Pioneer Natural Resources Company Reports Fourth Quarter 2017 Financial and Operating Results and Announces 2018 Capital Program

Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the
Company”) today reported financial and operating results for the quarter
ended December 31, 2017, and announced the Company’s capital program for
2018.

Pioneer reported fourth quarter net income attributable to common
stockholders of $665 million, or $3.87 per diluted share. Without the
effect of noncash mark-to-market (MTM) derivative losses of $169 million
after tax, or $0.99 per diluted share, and a noncash benefit related to
the reduction in Pioneer’s deferred tax liability resulting from the Tax
Cuts and Jobs Act of $625 million, or $3.64 per diluted share, adjusted
income for the fourth quarter was $209 million after tax, or $1.22 per
diluted share.

Fourth quarter, full-year 2017 and other recent production and financial
highlights included:

• producing 305 thousand barrels oil equivalent per day (MBOEPD) in the
  fourth quarter, an increase of 29 MBOEPD, or 11%, compared to the
  third quarter of 2017; fourth quarter production was above the top end
  of Pioneer’s production guidance range of 292 MBOEPD to 302 MBOEPD;
  fourth quarter oil production was up 18 thousand barrels oil per day
  (MBOPD), or 11%, compared to the third quarter of 2017;
• producing 272 MBOEPD in 2017, an increase of 38 MBOEPD, or 16%,
  compared to 2016; oil production was up by 25 MBOPD, or 19%, compared
  to 2016; the 2017 production growth was driven by the Company’s
  Permian Basin horizontal drilling program, with total Permian Basin
  oil production for 2017 increasing by 26% compared to 2016;
• reducing 2017 production costs per barrel oil equivalent (BOE)
  (excluding taxes) by 12% compared to 2016; production costs in 2017
  benefited from the Company’s cost reduction initiatives and growing
  low-cost Permian Basin horizontal production;
• delivering 309% drillbit reserve replacement in 2017 by adding proved
  reserves of 314 million barrels oil equivalent (MMBOE) from
  discoveries, extensions and technical revisions of previous estimates
  at a drillbit finding and development cost of $8.46 per BOE (excludes
  positive price revisions of 52 MMBOE, proved reserves divested of 7
  MMBOE and proved reserves acquired of 1 MMBOE);
• continuing to maintain a strong balance sheet with cash on hand at the
  end of the fourth quarter of $2.2 billion (includes liquid
  investments); year-end net debt to 2017 operating cash flow was 0.3
  times and year-end net debt-to-book capitalization was 5%;
• placing 64 horizontal wells on production in the Permian Basin during
  the fourth quarter, of which eight wells had higher intensity
  completions (referred to as Version 3.0+ completions) compared to
  Version 3.0 completions; the Company has now placed 20 wells on
  production with higher intensity completions that continue to
  significantly outperform Version 3.0 completions;
• placing the Company’s first Wolfcamp D interval well with a Version
  3.0 completion on production during the fourth quarter in Midland
  County; the well delivered an initial peak 24-hour production rate of
  3.6 MBOEPD and has delivered 45-day cumulative production of 120
  thousand barrels oil equivalent (MBOE), with an oil content of 72%;
• completing acreage trades during 2017 for 7.2 million lateral feet in
  the Permian Basin;
• drilling and completing 11 new wells and completing nine previously
  drilled-but-uncompleted (DUC) wells in the Eagle Ford Shale during
  2017 (Pioneer has a 46% working interest); to date, average cumulative
  production per well from the new drills and DUCs with higher intensity
  completions has been more than double the average cumulative
  production per well from all wells placed on production in 2015 and
  2016; and
• exporting approximately 90 MBOPD of Permian Basin oil production
  during the fourth quarter to customers principally located in Asia and
  Europe; premiums on Gulf Coast refinery and export sales added $15
  million of incremental cash flow in the fourth quarter; the Company
  expects to export a similar amount of oil during the first quarter of
  2018.

Pioneer’s 2018 Plan and Capital Program is summarized below:

• planning to divest the Company’s Eagle Ford Shale, South Texas, Raton
  and West Panhandle assets during 2018, making Pioneer a Permian Basin
  “pure play”; data rooms are expected to open later in the first
  quarter for the assets being divested; after the divestitures are
  completed, the Company expects reported revenue per BOE will increase
  and operating expense per BOE will decrease, thereby significantly
  improving reported cash operating margins and corporate returns;
• planning to operate 20 horizontal rigs in the Permian Basin during
  2018; 16 rigs are currently operating in the northern portion of the
  play, with two rigs focused on increasing the DUC inventory to improve
  operational flexibility; once an adequate DUC inventory is built, the
  two rigs will focus on production growth with incremental production
  volumes not expected until early 2019 as a result of pad drilling;
  four rigs will continue to operate in the southern Wolfcamp joint
  venture area, with activity focused in the northern portion of this
  area (Pioneer has a 60% working interest);
• expecting to place 250 to 275 wells on production in the Permian Basin
  during 2018; approximately 45 of these wells will be Version 3.0+
  completions in the first half of 2018; the remaining wells for 2018
  are currently planned to be predominantly Version 3.0 completions;
  Pioneer’s 2018 production forecast reflects this completion mix;
• reducing the use of four-string casing designs in the 2018 Permian
  Basin drilling program to approximately 50% compared to 75% in the
  second half of 2017;
• forecasting Permian Basin oil production growth in 2018 ranging from
  19% to 24% compared to 2017; total Permian Basin production, on a BOE
  basis, is also forecasted to grow by 19% to 24% compared to 2017;
• expecting internal rates of return (IRRs) averaging 65% for the 2018
  drilling program (including facility investments) assuming an oil
  price of $55.00 per barrel and a gas price of $3.00 per thousand cubic
  feet (MCF);
• planning capital expenditures for 2018 of $2.9 billion, which includes
  $2.65 billion for drilling and completion activities and $260 million
  for water infrastructure, vertical integration, field facilities and
  vehicles; this capital program assumes that further efficiency gains
  will offset the Company’s estimated cost inflation of 5%; Pioneer’s
  vertical integration operations mitigate the impact of the 10% to 15%
  cost inflation forecasted for the industry in 2018;
• funding the 2018 capital program from forecasted cash flow of $2.8
  billion (assumes prices of $55 per barrel for oil and $3 per MCF for
  gas), proceeds from asset divestitures and cash on hand; the 2018
  capital program is expected to be cash flow breakeven at approximately
  a $58 per barrel oil price; at current strip prices of $61.00 per
  barrel for oil and $2.85 per MCF for gas, forecasted cash flow would
  be $3.0 billion;
• maintaining derivative positions that cover more than 85% of
  forecasted 2018 Permian Basin oil production and more than 60% of
  forecasted 2018 Permian Basin gas production;
• enhancing cash flow with premiums on growing sales to the Gulf Coast
  refinery and export markets;
• expecting to repay the May 2018 debt maturity of $450 million from
  cash on hand;
• forecasting 2018 year-end net debt to 2018 operating cash flow to be
  below 0.5x;
• increasing the Company’s semiannual per share dividend from $0.04 to
  $0.16 (equivalent to $0.32 per share on an annualized basis); reflects
  the Company’s strong balance sheet, expected proceeds from asset
  divestitures and positive outlook for generating free cash flow; the
  Company also plans a common stock repurchase program during 2018 to
  offset the impact of dilution associated with employee stock
  compensation awards; and
• expecting to include return and per-share growth goals in the
  Company’s 2018 executive compensation program.

President and CEO Timothy L. Dove stated, “The Company delivered another
excellent quarter, with strong earnings, solid execution, robust oil
production growth, excellent horizontal well performance in the Permian
Basin and reduced production costs. Our world-class Permian Basin asset
is considered by many to be the top oil shale play in North America. We
are drilling low-cost, highly productive wells that generate high rates
of return as a result of a low all-in cost structure of approximately
$19 per barrel.”

“We are in year two of our 10-year plan and remain committed to
achieving oil production greater than 700 MBOPD and total production
greater than 1 million barrels oil equivalent per day in 2026. By
steadily increasing the pace of drilling our low-cost, high-return
Permian Basin horizontal wells through 2026, we expect to deliver robust
cash flow growth that will self-fund our capital program, improve our
return on capital employed (ROCE)¹ and generate free cash
flow. It will also allow us to continue to return cash to our
stakeholders as demonstrated by the dividend increase and share
repurchase program we announced today and planned debt repayment in May
2018.”

“In 2018, our capital program is expected to be funded by cash flow if
oil prices average approximately $58 per barrel. Looking forward, the
breakeven oil price to fund our planned capital program declines to
approximately $50 per barrel in 2020 and $40 per barrel in 2026. At an
oil price of $55 per barrel and a gas price of $3 per MCF, cash flow is
expected to grow by approximately 20% annually and be more than $11
billion in 2026, and our ROCE is forecasted to increase from
approximately 5% in 2018 to 15% in 2026.”

Permian Basin Operations Update and Outlook

Pioneer is the largest acreage holder in the Midland Basin, with
approximately 550,000 gross acres in the northern portion of the play
and approximately 200,000 gross acres in the southern Wolfcamp joint
venture area. Pioneer’s contiguous acreage position and substantial
resource potential allow for decades of drilling horizontal wells with
lateral lengths ranging from 7,500 feet to 14,000 feet.

The Company implemented a completion optimization program during 2015 in
the Spraberry/Wolfcamp that combines longer laterals with optimized
stage lengths, clusters per stage, fluid volumes and proppant
concentrations. The objective of the program was to improve well
productivity by allowing more rock to be contacted closer to the
horizontal wellbore. In 2013 and 2014, the Company’s initial fracture
stimulation design (Version 1.0) consisted of proppant concentrations of
approximately 1,000 pounds per foot, fluid concentrations of 30 barrels
per foot, cluster spacing of 60 feet and stage spacing of 240 feet.
Beginning in mid-2015, the Company enhanced its fracture stimulation
design (Version 2.0), which consisted of larger proppant concentrations
of approximately 1,400 pounds per foot, larger fluid concentrations of
36 barrels per foot, tighter cluster spacing of 30 feet and shorter
stage spacing of 150 feet. Beginning in the first quarter of 2016,
Pioneer commenced testing further-enhanced completion designs (Version
3.0), which included larger proppant concentrations of approximately
2,000 pounds per foot, larger fluid concentrations up to 50 barrels per
foot, tighter cluster spacing down to 15 feet and shorter stage spacing
down to 100 feet.

The Company placed 56 Version 3.0 wells on production during the fourth
quarter of 2017. On average, these wells and the more than 260 Version
3.0 wells that were placed on production prior to the fourth quarter are
continuing to outperform Version 2.0 completions.

Pioneer placed 12 wells on production during the second quarter of 2017
that utilized higher intensity completions compared to Version 3.0
wells. These are referred to as Version 3.0+ completions. Eight
additional wells using Version 3.0+ completions were placed on
production in the fourth quarter. All of these wells utilized increased
proppant, and three wells utilized increased proppant and water compared
to Version 3.0 wells. Of the eight wells, five were placed on production
toward the end of the fourth quarter and are still flowing back. Early
production results from the remaining three wells that were placed on
production earlier in the quarter are significantly outperforming
production from nearby offset wells with less intense completions. Based
on the initial success of the higher intensity completions to date, the
Company plans to test approximately 45 additional Version 3.0+
completions during the first half of 2018.

Two of the Version 3.0 wells that were placed on production during the
fourth quarter were in the Jo Mill interval. Fifteen wells have now been
tested as part of the Jo Mill appraisal program since the third quarter
of 2014. Performance from all of these wells is encouraging. The Jo Mill
wells placed on production to date cover a large cross section of
Pioneer’s acreage. The Company plans to drill seven additional Jo Mill
appraisal wells during 2018.

Pioneer placed its first Wolfcamp D well with a Version 3.0 completion
on production in Midland County during the fourth quarter. The well,
which had a lateral length of ~9,700 feet, had an initial 24-hour peak
production rate of 3.6 MBOEPD and has delivered 45-day cumulative
production of 120 MBOE, with an oil content of 72%. This well delivered
the strongest 45-day cumulative production for all Pioneer Wolfcamp D
wells to date and ranks as one of Pioneer’s top producing Wolfcamp wells
during its early production days.

Pioneer’s 2018 drilling program includes appraising: (i) its first
Clearfork horizontal well (located in Midland County), (ii) 10 wells in
the Jo Mill and Middle Spraberry intervals in conjunction with nine
Lower Spraberry Shale wells to determine an optimal development strategy
for the Spraberry formation (these appraisals will test different
spacing, staggering, sequencing, and completion design) and (iii) three
Wolfcamp D interval wells.

For the fourth quarter of 2017, Pioneer placed 64 horizontal wells on
production. Forty-three wells were in the northern area and 21 wells
were in the southern Wolfcamp joint venture area. For the full year, 224
wells were placed on production, of which 184 were in the northern area
and 40 wells were in the southern Wolfcamp joint venture area.

The Company’s Permian Basin horizontal drilling program continues to
drive production growth, with total Permian Basin oil production
increasing by 14 MBOPD, or 9%, in the fourth quarter of 2017 compared to
the third quarter of 2017. Total Permian Basin oil production increased
by 26% in 2017 compared to 2016. Pioneer’s forecasted 2018 oil
production growth rate for the Permian Basin ranges from 19% to 24%.

The Company plans to operate 20 horizontal drilling rigs in the Permian
Basin during 2018. Sixteen rigs are currently operating in the northern
part of Pioneer’s acreage, with two rigs focused on increasing the DUC
inventory to improve operational flexibility. Once an adequate DUC
inventory is built, the two rigs will focus on production growth with
incremental production volumes not expected until early 2019 as a result
of pad drilling. Four rigs will continue to operate in the southern
Wolfcamp joint venture area, with activity focused in the northern
portion of this area (Pioneer has a 60% working interest). Pioneer
expects to place 250 to 275 gross wells on production in the Permian
Basin during 2018. Of these wells, approximately 200 to 225 wells will
be in the northern area and 50 wells will be in the southern Wolfcamp
joint venture area. Approximately 60% of the wells will be in the
Wolfcamp B interval and 25% in the Wolfcamp A interval. The remaining
15% will be a combination of wells in the Spraberry Shale intervals (Jo
Mill, Lower Spraberry and Middle Spraberry) and a limited appraisal
program for the Clearfork and Wolfcamp D intervals.

The budgeted costs to drill and complete these wells in 2018 are:
Wolfcamp B – $8.9 million for a 10,000-foot lateral well; Wolfcamp A –
$8.3 million for a 9,500-foot lateral well; and Spraberry intervals –
$7.5 million for a 9,500-foot lateral well. For the 2018 drilling
program, the expected ultimate recoveries (EURs) by interval are:
Wolfcamp B – 1.7 MMBOE, Wolfcamp A – 1.4 MMBOE and the Spraberry
intervals – 1.1 MMBOE.

Production costs (including production and ad valorem taxes) for
Pioneer’s horizontal Permian Basin wells are expected to continue to
range from $4.00 per BOE to $5.00 per BOE.

The drilling program in the Permian Basin is expected to deliver IRRs
averaging 65%, assuming an oil price of $55.00 per barrel and a gas
price of $3.00 per MCF. These returns include facilities costs.

Permian Basin Infrastructure

Pioneer is focused on optimizing the development of the Permian Basin,
which includes ensuring that future infrastructure requirements are
constructed. These requirements include construction of large-scale
horizontal tank batteries, saltwater disposal facilities and below-grade
cellars. They also include construction of additional field and gas
processing facilities, the build-out of a field-wide water distribution
system and the development of optimal sand sourcing and logistics.

Forecasted spending for the construction of tank batteries, saltwater
disposal facilities and below-grade cellars reflects a combination of
building new facilities and expanding existing facilities. The Company
expects to spend approximately $300 million in 2018 for these
facilities. Approximately 65% of the long-term tank battery requirements
is forecasted to be completed at year-end 2018. The Company is utilizing
below-grade cellars for 24-well pads to minimize future surface acreage
requirements and thereby reduce full-cycle surface costs per well.

Pioneer owns a 27% interest in Targa Resources’ West Texas gas
processing system and a 30% interest in WTG’s Sale Ranch gas processing
system. These investments (i) improve Pioneer’s contract terms for field
gas processing, (ii) ensure the timely connection of Pioneer’s new
horizontal wells and (iii) provide the Company with opportunities to
benefit from third-party processing revenues. During 2018, the Company
expects to spend $170 million for (i) two new plants planned for
completion during the first and third quarters of this year (each will
have a capacity of 200 million cubic feet per day (MMCFPD)), (ii) two
new plants that are expected to be completed in the first and third
quarters of 2019 (each is expected to have a capacity of 250 MMCFPD) and
(iii) gathering system compression and new connections. The new plants
are needed to meet Pioneer’s and the industry’s gas production growth
expectations.

The Company is constructing a field-wide water distribution system to
reduce the cost of water for drilling and completion activities and to
ensure that adequate supplies of non-potable water are available for use
in the development of Pioneer’s acreage. The 2018 capital program
includes $135 million for the Midland wastewater treatment plant upgrade
and additional subsystems, frac ponds and produced water reuse.

Pioneer has signed a contract for its initial offtake of sand sourced in
West Texas. Additional contracts are being negotiated. As a result,
expansion of the Company’s sand mine at Brady, Texas has been deferred.

2018 Capital Program

The Company’s capital budget for 2018 is $2.9 billion (excluding
acquisitions, asset retirement obligations, capitalized interest,
geological and geophysical G&A and IT system upgrades). The budget
includes $2.65 billion for drilling and completion activities, including
tank batteries/saltwater disposal facilities and gas processing
facilities, and $260 million for water infrastructure, vertical
integration, field facilities and vehicles.

The following provides a breakdown of the drilling and completions
capital budget by asset:

• Permian Basin – $2.63 billion (includes $2.05 billion for the
  horizontal drilling and completion program, $300 million for tank
  batteries/saltwater disposal facilities/below-grade cellars, $170
  million for gas processing facilities and $110 million for land,
  science and other expenditures);
• Other assets – $20 million.

Capital spending for 2018 is expected to be funded from forecasted
operating cash flow of $2.8 billion (assuming average estimated prices
for 2018 of $55.00 per barrel for oil and $3.00 per MCF for gas),
proceeds from asset divestitures and cash on hand (including liquid
investments).

Fourth Quarter 2017 Financial Review

Sales volumes for the fourth quarter of 2017 averaged 305 MBOEPD. Oil
sales averaged 180 thousand barrels per day (MBPD), NGL sales averaged
62 MBPD and gas sales averaged 377 MMCFPD.

The average realized price for oil was $52.81 per barrel. The average
realized price for NGLs was $21.64 per barrel, and the average realized
price for gas was $2.53 per MCF. These prices exclude the effects of
derivatives.

Production costs, including taxes, averaged $7.60 per BOE. Depreciation,
depletion and amortization (DD&A) expense averaged $13.07 per BOE.
Exploration and abandonment costs were $28 million, including $8 million
for seismic purchases and $17 million for personnel costs. General and
administrative expense totaled $80 million. Interest expense was $35
million. Other expense was $67 million, including $40 million of charges
associated with excess firm gathering and transportation commitments.

First Quarter 2018 Financial Outlook

The Company’s first quarter 2018 outlook for certain operating and
financial items is provided below.

Total production is forecasted to average between 304 MBOEPD to 314
MBOEPD. Permian Basin production is forecasted to average between 252
MBOEPD to 260 MBOEPD. First quarter production was negatively impacted
by prolonged freezing temperatures in early January. Shut-in production
and completion delays are expected to result in production losses of
approximately 6 MBOEPD for the first quarter.

Production costs are expected to average $7.00 per BOE to $9.00 per BOE.
DD&A expense is expected to average $12.50 per BOE to $14.50 per BOE.
Total exploration and abandonment expense is forecasted to be $20
million to $30 million.

General and administrative expense is expected to be $80 million to $85
million. Interest expense is expected to be $33 million to $38 million.
Other expense is forecasted to be $60 million to $70 million and is
expected to include $45 million to $55 million of charges associated
with excess firm gathering and transportation commitments. Accretion of
discount on asset retirement obligations is expected to be $4 million to
$7 million.

The Company’s effective income tax rate is expected to range from 21% to
25%, reflecting the enactment of the Tax Cuts and Jobs Act that lowered
the corporate federal income tax rate. Current income taxes are expected
to be less than $5 million.

The Company’s financial and derivative MTM results and open derivatives
positions are outlined on the attached schedules.

Earnings Conference Call

On Wednesday, February 7, 2018, at 9:00 a.m. Central Time, Pioneer will
discuss its financial and operating results for the quarter ended
December 31, 2017, and the Company’s 2018 capital program, with an
accompanying presentation. Instructions for listening to the call and
viewing the accompanying presentation are shown below.

Internet: www.pxd.com
Select
“Investors,” then “Earnings & Webcasts” to listen to the discussion,
view the presentation and see other related material.

Telephone:
Dial (866) 564-2842 and confirmation code 1440973 five minutes before
the call. View the presentation via Pioneer’s internet address above.

A replay of the webcast will be archived on Pioneer’s website. This
replay will be available through March 4, 2018. Click
here to register for the call-in audio replay, and you will receive
the dial-in information.

Pioneer is a large independent oil and gas exploration and production
company, headquartered in Dallas, Texas, with operations in the United
States. For more information, visit www.pxd.com.

Footnote 1: Return on Capital Employed is a non-GAAP financial measure.
See definitions below.

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 commodity
prices, product supply and demand, competition, the ability to obtain
environmental and other permits and the timing thereof, other government
regulation or action, the ability to obtain approvals from third parties
and negotiate agreements with third parties on mutually acceptable
terms, completion of planned divestitures, litigation, the costs and
results of drilling and operations, availability of equipment, services,
resources and personnel required to perform the Company’s drilling and
operating activities, access to and availability of transportation,
processing, fractionation, refining and export facilities, Pioneer’s
ability to replace reserves, implement its business plans or complete
its development activities as scheduled, access to and cost of capital,
the financial strength of counterparties to Pioneer’s credit facility,
investment instruments and derivative contracts and purchasers of
Pioneer’s oil, natural gas liquids and gas production, uncertainties
about estimates of reserves and resource potential, identification of
drilling locations and the ability to add proved reserves in the future,
the assumptions underlying production forecasts, quality of technical
data, environmental and weather risks, including the possible impacts of
climate change, ability to implement planned stock repurchases, the
risks associated with the ownership and operation of the Company’s
industrial sand mining and oilfield services businesses and acts of war
or terrorism. These and other risks are described in Pioneer’s Annual
Report on Form 10-K for the year ended December 31, 2016, and other
filings with the Securities and Exchange Commission. In addition,
Pioneer may be subject to currently unforeseen risks that may have a
materially adverse impact on it. Accordingly, no assurances can be given
that the actual events and results will not be materially different than
the anticipated results described in the forward-looking statements.
Pioneer undertakes no duty to publicly update these statements except as
required by law.

An audit of proved reserves follows the general principles set forth
in the standards pertaining to the estimating and auditing of oil and
gas reserve information promulgated by the Society of Petroleum
Engineers (“SPE”). A reserve audit as defined by the SPE is not
the same as a financial audit. Please see the Company's Annual Report on
Form 10-K for a general description of the concepts included in the
SPE's definition of a reserve audit.

“Drillbit finding and development cost per BOE,” or “drillbit F&D
cost per BOE,” means the summation of exploration and development costs
incurred divided by the summation of annual proved reserves, on a BOE
basis, attributable to discoveries, extensions and revisions of previous
estimates. Revisions of previous estimates exclude price
revisions. Consistent with industry practice, future capital
costs to develop proved undeveloped reserves are not included in costs
incurred.

“Drillbit reserve replacement” is the summation of annual proved
reserves, on a BOE basis, attributable to discoveries, extensions and
revisions of previous estimates divided by annual production of oil,
NGLs and gas, on a BOE basis. Revisions of previous estimates
exclude price revisions.

“Proved developed finding and development cost per BOE,” or “proved
developed F&D cost per BOE,” means the summation of exploration and
development costs incurred (excluding asset retirement obligations)
divided by the summation of annual proved reserves, on a BOE basis,
attributable to proved developed reserve additions, including (i)
discoveries and extensions placed on production during 2017, (ii)
transfers from proved undeveloped reserves at year-end 2016 and (iii)
technical revisions of previous estimates for proved developed reserves
during 2017. Revisions of previous estimates exclude price revisions.

“Free Cash Flow (FCF)” occurs when net cash provided by operations
(before working capital changes) exceeds Capital Expenditures.

“Return on Capital Employed (ROCE)” is net income adjusted for
tax-effected interest expense, net noncash MTM derivative gains and
losses and other unusual items divided by the summation of
average equity plus average net debt.

“Cash Flow Breakeven Oil Price” is the NYMEX WTI price at which net
cash flow provided by operations (before working capital changes) equals
Capital Expenditures.

“Capital Expenditures” equals the Company’s planned capital budget
for any year excluding acquisitions, asset retirement obligations,
capitalized interest, geological and geophysical G&A and IT system
upgrades.

Pioneer may repurchase shares from time to time at management’s
discretion in accordance with applicable securities laws, including
through open market transactions, privately negotiated transactions or
any combination thereof. In addition, shares may also be
purchased pursuant to a trading plan meeting the requirements of Rule
10b5-1 under the Securities Exchange Act of 1934, as amended, which
would permit shares to be repurchased when the Company might otherwise
be precluded from doing so under insider trading laws. The amount
and timing of repurchases are subject to a number of factors, including
stock price, trading volume and general market conditions, and the
program may be modified, suspended or terminated at any time by
Pioneer’s Board of Directors. The Company intends to fund
repurchases under the program from existing cash flow, proceeds from
asset divestitures or cash and cash equivalents.

This news release also contains a forward-looking non-GAAP financial
measure, return on capital employed. Due to its forward-looking
nature, management cannot reliably predict certain of the necessary
components of the most directly comparable forward-looking GAAP measure,
such as future noncash property impairments, gains or losses on future
divestitures and future noncash MTM derivative gains and losses. Accordingly,
Pioneer is unable to present a quantitative reconciliation of such
forward-looking non-GAAP financial measure to its most directly
comparable forward-looking GAAP financial measure. Amounts
excluded from this non-GAAP measure in future periods could be
significant.

Cautionary Note to U.S. Investors --The SEC prohibits oil and gas
companies, in their filings with the SEC, from disclosing estimates of
oil or gas resources other than “reserves,” as that term is defined by
the SEC. In this news release, Pioneer includes estimates of
quantities of oil and gas using certain terms, such as “resource
potential,” “net recoverable resource potential,” “recoverable
resource,” “estimated ultimate recovery,” “EUR,” “oil in place” or other
descriptions of volumes of reserves, which terms include quantities of
oil and gas that may not meet the SEC’s definitions of proved, probable
and possible reserves, and which the SEC's guidelines strictly prohibit
Pioneer from including in filings with the SEC. These estimates
are by their nature more speculative than estimates of proved reserves
and, accordingly, are subject to substantially greater risk of being
recovered by Pioneer. U.S. investors are urged to consider
closely the disclosures in the Company’s periodic filings with the SEC.
Such filings are available from the Company at 5205 N. O'Connor
Blvd., Suite 200, Irving, Texas 75039, Attention: Investor Relations,
and the Company’s website at www.pxd.com.
These filings also can be obtained from the SEC by calling
1-800-SEC-0330.

PIONEER NATURAL RESOURCES COMPANY

UNAUDITED SUPPLEMENTARY EARNINGS PER SHARE INFORMATION

The Company uses the two-class method of calculating basic and diluted
earnings per share. Under the two-class method of calculating earnings
per share, generally acceptable accounting principles ("GAAP") provide
that share-based awards with guaranteed dividend or distribution
participation rights qualify as "participating securities" during their
vesting periods. During periods in which the Company realizes net income
attributable to common stockholders, the Company's basic net income per
share attributable to common stockholders is computed as (i) net income
attributable to common stockholders, (ii) less participating share-based
basic earnings (iii) divided by weighted average basic shares
outstanding and the Company's diluted net income per share attributable
to common stockholders is computed as (i) basic net income attributable
to common stockholders, (ii) plus the reallocation of participating
earnings, if any, (iii) divided by weighted average diluted shares
outstanding. During periods in which the Company realizes a loss
attributable to common stockholders, securities or other contracts to
issue common stock would be dilutive to loss per share; therefore,
conversion into common stock is assumed not to occur.

The following table is a reconciliation of the Company's net income
(loss) attributable to common stockholders to basic and diluted net
income (loss) attributable to common stockholders for the three and
twelve months ended December 31, 2017 and 2016:

Basic and diluted weighted average common shares outstanding were 170
million for both the three and twelve months ended December 31, 2017.
Basic and diluted weighted average common shares outstanding were
170 million and 166 million for the three and twelve months ended
December 31, 2016, respectively.

PIONEER NATURAL RESOURCES COMPANY

UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(in
millions)

EBITDAX and discretionary cash flow ("DCF") (as defined below) are
presented herein, and reconciled to the GAAP measures of net income
(loss) and net cash provided by operating activities, because of their
wide acceptance by the investment community as financial indicators of a
company's ability to internally fund exploration and development
activities and to service or incur debt. The Company also views the
non-GAAP measures of EBITDAX and DCF as useful tools for comparisons of
the Company's financial indicators with those of peer companies that
follow the full cost method of accounting. EBITDAX and DCF should not be
considered as alternatives to net income (loss) or net cash provided by
operating activities, as defined by GAAP.

_____________________

PIONEER NATURAL RESOURCES COMPANY

UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (continued)
(in
millions, except per share data)

Income adjusted for noncash mark-to-market ("MTM") derivative losses,
and income adjusted for noncash MTM derivative losses and an unusual
item, as presented in this press release, is presented and reconciled to
Pioneer's net income attributable to common stockholders (determined in
accordance with GAAP) because Pioneer believes that these non-GAAP
financial measures reflect an additional way of viewing aspects of
Pioneer's business that, when viewed together with its financial results
computed in accordance with GAAP, provide a more complete understanding
of factors and trends affecting its historical financial performance and
future operating results, greater transparency of underlying trends and
greater comparability of results across periods. In addition, management
believes that these non-GAAP measures may enhance investors' ability to
assess Pioneer's historical and future financial performance. These
non-GAAP financial measures are not intended to be a substitute for the
comparable GAAP measure and should be read only in conjunction with
Pioneer's consolidated financial statements prepared in accordance with
GAAP. Noncash MTM derivative gains and losses and unusual items will
recur in future periods; however, the amount and frequency can vary
significantly from period to period. The table below reconciles
Pioneer's net income attributable to common stockholders for the three
months ended December 31, 2017, as determined in accordance with GAAP,
to adjusted income excluding noncash MTM derivative losses and adjusted
income excluding MTM derivative losses and an unusual item for the
quarter.

_____________________

Marketing derivatives. Periodically, the Company enters into buy
and sell marketing arrangements to fulfill firm pipeline transportation
commitments. Associated with these marketing arrangements, the Company
may enter into index swap contracts to mitigate price risk.

The following table presents Pioneer's open marketing derivative
positions as of February 5, 2018:

_____________________

_____________________

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