As filed with the Securities and Exchange Commission on June 28, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/ x / ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File No. 333-39249
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive officer:
Pioneer Natural Resources Company
5205 N. O'Connor Boulevard
1400 Williams Square West
Irving, Texas 75039
PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Financial Statements and Supplemental Schedules
As of and for the years ended December 31, 1998 and 1997
(With Reports of Independent Auditors)
<PAGE>
Report of Independent Auditors
To the Participants and the Plan Administrator
of Pioneer Natural Resources USA, Inc.
401(k) Plan:
We have audited the accompanying statement of net assets available for benefits
of Pioneer Natural Resources USA, Inc. 401(k) Plan as of December 31, 1998, and
the related statement of changes in net assets available for benefits for the
year then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements, referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998, and the changes in its net assets available for benefits for
the year then ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998 and reportable transactions
for the year then ended, are presented for the purpose of additional analysis
and are not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The Fund Information in the statement of net assets available for
benefits and the changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and the changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information have been subjected to
the auditing procedures applied in our audit of the financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
Ernst & Young LLP
Fort Worth, Texas
May 18, 1999
PAGE>
Report of Independent Auditor
To the Participants and Administrator
of Pioneer Natural Resources USA, Inc.
401(k) Plan:
We have audited the accompanying statement of net assets available for
benefits of Pioneer Natural Resources USA, Inc. 401(k) Plan (the "Plan") as
of December 31, 1997, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1997. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements, referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 1997, and the changes in net assets available for benefits
for the year ended December 31, 1997 in conformity with generally accepted
accounting principles.
KPMG LLP
Midland, Texas
June 12, 1998
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 1998 and 1997
<TABLE>
1998 1997
---- ----
<S> <C> <C>
Investments at fair value:
VMMR - Prime Portfolio - 9,022,294 shares in
1998 and 6,920,007 shares in 1997
(cost approximates fair value) $ 9,022,294 $ 6,920,007
Mutual Funds:
Vanguard - ST Corporate Fund - 462,563 shares
in 1998 and 512,013 shares in 1997 (cost
$4,990,127 and $5,516,188, respectively) 5,014,181 5,536,114
Vanguard 500 Index Fund - 53,190 shares in 1998
and 40,837 shares in 1997 (cost $4,443,663 and
$2,872,952, respectively) 6,061,044 3,680,362
Vanguard Primecap Fund - 160,887 shares in 1998
and 156,311 shares in 1997 (cost $5,432,011
and $4,845,166, respectively) 7,667,874 6,188,725
Vanguard Windsor II Fund - 284,179 shares in
1998 and 254,464 shares in 1997 (cost
$7,412,372 and $6,128,990, respectively) 8,482,733 7,286,947
Vanguard International Growth Fund - 26,813
shares in 1998 and 22,235 shares in 1997
(cost $468,142 and $380,071, respectively) 503,275 364,755
Sarofim Equity Fund - 721,068 shares in 1998 and
916,548 shares in 1997 cost $28,018,845 and
$35,277,286, respectively) 35,779,402 35,727,154
Pioneer Natural Resources Stock Fund - 131,265
shares in 1998 and 94,711 shares in 1997
(cost $2,776,429 and $2,415,438, respectively) 1,148,565 2,740,713
---------- ----------
73,679,368 68,444,777
---------- ----------
Investments at Contract Value:
Pioneer Natural Resources Stable Value Fund 2,276,593 3,178,713
Participants' loans (unpaid principal balance
approximates fair value) 1,657,912 1,538,357
------------ ------------
Net assets available for benefits $ 77,613,873 $ 73,161,847
============ ============
</TABLE>
See accompanying notes to financial statements.
PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the year ended December 31, 1998
<TABLE>
Pioneer Pioneer
Vanguard Vanguard Natural Natural
VMMR- - ST Vanguard Vanguard Vanguard Internat. Sarofim Resources Resources
Prime Corp. 500 Index Primecap Windsor II Growth Equity Stable Stock Participants'
Portfolio Fund Fund Fund Fund Fund Fund Value Fund Fund Loans Total
--------- ---- ---- ---- ---- --------- ---- ---------- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income
(loss) 360,684 318,740 89,027 298,830 877,800 10,968 1,491 169,900 12,114 134,425 2,273,979
Employee
contributions 416,381 244,668 713,643 708,611 818,257 139,633 772,250 - 168,821 - 3,982,264
Rollovers 204,653 243,570 903,321 324,710 495,295 48,547 697,125 - 260,222 - 3,177,443
Loan payments 84,115 49,910 108,557 154,502 149,423 8,590 173,484 - 8,393 (736,974) -
Net appreciation
(depreciation)in
fair value of
investments - 15,992 1,135,647 1,284,683 335,362 53,008 8,616,572 - (2,139,857) - 9,301,407
---------- ------- --------- --------- --------- ------- ---------- ------- ---------- -------- ----------
Total additions 1,065,833 872,880 2,950,195 2,771,336 2,676,137 260,746 10,260,922 169,900 (1,690,307) (602,549) 18,735,093
---------- ------- --------- --------- --------- ------- ---------- ------- ---------- -------- ----------
Deductions from net
assets attributed to:
Employee loans 78,077 48,925 77,459 76,267 125,587 8,012 568,914 46,207 21,169 (1,050,617) -
Distributions to
participants 2,753,964 750,495 938,957 918,425 1,340,297 145,970 5,940,944 690,588 266,047 328,513 14,074,200
Fees 21,394 936 631 819 1,732 84 180,309 1,734 1,228 - 208,867
---------- ------- --------- --------- --------- ------- ---------- ------- ---------- ---------- ----------
Total deductions 2,853,435 800,356 1,017,047 995,511 1,467,616 154,066 6,690,167 738,529 288,444 (722,104) 14,283,067
---------- ------- --------- --------- --------- ------- ---------- ------- ---------- ---------- ----------
Net increase
(decrease)
prior to
interfund
transfers (1,787,602) 72,524 1,933,148 1,775,825 1,208,521 106,680 3,570,755 (568,629) (1,978,751) 119,555 4,452,026
Interfund
transfers 3,889,889 (594,457) 447,534 (296,676) (12,735) 31,840 (3,518,507)(333,491) 386,603 - -
--------- ------- --------- --------- --------- ------- ---------- -------- ---------- ---------- ----------
Net increase
(decrease) 2,102,287 (521,933)2,380,682 1,479,149 1,195,786 138,520 52,248 (902,120) (1,592,148) 119,555 4,452,026
Net assets available for benefits:
Beginning of
year 6,920,007 5,536,114 3,680,362 6,188,725 7,286,947 364,755 35,727,154 3,178,713 2,740,713 1,538,357 73,161,847
---------- --------- --------- --------- --------- ------- ---------- --------- --------- --------- ----------
End of year 9,022,294 5,014,181 6,061,044 7,667,874 8,482,733 503,275 35,779,402 2,276,593 1,148,565 1,657,912 77,613,873
========== ========= ========= ========= ========= ======= ========== ========= ========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the year ended December 31, 1997
<TABLE>
Pioneer Pioneer
Vanguard Vanguard Natural Natural
VMMR- - ST Vanguard Vanguard Vanguard Internat. Sarofim Resources Resources
Prime Corp. 500 Index Primecap Windsor II Growth Equity Stable Stock Participants'
Portfolio Fund Fund Fund Fund Portfolio Fund Value Fund Fund Loans Total
--------- ---- ---- ---- ---- --------- ---- ---------- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net
assets attributed
to:
Investment income 125,057 176,827 84,758 222,360 659,604 15,336 8,005 239,065 8,529 99,402 1,638,943
Employer
contributions 101,571 58,668 100,489 153,602 180,227 21,276 - - 629,404 - 1,245,237
Employee
contributions 451,351 284,119 542,391 635,781 755,218 131,538 241,281 - 22,228 - 3,063,907
Transfers from
other plans 4,728,468 3,528,089 - - - - 35,419,100 - - - 43,675,657
Loan payments 81,688 40,610 2,120 128,600 141,128 4,152 750 - 52 (459,100) -
Net appreciation
(depreciation)
in fair value of
investments - 11,267 728,875 1,260,371 1,085,522 (13,464) 450,231 - (603,051) - 2,919,751
--------- --------- --------- --------- --------- ------- ---------- ------- -------- -------- ----------
Total additions 5,488,135 4,099,580 1,518,633 2,400,714 2,821,699 158,838 36,119,367 239,065 57,162 (359,698) 52,543,495
Deductions from net
assets attributed
to:
Employee loans 76,577 71,653 103,343 169,886 188,334 7,761 333,687 88,875 889 (1,041,005) -
Distributions
to participants 276,375 80,913 104,683 176,923 373,691 13,112 - 238,428 108,770 36,709 1,409,604
Fees 860 540 - 40 300 40 - - - - 1,780
-------- --------- --------- --------- --------- ------- ---------- -------- -------- ---------- ----------
Total deductions 353,812 153,106 208,026 346,849 562,325 20,913 333,687 327,303 109,659 (1,004,296) 1,411,384
Net increase
(decrease)prior
to interfund
transfers 5,134,323 3,946,474 1,310,607 2,053,865 2,259,374 137,925 35,785,680 (88,238) (52,497) 644,598 51,132,111
Interfund
transfers 109,653 (85,959) 193,581 204,528 (260,726) 95,626 (58,526) (528,343) 330,166 - -
--------- --------- --------- --------- -------- ------- ---------- -------- ------- ---------- ----------
Net increase
(decrease) 5,243,976 3,860,515 1,504,188 2,258,393 1,998,648 233,551 35,727,154 (616,581) 277,669 644,598 51,132,111
Net assets available
for benefits:
Beginning of
year 1,676,031 1,675,599 2,176,174 3,930,332 5,288,299 131,204 - 3,795,294 2,463,044 893,759 22,029,736
--------- --------- --------- --------- --------- ------- ---------- --------- --------- ---------- ----------
End of year 6,920,007 5,536,114 3,680,362 6,188,725 7,286,947 364,755 35,727,154 3,178,713 2,740,713 1,538,357 73,161,847
</TABLE>
See accompanying notes to financial statements.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. Description of Plan
The following brief description of the Pioneer Natural Resources USA,
Inc. 401(k) Plan (the "Plan") provides only general information. Participants
should refer to the Summary Plan Description for a complete description of the
Plan, a copy of which is available to each participant from the Pioneer
Natural Resources USA, Inc. 401(k) Plan Committee (the "Plan Administrator").
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
General
-------
Parker & Parsley Petroleum Company merged with MESA Inc. ("Mesa")
during August 1997, creating a new company, Pioneer Natural Resources
Company (collectively, the "Company"). As a result of the merger, the Parker
& Parsley Retirement Savings Plan became Pioneer Natural Resources USA, Inc.
401(k) Plan effective October 1, 1997 and the Mesa Profit Sharing Plan merged
into the Pioneer Natural Resources USA, Inc. 401(k) Plan on October 1, 1997. Net
assets of $43,675,657 were transferred into the Plan at fair value on the date
of transfer.
The Plan is a defined contribution plan established under the
Internal Revenue Code (the "Code") Section 401 on January 1, 1990 covering all
employees of Pioneer Natural Resources USA, Inc. ("the Employer"), a wholly-
owned subsidiary of the Company and its successor or successors. Regular
full-time employees and part-time employees are eligible to participate on
the first day of the month following their date of hire.
Contributions
-------------
Prior to October 1, 1997, participants of the Plan contributed an
amount of not less than two percent nor more than 15 percent of their annual
salary. The Company matched 100 percent of the first six percent of the Plan
participant's compensation through September 30, 1997. The Company's
contributions were made in the form of cash or in common stock, or in a
combination of cash and common stock.
Effective October 1, 1997, participants may contribute an amount
of not less than two percent nor more than 12 percent of their annual salary.
The Employer match is contributed in cash to the Pioneer Natural Resources USA,
Inc. Matching Plan ("Matching Plan") at an amount equal to 200 percent of the
first five percent of basic compensation contributed by the Plan participants.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. Description of Plan (continued)
Participant Accounts
--------------------
Each participant's account is credited with the participant's
contributions and an allocation of Plan earnings. Plan earnings are allocated
to each participant's account in proportion to their fund balance relative to
the total fund balance.
Participants may borrow from their accounts a minimum of $1,000 up to
a maximum of $50,000, or 50 percent of their account's vested balances,
whichever amount is less. The loans are secured by the balance in the
participant's account. Participant loans bear interest at an annual rate equal
to the prime borrowing rate at the inception of the loan plus one percent.
Loan principal and interest is paid ratably through payroll deductions.
Investment Options
------------------
Except for the Pioneer Natural Resources Stable Value Fund, which
became closed to new investments prior to 1998, participants were able to
allocate their contributions among the following investment options during the
plan year ended Dccember 31, 1998:
o Vanguard Money Market Reserves - Prime Portolio - Seeks to
provide high income and a stable share price of $1 by
investing in short-term, high quality money market
instruments issued by financial institutions, non-financial
corporations, the United States government and United States
federal agencies.
o Vanguard - ST Corporate Fund - Seeks to provide income while
maintaining a high degree of stability of principal by
investing in short-term bonds, including high-quality
corporate and United States Treasury securities.
o Vanguard 500 Index Fund - Seeks to provide long-term growth
of capital and income from dividends by holding all of
the 500 stocks that make up the unmanaged Standard & Poor's
500 Composite Stock Price Index, a widely recognized
benchmark of United States. stock market performance.
o Vanguard Primecap Fund - Seeks long-term growth of capital
by investing in stocks of companies with above-average
prospects for continued earnings growth, strong industry
positions and skilled management teams.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. Description of Plan (continued)
o Vanguard Windsor II Fund - Seeks to provide long-term growth
of capital and income from dividends by investing in a
diversified group of out-of-favor stocks of large
capitalization companies. The stocks generally sell at prices
below the overall market average compared to their dividend
income and future return potential.
o Vanguard International Growth Fund - Seeks to provide
long-term growth of capital by investing in stocks of
high-quality, seasoned companies based outside the United
States. Stocks are selected from more than 15 countries.
o Sarofim Equity Fund - Seeks to provide high growth of capital
by investing in a broadly diversified portfolio of
large companies. Income is a secondary goal.
o Pioneer Natural Resources Stable Value Fund - Seeks to provide
a high level of income and a stable unit value of $1
in most cases.
o Pioneer Natural Resources Stock Fund - The Pioneer Natural
Resources Stock Fund is designed to provide long-term
growth of capital through increases in the value of the common
stock of the Company. Dividends, if any, are reinvested to
purchase more shares.
Vesting
-------
As is described in more detail in "Contributions" above, participants'
contributions and Plan earnings are maintained in the Plan. Employer
contributions are maintained in the Matching Plan, together with the earnings
of the Matching Plan.
Participants are immediately vested in their voluntary contributions
made into the Plan plus the actual Plan earnings thereon. Vesting in the
Matching Plan is based upon years of continuous service. A participant is fully
vested in the Matching Plan after four years of service.
During 1998, certain participants were terminated by the Company in
connection with a corporate reorganization. By amendment to the Plan, these
participants became fully vested in all contributions to the Plan, as of their
dates of termination.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. Description of Plan (continued)
Payments of Benefits
--------------------
If the total value of the vested portion of the participant's account
is $5,000 or less, payment will be made in one lump sum as soon as
administratively possible. If the total value of the vested portion of
the participant's account exceeds $5,000, payment will occur at age 70-1/2
unless the participant terminates, retires or becomes disabled prior to age
70-1/2 and consents to an earlier distribution date by filing a written request
to the Plan Administrator within 90 days prior to the date the participant
wishes to receive a distribution. Except for participant accounts that have
a total vested value of $5,000 or less, distributions to terminated, retired or
disabled participants will be annuities, but may be installments or lump sum
payments if so directed by the participant. A participant's beneficiary will
receive the participant's account balance in the event of a participant's death.
Withdrawal of Benefits
----------------------
Employees may withdraw their vested assets in the Plan under certain
hardship conditions as defined in the Plan agreement. Terminated participants
may also withdraw their vested assets in the Plan.
Plan Termination
----------------
Although it has not expressed any intent to do so, the Employer
has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In the
event of the Plan's termination, participants will become fully vested in their
accounts.
Note 2. Summary of Significant Accounting Policies
- ------- ------------------------------------------
Basis of Presentation
---------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting.
Investment Valuation
--------------------
Investments are valued at fair value as determined by Vanguard
Fiduciary Trust Company (the "Trustee"). Fair value is determined as
follows:
1) Investments in securities traded on national securities exchanges
are valued at the last reported sales price on the last business day
of the year;
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 2. Summary of Significant Accounting Policies (continued)
- ------- ------------------------------------------------------
2) Investments in guaranteed investment contracts with insurance
companies are valued at contract value, which approximates
fair value (see Note 3. of the Notes to Financial Statements); and
3) Participant loans receivable are valued at their unpaid principal
balance which approximates fair value.
Security Transactions and Investment Income
-------------------------------------------
Security transactions are accounted for on a trade-date basis.
Expenses incurred with transactions, if any, are added to the purchase price
or deducted from the selling price at the time of the transactions.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Plan Administrator to
make estimates that affect the reported amounts of net assets
available for benefits at the date of the financial statements and the reported
changes in net assets available for benefits during the reporting periods.
Actual results could differ from those estimates.
Reclassifications
-----------------
Certain reclassifications have been made to the 1997 amounts to conform
to the 1998 presentation.
Note 3. Investments
- ------- -----------
The Pioneer Natural Resources Stable Value Fund is composed of
investment contracts issued by insurance companies as well as a money market
account which acts as a holding account as the contracts mature. Each contract
earns a guaranteed annual interest rate for a specific period of time. The
accounts earn interest as credited by the insurer. The guaranteed annual rates
ranged from 5.9 percent to 7.7 percent during 1998 and the average annual yield
ranged from 5.9 percent to 7.4 percent during 1998, and 5.4 percent to 7.7
percent during 1997. The contracts mature on December 31, 1999 and are stated
at contract value which approximates fair value.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 3. Investments (continued)
- ------- -----------------------
The number of units and net asset value per unit for the Pioneer
Natural Resources Stock Fund at December 31, 1998 and 1997 was 363,470 and $3.16
and 262,769 and $10.43, respectively.
Note 4. Administrative Expenses
- ------- -----------------------
Administrative expenses incurred by the Plan were $208,867 and
$1,780 during the yesrs ended December 31, 1998 and 1997, respectively. The
increase in expenses incurred is primarily reflective of Sarofim Equity Fund
fees that were paid by Mesa during 1997, but are being incurred by the Plan
since the merger of the Mesa Profit Sharing Plan in 1997 (see Note 1. to the
Notes to Financial Statements). The Employer may pay certain expenses incurred
in the establishment and administration of the Plan, including expenses and fees
of the Trustee, but it shall not be obligated to do so, and any such expenses
not paid by the Employer shall be paid from the Plan earnings. The Employer paid
approximately $46,000 and $58,000 of administrative expenses relating to 1998
and 1997, respectively.
Note 5. Tax Status of the Plan
- ------- ----------------------
The Plan has received a determination letter from the Internal Revenue
Service dated January 14, 1999, stating that the Plan is qualified under Section
401(a) of the Code and, therefore, the related trust is exempt from taxation.
Once qualified, the Plan is required to operate in conformity with the Code
to maintain its qualification. The Plan administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code
and, therefore, believes that the Plan is qualified and the related trust is
tax exempt.
Note 6. Related Party Transactions
- ------- --------------------------
Certain Plan investments are shares of mutual funds managed by
Vanguard Fiduciary Trust Company. Vanguard Fiduciary Trust Company is the
Trustee as defined by the Plan and, therefore, these transactions qualify as
party-in-interest.
PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 7. Reconciliation of Financial Statements to Forms 5500
- ------- ----------------------------------------------------
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
<TABLE>
December 31,
-------------------------
1998 1997
---- ----
<S> <C> <C>
Net assets available for benefits per the
accompanying financial statements $77,613,873 $73,161,847
allocated to withdrawing participants (84,710) (237,736)
----------- -----------
Net assets available for benefits per the
Form 5500 $77,529,163 $72,924,111
=========== ===========
</TABLE>
The following is a reconciliation of distributions to participants per
the financial statements to the Forms 5500:
<TABLE>
For the year ended
------------------
December 31,
1998 1997
---- ----
<S> <C> <C>
Distributions to participants per the
accompanying financial statements $ 14,074,200 $ 1,409,604
Add: Amounts allocated to withdrawing
participants at end of year 84,710 237,736
Less: amounts allocated to withdrawing
participants at beginning of year (237,736) (46,113)
------------ -----------
Distributions to participants per the
Form 5500 $ 13,921,174 $ 1,601,227
============ ===========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the
Form 5500 for benefit claims that have been processed and approved for payment
prior to December 31, but not yet paid as of that date.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 8. Subsequent Event
Effective April 1, 1999, the Plan was amended to allow participants
to change their applicable percentage of payroll deductions as of the first
day of the first pay period in any calendar month. Prior to the amendment,
participants could only make percentage of payroll deduction changes quarterly.
<PAGE>
EIN: 75-2516853
Plan Number: 001
PIONEER NATURAL RESOURCES USA, INC.
401(k)
Line 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1998
<TABLE>
(c)
Description of
(b) investment including
Identify of issue maturity date, rate of (e)
borrower, lessor, interest, collateral, par (d) Current
(a) or similar party or maturity value Cost Value
- ------- ----------------------- -------------------------- ------ --------
<S> <C> <C> <C> <C> <C>
* VMMR- Prime Portfolio Money Market Fund $ 9,022,294 $9,022,294
* Vanguard-ST Registered Investment
Corporate Fund Company 4,990,127 5,014,181
* Vanguard 500 Index Registered Investment
Fund Company 4,443,663 6,061,044
* Vanguard Primecap Fund Registered Investment
Company 5,432,011 7,667,874
* Vanguard Windsor II Fund Registered Investment
Company 7,412,372 8,482,733
* Vanguard International Registered Investment
Growth Fund Company 468,142 503,275
Sarofim Equity Fund Registered Investment
Company 28,018,845 35,779,402
* Pioneer Natural Resources
Stable Value Fund:
New York Life Guaranteed Insurance
Insurance Company Contract 606,978 606,978
VGI Prime Money
Market Fund Money Market Fund 1,669,615 1,669,615
* Pioneer Natural Resources
Stock Fund Common Stock Fund 2,776,429 1,148,565
* Participants' loans Interest rates ranging
from 7% - 10% - 1,657,912
----------- -----------
$64,840,476 $77,613,873
=========== ===========
</TABLE>
___________________________
*Party in-interest
PAGE>
EIN: 75-2516853
Plan Number: 001
PIONEER NATURAL RESOURCES USA, INC.
401(k) PLAN
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
(h)
Current
Value
(a) (c) (d) (g) of asset on (i)
Identity of (b) Purchase Selling Cost of transaction Net
Party Involved Description of Asset Price Price Assets date gain
- ---------------- --------------------------------------- --------- -------- -------- ------------ -------
Category (iii) - series of transactions
in excess of five percent of net assets:
<S> <C> <C> <C> <C> <C> <C> <C>
* Sarofim Equity Fund $ 2,706,796 $ - $2,706,796 $ 2,706,796 $ -
11,271,120 9,985,980 11,271,120 1,285,140
* VMMR -Prime Portfolio 6,911,386 - 6,911,386 6,911,386 -
4,809,099 4,809,099 4,809,099 -
* Vanguard 500 Index Fund 2,654,750 - 2,654,750 2,654,750 -
1,409,715 1,088,979 1,409,715 320,736
* Vanguard Primecap Fund 2,204,475 - 2,204,475 2,204,475 -
2,010,009 1,622,115 2,010,009 387,894
* Vanguard Windsor II Fund 3,130,018 - 3,130,018 3,130,018 -
2,269,594 1,852,705 2,269,594 416,889
</TABLE>
______________________
*Vanguard Fiduciary Trust Company
There were no category (i), (ii) or (iv) transactions during 1998 and columns(e)
and (f) are not applicable.
<PAGE>
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
S I G N A T U R E S
The Plan, pursuant to the requirements of the Securities Exchange Act of 1934,
the trustee has duly caused this annual report to be signed on its behalf by
the undersigned thereto duly authorized.
PIONEER NATURAL RESOURCES USA, INC. 401(k) PLAN
By: Pioneer Natural Resources USA, Inc.
401(k) Plan Committee
Date: June 25, 1999 By: /s/ Larry N. Paulsen
--------------------------------
Larry N. Paulsen
Chairman
Date: June 25, 1999 By: /s/ John V. Peters
--------------------------------
John V. Peters
Date: June 25, 1999 By: /s/ Kevin W. Reed
--------------------------------
Kevin W. Reed
Date: June 25, 1999 By: /s/ David W. Simpson
--------------------------------
David W. Simpson
Date: June 25, 1999 By: /s/ M. Garrett Smith
--------------------------------
M. Garrett Smith
PAGE>
INDEX TO EXHIBITS
<TABLE>
Exhibit
Number Description Page
- ------ --------------------------- ----
<S> <C> <C>
23.1 Consent of Ernst & Young LLP
23.2 Consent of KPMG LLP
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-39249) pertaining to the Pioneer Natural Resources USA, Inc.
401(k) Plan of our report dated May 18, 1999, with respect to the financial
statements and schedules of the Pioneer Natural Resources USA, Inc. 401(k)Plan
included in this Annual Report on Form 11-K for the year ended December 31,
1998.
Ernst & Young LLP
Fort Worth, Texas
June 28, 1999
PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
Pioneer Natural Resources Company
Pioneer Natural Resources USA, Inc.
401(k) Plan Committee
We consent to incorporation by reference in the registration statement
(No. 333-39249) on Form S-8 of Pioneer Natural Resources USA, Inc. 401(k)
Plan of our report dated June 12, 1998, relating to the statement of net assets
available for benefits of the Pioneer Natural Resources USA, Inc. 401(k)
Plan as of December 31, 1997 and the related statement of changes in net assets
available for benefits for the year ended December 31, 1997, which report
appears in the December 31, 1998 annual report on Form 11-K of the Pioneer
Natural Resources USA, Inc. 401(k) Plan.
KPMG LLP
Midland, Texas
June 28, 1999
