SOURCE: Pyramid Oil Company

Pyramid Oil Company

March 30, 2011 11:51 ET

Pyramid Oil Company Reports Fourth Quarter and Full-Year Financial Results

Initial Horizontal Well in California Joint Venture Completed; Well to Be Placed on Production

BAKERSFIELD, CA--(Marketwire - March 30, 2011) - Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its fourth quarter and full fiscal year ended December 31, 2010. The Company also announced that the Pike 1-H, the first well in Pyramid's California joint venture with Victory Oil Company, has been drilled, logged and completed, and is expected to be placed on production by this weekend.

Fourth quarter revenue increased 22% to $1.2 million from $971,000 in the comparable year-ago quarter. The increase is attributable to higher oil and gas revenue from the Company's core properties in Kern County, California. Operating loss declined to $91,000 from $302,000 in last year's fourth quarter, while net loss declined to $27,000, or $0.01 per diluted share, from a net loss of $183,000, or $0.04 per diluted share, in the fourth quarter a year ago.

Average crude oil prices during the fourth quarter increased by $10.66 to $81.65 per barrel of oil equivalent (BOE) from $70.99 per BOE in last year's fourth quarter. Net volumes sold during the quarter increased 6% to 14,521 barrels versus last year's fourth quarter.

For the full fiscal year, Pyramid reported revenue of $4.5 million, an increase of 36% versus revenue of $3.3 million in fiscal 2009. Operating income was $54,000 versus an operating loss of $537,000 in the prior year. Full-year net income was $246,000, or $0.05 per diluted share, versus a net loss $189,000, or less than $0.01 per diluted share, in the same period last year.

Pyramid reported operating cash flow for fiscal 2010 of $1.7 million versus $573,000 in 2009. The Company ended 2010 with cash and short-term investments of $4.6 million, no long-term debt and working capital of $5.0 million.

John H. Alexander, president and CEO of Pyramid, said, "One of our primary objectives during the fourth quarter was to establish a framework for our joint venture with Victory Oil Company, a successful private oil and gas company that owns and operates land adjacent to Pyramid's in Taft, California. The outcome of those efforts is reflected in the progress we made with our initial drilling project, a successful horizontal oil well that will be placed on production in the coming days."

The Pike 1-H well was drilled to a depth of 3,600 feet with a 917-foot lateral crossing both companies' properties. Based on the lateral intervals open to production, the ownership split of this first well is 68% to Pyramid and 32% to Victory. A pumping unit is currently being moved on site and the well will begin commercial production shortly thereafter. Flow rates for the well will be announced following production testing, which is expected to be complete sometime in April.

"We are now in the planning stages of a follow-on horizontal well in the same area, and expect to spud sometime in the next 45 to 60 days, based on rig availability," Mr. Alexander added. "We are very encouraged by the long-range opportunities of this joint venture, and look forward to working with Victory on expanding our drilling efforts."

"While our immediate focus will be on drilling additional JV wells in the area of the Pike 1-H, we also intend to pursue certain re-entry and side track wells on our core properties in Kern County, California during the next six months."

Pyramid said log analysis of the recently drilled joint venture well in Menard County, Texas indicated the well would not be commercially viable, and was plugged and abandoned. Pyramid owns a 30% interest in the joint venture.

"Our primary objective for 2011 is to increase oil production from our California-based properties," Mr. Alexander said. "We feel we have an outstanding, motivated partner in Victory Oil Company, and also believe there are a number of compelling drilling prospects in our core Kern County properties, particularly in the Carneros Creek and Mountain View areas. With our strong balance sheet and talented operational team, I believe we are well positioned to achieve our growth objectives for the coming year and beyond."

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                          

                                  Three months ended   Twelve months ended 
                                      December 31,         December 31,
                                 -------------------- ---------------------
                                   2010       2009      2010       2009
                                 ---------- --------- ---------- ----------

REVENUES:
    Oil and gas sales            $1,185,617 $ 970,536 $4,515,211 $3,311,895
    Gain on sale of fixed assets          0         0    320,556          0
                                 ---------- --------- ---------- ----------

                                  1,185,617   970,536  4,835,767  3,311,895
                                 ---------- --------- ---------- ----------

COSTS AND EXPENSES:
    Operating expenses              411,683   388,382  1,576,892  1,411,721
    General and administrative      221,106   270,871    874,899    924,676
    Stock based compensation          9,783         0    123,283    209,935
    Taxes, other than income
     and payroll taxes               31,038    33,131    128,351    147,724
    Provision for depletion,
     depreciation and
     amortization                   204,979   171,073    703,094    639,738
    Valuation allowances            355,059   358,757  1,222,527    358,757
    Accretion expense                16,180    23,922     34,955     41,618
    Other costs and expenses         27,097    26,391    118,043    115,164
                                 ---------- --------- ---------- ----------

                                  1,276,925 1,272,527  4,782,044  3,849,333
                                 ---------- --------- ---------- ----------

OPERATING INCOME (LOSS)             -91,308  -301,991     53,723   -537,438
                                 ---------- --------- ---------- ----------

OTHER INCOME (EXPENSE):
    Interest income                  13,697     7,049     43,601     75,427
    Other income (expense)          -24,058     3,600    -14,061     14,400
    Interest expense                     33      -241       -300     -1,313
                                 ---------- --------- ---------- ----------

                                    -10,328    10,408     29,240     88,514
                                 ---------- --------- ---------- ----------
INCOME (LOSS) BEFORE INCOME
 TAX PROVISION (BENEFIT)           -101,636  -291,583     82,963   -448,924
    Income tax provision (benefit)
      Current                        17,000   -14,200    109,100   -195,282
      Deferred                      -91,900   -94,855   -272,000    -64,355
                                 ---------- --------- ---------- ----------
                                    -74,900  -109,055   -162,900   -259,637
                                 ---------- --------- ---------- ----------

NET INCOME (LOSS)                -$  26,736 -$182,528 $  245,863 -$ 189,287
                                 ========== ========= ========== ==========

Basic Income Per Common Share    -$    0.01 -$   0.04 $     0.05 -$    0.04
                                 ========== ========= ========== ==========

Diluted Income Per Common Share  -$    0.01 -$   0.04 $     0.05 -$    0.04
                                 ========== ========= ========== ==========

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     4,686,003 4,677,728  4,686,249  4,677,728
                                 ========== ========= ========== ==========





                            PYRAMID OIL COMPANY                            
                              BALANCE SHEETS                               
                                                                           
                                  ASSETS                                   

                                                  December 31, December 31,
                                                      2010         2009
                                                  ------------ ------------

CURRENT ASSETS:
  Cash and cash equivalents                       $  1,535,532 $  1,438,825
  Short-term investments                             3,058,528    3,344,061
  Trade accounts receivable                            508,457      375,954
  Income taxes receivable                                    0      124,281
  Crude oil inventory                                   86,361       62,760
  Prepaid expenses and other assets                    230,876      169,595
  Deferred income taxes                                245,100      196,200
                                                  ------------ ------------

         TOTAL CURRENT ASSETS                        5,664,854    5,711,676
                                                  ------------ ------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
   (successful efforts method)                      18,101,529   16,085,228
  Capitalized asset retirement costs                   389,463      382,550
  Drilling and operating equipment                   1,946,805    2,109,993
  Land, buildings and improvements                   1,066,571    1,065,371
  Automotive, office and other
    property and equipment                           1,182,613    1,160,617
                                                  ------------ ------------

                                                    22,686,981   20,803,759
  Less: accumulated depletion, depreciation,
   amortization and valuation allowance            -18,687,908  -17,125,834
                                                  ------------ ------------

  TOTAL PROPERTY AND EQUIPMENT                       3,999,073    3,677,925
                                                  ------------ ------------

OTHER ASSETS
  Deferred income taxes                                708,500      485,400
  Deposits                                             250,000      250,000
  Other Assets                                           7,380       17,013
                                                  ------------ ------------

  TOTAL OTHER ASSETS                                   965,880      752,413
                                                  ------------ ------------

       TOTAL ASSETS                               $ 10,629,807 $ 10,142,014
                                                  ============ ============



                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                                  December 31, December 31,
                                                      2010         2009
                                                  ------------ ------------

CURRENT LIABILITIES:
  Accounts payable                                $     73,374 $     88,170
  Accrued professional fees                            122,506      138,381
  Accrued taxes, other than income taxes                63,361       62,310
  Accrued payroll and related costs                     60,365       51,606
  Accrued royalties payable                            193,052      159,933
  Accrued insurance                                     86,888       54,947
  Accrued income taxes                                  12,800            0
  Current maturities of long term debt                  13,473       20,640
                                                  ------------ ------------

         TOTAL CURRENT LIABILITIES                     625,819      575,987
                                                  ------------ ------------

LONG TERM DEBT, net of current maturities               26,946            0
                                                  ------------ ------------

LIABILITY FOR ASSET RETIREMENT OBLIGATIONS           1,235,193    1,193,324
                                                  ------------ ------------

       TOTAL LIABILITIES                             1,887,958    1,769,311
                                                  ------------ ------------

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; 4,677,728 shares issued
   and outstanding                                   1,639,228    1,515,945
  Retained earnings                                  7,102,621    6,856,758
                                                  ------------ ------------

       TOTAL STOCKHOLDERS' EQUITY                    8,741,849    8,372,703
                                                  ------------ ------------


  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 10,629,807 $ 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