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Enterprise Products Partners Press Release

Enterprise Products Partners L.P. (EPD) today announced it has closed on its purchase of the member interests in EFS Midstream LLC (“EFS Midstream”) from affiliates of Pioneer Natural Resources Company (“Pioneer”) and Reliance Holding USA Inc. (“Reliance”). The purchase price of $2.15 billion is being paid in two installments. The first installment of $1.15 billion was paid at closing today with the final payment of $1.0 billion to be made no later than the first anniversary of the closing date. The effective date of the transaction is July 1, 2015.

EFS Midstream provides natural gas gathering, treating, compression and condensate processing services in the Eagle Ford Shale. The EFS Midstream system includes approximately 460 miles of natural gas gathering pipelines, 10 central gathering plants, 780 million cubic feet per day of natural gas treating capacity and 119 thousand barrels per day of condensate stabilization capacity.

“We are pleased to close this acquisition,” said Michael A. Creel, chief executive officer of Enterprise’s general partner. “These assets ‘bolt on’ to our existing Eagle Ford crude oil, natural gas and NGL infrastructure network. We are looking forward to expanding our capabilities to provide Pioneer and Reliance as well as new customers with market flow assurance and market access. Supported by long-term, fixed-fee contracts and minimum volume commitments, this transaction will be immediately accretive to distributable cash flow per common unit and support future distribution growth.”

Under the terms of the agreements, the Pioneer and Reliance joint development dedicated its Eagle Ford Shale acreage to Enterprise under a 20-year, fixed-fee gathering agreement that includes a minimum volume requirement for the first seven years. Pioneer and Reliance also dedicated their Eagle Ford Shale acreage under related 20-year fee-based agreements with Enterprise for natural gas processing, natural gas liquids transportation and fractionation, and for natural gas, processed condensate and crude oil transportation services.

After closing the transaction today, Enterprise had consolidated liquidity of approximately $4.3 billion, which is comprised of unrestricted cash on hand and available borrowing capacity under its $3.5 billion multi-year revolving credit facility and $1.5 billion 364-day credit facility.

Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. Our services include: natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage and import and export terminals; crude oil and refined products transportation, storage and terminals; offshore production platforms; petrochemical transportation and services; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico. The partnership’s assets include approximately 51,000 miles of onshore and offshore pipelines; 225 million barrels of storage capacity for NGLs, crude oil, refined products and petrochemicals; and 14 billion cubic feet of natural gas storage capacity.

Pioneer Natural Resources Press Release

Pioneer Natural Resources Company (PXD)(“Pioneer” or “the Company”) today announced the Company and Reliance Holding USA, Inc. (“Reliance”) closed the previously announced sale of their Eagle Ford Shale Midstream business (“EFS Midstream”) to an affiliate of Enterprise Products Partners L.P. (“Enterprise”) for $2.15 billion, subject to normal closing adjustments. Pioneer owned 50.1% of EFS Midstream and Reliance owned the remaining 49.9%.

Pioneer and Reliance will also benefit from fee reductions under existing downstream processing and transportation contracts with Enterprise in exchange for extending the contracts’ terms to 20 years and dedicating additional Eagle Ford Shale volumes to Enterprise. The reduced fees are expected to benefit Pioneer and Reliance over the original terms of the downstream contracts by approximately $200 million on a net present value basis at 10%. These reduced fees will primarily be reflected as improvements in future realized prices. Enterprise has also agreed to spend $270 million over the next ten years on new facilities, connections and expansions to support the continuing development of the Eagle Ford Shale resource.

The purchase price for the EFS Midstream business will be paid by Enterprise in two installments: $1.15 billion was paid at closing, before normal closing adjustments, and approximately $1 billion will be paid twelve months after closing. After retiring the debt of EFS Midstream of approximately $125 million, Pioneer’s share of the net sale proceeds is $530 million at closing and approximately $500 million one year later. The sale of EFS Midstream is expected to result in a pretax gain in excess of $725 million to Pioneer, which will be recognized in the third quarter of 2015. Pioneer expects net cash proceeds from the sale to total approximately $930 million after tax. In addition, the Company will realize its $100 million share of the reduced transportation and processing fees associated with the new downstream agreements. The sale of EFS Midstream is also expected to enhance Pioneer’s ability to export processed Eagle Ford Shale condensate.

Upon closing this transaction, Pioneer will no longer receive its share of the cash flow generated by the EFS Midstream business, which was forecasted to be more than $100 million in 2015. The loss of this cash flow will result in an increase to Pioneer’s Eagle Ford Shale production costs of approximately $3.00 per barrel oil equivalent (BOE) and total corporate production costs of approximately $0.75 per BOE.

Scott D. Sheffield, Chairman and CEO, stated, “The sale of EFS Midstream will further improve our already strong balance sheet and allow us to strategically redeploy capital to our core, oil-rich Spraberry/Wolfcamp asset in the Permian Basin of West Texas. We are currently operating 12 horizontal rigs in the Spraberry/Wolfcamp, including two horizontal rigs added this month. Our strong balance sheet, combined with a strong derivatives position for 2015 and 2016, provides us with the financial firepower to ramp up drilling activity on high-return Wolfcamp B, Wolfcamp A and Lower Spraberry Shale horizontal wells during the second half of this year.”

“We have already added two horizontal rigs in the northern Spraberry/Wolfcamp and plan to add an average of two horizontal rigs per month in this area over the remainder of 2015 as long as the oil price outlook remains constructive. This additional drilling activity is expected to increase the Company’s 2015 capital budget by approximately $350 million to $2.2 billion. Adding these 12 rigs will have minimal impact on forecasted 2015 production growth of greater than 10% due to multi-well pad drilling.”

“During the first quarter of 2016, we are planning to add another eight horizontal rigs, of which six rigs will be in the northern Spraberry/Wolfcamp and two rigs will be in the Eagle Ford Shale. This rig ramp-up will bring our total horizontal rig count to 36 rigs (28 rigs in the Spraberry/Wolfcamp and eight rigs in the Eagle Ford Shale), which is essentially the same as our horizontal rig count prior to the oil price collapse in late 2014 and early 2015. Based on this planned increase in drilling activity, we expect to deliver compound annual production growth of greater than 15% over the 2016 through 2018 period.”

“I want to again personally thank all of our EFS Midstream employees for the value they have created for Pioneer shareholders in supporting our successful development of the Eagle Ford Shale. I am pleased Enterprise will be working with us going forward to build on this success.”

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 Pioneer’s website at