EXHIBIT 99.2
NEWS RELEASE
Company Contacts: (972) 444-9001
Investors: Frank Hopkins or Scott Rice
Media and Public Affairs: Susan Spratlen
Pioneer Reports Year-End 2006 Reserves and Finding Costs
Dallas, Texas, February 6, 2007 -- Pioneer Natural Resources Company (NYSE:PXD)
today announced that as of December 31, 2006, its total proved oil and gas
reserves were 905 million barrels oil equivalent (MMBOE). During 2006, Pioneer
replaced 200% of production at a finding and development cost of $18.36 per
barrel oil equivalent (BOE).
Pioneer invested total capital for its continuing operations in 2006 of
approximately $1.5 billion, excluding asset retirement obligations, capitalized
interest, and geological and geophysical G&A. These expenditures exceeded
Pioneer's prior projection by approximately $100 million, primarily due to
acreage acquisitions in several core areas which were closed during the fourth
quarter. The Company estimates that the acreage acquired during 2006 has
resource potential of approximately 150 MMBOE.
Of the $1.5 billion of total capital invested during 2006, approximately $1.2
billion generated Pioneer's 12% production growth in North America and total
reserve additions of 91 MMBOE. Another $225 million was allocated to two
multi-year development projects -- South Coast Gas offshore South Africa and
Oooguruk on the North Slope of Alaska. Production from these projects is
expected to commence in 2007 and 2008, respectively. Pioneer did not record any
proved reserves related to these projects during 2006. Additionally, $82 million
was allocated to high-impact exploration for which no proved reserves were
recorded.
Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "Our finding and
development cost for 2006 of $18.36 per BOE was within our target range of $15
to $20 per BOE, despite the upward pressure on drilling and development costs
throughout the year. In the lower 48 states and Canada, which was our primary
focus area for reserve growth in 2006, our finding and development cost was
approximately $15 per BOE. We also met our reserve replacement target of 200%
for 2006, reflecting the success of our lower-risk North America focus,
continued opportunity for expansion in our core areas and new resource plays,
and the expertise and diligence of our asset teams."
Pioneer's proved reserves were determined using year-end NYMEX equivalent prices
of $60.82 per barrel of oil and $5.64 per thousand cubic feet (Mcf) of gas,
compared to $61.04 per barrel of oil and $10.08 per Mcf of gas at the end of
2005. This resulted in negative reserve revisions of 14 MMBOE that were related
to the decline in year-end gas prices, the majority of which would be recovered
at a NYMEX equivalent gas price of $7.50 per Mcf.
Netherland, Sewell and Associates, Inc. (NSA), an independent reserve
engineering firm, audited the proved reserves of significant fields. NSA's audit
covered properties representing approximately 89% of Pioneer's total proved
reserves at year-end 2006.
For the three years ending in 2006, Pioneer's finding and development cost
averaged $12.92 per BOE. Over the three-year period, Pioneer added 474 MMBOE of
proved reserves for total costs incurred of $6.1 billion. Three-year average
reserve replacement was 261%. For the five years ending in 2006, Pioneer's
finding and development cost averaged $10.97 per BOE. Over the five-year period,
Pioneer added 690 MMBOE of proved reserves for total costs incurred of $7.6
billion. Five-year average reserve replacement was 246%.
Year-end proved reserves and costs incurred are detailed in the attached
supplemental schedule.
Pioneer is a large independent oil and gas exploration and production company,
headquartered in Dallas, Texas, with operations in the United States, Canada,
South Africa and Tunisia. 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 which 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, 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, the costs and results of drilling and operations, Pioneer's ability
to replace reserves, implement its business plans or complete its development
projects as scheduled, access to and cost of capital, uncertainties about
estimates of reserves and quality of technical data. These and other risks are
described in Pioneer's 10-K and 10-Q Reports and other filings with the
Securities and Exchange Commission. Pioneer undertakes no duty to publicly
update these statements except as required by law.
Cautionary Note to U.S. Investors -- The SEC permits oil and gas companies, in
their filings with the SEC, to disclose only proved reserves that a company has
demonstrated by actual production or conclusive formation tests to be
economically and legally producible under existing economic and operating
conditions. Pioneer uses certain terms in this release, such as "resource
potential" or other descriptions of volumes of reserves potentially recoverable
through additional drilling or recovery techniques that the SEC's guidelines
prohibit Pioneer from including in filings with the SEC. These estimates are by
their nature more speculative than estimates of proved reserves and accordingly
are subject to substantially greater risk of being recovered by Pioneer.
PIONEER NATURAL RESOURCES COMPANY
PROVED RESERVES & COSTS INCURRED SUPPLEMENTAL INFORMATION
Year Ended December 31, 2006
United
States Argentina Canada Africa Total
---------- --------- -------- ------- ----------
Proved reserves:
Oil (MBbls):
Balance, January 1, 2006 232,513 27,087 2,051 6,824 268,475
Revisions of previous estimates 4,072 (247) (259) 3,100 6,666
Purchases of minerals-in-place 31,304 - - - 31,304
Discoveries and extensions 8,910 111 182 500 9,703
Production (7,343) (918) (113) (2,377) (10,751)
Sales of minerals-in-place (11,261) (26,033) - - (37,294)
---------- --------- -------- -------- ----------
Balance, December 31, 2006 258,195 - 1,861 8,047 268,103
Natural Gas Liquids (MBbls):
Balance, January 1, 2006 153,258 6,937 372 - 160,567
Revisions of previous estimates (11,539) (59) 100 - (11,498)
Purchases of minerals-in-place 10,521 - - - 10,521
Discoveries and extensions 3,038 24 35 - 3,097
Production (6,748) (154) (169) - (7,071)
Sales of minerals-in-place - (6,748) - - (6,748)
---------- --------- -------- -------- -----------
Balance, December 31, 2006 148,530 - 338 - 148,868
Natural Gas (MMcf):
Balance, January 1, 2006 2,750,856 404,323 130,514 60,395 3,346,088
Revisions of previous estimates (10,664) (2,043) (7,953) 175 (20,485)
Purchases of minerals-in-place 52,308 - - - 52,308
Discoveries and extensions 136,712 4,576 66,801 8,223 216,312
Production (134,445) (16,025) (15,853) (436) (166,759)
Sales of minerals-in-place (108,806) (390,831) - - (499,637)
---------- --------- -------- -------- -----------
Balance, December 31, 2006 2,685,961 - 173,509 68,357 2,927,827
Equivalent Barrels (MBOE):
Balance, January 1, 2006 844,247 101,411 24,175 16,890 986,723
Revisions of previous estimates (9,244) (646) (1,485) 3,129 (8,246)
Purchases of minerals-in-place 50,543 - - - 50,543
Discoveries and extensions 34,733 898 11,351 1,870 48,852
Production (a) (36,499) (3,743) (2,924) (2,449) (45,615)
Sales of minerals-in-place (29,395) (97,920) - - (127,315)
---------- --------- -------- -------- -----------
Balance, December 31, 2006 854,385 - 31,117 19,440 904,942
========== ========= ======== ======== ==========
Costs incurred for oil and gas producing activities ($000):
Property acquisition costs:
Proved $ 77,338 $ - $ - $ - $ 77,338
Unproved 109,320 - 19,931 15,584 144,835
---------- --------- -------- -------- -----------
186,658 - 19,931 15,584 222,173
Exploration costs:
Resource plays 204,792 - 100,799 40,970 346,561
High impact 57,666 - - 24,352 82,018
Development costs:
Development drilling 560,214 - 97,188 (719) 656,683
Development projects 111,615 - - 112,897 224,512
---------- --------- -------- -------- -----------
1,120,945 - 217,918 193,084 1,531,947
Asset retirement obligations 22,868 - 8,299 14,299 45,466
Discontinued operations 6,976 35,768 - - 42,744
G&G G&A 26,659 - 2,446 11,951 41,056
Capitalized interest 6,833 - - 5,333 12,166
---------- --------- -------- -------- -----------
Total costs incurred $1,184,281 $ 35,768 $228,663 $224,667 $1,673,379
========== ========= ======== ======== ==========
Reserve replacement percentage (b) 200%
==========
Finding and development costs per BOE of proved reserves added (c) $ 18.36
==========
<FN>
- ------------
(a) Production includes 6,811 MBOE related to discontinued operations and 2,894
MBOE related to field fuel.
(b) The summation of annual proved reserves, on a BOE basis, attributable to
revisions of previous estimates, purchases of minerals-in-place and
discoveries and extensions divided by annual production of oil, NGLs and
natural gas, on a BOE basis.
(c) Total costs incurred divided by the summation of annual proved reserves, on
a BOE basis, attributable to revisions of previous estimates, purchases of
minerals-in-place and discoveries and extensions. Consistent with industry
practice, future capital costs to develop proved undeveloped reserves are
not included in costs incurred.
</FN>