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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
/X/ Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
/ / For the quarterly period ended March 31, 1995
OR
Transition report pursuant to section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File Number 0-5525
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PYRAMID OIL COMPANY
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0787340
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2008 - 21ST. STREET,
BAKERSFIELD, CALIFORNIA 93301
(Address of principal executive offices) (Zip Code)
(805) 325-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes `X' No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
COMMON STOCK WITHOUT PAR VALUE 2,494,430
(Class) (Outstanding at March 31, 1995)
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<PAGE> 2
FINANCIAL STATEMENTS
PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited) (Audited)
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<C> <C>
<S>
CURRENT ASSETS:
Cash and cash equivalents $587,975 $469,009
Trade accounts receivable 168,867 163,716
Crude oil inventory 83,000 83,000
Prepaid expenses 70,084 84,339
Deferred income taxes 81,227 88,785
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TOTAL CURRENT ASSETS 991,153 888,849
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PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment
(successful efforts method) 9,364,919 9,308,713
Well servicing and drilling equipment 3,947,076 3,947,076
Land, buildings and improvements 923,714 1,047,464
Automotive, office and other
property and equipment 1,028,049 1,028,049
------------ ------------
15,263,758 15,331,302
Less: accumulated depletion,
depreciation, amortization
and valuation allowance (12,840,349) (12,753,570)
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2,423,409 2,577,732
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OTHER ASSETS 4,715 4,715
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$3,419,277 $3,471,296
============ ============
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE> 3
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31 December 31,
1995 1994
(Unaudited) (Audited)
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<C> <C>
<S>
CURRENT LIABILITIES:
Accounts payable $55,686 $153,807
Accrued professional fees 41,300 36,050
Accrued taxes, other than income taxes 25,275 25,754
Accrued payroll and related costs 27,197 29,283
Accrued royalties payable 61,081 63,734
Accrued insurance 35,314 29,343
Other accrued liabilities 10,555 10,555
Current maturities of long-term debt 55,885 55,885
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TOTAL CURRENT LIABILITIES 312,293 404,411
------------ ------------
LONG-TERM DEBT, net of current maturities 136,525 150,195
------------ ------------
DEFERRED INCOME AND OTHER TAXES 123,698 131,698
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COMMITMENTS (note 3)
STOCKHOLDERS' EQUITY:
Common stock-no par value;
10,000,000 authorized shares;
2,494,430 shares issued and
outstanding 1,071,610 1,071,610
Retained earnings 1,775,151 1,713,382
------------ ------------
2,846,761 2,784,992
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$3,419,277 $3,471,296
============ ============
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE> 4
PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------
1995 1994
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<C> <C>
<S>
REVENUES:
Net crude oil and gas sales $398,678 $309,990
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398,678 309,990
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COSTS AND EXPENSES:
Operating expenses - crude oil
and gas 196,745 188,418
General and administrative 75,405 139,651
Taxes, other than income
and payroll taxes 16,170 18,187
Provision for depletion,
depreciation and amortization 86,779 137,934
Other costs and expenses 1,398 1,285
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376,497 485,475
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OPERATING INCOME (LOSS) 22,181 (175,485)
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OTHER INCOME (EXPENSE):
Interest income 4,580 1,324
Other income 39,627 4,114
Interest expense (4,619) (5,545)
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39,588 (107)
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INCOME (LOSS) BEFORE
INCOME TAX PROVISION 61,769 (175,592)
Income tax provision 0 0
------------ ------------
NET INCOME (LOSS) $61,769 ($175,592)
============ ============
INCOME (LOSS) PER COMMON SHARE $0.02 ($0.07)
============ ============
Weighted average number of
common shares outstanding 2,494,430 2,494,430
============ ============
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE> 5
PYRAMID OIL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------
1995 1994
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<C> <C>
<S>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $61,769 ($175,592)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Provision for depletion,
depreciation and amortization 86,779 137,934
(Gain) loss on sale of fixed assets (36,250) 686
Changes in assets and liabilities:
Increase in trade accounts
receivable (5,151) (54,290)
Decrease in prepaid expenses 14,255 9,915
(Decrease) increase in accounts
payable and accrued liabilities (92,118) 69,869
Decrease in deferred taxes (442) 0
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Net cash provided by (used in)
operating activities 28,842 (11,478)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (56,206) (24)
Proceeds from sale of property
and equipment 160,000 2,750
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Net cash provided by
investing activities 103,794 2,726
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit 0 5,000
Principal payments on long-term debt (13,670) (19,185)
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Net cash used in financing activities (13,670) (14,185)
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Net increase (decrease) in cash
and cash equivalents 118,966 (22,937)
Cash and cash equivalents
at beginning of period 469,009 241,158
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Cash and cash equivalents
at end of period $587,975 $218,221
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the three months
for interest $4,619 $5,545
============ ============
<FN> See Accompanying Notes to Financial Statements
</TABLE>
<PAGE> 6
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements include the accounts of Pyramid Oil Company and its
divisions (the Company). Such financial statements included herein have been
prepared by the Company, without an audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
A summary of the Company's significant accounting policies is contained in its
December 31, 1994 Form 10-KSB which is incorporated herein by reference. The
financial data presented herein should be read in conjunction with the
Company's December 31, 1994 financial statements and notes thereto, contained
in the Company's Form 10-KSB.
In the opinion of the Company, the unaudited financial statements, contained
herein, include all adjustments (consisting of normal recurring accruals and
the elimination of inter-division transactions) necessary to present fairly
the Company's financial position as of March 31, 1995 and the results of its
operations and its cash flows for the three month periods ended March 31, 1995
and 1994. The results of operations for an interim period are not necessarily
indicative of the results to be expected for a full year.
(2) DIVIDENDS
No cash dividends were paid during the three months ended March 31, 1995 and
1994.
(3) COMMITMENTS
Pursuant to a specific oil and gas lease in the Carneros Creek field, the
Company is obligated to drill at least one well per year on this lease. If
the price of oil reaches $20 per barrel or above and continues for a period of
60 consecutive days, the Company will thereafter be obligated to drill at
least one well per quarter on this lease. The price of oil on this lease was
approximately $17.80 per barrel at May 2, 1995. Failure to drill the
necessary well(s) will result in relinquishment of future drilling acreage on
this specific lease. The Company will drill and complete a well on this lease
in the second quarter of 1995. The cost of drilling and completing a well can
vary significantly. The Company's estimated total share of drilling and
completing the one well on this lease in 1995 is approximately $220,000.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
IMPACT OF CHANGING PRICES
The Company's revenue is connected directly to crude oil prices posted by
major oil companies. Average crude oil prices for the first quarter of 1995
increased by approximately $3.70 per equivalent barrel more than first quarter
1994 crude prices. Since March 31, 1995, crude oil prices have increased by
one dollar per barrel. This is a favorable trend for the second quarter of
1995. The Company cannot predict the future course of crude oil prices for
the foreseeable future.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased by $118,966 for the three months ended
March 31, 1995. The primary component of this increase were proceeds of
$160,000 from the sale of land. Capital spending for the first quarter of
1995 decreased cash by $56,206. Net cash provided by operating activities was
$28,842 for the three months ended March 31, 1995. Net reductions in long-term
debt of $13,670 were made during the three months ended March 31, 1995. See
the Statements of Cash Flows for additional detailed information.
As a consequence of persistent low crude oil prices, the Company has continued
with its approach of focusing on its most profitable properties to optimize
the Company's resources. Cost reductions and consolidations in all areas of
operations have been maintained in an effort to offset the decline in revenues
and conserve capital. In prior years, the Company shut-in or reduced
operations on certain other oil and gas properties that were uneconomic. Many
of these properties continue to be shut-in. Despite the factors described
above and the economic conditions existing in the oil and gas industry since
1986, the Company has been able to maintain its oil and gas reserves.
FORWARD LOOKING INFORMATION
Crude oil prices have increased by $2.50 per barrel since December 31, 1994.
This is an encouraging sign for the second quarter, however, crude oil prices
continue to remain unstable and unpredictable. With the continuing crude oil
market instability, management feels that it must continue to reduce costs.
Except for a specific commitment mentioned above, the majority of all
developmental and capital expenditures are being deferred at this time.
Effective June 1, 1993, operations of the Company's well servicing segment
were suspended. Management believes the related assets are stated at a
realizable value.
<PAGE> 8
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1995 COMPARED TO QUARTER ENDED MARCH 31, 1994
REVENUES
Revenues for oil and gas operations increased by 28.6% for the three months
ended March 31, 1995 as contrasted with the same period of 1994. Crude oil
sales increased by 31.8 % due to higher crude prices for the first quarter of
1995. The average equivalent crude oil price for the first quarter of 1995
increased by approximately $3.70 per equivalent barrel as compared with the
same period in 1994. This was offset by a slight reduction in crude oil
production, approximately ten barrels per day.
OPERATING EXPENSES
Operating expenses for crude oil and natural gas producing activities
increased slightly by 4.4% for the first quarter of 1995 as compared with the
same period of 1994. The average cost to produce a barrel of crude oil
increased by approximately fifty-four cents per equivalent barrel for the
first three months of 1995 as compared with the first quarter of 1994.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased by 46% over 1994. This is
primarily the result of lower professional fees for 1995.
PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION
The provision for depletion, depreciation and amortization has decreased by
37% for the first quarter of 1995 due primarily to lower depletion rates for
1995. This was caused by the increase in the Company's oil and gas reserves
at December 31, 1994.
OTHER INCOME
Other income has increased by approximately $35,500 for the first quarter of
1995 as compared with the same period of 1994. In the first quarter of 1995,
the Company sold certain real property it owned in Taft, Kern County,
California and realized a gain on the sale of approximately $33,000.
<PAGE> 9
PYRAMID OIL COMPANY
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes in Securities
None
Item 3. - Defaults Upon Senior Securities
None
Item 4. - Submission of Matters to a Vote of Security Holders
None
Item 5. - Other Information -
None
Item 6. - Exhibits and Reports on Form 8-K -
No Form 8-K's were filed during the three months
ended March 31, 1995.
<PAGE> 10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
PYRAMID OIL COMPANY
(registrant)
Dated: May 2, 1995 J. BEN HATHAWAY
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J. Ben Hathaway
President
Dated: May 2, 1995 JOHN H. ALEXANDER
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John H. Alexander
Vice President
<PAGE> 11
EXHIBIT INDEX
Exhibit
No. Description
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27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements at March 31, 1995 and for the three months ended
March 31, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 587,975
<SECURITIES> 0
<RECEIVABLES> 172,867
<ALLOWANCES> 4,000
<INVENTORY> 83,000
<CURRENT-ASSETS> 991,153
<PP&E> 15,263,758
<DEPRECIATION> 12,840,349
<TOTAL-ASSETS> 3,419,277
<CURRENT-LIABILITIES> 312,293
<BONDS> 0
<COMMON> 1,071,610
0
0
<OTHER-SE> 1,775,151
<TOTAL-LIABILITY-AND-EQUITY> 3,419,277
<SALES> 398,678
<TOTAL-REVENUES> 442,885
<CGS> 196,745
<TOTAL-COSTS> 196,745
<OTHER-EXPENSES> 179,752
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,619
<INCOME-PRETAX> 61,769
<INCOME-TAX> 0
<INCOME-CONTINUING> 61,769
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,769
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
