Pioneer Reports Fourth Quarter and Full Year 2006 Results.

DALLAS -- Pioneer Natural Resources Company (NYSE:PXD) today announced financial and operating results for the quarter and year ended December 31, 2006.

* Net income for the fourth quarter was $28 million, or $.22 per diluted share.

* Fourth quarter oil and gas sales from continuing operations averaged 100,799 barrels oil equivalent per day (BOEPD).

* North American production for the year rose 12% from equivalent volumetric production payment (VPP) adjusted 2005 levels.

* Total production rose 7% to 35.9 million barrels oil equivalent (MMBOE) from equivalent VPP adjusted 2005 levels. On a per share basis, total production was up 19%.

* During 2006, 8.8 million shares were repurchased at $39.16 per share, essentially completing the $1 billion share repurchase program authorized by the board of directors in September 2005.

* Net debt-to-book capitalization ended the year at 33%, reflecting the Company's strong balance sheet.

* Net proved reserves of 91 MMBOE were added in 2006 at a finding and development cost of $18.36 per barrel oil equivalent (BOE), resulting in reserve replacement of 200% of production.

Income from continuing operations for the fourth quarter of 2006 was $27 million, or $.22 per diluted share, as compared to $83 million, or $.64 per diluted share, for the fourth quarter of 2005. Income from continuing operations for the fourth quarter of 2006 included the following unusual items:

* incremental reclamation charge of $33 million ($21 million or $.17 per diluted share after taxes) resulting from the denial of the Company's application to "reef-in-place" the debris from East Cameron 322 which was destroyed in Hurricane Rita,

* estimated insurance recoveries for debris removal associated with East Cameron 322 of $43 million ($27 million or $.22 per diluted share after taxes) and

* a charge of $18 million ($13 million or $.11 per diluted share after taxes) related to previously drilled discoveries that had been suspended pending additional commercialization, appraisal and/or technical work.

Scott D. Sheffield, Pioneer's Chairman and CEO, stated, "Throughout 2006, we demonstrated that we can deliver strong, consistent production growth in North America. We expanded our resource base and made significant progress on two multi-year development projects. Our low-risk onshore development programs continue to deliver high returns, and with the contributions from our resource plays, especially in the Edwards Trend, and the initiation of production from the South Coast Gas project during the second half of 2007, we've laid a strong foundation for achieving our 10+% production growth target for 2007."

For the twelve months ended December 31, 2006, net income was $740 million, or $5.81 per diluted share, compared to $535 million, or $3.80 per diluted share for the prior year. Income from continuing operations was $172 million, or $1.36 per diluted share, compared to income from continuing operations of $195 million, or $1.40 per diluted share, for the same period in 2005.

Operations Review

For 2006, Pioneer posted outstanding operating results, drilling approximately 1,100 wells with 96% success. In the Permian Basin, Pioneer drilled over 300 wells in 2006, up from 190 wells during 2005, and increased Spraberry production by 21%. Successful drilling in the deeper Wolfcamp formation contributed to these strong results. The Company completed several attractive bolt-on acquisitions which added approximately 230,000 gross leasehold acres in the Spraberry field with estimated resource potential of more than 50 MMBOE.

In the Raton field, Pioneer drilled approximately 300 wells in 2006 and increased annual production by 10%, supported by pipeline expansion and improved compression. In South Texas, Pioneer focused on testing prospects with potential to further expand the Edwards Trend play, drilling six new discoveries with total program success of 88%.

In Canada, annual production rose 18% during 2006, supported by a 150-well Horseshoe Canyon CBM drilling program. In Tunisia, drilling success continued in the Adam Concession during 2006 and was extended to two adjacent blocks in early 2007. Recent discoveries in each of the three areas have tested approximately 13,000 BOPD on a combined gross basis. New 3-D seismic was acquired during 2006 to further optimize the drilling program going forward.

On the North Slope of Alaska, Pioneer completed the construction, contouring and armoring of the gravel drill site for its Oooguruk development project during 2006. Currently, winter-access construction activities are underway with development drilling anticipated to begin in late 2007 and first oil production in 2008.

Offshore South Africa, significant progress was made on the South Coast Gas project during 2006. Development wells were drilled and subsea equipment was fabricated in anticipation of first production during the second half of 2007.

Tim Dove, Pioneer's President and Chief Operating Officer, stated, "I congratulate our operations teams for their success in executing the shift in our focus to lower-risk opportunities, primarily in North America. The strong results delivered in 2006 support our confidence in our people and our expanding portfolio of growth opportunities in achieving continued success in 2007."

Financial Review

Fourth quarter oil sales averaged 25,004 barrels per day (BPD) and natural gas liquids sales averaged 18,708 BPD. Gas sales in the fourth quarter averaged 343 MMcfpd. The reported price for oil was $61.67 per barrel and included $12.58 per barrel related to deferred revenue from VPPs for which production was not recorded. The price for natural gas liquids was $32.78 per barrel. The reported price for gas was $5.67 per Mcf, including $.58 per Mcf related to deferred revenue from VPPs for which production was not recorded.

Fourth quarter production costs averaged $10.52 per BOE and were less than expected due to lower than anticipated 2006 ad valorem taxes.

Exploration and abandonment costs were $96 million for the quarter and included $44 million of unsuccessful drilling costs, $18 million of costs associated with previously drilled discoveries that will not be developed (included with unusual items noted above), $32 million of geologic and geophysical expenses, including seismic and personnel costs, and $2 million of acreage and other costs. Net activity related to the abandonment of East Cameron 322 resulted in an increase to earnings of $10 million (included with unusual items noted above and representing incremental abandonment charges of $33 million more than offset by $43 million of estimated insurance recoveries).

Comparable sales for the fourth quarter 2005, adjusted to exclude discontinued operations from asset divestitures and assuming that the 2006 VPP volumes were in place for all of the 2005 quarter, averaged 95,166 BOEPD. Adjusted to exclude only discontinued operations, sales averaged 103,906 BOEPD and included oil sales of 32,357 BPD, natural gas liquids sales of 19,568 BPD and gas sales of 312 MMcfpd. Reported prices for fourth quarter 2005 were $40.33 per barrel for oil, $37.22 per barrel for natural gas liquids and $8.10 per Mcf for gas, including $.76 per Mcf related to deferred revenue from VPPs for which production was not recorded.

Full-year 2006 oil and gas sales averaged 98,382 BOEPD, including oil sales of 24,540 BPD, natural gas liquids sales of 18,951 BPD and gas sales of 329 MMcfpd. Reported prices for 2006 were $65.51 per barrel for oil and included $12.96 per barrel related to deferred revenue from VPPs for which production was not recorded, $35.64 per barrel for natural gas liquids and $6.23 per Mcf for gas, including $.62 per Mcf related to deferred revenue from VPPs for which production was not recorded.

Comparable oil and gas sales for full-year 2005 (excluding discontinued operations and assuming the 2005 and 2006 VPP volumes were in place for all of 2005) averaged 91,640 BOEPD. Adjusted to exclude only discontinued operations from asset divestitures, full-year 2005 oil and gas sales averaged 101,366 BOEPD, including oil sales of 32,217 BPD, natural gas liquids sales of 17,906 BPD and gas sales of 307 MMcfpd. Reported prices for 2005 were $38.70 per barrel for oil, $32.12 per barrel for natural gas liquids and $7.02 per Mcf for gas, including $.68 per Mcf related to deferred revenue from VPPs for which production was not recorded.

Financial Outlook

First quarter 2007 production is forecasted to average 97,000 to 102,000 BOEPD, approximately 3,000 BOEPD lower than anticipated due to significant winter weather downtime in the Raton, Hugoton and West Panhandle fields during January. First quarter production costs (including production and ad valorem taxes and transportation costs) are expected to average $11.25 to $12.25 per BOE based on current NYMEX strip prices for oil and gas. Production costs per BOE are forecasted to be approximately $.25 per BOE higher in the first quarter as a result of the weather downtime and related repairs. Depreciation, depletion and amortization expense is expected to average $10.00 to $11.00 per BOE.

Total exploration and abandonment expense during the first quarter is expected to be $50 million to $90 million and could include up to $25 million of costs associated with high-impact drilling in the NPR-A on Alaska's North Slope. It could also include up to $30 million associated with lower-risk resource plays in the Edwards Trend in South Texas, Uinta/Piceance basins in the Rockies, Canada and Tunisia and up to $5 million for acreage and other expenses. In addition, exploration expense is expected to include up to $30 million for seismic investments and personnel, primarily related to the onshore resource plays Pioneer is currently progressing.

General and administrative expense is expected to be $30 million to $35 million, including performance-related compensation. Interest expense is expected to be $25 million to $28 million. Accretion of discount on asset retirement obligations is expected to be $1 million to $2 million.

The Company's first quarter effective income tax rate is expected to range from 37% to 45% based on current capital spending plans. Cash income taxes are expected to range from $5 million to $15 million, principally related to Tunisian income taxes.

The Company's financial results and oil and gas hedges are outlined on the attached schedules. First quarter 2007 amortization of deferred losses on terminated oil and gas hedges is expected to be $33 million.

Earnings Conference Call

On Wednesday, February 7 at 10:00 a.m. Eastern Time, Pioneer will discuss its quarterly financial and operating results with an accompanying presentation. The call will be webcast on Pioneer's website, www.pxd.com. At the website, select 'INVESTOR' at the top of the page. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Or you may choose to dial [phone] (confirmation code: 6881455) to listen to the call by telephone and view the accompanying visual presentation at the website above. A telephone replay will be available by dialing [phone] (confirmation code: 6881455).

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, Canada, South Africa and Tunisia. For more information, visit Pioneer's website at www.pxd.com.

Except for historical information contained herein, the statements in this News Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, third party approvals, international operations and associated international political and economic instability, litigation, the costs and results of drilling and operations, availability of drilling equipment, Pioneer's ability to replace reserves, implement its business plans, or complete its development projects as scheduled, access to and cost of capital, uncertainties about estimates of reserves, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, acts of war or terrorism. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission. Pioneer undertakes no duty to publicly update these statements except as required by law.

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