The Company also placed on production the Company’s first two Lower Spraberry Shale interval wells and its third Jo Mill Shale interval well during late October/early November in Midland and Martin counties. These wells are currently flowing back fracture stimulation water and have not yet achieved 24-hour peak rates. Since the Lower Spraberry Shale and Jo Mill Shale interval wells are at shallower depths than the Wolfcamp Shale interval wells, these wells can flow back fracture stimulation water for 30 days to 60 days before achieving initial peak production rates due to lower subsurface pressures.

The Company is currently running five horizontal rigs across its northern acreage and expects to increase to 10+ rigs in early 2014. The five-rig program is expected to spud 14 wells by year end. The wells are split evenly between Wolfcamp Shale and Spraberry Shale wells in Midland, Martin, Glasscock and Andrews counties. To date, the Company has placed 13 horizontal wells on production, with three of these currently flowing back. This includes eight Wolfcamp Shale wells and five Spraberry Shale wells in Midland, Martin and Upton counties. Seven horizontal wells are currently awaiting completion in Midland and Andrews counties, of which four are Wolfcamp Shale wells and three are Spraberry Shale wells. The majority of the wells are being drilled on two-well pads to gain efficiencies; therefore, the wells will not be completed until after the second well on each pad is drilled. It is expected to take 120 days to 150 days from the time the first well on a two-well pad is spud until both wells on the pad are placed on production. This includes the extra time required for “science” and appraisal activities. This is resulting in “lumpy” production growth. By the end of this year, Pioneer’s appraisal program will extend approximately 65 miles north of the area where the first two successful Wolfcamp B interval wells were drilled two years ago on the Giddings Estate lease.

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