Pyramid Oil Company Reports 47% Increase in Oil & Gas Revenue for Fiscal 2008

Market Wire, April, 2009

Pyramid Oil Company (AMEX: PDO) today announced financial results for its full year and fourth quarter ended December 31, 2008.

Full-year oil and gas revenue increased 47% to $6.6 million versus $4.5 million in 2007. The increase was largely the result of higher average oil and gas prices, which increased by $26.16 per equivalent barrel of oil versus 2007. Total revenue increased 34% to $6.6 million versus $4.9 million in 2007, when the Company recognized a $442,000 gain on the sale of fixed assets.

Operating expenses in 2008 increased by 21% to $1.9 million versus $1.6 million in the prior year. Total costs and expenses in 2008 were $5.5 million and included a non-cash impairment reserve of $1.2 million. Total costs and expenses in 2007 were $3.2 million.

Income from operations for 2008 was $1.1 million versus $1.8 million in 2007. Full-year net income, which included $305,000 in income tax benefits, was flat at $1.5 million, or $0.32 per diluted share, versus net income of $1.5 million, or $0.32 per diluted share, in 2007.

Full-year cash flow from operations increased 129% to $3.6 million versus $1.6 million in 2007. Pyramid ended fiscal 2008 with cash and short-term investments of $4.6 million, a net increase of $2.5 million, or 118%, versus December 31, 2007. At the end of 2008, the Company had working capital of $4.4 million, long-term debt of $21,000, and total stockholders' equity of $8.4 million.

For the fourth fiscal quarter, oil and gas sales were $898,000 versus $1.4 million in the 2007 fourth quarter. The average oil and gas price during the quarter declined by $32.64 per equivalent barrel versus the fourth quarter of 2007. Operating expenses were $509,000 versus $422,000 in the 2007 fourth quarter, while total costs and expenses, including the previously mentioned non-cash impairment reserve charges, were $2.6 million versus $805,000 in the 2007 fourth quarter. The Company recorded a fourth quarter operating loss of $1.7 million versus operating income of $594,000 in the comparable 2007 fourth quarter. Net loss was $933,000, or $0.20 per diluted share, versus net income of $427,000, or $0.09 per diluted share, in the same quarter a year ago.

John Alexander, president and CEO, said, "Pyramid achieved strong top-line growth during fiscal 2008, and despite the widespread asset impairment charges that resulted from the collapse in energy prices and impacted most companies in our industry, we still delivered solid bottom-line results for our stockholders."

Mr. Alexander added, "We significantly enhanced Pyramid's financial strength during the past year, and believe we are well prepared to endure the headwinds that are impacting our industry and the economy as a whole. We also believe that during the coming months, there will be an expanding range of opportunities to acquire oil and gas assets at much more attractive valuations than have been seen in several years."

In addition to its core California operations, Pyramid continues to participate in a natural gas joint venture in McMullen County, Texas. The JV recently re-entered an abandoned well that was originally drilled in the 1960s and showed favorable test results in several intervals. Due to low gas prices and lack of a sales pipeline, the original well was abandoned. The JV has been performing a series of improvement operations on the well, and once they are complete, the targeted gas zones will be perforated, tested and put on production. The Company expects these efforts to be complete by mid April.

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.