Pioneer Claims $373 Million for 2006 Net Income

Pioneer Natural Resources Company reported fourth quarter and full-year earnings for 2007.

In the fourth quarter, Pioneer reported fourth quarter net income of $205 million, or $1.72 per diluted share; an increased average daily oil and gas sales to 103,330 barrels oil equivalent per day (BOEPD) excluding discontinued operations; and 12% above comparable sales for the fourth quarter of 2006.

For the full year, Pioneer reported 2007 net income of $373 million, or $3.06 per diluted share; an increased full-year oil and gas sales to 35.5 MMBOE excluding discontinued operations; a 14% increase on a production per share basis; a replaced 357% of production, ending the year with net proved reserves of 964 MMBOE; and an added 148 MMBOE of proved reserves in 2007 at a finding and development cost of $15.40 per barrel oil equivalent (BOE).

Scott Sheffield, Chairman and CEO, stated, "Since successfully implementing our asset restructuring program two years ago, we have delivered 16% compound annual growth in production per share, added substantial reserves and resource potential and significantly reduced our finding and development cost. Over the next four years through 2011, we are confident that consistent, predictable production growth from our core assets will allow us to achieve our 12+% compound average annual production per share growth target. With this strong production growth and the expiration of our legacy hedges, we are also targeting approximately 20% compound average annual growth in cash flow for the four-year period and expect significant improvements in our return on capital employed."

Pioneer's fourth quarter net income was $205 million, or $1.72 per diluted share, and included income of $120 million ($1.01 per diluted share) from discontinued operations related to the previously announced divestiture of Canadian assets; income of $22 million ($14 million or $.11 per diluted share after tax) associated with the sale of Alaskan Petroleum Production Tax credits which are earned for qualified capital expenditures; and a noncash exploration and abandonment charge of $72 million ($45 million or $.38 per diluted share after tax) to write off the carrying value of the Clipper prospect in the deepwater Gulf of Mexico (previously announced).

Cash flow from operating activities for the fourth quarter was $237 million.

Excluding discontinued operations, fourth quarter oil sales averaged 24,846 barrels per day (BPD), natural gas liquids sales averaged 19,629 BPD and gas sales averaged 353 MMCFPD.

The reported fourth quarter average price for oil was $79.51 per barrel and included $11.96 per barrel related to deferred revenue from volumetric production payments (VPPs) for which production was not recorded. The price for natural gas liquids was $51.26 per barrel. The reported price for gas was $7.21 per MCF, including $.55 per MCF related to deferred revenue from VPPs for which production was not recorded.

Fourth quarter production costs averaged $11.82 per BOE.

Exploration and abandonment costs were $109 million for the quarter and included $80 million of acreage and unsuccessful drilling costs (primarily related to the previously discussed $72 million charge to write off the Clipper prospect) and $29 million of geologic and geophysical expenses, including seismic and personnel costs.

For the twelve months ended December 31, 2007, net income was $373 million, or $3.06 per diluted share. Cash flow from operating activities for the year was $775 million.

Full-year oil and gas sales averaged 97,351 BOEPD excluding discontinued operations, and included oil sales of 25,169 BPD, natural gas liquids sales of 18,553 BPD and gas sales of 322 MMCFPD. Reported average prices for 2007 were $66.08 per barrel for oil, $41.60 per barrel for natural gas liquids and $7.26 per MCF for gas. Average oil and gas prices for the year include $11.94 per barrel and $.61 per MCF, respectively, related to deferred revenue from VPPs for which production was not recorded.


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