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Pioneer Reports Fourth Quarter and Full Year 2007 Results

DALLAS--(BUSINESS WIRE)--Feb. 6, 2008--Pioneer Natural Resources Company (NYSE:PXD) today announced financial and operating results for the quarter and year ended December 31, 2007.

    Fourth quarter:

    --  Reported fourth quarter net income of $205 million, or $1.72
        per diluted share

    --  Increased average daily oil and gas sales to 103,330 barrels
        oil equivalent per day (BOEPD) excluding discontinued
        operations; 12% above comparable sales for the fourth quarter
        of 2006

    --  Increased oil and gas sales volumes from core onshore assets
        in Spraberry, Raton, Edwards and Tunisia by 18% compared to
        the same quarter of 2006

    --  Initiated development drilling on the Alaskan Oooguruk project

    --  Initiated production from the Jenein Nord block in Tunisia

    --  Closed bolt-on acquisitions in the Spraberry field, Raton
        Basin and Barnett Shale play, which added 140 million barrels
        oil equivalent (MMBOE) of net resource potential and more than
        1,000 drilling locations

    --  Closed the sale of Canadian assets for proceeds of $540
        million and recognized a gain of $101 million

    --  Increased 2008 gas hedges by approximately 70 million cubic
        feet per day (MMCFPD) to a total of approximately 200 MMCFPD
        at an average price of $8.42 per thousand cubic feet (MCF)

    Full year:

    --  Reported 2007 net income of $373 million, or $3.06 per diluted
        share

    --  Increased full-year oil and gas sales to 35.5 MMBOE excluding
        discontinued operations; a 14% increase on a production per
        share basis

    --  Replaced 357% of production, ending the year with net proved
        reserves of 964 MMBOE

    --  Added 148 MMBOE of proved reserves in 2007 at a finding and
        development cost of $15.40 per barrel oil equivalent (BOE)

    --  Expanded Edwards Trend gross discovered resource potential by
        approximately 250 billion cubic feet (BCF) to 400 BCF to 600
        BCF (reflects nine discoveries to date)

    --  Repurchased 4.9 million shares at an average cost of $43.07
        per share

Scott Sheffield, Chairman and CEO, stated, "Since successfully implementing our asset restructuring program two years ago, we have delivered 16% compound annual growth in production per share, added substantial reserves and resource potential and significantly reduced our finding and development cost. Over the next four years through 2011, we are confident that consistent, predictable production growth from our core assets will allow us to achieve our 12+% compound average annual production per share growth target. With this strong production growth and the expiration of our legacy hedges, we are also targeting approximately 20% compound average annual growth in cash flow for the four-year period and expect significant improvements in our return on capital employed."

Financial Review

Pioneer's fourth quarter net income was $205 million, or $1.72 per diluted share, and included:

    --  Income of $120 million ($1.01 per diluted share) from
        discontinued operations related to the previously announced
        divestiture of Canadian assets

    --  Income of $22 million ($14 million or $.11 per diluted share
        after tax) associated with the sale of Alaskan Petroleum
        Production Tax credits which are earned for qualified capital
        expenditures

    --  A noncash exploration and abandonment charge of $72 million
        ($45 million or $.38 per diluted share after tax) to write off
        the carrying value of the Clipper prospect in the deepwater
        Gulf of Mexico (previously announced)

    --  A noncash impairment charge of $10 million ($.09 per diluted
        share) to eliminate the remaining carrying value of its
        Equatorial Guinea assets (previously announced)

    --  A tax benefit of $10 million ($.08 per diluted share)
        associated with the relinquishment of certain of the Company's
        other remaining interests in West Africa (previously
        announced)

Cash flow from operating activities for the fourth quarter was $237 million.

Excluding discontinued operations, fourth quarter oil sales averaged 24,846 barrels per day (BPD), natural gas liquids sales averaged 19,629 BPD and gas sales averaged 353 MMCFPD.

The reported fourth quarter average price for oil was $79.51 per barrel and included $11.96 per barrel related to deferred revenue from volumetric production payments (VPPs) for which production was not recorded. The price for natural gas liquids was $51.26 per barrel. The reported price for gas was $7.21 per MCF, including $.55 per MCF related to deferred revenue from VPPs for which production was not recorded.

Fourth quarter production costs averaged $11.82 per BOE.

Exploration and abandonment costs were $109 million for the quarter and included $80 million of acreage and unsuccessful drilling costs (primarily related to the previously discussed $72 million charge to write off the Clipper prospect) and $29 million of geologic and geophysical expenses, including seismic and personnel costs.

For the twelve months ended December 31, 2007, net income was $373 million, or $3.06 per diluted share. Cash flow from operating activities for the year was $775 million.

Full-year oil and gas sales averaged 97,351 BOEPD excluding discontinued operations, and included oil sales of 25,169 BPD, natural gas liquids sales of 18,553 BPD and gas sales of 322 MMCFPD. Reported average prices for 2007 were $66.08 per barrel for oil, $41.60 per barrel for natural gas liquids and $7.26 per MCF for gas. Average oil and gas prices for the year include $11.94 per barrel and $.61 per MCF, respectively, related to deferred revenue from VPPs for which production was not recorded.

Operations

In the Spraberry oil field, Pioneer increased production by 13% in 2007 compared to 2006, drilling approximately 350 wells. The Company continues to have success drilling into the deeper Wolfcamp zone adding approximately 20% to the reserves and production of a typical Spraberry-only well. A similar drilling program is planned for 2008 with expected production growth of approximately 15%.

Pioneer increased its 2007 production in the Raton Basin by 10% compared to 2006. The Company completed approximately 300 coal bed methane wells during 2007, benefiting from improved drilling and completion efficiencies. Pioneer expects to complete 175 wells during 2008, increasing production by approximately 10%.

A news release covering new developments and Pioneer's 2007 results in the Edwards Trend was issued earlier this week. Highlights of the release included 2007 production growth of 38%, an expansion of the gross discovered gas resource potential to 400 BCF to 600 BCF from nine new field discoveries to date and three recent well tests of 12 MMCFPD to 16 MMCFPD each.

During 2007, Pioneer entered the Barnett Shale, building a land position of approximately 80,000 gross acres with more than 450 drilling locations and more than 600 BCF of net resource potential. The Company plans to drill approximately 20 wells in 2008, with plans to ramp up drilling in 2009.

In Tunisia, Pioneer's production grew 65% in 2007 from 2006 levels and is expected to grow 80% to 90% in 2008. Nine new discoveries were drilled in 2007, and production from Pioneer's operated Jenein Nord block commenced during the fourth quarter. Jenein Nord oil production will gradually increase during 2008 as wells are tied in and gross facility capacity is expanded from 5,000 BPD currently to 10,000 BPD in the third quarter and 20,000 BPD by year end. Pioneer plans to drill 15 to 17 wells in Tunisia during 2008.

Offshore South Africa, gas and condensate production from the South Coast Gas project has been initiated. Gas that is currently being reinjected (90 MMCFPD) to support Sable oil production represents approximately 90% of the reserves to be produced through the South Coast Gas project. Strong oil prices have extended the life of the Sable oil project and have led Pioneer to delay the start-up of Sable gas sales, pending the completion of facilities modifications that will allow for the simultaneous production of oil and gas from Sable. The modifications are expected to be completed in late 2008 or early 2009.

Production facilities are in place for Pioneer's Oooguruk project on Alaska's North Slope, and drilling is underway. The Company expects to drill 13 to 15 wells in 2008 and initiate production during the first half of the year. First sales are expected mid-year. Pioneer's net sales from the project are expected to reach 3,000 BOEPD to 4,000 BOEPD by year-end 2008.

On the Cosmopolitan project, offshore Kenai Peninsula, Pioneer has completed the drilling and testing of a horizontal appraisal well from an onshore pad. The initial unstimulated well test results are encouraging, indicating incremental production potential from a second zone ranging from 400 BOPD to 500 BOPD. The Company plans to begin permitting activities and continue facilities planning during 2008 for a potential future development of the project and to drill another appraisal well in 2009.

Financial Outlook

First quarter 2008 production is forecasted to average 103,000 BOEPD to 109,000 BOEPD. Consistent growth is expected to continue during the quarter, primarily driven by increasing production from Pioneer's core onshore areas (Spraberry, Raton, Edwards and Tunisia).

First 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 $10.75 to $11.75 per BOE.

Total exploration and abandonment expense during the first quarter is expected to be $40 million to $70 million and could include up to $40 million associated with lower-risk resource plays in the Edwards Trend, the Rockies and Tunisia. In addition, exploration expense is expected to include up to $30 million for seismic investments and personnel, primarily related to the onshore resource plays in South Texas and Tunisia.

General and administrative expense is expected to be $32 million to $36 million. Interest expense is expected to be $35 million to $40 million. Accretion of discount on asset retirement obligations is expected to be $2 million to $3 million.

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

First quarter 2008 amortization of deferred losses on terminated oil and gas hedges is expected to be $24 million. The Company's financial results, oil and gas hedges and future VPP amortization are outlined on the attached schedules.

The initial public offering of common units of Pioneer Southwest Energy Partners L.P. has been postponed due to market conditions, and the timing of the offering remains uncertain.

Earnings Conference Call

On Wednesday, February 6 at 10:00 a.m. Eastern Time, Pioneer will discuss its 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 (877) 723-9518 (confirmation code: 9085740) 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: 9085740).

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 "finding and development cost 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," or the replacing of production, 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 to repurchase stock) or complete its development projects as scheduled, Pioneer's ability to complete its plans to effect an initial public offering of interests in Pioneer Southwest Energy Partners L.P. and if effected, the timing, size, structure and terms of the offering, there being no assurance as to whether or when market conditions will improve to facilitate an offering, access to and cost of capital, the assumptions underlying production forecasts, uncertainties about estimates of reserves, quality of technical data, environmental and weather risks, and 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. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these statements except as required by law.

Cautionary Note to U.S. Investors -- The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Pioneer uses certain terms in this release, such as "resource potential," "production potential" or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines prohibit Pioneer from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Pioneer.

                  PIONEER NATURAL RESOURCES COMPANY
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                            December 31,  December 31,
                                                2007          2006
                                            ------------  ------------
                                            (Unaudited)

                                ASSETS

Current assets:
 Cash and cash equivalents                  $    12,171   $     7,033
 Accounts receivable, net                       283,832       199,371
 Income taxes receivable                         40,046        24,693
 Inventories                                     97,619        95,131
 Prepaid expenses                                 9,378        11,509
 Deferred income taxes                          108,073        82,927
 Other current assets, net                      213,936       115,894
                                            ------------  ------------

   Total current assets                         765,055       536,558
                                            ------------  ------------

Property, plant and equipment, at cost:
 Oil and gas properties, using the
  successful efforts method of accounting     9,251,113     8,178,052
 Accumulated depletion, depreciation and
  amortization                               (2,028,472)   (1,895,408)
                                            ------------  ------------

   Total property, plant and equipment        7,222,641     6,282,644
                                            ------------  ------------

Deferred income taxes                            10,263           345
Goodwill                                        310,870       309,908
Other assets, net                               308,152       225,944
                                            ------------  ------------

                                            $ 8,616,981   $ 7,355,399
                                            ============  ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                           $   378,416   $   349,820
 Interest payable                                42,020        31,008
 Income taxes payable                            12,842        12,865
 Deferred revenue                               158,138       181,232
 Other current liabilities                      402,753       312,054
                                            ------------  ------------

   Total current liabilities                    994,169       886,979
                                            ------------  ------------

Long-term debt                                2,755,491     1,497,162
Deferred income taxes                         1,229,677     1,172,507
Deferred revenue                                325,142       483,279
Other liabilities and minority interests        269,780       330,801
Stockholders' equity                          3,042,722     2,984,671
                                            ------------  ------------

                                            $ 8,616,981   $ 7,355,399
                                            ============  ============
                  PIONEER NATURAL RESOURCES COMPANY
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except for per share data)

                           Three months ended        Year ended
                              December 31,          December 31,
                           ------------------- -----------------------
                             2007      2006       2007        2006
                           --------- --------- ----------- -----------

Revenues and other income:
  Oil and gas              $508,579  $350,306  $1,740,851  $1,458,940
  Interest and other         23,610    14,814      94,661      48,390
  Loss on disposition of
   assets, net               (1,303)   (2,469)     (2,163)     (6,459)
                           --------- --------- ----------- -----------
                            530,886   362,651   1,833,349   1,500,871
                           --------- --------- ----------- -----------
Costs and expenses:
  Oil and gas production    112,358    84,325     420,738     349,066
  Depletion, depreciation
   and amortization         106,470    80,811     387,397     314,081
  Impairment of long-lived
   assets                    10,906         -      26,215           -
  Exploration and
   abandonments             109,186    91,526     279,329     250,196
  General and
   administrative            35,283    28,129     129,587     116,595
  Accretion of discount on
   asset retirement
   obligations                2,003       934       7,028       3,726
  Interest                   40,838    24,193     135,270     107,050
  Hurricane activity, net       651    (6,000)     61,309      32,000
  Other                       8,374     5,710      31,852      36,919
                           --------- --------- ----------- -----------
                            426,069   309,628   1,478,725   1,209,633
                           --------- --------- ----------- -----------

Income from continuing
 operations before income
 taxes                      104,817    53,023     354,624     291,238
Income tax provision        (20,464)  (27,055)   (112,645)   (141,021)
                           --------- --------- ----------- -----------

Income from continuing
 operations                  84,353    25,968     241,979     150,217
Income from discontinued
 operations, net of tax     120,375     1,718     130,749     589,514
                           --------- --------- ----------- -----------
  Net income               $204,728  $ 27,686  $  372,728  $  739,731
                           ========= ========= =========== ===========

Basic earnings per share:
  Income from continuing
   operations              $   0.72  $   0.22  $     2.01  $     1.21
  Income from discontinued
   operations, net of tax      1.02      0.01        1.09        4.74
                           --------- --------- ----------- -----------
  Net income               $   1.74  $   0.23  $     3.10  $     5.95
                           ========= ========= =========== ===========

Diluted earnings per
 share:
  Income from continuing
   operations              $   0.71  $   0.21  $     1.99  $     1.19
  Income from discontinued
   operations, net of tax      1.01      0.01        1.07        4.62
                           --------- --------- ----------- -----------
  Net income               $   1.72  $   0.22  $     3.06  $     5.81
                           ========= ========= =========== ===========

Weighted average shares
 outstanding:
  Basic                     117,599   120,914     120,158     124,359
                           ========= ========= =========== ===========
  Diluted                   119,175   123,067     121,659     127,608
                           ========= ========= =========== ===========
                  PIONEER NATURAL RESOURCES COMPANY
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)

                          Three months ended         Year ended
                             December 31,           December 31,
                         --------------------- -----------------------
                            2007       2006        2007        2006
                         ---------- ---------- ------------ ----------

Cash flows from
 operating activities:
  Net income             $ 204,728  $  27,686  $   372,728  $ 739,731
   Adjustments to
    reconcile net income
    to net cash provided
    by operating
    activities:
     Depletion,
      depreciation and
      amortization         106,470     80,811      387,397    314,081
     Impairment of long-
      lived assets          10,906          -       26,215          -
     Exploration
      expenses,
      including dry
      holes                 79,045     58,686      171,751    140,135
     Hurricane activity          -     33,000       66,000     75,000
     Deferred income
      taxes                (11,686)    45,973      123,819    161,761
     Loss on disposition
      of assets, net         1,303      2,469        2,163      6,459
     Loss on
      extinguishment of
      debt                       -          -            -      8,076
     Accretion of
      discount on asset
      retirement
      obligations            2,003        934        7,028      3,726
     Discontinued
      operations          (117,941)    22,876      (76,423)  (489,959)
     Interest expense        3,744      3,520       17,049     11,042
     Commodity hedge
      related activity      (3,898)    (2,233)      12,084     (8,443)
     Amortization of
      stock-based
      compensation          10,493      6,708       35,309     32,065
     Amortization of
      deferred revenue     (45,297)   (47,097)    (181,231)  (190,327)
     Other noncash items     1,438      2,267        3,182     14,486
  Change in operating
   assets and
   liabilities, net of
   effects from
   acquisition and
   disposition:
     Accounts
      receivable, net      (41,870)   (40,454)     (96,691)   121,360
     Income taxes
      receivable            48,648    (23,426)     (15,378)   (23,495)
     Inventories            (4,570)     4,053      (10,901)   (48,060)
     Prepaid expenses        1,869      4,517          656      4,808
     Other current
      assets, net           (7,983)   (44,531)      (2,946)   (42,484)
     Accounts payable       18,374    (14,832)      30,122    (36,085)
     Interest payable       13,604      4,976       11,012     (6,500)
     Income taxes
      payable               (4,620)   (21,515)         (23)    (3,695)
     Other current
      liabilities          (27,418)    (6,230)    (107,607)   (28,854)
                         ---------- ---------- ------------ ----------
Net cash provided by
 operating activities      237,342     98,158      775,315    754,828
Net cash provided by
 (used in) investing
 activities               (377,930)  (452,597)  (1,782,992)   145,515
Net cash provided by
 (used in) financing
 activities                133,401    261,683    1,011,319   (913,543)
                         ---------- ---------- ------------ ----------
Net increase (decrease)
 in cash and cash
 equivalents                (7,187)   (92,756)       3,642    (13,200)
Effect of exchange rate
 changes on cash and
 cash equivalents               87       (283)       1,496      1,431
Cash and cash
 equivalents, beginning
 of period                  19,271    100,072        7,033     18,802
                         ---------- ---------- ------------ ----------
Cash and cash
 equivalents, end of
 period                  $  12,171  $   7,033  $    12,171  $   7,033
                         ========== ========== ============ ==========
                  PIONEER NATURAL RESOURCES COMPANY
             UNAUDITED SUMMARY PRODUCTION AND PRICE DATA


                                  Three months ended    Year ended
                                     December 31,      December 31,
                                  ------------------ -----------------
                                    2007     2006      2007     2006
                                  -------- --------- -------- --------

Average Daily Sales
 Volumes from
 Continuing
 Operations:
    Oil (Bbls) -
                     U.S.           18,719   18,639    18,643   17,716
                     South Africa    2,926    3,653     2,681    4,127
                     Tunisia         3,201    2,365     3,845    2,386
                                  -------- --------- -------- --------
                       Worldwide    24,846   24,657    25,169   24,229
                                  ======== ========= ======== ========

    Natural gas
     liquids (Bbls)
     -               U.S.           19,629   18,156    18,553   18,488
                                  ======== ========= ======== ========

    Gas (Mcf) -      U.S.          340,073  291,509   316,418  284,732
                     South Africa   11,268        -     2,840        -
                     Tunisia         1,794    4,740     2,513    1,195
                                  -------- --------- -------- --------
                       Worldwide   353,135  296,249   321,771  285,927
                                  ======== ========= ======== ========


Average Daily Sales
 Volumes from
 Discontinued
 Operations:
    Oil (Bbls) -     U.S.                -        -         -    2,400
                     Argentina           -        -         -    2,515
                     Canada            143      347       267      311
                                  -------- --------- -------- --------
                       Worldwide       143      347       267    5,226
                                  ======== ========= ======== ========

    Natural gas
     liquids (Bbls)
     -               Argentina           -        -         -      421
                     Canada            267      552       371      463
                                  -------- --------- -------- --------
                       Worldwide       267      552       371      884
                                  ======== ========= ======== ========

    Gas (Mcf) -      U.S.                -      (36)        -   36,038
                     Argentina           -        -         -   43,905
                     Canada         29,325   46,166    44,645   43,434
                                  -------- --------- -------- --------
                       Worldwide    29,325   46,130    44,645  123,377
                                  ======== ========= ======== ========

Average Reported
 Prices (a):
    Oil (per Bbl) -  U.S.         $  76.79 $  62.45  $  63.78 $  65.73
                     South Africa $  91.61 $  61.31  $  76.36 $  65.92
                     Tunisia      $  84.37 $  57.24  $  70.04 $  63.16
                       Worldwide  $  79.51 $  61.78  $  66.08 $  65.51

    Natural gas
     liquids (per
     Bbl) -          U.S.         $  51.26 $  32.47  $  41.60 $  35.24

    Gas (per Mcf) -  U.S.         $   7.20 $   5.72  $   7.25 $   6.15
                     South Africa $   6.76 $      -  $   6.76 $      -
                     Tunisia      $  12.63 $   5.97  $   8.77 $   5.97
                       Worldwide  $   7.21 $   5.72  $   7.26 $   6.15


(a) Average prices are attributable to continuing operations and
 include the results of hedging activities and amortization of VPP
 deferred revenue.
                  PIONEER NATURAL RESOURCES 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         Year ended
                             December 31,           December 31,
                         --------------------- -----------------------
                            2007       2006       2007        2006
                         ---------- ---------- ----------- -----------

Net income               $ 204,728  $  27,686  $  372,728  $  739,731
Depletion, depreciation
 and amortization          106,470     80,811     387,397     314,081
Impairment of long-lived
 assets                     10,906          -      26,215           -
Exploration and
 abandonments              109,186     91,526     279,329     250,196
Hurricane activity               -     33,000      66,000      75,000
Loss on extinguishment
 of debt                         -          -           -       8,076
Accretion of discount on
 asset retirement
 obligations                 2,003        934       7,028       3,726
Interest expense            40,838     24,193     135,270     107,050
Income tax provision        20,464     27,055     112,645     141,021
Loss on disposition of
 assets, net                 1,303      2,469       2,163       6,459
Discontinued operations   (117,941)    22,876     (76,423)   (489,959)
Current income tax
 (benefit) provision on
 discontinued operations      (114)    (3,806)      4,915     151,676
Cash exploration expense
 on discontinued
 operations                  1,840        974       6,838       8,144
Commodity hedge related
 activity                   (3,898)    (2,233)     12,084      (8,443)
Amortization of stock-
 based compensation         10,493      6,708      35,309      32,065
Amortization of deferred
 revenue                   (45,297)   (47,097)   (181,231)   (190,327)
Other noncash items          1,438      2,267       3,182      14,486
                         ---------- ---------- ----------- -----------

   EBITDAX (a)             342,419    267,363   1,193,449   1,162,982

Cash interest expense      (37,094)   (20,673)   (118,221)    (95,990)
Current income taxes       (32,036)    22,724       6,259    (130,936)
                         ---------- ---------- ----------- -----------

     Discretionary cash
      flow (b)             273,289    269,414   1,081,487     936,056

Cash exploration expense   (31,981)   (33,814)   (114,416)   (118,223)
Changes in operating
 assets and liabilities     (3,966)  (137,442)   (191,756)    (63,005)
                         ---------- ---------- ----------- -----------

   Net cash provided by
    operating activities $ 237,342  $  98,158  $  775,315  $  754,828
                         ========== ========== =========== ===========


(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; amortization of 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 RESOURCES COMPANY

                       SUPPLEMENTAL INFORMATION

        Open Commodity Hedge Positions as of February 5, 2008

                           2008
            -----------------------------------
             First    Second   Third    Fourth
            Quarter  Quarter  Quarter  Quarter    Year    2009   2010
            -------- -------- -------- -------- -------- ------ ------

Average
 Daily Oil
 Production
 Hedged:
Swap
 Contracts:
  Volume
   (Bbl)      15,250   15,250   15,250   15,250   15,250  8,000  4,000
  NYMEX
   price
   (Bbl)    $  61.36 $  61.36 $  61.36 $  61.36 $  61.36 $71.57 $71.46
Collar
 Contracts:
  Volume
   (Bbl)       3,000    3,000    3,000    3,000    3,000  2,000      -
  NYMEX
   price
   (Bbl)
  Ceiling   $  80.80 $  80.80 $  80.80 $  80.80 $  80.80 $76.50 $    -
  Floor     $  65.00 $  65.00 $  65.00 $  65.00 $  65.00 $65.00 $    -
Average
 Daily
 Natural
 Gas Liquid
 Production
  Hedged:
Swap
 Contracts:
  Volume
   (Bbl)         500      500      500      500      500    500    500
  Blended
   index
   price
   (Bbl)
   (a)      $  44.33 $  44.33 $  44.33 $  44.33 $  44.33 $41.75 $39.63
Average
 Daily Gas
 Production
 Hedged:
Swap
 Contracts:
  Volume
   (MMBtu)   172,060  212,500  212,500  199,239  199,112  9,897  2,500
  NYMEX
   price
   (MMBtu)
   (b)      $   8.64 $   8.35 $   8.35 $   8.38 $   8.42 $ 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 as of December 31, 2007
                            (in thousands)

                                                  2008
                                   -----------------------------------
                                    First    Second   Third    Fourth
                                   Quarter  Quarter  Quarter  Quarter
                                   -------- -------- -------- --------

Total deferred revenues (a)         39,478   39,457   39,707  $39,495

Less derivative losses to be
 recognized in pretax earnings (b)  (2,877)    (372)    (284)    (839)
                                   -------- -------- -------- --------

Total VPP impact to pretax
 earnings                          $36,601  $39,085  $39,423  $38,656
                                   ======== ======== ======== ========




                                          2009    Thereafter   Total
                                        --------- ---------- ---------

Total deferred revenues (a)             $147,905  $ 177,238  $483,280

Less derivative losses to be recognized
 in pretax earnings (b)                   (3,613)    (9,133)  (17,118)
                                        --------- ---------- ---------

Total VPP impact to pretax earnings     $144,292  $ 168,105  $466,162
                                        ========= ========== =========


(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 RESOURCES COMPANY

                       SUPPLEMENTAL INFORMATION

Deferred Losses on Terminated Commodity Hedges as of December 31, 2007
                                  (a)
----------------------------------------------------------------------
                            (in thousands)

                                               2008
                            ------------------------------------------
                              First     Second      Third     Fourth
                             Quarter    Quarter    Quarter    Quarter
                            ---------  ---------  ---------  ---------

Commodity hedge losses (b)   $ 23,980   $ 23,655   $ 23,588   $ 23,263

(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.

CONTACT: Pioneer Natural Resources
Investors-
Frank Hopkins, 972-969-4065
or
James Meier, 972-969-3931
or
Scott Rice, 972-969-4017
or
Media and Public Affairs-
Susan Spratlen, 972-969-4018

SOURCE: Pioneer Natural Resources Company

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