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

BAKERSFIELD, CA--(Marketwire - Nov 14, 2012) - Pyramid Oil Company (NYSE MKT: PDO) today announced financial results for its third quarter and nine-month period ended September 30, 2012.

Third quarter revenue was $1.2 million versus $1.4 million in the same quarter a year ago. The decline was attributable to lower average crude sales prices and a decrease in crude production volumes. The Company realized third quarter crude prices per average barrel of oil equivalent (BOE) of $99.81 versus $105.06 per average BOE in the same quarter last year, while its net revenue share of crude oil sales decreased by approximately 1,400 barrels versus the 2011 third quarter.

Operating income was $286,000 versus a loss from operations of $162,000 in the third quarter last year. Last year's operating results included a $673,000 non-cash valuation allowance associated with the Pike 1-H horizontal joint venture well. Third quarter net income was $208,000, or $0.04 per share, versus net income of $4,000, or $0.00 per share in comparable prior-year quarter. 

For the nine-month period, revenue was $3.9 million versus $4.3 million during the same period of 2011. Operating income was $1.1 million versus $726,000 in the comparable prior-year period, while net income was $869,000, or $0.19 per share, compared with net income of $751,000, or $0.16 per share, in the same period a year ago. Operating cash flow at the nine-month mark was to $1.7 million versus $2.0 million during the first nine months of last year. 

Pyramid further strengthened its financial position during the quarter, as cash, cash equivalents and short-term investments increased to $5.7 million from $5.3 million at the end of the second quarter and $4.9 million at December 31, 2011. Working capital improved to $6.1 million, while total current assets have increased to $6.7 million. The Company also held $1.1 million in CDs at the end of the quarter, which, when combined with cash, cash equivalents and short-term investments, was $6.8 million, or $1.45 per share. Pyramid's balance sheet remained free of long-term debt at the close of the quarter.

"Another quarter of solid earnings and cash flow has added to the strength of our financial position, giving us increased flexibility as we seek opportunities to grow the Company," said John Alexander, president and CEO. "Enhancing shareholder value remains our primary focus as we evaluate these opportunities."

Pyramid is in the process of acquiring Victory Oil Company's 32% working interest in the Pike 1-H well and 50 acres of surface and mineral interests associated with Victory's Murphy Fee property. The transaction will give Pyramid 100% working interest in the Pike 1-H, which was drilled as a joint venture by Pyramid and Victory during the first quarter of 2011. Both Companies expect to conclude the transaction in the fourth quarter of 2012.

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,
				2012			2011			2012			2011
REVENUES:
	Oil and gas sales			$	1,198,420		$	1,412,842		$	3,907,792		$	4,289,181
COSTS AND EXPENSES:
	Operating expenses				476,122			421,405			1,365,861			1,282,950
	General and administrative				192,910			222,583			632,804			666,375
	Stock based compensation				0			0			0			43,743
	Taxes, other than income and payroll taxes				44,885			37,399			129,266			101,358
	Provision for depletion, depreciation and amortization				151,502			184,208			519,396			595,631
	Valuation allowances				0			673,000			0			727,384
	Accretion expense				13,153			5,229			31,970			26,793
	Other costs and expenses				33,975			31,280			118,449			118,964
					912,547			1,575,104			2,797,746			3,563,198
OPERATING INCOME (LOSS)					285,873			-162,262			1,110,046			725,983
OTHER INCOME (EXPENSE):
	Interest income				10,975			12,193			31,835			38,704
	Other income				0			0			250			500
	Interest expense				-152			-568			-868			-2,459
					10,823			11,625			31,217			36,745
INCOME (LOSS) BEFORE INCOME TAX PROVISION (BENEFIT)					296,696			-150,637			1,141,263			762,728
	Income tax provision (benefit)
		Current			16,800			52,700			99,800			163,300
		Deferred			72,000			-207,600			172,900			-151,500
					88,800			-154,900			272,700			11,800
NET INCOME				$	207,896		$	4,263		$	868,563		$	750,928
BASIC INCOME PER COMMON SHARE				$	0.04		$	0.00		$	0.19		$	0.16
DILUTED INCOME PER COMMON SHARE				$	0.04		$	0.00		$	0.19		$	0.16
Weighted average number of common shares outstanding
					4,687,644			4,683,853			4,685,117			4,682,492
Diluted average number of common shares outstanding
					4,687,644			4,685,177			4,685,117			4,688,465

PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
				September 30, 2012			December 31, 2011
				(Unaudited)			(Audited)
CURRENT ASSETS:
	Cash and cash equivalents			$	3,582,642		$	2,762,676
	Short-term investments				2,134,391			2,128,380
	Trade accounts receivable				431,151			555,495
	Income taxes receivable				55,569			21,169
	Crude oil inventory				106,025			118,156
	Prepaid expenses and other assets				116,140			255,846
	Deferred income taxes				262,500			262,500
		TOTAL CURRENT ASSETS			6,688,418			6,104,222
PROPERTY AND EQUIPMENT, at cost
	Oil and gas properties and equipment (successful efforts method)				19,919,006			19,124,558
	Capitalized asset retirement costs				409,338			401,242
	Drilling and operating equipment				1,966,750			1,956,371
	Land, buildings and improvements				1,073,918			1,073,918
	Automotive, office and other property and equipment				1,228,147			1,192,118
					24,597,159			23,748,207
	Less: accumulated depletion, depreciation, amortization and valuation allowances				-20,611,051			-20,091,655
	TOTAL PROPERTY AND EQUIPMENT				3,986,108			3,656,552
INVESTMENTS AND OTHER ASSETS
	Long-term investments				1,093,919			1,071,984
	Deferred income taxes				608,700			781,600
	Deposits				250,000			250,000
	Other Assets				17,380			17,380
	TOTAL INVESTMENTS OTHER ASSETS				1,969,999			2,120,964
		TOTAL ASSETS		$	12,644,525		$	11,881,738

PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
				September 30, 2012,			December 31, 2011
				(Unaudited)			(Audited)
CURRENT LIABILITIES:
	Accounts payable			$	147,763		$	88,494
	Accrued professional fees				126,876			142,990
	Accrued taxes, other than income taxes				40,203			77,471
	Accrued payroll and related costs				62,987			51,252
	Accrued royalties payable				206,513			224,810
	Accrued insurance				0			82,428
	Current maturities of long-term debt				5,981			32,285
		TOTAL CURRENT LIABILITIES			590,323			699,730
LONG TERM DEBT, net of current maturites					0			22,330
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS					1,304,850			1,278,889
		TOTAL LIABILITIES			1,895,173			2,000,949
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			1,682,971
	Retained earnings				9,066,381			8,197,818
		TOTAL STOCKHOLDERS' EQUITY			10,749,352			9,880,789
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	12,644,525		$	11,881,738