Pyramid Oil Company Reports Second Quarter Financial Results

BAKERSFIELD, CA--(Marketwire - August 17, 2009) - Pyramid Oil Company (NYSE Amex: PDO) today
announced financial results for its second fiscal quarter ended June 30,
2009.

Revenue for the second quarter was $802,000 versus $594,000 in this year's
first quarter and $2,123,000 in the second quarter of fiscal 2008. Both
the sequential improvement and quarter-over-quarter decline were primarily
due to significant fluctuations in average crude oil prices. The average
price received per barrel of oil equivalent (BOE) in the second quarter was
$55.09, an increase of 40% compared with the 2009 first quarter, and a
decline of 43% versus the average BOE during last year's second quarter.

Pyramid reduced its operating expenses for the quarter to $325,000 from
$351,000 in this year's first quarter and $461,000 in the second quarter a
year ago. The Company recorded a non-recurring, non-cash charge of
$210,000 associated with a board-authorized supplemental stock-based
severance payment.

As a result of the booked non-cash charge, the Company reported a loss from
operations of $208,000 versus a loss from operations of $219,000 in this
year's first quarter and operating income of $1,178,000 in the second
quarter a year ago. Second quarter net loss was $39,000, or $0.01 per
diluted share, versus a net loss of $189,000, or $0.04 per diluted share,
in the first quarter and net income of $908,000, or $0.19 per diluted
share, in the comparable year-ago quarter.

John Alexander, president and CEO, said, "The sequential improvement in our
financial performance reflects both the rebound in oil prices off of the
first quarter lows, as well as our efforts to tightly control operating
costs. As anticipated, our strong balance sheet is allowing us to consider
a range of opportunities to enhance our reserve base, including a potential
joint venture investment in a 1,900-acre drilling prospect in Louisiana.
We also are proceeding with our Texas natural-gas joint venture, on which
we recently drilled a side-track section on our well re-entry program and
encountered nearly twice the amount of gas zone as had been expected.
While this project is taking longer than originally anticipated to bring on
line, we are encouraged by the recent acceleration in activity."

Pyramid further strengthened its balance sheet during the second quarter,
which at June 30 included cash and short-term investments of $4,335,000,
working capital of $4,633,000 and less than $10,000 in long-term debt.

Six-month results

Through six months, Pyramid reported revenue of $1,396,000 versus
$3,713,000 in the same period a year ago. Operating loss was $427,000
versus operating income of $1,918,000 at the six-month mark a year ago.
Net loss was $228,000, or $0.05 per diluted share, versus net income of
$1,742,000, or $0.37 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:
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,
----------- ----------- ----------- -----------
2009 2008 2009 2008
----------- ----------- ----------- -----------

REVENUES: $ 801,901 $ 2,123,186 $ 1,395,946 $ 3,713,082
----------- ----------- ----------- -----------

COSTS AND EXPENSES:
Operating expenses 325,189 461,477 676,539 884,283
Exploration Costs 0 0 0 -28,812
General and
administrative 229,797 209,088 455,102 441,600
Severance award
agreement 209,935 0 209,935 0
Taxes, other than
income
and payroll taxes 32,486 21,100 80,784 56,610
Provision for
depletion,
depreciation and
amortization 160,142 191,239 318,456 354,059
Accretion expense 5,932 5,811 11,798 11,621
Other costs and
expenses 45,975 56,020 70,145 75,572
----------- ----------- ----------- -----------

1,009,456 944,735 1,822,759 1,794,933
----------- ----------- ----------- -----------

OPERATING INCOME (LOSS) -207,555 1,178,451 -426,813 1,918,149
----------- ----------- ----------- -----------

OTHER INCOME (EXPENSE):
Interest income 21,395 19,934 47,870 42,011
Other income 3,600 9,152 7,200 18,814
Interest expense -358 -593 -773 -1,234
----------- ----------- ----------- -----------

24,637 28,493 54,297 59,591
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAX PROVISION (BENEFIT) -182,918 1,206,944 -372,516 1,977,740
Income tax provision
Current -34,200 182,850 -137,583 274,475
Deferred -109,800 116,100 -6,800 -39,000
----------- ----------- ----------- -----------
-144,000 298,950 -144,383 235,475
----------- ----------- ----------- -----------

NET INCOME (LOSS) $ -38,918 $ 907,994 $ -228,133 $ 1,742,265
=========== =========== =========== ===========

BASIC INCOME (LOSS)
PER COMMON SHARE $ -0.01 $ 0.19 $ -0.05 $ 0.37
=========== =========== =========== ===========

DILUTED INCOME (LOSS)
PER COMMON SHARE $ -0.01 $ 0.19 $ -0.05 $ 0.37
=========== =========== =========== ===========

Basic and diluted weighted
average number of common
shares outstanding 4,677,728 4,677,728 4,677,728 4,677,728

PYRAMID OIL COMPANY
BALANCE SHEETS

ASSETS

June 30, December 31,
2009 2008
(Unaudited) (Audited)
------------ ------------

CURRENT ASSETS:
Cash and cash equivalents $ 1,009,273 $ 1,793,563
Short-term investments 3,325,389 2,789,099
Trade accounts receivable 286,581 213,588
Income taxes receivable 60,555 0
Crude oil inventory 80,832 82,025
Deferred income taxes 195,800 108,000
Prepaid expenses and other assets 87,787 186,353
------------ ------------

TOTAL CURRENT ASSETS 5,046,217 5,172,628
------------ ------------

PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment
(successful efforts method) 15,922,218 15,755,472
Capitalized asset retirement costs 382,550 382,550
Drilling and operating equipment 2,109,993 2,109,993
Land, buildings and improvements 1,065,371 1,065,371
Automotive, office and other
property and equipment 1,163,076 1,162,324
------------ ------------
20,643,208 20,475,710
Less: accumulated depletion, depreciation,
amortization and valuation allowance -16,465,613 -16,147,157
------------ ------------
4,177,595 4,328,553
------------ ------------
OTHER ASSETS
Deposits 250,000 250,000
Deferred income taxes 428,245 509,245
Other Assets 17,013 17,013
------------ ------------

$ 9,919,070 $ 10,277,439

PYRAMID OIL COMPANY
BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY

June 30, December 31,
2009 2008
(Unaudited) (Audited)
------------ ------------

CURRENT LIABILITIES:
Accounts payable $ 54,429 $ 40,820
Accrued professional fees 76,871 130,261
Accrued taxes, other than income taxes 0 76,222
Accrued payroll and related costs 89,276 50,451
Accrued royalties payable 146,561 132,472
Accrued insurance 21,865 59,096
Accrued income taxes 0 239,815
Current maturities of long-term debt 24,371 23,901
------------ ------------

TOTAL CURRENT LIABILITIES 413,373 753,038
------------ ------------

LONG-TERM DEBT, net of current maturities 8,336 20,640
------------ ------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION 1,163,504 1,151,706
------------ ------------

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 1,515,945 1,306,010
Retained earnings 6,817,912 7,046,045
------------ ------------

8,333,857 8,352,055
------------ ------------

$ 9,919,070 $ 10,277,439