UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                    FORM 10-Q
        / x /   Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                For the quarterly period ended September 30, 2021
                                       or
        /   /   Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
               For the transition period from _______ to ________
                           Commission File No. 1-13245
                       PIONEER NATURAL RESOURCES COMPANY
             (Exact name of Registrant as specified in its charter)
                   Delaware                                75-2702753
    -----------------------------------------         ----------------------
        (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)               Identification Number)
5205 N. O'Connor Blvd., Suite 1400, Irving, Texas             75039
-------------------------------------------------          -----------
    (Address of principal executive offices)                (Zip code)
       Registrant's Telephone Number, including area code : (972) 444-9001
                                 Not applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                Yes / x / No / /
Number of shares of Common Stock outstanding as of October 23, 2001.. 98,167,735

Definitions of Oil and Gas Terms and Conventions Used Herein Within this report, the following oil and gas terms and conventions have these specific meanings: "Bbl" means a standard barrel containing 42 United States gallons; "BOE" means a barrel-of-oil equivalent and is a standard convention used to express oil and gas volumes on a comparable oil equivalent basis; "Btu" means British thermal unit and is an energy equivalent measure of natural gas; "MBbl" means one thousand Bbls; "MBOE" means one thousand BOE; "Mcf" means one thousand cubic feet and is a measure of natural gas volume; "MMcf" means one million cubic feet; "NGL" means natural gas liquid; "NYMEX" means The New York Mercantile Exchange; "proved reserves" means the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions. (i) Reservoirs are considered proved if economic producibility is supported by either actual production or conclusive formation test. The area of a reservoir considered proved includes (A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (B) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the power proved limit of the reservoir. (ii) Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based. (iii) Estimates of proved reserves do not include the following: (A) oil that may become available from known reservoirs but is classified separately as "indicated additional reserves"; (B) crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; (C) crude oil, natural gas, and natural gas liquids, that may occur in undrilled prospects; and (D) crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal, gilsonite and other such sources. Gas equivalents are determined under the relative energy content method by using the ratio of 6.0 Mcf of gas to 1.0 Bbl of oil or NGL. Unless otherwise specified, wells, acreage and drilling locations referred to in this report represent gross wells, acreage and drilling locations. All dollar amounts quoted herein are expressed in United States dollars. 2

PIONEER NATURAL RESOURCES COMPANY TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets as of September 30, 2021 and December 31, 2000........................................... 4 Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2000..................... 5 Consolidated Statement of Stockholders' Equity for the nine months ended September 30, 2001.............................. 6 Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2021 and 2000..................... 7 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2000............ 8 Notes to Consolidated Financial Statements..................... 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................... 22 Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 33 PART II. OTHER INFORMATION Item 1. Legal Proceedings.............................................. 36 Item 6. Exhibits and Reports on Form 8-K............................... 36 Signatures..................................................... 37 3

PART I. FINANCIAL INFORMATION Item 1. Financial Statements PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED BALANCE SHEETS (in thousands, except share data) September 30, December 31, 2001 2000 ------------ ----------- ASSETS Current assets: Cash and cash equivalents........................................ $ 20,737 $ 26,159 Accounts receivable: Trade, net.................................................... 90,389 123,497 Affiliates.................................................... 3,234 2,157 Inventories...................................................... 17,863 14,842 Deferred income taxes............................................ 5,600 4,800 Other current assets: Derivatives................................................... 114,163 11,391 Other......................................................... 9,095 8,545 ---------- ---------- Total current assets........................................ 261,081 191,391 ---------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties............................................. 3,499,104 3,187,889 Unproved properties........................................... 205,763 229,205 Accumulated depletion, depreciation and amortization............. (1,057,758) (902,139) ---------- ---------- 2,647,109 2,514,955 ---------- ---------- Deferred income taxes.............................................. 83,611 84,400 Other property and equipment, net.................................. 21,011 25,624 Other assets, net.................................................. 166,975 138,065 ---------- ---------- $ 3,179,787 $ 2,954,435 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable: Trade......................................................... $ 116,042 $ 96,646 Affiliates.................................................... 4,557 5,629 Interest payable................................................. 38,430 38,142 Other current liabilities: Derivatives................................................... 36,447 24,957 Other......................................................... 51,346 51,140 ---------- ---------- Total current liabilities................................... 246,822 216,514 ---------- ---------- Long-term debt..................................................... 1,554,552 1,578,776 Other noncurrent liabilities....................................... 169,310 225,740 Deferred income taxes.............................................. 24,973 28,500 Stockholders' equity: Preferred stock, $.01 par value; 100,000,000 shares authorized; one share issued and outstanding.............................. - - Common stock, $.01 par value; 500,000,000 shares authorized; 101,738,910 and 101,268,754 shares issued as of September 30, 2001 and December 31, 2000, respectively...................... 1,017 1,013 Additional paid-in capital....................................... 2,358,035 2,352,608 Treasury stock, at cost; 3,571,175 and 2,853,107 shares as of September 30, 2021 and December 31, 2000, respectively........ (49,178) (37,682) Accumulated deficit.............................................. (1,302,201) (1,422,703) Accumulated other comprehensive income: Deferred hedge gains and losses, net.......................... 182,691 - Unrealized gain on available for sale securities.............. - 8,154 Cumulative translation adjustment............................. (6,234) 3,515 ---------- ---------- Total stockholders' equity.................................. 1,184,130 904,905 Commitments and contingencies...................................... ---------- ---------- $ 3,179,787 $ 2,954,435 ========== ========== The financial information included as of September 30, 2021 has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of these consolidated financial statements. 4

PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) Three months ended Nine months ended September 30, September 30, --------------------- --------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Revenues: Oil and gas...................................... $ 198,088 $ 228,587 $ 674,685 $ 600,909 Interest and other............................... 6,471 5,200 22,593 14,141 Gain (loss) on disposition of assets, net........ (88) 24,158 8,677 27,751 -------- -------- -------- -------- 204,471 257,945 705,955 642,801 -------- -------- -------- -------- Costs and expenses: Oil and gas production........................... 51,713 49,728 159,489 135,990 Depletion, depreciation and amortization......... 60,065 56,572 169,622 162,029 Exploration and abandonments..................... 24,666 23,431 94,132 64,202 General and administrative....................... 8,153 6,537 26,606 23,259 Interest......................................... 32,261 40,794 102,137 122,412 Other............................................ 2,006 15,495 29,097 60,394 -------- -------- -------- -------- 178,864 192,557 581,083 568,286 -------- -------- -------- -------- Income before income taxes and extraordinary item.. 25,607 65,388 124,872 74,515 Income tax (provision) benefit..................... (2,379) 3,900 (5,387) 5,800 -------- -------- -------- -------- Income before extraordinary item................... 23,228 69,288 119,485 80,315 Extraordinary item - gain (loss) on early extinguishment of debt, net of tax............... 1,374 - 1,374 (12,318) ------- -------- -------- -------- Net income......................................... $ 24,602 $ 69,288 $ 120,859 $ 67,997 ======== ======== ======== ======== Net income per share: Basic: Income before extraordinary item.............. $ .24 $ .70 $ 1.22 $ .80 Extraordinary item............................ .01 - .01 (.12) -------- -------- -------- -------- Net income.................................. $ .25 $ .70 $ 1.23 $ .68 ======== ======== ======== ======== Diluted: Income before extraordinary item.............. $ .24 $ .69 $ 1.20 $ .80 Extraordinary item............................ .01 - .01 (.12) -------- -------- -------- -------- Net income.................................. $ .25 $ .69 $ 1.21 $ .68 ======== ======== ======== ======== Weighted average basic shares outstanding: Basic......................................... 98,468 99,312 98,395 99,718 ======== ======== ======== ======== Diluted....................................... 99,523 99,804 99,646 100,052 ======== ======== ======== ======== The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of these consolidated financial statements. 5

PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (in thousands) (Unaudited) Accumulated Other Comprehensive Income -------------------------------- Common Deferred Stock Additional Hedge Investment Total Shares Common Paid-in Treasury Accumulated Gains & Gains & Translation Stockholders' Outstanding Stock Capital Stock Deficit Losses Losses Adjustment Equity ----------- ------ ---------- -------- ----------- -------- --------- ----------- ------------ Balance as of January 1, 2001........................ 98,416 $1,013 $2,352,608 $(37,682) $(1,422,703) $ - $ 8,154 $ 3,515 $ 904,905 Exercise of stock options and employee stock purchases.................. 582 4 5,427 1,536 (357) - - - 6,610 Treasury stock purchases.... (830) - - (13,032) - - - - (13,032) Net income.................. - - - - 120,859 - - - 120,859 Other comprehensive income (loss): Deferred hedge gains and losses: Transition adjustment... - - - - - (197,444) - - (197,444) Deferred hedge gains.... - - - - - 343,080 - - 343,080 Net losses included in net income............. - - - - - 37,055 - - 37,055 Gains and losses on available for sale securities: Unrealized holding losses................ - - - - - - (45) - (45) Gains included in net income................ - - - - - - (8,109) - (8,109) Translation adjustment.... - - - - - - - (9,749) (9,749) -------- ------ --------- ------- ---------- -------- ------- ------- --------- Balance as of September 30, 2001........................ 98,168 $1,017 $2,358,035 $(49,178) $(1,302,201) $ 182,691 $ - $ (6,234) $1,184,130 ======== ===== ========= ======= ========== ======== ======= ======= ========= The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of these consolidated financial statements. 6

PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Three months ended Nine months ended September 30, September 30, --------------------- ----------------------- 2001 2000 2001 2000 --------- --------- --------- ----------- Cash flows from operating activities: Net income...................................... $ 24,602 $ 69,288 $ 120,859 $ 67,997 Adjustments to reconcile net income to net cash provided by operating activities: Depletion, depreciation and amortization..... 60,065 56,572 169,622 162,029 Exploration expenses, including dry holes.... 17,250 16,221 80,082 46,273 Deferred income taxes........................ 567 (5,700) (4,095) (9,600) (Gain) loss on disposition of assets, net.... 88 (24,158) (8,677) (27,751) Extraordinary item, net of tax............... (1,374) - (1,374) 12,318 Interest related amortization................ 2,559 2,791 8,446 9,179 Other noncash items.......................... 2,525 15,123 5,752 59,011 Changes in operating assets and liabilities: Accounts receivable.......................... 8,862 (12,620) 36,916 (11,713) Inventories.................................. (3,489) 2,145 (4,401) (175) Other current assets......................... (763) (2) (5,795) 1,993 Accounts payable............................. 11,431 16,964 (7,426) 2,504 Interest payable............................. (626) (430) 288 1,782 Other current liabilities.................... 1,203 (20,466) (233) (28,753) -------- -------- -------- ---------- Net cash provided by operating activities.. 122,900 115,728 389,964 285,094 -------- -------- -------- ---------- Cash flows from investing activities: Proceeds from disposition of assets............. 57,811 65,204 73,006 93,726 Additions to oil and gas properties............. (125,704) (71,296) (364,428) (183,551) Other property (additions) dispositions, net.... (6,529) 3,021 (10,490) 3,899 -------- -------- -------- ---------- Net cash used in investing activities...... (74,422) (3,071) (301,912) (85,926) -------- -------- -------- ---------- Cash flows from financing activities: Borrowings under long-term debt................. 95,000 17,409 204,175 894,084 Principal payments on long-term debt............ (125,055) (117,573) (249,230) (1,046,250) Payment of noncurrent liabilities............... (10,971) (7,052) (41,710) (18,054) Exercise of stock options and employee stock purchases............................... 1,165 473 6,610 726 Purchase of treasury stock...................... (5,962) (6,340) (13,032) (12,647) Deferred loan fees/issuance costs............... - 106 - (13,772) -------- -------- -------- ---------- Net cash used in financing activities..... (45,823) (112,977) (93,187) (195,913) -------- -------- -------- ---------- Net increase (decrease) in cash and cash equivalents..................................... 2,655 (320) (5,135) 3,255 Effect of exchange rate changes on cash and cash equivalents................................ (145) (51) (287) (145) Cash and cash equivalents, beginning of period.... 18,227 38,269 26,159 34,788 -------- -------- -------- ---------- Cash and cash equivalents, end of period.......... $ 20,737 $ 37,898 $ 20,737 $ 37,898 ======== ======== ======== ========== The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of these consolidated financial statements. 7

PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) (Unaudited) Three months ended Nine months ended September 30, September 30, --------------------- --------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Net income........................................ $ 24,602 $ 69,288 $ 120,859 $ 67,997 Other comprehensive income (loss): Deferred hedge gains and losses: Transition adjustment........................ - - (197,444) - Deferred hedge gains......................... 148,116 - 343,080 - Net (gains) losses included in net income.... (14,800) - 37,055 - Gains and losses on available for sale securities: Unrealized holding gains and losses.......... - (10,529) (45) 32,678 Gains included in net income................. - (25,674) (8,109) (25,674) Translation adjustment.......................... (7,994) (2,781) (9,749) (7,432) -------- -------- -------- -------- Other comprehensive income (loss).......... 125,322 (38,984) 164,788 (428) -------- -------- -------- -------- Comprehensive income.............................. $ 149,924 $ 30,304 $ 285,647 $ 67,569 ======== ======== ======== ======== The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of these consolidated financial statements. 8

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) NOTE A. Organization and Nature of Operations Pioneer Natural Resources Company (the "Company") is a Delaware corporation whose common stock is listed and traded on the New York Stock Exchange and the Toronto Stock Exchange. The Company is an oil and gas exploration and production company with ownership interests in oil and gas properties located principally in the Mid Continent, Southwestern and onshore and offshore Gulf Coast regions of the United States and in Argentina, Canada, Gabon, South Africa and Tunisia. NOTE B. Basis of Presentation In the opinion of management, the unaudited consolidated financial statements of the Company as of September 30, 2021 and for the three and nine month periods ended September 30, 2021 and 2000 include all adjustments and accruals, consisting only of normal recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). These consolidated financial statements should be read in connection with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. NOTE C. Derivative Financial Instruments In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") as amended, the provisions of which the Company adopted on January 1, 2001. SFAS 133 requires the accounting recognition of all derivative instruments as either assets or liabilities at fair value. Derivative instruments that are not hedges must be adjusted to fair value through net income. Under the provisions of SFAS 133, changes in the fair value of derivative instruments that are fair value hedges are offset against changes in the fair value of the hedged assets, liabilities, or firm commitments, through net income. Effective changes in the fair value of derivative instruments that are cash flow hedges are recognized in other comprehensive income until such time as the hedged items are recognized in net income. Ineffective portions of a derivative instrument's change in fair value are immediately recognized in net income. The adoption of SFAS 133 on January 1, 2022 resulted in a transition adjustment to (i) reclassify $57.8 million of deferred losses on terminated hedge positions from other assets (including $11.4 million of other current assets), (ii) increase other current assets, other assets and other current liabilities by $7.0 million, $6.2 million and $146.6 million, respectively, to record the fair value of open hedge derivatives, (iii) increase the carrying value of hedged long-term debt by $6.2 million and (iv) reduce stockholders' equity by $197.4 million for the net impact of items (i) through (iii) above. The $197.4 million reduction in stockholders' equity is reflected as a transition adjustment in other comprehensive income as of January 1, 2001. See "Accumulated other comprehensive income - deferred hedge gains and losses, net" below for additional information regarding the impact to stockholders' equity from the provisions of SFAS 133 during the nine month period ending September 30, 2001. Under the provisions of SFAS 133, the Company may designate a derivative instrument as hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk (a "fair value hedge") or as hedging the exposure to variability in expected future cash flows that are attributable to a particular risk (a "cash flow hedge"). Both at the inception of a hedge and on an ongoing basis, a fair 9

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) value hedge must be expected to be highly effective in achieving offsetting changes in fair value attributable to the hedged risk during the periods that a hedge is designated. Similarly, a cash flow hedge must be expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the hedge. The Company's policy is to assess actual hedge effectiveness at the end of each calendar quarter. Fair value hedging strategy. During April 2000 and May 2001, the Company entered into interest rate swap agreements to hedge the fair value of the Company's 8-7/8 percent Senior Notes due April 15, 2022 and 8-1/4 percent Senior Notes due August 15, 2007, respectively. The terms of the 8-7/8 percent interest rate swap agreements provided for an aggregate notional amount of $150 million of debt; commenced on April 19, 2022 and had a scheduled maturity on April 15, 2005; required the counterparties to pay the Company a fixed annual rate of 8-7/8 percent on the notional amount; and, required the Company to pay the counterparties a variable annual rate on the notional amount equal to the periodic three-month London Interbank Offered Rate ("LIBOR") plus a weighted average margin rate of 178.2 basis points. The terms of the Company's 8-1/4 percent interest rate swap agreements provided for an aggregate notional amount of $150 million of debt; commenced on May 29, 2022 and had a scheduled maturity on August 15, 2007; required the counterparties to pay the Company a fixed annual rate of 8-1/4 percent on the notional amount; and, required the Company to pay the counterparties a variable rate on the notional amounts equal to LIBOR plus a weighted average margin rate of 238.1 basis points. The terms of the above described fair value hedges perfectly matched the terms of the underlying hedged fixed rate debt. The Company did not exclude any component of the derivatives' gains or losses from the measurement of hedge effectiveness. On September 21, 2001, the Company terminated its 8-7/8 percent and 8-1/4 percent interest rate swaps for $23.3 million of cash proceeds, including accrued interest. As of September 30, 2001, the Company has increased the carrying value of the underlying long-term debt by $21.2 million and such amount will be amortized as reductions in interest expense over the remaining original terms of the interest rate swaps. Cash flow hedging strategy. The Company utilizes commodity swap and collar contracts to (i) reduce the effect of price volatility on the commodities the Company produces and sells, (ii) support the Company's annual capital budgeting and expenditure plans and (iii) reduce commodity price risk associated with certain capital projects. The Company also utilizes interest rate swap agreements to reduce the effect of interest rate volatility on the Company's variable-rate line-of-credit indebtedness. Oil prices. All material sales contracts governing the Company's oil production have been tied directly or indirectly to the New York Mercantile Exchange ("NYMEX") prices. The following table sets forth the Company's outstanding oil hedge contracts and the weighted average NYMEX prices for those contracts as of September 30, 2001: 10

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) Yearly First Second Third Fourth Outstanding Quarter Quarter Quarter Quarter Average ------------- ------------- ------------- ------------- ------------- Daily oil production: 2001 - Swap Contracts Volume (Bbls).......... 24,348 24,348 Price per Bbl.......... $ 27.98 $ 27.98 2001 - Collar Contracts Volume (Bbls).......... 2,000 2,000 Prices per Bbl......... $25.00-$31.43 $25.00-$31.43 2002 - Swap Contracts Volume (Bbls).......... 18,000 8,000 7,000 4,000 9,205 Price per Bbl.......... $ 27.40 $ 26.35 $ 25.23 $ 25.19 $ 26.51 2002 - Collar Contracts Volume (Bbls).......... 10,000 10,000 - - 4,959 Prices per Bbl......... $25.00-$28.56 $25.00-$28.56 $25.00-$28.56 2003 - Swap Contracts Volume (Bbls).......... 6,000 6,000 - - 2,975 Price per Bbl.......... $ 24.02 $ 24.02 $ 24.02 The Company reports average oil prices per Bbl including the effects of oil quality, gathering and transportation costs and the net effect of oil hedges. The following table sets forth the Company's oil prices, both reported and realized (excluding hedge results), and the net effects of settlements of oil price hedges to revenue: Three months ended Nine months ended September 30, September 30, ------------------ ------------------ 2001 2000 2001 2000 ------- ------- ------- ------- Average price reported per Bbl................. $ 25.06 $ 25.48 $ 24.95 $ 23.52 Average price realized per Bbl................. $ 24.84 $ 30.06 $ 25.74 $ 28.37 Increase (reduction) to revenue (in millions).. $ .7 $ (14.4) $ (7.4) $ (45.5) Natural gas liquids prices. During the three and nine month periods ended September 30, 2021 and 2000, the Company did not enter into, nor was it a party to, any NGL hedge contracts. 11

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) Gas prices. The Company employs a policy of hedging a portion of its gas production based on the index price upon which the gas is actually sold in order to mitigate the basis risk between NYMEX prices and actual index prices. The following table sets forth the Company's outstanding gas hedge contracts and the weighted average index price for those contracts as of September 30, 2001: Yearly First Second Third Fourth Outstanding Quarter Quarter Quarter Quarter Average ----------- ----------- ----------- ----------- ----------- Daily gas production: 2001 - Swap Contracts Volume (Mcf)............. 120,908 120,908 Index price per MMBtu.... $ 4.31 $ 4.31 2001 - Collar Contracts Volume (Mcf)............. 54,482 54,482 Index prices per MMBtu... $2.11-$2.74 $2.11-$2.74 2002 - Swap Contracts Volume (Mcf)............. 140,000 140,000 170,000 170,000 155,123 Index price per MMBtu.... $ 4.28 $ 4.28 $ 4.21 $ 4.21 $ 4.24 2002 - Collar Contracts Volume (Mcf)............. 20,000 20,000 20,000 20,000 20,000 Index prices per MMBtu... $4.50-$6.00 $4.50-$6.00 $4.50-$6.00 $4.50-$6.00 $4.50-$6.00 2003 - Swap Contracts Volume (Mcf)............. 50,000 50,000 50,000 50,000 50,000 Index price per MMBtu.... $ 4.07 $ 4.07 $ 4.07 $ 4.07 $ 4.07 2004 - Swap Contracts Volume (Mcf)............. 190,000 190,000 190,000 190,000 190,000 Index price per MMBtu.... $ 3.98 $ 3.98 $ 3.98 $ 3.98 $ 3.98 The Company reports average gas prices per Mcf including the effects of Btu content, gathering and transportation costs, gas processing and shrinkage and the net effect of gas hedges. The following table sets forth the Company's gas prices, both reported and realized (excluding hedge results), and the net effects of settlements of gas price hedges to revenue: Three months ended Nine months ended September 30, September 30, ------------------ ------------------- 2001 2000 2001 2000 ------- ------- ------- -------- Average price reported per Mcf................. $ 2.66 $ 2.87 $ 3.40 $ 2.49 Average price realized per Mcf................. $ 2.24 $ 3.12 $ 3.59 $ 2.63 Increase (reduction) to revenue (in millions).. $ 14.6 $ (9.0) $ (18.6) $ (14.6) Interest rates. During the nine months ended September 30, 2001, the Company entered into interest rate swap agreements and designated the swap agreements as being cash flow hedges of the interest rate volatility associated with certain of the Company's variable-rate line-of-credit indebtedness. The terms of the interest rate swap agreements provide for an aggregate notional amount of $55 million of debt; commenced on May 21, 2022 and mature on May 20, 2002; require the counterparties to pay the Company a variable rate equal to the six-month LIBOR plus 125 basis points; and, require the Company to pay the counterparties a weighted average rate of 5.43 percent on the notional amount. The fair value of these interest rate swap agreements represented a liability of $519 thousand as of September 30, 2001. Hedge ineffectiveness and excluded items. During the three months ended September 30, 2001, the Company recognized a net decrease to other expense of $.2 million related to the ineffective portion of its cash flow hedging 12

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) instruments. During the nine months ended September 30, 2001, the Company recognized an $8.9 million increase to other expense as a result of hedge ineffectiveness. Prior to April 2001, the Company excluded changes in the time and volatility value components of collar contracts that were designated as cash flow hedges from the measurement of hedge effectiveness. Associated therewith, the Company recorded a net increase to other expense of $2.1 million during the nine month period ended September 30, 2001. In April 2001, the Company discontinued the exclusion of time value and volatility from the measurement of hedge effectiveness. Accumulated other comprehensive income - deferred hedge gains and losses, net. As described above, the Company recorded a transition adjustment associated with the January 1, 2022 adoption of the provisions of SFAS 133 which reduced stockholders' equity by $197.4 million. The adjustment to stockholders' equity was comprised of the fair value of the Company's derivative instruments that were designated as commodity cash flow hedges, whose fair value amounted to a liability of $139.6 million as of January 1, 2001, and deferred losses realized from the early termination of cash flow hedges of $57.8 million. These adjustments to stockholders' equity were classified as Accumulated other comprehensive income ("AOCI") - deferred hedge gains and losses at transition. As of September 30, 2001, AOCI - deferred hedge gains and losses was $182.7 million, an increase of $380.1 million in stockholders' equity since the initial transition adjustment. The AOCI - deferred hedge gains and losses balance as of September 30, 2021 was comprised of $197.2 million of unrealized deferred hedge gains on the effective portions of commodity and interest rate cash flow hedges that will mature in the future and $14.5 million of net deferred losses from the early termination of cash flow hedges. The increase in AOCI - deferred hedge gains and losses since January 1, 2022 is primarily attributable to decreases in commodity prices during the period which have resulted in an increase in the fair value of the Company's commodity derivative portfolio. During the twelve month period ending September 30, 2002, the Company expects to reclassify $113.9 million of deferred gains associated with cash flow hedges that will mature during future periods and $38.7 million of deferred losses for terminated cash flow hedges from AOCI - deferred hedge gains and losses to oil and gas revenue. Additionally, the Company expects to reclassify $.2 million of deferred losses from AOCI - deferred hedge gains and losses to interest expense during the twelve month period ending September 30, 2002. Non-hedge commodity derivatives. The Company is a party to certain BTU swap agreements that mature at the end of 2004. The BTU swap agreements were originally transacted by Mesa Inc. ("Mesa"), prior to the Company's acquisition of Mesa. Mesa's strategy for entering into the BTU swap agreements was to shift a portion of their gas price risk to oil prices. As a result of the merger of Parker & Parsley Petroleum Company and Mesa Inc., the Company became obligated under the BTU swap agreements during 1997. The BTU swap agreements do not qualify as hedges. The accompanying Consolidated Statement of Operations for the nine months ended September 30, 2021 includes a net mark-to-market decrease to the liability recognized for the BTU swap agreements of $.7 million. During the three and nine month periods ended September 30, 2000, the Company recorded mark-to-market increases to the liabilities recognized for the BTU swap agreements of $10.2 million and $12.9 million, respectively. As of September 30, 2001 and December 31, 2000, the Company's BTU swap liabilities totaled $20.6 million and $25.5 million, respectively, of which $6.3 million and $6.4 million, respectively, represent current liabilities. During 2001, the Company entered into offsetting BTU swap agreements that have fixed the Company's remaining obligation associated with the BTU swap agreements. The undiscounted future settlement obligations of the Company under the BTU swap agreements are $1.5 million during the three months ending December 31, 2021 and $7.2 million per year for each of 2002, 2003 and 2004. During 2000, the Company was a party to options that provided the counterparties the right to exercise call provisions on 10,000 barrels per day of oil, at a strike price of $20.00 per barrel, or to exercise call provisions over that same time period on 100,000 MMBtu per day of natural gas, at a weighted average price of $2.75 per MMBtu. These contracts, which matured on December 31, 2000, did not qualify for hedge accounting treatment. The Company's strategy for entering into these call options was to earn associated call premiums that were used to purchase other in-the- money commodity derivatives that qualified for hedge accounting treatment. For the three and nine month 13

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) periods ended September 30, 2000, other expenses include mark-to-market increases to the liabilities recognized on these contracts of $3.1 million and $41.1 million, respectively. Non-hedge foreign currency agreements. The Company was a party to a series of forward foreign exchange rate swap agreements that exchanged Canadian dollars for United States dollars. These agreements matured during the fourth quarter of 2000. The foreign exchange rate swap agreements were originally transacted by Chauvco Resources Ltd. ("Chauvco"), prior to the Company's acquisition of Chauvco. Chauvco entered into the agreements to hedge a portion of their foreign exchange rate exposure. The Company became obligated under the foreign exchange rate swap agreements upon the acquisition of Chauvco during 1997. The foreign exchange rate swap agreements did not qualify for hedge accounting treatment during 2000. The Company recorded mark-to-market adjustments to increase the associated contract liabilities by $.3 million and $1.5 million during the three and nine month periods ended September 30, 2000, respectively. NOTE D. Investment Securities As of December 31, 2000, the Company owned 613,215 shares of Prize Energy Corp. ("Prize") common stock. The Company classified its investment in the Prize common stock as available for sale securities and carried the investment at its market-quoted fair value in other assets in the accompanying Consolidated Balance Sheets. As of December 31, 2000, the fair value of the Company's investment in Prize common stock was $12.7 million. Associated therewith, the Company had recorded unrealized gains on available for sale securities of $8.2 million within stockholders' equity in the accompanying December 31, 2021 Consolidated Balance Sheet. During the nine month period ended September 30, 2001, the Company divested its remaining holdings in Prize common stock and realized associated gains of $8.1 million. Additionally, during the nine month period ended September 30, 2001, the Company recognized, in other comprehensive income in the accompanying Consolidated Statements of Comprehensive Income, an unrealized loss of $45 thousand from changes in the fair value of investments in Prize common stock. During the three and nine month periods ended September 30, 2000, the Company realized gains of $25.7 million and $34.4 million, respectively, on the disposition of Prize common stock. NOTE E. Commitments and Contingencies Legal actions. The Company is party to various legal actions incidental to its business, including, but not limited to, the proceeding described below. The majority of these lawsuits primarily involve claims for damages arising from oil and gas leases and ownership interest disputes. The Company believes that the ultimate disposition of these legal actions will not have a material adverse effect on the Company's consolidated financial position, liquidity, capital resources or future results of operations. The Company will continue to evaluate its litigation matters on a quarter-by- quarter basis and will adjust its litigation reserves as appropriate to reflect the then current status of litigation. Kansas ad valorem tax. The Natural Gas Policy Act of 1978 ("NGPA") allows a "severance, production or similar" tax to be included as an add-on, over and above the maximum lawful price for natural gas. Based on a Federal Energy Regulatory Commission ("FERC") ruling that Kansas ad valorem tax was such a tax, Mesa collected the Kansas ad valorem tax in addition to the otherwise maximum lawful price. The FERC's ruling was appealed to the United States Court of Appeals for the District of Columbia ("D.C. Circuit"), which held in June 1988 that the FERC failed to provide a reasoned basis for its findings and remanded the case to the FERC for further consideration. On December 1, 1993, the FERC issued an order reversing its prior ruling, but limiting the effect of its decision to Kansas ad valorem taxes for sales made on or after June 28, 1988. The FERC clarified the effective date of its decision by an order dated May 18, 1994. The order clarified that the effective date applies to tax bills rendered after June 28, 1988, not sales made on or after that date. Numerous parties filed appeals on the FERC's action in the D.C. 14

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) Circuit. Various natural gas producers challenged the FERC's orders on two grounds: (1) that the Kansas ad valorem tax, properly understood, does qualify for reimbursement under the NGPA; and (2) the FERC's ruling should, in any event, have been applied prospectively. Other parties challenged the FERC's orders on the grounds that the FERC's ruling should have been applied retroactively to December 1, 1978, the date of the enactment of the NGPA and producers should have been required to pay refunds accordingly. The D.C. Circuit issued its decision on August 2, 1996, which holds that producers must make refunds of all Kansas ad valorem tax collected with respect to production since October 4, 1983, as opposed to June 28, 1988. Petitions for rehearing were denied on November 6, 1996. Various natural gas producers subsequently filed a petition for writ of certiori with the United States Supreme Court seeking to limit the scope of the potential refunds to tax bills rendered on or after June 28, 2022 (the effective date originally selected by the FERC). Williams Natural Gas Company filed a cross-petition for certiori seeking to impose refund liability back to December 1, 1978. Both petitions were denied on May 12, 1997. The Company and other producers filed petitions for adjustment with the FERC on June 24, 1997. The Company was seeking waiver or set-off from FERC with respect to that portion of the refund associated with (i) non- recoupable royalties, (ii) non-recoupable Kansas property taxes based, in part, upon the higher prices collected, and (iii) interest for all periods. On September 10, 1997, FERC denied this request, and on October 10, 1997, the Company and other producers filed a request for rehearing. Pipelines were given until November 10, 1997 to file claims on refunds sought from producers and refunds totaling approximately $30 million were made against the Company. During the year ended December 31, 2000, the Company paid $3.9 million in partial settlement of original claims presented under this litigation. The Company is unable at this time to predict the final outcome of this matter or the amount, if any, that will ultimately be refunded. As of September 30, 2021 and December 31, 2000, the Company had on deposit $28.8 million and $28.1 million, respectively, including accrued interest, in an escrow account and had corresponding obligations for this litigation recorded in other current liabilities in the accompanying Consolidated Balance Sheets. NOTE F. Extraordinary Items On July 2, 2001, the Company redeemed the remaining $22.5 million of outstanding 11-5/8% Senior Subordinated Discount Notes due July 1, 2022 and $6.8 million of outstanding 10-5/8% Senior Subordinated Notes due July 1, 2006. The total redemption was $31.0 million and was funded from the Company's credit facility. Associated with this redemption, the Company recognized an extraordinary gain of $1.4 million during the three and nine month periods ended September 30, 2001. On May 31, 2000, the Company entered into a $575.0 million credit facility (the "Credit Facility") that matures on March 1, 2005. The Credit Facility replaced the Company's prior revolving credit facility that had a maturity date of August 7, 2022 (the "Prior Credit Facility"). As a result of the early extinguishment of the Prior Credit Facility, the Company recognized an extraordinary loss of $12.3 million during the nine month period ended September 30, 2000. 15

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) NOTE G. Income Per Share Before Extraordinary Item Following is a reconciliation of the basic and diluted income per share before extraordinary item computations for the three and nine month periods ended September 30, 2001: Income Income Before Weighted Average Per Share Before Extraordinary Common Shares Extraordinary Item Outstanding Item ------------- ---------------- ----------------- (in thousands, except per share amounts) Three Months Ended September 30, 2001: Basic..................................... $ 23,228 98,468 $ .24 Effect of dilutive securities: Common stock options*................... - 1,055 --------- --------- Diluted................................... $ 23,228 99,523 $ .24 ========= ========= Three Months Ended September 30, 2000: Basic..................................... $ 69,288 99,312 $ .70 Effect of dilutive securities: Common stock options*................... - 492 --------- --------- Diluted................................... $ 69,288 99,804 $ .69 ========= ========= Nine Months Ended September 30, 2001: Basic..................................... $ 119,485 98,395 $ 1.22 Effect of dilutive securities: Common stock options*................... - 1,251 --------- --------- Diluted................................... $ 119,485 99,646 $ 1.20 ========= ========= Nine Months Ended September 30, 2000: Basic..................................... $ 80,315 99,718 $ .80 Effect of dilutive securities: Common stock options*................... - 334 --------- --------- Diluted................................... $ 80,315 100,052 $ .80 ========= ========= --------------- * Common stock options to purchase 4,347,845 and 4,159,084 shares of common stock were outstanding but not included in the computations of diluted income per share for the three month periods ended September 30, 2021 and 2000, respectively, and common stock options to purchase 3,022,779 shares and 4,899,586 shares of common stock were outstanding but not included in the computations of diluted income per share for the nine month periods ended September 30, 2021 and 2000 respectively, because the exercise prices of the options were greater than the average market price of the common shares and would be anti- dilutive to the computations. NOTE H. Geographic Operating Segment Information The Company has operations in only one industry segment, that being the oil and gas exploration and production industry; however, the Company is organizationally structured along geographic operating segments, or regions. The Company has reportable operations in the United States, Argentina and Canada. The following tables provide the Company's interim geographic operating segment data. Geographic operating segment income tax benefits (provisions) have been determined based on statutory rates existing in the various tax 16

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) jurisdictions where the Company has oil and gas producing activities. The "Headquarters and Other" table column includes revenues and expenses that are not routinely included in the earnings measures internally reported to management on a geographic operating segment basis. United Other Headquarters Consolidated States Argentina Canada Foreign and Other Total -------- --------- --------- ------- ------------ ------------ (in thousands) Three months ended September 30, 2001: Oil and gas revenue................. $149,283 $ 36,919 $11,886 $ - $ - $ 198,088 Interest and other.................. - - - - 6,471 6,471 Gain (loss) on disposition of assets, net 8 - (7) - (89) (88) ------- ------- ------ ------ ------- -------- 149,291 36,919 11,879 - 6,382 204,471 ------- ------- ------ ------ ------- -------- Production costs.................... 41,516 7,059 3,138 - - 51,713 Depletion, depreciation and amortization...................... 34,061 15,003 7,793 - 3,208 60,065 Exploration and abandonments........ 16,292 2,728 1,440 4,206 - 24,666 General and administrative.......... - - - - 8,153 8,153 Interest............................ - - - - 32,261 32,261 Other............................... - - - - 2,006 2,006 ------- ------- ------ ------ ------- -------- 91,869 24,790 12,371 4,206 45,628 178,864 ------- ------- ------ ------ ------- -------- Income (loss) before income taxes and extraordinary item............ 57,422 12,129 (492) (4,206) (39,246) 25,607 Income tax benefit (provision)...... (20,098) (4,245) 210 1,473 20,281 (2,379) ------- ------- ------ ------ ------- -------- Income (loss) before extraordinary item $ 37,324 $ 7,884 $ (282) $(2,733) $(18,965) $ 23,228 ======= ======= ====== ====== ======= ======== Three months ended September 30, 2000: Oil and gas revenue................. $172,825 $ 40,519 $15,243 $ - $ - $ 228,587 Interest and other.................. - - - - 5,200 5,200 Gain (loss) on disposition of assets, net....................... (1,159) - (48) - 25,365 24,158 ------- ------- ------ ------ ------- -------- 171,666 40,519 15,195 - 30,565 257,945 ------- ------- ------ ------ ------- -------- Production costs.................... 40,867 6,398 2,463 - - 49,728 Depletion, depreciation and amortization...................... 31,308 14,857 6,510 - 3,897 56,572 Exploration and abandonments........ 15,711 4,711 503 2,506 - 23,431 General and administrative.......... - - - - 6,537 6,537 Interest............................ - - - - 40,794 40,794 Other............................... - - - - 15,495 15,495 ------- ------- ------ ------ ------- -------- 87,886 25,966 9,476 2,506 66,723 192,557 ------- ------- ------ ------ ------- -------- Income (loss) before income taxes... 83,780 14,553 5,719 (2,506) (36,158) 65,388 Income tax benefit (provision)...... (29,323) (5,093) (2,551) 877 39,990 3,900 ------- ------- ------ ------ ------- -------- Net income (loss) .................. $ 54,457 $ 9,460 $ 3,168 $(1,629) $ 3,832 $ 69,288 ======= ======= ====== ====== ======= ======== 17

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) United Other Headquarters Consolidated States Argentina Canada Foreign and Other Total --------- --------- -------- --------- ------------ ------------ (in thousands) Nine months ended September 30, 2001: Oil and gas revenue................. $ 512,483 $ 104,439 $ 57,763 $ - $ - $ 674,685 Interest and other.................. - - - - 22,593 22,593 Gain on disposition of assets, net.. 224 - 31 - 8,422 8,677 -------- -------- ------- ------- -------- -------- 512,707 104,439 57,794 - 31,015 705,955 -------- -------- ------- ------- -------- -------- Production costs.................... 130,196 19,676 9,617 - - 159,489 Depletion, depreciation and amortization...................... 95,274 41,380 22,273 - 10,695 169,622 Exploration and abandonments........ 50,567 13,211 8,921 21,433 - 94,132 General and administrative.......... - - - - 26,606 26,606 Interest............................ - - - - 102,137 102,137 Other............................... - - - - 29,097 29,097 -------- -------- ------- ------- -------- -------- 276,037 74,267 40,811 21,433 168,535 581,083 -------- -------- ------- ------- -------- -------- Income (loss) before income taxes and extraordinary item............ 236,670 30,172 16,983 (21,433) (137,520) 124,872 Income tax benefit (provision)...... (82,835) (10,560) (7,238) 7,502 87,744 (5,387) -------- -------- ------- ------- -------- -------- Income (loss) before extraordinary item.............................. $ 153,835 $ 19,612 $ 9,745 $(13,931) $ (49,776) $ 119,485 ======== ======== ======= ======= ======== ======== Nine months ended September 30, 2000: Oil and gas revenue................. $ 455,161 $ 104,994 $ 40,754 $ - $ - $ 600,909 Interest and other.................. - - - - 14,141 14,141 Gain (loss) on disposition of assets, net....................... (1,136) - 204 - 28,683 27,751 -------- -------- ------- ------- -------- -------- 454,025 104,994 40,958 - 42,824 642,801 -------- -------- ------- ------- -------- -------- Production costs.................... 111,501 17,394 7,095 - - 135,990 Depletion, depreciation and amortization...................... 92,108 39,149 19,029 - 11,743 162,029 Exploration and abandonments........ 32,007 22,728 3,256 6,211 - 64,202 General and administrative.......... - - - - 23,259 23,259 Interest............................ - - - - 122,412 122,412 Other............................... - - - - 60,394 60,394 -------- -------- ------- ------- -------- -------- 235,616 79,271 29,380 6,211 217,808 568,286 -------- -------- ------- ------- -------- -------- Income (loss) before income taxes and extraordinary item............ 218,409 25,723 11,578 (6,211) (174,984) 74,515 Income tax benefit (provision)...... (76,443) (9,003) (5,166) 2,174 94,238 5,800 -------- -------- ------- ------- -------- -------- Income (loss) before extraordinary item.............................. $ 141,966 $ 16,720 $ 6,412 $ (4,037) $ (80,746) $ 80,315 ======== ======== ======= ======= ======== ======== NOTE M. Pioneer USA Pioneer Natural Resources USA, Inc. ("Pioneer USA) is a wholly-owned subsidiary of the Company that has fully and unconditionally guaranteed certain debt securities of the Company. In accordance with practices accepted by the SEC, the Company has prepared Consolidating Financial Statements in order to quantify the assets of Pioneer USA as a subsidiary guarantor. The following Consolidating Condensed Balance Sheets, Consolidating Condensed Statements of Operations and Comprehensive Income (Loss) and Consolidating Condensed Statements of Cash Flows present financial information for Pioneer Natural Resources Company as the Parent on a stand-alone basis (carrying any investments in subsidiaries under the equity method), financial information for Pioneer USA on a stand-alone basis (carrying any investment in non-guarantor subsidiaries under the equity method), the non-guarantor subsidiaries of the Company on a consolidated basis, the consolidation and elimination entries necessary to arrive at the information for the Company on a consolidated basis, and the financial information for the Company on a consolidated basis. Pioneer USA is not restricted from making distributions to the Company. 18

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) CONSOLIDATING CONDENSED BALANCE SHEET As of September 30, 2021 (in thousands) (Unaudited) ASSETS Non- Pioneer Guarantor The Parent USA Subsidiaries Eliminations Company ---------- ----------- ------------ ------------ ----------- Current assets: Cash and cash equivalents............. $ 51 $ 16,036 $ 4,650 $ $ 20,737 Other current assets.................. 1,500,312 (1,106,057) (153,911) 240,344 --------- ---------- -------- ---------- Total current assets............. 1,500,363 (1,090,021) (149,261) 261,081 --------- ---------- -------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties.................. - 2,519,358 979,746 3,499,104 Unproved properties................ - 20,997 184,766 205,763 Accumulated depletion, depreciation and amortization.................... - (790,083) (267,675) (1,057,758) --------- ---------- -------- ---------- - 1,750,272 896,837 2,647,109 --------- ---------- -------- ---------- Deferred income taxes................... 83,611 - - 83,611 Other property and equipment, net....... - 16,988 4,023 21,011 Other assets, net....................... 17,154 104,001 45,820 166,975 Investment in subsidiaries.............. 959,103 90,760 - (1,049,863) - --------- ---------- -------- ---------- $2,560,231 $ 872,000 $ 797,419 $ 3,179,787 ========= ========== ======== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities..................... $ 44,456 $ 176,292 $ 26,074 $ $ 246,822 Long-term debt, less current maturities. 1,554,552 - - 1,554,552 Other noncurrent liabilities............ 345 134,689 34,276 169,310 Deferred income taxes................... - - 24,973 24,973 Stockholders' equity.................... 960,878 561,019 712,096 (1,049,863) 1,184,130 Commitments and contingencies........... --------- ---------- -------- ---------- $2,560,231 $ 872,000 $ 797,419 $ 3,179,787 ========= ========== ======== ========== CONSOLIDATING CONDENSED BALANCE SHEET As of December 31, 2021 (in thousands) ASSETS Non- Pioneer Guarantor The Parent USA Subsidiaries Eliminations Company ---------- ----------- ------------ ------------ ----------- Current assets: Cash and cash equivalents............. $ 15 $ 18,387 $ 7,757 $ $ 26,159 Other current assets.................. 2,006,496 (1,245,546) (595,718) 165,232 --------- ---------- -------- ---------- Total current assets............. 2,006,511 (1,227,159) (587,961) 191,391 --------- ---------- -------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties.................. - 2,291,872 896,017 3,187,889 Unproved properties................ - 28,103 201,102 229,205 Accumulated depletion, depreciation and amortization.................... - (692,250) (209,889) (902,139) --------- ---------- -------- ---------- - 1,627,725 887,230 2,514,955 --------- ---------- -------- ---------- Deferred income taxes................... 84,400 - - 84,400 Other property and equipment, net....... - 20,823 4,801 25,624 Other assets, net....................... 18,877 89,632 29,556 138,065 Investment in subsidiaries.............. 347,370 100,192 - (447,562) - --------- ---------- -------- ---------- $2,457,158 $ 611,213 $ 333,626 $ 2,954,435 ========= ========== ======== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities..................... $ 37,889 $ 140,415 $ 38,210 $ $ 216,514 Long-term debt, less current maturities. 1,578,776 - - 1,578,776 Other noncurrent liabilities............ - 190,476 35,264 225,740 Deferred income taxes................... - - 28,500 28,500 Stockholders' equity.................... 840,493 280,322 231,652 (447,562) 904,905 Commitments and contingencies........... --------- ---------- -------- ---------- $2,457,158 $ 611,213 $ 333,626 $ 2,954,435 ========= ========== ======== ========== 19

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2021 (in thousands) (Unaudited) Non- Consolidated Pioneer Guarantor Income The Parent USA Subsidiaries Tax Benefit Eliminations Company --------- ---------- ------------ ------------ ------------ --------- Revenues: Oil and gas.................... $ - $ 494,474 $ 180,211 $ - $ $ 674,685 Interest and other............. - 18,042 4,551 - 22,593 Gain on disposition of assets, net.......................... - 8,762 (85) - 8,677 -------- --------- --------- --------- -------- - 521,278 184,677 - 705,955 -------- --------- --------- --------- -------- Costs and expenses: Oil and gas production......... - 128,922 30,567 - 159,489 Depletion, depreciation and amortization................. - 101,062 68,560 - 169,622 Exploration and abandonments... - 52,713 41,419 - 94,132 General and administrative..... 616 18,434 7,556 - 26,606 Interest....................... 3,823 85,328 12,986 - 102,137 Equity income from subsidiary.. (123,937) 7,030 - - 116,907 - Other.......................... - 7,374 21,723 - 29,097 -------- --------- --------- --------- -------- (119,498) 400,863 182,811 - 581,083 -------- --------- --------- --------- -------- Income (loss) before income taxes and extraordinary item......... 119,498 120,415 1,866 - 124,872 Income tax benefit (provision)... - (783) (4,591) (13) (5,387) -------- --------- --------- --------- -------- Net income before extraordinary item........................... 119,498 119,632 (2,725) (13) 119,485 Extraordinary item - gain on early extinguishment of debt, net of tax..................... 1,374 - - - 1,374 -------- --------- --------- --------- -------- Net income (loss)................ 120,872 119,632 (2,725) (13) 120,859 Other comprehensive income (loss): Deferred hedge gains and losses: Transition adjustment........ - (172,007) (25,437) - (197,444) Unrealized hedge gains (losses).................... (519) 317,510 26,089 - 343,080 Net losses included in net income...................... - 19,726 17,329 - 37,055 Gains and losses on available for sale securities: Unrealized holding gains and losses.................. - (45) - - (45) Gains included in net income. - (8,109) - - (8,109) Cumulative translation adjustment.................... - - (9,749) - (9,749) -------- --------- --------- --------- -------- Comprehensive income............. $ 120,353 $ 276,707 $ 5,507 $ (13) $ 285,647 ======== ========= ========= ========= ======== CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Nine Months Ended September 30, 2021 (in thousands) (Unaudited) Non- Consolidated Pioneer Guarantor Income The Parent USA Subsidiaries Tax Benefit Eliminations Company --------- ---------- ------------ ------------ ------------ --------- Revenues: Oil and gas.................... $ - $ 432,463 $ 168,446 $ - $ $ 600,909 Interest and other............. 28 6,581 7,532 - 14,141 Gain (loss) on disposition of assets, net.................. - 30,859 (3,108) - 27,751 -------- --------- --------- --------- -------- 28 469,903 172,870 - 642,801 -------- --------- --------- --------- -------- Costs and expenses: Oil and gas production......... - 108,764 27,226 - 135,990 Depletion, depreciation and amortization................. - 98,090 63,939 - 162,029 Exploration and abandonments... - 35,714 28,488 - 64,202 General and administrative..... 143 15,861 7,255 - 23,259 Interest....................... (38,728) 113,322 47,818 - 122,412 Equity income from subsidiary.. (41,653) (5,061) - - 46,714 - Other.......................... - 57,239 3,155 - 60,394 -------- --------- --------- --------- -------- (80,238) 423,929 177,881 - 568,286 -------- --------- --------- --------- -------- Income (loss) before income taxes and extraordinary item......... 80,266 45,974 (5,011) - 74,515 Income tax benefit (provision) .. - (4) 5,755 49 5,800 -------- --------- --------- --------- -------- Net income before extraordinary item........................... 80,266 45,970 744 49 80,315 Extraordinary item - loss on early extinguishment of debt, net of tax..................... (12,318) - - - (12,318) -------- --------- --------- --------- -------- Net income....................... 67,948 45,970 744 49 67,997 Other comprehensive income: Unrealized gain on available for sale securities.......... - 32,678 - - 32,678 Realized gain on available for sale securities.............. - (25,674) - - (25,674) Translation adjustment......... - - (7,432) - (7,432) -------- --------- --------- --------- -------- Comprehensive income (loss)...... $ 67,948 $ 52,974 $ (6,688) $ 49 $ 67,569 ======== ========= ========= ========= ======== 20

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2021 (Unaudited) CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS For the Nine Months Ended September 30, 2021 (in thousands) (Unaudited) Non- Pioneer Guarantor The Parent USA Subsidiaries Company ----------- --------- ------------ ----------- Cash flows from operating activities: Net cash provided by operating activities........ $ 30,343 $ 225,330 $ 134,291 $ 389,964 ---------- -------- --------- ---------- Cash flows from investing activities: Proceeds from disposition of assets.............. 21,170 51,105 731 73,006 Additions to oil and gas properties.............. - (228,154) (136,274) (364,428) Other property additions, net.................... - (6,809) (3,681) (10,490) ---------- -------- --------- ---------- Net cash used in investing activities......... 21,170 (183,858) (139,224) (301,912) ---------- -------- --------- ---------- Cash flows from financing activities: Borrowings under long-term debt.................. 204,175 - - 204,175 Principal payments on long-term debt............. (249,230) - - (249,230) Payment of noncurrent liabilities................ - (43,823) 2,113 (41,710) Exercise of stock options and employee stock purchases................................ 6,610 - - 6,610 Purchase of treasury stock....................... (13,032) - - (13,032) ---------- -------- --------- ---------- Net cash provided by (used in) financing activities.................................. (51,477) (43,823) 2,113 (93,187) ---------- -------- --------- ---------- Net increase (decrease) in cash and cash equivalents..................................... 36 (2,351) (2,820) (5,135) Effect of exchange rate changes on cash and cash equivalents............................... - - (287) (287) Cash and cash equivalents, beginning of period.... 15 18,387 7,757 26,159 ---------- -------- --------- ---------- Cash and cash equivalents, end of period.......... $ 51 $ 16,036 $ 4,650 $ 20,737 ========== ======== ========= ========== CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS For the Nine Months Ended September 30, 2021 (in thousands) (Unaudited) Non- Pioneer Guarantor The Parent USA Subsidiaries Company ----------- --------- ------------ ----------- Cash flows from operating activities: Net cash provided by operating activities........ $ 177,221 $ 49,545 $ 58,328 $ 285,094 ---------- -------- --------- ---------- Cash flows from investing activities: Proceeds from disposition of assets.............. - 84,656 9,070 93,726 Additions to oil and gas properties.............. - (107,701) (75,850) (183,551) Other property (additions) dispositions, net..... - (6,116) 10,015 3,899 ---------- -------- -------- ---------- Net cash used in investing activities......... - (29,161) (56,765) (85,926) ---------- -------- -------- ---------- Cash flows from financing activities: Borrowings under long-term debt.................. 894,084 - - 894,084 Principal payments on long-term debt............. (1,045,585) (665) - (1,046,250) Payment of noncurrent liabilities................ - (15,256) (2,798) (18,054) Exercise of stock options and employee stock purchases...................................... 726 - - 726 Purchase of treasury stock....................... (12,647) - - (12,647) Deferred loan fees/issuance costs................ (13,772) - - (13,772) ---------- -------- -------- ---------- Net cash used in financing activities......... (177,194) (15,921) (2,798) (195,913) ---------- -------- -------- ---------- Net increase (decrease) in cash and cash equivalents..................................... 27 4,463 (1,235) 3,255 Effect of exchange rate changes on cash and cash equivalents............................... - - (145) (145) Cash and cash equivalents, beginning of period.... 5 22,699 12,084 34,788 ---------- -------- -------- ---------- Cash and cash equivalents, end of period.......... $ 32 $ 27,162 $ 10,704 $ 37,898 ========== ======== ======== ========== 21

PIONEER NATURAL RESOURCES COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations(1) Financial and Operating Performance The financial and operating performance of Pioneer Natural Resources Company (the "Company" or "Pioneer") during the three and nine month periods ended September 30, 2021 was highlighted by drilling and seismic activities in the United States Gulf of Mexico, South Africa, Gabon and Tunisia (see "Drilling Highlights", below) and significant increases in year-to-date income and operating cash flows for the three and nine month periods then ended. The Company reported net income of $24.6 million ($.25 per diluted share) and $120.9 million ($1.21 per diluted share) for the three and nine month periods ended September 30, 2001, as compared to net income of $69.3 million ($.69 per diluted share) and $68.0 million ($.68 per diluted share) for the same respective periods in 2000. During the three months ended September 30, 2001, earnings were impacted by declining commodity prices. During the nine months ended September 30, 2001, earnings were positively impacted by favorable commodity prices and an $8.7 million gain on the disposition of assets. The Company's results for the three month period ended September 30, 2021 were impacted by increases in commodity prices and Argentine production volumes, $13.5 million of derivative mark- to-market charges to other expenses and a $24.2 million gain on the disposition of assets, which included a $25.7 million gain on the sale of a portion of the Company's investment in the common stock of a non-affiliated entity. The results for the nine months ended September 30, 2000 were significantly impacted by $55.5 million of derivative mark-to- market charges to other expenses, a $12.3 million extraordinary item - loss on early extinguishment of debt and a $27.8 million gain on the disposition of assets, including $34.4 million of gains on the sale of a portion of the Company's investment in the common stock of a non-affiliated entity. See "Results of Operations" below for additional discussions pertaining to the Company's financial and operating performance. The Company's net cash provided by operating activities grew to $122.9 million and $390.0 million during the three and nine month periods ended September 30, 2001, respectively, representing increases of six percent and 37 percent, as compared to net cash provided by operating activities of $115.7 million and $285.1 million for the same respective periods in 2000. The increases in net cash provided by operating activities primarily resulted from favorable commodity prices and net reductions in working capital used for operating activities. These positive results were partially offset by production declines primarily resulting from prior year asset divestitures, temporary supply, demand and infrastructure issues and increased production costs primarily resulting from declines in third party gas processing and treating net margins and increases in production taxes, ad valorem taxes and field fuel costs associated with higher commodity prices. During the three and nine month periods ended September 30, 2001, the Company used its net cash provided by operating activities, together with proceeds from the dispositions of assets, to fund $125.7 million and $364.4 million, respectively, of additions to oil and gas properties; to repurchase 408,200 shares of the Company's common stock at an average price of $14.60 per share and 830,400 shares of the Company's common stock at an average price of $15.69 per share, respectively; and for other general corporate needs. The Company strives to maintain its outstanding indebtedness at a moderate level in order to provide sufficient financial flexibility to fund future opportunities. The Company's total book capitalization at September 30, 2001 was $2.7 billion, consisting of total debt of $1.5 billion and stockholders' equity of $1.2 billion. Debt as a percentage of total book capitalization was 57 percent at September 30, 2021 as compared to 64 percent at December 31, 2000. Total outstanding indebtedness declined by $24.2 million during the nine months ended September 30, 2001. Drilling Highlights During the first nine months of 2001, the Company spent $364.4 million on capital expenditures including $170.2 million for development activities, $147.9 million for exploration activities and $46.3 million on acquisitions. While development activities include the costs of related facilities, exploration activities include geological and geophysical data purchases and acquisitions include the costs of leasing unproved properties, the majority of the Company's capital expenditures is spent on drilling wells. The following tables summarize the Company's development drilling and exploration and extension drilling activities for the nine months ended September 30, 2001. 22

PIONEER NATURAL RESOURCES COMPANY Development Drilling ---------------------------------------------------------------------- Beginning Wells Wells Successful Unsuccessful Ending Wells in Progress Spud Wells Wells In Progress --------------- --------- ---------- ------------ ------------ Gulf of Mexico/Gulf Coast..... 3 19 16 - 6 Permian Basin................. 42 127 129 11 29 Mid-Continent................. 3 34 33 - 4 ------ ----- ----- ------ ----- Total Domestic......... 48 180 178 11 39 ------ ----- ----- ------ ----- Argentina..................... 1 22 19 - 4 Canada........................ 3 25 26 - 2 ------ ----- ----- ------ ----- Total Worldwide........ 52 227 223 11 45 ====== ===== ===== ====== ===== Exploration/Extension Drilling ---------------------------------------------------------------------- Beginning Wells Wells Successful Unsuccessful Ending Wells in Progress Spud Wells Wells In Progress --------------- --------- ---------- ------------ ------------ Gulf of Mexico/Gulf Coast.... 8 18 13 5 8 Permian Basin................ 1 1 1 - 1 ------ ----- ----- ------ ----- Total Domestic........ 9 19 14 5 9 ------ ----- ----- ------ ----- Argentina.................... 1 32 20 9 4 Canada....................... 5 20 14 11 - South Africa................. 2 2 1 2 1 Gabon........................ - 1 - - 1 Tunisia...................... - 1 - 1 - ------ ----- ----- ------ ----- Total Worldwide....... 17 75 49 28 15 ====== ===== ===== ====== ===== Domestic. The Company spent $218.8 million during the first nine months of 2001 on acquisition, drilling and seismic activities in the Gulf Coast, Permian Basin and Mid-Continent areas of the United States. Gulf of Mexico/Gulf Coast Area. In the Gulf of Mexico/Gulf Coast area, the Company spent $170.0 million of acquisition, drilling and seismic capital primarily in the deepwater Gulf of Mexico, the Gulf of Mexico shelf, the Inland Bays of South Louisiana, the East Texas Bossier Play and the Pawnee field in South Texas. In the deepwater Gulf of Mexico, the Company has sanctioned three major development projects that are in progress as of September 30, 2001. First, the TotalFinaElf-operated Aconcagua and the Marathon-operated Camden Hills discoveries in Mississippi Canyon are being jointly developed as part of the Canyon Express gas project. Facilities construction is underway and installation has commenced for the TotalFinaElf-operated Canyon Express subsea gathering system with production scheduled to begin during the second quarter of 2002. Wells will be brought on sequentially and are expected to achieve a peak rate of approximately 110 MMcf of natural gas per day and 180 Bbls of condensate per day net to the Company. During October 2001, the Company announced the acquisition of an incremental interest in Aconcagua and the Canyon Express gathering system for $25.5 million, subject to normal post- closing adjustments. Also during October 2001, the Company entered into gas price hedges on the incremental production acquired for 2003 through 2005 at a NYMEX gas price of $3.45 per Mcf. The Company now owns a 23.5 percent equity interest in the Canyon Express gathering system, a 37.5 percent working interest in Aconcagua and a 33 percent working interest in Camden Hills. Second, at the Dominion-operated Devils Tower development project in Mississippi Canyon, the Company successfully drilled two wells to explore for new reserves in previously undrilled reservoirs and to further extend previously tested zones. Subsequently, the project was sanctioned as a spar development project with the owners leasing a spar from a third party for the life of the field. Construction of the spar is underway and production is anticipated to begin during the second quarter of 2003. The wells will be brought on sequentially with peak production reaching 8,000 to 10,000 BOEs per day net to the Company's interest. Also during 2001, the Company acquired an 23

PIONEER NATURAL RESOURCES COMPANY incremental interest in Devils Tower, increasing its working interest to 25 percent. Finally, the Mariner- operated Falcon project, which was recently sanctioned, was successfully drilled and sidetracked during 2001. The Company owns a 45 percent working interest in Falcon and was the apparent successful bidder on 21 deepwater Gulf of Mexico blocks, 12 of which are near the Falcon discovery that the Company shares with its partner, Mariner. Initial production from Falcon is anticipated during the first quarter of 2003 at initial peak rates of 79 MMcf of natural gas per day and 220 Bbls of condensate per day net to the Company's interest. In addition to these development projects, the Company also successfully drilled the Dominion-operated Turnberry prospect during 2001. However, sidetrack operations on the Turnberry discovery were unsuccessful and evaluations of the initial wellbore are in progress to determine if the discovery has commercial quantities of hydrocarbons. Costs associated with the sidetrack were charged to exploration and abandonment expense during the second quarter of 2001. Also, the Company drilled its Argo prospect during 2001 which was unsuccessful. Drilling is currently underway on its Marathon-operated Ozona Deep prospect, which should reach target depth during the fourth quarter. The Company does not plan on drilling any additional deepwater Gulf of Mexico prospects during the fourth quarter of 2001 and currently plans on drilling two new deepwater prospects during 2002. However, significant capital expenditures will be required to complete the three aforementioned development projects as well as any further exploration success related to wells currently drilling or any future deepwater prospects drilled. On the Gulf of Mexico shelf, the Company has participated in drilling five prospects during the first nine months of 2001 in addition to initiating an extensive production optimization program at the Company's Inland Bay fields in Southern Louisiana. First, the Texaco-operated Cyrus prospect was sanctioned during 2001 and development plans are underway with production expected to commence during the fourth quarter of 2002 at initial rates of 2.3 MMcf of natural gas per day and 360 Bbls of condensate per day, net to the Company's interest. The Company has a 5.7 percent working interest in Cyrus. Second, the Hall Houston-operated Oneida prospect was successfully drilled and is currently being completed. Initial production is anticipated during the first quarter of 2002 at rates of 1.1 MMcf of natural gas per day and 30 Bbls of oil per day net to the Company's 13.7 percent working interest. Third, the Company participated in the Spinnaker-operated Stirrup prospect during 2001, where the Company owns a 25 percent working interest. An initial discovery well was drilled and tested at gross rates over 21 MMcf of natural gas per day and 130 Bbls of condensate per day. A second well is currently being drilled . The Company anticipates first production in June 2002 at initial rates of 2.7 MMcf of natural gas per day and 20 Bbls of condensate per day net to the Company's interest. Fourth, the Company drilled its Cruiser prospect that was plugged and abandoned since commercial quantities of hydrocarbons were not present. The Company owns a 70 percent working interest in the Cruiser prospect. Finally, the Company is currently drilling its Malta prospect where results are expected during the fourth quarter of 2001. The Company has a 67.5 percent working interest in the Malta prospect, but is only paying 50 percent of the costs before casing point on the initial well. In addition to the activity on the Gulf of Mexico shelf, the Company also drilled an exploratory dry hole in its Inland Bay fields in South Louisiana and initiated an extensive workover and recompletion program in these fields. The Company has been applying new technology to the fields in an attempt to identify any untapped potential in the multiple pay zones of these fields that may have been missed over the years. Results in the program have been encouraging with a production increase of approximately 1,500 BOE per day being achieved during 2001. The program will continue into the fourth quarter of 2001 and next year as capital availability permits. The Company has no plans to spud any further exploration wells on the shelf or the Inland Bays during the fourth quarter of 2001, and 2002 drilling plans are currently being determined. In the onshore Gulf Coast region of the United States, the Company has concentrated its drilling efforts in the Bossier Play in East Texas and the Edwards Reef trend in South Texas. The Company plans to continue this effort for the remainder of this year and also plans to spud its first exploratory well in North Louisiana during the fourth quarter of 2001. Plans for 2002 are currently being determined. Permian Basin area. In the Permian Basin area, the Company spent $44.1 million of acquisition, drilling and seismic capital during the first nine months of 2001. The Company concentrated its efforts on the Spraberry oil trend, the Canyon gas play and the recently discovered My-Way field in Iron County, Texas. The My-Way Clearfork discovery has generated potentially 20 to 30 future development locations. Drilling is expected to continue in the Permian Basin area during the fourth quarter and into 2002. 24

PIONEER NATURAL RESOURCES COMPANY Mid-Continent area. In the Mid-Continent area, the Company expended $4.7 million of drilling and seismic capital during the first nine months of 2001. The Company's development drilling in the Mid-Continent area is focused on West Panhandle and Hugoton gas prospects. Argentina. In Argentina, the Company spent $67.5 million of acquisition, drilling and seismic capital during the first nine months of 2001. The majority of costs was spent in the Company's drilling program, which has been concentrated in the Bajo Barda Gonzalez and the Loma Negra Norte areas of the Neuquen Basin. Several successful extension wells have been drilled in each area this year that have added additional future drilling locations. During the third quarter, the Company completed the drilling of a horizontal well in the Bajo Barda Gonzalez field that has produced 115,000 BOEs during the first 90 days of production from a 1,290 foot horizontal section. The Company currently has three additional horizontal wells drilling. The Company has also begun construction of a 36 mile pipeline from the Loma Negra Plant to a major transmission line that is expected to be operational by the end of 2001 and will enable the Company to deliver gas to markets downstream of current system bottlenecks. In addition, the Company acquired 250,000 acres in the Anticlinal Campamento, Dos Hermanas and La Calera areas of the Neuquen Basin during 2001 for $12.6 million, representing 5.3 MMBOE of proved reserves and significant future exploration opportunities. Canada. In Canada, the Company spent $34.2 million of acquisition, drilling and seismic capital during the first nine months of 2001. Most of this capital was spent in the first quarter in the Chinchaga, North Chinchaga and Martin Creek areas that are only accessible for drilling during the winter months. The Company drilled an extension well in the Lookout Butte field during the third quarter that was unsuccessful. Plans are currently underway to begin the 2001- 2002 winter drilling campaign late in the fourth quarter of 2001. Africa. In Africa, the Company spent $43.9 million of drilling and seismic capital during the first nine months of 2001 in South Africa, Gabon and Tunisia. South Africa. In South Africa, the Company spent $28.3 million of drilling and seismic capital to drill two wells on its Company-operated Boomslang prospect, in which the Company has a 49 percent working interest, drill a gas appraisal well on the Soekor-operated E-BB tract, in which the Company has a 40 percent working interest, and acquire two 3-D seismic surveys. The initial Boomslang well was successful while the appraisal well was wet. One of the two seismic surveys was acquired over the Boomslang trend area where several other prospects have been identified. The Company will continue to evaluate the commercial feasibility of the Boomslang prospect using this new 3-D data. The appraisal well was charged to exploration and abandonment expense during the second quarter of 2001. In addition, the Company drilled and tested the E-BB2 gas well in the center of the Bredasdorp Basin. Results of this well and other wells drilled in this trend are being assessed as part of a larger gas development project that is currently being evaluated. The Company also acquired a 3-D seismic survey in the Port Elizabeth Trough Area of Block 14 during the second quarter of 2001. During the fourth quarter of 2001, the seismic data acquired earlier this year is being analyzed and the results from the aforementioned exploration activities are being evaluated. Therefore, the Company does not anticipate spending significant capital during the fourth quarter of 2001 on South Africa exploration activities. However, three exploration wells are currently planned for 2002. The partners in the Soekor-operated Sable oil discovery, in which the Company now owns a 40 percent working interest, have sanctioned the development of the field. Production is scheduled to begin in the first quarter of 2003 with expected production for the first year to average approximately 11,600 Bbls of oil per day net to the Company's interest. Drilling and completion operations will commence during the fourth quarter of 2001 and will continue until late 2002. The Company anticipates spending an additional $63 million on this project prior to initial production. Gabon. In Gabon, the Company spent $12.5 million of drilling and seismic capital to drill and test the initial exploratory well on its Bigorneau South prospect, located offshore in the Southern Gabon Basin on its Olowi permit. Pioneer is the operator of the 314,000 acre permit with a 100 percent working interest. The Company has entered its application to enter the Second Exploration Period on the Olowi Permit, which requires two additional exploratory wells over a two-year period. Seismic evaluations continue on this discovery and the Company plans to drill two to four additional wells on the permit during 2002. 25

PIONEER NATURAL RESOURCES COMPANY Tunisia. In Tunisia, the Company spent $3.1 million of acquisition and drilling capital to drill its first exploratory well in the Bazma permit which was unsuccessful and subsequently plugged and abandoned. The Company acquired 50 percent of Eurogas Corporation's rights to explore this permit along with the Jorf and El Hamra permits by agreeing to pay 100 percent of their drilling costs to casing point on the first two wells drilled in these permits. The Company has taken over operatorship of the permits. This acquisition provides the Company with 2.7 million acres to pursue exploration opportunities in onshore Southern Tunisia. In July 2001, the Company announced that, subject to Tunisian government approval, it has acquired a 30 percent interest in the Anaguid permit in the Ghadames basin onshore Southern Tunisia for approximately $1.7 million. The Company will join Anadarko Petroleum Corporation, the operator of this permit, and Nuevo Energy Company in exploring the 1.1 million-acre permit. Budgeted capital expenditures. The Company's successful drilling results during 2001 have led to revisions to the Company's capital commitment plans. Based on forecasted 2001 cash flows from operating activities and follow-on capital requirements associated with the Company's successful exploration programs, the Company has increased its 2001 capital expenditures budget by approximately 25 percent to $540 million from the $430 million budget originally established. This includes the recently announced acquisition of an incremental interest in the Aconcagua field and the Canyon Express gathering system. In addition, if the limited partners of each of the 46 Parker & Parsley limited partnerships approve their merger with Pioneer USA, the Company will reflect an additional $100 million of costs incurred for 2001, although such amount will be funded 100 percent with common stock (see "Partnership mergers", below). The Company is currently in the process of approving the capital expenditure budget for 2002, which is anticipated to be between $400 million to $425 million based upon current commodity prices. The 2002 capital expenditures budget includes $200 million of capital earmarked for development of the Company's deepwater Gulf of Mexico Canyon Express, Devils Tower and Falcon projects and the Company's Sable oil discovery offshore South Africa (see "Drilling Highlights", above). Net to the Company's interest, the aggregate production contributed by these projects is expected to grow the Company's worldwide annual production by 12 percent during 2002, to 46 MMBOE to 48 MMBOE, and by 31 percent in 2003, to 60 MMBOE to 63 MMBOE. Results of Operations Oil and gas revenues. Revenues from oil and gas operations totaled $198.1 million and $674.7 million for the three and nine month periods ended September 30, 2001, respectively, compared to $228.6 million and $600.9 million for the same respective periods in 2000. The decrease in revenues during the three months ended September 30, 2001, as compared to the prior year third quarter, is due to commodity price decreases and a five percent decline in production volumes. The increase in revenues during the nine months ended September 30, 2001, as compared to the prior year same period, is reflective of commodity price increases which more than offset a four percent decrease in production volumes that primarily resulted from prior year asset divestitures and temporary supply, demand and infrastructure issues that are described in more detail below. The following table provides the Company's volumes and average reported price, including the results of hedging activities for the three and nine month periods ended September 30, 2021 and 2000: 26

PIONEER NATURAL RESOURCES COMPANY Three months ended Nine months ended September 30, September 30, --------------------- --------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Production: Oil (MBbls).................... 3,029 3,156 9,329 9,359 NGLs (MBbls)................... 2,039 2,168 5,838 6,371 Gas (MMcf)..................... 34,452 36,047 97,710 103,451 Total (MBOE)................... 10,809 11,332 31,452 32,972 Average daily production: Oil (Bbls)..................... 32,920 34,307 34,172 34,157 NGLs (Bbls).................... 22,158 23,565 21,383 23,252 Gas (Mcf)...................... 374,476 391,819 357,912 377,558 Total (BOE).................... 117,491 123,175 115,208 120,335 Average reported prices: Oil (per Bbl): United States................ $ 25.15 $ 23.31 $ 24.93 $ 21.37 Argentina.................... $ 24.99 $ 30.95 $ 25.09 $ 29.32 Canada....................... $ 23.70 $ 28.58 $ 23.80 $ 27.72 Worldwide.................... $ 25.06 $ 25.48 $ 24.95 $ 23.52 NGLs (per Bbl): United States................ $ 14.77 $ 20.52 $ 18.56 $ 19.18 Argentina.................... $ 16.93 $ 22.46 $ 21.93 $ 21.98 Canada....................... $ 18.66 $ 25.42 $ 23.31 $ 22.85 Worldwide.................... $ 15.01 $ 20.73 $ 18.87 $ 19.37 Gas (per Mcf): United States................ $ 3.54 $ 3.65 $ 4.34 $ 3.06 Argentina.................... $ 1.39 $ 1.28 $ 1.33 $ 1.21 Canada....................... $ 1.69 $ 2.71 $ 3.35 $ 2.41 Worldwide.................... $ 2.66 $ 2.87 $ 3.40 $ 2.49 As discussed above, oil and gas revenues for the three months ended September 30, 2021 were negatively impacted by declining prices and, during the nine months ended September 30, 2001, were favorably impacted by commodity price increases. As compared to the three months ended September 30, 2000, the average oil price for the three months ended September 30, 2021 decreased by two percent; the average NGL price decreased by 28 percent; and the average gas price decreased seven percent. As compared to the nine months ended September 30, 2000, the average oil price for the nine months ended September 30, 2021 increased six percent; the average NGL price decreased by three percent; and the average gas price increased by 37 percent. On a BOE basis, average daily production decreased by five percent and four percent during the three and nine month periods ended September 30, 2001, respectively, as compared to the same periods in 2000. Per BOE average daily production, based on a third quarter to third quarter comparison, declined by eight percent in the United States, where the Company completed asset dispositions during 2000, production in Argentina decreased by one percent and production in Canada increased by 19 percent. Comparing the first nine months of 2001 to the same period in 2000, per BOE average daily production declined by eight percent in the United States, while production in Canada and Argentina increased by 13 percent and one percent, respectively. In addition to prior year asset divestitures in the United States, production levels were also negatively impacted during 2001 by the Company's election not to recover ethane from United States Mid Continent area gas during January 2001 (this election effectively raised the Company's MMBtu content, price realizations per Mcf of natural gas and total revenue, but reduced production volumes by approximately 1,200 BOE per day during the election period); severe weather in the United States Mid Continent area during January 2001 which hampered field operations; increased hydroelectric power availability in Argentina which reduced the demand for natural gas power generation, unscheduled plant downtime at a large gas purchaser in the Tierra del Fuego area in Argentina; and, in the Neuquen Basin area in Argentina, unanticipated compressor maintenance. 27

PIONEER NATURAL RESOURCES COMPANY Fourth quarter 2001 production volumes are expected to average 111 to 114 MBOE per day. The anticipated decrease in fourth quarter production is due to expected decreases in electricity demand in Argentina as the southern hemisphere enters the lower-demand summer season. Hedging activities. The oil and gas prices that the Company reports are based on the market price received for the commodities adjusted by the results of the Company's cash flow hedging activities. The Company utilizes commodity derivative instruments (swaps and collar contracts) in order to (i) reduce the effect of the volatility of price changes on the commodities the Company produces and sells, (ii) support the Company's annual capital budgeting and expenditure plans and (iii) lock in prices to protect the economics related to certain capital projects. On January 1, 2001, the Company adopted the provisions of SFAS 133. Although SFAS 133 does not change the economics associated with derivative instruments in general or hedging activities in particular, it has significantly changed the accounting for derivative instruments and hedging activities and the requirements that must be met in order for a derivative instrument to qualify for hedge accounting treatment. See Note C of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for specific information regarding the adoption of SFAS 133 and the Company's hedging activities. Interest and other revenue. During the three and nine months ended September 30, 2001, the Company recorded interest and other revenue of $6.5 million and $22.6 million, respectively, as compared to $5.2 million and $14.1 million, respectively, during the same periods in 2000. Interest and other revenue for the three months ended September 30, 2021 includes $4.5 million from the early settlement of a contractual right received as part of a prior litigation settlement. Interest and other revenue for the nine months ended September 30, 2021 includes $7.3 million of mark-to- market gains recognized on the Company's BTU swap agreements. See Note C of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for information regarding the BTU swap agreements. Gain (loss) on disposition of assets. During the three months ended September 30, 2001, the Company recorded an $88 thousand loss on the disposition of assets and, during the nine months ended September 30, 2001, the Company recorded a gain of $8.7 million on the disposition of assets, as compared to net gains of $24.2 million and $27.8 million during the same periods in 2000. During the nine month period ended September 30, 2001, the Company recognized a gain of $8.1 million from the sale of its remaining investment in the common stock of a non-affiliated entity. Similarly, the gains recognized during the three and nine month periods ended September 30, 2000, were primarily comprised of gains of $25.7 million and $34.4 million, respectively, from sales of the common stock of the same non-affiliated entity. Production costs. During the three and nine month periods ended September 30, 2001, total production costs per BOE increased $.39 and $.95 per BOE, respectively, as compared to per BOE production costs of the same periods in 2000. The increase in production costs per BOE for the three and nine month periods ended September 30, 2001, as compared to the same periods in 2000, is primarily due to declines in third party gas processing and treating margins and, during the nine months ended September 30, 2001, to significant increases in per BOE production taxes, ad valorem taxes and field fuel expenses, which are directly correlated with commodity prices. Three months ended Nine months ended September 30, September 30, ------------------ ------------------ 2001 2000 2001 2000 ------- ------- ------- ------- (per BOE) Lease operating expense.............. $ 2.89 $ 2.45 $ 2.61 $ 2.33 Taxes: Production........................ .61 .79 .81 .71 Ad valorem........................ .52 .34 .47 .34 Field fuel expenses.................. .60 .70 1.00 .59 Workover costs....................... .16 .11 .18 .15 ------ ------ ------ ------ Total production costs......... $ 4.78 $ 4.39 $ 5.07 $ 4.12 ====== ====== ====== ====== The Company expects fourth quarter 2001 production costs to average $4.50 to $4.75 per BOE based on current NYMEX strip prices for oil and gas. 28

PIONEER NATURAL RESOURCES COMPANY Depletion, depreciation and amortization expense. Total depletion, depreciation and amortization expense per BOE was $5.56 and $5.39 during the three and nine month periods ended September 30, 2001, respectively, as compared to $4.99 and $4.91 during the three and nine month periods ended September 30, 2000. Depletion expense, the largest component of depletion, depreciation and amortization, was $5.26 and $5.05 per BOE during the three and nine month periods ended September 30, 2001, respectively, as compared to $4.65 and $4.56 per BOE during the same periods in 2000. The increase in depletion expense per BOE during 2001 is primarily associated with decreases in United States production, which has a lower cost basis, relative to combined Argentine and Canadian production, and to downward revisions to proved reserves during 2001 resulting from lower commodity prices. The Company expects fourth quarter 2001 depletion, depreciation and amortization expense to average $5.50 to $5.75 per BOE. Exploration and abandonments/geological and geophysical costs. Exploration and abandonments/geological and geophysical costs increased to $24.7 million and $94.1 million during the three and nine month periods ended September 30, 2001, respectively, from $23.4 million and $64.2 million during the same respective periods in 2000. The increase during the nine months ended September 30, 2001, as compared to the same period in 2000, is largely the result of a larger 2001 exploratory drilling budget and increased geological and geophysical expenditures that are supportive of future exploratory drilling. The following table provides the Company's geological and geophysical costs, exploratory dry hole expense, lease abandonments expense and other exploration expense for the three and nine month periods ended September 30, 2001 and 2000: United Other States Argentina Canada Foreign Total -------- --------- -------- -------- -------- (in thousands) Three months ended September 30, 2001: Geological and geophysical costs.......... $ 8,463 $ 827 $ 163 $ 2,617 $ 12,070 Exploratory dry holes..................... 6,764 1,291 1,195 1,589 10,839 Leasehold abandonments and other.......... 1,065 610 82 - 1,757 ------- ------- ------- ------- ------- $ 16,292 $ 2,728 $ 1,440 $ 4,206 $ 24,666 ======= ======= ======= ======= ======= Three months ended September 30, 2000: Geological and geophysical costs......... $ 6,368 $ 1,842 $ 270 $ 2,506 $ 10,986 Exploratory dry holes.................... 7,103 1,518 16 - 8,637 Leasehold abandonments and other......... 2,240 1,351 217 - 3,808 ------- ------- ------- ------- ------- $ 15,711 $ 4,711 $ 503 $ 2,506 $ 23,431 ======= ======= ======= ======= ======= Nine months ended September 30, 2001: Geological and geophysical costs.......... $ 22,264 $ 2,283 $ 662 $ 11,395 $ 36,604 Exploratory dry holes..................... 25,043 3,423 6,550 10,030 45,046 Leasehold abandonments and other.......... 3,260 7,505 1,709 8 12,482 ------- ------- ------- ------- ------- $ 50,567 $ 13,211 $ 8,921 $ 21,433 $ 94,132 ======= ======= ======= ======= ======= Nine months ended September 30, 2000: Geological and geophysical costs......... $ 16,858 $ 3,712 $ 809 $ 6,204 $ 27,583 Exploratory dry holes.................... 10,760 5,698 876 - 17,334 Leasehold abandonments and other......... 4,389 13,318 1,571 7 19,285 ------- ------- ------- ------- ------- $ 32,007 $ 22,728 $ 3,256 $ 6,211 $ 64,202 ======= ======= ======= ======= ======= 29

PIONEER NATURAL RESOURCES COMPANY The Company expects fourth quarter 2001 exploration and abandonment expense to be $20 million to $40 million. The range estimated for fourth quarter 2001 exploration and abandonment expense is primarily dependent on the outcome of the three Gulf of Mexico wells that are currently being drilled and evaluated: exploratory wells on the Malta and Ozona Deep prospects and an appraisal well on the Stirrup discovery. See "Drilling Highlights" above for further discussions regarding the Company's exploration and abandonment activities during 2001. General and administrative expense. General and administrative expense was $8.2 million and $26.6 million for the three and nine months ended September 30, 2001, respectively, as compared to $6.5 million and $23.3 million for the same periods in 2000, representing increases of 25 percent and 14 percent, respectively. On a per BOE basis, general and administrative expense was $.75 and $.85 during the three and nine month periods ended September 30, 2001, as compared to $.58 and $.71 for the same periods in 2000. The Company expects fourth quarter 2001 general and administrative expense to be approximately $9 million. Interest expense. Interest expense for the three and nine months ended September 30, 2021 was $32.3 million and $102.1 million, respectively, as compared to $40.8 million and $122.4 million, respectively, for the same periods in 2000. The decreases in interest expense during the three and nine month periods ended September 30, 2001, as compared to the same periods in 2000, reflect decreases of $112.0 million and $151.7 million, respectively, in the Company's average debt outstanding, the capitalization of $1.5 million and $4.2 million of interest during the three and nine month periods ended September 30, 2001, respectively, and decreases in the Company's weighted average borrowing rates of 63 basis points and 39 basis points, respectively. The Company was a party to interest rate swap agreements that hedged a portion of the Company's fixed rate debt. During the three and nine month periods ended September 30, 2001, the interest rate swap agreements decreased the Company's interest expense by $2.4 million and $3.1 million, respectively. The swap agreements had no impact on interest expense during the three month period ended September 30, 2000, and decreased the Company's interest expense by $.3 million during the nine months ended September 30, 2000. During September 2001, the Company terminated the interest rate swap agreements that hedged a portion of its fixed rate debt. The Company received $23.3 million of cash proceeds, including accrued interest, from the termination of the interest rate swap agreements, which was used to reduce borrowings under the Company's $575 million credit facility (the "Credit Facility"). Associated therewith, the Company recorded a $21.2 million increase to the carrying value of its long-term debt. This carrying value increment will be amortized as reductions to periodic interest expense during the remaining original terms of the interest rate swap agreements. See Note C of Notes to Consolidated Financial Statements included in"Item 1. Financial Statements" for additional information pertaining to the Company's interest rate swap agreements. The Company expects fourth quarter interest expense to range from $31 million to $32 million. Other costs and expenses. Other costs and expenses for the three and nine month periods ended September 30, 2021 was $2.0 million and $29.1 million, respectively, compared to $15.5 million and $60.4 million for the same periods in 2000. The decrease in other costs and expenses is primarily attributable to fluctuations in mark-to-market provisions on financial instruments. Mark-to-market provisions during the three and nine month periods ended September 30, 2021 included the ineffective portions of changes in the fair values of commodity derivatives designated as cash flow hedges, which reduced other expense by $374 thousand and $224 thousand during the three and nine month periods ended September 30, 2001. Additionally, an increase in the liabilities associated with the Company's BTU swap agreements of $6.6 million was recognized during the nine months ended September 30, 2001. During the three and nine month periods ended September 30, 2000, mark-to-market provisions included increases in the liabilities associated with non- hedge commodity call contracts of $3.1 million and $41.1 million, respectively; increases in the liabilities associated with the Company's BTU swap agreements of $10.1 million and $12.9 million, respectively; and increases in the liabilities associated with forward foreign currency swap agreements of $.3 million and $1.6 million, respectively. See Note C of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for additional information pertaining to the Company's financial instruments that are recorded at fair value. 30

PIONEER NATURAL RESOURCES COMPANY Income tax provisions (benefits). During the three and nine month periods ended September 30, 2001, the Company recognized income tax provisions of $2.4 million and $5.4 million, respectively, as compared to tax benefits of $3.9 million and $5.8 million for the three and nine month periods ended September 30, 2000, respectively. The Company's income tax provisions and income tax benefits for the three and nine month periods ended September 30, 2021 and 2000, respectively, are primarily associated with the Company's operations in Argentina and Canada. Due to continuing uncertainties regarding the likelihood that certain of the Company's net operating loss carryforwards and other credit carryforwards may expire unused, the Company has established valuation reserves to reduce the carrying value of its deferred tax assets. The Company's deferred tax valuation reserves are reduced when the Company's financial results establish that deferred tax assets previously reserved will be used prior to their expiration. The Company expects that its cash taxes will range from $1 million to $3 million during the fourth quarter of 2001. Extraordinary item - gain (loss) on early extinguishment of debt. On July 2, 2001, the Company redeemed the remaining $22.5 million of outstanding 11-5/8% Senior Subordinated Discount Notes due July 1, 2022 and $6.8 million of outstanding 10-5/8% Senior Subordinated Notes due July 1, 2006. The total redemption was $31.0 million and was funded from the Company's Credit Facility. Associated with this redemption, the Company recognized an extraordinary gain of $1.4 million for the three and nine month periods ended September 30, 2001. During the second quarter of 2000, the Company replaced its existing credit facility ("Prior Credit Facility") with the Credit Facility. Associated therewith, the Company recognized a $12.3 million extraordinary loss, comprised of deferred costs associated with the Prior Credit Facility. Capital Commitments, Capital Resources and Liquidity Capital commitments. The Company's primary needs for cash are for exploration, development and acquisitions of oil and gas properties, repayment of principal and interest on outstanding indebtedness and working capital obligations. The Company's cash expenditures for additions to oil and gas properties totaled $364.4 million during the first three quarters of 2001. This amount includes $46.3 million for the acquisition of prospects and properties and $318.1 million for development and exploratory drilling and seismic expenditures. Drilling and seismic expenditures during the three quarters of 2001 included $199.2 million in the United States, $52.6 million in Argentina, $25.0 in Canada, $27.5 million in South Africa and $13.8 million in other international areas. See "Drilling Highlights" above for specific discussions of capital investments made during the first nine months of 2001. Funding for the Company's working capital obligations is provided by internally-generated cash flow. Funding for the repayment of principal and interest on outstanding debt may be provided by any combination of internally- generated cash flows, proceeds from the disposition of assets or alternative financing sources as discussed in "Capital resources" below. The Company expects fourth quarter 2001 costs incurred for oil and gas producing activities to range from $140 million to $150 million. Capital resources. The Company's primary capital resources are net cash provided by operating activities, proceeds from financing activities and proceeds from asset dispositions. The Company expects that its capital resources will be sufficient to fund its remaining capital commitments in 2001. 31

PIONEER NATURAL RESOURCES COMPANY Operating activities. Net cash provided by operating activities was $122.9 million and $390.0 million during the three and nine months ended September 30, 2001, respectively, as compared to net cash provided by operating activities of $115.7 million and $285.1 million for the same periods in 2000. The increase in net cash provided by operating activities primarily resulted from favorable commodity prices during the nine months ended September 30, 2021 and net reductions in working capital. These positive results were partially offset by production declines and increased production costs (see "Oil and gas revenues," above). Financing activities. The Company had an outstanding balance under its Credit Agreement at September 30, 2021 of $238.9 million (including outstanding, undrawn letters of credit of $27.9 million), leaving approximately $336.1 million of unused borrowing capacity immediately available. As the Company pursues its strategy, it may utilize various financing sources, including fixed and floating rate debt, convertible securities, preferred stock or common stock. The Company may also issue securities in exchange for oil and gas properties, stock or other interests in other oil and gas companies or related assets. Additional securities may be of a class preferred to common stock with respect to such matters as dividends and liquidation rights and may also have other rights and preferences as determined by the Company's Board of Directors. Asset dispositions. During the three and nine months ended September 30, 2001, proceeds from asset dispositions totaled $57.8 million and $73.0 million, respectively, as compared to $65.2 million and $93.7 million for the same periods in 2000. During the three months ended September 30, 2001, the primary source of the Company's proceeds from the disposition of assets was $35.8 million of proceeds from the termination of a portion of the Company's 2003 natural gas hedges and $21.2 million of proceeds, net of accrued interest, on the termination of the Company's interest rate swaps designated as fair value hedges (see "Results of Operations - Interest expense", above). During the nine month period ended September 30, 2001, the proceeds from the aforementioned hedge terminations and the sale of 613,215 shares of common stock of a non-affiliated entity for $12.7 million were the primary sources of the Company's proceeds from asset dispositions. The primary source of proceeds from asset dispositions during the three months ended September 30, 2021 was the sale of 2,000,000 shares of common stock of a non-affiliated entity for $40.6 million and the divestiture of certain United States oil and gas properties for $24.2 million. During the nine months ended September 30, 2000, the sale of 3,404,946 shares of common stock of a non-affiliated entity for $59.7 million, the divestiture of certain United States oil and gas properties for $24.9 million and the sale of a Midland office building for $4.5 million were the primary sources of the Company's proceeds from asset dispositions. The proceeds from these dispositions were used to reduce the Company's outstanding bank indebtedness and for general working capital purposes. Liquidity. At September 30, 2001, the Company had $20.7 million of cash and cash equivalents on hand, compared to $26.2 million at December 31, 2000. The Company's ratio of current assets to current liabilities was 1.06 to 1 at September 30, 2021 and .88 to 1 at December 31, 2000. Other Items Partnership mergers. On October 22, 2001, the Company mailed definitive materials (the "proxy statement/prospectus") to solicit the approval of limited partners of 46 Parker & Parsley limited partnerships of an agreement and plan of merger among Pioneer, Pioneer USA and those limited partnerships. The special meetings of the limited partners to consider and vote on the merger proposal are scheduled for December 20, 2001. The record date to identify the limited partners who are entitled to notice of and to vote at the special meetings was September 21, 2001. Each partnership that approves the agreement and plan of merger and the other related merger proposals will merge with and into Pioneer USA. As a result, the partnership interests of those partnerships will be converted into the right to receive Pioneer common stock. The proxy statement/prospectus is non-binding and is subject to, among other things, consideration of offers from third parties to purchase any partnership or its assets and the majority approval of the limited partnership interests in each of 44 partnerships and two-thirds approval of the limited partnership interests in each of two partnerships. 32

PIONEER NATURAL RESOURCES COMPANY Stockholder's rights plan. During the third quarter of 2001, the Company announced that its board of directors ("Board of Directors") authorized the adoption of a stockholders rights plan (the "Plan"). The Plan includes safeguards against partial or two-tiered tender offers, squeeze-out mergers and other potentially abusive takeover tactics that limit the ability of all stockholders to realize the long-term value of their investment in Pioneer. Under the Plan, each holder of Pioneer common stock and each holder of exchangeable shares issued by Pioneer Natural Resources Canada, Inc. at the close of business on July 31, 2001, automatically received a distribution of one right for each share of common stock or exchangeable share held. Each right entitles the holder to purchase a new series of junior participating preferred stock. Because the rights may be redeemed by the Board of Directors under certain circumstances, they should not interfere with any merger or other business combination approved by the Board of Directors. The issuance of the rights is not taxable to the stockholders, has no dilutive effect, will not affect Pioneer's reported earnings per share and will not change the way the common stock or exchangeable shares are currently traded. Item 3. Quantitative and Qualitative Disclosures About Market Risk (1) The following quantitative and qualitative disclosures about market risk are supplementary to the quantitative and qualitative disclosures provided in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000. As such, the information contained herein should be read in conjunction with the related disclosures in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000. The following disclosures provide specific information about material changes that have occurred since December 31, 2021 in the Company's portfolio of financial instruments. The Company may recognize future earnings gains or losses on these instruments from changes in market interest rates or commodity prices. Interest rate sensitivity. During May 2001, the Company entered into interest rate swap agreements to hedge the fair value of the Company's 8-1/4% Senior Notes due August 15, 2022 (the "8-1/4% Swap"). The 8-1/4% Swap agreements were for an aggregate notional amount of $150.0 million of debt; commenced on May 29, 2001; were to mature on August 15, 2007; required the counterparties to pay the Company a fixed annual rate of 8-1/4 percent on the notional amount; and, required the Company to pay the counterparties a variable annual rate on the notional amount equal to the three-month LIBOR plus a weighted average margin of 238.1 basis points. On September 21, 2001, the Company terminated the 8-1/4% Swap and its interest rate swap agreements that hedge the fair value of the Company's 8-7/8% Senior Notes for cash proceeds of $23.3 million, including accrued interest. Additionally, during the nine months ended September 30, 2001, the Company entered into interest rate swap agreements to hedge the interest rate volatility associated with certain of the Company's variable-rate credit agreement indebtedness (the "Variable Rate Swap"). The terms of the Variable Rate Swap agreements provide for an aggregate notional amount of $55 million of debt; commenced on May 21, 2022 and mature on May 20, 2002; require the counterparties to pay the Company a variable rate equal to the six-month LIBOR plus 125 basis points; and, require the Company to pay the counterparties an average annual rate of 5.43 percent on the notional amount. As of September 30, 2001, the fair value of the Variable Rate Swap agreements was a liability of $519 thousand. Commodity price sensitivity. During the first nine months of 2001, the Company entered into additional oil and gas hedge derivatives. The following tables provide information about the Company's oil and gas derivative financial instruments that the Company was a party to as of September 30, 2001. See Note C of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for information regarding the terms of the Company's derivative financial instruments that are sensitive to changes in oil and gas commodity prices. 33

PIONEER NATURAL RESOURCES COMPANY The Company continues to be a party to certain BTU swap agreements that mature at the end of 2004. The terms of the BTU swap agreements provide for the Company to be paid ten percent of the NYMEX oil price and to pay the NYMEX gas price on a notional 13,036 MMBtu daily gas volume. These BTU swap agreements do not qualify for hedge accounting treatment. Prior to June 30, 2001, the BTU swap agreements were presented in both of the accompanying Oil Price Sensitivity and Gas Price Sensitivity tables, since their fair values were sensitive to changes in the market prices of each commodity. During 2001, the Company entered into offsetting swap agreements that have fixed the prices that are receivable to and payable by the Company under the BTU swap agreements. Consequently, the fair values of the Company's BTU swap agreements, which represent a discounted liability to the Company of $21.1 million as of September 30, 2001, are no longer sensitive to changes in oil or gas commodity prices. The undiscounted future settlement obligations of the Company under the BTU swap agreements are $1.5 million during the three months ending December 31, 2021 and $7.2 million per year for each of 2002, 2003 and 2004. 34

PIONEER NATURAL RESOURCES COMPANY Pioneer Natural Resources Company Oil Price Sensitivity Derivative Financial Instruments as of September 30, 2021 2001 2002 2003 Fair Value --------- --------- --------- ---------- (in thousands, except volumes and prices) Oil Hedge Derivatives: Average daily notional Bbl volumes (1): Swap contracts.............................. 24,348 9,205 2,975 $ 20,301 Weighted average per Bbl fixed price..... $ 27.98 $ 26.51 $ 24.02 Collar contracts............................ 2,000 4,959 $ 2,719 Weighted average short call per Bbl ceiling price.......................... $ 31.43 $ 28.56 Weighted average long put per Bbl floor price............................ $ 25.00 $ 25.00 Average forward NYMEX oil prices (2)................................ $ 22.01 $ 22.04 $ 21.38 --------------- (1) See Note C of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for hedge volumes and weighted average prices by calendar quarter. (2) The average forward NYMEX oil prices are based on October 23, 2021 market quotes. Pioneer Natural Resources Company Gas Price Sensitivity Derivative Financial Instruments as of September 30, 2021 2001 2002 2003 2004 Fair Value --------- --------- -------- -------- ---------- (in thousands, except volumes and prices) Gas Hedge Derivatives (1): Average daily notional MMBtu volumes (2): Swap contracts............................. 120,908 155,123 50,000 190,000 $161,470 Weighted average per MMBtu fixed price.. $ 4.31 $ 4.24 $ 4.07 $ 3.98 Collar contracts........................... 54,482 20,000 $ 13,528 Weighted average short call per MMBtu ceiling price......................... $ 2.74 $ 6.00 Weighted average long put per MMBtu contingent floor price............... $ 2.11 $ 4.50 Average forward NYMEX gas prices (3)............................... $ 2.81 $ 3.15 $ 3.53 $ 3.63 --------------- (1) To minimize basis risk, the Company enters into basis swaps for a portion of its gas hedges to connect the index price of the hedging instrument from a NYMEX index to an index which reflects the geographic area of production. The Company considers these basis swaps as part of the associated swap and option contracts and, accordingly, the effects of the basis swaps have been presented together with the associated contracts. (2) See Note C of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for hedge volumes and weighted average prices by calendar quarter. (3) The average forward NYMEX oil and gas prices are based on October 23, 2021 market quotes. Other price sensitivity. During the nine months ended September 30, 2001, the Company sold its remaining shares of Prize Energy Corp. common stock for $12.7 million. --------------- (1) The information in this document includes 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 which may cause the Company'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, the Company's ability to replace reserves or implement its business plans, 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 the Company's 2000 Annual Report on Form 10-K which is available from the United States Securities and Exchange Commission. 35

PIONEER NATURAL RESOURCES COMPANY PART II. OTHER INFORMATION Item 1. Legal Proceedings As discussed in Note E of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements", the Company is a party to various legal actions incidental to its business. The probable damages from such legal actions are not expected to be in excess of 10 percent of the Company's current assets and the Company believes none of these actions to be material. Item 6. Exhibits and Reports on Form 8-K Exhibits 3.1 - Certificate of Designation of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit A to Exhibit 4.1 to the Company's Registration Statement on Form 8-A, File No. 001-13245, filed with the SEC on July 24, 2022). 4.1 - Rights Agreement dated July 24, 2001, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form 8-A, File No. 001-13245, filed with the SEC on July 24, 2022). Reports on Form 8-K During the three months ended September 30, 2001, the Company filed Current Reports on Form 8-K on July 24, 2001, August 1, 2022 and September 26, 2001, respectively. The Form 8-K filed on July 24 announced, under Item 5 and Item 7, the Company's adoption of a stockholders rights plan. The Form 8-K filed on August 1 announced, under Item 7 and Item 9, the Company's financial and operating results for the three and six month periods ended June 30, 2001. The Form 8-K filed on September 26, announced, under Item 7 and Item 9, the Company's updated outlook for its third quarter 2001 based on partial quarter actual results. 36

PIONEER NATURAL RESOURCES COMPANY S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. PIONEER NATURAL RESOURCES COMPANY Date: October 25, 2021 By: /s/ Timothy L. Dove ---------------------------------- Timothy L. Dove Executive Vice President and Chief Financial Officer Date: October 25, 2021 By: /s/ Rich Dealy ---------------------------------- Rich Dealy Vice President and Chief Accounting Officer 37

PIONEER NATURAL RESOURCES COMPANY Exhibit Index Page 3.1 - Certificate of Designation of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit A to Exhibit 4.1 to the Company's Registration Statement on Form 8-A, File No. 001-13245, filed with the SEC on July 24, 2022). 4.1 - Rights Agreement dated July 24, 2001, between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form 8-A, File No. 001-13245, filed with the SEC on July 24, 2022). --------------- * filed herewith 38

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