Pyramid Oil Company Announces Strong Revenue and Earnings Growth in First Fiscal Quarter

BAKERSFIELD, CA--(Marketwire - May 15, 2008) - Pyramid Oil Company (AMEX: PDO) today announced financial results for its first fiscal quarter ended March 31, 2008.

Revenue increased 92% to $1,589,896 versus $826,180 in last year's first quarter. Approximately 81% of the increase was due to higher oil and gas prices, which were up by $38.50 per equivalent barrel of oil versus the first quarter last year. Approximately 12% of the increase was due to higher production and sales levels. Pyramid's first quarter net revenue share of crude oil production increased by approximately 1,800 barrels compared with the first quarter last year.

Operating income increased to $739,698 versus $44,379 in the first quarter a year ago. Net income rose to $834,271, or $0.22 per diluted share, from $57,929, or $0.02 per diluted share, in the comparable year-ago quarter.

John Alexander, president and CEO, said, "The sales and earnings momentum we carried at the end fiscal 2007 continued through the first fiscal quarter, and in light of the opportunities we are pursuing to increase our oil and gas production, we are optimistic about our prospects for continued financial growth during the remainder of the year.

"Important progress has been achieved on our natural gas joint venture in Texas, where the operator recently executed a gas sales contract," Alexander said. "We anticipate construction of the 3.8-mile gas pipeline will begin shortly, and are anticipating that sales will commence sometime this summer."

Post-frac testing on the initial well in the Texas JV indicated natural gas rates of more than 4 million cubic feet per day. Pyramid owns a gross 12.5% working interest (before payout) in the prospect. The JV also holds oil and gas leases on approximately 5,700 contiguous acres surrounding the initial well, and plans to commence additional drilling operations on the acreage shortly after completion of the gas sales pipeline.

Pyramid also is currently conducting completion and testing operations on a recently drilled well in its Carneros Creek field in California, and intends to report on production results once testing efforts have been completed. The Company plans to drill additional wells in the field during 2008, and also is conducting enhancement efforts on several existing Carneros Creek wells in an effort to boost production rates.

Cash and short-term investments at March 31, 2008, were $2,329,113, up from $2,097,427 at December 31, 2007. Working capital at the end of the first quarter improved to $2,398,148 from $2,251,635 at the end of fiscal 2007. Stockholders' equity increased to $7,438,226 from $6,603,955 during the three-month period.

About Pyramid Oil Company

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

Safe Harbor Statement

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

                            PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)



                                                      Three months ended
                                                          March 31,
                                                       2008        2007
                                                    ----------- -----------

REVENUES:                                           $ 1,589,896 $   826,180
                                                    ----------- -----------

COSTS AND EXPENSES:
    Operating expenses                                  422,806     362,663
    Exploration costs                                   -28,812       4,835
    General and administrative                          232,511     275,154
    Taxes, other than income and payroll taxes           35,510      27,156
    Provision for depletion,
        depreciation and amortization                   162,820      97,670
    Accretion expense                                     5,810       5,631
    Other costs and expenses                             19,552       8,692
                                                    ----------- -----------

                                                        850,198     781,801
                                                    ----------- -----------

OPERATING  INCOME                                       739,698      44,379
                                                    ----------- -----------

OTHER INCOME (EXPENSE):
    Interest income                                      22,077      23,789
    Other income                                          9,662       3,600
    Interest expense                                       -641         -14
                                                    ----------- -----------

                                                         31,098      27,375
                                                    ----------- -----------
INCOME (LOSS) BEFORE
   INCOME TAX PROVISION                                 770,796      71,754
    Income taxes
        Current                                          91,625      13,825
        Deferred                                       -155,100           0
                                                    ----------- -----------
                                                        -63,475      13,825
                                                    ----------- -----------

NET INCOME                                          $   834,271 $    57,929
                                                    =========== ===========

BASIC INCOME PER COMMON SHARE                       $      0.22 $      0.02
                                                    =========== ===========

DILUTED INCOME PER COMMON SHARE                     $      0.22 $      0.02
                                                    =========== ===========

Weighted average number of common shares
 outstanding                                          3,741,721   3,741,721





                            PYRAMID OIL COMPANY
                              BALANCE SHEETS

                                  ASSETS



                                                 March  31,   December 31,
                                                    2008          2007
                                                (Unaudited)   (Unaudited)
                                                ------------- -------------

CURRENT ASSETS:
  Cash                                          $     836,845 $     618,448
  Short-term investments                            1,492,268     1,478,979
  Trade accounts receivable                           882,867       643,340
  Employee loan receivable                              1,200             0
  Interest receivable                                   4,579         2,251
  Crude oil inventory                                  80,785        71,298
  Deferred taxes                                       56,000             0
  Prepaid expenses                                    139,725       170,914
                                                ------------- -------------

         TOTAL CURRENT ASSETS                       3,494,268     2,985,229
                                                ------------- -------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
    (successful efforts method)                    15,422,676    14,734,929
  Capitalized asset retirement costs                  310,579       310,579
  Drilling and operating equipment                  2,073,137     2,050,556
  Land, buildings and improvements                  1,043,744     1,010,847
  Automotive, office and other
    property and equipment                          1,148,025     1,141,451
                                                ------------- -------------

                                                   19,998,161    19,248,362
  Less: accumulated depletion, depreciation,
   amortization and valuation allowance           -14,203,430   -14,040,610
                                                ------------- -------------

                                                    5,794,731     5,207,752
                                                ------------- -------------
OTHER ASSETS
  Deposits                                            250,000       250,000
  Deferred Taxes                                       99,100             0
  Other Assets                                          7,380         7,380
  Assets held for resale                                9,633         9,633

                                                ------------- -------------

                                                $   9,655,112 $   8,459,994
                                                ------------- -------------



                            PYRAMID OIL COMPANY
                              BALANCE SHEETS

                   LIABILITIES AND STOCKHOLDERS' EQUITY



                                                 March  31,   December 31,
                                                    2008          2007
                                                (Unaudited)   (Unaudited)
                                                ------------- -------------

CURRENT LIABILITIES:
  Accounts payable                              $     513,836 $     108,500
  Accrued professional fees                            43,500        54,165
  Accrued taxes, other than income taxes               61,954        61,684
  Accrued payroll and related costs                    55,975        57,647
  Accrued royalties payable                           252,539       212,916
  Accrued insurance                                    49,763        65,999
  Accrued income taxes                                 92,753       145,815
  Current maturities of long-term debt                 25,800        26,868
                                                ------------- -------------

         TOTAL CURRENT LIABILITIES                  1,096,120       733,594
                                                ------------- -------------

LONG-TERM DEBT, net of current maturities              38,653        44,542
                                                ------------- -------------

LIABILITY FOR SHARE BASED COMPENSATION                 65,400        67,000
                                                ------------- -------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION           1,016,713     1,010,903
                                                ------------- -------------

COMMITMENTS

STOCKHOLDERS' EQUITY:
  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; 3,741,721 shares issued
   and outstanding                                  1,071,610     1,071,610
  Retained earnings                                 6,366,616     5,532,345
                                                ------------- -------------

                                                    7,438,226     6,603,955
                                                ------------- -------------

                                                $   9,655,112 $   8,459,994
                                                ------------- -------------

Contact Information: CONTACTS: John H. Alexander President and CEO Pyramid Oil Company 661-325-1000 Geoff High Principal Pfeiffer High Investor Relations, Inc. 303-393-7044