Pioneer growth in South Texas Edwards Trend

Pioneer Natural Resources Company announced continued success with its drilling program in the Edwards Trend in South Texas.
Two new fields have been discovered in the trend, bringing total discoveries in the Edwards expansion area to eight. The two new wells encountered 150 feet to more than 200 feet of vertical gas pay. An appraisal well is currently drilling on one of the discoveries where 3-D seismic is available. Appraisal of the second discovery will begin after 3-D seismic data has been acquired and interpreted in 2008.

Development drilling is also delivering positive results, with current net gas production reaching approximately 60 million cubic feet per day (MMCFPD), a 50% increase since year-end 2006. Average net gas production is expected to exceed the 30% annual growth rate targeted for 2007 and is expected to increase approximately 25% next year based on current 2008 drilling plans. Pioneer continues to add new treating capacity to handle the increasing gas production and is making progress on a 37-mile extension of the Company’s existing 44-mile gathering pipeline.

Pioneer’s strong growth from the Edwards Trend reflects a successful 2007 drilling program which has focused primarily on lower-risk development wells on existing discoveries with 3-D seismic coverage. Pioneer is utilizing multiple isolation packer devices to fracture stimulate gas pay sections in most of these wells which adds about $1 million to the cost per well, but results in a much more effective stimulation yielding both increased production rates and reserves. Pioneer estimates that the enhanced stimulation is increasing average recoverable gas reserves per well by approximately 1 to 1.5 billion cubic feet (BCF) to an average of 4.5 to 5 BCF per well.