Filed Pursuant to Rule 424(b)(3)
Registration No. 333-59094
Dear Limited Partner:
YOU MAY HAVE RECEIVED A LETTER FROM NANCY SCHAUER REGARDING OUR MERGER OFFER TO
THE LIMITED PARTNERS OF PARKER & PARSLEY 87-A CONV., LTD. WE BELIEVE THE LETTER
DOES NOT INCLUDE ALL THE INFORMATION YOU SHOULD CONSIDER AND THAT THE LETTER MAY
BE MISINTERPRETED. To clarify the issues raised in the letter, we direct you to
the information provided in the Proxy Statement/Prospectus mailed to you on or
about October 22, 2001. Please let us know if you did not receive a Proxy
Statement/Prospectus, and we will mail a duplicate copy to you immediately.
As your general partner, we want you to have all the information you need to
make your own decision as to how to vote regarding the merger offer. Ms. Schauer
addresses distributions and taxes in her letter. We believe you should consider
the following with regard to these matters:
o Distributions should be compared to the merger value offered to you, not to
dividends. By accepting the merger value, you are able to accelerate
distributions you could expect to receive in the future if you remained in
the partnership, taking into account present values and current oil and gas
prices.
o Ms. Schauer compares pre-tax distributions to after-tax merger value. When
considering the benefit of future distributions, you should reduce them by
the taxes you pay on your share of the partnership's taxable income. In the
merger, you will generally recognize an aggregate of net gain or loss, but
only to the extent that the merger value exceeds your adjusted tax basis in
your partnership, and part of any gain could be taxed at the capital gains
rate rather than the highest tax rate. Original investors in the
partnership may have a different tax treatment than transferees, such as
Ms. Schauer, who subsequently acquired their partnership interests in other
ways.
These matters are discussed in more detail in the rest of this letter.
DISTRIBUTIONS COMPARED TO MERGER VALUE
We are offering you an amount of Pioneer Natural Resources Company common stock
based on the merger value of your partnership. That merger value already
reflects the estimated value of any partnership distributions you would have
received in the future. We calculated the merger value of your partnership using
oil and gas prices that are higher than current market prices. You should not
expect that last year's distributions are indicative of future distributions,
unless you believe that oil and gas prices will recover to last year's levels
and that production will not decline.
The Pioneer Natural Resources Company common stock we are offering in the merger
is a liquid security. You may sell that common stock in the market for cash or
you may hold it as an investment.
----------
Supplement to Proxy Statement/Prospectus Dated October 12, 2001,
As Supplemented November 15, 2001
The date of this Supplement is November 19, 2001
Limited partners of Parker & Parsley 87-A Conv., Ltd. received the following
quarterly distributions per $1,000 investment. This information is also set
forth on Table 7 on page A-8 of the Proxy Statement/Prospectus.
HISTORICAL QUARTERLY DISTRIBUTIONS TO PARKER & PARSLEY 87-A CONV., LTD. LIMITED PARTNERS
PER $1,000 INVESTMENT
------------------------------------------------------------------------------------------------------------------------------------
FROM INCEPTION THROUGH JULY 31, 2001
------------------------------------------------------------------------------------------------------------------------------------
INCEPTION QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. MO. INCEPTION
TO ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED TO
12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01 7/31/01(1) 7/31/01
--------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ---------- ---------
$1,228.63 $ 1.83 $ 2.20 $ 6.07 $ 7.90 $ 11.58 $ 15.18 $ 13.96 $ 12.79 $ 16.86 -- $ 15.03 $1,332.03
----------
(1) Includes the distribution for the second quarter 2001 made on July 13,
2001.
If you invested $10,000, you have already received approximately $13,320 in
distributions since inception, and, on top of that, Pioneer Natural Resources
Company is offering you $2,002.10 of its common stock. The total of all
distributions paid in 1998, 1999, 2000 and 2001 for a limited partner who
invested $10,000 in Parker & Parsley 87-A Conv., Ltd. are listed below with the
average oil, natural gas liquids (NGL), and gas sales prices for those same
years as detailed in Table 10 of the Proxy Statement/Prospectus through June 30,
2001, and in the financial statements mailed to you for the third quarter ended
September 30, 2001. The average sales price of oil, NGLs, and gas has declined
since the merger value was established.
HISTORICAL ANNUAL DISTRIBUTIONS TO PARKER & PARSLEY 87-A CONV., LTD. LIMITED PARTNERS
PER $10,000 INVESTMENT
--------------------------------------------------------------------------------------
AVERAGE SALES PRICE
------------------------------------------
PERIOD DISTRIBUTION OIL ($/Bbl) NGL ($/Bbl) GAS ($/Mcf)
------------------------- ------------ ------------ ------------ ------------
1998 $ 195.30 $ 13.22 $ 6.76 $ 1.54
1999 $ 180.00 $ 17.06 $ 9.81 $ 1.68
2000 $ 535.10 $ 29.46 $ 16.01 $ 2.86
2001 (through June 30)(1) $ 318.90 $ 27.45 $ 16.73 $ 4.69
2001 (third quarter) (2) $ 26.26 $ 12.04 $ 2.21
----------
(1) Includes the distribution for the second quarter 2001 made on July 13,
2001.
(2) If the partnership does not approve the merger, a distribution will be
made after December 20, 2001.
The following table shows the NYMEX futures price for oil and gas as of March
30, 2001, the date we and our parent company, Pioneer Natural Resources Company,
used to calculate the merger value for your partnership, and as of November 15,
2001. Oil and gas prices are subject to rapid change. See "Risk Factors -- Risk
Factors Relating to the Merger of Each Partnership -- The Merger Value for a
Partnership Will Not be Adjusted For Changes in Oil and Gas Prices Before the
Completion of Its Merger" on page 20 of the Proxy Statement/Prospectus.
NYMEX FUTURES PRICES FOR OIL AND GAS
--------------------------------------------------------------------------------------------------
MARCH 30, 2001 NOVEMBER 15, 2001(1)
------------------------------- -------------------------------
DATE OIL ($/Bbl) GAS ($/Mcf)(2) OIL ($/Bbl) GAS ($/Mcf)(2)
------------------------------ -------------- -------------- -------------- --------------
April - December 2001 ........ $ 26.17 $ 5.18 -- --
December 2001 ................ -- -- $ 17.46 $ 2.55
2002 ......................... 24.36 4.61 18.90 2.98
2003 ......................... 22.83 4.16 19.74 3.46
2004 ......................... 22.31 4.09 20.15 3.66
2005 ......................... 21.97 4.12 20.31 3.78
Thereafter ................... 21.97 4.12 20.31 3.78
----------
(1) NYMEX prices for some periods can be found without charge on the web site
maintained by the NYMEX at www.nymex.com. Many institutional brokerage
houses can also provide this information. Limited partners seeking
information about NYMEX prices are encouraged to contact their own brokers.
(2) The NYMEX price for gas is quoted in dollars per million British thermal
units, or MMBTU. We converted those prices to dollars per thousand cubic
feet, or Mcf.
THE MERGER VALUE AND THE DISTRIBUTIONS ARE BOTH TAXABLE
When comparing what you expect to receive in distributions with what you will
receive in the merger, you should either compare both on a pre-tax basis or both
on an after-tax basis. Each year, we send you a Schedule K-1 that includes your
share of the partnership's taxable income. You must include that amount on your
federal, and perhaps state, income tax return and pay taxes at your marginal tax
rate. The taxes payable reduce the net economic benefit of your distributions.
The amount of taxes you must pay may vary from other limited partners depending
on your individual circumstances. Original investors in the partnership have a
different tax treatment than transferees, such as Ms. Schauer, who subsequently
acquired their partnership interests in other ways.
In the merger, you will generally recognize an aggregate of net gain or loss,
but only to the extent that the value of the Pioneer Natural Resources Company
common stock exceeds your adjusted tax basis in your partnership. The
characterization of your gain or loss as ordinary income or capital gains (the
capital gains tax rate for individuals is 20% if the capital asset has been held
for more than one year) will depend upon your individual federal income tax
position. U.S. federal income tax consequences are discussed in the summary on
page 9 of the Proxy Statement/Prospectus and in more detail on page 54.
AS DISCUSSED IN THE PROXY STATEMENT/PROSPECTUS, WE ARE THE SOLE GENERAL PARTNER
OF YOUR PARTNERSHIP. OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
MERGER AND THE MERGER PROPOSALS.
We enclose a duplicate proxy card for your use if you have not voted or want to
change your vote. You may vote for or against, or may abstain from voting on,
the merger proposals for your partnership by marking your proxy card and
returning it by mail or fax to our information agent, D.F. King & Co., Inc.,
before the special meeting of limited partners. You may revoke a proxy you have
given us at any time before the proxy is voted at the special meeting of the
limited partners by (1) giving written notice to D.F. King & Co., Inc. of that
revocation, (2) voting in person at the special meeting, or (3) signing and
returning a later dated proxy card to D.F. King & Co., Inc.
All proxies received and not revoked as described above, will be voted at the
special meetings for the limited partners, subject to the terms and conditions
described in the Proxy Statement/Prospectus.
A COPY OF THE PROXY STATEMENT/PROSPECTUS MAY BE OBTAINED WITHOUT CHARGE UPON
REQUEST FROM PIONEER NATURAL RESOURCES COMPANY, 5205 NORTH O'CONNOR BLVD., SUITE
1400, IRVING, TEXAS 75039, ATTENTION: INVESTOR RELATIONS. YOU MAY ALSO OBTAIN
THE FINAL PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS RELATING TO
THE PROPOSED MERGERS FREE THROUGH THE INTERNET WEB SITE THAT THE SEC MAINTAINS
AT WWW.SEC.GOV.
If you have any questions or need additional information, we strongly encourage
you to call the Investor Relations Department at (800) 242-2607.
Sincerely,
Pioneer Natural Resources USA, Inc.
Dear Limited Partner:
YOU MAY HAVE RECEIVED A LETTER FROM NANCY SCHAUER REGARDING OUR MERGER OFFER TO
THE LIMITED PARTNERS OF PARKER & PARSLEY 87-B CONV., LTD. WE BELIEVE THE LETTER
DOES NOT INCLUDE ALL THE INFORMATION YOU SHOULD CONSIDER AND THAT THE LETTER MAY
BE MISINTERPRETED. To clarify the issues raised in the letter, we direct you to
the information provided in the Proxy Statement/Prospectus mailed to you on or
about October 22, 2001. Please let us know if you did not receive a Proxy
Statement/Prospectus, and we will mail a duplicate copy to you immediately.
As your general partner, we want you to have all the information you need to
make your own decision as to how to vote regarding the merger offer. Ms. Schauer
addresses distributions and taxes in her letter. We believe you should consider
the following with regard to these matters:
o Distributions should be compared to the merger value offered to you, not to
dividends. By accepting the merger value, you are able to accelerate
distributions you could expect to receive in the future if you remained in
the partnership, taking into account present values and current oil and gas
prices.
o Ms. Schauer compares pre-tax distributions to after-tax merger value. When
considering the benefit of future distributions, you should reduce them by
the taxes you pay on your share of the partnership's taxable income. In the
merger, you will generally recognize an aggregate of net gain or loss, but
only to the extent that the merger value exceeds your adjusted tax basis in
your partnership, and part of any gain could be taxed at the capital gains
rate rather than the highest tax rate. Original investors in the
partnership may have a different tax treatment than transferees, such as
Ms. Schauer, who subsequently acquired their partnership interests in other
ways.
These matters are discussed in more detail in the rest of this letter.
DISTRIBUTIONS COMPARED TO MERGER VALUE
We are offering you an amount of Pioneer Natural Resources Company common stock
based on the merger value of your partnership. That merger value already
reflects the estimated value of any partnership distributions you would have
received in the future. We calculated the merger value of your partnership using
oil and gas prices that are higher than current market prices. You should not
expect that last year's distributions are indicative of future distributions,
unless you believe that oil and gas prices will recover to last year's levels
and that production will not decline.
The Pioneer Natural Resources Company common stock we are offering in the merger
is a liquid security. You may sell that common stock in the market for cash or
you may hold it as an investment.
----------
Supplement to Proxy Statement/Prospectus Dated October 12, 2001,
As Supplemented November 15, 2001
The date of this Supplement is November 19, 2001
Limited partners of Parker & Parsley 87-B Conv., Ltd. received the following
quarterly distributions per $1,000 investment. This information is also set
forth on Table 7 on page A-8 of the Proxy Statement/Prospectus.
HISTORICAL QUARTERLY DISTRIBUTIONS TO PARKER & PARSLEY 87-B CONV., LTD. LIMITED PARTNERS
PER $1,000 INVESTMENT
------------------------------------------------------------------------------------------------------------------------------------
FROM INCEPTION THROUGH JULY 31, 2001
------------------------------------------------------------------------------------------------------------------------------------
INCEPTION QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. MO. INCEPTION
TO ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED TO
12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01 7/31/01(1) 7/31/01
--------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ---------- ---------
$1,154.18 $ 1.85 $ 2.29 $ 5.50 $ 8.64 $ 10.07 $ 12.58 $ 13.53 $ 12.84 $ 17.13 -- $ 12.85 $1,251.46
----------
(1) Includes the distribution for the second quarter 2001 made on July 13,
2001.
If you invested $10,000, you have already received approximately $12,515 in
distributions since inception, and, on top of that, Pioneer Natural Resources
Company is offering you $2,077.30 of its common stock. The total of all
distributions paid in 1998, 1999, 2000 and 2001 for a limited partner who
invested $10,000 in Parker & Parsley 87-B Conv., Ltd. are listed below with the
average oil, natural gas liquids (NGL), and gas sales prices for those same
years as detailed in Table 10 of the Proxy Statement/Prospectus through June 30,
2001, and in the financial statements mailed to you for the third quarter ended
September 30, 2001. The average sales price of oil, NGLs, and gas has declined
since the merger value was established.
HISTORICAL ANNUAL DISTRIBUTIONS TO PARKER & PARSLEY 87-B CONV., LTD. LIMITED PARTNERS
PER $10,000 INVESTMENT
--------------------------------------------------------------------------------------
AVERAGE SALES PRICE
------------------------------------------
PERIOD DISTRIBUTION OIL ($/Bbl) NGL ($/Bbl) GAS ($/Mcf)
------------------------- ------------ ------------ ------------ ------------
1998 $ 212.30 $ 13.17 $ 6.82 $ 1.49
1999 $ 182.80 $ 16.71 $ 9.73 $ 1.64
2000 $ 490.20 $ 29.31 $ 16.90 $ 2.98
2001 (through June 30)(1) $ 299.80 $ 27.14 $ 17.29 $ 5.13
2001 (third quarter) (2) $ 26.03 $ 12.64 $ 2.22
----------
(1) Includes the distribution for the second quarter 2001 made on July 13,
2001.
(2) If the partnership does not approve the merger, a distribution will be
made after December 20, 2001.
The following table shows the NYMEX futures price for oil and gas as of March
30, 2001, the date we and our parent company, Pioneer Natural Resources Company,
used to calculate the merger value for your partnership, and as of November 15,
2001. Oil and gas prices are subject to rapid change. See "Risk Factors -- Risk
Factors Relating to the Merger of Each Partnership -- The Merger Value for a
Partnership Will Not be Adjusted For Changes in Oil and Gas Prices Before the
Completion of Its Merger" on page 20 of the Proxy Statement/Prospectus.
NYMEX FUTURES PRICES FOR OIL AND GAS
--------------------------------------------------------------------------------------------------
MARCH 30, 2001 NOVEMBER 15, 2001(1)
------------------------------- -------------------------------
DATE OIL ($/Bbl) GAS ($/Mcf)(2) OIL ($/Bbl) GAS ($/Mcf)(2)
------------------------------ -------------- -------------- -------------- --------------
April - December 2001 ........ $ 26.17 $ 5.18 -- --
December 2001 ................ -- -- $ 17.46 $ 2.55
2002 ......................... 24.36 4.61 18.90 2.98
2003 ......................... 22.83 4.16 19.74 3.46
2004 ......................... 22.31 4.09 20.15 3.66
2005 ......................... 21.97 4.12 20.31 3.78
Thereafter ................... 21.97 4.12 20.31 3.78
----------
(1) NYMEX prices for some periods can be found without charge on the web site
maintained by the NYMEX at www.nymex.com. Many institutional brokerage
houses can also provide this information. Limited partners seeking
information about NYMEX prices are encouraged to contact their own brokers.
(2) The NYMEX price for gas is quoted in dollars per million British thermal
units, or MMBTU. We converted those prices to dollars per thousand cubic
feet, or Mcf.
THE MERGER VALUE AND THE DISTRIBUTIONS ARE BOTH TAXABLE
When comparing what you expect to receive in distributions with what you will
receive in the merger, you should either compare both on a pre-tax basis or both
on an after-tax basis. Each year, we send you a Schedule K-1 that includes your
share of the partnership's taxable income. You must include that amount on your
federal, and perhaps state, income tax return and pay taxes at your marginal tax
rate. The taxes payable reduce the net economic benefit of your distributions.
The amount of taxes you must pay may vary from other limited partners depending
on your individual circumstances. Original investors in the partnership have a
different tax treatment than transferees, such as Ms. Schauer, who subsequently
acquired their partnership interests in other ways.
In the merger, you will generally recognize an aggregate of net gain or loss,
but only to the extent that the value of the Pioneer Natural Resources Company
common stock exceeds your adjusted tax basis in your partnership. The
characterization of your gain or loss as ordinary income or capital gains (the
capital gains tax rate for individuals is 20% if the capital asset has been held
for more than one year) will depend upon your individual federal income tax
position. U.S. federal income tax consequences are discussed in the summary on
page 9 of the Proxy Statement/Prospectus and in more detail on page 54.
AS DISCUSSED IN THE PROXY STATEMENT/PROSPECTUS, WE ARE THE SOLE GENERAL PARTNER
OF YOUR PARTNERSHIP. OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
MERGER AND THE MERGER PROPOSALS.
We enclose a duplicate proxy card for your use if you have not voted or want to
change your vote. You may vote for or against, or may abstain from voting on,
the merger proposals for your partnership by marking your proxy card and
returning it by mail or fax to our information agent, D.F. King & Co., Inc.,
before the special meeting of limited partners. You may revoke a proxy you have
given us at any time before the proxy is voted at the special meeting of the
limited partners by (1) giving written notice to D.F. King & Co., Inc. of that
revocation, (2) voting in person at the special meeting, or (3) signing and
returning a later dated proxy card to D.F. King & Co., Inc.
All proxies received and not revoked as described above, will be voted at the
special meetings for the limited partners, subject to the terms and conditions
described in the Proxy Statement/Prospectus.
A COPY OF THE PROXY STATEMENT/PROSPECTUS MAY BE OBTAINED WITHOUT CHARGE UPON
REQUEST FROM PIONEER NATURAL RESOURCES COMPANY, 5205 NORTH O'CONNOR BLVD., SUITE
1400, IRVING, TEXAS 75039, ATTENTION: INVESTOR RELATIONS. YOU MAY ALSO OBTAIN
THE FINAL PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS RELATING TO
THE PROPOSED MERGERS FREE THROUGH THE INTERNET WEB SITE THAT THE SEC MAINTAINS
AT WWW.SEC.GOV.
If you have any questions or need additional information, we strongly encourage
you to call the Investor Relations Department at (800) 242-2607.
Sincerely,
Pioneer Natural Resources USA, Inc.
Dear Limited Partner:
YOU MAY HAVE RECEIVED A LETTER FROM NANCY SCHAUER REGARDING OUR MERGER OFFER TO
THE LIMITED PARTNERS OF PARKER & PARSLEY PRIVATE INVESTMENT 88, L.P. WE BELIEVE
THE LETTER DOES NOT INCLUDE ALL THE INFORMATION YOU SHOULD CONSIDER AND THAT THE
LETTER MAY BE MISINTERPRETED. To clarify the issues raised in the letter, we
direct you to the information provided in the Proxy Statement/Prospectus mailed
to you on or about October 22, 2001. Please let us know if you did not receive a
Proxy Statement/Prospectus, and we will mail a duplicate copy to you
immediately.
As your general partner, we want you to have all the information you need to
make your own decision as to how to vote regarding the merger offer. Ms. Schauer
addresses distributions and taxes in her letter. We believe you should consider
the following with regard to these matters:
o Distributions should be compared to the merger value offered to you, not to
dividends. By accepting the merger value, you are able to accelerate
distributions you could expect to receive in the future if you remained in
the partnership, taking into account present values and current oil and gas
prices.
o Ms. Schauer compares pre-tax distributions to after-tax merger value. When
considering the benefit of future distributions, you should reduce them by
the taxes you pay on your share of the partnership's taxable income. In the
merger, you will generally recognize an aggregate of net gain or loss, but
only to the extent that the merger value exceeds your adjusted tax basis in
your partnership, and part of any gain could be taxed at the capital gains
rate rather than the highest tax rate. Original investors in the
partnership may have a different tax treatment than transferees, such as
Ms. Schauer, who subsequently acquired their partnership interests in other
ways.
These matters are discussed in more detail in the rest of this letter.
DISTRIBUTIONS COMPARED TO MERGER VALUE
We are offering you an amount of Pioneer Natural Resources Company common stock
based on the merger value of your partnership. That merger value already
reflects the estimated value of any partnership distributions you would have
received in the future. We calculated the merger value of your partnership using
oil and gas prices that are higher than current market prices. You should not
expect that last year's distributions are indicative of future distributions,
unless you believe that oil and gas prices will recover to last year's levels
and that production will not decline.
The Pioneer Natural Resources Company common stock we are offering in the merger
is a liquid security. You may sell that common stock in the market for cash or
you may hold it as an investment.
----------
Supplement to Proxy Statement/Prospectus Dated October 12, 2001,
As Supplemented November 15, 2001
The date of this Supplement is November 19, 2001
Limited partners of Parker & Parsley Private Investment 88, L.P. received the
following quarterly distributions per $1,000 investment. This information is
also set forth on Table 7 on page A-8 of the Proxy Statement/Prospectus.
HISTORICAL QUARTERLY DISTRIBUTIONS TO PARKER & PARSLEY PRIVATE INVESTMENT 88, L.P. LIMITED PARTNERS
PER $1,000 INVESTMENT
------------------------------------------------------------------------------------------------------------------------------------
FROM INCEPTION THROUGH JULY 31, 2001
------------------------------------------------------------------------------------------------------------------------------------
INCEPTION QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. QTR. MO. INCEPTION
TO ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED TO
12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01 7/31/01(1) 7/31/01
--------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- ---------- ---------
$1,031.07 $ 3.57 $ 6.66 $ 8.39 $ 12.47 $ 15.99 $ 19.23 $ 23.09 $ 21.51 $ 23.55 -- $ 20.42 $1,185.95
----------
(1) Includes the distribution for the second quarter 2001 made on July 13,
2001.
If you have 1.0 unit (you invested $40,000), you have already received
approximately $47,438 in distributions since inception, and, on top of that,
Pioneer Natural Resources Company is offering you $14,070.40 of its common
stock. The total of all distributions paid in 1998, 1999, 2000 and 2001 for a
limited partner who invested $40,000 for 1.0 unit of Parker & Parsley Private
Investment 88, L.P. are listed below with the average oil, natural gas liquids
(NGL), and gas sales prices for those same years as detailed in Table 10 of the
Proxy Statement/Prospectus through June 30, 2001, and in the financial
statements mailed to you for the third quarter ended September 30, 2001. The
average sales price of oil, NGLs, and gas has declined since the merger value
was established.
--------------------------------------------------------------------------------------
HISTORICAL ANNUAL DISTRIBUTIONS TO PARKER & PARSLEY PRIVATE INVESTMENT 88, L.P.
LIMITED PARTNERS
PER $40,000 INVESTMENT (1.0 UNIT)
--------------------------------------------------------------------------------------
AVERAGE SALES PRICE
------------------------------------------
PERIOD DISTRIBUTION OIL ($/Bbl) NGL ($/Bbl) GAS ($/Mcf)
------------------------- ------------ ------------ ------------ ------------
1998 $ 1,150.00 $ 13.31 $ 6.79 $ 1.55
1999 $ 1,243.60 $ 17.01 $ 9.32 $ 1.69
2000 $ 3,192.80 $ 29.45 $ 15.61 $ 2.82
2001 (through June 30)(1) $ 1,758.80 $ 27.55 $ 16.27 $ 4.88
2001 (third quarter) (2) $ 26.26 $ 11.55 $ 2.10
----------
(1) Includes the distribution for the second quarter 2001 made on July 13,
2001.
(2) If the partnership does not approve the merger, a distribution will be
made after December 20, 2001.
The following table shows the NYMEX futures price for oil and gas as of March
30, 2001, the date we and our parent company, Pioneer Natural Resources Company,
used to calculate the merger value for your partnership, and as of November 15,
2001. Oil and gas prices are subject to rapid change. See "Risk Factors -- Risk
Factors Relating to the Merger of Each Partnership -- The Merger Value for a
Partnership Will Not be Adjusted For Changes in Oil and Gas Prices Before the
Completion of Its Merger" on page 20 of the Proxy Statement/Prospectus.
NYMEX FUTURES PRICES FOR OIL AND GAS
--------------------------------------------------------------------------------------------------
MARCH 30, 2001 NOVEMBER 15, 2001(1)
------------------------------- -------------------------------
DATE OIL ($/Bbl) GAS ($/Mcf)(2) OIL ($/Bbl) GAS ($/Mcf)(2)
------------------------------ -------------- -------------- -------------- --------------
April - December 2001 ........ $ 26.17 $ 5.18 -- --
December 2001 ................ -- -- $ 17.46 $ 2.55
2002 ......................... 24.36 4.61 18.90 2.98
2003 ......................... 22.83 4.16 19.74 3.46
2004 ......................... 22.31 4.09 20.15 3.66
2005 ......................... 21.97 4.12 20.31 3.78
Thereafter ................... 21.97 4.12 20.31 3.78
----------
(1) NYMEX prices for some periods can be found without charge on the web site
maintained by the NYMEX at www.nymex.com. Many institutional brokerage
houses can also provide this information. Limited partners seeking
information about NYMEX prices are encouraged to contact their own brokers.
(2) The NYMEX price for gas is quoted in dollars per million British thermal
units, or MMBTU. We converted those prices to dollars per thousand cubic
feet, or Mcf.
THE MERGER VALUE AND THE DISTRIBUTIONS ARE BOTH TAXABLE
When comparing what you expect to receive in distributions with what you will
receive in the merger, you should either compare both on a pre-tax basis or both
on an after-tax basis. Each year, we send you a Schedule K-1 that includes your
share of the partnership's taxable income. You must include that amount on your
federal, and perhaps state, income tax return and pay taxes at your marginal tax
rate. The taxes payable reduce the net economic benefit of your distributions.
The amount of taxes you must pay may vary from other limited partners depending
on your individual circumstances. Original investors in the partnership have a
different tax treatment than transferees, such as Ms. Schauer, who subsequently
acquired their partnership interests in other ways.
In the merger, you will generally recognize an aggregate of net gain or loss,
but only to the extent that the value of the Pioneer Natural Resources Company
common stock exceeds your adjusted tax basis in your partnership. The
characterization of your gain or loss as ordinary income or capital gains (the
capital gains tax rate for individuals is 20% if the capital asset has been held
for more than one year) will depend upon your individual federal income tax
position. U.S. federal income tax consequences are discussed in the summary on
page 9 of the Proxy Statement/Prospectus and in more detail on page 54.
AS DISCUSSED IN THE PROXY STATEMENT/PROSPECTUS, WE ARE THE SOLE GENERAL PARTNER
OF YOUR PARTNERSHIP. OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
MERGER AND THE MERGER PROPOSALS.
We enclose a duplicate proxy card for your use if you have not voted or want to
change your vote. You may vote for or against, or may abstain from voting on,
the merger proposals for your partnership by marking your proxy card and
returning it by mail or fax to our information agent, D.F. King & Co., Inc.,
before the special meeting of limited partners. You may revoke a proxy you have
given us at any time before the proxy is voted at the special meeting of the
limited partners by (1) giving written notice to D.F. King & Co., Inc. of that
revocation, (2) voting in person at the special meeting, or (3) signing and
returning a later dated proxy card to D.F. King & Co., Inc.
All proxies received and not revoked as described above, will be voted at the
special meetings for the limited partners, subject to the terms and conditions
described in the Proxy Statement/Prospectus.
A COPY OF THE PROXY STATEMENT/PROSPECTUS MAY BE OBTAINED WITHOUT CHARGE UPON
REQUEST FROM PIONEER NATURAL RESOURCES COMPANY, 5205 NORTH O'CONNOR BLVD., SUITE
1400, IRVING, TEXAS 75039, ATTENTION: INVESTOR RELATIONS. YOU MAY ALSO OBTAIN
THE FINAL PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS RELATING TO
THE PROPOSED MERGERS FREE THROUGH THE INTERNET WEB SITE THAT THE SEC MAINTAINS
AT WWW.SEC.GOV.
If you have any questions or need additional information, we strongly encourage
you to call the Investor Relations Department at (800) 242-2607.
Sincerely,
Pioneer Natural Resources USA, Inc.