EXHIBIT 99.1
NEWS RELEASE
Company Contacts: (972) 444-9001
Investors: Frank Hopkins
Scott Rice
Media and Public Affairs: Susan Spratlen
Pioneer Reports Third Quarter 2006 Results
Dallas, Texas, November 1, 2006 -- Pioneer Natural Resources Company (NYSE:PXD)
today announced financial and operating results for the quarter ended September
30, 2006.
o Pioneer reported net income of $81 million, or $.64 per diluted share.
o Third quarter oil and gas sales from continuing operations averaged 98,525
barrels oil equivalent per day (BOEPD).
o North American production for the first nine months of 2006 rose 14% from
equivalent volumetric production payment (VPP) adjusted 2005 nine-month
levels, reflecting the continuing success of Pioneer's accelerated
development drilling program.
o Production growth is on track to reach approximately 36 million barrels
oil equivalent (BOE), near the high end of the 2006 production guidance
range of 33 million to 37 million BOE.
o The Company purchased 3.1 million shares at $39.54 per share during the
quarter, completing $294 million of the remaining $359 million share
repurchase program authorized by the Board of Directors.
o Pioneer exited the quarter with net debt-to-book capitalization of 27%.
Income from continuing operations for the third quarter of 2006 was $81 million,
or $.64 per diluted share, as compared to $62 million, or $.44 per diluted
share, for the third quarter of 2005.
Cash flow from operating activities for the third quarter of 2006 was $183
million.
Pioneer also increased its 2007 natural gas hedge position by 91 million cubic
feet per day (Mmcfpd). The 2007 hedges were added at NYMEX-equivalent prices
greater than $9.00 per thousand cubic feet (Mcf) in order to protect a portion
of the economics associated with the Company's planned 2007 gas drilling
program.
Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "Our strategy to deliver
strong, consistent production growth in North America is on track to provide the
results we expected for 2006 and lay the foundation for another strong year in
2007. Our low-risk onshore development programs are delivering high returns and
consistent growth, and with the contributions from our resource plays,
especially the Edwards Trend play and the initiation of production from the
South Coast Gas project during the second half of 2007, I am confident that we
will reach our 10+% production per share growth target for 2007."
Operations Review
Pioneer currently has 39 rigs running in North America and one rig running in
Tunisia. By the end of 2006, an additional rig will be added in North America
bringing the total to 40 rigs as compared to 23 rigs at the end of 2005. Average
daily oil and gas production from North America increased 3% during the third
quarter from the average for the first half of 2006, and is on target to meet or
exceed the high end of the forecasted 2006 exit rate of 90,000 to 95,000 BOEPD.
In the Permian Basin, Pioneer is running 20 rigs and through October has drilled
approximately 240 of the 335 wells expected during 2006. The Company has
increased nine-month oil and gas sales 23% above 2005 nine-month levels, after
adjusting for the Company's VPPs for comparison purposes. Production growth from
the Spraberry field is on target to exceed the Company's exit rate forecast and
is being driven by the success of Pioneer's deeper drilling campaign, which
increases reserves and production by including the deeper Wolfcamp formation,
and new opportunities from bolt-on acquisitions. Year-to-date, more than 90,000
gross acres have been leased in the Permian Basin.
Mid-Continent production from the Hugoton and West Panhandle gas fields is being
maintained at consistent levels and is exceeding expectations.
In the Rocky Mountains, nine-month coal bed methane (CBM) production in the
Raton field was up 9% from the same period in 2005. During the third quarter,
Pioneer added a third rig and through October has drilled approximately 250 of
the 330 Raton wells planned for 2006. Raton production for the third quarter was
up 5% compared to the first half of 2006, and the Company now expects 2006
production from the Raton field to exceed the 5% to 7% annual growth target
announced earlier this year.
In South Texas, Pioneer is running five rigs in the Edwards Trend and expects to
add another rig in early 2007. The Company has 245,000 gross acres under lease
and continues to develop its Pawnee and Word fields while expanding the
potential of the trend by drilling exploration and appraisal wells on new field
prospects. Pioneer drilled a new discovery during the third quarter and has
drilled six discoveries to date in 2006. Two new processing facilities were also
added during the third quarter. The Company has tied in five new discovery wells
which are currently producing approximately 6 Mmcfpd, and has twelve Edwards
expansion wells currently drilling or waiting to be tied in to pipelines,
including two wells that are expected to begin producing in early November which
tested at approximately 3.5 Mmcfpd each.
During the fourth quarter, Pioneer plans to test one new prospect and drill five
appraisal wells and four development wells. In addition, approximately 850
square miles of 3-D seismic data will be acquired on new discoveries in South
Texas through 2007 to support new field development drilling which is expected
to be initiated mid-2007.
In Canada, nine-month production is up 16% compared to the same period of 2005,
and third quarter production rose 15% compared to the first half of 2006. The
Company has drilled 85 Horseshoe Canyon CBM wells and has three rigs running to
complete the 175 wells planned for 2006. Pioneer expects to have 120 wells on
production by year end and to tie in the remaining 55 wells in early 2007 after
adding compression facilities during the fourth quarter.
On the North Slope of Alaska, Pioneer has completed the construction, contouring
and armoring of the gravel drill site for the Oooguruk development project.
Current activities include procuring equipment and services, fabricating
equipment and modifying the drilling rig for installation during 2007. The
project is on schedule to achieve first oil production in 2008.
Offshore South Africa, production from the Sable oil field continues to exceed
expectations and development drilling continues on the South Coast Gas Project,
a seven-well subsea tie-back to the existing F-A platform. Subsea infrastructure
is expected to be in place for project startup and first production during the
second half of 2007.
In Tunisia, the Hawa appraisal well became the ninth successful well drilled on
the Adam Concession and is expected to be producing by the end of the year.
During the fourth quarter, Pioneer expects to drill another well on the Adam
Concession, two wells in the Pioneer-operated Jenein Nord block and a well in
the Borj El Khadra block.
Financial Review
Third quarter oil sales averaged 23,699 barrels per day (BPD) and natural gas
liquids sales averaged 19,352 BPD. Gas sales in the third quarter averaged 333
Mmcfpd. The reported price for oil was $70.89 per barrel and included $13.38 per
barrel related to deferred revenue from VPPs for which production was not
recorded. The price for natural gas liquids was $39.08 per barrel. The reported
price for gas was $6.33 per Mcf and included $.60 per Mcf related to deferred
revenue from VPPs for which production was not recorded.
Third quarter production costs averaged $11.36 per BOE. Exploration and
abandonment costs were $44 million for the quarter and included $13 million of
unsuccessful drilling costs, $27 million of geologic and geophysical expenses
including seismic and personnel costs and $4 million of acreage and other costs.
Financial Outlook
The following statements are estimates based on current expectations. These
forward-looking statements are subject to a number of risks and uncertainties
that may cause the Company's actual results to differ materially from the
following statements. The last paragraph of this release addresses certain of
the risks and uncertainties to which the Company is subject.
Fourth quarter 2006 production is expected to average 98,000 to 103,000 BOEPD.
Fourth quarter production costs (including production and ad valorem taxes and
transportation costs) are expected to average $11.00 to $12.00 per BOE based on
current NYMEX strip prices for oil and gas. Depreciation, depletion and
amortization expense is expected to average $10.00 to $11.00 per BOE.
Total exploration and abandonment expense during the fourth quarter is expected
to be $45 million to $110 million and includes approximately $15 million of
costs associated with an unsuccessful test of the Flying Cloud prospect adjacent
to Pioneer's Clipper discovery (deepwater Gulf of Mexico) and could include up
to $15 million associated with high-impact onshore drilling in Mississippi. It
could also include $30 million associated with lower-risk resource plays in the
Edwards Trend in South Texas, Uinta/Piceance basins in the Rockies, Canada and
Tunisia and up to $15 million for acreage and other expenses. In addition,
exploration expense is expected to include $30 million to $35 million for
seismic investments and personnel, primarily related to the onshore resource
plays Pioneer is currently pursuing. General and administrative expense is
expected to be $29 million to $33 million. Interest expense is expected to be
$24 million to $28 million, offset by interest income of $1 million to $3
million. Accretion of discount on asset retirement obligations is expected to be
$1 million to $2 million.
The Company's fourth quarter effective income tax rate is expected to range from
35% to 45% based on current capital spending plans. Cash income taxes are
expected to range from $5 million to $15 million, principally related to
Tunisian income taxes and nominal alternative minimum tax in the U.S.
The Company's financial results and oil and gas hedges are outlined on the
attached schedules.
Earnings Conference Call
This afternoon at 1:00 p.m. Eastern Time, Pioneer will discuss its quarterly
financial and operating results with an accompanying presentation. The call will
be webcast on Pioneer's website, www.pxd.com. At the website, select `INVESTOR'
at the top of the page. For those who cannot listen to the live broadcast, a
replay will be available shortly after the call. Or you may choose to dial (800)
289-0528 (confirmation code: 6893514) to listen to the call by telephone and
view the accompanying visual presentation at the website above. A telephone
replay will be available by dialing (888) 203-1112 (confirmation code: 6893514).
Pioneer is a large independent oil and gas exploration and production company,
headquartered in Dallas, with operations in the United States, Canada and
Africa. For more information, visit Pioneer's website at www.pxd.com.
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 oil and gas
prices, product supply and demand, competition, the ability to obtain
environmental and other permits and the timing thereof, other government
regulation or action, third party approvals, international operations and
associated international political and economic instability, litigation, the
costs and results of drilling and operations, availability of drilling
equipment, Pioneer's ability to replace reserves, implement its business plans
(including its plan to repurchase stock), or complete its development projects
as scheduled, access to and cost of capital, uncertainties about estimates of
reserves, the assumptions underlying production forecasts, quality of technical
data, environmental and weather risks, 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 (the "SEC").
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2006 2005
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 100,072 $ 18,802
Accounts receivable, net 161,476 337,658
Inventories 109,509 79,659
Prepaid expenses 16,497 18,091
Deferred income taxes 82,638 158,878
Other current assets, net 47,963 10,716
----------- -----------
Total current assets 518,155 623,804
----------- -----------
Property, plant and equipment, at cost:
Oil and gas properties, using the successful efforts
method of accounting 7,772,354 8,813,134
Accumulated depletion, depreciation and amortization (1,816,875) (2,577,946)
----------- -----------
Total property, plant and equipment 5,955,479 6,235,188
----------- -----------
Goodwill 310,626 311,651
Other assets, net 214,025 158,591
----------- -----------
$ 6,998,285 $ 7,329,234
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 333,475 $ 345,204
Interest payable 26,032 40,314
Income taxes payable 34,397 22,470
Deferred revenue 183,031 190,327
Other current liabilities 301,552 435,040
----------- -----------
Total current liabilities 878,487 1,033,355
----------- -----------
Long-term debt 1,194,556 2,058,412
Deferred income taxes 1,105,118 767,329
Deferred revenue 528,576 664,511
Other liabilities and minority interests 322,214 588,525
Stockholders' equity 2,969,334 2,217,102
----------- -----------
$ 6,998,285 $ 7,329,234
=========== ===========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------------- ----------------------------
2006 2005 2006 2005
---------- ---------- ----------- ------------
Revenues and other income:
Oil and gas $ 418,106 $ 389,679 $ 1,205,144 $ 1,033,842
Interest and other 15,229 7,885 42,081 21,936
Gain (loss) on disposition of assets, net (708) 375 (4,184) 2,625
---------- ---------- ----------- -----------
432,627 397,939 1,243,041 1,058,403
---------- ---------- ----------- -----------
Costs and expenses:
Oil and gas production 102,969 92,809 300,718 253,393
Depletion, depreciation and amortization 95,288 75,836 265,678 215,143
Impairment of long-lived assets - 21 - 644
Exploration and abandonments 43,820 56,364 210,080 147,691
General and administrative 30,421 29,817 92,136 83,901
Accretion of discount on asset retirement
obligations 1,168 1,094 3,470 3,183
Interest 23,586 28,862 82,928 91,011
Other 14,779 34,185 31,592 58,739
---------- ---------- ----------- -----------
312,031 318,988 986,602 853,705
---------- ---------- ----------- -----------
Income from continuing operations before
income taxes 120,596 78,951 256,439 204,698
Income tax provision (40,270) (17,438) (111,194) (93,234)
---------- ---------- ----------- -----------
Income from continuing operations 80,326 61,513 145,245 111,464
Income from discontinued operations, net of tax 473 62,060 566,800 282,325
---------- ---------- ----------- ------------
Net income $ 80,799 $ 123,573 $ 712,045 $ 393,789
========== ========== =========== ============
Basic earnings per share:
Income from continuing operations $ .65 $ .45 $ 1.15 $ .79
Income from discontinued operations,
net of tax - .45 4.52 2.01
---------- ---------- ----------- -----------
Net income $ .65 $ .90 $ 5.67 $ 2.80
========== ========== =========== ============
Diluted earnings per share:
Income from continuing operations $ .64 $ .44 $ 1.14 $ .79
Income from discontinued operations,
net of tax - .44 4.39 1.95
---------- ---------- ----------- ------------
Net income $ .64 $ .88 $ 5.53 $ 2.74
========== ========== =========== ============
Weighted average shares outstanding:
Basic 124,021 137,655 125,520 140,436
========== ========== =========== ===========
Diluted 126,734 141,786 129,134 144,770
========== ========== =========== ===========
PIONEER NATURAL RESOURCES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------------- ---------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Cash flows from operating activities:
Net income $ 80,799 $ 123,573 $ 712,045 $ 393,789
Adjustments to reconcile net income to net
cash provided by operating activities:
Depletion, depreciation and amortization 95,288 75,836 265,678 215,143
Impairment of long-lived assets - 21 - 644
Exploration expenses, including dry holes 15,981 38,609 127,917 67,571
Deferred income taxes 43,336 4,383 110,520 60,759
Loss (gain) on disposition of assets, net 708 (375) 4,184 (2,625)
Loss on extinguishment of debt - 18,633 8,076 25,975
Accretion of discount on asset retirement
obligations 1,168 1,094 3,470 3,183
Discontinued operations (3,248) 78,804 (543,903) 262,876
Interest expense 2,357 1,493 7,522 2,555
Commodity hedge related activity (3,867) 1,658 (9,420) (9,069)
Stock-based compensation 7,047 6,449 25,357 19,619
Amortization of deferred revenue (47,396) (21,882) (143,231) (53,956)
Other noncash items 4,494 4,059 14,018 9,758
Changes in operating assets and liabilities,
net of effects from acquisition:
Accounts receivable, net (1,351) 9,047 161,814 (45,255)
Inventories (12,988) (8,964) (52,113) (21,667)
Prepaid expenses (1,673) (13,513) 291 (7,705)
Other current assets, net (7,214) 405 1,978 (124)
Accounts payable 80,005 27,730 (33,636) 37,294
Interest payable (1,202) (21,593) (11,476) (25,957)
Income taxes payable (37,995) (6,314) 17,820 5,605
Other current liabilities (31,551) (9,350) (22,624) (15,039)
----------- ----------- ----------- -----------
Net cash provided by operating activities 182,698 309,803 644,287 923,374
Net cash provided by (used in) investing
activities (367,179) (356,980) 598,112 302,248
Net cash provided by (used in) financing
activities (172,403) 52,616 (1,162,843) (1,171,751)
----------- ----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents (356,884) 5,439 79,556 53,871
Effect of exchange rate changes on cash and
cash equivalents (86) 618 1,714 3,380
Cash and cash equivalents, beginning of period 457,042 58,451 18,802 7,257
----------- ----------- ----------- -----------
Cash and cash equivalents, end of period $ 100,072 $ 64,508 $ 100,072 $ 64,508
=========== =========== =========== ===========
PIONEER NATURAL RESOURCES COMPANY
SUMMARY PRODUCTION AND PRICE DATA
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
----------------------- ----------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Average Daily Sales Volumes
from Continuing Operations:
Oil (Bbls) - U.S. 17,575 21,484 17,406 21,290
Canada 312 209 299 194
Africa 5,812 9,666 6,680 10,686
--------- --------- --------- ---------
Worldwide 23,699 31,359 24,385 32,170
========= ========= ========= =========
Natural gas liquids (Bbls) - U.S. 18,884 18,176 18,599 16,835
Canada 468 502 433 510
--------- --------- --------- ---------
Worldwide 19,352 18,678 19,032 17,345
========= ========= ========= =========
Gas (Mcf) - U.S. 286,182 274,390 282,450 269,807
Canada 46,664 37,562 42,456 36,160
--------- --------- --------- ---------
Worldwide 332,846 311,952 324,906 305,967
========= ========= ========= =========
Average Daily Sales Volumes
from Discontinued Operations:
Oil (Bbls) - U.S. - 3,715 3,208 5,478
Argentina - 7,930 3,362 7,972
Canada - - - 38
--------- --------- --------- ---------
Worldwide - 11,645 6,570 13,488
========= ========= ========= =========
Natural gas liquids (Bbls) - U.S. - 131 - 87
Argentina - 1,917 563 1,814
Canada - 2 - 149
--------- --------- --------- ---------
Worldwide - 2,050 563 2,050
========= ========= ========= =========
Gas (Mcf) - U.S. (140) 189,429 48,195 248,556
Argentina - 142,399 58,700 136,023
Canada - 347 58 8,676
--------- --------- --------- ---------
Worldwide (140) 332,175 106,953 393,255
========= ========= ========= =========
Average Reported Prices (a):
Oil (per Bbl) - U.S. $ 70.96 $ 34.57 $ 66.91 $ 31.37
Canada $ 70.44 $ 68.77 $ 70.09 $ 51.73
Africa $ 70.73 $ 59.57 $ 66.49 $ 51.40
Worldwide $ 70.89 $ 42.51 $ 66.83 $ 38.15
Natural gas liquids (per Bbl) - U.S. $ 38.73 $ 34.40 $ 36.15 $ 29.78
Canada $ 53.11 $ 49.93 $ 55.01 $ 43.22
Worldwide $ 39.08 $ 34.82 $ 36.58 $ 30.18
Gas (per Mcf) - U.S. $ 6.24 $ 7.18 $ 6.30 $ 6.67
Canada $ 6.91 $ 7.51 $ 7.27 $ 6.57
Worldwide $ 6.33 $ 7.22 $ 6.43 $ 6.66
<FN>
- -----------
(a) Average prices are attributable to continuing operations and include the
results of hedging activities and amortization of VPP deferred revenue.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
EBITDAX and discretionary cash flow ("DCF") (as defined below) are
presented herein, and reconciled to the generally accepted accounting principle
("GAAP") measures of net income and net cash provided by operating activities
because of their wide acceptance by the investment community as financial
indicators of a company's ability to internally fund exploration and development
activities and to service or incur debt. The Company also views the non-GAAP
measures of EBITDAX and DCF as useful tools for comparisons of the Company's
financial indicators with those of peer companies that follow the full cost
method of accounting. EBITDAX and DCF should not be considered as alternatives
to net income or net cash provided by operating activities, as defined by GAAP.
Three months ended Nine months ended
September 30, September 30,
------------------------- -------------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net income $ 80,799 $ 123,573 $ 712,045 $ 393,789
Depletion, depreciation and amortization 95,288 75,836 265,678 215,143
Impairment of long-lived assets - 21 - 644
Exploration and abandonments 43,820 56,364 210,080 147,691
Accretion of discount on asset retirement
obligations 1,168 1,094 3,470 3,183
Interest expense 23,586 28,862 82,928 91,011
Income tax provision 40,270 17,438 111,194 93,234
Loss (gain) on disposition of assets, net 708 (375) 4,184 (2,625)
Loss on extinguishment of debt - 18,633 8,076 25,975
Discontinued operations (3,248) 78,804 (543,903) 262,876
Current income taxes on discontinued
operations 412 (1,056) 152,987 6,833
Cash exploration expense on discontinued
operations 10 1,558 2,155 7,788
Commodity hedge related activity (3,867) 1,658 (9,420) (9,069)
Stock-based compensation 7,044 6,449 25,354 19,619
Amortization of deferred revenue (47,396) (21,882) (143,231) (53,956)
Other noncash items 4,494 4,059 14,018 9,725
---------- ---------- ---------- ----------
EBITDAX (a) 243,088 391,036 895,615 1,211,861
Less: Cash interest expense (21,229) (27,369) (75,406) (88,423)
Current income taxes 2,654 (11,999) (153,661) (39,308)
---------- ---------- ---------- ----------
Discretionary cash flow (b) 224,513 351,668 666,548 1,084,130
Less: Cash exploration expense (27,849) (19,313) (84,318) (87,908)
Changes in operating assets and
liabilities (13,966) (22,552) 62,057 (72,848)
---------- ---------- ---------- ----------
Net cash provided by operating activities $ 182,698 $ 309,803 $ 644,287 $ 923,374
========== ========== ========== ==========
<FN>
- -------------
(a) "EBITDAX" represents earnings before depletion, depreciation and
amortization expense; impairment of long-lived assets; exploration and
abandonments; accretion of discount on asset retirement obligations;
interest expense; income taxes; gain or loss on the disposition of assets;
loss on extinguishment of debt; noncash effects from discontinued
operations; commodity hedge related activity; stock-based compensation;
amortization of deferred revenue; and other noncash items.
(b) Discretionary cash flow equals cash flows from operating activities before
changes in operating assets and liabilities and before cash exploration
expense.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
As of October 30, 2006
Open Commodity Hedge Positions
2006
Fourth
Quarter 2007 2008
---------- ---------- ----------
Average Daily Oil Production Hedged:
Swap Contracts:
Volume (Bbl) 5,000 6,000 6,500
NYMEX price (Bbl) $ 37.20 $ 31.26 $ 31.19
Collar Contracts:
Volume (Bbl) 6,500 - -
NYMEX price (Bbl)
Ceiling $ 66.41 $ - $ -
Floor $ 41.92 $ - $ -
Average Daily Gas Production Hedged:
Swap Contracts:
Volume (MMBtu) 63,875 109,195 15,000
NYMEX price (MMBtu) (a) $ 4.30 $ 8.00 $ 9.10
Collar Contracts:
Volume (MMBtu) 95,000 6,164 -
NYMEX price (MMBtu)(a)
Ceiling $ 15.25 $ 12.82 $ -
Floor $ 6.96 $ 10.00 $ -
<FN>
- ---------------
(a) Approximate, based on historical differentials to index prices.
</FN>
Amortization of Volumetric Production Payment Proceeds and Net Derivative Losses
(in thousands)
2006
Fourth
Quarter 2007 Thereafter Total
---------- ---------- ---------- ----------
VPP proceeds, net of transaction costs $ 45,527 $ 175,216 $ 460,322 $ 681,065
Net hedge obligations assigned 1,569 6,016 22,957 30,542
---------- ---------- ---------- ----------
Total deferred revenue (a) 47,096 181,232 483,279 711,607
Less net derivative losses to be recognized
in pretax earnings (b) (396) (3,540) (17,117) (21,053)
---------- ---------- ---------- ----------
Total VPP impact to pretax earnings $ 46,700 $ 177,692 $ 466,162 $ 690,554
========== ========== ========== ==========
<FN>
- --------------
(a) Deferred revenue will be amortized as increases to oil and gas revenues
during the indicated future periods.
(b) Represents the remaining pretax earnings impact of the derivatives assigned
in the VPPs.
</FN>
PIONEER NATURAL RESOURCES COMPANY
SUPPLEMENTAL INFORMATION
As of October 30, 2006
(continued)
Deferred Gains (Losses) on Terminated Hedges (a)
(in thousands)
2006
Fourth
Quarter 2007 2008 Thereafter
--------- ----------- ----------- ----------
Commodity hedge gains (losses) (b) $ 1,834 $ (66,845) $ (68,574) $ -
Debt hedge losses (c) (58) (325) (371) (4,412)
--------- ----------- ----------- ----------
Total deferred gains (losses) $ 1,776 $ (67,170) $ (68,945) $ (4,412)
========= =========== =========== ==========
<FN>
- --------------
(a) Excludes deferred hedge gains and losses on terminated VPPs.
(b) Deferred commodity hedge gains will be amortized as increases to oil and
gas revenues during the indicated future periods and deferred commodity
hedge losses will be amortized as decreases during the indicated future
periods.
(c) Deferred debt hedge losses will be amortized as increases to interest
expense during the indicated future periods.
</FN>