Pyramid Oil Company (PDO)

[OilStockReport]

BAKERSFIELD, CA -- (MARKET WIRE) -- 11/15/10 -- Pyramid Oil Company (NYSE Amex: PDO)


Selected Highlights:

-- Operating income and net income up 161% and 78%, respectively, vs. Q3
'09
-- Operating cash flow at Sept. 30 reaches $1.4 million
-- Two new wells drilled in Mountain View Field
-- Pyramid and Victory Oil Company agree in principle on California JV
program

Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its third quarter and nine-month period ended September 30, 2010.

Third quarter revenue increased 50% to $1.4 million from $945,000 in the comparable year-ago quarter. The increase is attributable to a $321,000 gain on the sale of a portion of Pyramid's interest in a Texas natural gas joint venture, as well as higher oil and gas revenue. Operating income increased 161% to $499,000 from $191,000 in last year's third quarter. Net income advanced 78% to $394,000, or $0.08 per diluted share, from $221,000, or $0.05 per diluted share, in the third quarter a year ago.

Average crude oil prices during the third quarter increased by $9.30 to $73.26 per barrel of oil equivalent (BOE) from $63.96 per BOE in last year's third quarter.

Operating cash flow through the first nine months of fiscal 2010 was $1.4 million versus $298,000 at the nine-month mark last year. Pyramid ended the third quarter with cash and short-term investments of $4.8 million, up from $4.0 million at the end of the second quarter. At Sept. 30, the Company's balance sheet was free of long-term debt and included working capital of $5.1 million and a current ratio of 10.1:1.

"By monetizing a small portion of our joint venture in Texas, we have reinforced our already strong financial position," said John H. Alexander, president and CEO. "We also have maintained our exposure to opportunities in the increasingly productive Eagle Ford shale formation. In addition to the interest we continue to hold in our original Texas JV, we own a 30% interest in an 876-acre joint venture in Menard County, and expect the first well on this prospect will be drilled before the end of the year."

"Closer to home, we have been exploring a joint venture opportunity with Victory Oil Company, a highly regarded, 75-year-old business with producing properties in close proximity to our leases in Kern County, Calif.," Mr. Alexander added. "We have agreed in principal to jointly participate in an approximately 4,000-foot test well in the Taft area of the county, and also are working to finalize the terms of a drilling program that could involve up to four wells during the next 12 months.

"Meantime, we successfully re-entered two previously drilled wells in our Mountain View field as part of our effort to increase production from our core California properties. We have completed the first well and are conducting a down-hole survey to identify and terminate an area of water entry. The second well has been completed and perforated, and we are currently conducting initial testing. We plan to initiate an additional re-drill in the Mountain View field shortly after the first of the year, depending on rig availability."

Mr. Alexander concluded, "Given the diverse range of opportunities we have established to ramp up production, coupled with the strong price environment for crude, we are optimistic about our prospects for continued growth."

Nine-month results

Through nine months, Pyramid reported revenue of $3.7 million, up 55% from $2.3 million reported in the same period a year ago. Operating income was $145,000 versus an operating loss of $235,000 at the nine-month mark a year ago. Net income was $273,000, or $0.06 per diluted share, versus a net loss $7,000, or less than $0.01 per diluted share, in the same period last year.

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: www.pyramidoil.com.