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Gulf Coast

Pioneer continues to expand its Pawnee resource play concept to new field discoveries along the Edwards Reef trend in South Texas with outstanding success. More than 300 billion cubic feet (Bcf) of gas is ultimately expected to be produced from the Pawnee field, where the Company has been the most active driller for several years and has established a large and growing acreage position to support its expansion efforts.

Eight new discoveries have been drilled since early 2006, providing evidence of the development growth potential of the play. During 2007, Pioneer is initiating full-scale development drilling where 3-D seismic data is available. More than 900 square miles of 3-D seismic is being shot and processed to cover the eight discoveries and to more accurately locate future horizontal development wells.

South Texas operationsAverage net gas production is expected to exceed the 30% annual growth rate targeted for 2007 and is expected to increase approximately 25% next year based on current 2008 drilling plans. Pioneer continues to add new treating capacity to handle the increasing gas production and is making progress on an extension of its existing gathering pipeline.

New well stimulation techniques have also shown promise in enhancing production from new and existing wells. This emerging growth asset is expected to deliver significant additions to production and reserves over the next few years.