SOURCE: Pyramid Oil Company

Pyramid Oil Company

May 16, 2011 08:00 ET

Pyramid Oil Company Reports Strong Improvements in First Quarter Revenue and Earnings

BAKERSFIELD, CA--(Marketwire - May 16, 2011) -

Highlights:

  • Revenue increases 33% to $1.3 million from 2010 first quarter
  • Operating income up 65% to $376,000
  • Net income improves 77% to $320,000
  • EPS of $0.07 versus $0.04 in Q1 last year
  • Operating cash flow reaches $1.4 million

Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its first quarter ended March 31, 2011.

Revenue increased 33% to $1.3 million from $1.0 million in the first quarter last year. The increase was largely attributable to higher average crude oil prices, which increased $21.57 per barrel of oil equivalent (BOE) to $97.12 from $75.55 per average BOE in the 2010 first quarter. Revenue also benefitted from a 3% increase in production volumes during the quarter.

Operating income increased 65% to $376,000 from $229,000 in last year's first quarter. Operating margin in the first quarter was 28%, up from 23% in the comparable year-ago quarter. Net income improved 77% to $320,000, or $0.07 per share, from $181,000, or $0.04 per share, in the comparable year-ago quarter.

Pyramid generated operating cash flow of $1.4 million, up sharply from $176,000 during the first three months of fiscal 2010. At March 31, 2011, the Company's balance sheet included $4.9 million in cash, cash equivalents and short-term investments; total current assets of $6.3 million and working capital of $4.5 million.

"Our first quarter financial performance reflects the benefits of a strong price environment and our lean cost structure," said John Alexander, president and CEO. "During the quarter we maintained our focus on increasing production volumes in an effort to capitalize on our strong business model."

"Much of our attention was devoted to drilling operations on the Pike 1-H, our first Joint Venture well with Victory Oil Company. We received very encouraging test results during the drilling operations on this horizontal well, and moved in a pumping unit as we prepared to put it into production. However, in the weeks following completion, the well has generated significant water volumes, and we believe this has interrupted the initial flow of oil. We are currently working with several outside consultants in hopes of identifying and overcoming these technical issues."

Mr. Alexander said the Company has established a roster of additional drilling targets on its core properties in Kern County, California, and plans to drill up to two sidetrack wells and one potential new well during the latter half of the year. "Given the tight supply of contract rigs, we anticipate drilling on our next well will commence sometime this fall. In the meantime, we will continue to evaluate projects and opportunities that could accelerate our growth and 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 March 31,
20112010
REVENUES:
Oil and gas sales$1,326,298$1,001,739
Gain on sale of fixed assets1,0120
1,327,3101,001,739
COSTS AND EXPENSES:
Operating expenses413,656339,920
General and administrative224,720207,367
Taxes, other than income and payroll taxes36,85527,820
Provision for depletion, depreciation and amortization185,528149,387
Valuation allowances48,53325,141
Accretion expense16,3356,213
Other costs and expenses25,48717,240
951,114773,088
OPERATING INCOME376,196228,651
OTHER INCOME (EXPENSE):
Interest income13,3527,953
Other income5002,797
Interest expense(1,506)(181)
12,34610,569
INCOME BEFORE INCOME TAX PROVISION388,542239,220
Income tax provision
Current46,20020,000
Deferred22,70038,550
68,90058,550
NET INCOME$319,642$180,670
BASIC INCOME PER COMMON SHARE$0.07$0.04
DILUTED INCOME PER COMMON SHARE$0.07$0.04
Weighted average number of common shares outstanding4,679,7704,677,728
Diluted average number of common shares outstanding4,687,0304,686,018
PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
March 31,December 31,
20112010
(Unaudited)(Audited)
CURRENT ASSETS:
Cash and cash equivalents$1,841,418$1,535,532
Short-term investments3,069,2703,058,528
Trade accounts receivable (net of reserve for doubtful accounts of $4,000 in 2011 and 2010)629,833508,457
Joint interest billing receivable192,433--
Crude oil inventory95,73686,361
Prepaid expenses and other assets195,098230,876
Deferred income taxes245,100245,100
TOTAL CURRENT ASSETS6,268,8885,664,854
PROPERTY AND EQUIPMENT, at cost:
Oil and gas properties and equipment (successful efforts method)19,219,96118,101,529
Capitalized asset retirement costs389,463389,463
Drilling and operating equipment1,946,8051,946,805
Land, buildings and improvements1,073,9181,066,571
Automotive, office and other property and equipment1,195,3961,182,613
23,825,54322,686,981
Less: accumulated depletion, depreciation, amortization and valuation allowance(18,886,570)(18,687,908)
TOTAL PROPERTY AND EQUIPMENT4,938,9733,999,073
OTHER ASSETS
Deferred income taxes685,800708,500
Deposits250,000250,000
Other Assets17,3807,380
TOTAL OTHER ASSETS953,180965,880
TOTAL ASSETS$12,161,041$10,629,807
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31,December 31,
20112010
(Unaudited)(Audited)
CURRENT LIABILITIES:
Accounts payable$1,200,689$73,374
Accrued professional fees98,235122,506
Accrued taxes, other than income taxes61,70163,361
Accrued payroll and related costs78,56260,365
Accrued royalties payable211,390193,052
Accrued insurance46,84086,888
Accrued income taxes59,00012,800
Current maturities of long-term debt31,66013,473
TOTAL CURRENT LIABILITIES1,788,077625,819
LONG TERM DEBT, net of current maturites59,94426,946
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS1,251,5281,235,193
TOTAL LIABILITIES3,099,5491,887,958
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock-no par value; 10,000,000 authorized shares; no shares issued or outstanding----
Common stock-no par value; 50,000,000 authorized shares; 4,683,853 shares issued and outstanding1,639,2281,639,228
Retained earnings7,422,2647,102,621
TOTAL STOCKHOLDERS' EQUITY9,061,4928,741,849
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$12,161,041$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