Pioneer Reports Third Quarter 2007 Results



    DALLAS, November 6 /CNW/ - Pioneer Natural Resources Company (NYSE:  PXD)
today announced financial and operating results for the quarter ended
September 30, 2007.

    --  Third quarter net income of $102 million, or $.84 per diluted share

    --  Third quarter average daily oil and gas sales of 109,423 barrels oil
equivalent per day (BOEPD), or 100,799 BOEPD excluding discontinued operations
in Canada

    --  A 21% increase in production from core onshore assets in Spraberry,
Raton, Edwards and Tunisia compared to the same quarter of 2006

    --  Initial production from South Coast Gas in South Africa

    --  Alaskan Oooguruk project on schedule

    --  The sale of Pioneer's Canadian assets for $540 million

    --  Bolt-on acquisitions in the Spraberry field and the Barnett Shale
totaling $240 million

    --  Three new discoveries in Tunisia and two new discoveries in Edwards

    --  The repurchase of 3.7 million shares at an average cost of $43.14 per
share

    Pioneer also announced that it expects 2007 all-in finding and
development costs to be approximately $14 to $17 per barrel oil equivalent
(BOE). Reserve replacement for 2007 is expected to be greater than 300%. The
expected 2007 reserve additions are primarily attributable to continuing
success in Tunisia, Spraberry, Raton and Edwards, and attractive acquisitions
in Raton, Spraberry and the Barnett Shale.

    Operations

    In the Spraberry oil field, Pioneer has drilled approximately 300 wells
year to date, and production for the third quarter of 2007 increased 14%
compared to the same quarter of 2006. The Company continues to drill a
majority of the wells to the deeper Wolfcamp zone resulting in incremental
reserves and production of more than 20% being added to the typical Spraberry
well. Today, Pioneer also separately announced a Spraberry acquisition.

    In the Edwards Trend in South Texas, gas production increased 63%
compared to the same quarter of 2006. Two new fields were discovered during
the third quarter increasing Pioneer's new field discoveries in the Edwards
expansion area to eight. The Company's 3-D seismic program is progressing
well, and treating and pipeline infrastructure in the field is being expanded
to handle Pioneer's increasing production.

    The Raton Basin program continues to be ahead of schedule as a result of
improved permitting and drilling and completion efficiencies. The Company
expects that 300 new coal bed methane wells will be completed and placed
online in Raton during 2007. Raton production for the third quarter of 2007 is
up 11% compared to the third quarter of 2006. Pioneer continues to further
enhance production by adding wellhead compression throughout the field and
optimizing field pressures.

    Today, Pioneer also separately announced that it has agreed to purchase
additional properties in the Barnett Shale and provided an update on its
initial activity.

    On its operated Jenein Nord block in Tunisia, Pioneer announced two new
discoveries during the third quarter, for a total of seven successful wells on
the block since late 2006. The Company is constructing new facilities and
expects to initiate oil production from Jenein Nord during the fourth quarter
of 2007, with first sales expected in the first quarter of 2008. The three
latest discoveries on the block, Farrah, Angham and Methaq, tested at a
combined production rate of greater than 10,000 barrels of oil per day (BOPD).
The Nadir well, a recent discovery in the Adam Concession, tested in excess of
4,000 BOPD. The acquisition of additional 3-D seismic is underway in Jenein
Nord and will soon commence on the Anaguid block. Three additional wells are
expected to be drilled in Tunisia before the end of the year, and 15 to 19
wells are planned for 2008.

    Gas and condensate production from four wells in the South Coast Gas
project offshore South Africa has been initiated. Net gas equivalent
production is expected to average 15 to 20 million cubic feet per day (MMCFPD)
during the fourth quarter, and one additional gas well is expected to be
online by the end of the year.

    In Alaska, the Company has installed the Oooguruk production modules,
export pipeline and the drilling rig in order to commence drilling in
December. The project is on schedule for first oil production during the first
half of 2008 with first sales expected mid-year. On the Cosmopolitan project,
offshore Kenai Peninsula, Pioneer is drilling a horizontal appraisal well from
an onshore pad. It is anticipated that the appraisal well will be completed by
the end of the year, followed by an extended production test.

    Financial Review

    Pioneer's third quarter net income was $102 million, or $.84 per diluted
share, and included income from continuing operations of $93 million, or $.77
per diluted share. Cash flow from operating activities for the third quarter
was $191 million.

    Excluding discontinued operations attributable to the pending sale of the
Company's Canadian assets, third quarter oil sales averaged 24,994 barrels per
day (BPD), natural gas liquids sales averaged 19,997 BPD and gas sales
averaged 335 MMCFPD.

    The reported price for oil was $70.27 per barrel and included $11.98 per
barrel related to deferred revenue from volumetric production payments (VPPs)
for which production was not recorded. The price for natural gas liquids was
$42.48 per barrel. The reported price for gas was $7.11 per thousand cubic
feet (MCF), including $.58 per MCF related to deferred revenue from VPPs for
which production was not recorded.

    During the third quarter of 2007, Pioneer recorded in Other Income $28
million ($18 million or $.15 per diluted share after tax) associated with the
sale of Alaskan Petroleum Production Tax (PPT) credits. The Company earns PPT
credits for qualified capital expenditures that can be used to reduce future
PPT liabilities, sold to third parties or refunded by the State of Alaska.

    Third quarter production costs averaged $12.24 per barrel oil equivalent
(BOE). DD&A expense for the quarter was $114 million, or $12.28 per BOE, and
included a charge of $17 million ($11 million or $.09 per diluted share after
tax), due to downward price-related proved reserve revisions for properties in
the Uinta/Piceance basin as a result of extremely low Rockies spot gas prices
of $.60 per MCF as of September 30, 2007. Production from Pioneer's Raton
Basin properties is sold through Mid-Continent markets, and therefore Raton
proved reserves were not impacted by low quarter-end prices in the Rockies.

    Exploration and abandonment costs were $34 million for the quarter and
included $10 million of acreage and unsuccessful drilling costs and $24
million of geologic and geophysical expenses, including seismic and personnel
costs.

    Considering that the South Coast Gas project is completed and that most
of the investment in Oooguruk facilities will be expended by the end of 2007,
Pioneer's 2008 capital budget is expected to be approximately $1 billion, in
line with expected cash flow. Capital spending for 2008 will be focused
primarily on onshore development activities in Spraberry, Raton, Edwards and
Tunisia and offshore development drilling at Oooguruk.

    Scott Sheffield, Chairman and CEO, stated, "Third quarter production from
continuing operations was up 12% from the prior year quarter. This strong
organic production growth coupled with the opportunity to enhance per-share
performance with share repurchases give us confidence that we can achieve our
12+% compounded annual production growth target for 2007 through 2010."

    Financial Outlook

    Fourth quarter 2007 production from continuing operations is forecasted
to average 101,000 to 106,000 BOEPD. Consistent growth is expected to
continue, primarily driven by increasing production from Spraberry, Raton,
Edwards, Tunisia and the South Coast Gas project in South Africa.

    Fourth quarter production costs (including production and ad valorem
taxes and transportation costs) are expected to average $11.75 to $12.75 per
BOE based on current NYMEX strip prices for oil and gas. Depreciation,
depletion and amortization expense is expected to average $10.50 to $11.50 per
BOE.

    Total exploration and abandonment expense during the fourth quarter is
expected to be $40 million to $70 million and could include up to $45 million
associated with lower-risk resource plays in the Edwards Trend in South Texas,
the Rockies and Tunisia. In addition, exploration expense is expected to
include up to $25 million for seismic investments and personnel, primarily
related to the onshore resource plays in South Texas and Tunisia that Pioneer
is currently progressing.

    General and administrative expense is expected to be $30 million to $34
million. Interest expense is expected to be $38 million to $42 million,
reflecting the ceasing of capitalization of interest on the South Gas Project
in South Africa since it has started producing. Accretion of discount on asset
retirement obligations is expected to be $2 million to $3 million.

    The Company's fourth quarter effective income tax rate is expected to
range from 40% to 45% based on current capital spending plans.

    Fourth quarter 2007 amortization of deferred losses on terminated oil and
gas hedges is expected to be $38 million. The Company's financial results, oil
and gas hedges and future VPP amortization are outlined on the attached
schedules.

    All necessary approvals for the divestiture of Pioneer's Canadian
subsidiary have been obtained, except for the purchaser's approval under the
Investment Canada Act. During the fourth quarter, Pioneer expects to close the
sale of its Canadian subsidiary and the initial public offering of units in
Pioneer Southwest Energy Partners L.P. Proceeds from these transactions will
be used to fund the previously announced acquisitions in the Rockies, Barnett
Shale and Spraberry and to reduce outstanding indebtedness.

    Earnings Conference Call

    On Tuesday, November 6 at 10:00 a.m. Eastern Time, Pioneer will discuss
its quarterly financial and operating results with an accompanying
presentation. The call will be webcast on Pioneer's website, www.pxd.com. At
the website, select 'INVESTOR' at the top of the page. For those who cannot
listen to the live broadcast, a replay will be available shortly after the
call. Or you may choose to dial (800) 310-6649 (confirmation code: 3997429) to
listen to the call by telephone and view the accompanying visual presentation
at the website above. A telephone replay will be available by dialing (888)
203-1112 (confirmation code: 3997429).

    Pioneer is a large independent oil and gas exploration and production
company, headquartered in Dallas, with operations in the United States, South
Africa and Tunisia. For more information, visit Pioneer's website at
www.pxd.com.

    Pioneer uses the term "all-in finding and development costs per BOE" to
mean total costs incurred divided by the summation of annual proved reserves,
on a BOE basis, attributable to revisions of previous estimates, purchases of
minerals-in-place and discoveries and extensions. Consistent with industry
practice, future capital costs to develop proved undeveloped reserves are not
included in costs incurred. "Reserve replacement" is the summation of annual
proved reserves, on a BOE basis, attributable to revisions of previous
estimates, purchases of minerals-in-place and discoveries and extensions
divided by annual production of oil, NGLs and natural gas, on a BOE basis.

    A registration statement relating to the common units of Pioneer
Southwest Energy Partners L.P. has been filed with the Securities and Exchange
Commission but has not yet become effective. These securities may not be sold,
nor may offers to buy be accepted, prior to the time the registration
statement becomes effective. This communication does not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such state or jurisdiction.

    The offering of common units will be made only by means of a prospectus.
A copy of the prospectus, when available, may be obtained by submitting
requests to Citigroup Global Markets Inc., Attention: Prospectus Department,
Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220,
phone: 718-765-6732, fax: 718-765-6734; Deutsche Bank Securities Inc.,
Attention: Prospectus Department, 100 Plaza One, Jersey City, New Jersey
07311, phone: 800-503-4611, or email: prospectusrequest@list.db.com; or UBS
Securities LLC, Attention: Prospectus Department, 299 Park Avenue, New York,
New York 10171, phone: 212-821-3000.

    Except for historical information contained herein, the statements in
this News Release are forward-looking statements that are made pursuant to the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements and the business prospects of Pioneer are
subject to a number of risks and uncertainties that may cause Pioneer's actual
results in future periods to differ materially from the forward-looking
statements. These risks and uncertainties include, among other things,
volatility of commodity prices, product supply and demand, competition, the
ability to obtain environmental and other permits and the timing thereof,
other government regulation or action, third party approvals, international
operations and associated international political and economic instability,
litigation, the costs and results of drilling and operations, availability of
drilling equipment, Pioneer's ability to replace reserves, implement its
business plans (including its plan sell its Canadian subsidiary, its plan to
repurchase stock and its plan to form Pioneer Southwest Energy Partners L.P.
and offer securities representing interests therein) or complete its
development projects as scheduled, access to and cost of capital, the
assumptions underlying production forecasts, uncertainties about estimates of
reserves, quality of technical data, environmental and weather risks, acts of
war or terrorism. These and other risks are described in Pioneer's 10-K and
10-Q Reports and other filings with the Securities and Exchange Commission.
Pioneer undertakes no duty to publicly update these statements except as
required by law.

    
                      PIONEER NATURAL RE

SOURCES COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2007 2006 ------------- ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 19,271 $ 7,033 Accounts receivable, net 239,732 199,371 Income taxes receivable 88,302 24,693 Inventories 98,918 95,131 Prepaid expenses 11,004 11,509 Deferred income taxes 89,077 82,927 Discontinued operations held for sale 670,026 - Other current assets, net 90,795 115,894 ------------- ------------ Total current assets 1,307,125 536,558 ------------- ------------ Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting 8,603,233 8,178,052 Accumulated depletion, depreciation and amortization (1,940,595) (1,895,408) ------------- ------------ Total property, plant and equipment 6,662,638 6,282,644 ------------- ------------ Deferred income taxes 3,817 345 Goodwill 310,872 309,908 Other assets, net 269,132 225,944 ------------- ------------ $ 8,553,584 $ 7,355,399 ------------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 362,458 $ 349,820 Interest payable 28,415 31,008 Income taxes payable 17,462 12,865 Discontinued operations held for sale 104,582 - Deferred revenue 163,941 181,232 Other current liabilities 326,614 312,054 ------------- ------------ Total current liabilities 1,003,472 886,979 ------------- ------------ Long-term debt 2,610,683 1,497,162 Deferred income taxes 1,289,401 1,172,507 Deferred revenue 364,636 483,279 Other liabilities and minority interests 220,666 330,801 Stockholders' equity 3,064,726 2,984,671 ------------- ------------ $ 8,553,584 $ 7,355,399 ------------- ------------ PIONEER NATURAL RE

SOURCES COMPANY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for per share data) Three months ended Nine months ended September 30, September 30, ------------------- ----------------------- 2007 2006 2007 2006 --------- --------- ----------- ----------- Revenues and other income: Oil and gas $458,898 384,112 $1,232,272 1,108,634 Interest and other 30,991 14,017 71,051 33,576 Gain (loss) on disposition of assets, net 558 (436) (860) (3,990) --------- --------- ----------- ----------- 490,447 397,693 1,302,463 1,138,220 --------- --------- ----------- ----------- Costs and expenses: Oil and gas production 113,554 88,687 308,380 264,741 Depletion, depreciation and amortization 113,879 82,562 280,927 233,269 Impairment of long-lived assets (2,582) - 15,309 - Exploration and abandonments 34,498 41,006 170,143 158,671 General and administrative 32,330 29,262 94,304 88,466 Accretion of discount on asset retirement obligations 1,702 940 5,025 2,793 Interest 35,476 23,467 94,432 82,857 Hurricane activity, net 110 - 60,658 38,000 Other 7,513 14,001 23,478 31,208 --------- --------- ----------- ----------- 336,480 279,925 1,052,656 900,005 --------- --------- ----------- ----------- Income from continuing operations before income taxes 153,967 117,768 249,807 238,215 Income tax provision (60,948) (39,271) (92,181) (113,966) --------- --------- ----------- ----------- Income from continuing operations 93,019 78,497 157,626 124,249 Income from discontinued operations, net of tax 8,908 2,302 10,374 587,796 --------- --------- ----------- ----------- Net income $101,927 $ 80,799 $ 168,000 $ 712,045 --------- --------- ----------- ----------- Basic earnings per share: Income from continuing operations $ 0.78 $ 0.63 $ 1.30 $ 0.99 Income from discontinued operations, net of tax 0.07 0.02 0.09 4.68 --------- --------- ----------- ----------- Net income $ 0.85 $ 0.65 $ 1.39 $ 5.67 --------- --------- ----------- ----------- Diluted earnings per share: Income from continuing operations $ 0.77 $ 0.62 $ 1.29 $ 0.98 Income from discontinued operations, net of tax 0.07 0.02 0.08 4.55 --------- --------- ----------- ----------- Net income $ 0.84 $ 0.64 $ 1.37 $ 5.53 --------- --------- ----------- ----------- Weighted average shares outstanding: Basic 120,323 124,021 121,020 125,520 --------- --------- ----------- ----------- Diluted 121,805 126,734 122,496 129,134 --------- --------- ----------- ----------- PIONEER NATURAL RE

SOURCES COMPANY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three months ended Nine months ended September 30, September 30, --------------------- ------------------------- 2007 2006 2007 2006 ---------- ---------- ------------ ------------ Cash flows from operating activities: Net income $ 101,927 $ 80,799 $ 168,000 $ 712,045 Adjustments to reconcile net income to net cash provided by operating activities: Depletion, depreciation and amortization 113,879 82,562 280,927 233,269 Impairment of long- lived assets (2,582) - 15,309 - Exploration expenses, including dry holes 8,725 15,043 92,706 81,449 Hurricane activity - - 66,000 42,000 Deferred income taxes 73,091 42,337 135,505 115,788 (Gain) loss on disposition of assets, net (558) 436 860 3,990 Loss on extinguishment of debt - - - 8,076 Accretion of discount on asset retirement obligations 1,702 940 5,025 2,793 Discontinued operations 6,719 12,987 41,518 (512,835) Interest expense 4,092 2,357 13,305 7,522 Commodity hedge related activity 5,349 (3,713) 15,982 (6,210) Amortization of stock-based compensation 8,461 7,047 24,816 25,357 Amortization of deferred revenue (45,578) (47,395) (135,934) (143,230) Other noncash items 5,193 5,201 1,744 12,219 Change in operating assets and liabilities, net of effects from acquisition and disposition: Accounts receivable, net (55,383) (1,351) (54,821) 161,814 Income taxes receivable (27,428) (54) (64,026) (69) Inventories 3,073 (12,990) (6,331) (52,113) Prepaid expenses (6,723) (1,673) (1,213) 291 Other current assets, net 5,224 (7,160) 5,037 2,047 Accounts payable 44,334 75,160 11,748 (21,253) Interest payable (12,858) (1,202) (2,592) (11,476) Income taxes payable 1,697 (37,993) 4,597 17,820 Other current liabilities (41,743) (31,552) (80,189) (22,624) ---------- ---------- ------------ ------------ Net cash provided by operating activities 190,613 179,786 537,973 656,670 Net cash provided by (used in) investing activities (418,625) (367,179) (1,405,062) 598,112 Net cash provided by (used in) financing activities 221,206 (169,491) 877,918 (1,175,226) ---------- ---------- ------------ ------------ Net increase (decrease) in cash and cash equivalents (6,806) (356,884) 10,829 79,556 Effect of exchange rate changes on cash and cash equivalents 758 (86) 1,409 1,714 Cash and cash equivalents, beginning of period 25,319 457,042 7,033 18,802 ---------- ---------- ------------ ------------ Cash and cash equivalents, end of period $ 19,271 $ 100,072 $ 19,271 $ 100,072 ---------- ---------- ------------ ------------ PIONEER NATURAL RE

SOURCES COMPANY UNAUDITED SUMMARY PRODUCTION AND PRICE DATA Three months ended Nine months ended September 30, September 30, ------------------ ----------------- 2007 2006 2007 2006 -------- --------- -------- -------- Average Daily Sales Volumes from Continuing Operations: Oil (Bbls) - U.S. 18,298 17,575 18,617 17,406 South Africa 2,368 3,513 2,599 4,287 Tunisia 4,328 2,299 4,062 2,393 -------- --------- -------- -------- Worldwide 24,994 23,387 25,278 24,086 -------- --------- -------- -------- Natural gas liquids (Bbls) - U.S. 19,997 18,884 18,190 18,599 -------- --------- -------- -------- Worldwide 19,997 18,884 18,190 18,599 -------- --------- -------- -------- Gas (Mcf) - U.S. 333,842 286,182 308,447 282,450 Tunisia 1,003 - 2,755 - -------- --------- -------- -------- Worldwide 334,845 286,182 311,202 282,450 -------- --------- -------- -------- Average Daily Sales Volumes from Discontinued Operations: Oil (Bbls) - U.S. - - - 3,208 Argentina - - - 3,362 Canada 277 312 309 299 -------- --------- -------- -------- Worldwide 277 312 309 6,869 -------- --------- -------- -------- Natural gas liquids (Bbls) - Argentina - - - 563 Canada 425 468 406 433 -------- --------- -------- -------- Worldwide 425 468 406 996 -------- --------- -------- -------- Gas (Mcf) - U.S. - (140) - 48,195 Argentina - - - 58,700 Canada 47,537 46,664 49,808 42,514 -------- --------- -------- -------- Worldwide 47,537 46,524 49,808 149,409 -------- --------- -------- -------- Average Reported Prices (a): Oil (per Bbl) - U.S. $ 68.28 $ 70.96 $ 59.38 $ 66.91 South Africa $ 79.54 $ 70.68 $ 70.57 $ 67.25 Tunisia $ 73.61 $ 70.79 $ 66.24 $ 65.13 Worldwide $ 70.27 $ 70.90 $ 61.63 $ 66.79 Natural gas liquids (per Bbl) - U.S. $ 42.48 $ 38.73 $ 38.09 $ 36.15 Worldwide $ 42.48 $ 38.73 $ 38.09 $ 36.15 Gas (per Mcf) - U.S. $ 7.11 $ 6.24 $ 7.27 $ 6.30 Tunisia $ 9.83 $ - $ 7.92 $ - Worldwide $ 7.11 $ 6.24 $ 7.27 $ 6.30 (a) Average prices are attributable to continuing operations and include the results of hedging activities and amortization of VPP deferred revenue. PIONEER NATURAL RE

SOURCES COMPANY UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (in thousands) EBITDAX and discretionary cash flow ("DCF") (as defined below) are presented herein, and reconciled to the generally accepted accounting principle ("GAAP") measures of net income and net cash provided by operating activities because of their wide acceptance by the investment community as financial indicators of a company's ability to internally fund exploration and development activities and to service or incur debt. The Company also views the non-GAAP measures of EBITDAX and DCF as useful tools for comparisons of the Company's financial indicators with those of peer companies that follow the full cost method of accounting. EBITDAX and DCF should not be considered as alternatives to net income or net cash provided by operating activities, as defined by GAAP. Three months ended Nine months ended September 30, September 30, ------------------- --------------------- 2007 2006 2007 2006 --------- --------- ---------- ---------- Net income $101,927 $ 80,799 $ 168,000 $ 712,045 Depletion, depreciation and amortization 113,879 82,562 280,927 233,269 Impairment of long-lived assets (2,582) - 15,309 - Exploration and abandonments 34,498 41,006 170,143 158,671 Hurricane activity - - 66,000 42,000 Loss on extinguishment of debt - - - 8,076 Accretion of discount on asset retirement obligations 1,702 940 5,025 2,793 Interest expense 35,476 23,467 94,432 82,857 Income tax provision 60,948 39,271 92,181 113,966 (Gain) loss on disposition of assets, net (558) 436 860 3,990 Discontinued operations 6,719 12,987 41,518 (512,835) Current income taxes on discontinued operations 340 412 5,029 155,484 Cash exploration expense on discontinued operations 1,051 1,501 4,998 2,641 Commodity hedge related activity 5,349 (3,713) 15,982 (6,210) Amortization of stock-based compensation 8,461 7,047 24,816 25,357 Amortization of deferred revenue (45,578) (47,395) (135,934) (143,230) Other noncash items 5,193 5,201 1,744 12,219 --------- --------- ---------- ---------- EBITDAX (a) 326,825 244,521 851,030 891,093 Cash interest expense (31,384) (21,110) (81,127) (75,335) Current income taxes 11,803 2,654 38,295 (153,662) --------- --------- ---------- ---------- Discretionary cash flow (b) 307,244 226,065 808,198 662,096 Cash exploration expense (26,824) (27,464) (82,435) (79,863) Changes in operating assets and liabilities (89,807) (18,815) (187,790) 74,437 --------- --------- ---------- ---------- Net cash provided by operating activities $190,613 $179,786 $ 537,973 $ 656,670 --------- --------- ---------- ---------- (a)"EBITDAX" represents earnings before depletion, depreciation and amortization expense; impairment of long-lived assets; exploration and abandonments; noncash hurricane activity; loss on extinguishment of debt; accretion of discount on asset retirement obligations; interest expense; income taxes; loss on the disposition of assets; noncash effects from discontinued operations; commodity hedge related activity; stock-based compensation; amortization of deferred revenue; and other noncash items. (b) Discretionary cash flow equals cash flows from operating activities before changes in operating assets and liabilities and before cash exploration expense. PIONEER NATURAL RE

SOURCES COMPANY SUPPLEMENTAL INFORMATION As of November 2, 2007 Open Commodity Hedge Positions 2007 --------- Fourth Quarter 2008 2009 2010 --------- --------- ---------- --------- Average Daily Oil Production Hedged: Swap Contracts: Volume (Bbl) 9,500 15,250 8,000 4,000 NYMEX price (Bbl) $ 73.56 $ 61.36 $ 71.57 $ 71.46 Collar Contracts: Volume (Bbl) 5,000 3,000 2,000 - NYMEX price (Bbl) Ceiling $ 76.04 $ 80.80 $ 76.50 $ - Floor $ 63.00 $ 65.00 $ 65.00 $ - Average Daily Natural Gas Liquid Production Hedged: Swap Contracts: Volume (Bbl) - 500 500 500 Blended index price (Bbl) (a) $ - $ 44.33 $ 41.75 $ 39.63 Average Daily Gas Production Hedged: Swap Contracts: Volume (MMBtu) 205,054 129,167 9,897 2,500 NYMEX price (MMBtu) (b) $ 8.41 $ 8.61 $ 9.00 $ 8.07 (a) Represents blended Mont Belvieu posted price per Bbl. (b) Approximate, based on historical differentials to index prices. Amortization of Deferred Revenue Associated with Volumetric Production Payments and Net Derivative Losses (in thousands) 2007 --------- Fourth Quarter 2008 Thereafter Total --------- --------- ---------- --------- Total deferred revenues (a) $ 45,297 $158,138 $325,142 $528,577 Less derivative losses to be recognized in pretax earnings (b) (347) (4,373) (12,744) (17,464) --------- --------- ---------- --------- Total VPP impact to pretax earnings $ 44,950 $153,765 $312,398 $511,113 --------- --------- ---------- --------- (a) Deferred revenue will be amortized as increases to oil and gas revenues during the indicated future periods. (b) Represents the remaining pretax earnings impact of the derivatives assigned in the VPPs. PIONEER NATURAL RE

SOURCES COMPANY SUPPLEMENTAL INFORMATION As of November 2, 2007 Deferred Losses on Terminated Hedges (a) ---------------------------------------------------------------------- (in thousands) 2007 --------- Fourth Quarter 2008 2009 Thereafter --------- --------- ------ ---------- Commodity hedge losses (b) $ 31,615 $ 94,487 $ - $ - Debt hedge losses (c) 119 488 541 5,203 --------- --------- ------ ---------- Total deferred losses $ 31,734 $ 94,975 $ 541 $ 5,203 --------- --------- ------ ---------- (a) Excludes deferred hedge gains and losses on terminated derivatives related to the VPPs. (b) Deferred commodity hedge losses will be amortized as decreases to oil and gas revenues during the indicated future periods. (c) Deferred debt hedge losses will be amortized as increases to interest expense during the indicated future periods.

For further information:

For further information: Pioneer Natural Resources Company Investors:
Frank Hopkins/Scott Rice, 972-444-9001 or Media and Public Affairs: Susan
Spratlen, 972-444-9001

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