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Pioneer Increases Production; Quarterly Earnings Jump 78%

Dallas-based independent Pioneer Natural Resources Co. beat 4Q2004 Wall Street forecasts on higher oil and natural gas prices, and earnings jumped 78% compared with a year ago.

The producer earned $102 million (69 cents/share), up from $57.4 million (48 cents) in 4Q2003. Revenue rose 52% to $529.1 million from $347.8 million. For all of 2004, Pioneer earned $312.9 million ($2.46/share) on revenue of $1.85 billion. Fourth quarter oil and natural gas sales averaged a record 191,451 boe/d, with gas sales averaging 722 MMcf/d.

"We had a solid quarter as each of our divisions posted strong results, and with the addition of our new Rockies division, we've set a new production record," said COO Tim Dove. "We expect to continue to add production from our core properties as we step up our development drilling program in 2005, leading to full-year expected production of 70-74 million boe."

CEO Scott Sheffield noted that with high 2005 cash flow, "we expect to have over $1 billion of cash available during 2005 in excess of our current capital budget. By reaching our debt reduction targets early, we now have the flexibility to aggressively repurchase shares under our new $300 million authorization and have purchased approximately 600,000 shares since the end of January."

Sheffield said Pioneer's 2005 drilling programs in its core U.S. onshore areas are "well under way." In the deepwater Gulf of Mexico, completion operations have resumed at Devils Tower, and production is expected to be back online this week at Canyon Express. Both were suspended following Hurricane Ivan last September.

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