O’Daniel Pilot Performance Update (2/10/02)

1. O’Daniel Pilot Performance Update (2/10/02) Pioneer Natural Resources

2. O’Daniel Area Map

3. Oil Production Response due to Water Injection In O’ Daniel Pilot

4. Volume of Water Injection until On-trend Production Wells Start Responding Note: Volume CO2 injected up to 2/10/02: 46,966 bbls Brunson C-2 (429,807 bbls) Brunson F-1 (170,244 bbls) Brunson G-1 (757,551 bbls)

5. CO2 injection vs. water injection CO2 injection: • Total volume of CO2 injection is 84,539 MSCF (~ 46,966 bbls) from 2/26/01 to 2/10/02. Water injection: • Total volume of water injection is 170,244 bbls until oil starts responding (1/1/99 to 8/18/99). • Full water injection started on 10/3/99.

6. A  67 Acre HCPV  402,000 bbls CO2 Injection  11.7 % HCPV (Water Injection*  42.3% HCPV) A  20 Acre HCPV  120,000 bbls CO2 Injection  39% HCPV (Water Injection*  142% HCPV) A  2387.5 Acre HCPV  14.3 MMBbls CO2 Injection  0.33 % HCPV (Water Injection*  1.2% HCPV) Amount of CO2 injected compared to water injected Assuming HCVP = 6000 bbls/acre 360 Mcf ~ 200 bbls/d (at 2500 psi) Injection days from Feb 26, 2001 to Feb 10, 2002) *) Volume of water injection until oil starts responding (1/1/99 - 8/18/99)

7. Daily pilot battery production

8. Daily pilot battery performance

9. High pressure confinement restricts CO2 movement

10. Total injection is maintained during CO2 injection

11. 18.5 % of water has been produced from the battery

12. 48 % of CO2 slug has been produced at pilot battery Less than 5% of CO2 slug has been produced at the O’Daniel A#1

13. ET O’Daniel “A” – 1 Performance as of 2/10/02

14. The E.T O’Daniel “A” 1 shows response to CO2 injection CO2 started

15. Decline analysis taken from peak oil rate

16. Incremental oil recovery after injecting 84.5 MMSCF CO2 (Based on decline curve at peak oil rate)

17. Decline analysis after water injection

18. Incremental oil recovery after injecting 84.5 MMSCF CO2 (Based on decline curve taken after waterflood)

19. C1 relative enrichment

20. Does WAG improve oil recovery? Effect of CO2 Injection on Oil Production Rate at Well ET O Daniel A-1

21. High water production rate at A#1

22. Where does the CO2 go?

23. Does CO2 in the interior pilot go to non-productive zones?

24. 31-Jan-2001 17-Apr-2001 Log response on CO2 injection 1U 2U Shaded area shows response due to CO2 injection 3U 4U 5U

25. Well #41 Well #42 “Temperature logs show that CO2 injection is not localized to just 1U and 5U zones” (EPIC)

26. Summary • LOW response and temperature logs indicate CO2 injection occurs throughout the Upper Spraberry interval, consistent with the notion that hydraulic fractures dominate CO2 movement in the interior of the pilot • Most of the produced CO2 is from the interior pilot wells, the 38, 39 and 40, probably through non-pay shaly zones, i.e. 3U

27. Summary • To the contrary, the E.T. O’Daniel A-1 which is oriented directly along the known natural fracture trend from the CO2 injection wells has produced a very low total volume of CO2 • Oil has been mobilized to the E.T. O’Daniel A-1 as indicated by C1 enrichment and incremental oil response. No enrichment is observed in the interior pilot wells • The total volume of CO2 injected to date compared to the volume of water required for incremental waterflood recovery is still considerably low • WAG does not improve sweep efficiency or improve oil recovery