Pyramid Oil Company Reports Second Quarter and Year-to-Date Financial Results

BAKERSFIELD, CA--(Marketwired - Aug 14, 2014) - Pyramid Oil Company (NYSE MKT: PDO) today announced financial results for its second quarter and six-month period ended June 30, 2014.

Second quarter 2014 revenue was $1.0 million versus $1.2 million in the same quarter a year ago. Crude oil production for the second quarter of 2014 declined 16% to 9,809 barrels of oil equivalent (BOE) from 11,685 BOE in the second quarter a year ago. The production decrease was partially offset by an increase of $5.47 in the average realized crude oil price, which was $104.27 during the second quarter of 2014 versus $98.79 in the same period of 2013.

Operating income for the second quarter of 2014 was $115,000 versus $173,000 for the second quarter of 2013. Net income was $73,000, or $0.02 per share, versus $130,000, or $0.03 per share, in the 2013 second quarter.

Through the first six months of 2014, revenue was $2.1 million, versus $2.2 million the same period of 2013. The Company reported an operating loss for the 2014 six-month period of $108,000 versus operating income of $337,000 for the first six months of 2013. The decline was largely due to a $393,000 increase in general and administrative expense for the first six months of 2014 compared to last year's six-month period. During the first six months of 2014, an increase of $581,000 in legal and consulting fees associated with the proposed merger agreement between the Company and Yuma Energy, Inc. was partially offset by a $99,000 reduction in officer and administrative salaries and a $77,000 reduction in accounting fees. Net loss for the first six months of 2014 was $86,000, or $0.02 per share, versus net income of $243,000, or $0.05 per share, in the first six months of 2013.

Pyramid closed the second quarter of 2014 with cash and cash equivalents of $4.4 million. Working capital was $7.3 million and the Company's current ratio was 12:1. Pyramid also reported long-term assets in the form of certificates of deposit of $1.1 million. Current liabilities at June 30, 2014, were $670,000 and total liabilities were $2.0 million. Stockholders' equity at the end of the 2014 second quarter was $10.9 million.

Michael D. Herman, Interim President and CEO, said, "We are making continued progress on our planned merger with Yuma Energy. As was recently announced, both companies have set September 10, 2014, as the date for special meetings of their respective stockholders, who will be asked to vote on the transaction and certain other related matters. Provided both companies receive stockholder approval, we expect to complete the merger in the third quarter of 2014."

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.

Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as "expects," "believes," "intends," "anticipates," "plans," "estimates," "potential," "possible," or "probable" or statements that certain actions, events or results "may," "will," "should," or "could" be taken occur or be achieved. The forward-looking statements include statements about the anticipated timing for closing the proposed merger. Forward-looking statements are based on current expectations and assumptions and analyses made by Yuma and Pyramid in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances. However, whether actual results and developments will conform with expectations is subject to a number of risks and uncertainties, including but not limited to: the possibility that the companies may be unable to obtain stockholder approval or satisfy the other conditions to closing; that problems may arise in the integration of the businesses of the two companies; that the acquisition may involve unexpected costs; the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits); the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather; fluctuations in oil and gas prices; inability of management to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change. Pyramid's annual report on Form 10-K for the year ended December 31, 2013, quarterly reports on Form 10-Q, recent current reports on Form 8-K, and other Securities and Exchange Commission ("SEC") filings discuss some of the important risk factors identified that may affect its business, results of operations, and financial condition. Pyramid and Yuma undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Additional Information About the Transaction
In connection with the proposed transaction, Pyramid has filed with the SEC a registration statement on Form S-4 that includes a proxy statement of Pyramid that also constitutes a prospectus of Pyramid relating to Pyramid common stock to be issued to Yuma stockholders pursuant to the merger. The definitive proxy statement/prospectus includes important information about both Yuma and Pyramid. Pyramid may also file other relevant documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PYRAMID AND THE PROPOSED TRANSACTION. Investors and security holders may obtain these documents when available free of charge at the SEC's website at www.sec.gov. In addition, the documents filed with the SEC by Pyramid can be obtained free of charge from Pyramid's website at www.pyramidoil.com.

Participants in Solicitation
Pyramid and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Pyramid in respect of the proposed transaction. Information regarding Pyramid's directors and executive officers is available in its annual report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC on March 31, 2014. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are and will be contained in the proxy statement/prospectus referred to above and other relevant materials filed with the SEC.

This release shall not constitute an offer to sell or the solicitation of any offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
				Three months ended June 30,							Six months ended June 30,
				2014				2013			2014			2013
REVENUES:
	Oil and gas sales			$	1,022,757			$	1,154,409		$	2,066,356		$	2,162,212
COSTS AND EXPENSES:
	Operating expenses				435,837				500,043			932,127			934,481
	General and administrative				272,328				234,862			850,291			457,003
	Taxes, other than income
	and payroll taxes				27,495				37,158			61,104			67,555
	Provision for depletion,
	depreciation and amortization				113,541				148,817			217,511			261,796
	Accretion expense				14,073				7,932			23,490			18,311
	Other costs and expenses				43,989				52,973			90,079			86,198
					907,263				981,785			2,174,602			1,825,344
OPERATING INCOME (LOSS)					115,494				172,624			(108,246	)		336,868
OTHER INCOME (EXPENSE):
	Interest income				9,736				10,004			19,397			20,315
	Other income				(321	)			0			6,679			0
					9,415				10,004			26,076			20,315
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)					124,909				182,628			(82,170	)		357,183
	Income tax expense (benefit)
		Current			(186,200	)			9,357			(711,200	)		15,126
		Deferred			238,200				43,200			714,700			99,300
					52,000				52,557			3,500			114,426
NET INCOME (LOSS)				$	72,909			$	130,071		$	(85,670	)	$	242,757
BASIC INCOME (LOSS)
PER COMMON SHARE				$	0.02			$	0.03		$	(0.02	)	$	0.05
DILUTED INCOME (LOSS)
PER COMMON SHARE				$	0.02			$	0.03		$	(0.02	)	$	0.05
Weighted average number of common shares outstanding					4,754,752				4,688,085			4,721,418			4,688,085
Diluted average number of common shares outstanding					4,761,614				4,688,085			4,721,418			4,688,085

PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
				June 30,				December 31,
				2014				2013
				(Unaudited)				(Audited)
CURRENT ASSETS:
	Cash and cash equivalents			$	4,355,590			$	4,404,246
	Restricted cash				0				967,329
	Short-term investments				2,143,028				2,140,822
	Trade accounts receivable				486,632				484,468
	Income taxes receivable				724,400				12,400
	Crude oil inventory				92,524				102,334
	Prepaid expenses and other assets				126,839				249,030
	Deferred income taxes				87,000				711,800
		TOTAL CURRENT ASSETS			8,016,013				9,072,429
PROPERTY AND EQUIPMENT, at cost
	Oil and gas properties and equipment
	(successful efforts method)				19,899,762				19,883,190
	Capitalized asset retirement costs				412,612				412,612
	Drilling and operating equipment				2,058,744				2,058,744
	Land, buildings and improvements				1,098,918				1,098,918
	Automotive, office and other
	property and equipment				1,158,764				1,136,566
					24,628,800				24,590,030
	Less: accumulated depletion, depreciation, amortization and valuation allowances				(21,529,273	)			(21,335,914	)
	TOTAL PROPERTY AND EQUIPMENT				3,099,527				3,254,116
INVESTMENTS AND OTHER ASSETS
	Long-term investments				1,146,674				1,131,707
	Deferred income taxes				370,000				459,900
	Deposits				250,000				250,000
	Other Assets				11,380				11,380
	TOTAL INVESTMENTS OTHER ASSETS				1,778,054				1,852,987
		TOTAL ASSETS		$	12,893,594			$	14,179,532

PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
				June 30,			December 31,
				2014			2013
				(Unaudited)			(Audited)
CURRENT LIABILITIES:
	Accounts payable			$	304,429		$	290,930
	Accrued professional fees				12,162			140,711
	Accrued taxes, other than income taxes				0			54,444
	Accrued payroll and related costs				37,572			40,932
	Accrued royalties payable				240,548			226,502
	Liability for deferred compensation				39,166			1,026,655
	Accrued insurance				36,018			113,480
		TOTAL CURRENT LIABILITIES			669,895			1,893,654
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS					1,329,352			1,305,862
	TOTAL LIABILITIES				1,999,247			3,199,516
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; 4,788,085 shares issued andoutstanding				1,847,384			1,847,384
	Retained earnings				9,046,963			9,132,632
		TOTAL STOCKHOLDERS' EQUITY			10,894,347			10,980,016
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	12,893,594		$	14,179,532