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Pioneer Reports Second Quarter 2008 Results

DALLAS--(BUSINESS WIRE)--Aug. 4, 2008--Pioneer Natural Resources Company (NYSE:PXD) today announced financial and operating results for the quarter ended June 30, 2008.

    --  Reported second quarter net income of $159 million, or $1.32
        per diluted share

    --  Increased average daily oil and gas sales to 113,987 barrels
        oil equivalent per day (BOEPD); 19% above sales for the second
        quarter of 2007 (excluding 2007 sales from divested Canada
        assets)

    --  Posted strong production growth in Spraberry, Raton, Edwards,
        Tunisia and Alaska

    --  Increased 2008 production growth target to 18% to 20% from 14%
        versus 2007 in response to strong production growth to date,
        improved drilling efficiencies (more wells per rig) and
        operational success

    --  Raised 2008 capital budget by $300 million to fund a portion
        of the incremental production growth and to cover rising costs
        for tubulars, fuel and pumping services

    --  Advanced enhanced recovery initiatives and shale interval
        testing in Spraberry

    --  Confirmed contribution from two additional zones in Pierre
        Shale

    --  Drilled three new discovery wells in Tunisia

    --  Commenced production at Oooguruk on the North Slope of Alaska

    --  Closed the Pioneer Southwest Energy Partners L.P. IPO
        generating net proceeds of $163 million

Scott Sheffield, Chairman and CEO, stated, "We are extremely pleased with the strong and consistent production growth our core operating areas continue to deliver. This strong performance and our investment discipline will result in the Company generating free cash flow beginning this year. Pioneer is at a significant inflection point, as we expect our 2009 discretionary cash flow to increase by approximately 50% and our earnings to double from 2008 levels based on current commodity prices and costs."

2008 Production Growth Target

Based on Pioneer's successful year-to-date production growth results and its remaining planned drilling activity, the Company has increased its 2008 production growth forecast to 18% to 20% from 14% compared to 2007. Pioneer has increased its 2008 capital budget from $1.0 billion to $1.3 billion (which excludes acquisitions, asset retirement obligations, capitalized interest and geological and geophysical G&A), and with the related increase in its 2008 production growth forecast, the Company expects to generate free cash flow for the year. The capital budget was increased to reflect drilling efficiencies (more wells per rig), operational success and today's higher cost environment, primarily for tubulars, fuel and pumping services. More specifically, drilling efficiencies in the Spraberry and Edwards fields are allowing wells to be drilled at a faster-than-expected pace which will result in the Company drilling and completing more wells during 2008. Additional development capital related to drilling success in the Edwards Trend and progressing front-end engineering planning for the Cosmopolitan project in Alaska is also being added to the 2008 budget.

Financial Review

Pioneer's second quarter net income was $159 million, or $1.32 per diluted share. Cash flow from operating activities for the second quarter was $333 million.

Second quarter oil sales averaged 30,229 barrels per day (BPD), natural gas liquids sales averaged 20,509 BPD and gas sales averaged 379 million cubic feet per day (MMCFPD).

The reported second quarter average price for oil was $89.73 per barrel and included $9.46 per barrel related to deferred revenue from volumetric production payments (VPPs) for which production was not recorded. The reported price for natural gas liquids was $56.30 per barrel. The reported price for gas was $8.73 per thousand cubic feet (MCF), including $.39 per MCF related to deferred revenue from VPPs for which production was not recorded.

Second quarter production costs averaged $13.93 per BOE. Production costs were primarily impacted by higher production taxes related to the increase in commodity prices.

Exploration and abandonment costs were $30 million for the quarter and included $1 million of acreage costs and $29 million of geologic and geophysical expenses, including seismic costs related to ongoing activities in the Edwards Trend and Tunisia and personnel costs.

In May, Pioneer completed the initial public offering of common units in Pioneer Southwest Energy Partners L.P. (PSE) and received net proceeds of $163 million. Pioneer retains an ownership interest in PSE of approximately 68%.

Operations

In the Spraberry field, production increased 21% in the first half of 2008 compared to the first half of 2007. Pioneer is increasing its forecast for full-year 2008 Spraberry production growth from approximately 15% to more than 18%. Production growth is exceeding expectations due to the strong incremental contribution from the Wolfcamp formation, operational efficiencies and a faster drilling pace related to improved drilling efficiency which has increased the number of wells being drilled per rig. The 2008 Spraberry drilling program is being expanded by 40 wells to 390 wells. Pioneer is currently running 17 rigs in the field and has drilled approximately 225 wells year-to-date.

Early results from Pioneer's 20-acre drilling, horizontal re-entry program and shale interval testing in the Spraberry field are encouraging. These results and the Company's plans to continue to increase its drilling activity in the field support expectations for 15% compound average annual growth in Spraberry production through 2011.

Pioneer's Raton Basin production increased 24% in the first half of 2008 compared to the first half of 2007. The Company has successfully integrated the properties acquired in December 2007 and is very encouraged with Pierre Shale drilling and test results to date which confirmed contribution from two additional zones. Raton production growth is expected to exceed 15% for 2008 versus 2007. To accommodate longer-term growth, Pioneer has added firm pipeline capacity to transport 75 MMCFPD from Raton to the West Coast beginning in 2011.

In the Edwards Trend in South Texas, Pioneer's production for the first half of 2008 rose 56% from a year ago. Year-to-date, the Company has drilled 22 Edwards wells, benefiting from reduced drilling time related to rig improvements and wellbore design enhancements. As a result, the 2008 drilling program is being expanded from 35 wells to 40 wells. Pioneer is steadily expanding infrastructure and treating capacity to accommodate new drilling and the higher producing rates seen in recent wells. The Company is also increasing its forecast for full-year 2008 Edwards Trend production growth from approximately 25% to more than 40%.

Pioneer's Barnett Shale drilling program is on track with seven operated wells drilled year-to-date. The Company plans to drill approximately 25 Barnett wells during 2008, including six wells operated by others. Early production results are in line with other wells in Parker County with peak-month daily rates averaging approximately 1 MMCFPD. Pioneer expects to expand its Barnett drilling program to include four operated rigs during 2009, targeting production of 100 MMCFPD gas equivalent by 2011.

In Tunisia, Pioneer continues to drill successful wells and expand its production facilities. During the second quarter, three successful wells were drilled and gross facility capacity in the Cherouq Concession was expanded to 10 thousand barrels of oil per day (MBOPD). Six to seven wells are planned for the second half of 2008 and gross facility capacity will be further increased to 20 MBOPD during the fourth quarter. Pioneer's net production from Tunisia is currently averaging more than 7.5 thousand barrels oil equivalent per day (MBOEPD), and the Company expects full-year 2008 production growth of 80% to 90% versus 2007.

Offshore South Africa, Pioneer's production from interests in the Sable oil field and the South Coast Gas (SCG) project averaged 3.7 MBOEPD during the second quarter. Late in the third quarter, it is anticipated that Sable oil production will be shut in to convert Sable's gas re-injection well to a producing well. The Sable gas well is expected to be the most productive well in the SCG system. Total gas equivalent production from SCG is expected to average approximately 10 MMCFPD to 15 MMCFPD net to Pioneer for the fourth quarter of 2008, rising to 30 MMCFPD to 35 MMCFPD net for the first half of 2009.

During the second quarter of 2008, the Oooguruk project on the North Slope of Alaska commenced production operations. Following the completion of scheduled mid-year maintenance at third-party onshore production facilities, production will be reinitiated. Net sales are expected to reach 3 MBOPD to 4 MBOPD by year-end 2008 and gradually increase to 10 MBOPD to 14 MBOPD by 2010 as development drilling continues.

Financial Outlook

Third quarter 2008 production is forecasted to average 114,000 BOEPD to 119,000 BOEPD. Production growth is expected to continue during the third quarter, driven primarily by increasing production from several of Pioneer's core onshore areas (Spraberry, Edwards and Tunisia). The forecasted third quarter production range includes production that is attributable to the public ownership in PSE. The expense estimates below also include amounts attributable to the public ownership in PSE.

Third quarter production costs (including production and ad valorem taxes and transportation costs) are expected to average $13.50 to $14.50 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 third quarter is expected to be $40 million to $70 million, including up to $45 million associated with drilling in lower-risk resource plays in the Edwards Trend and Tunisia and $35 million of seismic (principally in the Edwards Trend and Tunisia) and personnel costs.

General and administrative expense is expected to be $35 million to $39 million. Interest expense is expected to be $36 million to $40 million. Accretion of discount on asset retirement obligations is expected to be $2 million to $4 million.

Minority interest in consolidated subsidiaries' net income is expected to be $8 million to $10 million, primarily reflecting the public ownership in PSE.

The Company's third quarter effective income tax rate is expected to range from 40% to 50% based on current capital spending plans. Cash taxes are expected to be $30 million to $40 million and are primarily attributable to Tunisia.

Third quarter 2008 amortization of deferred losses on terminated oil and gas hedges is expected to be $30 million. The Company's financial results, oil, NGL and gas hedges and future VPP amortization are outlined on the attached schedules.

Earnings Conference Call

On Tuesday, August 5 at 11:00 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. The presentation will soon be available on Pioneer's website for preview in advance of the call. At the website, select 'INVESTORS' 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) 741-4245 (confirmation code: 1498320) 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: 1498320).

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.

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, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, access to and availability of drilling equipment and transportation, processing and refining facilities, Pioneer's ability to replace reserves, implement its business plans (including its plan to repurchase stock) or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves and resource potential and the ability to add proved reserves in the future, the assumptions underlying production forecasts, 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.

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

                                               June 30,   December 31,
                                                 2008         2007
                                             ------------ ------------
                                             (Unaudited)

                   ASSETS

Current assets:
  Cash and cash equivalents                  $    43,282  $    12,171
  Accounts receivable, net                       378,664      283,832
  Income taxes receivable                         49,448       40,046
  Inventories                                    131,973       97,619
  Prepaid expenses                                 8,477        9,378
  Deferred income taxes                          238,446      108,073
  Other current assets, net                        7,720      213,936
                                             ------------ ------------

     Total current assets                        858,010      765,055
                                             ------------ ------------

Property, plant and equipment, at cost:
  Oil and gas properties, using the
   successful efforts method of accounting     9,878,071    9,251,113
  Accumulated depletion, depreciation and
   amortization                               (2,238,250)  (2,028,472)
                                             ------------ ------------

     Total property, plant and equipment       7,639,821    7,222,641
                                             ------------ ------------

Deferred income taxes                                241       10,263
Goodwill                                         310,596      310,870
Other assets, net                                356,269      308,152
                                             ------------ ------------

                                             $ 9,164,937  $ 8,616,981
                                             ============ ============

    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                           $   417,414  $   378,416
  Interest payable                                45,174       42,020
  Income taxes payable                            40,954       12,842
  Deferred revenue                               152,897      158,138
  Other current liabilities                      682,860      402,753
                                             ------------ ------------

     Total current liabilities                 1,339,299      994,169
                                             ------------ ------------

Long-term debt                                 2,642,443    2,755,491
Deferred income taxes                          1,338,254    1,229,677
Deferred revenue                                 251,447      325,142
Minority interest in consolidated
 subsidiaries                                     50,869       11,942
Other liabilities                                416,337      257,838
Stockholders' equity                           3,126,288    3,042,722
                                             ------------ ------------

                                             $ 9,164,937  $ 8,616,981
                                             ============ ============
                  PIONEER NATURAL RESOURCES COMPANY
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except for per share data)

                             Three Months Ended    Six Months Ended
                                  June 30,             June 30,
                            -------------------- ---------------------
                               2008      2007       2008       2007
                            ---------- --------- ----------- ---------

Revenues and other income:
   Oil and gas              $ 653,309  $419,792  $1,211,785  $773,374
   Interest and other           8,479    26,206      33,503    37,608
   Gain (loss) on
    disposition of assets,
    net                         3,901    (1,669)      4,578    (1,418)
                            ---------- --------- ----------- ---------
                              665,689   444,329   1,249,866   809,564
                            ---------- --------- ----------- ---------
Costs and expenses:
   Oil and gas production     144,528   105,378     277,175   194,826
   Depletion, depreciation
    and amortization          114,679    88,198     224,306   167,048
   Impairment of oil and gas
    properties                      -    17,891           -    17,891
   Exploration and
    abandonments               30,088    63,874      68,766   135,645
   General and
    administrative             35,548    29,350      72,029    61,974
   Accretion of discount on
    asset retirement
    obligations                 2,160     1,691       4,302     3,323
   Interest                    38,281    30,531      75,734    58,956
   Hurricane activity, net      1,401    47,000       1,859    60,548
   Minority interest in
    consolidated
    subsidiaries' net income
    (loss)                      6,227       199       6,966    (1,192)
   Other                        8,986     7,025      19,873    14,705
                            ---------- --------- ----------- ---------
                              381,898   391,137     751,010   713,724
                            ---------- --------- ----------- ---------


Income from continuing
 operations before income
 taxes                        283,791    53,192     498,856    95,840
Income tax provision         (125,758)  (16,601)   (213,024)  (31,233)
                            ---------- --------- ----------- ---------

Income from continuing
 operations                   158,033    36,591     285,832    64,607
Income (loss) from
 discontinued operations,
 net of tax                       796      (111)      2,736     1,466
                            ---------- --------- ----------- ---------
Net income                  $ 158,829  $ 36,480  $  288,568  $ 66,073
                            ========== ========= =========== =========

Basic earnings per share:
   Income from continuing
    operations              $    1.33  $   0.30  $     2.42  $   0.53
   Income from discontinued
    operations, net of tax       0.01         -        0.02      0.01
                            ---------- --------- ----------- ---------
   Net income               $    1.34  $   0.30  $     2.44  $   0.54
                            ========== ========= =========== =========

Diluted earnings per share:
   Income from continuing
    operations              $    1.31  $   0.30  $     2.39  $   0.53
   Income from discontinued
    operations, net of tax       0.01         -        0.02      0.01
                            ---------- --------- ----------- ---------
   Net income               $    1.32  $   0.30  $     2.41  $   0.54
                            ========== ========= =========== =========

Weighted average shares
 outstanding:
   Basic                      118,363   121,226     118,149   121,374
                            ========== ========= =========== =========
   Diluted                    120,047   122,776     119,570   122,847
                            ========== ========= =========== =========
                  PIONEER NATURAL RESOURCES COMPANY
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)

                            Three Months Ended     Six Months Ended
                                 June 30,              June 30,
                           --------------------- ---------------------
                              2008       2007       2008       2007
                           ---------- ---------- ---------- ----------

Cash flows from operating
 activities:
  Net income               $ 158,829  $  36,480  $ 288,568  $  66,073
    Adjustments to
     reconcile net income
     to net cash provided
     by operating
     activities:
      Depletion,
       depreciation and
       amortization          114,679     88,198    224,306    167,048
      Impairment of oil and
       gas properties              -     17,891          -     17,891
      Exploration expenses,
       including dry holes     1,034     40,563      4,582     83,981
      Hurricane activity           -     47,000          -     66,000
      Deferred income taxes  113,720     52,938    179,884     62,414
      Loss (gain) on
       disposition of
       assets, net            (3,901)     1,669     (4,578)     1,418
      Accretion of discount
       on asset retirement
       obligations             2,160      1,691      4,302      3,323
      Discontinued
       operations                 25     18,357        373     34,799
      Interest expense         4,408      4,487      7,880      9,213
      Commodity hedge
       related activity        7,851      4,734     15,516     10,633
      Amortization of
       stock-based
       compensation            8,241      8,617     17,221     16,355
      Amortization of
       deferred revenue      (39,457)   (45,322)   (78,936)   (90,356)
      Other noncash items      8,454      3,124      3,814     (3,159)
    Changes in operating
     assets and
     liabilities:
      Accounts receivable,
       net                   (84,474)    15,789    (98,535)       562
      Income taxes
       receivable             (9,327)   (49,156)    (9,403)   (36,598)
      Inventories            (14,471)   (11,393)   (40,643)    (9,404)
      Prepaid expenses           166      4,063      1,103      5,219
      Other current assets,
       net                     5,191       (399)     7,186       (187)
      Accounts payable        32,744     (7,996)    (1,169)   (32,586)
      Interest payable        16,489     13,736      3,154     10,266
      Income taxes payable    18,921     (3,914)    28,111      2,900
      Other current
       liabilities            (8,232)   (23,795)   (42,004)   (38,446)
                           ---------- ---------- ---------- ----------
Net cash provided by
 operating activities        333,050    217,362    510,732    347,359
Net cash used in investing
 activities                 (313,941)  (538,982)  (491,481)  (986,437)
Net cash provided by
 financing activities          6,853    333,069     11,860    656,712
                           ---------- ---------- ---------- ----------
Net increase in cash and
 cash equivalents             25,962     11,449     31,111     17,634
Effect of exchange rate
 changes on cash and cash
 equivalents                       -        519          -        651
Cash and cash equivalents,
 beginning of period          17,320     13,350     12,171      7,033
                           ---------- ---------- ---------- ----------
Cash and cash equivalents,
 end of period             $  43,282  $  25,318  $  43,282  $  25,318
                           ========== ========== ========== ==========
                  PIONEER NATURAL RESOURCES COMPANY
             UNAUDITED SUMMARY PRODUCTION AND PRICE DATA


                                     Three Months       Six Months
                                         Ended             Ended
                                       June 30,          June 30,
                                   ----------------- -----------------
                                     2008     2007     2008     2007
                                   -------- -------- -------- --------

Average Daily Sales Volumes from
 Continuing Operations:
 Oil (Bbls) -        U.S.            21,040   18,753   21,230   18,779
                     South Africa     2,819    3,080    2,821    2,716
                     Tunisia          6,370    3,763    5,136    3,927
                                   -------- -------- -------- --------
                       Worldwide     30,229   25,596   29,187   25,422
                                   ======== ======== ======== ========

 Natural gas liquids
  (Bbls) -           U.S.            20,509   17,685   19,959   17,272
                                   ======== ======== ======== ========

 Gas (Mcf) -         U.S.           371,307  308,342  370,563  295,540
                     South Africa     5,570        -    5,322        -
                     Tunisia          2,619    7,250    2,098    3,645
                                   -------- -------- -------- --------
                       Worldwide    379,496  315,592  377,983  299,185
                                   ======== ======== ======== ========

 Total (BOE) -       U.S.           103,434   87,828  102,949   85,307
                     South Africa     3,747    3,080    3,708    2,716
                     Tunisia          6,806    4,971    5,486    4,535
                                   -------- -------- -------- --------
                       Worldwide    113,987   95,879  112,143   92,558
                                   ======== ======== ======== ========

Average Daily Sales Volumes from
 Discontinued Operations:
 Oil (Bbls) -        Canada               -      292        -      326
                                   ======== ======== ======== ========

 Natural gas liquids
  (Bbls) -           Canada               -      455        -      397
                                   ======== ======== ======== ========

 Gas (Mcf) -         Canada               -   54,176        -   50,962
                                   ======== ======== ======== ========

 Total (BOE) -       Canada               -    9,777        -    9,217
                                   ======== ======== ======== ========

Average Reported Prices (a):
 Oil (per Bbl) -     U.S.          $  73.63 $  57.93 $  71.91 $  54.97
                     South Africa  $ 131.23 $  69.73 $ 116.34 $  66.59
                     Tunisia       $ 124.58 $  64.89 $ 115.00 $  62.11
                       Worldwide   $  89.73 $  60.37 $  83.79 $  57.32

 Natural gas liquids
  (per Bbl) -        U.S.          $  56.30 $  39.11 $  55.13 $  35.51

 Gas (per Mcf) -     U.S.          $   8.69 $   7.53 $   8.21 $   7.36
                     South Africa  $   8.52 $      - $   8.09 $      -
                     Tunisia       $  14.89 $   7.65 $  13.39 $   7.65
                       Worldwide   $   8.73 $   7.53 $   8.23 $   7.36

 Total (BOE) -       U.S.          $  57.32 $  46.67 $  55.06 $  44.78
                     South Africa  $ 111.39 $  69.73 $ 100.12 $  66.59
                     Tunisia       $ 122.32 $  60.28 $ 112.79 $  59.94
                       Worldwide   $  62.98 $  48.11 $  59.37 $  46.16

(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    Six Months Ended
                                   June 30,             June 30,
                              ------------------- --------------------
                                2008      2007       2008      2007
                              --------- --------- ---------- ---------

Net income                    $158,829  $ 36,480  $ 288,568  $ 66,073
Depletion, depreciation and
 amortization                  114,679    88,198    224,306   167,048
Impairment of oil and gas
 properties                          -    17,891          -    17,891
Exploration and abandonments    30,088    63,874     68,766   135,645
Hurricane activity                   -    47,000          -    66,000
Accretion of discount on
 asset retirement obligations    2,160     1,691      4,302     3,323
Interest expense                38,281    30,531     75,734    58,956
Income tax provision           125,758    16,601    213,024    31,233
(Gain) loss on disposition of
 assets, net                    (3,901)    1,669     (4,578)    1,418
Discontinued operations             25    18,357        373    34,799
Current income tax provision
 (benefit) on discontinued
 operations                       (348)      194        171     4,688
Cash exploration and interest
 expense on discontinued
 operations                          -     3,530          -     4,652
Commodity hedge related
 activity                        7,851     4,734     15,516    10,633
Amortization of stock-based
 compensation                    8,241     8,617     17,221    16,355
Amortization of deferred
 revenue                       (39,457)  (45,322)   (78,936)  (90,356)
Other noncash items              8,454     3,124      3,814    (3,159)
                              --------- --------- ---------- ---------

   EBITDAX (a)                 450,660   297,169    828,281   525,199

Cash interest expense          (33,873)  (26,015)   (67,854)  (49,784)
Current income taxes           (11,690)   36,142    (33,311)   26,493
                              --------- --------- ---------- ---------

   Discretionary cash flow
    (b)                        405,097   307,296    727,116   501,908

Cash exploration expense       (29,054)  (26,869)   (64,184)  (56,275)

Changes in operating assets
 and liabilities               (42,993)  (63,065)  (152,200)  (98,274)
                              --------- --------- ---------- ---------

   Net cash provided by
    operating activities      $333,050  $217,362  $ 510,732  $347,359
                              ========= ========= ========== =========


(a)  "EBITDAX" represents earnings before depletion, depreciation and
      amortization expense; impairment of oil and gas properties;
      exploration and abandonments; noncash hurricane activity;
      accretion of discount on asset retirement obligations; interest
      expense; income taxes; (gain) 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 August 1, 2008

                                   2008
                             -----------------
                              Third    Fourth
                             Quarter  Quarter   2009    2010    2011
                             -------- -------- ------- ------- -------

Average Daily Oil Production
 Hedged:
Swap Contracts:
   Volume (Bbl)                15,000   15,000   8,000   4,000       -
   NYMEX price (Bbl)         $  65.46 $  65.46 $ 79.43 $ 85.21 $     -
Collar Contracts:
   Volume (Bbl)                 3,000    3,000   7,000   5,000   2,000
   NYMEX price (Bbl):
     Ceiling                 $  80.80 $  80.80 $159.04 $194.70 $170.00
     Floor                   $  65.00 $  65.00 $ 90.00 $100.00 $115.00
Average Daily Natural Gas
 Liquid Production Hedged:
Swap Contracts:
   Volume (Bbl)                 1,000    1,000   1,000   1,000       -
   Blended index price (Bbl)
    (a)                      $  50.74 $  50.74 $ 47.41 $ 46.15 $     -
Average Daily Gas Production
 Hedged:
Swap Contracts:
   Volume (MMBtu)             215,000  201,739  19,795   5,000       -
   NYMEX price (MMBtu) (b)   $   8.37 $   8.40 $  9.45 $  8.54 $     -

(a)  Represents blended Mont Belvieu posted price per Bbl.
(b)  Approximate NYMEX price, based on historical differentials to the
      index price at the time the derivative was entered into.
Amortization of Deferred Revenue Associated with Volumetric Production
        Payments and Net Derivative Losses as of June 30, 2008
                            (in thousands)

                    2008
              -----------------
               Third    Fourth
              Quarter  Quarter    2009      2010   Thereafter  Total
              -------- -------- --------- -------- -------------------

Total
 deferred
 revenues (a) $39,707  $39,495  $147,906  $90,216   $87,020  $404,344
Less
 derivative
 losses to be
 recognized
 in pretax
 earnings (b)    (284)    (839)   (3,613)  (2,403)   (6,730)  (13,869)
               -------  -------  --------  -------   -------  --------

Total VPP
 impact to
 pretax
 earnings     $39,423  $38,656  $144,293  $87,813   $80,290  $390,475
              ======== ======== ========= ======== ========= =========

(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 June 30, 2008 (a)
----------------------------------------------------------------------
                            (in thousands)


                                            2008
                                       ---------------
                                        Third  Fourth
                                       Quarter Quarter  2009    2010
                                       ------- ------- ------- -------

Commodity hedge losses (b)             $29,601 $29,237 $20,709 $17,783

(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
Matt Gallagher, 972-969-4017
or
Media and Public Affairs
Susan Spratlen, 972-969-4018

SOURCE: Pioneer Natural Resources Company

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