Pyramid Oil Company Reports Continued Earnings Growth in First Fiscal Quarter

BAKERSFIELD, CA--(Marketwire - May 15, 2012) - Pyramid Oil Company (NYSE Amex: PDO) today announced financial results for its first quarter ended March 31, 2012.

First quarter revenue increased to $1.4 million from $1.3 million in the same quarter of fiscal 2011. The increase was attributable to higher crude oil prices, which increased by $14.70 per average barrel of oil equivalent (BOE) to $111.82 from $97.12 per average BOE in the 2011 first quarter.

Operating income increased to $457,000, up 21% from $376,000 in the first quarter last year. Net income increased 16% to $372,000, or $0.08 per share, from $320,000, or $0.07 per share, during the 2011 first quarter.

Pyramid ended the quarter with cash, cash equivalents and short-term investments of $4.9 million, total current assets of $6.0 million, and working capital of $5.4 million. The Company also reported long-term assets in the form of certificates of deposit of $1.1 million. These CDs were classified on the December 31, 2011, balance sheet as short-term investments, but have been reclassified due to their date of maturity. At March 31, the Company remained free of long-term debt.

"We have delivered another quarter of solid earnings growth and have maintained a very strong balance sheet," said John Alexander, president and CEO. "During the period we also drilled a development well on our Carneros Creek property in Kern County, California. This well, the Santa Fe #20, has now been completed and stimulated using a gel-fracking procedure. Following an initial production of fluids, an unexplained blockage has occurred, and we are currently attempting to identify the cause and correct it."

Mr. Alexander added, "As part of our long-range effort to increase oil volumes, we hope to drill at least two additional wells during the balance of the year, provided we can obtain contract drilling rigs. Of course we also will continue to evaluate external growth opportunities that could further enhance value for our shareholders."

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 March 31,
			2012			2011
REVENUES:
	Oil and gas sales		$	1,369,058		$	1,327,310
COSTS AND EXPENSES:
	Operating expenses			429,941			413,656
	General and administrative			211,016			224,720
	Taxes, other than income and payroll taxes			47,421			36,855
	Provision for depletion,
		depreciation and amortization		181,156			185,528
	Valuation allowances			0			48,533
	Accretion expense			13,087			16,335
	Other costs and expenses			29,805			25,487
				912,426			951,114
OPERATING INCOME				456,632			376,196
OTHER INCOME (EXPENSE):
	Interest income			10,690			13,352
	Other income			0			500
	Interest expense			-426			-1,506
				10,264			12,346
INCOME BEFORE INCOME TAX PROVISION				466,896			388,542
	Income tax provision
		Current		48,400			46,200
		Deferred		46,400			22,700
				94,800			68,900
NET INCOME			$	372,096		$	319,642
BASIC INCOME PER COMMON SHARE			$	0.08		$	0.07
DILUTED INCOME PER COMMON SHARE			$	0.08		$	0.07
Weighted average number of common shares outstanding				4,683,853			4,679,770
Diluted average number of common shares outstanding				4,687,033			4,687,030

PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
			March 31,			December 31,
			2012			2011
			(Unaudited)			(Audited)
CURRENT ASSETS:
	Cash and cash equivalents		$	2,740,356		$	2,762,676
	Short-term investments			2,130,510			2,128,380
	Trade accounts receivable			519,581			549,476
	Joint interest billing receivable			8,495			6,019
	Income taxes receivable			0			21,169
	Crude oil inventory			134,709			118,156
	Prepaid expenses and other assets			205,726			255,846
	Deferred income taxes			262,500			262,500
		TOTAL CURRENT ASSETS		6,001,877			6,104,222
PROPERTY AND EQUIPMENT, at cost
	Oil and gas properties and equipment (successful efforts method)			19,727,871			19,124,558
	Capitalized asset retirement costs			409,338			401,242
	Drilling and operating equipment			1,966,750			1,956,371
	Land, buildings and improvements			1,073,918			1,073,918
	Automotive, office and other property and equipment			1,192,118			1,192,118
				24,369,995			23,748,207
	Less: accumulated depletion, depreciation, amortization and valuation allowances			-20,272,811			-20,091,655
	TOTAL PROPERTY AND EQUIPMENT			4,097,184			3,656,552
INVESTMENTS AND OTHER ASSETS
	Long-term investments			1,078,787			1,071,984
	Deferred income taxes			735,200			781,600
	Deposits			250,000			250,000
	Other Assets			17,380			17,380
	TOTAL INVESTMENTS OTHER ASSETS			2,081,367			2,120,964
		TOTAL ASSETS	$	12,180,428		$	11,881,738

PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
			March 31,			December 31,
			2012			2011
			(Unaudited)			(Audited)
CURRENT LIABILITIES:
	Accounts payable		$	126,360		$	88,494
	Accrued professional fees			43,784			142,990
	Accrued taxes, other than income taxes			77,471			77,471
	Accrued payroll and related costs			59,645			51,252
	Accrued royalties payable			209,085			224,810
	Accrued insurance			45,354			82,428
	Accrued income taxes			27,231			0
	Current maturities of long-term debt			32,560			32,285
		TOTAL CURRENT LIABILITIES		621,490			699,730
LONG TERM DEBT, net of current maturites				5,981			22,330
LIABILITY FOR ASSET RETIREMENT OBLIGATIONS				1,300,072			1,278,889
		TOTAL LIABILITIES		1,927,543			2,000,949
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; 4,683,853 shares issued and outstanding			1,682,971			1,682,971
	Retained earnings			8,569,914			8,197,818
		TOTAL STOCKHOLDERS' EQUITY		10,252,885			9,880,789
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	12,180,428		$	11,881,738