diluted share, versus a net loss $7,000, or less than $0.01 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,
                            ----------------------- -----------------------
                               2010        2009        2010        2009
                            ----------- ----------- ----------- -----------


REVENUES:
  Oil and gas sales         $ 1,099,464 $   945,413 $ 3,329,594 $ 2,341,359
  Gain on sale of fixed
   assets                       320,556           0     320,556           0
                            ----------- ----------- ----------- -----------

                              1,420,020     945,413   3,650,150   2,341,359
                            ----------- ----------- ----------- -----------

COSTS AND EXPENSES:
  Operating expenses            386,897     346,800   1,165,209   1,023,339
  General and
   administrative               195,838     198,703     653,793     653,805
  Severance award agreement     113,500           0     113,500     209,935
  Taxes, other than income
   and payroll taxes             39,654      33,809      97,313     114,593
  Valuation allowances                0           0     867,468           0
  Provision for depletion,
   depreciation and
   amortization                 151,855     150,209     498,115     468,665
  Accretion expense               6,664       5,898      18,775      17,696
  Other costs and expenses       26,403      18,628      90,946      88,773
                            ----------- ----------- ----------- -----------

                                920,811     754,047   3,505,119   2,576,806
                            ----------- ----------- ----------- -----------

OPERATING INCOME (LOSS)         499,209     191,366     145,031    -235,447
                            ----------- ----------- ----------- -----------


OTHER INCOME (EXPENSE):
  Interest income                13,521      20,508      29,904      68,378
  Other income                    3,600       3,600       9,997      10,800
  Interest expense                  -30        -299        -333      -1,072
                            ----------- ----------- ----------- -----------

                                 17,091      23,809      39,568      78,106
                            ----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
 TAX PROVISION (BENEFIT)        516,300     215,175     184,599    -157,341
  Income tax provision 
   (benefit)
    Current                      47,200     -43,499      92,100    -181,082
    Deferred                     75,300      37,300    -180,100      30,500
                            ----------- ----------- ----------- -----------
                                122,500      -6,199     -88,000    -150,582
                            ----------- ----------- ----------- -----------

NET INCOME (LOSS)           $   393,800 $   221,374 $   272,599 $    -6,759
                            =========== =========== =========== ===========

EARNINGS PER COMMON SHARE
  Basic and diluted income 
   (loss) per common share  $      0.08 $      0.05 $      0.06 $      0.00
                            =========== =========== =========== ===========

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                  4,720,014   4,677,728   4,719,276   4,677,728
                            =========== =========== =========== ===========




                            PYRAMID OIL COMPANY                            
                              BALANCE SHEETS                               
                                                                           
                                  ASSETS                                   

        
        
                                              September 30,  December 31,
                                                  2010           2009
                                               (Unaudited)     (Audited)
                                              -------------- --------------

CURRENT ASSETS:
  Cash and cash equivalents                   $    1,677,586 $    1,438,825
  Short-term investments                           3,110,446      3,344,061
  Trade accounts receivable                          406,751        375,954
  Income taxes receivable                              4,200        124,281
  Crude oil inventory                                 63,861         62,760
  Deferred income taxes                              241,400        196,200
  Prepaid expenses and other assets                  107,090        169,595
                                              -------------- --------------

    TOTAL CURRENT ASSETS                           5,611,334      5,711,676
                                              -------------- --------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
    (successful efforts method)                   17,613,326     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                         1,183,114      1,160,617
                                              -------------- --------------

                                                  22,362,467     20,803,759
  Less: accumulated depletion, depreciation,
      amortization and valuation allowance       -18,329,833    -17,125,834
                                              -------------- --------------

  TOTAL PROPERTY AND EQUIPMENT                     4,032,634      3,677,925
                                              -------------- --------------

OTHER ASSETS
  Deposits                                           250,000        250,000
  Deferred income taxes                              620,300        485,400
  Other Assets                                        17,013         17,013

  TOTAL OTHER ASSETS                                 887,313        752,413
                                              -------------- --------------

    TOTAL  ASSETS                             $   10,531,281 $   10,142,014
                                              ============== ==============





                       PYRAMID OIL COMPANY
                          BALANCE SHEETS

             LIABILITIES AND STOCKHOLDERS' EQUITY
                
                
                

        
                                              September 30,  December 31,
                                                  2010           2009
                                               (Unaudited)     (Audited)
                                              -------------- --------------

CURRENT LIABILITIES:
  Accounts payable                            $      160,120 $       88,170
  Accrued professional fees                          111,663        138,381
  Accrued taxes, other than income taxes              35,661         62,310
  Accrued payroll and related costs                   72,864         51,606
  Accrued royalties payable                          172,253        159,933
  Accrued insurance                                        0         54,947
  Current debt                                           905         20,640
                                              -------------- --------------

    TOTAL CURRENT LIABILITIES                        553,466        575,987
                                              -------------- --------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION          1,219,013      1,193,324
                                              -------------- --------------

    TOTAL LIABILITIES                              1,772,479      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         1,629,445      1,515,945
  Retained earnings                                7,129,357      6,856,758
                                              -------------- --------------

    TOTAL STOCKHOLDERS' EQUITY                     8,758,802      8,372,703
                                              -------------- --------------


  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $   10,531,281 $   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