The two A interval wells were placed on production during the third quarter, drilled to depths of 7,483 feet and 7,586 feet, with lateral lengths of 6,902 feet and 6,422 feet. One was successful and had an initial production rate of 585 BOEPD, of which 85% was oil. The other was drilled through a fault due to 3-D seismic not being available at the time the well was drilled. The fracture stimulation was not effective on this well and it had an initial production rate of 156 BOEPD, of which 70% was oil. Two additional A interval wells have been drilled and are awaiting completion. Pioneer has also drilled its first Wolfcamp Lower B interval well which is also awaiting completion.

In the Spraberry interval, Pioneer drilled two highly successful horizontal Jo Mill wells with lateral lengths of 2,628 feet and 2,178 feet. Current 24-hour production rates are 554 BOEPD and 308 BOEPD, with oil content greater than 80%. The Company plans drilling additional horizontal Jo Mill wells in the future, likely with significantly longer laterals.

Pioneer currently has four horizontal rigs running in the southern 200,000 acres of the play and plans to add three rigs in this area late in the fourth quarter of 2012 or early in the first quarter of 2013. During the third quarter, Pioneer added a fifth horizontal rig to accelerate the delineation of the Company’s northern portion of its Spraberry acreage position in Midland, Martin and Gaines Counties. Pioneer continues to believe a successful drilling program in this area could substantially increase its prospective horizontal Wolfcamp Shale acreage position.

In order to better delineate the Wolfcamp intervals, a high percentage of the horizontal wells drilled to date have been drilled and completed with extra “science,” including coring, extensive logging and micro-seismic, resulting in well costs of $9 million to $10 million per well. Pioneer began drilling “development” wells in the third quarter and is targeting to lower its well cost to $7 million per well for a 7,000-foot stimulated lateral with 35 to 40 fracture stimulation stages. This will include the utilization of Brady Brown ® sand produced by the U.S. industrial sands business acquired by Pioneer in early April. Pioneer is currently targeting 7,000-foot or longer laterals on most of its horizontal wells. The Company recently drilled its first 10,000-foot lateral in 19 days.

Pioneer has a data room underway to pursue a joint venture partner to accelerate the development of the horizontal Wolfcamp Shale in the southern 200,000 acres of the Company’s total prospective acreage position. Pioneer is offering 33% to 50% of its working interest in the southern acreage. The acreage position being offered is estimated to have more than 4,000 potential horizontal development locations, with downspacing upside, and a total gross resource potential of more than two billion barrels oil equivalent. Wells in this area are expected to have liquids content of approximately 90% and EURs of 575 MBOE for 7,000-foot laterals.

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