Pyramid Oil Builds Revenue on Increased Crude Prices
Pyramid Oil Company announced financial results for its fourth quarter and full year ended December 31, 2009.
Fourth quarter revenue increased to $971,000 from $898,000 in the fourth quarter of fiscal 2008. The increase was largely due to higher average crude oil prices, which rose $18.71 per barrel of oil equivalent (BOE) to $70.98 from $52.27 per BOE in last year's fourth quarter. The increase was partially offset by a 21% decline in production volumes.
Pyramid reported a fourth quarter net loss of $183,000, or $0.04 per diluted share, versus a net loss of $933,000, or $0.20 per share, in the prior year's fourth quarter. This year's fourth quarter was impacted by a non-cash reserve-impairment charge of $359,000, which was related primarily to the Company's Texas natural gas joint venture. The 2008 fourth quarter included a non-cash reserve-impairment charge of $1.2 million, due principally to the significant drop in oil prices during the second half of 2008.
Fourth quarter operating expenses declined to $388,000 from $509,000 in last year's fourth quarter, while total costs and expenses were reduced to $1.3 million from $2.6 million during the same respective periods. The Company reported a loss from operations of $302,000 versus an operating loss of $1.7 million in the comparable 2008 fourth quarter.
For the full fiscal year, revenue was $3.3 million versus $6.6 million in fiscal 2008. The decrease resulted from a decline of $36.40 per BOE received by the Company during 2009 compared with the prior year, as well as by a 12,600-barrel year-over-year decline in production volumes.
Full-year operating expenses declined by $530,000, or 27%, to $1.4 million compared with operating expenses of $1.9 million during fiscal 2008. Total 2009 costs and expenses declined to $3.8 million from $5.5 million in fiscal 2008. The Company reported a 2009 operating loss of $537,000 versus operating income of $1.1 million during 2008.
Pyramid generated $573,000 in 2009 operating cash flow, and closed the year with $4.8 million in cash and cash equivalents. The Company has $5.1 million in working capital and remains free of long-term debt.
"We closed fiscal 2009 with a strong balance sheet and a focused plan for capitalizing on our property portfolio and the improved pricing environment for crude oil," said John Alexander, president and CEO. "We have retained a talented independent geologist, who in recent months has led an extensive review of many of our California properties. This process has resulted in a short list of drilling prospects we intend to pursue during the coming year, provided the economics remain compelling. The first of these projects will be a horizontal well we intend to spud on one of our existing leases in Kern County during the coming month."
Mr. Alexander added, "We recently commenced production from a new well on our Carneros Creek property, and we are finally seeing encouraging signs of progress on our Texas natural gas joint venture, where Union Gas Company of Houston recently commenced field operations. We are optimistic that our efforts to increase production and enhance shareholder value will be successful during the coming year and beyond."
Mr. Alexander said management plans to fund the Company's near-term drilling program with cash on hand and future operating cash flow.