Pyramid Oil Company Reports Third Quarter Financial Results

BAKERSFIELD, CA--(Marketwired - Nov 14, 2013) - Pyramid Oil Company (NYSE MKT: PDO) today announced financial results for its third quarter ended September 30, 2013.

Third quarter revenue was $1.1 million versus $1.2 million in the same quarter last year. The decrease was principally attributable to a 7% decline in crude oil production volumes offset by higher average sales prices. Crude prices increased by $2.32 per average barrel of oil equivalent (BOE) to $102.21 from $99.89 per average BOE in the 2012 third quarter.

The Company reported an operating loss of $928,000 versus operating income of $286,000 in the third quarter last year. The decline is attributable to $1.1 million in one-time expenses related to an employment agreement entered into in 2002 with the former president and CEO, who retired effective September 30, 2013. Net loss was $534,000, or $0.11 per share, versus net income of $208,000, or $0.04 per share, during the same quarter in 2012.

For the nine-month period, revenue was $3.3 million versus $3.9 million during the same period of 2012. Operating loss was $591,000 versus operating income of $1.1 million in the comparable prior-year period, while net loss was $291,000, or $0.06 per share, versus net income of $869,000, or $0.19 per share, in the same period a year ago. Operating cash flow at the nine-month mark was $846,000 compared with $1.7 million during the first nine months of last year.

At September 30, Pyramid had cash, cash equivalents, restricted cash and short-term investments of $6.6 million, and total current assets of $8.0 million. The Company also reported long-term assets in the form of certificates of deposit of $1.1 million. Current liabilities at September 30 were $964,000 and total liabilities were $3.0 million. Stockholders' equity at the end of the quarter was $10.4 million.

"Absent one-time severance-related expenses, our year-to-date results would have generated income in excess of half a million dollars," said Mike Herman, interim president and CEO. "Moreover, we have maintained our financial strength and closed the quarter with a healthy balance sheet."

"Looking forward, we are establishing an aggressive program designed to improve oil production volumes and strengthen our financial performance. This program will include the rework and recompletion of several existing wells on our California properties."

Herman added, "We have made important progress on our previously announced program to re-drill and deepen three wells into the Monterey formation on our Delaney Tunnell property in Santa Maria, California. State permits to re-drill two wells are now in hand, and we have received verbal confirmation from the State that two additional permits, which allow us to re-drill a third well and utilize it for water disposal, have been approved and will be sent to the Company shortly. We expect drilling operations on this project will commence during next year's first quarter."

Pursuant to management's goal of growing the Company and improving shareholder value, Herman said Pyramid also will explore reserve acquisitions from other oil and gas operators, as well as potential merger and joint venture opportunities, should they arise.

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,
				2013				2012				2013				2012
REVENUES:
	Oil and gas sales			$	1,138,438			$	1,198,420			$	3,300,650			$	3,907,792
COSTS AND EXPENSES:
	Operating expenses				535,227				476,122				1,469,708				1,365,861
	General and administrative				294,430				192,910				751,433				632,804
	Termination expenses				1,040,764				0				1,040,764				0
	Taxes, other than income and payroll taxes				33,044				44,885				100,599				129,266
	Provision for depletion, depreciation and amortization				127,010				151,502				388,806				519,396
	Accretion expense				6,288				13,153				24,599				31,970
	Other costs and expenses				29,991				33,975				116,189				118,449
					2,066,754				912,547				3,892,098				2,797,746
OPERATING (LOSS) INCOME					(928,316	)			285,873				(591,448	)			1,110,046
OTHER INCOME (EXPENSE):
	Interest income				10,235				10,975				30,550				31,835
	Other income				0				0				0				250
	Interest expense				0				(152	)			0				(868	)
					10,235				10,823				30,550				31,217
(LOSS) INCOME BEFORE INCOME TAX PROVISION (BENEFIT)					(918,081	)			296,696				(560,898	)			1,141,263
	Income tax provision (benefit)
		Current			(4,000	)			16,800				11,126				99,800
		Deferred			(380,300	)			72,000				(281,000	)			172,900
					(384,300	)			88,800				(269,874	)			272,700
NET (LOSS) INCOME				$	(533,781	)		$	207,896			$	(291,024	)		$	868,563
BASIC (LOSS) INCOME PER COMMON SHARE				$	(0.11	)		$	0.04			$	(0.06	)		$	0.19
DILUTED (LOSS) INCOME PER COMMON SHARE				$	(0.11	)		$	0.04			$	(0.06	)		$	0.19
Weighted average number of common shares outstanding					4,688,085				4,687,644				4,688,085				4,685,117
Diluted average number of common shares outstanding					4,688,085				4,687,644				4,688,085				4,685,117

PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
				September 30,				December 31,
				2013				2012
				(Unaudited)				(Audited)
CURRENT ASSETS:
	Cash and cash equivalents			$	3,512,689			$	3,834,097
	Restricted cash				334,657				0
	Short-term investments				2,139,695				2,135,709
	Trade accounts receivable				446,973				375,090
	Income taxes receivable				45,400				73,069
	Crude oil inventory				85,684				82,180
	Prepaid expenses and other assets				99,923				257,370
	Deferred income taxes				694,500				264,400
		TOTAL CURRENT ASSETS			7,359,521				7,021,915
PROPERTY AND EQUIPMENT, at cost
	Oil and gas properties and equipment (successful efforts method)				20,089,288				20,007,453
	Capitalized asset retirement costs				425,978				425,978
	Drilling and operating equipment				2,058,744				1,966,750
	Land, buildings and improvements				1,098,918				1,098,918
	Automotive, office and other property and equipment				1,136,566				1,202,544
					24,809,494				24,701,643
	Less: accumulated depletion, depreciation, amortization and valuation allowances				(21,306,941	)			(20,953,324	)
	TOTAL PROPERTY AND EQUIPMENT				3,502,553				3,748,319
INVESTMENTS AND OTHER ASSETS
	Long-term investments				1,124,100				1,101,526
	Restricted cash				632,672				0
	Deferred income taxes				472,700				621,800
	Deposits				250,000				250,000
	Other Assets				11,380				17,380
	TOTAL INVESTMENTS OTHER ASSETS				2,490,852				1,990,706
		TOTAL ASSETS		$	13,352,926			$	12,760,940
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
				September 30,				December 31,
				2013				2012
				(Unaudited)				(Audited)
CURRENT LIABILITIES:
	Accounts payable			$	199,909			$	226,759
	Accrued professional fees				116,020				120,000
	Accrued taxes, other than income taxes				28,822				70,407
	Accrued payroll and related costs				65,649				58,954
	Accrued royalties payable				218,783				204,509
	Deferred compensation liability				334,657				0
	Accrued insurance				0				94,116
		TOTAL CURRENT LIABILITIES			963,840				774,745
LIABILITY FOR DEFERRED COMPENSATION					669,316				0
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS					1,352,460				1,327,861
		TOTAL LIABILITIES			2,985,616				2,102,606
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; 4,688,085 shares issued and outstanding				1,682,971				1,682,971
	Retained earnings				8,684,339				8,975,363
		TOTAL STOCKHOLDERS' EQUITY			10,367,310				10,658,334
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	13,352,926			$	12,760,940