PIONEER NATURAL RESOURCES COMPANY

PIONEER NATURAL RESOURCES COMPANY

January 11, 2005 09:00 ET

Pioneer Announces 2005 Capital Program


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: PIONEER NATURAL RESOURCES COMPANY

NYSE SYMBOL: PXD

JANUARY 11, 2005 - 09:00 ET

Pioneer Announces 2005 Capital Program

DALLAS--(CCNMatthews - Jan 11, 2005) -

Pioneer Natural Resources Company (NYSE:PXD) announced today that its
Board of Directors has approved its 2005 capital program. The program is
expected to include:

-- Total capital expenditures of $900 million to $950 million, a 12%
increase over 2004 levels, proforma for the recent Rockies merger,

-- Plans to drill approximately 800 development wells,

-- $200 million to $250 million exploration program, which represents
approximately 25% of total capital,

-- Plans to drill approximately 20 higher-impact exploration wells, and

-- Significant cash flow in excess of base capital expenditures.

"In 2005, we plan to step up our activity level and drill more
development and exploration wells," stated Tim Dove, Pioneer's President
and COO. "Our prior investments in land and seismic should begin to pay
off as we test new exploration prospects in each of our focus areas and
expand our onshore development program."

Approximately 75% of the 2005 capital budget is directed toward
development activities, including facilities, with 25% allocated to
exploration. Pioneer plans to direct a majority of its capital program
to its U.S. assets with approximately 20% allocated to its new Rockies
assets, 25% to other onshore U.S. assets, 25% to the Gulf of Mexico and
five percent to Alaska. Approximately 25% of 2005 capital is designated
for international projects with approximately 15% allocated to Argentina
and five percent directed to projects in both Africa and Canada.

"This capital plan accounts for only about two-thirds of the
discretionary cash flow we expect to have available for investment based
on current oil and gas strip pricing forecasts. The plan calls for an
increase in drilling activity in our core areas, especially the Rockies,
continued expansion of our gas play in Argentina, an active Canadian
program including key coal bed methane tests and a significant increase
in high-impact wells in our four exploration focus areas," continued
Scott Sheffield, Chairman and CEO.

Low-Risk Development is Foundation for Growth

Pioneer plans to drill approximately 800 wells during 2005, a
significant increase over 2004, and will again allocate considerable
capital dollars to develop its proved reserves, following a strategy of
accelerating value realization at today's historically high commodity
prices.

In the Raton Basin, Pioneer plans to drill approximately 300 wells, up
approximately 50% from 2004 activity levels. To handle the stepped-up
drilling schedule and deliver on the expected double-digit production
growth, Pioneer has added staff, purchased additional fracture
stimulation and drilling equipment and secured additional pipeline
capacity. The Company believes that the Raton Basin offers sufficient
opportunity to sustain this accelerated level of drilling for a minimum
of five years allowing for the execution of a measured program to
deliver incremental reserves annually. Pioneer's recent Rockies
acquisition also added significant acreage in the Piceance and Uinta
basins, and the Company expects to complete a comprehensive evaluation
of the resource potential and gas marketing alternatives for these
assets during 2005.

Other onshore U.S. drilling will include approximately 260 development
wells primarily concentrated in the legacy Spraberry, Pawnee and West
Panhandle fields where Pioneer has a multi-year inventory of development
drilling locations.

In the Gulf of Mexico, Pioneer plans to invest approximately $100
million on appraisal wells related to field discoveries that are
expected to add new production in 2006 and 2007 and sidetracks expected
to capture additional reserves and extend the production life of key
wells in the Canyon Express and Falcon areas.

In Canada, Pioneer will concentrate its winter drilling activities in
the Chinchaga field of northeastern British Columbia with more than 50
wells planned, a 40% increase over 2004. In southern Alberta where the
drilling is not limited to the winter season, Pioneer plans to drill as
many as 80 wells targeting coal bed methane in the Horseshoe Canyon
area. The Company has identified several non-strategic fields for
divestiture during the first quarter of 2005 and has included the impact
of these planned asset sales in its 2005 production forecasts.

In Argentina, Pioneer plans to capitalize on strengthening gas demand
and on the government's plans to increase natural gas prices and has
plans to expand its Argentine gas processing facilities to extract
additional liquids and further enhance profitability. In the Neuquen
Basin, more than 90 development wells are planned, and the Company will
continue to evaluate the potential for deeper gas accumulations
expecting to deliver 8% to 10% production growth in 2005.

Exploration Program Includes Increased Drilling and Reserve Exposure

"Exploration is a cyclical process," stated Chris Cheatwood, Executive
Vice President of Worldwide Exploration. "We drilled fewer high-impact
wells in 2004 and focused most of our time and dollars on refining
existing prospects and building our exploration inventory. In 2005, we
plan to test approximately 20 high-impact prospects and increase our
exploration drilling expenditures by about 150%."

Pioneer has earmarked $200 to $250 million of its 2005 capital budget
for exploration in its four areas of focus, the Gulf of Mexico, Alaska,
North Africa and West Africa. The portfolio covers a broad spectrum of
risk profiles and reserve size targets.

In the Gulf of Mexico, Pioneer plans to drill six to eight exploration
wells focused primarily in the deepwater. The program is balanced
between Falcon satellites and shallow-water prospects with shorter lead
times to first production and higher-potential targets in deeper water.

Pioneer was one of the first independent companies to operate on the
North Slope of Alaska and has established a significant acreage
position. Pioneer's diversified portfolio covers a wide range of
prospect types, from low-risk drilling on undeveloped discoveries near
existing infrastructure to higher-reward objectives in more remote
areas. The Company has completed an extensive technical and economic
evaluation of resource potential within the Oooguruk field discovery and
will continue with engineering and permitting activities to confirm
favorable development economics. Pioneer also plans to drill three wells
on other Alaska prospects during 2005.

In North Africa, Pioneer has five wells currently producing in excess of
13,000 barrels of oil per day (gross) on the Adam concession, and plans
to add production in 2005, drilling two to four additional wells.
Outside the Adam concession, the Company plans to drill three
exploration wells, two of which will test the lateral extent of previous
discoveries on the Anaguid block.

In the past twelve months, Pioneer has made significant strides toward
building a strong position in deepwater West Africa. The Company expects
that rights to new West Africa acreage in the Niger Delta will be
granted during 2005, possibly including two highly-prospective blocks in
the Joint Development Zone (JDZ) of Nigeria/Sao Tome and Principe where
bids have been submitted. Pioneer expects to participate in two to three
high-impact deepwater wells in the area, one of which will be drilled on
its current acreage in Equatorial Guinea.

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

Except for historical information contained herein, the statements in
this News Release are forward-looking statements that are made pursuant
to the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements and the business
prospects of Pioneer are subject to a number of risks and uncertainties
that may cause Pioneer's actual results in future periods to differ
materially from the forward-looking statements. These risks and
uncertainties include, among other things, volatility of oil and gas
prices, product supply and demand, competition, government regulation or
action, international operations and associated international political
and economic instability, litigation, the costs and results of drilling
and operations, Pioneer's ability to replace reserves, implement its
business plans, or complete its development projects as scheduled,
access to and cost of capital, uncertainties about estimates of
reserves, quality of technical data, environmental and weather risks,
acts of war or terrorism. These and other risks are described in
Pioneer's 10-K and 10-Q Reports and other filings with the Securities
and Exchange Commission.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Pioneer Natural Resources Company
    Investor Relations:
    Susan Spratlen or Chris Paulsen, 972-444-9001