APPRAISAL

While first production from the “Big 4” projects currently under development will have significant near-term impact to net income and cash flow, Pioneer also has several significant projects in the earlier phases of the exploration project’s life cycle to support longer-term growth.

During 2001, the Company made new discoveries on the Olowi prospect offshore Gabon in West Africa, on the Ozona Deep prospect in the deepwater Gulf of Mexico and on its Block 9 gas prospects in South Africa. During 2002, Pioneer plans to appraise these discoveries and hopes to approve the projects for development by the end of the year. These projects, if successfully appraised and approved, have the potential to significantly impact production in 2004 and beyond. Pioneer drilled its first well on its 315,000-acre Olowi block offshore Gabon, discovering the Olowi field in 2001. The field is 3 miles southeast of the 300-million-barrel Gamba oil field. The first well encountered a 75-foot oil column with excellent porosity, and Pioneer plans to drill three wells to further define and appraise the field in 2002. The Company holds a 100% working interest and is operator of the permit.

In October 2001, the Ozona Deep field was discovered in the deepwater Gulf of Mexico in over 3,000 feet of water and encountered approximately 345 feet of net oil pay. The field is near existing infrastructure providing several alternatives for future development, and Pioneer plans to appraise the discovery in 2002. The Company holds a 32% working interest in the field.

Two discoveries were drilled on Pioneer’s acreage in Block 9 offshore South Africa. The Boomslang discovery encountered significant oil and gas and the E-BB#2 well drilled in the center of the basin to assess potential deliverability and reservoir limits also encountered significant gas. The Company is evaluating the commercial viability of providing gas to a synthetic fuels plant onshore and plans to drill two wells to test oil and gas prospects during 2002.

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