Pioneer Natural Resources Company (NYSE: PXD) (“Pioneer”) and Pioneer Southwest Energy Partners L.P. (NYSE: PSE) (“Pioneer Southwest”) today announced the execution of a definitive agreement and plan of merger (the “Merger Agreement”) that would result in a merger whereby Pioneer Southwest would become a wholly-owned subsidiary of Pioneer’s operating company, Pioneer Natural Resources USA, Inc. (“Pioneer USA”), through a stock-for-unit exchange (the “Merger”). Under the terms of the Merger Agreement, Pioneer Southwest’s public unitholders would receive 0.2325 of a share of common stock of Pioneer per Pioneer Southwest common unit surrendered pursuant to the Merger Agreement, plus a whole share of Pioneer common stock in lieu of any fractional share of Pioneer common stock otherwise issuable in the Merger. The transaction is expected to result in 3.95 million additional shares of common stock being issued by Pioneer. Regular quarterly distributions on the Pioneer Southwest common units will continue until the closing of the Merger. The terms of the Merger Agreement were unanimously approved by the Conflicts Committee of the board of directors of the general partner of Pioneer Southwest (the “Conflicts Committee”), who negotiated the terms on behalf of Pioneer Southwest and is comprised solely of independent directors. The board of directors of the general partner of Pioneer Southwest also approved the terms of the Merger Agreement. In addition, Evercore Partners acted as financial advisor to the Conflicts Committee and delivered a fairness opinion to the Conflicts Committee in connection with the transaction. The closing of the Merger is subject to certain closing conditions, including the approval of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger (the “Merger Proposal”), by the affirmative vote of holders of a majority of the outstanding Pioneer Southwest common units entitled to vote on the Merger Proposal at a special meeting of the unitholders. Pioneer USA owns 100% of the membership interests in the general partner of Pioneer Southwest and 52.4% of the 35,713,700 outstanding common units of Pioneer Southwest. Pursuant to a voting agreement, Pioneer USA has agreed to vote its common units in favor of the Merger Proposal. The parties anticipate that the Merger will close in the fourth quarter of 2013.