Pioneer Reports Preliminary Assessment Due to Hurricane

Pioneer Natural Resources reports that it is in the process of inspecting its production facilities in the Gulf of Mexico to assess the damage inflicted by Hurricane Ivan.

A visual inspection of the facilities at the Devils Tower field has confirmed that the production spar is in place having incurred damage including the loss of the platform derrick used in well completion activities. Further inspection is needed to determine the extent of the damage and its impact on the timing for resuming production from the three wells online prior to the hurricane and for continuing with completion activities for five additional wells drilled to develop the field. Pioneer holds a 25% working interest in the field with net production having reached approximately 5 thousand barrels of oil and 4 million cubic feet of gas per day before operations were suspended in anticipation of the hurricane.

Pioneer maintains business interruption insurance to limit the impact of production interruptions extending beyond 45 days.

The topsides of the Canyon Station platform, part of the Canyon Express gas gathering system appear to have sustained minimal damage. Additional assessment is required to determine the condition of the subsea systems. Pioneer holds interests in the Aconcagua and Camden Hills fields, two of the three fields that produce through the Canyon Express system.

Production from the Pioneer-operated Falcon Corridor was not affected by the storm, and there was no significant damage at Pioneer-operated platforms at Eugene Island 208, East Cameron 322, Vermillion 397 and South Pelto 13. These platforms are back on production except for East Cameron where production start up is awaiting clearance from downstream handling facilities. Production from the inland bays is expected to begin ramping up today and be at full production over the weekend.

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