<PAGE> 1

                              UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                               FORM  10-Q

 /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                For the quarterly period ended June 30, 2010

                                     OR

 / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                      Commission File Number 001-32989

                             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 period 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 by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files) Yes [ ] No [ ]

     Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of large accelerated filer, accelerated filer
and smaller reporting company in Rule 12b-2 of the Exchange Act (Check one):

        Large accelerated filer [ ]          Accelerated filer [ ]
        Non-accelerated filer [ ]            Smaller reporting company [X]


<PAGE>  2

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes [ ] No [X]

     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.

               (Class)                     (Outstanding at August 13,2010)
    COMMON STOCK WITHOUT PAR VALUE                    4,677,728












































<PAGE> 3
                          PYRAMID OIL COMPANY

                               FORM 10-Q
                             JUNE 30, 2010
                           Table of Contents

                                                                  Page
                                                                  ----
                                 PART I

Item 1.  Financial Statements

     Balance Sheets - June 30, 2010 and December 31, 2009           4

     Condensed Statements of Operations -
       Three months ended June 30, 2010 and 2009                    6
       Six months ended June 30, 2010 and 2009                      8

     Condensed - Statements of Cash Flows -
       Six months ended June 30, 2010 and 2009                     10

     Notes to Financial Statements                                 12


Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations           20

Item 3.  Quantitative and Qualitative Disclosures
           About Market Risk                                       26

Item 4.  Controls and Procedures                                   26


                                 PART II

Item 1.  Legal Proceedings                                         27

Item 1A. Risk Factors                                              27

Item 2.  Unregistered Sales of Equity Securities
           and Use of Proceeds                                     27

Item 3.  Defaults Upon Senior Securities                           27

Item 4.  Removed and Reserved                                      27

Item 5.  Other Information                                         27

Item 6.  Exhibits                                                  27




<PAGE> 4
                      PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                            PYRAMID OIL COMPANY
                              BALANCE SHEETS
                                  ASSETS
<Table>
<Caption>                                      June 30,
                                                 2010       December 31,
                                             (Unaudited)        2009
                                             ------------   ------------
<S>                                          <C>            <C>
CURRENT ASSETS:
  Cash and cash equivalents                   $  903,380     $1,438,825
  Short-term investments                       3,075,960      3,344,061
  Trade accounts receivable                      529,553        375,954
  Income taxes receivable                         51,100        124,281
  Crude oil inventory                             64,833         62,760
  Prepaid expenses and other assets               97,448        169,595
  Deferred income taxes                          196,200        196,200
                                             ------------   ------------
         TOTAL CURRENT ASSETS                  4,918,474      5,711,676
                                             ------------   ------------

PROPERTY AND EQUIPMENT, at cost
  Oil and gas properties and equipment
    (successful efforts method)               17,572,902     16,085,228
  Capitalized asset retirement costs             389,463        382,550
  Drilling and operating equipment             2,109,993      2,109,993
  Land, buildings and improvements             1,066,571      1,065,371
  Automotive, office and other
    property and equipment                     1,164,636      1,160,617
                                             ------------   ------------
                                              22,303,565     20,803,759
  Less: accumulated depletion,
      depreciation, amortization
      and valuation allowance                (18,335,247)   (17,125,834)
                                             ------------   ------------
         TOTAL PROPERTY AND EQUIPMENT          3,968,318      3,677,925
                                             ------------   ------------
OTHER ASSETS
  Deposits                                       250,000        250,000
  Deferred income taxes                          740,800        485,400
  Other assets                                    17,013         17,013
                                             ------------   ------------
         TOTAL OTHER ASSETS                    1,007,813        752,413
                                             ------------   ------------
         TOTAL ASSETS                        $ 9,894,605    $10,142,014
                                             ============   ============
<FN>
  The Accompanying Notes Are an Integral Part of These Financial Statements.
</Table>


<PAGE> 5
                            PYRAMID OIL COMPANY
                              BALANCE SHEETS
                     LIABILITIES AND STOCKHOLDERS' EQUITY
<Table>
<Caption>
                                               June 30,
                                                 2010       December 31,
                                             (Unaudited)        2009
                                             ------------   ------------
<S>                                          <C>            <C>
CURRENT LIABILITIES:
  Accounts payable                            $   50,905     $   88,170
  Accrued professional fees                      103,890        138,381
  Accrued taxes, other than income taxes           4,194         62,310
  Accrued payroll and related costs               55,324         51,606
  Accrued royalties payable                      190,095        159,933
  Accrued insurance                               18,010         54,947
  Current debt                                     8,336         20,640
                                             ------------   ------------
         TOTAL CURRENT LIABILITIES               430,754        575,987
                                             ------------   ------------

LIABILITY FOR ASSET RETIREMENT OBLIGATION      1,212,349      1,193,324
                                             ------------   ------------
         TOTAL LIABILITIES                     1,643,103      1,769,311
                                             ------------   ------------
COMMITMENTS (Note 5)

STOCKHOLDERS' EQUITY:
  Preferred stock - no par value;
    10,000,000 authorized shares;
    no shares issued or outstanding                   --             --
  Common stock - no par value;
    50,000,000 authorized shares;
    4,677,728 shares issued and
    outstanding                                1,515,945      1,515,945
  Retained earnings                            6,735,557      6,856,758
                                             ------------   ------------
         TOTAL STOCKHOLDERS' EQUITY            8,251,502      8,372,703
                                             ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 9,894,605    $10,142,014
                                             ============   ============
<FN>
  The Accompanying Notes Are an Integral Part of These Financial Statements.

</Table>







<PAGE> 6                    PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)

<Table>                                          Three months ended June 30,
<Caption>                                        ---------------------------
                                                     2010           2009
                                                 ------------   ------------
  <S>                                            <C>            <C>
  REVENUES                                        $1,228,391     $  801,901
                                                 ------------   ------------
  COSTS AND EXPENSES:
    Operating expenses                               438,392        325,189
    General and administrative                       250,588        229,797
    Severance award agreement                             --        209,935
    Taxes, other than income
      and payroll taxes                               29,839         32,486
    Provision for depletion,
      depreciation and amortization                  196,873        160,142
    Valuation allowances                             842,327             --
    Accretion expense                                  5,898          5,932
    Other costs and expenses                          47,303         45,975
                                                 ------------   ------------
                                                   1,811,220      1,009,456
                                                 ------------   ------------
  OPERATING INCOME (LOSS)                           (582,829)      (207,555)
                                                 ------------   ------------
  OTHER INCOME (EXPENSE):
    Interest income                                    8,430         21,395
    Other income                                       3,600          3,600
    Interest expense                                    (122)          (358)
                                                 ------------   ------------
                                                      11,908         24,637
                                                 ------------   ------------

INCOME (LOSS) BEFORE INCOME
  TAX PROVISION (BENEFIT)                           (570,921)      (182,918)
    Income tax provision (benefit)
      Current                                         24,900       ( 34,200)
      Deferred                                      (293,950)      (109,800)
                                                 -----------    ------------
                                                    (269,050)      (144,000)
                                                 ------------   ------------
 NET INCOME (LOSS)                                 $(301,871)     $( 38,918)
                                                 ============   ============

<FN>

The Accompanying Notes are an Integral Part of These Financial Statements.

</Table>




<PAGE> 7                    PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)

<Table>                                          Three months ended June 30,
<Caption>                                        ---------------------------
                                                     2010         2009
                                                 ------------   ------------
  <S>                                            <C>            <C>
 EARNINGS PER COMMON SHARE
   Basic Income (Loss)
     Per Common Share                                $(0.06)        $(0.01)
                                                 ============   ============

   Diluted Income (Loss)
     Per Common Share                                $(0.06)        $(0.01)
                                                 ============   ============

 Weighted average number
   of common shares outstanding                    4,677,728      4,677,728
                                                 ============   ============

 Diluted average number
   of common shares outstanding                    4,677,728      4,677,728
                                                 ============   ============

<FN>

The Accompanying Notes are an Integral Part of These Financial Statements.

</Table>























<PAGE> 8                    PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)

<Table>                                           Six months ended June 30,
<Caption>                                        ---------------------------
                                                     2010           2009
                                                 ------------   ------------
  <S>                                            <C>            <C>
  REVENUES                                        $2,230,130     $1,395,946
                                                 ------------   ------------
  COSTS AND EXPENSES:
    Operating expenses                               778,312        676,539
    General and administrative                       457,955        455,102
    Severance award agreement                             --        209,935
    Taxes, other than income
      and payroll taxes                               57,659         80,784
    Provision for depletion,
      depreciation and amortization                  346,260        318,456
    Valuation allowances                             867,468             --
    Accretion expense                                 12,111         11,798
    Other costs and expenses                          64,543         70,145
                                                 ------------   ------------
                                                   2,584,308      1,822,759
                                                 ------------   ------------
  OPERATING INCOME (LOSS)                           (354,178)      (426,813)
                                                 ------------   ------------
  OTHER INCOME (EXPENSE):
    Interest income                                   16,383         47,870
    Other income                                       6,397          7,200
    Interest expense                                    (303)          (773)
                                                 ------------   ------------
                                                      22,477         54,297
                                                 ------------   ------------

INCOME (LOSS) BEFORE INCOME
  TAX PROVISION (BENEFIT)                           (331,701)      (372,516)
    Income tax provision (benefit)
      Current                                         44,900       (137,583)
      Deferred                                      (255,400)      (  6,800)
                                                 -----------    ------------
                                                    (210,500)      (144,383)
                                                 ------------   ------------
 NET INCOME (LOSS)                                $ (121,201)    $ (228,133)
                                                 ============   ============


<FN>

The Accompanying Notes are an Integral Part of These Financial Statements.

</Table>



<PAGE> 9                    PYRAMID OIL COMPANY
                         STATEMENTS OF OPERATIONS
                                (UNAUDITED)

<Table>                                           Six months ended June 30,
<Caption>                                        ---------------------------
                                                     2010         2009
                                                 ------------   ------------
  <S>                                            <C>            <C>
 EARNINGS PER COMMON SHARE
   Basic Income (Loss)
     Per Common Share                                $(0.03)        $(0.05)
                                                 ============   ============
   Diluted Income (Loss)
     Per Common Share                                $(0.03)        $(0.05)
                                                 ============   ============

 Weighted average number
   of common shares outstanding                    4,677,728      4,677,728
                                                 ============   ============

 Diluted average number
   of common shares outstanding                    4,677,728      4,677,728
                                                 ============   ============

<FN>

The Accompanying Notes are an Integral Part of These Financial Statements.

</Table>
























<PAGE> 10                  PYRAMID OIL COMPANY
                         STATEMENTS OF CASH FLOWS
                               (UNAUDITED)
<Table>                                            Six months ended June 30,
<Caption>                                         ---------------------------
                                                      2010           2009
                                                  ------------   ------------
<S>                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income (loss)                                 $ (121,201)    $ (228,133)
  Adjustments to reconcile net income (loss)
    to cash provided by (used in)
    operating activities:
      Provision for depletion,
        depreciation and amortization                  346,260        318,456
      Accretion expense                                 12,111         11,798
      Valuation allowances                             867,468             --
      Severance award agreement                             --        209,935
      Loss on retirement of fixes assets                   803             --
      Deferred taxes                                  (255,400)       ( 6,800)

  Changes in assets and liabilities:
    Increase in trade accounts, interest
      and income taxes receivable                      (80,418)      (133,548)
    (Increase) decrease in crude oil inventories        (2,073)         1,193
    Decrease in prepaid expenses                        71,747         98,466
    Decrease in accounts payable
      and accrued liabilities                         (132,929)      (340,135)
                                                     ---------      ---------
    Net cash provided by (used in)
      operating activities                             706,368       ( 68,768)
                                                     ---------      ---------

<FN>

  The Accompanying Notes Are an Integral Part of These Financial Statements.

</Table>
















<PAGE> 11

                           PYRAMID OIL COMPANY
                         STATEMENTS OF CASH FLOWS
                               (UNAUDITED)
<Table>                                            Six months ended June 30,
<Caption>                                         ---------------------------
                                                       2010           2009
                                                  ------------   ------------
<S>                                                 <C>            <C>
CASH FLOWS FROM INVESTING ACTIVITIES:

  Capital expenditures                             $(1,498,010)     $(167,498)
  Redemptions of short-term investments                480,000             --
  Purchases of short-term investments                 (250,000)      (500,000)
  Decrease (increase) in short-term investments         38,101       ( 36,290)
                                                     ---------      ---------
Net cash (used in) investing activities             (1,229,909)      (703,788)
                                                     ---------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:

   Loans to employees                                   (1,900)        (1,100)
   Principal payments from loans to employees            2,300          1,200
   Principal payments on debt                         ( 12,304)      ( 11,834)
                                                     ---------       --------
Net cash (used in) financing activities                (11,904)       (11,734)
                                                     ---------       --------

Net (decrease) in cash                                (535,445)      (784,290)

Cash at beginning of period                          1,438,825      1,793,563
                                                     ---------      ---------
Cash at end of period                               $  903,380     $1,009,273
                                                     =========      =========
SUPPLEMENTAL CASH FLOW INFORMATION:

  Cash paid during the six months for interest        $    303       $    773
                                                      ========       ========
  Cash paid during the six months for income taxes    $    800       $162,787
                                                      ========       ========

<FN>

   The Accompanying Notes Are an Integral Part of These Financial Statements.

</Table>









<PAGE> 12                     PYRAMID OIL COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                                 JUNE 30, 2010
                                  (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, 2009 Form 10-K which is incorporated herein by reference.  The
financial data presented herein should be read in conjunction with the
Company's December 31, 2009 financial statements and notes thereto, contained
in the Company's Form 10-K.

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 June 30, 2010 and December 31, 2009 and the results
of its operations and its cash flows for the three and six month periods ended
June 30, 2010 and 2009.  The results of operations for an interim period are
not necessarily indicative of the results to be expected for a full year.

Income taxes:  When tax returns are filed, it is highly certain that some
positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken
or the amount of the position that would be ultimately sustained.  The benefit
of a tax position is recognized in the financial statements in the period
during which, based on all available evidence, management believes it is more
likely than not that the position will be sustained upon examination,
including the resolution of appeals or litigation processes, if any.  Tax
positions taken are not offset or aggregated with other positions.  Tax
positions that meet the more-likely-than-not recognition threshold are
measured as the largest amount of tax benefit that is more than 50 percent
likely of being realized upon settlement with the applicable taxing authority.
The portion of the benefits associated with tax positions taken that exceeds
the amount measured as described above is reflected as a liability for
unrecognized tax benefits in the accompanying balance sheets along with any
associated interest and penalties that would be payable to the taxing
authorities upon examination.

Interest associated with unrecognized tax benefits are classified as interest
expense and penalties are classified in selling, general and administrative
expenses in the statements of income.




<PAGE> 13

Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing the net income
(loss) applicable to common stock by the weighted average number of shares of
common stock outstanding during the period.

Valuation Allowances

The Company has recorded valuation allowances for certain of its oil and gas
properties when the undiscounted future net cash flows are less than the net
capitalized costs for the property.  For the six months ended June 30, 2010,
the Company has recorded a valuation allowance of approximately $867,000 for a
well that was drilled and abandoned in the second quarter of 2010. The well
was drilled to its objective but did not encounter adequate hydrocarbons to
warrant completion of the well.


2.  Impact of Recent Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update 2010-06, Fair
Value Measurements and Disclosures (Topic 820): Improving Disclosures about
Fair Value Measurements.  This guidance amends the disclosure requirements
related to recurring and nonrecurring fair value measurements and requires new
disclosures on the transfers of assets and liabilities between Level 1 (quoted
prices in active market for identical assets or liabilities) and Level 2
(significant other observable inputs) of the fair value measurement hierarchy,
including the reasons and the timing of the transfers.  Additionally, the
guidance requires a roll forward of activities on purchases, sales, issuance
and settlements of the assets and liabilities measured using significant
unobservable inputs (Level 3 fair value measurements).  The guidance became
effective for the reporting period beginning January 1, 2010, except for the
disclosure on the roll forward activities for Level 3 fair value measurements,
which will become effective for the reporting period beginning January 1,
2011.  Other than requiring additional disclosures, adoption of this new
guidance has not and is not expected to have a significant impact on our
consolidated financial statements.  The Company's adoption of this updated
guidance was not significant to our consolidated financial statements.

In February 2010, the FASB issued updated guidance related to subsequent
events. As a result of this updated guidance, public filers must still
evaluate subsequent events through the issuance date of their financial
statements, however, they are not required to disclose the date in which
subsequent events were evaluated in their financial statements disclosures.
This amended guidance became effective upon its issuance on February 24, 2010
at which time the Company adopted this updated guidance.







<PAGE> 14

3.  Dividends

No cash dividends were paid during the six months ended June 30, 2010 and
2009.


4.  Income Taxes

The Company adopted FASB ASC 740, Income Taxes (formerly FASB Interpretation
48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB
Statement No. 109) (Topic 740) on January 1, 2007.  As a result of the
implementation of FASB ASC 740, the company made a comprehensive review of its
portfolio of tax positions in accordance with recognition standards
established by FASB ASC 740.  As a result of the implementation of FASB ASC
740, the Company recognized no material adjustments to liabilities or
stockholders equity.

The Company files income tax returns in the U.S. federal jurisdiction,
California and New York states.  With few exceptions, the Company is no longer
subject to U.S. federal tax examination for the years before 2006.  State
jurisdictions that remain subject to examination range from 2005 to 2009.  The
Company does not believe there will be any material changes in its
unrecognized tax positions over the next 12 months.

The Company policy is to recognize interest and penalties accrued on any
unrecognized tax benefits as a component of income tax expense.  As of the
date of adoption of FASB ASC 740, the Company did not have any accrued
interest or penalties associated with any unrecognized tax benefits, nor was
any interest expense recognized during the quarter.


5.  Commitments

In February 2002, the Company entered into an employment agreement with
John H. Alexander pursuant to which Mr. Alexander agreed to serve as the
Company's Vice President. On June 3, 2004, Mr. Alexander was appointed as the
Company's President and Chief Executive Officer.  The employment agreement is
for an initial term of six years, which term automatically renews annually if
written notice is not tendered.

Pursuant to the employment agreement, the Company may terminate Mr.
Alexander's employment with or without cause at any time before its term
expires upon providing written notice.  In the event the Company terminates
Mr. Alexander's employment without cause, Mr. Alexander would be entitled to
receive a severance amount equal to his annual base salary and benefits for
the balance of the term of his employment agreement.  In the event of






<PAGE> 15

termination by reason of Mr. Alexander's death or permanent disability, his
legal representative will be entitled to receive his annual salary and
benefits for the remaining term of his employment agreement.  In the event of,
or termination following, a change in control of the Company, as defined in
the agreement, Mr. Alexander would be entitled to receive his annual salary
and benefits for the remainder of the term of his agreement.  In the event
that Mr. Alexander is terminated the Company would incur approximately
$600,000 in costs.

The Company has been notified by the United States Environmental Protection
Agency (EPA) of a final settlement offer to settle its potential liability as
a generator of waste containing hazardous substances that was disposed of at a
waste disposal site in Santa Barbara County.  The Company has responded to the
EPA by indicating that the waste contained petroleum products that fall within
the exception to the definition of hazardous substances for petroleum-related
substances of the pertinent EPA regulations.  Management has concluded
that under both Federal and State regulations no reasonable basis exists for
any valid claim against the Company.  As such, the likelihood of any adverse
settlement is deemed remote.

6.  Income Tax Provision

Income tax benefits of $210,500 were realized by the Company for the first
six months of 2010, due primarily to a valuation allowance for the write-down
of a certain oil and gas property in the amount of $867,468.  Income tax
benefits of $144,383 were realized by the Company for the first six months of
2009, due primarily to a net loss before income tax benefit of $372,516 for
the six months ended June 30, 2009.

Net income tax benefit for the first six months ended June 30, 2010 was
calculated as follows:
                                    Federal       State      Total
                                    --------    ---------  --------
         Current tax provision     $  37,850    $  7,050  $  44,900
         Deferred tax benefit       (198,900)    (56,500)  (255,400)
                                     -------     -------    -------
                                   $(161,050)   $(49,450) $(210,500)
                                     =======      ======    =======

Deferred income taxes are recognized using the asset and liability method by
applying income tax rates to cumulative temporary differences based on when
and how they are expected to affect the tax returns.  Deferred tax assets and
liabilities are adjusted for income tax rate changes.  Deferred income tax
assets have been offset by a valuation allowance of $1,766,000 as of June 30,
2010.  Management reviews deferred income taxes regularly throughout the year,
and accordingly makes any necessary adjustments to properly reflect the
valuation allowance based upon current financial trends and projected results.





<PAGE> 16

7.  Severance Award Agreements

On June 4, 2009, the Company and John Alexander entered into a Severance
Award Agreement pursuant to which the Company awarded Mr. Alexander a
supplemental payment in connection with his future severance of employment
with the Company and recorded an increase to stockholders' equity of $209,935.
Pursuant to the Severance Award Agreement and following the termination of Mr.
Alexander's employment, he will be entitled to receive (at the Company's
option) 25,000 shares of the Company's common stock or the then-fair market
value of the shares.  As of June 30, 2009, the Company intends to deliver
the Company's common shares for the Severance Award; therefore, in accordance
with FASB ASC Topic 718, Compensation-Stock Compensation, management has
classified the share-based compensation as stockholders' equity at June 30,
2009.

On December 30, 2008, the Company and John Alexander entered into a Severance
Award Agreement pursuant to which the Company awarded Mr. Alexander a
supplemental payment in connection with his future severance of employment
with the Company and recorded an increase to stockholders' equity of $100,000.
Pursuant to the Severance Award Agreement and following the termination of Mr.
Alexander's employment, he will be entitled to receive (at the Company's
option) 25,000 shares of the Company's common stock or the then-fair market
value of the shares.  As of December 31, 2008, the Company intends to deliver
the Company's common shares for the Severance Award; therefore, in accordance
with FASB ASC Topic 718, Compensation-Stock Compensation, management has
classified the share-based compensation as stockholders' equity at December
31, 2008.


8.  Incentive and Retention Plan

On January 9, 2007, the Company's Board of Directors adopted an Incentive and
Retention Plan pursuant to which the Company's officers and other employees
selected by the Company's Compensation Committee are entitled to receive
payments if they are employed by the Company as of the date of a 'Corporate
Transaction,' as defined in the Incentive and Retention Plan.  A 'Corporate
Transaction' includes certain mergers involving the Company, sales of Company
assets, and other changes in the control of the Company, as specified in the
Incentive and Retention Plan.  In general, the amount that is payable to each
plan participant will equal the number of plan units that have been granted to
him or her, multiplied by the increase in the value of the Company between
January 9, 2007 and the date of a Corporate Transaction.  There has been no
Corporate Transaction since the adoption of the Incentive and Retention Plan.









<PAGE> 17

9.  Related-party Transaction

Effective January 1, 1990, John H. Alexander, an officer and director of the
Company participated with a group of investors that acquired the mineral and
fee interest on one of the Company's oil and gas leases (Santa Fe Energy
lease) in the Carneros Creek field after the Company declined to participate.
The thirty-three percent interest owned by Mr. Alexander represents a minority
interest in the investor group.  Royalties on oil and gas production from this
property paid to the investor group approximated $103,000 during the first six
months of 2010 and $79,000 during the fist six months of 2009.


10.  Subsequent Event

On July 28, 2010, the Company entered into a Purchase and Sale Agreement for
the sale of a portion of its Texas joint venture properties.  Pursuant to the
agreement, the Company has agreed to sell to the buyers 5% of the working
interest of the Company's Texas joint venture, subject to certain prior
agreements and encumbrances.  The purchase price for the assigned interest is
$306,146.  After the sale, the Company will continue to own a 7.5% working
interest in the assets.  The sale will be completed upon receipt of funds from
the buyers, which are payable upon delivery of a reasonably acceptable
assignment from the Company.





























<PAGE> 18

11.  Warrants Issued

The Company issued warrants to purchase common shares of the Company as
compensation for consulting services.  The value of warrants issued for
compensation is accounted for as a non-cash expense to the Company at the fair
value of the warrants issued.  The Company values the warrants at fair value
as calculated by using the Black-Scholes option-pricing model.

The following table summarizes the warrant activity for the six months ended
June 30, 2010:

                                           Number         Weighted-Average
(Unaudited)                              of Warrants        Exercise Price
                                         -----------       ----------------

Outstanding, December 31, 2009               25,000               $3.20

  Granted                                        --                 --
  Exercised                                      --                 --
  Cancelled                                      --                 --
                                             ------                ----
Outstanding, June 30, 2010                   25,000               $3.20
                                             ======                ====

The following summarizes the warrants issued, outstanding and exercisable as
of June 30, 2010:

                      Grant Date                November, 2008
                      Strike Price                   $3.20
                      Expiration Date           November, 2010
                      Warrants Remaining            25,000
                      Proceeds if Exercised        $80,000
                      Call Feature                   None


12.  Fair Value

Effective January 1, 2009, we adopted FASB ASC 820 (formerly SFAS No. 157) for
our nonfinancial assets and nonfinancial liabilities measured on a
non-recurring basis.  We adopted the provisions of FASB ASC 820 for measuring
the fair value of our financial assets and liabilities during 2008.  As
defined in FASB ASC 820, fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.  We utilize market data
or assumptions that we believe market participants would use in pricing the
asset or liability, including assumptions about risk and the risks inherent in
the inputs to the valuation technique.  FASB ASC 820 establishes a
three-tiered fair value hierarchy which prioritizes the inputs used in
measuring fair value as follows:

     Level 1 - Observable inputs such as quoted prices in active markets; this
included the Company's short-term investments.

PAGE <19>

     Level 2 - Inputs, other than quoted prices, that are observable for the
asset or liability, either directly or indirectly. These include quoted prices
for similar assets or liabilities in active markets and quoted prices for
identical or similar assets or liabilities in markets that are not active; and

     Level 3 - Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own assumptions.  Included
in this category is the Company's determination of the value of its asset
retirement obligation liability.  The obligation has increased $19,025 during
the six months ended June 30, 2010 as a result of normal accretion expense and
the drilling of a new well in the first quarter of 2010.

The carrying amount of our cash and equivalents, accounts receivable, accrued
current liabilities, accounts payable and long term debt reported in the
condensed consolidated balance sheets approximates fair value because of the
short maturity of those instruments.


Note 13.  Registration Statement on Form S-3

The Company filed a shelf registration statement on Form S-3 with the
Securities and Exchange Commission (SEC) on December 22,2009, that became
effective on January 14, 2010.  The registration statement is designed to
provide the Company the flexibility to offer and sell from time to time up to
$20 million of the Company's common stock.  The Company may offer and sell
such securities through one or more methods of distribution, subject to market
conditions and the Company's capital needs.  The terms of any offering under
the shelf registration statement will be established at the time of such
offering and will be described in a prospectus supplement filed with the SEC
prior to the completion of the offering.  The Company has not filed any
supplemental prospectus with the SEC or sold any common stock under this
registration statement.


Note 14.  Assets Retirement Obligations

The Company recognizes a liability at discounted fair value for the future
retirement of tangible long-lived assets and associated assets retirement cost
associated with the petroleum and natural gas properties. The fair value of
the liability is capitalized as part of the cost of the related asset and
amortized to expense over its useful life. The liability accretes until the
date of expected settlement of the retirement obligations. The related
accretion expense is recognized in the statement of operations. The provision
will be revised for the effect of any changes to timing related to cash flow
or undiscounted abandonment costs. Actual expenditures incurred for the
purpose of site reclamation are charged to the asset retirement obligations to
the extent that the liability exists on the balance sheet. Differences between
the actual costs incurred and the fair value of the liability recorded are
recognized in income in the period the actual costs are incurred.




PAGE <20>

There are no legally restricted assets for the settlement of asset retirement
obligations.  A reconciliation of the Company's asset retirement obligations
from the periods presented are as follows:

<Table>
<Caption>
              <S>                               <C>
              Balance at December 31, 2009      $1,193,324
                Incurred during the period              --
                Additions for new wells              6,914
                Accretion expense                   12,111
                                                 ---------
              Balance at June 30, 2010          $1,212,349
                                                 =========
</Table>


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS


FORWARD LOOKING INFORMATION

Looking forward into the balance of fiscal 2010, crude oil prices have
increased by 35 cents per barrel.

In late July the Company sold 40% of its 12.5% working interest in a Texas
natural gas joint venture for approximately $306,000.  Forty percent of the
Company's interest equaled 5% of the pre-farmout working interest, leaving
Pyramid with approximately 7.5% of the pre-farmout working interest in the
joint venture.

Also in July, the Company acquired a 30% interest in a shallow oil and gas
prospect located in Menard County, Texas.  The 876-acre prospect is based upon
an extension of the Wilhelm Lane and Jacoby field.  The first well is expected
to spud late in this year's third quarter or in the fourth quarter, and will
test the Goem Lime at a depth of approximately 3,500 feet.

The Company is preparing to start re-drilling operations in its Mountain View
field in Kern County, California, and is awaiting a contract-drilling rig
scheduled to arrive in late September.  The Company plans to re-drill one well
and possibly a second depending on conditions encountered on the first.  Both
of these wells are located on Company properties and have complete
infrastructure in place.

Pyramid has been in discussions with another oil company for several months
regarding the establishment of a joint venture between the two companies for
the purpose of drilling several new wells in Kern County beginning later this
year.  The discussions involve combining specific interests of each company
and drilling one to four new wells during the next 12 to 18 months.  Neither
party has as yet entered into any formal agreement.


<PAGE> 21

The Company was well prepared for, and is effectively managing, the present
economic downturn, as management positioned the Company with no debt and
significant cash reserves. Management continues to believe that during the
next 12 months there will be an expanding range of opportunities to invest in
oil and gas assets at more attractive valuations than have been available
during the past several years.

The Company's growth in 2010 will be highly dependant on the amount of success
the Company has in its operations and capital investments, including the
outcome of wells that have not yet been drilled.  The Company's capital
investment program may be modified during the year due to explorations and
development successes or failures, market conditions and other variables.  The
production and sales of oil and gas involves many complex processes that are
subject to numerous uncertainties, including reservoir risk, mechanical
failures, human error and market conditions.

The Company has positioned itself, over the past several years, to withstand
various types of economic uncertainties, with a program of consolidating
operations on certain producing properties and concentrating on properties
that provide the major revenue sources.  The drilling of a new well and
several limited work-overs of certain wells have allowed the Company to
maintain its crude oil reserves for the last three years.  The Company expects
to maintain its reserve base in 2010, by drilling new wells and routine
maintenance of its existing wells.

The Company may be subject to future costs necessary for compliance with the
new implementation of air and water environmental quality requirements of the
various state and federal governmental agencies.  The requirements and costs
are unknown at this time, but management believes that costs could be
significant in some cases.  As the scope of the requirements become more
clearly defined, management may be better equipped to determine the true costs
to the Company.

The Company continues to absorb the costs for various state and local fees and
permits under new environmental programs, the sum of which were not material
during 2009 and for the six months ended June 30, 2010.  The Company retains
outside consultants to assist the Company in maintaining compliance with these
regulations.  The  Company is actively pursuing an ongoing policy of upgrading
and restoring older properties to comply with current and proposed
environmental regulations.  The costs of upgrading and restoring older
properties to comply with environmental regulations have not been determined.
Management believes that these costs will not have a material adverse effect
upon its financial position or results of operations.

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
release.  Such forward-looking statements speak only as of the date of this

<PAGE> 22

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.


ANALYSIS OF SIGNIFICANT CHANGES IN RESULTS OF OPERATIONS

RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2010
  COMPARED TO THE QUARTER ENDED JUNE 30, 2009

REVENUES

The increase in revenues of $426,490 is due to higher average prices for the
second quarter of 2010 and higher crude oil production.  Oil and gas revenues
increased by 53% for the three months ended June 30, 2010 when compared with
the same period for 2009.  Oil and gas revenues increased by 39% due to higher
average crude oil prices for the second quarter of 2010.  The average price of
the Company's oil and gas for the second quarter of 2010 increased by
approximately $18.94 per equivalent barrel when compared to the same period of
2009.  Revenues increased by 14% due to higher crude oil production/shipments.
The Company's net revenue share of crude oil production/sales increased by
approximately 2,000 barrels for the second quarter of 2010.  The increase in
crude oil production is due to the drilling of a new well on the Company's
Anderson lease during the first quarter of 2010 and an increase in production
on its Mountain View properties.


OPERATING EXPENSES

Operating expenses increased by $113,203 for the second quarter of 2010.  The
cost to produce an equivalent barrel of crude oil during the second quarter of
2010 was approximately $26.42 per barrel, an increase of approximately $4.08
per barrel when compared with production costs for the second quarter of 2009.
The increase in lease operating expenses is caused by many factors.  The
largest component of the increase in operating expenses is the quarterly
adjustment for inventory change. Inventory change increased by approximately
$35,000 as compared with the same period of 2009.  Inventory volumes were
lower at June 30, 2010 as compared with the same period in 2009.  Higher costs
were also incurred for parts and supplies, pump repairs, labor, equipment
rental, chemicals, contract operations, insurance and equipment fuel.

Parts and supplies increased by approximately $24,000 due to an  increase in
lease and well maintenance activities.  Pump repairs increased by
approximately $11,500 due to an increase in well maintenance work in the
second quarter of 2010 and the replacement of down-hole pumps with more
expensive pumps that are more efficient and have better longevity. Company
labor increased by approximately $9,000 due to an increase in both regular and
overtime hours worked.

<PAGE> 23

Equipment rental increased by approximately $8,000 due primarily to the rental
of a crude oil storage tank for the new well that was drilled on the Anderson
lease during the first quarter of 2010.  Chemical usage increased by
approximately $7,000.

Contract operations increased by approximately $6,000 due to greater activity
for the Texas prospect.  Insurance expense increased by approximately $6,000
due to higher costs for workers' compensation and liability insurance
premiums.  Equipment fuel increased by approximately $4,000 due to higher
overall maintenance activities and higher prices for gasoline and diesel
during the second quarter of 2010.


GENERAL AND ADMINISTRATIVE

General and administrative expenses increased by approximately $21,000 for the
second quarter of 2010 when compared with the same period for 2009.  Legal
services increased by approximately $20,000 due primarily to services related
to the Company's filing of its proxy for the 2010 annual meeting.  Consulting
services increased by approximately $13,000 due to fees paid to a third-party
geologist that is reviewing the Company's oil and gas properties for potential
well drilling locations.  Administrative salaries increased by approximately
$8,600 due to the hiring of a part-time petroleum engineer during the third
quarter of 2009.  This was offset by a decrease in officers salaries of
approximately $27,000.  During the second quarter of 2009, the Board of
Directors approved the payment of a bonus of $25,000 to Mr. Alexander,
President.  No bonuses was paid during the second quarter of 2010.


PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION

The provision for depletion, depreciation and amortization increased
by approximately $37,000 for the second quarter of 2010, when compared with
the same period for 2009.  The increase is due primarily to an increase in
depletion of the Company's oil and gas properties.  The increase in depletion
is due primarily to a higher per barrel depletion rate for the second quarter
of 2010.


VALUATION ALLOWANCES

During the second quarter of 2010, the Company commenced drilling of a
horizontal well on one of its Mountain View properties in Kern County,
California.  The well was drilled to its objective but did not encounter
adequate hydrocarbons to warrant completion of the well.  During the second
quarter of 2010, the Company recorded a valuation allowance of $842,327 for
the costs that had been incurred for the drilling of this well.






<PAGE> 24

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2010
  COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2009


REVENUES

The increase in revenues of $834,184 is due primarily to higher average prices
for the first six months of 2010.  Oil and gas revenues increased by 60% for
the six months ended June 30, 2010 when compared with the same period for
2009.  Oil and gas revenues increased by 60% due to higher average crude oil
prices for the first six months of 2010.  The average price of the Company's
oil and gas for the first six months of 2010 increased by approximately $27.96
per equivalent barrel when compared to the same period of 2009.


OPERATING EXPENSES

Operating expenses increased by $101,773 for the first six months of 2010.
The cost to produce an equivalent barrel of crude oil during the first half of
2010 was approximately $26.07 per barrel, an increase of approximately $3.42
per barrel when compared with production costs for the same period of 2009.
The increase in lease operating expenses is caused by many factors.  These
include higher costs for parts and supplies, waste water disposal, production
equipment repair and maintenance, equipment rental, pump repairs, insurance
expense, chemicals and equipment fuel.

Parts and supplies increased by approximately $40,000 due to an increase in
lease and well maintenance activities during the first half of 2010.  Waste
water disposal increased by approximately $20,000 due to higher costs at the
Company's Delaney Tunnell lease.  Production equipment repair and maintenance
increased by approximately $15,000 due to an increase in maintenance
activities.  Equipment rental increased by approximately $13,000 due primarily
to maintenance activities on the Company's Mullaney lease and the rental of a
crude oil storage tank in the second quarter of 2010 for the new well that was
drilled on the Anderson lease in the first quarter of 2010.

Pump repairs increased by approximately $11,500 due to an increase in well
maintenance work in the second quarter of 2010 and the replacement of
down-hole pumps with more expensive pumps that are more efficient and have
better longevity.  Insurance expense increased by approximately $10,000 due to
higher costs for workers' compensation and employee health insurance premiums.

Chemical usage increased by approximately $10,000.  Equipment fuel costs
increased by approximately $9,000 due to increased maintenance activities and
higher prices for gasoline and diesel for the first six months of 2010.







<PAGE> 25

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased by approximately $3,000 for the
first six months of 2010 when compared with the same period for 2009.
Officers salaries decreased by approximately $27,000 for the six months ended
June 30, 2010.  During June of 2009, the Board of Directors approved the
payment of a bonus of $25,000 to Mr. Alexander, President.  No bonuses were
paid during the first six months of 2010.  Accounting services decreased by
approximately $25,000 due primarily to lower audit fees.  These were offset by
higher costs for legal fees, administrative salaries and consulting services.
Legal services increased by approximately $17,000 due primarily to services
related to the Company's filing of its proxy for the 2010 annual meeting.
Administrative salaries increased by approximately $15,000 due to the hiring
of a part-time employee effective August 1, 2009.  Consulting services
increased by approximately $15,000 due to fees paid to a third-party
geologist that is reviewing the Company's oil and gas properties for potential
well drilling locations.


PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION

The provision for depletion, depreciation and amortization increased
by approximately $28,000 for the six months ended June 30, 2010, when compared
with the same period for 2009.  The increase is due primarily to an increase
in depletion of the Company's oil and gas properties.  The increase in
depletion is due primarily to a higher per barrel depletion rate for 2010.


VALUATION ALLOWANCES

During the second quarter of 2010, the Company commenced drilling of a
horizontal well on one of its Mountain View properties in Kern County,
California.  The well was drilled to its objective but did not encounter
adequate hydrocarbons to warrant completion of the well.  During the first six
months of 2010, the Company recorded a valuation allowance of $867,468 for the
costs that had been incurred for the drilling of this well.


LIQUIDITY AND CAPITAL RESOURCES

Cash decreased by $535,445 for the six months ended June 30, 2010.  During the
first half of 2010, operating activities provided cash of $706,368.   Cash was
provided by the redemption of short-term investments in the amount of
$480,000.  Cash was used for the purchase of short-term investments of
$250,000, capital expenditures of $1,498,010 and payments on long-term debt of
$12,304.  See the Statements of Cash Flows for additional detailed
information.  The Company had available a line of credit of $500,000 and
short-term investments of $3,075,960 that provided additional liquidity during
the first six months of 2010.




<PAGE> 26

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 first six months of 2010
increased by approximately 60% ($27.96 per equivalent barrel) when compared
with the same period for 2009.  The Company cannot predict the future course
of crude oil prices.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          Not Applicable


Item 4.  CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief Financial Officer have concluded, based
on their evaluation as of the end of the period covered by this report, that
our disclosure controls and procedures (as defined in the Securities Exchange
Act of 1934 Rules 13a-15(e) and 15d-15(e)) are effective to ensure that
information required to be disclosed in the reports that we file or submit
under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosures.

There was no change in our internal control over financial reporting that
occurred during the three months ended June 30, 2010 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
<PAGE>
<PAGE> 27
                       PYRAMID OIL COMPANY

                   PART II - OTHER INFORMATION

Item 1.  -  Legal Proceedings

               None

Item 1A. -  Risk Factors

     See the risk factors that are included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2009.

Item 2.  -  Unregistered Sales of Equity Securities and Use of Proceeds

               None

Item 3.  -  Defaults Upon Senior Securities

               None

Item 4.  -  Removed and Reserved


Item 5.  -  Other Information -

               None

Item 6.  -  Exhibits

     a.  Exhibits

         3.1  Restated Articles of Incorporation of Pyramid Oil Company

         3.2  Amended and Restated Bylaws of Pyramid Oil Company

        31.1  Certification of the Registrant's Principal Executive Officer
              under Exchange Act Rules 13a-14(a) and 15-d-14(a), as adopted
              pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

        31.2  Certification of the Registrant's Principal Financial Officer
              under Exchange Act Rules 13a-14(a) and 15-d-14(a), as adopted
              pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

        32.1  Certification of the Registrant's  Principal Executive Officer
              under 18 U.S.C. Section 1350, as adopted pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002.

        32.2  Certification of the Registrant's  Principal Financial Officer
              under 18 U.S.C. Section 1350, as adopted pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002.

     
<PAGE>
<PAGE> 28


                            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: August 13, 2010
                                            JOHN H. ALEXANDER
                                           ---------------------
                                            John H. Alexander
                                                President


Dated: August 13, 2010
                                            LEE G. CHRISTIANSON
                                           ---------------------
                                            Lee G. Christianson
                                          Chief Financial Officer