SOURCE: Pyramid Oil Company

Pyramid Oil Company

November 14, 2011 08:00 ET

Pyramid Oil Company Reports Third Quarter and Nine-Month Financial Results

BAKERSFIELD, CA--(Marketwire - Nov 14, 2011) - Pyramid Oil Company (NYSE Amex: PDO)

Selected Highlights:

  • 29% Increase in Nine-month Oil and Gas Sales Drives Strong Improvements in Year-to-date Operating Income and Net Income
  • Operating Cash Flow Reaches $2.0 Million at Nine-Month Mark
  • Cash, Cash Equivalents and Short-term Investments increase to $5.5 Million from $4.6 Million at December 31, 2011

Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its year-to-date and third quarter periods ended September 30, 2011.

Through nine months, oil and gas sales increased 29% to $4.3 million from $3.3 million in the nine-month period last year. The increase was due to higher average crude oil prices, which increased by $29.50 per average barrel of oil equivalent (BOE) to $103.72 from $74.22 per average BOE in the comparable 2010 period. Total revenue increased 18% to $4.3 million from $3.7 million in last year's nine-month period. Total revenue in the 2010 nine-month period included a $321,000 gain on the third quarter sale of a portion of the Company's interest in a Texas natural gas joint venture.

Nine-month operating income improved to $726,000 compared with $145,000 during the 2010 nine-month period. Net income increased 175% to $751,000, or $0.16 per share, from net income of $273,000, or $0.06 per share, during the same period last year. Pyramid reported cash flow from operations of $2.0 million, up 38% from $1.4 million during the first nine months of fiscal 2010.

For the third quarter, revenue from oil and gas sales increased 29% to $1.4 million from $1.1 million in the same quarter last year. Average crude oil prices during the quarter increased $31.80 per average BOE to $105.06 from $73.26 per average BOE in the 2010 third quarter. Total revenue was $1.4 million, flat versus revenue of $1.4 million in last year's third quarter, which included the previously mentioned $321,000 gain on the sale of fixed assets.

Third quarter operating loss, which included a $673,000 non-cash valuation allowance associated with Pyramid's Pike 1-H horizontal joint venture well, was $162,000 versus operating income of $499,000 in last year's third quarter. Pyramid and joint venture partner Victory Oil Company continued efforts to address production challenges associated with the Pike 1-H. However, the well has not responded favorably to a range of stimulation efforts. Third quarter net income was $4,000, or $0.00 per share, versus net income of $394,000, or $0.08 per share, in the year-ago third quarter.

Pyramid's balance sheet at September 30, 2011, included $5.5 million in cash, cash equivalents and short-term investments; up from $4.7 million at the end of the second quarter and $4.6 million at December 31, 2010. Total current assets at September 30, 2011, were $6.5 million and working capital was $5.9 million. Long-term debt was $39,000.

"We have achieved solid financial growth through the first three quarters of 2011, and we expect to finish the year with strong improvements in revenue, profitability and operating cash flow," said John Alexander, president and CEO. "Despite recent challenges with the Pike 1-H, we remain focused on enhancing shareholder value through increased production. We have re-prioritized our drilling plans, and now intend to focus on new well opportunities that could generate higher production volumes than the re-drill program previously under consideration. The first of our new wells is slated for early next year in our productive Carneros Creek field. Once contract rigs are more accessible, we also intend to revisit various well re-entry opportunities. The growing strength of our balance sheet clearly gives us the flexibility to pursue a range of options for enhancing our production portfolio."

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 September 30, Nine months ended September 30,
2011 2010 2011 2010
REVENUES:
Oil and gas sales $ 1,412,342 $ 1,099,464 $ 4,287,669 $ 3,329,594
Gain on sale of fixed assets 500 320,556 1,512 320,556
1,412,842 1,420,020 4,289,181 3,650,150
COSTS AND EXPENSES:
Operating expenses 421,405 386,897 1,282,950 1,165,209
General and administrative 222,583 195,838 666,375 653,793
Stock based compensation 0 113,500 43,743 113,500
Taxes, other than income and payroll taxes 37,399 39,654 101,358 97,313
Valuation allowances 673,000 0 727,384 867,468
Provision for depletion, depreciation and amortization 184,208 151,855 595,631 498,115
Accretion expense 5,229 6,664 26,793 18,775
Other costs and expenses 31,280 26,403 118,964 90,946
1,575,104 920,811 3,563,198 3,505,119
OPERATING INCOME (LOSS) -162,262 499,209 725,983 145,031
OTHER INCOME (EXPENSE):
Interest income 12,193 13,521 38,704 29,904
Other income 0 3,600 500 9,997
Interest expense -568 -30 -2,459 -333
11,625 17,091 36,745 39,568
INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT) -150,637 516,300 762,728 184,599
Income tax provision (benefit)
Current 52,700 47,200 163,300 92,100
Deferred -207,600 75,300 -151,500 -180,100
-154,900 122,500 11,800 -88,000
NET INCOME $ 4,263 $ 393,800 $ 750,928 $ 272,599
BASIC INCOME PER COMMON SHARE $ 0.00 $ 0.08 $ 0.16 $ 0.06
DILUTED INCOME PER COMMON SHARE $ 0.00 $ 0.08 $ 0.16 $ 0.06
Weighted average number of common shares outstanding 4,683,853 4,677,728 4,682,492 4,677,728
Diluted weighted average number of common shares outstanding 4,685,177 4,720,014 4,688,465 4,719,276
PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
September 30, December 31,
2011 2010
(Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $ 2,267,006 $ 1,535,532
Short-term investments 3,190,618 3,058,528
Trade accounts receivable 532,333 508,457
Joint interest billing receivable 10,776 0
Income taxes receivable 9,498 0
Crude oil inventory 96,697 86,361
Prepaid expenses and other assets 92,661 230,876
Deferred income taxes 262,500 245,100
TOTAL CURRENT ASSETS 6,462,089 5,664,854
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment (successful efforts method) 19,110,614 18,101,529
Capitalized asset retirement costs 401,242 389,463
Drilling and operating equipment 1,956,371 1,946,805
Land, buildings and improvements 1,073,918 1,066,571
Automotive, office and other property and equipment 1,180,042 1,182,613
23,722,187 22,686,981
Less: accumulated depletion, depreciation, amortization and valuation allowances -19,928,176 -18,687,908
TOTAL PROPERTY AND EQUIPMENT 3,794,011 3,999,073
OTHER ASSETS
Deferred income taxes 842,600 708,500
Deposits 250,000 250,000
Other Assets 17,380 7,380
TOTAL OTHER ASSETS 1,109,980 965,880
TOTAL ASSETS $ 11,366,080 $ 10,629,807
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
2011 2010
(Unaudited) (Audited)
CURRENT LIABILITIES:
Accounts payable $ 48,651 $ 73,374
Accrued professional fees 123,045 122,506
Accrued taxes, other than income taxes 32,143 63,361
Accrued payroll and related costs 77,416 60,365
Accrued royalties payable 203,983 193,052
Accrued insurance 0 86,888
Accrued income taxes 0 12,800
Current maturities of long-term debt 32,015 13,473
TOTAL CURRENT LIABILITIES 517,253 625,819
LONG TERM DEBT, net of current maturites 38,541 26,946
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS 1,273,765 1,235,193
TOTAL LIABILITIES 1,829,559 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 7,853,550 7,102,621
TOTAL STOCKHOLDERS' EQUITY 9,536,521 8,741,849
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,366,080 $ 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