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Pioneer Natural Resources Announces $1.15 Billion Eagle Ford Shale
Joint Venture with Reliance Industries

DALLAS, Jun 24, 2010 (BUSINESS WIRE) --Pioneer Natural Resources Company (NYSE:PXD) ("Pioneer" or "the Company") today announced the Company signed a joint venture agreement with a wholly-owned U.S. subsidiary of Reliance Industries Limited ("Reliance"). Under the agreement, Pioneer will sell a 45% interest in approximately 212,000 net acres leased by the Company in the highly prospective Eagle Ford Shale play for a total price of $1.15 billion. Reliance will pay $266 million in cash to Pioneer at closing and will pay an additional $879 million to carry Pioneer's share of future drilling costs ("drilling carry"). Reliance will also participate with Pioneer in the development of midstream assets in the Eagle Ford Shale as a 49.9% partner. Closing is expected within five business days. Reliance has also entered into a joint venture agreement with Pioneer's existing partner in the Eagle Ford Shale play, Newpek LLC, for total consideration of approximately $210 million.

The joint venture agreement is effective June 1, 2010. Under the agreement, Reliance acquires 95,300 net acres of leasehold held by Pioneer. Pioneer retains an average 42% working interest in the acreage and Reliance receives an average 41% working interest, with other working interest owners continuing to hold the remaining 17% working interest. Pioneer continues as operator. Reliance has the right to perform certain drilling and completion operations beginning in 2011 - one rig initially escalating up to four rigs under the current drilling ramp-up schedule. In addition to funding its own drilling obligations, Reliance has agreed to fund 75% of Pioneer's portion of drilling costs until the $879 million of drilling carry is fully utilized. Pioneer has six years to utilize the drilling carry, subject to extension under certain circumstances.

Pioneer and Reliance have agreed to a joint venture development plan which forecasts the drilling of 26 horizontal Eagle Ford Shale wells during June through December 2010, increasing to 70 wells in 2011, 120 wells in 2012 and 140 wells in 2013. This plan is consistent with the accelerated development program previously announced by Pioneer (7 rigs by year-end 2010, 10 rigs by year-end 2011 and 14 rigs by year-end 2012) and will allow the joint venture to retain its acreage position.

Pioneer has successfully drilled and completed six horizontal wells in the Eagle Ford Shale. Five of these are on production at a combined rate of 28 million cubic feet equivalent per day (gross) and the sixth is expected to be brought online late in the third quarter following the completion of a central gathering facility. Pioneer recently increased its drilling activity in the play from two rigs to five rigs. These rigs are currently drilling in Live Oak, Karnes and DeWitt Counties. Three additional wells are awaiting completion. These three wells are expected to be brought online during the fourth quarter after central gathering facilities are completed. Pioneer is also purchasing a new fracture stimulation fleet to support the joint venture's drilling ramp-up. This new fleet is expected to be operational by the second quarter of 2011.

The joint venture will benefit from Pioneer's position as a technology leader in the Eagle Ford Shale with greater than 2,000 square miles of 3-D seismic data, logs from more than 150 operated wells, proprietary core samples and micro-seismic results. Approximately 1,750 drilling locations have been identified over the existing joint venture acreage position with a gross resource potential of more than 11 trillion cubic feet equivalent.

Pioneer and Reliance expect to continue to grow the joint venture's Eagle Ford Shale leasehold position within an area of mutual interest (AMI), which includes six counties in Texas (Atascosa, Bee, DeWitt, Karnes, Live Oak and McMullen). Pioneer will act as the sole leasing agent for the joint venture in the AMI. Reliance will have the option to acquire a 45% interest in Pioneer's share of such new acreage under comparable terms to those agreed to by Pioneer with the leasehold owner. The joint venture will own approximately 9,500 net acres within the AMI that have recently been acquired by Pioneer.

Pioneer and Reliance will also develop a midstream business which will initially consist of central gathering facilities to separate condensate production from produced gas and to treat the produced gas. Pioneer's 50.1% capital requirement associated with the construction of these facilities through 2013 is estimated to total approximately $275 million, with much of this capital expected to be spent by the end of 2011. Developing this midstream business as opposed to contracting with a third-party will provide enhanced control and efficiencies for the marketing of the joint venture's upstream production and the potential to attract third party business.

Based on the joint venture development plan, Pioneer's net production in the Eagle Ford Shale is expected to increase from an average of 2,000 barrels oil equivalent per day (BOEPD) in 2010 to a range of 32,000 BOEPD to 41,000 BOEPD in 2013. This strong production growth, coupled with the up-front cash payment and drilling carry from Reliance, is expected to generate positive cash flow for Pioneer from its Eagle Ford Shale upstream and midstream activities in all years going forward (assuming current NYMEX strip prices for oil and gas).

Scott Sheffield, Chairman and CEO, stated, "We are very excited to partner with Reliance, a global energy industry leader, and pleased that they share our confidence in the development potential of Pioneer's large, liquids-rich acreage position in the Eagle Ford Shale. Our joint development plan will add significant production and reserves for Pioneer while enhancing shareholder value."

"We had originally forecasted total Company production growth at 10+% per year over the 2011 through 2013 period, while continuing our commitment to spend within cash flow. This strong growth was primarily attributable to our significant drilling ramp up in the Spraberry field. With the addition of the ramp up in Eagle Ford Shale drilling, we now expect production growth over this same period to be 15+% per year, while still spending within cash flow. Cash flow is forecasted to substantially increase from $1.2 billion in 2010 to $2.0 billion in 2013 assuming current NYMEX strip prices and taking into account the Company's attractive oil and gas derivatives for 2010 through 2013."

Pioneer Natural Resources Company is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations primarily in the United States. For more information, visit Pioneer's website at

Reliance Industries Limited is an India-based industrial enterprise with a market capitalization of over $78 billion. It is one of the largest refiners and petrochemical producers in the world and currently produces approximately 3 billion cubic feet equivalent per day of oil and gas production from its E&P operations. For more information, visit Reliance's website at

On Thursday, June 24, 2010, at 9:00 a.m. Central Time, Pioneer will hold a conference call and webcast to discuss the Eagle Ford Shale joint venture transaction, with an accompanying presentation. Instructions for listening to the call and viewing the presentation are shown below.

Select "Investors," then "Investor Presentations," to listen to the discussion and view the presentation.

Telephone: Dial (877) 440-5807, confirmation code: 4015000 five minutes before the call. View the presentation via Pioneer's internet address above.

A replay of the webcast will be archived on Pioneer's website. A telephone replay will be available through July 16 by dialing (888) 203-1112, confirmation code: 4015000.

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 or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to Pioneer's credit facility and derivative contracts and the purchasers of Pioneer's oil, NGL and gas production, 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, including the possible impacts of climate change, 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 U.S. Securities and Exchange Commission (the "SEC") prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than "reserves," as that term is defined by the SEC. In this presentation, Pioneer includes estimates of quantities of oil and gas using certain terms, such as "resource potential," or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC's definitions of proved, probable and possible reserves, and which the SEC's guidelines strictly 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. U.S. investors are urged to consider closely the disclosures in the Company's periodic filings with the SEC.Such filings are available from the Company at 5205 N. O'Connor Blvd., Suite 200, Irving, Texas 75039, Attention: Investor Relations, and the Company's website at These filings also can be obtained from the SEC by calling 1-800-SEC-0330.

SOURCE: Pioneer Natural Resources Company

Pioneer Natural Resources
Frank Hopkins, 972-969-4065
Nolan Badders, 972-969-3955
Media and Public Affairs
Susan Spratlen, 972-969-4018
Suzanne Hicks, 972-969-4020

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