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Pioneer Natural Resources Reports Third Quarter 2012 Financial And Operating Results

Thirty-one comingled vertical wells were also placed on production through the Mississippian interval during the third quarter, with an average initial 24-hour IP rate of 118 BOEPD. Data from Mississippian wells drilled to date continues to support an incremental gross EUR per well of 15 MBOE to 40 MBOE from this interval. Pioneer continues to believe the Mississippian interval is prospective in 20% of its Spraberry acreage.

Third quarter production from the Spraberry field averaged 69 MBOEPD, an increase of 5 MBOEPD from the second quarter of 2012. Production benefited by approximately 1,800 barrels per day (BPD) from the partial drawdown of NGL inventory at Mont Belvieu that was built during the second quarter as a result of third-party NGL fractionation capacity constraints. However, this benefit was offset by a production loss of approximately 4,000 BOEPD due to continuing NGL fractionation constraints during the third quarter. The fractionation capacity constraints were resolved in early October.

The remaining NGL inventory of 90 thousand barrels (approximately 1,000 BPD) is expected to be drawn down in the fourth quarter, but will be offset by line fill requirements that Pioneer must provide during the quarter for the start-up of the new Lone Star NGL pipeline. Pioneer has also been informed that gas processing capacity in the Spraberry area is expected to be nearing capacity in the fourth quarter due to greater-than-anticipated Pioneer and industry production growth. This is expected to negatively impact Pioneer’s fourth quarter production by 1,000 BOEPD to 2,000 BOEPD due to reduced ethane recoveries and result in total Spraberry production ranging from 69 MBOEPD to 71 MBOEPD for the quarter. New gas processing capacity is expected to be on line late in the first quarter or early in the second quarter of 2013 to alleviate the capacity bottleneck and increase ethane recoveries.

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