Pioneer Southwest Energy Partners L.P. Reports Second Quarter Results

Business Wire, August 4, 2008

DALLAS -- Pioneer Southwest Energy Partners L.P. ("Pioneer Southwest") (NYSE:PSE) today announced financial results for the quarter ending June 30, 2008.

Net income for the second quarter was $26 million. Income since the May 6, 2008 closing date of the initial public offering was $16 million or $.53 per common unit. Oil and gas sales for the second quarter averaged 5,006 barrels oil equivalent per day (BOEPD).

Cash flow from operating activities for the period was $35 million of which approximately $16 million was attributable to operations from May 6 through June 30.

Second quarter oil sales averaged 3,046 barrels per day (BPD), natural gas liquids (NGLs) sales averaged 1,135 BPD and gas sales averaged 5.0 million cubic feet per day (MMCFPD). The reported second quarter average price for oil was $116.54 per barrel. The price for natural gas liquids was $50.05 per barrel. The reported price for gas was $7.81 per thousand cubic feet (MCF). The average prices reported for the second quarter include hedging results from May 6 through June 30.

Pioneer Southwest previously announced a cash distribution of $.31 per outstanding common unit for the quarter ended June 30. The distribution is payable August 12, 2008 to holders of record at the close of business on July 29, 2008. This distribution reflects an annual distribution rate of $2.00 per common unit, pro rated from the May 6 closing date through June 30.

Financial Outlook

Third quarter 2008 production is forecasted to average 4,900 BOEPD to 5,100 BOEPD. Third quarter production costs (including production and ad valorem taxes and transportation costs) are expected to average $24.00 to $27.00 per BOE based on current NYMEX strip prices for oil, NGLs and gas. Depreciation, depletion and amortization expense is expected to average $3.50 to $4.00 per BOE.

General and administrative expense is expected to be $1 million to $2 million. Interest expense and accretion of discount on asset retirement obligations are both expected to be nominal.

Pioneer Southwest's third quarter cash taxes and effective income tax rate are expected to be approximately 1% as a result of Pioneer Southwest being subject to the Texas Margin tax.

Earnings Conference Call

On Tuesday, August 5 at 12:30 p.m. Eastern Time, Pioneer Southwest will discuss its financial and operating results with an accompanying presentation. The call will be webcast on Pioneer Southwest's website, www.pioneersouthwest.com. The presentation will soon be available on Pioneer Southwest's website for preview in advance of the call. At the website, select 'INVESTORS' at the top of the page. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. Or you may choose to dial (877) 795-3610 (confirmation code: 1064543) to listen to the call by telephone and view the accompanying visual presentation at the website above. A telephone replay will be available by dialing (888) 203-1112 (confirmation code: 1064543).

Pioneer Southwest is a Delaware limited partnership formed by Pioneer Natural Resources Company to own and acquire oil and gas assets in its area of operations. This area includes onshore Texas and eight counties in the southeast region of New Mexico.

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 Southwest are subject to a number of risks and uncertainties that may cause Pioneer Southwest'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, the effectiveness of Pioneer Southwest's commodity price hedging strategy, reliance on Pioneer Natural Resources Company and its subsidiaries to manage Pioneer Southwest's business and identify and evaluate acquisitions, 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, litigation, the costs and results of operations, access to and availability of transportation, processing and refining facilities, Pioneer Southwest's ability to replace reserves, including through acquisitions, and implement its business plans, uncertainties associated with acquisitions, access to and cost of capital, uncertainties about estimates of reserves, the assumptions underlying production forecasts, quality of technical data and environmental and weather risks. These and other risks are described in Pioneer Southwest's final prospectus dated April 30, 2008 (File No. 333-144868) and filed on May 1, 2008 with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(4) under the Securities Act of 1933 (the "Prospectus"), as well as Pioneer Southwest's 10-Q Reports and other filings with the Securities and Exchange Commission. In addition, Pioneer Southwest may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer Southwest undertakes no duty to publicly update these statements except as required by law.