Pyramid Oil Company Reports Continued Financial Growth During Third Fiscal Quarter and Nine-Month Periods

Market Wire, November, 2008

Pyramid Oil Company (AMEX: PDO) today announced financial results for its third quarter and nine-month period ended Sept. 30, 2008.

Revenue from oil and gas sales increased 71% to $2.0 million versus $1.2 million in the third quarter a year ago. Total third quarter revenue increased 24% to $2.0 million from $1.6 million in last year's third quarter. Total revenue in last year's third quarter included a gain of $440,000 from the sale of certain fixed assets. Approximately 63% of the increase in oil and gas sales resulted from higher oil and gas prices, which increased by $40.41 per equivalent barrel of oil versus last year's third quarter. Roughly 8% of the increase resulted from higher crude production.

Operating income increased 12% to $860,000 versus $767,000 in the third quarter a year ago, while net income improved by 8% to $704,000, or $0.15 per diluted share, from $652,000, or $0.14 per diluted share, in the third quarter last year. Cash flow from operations at Sept. 30, 2008, was $3.2 million, up 177% versus $1.2 million at Sept. 30, 2007.

John Alexander, president and CEO, said, "Our strong third quarter revenue and earnings results allowed us to further enhance our financial position. Our balance sheet at Sept. 30 included more than $4.2 million in cash, cash equivalents and short-term investments, up from $2.9 million at the end of our second quarter, and $2.1 million at Dec. 31, 2007. We also have less than $30,000 in long-term debt and no obligatory capital projects scheduled. We have utilized cash on hand to upgrade certain wells, facilities and equipment, and in light of the recent steep decline in crude prices, we already have taken action to reduce operating costs and maintain our financial strength. We also are exploring opportunities for acquiring attractively priced production assets. We believe Pyramid is well positioned to weather the current pricing environment and capitalize on strategic opportunities to expand our asset portfolio."

In light of these declines, Mr. Alexander said Pyramid's Texas natural gas joint venture is not currently producing at anticipated levels. "The consensus opinion of the operator and JV participants is that the well has a 'skin damage' condition that is preventing gas from entering the well bore. The joint venture is currently considering a small workover program and acid job to address the problem."

Nine-month Results

Total revenue at the nine-month mark increased 61% to $5.7 million versus total revenue of $3.5 million in the same period a year ago. Last year's total nine-month revenue included the previously mentioned $440,000 gain from the sale of fixed assets. Nine-month operating income increased 137% to $2.8 million from $1.2 million in the same period a year ago. Net income increased 129% to $2.4 million, or $0.52 per diluted share, from $1.1 million, or $0.23 per diluted share, during the 2007 nine-month period.

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.