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Pyramid Oil Company Reports 154% Increase in Second Quarter Net Income on 91% Increase in Q2 Revenue

Posted on: Wednesday, 13 August 2008, 09:01 CDT

Pyramid Oil Company (AMEX: PDO) today announced financial results for its second quarter and six-month period ended June 30, 2008.

Second quarter revenue increased 91% to $2.1 million from $1.1 million in last year's second quarter. Approximately 93% of the increase resulted from higher oil and gas prices, which increased by approximately $57.19 per equivalent barrel of oil versus last year's second quarter. Operating income increased by 226% to $1.2 million versus $362,000 in the second quarter a year ago. Net income improved by 154% to $908,000, or $0.24 per diluted share ($0.19 per diluted share after a 5-for-4 stock split that became effective July 7, 2008) from $357,000, or $0.10 per diluted share ($0.08 per diluted share, post split) in the second quarter last year.

Through six months, Pyramid reported revenue of $3.7 million, up 92% versus revenue of $1.9 million in the same period a year ago. Operating income increased 372% to $1.9 million from $406,000 in the six-month period last year. Net income increased 320% to $1.7 million, or $0.47 per diluted share ($0.37 per diluted share, post split) from $415,000, or $0.11 per diluted share ($0.09 per diluted share, post split) in the 2007 six-month period.

John Alexander, president and CEO, said, "Our strong second quarter performance helped fuel solid cash flow from operations, which through six months had increased 183% to $1.7 million versus the comparable period last year. We expect to elevate our oil and gas production rates during the second half of the year, and are therefore optimistic about our prospects for continued strong top- and bottom-line financial results."

Mr. Alexander said construction and hook up of a gas sales line at the Company's Texas natural gas joint venture was completed during the first week in August, and the well is scheduled to commence production in the coming days. A gas sales contract is in place, and the operator has plans for additional near-term drilling on the joint venture's 5,700-acre lease area in south-central Texas. Post-frac testing on the initial well indicated natural gas rates of more than 4 million cubic feet per day. Pyramid owns a gross 12.5% working interest (before payout) in the prospect.

Pyramid remained active in its Carneros Creek field in California, where it has been conducting enhancement efforts on several existing wells, and also has been executing a developmental drilling program. The Company is currently waiting on a drilling rig, which it will use on its Anderson property to penetrate the point-of-rocks formation at a depth of approximately 3,100 feet. Drilling is expected to commence late in the third quarter.

Cash and short-term investments at June 30, 2008, were $2.9 million, up from $2.1 million at December 31, 2007. Working capital at the end of the second quarter improved to $3.4 million from $2.3 million at the end of fiscal 2007. Stockholders' equity increased to $8.4 million from $6.6 million at the end of fiscal 2007.

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.

(Financial tables follow)

                             PYRAMID OIL COMPANY                          STATEMENTS OF OPERATIONS                                 (UNAUDITED)                             Three months ended         Six months ended                                   June 30,                  June 30,                          ------------------------  ------------------------                             2008         2007         2008         2007                          -----------  -----------  -----------  ----------- REVENUES:                $ 2,123,186  $ 1,110,413  $ 3,713,082  $ 1,936,593                          -----------  -----------  -----------  ----------- COSTS AND EXPENSES:   Operating expenses         461,477      408,650      884,283      771,313   Exploration Costs                0          816      -28,812        5,651   General and    administrative            209,088      175,775      441,600      450,929   Taxes, other than    income and payroll    taxes                      21,100       21,455       56,610       48,611   Provision for    depletion,    depreciation and    amortization              191,239      120,907      354,059      218,577   Accretion expense            5,811        5,490       11,621       11,121   Other costs and    expenses                   56,020       15,360       75,572       24,052                          -----------  -----------  -----------  -----------                              944,735      748,453    1,794,933    1,530,254                          -----------  -----------  -----------  ----------- OPERATING INCOME           1,178,451      361,960    1,918,149      406,339                          -----------  -----------  -----------  ----------- OTHER INCOME (EXPENSE):   Interest income             19,934       18,391       42,011       42,180   Other income                 9,152        8,381       18,814       11,981   Interest expense              -593       -1,783       -1,234       -1,797                          -----------  -----------  -----------  -----------                               28,493       24,989       59,591       52,364                          -----------  -----------  -----------  ----------- INCOME BEFORE INCOME  TAX PROVISION             1,206,944      386,949    1,977,740      458,703   Income tax provision     Current                  182,850       29,600      274,475       43,425     Deferred                 116,100            0      -39,000            0                          -----------  -----------  -----------  -----------                              298,950       29,600      235,475       43,425                          -----------  -----------  -----------  ----------- NET INCOME               $   907,994  $   357,349  $ 1,742,265  $   415,278                          ===========  ===========  ===========  =========== EARNINGS PER SHARE -  Post Split   Basic and diluted    income per    common share          $      0.19  $      0.08  $      0.37  $      0.09                          ===========  ===========  ===========  =========== Basic and diluted  weighted average  number of common  shares outstanding        4,677,728    4,677,728    4,677,728    4,677,728                          ===========  ===========  ===========  =========== EARNINGS PER SHARE -  Pre Split   Basic and diluted    income per    common share          $      0.24  $      0.10  $      0.47  $      0.11                          ===========  ===========  ===========  =========== Basic and diluted  weighted average  number of common  shares outstanding        3,741,721    3,741,721    3,741,721    3,741,721                          ===========  ===========  ===========  ===========                             PYRAMID OIL COMPANY                               BALANCE SHEETS                                   ASSETS                                                    June 30,    December 31,                                                      2008          2007                                                  (Unaudited)    (Audited)                                                  ------------  ------------ CURRENT ASSETS:   Cash                                           $  1,381,425  $    618,448   Short-term investments                            1,505,325     1,478,979   Trade accounts receivable                         1,059,244       643,340   Employee loan receivable                                600             0   Interest receivable                                   2,225         2,251   Crude oil inventory                                  74,857        71,298   Deferred taxes                                       64,000             0   Prepaid expenses                                     84,393       170,913                                                  ------------  ------------          TOTAL CURRENT ASSETS                       4,172,069     2,985,229                                                  ------------  ------------ PROPERTY AND EQUIPMENT, at cost   Oil and gas properties and equipment    (successful efforts method)                     15,593,748    14,734,929   Capitalized asset retirement costs                  310,579       310,579   Drilling and operating equipment                  2,073,137     2,050,556   Land, buildings and improvements                  1,045,649     1,010,847   Automotive, office and other property    and equipment                                    1,162,324     1,141,451                                                  ------------  ------------                                                    20,185,437    19,248,362   Less: accumulated depletion, depreciation,    amortization and valuation allowance           -14,394,669   -14,040,610                                                  ------------  ------------                                                     5,790,768     5,207,752                                                  ------------  ------------ OTHER ASSETS   Deposits                                            250,000       250,000   Other Assets                                          7,380         7,380   Assets held for resale                                9,633         9,633                                                  ------------  ------------                                                  $ 10,229,850  $  8,459,994                                                  ============  ============                             PYRAMID OIL COMPANY                               BALANCE SHEETS                    LIABILITIES AND STOCKHOLDERS' EQUITY                                                    June, 30    December 31,                                                      2008          2007                                                  (Unaudited)    (Audited)                                                  ------------  ------------ CURRENT LIABILITIES:   Accounts payable                               $     98,350  $    108,500   Accrued professional fees                            53,223        54,165   Accrued taxes, other than income taxes                    0        61,684   Accrued payroll and related costs                    64,444        57,647   Accrued royalties payable                           280,643       212,916   Accrued insurance                                    26,399        65,999   Accrued income taxes                                190,206       145,815   Current maturities of long-term debt                 24,734        26,868                                                  ------------  ------------          TOTAL CURRENT LIABILITIES                    737,999       733,594                                                  ------------  ------------ LONG-TERM DEBT, net of current maturities              32,707        44,542                                                  ------------  ------------ DEFERRED TAXES                                         25,000             0                                                  ------------  ------------ LIABILITY FOR SHARE BASED COMPENSATION                      0        67,000                                                  ------------  ------------ LIABILITY FOR ASSET RETIREMENT OBLIGATION           1,022,524     1,010,903                                                  ------------  ------------ COMMITMENTS 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; 4,677,728 shares    issued and outstanding                           1,137,010     1,071,610   Retained earnings                                 7,274,610     5,532,345                                                  ------------  ------------                                                     8,411,620     6,603,955                                                  ------------  ------------                                                  $ 10,229,850  $  8,459,994                                                  ============  ============ 

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

SOURCE: Pyramid Oil Company

Source: MARKET WIRE

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