PAWNEE RESERVOIR SIMULATION STUDY Pioneer Natural Resources Co. Performed By Gemini Solutions, Inc. January 2001

Pawnee Prospect  Tasks:  Create model of one section of the field  History match recorded production and pressures  Verify history match by predicting actual horizontal well completion rates/flowing pressures  Predict future production for current wells  Predict production acceleration and incremental recovery from additional horizontal wells

Pawnee Prospect Top of Structure - Section Modeled

Ternary Diagram - gas and water Six layer Model – 95 BCF in area modeled

Core Permeability Distribution No recognizable distribution vertically

Core Permeability Distribution Trend from well to well – northeast to southwest

Pawnee Reservoir – Permeability Variation  Permeability Conclusions:  There appears to be a general trend from well to well looking at all of the cores  No vertical trend identifiable  Including vertical stratification would not improve model because distribution is uncertain.

Pawnee Reservoir – Porosity Variation Average porosity for first 100 feet – mapped using core data except: Increased porosity around Tomasek 4

Permeability Field to Match History  Match very sensitive to K

History Match Results – Tomasek 1 Match tubing head pressures before fracture job

History Match Results – Tomasek 1 Match buildup at days, tubing head surface pressures after fracture job – add hydraulic fracture

History Match Results – Gordon Albert 1 Match buildup at days and surface pressures during well life

Pawnee Reservoir Future Forecasts Red =Vert. +hor +2 infill Green = Vert. +hor +1 infill Blue = Vert.+hor wells Light Blue =Vert. wells

Pawnee Reservoir Pressure Map  Vertical wells only – horizontal wells shut in Poor reservoir sweep and low recovery, maps from years 2001 to 2006

Pawnee Reservoir Pressure Map  Vertical wells plus existing horizontal wells – no infill drilling Better reservoir sweep and recovery, maps from years 2001 to 2006

Pawnee Reservoir Pressure Map  Vertical wells plus existing horizontal wells – drill Tomasek 7  Good reservoir sweep and recovery, maps from years 2001 to 2006

Pawnee Reservoir Pressure Map  Vertical wells plus existing hor. wells – drill Tomasek nd well  Best reservoir sweep and recovery, maps from years 2001 to 2006

Pawnee Reservoir Study - Conclusions  Permeability field that matches production identified  Estimated future recovery to 2022  18 BCF for vertical wells  39 BCF for 1 infill well – Tomasek 7  42 BCF for 2 infill wells  Tomasek 7 recovers 6 BCF (4 BCF incremental)  Second infill recovers 8.5 BCF (4 BCF incremental)  Hor wells accelerate production and provide 24 BCF incremental production

PAWNEE RESERVOIR SIMULATION STUDY Pioneer Natural Resources Co. Performed By Gemini Solutions, Inc. January 2001