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Pioneer Natural Resources enjoys strong Q3, expanding in Permian Basin

Midland, Texas-based Pioneer Natural Resources continues with Eagle Ford, Spraberry/Wolfcamp drilling

DALLAS, TX – Pioneer Natural Resources Company bucked the trend and delivered strong third quarter financial results thanks to better than expected growth in production.

Pioneer Natural ResourcesPioneer Natural Resources reported third quarter net income attributable to common stockholders of $646 million, or $4.27 per diluted share. Without the effect of non cash derivative mark-to-market gains and other unusual items, adjusted results for the third quarter were a net loss of $1 million after tax, or $0.01 per diluted share.

Pioneer’s third quarter earnings included non cash mark-to-market gains on derivatives of $214 million after tax, or $1.42 per diluted share.

Spraberry/Wolfcamp Operations Update and 2015 Outlook

Pioneer Natural Resources is the largest acreage holder in the Spraberry/Wolfcamp, with approximately 600,000 gross acres in the northern portion of the play and approximately 200,000 gross acres in the southern Wolfcamp joint venture area. The company believes it has greater than 10 billion barrels oil equivalent of net recoverable resource potential from horizontal drilling across its entire acreage position based on its extensive geologic data and successful drilling results to date.

Pioneer Natural ResourcesPioneer Natural Resources is currently operating 14 horizontal rigs in the northern Spraberry/Wolfcamp, of which eight have been added since July.

Pioneer Natural Resources has successfully placed 107 horizontal Wolfcamp B wells and 30 horizontal Wolfcamp A wells on production since it commenced drilling horizontal wells in the northern Spraberry/Wolfcamp in 2013.

In the southern Wolfcamp joint venture area, Pioneer expects to place approximately 85 horizontal wells on production during 2015. Of these, 75% will be Wolfcamp B interval wells. The Company’s successful horizontal drilling program continues to drive production growth, with total Spraberry/Wolfcamp production growing 15 MBOEPD in the third quarter to 134 MBOEPD, or 13%, compared to the second quarter of 2015.

Pioneer Natural Resources is focused on optimizing the development of the Spraberry/Wolfcamp, which includes ensuring that future infrastructure requirements are constructed.

These requirements include the build-out of horizontal tank batteries and saltwater disposal facilities, construction of a field-wide water distribution system, construction of additional gas processing facilities and the expansion of the sand mine in Brady, Texas.

Eagle Ford Shale Operations Update and 2015 Outlook

In the liquids-rich area of the Eagle Ford Shale play in South Texas, Pioneer’s horizontal rig count was reduced from nine rigs in 2014 to six rigs in early 2015. Drilling activity is focused in Karnes and DeWitt counties.

Pioneer Natural Resources placed 36 wells on production in the Eagle Ford Shale during the third quarter, of which 21 wells were in Upper targets and 15 wells were in Lower targets.

2015 capital budget

The Pioneer Natural Resources capital budget for 2015 remains at $2.2 billion (excluding acquisitions, asset retirement obligations, capitalized interest and geological and geophysical G&A).

The budget includes $1.95 billion for drilling-related activities and $250 million related to the development of the Spraberry/Wolfcamp water infrastructure, vertical integration and facilities.

Fourth quarter 2015 financial outlook

The Pioneer Natural Resources fourth quarter 2015 outlook remains positive.

Production is forecasted to average 206 MBOEPD to 211 MBOEPD.

Production costs are expected to average $11.00 per BOE to $13.00 per BOE. DD&A expense is expected to average $18.50 per BOE to $20.50 per BOE. Total exploration and abandonment expense is forecasted to be $25 million to $35 million.

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