pyramid oilfeb2012presentation
TRANSCRIPT
Pyramid Oil Company
Incorporated 1909
Pyramid Oil Company Incorporated in 1909
Certain statements and information included in this presentation 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.
Safe Harbor Statement
Key Data
Stock: AMEX: PDO Recent price: $4.00 52-week range $3.74 - $9.40 Average daily share volume 21,000 Approximate Market cap $18,700,000 Approximate Enterprise Value $13,600,000 Shares outstanding 4,678,000 Approximate float 2,650,000 Fiscal year end Dec. 31 Cash (9-30-11) $5,500,000 LT Debt (9-30-10) Nil Operating cash flow (9-30-11) $1,950,000
As of 11-29-11
Company Overview Independent oil and gas company focused on onshore
exploration, development and production
Most operations are in Kern County, California – one of nation’s leading oil producing regions
Company owns and operates much of its own equipment, including service rigs, mobile pumps, vacuum units and hot oil trucks
Strong financial position
Significant insider ownership position (~43%)
More than 100-year operating history
Strategy
Pyramid seeks to build value by maximizing the production potential of its U.S. oil and gas properties. The Company is working to expand its portfolio of oil and gas assets through an active drilling campaign, and also is exploring potential partnerships with other energy companies on new domestic, onshore prospects.
Operations
Pyramid owns and operates 27 oil and gas leases within Kern & Santa Barbara Counties. Of these, 18 were operating in 2010
Company has potential to operate 122 wells on its California properties. 54 were operating in 2010
Most production currently classified as primary recovery, although certain wells could be considered for secondary recovery programs depending on crude price environment
Most oil production is light to intermediate oil with an average API gravity of 23
Company enjoys 20+ year relationships with its two largest crude customers: ConocoPhillips & Kern Oil & Refining
California
Kern County Santa
Barbara County
California
Kern County’s Prolific Oil Production
Kern County accounts for approximately 10% of overall U.S. oil production
County is home to three of the five largest U.S. oil fields
At approximately 400,000 bbls/day, Kern is California's top oil-producing county
County had 81% of the state's 52,144 active oil wells in 2009
Operations
Kern County
Pyramid’s Properties in Kern County, CA
Carneros Creek
Chico Martinez
Lost Hills
Midway Sunset
Mountain View
Edison
Oil Reserves Estimated future net recoverable oil reserves from proved reserves, both developed and undeveloped
Crude Oil (Bbls)
PV-10
* Based on year-end oil and gas prices and lease operating expenses
Present value of estimated future net revenues of proved developed reserves, discounted at 10%*
$ In Millions
Wells & Acreage
* "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.
** "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.!
Gross and net position in wells and proved acres as of December 31, 2010
Wells Proved Acres Gross* Net* Gross** Net**
149 133 21,387 5,844
Oil and Gas Production
2006 2007 2008 2009 2010
Crude Oil (Bbls)
66,000 67,000 65,000 57,000 60,000
Nat. Gas (Mcf)
7,000 5,000 5,000 5,000 9,000
Net oil and gas production after royalty and other working interest
Pricing and Production Costs
2006 2007 2008 2009 2010
Crude Oil $58.88 $67.83 $93.47 $57.16 $77.10
Nat. Gas $7.28 $7.16 $7.94 $4.02 $4.37
Production Costs $22.80 $24.00 $27.20 $24.20 $26.60
Average sales prices per barrel or per MCF of crude oil and natural gas, respectively, and production costs per equivalent barrel* for the past five years ending December 31
*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
Revenue
$ in millions
Net Income
$ in millions
Statements of Operations Highlights
Year ended December 31, Nine months ended Sept. 30,
In thousands except per share data 2008 2009 2010 2010 2011 Revenues $6,611 $3,312 $4,836 $3,330 $4,289
Operating expenses $1,942 $1,412 $1,577 $1,165 $1,283
General and administrative $925 $1,102 $875 $654 $666
Total costs and expenses $5,517 $3,849 $4,782 $3,505 $3,563
Operating income $1,094 $(537) $54 $145 $726
Other income $115 $89 $29 $40 $37
Income before income tax provision $1,209 $(449) $83 $185 $763
Net Income $1,514 $(189) $246 $273 $751
Diluted income per share $0.32 $(0.04) $0.05 $0.06 $0.16
Weighted average number of common shares outstanding 4,713 4,686 4,678 4,719 4,688
Balance Sheet Highlights ($K) December 31,
2010 September 30,
2011 Assets Cash and short term investments $4,594 $5,458 Trade accounts receivable $508 $532
Total current assets $5,665 $6,462
Oil and gas properties and equipment (successful efforts method) $18,102 $19,111
Other $4,585 $4,612
Less: accumulated depletion, depreciation, amortization and valuation allowance ($18,688) ($19,928)
Total Property and Equipment $3,999 $3,794
Total Assets $10,630 $11,366
Liabilities Current liabilities $626 $517
Long-term debt, net of current maturities $27 $39
Liability for asset retirement obligation $1,235 $1,274 Stockholders’ equity $8,742 $9,537
Total liabilities and stockholders equity $10,630 $11,366
Management
Michael D. Herman - Director & Chairman of the Board • Chairman of Pyramid since July 2005 and majority shareholder since June 2005 • Chairman and CEO of ENSERVCO Corporation (OTCBB: ENSV) Provides water hauling, acidizing, frac heating and hot-oil services • Past Chairman and Owner of Key Food Ingredients - Worldwide supplier of dehydrated vegetables from factory in China - Sold in October 2007
John H. Alexander - Director, President and Chief Executive Officer • President and CEO of Pyramid since June 2004 • Vice president and director of Pyramid from 1986 to 2004 • Independent oil operator in Orange County, Calif. since 1970
Investment Considerations
Substantial portfolio of new and re-entry well targets in prolific oil producing region
Strong, debt-free balance sheet Lean cost structure
Seasoned management team with extensive industry expertise
Pyramid Oil Company
Incorporated 1909
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