Before May 15, 2008, not many people on Wall Street had heard about this tiny oil company whose shares are up a whopping 422% year to date. PDO shares are up 96% since May 15th. But why? Earnings.
Pyramid Oil Company engages in the exploration, development, and production of crude oil and natural gas. It holds oil and gas property interests primarily in California, as well as in New York, Wyoming, and Texas. The company sells oil and gas primarily to crude oil purchasers, refineries, or pipeline companies. Pyramid Oil Company, whose shares trade on the AMEX, was founded in 1909 and is based in Bakersfield, California.
Pyramid Oil Company reported strong revenue and net income growth for the first quarter. Revenue increased 92% to $1,589,896 versus $826,180 in last year's first quarter as well as net income rising to $834,271, or $0.22 per diluted share, from $57,929, or $0.02 per diluted share, in the comparable year-ago quarter.
"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," said John Alexander, president and CEO.
"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."
The main thing you will want to watch is oil prices as 81% of their revenue increase was to due to the rise in oil during the quarter. A fall in oil prices will most likely cause a decline in PDO shares.
Technically, if PDO can close above $20 again, I think it could make another run toward its 52 week high of $29.88. Be cautious though. This stock is extremely volatile both ways.