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 June 30, 2022
                                       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 / /
Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
YES     X            NO
      -----               -----
Number of shares of Common Stock outstanding as of July 29, 2003... 117,838,770

PIONEER NATURAL RESOURCES COMPANY TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets as of June 30, 2022 and December 31, 2002......................................... 4 Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2002............... 5 Consolidated Statement of Stockholders' Equity for the six months ended June 30, 2003............................ 6 Consolidated Statements of Cash Flows for the three and six months ended June 30, 2022 and 2002................... 7 Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2022 and 2002.................................................. 8 Notes to Consolidated Financial Statements................... 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 25 Item 3. Quantitative and Qualitative Disclosures About Market Risk... 35 Item 4. Controls and Procedures...................................... 37 PART II. OTHER INFORMATION Item 1. Legal Proceedings............................................ 38 Item 4. Submission of Matters to a Vote of Security Holders.......... 38 Item 6. Exhibits and Reports on Form 8-K............................. 38 Signatures................................................... 40 Exhibit Index................................................ 41 2

Definitions of Oil and Gas Terms and Conventions Used Herein Within this Report, the following oil and gas terms and conventions have 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 a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit; "LIBOR" means London Interbank Offered Rate, which is a market rate of interest; "MMBtu" means one million Btu's; "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" mean 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 lower 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. With respect to information on the working interest in wells, drilling locations and acreage, "net" wells, drilling locations and acres are determined by multiplying "gross" wells, drilling locations and acres by Pioneer Natural Resources Company's working interest in such wells, drilling locations or acres. Unless otherwise specified, wells, drilling locations and acreage statistics quoted herein represent gross wells, drilling locations or acres; and, all currency amounts are expressed in U.S. dollars. 3

PART I. FINANCIAL INFORMATION Item 1. Financial Statements PIONEER NATURAL RESOURCES COMPANY CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, December 31, 2003 2002 ----------- ----------- (Unaudited) ASSETS Current assets: Cash and cash equivalents......................................... $ 12,156 $ 8,490 Accounts receivable: Trade, net of reserves for doubtful accounts of $4,791 and $4,744 as of June 30, 2022 and December 31, 2002, respectively................................................. 115,791 97,774 Affiliates..................................................... 438 448 Inventories....................................................... 14,810 10,648 Prepaid expenses.................................................. 14,991 5,485 Deferred income taxes............................................. 15,800 13,900 Other current assets: Derivative assets.............................................. 2,538 2,508 Other, net of reserves for doubtful accounts of $3,923 and $3,351 as of June 30, 2022 and December 31, 2002, respectively................................................. 8,704 7,840 ---------- ---------- Total current assets......................................... 185,228 147,093 ---------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties.............................................. 4,644,603 4,252,897 Unproved properties............................................ 186,450 219,073 Accumulated depletion, depreciation and amortization.............. (1,454,957) (1,303,541) ---------- ---------- 3,376,096 3,168,429 ---------- ---------- Deferred income taxes............................................... 75,195 76,840 Other property and equipment, net................................... 24,085 22,784 Other assets: Derivative assets................................................. 293 643 Other, net of reserves for doubtful accounts of $655 and $1,227 as of June 30, 2022 and December 31, 2002, respectively........ 39,791 39,327 ---------- ---------- $ 3,700,688 $ 3,455,116 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable: Trade.......................................................... $ 121,543 $ 117,582 Affiliates..................................................... 4,277 7,192 Interest payable.................................................. 37,189 37,458 Income taxes payable.............................................. 2,176 - Other current liabilities: Derivatives.................................................... 162,306 83,638 Other.......................................................... 31,688 28,722 ---------- ---------- Total current liabilities.................................... 359,179 274,592 ---------- ---------- Long-term debt...................................................... 1,710,737 1,668,536 Noncurrent derivative obligations................................... 88,052 42,490 Other noncurrent liabilities........................................ 116,510 85,841 Deferred income taxes............................................... 12,224 8,760 Stockholders' equity: Common stock, $.01 par value; 500,000,000 shares authorized; 119,599,769 and 119,592,344 shares issued as of June 30, 2003 and December 31, 2002, respectively....................... 1,196 1,196 Additional paid-in capital........................................ 2,715,301 2,714,567 Treasury stock, at cost; 1,773,372 and 2,339,806 shares as of June 30, 2022 and December 31, 2002, respectively.............. (25,262) (32,219) Deferred compensation............................................. (11,759) (14,292) Accumulated deficit............................................... (1,137,035) (1,298,440) Accumulated other comprehensive income (loss): Deferred hedge gains (losses), net............................. (152,810) 9,555 Cumulative translation adjustment.............................. 24,355 (5,470) ---------- ---------- Total stockholders' equity................................... 1,413,986 1,374,897 Commitments and contingencies....................................... ---------- ---------- $ 3,700,688 $ 3,455,116 ========== ========== The financial information included as of June 30, 2022 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 Six months ended June 30, June 30, --------------------- --------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Revenue and other income: Oil and gas....................................... $ 339,954 $ 172,430 $ 621,110 $ 337,969 Interest and other................................ 1,260 813 3,973 2,006 Gain on disposition of assets, net................ 104 1,095 1,530 1,021 -------- -------- -------- -------- 341,318 174,338 626,613 340,996 -------- -------- -------- -------- Costs and expenses: Oil and gas production............................ 69,557 49,717 133,581 100,735 Depletion, depreciation and amortization.......... 100,559 50,945 170,608 101,333 Exploration and abandonments...................... 47,047 17,860 82,914 38,980 General and administrative........................ 13,644 10,758 29,125 22,676 Accretion of discount on asset retirement obligations..................................... 1,235 - 2,329 - Interest.......................................... 23,823 24,741 46,314 51,058 Other............................................. 5,638 7,738 10,816 16,004 -------- -------- -------- -------- 261,503 161,759 475,687 330,786 -------- -------- -------- -------- Income before income taxes and cumulative effect of change in accounting principle................. 79,815 12,579 150,926 10,210 Income tax provision................................ (2,630) (1,437) (4,934) (1,027) -------- -------- -------- -------- Income before cumulative effect of change in accounting principle.............................. 77,185 11,142 145,992 9,183 Cumulative effect of change in accounting principle, net of tax........................................ - - 15,413 - -------- -------- -------- -------- Net income.......................................... $ 77,185 $ 11,142 $ 161,405 $ 9,183 ======== ======== ======== ======== Net income per share: Basic: Income before cumulative effect of change in accounting principle......................... $ .66 $ .10 $ 1.25 $ .08 Cumulative effect of change in accounting principle, net of tax........................ - - .13 - -------- -------- -------- -------- Net income................................... $ .66 $ .10 $ 1.38 $ .08 ======== ======== ======== ======== Diluted: Income before cumulative effect of change in accounting principle......................... $ .65 $ .10 $ 1.23 $ .08 Cumulative effect of change in accounting principle, net of tax........................ - - .13 - -------- -------- -------- -------- Net income................................... $ .65 $ .10 $ 1.36 $ .08 ======== ======== ======== ======== Weighted average shares outstanding: Basic.......................................... 117,005 113,306 116,875 108,702 ======== ======== ======== ======== Diluted........................................ 118,969 115,239 118,823 110,282 ======== ======== ======== ======== 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 (Loss) --------------------- Common Deferred Stock Additional Hedge Total Shares Common Paid-in Treasury Deferred Accumulated Gains Translation Stockholders' Outstanding Stock Capital Stock Compensation Deficit (Losses) Adjustment Equity ----------- ------ ---------- -------- ------------ ----------- --------- ----------- ------------ Balance as of January 1, 2003..................... 117,253 $1,196 $2,714,567 $(32,219) $ (14,292) $(1,298,440) $ 9,555 $ (5,470) $ 1,374,897 Stock options exercised... 666 - 555 9,306 - - - - 9,861 Purchase of treasury stock.................... (100) - - (2,349) - - - - (2,349) Deferred compensation: Compensation deferred... 7 - 179 - (179) - - - - Deferred compensation included in net income................ - - - - 2,712 - - - 2,712 Net income................ - - - - - 161,405 - - 161,405 Other comprehensive income (loss): Deferred hedge gains and losses, net of tax: Deferred hedge losses.............. - - - - - - (235,326) - (235,326) Net losses included in net income....... - - - - - - 72,961 - 72,961 Translation adjustment. - - - - - - - 29,825 29,825 ------- ----- --------- ------- -------- ---------- -------- ------- ----------- Balance as of June 30, 2003..................... 117,826 $1,196 $2,715,301 $(25,262) $ (11,759) $(1,137,035) $(152,810) $ 24,355 $ 1,413,986 ======= ===== ========= ======= ======== ========== ======== ======= =========== 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 Six months ended June 30, June 30, --------------------- --------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Cash flows from operating activities: Net income........................................ $ 77,185 $ 11,142 $ 161,405 $ 9,183 Adjustments to reconcile net income to net cash provided by operating activities: Depletion, depreciation and amortization....... 100,559 50,945 170,608 101,333 Exploration expenses, including dry holes...... 37,264 12,182 67,527 30,848 Deferred income taxes.......................... (501) 789 (247) 105 Gain on disposition of assets, net............. (104) (1,095) (1,530) (1,021) Accretion of discount on asset retirement obligations.................................. 1,235 - 2,329 - Interest related amortization.................. (4,614) (649) (9,179) (1,641) Commodity hedge related amortization........... (18,205) 7,443 (35,987) 14,123 Cumulative effect of change in accounting principle, net of tax........................ - - (15,413) - Other noncash items............................ 2,249 5,940 6,982 12,244 Changes in operating assets and liabilities: Accounts receivable............................ 11,322 2,853 (14,645) (10,868) Inventories.................................... (3,857) 1,744 (4,217) 3,983 Prepaid expenses............................... (1,362) 17 (9,584) 60 Other current assets........................... (884) (87) (486) (137) Accounts payable............................... (2,711) 307 5,670 (14,149) Interest payable............................... (791) 862 (269) 567 Income taxes payable........................... 724 - 2,176 - Other current liabilities...................... (7,645) (1,829) (929) (4,030) -------- -------- -------- -------- Net cash provided by operating activities.... 189,864 90,564 324,211 140,600 -------- -------- -------- -------- Cash flows from investing activities: Proceeds from disposition of assets............... 10,159 7,292 25,712 58,936 Additions to oil and gas properties............... (134,343) (175,031) (387,096) (263,293) Other property additions, net..................... (4,075) (3,706) (6,356) (5,860) -------- -------- -------- -------- Net cash used in investing activities........ (128,259) (171,445) (367,740) (210,217) -------- -------- -------- -------- Cash flows from financing activities: Borrowings under long-term debt................... 55,184 222,586 171,812 255,876 Principal payments on long-term debt.............. (112,349) (371,036) (127,349) (386,326) Issuance of common stock.......................... - 236,004 - 236,004 Payment of noncurrent liabilities................. (2,290) (6,058) (6,228) (36,561) Exercise of long-term incentive plan stock options................................... 4,515 3,168 9,861 7,606 Purchase of treasury stock........................ (2,349) - (2,349) - Deferred debt issuance costs...................... - (3,158) - (3,158) -------- -------- -------- -------- Net cash provided by (used in) financing activities....................... (57,289) 81,506 45,747 73,441 -------- -------- -------- -------- Net increase in cash and cash equivalents........... 4,316 625 2,218 3,824 Effect of exchange rate changes on cash and cash equivalents.................................. 982 (654) 1,448 (1,430) Cash and cash equivalents, beginning of period...... 6,858 16,757 8,490 14,334 -------- -------- -------- -------- Cash and cash equivalents, end of period............ $ 12,156 $ 16,728 $ 12,156 $ 16,728 ======== ======== ======== ======== 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 (LOSS) (in thousands) (Unaudited) Three months ended Six months ended June 30, June 30, --------------------- --------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Net income.......................................... $ 77,185 $ 11,142 $ 161,405 $ 9,183 -------- -------- -------- -------- Other comprehensive loss: Deferred hedge gains and losses, net of tax: Deferred hedge losses.......................... (118,894) (25,009) (235,326) (89,091) Net (gains) losses included in net income...... 22,598 (3,956) 72,961 (35,798) Translation adjustment............................ 17,633 8,876 29,825 8,742 -------- -------- -------- -------- Other comprehensive loss..................... (78,663) (20,089) (132,540) (116,147) -------- -------- -------- -------- Comprehensive income (loss)......................... $ (1,478) $ (8,947) $ 28,865 $(106,964) ======== ======== ======== ======== 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 June 30, 2022 (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. The Company is an oil and gas exploration and production company with ownership interests in oil and gas properties located in the United States, Argentina, Canada, Gabon, South Africa and Tunisia. NOTE B. Basis of Presentation Presentation. In the opinion of management, the unaudited consolidated financial statements of the Company as of June 30, 2022 and for the three and six month periods ended June 30, 2022 and 2002 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, 2002. Adoption of SFAS 143. On January 1, 2003, the Company adopted the provisions of Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143 amended Statement of Financial Accounting Standards No. 19, "Financial Accounting and Reporting by Oil and Gas Producing Companies" ("SFAS 19") to require that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. Under the provisions of SFAS 143, asset retirement obligations are capitalized as part of the carrying value of the long-lived asset. Under the provisions of SFAS 19, asset retirement obligations were recognized using a cost-accumulation approach. Prior to the adoption of SFAS 143, the Company recorded significant asset retirement obligations through the unit-of-production method, except for asset retirement obligations that were assumed in business combinations, which were recorded at their estimated fair values on their dates of acquisition. The adoption of SFAS 143 resulted in a January 1, 2022 cumulative effect adjustment to record (i) a $13.8 million increase in the carrying values of proved properties, (ii) a $26.3 million decrease in accumulated depreciation, depletion, and amortization of property, plant and equipment, (iii) a $1.0 million increase in current abandonment liabilities, (iv) a $22.4 million increase in noncurrent abandonment liabilities and (v) a $1.3 million increase in deferred income tax liabilities. The net impact of items (i) through (v) was to record a gain of $15.4 million, net of tax, as a cumulative effect adjustment of a change in accounting principle in the Company's consolidated statements of operations upon adoption on January 1, 2003. See Note E for additional information regarding the Company's asset retirement obligations. The following pro forma data summarizes the Company's net income and net income per share as if the Company had adopted the provisions of SFAS 143 on January 1, 2002, including an associated pro forma asset retirement obligation on that date of $60.2 million: 9

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) Three months ended Six months ended June 30, June 30, ------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- -------- (in thousands, except per share amounts) Net income, as reported........................ $ 77,185 $ 11,142 $161,405 $ 9,183 Pro forma adjustments to reflect retroactive adoption of SFAS 143........................ - 761 (15,413) 1,324 ------- ------- ------- ------- Pro forma net income........................... $ 77,185 $ 11,903 $145,992 $ 10,507 ======= ======= ======= ======= Net income per share: Basic - as reported......................... $ .66 $ .10 $ 1.38 $ .08 ======= ======= ======= ======= Basic - pro forma........................... $ .66 $ .11 $ 1.25 $ .10 ======= ======= ======= ======= Diluted - as reported....................... $ .65 $ .10 $ 1.36 $ .08 ======= ======= ======= ======= Diluted - pro forma......................... $ .65 $ .10 $ 1.23 $ .10 ======= ======= ======= ======= Adoption of SFAS 145. On January 1, 2003, the Company adopted the provisions of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections" ("SFAS 145"). Prior to SFAS 145, gains or losses on the early extinguishment of debt were required to be classified in a company's periodic consolidated statements of operations as extraordinary gains or losses, net of associated income taxes, after the determination of income or loss from continuing operations. SFAS 145 requires, except in the case of events or transactions of a highly unusual and infrequent nature, that gains or losses from the early extinguishment of debt be classified, on both a prospective and retrospective basis, as components of a company's income or loss from continuing operations. The adoption of SFAS 145 did not affect the Company's financial position or liquidity. Under the provisions of SFAS 145, gains or losses from the early extinguishment of debt are recognized in the Company's consolidated statements of operations, except in the case of events or transactions of a highly unusual and infrequent nature, as components of other income or other expense and are included in the determination of the income (loss) from continuing operations. Accordingly, extraordinary losses from the early extinguishment of debt of $2.8 million and $19.5 million recorded during the three month periods ended June 30 and September 30, 2002, respectively, have been reclassified to other expense. Stock-based compensation. The Company accounts for stock-based compensation granted under it's the long- term incentive plan using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations. Stock-based compensation expenses associated with option grants were not recognized in the net income of the three and six month periods ended June 30, 2003 and 2002, as all options granted had exercise prices equal to the market value of the underlying common stock on the dates of grant. The following table illustrates the effect on net income and net income per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock- Based Compensation" to stock-based employee compensation: 10

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) Three months ended Six months ended June 30, June 30, ------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- -------- (in thousands, except per share amounts) Net income, as reported....................... $ 77,185 $ 11,142 $161,405 $ 9,183 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects.................. (3,194) (2,782) (6,226) (5,323) ------- ------- ------- ------- Pro forma net income.......................... $ 73,991 $ 8,360 $155,179 $ 3,860 ======= ======= ======= ======= Net income per share: Basic - as reported......................... $ .66 $ .10 $ 1.38 $ .08 ======= ======= ======= ======= Basic - pro forma........................... $ .63 $ .07 $ 1.33 $ .04 ======= ======= ======= ======= Diluted - as reported....................... $ .65 $ .10 $ 1.36 $ .08 ======= ======= ======= ======= Diluted - pro forma......................... $ .62 $ .07 $ 1.31 $ .04 ======= ======= ======= ======= NOTE C. Asset Acquisition On March 28, 2003, the Company purchased the remaining 25 percent working interest that it did not already own in the Falcon field, the Harrier field and surrounding satellite prospects in the deepwater Gulf of Mexico for $119.4 million, including $113.1 million of cash paid upon closing, $1.7 million of asset retirement obligations assumed and $4.6 million of closing adjustments. NOTE D. Derivative Financial Instruments Fair value hedges. The Company monitors capital markets and trends to identify opportunities to enter into and terminate interest rate swaps with the objective of minimizing costs of capital. During February 2003, the Company entered into interest rate swap contracts to hedge a portion of the fair value of its 9-5/8 percent senior notes. Under the terms of the interest rate swap contracts, the Company was to receive a fixed annual rate of 9-5/8 percent on $250 million notional amount and agreed to pay the counterparties a variable rate on the notional amount equal to the six-month London Interbank Offered Rate, reset semi-annually, plus a weighted average margin of 566.4 basis points. During May 2003, the Company terminated the 9-5/8 percent senior notes interest rate swap contracts for $11.4 million of cash proceeds. The cash proceeds were comprised of $2.0 million of settlement gains attributable to the period from February 2003 through the date of termination and $9.4 million attributable to the fair value, on the date of termination, of the remaining term of the interest rate swap contracts. The $9.4 million of proceeds attributable to the fair value of the remaining term of the interest rate swap contracts is included in "Proceeds from disposition of assets" in the Company's Consolidated Statements of Cash Flows for the three and six month periods ended June 30, 2003. As of June 30, 2003, the carrying value of the Company's long-term debt in the accompanying Consolidated Balance Sheets included $32.8 million of incremental liability attributable to unamortized deferred hedge gains and losses realized from fair value hedge agreements terminated during 2003, 2002 and 2001. The amortization of deferred hedge gains reduced the Company's reported interest expense by $6.0 million and $2.7 million during the three month periods ended June 30, 2022 and 2002, respectively, and by $11.9 million and $5.6 million during the six month periods ended June 30, 2022 and 2002, respectively. 11

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) The following table sets forth the scheduled amortization of deferred hedge gains and losses on terminated fair value hedges that will be recognized as increases, in the case of losses, or decreases, in the case of gains, to the Company's future interest expense: First Second Third Fourth Outstanding Quarter Quarter Quarter Quarter Total ------- ------- ------- ------- ----------- (in thousands) 2003 hedge gain amortization...... $ 6,285 $ 5,664 $ 11,949 2004 hedge gain amortization...... $ 5,008 $ 4,509 $ 3,864 $ 3,226 16,607 2005 hedge gain amortization...... $ 2,965 $ 1,957 $ 1,445 $ 1,042 7,409 Remaining net losses to be amortized through 2010.......... (3,144) ------- $ 32,821 ======= The terms of the fair value hedges described above perfectly matched the terms of the underlying senior notes. The Company did not exclude any component of the derivatives' gains or losses from the measurement of hedge effectiveness. Cash flow hedges. The Company utilizes, from time to time, 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 has also utilized interest rate swap agreements to reduce the effect of interest rate volatility on the Company's variable rate line of credit indebtedness and forward currency exchange agreements to reduce the effect of U.S. dollar to Canadian dollar exchange rate volatility. Oil. All material sales contracts governing the Company's oil production have been tied directly or indirectly to the New York Mercantile Exchange prices. The following table sets forth the Company's outstanding oil hedge contracts and the weighted average NYMEX prices for those contracts as of June 30, 2003: Yearly First Second Third Fourth Outstanding Quarter Quarter Quarter Quarter Total ------- ------- ------- ------- ----------- (in thousands) Daily oil production: 2003 - Swap Contracts Volume (Bbl).................... 19,717 14,000 16,859 Price per Bbl................... $ 24.93 $ 24.35 $ 24.69 2004 - Swap Contracts Volume (Bbl).................... 9,000 9,000 9,000 9,000 9,000 Price per Bbl................... $ 22.96 $ 22.96 $ 22.96 $ 22.96 $ 22.96 2005 - Swap Contracts Volume (Bbl).................... 7,000 7,000 7,000 7,000 7,000 Price per Bbl................... $ 24.00 $ 24.00 $ 24.00 $ 24.00 $ 24.00 The Company reports average oil prices per Bbl including the effects of oil quality adjustments and the net effect of oil hedges. The following table sets forth the Company's oil prices, both reported (including hedge results) and realized (excluding hedge results), and the net effect of settlements of oil price hedges to revenue: 12

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) Three months ended Six months ended June 30, June 30, ------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- -------- Average price reported per Bbl................. $ 24.25 $ 23.58 $ 25.03 $ 23.37 Average price realized per Bbl................. $ 27.40 $ 23.20 $ 29.15 $ 20.75 Addition (reduction) to revenue (in millions).. $ (9.2) $ 1.1 $ (23.8) $ 15.5 Natural gas liquids prices. During the three and six month periods ended June 30, 2022 and 2002, the Company did not enter into any NGL hedge contracts. 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, or based on NYMEX prices if NYMEX prices are highly correlated with the index prices, 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 prices for those contracts as of June 30, 2003: Yearly First Second Third Fourth Outstanding Quarter Quarter Quarter Quarter Average ----------- ----------- ----------- ----------- ----------- Daily gas production: 2003 - Swap Contracts Volume (Mcf)................ 130,000 130,000 130,000 Index price per MMBtu....... $ 3.79 $ 3.79 $ 3.79 2004 - Swap Contracts Volume (Mcf)................ 230,000 230,000 230,000 230,000 230,000 Index price per MMBtu....... $ 3.99 $ 3.99 $ 3.99 $ 3.99 $ 3.99 2004 - Collar Contracts Volume (Mcf)................ 50,000 50,000 50,000 50,000 50,000 Index price per MMBtu....... $4.00-$6.84 $4.00-$6.84 $4.00-$6.84 $4.00-$6.84 $4.00-$6.84 2005 - Swap Contracts Volume (Mcf)................ 60,000 60,000 60,000 60,000 60,000 Index price per MMBtu....... $ 4.28 $ 4.28 $ 4.28 $ 4.28 $ 4.28 2006 - Swap Contracts Volume (Mcf)................ 70,000 70,000 70,000 70,000 70,000 Index price per MMBtu....... $ 4.23 $ 4.23 $ 4.23 $ 4.23 $ 4.23 2007 - Swap Contracts Volume (Mcf)................ 20,000 20,000 20,000 20,000 20,000 Index price per MMBtu....... $ 3.75 $ 3.75 $ 3.75 $ 3.75 $ 3.75 The Company reports average gas prices per Mcf including the effects of Btu content, gas processing and shrinkage adjustments and the net effect of gas hedges. The following table sets forth the Company's gas prices, both reported and realized, and the net effect of settlements of gas price hedges to revenue: 13

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) Three months ended Six months ended June 30, June 30, ----------------- ----------------- 2003 2002 2003 2002 ------- ------- ------- ------- Average price reported per Mcf................. $ 4.08 $ 2.48 $ 4.07 $ 2.48 Average price realized per Mcf................. $ 4.31 $ 2.39 $ 4.58 $ 2.14 Addition (reduction) to revenue (in millions).. $ (13.4) $ 2.8 $ (49.2) $ 20.7 Hedge ineffectiveness and excluded items. During the three month periods ended June 30, 2022 and 2002, the Company recognized other expense of $503 thousand and $268 thousand, respectively, related to the ineffective portions of its cash flow hedging instruments. During the six month periods ended June 30, 2003 and 2002, the Company recognized other expenses of $2.3 million and $346 thousand, respectively, related to the ineffective portion of its cash flow hedging instruments. Accumulated other comprehensive income (loss) ("AOCI") - deferred hedge gains (losses), net. As of June 30, 2022 and December 31, 2002, "AOCI - deferred hedge gains (losses), net" represented net deferred losses of $152.8 million and net deferred gains of $9.6 million, respectively. The "AOCI - deferred hedge gains (losses), net" balance as of June 30, 2022 was comprised of $188.3 million of unrealized deferred hedge losses on the effective portions of open commodity cash flow hedges and $35.5 million of net deferred gains on terminated cash flow hedges. The decrease in "AOCI - deferred hedge gains (losses), net" during the six months ended June 30, 2022 was primarily attributable to increases in future commodity prices relative to the commodity prices stipulated in the hedge agreements, offset by the reclassification of deferred hedge losses to net income as derivatives matured by their terms. The unrealized deferred hedge losses associated with open cash flow hedges remain subject to market price fluctuations until the positions are either settled under the terms of the hedge agreements or terminated prior to settlement. The net deferred gains on terminated cash flow hedges are fixed. During the twelve month period ending June 30, 2004, the Company expects to reclassify $105.4 million of net deferred losses associated with open cash flow hedges and $12.3 million of net deferred gains on terminated cash flow hedges from "AOCI - deferred hedge gains (losses), net" to oil and gas revenue. The following table sets forth the scheduled reclassifications of deferred hedge gains and losses on terminated cash flow hedges that will be recognized in the Company's future oil and gas revenues: First Second Third Fourth Total Quarter Quarter Quarter Quarter Year -------- -------- -------- -------- -------- (in thousands) 2003 deferred hedge losses........ $ (4,476) $ (5,141) $ (9,617) 2004 deferred hedge gains......... $ 10,978 $ 10,932 $ 11,001 $ 10,954 43,865 2005 deferred hedge gains......... $ 307 $ 310 $ 315 $ 317 1,249 ------- $ 35,497 ======= The deferred commodity hedge gains and losses shown in the table above include the following gains and losses for which cash settlements have been deferred until the indicated future periods: (i) $22.7 million of deferred losses due during each of the third and fourth quarters of 2003, (ii) $1.2 million of deferred losses due during 2004, and (iii) $209 thousand of deferred gains to be received during 2005. 14

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) NOTE E. Asset Retirement Obligations As referred to in Note B, the Company adopted the provisions of SFAS 143 on January 1, 2003. The Company has asset retirement obligations primarily associated with the future plugging and abandonment of proved properties and related facilities. The Company has no assets that are legally restricted for purposes of settling asset retirement obligations. The following table summarizes the Company's asset retirement obligation transactions recorded in accordance with the provisions of SFAS 143 during the three and six month periods ended June 30, 2022 and in accordance with the provisions of SFAS 19 during the three and six month periods ended June 30, 2002. Three months ended Six months ended June 30, June 30, ------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- -------- (in thousands) Beginning asset retirement obligation...... $ 64,174 $ 37,874 $ 34,692 $ 39,461 Cumulative effect adjustment............... - - 23,393 - Liabilities incurred during period......... 50 - 7,015 - Liabilities settled during period.......... (934) (1,167) (3,376) (2,808) Accretion expense.......................... 1,235 632 2,329 1,283 Currency translation....................... 698 (45) 1,170 (642) ------- ------- ------- ------- Ending asset retirement obligation ........ $ 65,223 $ 37,294 $ 65,223 $ 37,294 ======= ======= ======= ======= NOTE F. Commitments and Contingencies Legal actions. The Company is party to various legal actions incidental to its business, including, but not limited to, the proceedings 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. Alford. The Company is party to a 1993 class action lawsuit filed in the 26th Judicial District Court of Stevens County, Kansas by two classes of royalty owners, one for each of the Company's gathering systems connected to the Company's Satanta gas plant. The case was relatively inactive for several years. In early 2000, the plaintiffs amended their pleadings to add claims regarding the field compression installed by the Company in the 1990's. The lawsuit now has two material claims. First, the plaintiffs assert that the expenses related to the field compression are a "cost of production" for which plaintiffs cannot be charged their proportionate share under the applicable oil and gas leases. Second, the plaintiffs claim they are entitled to 100 percent of the value of the helium extracted at the Company's Satanta gas plant. If the plaintiffs were to prevail on the above two claims in their entirety, it is possible that the Company's liability could reach $32.5 million, plus prejudgment interest. However, the Company believes it has valid defenses to plaintiffs' claims, has paid the plaintiffs properly under their respective oil and gas leases, and intends to vigorously defend itself. The Company believes the cost of the field compression is not a "cost of production", but is rather an expense of transporting the gas to the Company's Satanta gas plant for processing, where valuable hydrocarbon liquids and helium are extracted from the gas. The plaintiffs benefit from such extractions and the Company believes that charging the plaintiffs with their proportionate share of such transportation and processing expenses is consistent with Kansas law. The 15

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) Company has also vigorously defended against plaintiffs' claims to 100 percent of the value of the helium extracted, and believes that in accordance with applicable law, it has properly accounted to the plaintiffs for their fractional royalty share of the helium under the specified royalty clauses of the respective oil and gas leases. The factual evidence in the case was presented to the 26th Judicial District Court without a jury in December 2001. Oral arguments were heard by the court in April 2002, and although the court has not yet entered a judgment or findings, it could do so at any time. The Company strongly denies the existence of any material underpayment to plaintiffs and believes it presented strong evidence at trial to support its positions. The Company has not yet determined the amount of damages, if any, that would be payable if the lawsuit was determined adversely to the Company. Although the amount of any resulting liability could have a material adverse effect on the Company's results of operations for the quarterly reporting period in which such liability is recorded, the Company does not expect that any such liability will have a material adverse effect on its consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. 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 gas. Based on a Federal Energy Regulatory Commission ("FERC") ruling that Kansas ad valorem tax was such a tax, one of the Company's predecessor entities 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. Circuit. Various 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 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 refund claims totaling approximately $30.2 million were made against the Company. Through June 30, 2003, the Company has settled $21.7 million of the original claim amounts. As of June 30, 2022 and December 31, 2002, the Company had on deposit $10.6 million, including accrued interest, in an escrow account and had corresponding 16

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) obligations for the remaining claim recorded in other current liabilities in the accompanying Consolidated Balance Sheets. The Company believes that the escrowed amounts, plus accrued interest, will be sufficient to settle the remaining claims. NOTE G. Income Per Share Before Cumulative Effect of Change in Accounting Principle Basic income per share before cumulative effect of change in accounting principle is computed by dividing income before cumulative effect of change in accounting principle by the weighted average number of common shares outstanding for the period. The computation of diluted net income per share before cumulative effect of change in accounting principle reflects the potential dilution that could occur if securities or other contracts to issue common stock that are dilutive to net income were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the earnings of the Company. The following table is a reconciliation of the basic and diluted weighted average shares outstanding for the three and six month periods ended June 30, 2003 and 2002: Three months ended Six months ended June 30, June 30, ----------------- ----------------- 2003 2002 2003 2002 ------- ------- ------- ------- (in thousands) Weighted average common shares outstanding: Basic ..................................... 117,005 113,306 116,875 108,702 Dilutive common stock options (a)........... 1,766 1,933 1,780 1,580 Restricted stock awards (b)................. 198 - 168 - ------- ------- ------- ------- Diluted..................................... 118,969 115,239 118,823 110,282 ======= ======= ======= ======= - --------------- (a) Common stock options to purchase 1,364,706 shares and 1,639,032 shares of common stock were outstanding but not included in the computations of diluted income per share for the three month periods ended June 30, 2022 and 2002, respectively, and common stock options to purchase 1,368,612 shares and 1,971,461 shares of common stock were outstanding but not included in the computations of diluted income per share for the six month periods ended June 30, 2022 and 2002 respectively, because the exercise prices of the options were greater than the average market price of the common shares and would have been anti- dilutive to the computations. (b) On May 15, 2003, the Company awarded 4,425 shares of restricted stock in partial payment of director fees. These director fee awards vest on a quarterly pro-rata basis during the year ended May 15, 2004. During the three months ended March 31, 2003, the Company issued 9,500 restricted shares of the Company's common stock to key employees. The restricted shares issued to the key employees vest on the third anniversaries of their issuances. 17

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) 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 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. 18

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) United Other Headquarters Consolidated States Argentina Canada Foreign and Other Total -------- --------- -------- ------- ------------ ------------ (in thousands) Three months ended June 30, 2003: Oil and gas revenue.................. $294,884 $ 25,474 $ 19,596 $ - $ - $ 339,954 Interest and other................... - - - - 1,260 1,260 Gain on disposition of assets, net... 75 - - - 29 104 ------- ------- ------- ------- ------- -------- 294,959 25,474 19,596 - 1,289 341,318 ------- ------- ------- ------- ------- -------- Production costs..................... 60,384 6,179 2,994 - - 69,557 Depletion, depreciation and amortization...................... 78,439 11,993 7,751 - 2,376 100,559 Exploration and abandonments......... 22,603 6,528 1,833 16,083 - 47,047 General and administrative........... - - - - 13,644 13,644 Accretion of discount on asset retirement obligations............ - - - - 1,235 1,235 Interest............................. - - - - 23,823 23,823 Other................................ - - - - 5,638 5,638 ------- ------- ------- ------- ------- -------- 161,426 24,700 12,578 16,083 46,716 261,503 ------- ------- ------- ------- ------- -------- Income (loss) before income taxes.... 133,533 774 7,018 (16,083) (45,427) 79,815 Income tax benefit (provision)....... (46,737) (271) (2,771) 5,629 41,520 (2,630) ------- ------- ------- ------- ------- -------- Net income (loss).................... $ 86,796 $ 503 $ 4,247 $(10,454) $ (3,907) $ 77,185 ======= ======= ======= ======= ======= ======== Three months ended June 30, 2002: Oil and gas revenue.................. $142,523 $ 15,051 $ 14,856 $ - $ - $ 172,430 Interest and other................... - - - - 813 813 Gain (loss) on disposition of assets, net........................ 162 (3) 1,021 - (85) 1,095 ------- ------- ------- ------- ------- -------- 142,685 15,048 15,877 - 728 174,338 ------- ------- ------- ------- ------- -------- Production costs..................... 44,168 2,816 2,733 - - 49,717 Depletion, depreciation and amortization...................... 32,312 8,937 7,581 - 2,115 50,945 Exploration and abandonments......... 13,973 1,648 1,540 699 - 17,860 General and administrative........... - - - - 10,758 10,758 Interest............................. - - - - 24,741 24,741 Other................................ - - - - 7,738 7,738 ------- ------- ------- ------- ------- -------- 90,453 13,401 11,854 699 45,352 161,759 ------- ------- ------- ------- ------- -------- Income (loss) before income taxes.... 52,232 1,647 4,023 (699) (44,624) 12,579 Income tax benefit (provision)....... (18,281) (577) (1,696) 245 18,872 (1,437) ------ ------- ------- ------- ------- -------- Net income (loss).................... $ 33,951 $ 1,070 $ 2,327 $ (454) $(25,752) $ 11,142 ======= ======= ======= ======= ======= ======== Six months ended June 30, 2003: Oil and gas revenue.................. $534,135 $ 48,855 $ 38,120 $ - $ - $ 621,110 Interest and other................... - - - - 3,973 3,973 Gain on disposition of assets, net... 1,321 - 1 - 208 1,530 ------- ------- ------- ------- ------- -------- 535,456 48,855 38,121 - 4,181 626,613 ------- ------- ------- ------- ------- -------- Production costs..................... 115,921 11,588 6,072 - - 133,581 Depletion, depreciation and amortization...................... 131,297 20,319 14,302 - 4,690 170,608 Exploration and abandonments......... 40,390 9,572 13,160 19,792 - 82,914 General and administrative........... - - - - 29,125 29,125 Accretion of discount on asset retirement obligations............ - - - - 2,329 2,329 Interest............................. - - - - 46,314 46,314 Other................................ - - - - 10,816 10,816 ------- ------- ------- ------- ------- -------- 287,608 41,479 33,534 19,792 93,274 475,687 ------- ------- ------- ------- ------- -------- Income (loss) before income taxes and cumulative effect of change in accounting principle.............. 247,848 7,376 4,587 (19,792) (89,093) 150,926 Income tax benefit (provision)....... (86,747) (2,582) (1,811) 6,927 79,279 (4,934) ------- ------- ------- ------- ------- -------- Income (loss) before cumulative effect of change in accounting principle.......................... $161,101 $ 4,794 $ 2,776 $(12,865) $ (9,814) $ 145,992 ======= ======= ======= ======= ======= ======== Six months ended June 30, 2002: Oil and gas revenue.................. $273,984 $ 38,310 $ 25,675 $ - $ - $ 337,969 Interest and other................... - - - - 2,006 2,006 Gain (loss) on disposition of assets, net........................ 162 (3) 1,010 - (148) 1,021 ------- ------- ------- ------- ------- -------- 274,146 38,307 26,685 - 1,858 340,996 ------- ------- ------- ------- ------- -------- Production costs..................... 89,012 6,401 5,322 - - 100,735 Depletion, depreciation and amortization...................... 63,986 19,036 14,045 - 4,266 101,333 Exploration and abandonments......... 27,284 3,788 3,843 4,065 - 38,980 General and administrative........... - - - - 22,676 22,676 Interest............................. - - - - 51,058 51,058 Other................................ - - - - 16,004 16,004 ------- ------- ------- ------- ------- -------- 180,282 29,225 23,210 4,065 94,004 330,786 ------- ------- ------- ------- ------- -------- Income (loss) before income taxes.... 93,864 9,082 3,475 (4,065) (92,146) 10,210 Income tax benefit (provision)....... (32,852) (3,179) (1,465) 1,423 35,046 (1,027) ------- ------- ------- ------- ------- -------- Net income (loss).................... $ 61,012 $ 5,903 $ 2,010 $ (2,642) $(57,100) $ 9,183 ======= ======= ======= ======= ======= ======== 19

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) NOTE I. Pioneer USA Pioneer Natural Resources USA, Inc. ("Pioneer USA") is a wholly-owned subsidiary of the Company that has fully and unconditionally guaranteed the long-term debt of the Company. In accordance with practices accepted by the SEC, the Company has prepared Consolidating Condensed Financial Statements in order to quantify the assets and results of operations 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. 20

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) CONSOLIDATING CONDENSED BALANCE SHEET As of June 30, 2022 (in thousands) (Unaudited) ASSETS Pioneer Natural Resources Non- Company Pioneer Guarantor The (Parent) USA Subsidiaries Eliminations Company ----------- ----------- ------------ ------------ ----------- Current assets: Cash and cash equivalents............. $ 37 $ 4,258 $ 7,861 $ $ 12,156 Other current assets.................. 1,752,908 (1,454,052) (125,784) 173,072 ---------- ---------- --------- ---------- Total current assets............. 1,752,945 (1,449,794) (117,923) 185,228 ---------- ---------- --------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties.................. - 3,256,964 1,387,639 4,644,603 Unproved properties................ - 28,910 157,540 186,450 Accumulated depletion, depreciation and amortization.................... - (1,048,291) (406,666) (1,454,957) --------- ---------- --------- ---------- - 2,237,583 1,138,513 3,376,096 --------- ---------- --------- ---------- Deferred income taxes................... 73,411 - 1,784 75,195 Other property and equipment, net....... - 19,938 4,147 24,085 Other assets, net....................... 14,752 16,063 9,269 40,084 Investment in subsidiaries.............. 1,438,937 141,337 - (1,580,274) - ---------- ---------- --------- ---------- $ 3,280,045 $ 965,127 $1,035,790 $ 3,700,688 ========== ========== ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities..................... $ 30,747 $ 287,992 $ 40,440 $ $ 359,179 Long-term debt.......................... 1,710,737 - - 1,710,737 Other noncurrent liabilities............ - 225,158 (20,596) 204,562 Deferred income taxes................... - - 12,224 12,224 Stockholders' equity.................... 1,538,561 451,977 1,003,722 (1,580,274) 1,413,986 Commitments and contingencies........... ---------- ---------- --------- ---------- $ 3,280,045 $ 965,127 $1,035,790 $ 3,700,688 ========== ========== ========= ========== 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............. $ 6 $ 1,783 $ 6,701 $ $ 8,490 Other current assets.................. 1,727,828 (1,480,657) (108,568) 138,603 ---------- ---------- --------- ---------- Total current assets............. 1,727,834 (1,478,874) (101,867) 147,093 ---------- ---------- --------- ---------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties.................. - 3,024,845 1,228,052 4,252,897 Unproved properties................ - 43,969 175,104 219,073 Accumulated depletion, depreciation and amortization.................... - (947,091) (356,450) (1,303,541) ---------- ---------- --------- ---------- - 2,121,723 1,046,706 3,168,429 ---------- ---------- ---------- ---------- Deferred income taxes................... 75,311 - 1,529 76,840 Other property and equipment, net....... - 19,000 3,784 22,784 Other assets, net....................... 16,067 14,231 9,672 39,970 Investment in subsidiaries.............. 1,247,042 136,159 - (1,383,201) - ---------- ---------- --------- ---------- $ 3,066,254 $ 812,239 $ 959,824 $ 3,455,116 ========== ========== ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities..................... $ 30,785 $ 216,065 $ 27,742 $ $ 274,592 Long-term debt, less current maturities. 1,668,536 - - 1,668,536 Other noncurrent liabilities............ - 147,970 (19,639) 128,331 Deferred income taxes................... - - 8,760 8,760 Stockholders' equity.................... 1,366,933 448,204 942,961 (1,383,201) 1,374,897 Commitments and contingencies........... ---------- ---------- --------- ---------- $ 3,066,254 $ 812,239 $ 959,824 $ 3,455,116 ========== ========== ========= ========== 21

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS For the Six Months Ended June 30, 2022 (in thousands) (Unaudited) Non- Consolidated Pioneer Guarantor Income Tax The Parent USA Subsidiaries Provision Eliminations Company --------- --------- ------------ ------------- ------------ ---------- Revenue and other income: Oil and gas.......................... $ - $ 490,349 $ 130,761 $ - $ 621,110 Interest and other................... - 1,453 2,520 - 3,973 Gain on disposition of assets, net... - 1,413 117 - 1,530 -------- -------- -------- ----- --------- - 493,215 133,398 - 626,613 -------- -------- -------- ----- --------- Costs and expenses: Oil and gas production............... - 107,404 26,177 - 133,581 Depletion, depreciation and amortization...................... - 129,394 41,214 - 170,608 Exploration and abandonments......... - 41,626 41,288 - 82,914 General and administrative........... 632 22,744 5,749 - 29,125 Accretion of discount on asset retirement obligations............ - 1,844 485 - 2,329 Interest............................. 11,487 34,173 654 - 46,314 Equity (income) loss from subsidiaries...................... (174,196) 21,728 - - 152,468 - Other................................ 72 1,312 9,432 - 10,816 -------- -------- -------- ----- --------- (162,005) 360,225 124,999 - 475,687 -------- -------- -------- ----- --------- Income before income taxes and cumulative effect of change in accounting principle............................ 162,005 132,990 8,399 - 150,926 Income tax provision.................... - - (4,334) (600) (4,934) -------- -------- -------- ----- --------- Income before cumulative effect of change in accounting principle........ 162,005 132,990 4,065 (600) 145,992 Cumulative effect of change in accounting principle, net of tax...... - 11,859 3,554 - 15,413 -------- -------- -------- ----- --------- Net income.............................. 162,005 144,849 7,619 (600) 161,405 Other comprehensive income (loss): Deferred hedge gains and losses: Deferred hedge losses, net of tax.. - (218,050) (17,276) - (235,326) Net losses included in net income.. - 65,761 7,200 - 72,961 Cumulative translation adjustment.... - - 29,825 - 29,825 -------- -------- -------- ----- --------- Comprehensive income (loss)............. $ 162,005 $ (7,440) $ 27,368 $ (600) $ 28,865 ======== ======== ======== ===== ========= 22

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Six Months Ended June 30, 2022 (in thousands) (Unaudited) Non- Consolidated Pioneer Guarantor Income Tax The Parent USA Subsidiaries Benefit Eliminations Company --------- --------- ------------ ------------- ------------ ---------- Revenue and other income: Oil and gas......................... $ - $ 263,499 $ 74,470 $ - $ $ 337,969 Interest and other.................. - 1,077 929 - 2,006 Gain on disposition of assets, net.. - 54 967 - 1,021 -------- -------- ------- -------- --------- - 264,630 76,366 - 340,996 -------- -------- ------- -------- --------- Costs and expenses: Oil and gas production.............. - 88,381 12,354 - 100,735 Depletion, depreciation and amortization...................... - 65,454 35,879 - 101,333 Exploration and abandonments........ - 28,303 10,677 - 38,980 General and administrative.......... 602 17,868 4,206 - 22,676 Interest............................ 9,739 40,656 663 - 51,058 Equity income from subsidiaries..... (22,501) (3,674) - - 26,175 - Other............................... 2,977 1,403 11,624 - 16,004 -------- -------- ------- -------- --------- (9,183) 238,391 75,403 - 330,786 -------- -------- ------- -------- --------- Income before income taxes............. 9,183 26,239 963 - 10,210 Income tax provision................... - - (1,027) - (1,027) -------- -------- ------- -------- --------- Net income (loss)...................... 9,183 26,239 (64) - 9,183 Other comprehensive income (loss): Deferred hedge gains and losses: Unrealized hedge losses........... (181) (77,579) (11,331) - (89,091) Net gains included in net income.. 262 (30,300) (5,760) - (35,798) Cumulative translation adjustment...................... - - 8,742 - 8,742 -------- -------- ------- -------- --------- Comprehensive income (loss)......... $ 9,264 $ (81,640) $ (8,413) $ - $ (106,964) ======== ======== ======== ======== ========= 23

PIONEER NATURAL RESOURCES COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2022 (Unaudited) CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 2022 (in thousands) (Unaudited) Non- Pioneer Guarantor The Parent USA Subsidiaries Company ---------- --------- ------------- --------- Cash flows from operating activities: Net cash provided by (used in) operating activities........................................ $ (61,384) $ 260,274 $ 125,321 $ 324,211 --------- -------- -------- -------- Cash flows from investing activities: Proceeds from disposition of assets................. 9,440 15,631 641 25,712 Additions to oil and gas properties................. - (260,680) (126,416) (387,096) Other property (additions) dispositions, net........ - (6,705) 349 (6,356) --------- -------- -------- -------- Net cash used in investing activities............. 9,440 (251,754) (125,426) (367,740) --------- --------- -------- -------- Cash flows from financing activities: Borrowings under long-term debt..................... 171,812 - - 171,812 Principal payments on long-term debt................ (127,349) - - (127,349) Payment of noncurrent liabilities................... - (6,045) (183) (6,228) Exercise of long-term incentive plan stock options..................................... 9,861 - - 9,861 Purchase of treasury stock.......................... (2,349) - - (2,349) --------- -------- -------- -------- Net cash provided by (used in) financing activities...................................... 51,975 (6,045) (183) 45,747 --------- -------- -------- -------- Net increase (decrease) in cash and cash equivalents... 31 2,475 (288) 2,218 Effect of exchange rate changes on cash and cash equivalents.................................... - - 1,448 1,448 Cash and cash equivalents, beginning of period......... 6 1,783 6,701 8,490 --------- -------- -------- -------- Cash and cash equivalents, end of period............... $ 37 $ 4,258 $ 7,861 $ 12,156 ========= ======== ======== ======== CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 2022 (in thousands) (Unaudited) Non- Pioneer Guarantor The Parent USA Subsidiaries Company ---------- --------- ------------- --------- Cash flows from operating activities: Net cash provided by (used in) operating activities....................................... $ (110,071) $ 185,900 $ 64,771 $ 140,600 --------- -------- -------- -------- Cash flows from investing activities: Proceeds from disposition of assets................. - 57,791 1,145 58,936 Additions to oil and gas properties................. - (198,066) (65,227) (263,293) Other property additions, net....................... - (6,830) 970 (5,860) --------- -------- -------- -------- Net cash used in investing activities............. - (147,105) (63,112) (210,217) --------- --------- -------- -------- Cash flows from financing activities: Borrowings under long-term debt..................... 255,876 - - 255,876 Principal payments on long-term debt................ (386,326) - - (386,326) Issuance of common stock............................ 236,004 - - 236,004 Payment of noncurrent liabilities................... - (36,282) (279) (36,561) Exercise of long-term incentive plan stock options.. 7,606 - - 7,606 Deferred debt issuance costs........................ (3,158) - - (3,158) --------- -------- -------- -------- Net cash provided by (used in) financing activities...................................... 110,002 (36,282) (279) 73,441 --------- -------- -------- -------- Net increase (decrease) in cash and cash equivalents... (69) 2,513 1,380 3,824 Effect of exchange rate changes on cash and cash equivalents.................................... - - (1,430) (1,430) Cash and cash equivalents, beginning of period......... 79 10,900 3,355 14,334 --------- -------- -------- -------- Cash and cash equivalents, end of period............... $ 10 $ 13,413 $ 3,305 $ 16,728 ========= ======== ======== ======== 24

PIONEER NATURAL RESOURCES COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The information included in Item 2 and Item 3 of 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 ("Pioneer" or the "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, international operations and associated international political and economic instability, 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, acts of war and terrorism. These and other risks are described in the Company's 2002 Annual Report on Form 10-K that is available from the United States Securities and Exchange Commission ("SEC"). Financial and Operating Performance The Company's financial and operating performance for the second quarter of 2003 was highlighted by continued production growth, primarily associated with a full quarter of production from the Company's deepwater Gulf of Mexico Canyon Express gas project and the Company-operated Falcon field, which is the second of five significant projects that the Company plans to bring on production through early 2004. The production growth realized by the Company together with favorable worldwide oil and North American gas prices have resulted in significant increases in Pioneer's net income and net cash provided by operating activities during the three and six month periods ended June 30, 2003, as compared to the same periods of 2002. The Company reported net income of $77.2 million ($.65 per diluted share) and $161.4 million ($1.36 per diluted share) for the three and six month periods ended June 30, 2003, respectively, as compared to net income of $11.1 million ($.10 per share) and $9.2 million ($.08 per share) for the same periods of 2002. The Company's net income for the six months ended June 30, 2022 includes a $15.4 million ($.13 per share) benefit from the cumulative effect of change in accounting principle, net of tax, associated with the Company's adoption of Statement of Accounting Principles No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). See Notes B and E of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for additional information regarding the Company's adoption of new accounting pronouncements. The Company's net cash provided by operating activities was $189.9 million and $324.2 million for the three and six month periods ended June 30, 2003, respectively, representing increases of $99.3 million, or 110 percent, and $183.6 million, or 131 percent, over the net cash provided by operating activities of the same respective periods of 2002. Net cash provided by operating activities during the three and six month periods ended June 30, 2022 was $90.6 million and $140.6 million, respectively. During the three months ended June 30, 2003, the Company used its net cash provided by operating activities, together with proceeds from the disposition of assets, to fund $134.3 million of additions to oil and gas properties and to repay $57.2 million of long-term debt. During the six months ended June 30, 2003, the Company used its net cash provided by operating activities, together with proceeds from the disposition of assets and borrowings under the Company's corporate credit facility, to fund $387.1 million of additions to oil and gas properties. Drilling Highlights During the first six months of 2003, the Company incurred $395.1 million in capital expenditures including $124.7 million for development activities, $140.7 million for exploration activities and $129.7 million on acquisitions. The majority of the Company's development and exploration expenditures was spent on drilling wells, seismic data and infrastructure for the Company's significant development projects. The primary component of the acquisition expenditures was the Company's purchase of the 25 percent working interest it did not already own in the Falcon field, the Harrier field and surrounding satellite prospects during March 2003. The following tables summarize the Company's development drilling and exploration and extension drilling activities for the six months ended June 30, 2003: 25

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..... 1 13 14 - - Permian Basin................. 2 78 75 - 5 Mid-Continent................. 4 65 64 2 3 ------ ------ ------ ------ ------ Total Domestic......... 7 156 153 2 8 ------ ------ ------ ------ ------ Argentina..................... 3 19 18 1 3 Canada........................ 4 10 7 7 - Tunisia....................... - 1 - - 1 ------ ------ ------ ------ ------ Total Worldwide........ 14 186 178 10 12 ====== ====== ====== ====== ====== Exploration/Extension Drilling ------------------------------------------------------------------------ Beginning Wells Wells Successful Unsuccessful Ending Wells in Progress Spud Wells Wells In Progress --------------- ----------- ---------- ------------ ------------ Gulf of Mexico/Gulf Coast..... - 8 2 5 1 Alaska........................ - 3 - - 3 ------ ------ ------ ------ ------ Total Domestic........... - 11 2 5 4 ------ ------ ------ ------ ------ Argentina..................... 6 19 17 5 3 Canada........................ 4 46 16 24 10 South Africa.................. - 3 - 3 - Tunisia....................... - 3 - 1 2 ------ ------ ------ ------ ------ Total Worldwide.......... 10 82 35 38 19 ====== ====== ====== ====== ====== Domestic. The Company spent $301.4 million during the first six months of 2003 on acquisition, drilling and seismic activities in the Gulf of Mexico/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 $206.1 million of acquisition, drilling and seismic capital. In the deepwater Gulf of Mexico, the Company completed its Falcon field development in mid-March 2003 and, as discussed above, purchased the remaining 25 percent working interest in Falcon and related prospects that the Company did not already own. The Company has two major development projects that remain in progress as of June 30, 2003: o Devils Tower - The Dominion-operated Devils Tower development project in Mississippi Canyon was sanctioned in 2001 as a spar development project with the owners leasing a spar from a third party for the life of the field. The hull of the spar was constructed in Indonesia and was successfully transported to the United States during the first quarter of 2003 where the topsides will be added during the third quarter of 2003. The spar has slots for eight dry tree wells and up to three subsea tie-back wells and is capable of handling 60 MBbls of oil per day and 60 MMcf of gas per day. Eight Devils Tower wells and one subsea tie-back well have been drilled and are awaiting completion, while a second subsea tie-back development well is planned to be drilled during the fourth quarter of 2003. Devils Tower production is scheduled to begin in the first quarter of 2004 and will be phased in as the wells are individually completed from the spar. Pioneer holds a 25 percent working interest in the projects. The Company also has plans to drill another exploratory well by the end of 2003 that would be completed as a third subsea tie-back well, if successful. o Harrier - The Company discovered the Harrier field during the first quarter of 2003, encountering over 350 feet of gas-bearing sand in a single zone. Pioneer operates the block with a 100 percent working interest, subsequent to the acquisition discussed above, and 26

PIONEER NATURAL RESOURCES COMPANY is developing the field as a single-well subsea tie-back to the Falcon field facilities which were designed to be expandable. To accommodate incremental Harrier field production and potential throughput associated with planned exploration, an additional parallel pipeline connecting the Falcon field to the Falcon platform on the Gulf of Mexico shelf is being added, doubling its capacity to 400 MMcf of gas per day. The Company expects first gas production from Harrier field in early 2004 with combined daily gas production from Falcon field and Harrier field expected to reach 275 MMcf per day. The Devils Tower and Harrier field projects were impacted by recent severe weather and strong currents in the Gulf of Mexico. Although the severe weather and strong currents did not result in meaningful change to the projects' schedules, future weather-related delays, if extensive, may result in unavoidable schedule changes. In addition to the development projects described above in the deepwater Gulf of Mexico, the Company drilled two exploratory dry holes in the Falcon area during the first quarter and plans to drill two additional exploration prospects later this year in conjunction with the completion of the Harrier well. If successful, these Falcon area prospects could also be tied back to the Falcon field to utilize excess pipeline and processing capacity. Additionally, the Company controls 32 blocks in the area. During January 2003, the Company announced a joint exploration agreement with Woodside for a two-year drilling program over the shallow-water Texas shelf region of the Gulf of Mexico. Under the agreement, Woodside has taken a 50 percent working interest in 47 offshore exploration blocks operated by the Company. The agreement covers eight prospects and 19 leads and includes five exploratory wells to be drilled in 2003 and three in 2004. Most of the wells to be drilled under the agreement will target gas plays below 15,000 feet. The eight wells to be drilled by the parties in 2003 and 2004 are on prospects generated and leased by the Company since 1997. The first two wells under this joint agreement were unsuccessful. The third well is in progress and the results are expected to be known in August 2003. Additionally, the Company and Woodside will evaluate shallower gas prospects on the Gulf of Mexico shelf on other blocks covered by the leases for potential inclusion in the drilling program. In the onshore Gulf Coast region of the United States, the Company has concentrated its drilling efforts in the Pawnee field in South Texas, where three development wells and one extension well were successfully completed during the first half of 2003. The Company plans to drill an additional four development wells and two extension wells during the remainder of 2003. Alaska. In Alaska, the Company spent $33.4 million during the first six months of 2003 to drill three exploration wells on the NW Kuparuk prospect to test a possible extension of the productive sands in the Kuparuk River field into the shallow waters offshore. Although all three of the wells found the sands filled with oil, they were too thin to be considered commercial. The wells also encountered thick sections of oil-bearing Jurassic-aged sands. The first well flowed at a sustained rate of approximately 1,300 barrels per day. The test results are currently being evaluated to determine the commercial viability of the Jurassic reservoir. Permian Basin area. In the Permian Basin area, the Company spent $34.1 million during the first six months of 2003 primarily on development drilling in the Spraberry field. The Company plans to drill approximately 150 wells in the Spraberry field during 2003. Mid-Continent area. I n the Mid-Continent area, the Company spent $27.8 million during the first six months of 2003, primarily in the West Panhandle field where the Company plans to drill approximately 100 wells this year. The Company also plans to drill approximately 30 Hugoton wells later this year. Argentina. In Argentina, the Company spent $26.1 million of acquisition, drilling and seismic capital during the first six months of 2003. The majority of costs was spent to drill extension and development wells targeting oil reserves in the Neuquen Basin. 27

PIONEER NATURAL RESOURCES COMPANY Canada. In Canada, the Company spent $36.7 million of acquisition, drilling and seismic capital during the first six months of 2003, primarily in the Chinchaga, Martin Creek and Ladyfern areas that are only accessible for drilling during the winter months. Pioneer tested several shallow gas plays finding multiple gas-bearing zones based on open-hole logs and mud log shows in several wells. However, unseasonably warm weather resulted in a very short drilling season in Canada, and approximately eight of the wells drilled will have to be tested during next year's winter drilling season. Three wells were drilled to test the Slave Point formation in the Ladyfern field area. One well was unsuccessful and two wells were unsuccessful in the Slave Point formation, but are being evaluated for uphole potential in another formation. Africa. In Africa, the Company spent $30.9 million of acquisition, drilling and seismic capital during the first six months of 2003 in South Africa, Tunisia and Gabon. South Africa. In South Africa, the Company spent $19.6 million of capital to drill three exploratory wells and to continue development of its Sable field that is expected to have first oil production during August 2003. The production delay to August 2003 is primarily attributable to the owner of the floating production facility being leased by Pioneer encountering unexpected problems with the new compression equipment installed on the facility, resulting in extensive reconditioning. Oil sales are expected by late in the third quarter as soon as sufficient inventory has been built to offload oil for the first shuttle delivery to onshore facilities. During the second quarter of 2003, the Company drilled its three 2003 planned exploratory wells in South Africa, none of which were commercial. Tunisia. In Tunisia, the Company spent $9.7 million of capital during the first six months of 2003. The Company began development activities on its Adam discovery which began production during the second quarter of 2003. First sales are expected during the fourth quarter. The Company also drilled an exploration well on its Jorf permit which was unsuccessful. The Company drilled two exploration wells on its Anadarko-operated Anaguid permit during the second quarter of 2003. The CEM-1 encountered 95 feet of net gas and condensate pay in upper Ordovician sandstones. In a drill stem test, the unstimulated well flowed at a rate of 3,600 Mcf per day and 540 Bbls per day. A second well, the SEA-1, encountered 52 feet of net pay in the same section. Both wells have been suspended, pending the evaluation of commercial development plans. On the Borj El Khadra block, Pioneer is participating in the Adam 2 development well, the first development well in the new 860 square kilometer Adam concession. The discovery well, Adam 1, has been producing through nearby facilities at the Oued Zar field at a gross stabilized rate of over 3,500 Bbls per day since late May 2003. Following the completion of the Adam 2 well, the Company plans to drill the Hawa exploration well in the southern portion of the Adam concession where Pioneer has a 28 percent working interest. Gabon. In Gabon, the Company spent $1.6 million during the first half of 2003. The Company is awaiting final government approval of renegotiated terms in Gabon. Upon formal approval of terms, the Company expects to commence a drilling program early in 2004 as part of its development plan for the project. Results of Operations Oil and gas revenues. Revenues from oil and gas operations totaled $340.0 million and $621.1 million for the three and six month periods ended June 30, 2003, respectively, compared to $172.4 million and $338.0 million for the same respective periods of 2002. The increase in oil and gas revenues during the three and six month periods ended June 30, 2003, as compared to the same periods of 2002, was principally attributable to initial sales from the Company's deepwater Gulf of Mexico Canyon Express and Falcon field gas projects, increased gas sales in Argentina and to commodity price increases. As expected, declines in Canadian production partially offset the above described increases to oil and gas revenues. The following table provides the Company's volumes and average reported prices, including the results of hedging activities, for the three and six month periods ended June 30, 2022 and 2002: 28

PIONEER NATURAL RESOURCES COMPANY Three months ended Six months ended June 30, June 30, ------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- -------- Production: Oil (MBbls)........................ 2,919 2,806 5,790 5,915 NGLs (MBbls)....................... 2,062 1,981 4,045 3,920 Gas (MMcf)......................... 56,979 31,166 97,219 60,662 Total (MBOE)....................... 14,477 9,983 26,037 19,946 Average daily production: Oil (Bbls)......................... 32,079 30,840 31,987 32,680 NGLs (Bbls)........................ 22,656 21,776 22,346 21,658 Gas (Mcf).......................... 626,143 342,478 537,119 335,148 Total (BOE)........................ 159,092 109,696 143,853 110,196 Average reported prices: Oil (per Bbl): United States.................... $ 24.31 $ 24.54 $ 25.07 $ 24.40 Argentina........................ $ 24.07 $ 19.74 $ 24.83 $ 20.28 Canada........................... $ 25.09 $ 20.08 $ 28.57 $ 18.94 Worldwide........................ $ 24.25 $ 23.58 $ 25.03 $ 23.37 NGLs (per Bbl): United States.................... $ 17.09 $ 14.20 $ 19.34 $ 12.47 Argentina........................ $ 23.13 $ 17.64 $ 23.63 $ 13.32 Canada........................... $ 26.90 $ 20.37 $ 27.18 $ 16.47 Worldwide........................ $ 17.92 $ 14.58 $ 19.92 $ 12.68 Gas (per Mcf): United States.................... $ 4.84 $ 3.23 $ 4.79 $ 3.14 Argentina........................ $ .57 $ .44 $ .56 $ .54 Canada........................... $ 4.08 $ 2.64 $ 4.20 $ 2.47 Worldwide........................ $ 4.08 $ 2.48 $ 4.07 $ 2.48 On a BOE basis, worldwide average daily production increased by 45 percent and 31 percent during the three and six month periods ended June 30, 2003, respectively, as compared to the same periods in 2002. During the second quarter of 2003 as compared to the second quarter of 2002, worldwide oil production increased by four percent; NGL production increased by four percent; and gas production, augmented by a full quarter of production from both the Canyon Express and Falcon field gas projects, increased by 83 percent. During the first half of 2003, as compared to the first half of 2002, worldwide oil production declined by two percent; NGL production increased by three percent; and gas production, augmented by six months of production from Canyon Express and production since March from the Falcon field, increased by 60 percent. Per BOE average daily production, on a second-quarter to second-quarter comparison, increased by 56 percent in the United States and by 32 percent in Argentina, while production in Canada decreased by 13 percent. During the first half of 2003 as compared to the first half of 2002, per BOE average daily production increased by 41 percent in the United States and by 11 percent in Argentina and declined by 12 percent in Canada. Third quarter 2003 production is expected to average 150,000 to 165,000 BOE per day and total 2003 production is expected to range from 55 million to 60 million BOE. With a full year of production from the new fields brought on in 2003 and the addition of Harrier field and Devils Tower production in early 2004, the Company expects 2004 production to range from 63 million to 75 million BOE. As discussed above, oil and gas revenues for the three and six month periods ended June 30, 2022 were positively impacted by commodity price increases. Comparing the second quarter of 2003 to the same period in 2002, the Company's average worldwide oil price increased three percent, average worldwide NGL prices increased 23 percent and average worldwide gas prices increased 65 percent. Comparing the first six months of 2003 to the same period in 2002, the 29

PIONEER NATURAL RESOURCES COMPANY Company's average worldwide oil price increased seven percent, average worldwide NGL prices increased 57 percent and average worldwide gas prices increased 64 percent. 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 (swap 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. During the three and six months periods ended June 30, 2003, the Company's commodity price hedges decreased oil and gas revenues by $22.6 million and $73.0 million, respectively, as compared to increasing oil and gas revenues by $3.9 million and $36.2 million during the same periods in 2002. See Note D of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for specific information regarding the Company's hedging activities during the three and six month periods ended June 30, 2022 and 2002. During July 2003, the Company entered into new oil swap contracts for 2,000 Bbls per day for September 2003 with average per Bbl fixed prices of $30.18 and gas swap contracts for 180,000 Mcf per day for the period of September 2003 through December 2003with average per Mcf fixed prices of $4.85. Gain on disposition of assets. During the three and six month periods ended June 30, 2003, the Company recorded $104 thousand and $1.5 million, respectively, of net gains on the disposition of assets, as compared to $1.1 million and $1.0 million, respectively, of net gains on the disposition of assets during the same periods in 2002. Production costs. During the three and six month periods ended June 30, 2003, total production costs per BOE averaged $4.80 and $5.13, respectively, representing a decrease of $.18 per BOE (four percent) and an increase of $.08 per BOE (two percent), respectively, as compared to production costs per BOE of $4.98 and $5.05 during the same respective periods of 2002. Lease operating expenses and workover expenses represent the components of production costs for which the Company has management control, while production and ad valorem taxes and field fuel expenses are directly related to commodity price changes. The decrease in production costs per BOE during the three months ended June 30, 2003, as compared to the same period in 2002, is primarily due to decreases in workover costs, ad valorem taxes and production taxes, partially offset by an increase in field fuel expense as a result of higher gas prices and increased lease operating expenses. As compared to the first half of 2002, the increase in production costs per BOE during the first half of 2003 was due to increases in production taxes and field fuel expenses as a result of higher gas prices, partially offset by lower lease operating expense, ad valorem taxes and workover costs. Three months ended Six months ended June 30, June 30, ----------------- ----------------- 2003 2002 2003 2002 ------- ------- ------- ------- (per BOE) Lease operating expense............... $ 3.00 $ 2.87 $ 3.00 $ 3.08 Taxes: Production......................... .59 .63 .70 .56 Ad valorem......................... .38 .55 .43 .55 Field fuel expenses................... .72 .65 .85 .57 Workover costs........................ .11 .28 .15 .29 ------ ------ ------ ------ Total production costs.......... $ 4.80 $ 4.98 $ 5.13 $ 5.05 ====== ====== ====== ====== Based on market-quoted commodity prices during July 2003, the Company expects third quarter 2003 production costs to average $4.75 to $5.15 per BOE. The potential increase is primarily due to higher per BOE lease operating expenses associated with forecasted Sable production and an increase in expected workover costs. 30

PIONEER NATURAL RESOURCES COMPANY Depletion, depreciation and amortization expense. The Company's total depletion, depreciation and amortization expense per BOE was $6.95 and $6.55 for the three and six month periods ended June 30, 2003, respectively, as compared to $5.10 and $5.08 during the three and six month periods ended June 30, 2002. Depletion expense per BOE, the largest component of depletion, depreciation and amortization expense, was $6.78 and $6.37 per BOE during the three and six month periods ended June 30, 2003, respectively, as compared to $4.89 and $4.87 per BOE during the same respective periods of 2002. The increase in per BOE depletion expense is primarily due to increases in higher cost-basis deepwater Gulf of Mexico production volumes. The Company expects third quarter 2003 depletion, depreciation and amortization expense to average $6.90 to $7.30 per BOE. The potential increase is principally attributable to higher cost-basis Sable production volumes. Exploration, abandonments, geological and geophysical costs. Exploration, abandonments, geological and geophysical costs were $47.0 million and $82.9 million during the three and six month periods ended June 30, 2003, respectively, as compared to $17.9 million and $39.0 million during the same respective periods in 2002. The in exploration, abandonments, geological and geophysical costs during the six months of 2003 as compared to the first six months of 2002 is primarily due to increased exploration/extension drilling in the Gulf of Mexico, South Africa, Canada and Tunisia and increases in seismic acquisitions that will contribute to future exploration activities. During the six months ended June 30, 2003, the Company completed and evaluated 73 exploration/extension wells, 35 of which were successfully completed as discoveries. During the same period in 2002, the Company completed and evaluated 18 exploration/extension wells, 14 of which were successfully completed as discoveries. 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 six month periods ended June 30, 2022 and 2002: United Other States Argentina Canada Foreign Total -------- --------- -------- ------- ---------- (in thousands) Three months ended June 30, 2003: Geological and geophysical costs...... $ 11,849 $ 4,776 $ 578 $ 854 $ 18,057 Exploratory dry holes................. 9,820 551 1,156 15,229 26,756 Leasehold abandonments and other...... 934 1,201 99 - 2,234 ------- ------ ------- ------ ------- $ 22,603 $ 6,528 $ 1,833 $16,083 $ 47,047 ======= ====== ======= ====== ======= Three months ended June 30, 2002: Geological and geophysical costs...... $ 6,002 $ 1,645 $ 1,364 $ 521 $ 9,532 Exploratory dry holes................. 6,844 - 31 178 7,053 Leasehold abandonments and other...... 1,127 3 145 - 1,275 ------- ------ ------- ------ ------- $ 13,973 $ 1,648 $ 1,540 $ 699 $ 17,860 ======= ====== ======= ====== ======= Six months ended June 30, 2003: Geological and geophysical costs...... $ 17,688 $ 6,508 $ 1,915 $ 2,328 $ 28,439 Exploratory dry holes................. 21,178 1,431 9,870 17,456 49,935 Leasehold abandonments and other...... 1,524 1,633 1,375 8 4,540 ------- ------ ------- ------ ------- $ 40,390 $ 9,572 $ 13,160 $19,792 $ 82,914 ======= ====== ======= ====== ======= Six months ended June 30, 2002: Geological and geophysical costs...... $ 10,302 $ 3,215 $ 2,367 $ 3,853 $ 19,737 Exploratory dry holes................. 14,684 399 1,190 204 16,477 Leasehold abandonments and other...... 2,298 174 286 8 2,766 ------- ------ ------- ------ ------- $ 27,284 $ 3,788 $ 3,843 $ 4,065 $ 38,980 ======= ====== ======= ====== ======= 31

PIONEER NATURAL RESOURCES COMPANY The Company expects third quarter 2003 exploration and abandonment expense to be $25 million to $50 million, dependent largely on exploratory drilling results and expected seismic expenditures. General and administrative expense. General and administrative expenses for the three and six month periods ended June 30, 2022 were $13.6 million and $29.1 million, respectively, as compared to $10.8 million and $22.7 million during the same respective periods in 2002. The increases of $2.8 million and $6.4 million in general and administrative expense for the respective three and six month periods ended June 30, 2003, as compared to the same periods in 2002, are primarily due to increases in performance related compensation costs. The Company expects third quarter 2003 general and administrative expense to be approximately $13 million to $15 million. Accretion of discount on asset retirement obligations. During the three and six month periods ended June 30, 2003, accretion of discount on asset retirement obligations was $1.2 million and $2.3 million, respectively. The provisions of SFAS 143 require that the accretion of discount on asset retirement obligations be classified in the consolidated statement of operations separate from interest expense. Prior to 2003 and the adoption of SFAS 143, the Company classified accretion of discount on asset retirement obligations in interest expense. The Company's interest expenses during the three and six month periods ended June 30, 2022 include $632 thousand and $1.3 million, respectively, of accretion of discount on asset retirement obligations that was calculated prior to the adoption of SFAS 143 based on asset retirement obligations recorded in purchased business combinations. See "Cumulative effect of change in accounting principle" and Notes B and E of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for additional information regarding the Company's adoption of SFAS 143. The Company expects third quarter 2003 accretion of discount on asset retirement obligations to be approximately $1 million. Interest expense. Interest expense was $23.8 million and $46.3 million for the three and six month periods ended June 30, 2003, respectively, as compared to $24.7 million and $51.1 million for the same respective periods in 2002. The decreases of $918 thousand (or four percent) and $4.8 million (or nine percent) in interest expense for the three and six month periods ended June 30, 2003, respectively, as compared to the same respective periods of 2002, are primarily attributable to interest savings from the repayment of a higher yielding capital cost obligation and a portion of the Company's 9-5/8 percent and 8-7/8 percent senior notes, lower underlying market rates of interest, a 12.5 basis point decrease on May 16, 2022 in the Eurodollar margin component of the interest rate incurred under the Company's $575.0 million corporate credit facility, the aforementioned separate classification of accretion of discount on asset retirement obligations and increases of $503 thousand and $1.5 million in interest rate hedge gains, respectively. Partially offsetting the decreases in interest expense described above were reductions of $1.5 million and $1.7 million, respectively, in interest capitalized during the three and six month periods ended June 30, 2003, as compared to the same respective periods in 2002. The Company expects third quarter 2003 interest expense to be $23 million to $25 million. Other expenses. Other expenses for the three and six month periods ended June 30, 2022 were $5.6 million and $10.8 million, respectively, as compared to $7.7 million and $16.0 million for the same respective periods in 2002. The $2.1 million decrease in other expenses during the three months ended June 30, 2003, as compared to the same period of 2002, is primarily attributable to a $2.8 million loss recognized from the early extinguishment of higher yielding senior notes in 2002. The $5.2 million decrease in other expense during the six months ended June 30, 2003, as compared to the same period of 2002, is primarily attributable to a $6.5 million decrease in foreign exchange transaction and remeasurement charges and a $2.8 million loss recognized from the early extinguishment of higher yielding senior notes in 2002, partially offset by a $2.0 million increase in the ineffective portions of commodity price hedge losses. See "Cumulative effect of change in accounting principle" presented below for information regarding the classification of 2002 extraordinary losses on the early extinguishment of debt. 32

PIONEER NATURAL RESOURCES COMPANY Income tax provisions. During the three and six month periods ended June 30, 2003, the Company recognized income tax provisions of $2.6 million and $4.9 million, respectively, that were primarily attributable to Argentine taxable income and a $600 thousand United States alternative minimum tax provision. During the three and six month periods ended June 30, 2002, the Company recognized income tax provisions of $1.4 million and $1.0 million, of which amounts $1.2 million and $659 thousand, respectively, were attributable to Argentine taxable income. The income tax provision for the six months ended June 30, 2003 is net of a $1.3 million provision that is associated with the benefit recognized from the adoption of SFAS 143 during the first quarter of 2003 (see "Cumulative effect of change in accounting principle"). Due to uncertainties regarding the Company's utilization of net operating loss carryforwards and other credit carryforwards, the Company has established valuation reserves to reduce the carrying value of its deferred tax assets. The Company continues to monitor oil and gas commodity price outlooks and forecasted capital spending plans, production volumes and taxable income and will reduce its deferred tax asset valuation reserves if it becomes more likely than not that they will be utilized prior to their scheduled maturity. The Company's financial results have improved substantially during 2003 as a result of the combined affects of significant production growth and improved commodity prices. Further production growth is anticipated from projects currently under development that will be completed during the next six to eight months. These circumstances, combined with a stable outlook for future commodity prices, increase the likelihood that the Company may generate sufficient future taxable income to utilize its net operating loss and other tax credit carryforwards prior to their scheduled expiration. The Company estimates that its third quarter income tax provision will be $4 million to $6 million, principally comprised of Argentine income taxes and minimal alternative minimum tax in the United States as the Company benefits from its net operating loss carryforwards in the United States and Canada. Cumulative effect of change in accounting principle. As previously noted, the Company adopted the provisions of SFAS 143 on January 1, 2022 and recognized a $15.4 million benefit from the cumulative effect of change in accounting principle, net of $1.3 million of associated deferred income taxes. On January 1, 2003, the Company also adopted the provisions of SFAS 145, the provisions of which did not result in a cumulative effect adjustment. In accordance with the provisions of SFAS 145, the Company reclassified to other expense extraordinary losses from the early extinguishment of debt of $2.8 million and $19.5 million recorded during the three month periods ended June 30 and September 30, 2002, respectively. See Note B of Notes to Consolidated Financial Statements included in "Item 1. Financial Statements" for additional information regarding the Company's adoption of SFAS 143 and SFAS 145. 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 contractual obligations and working capital obligations. Oil and gas properties. The Company's cash expenditures for additions to oil and gas properties during the three and six month periods ended June 30, 2003 totaled $134.3 million and $387.1 million, respectively. The Company's second quarter 2003 additions to oil and gas properties were funded by $189.9 million of net cash provided by operating activities. During the six months ended June 30, 2003, the Company's additions to oil and gas properties were funded by $324.2 million of net cash provided by operating activities, $25.7 million of proceeds from the disposition of assets and borrowings under the Company's corporate credit facility. The Company's capital expenditures during the three months ended June 30, 2022 were funded by $90.6 million of net cash provided by operating activities, $7.3 million of proceeds from the disposition of assets and proceeds from the April 2002 sale of 11.5 million shares of common stock (the "Stock Offering"). The Company's capital expenditures during the six months ended June 30, 2022 were funded by $140.6 million of net cash provided by operating activities, $58.9 million of proceeds from the disposition of assets and proceeds from the Stock Offering. Contractual obligations. The Company's contractual obligations include long-term debt, operating leases, Btu swap agreements, terminated commodity 33

PIONEER NATURAL RESOURCES COMPANY hedges and other contracts. During the six months ended June 30, 2003, the Company increased its long-term debt by $42.2 million, reduced its obligations under the Btu swap agreements by $3.2 million and locked-in $46.0 million of remaining liabilities associated with the termination of commodity hedges prior to their scheduled maturity. The Company's contractual obligations for which the ultimate settlement amounts are not fixed and determinable are currently limited to derivative contracts that are sensitive to future changes in commodity prices. See "Item 3. Quantitative and Qualitative Disclosures About Market Risk" for a table of changes in the fair value of the Company's derivative contract assets and liabilities during the six months ended June 30, 2003. Working capital. 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 and the Company's capital expenditure program may be provided by any combination of internally-generated cash flow, proceeds from the disposition of non-strategic assets or alternative financing sources as discussed in "Capital resources" below. Capital resources. The Company's primary capital resources are net cash provided by operating activities, proceeds from financing activities and proceeds from sales of non-strategic assets. The Company expects that these resources will be sufficient to fund its capital commitments in 2003. Operating activities. Net cash provided by operating activities during the three and six month periods ended June 30, 2022 were $189.9 million and $324.2 million, respectively, as compared to $90.6 million and $140.6 million for the same respective periods in 2002. The increase in net cash provided by operating activities during the three and six month periods ended June 30, 2003, as compared to the same periods in 2002, is primarily due to higher gas production and higher commodity prices. Financing activities. Net cash used in financing activities during the three months ended June 30, 2022 was $57.3 million and net cash provided by financing activities during the six months ended June 30, 2022 was $45.7 million. In comparison, net cash provided by financing activities was $81.5 million and $73.4 million during the three and six month periods ended June 30, 2002. During the three and six month periods ended June 30, 2002, the Company used a portion of the $236.0 million of net proceeds from the Stock Offering to fund a portion of the net cash used in investing activities and to repay a portion of its long-term debt and noncurrent liabilities. During the six months ended June 30, 2003, the primary source of net cash provided by financing activities was first quarter 2003 borrowings under the Company's $575 million corporate credit facility (the "Credit Facility"). The borrowings under the Credit Facility were used to fund the $117.7 million of cash paid, including normal closing adjustments, to acquire an additional 25 percent working interest in the Falcon field, the Harrier field and surrounding satellite prospects in the deepwater Gulf of Mexico. During the second quarter of 2003, net cash provided by operating activities increased while net cash used for investing activities declined allowing the Company to reduce long-term debt by $57.2 million. During February 2003, the Company entered into interest rate swap contracts to hedge the fair value of its 9-5/8 percent senior notes due in 2010. The terms of these swap contracts obligated the Company to pay the counterparties a variable annual rate equal to the six-month LIBOR plus 566.4 basis points and obligated the counterparties to pay the Company a fixed rate of 9-5/8 percent based on a notional debt amount of $250 million. During May 2003, the Company received $11.4 million of cash from the termination of the interest rate swap agreements prior to their scheduled maturity. Outstanding borrowings under the Credit Facility totaled $310.0 million as of June 30, 2003, excluding $28.8 million of undrawn letters of credit issued under the Credit Facility. The weighted average interest rates on the Company's indebtedness for each of the three and six month periods ended June 30, 2022 was 5.0 percent, as compared to 6.0 percent and 6.1 percent for the same respective periods in 2002, taking into account the effect of lower market interest rates and the Company's interest rate swaps. 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. 34

PIONEER NATURAL RESOURCES COMPANY Sales of assets. During the three and six month periods ended June 30, 2003, proceeds from the sale of assets totaled $10.2 million and $25.7 million, respectively, as compared to $7.3 million and $58.9 million for the same periods in 2002. The Company's 2003 asset divestitures were primarily comprised of derivative assets and Gulf of Mexico shelf prospects, in which a partial interest was sold to Woodside. The Company's 2002 asset divestitures were primarily comprised of derivative assets. Book capitalization and liquidity. The Company's total debt was $1.7 billion as of June 30, 2022 and December 31, 2002. The Company's total book capitalization at June 30, 2022 was $3.1 billion, consisting of total debt of $1.7 billion and stockholders' equity of $1.4 billion. Consequently, the Company's debt to total capitalization at June 30, 2022 and December 31, 2021 was 55 percent. The Company's ratio of current assets to current liabilities was ..52 at June 30, 2022 and .54 at December 31, 2002. Including $28.8 million of undrawn and outstanding letters of credit, the Company had $236.2 million of unused borrowing capacity available under its Credit Facility as of June 30, 2003. During the remainder of 2003, the Company anticipates that net cash provided by operating activities, based on current commodity prices, will exceed budgeted capital expenditures and contractual obligations and be sufficient to reduce long-term debt by $75 million to $100 million from the year-end 2002 balance. Item 3. Quantitative and Qualitative Disclosures About Market Risk 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, 2002. 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, 2002. The following table reconciles the changes that occurred in the fair values of the Company's open derivative contracts during the first six months of 2003: Derivative Contract Assets (Liabilities) -------------------------------------------- Foreign Interest Exchange Commodity Rate Rate Total --------- -------- --------- --------- (in thousands) Fair value of contracts outstanding as of December 31, 2002............... $(108,804) $ - $ 15 $(108,789) Changes in contract fair value........... (236,730) 11,374 3 (225,353) Contract realizations: Maturities........................... 101,483 (1,934) (18) 99,531 Terminations - cash settlements...... 125 (9,440) - (9,315) Terminations - future net obligations 53,362 - - 53,362 -------- ------- ----- -------- Fair value of contracts outstanding as of June 30, 2003................... $(190,564) $ - $ - $(190,564) ======== ======= ===== ======== 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 commodity prices, interest rates or foreign exchange rates. Interest rate sensitivity. The following table provides information about the debt obligations that the Company was a party to as of June 30, 2022 and that are sensitive to changes in interest rates. The table presents the debt obligations by maturity dates together with the weighted average interest rates expected to be paid on the debt, given current contractual terms and market conditions. For fixed rate debt, the weighted average interest rate represents the contractual fixed rates that the Company was obligated to periodically pay on the debt as of June 30, 2003. For variable rate debt, the average interest rate represents the average rates being paid on the debt projected forward proportionate to the forward yield curve for the six-month LIBOR. 35

PIONEER NATURAL RESOURCES COMPANY During February 2003, the Company entered into interest rate swap contracts to hedge a portion of the fair value of its 9-5/8 percent senior notes. Under the terms of the interest rate swap contracts, the Company was to receive a fixed annual rate of 9-5/8 percent on $250 million notional amount and agreed to pay the counterparties a variable rate on the notional amount equal to the six-month LIBOR, reset semi-annually, plus a weighted average margin of 566.4 basis points. During May 2003, the Company terminated the 9-5/8 percent senior notes interest rate swaps for cash proceeds of $11.4 million, including outstanding maturities of $2.0 million. Interest Rate Sensitivity Debt Obligations as of June 30, 2022 Liability 2003 2004 2005 2006 2007 Thereafter Total Fair Value ------ ------ -------- ------ -------- ---------- ---------- ---------- (in thousands, except interest rates) Total Debt: Fixed rate debt............ $ - $ - $137,770 $ - $157,764 $1,105,203 $1,400,737 $(1,513,450) Weighted average interest rate (%)........ 7.93 7.93 7.94 7.94 7.92 7.90 Variable rate debt......... $ - $ - $310,000 $ - $ - $ - $ 310,000 $ (310,000) Average interest rate (%).. 2.45 3.37 5.00 Commodity price sensitivity. During the first six months of 2003, the Company entered into certain oil and gas hedge derivatives and terminated other 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 June 30, 2003. All of the oil and gas derivative financial instruments that the Company was a party to as of June 30, 2022 and that were sensitive to oil or gas price changes qualified as hedges. See Note D 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 prices. Oil Price Sensitivity Derivative Financial Instruments as of June 30, 2022(3) Liability 2003 2004 2005 Fair Value ------- ------- ------- ---------- (in thousands, except volumes and prices) Oil Hedge Derivatives: Average daily notional Bbl volumes (1): Swap contracts............................ 16,859 9,000 7,000 $(24,849) Weighted average fixed price per Bbl.............................. $ 24.69 $ 22.96 $ 24.00 Average forward NYMEX oil prices (2)................................ $ 29.61 $ 26.77 $ 24.67 - --------------- (1) See Note D 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 July 29, 2022 market quotes. (3) During July 2003, the Company entered into new oil swap contracts for 2,000 Bbls per day for September 2003 with average per Bbl fixed prices of $30.18. 36

PIONEER NATURAL RESOURCES COMPANY Gas Price Sensitivity Derivative Financial Instruments as of June 30, 2022 (4) Liability 2003 2004 2005 2006 2007 Fair Value --------- -------- ------- -------- ------- ---------- (in thousands, except volumes and prices) Gas Hedge Derivatives (1): Average daily notional MMBtu volumes (2): Swap contracts............................ 130,000 230,000 60,000 70,000 20,000 $(163,431) Weighted average fixed price per MMBtu............................ $ 3.79 $ 3.99 $ 4.28 $ 4.23 $ 3.75 Collar contracts.......................... 50,000 $ (2,284) Weighted average short call ceiling price per MMBtu...................... $ 6.84 Weighted average long put floor price per MMBtu........................... $ 4.00 Average forward NYMEX gas prices (3)................................ $ 4.81 $ 4.79 $ 4.59 $ 4.60 $ 4.67 - --------------- (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 D 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 gas prices are based on July 29, 2022 market quotes. (4) During July 2003, the Company entered into new gas swap contracts for 180,000 Mcf per day for the period September 2003 through December 2003 with average per Mcf fixed prices of $4.85. Item 4. Controls and Procedures (a) Evaluation of disclosure controls and procedures. As of the end of the period covered by this Report, the Company's principal executive officer ("CEO") and principal financial officer ("CFO") carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures. Based on those evaluations, the Company's CEO and CFO believe (i) that the Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure; and (ii) that the Company's disclosure controls and procedures are effective. (b) Changes in internal controls. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the evaluation referred to in Item 4. (a), above, nor have there been any corrective actions with regard to significant deficiencies or material weaknesses. 37

PIONEER NATURAL RESOURCES COMPANY PART II. OTHER INFORMATION Item 1. Legal Proceedings As discussed in Note F 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. Except for the specific legal actions described in Note F, the Company believes that the probable damages from such other legal actions will not be in excess of 10 percent of the Company's current assets. Item 4. Submission of Matters to a Vote of Security Holders The Company's annual meeting of stockholders was held on May 15, 2022 in Irving, Texas. At the meeting, two proposals were submitted for vote of stockholders (as described in the Company's Proxy Statement dated April 7, 2003). The following is a brief description of each proposal and results of the stockholders' votes. Election of Directors. Prior to the meeting, the Company's Board of Directors designated three nominees as Class III directors with their terms to expire at the annual meeting in 2006 when their successors are elected and qualified. Messrs. Jones, Ramsey and Solberg were, at the time of such nomination and at the time of the meeting, directors of the Company. Each nominee was elected as a director of the Company, with the results of the stockholder voting being as follows: Authority Broker For Withheld Abstain Non-Votes ----------- --------- ------- --------- Jerry P. Jones 107,705,194 665,595 - - Charles E. Ramsey, Jr. 107,687,034 683,755 - - Robert A. Solberg 107,884,263 486,526 - - In addition, the term of office for the following directors continued after May 15, 2003: James R. Baroffio, Edison C. Buchanan, R. Hartwell Gardner, James L. Houghton, Linda K. Lawson, and Scott D. Sheffield. Ratification of selection of auditors. The engagement of Ernst & Young LLP as the Company's independent auditors for 2003 was submitted to the stockholders for ratification. Such election was ratified, with the results of the stockholder voting being as follows: For 106,523,026 Against 1,781,908 Abstain 65,855 Broker non-votes - Item 6. Exhibits and Reports on Form 8-K Exhibits 31.1 Chief Executive Officer certification under Section 302 of Sarbanes-Oxley Act of 2002. 31.2 Chief Financial Officer certification under Section 302 of Sarbanes-Oxley Act of 2002. 32.1 Chief Executive Officer certification under Section 906 of Sarbanes-Oxley Act of 2002. 32.2 Chief Financial Officer certification under Section 906 of Sarbanes-Oxley Act of 2002. Reports on Form 8-K During the three months ended June 30, 2003, the Company filed with the SEC current reports on Form 8-K on April 1 and April 29. 38

PIONEER NATURAL RESOURCES COMPANY The Company's April 1, 2022 Form 8-K provided, as exhibits thereto, two news releases issued by the Company on March 31 announcing, together with related information, (i) first production from the Falcon field in the Gulf of Mexico, (ii) approval of Harrier development, (iii) acquisition of an additional interest in Falcon, Harrier and related assets, (iv) a new Company record for North American gas production and (v) an update on operations. The Company's April 29, 2022 Form 8-K provided, as an exhibit thereto, a news release issued by the Company on April 29, 2022 announcing the Company's financial and operating results for the quarter ended March 31, 2003; providing the Company's second quarter 2003 financial outlook based on then current expectations and providing information regarding the Company's oil and gas price hedges. 39

PIONEER NATURAL RESOURCES COMPANY SIGNATURES 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 hereto duly authorized. PIONEER NATURAL RESOURCES COMPANY Date: July 31, 2022 By: /s/ Timothy L. Dove ------------------------------------- Timothy L. Dove Executive Vice President and Chief Financial Officer Date: July 31, 2022 By: /s/ Richard P. Dealy ------------------------------------- Richard P. Dealy Vice President and Chief Accounting Officer 40

PIONEER NATURAL RESOURCES COMPANY Exhibit Index Page 31.1* Chief Executive Officer certification under Section 302 of Sarbanes-Oxley Act of 2002. 31.2* Chief Financial Officer certification under Section 302 of Sarbanes-Oxley Act of 2002. 32.1* Chief Executive Officer certification under Section 906 of Sarbanes-Oxley Act of 2002. 32.2* Chief Financial Officer certification under Section 906 of Sarbanes-Oxley Act of 2002. * filed herewith 41

                                                                   EXHIBIT 31.1
                      CHIEF EXECUTIVE OFFICER CERTIFICATION
                UNDER SECTION 302 OF SARBANES-OXLEY ACT OF 2002
I, Scott D.  Sheffield, certify that:
1. I have  reviewed  this  quarterly  report  on Form  10-Q of  Pioneer  Natural
Resources Company:
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made,  in light of  circumstances  under which such  statements  were made,  not
misleading with respect to the period covered by this report;
3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure  controls and procedures,  or caused such disclosure
controls and  procedures to be designed  under our  supervision,  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this report is being prepared;
b) Evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal control over
financial  reporting that occurred  during the  registrant's  most recent fiscal
quarter that has  materially  affected,  or is  reasonably  likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent function):
a) All  significant  deficiencies  and  material  weaknesses  in the  design  or
operation of internal  controls over  financial  reporting  which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and
b) Any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls over
financial reporting.
July 31, 2022
                                /s/ Scott D.  Sheffield
                               ---------------------------------------------
                               Scott D.  Sheffield, Chairman, President
                               and Chief Executive Officer

                                                                   EXHIBIT 31.2
                      CHIEF FINANCIAL OFFICER CERTIFICATION
                 UNDER SECTION 302 OF SARBANES-OXLEY ACT OF 2002
I, Timothy L. Dove, certify that:
1. I have  reviewed  this  quarterly  report  on Form  10-Q of  Pioneer  Natural
Resources Company:
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
made,  in light of  circumstances  under which such  statements  were made,  not
misleading with respect to the period covered by this report;
3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure  controls and procedures,  or caused such disclosure
controls and  procedures to be designed  under our  supervision,  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this report is being prepared;
b) Evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal control over
financial  reporting that occurred  during the  registrant's  most recent fiscal
quarter that has  materially  affected,  or is  reasonably  likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent function):
a) All  significant  deficiencies  and  material  weaknesses  in the  design  or
operation of internal  controls over  financial  reporting  which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and
b) Any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls over
financial reporting.
July 31, 2022
                              /s/ Timothy L.  Dove
                            --------------------------------------------
                            Timothy L.  Dove, Executive Vice President
                            and Chief Financial Officer

                                                                   EXHIBIT 32.1
                                CERTIFICATION OF
                             CHIEF EXECUTIVE OFFICER
                      OF PIONEER NATURAL RESOURCES COMPANY
                         PURSUANT TO 18 U.S.C. ss. 1350
         I, Scott D. Sheffield, Chairman,  President and Chief Executive Officer
of Pioneer Natural  Resources  Company (the "Company"),  hereby certify that the
accompanying  report on Form 10-Q for the  quarterly  period ended June 30, 2022
and  filed  with the  Securities  and  Exchange  Commission  on the date  hereof
pursuant to Section 15(d) of the Securities  Exchange Act of 1934 (the "Report")
by the Company fully complies with the requirements of that section.
         I further certify  that the information  contained in the Report fairly
presents,  in all  material  aspects,  the  financial  condition  and results of
operations of the Company.
                                  /s/ Scott D. Sheffield
                                  ---------------------------------------
                          Name:   Scott D. Sheffield, Chairman, President
                                    and Chief Executive Officer
                          Date:   July 31, 2022

                                                                   EXHIBIT 32.2
                                CERTIFICATION OF
                             CHIEF FINANCIAL OFFICER
                      OF PIONEER NATURAL RESOURCES COMPANY
                         PURSUANT TO 18 U.S.C. ss. 1350
         I,  Timothy L. Dove,  Executive  Vice  President  and  Chief  Financial
Officer of Pioneer Natural  Resources  Company (the  "Company"),  hereby certify
that the  accompanying  report on Form 10-Q for the quarterly  period ended June
30,  2003 and filed with the  Securities  and  Exchange  Commission  on the date
hereof  pursuant to Section  15(d) of the  Securities  Exchange Act of 1934 (the
"Report") by the Company fully complies with the requirements of that section.
         I further certify  that the information contained  in the Report fairly
presents,  in all  material  aspects,  the  financial  condition  and results of
operations of the Company.
                                 /s/ Timothy L. Dove
                                 -----------------------------------------
                           Name: Timothy L. Dove, Executive Vice
                                  President and Chief Financial Officer
                                 Date:   July 31, 2022

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