BAKERSFIELD, CA — (Marketwire) — 08/15/11 — Pyramid Oil Company (NYSE Amex: PDO)
Second quarter net income improves to $427,000 vs. net loss of $302,000 in 2010 Q2
EPS of $0.09 versus loss of $0.06 in Q2 last year
Six-month operating cash flow up 65% to $1.2 million vs. same period in 2010
Balance sheet includes cash, cash equivalents and short-term investments of $4.7 million, and nominal long-term debt
Pyramid Oil Company (NYSE Amex: PDO) today announced continued revenue and earnings growth for its second quarter and six-month period ended June 30, 2011.
Second quarter revenue increased 26% to $1.5 million from $1.2 million in the same quarter last year. The increase was due to higher average crude oil prices, which increased $34.76 per barrel of oil equivalent (BOE) to $108.79 from $74.03 per average BOE in the 2010 second quarter.
Operating income was $512,000, a positive swing of $1.1 million when compared with a loss from operations of $583,000 in last year–s second quarter. The 2010 second quarter was negatively impacted by a non-cash valuation allowance of $842,000 associated with an unsuccessful well. Net income in this year–s second quarter was $427,000, or $0.09 per share, an improvement of $729,000, when compared with a net loss of $302,000, or $0.06 per share, in the year-ago second quarter.
For the six-month period, revenue increased 29% to $2.9 million from $2.2 million in the same period last year. Operating income was $888,000, an improvement of $1.2 million when compared with an operating loss of $354,000 during the 2010 six-month period. Net income improved by $868,000 to $747,000, or $0.16 per share, from a net loss of $121,000, or $0.03 per share, during the same period last year.
Cash flow from operations at June 30 was $1.2 million, up 65% from $706,000 during the first six months of fiscal 2010. The Company–s balance at June 30, 2011, included $4.7 million in cash, cash equivalents and short-term investments; total current assets of $5.8 million, and working capital of $5.3 million. Long-term debt was a nominal $52,000.
“Our second quarter and year-to-date financial results reflect both solid industry fundamentals and the benefits of our efficient business model,” said John Alexander, president and CEO. “A 34% increase in the average price per barrel of oil versus last year–s second quarter combined with our lean expense structure fueled strong bottom-line results.”
“Despite recent market volatility, the oil sector remains healthy, and we therefore continue to focus on opportunities to increase our production volumes,” Mr. Alexander added. “We are currently targeting up to four wells on our Kern County, California leases. Two would be re-entries of existing wells on our Mountain View property, and two would be shallow, heavy oil test wells on our Chico Martinez property. Of course contract rig availability remains very tight, and consequently, the timing of initiating these wells is challenging to pinpoint.”
Mr. Alexander said the Company is continuing work on the production challenges associated with the Pike 1-H, a horizontal joint-venture well the Company drilled in March with Victory Oil Company. As previously reported, initial tests were encouraging, but the well has subsequently been generating significant volumes of water, which is believed to be inhibiting the flow of oil. The companies are consulting with outside industry experts and pursuing a variety of technical options to address this production issue.
“In the meantime, we have strong cash and working capital positions, and are free of long-term debt,” Mr. Alexander said. “Given current market conditions, our priorities are to maintain the Company–s financial strength, while also being mindful of opportunities to enhance shareholder value.”
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: .
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.
John H. Alexander
President and CEO
Pyramid Oil Company
661-325-1000
Geoff High
Principal
Pfeiffer High Investor Relations, Inc.
303-393-7044