1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-QSB
/X/ Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
/ / For the quarterly period ended September 30, 2003
OR
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 Number)
2008 - 21ST. STREET,
BAKERSFIELD, CALIFORNIA 93301
(Address of principal executive offices) (Zip Code)
(661) 325-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
COMMON STOCK WITHOUT PAR VALUE 2,494,430
(Class) (Outstanding at September 30, 2003)
2
FINANCIAL STATEMENTS
PYRAMID OIL COMPANY
BALANCE SHEETS
ASSETS
September 30, December 31,
2003 2002
(Unaudited) (Audited)
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 602,175 $ 502,839
Short-term investments 850,000 850,000
Trade accounts receivable 180,609 201,777
Interest receivable 60,098 54,689
Crude oil inventory 52,952 50,153
Prepaid expenses 30,998 103,324
Deferred income taxes 18,166 22,911
------------ ------------
TOTAL CURRENT ASSETS 1,794,998 1,785,693
------------ ------------
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties and equipment
(successful efforts method) 10,772,157 10,521,514
Capitalized asset retirement costs 272,649 --
Drilling and operating equipment 2,800,925 2,793,674
Land, buildings and improvements 936,681 936,681
Automotive, office and other
property and equipment 1,016,332 970,314
------------ ------------
15,798,744 15,222,183
Less: accumulated depletion,
depreciation, amortization
and valuation allowance (13,882,964) (13,570,579)
------------ ------------
1,915,780 1,651,604
------------ ------------
$3,710,778 $3,437,297
============ ============
The Accompanying Notes Are an Integral Part of These Financial Statements.
3
PYRAMID OIL COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
2003 2002
(Unaudited) (Audited)
------------ ------------
CURRENT LIABILITIES:
Accounts payable $ 38,074 $ 44,065
Accrued professional fees 25,200 24,633
Accrued taxes, other than income taxes 10,365 21,925
Accrued payroll and related costs 45,610 31,060
Accrued royalties payable 73,744 76,360
Accrued insurance -- 46,222
Interest payable -- 5,514
Loan payable to a related party -- 36,166
Current maturities of long-term debt 38,688 97,652
------------ ------------
TOTAL CURRENT LIABILITIES 231,681 383,597
------------ ------------
LONG-TERM DEBT, net of current maturities 42,834 35,076
------------ ------------
LIABILITY FOR ASSET RETIREMENT OBLIGATION 893,321 --
------------ ------------
DEFERRED INCOME TAXES 18,166 22,911
------------ ------------
COMMITMENTS and CONTINGENCIES (note 3)
STOCKHOLDERS' EQUITY:
Common stock-no par value;
10,000,000 authorized shares;
2,494,430 shares issued and
outstanding 1,071,610 1,071,610
Retained earnings 1,453,166 1,924,103
------------ ------------
2,524,776 2,995,713
------------ ------------
$3,710,778 $3,437,297
============ ============
The Accompanying Notes Are an Integral Part of These Financial Statements.
4 PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2003 2002 2003 2002
--------- --------- --------- ---------
REVENUES $506,801 $439,354 $1,532,631 $1,149,724
--------- --------- --------- ---------
COSTS AND EXPENSES:
Operating expenses 268,408 274,233 777,757 778,122
Exploration costs -- 2,942 -- 6,717
General and administrative 83,693 94,513 256,234 311,972
Taxes, other than income
and payroll taxes 13,798 13,877 41,536 42,417
Provision for depletion,
depreciation and
amortization 35,657 42,602 112,506 126,582
Accretion expense 4,800 -- 14,411 --
Other costs and expenses 2,066 7,584 12,819 12,998
--------- --------- --------- ---------
408,422 435,751 1,215,263 1,278,808
--------- --------- --------- ---------
OPERATING INCOME (LOSS) 98,379 3,603 317,368 (129,084)
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income 4,712 8,477 14,216 28,888
Gain on sale of assets -- 300 -- 300
Loss on disposal of assets -- -- -- (10,100)
Other income 3,600 3,600 10,800 28,313
Interest expense -- -- (2,081) ( 52)
--------- --------- --------- ---------
8,312 12,377 22,935 47,349
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAX PROVISION 106,691 15,980 340,303 (81,735)
Income tax provision -- -- 1,125 1,125
--------- --------- --------- ---------
NET INCOME (LOSS) BEFORE
CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING
PRINCIPLE 106,691 15,980 339,178 (82,860)
Cumulative effect on prior
years of change in method
of accounting for asset
retirement obligation -- -- (810,115) --
--------- --------- --------- ---------
NET INCOME (LOSS) $ 106,691 $ 15,980 $(470,937) $ (82,860)
========= ========= ========= =========
The Accompanying Notes Are an Integral Part of These Financial Statements.
5 PYRAMID OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2003 2002 2003 2002
--------- --------- --------- ---------
EARNINGS PER COMMON SHARE
Basic:
Income (Loss) Before
Cumulative Effect of
Change in Accounting
Principle $0.04 $ 0.01 $ 0.13 $(0.03)
Cumulative effect on
prior years of change
in method of accounting
for asset retirement
obligation -- -- (0.32) --
--------- --------- --------- ---------
Net Income (Loss) $0.04 $ 0.01 $(0.19) $(0.03)
========= ========= ========= =========
Diluted:
Income (Loss) Before
Cumulative Effect of
Change in Accounting
Principle $0.04 $ 0.01 $ 0.13 $(0.03)
Cumulative effect on
prior years of change
in method of accounting
for asset retirement
obligation -- -- (0.32) --
--------- --------- --------- ---------
Net Income (Loss) $0.04 $ 0.01 $(0.19) $(0.03)
========= ========= ========= =========
Weighted average number of
common shares outstanding 2,494,430 2,494,430 2,494,430 2,494,430
========= ========= ========= =========
The Accompanying Notes Are an Integral Part of These Financial Statements.
6
PYRAMID OIL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended
September 30,
---------------------------
2003 2002
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(470,937) $ (82,860)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Cumulative effect on prior years of change
in method of accounting for asset
retirement obligation 810,115 --
Provision for depletion,
depreciation and amortization 112,506 126,582
Accretion expense 14,411 --
Exploration costs -- 6,717
Decrease in asset retirement obligation (3,975) --
Gain on sale of assets -- (300)
Loss on disposal of fixed assets -- 10,100
Changes in assets and liabilities:
Decrease (Increase) in trade accounts
and interest receivable 15,759 (38,374)
Increase in crude oil inventories (2,799) (13,851)
Decrease in prepaid expenses 72,326 31,622
(Decrease) in accounts payable
and accrued liabilities (56,786) (21,632)
-------- --------
Net cash provided by
operating activities 490,620 18,004
-------- --------
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PYRAMID OIL COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended
September 30,
---------------------------
2003 2002
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures $(303,912) $ (45,165)
Proceeds from sales of assets -- 300
-------- --------
Net cash used in investing activities (303,912) (44,865)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (127,489) (12,075)
Proceeds from issuance of long-term debt 40,117 --
-------- --------
Net cash used in financing activities ( 87,372) (12,075)
-------- --------
Net increase (decrease) in cash 99,336 (38,936)
Cash at beginning of period 502,839 614,416
-------- --------
Cash at end of period $602,175 $575,480
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the nine months for interest $7,387 $ 52
======== ========
Cash paid during the nine months for income taxes $1,125 $1,125
======== ========
The Accompanying Notes Are an Integral Part of These Financial Statements.
8 PYRAMID OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements include the accounts of Pyramid Oil Company (the
Company). Such financial statements included herein have been prepared by the
Company, without an audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.
A summary of the Company's significant accounting policies is contained in its
December 31, 2002 Form 10-KSB which is incorporated herein by reference. The
financial data presented herein should be read in conjunction with the
Company's December 31, 2002 financial statements and notes thereto, contained
in the Company's Form 10-KSB.
In the opinion of the Company, the unaudited financial statements, contained
herein, include all adjustments necessary to present fairly the Company's
financial position as of September 30, 2003 and the results of its operations
and its cash flows for the nine month periods ended September 30, 2003 and
2002. The results of operations for an interim period are not necessarily
indicative of the results to be expected for a full year.
(2) DIVIDENDS
No cash dividends were paid during the nine months ended September 30, 2003
and 2002.
(3) COMMITMENTS AND CONTINGENCIES
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. The Company
participated in the drilling of a second well on this lease in the fourth
quarter of 2000. This well was abandoned due to insufficient gas reserves.
The Company has not made any decisions about participating in any future
proposed exploration wells on this project. The Company expended
approximately $18,000 for its share of costs on the first well during 1999,
9
and expended an additional $15,000 during 2000. The Company expended
approximately $18,000 for its share of costs on the second well during 2000.
These costs are recorded in Operating Costs on the Statements of Operations.
The Company agreed to participate in the drilling of a third natural gas well
in conjunction with the same operator in a new prospect area located in
Solano County. This well commenced drilling in the fourth quarter of 2001 and
was abandoned due to inadequate gas reserves. The Company's share of the
prospect fee and drilling costs for this new well were approximately $36,000
during the fourth quarter of 2001 and $3,800 in the first six months of 2002.
The costs for the third well are recorded in Costs and Expenses on the
Statements of Operations. A fourth well has not been proposed by the joint
venture operator.
The Company has entered into various employment agreements with key executive
employees. In the event the key executives are dismissed, the Company would
incur approximately $1,042,000 in costs.
(4) OTHER INCOME
The Company disposed of a well servicing rig in the first Quarter of 2002 with
a net book value of $10,100. The Company received approximately $16,000 as a
settlement of lease oil antitrust litigation, also in the first quarter of
2002.
(5) INCOME TAX PROVISION
The Company's income tax provision consists mainly of current minimum taxes
for California and New York. The Company is utilizing its significant net
operating loss carryforwards to offset Federal income taxes.
(6) CHANGE IN ACCOUNTING PRINCIPLE
In accordance with Statement of Financial Accounting Standards No. 143,
''Accounting for Assets Retirement Obligations'', effective January 1, 2003,
the Company changed its method of accounting for asset retirement obligations
(ARO) relating to well abandonment costs from expensing such costs in the year
the wells are abandoned to recording a liability when such costs are incurred
in order to provide a better matching of revenue and expenses and to improve
interim financial reporting.
Upon adoption of SFAS 143, the Company was required to recognize a liability
for the present value of all legal obligations associated with the retirement
of tangible long-lived assets and an asset retirement cost was capitalized as
part of the carrying value of the associated asset. Upon initial application
of SFAS 143, a cumulative effect of a change in accounting principle was also
required in order to recognize a liability for any existing ARO's adjusted for
cumulative accretion, an increase to the carrying amount of the associated
long-lived asset and accumulated depreciation on the capitalized cost.
10
Subsequent to initial measurement, liabilities are required to be accreted to
their present value each period and capitalized costs are depreciated over the
estimated useful life of the related assets. Upon settlement of the liability,
the Company will settle the obligation against its recorded amount and will
record any resulting gain or loss. As a result of the adoption of SFAS 143 on
January 1, 2003, the Company recorded a $272,649 increase in the net
capitalized cost of its oil and gas properties.
The effect of these changes for the nine months ending September 30, 2003,
resulted in a decrease in income from continuing operations of $17,795. The
cumulative effect of these changes on years prior to January 1, 2003,
approximately $810,115 ($0.23 per common share), has been charged to
operations in 2003. The effect on net income of this change in accounting
methods is as follows:
Amount Per Share
-------- ---------
Cumulative effect to January 1, 2003 $(810,115) $(0.23)
Effect on nine months ended
September 30, 2003 (17,795) (0.01)
Pro Forma effect on nine months
ended September 30, 2002:
As reported $( 82,860) $(0.03)
Pro Forma (100,106) (0.04)
There are no legally restricted assets for the settlement of asset retirement
obligations. No income tax is applicable to the asset retirement obligation
as of September 30, 2003, because the Company records a valuation allowance on
net operating losses and deductible temporary differences due to the
uncertainty of its realization.
A reconciliation of the Company's asset retirement obligations from the
periods presented are as follows:
Amount
-------
Beginning Balance, January 1, 2003 $882,885
Incurred during the period (3,975)
Settled during the period --
Accretion expense 14,411
Revisions in estimates --
-------
Ending Balance, September 30, 2003 $893,321
=======
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
IMPACT OF CHANGING PRICES
The Company's revenue is affected by crude oil prices paid by the major oil
companies. Average crude oil prices for the third quarter of 2003 increased
by approximately $1.70 when compared with the same period for 2002. Average
crude oil prices for the first nine months of 2003 increased by approximately
$5.70 per equivalent barrel when compared with the same period for 2002. At
the end of the third quarter of 2003, crude oil prices had decreased by
approximately $2.90 per barrel when compared with crude oil prices at December
31, 2002. The Company cannot predict the future course of crude oil prices.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased by $99,336 for the nine months ended
September 30, 2003. During the first nine months of 2003, operating
activities provided cash of $490,620. This was offset by capital expenditures
of $303,912 and principal payments on long-term debt totaling $127,489 during
the first nine months of 2003. Capital expenditures during 2003 included
approximately $244,000 for the drilling and completion of a new well in the
Company's Carneros Creek oil and gas area. The new well was placed into
production at the end of the second quarter. See the Statements of Cash Flows
for additional detailed information. A $100,000 line of credit, unused at
September 30, 2003, provided additional liquidity during the first half of
2003.
FORWARD LOOKING INFORMATION
During the third quarter of 2003, the Company drilled a new well on one of its
existing leases in the Carneros Creek field of Kern County. This well was
completed and hydraulically fractured and is currently producing approximately
30 barrels per day of 31 gravity oil. This additional oil production has
resulted in increased revenues for the Company. The Company is currently
evaluating other existing wells in this area for the possibility of
stimulation using hydraulic fracturing methods.
The Company's average crude oil price has increased by approximately $1.70 per
barrel since September 30, 2003.
Portions of the Quarterly Report, including Management's Discussion and
Analysis, contain forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the Company's actual results
and performance in future periods to be materially different from any future
results or performance suggested in forward-looking statements in this
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release. Such forward-looking statements speak only as of the date of this
report and the Company expressly disclaims any obligation to update or revise
any forward-looking statements found herein to reflect any changes in Company
expectations or results or any change in events. Factors that could cause
results to differ materially include, but are not limited to: the timing and
extent of changes in commodity prices of oil, gas and electricity,
environmental risk, drilling and operational costs, uncertainties about
estimates of reserves and government regulations.
Item 4. CONTROLS AND PROCEDURES
Based on their evaluation of the Company's disclosure controls and
procedures as of a date within 90 days of the filing of this Report, the Chief
Executive Officer and Chief Financial Officer have concluded that such
controls and procedures are effective. There were no significant changes in
the Company's internal controls or in other factors that could significantly
affect such controls subsequent to the date of their evaluation.
ANALYSIS OF SIGNIFICANT CHANGES IN RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2003
COMPARED TO THE QUARTER ENDED SEPTEMBER 30, 2002
REVENUES
Oil and gas revenues increased by 15% for the three months ended September 30,
2003 when compared with the same period for 2002. Oil and gas revenues
increased by 7% due to higher average crude oil prices for the third quarter
of 2003. The average price of the Company's oil and gas for the third quarter
of 2003 increased by approximately $1.70 per equivalent barrel when compared
to the same period of 2002. Revenues increased by 8% due to higher crude oil
production. The Company's net revenue share of crude oil production increased
by approximately 1,400 barrels for the third quarter of 2003. The increase in
crude oil production is due to the drilling of a new well in the second
quarter of 2003.
OPERATING EXPENSES
Operating expenses decreased by approximately 2% for the three months ended
September 30, 2003 when compared with the same period for 2002. The cost to
produce an equivalent barrel of crude oil decreased by approximately $1.50 for
the third quarter of 2003 when compared with the third quarter of 2002, due to
higher production of crude oil during the third quarter of 2003.
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GENERAL AND ADMINISTRATIVE
General and administrative expenses decreased by approximately 11% for the
three months ended September 30, 2003 when compared with the same period for
2002. Expenses were lower for legal fees, consulting services, office and
computer supplies and sundry other expense categories.
PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION
The provision for depletion, depreciation and amortization decreased by 16%
for the third quarter of 2003, when compared with the same period for 2002.
The decrease is due primarily to an 18% decline in depletion charges. The
reduction in depletion is due to a decrease in the depletion rate due to
higher crude oil reserves at January 1, 2003.
INTEREST INCOME
Interest income decreased by approximately $4,000 during the three months
ended September 30, 2003 when compared with the same period for 2002. The
decrease in interest income is due primarily to the decline in interest rates.
INCOME TAX PROVISION
The Company's income tax provision consists mainly of current minimum taxes
for California and New York. The Company is utilizing its significant net
operating loss carryforwards to offset Federal income taxes.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2002
REVENUES
Oil and gas revenues increased by 33% for the nine months ended September 30,
2003 when compared with the same period for 2002. Oil and gas revenues
increased by approximately 27% due to higher average crude oil prices for the
first nine months of 2003. The average price of the Company's oil and gas for
the first nine months of 2003 increased by approximately $5.70 per equivalent
barrel when compared with the same period for 2002. The Company's net revenue
share of crude oil production increased by approximately 3,100 barrels for the
nine months ended September 30, 2002. The increase in crude oil production is
due primarily to the drilling of a new well in the second quarter of 2003.
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OPERATING EXPENSES
Operating expenses decreased by less than $500 for the nine months ended
September 30, 2003, when compared with the same period for 2002. The cost to
produce an equivalent barrel of crude oil decreased by approximately eighty-
four cents per barrel for the nine months ended September 30, 2003, due to
higher production of crude oil during the first nine months of 2003.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased by approximately 18% for the
nine months ended September 30, 2003, when compared with the same period for
2002. Legal services decreased by 13% during the first nine months of 2003.
During the second quarter of 2002, legal fees were incurred related to certain
transactions contemplated by the Board of Directors for the acquisition of the
Company's common stock from its major shareholders.
PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION
The provision for depletion, depreciation and amortization decreased by 11%
for the nine months ended September 30, 2003, when compared with the same
period for 2002. Depletion decreased by 13% for the nine months ended
September 30, 2003. The decrease in depletion is due primarily to the
decrease in the depletion rate due to higher crude oil reserves at January 1,
2003.
INTEREST INCOME
Interest income decreased by approximately $15,000 during the nine months
ended September 30, 2003, when compared with the same period for 2002. The
decrease in interest income is due primarily to the decline in interest rates.
LOSS ON DISPOSAL OF ASSETS
The Company disposed of a well servicing rig in the first quarter of 2002 with
a net book value of $10,100.
OTHER INCOME
The Company received approximately $16,000 as a settlement of lease oil
antitrust litigation, also in the first quarter of 2002.
INCOME TAX PROVISION
The Company's income tax provision consists mostly of current minimum taxes
for California and New York. The Company is utilizing its significant net
operating loss carryforwards to offset Federal income taxes.
15
PYRAMID OIL COMPANY
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes in Securities
None
Item 3. - Defaults Upon Senior Securities
None
Item 4. - Submission of Matters to a Vote of Security Holders
None
Item 5. - Other Information -
None
Item 6. - Exhibits and Reports on Form 8-K -
a. Exhibits
99.1 Written Statement of the Chief Executive Officer Pursuant
to 18 U.S.C. Section 1350
99.2 Written Statement of the Chief Financial Officer Pursuant
to 18 U.S.C. Section 1350
b. No Form 8-K's were filed during the three months
ended September 30, 2003.
16
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
PYRAMID OIL COMPANY
(registrant)
Dated: November 12, 2003
J. BEN HATHAWAY
---------------------
J. Ben Hathaway
President
Dated: November 12, 2003
JOHN H. ALEXANDER
---------------------
John H. Alexander
Vice President
PAGE <17>
Certification By Principal Executive Officer Pursuant
to Rule 13A-14 or 15D-14 of the SEC Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, J. Ben Hathaway, the President of Pyramid Oil Company (the registrant),
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Pyramid Oil
Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
PAGE <18>
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: November 12, 2003
By: J. BEN HATHAWAY
-----------------------
J. Ben Hathaway
Chief Executive Officer
PAGE <19>
Certification By Principal Financial Officer Pursuant
to Rule 13A-14 or 15D-14 of the SEC Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Lee G. Christianson, the Chief Financial Officer of Pyramid Oil Company
(the registrant), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Pyramid Oil
Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
PAGE <20>
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Dated: November 12, 2003
By: LEE G. CHRISTIANSON
------------------------
Lee G. Christianson
Chief Financial Officer