Pioneer Updates Gulf Of Mexico Operations

Development drilling has been recently completed at Pioneer's Aconcagua and Camden Hills fields in MC 305 and MC 348, respectively. These fields are part of the TotalFinaElf-operated Canyon Express Project. At Aconcagua, the MC 305 #3 well was drilled by Global Marine's drill ship, Glomar Explorer to a total depth of 13,150 feet measured depth and encountered over 130 feet of net gas pay in three zones, exceeding expectations as previously announced. In the Camden Hills field, the MC 348 #1 sidetrack was drilled by Transocean Sedco Forex's semisubmersible, Cajun Express to 15,050 feet measured depth and encountered over 80 net feet of gas pay in two zones.

Canyon Express facility construction and installation is currently on schedule for first gas production in mid-2002. The project has the capacity to deliver 500 million cubic feet of gas per day and is the largest development project currently underway to deliver gas to the North American market in 2002. Production from Pioneer's 18% interest in Canyon Express is expected to increase its North American gas production by approximately 30%.

The results of appraisal drilling on two recently announced discoveries is available. A sidetrack drilled on the Falcon discovery in East Breaks 579 was successful, and detailed geologic, reservoir and economic evaluations required for project sanction should be completed during the third quarter. A sidetrack drilled to appraise the Turnberry discovery in Atwater Valley 92 found two hydrocarbon-bearing sands updip of the over 100 feet of net pay in the discovery well, but the pay was much thinner than anticipated. Results of the Turnberry appraisal well are currently being evaluated; however, the well did not prove up sufficient reserves to establish economic feasibility at this time.

Pioneer expects to spud its first operated deepwater Gulf of Mexico well in early July. The well will be drilled in East Breaks 981 on the Argo prospect (formerly known as Sanibel). Pioneer will have a 75% working interest in the prospect and Mariner Energy, Inc. will have the remaining 25%.

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