Pioneer Southwest Energy Partners L.P.(“Pioneer Southwest” or “the Partnership”)(NYSE:PSE) today announced financial and operating results for the quarter ended September 30, 2012. Pioneer Southwest reported third quarter net income of $6 million, or $0.15 per common unit. Net income for the third quarter included unrealized mark-to-market derivative losses of $11 million, or $0.32 per common unit. Without the effect of this item, adjusted income for the third quarter was $17 million, or $0.47 per common unit. Cash flow from operations for the third quarter was $25 million. During October, the Partnership purchased a 94% working interest in approximately 3,000 gross acres in Midland County for $6.3 million. The acquisition includes all deep drilling rights on the acreage, with approximately 75 40-acre locations and 75 20-acre locations, which are expected to be completed in the Spraberry, Dean, Wolfcamp and Strawn intervals and potentially the Atoka interval. The acreage also has horizontal Wolfcamp Shale potential. There is no existing production on this acreage. The Partnership expects to move two of its three drilling rigs to this acreage during the fourth quarter. Oil and gas sales for the third quarter averaged 7,664 barrels oil equivalent per day (BOEPD). Production benefited by 215 barrels per day (BPD) from the drawdown of natural gas liquids (NGL) inventory at Mont Belvieu, Texas, associated with unplanned third-party fractionator downtime during the second quarter. This benefit was offset by a production loss of approximately 450 BOEPD during the third quarter due to continuing third-party fractionator capacity constraints at Mont Belvieu. The NGL fractionation constraints were resolved in early October. The Partnership’s three-rig drilling program continued during the third quarter, with six new wells being placed on production and the recompletion of four wells that were previously only producing from one interval. At the end of the quarter, the Partnership had six wells awaiting completion. The Partnership has a large inventory of remaining oil drilling locations in the Spraberry field, with approximately 155 40-acre locations and 1,275 20-acre locations. The 2012 capital program is expected to result in approximately 50 wells being drilled or recompleted during the year. Essentially all of the wells drilled will be deepened to the Strawn formation, and 35% of the planned wells will also be deepened to the Atoka formation. Production data from current Strawn completions supports the addition of an incremental 30 thousand barrels oil equivalent (MBOE) of estimated ultimate recovery (EUR) for wells completed in this interval. Completions in the Atoka interval are estimated to add an incremental 50 MBOE to 70 MBOE of EUR. Approximately 85% and 70% of the Partnership’s acreage position has Strawn and Atoka potential, respectively.