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Pioneer Reports Third Quarter 2006 Results

DALLAS--(BUSINESS WIRE)--Nov. 1, 2006--Pioneer Natural Resources Company (NYSE:PXD) today announced financial and operating results for the quarter ended September 30, 2006.

-- Pioneer reported net income of $81 million, or $.64 per diluted share.

-- Third quarter oil and gas sales from continuing operations averaged 98,525 barrels oil equivalent per day (BOEPD).

-- North American production for the first nine months of 2006 rose 14% from equivalent volumetric production payment (VPP) adjusted 2005 nine-month levels, reflecting the continuing success of Pioneer's accelerated development drilling program.

-- Production growth is on track to reach approximately 36 million barrels oil equivalent (BOE), near the high end of the 2006 production guidance range of 33 million to 37 million BOE.

-- The Company purchased 3.1 million shares at $39.54 per share during the quarter, completing $294 million of the remaining $359 million share repurchase program authorized by the Board of Directors.

-- Pioneer exited the quarter with net debt-to-book capitalization of 27%.

Income from continuing operations for the third quarter of 2006 was $81 million, or $.64 per diluted share, as compared to $62 million, or $.44 per diluted share, for the third quarter of 2005.

Cash flow from operating activities for the third quarter of 2006 was $183 million.

Pioneer also increased its 2007 natural gas hedge position by 91 million cubic feet per day (Mmcfpd). The 2007 hedges were added at NYMEX-equivalent prices greater than $9.00 per thousand cubic feet (Mcf) in order to protect a portion of the economics associated with the Company's planned 2007 gas drilling program.

Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "Our strategy to deliver strong, consistent production growth in North America is on track to provide the results we expected for 2006 and lay the foundation for another strong year in 2007. Our low-risk onshore development programs are delivering high returns and consistent growth, and with the contributions from our resource plays, especially the Edwards Trend play and the initiation of production from the South Coast Gas project during the second half of 2007, I am confident that we will reach our 10+% production per share growth target for 2007."

Operations Review

Pioneer currently has 39 rigs running in North America and one rig running in Tunisia. By the end of 2006, an additional rig will be added in North America bringing the total to 40 rigs as compared to 23 rigs at the end of 2005. Average daily oil and gas production from North America increased 3% during the third quarter from the average for the first half of 2006, and is on target to meet or exceed the high end of the forecasted 2006 exit rate of 90,000 to 95,000 BOEPD.

In the Permian Basin, Pioneer is running 20 rigs and through October has drilled approximately 240 of the 335 wells expected during 2006. The Company has increased nine-month oil and gas sales 23% above 2005 nine-month levels, after adjusting for the Company's VPPs for comparison purposes. Production growth from the Spraberry field is on target to exceed the Company's exit rate forecast and is being driven by the success of Pioneer's deeper drilling campaign, which increases reserves and production by including the deeper Wolfcamp formation, and new opportunities from bolt-on acquisitions. Year-to-date, more than 90,000 gross acres have been leased in the Permian Basin.

Mid-Continent production from the Hugoton and West Panhandle gas fields is being maintained at consistent levels and is exceeding expectations.

In the Rocky Mountains, nine-month coal bed methane (CBM) production in the Raton field was up 9% from the same period in 2005. During the third quarter, Pioneer added a third rig and through October has drilled approximately 250 of the 330 Raton wells planned for 2006. Raton production for the third quarter was up 5% compared to the first half of 2006, and the Company now expects 2006 production from the Raton field to exceed the 5% to 7% annual growth target announced earlier this year.

In South Texas, Pioneer is running five rigs in the Edwards Trend and expects to add another rig in early 2007. The Company has 245,000 gross acres under lease and continues to develop its Pawnee and Word fields while expanding the potential of the trend by drilling exploration and appraisal wells on new field prospects. Pioneer drilled a new discovery during the third quarter and has drilled six discoveries to date in 2006. Two new processing facilities were also added during the third quarter. The Company has tied in five new discovery wells which are currently producing approximately 6 Mmcfpd, and has twelve Edwards expansion wells currently drilling or waiting to be tied in to pipelines, including two wells that are expected to begin producing in early November which tested at approximately 3.5 Mmcfpd each.

During the fourth quarter, Pioneer plans to test one new prospect and drill five appraisal wells and four development wells. In addition, approximately 850 square miles of 3-D seismic data will be acquired on new discoveries in South Texas through 2007 to support new field development drilling which is expected to be initiated mid-2007.

In Canada, nine-month production is up 16% compared to the same period of 2005, and third quarter production rose 15% compared to the first half of 2006. The Company has drilled 85 Horseshoe Canyon CBM wells and has three rigs running to complete the 175 wells planned for 2006. Pioneer expects to have 120 wells on production by year end and to tie in the remaining 55 wells in early 2007 after adding compression facilities during the fourth quarter.

On the North Slope of Alaska, Pioneer has completed the construction, contouring and armoring of the gravel drill site for the Oooguruk development project. Current activities include procuring equipment and services, fabricating equipment and modifying the drilling rig for installation during 2007. The project is on schedule to achieve first oil production in 2008.

Offshore South Africa, production from the Sable oil field continues to exceed expectations and development drilling continues on the South Coast Gas Project, a seven-well subsea tie-back to the existing F-A platform. Subsea infrastructure is expected to be in place for project startup and first production during the second half of 2007.

In Tunisia, the Hawa appraisal well became the ninth successful well drilled on the Adam Concession and is expected to be producing by the end of the year. During the fourth quarter, Pioneer expects to drill another well on the Adam Concession, two wells in the Pioneer-operated Jenein Nord block and a well in the Borj El Khadra block.

Financial Review

Third quarter oil sales averaged 23,699 barrels per day (BPD) and natural gas liquids sales averaged 19,352 BPD. Gas sales in the third quarter averaged 333 Mmcfpd. The reported price for oil was $70.89 per barrel and included $13.38 per barrel related to deferred revenue from VPPs for which production was not recorded. The price for natural gas liquids was $39.08 per barrel. The reported price for gas was $6.33 per Mcf and included $.60 per Mcf related to deferred revenue from VPPs for which production was not recorded.

Third quarter production costs averaged $11.36 per BOE. Exploration and abandonment costs were $44 million for the quarter and included $13 million of unsuccessful drilling costs, $27 million of geologic and geophysical expenses including seismic and personnel costs and $4 million of acreage and other costs.

Financial Outlook

The following statements are estimates based on current expectations. These forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual results to differ materially from the following statements. The last paragraph of this release addresses certain of the risks and uncertainties to which the Company is subject.

Fourth quarter 2006 production is expected to average 98,000 to 103,000 BOEPD. Fourth quarter production costs (including production and ad valorem taxes and transportation costs) are expected to average $11.00 to $12.00 per BOE based on current NYMEX strip prices for oil and gas. Depreciation, depletion and amortization expense is expected to average $10.00 to $11.00 per BOE.

Total exploration and abandonment expense during the fourth quarter is expected to be $45 million to $110 million and includes approximately $15 million of costs associated with an unsuccessful test of the Flying Cloud prospect adjacent to Pioneer's Clipper discovery (deepwater Gulf of Mexico) and could include up to $15 million associated with high-impact onshore drilling in Mississippi. It could also include $30 million associated with lower-risk resource plays in the Edwards Trend in South Texas, Uinta/Piceance basins in the Rockies, Canada and Tunisia and up to $15 million for acreage and other expenses. In addition, exploration expense is expected to include $30 million to $35 million for seismic investments and personnel, primarily related to the onshore resource plays Pioneer is currently pursuing. General and administrative expense is expected to be $29 million to $33 million. Interest expense is expected to be $24 million to $28 million, offset by interest income of $1 million to $3 million. Accretion of discount on asset retirement obligations is expected to be $1 million to $2 million.

The Company's fourth quarter effective income tax rate is expected to range from 35% to 45% based on current capital spending plans. Cash income taxes are expected to range from $5 million to $15 million, principally related to Tunisian income taxes and nominal alternative minimum tax in the U.S.

The Company's financial results and oil and gas hedges are outlined on the attached schedules.

Earnings Conference Call

This afternoon at 1:00 p.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) 289-0528 (confirmation code: 6893514) 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: 6893514).

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, Canada and Africa. 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 oil and gas 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, access to and cost of capital, uncertainties about estimates of reserves, the assumptions underlying production forecasts, 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 (the "SEC").


                   PIONEER NATURAL RESOURCES COMPANY

                 CONDENSED CONSOLIDATED BALANCE SHEETS

                            (in thousands)

                                            September 30, December 31,
                                                    2006         2005
                                            ------------- ------------
                                              (Unaudited)

                                ASSETS

Current assets:
  Cash and cash equivalents                 $    100,072  $    18,802
  Accounts receivable, net                       161,476      337,658
  Inventories                                    109,509       79,659
  Prepaid expenses                                16,497       18,091
  Deferred income taxes                           82,638      158,878
  Other current assets, net                       47,963       10,716
                                            ------------- ------------

    Total current assets                         518,155      623,804
                                            ------------- ------------

Property, plant and equipment, at cost:
  Oil and gas properties, using the
   successful efforts method of accounting     7,772,354    8,813,134
  Accumulated depletion, depreciation and
   amortization                               (1,816,875)  (2,577,946)
                                            ------------- ------------

    Total property, plant and equipment        5,955,479    6,235,188
                                            ------------- ------------

Goodwill                                         310,626      311,651
Other assets, net                                214,025      158,591
                                            ------------- ------------

                                            $  6,998,285  $ 7,329,234
                                            ============= ============

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                          $    333,475  $   345,204
  Interest payable                                26,032       40,314
  Income taxes payable                            34,397       22,470
  Deferred revenue                               183,031      190,327
  Other current liabilities                      301,552      435,040
                                            ------------- ------------

    Total current liabilities                    878,487    1,033,355
                                            ------------- ------------

Long-term debt                                 1,194,556    2,058,412
Deferred income taxes                          1,105,118      767,329
Deferred revenue                                 528,576      664,511
Other liabilities and minority interests         322,214      588,525
Stockholders' equity                           2,969,334    2,217,102
                                            ------------- ------------

                                            $  6,998,285  $ 7,329,234
                                            ============= ============
                   PIONEER NATURAL RESOURCES COMPANY

            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

               (in thousands, except for per share data)

                              (Unaudited)
                           Three months ended     Nine months ended
                               September 30,         September 30,
                           ------------------- -----------------------
                               2006      2005        2006        2005
                           --------- --------- ----------- -----------

Revenues and other income:
  Oil and gas              $418,106  $389,679  $1,205,144  $1,033,842
  Interest and other         15,229     7,885      42,081      21,936
  Gain (loss) on
   disposition of assets,
   net                         (708)      375      (4,184)      2,625
                           --------- --------- ----------- -----------

                            432,627   397,939   1,243,041   1,058,403
                           --------- --------- ----------- -----------

Costs and expenses:
  Oil and gas production    102,969    92,809     300,718     253,393
  Depletion, depreciation
   and amortization          95,288    75,836     265,678     215,143
  Impairment of long-lived
   assets                         -        21           -         644
  Exploration and
   abandonments              43,820    56,364     210,080     147,691
  General and
   administrative            30,421    29,817      92,136      83,901
  Accretion of discount on
   asset retirement
   obligations                1,168     1,094       3,470       3,183
  Interest                   23,586    28,862      82,928      91,011
  Other                      14,779    34,185      31,592      58,739
                           --------- --------- ----------- -----------

                            312,031   318,988     986,602     853,705
                           --------- --------- ----------- -----------

Income from continuing
 operations before income
 taxes                      120,596    78,951     256,439     204,698
Income tax provision        (40,270)  (17,438)   (111,194)    (93,234)
                           --------- --------- ----------- -----------

Income from continuing
 operations                  80,326    61,513     145,245     111,464
Income from discontinued
 operations, net of tax         473    62,060     566,800     282,325
                           --------- --------- ----------- -----------
Net income                 $ 80,799  $123,573  $  712,045  $  393,789
                           ========= ========= =========== ===========

Basic earnings per share:
  Income from continuing
   operations              $    .65  $    .45  $     1.15  $      .79
  Income from discontinued
   operations, net of tax         -       .45        4.52        2.01
                           --------- --------- ----------- -----------
  Net income               $    .65  $    .90  $     5.67  $     2.80
                           ========= ========= =========== ===========

Diluted earnings per
 share:
  Income from continuing
   operations              $    .64  $    .44  $     1.14  $      .79
  Income from discontinued
   operations, net of tax         -       .44        4.39        1.95
                           --------- --------- ----------- -----------
  Net income               $    .64  $    .88  $     5.53  $     2.74
                           ========= ========= =========== ===========

Weighted average shares
 outstanding:
  Basic                     124,021   137,655     125,520     140,436
                           ========= ========= =========== ===========
  Diluted                   126,734   141,786     129,134     144,770
                           ========= ========= =========== ===========
                   PIONEER NATURAL RESOURCES COMPANY

            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                            (in thousands)

                              (Unaudited)
                        Three months ended       Nine months ended
                             September 30,           September 30,
                       --------------------- -------------------------
                            2006       2005         2006         2005
                       ---------- ---------- ------------ ------------

Cash flows from
 operating activities:
  Net income           $  80,799  $ 123,573  $   712,045  $   393,789
  Adjustments to
   reconcile net
   income to net cash
   provided by
   operating
   activities:
    Depletion,
     depreciation and
     amortization         95,288     75,836      265,678      215,143
    Impairment of
     long-lived assets         -         21            -          644
    Exploration
     expenses,
     including dry
     holes                15,981     38,609      127,917       67,571
    Deferred income
     taxes                43,336      4,383      110,520       60,759
    Loss (gain) on
     disposition of
     assets, net             708       (375)       4,184       (2,625)
    Loss on
     extinguishment of
     debt                      -     18,633        8,076       25,975
    Accretion of
     discount on asset
     retirement
     obligations           1,168      1,094        3,470        3,183
    Discontinued
     operations           (3,248)    78,804     (543,903)     262,876
    Interest expense       2,357      1,493        7,522        2,555
    Commodity hedge
     related activity     (3,867)     1,658       (9,420)      (9,069)
    Stock-based
     compensation          7,047      6,449       25,357       19,619
    Amortization of
     deferred revenue    (47,396)   (21,882)    (143,231)     (53,956)
    Other noncash
     items                 4,494      4,059       14,018        9,758
Changes in operating
 assets and
 liabilities, net of
 effects from
 acquisition:
  Accounts receivable,
   net                    (1,351)     9,047      161,814      (45,255)
  Inventories            (12,988)    (8,964)     (52,113)     (21,667)
  Prepaid expenses        (1,673)   (13,513)         291       (7,705)
  Other current
   assets, net            (7,214)       405        1,978         (124)
  Accounts payable        80,005     27,730      (33,636)      37,294
  Interest payable        (1,202)   (21,593)     (11,476)     (25,957)
  Income taxes payable   (37,995)    (6,314)      17,820        5,605
      Other current
       liabilities       (31,551)    (9,350)     (22,624)     (15,039)
                       ---------- ---------- ------------ ------------

Net cash provided by
 operating activities    182,698    309,803      644,287      923,374
Net cash provided by
 (used in) investing
 activities             (367,179)  (356,980)     598,112      302,248
Net cash provided by
 (used in) financing
 activities             (172,403)    52,616   (1,162,843)  (1,171,751)
                       ---------- ---------- ------------ ------------

Net increase
 (decrease) in cash
 and cash equivalents   (356,884)     5,439       79,556       53,871
Effect of exchange
 rate changes on cash
 and cash equivalents        (86)       618        1,714        3,380
Cash and cash
 equivalents,
 beginning of period     457,042     58,451       18,802        7,257
                       ---------- ---------- ------------ ------------

Cash and cash
 equivalents, end of
 period                $ 100,072  $  64,508  $   100,072  $    64,508
                       ========== ========== ============ ============
                   PIONEER NATURAL RESOURCES COMPANY

                   SUMMARY PRODUCTION AND PRICE DATA

                              (Unaudited)
                               Three months ended   Nine months ended
                                   September 30,       September 30,
                               ------------------- -------------------
                                   2006      2005      2006      2005
                               --------- --------- --------- ---------

Average Daily
 Sales Volumes
from Continuing
 Operations:
  Oil (Bbls) -   U.S.            17,575    21,484    17,406    21,290
                 Canada             312       209       299       194
                 Africa           5,812     9,666     6,680    10,686
                               --------- --------- --------- ---------
                 Worldwide       23,699    31,359    24,385    32,170
                               ========= ========= ========= =========

Natural gas
 liquids (Bbls) -
                 U.S.            18,884    18,176    18,599    16,835
                 Canada             468       502       433       510
                               --------- --------- --------- ---------
                 Worldwide       19,352    18,678    19,032    17,345
                               ========= ========= ========= =========

Gas (Mcf) -      U.S.           286,182   274,390   282,450   269,807
                 Canada          46,664    37,562    42,456    36,160
                               --------- --------- --------- ---------
                 Worldwide      332,846   311,952   324,906   305,967
                               ========= ========= ========= =========

Average Daily
 Sales Volumes
from Discontinued
 Operations:
  Oil (Bbls) -   U.S.                 -     3,715     3,208     5,478
                 Argentina            -     7,930     3,362     7,972
                 Canada               -         -         -        38
                               --------- --------- --------- ---------
                 Worldwide            -    11,645     6,570    13,488
                               ========= ========= ========= =========

Natural gas
 liquids (Bbls) -
                 U.S.                 -       131         -        87
                 Argentina            -     1,917       563     1,814
                 Canada               -         2         -       149
                               --------- --------- --------- ---------
                 Worldwide            -     2,050       563     2,050
                               ========= ========= ========= =========

Gas (Mcf) -      U.S.              (140)  189,429    48,195   248,556
                 Argentina            -   142,399    58,700   136,023
                 Canada               -       347        58     8,676
                               --------- --------- --------- ---------
                 Worldwide         (140)  332,175   106,953   393,255
                               ========= ========= ========= =========

Average Reported
 Prices (a):
Oil (per Bbl) -  U.S.          $  70.96  $  34.57  $  66.91  $  31.37
                 Canada        $  70.44  $  68.77  $  70.09  $  51.73
                 Africa        $  70.73  $  59.57  $  66.49  $  51.40
                 Worldwide     $  70.89  $  42.51  $  66.83  $  38.15

Natural gas
 liquids
(per Bbl) -      U.S.          $  38.73  $  34.40  $  36.15  $  29.78
                 Canada        $  53.11  $  49.93  $  55.01  $  43.22
                 Worldwide     $  39.08  $  34.82  $  36.58  $  30.18

Gas (per Mcf) -  U.S.          $   6.24  $   7.18  $   6.30  $   6.67
                 Canada        $   6.91  $   7.51  $   7.27  $   6.57
                 Worldwide     $   6.33  $   7.22  $   6.43  $   6.66

(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

               SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

                            (in thousands)

                              (Unaudited)

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,
                            ------------------- ----------------------
                                2006      2005       2006        2005
                            --------- --------- ---------- -----------

Net income                  $ 80,799  $123,573  $ 712,045  $  393,789
Depletion, depreciation and
 amortization                 95,288    75,836    265,678     215,143
Impairment of long-lived
 assets                            -        21          -         644
Exploration and
 abandonments                 43,820    56,364    210,080     147,691
Accretion of discount
on asset retirement
obligations                    1,168     1,094      3,470       3,183
Interest expense              23,586    28,862     82,928      91,011
Income tax provision          40,270    17,438    111,194      93,234
Loss (gain) on disposition
 of assets, net                  708      (375)     4,184      (2,625)
Loss on extinguishment of
 debt                              -    18,633      8,076      25,975
Discontinued operations       (3,248)   78,804   (543,903)    262,876
Current income taxes on
 discontinued operations         412    (1,056)   152,987       6,833
Cash exploration expense on
 discontinued operations          10     1,558      2,155       7,788
Commodity hedge related
 activity                     (3,867)    1,658     (9,420)     (9,069)
Stock-based compensation       7,044     6,449     25,354      19,619
Amortization of deferred
 revenue                     (47,396)  (21,882)  (143,231)    (53,956)
Other noncash items            4,494     4,059     14,018       9,725
                            --------- --------- ---------- -----------

      EBITDAX (a)            243,088   391,036    895,615   1,211,861

Less: Cash interest expense  (21,229)  (27,369)   (75,406)    (88,423)
      Current income taxes     2,654   (11,999)  (153,661)    (39,308)
                            --------- --------- ---------- -----------

      Discretionary
       cash flow (b)         224,513   351,668    666,548   1,084,130

Less: Cash exploration
       expense               (27,849)  (19,313)   (84,318)    (87,908)
      Changes in operating
       assets and
       liabilities           (13,966)  (22,552)    62,057     (72,848)
                            --------- --------- ---------- -----------

Net cash provided by
 operating activities       $182,698  $309,803  $ 644,287  $  923,374
                            ========= ========= ========== ===========

(a) "EBITDAX" represents earnings before depletion, depreciation and
 amortization expense; impairment of long-lived assets; exploration
 and abandonments; accretion of discount on asset retirement
 obligations; interest expense; income taxes; gain or loss on the
 disposition of assets; loss on extinguishment of debt; 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 RESOURCES COMPANY

                       SUPPLEMENTAL INFORMATION

                        As of October 30, 2006

                    Open Commodity Hedge Positions
                                              2006
                                          ---------
                                           Fourth
                                            Quarter     2007     2008
                                          --------- --------- --------

Average Daily Oil Production Hedged:
  Swap Contracts:
  Volume (Bbl)                               5,000     6,000    6,500
  NYMEX price (Bbl)                        $ 37.20  $  31.26  $ 31.19
  Collar Contracts:
  Volume (Bbl)                               6,500         -        -
  NYMEX price (Bbl)
    Ceiling                                $ 66.41  $      -  $     -
    Floor                                  $ 41.92  $      -  $     -

Average Daily Gas Production Hedged:
  Swap Contracts:
  Volume (MMBtu)                            63,875   109,195   15,000
  NYMEX price (MMBtu) (a)                  $  4.30  $   8.00  $  9.10
  Collar Contracts:
  Volume (MMBtu)                            95,000     6,164        -
  NYMEX price (MMBtu) (a)
    Ceiling                                $ 15.25  $  12.82  $     -
    Floor                                  $  6.96  $  10.00  $     -

(a)  Approximate, based on historical differentials to index prices.
    Amortization of Volumetric Production Payment Proceeds and Net
                           Derivative Losses

                            (in thousands)
                                2006
                            ---------
                             Fourth
                              Quarter     2007    Thereafter   Total
                            --------- --------- ------------ ---------

VPP proceeds, net of
 transaction costs           $45,527  $175,216     $460,322  $681,065
Net hedge obligations
 assigned                      1,569     6,016       22,957    30,542
                            --------- --------- ------------ ---------

Total deferred revenue (a)    47,096   181,232      483,279   711,607
Less net derivative losses
 to be recognized in pretax
 earnings (b)                   (396)   (3,540)     (17,117)  (21,053)
                            --------- --------- ------------ ---------

Total VPP impact to pretax
 earnings                    $46,700  $177,692     $466,162  $690,554
                            ========= ========= ============ =========

(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

                        As of October 30, 2006

                              (continued)

           Deferred Gains (Losses) on Terminated Hedges (a)

                            (in thousands)
                                2006
                            ---------
                             Fourth
                             Quarter      2007      2008    Thereafter
                            --------- --------- --------- ------------

Commodity hedge gains
 (losses) (b)                 $1,834  $(66,845) $(68,574)     $     -
Debt hedge losses (c)            (58)     (325)     (371)      (4,412)
                            --------- --------- --------- ------------

  Total deferred gains
   (losses)                   $1,776  $(67,170) $(68,945)     $(4,412)
                            ========= ========= ========= ============


(a) Excludes deferred hedge gains and losses on terminated VPPs.

(b) Deferred commodity hedge gains will be amortized as increases to
 oil and gas revenues during the indicated future periods and deferred
 commodity hedge losses will be amortized as decreases during the
 indicated future periods.

(c) Deferred debt hedge losses will be amortized as increases to
 interest expense during the indicated future periods.

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

SOURCE: Pioneer Natural Resources

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