Pyramid Oil Company Reports Second Quarter and Six-Month Financial Results

Strong Operating Cash Flow Further Strengthens Financial Position

Marketwired

BAKERSFIELD, CA--(Marketwire -08/14/12)- Pyramid Oil Company (PDO) today announced financial results for its second quarter and six-month period ended June 30, 2012.

Second quarter revenue was $1.3 million versus $1.5 million in the same quarter a year ago. The decline was principally attributable to lower crude production volumes. The Company realized second quarter crude prices per average barrel of oil equivalent (BOE) of $108.06 versus $108.79 per average BOE in the same quarter last year.

Operating income was $368,000 versus $512,000 in the second quarter last year. Net income was $289,000, or $0.06 per share, versus net income of $427,000, or $0.09 per share in comparable prior-year quarter.

For the six-month period, revenue was $2.7 million versus $2.9 million during the same period of 2011. Operating income was $824,000 versus $888,000 in the comparable prior-year period, while net income was $661,000, or $0.14 per share, compared with net income of $747,000, or $0.16 per share, in the same period a year ago. Operating cash flow at the mid-year mark increased to $1.3 million from $1.2 million during the first six months of last year.

Pyramid's financial position continued to strengthen, with cash, cash equivalents and short-term investments increasing to $5.3 million from $4.9 million at December 31, 2011. Working capital improved to $5.7 million from $5.4 million, while total current assets increased to $6.2 million from $6.1 million. At June 30, 2012, the Company also held long-term assets of $1.1 million in the form of certificates of deposit, which, when combined with cash, cash equivalents and short-term investments, was equivalent to $1.37 per share. Pyramid's current ratio at the end of the second quarter was more than 13:1, and its balance sheet remained free of long-term debt.

"We have delivered another quarter of solid profitability and improved financial strength," said John Alexander, president and CEO. "Our results continue to reflect our lean corporate structure and the strong pricing we receive for our crude production. So far in the third quarter, our realized crude prices have continued to average more than $100 per BOE."

Alexander added, "Our recent efforts to increase production have not come without challenges. Our drilling plans have been hampered by the limited availability of contract rigs in our region, and we continue to face production issues with our most recent development well, the Santa Fe #20. We have achieved limited production volumes from the well to date, and have attempted a variety of technical procedures to address what we believe is a blockage in the well bore. We are now considering a re-perforation of the well, which we likely will perform later in the third quarter."

"Although these issues have temporarily slowed some of our operational progress, we have remained solidly profitable in what is an inherently volatile industry," Alexander added. "Moreover, our strong financial position has given us the flexibility to evaluate various strategic opportunities that could enhance our reserve portfolio and increase production. Our primary objective in this review process is to enhance long-term value for our shareholders by targeting opportunities that appropriately balancing risk and reward."

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 Six months ended
June 30, June 30,
--------------------- ---------------------

2012 2011 2012 2011
---------- ---------- ---------- ----------

REVENUES:
Oil and gas sales $1,340,314 $1,549,029 $2,709,372 $2,876,339
---------- ---------- ---------- ----------

COSTS AND EXPENSES:
Operating expenses 459,798 447,889 889,739 861,545
General and administrative 228,878 219,072 439,894 443,792
Stock based compensation 0 43,743 0 43,743
Taxes, other than income and
payroll taxes 36,960 27,104 84,381 63,959
Provision for depletion,
depreciation and amortization 186,738 225,895 367,894 411,423
Valuation allowances 0 5,851 0 54,384
Accretion expense 5,730 5,229 18,817 21,564
Other costs and expenses 54,669 62,197 84,474 87,684
---------- ---------- ---------- ----------

972,773 1,036,980 1,885,199 1,988,094
---------- ---------- ---------- ----------

OPERATING INCOME 367,541 512,049 824,173 888,245
---------- ---------- ---------- ----------

OTHER INCOME (EXPENSE):
Interest income 10,170 13,159 20,860 26,511
Other income 250 0 250 500
Interest expense -290 -385 -716 -1,891
---------- ---------- ---------- ----------

10,130 12,774 20,394 25,120
---------- ---------- ---------- ----------

INCOME BEFORE INCOME TAX
PROVISION 377,671 524,823 844,567 913,365
Income tax provision
Current 34,600 64,400 83,000 110,600
Deferred 54,500 33,400 100,900 56,100
---------- ---------- ---------- ----------
89,100 97,800 183,900 166,700
---------- ---------- ---------- ----------

NET INCOME $ 288,571 $ 427,023 $ 660,667 $ 746,665
========== ========== ========== ==========

BASIC INCOME PER COMMON SHARE $ 0.06 $ 0.09 $ 0.14 $ 0.16
========== ========== ========== ==========

DILUTED INCOME PER COMMON SHARE $ 0.06 $ 0.09 $ 0.14 $ 0.16
========== ========== ========== ==========

Weighted average number of common
shares outstanding 4,683,853 4,683,853 4,683,853 4,681,811
========== ========== ========== ==========

Diluted average number of common
shares outstanding 4,686,827 4,725,992 4,686,929 4,723,536
========== ========== ========== ==========



PYRAMID OIL COMPANY
BALANCE SHEETS

ASSETS


June 30, December 31,
2012 2011
(Unaudited) (Audited)
------------ ------------

CURRENT ASSETS:
Cash and cash equivalents $ 3,213,023 $ 2,762,676
Short-term investments 2,132,644 2,128,380
Trade accounts receivable 358,945 549,476
Joint interest billing receivable 3,235 6,019
Income taxes receivable 23,669 21,169
Crude oil inventory 116,168 118,156
Prepaid expenses and other assets 113,352 255,846
Deferred income taxes 262,500 262,500
------------ ------------

TOTAL CURRENT ASSETS 6,223,536 6,104,222
------------ ------------

PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment (successful
efforts method) 19,847,970 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
------------ ------------

24,526,123 23,748,207
Less: accumulated depletion, depreciation,
amortization and valuation allowances -20,459,549 -20,091,655
------------ ------------

TOTAL PROPERTY AND EQUIPMENT 4,066,574 3,656,552
------------ ------------

INVESTMENTS AND OTHER ASSETS
Long-term investments 1,086,311 1,071,984
Deferred income taxes 680,700 781,600
Deposits 250,000 250,000
Other Assets 17,380 17,380
------------ ------------

TOTAL INVESTMENTS OTHER ASSETS 2,034,391 2,120,964
------------ ------------

TOTAL ASSETS $ 12,324,501 $ 11,881,738
============ ============


PYRAMID OIL COMPANY
BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY


June 30, December 31,
2012 2011
(Unaudited) (Audited)
------------ ------------

CURRENT LIABILITIES:
Accounts payable $ 98,430 $ 88,494
Accrued professional fees 100,834 142,990
Accrued taxes, other than income taxes 0 77,471
Accrued payroll and related costs 51,968 51,252
Accrued royalties payable 189,753 224,810
Accrued insurance 13,928 82,428
Accrued income taxes 0 0
Current maturities of long-term debt 22,330 32,285
------------ ------------

TOTAL CURRENT LIABILITIES 477,243 699,730
------------ ------------

LONG TERM DEBT, net of current maturites 0 22,330
------------ ------------

LIABILITY FOR ASSET RETIREMENT OBLIGATIONS 1,305,802 1,278,889
------------ ------------

TOTAL LIABILITIES 1,783,045 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 8,858,485 8,197,818
------------ ------------

TOTAL STOCKHOLDERS' EQUITY 10,541,456 9,880,789
------------ ------------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,324,501 $ 11,881,738
============ ============

Contact:
CONTACTS:
John H. Alexander
President and CEO
Pyramid Oil Company
661-325-1000
Geoff High
Principal
Pfeiffer High Investor Relations, Inc.
303-393-7044

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