<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1999
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 0-5525
PYRAMID OIL COMPANY
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-0787340
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2008 - 21st. Street, P. O. Box 832 93302
Bakersfield, California
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (661) 325-1000
Securities registered pursuant to Section 12 (b) of the Exchange Act: NONE
Securities registered pursuant to Section 12 (g) of the Exchange Act:
Common Stock Without Par Value
(Title of Class)
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 period 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
<PAGE> 2
State the registrant's revenues for its most recent fiscal year: $1,309,136
The aggregate market value on March 17, 2000, of Common shares held by
non-affiliates was approximately $740,000 based on the average closing bid and
asked prices of the registrant's Common shares on such date, as quoted by the
National Quotation Bureau.
At March 17, 2000, there were 2,494,430 Common shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement for its 2000 Annual
Meeting of Shareholders to be filed with the Securities and Exchange
Commission within 120 days after the close of the registrant's fiscal year are
incorporated by reference into Part III.
Transitional Small Business Disclosure Format (check one):
Yes No X
<PAGE> 3
PYRAMID OIL COMPANY
1999 FORM 10-KSB ANNUAL REPORT
Table of Contents
Page
PART I
Item 1. Description of Business . . . . . . . . 4
Item 2. Description of Property . . . . . . . . 9
Item 3. Legal Proceedings . . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . 12
PART II
Item 5. Market for Common Equity and Related
Stockholder Matters. . . . . . . . . . 13
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . 14
Item 7. Financial Statements . . . . . . . . . . 20
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure . . . 45
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance With Section
16(a) of the Exchange Act . . . . . . . 45
Item 10. Executive Compensation . . . . . . . . . 45
Item 11. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . 45
Item 12. Certain Relationships and Related Transactions 46
PART IV
Item 13. Exhibits and Reports on Form 8-K . . . . . 47
<PAGE> 4
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995
- -----------------------------
Except for the historical information contained herein, the matters discussed
in this Annual Report are forward-looking statements which involve risks and
uncertainties, including but not limited to economic, competitive, political,
regulatory and governmental factors affecting the Company's revenues,
operations, markets and prices, properties and other factors discussed in the
Company's various filings with the Securities and Exchange Commission.
PART I
------
ITEM 1 - DESCRIPTION OF BUSINESS
- --------------------------------
(a) GENERAL BUSINESS DESCRIPTION
----------------------------
Pyramid Oil Company is a California corporation that has been in the oil and
gas business continuously, since it was incorporated on October 9, 1909.
Pyramid Oil Company, hereinafter referred to as "Pyramid" or the "Company", is
engaged in the business of exploration, development and production of crude
oil and natural gas.
Pyramid acquires interests in land and producing properties through
acquisition and lease on which it drills and/or operates oil or gas wells in
efforts to discover and/or to produce oil and gas. Crude oil and natural gas
produced from these properties are sold to various refineries and pipeline
companies. The majority of all oil and gas properties that Pyramid owns and
operates is for its own account. Pyramid also participates in specific joint
ventures with others in the development of oil and gas properties. Pyramid's
interests in these properties will vary depending on the availability of said
interests and their locations.
The Company's executive offices are located at 2008 21st Street, Bakersfield,
California, 93301, telephone (661) 325-1000, facsimile (661) 325-0100.
(b) DESCRIPTION OF BUSINESS - OIL AND GAS OPERATIONS
------------------------------------------------
Exploration and Development
- ---------------------------
Pyramid operates in a highly competitive industry wherein many companies, from
large multinational companies to small independent producers, are competing
for a finite amount of oil and gas resources. The Company seeks out
properties to explore for oil and gas by drilling and also seeks out producing
oil and gas properties that can be purchased and operated.
<PAGE> 5
Management believes that under the right economic conditions, several of the
producing properties that the Company owns could have further developmental
potential. Certain oil properties currently owned and operated by the Company
may be receptive to enhanced oil recovery procedures when economic conditions
improve.
Oil and Gas Production Operations
- ---------------------------------
Pyramid owns and operates 28 oil and gas leases (properties) located within
Kern and Santa Barbara Counties in the State of California. All of these
properties are capable of producing oil or natural gas, although not all of
these properties are considered profitable under certain economic conditions.
During 1999, the Company operated 16 leases within Kern County, with total
annual gross oil production exceeding 1,000 per lease. Production operations
primarily consist of the daily pumping of oil from a well(s) into tanks,
maintaining the production facilities both at the well and tank settings,
preparing and shipping the crude oil to buyers. Daily operations differ from
one property to another, depending on the number of wells, the depth of the
wells, the gravity of the oil produced and the location of the property. All
of Pyramid's oil production is classified as primary recovery production at
this time; although certain properties may be conducive to secondary recovery
operations in the future, depending on the prevailing price of oil.
Primary recovery of oil and gas is by means of natural flow(s) or artificial
lift of oil and gas from a single well bore. Natural gas and petroleum fluids
enter the well bore by means of reservoir pressure or gravity; fluids and
gases are moved to the surface by natural pressure or by means of artificial
lift. In secondary recovery operations, liquids or gases are injected into the
reservoirs for the purpose of augmenting reservoir energy or increasing
reservoir temperatures. Secondary recovery operations, usually, but not
always, is done after the primary-recovery phase has passed.
The Company employs field level personnel (i.e., pumpers, rig crews,
roustabouts and equipment operators) that perform the basic daily activities
associated with producing oil and gas. Daily operations include inspections of
surface facilities and equipment, gauging, reporting and shipping oil, and
routine maintenance and repair activities on wells, production facilities and
equipment. The Company owns and maintains various pieces of equipment
necessary for employees to perform repair and maintenance tasks on Company
properties. Such equipment consists of service rigs, mobile pumps, vacuum
trucks, hot oil truck, backhoe, trucks and trailers.
Occasionally, the Company drills new wells or redrills existing wells on
properties owned by the Company in an attempt to increase oil and gas
production. In the last five years, the Company has utilized the services of
outside drilling contractors for drilling new wells and redrilling existing
wells. Maintenance and repairs of existing wells to maintain or increase oil
and gas production are carried out by Company personnel on a continuing basis.
Most maintenance and repair work is performed with Company rigs.
<PAGE> 6
Economic factors associated with the price of oil and gas and the productive
output of wells determine the number of active wells the Company operates.
Under certain economic conditions, the Company has the potential to operate
approximately 130 wells, and of these, approximately 55 were in daily
operation during 1999. Operations continue to be reduced on specific
properties that are currently generating a marginal gross profit in an effort
to hold the properties until economic conditions warrant full scale
operations. The Company also owns other oil and gas interests outside of
California that it does not operate. These interests are located in Wyoming
and New York.
Marketing of Crude Oil and Natural Gas
- --------------------------------------
The Company sells its crude oil to Kern Oil & Refining and Tosco Refining
Company, accounting for approximately 50.3% and 45.7%, respectively, of
Pyramid's crude oil and gas sales in 1999. While revenue from these customers
is significant, and the loss of any one could have an adverse effect on the
Company, it is management's opinion that the oil and gas it produces could be
sold to other crude oil purchasers, refineries or pipeline companies.
Natural gas is sold to companies in the area of operations. Market demand for
Pyramid's production is subject to various influences and can never be
assured, especially in an era of changing prices. The base values for crude
oil the Company sells is set by major oil companies in response to area and
market strengths and international influences. Types and qualities of crude
oil vary substantially in base values posted by crude oil buyers in various
areas of the country. Pyramid's crude oil sales are not seasonal, but uniform
throughout the year; however, there are some seasonal influences that may
affect natural gas sales from the interests owned in the State of New York.
(C) RISKS, COMPETITION AND INDUSTRY CONDITIONS
------------------------------------------
The profitability of the Company's operations depends primarily on the
production of oil and gas in commercially profitable quantities. Oil and gas
properties often fail to provide a return sufficient to repay the substantial
sums of money required for their acquisition, exploration and development.
The acquisition, exploration and development of oil and gas properties is a
highly competitive business. Many entities with which the Company competes
have significantly greater financial and staff resources. Such competitive
disadvantage could materially and adversely affect the Company's ability to
acquire new properties or develop existing properties.
The oil and gas industry, in general, has been adversely affected by several
factors beyond the Company's control, including unstable oil and gas prices,
uncertainty regarding the effect of pricing agreements and production quotas
and allocations established by the Organization of Petroleum Exporting
Countries, political instability in the Middle East and the status of
ever-changing federal and state legislation and regulation.
<PAGE> 7
Given the uncertainty of international and domestic political actions and
their impact on the energy markets, it is difficult, if not impossible, to
predict the price or market situation for any oil or gas which is currently
owned or which could be developed by the Company. Depressed oil and gas
prices or significant curtailment in the Company's oil and gas production
from its better properties would have a material adverse effect on the
Company's operations.
(d) REGULATIONS
-----------
The Company's business is affected by an abundance of governmental laws and
regulations, including energy, environmental, conservation, tax and other laws
and regulations relating to the petroleum industry. Changes in any of these
laws and regulations could have a material and adverse effect on the Company's
business and financial stability. In view of the many uncertainties with
respect to current laws and regulations, including their applicability to the
Company, the Company cannot predict the overall effect of such laws and
regulations on future operations.
TAXATION
- --------
The operations of the Company, as is the case in the petroleum industry
generally, are significantly affected by federal tax laws. Federal, as well as
state, tax laws have many provisions applicable to corporations which could
affect the future tax liability of the Company.
ENVIRONMENTAL
- -------------
The Company's activities are subject to existing federal and state laws and
regulations governing environmental quality and pollution control. These laws
may require the acquisition of permits relating to certain ongoing operations,
for drilling, emissions, waste water disposal and other air and water quality
controls. In view of the uncertainty and unpredictability of environmental
statutes and regulations, the Company cannot ensure that such laws and
regulations will not materially and adversely affect the business of the
Company. The Company does not anticipate any material effect on its capital
expenditures or earnings as the result of governmental regulations, enacted or
proposed, concerning environmental protection or the discharge of material
into the environment. The Company is actively pursuing an ongoing policy of
upgrading and restoring older properties to comply with current and proposed
environmental regulations.
<PAGE> 8
Late in the fourth quarter of 1998, the Company was notified by the United
States Environmental Protection Agency (EPA) that the Company was identified
as a "de minimis" contributor to the Casmalia Disposal Site in Santa Barbara
County, California. The EPA claimed that all parties who contributed to the
disposal site were potentially liable for a share of the clean up costs.
After extensive examination of the EPA's documentation, upon which the EPA
based their claims, the Company determined that all of the materials sent to
the Casmalia disposal site, by the Company, between 1980 and 1983 were found
to be non-toxic, non-hazardous materials, specifically exempt under Federal
EPA statutes (RCRA Subtitle C Regulations and CERCLA, Section 101(14), 42
U.S.C. Sec 9601(14)). EPA manifests identified over 97% of the materials sent
by the Company to this site as being oil field waste water.
In December 1999, the Company formally responded to the EPA, by denying all of
the allegations and providing factual evidence in support of the Company's
position. Currently, the EPA's position is that it does not consider parties
which only sent petroleum wastes to the site liable. Therefore, management
does not believe that the Company is, or will be, liable for any clean up
costs associated with the EPA's remediation of the Casmalia Disposal Site.
(e) Commitments and Contingencies
-----------------------------
The Company is liable for future dismantlement and abandonment costs
associated with its oil and gas properties. These costs include future site
restoration, post closure and other environmental exit costs. The costs of
future dismantlement and abandonment have not been determined. Management
believes that these costs will not have a material adverse effect upon its
financial position or results of operations.
The Company is subject to certain litigation within the normal course of
business. In management's opinion, the resolution of such litigation would
not have a material adverse effect upon the financial position of the Company,
although the resolution in any reporting period of such litigation could have
a material impact on Pyramid's results of operations for that period.
<PAGE> 9
(f) OTHER
-----
The Company employed eleven full-time people as of December 31, 1999.
The Company had no material research and development costs for the three years
ended December 31, 1999.
All of the Company's revenues during 1999 were derived from domestic sources.
ITEM 2 - DESCRIPTION OF PROPERTY
- --------------------------------
(a) DESCRIPTION OF PROPERTIES
-------------------------
The principal assets of the Company consist of proven and unproven oil and
gas properties, oil and gas production related equipment and developed and
undeveloped real estate holdings. There are also well servicing and drilling
equipment, truck and automotive, office and other equipment. The Company's
oil and gas properties are located exclusively in the continental United
States, in California, Wyoming and New York.
Developed oil and gas properties are those on which sufficient wells have been
drilled to economically recover the estimated reserves calculated for the
property. Undeveloped properties do not presently have sufficient wells to
recover the estimated reserves. The Company has no significant proved
undeveloped properties at December 31, 1999 and 1998. The Company had one
producing property with proved undeveloped reserves as of December 31, 1997.
(b) OIL AND GAS PROPERTIES
----------------------
The Company's estimated future net recoverable oil and gas reserves from
proved developed properties were assembled by System Technology Associates,
Inc., independent petroleum engineers, and are as follows:
<TABLE>
<CAPTION>
Crude Oil Natural Gas
(BBLS) (MCF)
--------- -----------
<S> <C> <C>
December 31, 1999 361,000 65,000
1998 384,000 127,000
1997 435,000 145,000
1996 499,000 278,000
1995 451,000 171,000
</TABLE>
<PAGE> 10
The Company's estimated future net recoverable oil and gas reserves, noted in
the table above, have not been filed with any other Federal authority or
agency since January 1, 1999.
Using year-end oil and gas prices and lease operating expenses, the estimated
value of future net revenues to be derived from Pyramid's proved developed oil
and gas reserves, discounted at 10%, were $2,718,000 at December 31, 1999,
$1,001,000 at December 31, 1998, $1,688,000 at December 31, 1997, $3,958,000
at December 31, 1996, and $2,155,000 at December 31, 1995.
Pyramid participates in the drilling of developmental wells, no single one of
which would cause a significant change in the net reserve figure.
Pyramid's net oil and gas production after royalty and other working interests
for the past five years were as follows.
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Crude oil (Bbls) 84,000 85,000 91,000 101,000 104,000
Natural gas (MCF) 24,000 36,000 35,000 48,000 37,000
</TABLE>
Pyramid's average sales prices per barrel or per MCF of crude oil and natural
gas, respectively, and production costs per equivalent barrel (gas production
is converted to equivalent barrels at the rate of 6 MCF per barrel,
representing the estimated relative energy content of gas to oil) for the past
five years were as follows:
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sales price:
Crude oil $15.49 $10.73 $17.07 $18.80 $15.41
===== ===== ===== ===== =====
Natural gas $ 1.82 $ 1.64 $ 1.99 $ 1.35 $ 1.11
===== ===== ===== ===== =====
Production costs $ 8.70 $ 8.60 $ 9.90 $ 9.60 $ 8.50
===== ===== ===== ===== =====
</TABLE>
The average selling price of Pyramid's crude oil at December 31, 1999, was
approximately $23.00 per barrel and the average selling price of Pyramid's gas
at December 31, 1999, was approximately $2.27 per MCF.
<PAGE> 11
As of December 31, 1999, Pyramid had the following gross and net position in
wells and proved acres:
<TABLE>
WELLS PROVED ACRES
----------------- -----------------
Gross (1) Net (1) Gross (2) Net (2)
-------- ------ -------- ------
<C> <C> <C> <C>
155 131 22,217 6,489
=== === ====== =====
</TABLE>
(1) "Gross wells" represents the total number of wells in which the
Company has a working interest. "Net wells" represents the number
of gross wells multiplied by the percentage of the working
interests therein held by the Company.
(2) "Gross acreage" represents all acres in which the Company has a
working interest. "Net acres" represents the aggregate of the
working interests of the Company in the gross acres.
During the years ended December 31, 1997 and 1995, Pyramid participated in the
drilling of 1 well each year. No wells were drilled in 1999, 1998 and 1996.
All of these wells were drilled in California and completed as producing
wells.
"Unproven" oil and gas properties are those on which the presence of
commercial quantities of reserves of crude oil or natural gas has not
been established.
"Undeveloped" acreage exists on those oil and gas properties where
economically recoverable reserves are estimated to exist in proved
reservoirs from wells to be drilled in the future.
As of December 31, 1999, Pyramid held positions in unproven acreage in the
following locations:
<TABLE>
<CAPTION>
ACRES
------------------
Gross Net
------ ------
<S> <C> <C>
New York
Mount Morris and Livingston Counties 34,800 9,788
====== =====
</TABLE>
<PAGE> 12
(c) REAL PROPERTY OWNED
-------------------
Pyramid owned the following real property as of December 31, 1999, all located
in California.
County of Kern
Mullaney yard 20 acres
Grazing land 160 acres
Miller property 112 acres
Ranton property 80 acres
City of Bakersfield 3 lots
Located on the three lots of real property in the city of Bakersfield is the
Company's executive offices. This property was acquired by the Company in
1986. The office building located on this property is a one story structure
with approximately 4,200 square feet in good condition.
ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
Pyramid is not party to any proceedings or actions which management believes
might have a material effect upon its financial position or results of
operations.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of 1999.
<PAGE> 13
PART II
-------
ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- -----------------------------------------------------------------
(a) PRICE RANGE OF COMMON SHARES
The common stock of Pyramid is traded on the over-the-counter market. The
following are high and low "bid" quotations for each quarter of 1999 and 1998,
and reflect inter-dealer prices without retail markup, markdown or commission
and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
High Low
Bid Bid
---- -----
<S> <C> <C>
1999
First Quarter $ 1/8 $ 1/8
Second Quarter 1/8 1/8
Third Quarter 1/8 1/8
Fourth Quarter 5/8 1/8
1998
First Quarter 7/16 3/8
Second Quarter 13/32 5/16
Third Quarter 5/16 1/4
Fourth Quarter 1/4 1/8
</TABLE>
(b) APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS
Title of Class
--------------
Common Shares, without par value
Approximate Number of Holders of Record of
the Outstanding Common Shares as of
December 31, 1999
-------------------------------------------
738
The Company has paid no dividends on its common shares for the past five years
and does not anticipate paying any dividends in the foreseeable future.
Dividends on the common shares, if any, will be dependent upon the Company's
earnings, financial conditions and other relevant factors as determined by the
Board of Directors.
<PAGE> 14
ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
IMPACT OF CHANGING PRICES
- -------------------------
Average crude oil prices increased by approximately $4.80 per equivalent
barrel sold during 1999 as compared with average prices for 1998. Crude oil
prices during 1998 were at the lowest levels encountered for decades. Crude
oil prices rebounded during 1999 and at the end of the year were at levels not
seen since the early 90's. In 1999 there were sixty-four separate crude oil
price changes, as compared with sixty-two price changes in 1998. The price
fluctuations experienced in 1999 were extreme, the difference between the
highest and lowest posted prices in 1999 was $15.50 per barrel. By
comparison, this same differential in 1998 and 1997 was $6.00 and $8.60 per
barrel, respectively. Continuing uncertainty in crude oil prices has made it
impractical for the Company to make any commitments to further develop its oil
and gas properties. Crude oil prices must stabilize for a long-term period,
at economic levels, before resources would be available to expand the
Company's oil and gas reserves.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash decreased by $8,542 as of December 31, 1999 when compared to December
31, 1998. Operating activities in 1999 provided cash of $153,936. Capital
spending of $41,605 and principal payments on the Company's long-term debt
totaling $120,873 further reduced cash reserves in 1999. The components of
the changes in cash for 1999 are more fully described in the Statements of
Cash Flows included in Item 7 of this Form 10-KSB. Adequate funds were
available to carry out all necessary oil and gas operations and to maintain
its equipment. Management believes the Company could also secure funds, if
necessary, from other outside sources to finance acquisitions or other capital
projects.
Management continues to examine various alternatives for increasing capital
resources including, among other things, participation with industry and/or
private partners and specific rework of existing properties to enhance
production and expansion of its sales of crude oil and natural gas in
California. If necessary, Pyramid could sell certain nonessential assets to
raise capital for the benefit of these programs.
The Company has not generated sufficient cash flows to enable it to further
develop its oil and gas properties and to risk exploratory drilling costs in
attempts to expand its oil and gas reserves. The Company drilled one well in
1997 and no wells were drilled in 1998 or 1999. The Company completed a
redrill of an existing well in the second quarter of 1998.
<PAGE> 15
The Company's crude oil reserves declined for the year ended December 31,
1999, due primarily to production of existing reserves. The Company's crude
oil reserves decreased for the years ended December 31, 1998 and 1997, due
primarily to lower crude oil prices at year end.
The Company's business plan, implemented to deal with the unstable crude oil
market, has been to concentrate its efforts and resources on maintaining oil
and gas production on existing properties and deferring certain developmental
and exploration activities until crude oil prices increase. This has enabled
the Company to preserve its position on certain developmental properties
during the periods of low oil prices and to conserve its capital.
Certain properties that the Company owns have become uneconomic and have been
shut-in. When these properties are not operated, any reserves that could be
assigned to these properties are not included in the year-end engineering
report of total Company reserves. Another major factor that directly affects
the Company's future reserve base is the price of crude oil at December 31 of
any given year. The year-end price of oil and gas has a significant impact on
the estimated future net recoverable oil and gas reserves from proved
developed properties. At certain depressed price levels, some of the
Company's oil and gas properties are not economical to operate and thus its
year-end engineering reserve reports do not assign any oil and gas reserves to
these properties. Conversely, if year-end prices should increase to a certain
level, the reserves on these leases would be economic to produce and would
increase the Company's reserves.
During 1998, the Company entered into a joint venture project, with several
other oil and gas companies, to explore for and develop potential natural gas
reserves in the Solano County area of California. This project is employing
3-D seismic technology and exploratory drilling, in hopes of finding and
developing natural gas reserves on approximately 3,200 acres of leased ground.
The Company's position is that of a non-operator.
Drilling operations on the first well began early in the first quarter of
2000. This well encountered substantial mechanical problems prior to reaching
its intended depth and was abandoned, due to these problems. Although the
first well was unsuccessful, this disappointing factor does not diminish the
Company's overall view of this project, at this time. The Company expects that
the Operator will propose a second exploration well during the year 2000. At
this time, the Company has no way of accurately estimating the Company's
potential future costs associated with a second well.
The Company's expended approximately $18,000 for its share of costs in this
project during 1999. The Company is projecting to spend an additional $15,000
on this project in the first half of 2000.
The Company's business plan incorporates the concept that when crude oil
prices increase and stabilize at a profitable level, renewed developmental and
exploratory drilling activities will escalate accordingly. The plan also
projects that the Company would have sufficient cash flows from operations to
enable it to develop its existing oil and gas properties and the ability to
<PAGE> 16
acquire additional producing properties and/or exploratory prospects, thereby,
replacing and/or increasing its present oil and gas reserves.
The Company's main accounting software was updated to be compliant for the
year 2000 by it's third-party vendor in the fourth quarter of 1999. There was
no additional cost for this update. The Company's network file server was
replaced and the network software upgraded to comply with the year 2000 in the
fourth quarter of 1999. The costs to be fully compliant with the year 2000
were not material. The Company is not aware of any third-party issues
regarding year 2000 readiness. The Company has no computer systems that
interface electronically with third-party computer systems. The Company does
not have any electronic micro-controllers for any of it's equipment that is
used for it's field operations. The Company has not identified any potential
material lost revenue as a result of any non-compliance with the year 2000
issues.
FORWARD-LOOKING INFORMATION
- ---------------------------
Looking forward into 2000, crude oil prices have increased by $1.25 per barrel
as of March 28, 2000, compared to prices at December 31, 1999. There have
been twenty-three separate price changes since December 31, 1999. The Company
is unable to predict any future price changes that would impact the remainder
of 2000.
The Company has positioned itself, over the past several years, to withstand
various types of economic uncertainties, with a program of consolidating
operations on certain producing properties and concentrating on properties
that provide the major revenue sources. Several limited work-overs of certain
wells have allowed the Company to maintain its crude oil reserves for the
last three years. The Company expects to maintain its reserve base in 2000,
by routine maintenance of its existing wells.
The Company may be subject to future costs necessary for compliance with the
new implementation of air and water environmental quality requirements of the
various state and federal governmental agencies. The requirements and costs
are unknown at this time, but management believes that costs could be
significant in some cases. As the scope of the requirements become more
clearly defined, management may be better equipped to determine the true costs
to the Company.
The Company continues to be burdened with additional costs for various state
and local fees and permits under new environmental programs, the sum of which
were not material during 1999. The Company retains outside consultants to
assist the Company in maintaining compliance with these regulations. The
Company is actively pursuing an ongoing policy of upgrading and restoring
older properties to comply with current and proposed environmental
regulations. The costs of upgrading and restoring older properties to comply
with environmental regulations have not been determined. Management believes
that these costs will not have a material adverse effect upon its financial
position or results of operations.
<PAGE> 17
ANALYSIS OF SIGNIFICANT CHANGES IN RESULTS OF OPERATIONS
- --------------------------------------------------------
Results of Operations for the Fiscal Year Ended December 31, 1999
Compared to the Fiscal Year Ended December 31, 1998
- ---------------------------------------------------
REVENUES
- --------
Oil and gas sales increased by 38% for the year ended December 31, 1999, when
compared with the same period for 1998. Oil and gas sales increased by 43%
due to higher average prices for 1999. The average price of the Company's oil
and gas increased by approximately $4.80 per equivalent barrel for 1999 when
compared to 1998. Oil and gas sales decreased by 5% due to a decrease in
production for 1999. Production for 1999 decreased by approximately thirteen
barrels per day when compared with production in 1998.
OPERATING EXPENSES
- ------------------
Operating expenses decreased by 3% for the year ended December 31, 1999 when
compared with the same period of 1998. The cost to produce an equivalent
barrel of crude oil decreased by approximately twenty-five cents per barrel
for 1999 when compared to 1998.
GENERAL AND ADMINISTRATIVE
- --------------------------
General and administrative expenses decreased by 10% for the year ended
December 31, 1999 when compared to the same period for 1998. Outside
professional services were lower by 8% for 1999. Legal services were lower by
9% due to a reduction in the level of legal activity for 1999.
DEPLETION, DEPRECIATION, AMORTIZATION
AND VALUATION ALLOWANCE
- -------------------------------------
The provision for depletion, depreciation and amortization decreased by 60%
for the year ended December 31, 1999, when compared with the same period for
1998. The Company recorded an increase in valuation allowances of $270,000 in
the fourth quarter of 1998 due to an impairment in the value of certain oil
and gas properties (see Note 1 of Notes to Financial Statements, Significant
Accounting Policies, Costs Incurred in Oil and Gas Producing Activities). No
valuation allowances were recorded in 1999. The provision for depletion of
oil and gas properties also decreased in 1999 due to the decrease in the net
carrying value of oil and gas properties in 1998.
<PAGE> 18
Results of Operations for the Fiscal Year Ended December 31, 1998
Compared to the Fiscal Year Ended December 31, 1997
- ---------------------------------------------------
REVENUES
- --------
Oil and gas sales decreased by 38% for the year ended December 31, 1998, when
compared with the same period for 1997. Oil and gas sales decreased by 33%
due to lower average prices for 1998. The average price of the Company's oil
and gas decreased by approximately $5.60 per equivalent barrel for 1998 when
compared to 1997. Oil and gas sales decreased by 5% due to a decrease in
production for 1998. Production for 1998 decreased by approximately fourteen
barrels per day when compared with production in 1997. The decline in
production for 1998 is due primarily to the shut-in of certain oil and gas
properties, that were produced last year, which became uneconomic due to
the low oil prices experienced in 1998.
OPERATING EXPENSES
- ------------------
Operating expenses decreased by 19% for the year ended December 31, 1998 when
compared with the same period of 1997. The cost to produce an equivalent
barrel of crude oil decreased by approximately $1.45 per barrel for 1998 when
compared to 1997. The decrease in operating expenses is due primarily to the
shut-in of certain oil and gas properties as noted above. In addition,
expenditures were reduced for production equipment repair and maintenance, and
other well related maintenance activities on producing properties to reduce
operating costs. Labor costs were lower, due primarily to a reduction in
field personnel during 1998.
GENERAL AND ADMINISTRATIVE
- --------------------------
General and administrative expenses decreased by 16% for the year ended
December 31, 1998 when compared to the same period for 1997. Outside
professional services (legal and accounting) were lower by 9% for 1998. Legal
services were lower due to a reduction in the level of legal activity for
1998. Accounting services were lower due to a reduction in the activities
related to the preparation of the Company's tax returns for 1998.
<PAGE> 19
DEPLETION, DEPRECIATION, AMORTIZATION
AND VALUATION ALLOWANCE
- -------------------------------------
The provision for depletion, depreciation and amortization increased by 61%
for the year ended December 31, 1998, when compared with the same period for
1997. The Company recorded an increase in valuation allowances of $270,000 in
the fourth quarter of 1998 due to an impairment in the value of certain oil
and gas properties (see Note 1 of Notes to Financial Statements, Significant
Accounting Policies, Costs Incurred in Oil and Gas Producing Activities).
This was offset by a decrease in depreciation resulting from a number of the
Company's production equipment and production vehicles becoming fully
depreciated during the year.
OTHER INCOME
- ------------
Other income decreased by approximately $110,000 for the twelve months ended
December 31, 1998. In 1997, the Company sold five well servicing rigs for a
gain of $77,000. No well servicing rigs or other fixed assets were sold in
1998. The Company also sold certain excess tubular goods, production
equipment and scrap metal during 1997 for a decrease of approximately $29,000
when compared to the same period of 1998.
<PAGE> 20
ITEM 7- FINANCIAL STATEMENTS
- -----------------------------
PYRAMID OIL COMPANY
INDEX TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
Page
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS. . . . . . . . . . . . . . 21
FINANCIAL STATEMENTS:
Balance sheets - December 31, 1999 and 1998 . . . . . . . . . . 22-23
Statements of operations - years ended
December 31, 1999, 1998 and 1997 . . . . . . . . . . . . . . 24
Statements of shareholders' equity - years ended
December 31, 1999, 1998 and 1997 . . . . . . . . . . . . . . 25
Statements of cash flows - years
ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . 26-27
Notes to financial statements . . . . . . . . . . . . . . . . . 28
<PAGE> 21
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Shareholders and the Board of Directors of
Pyramid Oil Company:
We have audited the accompanying balance sheets of Pyramid Oil Company (a
California corporation) as of December 31, 1999 and 1998, and the related
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pyramid Oil Company as of
December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Los Angeles, California
February 25, 2000
<PAGE> 22
FINANCIAL STATEMENTS
PYRAMID OIL COMPANY
BALANCE SHEETS
- -----------------------------------------------------------------------------
ASSETS
------
<TABLE>
<CAPTION>
December 31,
-------------------------
1999 1998
---------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 309,775 $ 318,317
Trade accounts receivable
(net of reserve for doubtful
accounts of $4,000 in 1999
and 1998) 184,867 77,315
Crude oil inventory 35,153 38,371
Prepaid expenses 67,449 81,128
Deferred income taxes 75,650 73,350
--------- ----------
Total current assets 672,894 588,481
--------- ----------
PROPERTY AND EQUIPMENT, at cost:
Oil and gas properties and
equipment (successful
efforts method) 10,367,907 10,375,606
Drilling and operating equipment 3,179,652 3,177,722
Land, buildings and improvements 921,767 921,767
Automotive, office and
other property and equipment 1,055,857 1,036,459
---------- ----------
15,525,183 15,511,554
Less - accumulated depletion,
depreciation, amortization
and valuation allowances (13,872,078) (13,632,061)
---------- ----------
1,653,105 1,879,493
---------- ----------
$ 2,325,999 $ 2,467,974
========== ==========
The accompanying notes are an integral part of these balance sheets.
</TABLE>
<PAGE> 23
PYRAMID OIL COMPANY
BALANCE SHEETS
- -----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
December 31,
----------------------------
1999 1998
---------- ----------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 44,621 $ 52,975
Accrued professional fees 24,000 18,250
Accrued taxes, other than
income taxes 20,567 27,704
Accrued payroll and related costs 30,985 25,191
Accrued royalties payable 74,082 42,331
Accrued insurance 21,613 23,756
Current maturities of long-term debt 17,604 17,604
Line of credit -- 100,000
--------- ----------
Total current liabilities 233,472 307,811
--------- ----------
LONG-TERM DEBT, net of current
maturities 4,272 25,145
--------- ----------
DEFERRED INCOME AND OTHER TAXES 118,121 115,821
--------- ----------
COMMITMENTS AND CONTINGENCIES (Note 6)
SHAREHOLDERS' EQUITY:
Common stock, no par value -
Authorized - 10,000,000 shares
Issued and outstanding -
2,494,430 shares 1,071,610 1,071,610
Retained earnings 898,524 947,587
---------- ----------
1,970,134 2,019,197
---------- ----------
$ 2,325,999 $ 2,467,974
========== ==========
The accompanying notes are an integral part of these balance sheets.
</TABLE>
<PAGE> 24
PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES: $ 1,309,136 $ 951,015 $ 1,537,832
---------- ---------- ----------
COSTS AND EXPENSES:
Operating expenses 760,744 780,259 962,119
Exploration Costs 27,976
General and administrative 299,245 332,513 395,032
Taxes, other than income and
payroll taxes 51,744 59,743 61,604
Provision for depletion,
depreciation, amortization
and valuation allowance 240,017 607,067 377,209
Other costs and expenses 11,093 16,082 13,153
--------- --------- ----------
1,390,819 1,795,664 1,809,117
--------- --------- ----------
OPERATING LOSS ( 81,683) (844,649) (271,285)
--------- --------- ----------
OTHER INCOME (EXPENSE):
Interest income 11,104 30,192 23,309
Other income 29,465 21,594 131,834
Interest expense ( 6,824) ( 7,696) ( 8,648)
---------- --------- ---------
33,745 44,090 146,495
---------- --------- ---------
LOSS BEFORE INCOME
TAX PROVISION ( 47,938) ( 800,559) ( 124,790)
Income tax provision 1,125 1,125 1,133
---------- --------- ---------
NET LOSS $ ( 49,063) $ ( 801,684) $ ( 125,923)
========== ========= =========
BASIC LOSS
PER COMMON SHARE $ (.02) $ (.32) $ (.05)
========== ========= =========
DILUTED LOSS
PER COMMON SHARE $ (.02) $ (.32) $ (.05)
========== ========= =========
Weighted average number of
common shares outstanding 2,494,430 2,494,430 2,494,430
========== ========= ==========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> 25
PYRAMID OIL COMPANY
STATEMENTS OF SHAREHOLDERS' EQUITY
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Shares
Issued and Common Retained
Outstanding Stock Earnings
------------- ---------- ----------
<S> <C> <C> <C>
Balances, December 31, 1996 2,494,430 $1,071,610 $1,875,194
Net loss -- -- (125,923)
--------- --------- ---------
Balances, December 31, 1997 2,494,430 1,071,610 1,749,271
Net loss -- -- ( 801,684)
--------- --------- ---------
Balances, December 31, 1998 2,494,430 1,071,610 947,587
Net loss -- -- ( 49,063)
--------- --------- ---------
Balances, December 31, 1999 2,494,430 $1,071,610 $ 898,524
========= ========= =========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> 26
PYRAMID OIL COMPANY
STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------
1999 1998 1997
--------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $( 49,063) $(801,684) $(125,923)
Adjustments to reconcile net
loss to net cash (used in)
provided by operating activities:
Provision for depletion,
depreciation, amortization
and valuation allowance 240,017 607,067 377,209
Exploration costs 27,976 --
Gain on sale of
property and equipment -- -- (77,294)
Changes in operating assets
and liabilities:
(Increase) decrease in trade
accounts receivable (107,552) 76,506 106,732
Decrease in crude
oil inventories 3,218 22,823 56,698
Decrease in prepaid expenses 13,679 12,459 986
Increase (decrease) in
accounts payable and
accrued liabilities 25,661 (58,927) (72,670)
------- ------- -------
Net cash provided by (used in)
operating activities 153,936 (141,756) 265,738
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 41,605) (214,824) (509,532)
Proceeds from sale of
property and equipment -- -- 223,700
------- ------- -------
Net cash used in
investing activities ( 41,605) (214,824) (285,832)
------- ------- -------
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> 27
PYRAMID OIL COMPANY
STATEMENTS OF CASH FLOWS
(CONTINUED)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on line
of credit (181,650) ( 62,596) ( 30,000)
Proceeds from line of credit 81,650 162,596 30,000
Principal payments on long-term
debt ( 20,873) ( 26,097) ( 60,955)
------- ------- -------
Net cash (used in) provided by
financing activities (120,873) 73,903 (60,955)
------- ------- -------
Net decrease in cash ( 8,542) (282,677) ( 81,049)
Cash at beginning of year 318,317 600,994 682,043
------- ------- -------
Cash at end of year $ 309,775 $ 318,317 $ 600,994
======= ======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year
for interest $ 6,824 $ 7,696 $ 8,648
======= ======= =======
Cash paid during the year
for income taxes $ 1,125 $ 1,125 $ 1,133
======= ======= =======
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> 28
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
- ----------------------------------------------------------------------------
1. Significant Accounting Policies
-------------------------------
Nature of Operations
--------------------
Pyramid Oil Company (the Company), a California Corporation, has been in
the oil and gas business continuously since it was incorporated on
October 9, 1909. The Company is in the business of exploration,
development and production of crude oil and natural gas. The Company
operated and has interests in 28 oil and gas leases in Kern and Santa
Barbara Counties in the State of California. The Company also owns oil
and gas interests in Wyoming and New York that it does not operate. The
Company grants short-term credit to its customers and generally receives
payment within 30 days.
Pervasiveness of Estimates
--------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Costs Incurred in Oil and Gas Producing Activities
--------------------------------------------------
The Company has adopted the "successful efforts" method of accounting
for its oil and gas exploration and development activities, as set forth
in the Statement of Financial Accounting Standards No. 19, as amended,
issued by the Financial Accounting Standards Board.
The Company initially capitalizes expenditures for oil and gas property
acquisitions until they are either determined to be successful (capable
of commercial production) or unsuccessful. The carrying value of all
undeveloped oil and gas properties is evaluated periodically and reduced
if such carrying value appears to have been impaired. Leasehold costs
relating to successful oil and gas properties remain capitalized while
leasehold costs which have been proven unsuccessful are charged to
operations in the period the leasehold costs are proven unsuccessful.
Costs of carrying and retaining unproved properties are expensed as
incurred.
<PAGE> 29
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- ----------------------------------------------------------------------------
The costs of drilling and equipping development wells are capitalized,
whether the wells are successful or unsuccessful. The costs of drilling
and equipping exploratory wells are capitalized until they are
determined to be either successful or unsuccessful. If the wells are
successful, the costs of the wells remain capitalized. If, however, the
wells are unsuccessful, the capitalized costs of drilling the wells, net
of any salvage value, are charged to operations in the period the wells
are determined to be unsuccessful.
The Company adopted the Financial Accounting Standards Board Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of" (the
Statement). The Statement specifies when an impairment loss should be
recognized and how impairment losses should be measured for long-lived
assets to be held and used and for long-lived assets to be disposed of.
In accordance with the Statement, the costs of proved oil and gas
properties and equipment are periodically assessed on a lease by lease
basis to determine if such costs exceed undiscounted future cash flows,
and if conditions warrant an impairment reserve will be provided based on
the estimated future discounted cash flows. The Company recorded an
impairment of $270,000 in the fourth quarter of 1998 under these
guidelines. This impairment is reflected as additional depletion,
depreciation, amortization and valuation allowance in the accompanying
statement of operations.
Depletion, Depreciation, and Amortization
-----------------------------------------
Depletion of leasehold costs of producing oil and gas properties is
provided on the unit-of-production method, by individual property unit,
based on estimated recoverable proved reserves. Depreciation and
amortization of the costs of producing wells and related equipment are
provided on the unit-of-production method, by individual property unit,
based on estimated recoverable proved developed reserves. Amortization
of the costs of undeveloped oil and gas properties is based on the
Company's experience, giving consideration to the holding periods of
leaseholds. The average depletion per equivalent barrel of crude oil
produced for 1999, 1998 and 1997 were $1.94, $5.78 and $2.69,
respectively.
Drilling and operating equipment, buildings, automotive, office and
other property and equipment and leasehold improvements are stated at
cost. Depreciation and amortization are computed using the straight-line
method over the shorter of the estimated useful lives or the applicable
<PAGE> 30
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- ------------------------------------------------------------------------------
lease terms (range of 3 to 19 years). Any permanent impairment of the
carrying value of property and equipment is provided for at the time such
impairments become known.
Maintenance and Repairs
-----------------------
Maintenance, repairs and replacement expenditures are charged to
operations as incurred, while major renewals and betterments are
capitalized and depreciated over their useful lives.
Retirement or Disposal of Properties and Equipment
--------------------------------------------------
Costs and accumulated depletion, depreciation, amortization and
valuation allowances of property and equipment retired, abandoned, or
otherwise disposed of are removed from the accounts upon disposal, and
any resulting gain or loss is included in operations in the year of
disposition. However, upon disposal of a portion of an oil and gas
property, any proceeds received are treated as a recovery of cost and no
gain or loss is recognized in the year of disposition.
Income Taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the
period that includes the enactment date.
Concentration of Credit Risk
----------------------------
The Company sells its crude oil to Kern Oil & Refining and Tosco Refining
Company, accounting for approximately 50.3%, and 45.7%, respectively, of
Pyramid's crude oil and gas sales in 1999. While revenue from these
customers is significant, and the loss of any one could have an adverse
effect on the Company, it is management's opinion that the oil and gas it
produces could be sold to other crude oil purchasers, refineries or
pipeline companies.
<PAGE> 31
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- ------------------------------------------------------------------------------
2. Long-Term Debt and Line of Credit
---------------------------------
Long-term debt at December 31, 1999 and 1998, is summarized as follows:
<TABLE>
December 31,
<CAPTION> ----------------------
1999 1998
--------- ---------
<S> <C> <C>
Note payable to a bank, secured by a deed
of trust on the corporate office, payable
in monthly installments of $1,467 principal,
with interest at the prime rate (8.5 % at
December 31, 1999) plus 1.25%, payments
continuing through March 2001, with the
remaining principal and interest due in
March 2001. $ 21,876 $ 42,749
Line of credit -- 100,000
------- -------
21,876 142,749
Less - current maturities ( 17,604) (117,604)
------- -------
$ 4,272 $ 25,145
======= =======
</TABLE>
At December 31, 1999 approximately $379,000 of gross property and equipment
was pledged as collateral to secure $22,000 principal amount of long-term
debt.
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
<S> <C>
Year ending December 31, 2000 $ 17,604
2001 4,272
-------
$ 21,876
=======
</TABLE>
<PAGE> 32
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
At December 31, 1999, the Company had an unsecured line of credit with a bank,
under which the Company may borrow up to $100,000 through May 31, 2000.
Interest on any borrowing is accrued at the bank's index rate plus 0.50
percentage points. The bank's index rate was 8.5 % at December 31, 1999.
3. Income Taxes
------------
Income tax provision consists of the following:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1999 1998 1997
------- ------- ------
<S> <C> <C> <C>
Federal income taxes:
Current $ -- $ -- $ --
Deferred -- -- --
------- ------- -------
-- -- --
------- ------- -------
State income taxes:
Current 1,125 1,125 1,133
Deferred -- -- --
------- ------- -------
1,125 1,125 1,133
------- ------- -------
Income tax provision $ 1,125 $ 1,125 $ 1,133
======= ======= =======
</TABLE>
<PAGE> 33
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
Differences exist between certain accounting policies and related provisions
included in federal income tax rules. The amounts by which these differences
and other factors cause the total income tax provision to differ from an
amount computed by applying the federal statutory income tax rate to financial
income is set forth in the following reconciliation:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Federal income tax expense
(benefit) at statutory rate $ (16,299) $(180,390) $ (42,429)
Net operating loss carryover 14,402 183,591 42,269
Other 3,022 (2,076) 1,293
-------- -------- --------
Income tax provision $ 1,125 $ 1,125 $ 1,133
======== ======== ========
</TABLE>
The components of net deferred tax asset (liability) are as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Current deferred taxes:
Gross assets $ 75,650 $ 73,350 $ 79,853
Gross liabilities -- -- --
---------- ---------- ----------
75,650 73,350 79,853
---------- ---------- ----------
Noncurrent deferred taxes:
Gross assets 3,193,122 3,121,533 2,982,570
Gross liabilities ( 343,262) ( 435,430) ( 458,840)
Valuation allowance (2,967,981) (2,801,924) (2,646,054)
---------- --------- ---------
( 118,121) ( 115,821) ( 122,324)
---------- --------- ---------
$( 42,471) $( 42,471) $( 42,471)
========== ========= =========
</TABLE>
<PAGE> 34
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
The tax effect of significant temporary differences representing deferred tax
assets and (liabilities) are as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Accounts receivable $ 1,600 $ 1,600 $ 1,600
Inventory 55,200 55,200 55,200
Property and equipment ( 343,262) ( 435,430) ( 458,640)
Net operating loss
carry forwards 1,418,131 1,394,984 1,288,935
Investment tax credits 162,556 162,556 162,556
Statutory depletion
carryover 1,612,435 1,563,993 1,531,079
Accrued liabilities 18,850 16,550 23,053
Valuation allowance (2,967,981) (2,801,924) (2,646,254)
---------- --------- ---------
$( 42,471) $( 42,471) $( 42,471)
========== ========= =========
</TABLE>
At December 31, 1999, a valuation allowance has been provided against a
significant portion of the deferred tax assets generated by net operating loss
carryforwards, investment tax credits and the statutory depletion carryover
due to the uncertainty of their future utilization.
The Company has federal income tax net operating loss carry forwards of
approximately $4,019,000, which expire, to the extent not used, starting in
2001. For California franchise tax purposes, as of December 31, 1999, the
Company has unused net operating loss carryforwards of approximately $555,000,
a portion of which expire each year through 2001.
At December 31, 1999, the Company has, for federal income tax purposes, a
statutory depletion carryover of approximately $4,742,000, which currently
has no expiration date.
As of December 31, 1999, the Company has an investment tax credit carryforward
of approximately $163,000 available to reduce future taxes payable for
financial reporting and federal income tax purposes. The investment tax
credit, to the extent not used, will expire in varying amounts from 1999
through 2000. Upon expiration, the Company will be able to claim a current
deduction on their federal tax return.
<PAGE> 35
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
4. Related-Party Transaction
-------------------------
Effective January 1, 1990, John H. Alexander, an officer and director of the
Company participated with a group of investors that acquired the mineral and
fee interest on one of the Company's oil and gas leases in the Carneros Creek
field after the Company declined to participate. The thirty-three percent
interest owned by Mr. Alexander represents a minority interest in the investor
group. Royalties on oil and gas production from this property paid to the
investor group approximated $81,000, $69,000 and $130,000 in 1999, 1998 and
1997, respectively.
5. Fourth Quarter Results (Unaudited)
---------------------------------
During the fourth quarter of 1999, 1998 and 1997, the Company adjusted the
provision for depletion, depreciation and amortization to reflect the
adjustments made to the Company's oil and gas reserves by independent
consultants. The effect of these adjustments was to increase net income by
approximately $42,000, $54,000 and $50,000 in 1999, 1998 and 1997,
respectively. The Company recorded an increase in valuation allowances of
$270,000 in the fourth quarter of 1998 due to an impairment in the value of
certain oil and gas properties (see Note 1 of Notes to Financial Statements,
Significant Accounting Policies, Costs Incurred in Oil and Gas Producing
Activities).
6. Commitments and Contingencies
-----------------------------
The Company is liable for future dismantlement and abandonment costs
associated with its oil and gas properties. These costs include future site
restoration, post closure and other environmental exit costs. The costs of
future dismantlement and abandonment have not been determined. Management
believes that these costs will not have a material adverse effect upon its
financial position or results of operations.
The Company is subject to certain litigation within the normal course of
business. In management's opinion, the resolution of such litigation would
not have a material adverse effect upon the financial position of the Company,
although the resolution in any reporting period of such litigation could have
a material impact on Pyramid's results of operations for that period.
<PAGE> 36
PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
During 1998, the Company entered into a joint venture project, with several
other oil and gas companies, to explore for and develop potential natural gas
reserves in the Solano County area of California. This project is employing
3-D seismic technology and exploratory drilling, in hopes of finding and
developing natural gas reserves on approximately 3,200 acres of leased ground.
The Company's position is that of a non-operator.
Drilling operations on the first well began early in the first quarter of
2000. This well encountered substantial mechanical problems prior to reaching
its intended depth and was abandoned, due to these problems. Although the
first well was unsuccessful, this disappointing factor does not diminish the
Company's overall view of this project, at this time. The Company expects that
the Operator will propose a second exploration well during the year 2000. At
this time, the Company has no way of accurately estimating the Company's
potential future costs associated with a second well.
The Company's expended approximately $18,000 for its share of costs in this
project during 1999. The Company is projecting to spend an additional $15,000
on this project in the first half of 2000.
Late in the fourth quarter of 1998, the Company was notified by the United
States Environmental Protection Agency (EPA) that the Company was identified
as a "de minimis" contributor to the Casmalia Disposal Site in Santa Barbara
County, California. The EPA claimed that all parties who contributed to the
disposal site were potentially liable for a share of the clean up costs.
After extensive examination of the EPA's documentation, upon which the EPA
based their claims, the Company determined that all of the materials sent to
the Casmalia disposal site, by the Company, between 1980 and 1983 were found
to be non-toxic, non-hazardous materials, specifically exempt under Federal
EPA statutes (RCRA Subtitle C Regulations and CERCLA, Section 101(14), 42
U.S.C. Sec 9601(14)). EPA manifests identified over 97% of the materials sent
by the Company to this site as being oil field waste water.
In December 1999, the Company formally responded to the EPA, by denying all of
the allegations and providing factual evidence in support of the Company's
position. Currently, the EPA's position is that it does not consider parties
which only sent petroleum wastes to the site liable. Therefore, management
does not believe that the Company is, or will be, liable for any clean up
costs associated with the EPA's remediation of the Casmalia Disposal Site.
<PAGE> 37
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
OIL AND GAS PRODUCING ACTIVITIES
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
Statement of Financial Accounting Standards No. 19 (SFAS No. 19), "Financial
Accounting and Reporting by Oil and Gas Producing Companies", as amended,
requires disclosure of certain financial data for oil and gas operations and
reserve estimates of oil and gas. This information, presented here, is
intended to enable the reader to better evaluate the operations of the
Company. All of the Company's oil and gas reserves are located in the United
States.
The aggregate amounts of capitalized costs relating to oil and gas producing
activities and the related accumulated depletion, depreciation, and
amortization and valuation allowances as of December 31, 1999, 1998 and 1997
were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Proved properties $10,189,100 $10,197,000 $ 9,995,900
Unproved properties
being amortized 178,600 178,600 178,600
Unproved properties
not being amortized -- -- --
Accumulated depletion,
depreciation, amortization
and valuation allowances (9,802,700) (9,632,600) (9,109,500)
--------- --------- ---------
$ 565,000 $ 743,000 $ 1,065,000
========= ========= =========
</TABLE>
<PAGE> 38
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
The estimated quantities and the change in proved reserves, both developed and
undeveloped, for the Company are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
Oil Gas Oil Gas Oil Gas
(MBbls) (MMCF) (MBbls) (MMCF) (MBbls) (MMCF)
----- ---- ----- ---- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Proved reserves:
Beginning of year 384 127 462 169 517 294
Revisions of previous
estimates 61 (38) 2 ( 6) (20) (126)
Extensions, discoveries
and other additions -- -- 5 -- 56 36
Production (84) (24) ( 85) (36) ( 91) (35)
---- ---- ---- ---- ---- ----
End of year 361 65 384 127 462 169
==== ==== ==== ==== ==== ====
Proved developed reserves:
Beginning of year 384 127 435 145 499 278
==== ==== ==== ==== ==== ====
End of year 361 65 384 127 435 145
==== ==== ==== ==== ==== ====
</TABLE>
The foregoing estimates have been prepared by the Company from data prepared
by an independent petroleum engineer in respect to certain producing
properties. Revisions in previous estimates as set forth above resulted from
analysis of new information, as well as from additional production experience
or from a change in economic factors.
The reserve estimates are believed to be reasonable and consistent with
presently known physical data concerning size and character of the reservoirs
and are subject to change as additional knowledge concerning the reservoirs
becomes available.
<PAGE> 39
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
DECEMBER 31, 1999
- ---------------------------------------------------------------------------
The present value of estimated future net revenues of proved developed
reserves, discounted at 10%, were as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Proved developed reserves
(Present value before
income taxes) $2,718,000 $1,001,000 $1,688,000
========= ========= =========
</TABLE>
SFAS No. 69, "Disclosures About Oil and Gas Producing Activities", requires
certain disclosures of the costs and results of exploration and production
activities and established a standardized measure of oil and gas reserves and
the year-to-year changes therein.
In addition to the foregoing disclosures, SFAS No. 69 established a
"Standardized Measure of Discounted Future Net Cash Flows and Changes Therein
Relating to Proved Oil and Gas Reserves".
Costs incurred, both capitalized and expensed, of oil and gas property
acquisition, exploration and development for the years ended December 31,
1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Property acquisition costs $ -- $ 14,000 $ 4,000
Exploration costs 28,000 -- --
Development costs -- 201,000 435,700
</TABLE>
<PAGE> 40
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
DECEMBER 31, 1999
- ---------------------------------------------------------------------------
The results of operations for oil and gas producing activities for the years
ended December 31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Sales $ 1,309,000 $ 951,000 $ 1,537,800
Production costs 800,600 826,800 1,015,300
Exploration costs 28,000 -- --
Depletion, depreciation,
and amortization 170,200 523,100 260,800
--------- --------- ---------
310,200 ( 398,900) 261,700
Income tax provision 1,200 1,200 1,200
--------- --------- ---------
Results of operations from
production activities $ 309,000 $ ( 400,100) $ 260,500
========= ========= =========
</TABLE>
The standardized measure of discounted estimated future net cash flows
relating to proved oil and gas reserves for the years ended December 31, 1999,
1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Future cash inflows $10,401,000 $ 3,262,000 $ 6,682,000
Future development and
production costs 6,906,000 1,973,000 4,368,000
Future income tax expense 12,000 12,000 12,000
---------- ---------- ----------
Future net cash flow 3,483,000 1,277,000 2,302,000
10% annual discount 775,000 286,000 570,000
Standardized measure ---------- ---------- ----------
of discounted future
net cash flow $ 2,708,000 $ 991,000 $ 1,732,000
========== ========== ==========
</TABLE>
<PAGE> 41
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
DECEMBER 31, 1999
- -----------------------------------------------------------------------------
The principal changes in the standardized measure of discounted future net
cash flows during the years ended December 31, 1999, 1998 and 1997 were as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Extensions $ -- $ 11,000 $ 239,000
Revisions of previous estimates
Price changes 1,739,000 (948,000) (1,998,000)
Quantity estimate 403,000 2,000 (162,000)
Other, net ( 17,000) ( 56,000) (317,000)
Development costs incurred -- 181,000 440,000
Changes in estimated future
development costs -- 19,000 (503,000)
Sales of oil and gas, net of
production costs (508,000) (124,000) (523,000)
Accretion of discount 100,000 174,000 415,000
---------- ---------- ----------
1,717,000 ( 741,000) (2,409,000)
Net change in income taxes -- -- --
---------- ---------- ----------
Net increase (decrease) $1,717,000 $( 741,000) $(2,409,000)
========== ========== ==========
</TABLE>
<PAGE> 42
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
DECEMBER 31, 1999
- ------------------------------------------------------------------------------
Estimated future cash inflows are computed by applying year-end prices of oil
and gas to year-end quantities of proved reserves. Estimated future
development and production costs are determined by estimating the expenditures
to be incurred in developing and producing the proved oil and gas reserves at
the end of the year, based on year-end costs and assuming continuation of
existing economic conditions. Estimated future income tax expense is
calculated by applying the year-end effective tax rate to estimated future
pretax net cash flows related to proved oil and gas reserves, less the tax
basis of the properties involved.
These estimates are furnished and calculated in accordance with requirements
of the Financial Accounting Standards Board and the Securities and Exchange
Commission. Because of the unpredictable variances in expenses and capital
forecasts, crude oil and natural gas price changes being largely influenced
and controlled by United States and foreign governmental actions, and the fact
that the basis for such estimates vary significantly, management believes the
usefulness of these projections is limited. Estimates of future net cash
flows do not represent management's assessment of future profitability or
future actual cash flows of the Company.
It should be recognized that applying current costs and prices and a ten
percent standard discount rate allows for comparability but does not convey
absolute value. The discounted amounts arrived at are only one measure of
financial quantification of proved reserves.
The decrease of $741,000 and $2,409,000 in the Company's standardized measure
of future net cash flows for the years ended December 31, 1998 and 1997,
respectively, is due primarily to revisions of previous estimates due to price
changes. The changes in crude oil prices at the end of each year has a
significant impact on the valuation of the Company's reserves and discounted
future net cash flows. Lower crude oil prices at the end of 1998 and 1997
reduced the discounted future net cash flows by approximately $948,000 and
$1,998,000, respectively.
The increase in the standardized measure of discounted future net cash flows
at December 31, 1999 of $1,717,000 is due primarily to higher crude oil prices
at year end.
<PAGE> 43
PYRAMID OIL COMPANY
SUPPLEMENTAL INFORMATION (UNAUDITED)
QUARTERLY RESULTS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
REVENUES:
Quarter Ended:
March 31 $ 213,349 $ 252,780
June 30 312,762 230,186
September 30 403,579 260,173
December 31 379,446 207,876
---------- ----------
$ 1,309,136 $ 951,015
========== ==========
NET INCOME (LOSS):
Quarter Ended:
March 31 $( 92,081) $( 158,111)
June 30 ( 41,361) ( 165,479)
September 30 56,345 ( 114,025)
December 31 (a) 28,034 ( 364,069)
---------- ----------
$( 49,063) $( 801,684)
========== ==========
INCOME (LOSS) PER COMMON SHARE:
Quarter Ended:
March 31 $ (.04) $ (.06)
June 30 (.02) (.07)
September 30 .02 (.05)
December 31 (a) .02 (.14)
---------- ----------
$ (.02) $ (.32)
========== ==========
</TABLE>
(a) Adjustments to depletion, depreciation, amortization and valuation
allowances made by the Company are recorded in the fourth quarter amounts (see
Note 5 of Notes to Financial Statements included in Item 7 of this Form
10-KSB). The adjustments were required due to changes in estimates of oil and
gas reserves by independent consultants.
<PAGE> 44
PYRAMID OIL COMPANY
CORPORATE INFORMATION
Board of Directors....J. Ben Hathaway, President, Pyramid Oil Company
John H. Alexander, Vice President, Pyramid Oil Company
John E. Turco, Private Investor
Thomas W. Ladd, Independent Oil Producer and Geologist
Gary L. Ronning, Independent Oil Producer and Geologist
Officers..............J. Ben Hathaway, President and Chairman of the Board
John H. Alexander, Vice President
Lee G. Christianson, Secretary-Treasurer
Accountants and
Business Advisors.....Arthur Andersen LLP - Los Angeles, California
Transfer Agent
and Registrar.........U.S. Stock Transfer Corp.
1745 Gardena Avenue, Suite 200
Glendale, California 91204
Corporate Offices.....2008 21st Street
Bakersfield, California 93302
District Offices......Bakersfield, California
Legal Counsel.........Troy & Gould - Los Angeles, California
Ganong Law Office - Bakersfield, California
Investor
Information...........Availability of Form 10-KSB: The Annual Report of
Pyramid Oil Company on Form 10-KSB, as filed with the
Securities and Exchange Commission, is available to any
stockholder upon request without charge. Please
address all such requests to:
Corporate Secretary
Pyramid Oil Company
P.O. Box 832
Bakersfield, California 93302
COMMON STOCK: The Company's common stock is traded on
the Over-The-Counter Bulletin Board market using symbol
PYOL.
<PAGE> 45
ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- ------------------------------------------------------
ON ACCOUNTING AND FINANCIAL DISCLOSURE
--------------------------------------
None
PART III
ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
- -----------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------
The Company hereby incorporates by reference the information to be contained
under the section entitled "Directors and Executive Officers" or a similarly
entitled section from its definitive Proxy Statement to be filed with the
Securities and Exchange Commission in connection with its 2000 Annual Meeting
of Shareholders.
ITEM 10 - EXECUTIVE COMPENSATION
- --------------------------------
The Company hereby incorporates by reference the information to be contained
under the section entitled "Compensation of Directors and Executive Officers"
or a similarly entitled section from its definitive Proxy Statement to be
filed with the Securities and Exchange Commission in connection with its 2000
Annual Meeting of Shareholders.
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------------------------------------------------------------------------
The Company hereby incorporates by reference the information to be contained
under the section entitled "Voting Securities and Principal Holders Thereof"
or a similarly entitled section from its definitive Proxy Statement to be
filed with the Securities and Exchange Commission in connection with its 2000
Annual Meeting of Shareholders.
<PAGE> 46
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
The information in Note 4 of Notes to Financial Statements included in Item 7
of this Form 10-KSB is incorporated herein by reference.
Effective January 1, 1990, John H. Alexander, an officer and director of the
Company participated with a group of investors that acquired the mineral and
fee interest on one of the Company's oil and gas leases in the Carneros Creek
field after the Company declined to participate. The thirty-three percent
interest owned by Mr. Alexander represents a minority interest in the
investor group. Royalties on oil and gas production from this property paid
to the investor group approximated $81,000 in 1999, $69,000 in 1998 and
$130,000 in 1997.
<PAGE> 47
PART IV
ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) 1. Financial Statements
--------------------
These documents are listed and included in Part II, Item 7 of this
report:
Report of Independent Public Accountants
Balance Sheets at December 31, 1999 and 1998.
Statements of Operations for the three years in the period
ended December 31, 1999.
Statements of Shareholders' Equity for the three
years in the period ended December 31, 1999.
Statements of Cash Flows for the three
years in the period ended December 31, 1999.
Notes to Financial Statements.
(a) 3. Exhibit
-------
3.1 Registrant's Articles of Incorporation (1)
3.2 Registrant's By Laws (1)
3.2.1 Registrant's Amendment to the By Laws (2)
10.1 Agreement and Plan of Reorganization and Corporate
Separation, dated January 1, 1987. (3)
16.1 Letter regarding the change in Registrant's certified
accountant. (4)
27 Financial Data schedule
(1) Incorporated by reference from Exhibits 18-1 and 18-2, respectively, to
the Registrant's 1971 Form 10.
(2) Incorporated by reference from the Registrant's August 25, 1986 Proxy
Statement.
(3) Incorporated by reference from Exhibit 1 to the Registrant's August 25,
1986 Proxy Statement.
(4) Incorporated by reference from Exhibit 1 to the Registrant's June 4,
1987 Form 8-K.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the fourth quarter of 1999.
<PAGE> 48
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
March 29, 2000 By: J. BEN HATHAWAY
----------------------
J. Ben Hathaway
Director/President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
J. BEN HATHAWAY Director/President March 29, 2000
- ---------------------------
J. Ben Hathaway
JOHN H. ALEXANDER Director/Vice President March 29, 2000
- ---------------------------
John H. Alexander
THOMAS W. LADD Director March 29, 2000
- ---------------------------
Thomas W. Ladd
GARY L. RONNING Director March 29, 2000
- ---------------------------
Gary L. Ronning
Director March 29, 2000
- ---------------------------
John E. Turco
LEE G. CHRISTIANSON Corporate Secretary/ March 29, 2000
- --------------------------- Principal Accounting Officer
Lee G. Christianson
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-12-1999
<PERIOD-END> DEC-12-1999
<CASH> 309,775
<SECURITIES> 0
<RECEIVABLES> 188,867
<ALLOWANCES> 4,000
<INVENTORY> 35,153
<CURRENT-ASSETS> 672,894
<PP&E> 15,525,183
<DEPRECIATION> 13,872,078
<TOTAL-ASSETS> 2,325,999
<CURRENT-LIABILITIES> 233,472
<BONDS> 0
0
0
<COMMON> 1,071,610
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,325,999
<SALES> 1,309,136
<TOTAL-REVENUES> 1,349,705
<CGS> 1,080,481
<TOTAL-COSTS> 1,379,726
<OTHER-EXPENSES> 11,093
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,824
<INCOME-PRETAX> (47,938)
<INCOME-TAX> 1,125
<INCOME-CONTINUING> (49,063)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (49,063)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
