Pioneer Prices $440 Million of Convertible Senior Notes

Pioneer Natural Resources Company announced that it has priced an offering of $440 million aggregate principal amount of convertible senior notes due 2038 pursuant to a registration statement filed with the Securities and Exchange Commission. In addition, Pioneer has granted the underwriters a 13-day option to purchase up to an additional $60 million of the convertible notes solely to cover over-allotments.

The notes will be convertible, under certain circumstances, using a net share settlement process, into a combination of cash and Pioneer common stock pursuant to a formula. The initial base conversion price is approximately $72.60 (subject to adjustment in certain circumstances), which is equivalent to an initial base conversion rate of 13.7741 common shares per $1,000 principal amount of convertible notes. In general, upon conversion of a note, the holder of such note will receive cash equal to the principal amount of the note and Pioneer common stock for the note's conversion value in excess of such principal amount. If at the time of conversion the applicable price of Pioneer's common stock exceeds the base conversion price, holders will receive up to an additional 8.9532 shares of Pioneer common stock per $1,000 principal amount of notes, as determined pursuant to a specified formula.

The notes will bear interest at a rate of 2.875% per annum, subject to reduction in certain circumstances as set forth in the indenture for the notes. The notes will mature on January 15, 2038 and may not be redeemed by Pioneer prior to January 15, 2013, after which they may be redeemed at 100% of the principal amount plus accrued interest. Holders of the convertible notes may require Pioneer to repurchase some or all of their convertible notes for cash on January 15, 2013, 2018, 2023, 2028 and 2033, or in the event of certain change of control transactions, at 100% of the principal amount plus accrued interest. The notes will be senior unsecured obligations of Pioneer.

The offering is expected to close on January 22, 2008, subject to customary closing conditions. Pioneer plans to use the net proceeds to repay a portion of its outstanding bank debt.


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