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                                   EXHIBIT 99.2

                               PYRAMID OIL COMPANY
                          COMPENSATION COMMITTEE CHARTER


                                     PURPOSE

The purposes of the Compensation Committee (the "Committee") of the board of
directors (the "Board") of Pyramid Oil Company (the "Corporation") are:

     To discharge the Board's responsibilities relating to compensation of the
Corporation's directors and executive officers, including approving individual
executive officer compensation;

     To review and recommend to the Board compensation plans, policies and
benefit programs for employees generally; and

     To prepare the report on executive compensation required to be included
in the Corporation's annual proxy statement.


                          COMPOSITION AND TERM OF OFFICE

     The Committee will consist of not fewer than two members each of whom
shall be a director who satisfies the independence requirements of the
Securities and Exchange Commission, as interpreted by the Board in its
business judgment.

     One member shall serve as Chairman of the Committee. The members of the
Committee shall serve one-year terms, and shall be appointed by the Board
annually on the day of the Annual Meeting of Stockholders or on such other
date as the Board shall determine. Members of the Committee may be removed or
replaced by the Board.


                     COMMITTEE MEETINGS - OPERATING PRINCIPLES

     The Committee shall meet with such frequency and at such intervals as it
shall determine is necessary to carry out its duties and responsibilities, but
in any case, at least two times each year.

     Meetings of the Committee may be called as needed by the Chairman of the
Committee.

     The Chairman will preside, when present, at all meetings of the
Committee. The Committee may meet by telephone and may take action by written
consent.





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     The Committee shall have the sole right to retain and terminate
compensation consultants to assist in the evaluation of director, CEO or
executive officer compensation, including the sole authority to approve the
consultant's fees and other retention terms.

     The Committee shall have the authority to obtain advice and assistance
from any officer or employee of the Corporation or from any outside legal
expert or other advisor.

     The Committee may request that members of management or outside
consultants and advisors of the Committee, be present to assist the Committee
in performing its duties.

     Minutes of each meeting will be kept and distributed to the entire
Committee.

     The Committee may form, and where legally permissible may delegate
authority to, subcommittees when the Committee deems it appropriate or
desirable to facilitate the operation or administration of the plans or
programs.  Where legally permissible, the Committee may also delegate
authority to committees consisting of employees when the Committee deems it
appropriate or desirable for the efficient administration of employee
compensation and benefit plans.


             COMPENSATION/EMPLOYEE BENEFITS RESPONSIBILITIES

The Committee shall perform the following functions:

     Provide oversight and guidance for compensation and benefit philosophy
for all employees of the Corporation.

     Review and approve corporate goals and objectives relevant to CEO
compensation, evaluate the CEO's performance in light of those goals and
objectives and have the sole authority to determine the CEO's compensation
level based on this evaluation.

     Review and approve other significant terms of employment for the CEO.

     Review and make recommendations to the Board with respect to incentive
compensation plans and equity-based plans.

     Review and make recommendations to the Board on matters concerning the
directors' annual retainer, as well as any other compensation programs
relating to the Board.

     Prepare the report on executive compensation for inclusion in the
Corporation's proxy statement in accordance with applicable rules and
regulations.

     Exercise any fiduciary, administrative or other function assigned to the
Committee under any of the Corporation's health, benefit or welfare plans.

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                         OTHER RESPONSIBILITIES

     Following each Committee meeting, report at the next meeting of the full
Board all significant items discussed at the Committee meeting.

     Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.

     Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.

     Conduct an annual performance evaluation of the Committee.

     Take such further actions or provide such further advice as the full
Board may from time to time delegate to the Committee.