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Pyramid Oil Company Reports Third Quarter and Nine-Month Financial Results

Company Delivers Continued Profitability and Improved Financial Strength; Value of Cash, Short-Term Investments and CDs Increases to $1.45 per Share

BAKERSFIELD, CA -- (Marketwire) -- 11/14/12 -- Pyramid Oil Company (NYSE MKT: PDO) today announced financial results for its third quarter and nine-month period ended September 30, 2012.

Third quarter revenue was $1.2 million versus $1.4 million in the same quarter a year ago. The decline was attributable to lower average crude sales prices and a decrease in crude production volumes. The Company realized third quarter crude prices per average barrel of oil equivalent (BOE) of $99.81 versus $105.06 per average BOE in the same quarter last year, while its net revenue share of crude oil sales decreased by approximately 1,400 barrels versus the 2011 third quarter.

Operating income was $286,000 versus a loss from operations of $162,000 in the third quarter last year. Last year's operating results included a $673,000 non-cash valuation allowance associated with the Pike 1-H horizontal joint venture well. Third quarter net income was $208,000, or $0.04 per share, versus net income of $4,000, or $0.00 per share in comparable prior-year quarter.

For the nine-month period, revenue was $3.9 million versus $4.3 million during the same period of 2011. Operating income was $1.1 million versus $726,000 in the comparable prior-year period, while net income was $869,000, or $0.19 per share, compared with net income of $751,000, or $0.16 per share, in the same period a year ago. Operating cash flow at the nine-month mark was to $1.7 million versus $2.0 million during the first nine months of last year.

Pyramid further strengthened its financial position during the quarter, as cash, cash equivalents and short-term investments increased to $5.7 million from $5.3 million at the end of the second quarter and $4.9 million at December 31, 2011. Working capital improved to $6.1 million, while total current assets have increased to $6.7 million. The Company also held $1.1 million in CDs at the end of the quarter, which, when combined with cash, cash equivalents and short-term investments, was $6.8 million, or $1.45 per share. Pyramid's balance sheet remained free of long-term debt at the close of the quarter.

"Another quarter of solid earnings and cash flow has added to the strength of our financial position, giving us increased flexibility as we seek opportunities to grow the Company," said John Alexander, president and CEO. "Enhancing shareholder value remains our primary focus as we evaluate these opportunities."

Pyramid is in the process of acquiring Victory Oil Company's 32% working interest in the Pike 1-H well and 50 acres of surface and mineral interests associated with Victory's Murphy Fee property. The transaction will give Pyramid 100% working interest in the Pike 1-H, which was drilled as a joint venture by Pyramid and Victory during the first quarter of 2011. Both Companies expect to conclude the transaction in the fourth quarter of 2012.

About Pyramid Oil Company
Pyramid Oil Company has been in the oil and gas business continuously since incorporating in 1909. Pyramid acquires interests in land and producing properties through acquisition and lease, and then drills and/or operates crude or natural gas wells in an effort to discover or produce oil and/or natural gas. More information about the Company can be found at:

Safe Harbor Statement
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements regarding the completion and testing of wells. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Factors that could cause or contribute to such differences include, but are not limited to the value of crude oil or the performance of wells.

                             PYRAMID OIL COMPANY
                          STATEMENTS OF OPERATIONS

                             Three months ended         Nine months ended
                                September 30,             September 30,
                          ------------------------  ------------------------

                              2012         2011         2012         2011
                          -----------  -----------  -----------  -----------

  Oil and gas sales       $ 1,198,420  $ 1,412,842  $ 3,907,792  $ 4,289,181
                          -----------  -----------  -----------  -----------

  Operating expenses          476,122      421,405    1,365,861    1,282,950
  General and
   administrative             192,910      222,583      632,804      666,375
  Stock based
   compensation                     0            0            0       43,743
  Taxes, other than
   income and payroll
   taxes                       44,885       37,399      129,266      101,358
  Provision for
   depreciation and
   amortization               151,502      184,208      519,396      595,631
  Valuation allowances              0      673,000            0      727,384
  Accretion expense            13,153        5,229       31,970       26,793
  Other costs and
   expenses                    33,975       31,280      118,449      118,964
                          -----------   ----------   ----------   ----------

                              912,547    1,575,104    2,797,746    3,563,198
                          -----------   ----------   ----------   ----------

OPERATING INCOME (LOSS)       285,873     -162,262    1,110,046      725,983
                          -----------   ----------   ----------   ----------

  Interest income              10,975       12,193       31,835       38,704
  Other income                      0            0          250          500
  Interest expense               -152         -568         -868       -2,459
                          -----------   ----------   ----------   ----------

                               10,823       11,625       31,217       36,745
                          -----------   ----------   ----------   ----------
 (BENEFIT)                    296,696     -150,637    1,141,263      762,728
  Income tax provision
    Current                    16,800       52,700       99,800      163,300
    Deferred                   72,000     -207,600      172,900     -151,500
                          -----------   ----------   ----------   ----------
                               88,800     -154,900      272,700       11,800
                          -----------   ----------   ----------   ----------

NET INCOME                $   207,896  $     4,263  $   868,563  $   750,928
                          ===========  ===========  ===========  ===========

 SHARE                    $      0.04  $      0.00  $      0.19  $      0.16
                          ===========  ===========  ===========  ===========

 COMMON SHARE             $      0.04  $      0.00  $      0.19  $      0.16
                          ===========  ===========  ===========  ===========

Weighted average number
 of common shares
                            4,687,644    4,683,853    4,685,117    4,682,492
                          ===========  ===========  ===========  ===========

Diluted average number
 of common shares
                            4,687,644    4,685,177    4,685,117    4,688,465
                          ===========  ===========  ===========  ===========

                             PYRAMID OIL COMPANY
                               BALANCE SHEETS


                                           September 30,      December 31,
                                               2012               2011
                                            (Unaudited)         (Audited)
                                         ----------------   ----------------

  Cash and cash equivalents              $      3,582,642   $      2,762,676
  Short-term investments                        2,134,391          2,128,380
  Trade accounts receivable                       431,151            555,495
  Income taxes receivable                          55,569             21,169
  Crude oil inventory                             106,025            118,156
  Prepaid expenses and other assets               116,140            255,846
  Deferred income taxes                           262,500            262,500
                                         ----------------   ----------------

    TOTAL CURRENT ASSETS                        6,688,418          6,104,222
                                         ----------------   ----------------

  Oil and gas properties and
   equipment (successful efforts
   method)                                     19,919,006         19,124,558
  Capitalized asset retirement costs              409,338            401,242
  Drilling and operating equipment              1,966,750          1,956,371
  Land, buildings and improvements              1,073,918          1,073,918
  Automotive, office and other
   property and equipment                       1,228,147          1,192,118
                                         ----------------   ----------------

                                               24,597,159         23,748,207

  Less: accumulated depletion,
   depreciation, amortization and
   valuation allowances                       -20,611,051        -20,091,655
                                         ----------------   ----------------

  TOTAL PROPERTY AND EQUIPMENT                  3,986,108          3,656,552
                                         ----------------   ----------------

  Long-term investments                         1,093,919          1,071,984
  Deferred income taxes                           608,700            781,600
  Deposits                                        250,000            250,000
  Other Assets                                     17,380             17,380
                                         ----------------   ----------------

  TOTAL INVESTMENTS OTHER ASSETS                1,969,999          2,120,964
                                         ----------------   ----------------

    TOTAL ASSETS                         $     12,644,525   $     11,881,738
                                         ================   ================

                             PYRAMID OIL COMPANY
                               BALANCE SHEETS


                                           September 30,      December 31,
                                               2012,              2011
                                            (Unaudited)         (Audited)
                                         ----------------   ----------------

  Accounts payable                       $        147,763   $         88,494
  Accrued professional fees                       126,876            142,990
  Accrued taxes, other than income
   taxes                                           40,203             77,471
  Accrued payroll and related costs                62,987             51,252
  Accrued royalties payable                       206,513            224,810
  Accrued insurance                                     0             82,428
  Current maturities of long-term
   debt                                             5,981             32,285
                                         ----------------   ----------------

    TOTAL CURRENT LIABILITIES                     590,323            699,730
                                         ----------------   ----------------

LONG TERM DEBT, net of current
 maturites                                              0             22,330
                                         ----------------   ----------------

 OBLIGATIONS                                    1,304,850          1,278,889
                                         ----------------   ----------------

    TOTAL LIABILITIES                           1,895,173          2,000,949
                                         ----------------   ----------------


  Preferred stock-no par value;
   10,000,000 authorized shares; no
   shares issued or outstanding                         0                  0
  Common stock-no par value;
   50,000,000 authorized shares;
   4,683,853 shares issued and
   outstanding                                  1,682,971          1,682,971
  Retained earnings                             9,066,381          8,197,818
                                         ----------------   ----------------

    TOTAL STOCKHOLDERS' EQUITY                 10,749,352          9,880,789
                                         ----------------   ----------------

   EQUITY                                $     12,644,525   $     11,881,738
                                         ================   ================

John H. Alexander
President and CEO
Pyramid Oil Company

Geoff High
Pfeiffer High Investor Relations, Inc.

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