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Pioneer Announces 2002 Capital Budget

Expects Production to Increase 45-50% by Early 2003
Provides Update on Hedging Program

Dallas, Texas, December 12, 2021 -- Pioneer Natural Resources Company (“Pioneer”)(NYSE:PXD) (TSE:PXD) announced today that its Board of Directors has approved a 2002 development and exploration capital budget of $425 million. Pioneer plans to invest approximately $200 million to essentially complete the development of four significant projects, Canyon Express, Falcon and Devils Tower in the deepwater Gulf of Mexico and Sable in the shallow water offshore South Africa.

“We are very excited about 2002. The production and revenue impact from these four projects is expected to begin within seven months and continue to build through 2003, increasing 2002 production 12% to 15% and increasing 2003 production 45% to 50% over 2001 levels,” stated Scott D. Sheffield, CEO and Chairman.

Canyon Express, in the deepwater Gulf of Mexico, is expected to be the first of these projects to move into the production phase with first production expected in July of 2002, adding over 100 million cubic feet (Mmcf) of natural gas per day to Pioneer's North American natural gas production, an increase of 40% from current levels.

Sable, an oil field in the shallow water offshore South Africa, is scheduled for first production in late 2002. The field is expected to increase Pioneer's worldwide oil production by approximately 12,000 to 13,000 barrels per day or approximately 35% from current levels.

Falcon, a recently announced natural gas discovery in the deepwater Gulf of Mexico, is expected to be developed during 2002 for first production in the first quarter of 2003. Pioneer's share of peak production from the field is expected to be approximately 75 Mmcf of natural gas per day and, combined with production from Canyon Express, is expected to increase North American natural gas production approximately 70% from current levels.

Devils Tower, an oil discovery in the deepwater Gulf of Mexico, is being developed for first production in the second quarter of 2003. As additional wells are brought on production through the year, the field is expected to reach full production of approximately 8,000 to 10,000 barrels of oil per day net to Pioneer, an increase to worldwide oil production of approximately 25% from current levels.

Pioneer has budgeted approximately $70 million to continue its successful exploration program in 2002. The Company plans to drill four to six wells in the Gulf of Mexico, three wells offshore Gabon, two wells offshore South Africa, and two wells in North Africa. Pioneer will continue to drill lower-risk step-out exploration wells onshore U.S. and in Argentina and plans to expand its exploration program in Canada. The Company has budgeted approximately $155 million for continued development of its core areas in the U.S., Argentina and Canada.

Hedging Program

Pioneer has significant oil and natural gas hedges in place to protect its cash flow and lock in strong returns. In addition to the hedges monetized during the third quarter, Pioneer recently monetized a portion of its natural gas hedges for 2003 and 2004. The Company took the profit on 42.5 million cubic feet per day of its 2003 natural gas hedge position at approximately $3.15 per mcf and 50 million cubic feet per day of its 2004 natural gas hedge position at approximately $3.25 per mcf for a total profit of $26 million that will be recognized over the contract periods in 2003 and 2004. The remaining intrinsic value of Pioneer's 2002 through 2005 oil and natural gas hedges was approximately $167 million, or $1.70 per share, based on yesterday's closing NYMEX prices for oil and natural gas. Hedge contracts valued at $7.8 million, including unsettled 2001 contracts, were placed with Enron North America Corp. The remaining contracts are with a diverse group of intermediaries, principally large U.S. banks.

During 2002, Pioneer has hedges covering approximately 60% of expected North American natural gas production at an average NYMEX equivalent price of $4.30 per barrel or greater and approximately 45% of expected worldwide oil production at an average NYMEX equivalent price of $26.00 per barrel or greater. Pioneer has natural gas hedges that extend into 2005 and oil hedges through June of 2003 as outlined in its latest Form 10-Q filed with the Securities and Exchange Commission.

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

Except for historical information contained herein, the statements in this Press 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 Natural Resources Company 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, government regulation or action, litigation, the costs and results of drilling and operations, 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, quality of technical data, and environmental risks. These and other risks are described in Pioneer's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.

Investor Relations Contact: Susan Spratlen 972-444-9001

Important Legal Information ©2001 Pioneer Natural Resources Company
This information was published Wednesday, December 12, 2021
This page was last updated Wednesday, December 12, 2021

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