| /x/            | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934    |
|----------------|----------------------------------------------------------------------------------------|
|           | For the fiscal year ended December 31, 2010or                                          |
| /  / | TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 |
|           | For the transition period from___to___                                                 |

| Delaware                                         | 26-0388421                           |
|--------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation)   | (I.R.S. Employer Identification No.) |
|                                             |                                 |
| 5205 N. O'Connor Blvd., Suite 200, Irving, Texas | 75039                                |
| (Address of principal executive offices)         | (Zip Code)                           |

| Title of each class                             | Name of each exchange on which registered |
|-------------------------------------------------|-------------------------------------------|
| Common Units Representing Limited Partner Units | New York Stock Exchange                   |

| Large accelerated filer    o           |                                          | Accelerated filer                     ý |
|------------------------------------------------------------|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
| Non accelerated filer      o | (Do not check if a smaller reporting company) | Smaller reporting company   o                                                                                                |

| Aggregate market value of common units held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $305,811,272 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|
| Number of common units outstanding as of February 23, 2011                                                                                                                               | 33,113,700   |

| (1) | Portions of the definitive proxy statement for the 2011 Annual Meeting of Shareholders of Pioneer Natural Resources Company to be held during May 2011 as referenced in Part III, Item 11 of this report. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| TABLE OF CONTENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Page |
| Cautionary Statement Concerning Forward-Looking Statements                                                                                                                                     | 3 |
| Definitions of Certain Terms and Conventions Used Herein                                                                                                                                       | 4 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| PART  I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Business                                                                                                                       | 6 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | General                                                                                                                    | 6 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Presentation                                                                                                                    | 6 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Available Information                                                                                                                    | 7 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Business Strategy                                                                                                                    | 7 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Relationship with Pioneer                                                                                                                    | 8 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Competitive Strengths                                                                                                                    | 8 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Business Activities                                                                                                                    | 9 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Marketing of Production                                                                                                                    | 10 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Competition, Markets and Regulations                                                                                                                    | 10 |
| Item 1A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Risk Factors                                                                                                                       | 16 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Risks Related to the Partnership's Business                                                                                                                    | 16 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Risks Related to an Investment in the Partnership                                                                                                                    | 30 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Tax Risks to Common Unitholders                                                                                                                    | 35 |
| Item 1B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Unresolved Staff Comments                                                                                                                       | 37 |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Properties                                                                                                                       | 38 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Reserve Rule Changes                                                                                                                    | 38 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Reserve Estimation Procedures and Audits                                                                                                                    | 38 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Description of Properties                                                                                                                    | 41 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Selected Oil and Gas Information                                                                                                                    | 42 |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Legal Proceedings                                                                                                                       | 44 |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Removed and Reserved                                                                                                                       | 44 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
| PART  II                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
| Item 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity  Securities | 45 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Cash Distributions to Unitholders                                                                                                                    | 45 |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Selected Financial Data                                                                                                                       | 46 |
| Item 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Management's Discussion and Analysis of Financial Condition and Results of Operations | 47 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Financial and Operating Performance                                                                                                                    | 47 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | First Quarter 2011 Outlook                                                                                                                    | 47 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Results of Operations                                                                                                                    | 47 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Capital Commitments, Capital Resources and Liquidity                                                                                                                    | 50 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Critical Accounting Estimates                                                                                                                    | 53 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | New Accounting Pronouncements                                                                                                                    | 54 |
| Item 7A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                       | 55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Quantitative Disclosures                                                                                                                    | 55 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Qualitative Disclosures                                                                                                                    | 57 |
| Item 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Financial Statements and Supplementary Data                                                                                                                       | 58 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Index to Consolidated Financial Statements                                                                                                                    | 58 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Report of Independent Registered Public Accounting Firm                                                                                                                    | 59 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Consolidated Financial Statements                                                                                                                    | 60 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Notes to Consolidated Financial Statements                                                                                                                    | 66 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Unaudited Supplementary Information                                                                                                                    | 87 |
| Item 9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 92 |
| Item 9A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Controls and Procedures                                                                                                                       | 92 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Management Report on Internal Control Over Financial Reporting                                                                                                                    | 92 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting | 93 |
| Item 9B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Other Information                                                                                                                       | 94 |

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| PART  III                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| Item 10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Directors, Executive Officers and Corporate Governance                                                                                                                       | 95 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Directors and Executive Officers of the General Partner                                                                                                                    | 95 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Governance                                                                                                                    | 98 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Meetings and Committees of Directors                                                                                                                    | 98 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Executive Sessions of Non-Management Directors, Procedure for Directly Contacting the Board of Directors and Whistleblower Policy | 99 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Code of Ethics                                                                                                                    | 99 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Availability of Governance Guidelines, Charters and Code                                                                                                                    | 99 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Section 16(a) Beneficial Ownership Reporting Compliance                                                                                                                    | 99 |
| Item 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Executive Compensation                                                                                                                       | 100 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Compensation of Directors                                                                                                                    | 100 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Compensation of Executive Officers                                                                                                                    | 101 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Narrative Disclosure for the 2010 Grants of Plan-Based Awards Table                                                                                                                    | 107 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Pension Benefits; Nonqualified Deferred Compensation                                                                                                                    | 109 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Potential Payments Upon Termination or Change in Control                                                                                                                    | 109 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Compensation Committee Interlocks and Insider Participation                                                                                                                    | 109 |
| Item 12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 110 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Securities Authorized for Issuance under Equity Compensation Plans                                                                                                                    | 112 |
| Item 13.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Certain Relationships and Related Transactions, and Director Independence | 112 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Distributions and Payments to the General Partner and Its Affiliates                                                                                                                    | 112 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Administrative Services Agreement                                                                                                                    | 113 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Omnibus Agreement, Omnibus Operating Agreements and Operating Agreements | 113 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Gas Processing Agreements                                                                                                                    | 114 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Tax Sharing Agreement                                                                                                                    | 115 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Policies and Procedures for Review, Approval and Ratification of Related Person Transactions | 115 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Director Independence                                                                                                                    | 115 |
| Item 14.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Principal Accounting Fees and Services                                                                                                                       | 115 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Fees Incurred by the Partnership for Services Provided by Ernst & Young LLP | 116 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Audit Committee's Pre-Approval Policy and Procedures                                                                                                                    | 116 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| PART  IV                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| Item 15.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Exhibits, Financial Statement Schedules                                                                                                                       | 117 |
| Signatures                                                                                                                                  | 121 |
| Exhibit Index                                                                                                                               | 122 |

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| ·   | "Bbl" means a standard barrel containing 42 United States gallons. |
|--------------------|--------------------------------------------------------------------|

| ·   | "BOE" means a barrel of oil equivalent and is a standard convention used to express oil and gas volumes on a comparable oil equivalent basis. Gas equivalents are determined under the relative energy content method by using the ratio of 6.0 Mcf of gas to 1.0 Bbl of oil or natural gas liquid. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "BOEPD" means BOE per day. |
|--------------------|---------------------------------|

| ·   | "Btu" means British thermal unit, which is a measure of the amount of energy required to raise the temperature of one pound of water one degree Fahrenheit. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "Common unit" means outstanding Pioneer Southwest Energy Partners L.P. limited partner units. |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | "COPAS fee" means a fee based on an overhead rate established by the Council of Petroleum Accountants Societies to reimburse the operator of a well for overhead costs, such as accounting and engineering costs. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "Derivatives" means financial contracts, or financial instruments, whose values are derived from the value of an underlying asset, reference rate or index. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "GAAP" means accounting principles that are generally accepted in the United States of America. |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | "LIBOR" means London Interbank Offered Rate, which is a market rate of interest. |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | "LNG" means liquefied natural gas. |
|--------------------|-----------------------------------------|

| ·   | "MBbl" means one thousand Bbls. |
|--------------------|--------------------------------------|

| ·   | "MBOE" means one thousand BOEs. |
|--------------------|--------------------------------------|

| ·   | "Mcf" means one thousand cubic feet and is a measure of natural gas volume. |
|--------------------|-----------------------------------------------------------------------------|

| ·   | "MMBOE" means one million BOEs. |
|--------------------|--------------------------------------|

| ·   | "MMBtu" means one million Btus. |
|--------------------|---------------------------------|

| ·   | "MMcf" means one million cubic feet. |
|--------------------|-------------------------------------------|

| ·   | "Mont Belvieu-posted-price" means the daily average of natural gas liquids components as priced in Oil Price Information Service ("OPIS") in the table "U.S. and Canada LP – Gas Weekly Averages" at Mont Belvieu, Texas. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "NGL" means natural gas liquids. |
|--------------------|---------------------------------------|

| ·   | "Novation" represents the act of replacing one party to a contractual obligation with another party. |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | "NYMEX" means the New York Mercantile Exchange. |
|--------------------|-------------------------------------------------|

| ·   | "NYSE" means the New York Stock Exchange. |
|--------------------|-------------------------------------------|

| ·   | "Partnership Predecessor" means Pioneer Southwest Energy Partners L.P. Predecessor. |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | "Partnership" or "Pioneer Southwest" means Pioneer Southwest Energy Partners L.P. and its subsidiaries. |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | "Pioneer" means Pioneer Natural Resources Company and its wholly owned subsidiaries. |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | "Proved reserves" are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations--prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.(i) The area of the reservoir considered as proved includes: (A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons ("LKH") as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.(iii) Where direct observation from well penetrations has defined a highest known oil ("HKO") elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities.(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "Recompletion" means the completion for production of an existing wellbore in another formation from that in which the well has been previously completed. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "SEC" means the United States Securities and Exchange Commission. |
|--------------------|------------------------------------------------------------------------|

| ·   | "Standardized Measure" means the after-tax present value of estimated future net cash flows of proved reserves, determined in accordance with the rules and regulations of the SEC, using prices and costs employed in the determination of proved reserves and a ten percent discount rate. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | "U.S." means United States. |
|--------------------|-----------------------------|

| ·   | "Workover" means operations on a producing well to restore or increase production. |
|--------------------|------------------------------------------------------------------------------------|

| ·   | With respect to information on the working interest in wells, "net" wells are determined by multiplying "gross" wells by the Partnership's working interest in such wells. Unless otherwise specified, well statistics quoted herein represent gross wells. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Develop the Partnership's proved undeveloped reserves.  At current margins, the Partnership expects that development drilling of undeveloped properties will allow it to increase cash flow from operations in order to maintain and possibly increase cash distributions to unitholders in the future.  As part of a two-rig drilling program initiated in the fourth quarter of 2009, the Partnership drilled and completed one well in 2009 and 28 wells in 2010.  The Partnership expects to drill and complete 40 wells to 45 wells in 2011.  The Partnership is drilling and completing its wells in the upper and lower Spraberry, Dean and Wolfcamp formations. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | Purchase oil and gas properties in its area of operations from third parties either independently or jointly with Pioneer. The Partnership believes that over the long-term it will have a cost of capital advantage relative to its corporate competitors and a technical advantage due to the scale of Pioneer's operations, which will enhance the Partnership's ability to acquire producing and undeveloped oil and gas properties.  In addition, the Partnership believes that its relationship with Pioneer is advantageous because it allows the Partnership to jointly pursue acquisitions of oil and gas properties with Pioneer, which increases the number and type of transactions it can pursue and increases its competitiveness. |
|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | Purchase oil and gas properties in its area of operations directly from Pioneer. The Partnership believes that Pioneer intends to offer the Partnership over time the opportunity to purchase portions of Pioneer's producing and undeveloped oil and gas assets in its area of operations, provided that such transactions can be done in an economic manner and depending upon market conditions at the time.  See Note B of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for additional information about the 2009 Acquisition in the Spraberry field. |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Benefit from production and reserve enhancements as a result of infill and horizontal drilling and secondary recovery initiatives being advanced by Pioneer. The Partnership also believes that it benefits from its relationship with Pioneer because the Partnership is able to learn from the various production and proved reserve enhancement initiatives being performed by Pioneer.  For instance, Pioneer has (i) drilled 20-acre infill locations during the past three years with encouraging results, (ii) initiated a 7,000 acre waterflood project during 2010 with an initial production response expected during the first half of 2011 and (iii) commenced drilling on two horizontal wells during the fourth quarter of 2010. The ultimate outcome and impact to the Partnership of these initiatives cannot be predicted at this time. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Maintain a balanced capital structure to ensure financial flexibility for acquisitions. To fund development drilling initiatives and future property acquisitions, the Partnership is reserving approximately 25 percent of its net cash provided by operating activities. The Partnership may also use, to the extent available, external |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|    | financing sources to fund acquisitions, including borrowings under its credit facility and funds from future private and public equity and debt offerings. The Partnership intends to maintain a balanced capital structure, which will afford the Partnership the financial flexibility to fund development drilling initiatives and future acquisitions.  See "Liquidity" included in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Capital Commitments, Capital Resources and Liquidity" for additional information about the Partnership's capital structure. |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Mitigate commodity price risk through derivatives. To reduce the impact on the Partnership's net cash provided by operating activities from the price volatility of the commodities the Partnership produces and sells, the Partnership has adopted a policy that contemplates using derivative contracts to protect the prices for approximately 65 percent to 85 percent of expected production for a period of up to five years, as appropriate. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Its relationship with Pioneer: |
|--------------------|--------------------------------|

| o   | Pioneer has a significant retained interest in the Spraberry field as well as an active development plan, each of which should generate acquisition opportunities for the Partnership over time; |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Pioneer's significant ownership in the Partnership provides it an economic incentive to sell developed and proved undeveloped oil and gas properties to it over time; and |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | The Partnership's ability to pursue acquisitions jointly with Pioneer increases the number and type of transactions it can pursue and increases its competitiveness; |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Its assets are characterized by long-lived and stable production; and |
|--------------------|----------------------------------------------------------------------------|

| ·   | Its cost of capital and financial flexibility should over time provide it with a competitive advantage in pursuing acquisitions. Unlike the Partnership's corporate competitors, the Partnership is not subject to federal income taxation at the entity level. In addition, unlike a traditional master limited partnership structure, neither the Partnership's management nor Pioneer hold any incentive distribution rights that entitle them to increasing percentages of cash distributions as the Partnership's distributions grow. The Partnership believes that, collectively, these two factors provide the Partnership with a lower long-term cost of capital, thereby enhancing the Partnership's ability to compete for future acquisitions both individually and jointly with Pioneer. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | require the acquisition of various permits before drilling commences; |
|--------------------|-----------------------------------------------------------------------|

| ·   | enjoin some or all of the operations of facilities deemed in non-compliance with permits; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | restrict the types, quantities and concentration of various substances that can be released into the environment in connection with oil and gas drilling, production and transportation activities; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | require remedial measures to mitigate pollution from former and ongoing operations, such as requirements to close pits and plug abandoned wells. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ·   | the location of wells; |
|--------------------|------------------------|

| ·   | the method of drilling and casing wells; |
|--------------------|------------------------------------------|

| ·   | the method and ability to fracture stimulate wells; |
|--------------------|-----------------------------------------------------|

| ·   | the surface use and restoration of properties upon which wells are drilled; |
|--------------------|-----------------------------------------------------------------------------|

| ·   | the plugging and abandoning of wells; and |
|--------------------|-------------------------------------------|

| ·   | notice to surface owners and other third parties. |
|--------------------|---------------------------------------------------|

----

----

| ·   | the amount of oil, NGL and gas the Partnership produces; |
|--------------------|----------------------------------------------------------|

| ·   | the prices at which the Partnership sells its oil, NGL and gas production; |
|--------------------|----------------------------------------------------------------------------|

| ·   | the effectiveness of its commodity price derivatives; |
|--------------------|-------------------------------------------------------|

| ·   | the level of its operating costs, including fees and reimbursement of expenses to the General Partner and its affiliates; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | the Partnership's ability to economically replace proved reserves; |
|--------------------|--------------------------------------------------------------------|

| ·   | the success of the Partnership's development drilling program; |
|--------------------|----------------------------------------------------------------|

| ·   | the Partnership's ability to acquire oil and gas properties from third parties in a competitive market and at an attractive price to the Partnership; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pioneer's willingness to sell assets to the Partnership at a price that is attractive to the Partnership and to Pioneer; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | prevailing economic conditions; |
|--------------------|---------------------------------|

| ·   | the level of competition the Partnership faces; |
|--------------------|-------------------------------------------------|

| ·   | fuel conservation measures and alternate fuel requirements; and |
|--------------------|-----------------------------------------------------------------|

| ·   | government regulation and taxation. |
|--------------------|-------------------------------------|

----

| ·   | the level of the Partnership's capital expenditures for acquisitions of additional oil and gas assets, developing proved undeveloped properties, and recompletion opportunities in existing oil and gas wells; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the Partnership's ability to make borrowings under its credit facility to pay distributions; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | sources of cash used to fund acquisitions; |
|--------------------|--------------------------------------------|

| ·   | debt service requirements and restrictions on distributions contained in the Partnership's credit facility or future financing agreements; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | fluctuations in the Partnership's working capital needs; |
|--------------------|----------------------------------------------------------|

| ·   | general and administrative expenses; |
|--------------------|--------------------------------------|

| ·   | timing and collectability of receivables; and |
|--------------------|-----------------------------------------------|

| ·   | the amount of cash reserves, which the Partnership expects to be substantial, established by the General Partner for the proper conduct of the Partnership's business. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|         ·  domestic and worldwide supply of and demand for oil, NGL and gas;                                                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  inventory levels at Cushing, Oklahoma, the benchmark for West Texas Intermediate ("WTI") oil prices;                                                                                       |
| ·  weather conditions;                                                                                                                                                                        |
| ·  overall domestic and global political and economic conditions;                                                                                                                             |
| ·  actions of OPEC and other state-controlled oil companies relating to oil price and production controls;                                                                                    |
| ·  the effect of liquefied natural gas, or LNG, deliveries to the United States;                                                                                                              |
| ·  technological advances affecting energy consumption and energy supply;                                                                                                                     |
| ·  domestic and foreign governmental regulations and taxation;                                                                                                                                |
| ·  the effect of energy conservation efforts;                                                                                                                                                 |
| ·  the capacity, cost and availability of oil and gas pipelines and other transportation facilities, and the proximity of these facilities to the     Partnership's wells; and |
| ·  the price and availability of alternative fuels.                                                                                                                                           |

----

| ·  Pioneer decides not to sell any assets to the Partnership;                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  Pioneer decides to acquire assets in the Partnership's area of operations instead of allowing the Partnership to acquire them; |
| ·  the Partnership is unable to identify attractive acquisition opportunities in its area of operations;                          |
| ·  the Partnership is unable to agree on a purchase price for assets that are attractive to it; or                                |
| ·  the Partnership is unable to obtain financing for acquisitions on economically acceptable terms.                               |

----

| ·  the validity of the Partnership's assumptions about reserves, future production, revenues and costs, including synergies;                                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  a decrease in the Partnership's liquidity by using a significant portion of its available cash or borrowing capacity to finance acquisitions;                                                                                |
| ·  a significant increase in the Partnership's interest expense or financial leverage if the Partnership incurs additional debt to finance acquisitions;                                                                        |
| ·  dilution to its unitholders and a decrease in available cash per unit if the Partnership issues additional partnership securities to finance            acquisitions; |
| ·  the assumption of unknown liabilities, losses or costs for which the Partnership is not indemnified or for which its indemnity is inadequate;                                                                                |
| ·  the diversion of management's attention from other business concerns;                                                                                                                                                        |
| ·  an inability to hire, train or retain qualified personnel to manage and operate the Partnership's growing business and assets; and                                                                                           |
| ·  customer or key employee losses at the acquired businesses.                                                                                                                                                                  |

----

----

| ·   | historical production from the area compared with production from other producing areas; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | the quality and quantity of available data; |
|--------------------|---------------------------------------------|

| ·   | the interpretation of that data; |
|--------------------|----------------------------------|

| ·   | the assumed effects of regulations by governmental agencies; |
|--------------------|--------------------------------------------------------------|

| ·   | assumptions concerning future commodity prices; and |
|--------------------|-----------------------------------------------------|

| ·   | assumptions concerning future operating costs, severance, ad valorem and excise taxes, development costs, transportation costs and workover and remedial costs. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the quantities of oil and gas that are ultimately recovered; |
|--------------------|--------------------------------------------------------------|

| ·   | the production and operating costs incurred; |
|--------------------|----------------------------------------------|

| ·   | the amount and timing of future development expenditures; and |
|--------------------|---------------------------------------------------------------|

| ·   | future commodity prices. |
|--------------------|--------------------------|

| ·   | the amount and timing of actual production; |
|--------------------|---------------------------------------------|

| ·   | levels of future capital spending; |
|--------------------|------------------------------------|

| ·   | increases or decreases in the supply of or demand for oil and gas; and |
|--------------------|------------------------------------------------------------------------|

| ·   | changes in governmental regulations or taxation. |
|--------------------|--------------------------------------------------|

| ·  high costs of, or shortages or delays in the delivery of, drilling rigs, equipment, labor or other services; |
|--------------------------------------------------------------------------------------------------------------------------------|
| ·  unexpected operational events and/or conditions;                                                             |
| ·  reductions in oil, NGL and gas prices;                                                                       |
| ·  limitations in the market for oil, NGL and gas;                                                              |
| ·  adverse weather conditions;                                                                                  |
| ·  facility or equipment malfunctions;                                                                          |
| ·  equipment failures or accidents;                                                                             |
| ·  title problems;                                                                                              |
| ·  pipe or cement failures or casing collapses;                                                                 |
| ·  compliance with environmental and other governmental requirements;                                           |
| ·  environmental hazards, such as gas leaks, oil spills, pipeline ruptures and discharges of toxic gases;       |
| ·  lost or damaged oilfield workover and service tools;                                                         |

----

| ·  unusual or unexpected geological formations or pressure or irregularities in formations; |
|------------------------------------------------------------------------------------------------------------|
| ·  blowouts, cratering, explosions and fires;                                               |
| ·  natural disasters; and                                                                   |
| ·  uncontrollable flows of oil, gas or well fluids.                                         |

----

----

| ·    | the Partnership's ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms; |
|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | covenants contained in its existing and future credit and debt arrangements will require it to meet financial tests that may affect its flexibility in planning for and reacting to changes in its business, including possible acquisition opportunities; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | it could need a substantial portion of its cash flow to make principal and interest payments on its indebtedness, reducing the funds that wouldotherwise be available for operations, future business opportunities and distributions to unitholders; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | its debt level could make it more vulnerable than its competitors with less debt to the effects of competitive pressures or a downturn in its business or the economy generally. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | ·  grant liens;                                                            |
|--------|--------|-------------------------------------------------------------------------------------------|
|   |   | ·  incur additional indebtedness;                                          |
|   |   | ·  engage in a merger, consolidation or dissolution;                       |
|   |   | ·  enter into transactions with affiliates;                                |
|   |   | ·  pay distributions or repurchase equity;                                 |
|   |   | ·  make investments;                                                       |
|   |   | ·  sell or otherwise dispose of its assets, businesses and operations; and |
|   |   | ·  materially alter the character of its business.                         |

----

|   |   | ·  unexpected drilling conditions;                                                                                                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | ·  pressure or irregularities in formations;                                                                                                                                                                    |
|   |   | ·  equipment failures or accidents;                                                                                                                                                                             |
|   |   | ·  adverse weather conditions;                                                                                                                                                                                  |
|   |   | ·  restricted access to land for drilling or laying pipelines; and                                                                                                                                              |
|   |   | ·  access to, and the cost and availability of, the equipment, services and personnel required to complete the Partnership's drilling, completion       and operating activities. |

----

----

----

| ·   | Neither the Partnership Agreement nor any other agreement requires Pioneer to pursue a business strategy that favors the Partnership. Directors and officers of Pioneer have a fiduciary duty to make decisions in the best interest of its stockholders, which may be contrary to the Partnership's interests. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The General Partner is allowed to take into account the interests of parties other than the Partnership, such as Pioneer, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to the Partnership. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pioneer will compete with the Partnership and is under no obligation to offer properties to the Partnership. In addition, Pioneer may compete with the Partnership with respect to any future acquisition opportunities. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The General Partner determines the amount and timing of expenses, asset purchases and sales, capital expenditures, borrowings, repayments of indebtedness, issuances of additional partnership securities and cash reserves, each of which can affect the amount of cash that is available for distribution to unitholders. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | the Partnership Agreement permits the General Partner to cause the Partnership to pay it or its affiliates for any services rendered to the Partnership and permits the General Partner to enter into additional contractual arrangements with any of these entities on the Partnership's behalf, and provides for reimbursement to the General Partner for such amounts as it determines pursuant to the provisions of the Partnership Agreement. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | ·  each unitholder's proportionate ownership interest in the Partnership would decrease;     |
|--------|--------|-------------------------------------------------------------------------------------------------------------|
|   |   | ·  the amount of cash available for distribution on each unit could decrease;                |
|   |   | ·  the ratio of taxable income to distributions could increase;                              |
|   |   | ·  the relative voting strength of each previously outstanding unit could be diminished; and |
|   |   | ·  the market price of the common units could decline.                                       |

| ·   | permits the General Partner to make a number of decisions in its sole discretion. This entitles the General Partner to consider only the interests and factors that it desires, and it has no fiduciary duty or obligation to give any consideration to any interest of, or factors affecting, the Partnership, its subsidiaries or any limited partner. Examples include the exercise of its limited call rights, its rights to vote and transfer the units it owns and its registration rights and the determination of whether to consent to any merger or consolidation of the Partnership or any amendment to the Partnership Agreement; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | with respect to transactions not involving a conflict of interest, provides that the General Partner, when acting in its capacity as general partner and not in its sole discretion, shall not owe any fiduciary duty to the Partnership's unitholders and shall not owe any fiduciary duty to the Partnership except for the duty to act in good faith, which for purposes of the Partnership Agreement means that a person making any determination or taking or declining to take any action subjectively believes that the decision or action made or taken (or not made or not taken) is in the Partnership's best interests; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | generally provides that affiliate transactions and resolutions of conflicts of interest not approved by the Conflicts Committee of the Board of Directors of the General Partner and not involving a vote of unitholders must be determined in good faith. Under the Partnership Agreement, "good faith" for this purpose means that a person making any determination or taking or declining to take any action subjectively believes that the decision or action made or taken (or not made or taken) is fair and reasonable to the Partnership taking into account the totality of the relationships between the parties involved or is on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | provides that in resolving a conflict of interest, the General Partner and its Conflicts Committee may consider: |
|--------------------|------------------------------------------------------------------------------------------------------------------|

|   | ·  the relative interests of the parties involved and the benefits and burdens relating to such interest;                                                                       |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ·  the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership);         |
|   | ·  any customary or accepted industry practices and any customary or historical dealings with a particular person;                                                              |
|   | ·  any applicable engineering practices or generally accepted accounting practices or principles;                                                                               |
|   | ·  the relative cost of capital of the parties and the consequent rates of return to the equity holders of the parties; and                                                     |
|   | ·  in the case of the Conflicts Committee only, such additional factors it determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances; |

| ·   | provides that any decision or action made or taken by the General Partner or its Conflicts Committee in good faith, including those involving a conflict of interest, will be conclusive and binding on all partners and will not be a breach of the Partnership Agreement or of any duty owed to the Partnership; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | provides that in resolving conflicts of interest, it will be presumed that in making its decision the General Partner or its Conflicts Committee acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the Partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | provides that the General Partner and its officers and directors will not be liable for monetary damages to the Partnership, the Partnership's limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court ofcompetent jurisdiction determining that the General Partner or those other persons acted in bad faith or engaged in fraud or willful misconduct, or, in the case of a criminal matter, acted with knowledge that the conduct was criminal. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

----

| ·   | Expanding the definition of oil- and gas-producing activities to include the extraction of saleable hydrocarbons, in the solid, liquid or gaseous state, from oil sands, coalbeds or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Amending the definition of proved oil and gas reserves to require the use of an average of the first-day-of-the-month commodity prices during the 12-month period ending on the balance sheet date rather than the period-end commodity prices; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Adding to and amending other definitions used in estimating proved oil and gas reserves, such as "reliable technology" and "reasonable certainty"; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Broadening the types of technology that an issuer may use to establish reserves estimates and categories; and |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | Changing disclosure requirements and providing formats for tabular reserve disclosures. |
|--------------------|-----------------------------------------------------------------------------------------|

----

| ·    | A reserve audit is an examination of reserve information that is conducted for the purpose of expressing an opinion as to whether such reserve information, in the aggregate, is reasonable and has been presented in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information as promulgated by the SPE. |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·    | The estimation of reserves is an imprecise science due to the many unknown geologic and reservoir factors that cannot be estimated through sampling techniques. Since reserves are only estimates, they cannot be audited for the purpose of verifying exactness. Instead, reserve information is audited for the purpose of reviewing in sufficient detail the policies, procedures and methods used by a company in estimating its reserves so that the reserve auditors may express an opinion as to whether, in the aggregate, the reserve information furnished by a company is reasonable. |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The methods and procedures used by a company, and the reserve information furnished by a company, must be reviewed in sufficient detail to permit the reserve auditor, in its professional judgment, to express an opinion as to the reasonableness of the reserve information. The auditing procedures require the reserve auditor to prepare their own estimates of reserve information for the audited properties. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|         |               | Summary of Oil and Gas Reserves as of December 31, 2010 |
|--------------|--------------------|---------------------------------------------------------|
|         |               | Based on Average Fiscal Year Prices                     |
|         |               |                                                    |   |   |   |   |   |   |   |   | Standardized |
|         |               | Oil                                                     |   | NGLs |   | Gas |   |   |   |   | Measure |
|         |               | (MBbls)                                                 |   | (MBbls) |   | (MMcf) |   | MBOE |   |   | (in thousands) |
| Proved       |               |                                                    |   |   |   |   |   |   |   |   |
|         | Developed          |  23,682                                       |   |  9,966  |   |  39,032  |   |  40,153  |   | $ |  502,133  |
|         | Undeveloped        |  7,515                                        |   |  2,546  |   |  10,567  |   |  11,822  |   |   |  61,633  |
| Total proved |  31,197  |                                                    |  12,512  |   |  49,599  |   |  51,975  |   | $ |  563,766  |

----

|                        |   |               | Estimated  |    |                |   |       |                |        |       |                |   |   |                |   |
|-----------------------------|--------|--------------------|------------|---------|---------------------|--------|------------|---------------------|-------------|------------|---------------------|--------|--------|---------------------|--------|
|                        |   |               | Future     |    | Future              |   | Future     |                | Future      |       |                |   |
|                        |   |               | Production |    | Cash                |   | Production |                | Development |       | Future Net          |
| Year Ended December 31, (a) |   | (MBOE)             |       | Inflows |                | Costs  |       | Costs               |        | Cash Flows |
|                        |   |               |       |    |                |   |       |                |        |       |                |   |   |                |   |
| 2011                   |   |  250     |       | $       |  16,098   |   | $          |  2,180    |        | $          |  61,351   |   | $      |  (47,433)      |
| 2012                   |   |  702     |       |    |  44,650   |   |       |  6,576    |        |       |  67,530   |   |   |  (29,456)      |
| 2013                   |   |  942     |       |    |  58,909   |   |       |  9,245    |        |       |  57,689   |   |   |  (8,025)       |
| 2014                   |   |  873     |       |    |  53,806   |   |       |  9,327    |        |       |  3,219    |   |   |  41,260   |
| 2015                   |   |  668     |       |    |  40,322   |   |       |  7,640    |        |       |  -        |   |   |  32,682   |
| Thereafter                  |   |  8,387   |       |    |  502,451  |   |       |  188,807  |        |       |  6,573    |   |   |  307,071  |
|                        |   |  11,822  |       | $       |  716,236  |   | $          |  223,775  |        | $          |  196,362  |   | $      |  296,099  |

| (a) | Beginning in 2011 and thereafter, the production and cash flows represent the drilling results from the respective year plus the incremental effects of proved undeveloped drilling. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                       |   | Year Ended December 31, |
|------------------------------------------------------------|--------|-------------------------|
|                                                       |   | 2010               |   | 2009  |   | 2008  |
| Production information:                                    |   |                    |   |   |   |   |   |   |   |
|   Annual sales volumes:                          |   |                    |   |   |   |   |   |   |   |
|     Oil (MBbls)                        |   |                    | 1,425  |   |   | 1,344  |   |   | 1,441  |
|     NGLs (MBbls)                       |   |                    |  587  |   |   |  518  |   |   |  476  |
|     Gas (MMcf)                         |   |                    | 2,181  |   |   | 2,281  |   |   | 2,133  |
|     Total (MBOE)                       |   |                    | 2,375  |   |   | 2,243  |   |   | 2,272  |
|   Average daily sales volumes:                   |   |                    |   |   |   |   |   |   |   |
|     Oil (Bbls)                         |   |                    | 3,903  |   |   | 3,683  |   |   | 3,937  |
|     NGLs (Bbls)                        |   |                    | 1,608  |   |   | 1,420  |   |   | 1,298  |
|     Gas (Mcf)                          |   |                    | 5,975  |   |   | 6,248  |   |   | 5,828  |
|     Total (BOE)                        |   |                    | 6,507  |   |   | 6,145  |   |   | 6,206  |
|   Average prices, including hedge results (a):   |   |                    |   |   |   |   |   |   |   |
|     Oil (per Bbl)                      |   | $                       |  103.60  |   | $ |  100.35  |   | $ |  107.79  |
|     NGL (per Bbl)                      |   | $                       |  44.31  |   | $ |  41.61  |   | $ |  48.41  |
|     Gas (per Mcf)                      |   | $                       |  4.66  |   | $ |  5.37  |   | $ |  7.06  |
|     Revenue (per BOE)                  |   | $                       |  77.37  |   | $ |  75.23  |   | $ |  85.14  |
|   Average prices, excluding hedge results (a):   |   |                    |   |   |   |   |   |   |   |
|     Oil (per Bbl)                      |   | $                       |  77.56  |   | $ |  58.05  |   | $ |  99.71  |
|     NGL (per Bbl)                      |   | $                       |  32.91  |   | $ |  25.56  |   | $ |  45.84  |
|     Gas (per Mcf)                      |   | $                       |  3.33  |   | $ |  2.81  |   | $ |  6.24  |
|     Revenue (per BOE)                  |   | $                       |  57.72  |   | $ |  43.56  |   | $ |  78.69  |
| Average costs (per BOE):                                   |   |                    |   |   |   |   |   |   |   |
|   Production costs:                              |   |                    |   |   |   |   |   |   |   |
|     Lease operating (b)                |   | $                       |  14.24  |   | $ |  14.04  |   | $ |  14.24  |
|     Workover                           |   |                    |  1.90  |   |   |  1.46  |   |   | 2.85  |
|       Total production costs |   | $                       |  16.14  |   | $ |  15.50  |   | $ |  17.09  |
|   Production taxes:                              |   |                    |   |   |   |   |   |   |   |
|     Ad valorem                         |   | $                       |  2.15  |   | $ |  2.09  |   | $ | 2.23  |
|     Production                         |   |                    |  2.96  |   |   |  2.17  |   |   | 4.02  |
|       Total production taxes |   | $                       |  5.11  |   | $ |  4.26  |   | $ |  6.25  |
|   Depletion expense                              |   | $                       | 5.30  |   | $ | 5.80  |   | $ | 5.10  |

| (a) | The Partnership discontinued hedge accounting effective February 1, 2009.  Hedge results beginning February 1, 2009 represent the transfer to oil and gas revenues of net deferred hedge gains included in accumulated other comprehensive income as of the de-designation date. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Historical lease operating expense associated with those properties acquired in August 2009 and the Partnership's properties that were acquired in conjunction with the initial public offering in May 2008 include the direct internal costs of Pioneer to operate the properties.  The lease operating expense of the properties after they were acquired by the Partnership includes COPAS Fees. Assuming the COPAS Fees had been charged in the Partnership Predecessor's historical results, the Partnership's lease operating expense would have been higher on a BOE basis by approximately $0.15 and $1.03 for 2009 and 2008, respectively. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                    |   | Gross Productive Wells |   | Net Productive Wells |
|-------------------------|--------|------------------------|--------|----------------------|
|                    |   | Oil                    |   | Gas                  |   | Total |   | Oil |   | Gas |   | Total |
|                    |   |                   |   |                 |   |   |   |   |   |   |   |   |
| As of December 31, 2010 |   |  1,116       |   |  -         |   |  1,116  |   |  985  |   |  -  |   |  985  |
| As of December 31, 2009 |   |  1,135       |   |  -         |   |  1,135  |   |  981  |   |  -  |   |  981  |
| As of December 31, 2008 |   |  1,158       |   |  -         |   |  1,158  |   |  1,003  |   |  -  |   |  1,003  |

| (a) | All of the Partnership's wells are operated by Pioneer.  Productive wells consist of producing wells and wells capable of production, including shut-in wells.  The Partnership had no multiple completion wells as of December 31, 2010. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            |   | Developed Acreage |   | Undeveloped Acreage |
|-----------------|--------|-------------------|--------|---------------------|
|            |   | Gross Acres       |   | Net Acres           |   | Gross Acres |   | Net Acres |
|            |   |              |   |                |   |   |   |   |
| Spraberry field |   | 9,243        |   | 8,736          |   | 5,628  |   | 5,333  |

|       |   | Acres Expiring (a) |
|------------|--------|--------------------|
|       |   | Gross              |   | Net |
| 2011  |   |  1,506   |   |  1,485  |

| (a) | The Partnership's undeveloped acreage represents proved undeveloped acreage held by productive wells except for 1,506 acres (1,485 net acres) that are subject to a continuous drilling commitment.  The continuous drilling commitment obligates Pioneer and the Partnership to spud a well by April 22, 2011, and then spud another well thereafter within 120 days of completing the previous well.  These acres will not expire if the continuous drilling commitment is fulfilled. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | DRILLING ACTIVITIES |
|--------|---------------------|

|                  |        |           | Gross Wells             |          | Net Wells               |
|-----------------------|-------------|----------------|-------------------------|---------------|-------------------------|
|                  |        |           | Year Ended December 31, |          | Year Ended December 31, |
|                  |        |           | 2010               |          | 2009               |   | 2008  |   | 2010  |   | 2009  |   | 2008  |
| Productive wells: (a) |        |           |                    |          |                    |   |   |   |   |   |   |   |
|                  | Development |           |  28           |          |  1            |   |  9  |   |  27  |   |  1  |   |  9  |
|                  | Exploratory |           |  -            |          |  -            |   |  -  |   |  -  |   |  -  |   |  -  |
| Dry holes:            |        |           |                    |          |                    |   |   |   |   |   |   |   |
|                  | Development |           |  -            |          |  -            |   |  -  |   |  -  |   |  -  |   |  -  |
|                  | Exploratory |           |  -            |          |  -            |   |  -  |   |  -  |   |  -  |   |  -  |
| Total                 |        |  28  |                    |  1  |                    |  9  |   |  27  |   |  1  |   |  9  |

| (a) | As of December 31, 2010, drilling on 18 gross wells (18 net wells) was in progress.  The Partnership had seven gross wells (seven net wells) upon which drilling was in progress as of December 31, 2009 and no wells upon which drilling was in progress as of December 31, 2008. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                         |           |   |              |   |   |              |   | Dividends |
|------------------------------|----------------|--------|-------------------|--------|--------|-------------------|--------|-----------|
|                         |           |   |              |   |   |              |   | Declared  |
|                         |           | High   |              | Low    |   | Per Unit          |
| Year ended December 31, 2010 |           |   |              |   |   |              |   |      |
|                         | Fourth quarter | $      |  30.42  |   | $      |  27.15  |   | $         |  0.50  |
|                         | Third quarter  | $      |  28.33  |   | $      |  23.53  |   | $         |  0.50  |
|                         | Second quarter | $      |  25.65  |   | $      |  20.93  |   | $         |  0.50  |
|                         | First quarter  | $      |  23.87  |   | $      |  20.72  |   | $         |  0.50  |
|                         |           |   |              |   |   |              |   |      |   |
| Year ended December 31, 2009 |           |   |              |   |   |              |   |      |
|                         | Fourth quarter | $      |  22.67  |   | $      |  18.51  |   | $         |  0.50  |
|                         | Third quarter  | $      |  21.25  |   | $      |  17.03  |   | $         |  0.50  |
|                         | Second quarter | $      |  20.03  |   | $      |  15.50  |   | $         |  0.50  |
|                         | First quarter  | $      |  17.60  |   | $      |  13.01  |   | $         |  0.50  |

----

|                                    |                                                                |                                                        | Year Ended December 31, |
|-----------------------------------------|---------------------------------------------------------------------|-------------------------------------------------------------|-------------------------|
|                                    |                                                                |                                                        | 2010               |   | 2009  |   | 2008  |   | 2007  |   | 2006  |
| Statements of Operations Data:          | (in thousands, except per unit data)                                |
|                                    | Revenues:                                                           |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                | Oil and gas                                                 | $                       |  183,758  |   | $ |  168,717  |   | $ |  193,394  |   | $ |  144,038  |   | $ |  126,918  |
|                                    |                                                                | Interest and other                                          |                    |  -  |   |   |  210  |   |   |  192  |   |   |  -  |   |   |  -  |
|                                    |                                                                |                                                        |                    |  183,758  |   |   |  168,927  |   |   |  193,586  |   |   |  144,038  |   |   |  126,918  |
|                                    | Costs and expenses:                                                 |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                | Oil and gas production  (a)                       |                    |  38,334  |   |   |  34,749  |   |   |  38,807  |   |   |  27,879  |   |   |  24,133  |
|                                    |                                                                | Production and ad valorem taxes                             |                    |  12,119  |   |   |  9,547  |   |   |  14,213  |   |   |  11,550  |   |   |  11,124  |
|                                    |                                                                | Depletion, depreciation and amortization                    |                    |  12,577  |   |   |  13,016  |   |   |  11,582  |   |   |  11,382  |   |   |  9,678  |
|                                    |                                                                | General and administrative                                  |                    |  6,330  |   |   |  4,790  |   |   |  6,227  |   |   |  5,643  |   |   |  5,345  |
|                                    |                                                                | Accretion of discount on asset retirement obligations       |                    |  546  |   |   |  484  |   |   |  144  |   |   |  143  |   |   |  136  |
|                                    |                                                                | Interest                                                    |                    |  1,543  |   |   |  1,160  |   |   |  621  |   |   |  -  |   |   |  -  |
|                                    |                                                                | Derivative losses, net (b)                                  |                    |  5,431  |   |   |  78,265  |   |   |  -  |   |   |  -  |   |   |  -  |
|                                    |                                                                | Other, net                                                  |                    |  -  |   |   |  549  |   |   |  890  |   |   |  5  |   |   |  25  |
|                                    |                                                                |                                                        |                    |  76,880  |   |   |  142,560  |   |   |  72,484  |   |   |  56,602  |   |   |  50,441  |
|                                    | Income before taxes                                                 |                                                        |  106,878      |   |   |  26,367  |   |   |  121,102  |   |   |  87,436  |   |   |  76,477  |
|                                    | Income tax provision                                                |                                                        |  (1,045)           |   |   |  (46) |   |   |  (1,326) |   |   |  (920) |   |   |  (323) |
|                                    | Net income                                                          | $                                                           |  105,833      |   | $ |  26,321  |   | $ |  119,776  |   | $ |  86,516  |   | $ |  76,154  |
|                                    | Allocation of net income:                                           |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                | Net income (loss) applicable to the Partnership Predecessor | $                       |  -  |   | $ |  (1,598) |   | $ |  59,038  |   | $ |  86,516  |   | $ |  76,154  |
|                                    |                                                                | Net income applicable to the Partnership                    |                    |  105,833  |   |   |  27,919  |   |   |  60,738  |   |   |  -  |   |   |  -  |
|                                    |                                                                | Net income                                                  | $                       |  105,833  |   | $ |  26,321  |   | $ |  119,776  |   | $ |  86,516  |   | $ |  76,154  |
|                                    | Allocation of net income applicable to the Partnership:             |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |                                                                | General partner's interest in net income                    | $                       |  106  |   | $ |  28  |   | $ |  61  |   |   |   |   |   |   |
|                                    |                                                                | Limited partners' interest in net income                    |                    |  105,649  |   |   |  27,891  |   |   |  60,677  |   |   |   |   |   |   |
|                                    |                                                                | Unvested participating securities' interest in net income   |                    |  78  |   |   |  -  |   |   |  -  |   |   |   |   |   |   |
|                                    |                                                                | Net income applicable to the Partnership                    | $                       |  105,833  |   | $ |  27,919  |   | $ |  60,738  |   |   |   |   |   |   |
|                                    |                                                                |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Net income per common unit – basic and diluted                | $                                                           |  3.19         |   | $ |  0.92  |   | $ |  2.02  |   |   |   |   |   |   |
|                                    | Weighted average common units outstanding – basic and diluted |                                                        | 33,114             |   |   | 30,399  |   |   | 30,009  |   |   |   |   |   |   |
|                                    | Distributions declared per common unit                              | $                                                           | 2.00               |   | $ | 2.00  |   | $ | 0.81  |   |   |   |   |   |   |
|                                    |                                                                |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data (as of December 31): |                                                                |                                                        |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                    | Total assets                                                        | $                                                           |  280,060      |   | $ |  256,638  |   | $ |  367,164  |   | $ |  217,702  |   | $ |  209,687  |
|                                    | Long-term debt                                                      | $                                                           |  81,200       |   | $ |  67,000  |   | $ |  -  |   | $ |  -  |   | $ |  -  |
|                                    | Partners' equity                                                    | $                                                           |  134,745      |   | $ |  141,273  |   | $ |  347,831  |   | $ |  207,569  |   | $ |  196,498  |

| (a) | Historical oil and gas production costs associated with those properties acquired in August 2009 and the Partnership's properties that were acquired in conjunction with the initial public offering in May 2008 include the direct internal costs of Pioneer to operate the properties.  The oil and gas production costs of the properties after they were acquired by the Partnership include COPAS Fees.                                                                                 |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | Effective February 1, 2009, the Partnership discontinued hedge accounting for its derivative contracts and began using the mark-to-market method of accounting for derivatives.  See "Item 7A. Quantitative and Qualitative Disclosures About Market Risk" and Notes B and H of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for information about the Partnership's derivative contracts and associated accounting methods. |

----

| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS |
|---------|--------------------------------------------------------------------------------------|

| ·   | Net income increased 302 percent to $105.8 million in 2010 from $26.3 million in 2009.  The increase in earnings is primarily attributable to (i) a $72.8 million decrease in net derivative losses recorded in 2010 as compared to 2009 and (ii) increases in oil and NGL production volumes during 2010. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Daily sales volumes increased six percent to 6,507 BOEPD in 2010, as compared to 6,145 BOEPD for 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | Average reported oil and NGL sales prices per barrel increased to $103.60 and $44.31, respectively, during 2010 as compared to $100.35 and $41.61, respectively, for 2009.  Average reported gas sales prices per Mcf decreased to $4.66 during 2010 as compared to $5.37 during 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net cash provided by operating activities increased by $14.3 million to $96.9 million, or 17 percent, as compared to 2009, primarily due to higher oil and NGL production volumes and prices, and changes in working capital. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        |   | Year Ended December 31, |
|-------------|--------|-------------------------|
|        |   | 2010               |   | 2009  |   | 2008  |
|        |   |                    |   |   |   |   |
| Oil (Bbls)  |   | 3,903              |   | 3,683  |   | 3,937  |
| NGLs (Bbls) |   | 1,608              |   | 1,420  |   | 1,298  |
| Gas (Mcf)   |   | 5,975              |   | 6,248  |   | 5,828  |
| Total (BOE) |   | 6,507              |   | 6,145  |   | 6,206  |

|                     |   | Year Ended December 31, |
|--------------------------|--------|-------------------------|
|                     |   | 2010               |   | 2009  |   | 2008  |
| Average reported prices: |   |                    |   |   |   |   |   |   |   |
| Oil (per Bbl)            |   | $                       |  103.60  |   | $ |  100.35  |   | $ |  107.79  |
| NGL (per Bbl)            |   | $                       |  44.31  |   | $ |  41.61  |   | $ |  48.41  |
| Gas (per Mcf)            |   | $                       |  4.66  |   | $ |  5.37  |   | $ |  7.06  |
| Total (per BOE)          |   | $                       |  77.37  |   | $ |  75.23  |   | $ |  85.14  |
| Average realized prices: |   |                    |   |   |   |   |   |   |   |
| Oil (per Bbl)            |   | $                       |  77.56  |   | $ |  58.05  |   | $ |  99.71  |
| NGL (per Bbl)            |   | $                       |  32.91  |   | $ |  25.56  |   | $ |  45.84  |
| Gas (per Mcf)            |   | $                       |  3.33  |   | $ |  2.81  |   | $ |  6.24  |
| Total (per BOE)          |   | $                       |  57.72  |   | $ |  43.56  |   | $ |  78.69  |

|                               |   | Year Ended December 31, |
|------------------------------------|--------|-------------------------|
|                               |   | 2010               |   | 2009  |   | 2008  |
|                               |   |                    |   |   |   |   |   |   |   |
| Lease operating expenses           |   | $                       |  14.24  |   | $ |  14.04  |   | $ |  14.24  |
| Workover costs                     |   |                    |  1.90  |   |   |  1.46  |   |   |  2.85  |
|   Total production costs |   | $                       |  16.14  |   | $ |  15.50  |   | $ |  17.09  |

----

|                                              |   | Year Ended December 31, |
|---------------------------------------------------|--------|-------------------------|
|                                              |   | 2010               |   | 2009  |   | 2008  |
|                                              |   |                    |   |   |   |   |   |   |   |
| Ad valorem taxes                                  |   | $                       |  2.15  |   | $ |  2.09  |   | $ |  2.23  |
| Production taxes                                  |   |                    |  2.96  |   |   |  2.17  |   |   |  4.02  |
|   Total production and ad valorem taxes |   | $                       |  5.11  |   | $ |  4.26  |   | $ |  6.25  |

----

----

|                    |   |       |                |   | Payments Due by Year |
|-------------------------|--------|------------|---------------------|--------|----------------------|
|                    |   |       |                |   | 2011            |   | 2012 and |   | 2014 and |   | Thereafter |
| Total                   |   | 2013  | 2015           |
|                    |   |       |                |   | (in thousands)       |
|                    |   |       |                |   |                 |   |   |   |   |   |   |   |   |   |   |
| Long-term debt          |   | $          |  81,200   |   | $                    |  -  |   | $ |  81,200  |   | $ |  -  |   | $ |  -  |
| Derivative obligations  |   | $          |  41,386   |   | $                    |  9,673  |   | $ |  31,713  |   | $ |  -  |   | $ |  -  |
| Other liabilities (a)   |   | $          |  12,558   |   | $                    |  1,000  |   | $ |  2,000  |   | $ |  2,000  |   | $ |  7,558  |
|    Total |   | $          |  135,144  |   | $                    |  10,673  |   | $ |  114,913  |   | $ |  2,000  |   | $ |  7,558  |

|   | (a)  The Partnership's other liabilities represent the current and noncurrent portions of the Partnership's asset retirement obligations for which neither the ultimate settlement amounts nor their timings can be precisely determined in advance. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | the quality and quantity of available data; |
|--------------------|---------------------------------------------|

| ·   | the interpretation of that data; |
|--------------------|----------------------------------|

| ·   | the accuracy of various mandated economic assumptions; and |
|--------------------|------------------------------------------------------------|

| ·   | the judgment of the persons preparing the estimate. |
|--------------------|-----------------------------------------------------|

----

----

|                                                        |             | Derivative |
|-------------------------------------------------------------|------------------|------------|
|                                                        | Contract Net     |
|                                                        | Assets /         |
|                                                        | (Liabilities)(a) |
|                                                        |             |       |   |
| Fair value of contracts outstanding as of December 31, 2009 |             | $          |  6,015  |
|   Changes in contract fair values                 |             |       |  (5,431) |
|   Contract maturities                             |             |       |  (19,434) |
| Fair value of contracts outstanding as of December 31, 2010 |             | $          |  (18,850) |

|        |                    |          |                   |                     |          |       |         |          |   |   |               |   |   | Liability          |
|-------------|-------------------------|---------------|------------------------|--------------------------|---------------|------------|--------------|---------------|--------|--------|--------------------|--------|--------|--------------------|
|        |                    |          |                   |                     |          |       |         |          |   |   |               |   |   | Fair Value at      |
|        |                    |          |                   | Year Ending December 31, |          |       | December 31, |
|        |                    |          |                   | 2011                |          | 2012  |         | 2013     |   |   | 2010          |
|        |                    |          | (amounts in thousands) |
| Total Debt: |                    |          |                   |                     |          |       |         |          |   |   |               |   |
|        | Variable rate principal |          |                   |                     |          |       |         |          |   |   |               |   |   |
|        |                    | maturities    |                   | $                        |  -  |       | $            |  -  |   | $      |  81,200  |   | $      |  77,241  |
|        | Weighted average        |          |                   |                     |          |       |         |          |   |   |               |   |   |
|        |                    | interest rate |                   |                     | 1.35%         |       |         | 2.36%         |   |   | 3.52%              |   |   |               |

----

|                 |                                    |                             |                                     |               |                     |               |               |              |               |              |              |               |   | Asset (Liability) |
|----------------------|-----------------------------------------|----------------------------------|------------------------------------------|--------------------|--------------------------|--------------------|--------------------|-------------------|--------------------|-------------------|-------------------|--------------------|--------|-------------------|
|                 |                                    |                             |                                     |               |                     |               |               |              |               |              |              |               |   | Fair Value at     |
|                 |                                    |                             |                                     |               | Year Ending December 31, |               | December 31,       |
|                 |                                    |                             |                                     |               | 2011                |               | 2012          |              | 2013          |              | 2010         |
| Oil Derivatives (a): |                                    |                             |                                     |               |                     |               |               |              |               |              | (in thousands)    |
|                 | Average daily notional Bbl volumes (b): |                             |                                     |               |                     |               |               |              |               |              |              |               |   |
|                 |                                    | Swap contracts                   |                                     |               |  750           |               |               |  3,000  |               |              |  3,000  |               | $      | (31,183)          |
|                 |                                    |                             | Weighted average fixed price per Bbl     |               | $                        |  77.25   |               | $                 |  79.32   |              | $                 |  81.02   |   |              |   |
|                 |                                    | Collar contracts                 |                                     |               |  2,000         |               |               |  -      |               |              |  -      |               | $      | 16,875       |
|                 |                                    |                             | Weighted average ceiling price per Bbl   |               | $                        |  170.00  |               | $                 |  -       |              | $                 |  -       |   |              |   |
|                 |                                    |                             | Weighted average floor price per Bbl     |               | $                        |  115.00  |               | $                 |  -       |              | $                 |  -       |   |              |   |
|                 |                                    | Collar contracts with short puts |                                     |               |  1,000         |               |               |  1,000  |               |              |  1,000  |               | $      | (4,102)           |
|                 |                                    |                             | Weighted average ceiling price per Bbl   |               | $                        |  99.60   |               | $                 |  103.50  |              | $                 |  111.50  |   |              |   |
|                 |                                    |                             | Weighted average floor price per Bbl     |               | $                        |  70.00   |               | $                 |  80.00   |              | $                 |  83.00   |   |              |   |
|                 |                                    |                             | Weighted average short put price per Bbl |               | $                        |  55.00   |               | $                 |  65.00   |              | $                 |  68.00   |   |              |   |
|                 | Average forward NYMEX oil prices (c)    |                             | $                                        |  101.18  |                     | $                  |  100.66  |              | $                  |  98.83  |              |               |   |

| (a) | See Note H of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for additional information regarding the Partnership's derivative contracts. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Subsequent to December 31, 2010, the Partnership entered into additional collar contracts with short puts for 2,000 Bbls per day of the Partnership's 2014 production with a ceiling price of $133.00 per Bbl, a floor price of $90.00 per Bbl and a short put price of $75.00 per Bbl. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|             |                                        |           |                                 |              |                     |              |              |            |              |   | Asset (Liability) |
|------------------|---------------------------------------------|----------------|--------------------------------------|-------------------|--------------------------|-------------------|-------------------|-----------------|-------------------|--------|-------------------|
|             |                                        |           |                                 |              |                     |              |              |            |              |   | Fair Value at     |
|             |                                        |           |                                 |              | Year Ending December 31, |              | December 31,      |
|             |                                        |           |                                 |              | 2011                |              | 2012         |            | 2010         |
| NGL Derivatives: |                                        |           |                                 |              |                     |              |              | (in thousands)  |
|             | Average daily notional Bbl volumes (a):     |           |                                 |              |                     |              |              |            |              |   |
|             |                                        | Swap contracts |                                 |              |  750           |              |              |  750  |              | $      |  (6,101)     |
|             |                                        |           | Weighted average fixed price per Bbl |              | $                        |  34.65  |              | $               |  35.03  |   |              |   |
|             | Average forward Mont Belvieu NGL prices (b) |           | $                                    |  50.29  |                     | $                 |  47.96  |            |              |   |

| (a) | See Note H of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for additional information regarding the Partnership's derivative contracts. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Forward Mont Belvieu NGL prices are not available as formal market quotes.  These forward prices represent estimates as of February 22, 2011 provided by third parties who actively trade in the derivatives.  Accordingly, these prices are subject to estimates and assumptions. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|             |                                          |                 |                                       |             |                     |             |             |              |             |             |              |             |   | Asset (Liability) |
|------------------|-----------------------------------------------|----------------------|--------------------------------------------|------------------|--------------------------|------------------|------------------|-------------------|------------------|------------------|-------------------|------------------|--------|-------------------|
|             |                                          |                 |                                       |             |                     |             |             |              |             |             |              |             |   | Fair Value at     |
|             |                                          |                 |                                       |             | Year Ending December 31, |             | December 31,     |
|             |                                          |                 |                                       |             | 2011                |             | 2012        |              | 2013        |             | 2010         |
| Gas Derivatives: |                                          |                 |                                       |             |                     |             |             |              |             |             | (in thousands)    |
|             | Average daily notional MMBtu volumes (a):     |                 |                                       |             |                     |             |             |              |             |             |              |             |   |
|             |                                          | Swap contracts       |                                       |             |  2,500         |             |             |  5,000  |             |             |  2,500  |             | $      | 5,611        |
|             |                                          |                 | Weighted average fixed price per MMBtu (b) |             | $                        |  6.65  |             | $                 |  6.43  |             | $                 |  6.89  |   |              |   |
|             | Average forward NYMEX gas prices (c)          |                 | $                                          |  4.16  |                     | $                |  4.75  |              | $                |  5.13  |              |             |   |
|             | Average daily notional MMBtu volumes (a):     |                 |                                       |             |                     |             |             |              |             |             |              |             |   |
|             |                                          | Basis swap contracts |                                       |             |  -             |             |             |  2,500  |             |             |  2,500  |             | $      | 50           |
|             |                                          |                 | Weighted average fixed price per MMBtu (b) |             | $                        |  -     |             | $                 |  (0.30)     |             | $                 |  (0.31)     |   |              |   |
|             | Average forward basis differential prices (c) |                 | $                                          |             |                     | $                |  (0.30)     |              | $                |  (0.34)     |              |             |   |

| (a) | See Note H of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" for additional information regarding the Partnership's derivative contracts. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | To minimize basis risk, the Partnership enters into basis swaps to convert the index prices of the swap contracts from a NYMEX index to an El Paso Natural Gas (Permian Basin) posting index, which is highly correlated with the indices where the Partnership's forecasted gas sales are expected to be priced. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The average forward NYMEX gas prices are based on February 23, 2011 NYMEX market quotes and February 23, 2011 estimated El Paso Natural Gas (Permian Basin) differentials to NYMEX prices. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Page   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  Consolidated Financial Statements of Pioneer Southwest Energy Partners L.P.:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|  Report of Independent Registered Public Accounting Firm                                                                                                                                                                                      | 59     |
|  Consolidated Balance Sheets as of December 31, 2010 and 2009                                                                                                                                                                                 | 60     |
|  Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009 and 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 61     |
|  Consolidated Statements of Partners' Equity for the Years Ended December 31,2010, 2009 and 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 62     |
|  Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 64     |
|  Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31,    2010, 2009 and 2008                                                                                                                          | 65     |
|  Notes to Consolidated Financial Statements                                                                                                                                                                                                   | 66     |
|  Unaudited Supplementary Information                                                                                                                                                                                                          | 87     |

----

----

|                                                                       |                                                                                   |                                |               | December 31,        |
|----------------------------------------------------------------------------|----------------------------------------------------------------------------------------|-------------------------------------|--------------------|---------------------|
|                                                                       |                                                                                   |                                |               | 2010           |   | 2009  |
| ASSETS                                                                     |
| Current assets:                                                            |                                                                                   |                                |               |                |   |   |
|                                                                       | Cash and cash equivalents                                                              |                                | $                  |  107      |   | $ |  625  |
|                                                                       | Accounts receivable                                                                    |                                |               |  15,824   |   |   |  14,162  |
|                                                                       | Inventories                                                                            |                                |               |  883      |   |   |  851  |
|                                                                       | Prepaid expenses                                                                       |                                |               |  260      |   |   |  260  |
|                                                                       | Derivatives                                                                            |                                |               |  18,753   |   |   |  16,042  |
|                                                                       |                                                                                   | Total current assets                |               |                |  35,827  |   |   |  31,940  |
| Property, plant and equipment, at cost:                                    |                                                                                   |                                |               |                |   |   |
| Oil and gas properties, using the successful efforts method of accounting: |                                                                                   |                                |               |                |   |   |
|                                                                       | Proved properties                                                                      |                                |               |  364,237  |   |   |  311,730  |
|                                                                       | Accumulated depletion, depreciation and amortization                                   |                                |               |  (125,963)     |   |   |  (113,386) |
|                                                                       |                                                                                   | Total property, plant and equipment |               |                |  238,274  |   |   |  198,344  |
| Deferred income taxes                                                      |                                                                                   |                                |  1,751   |                |   |  1,964  |
| Derivatives                                                                |                                                                                   |                                |  3,783   |                |   |  23,784  |
| Other, net                                                                 |                                                                                   |                                |  425     |                |   |  606  |
|                                                                       |                                                                                   |                                |               | $                   |  280,060  |   | $ |  256,638  |
|                                                                       |                                                                                   |                                |               |                |   |   |   |   |
| LIABILITIES AND PARTNERS' EQUITY                                           |
| Current liabilities:                                                       |                                                                                   |                                |               |                |   |   |
|                                                                       | Accounts payable:                                                                      |                                |               |                |   |   |   |
|                                                                       |                                                                                   | Trade                               |               | $                   |  8,422  |   | $ |  6,139  |
|                                                                       |                                                                                   | Due to affiliates                   |               |                |  1,164  |   |   |  697  |
|                                                                       | Interest payable                                                                       |                                |               |  30       |   |   |  26  |
|                                                                       | Income taxes payable to affiliate                                                      |                                |               |  492      |   |   |  460  |
|                                                                       | Deferred income taxes                                                                  |                                |               |  63       |   |   |  127  |
|                                                                       | Derivatives                                                                            |                                |               |  9,673    |   |   |  3,606  |
|                                                                       | Asset retirement obligations                                                           |                                |               |  1,000    |   |   |  500  |
|                                                                       |                                                                                   | Total current liabilities           |               |                |  20,844  |   |   |  11,555  |
|                                                                       |                                                                                   |                                |               |                |   |   |   |   |
| Long-term debt                                                             |                                                                                   |                                |  81,200  |                |   |  67,000  |
| Derivatives                                                                |                                                                                   |                                |  31,713  |                |   |  30,205  |
| Asset retirement obligations                                               |                                                                                   |                                |  11,558  |                |   |  6,605  |
| Partners' equity:                                                          |                                                                                   |                                |               |                |   |   |
|                                                                       | General partner's interest – 33,147 general partner units issued and outstanding |                                |               |  251      |   |   |  211  |
|                                                                       | Limited partners' interest – 33,113,700 common units issued and outstanding      |                                |               |  98,333   |   |   |  58,624  |
|                                                                       | Accumulated other comprehensive income – deferred hedge gains, net of tax        |                                |               |  36,161   |   |   |  82,438  |
|                                                                       |                                                                                   | Total partners' equity              |               |                |  134,745  |   |   |  141,273  |
| Commitments and contingencies                                              |                                                                                   |                                |               |                |   |   |
|                                                                       |                                                                                   |                                |               | $                   |  280,060  |   | $ |  256,638  |
|                                                                       |                                                                                   |                                |               |                |   |   |   |   |

----

|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
|---------------------------------------------------------------|-------------------------------------------------------------|--------|---------------------|---------------------|-------------------------|---------------------|---------------------|--------|---------------------|---------------------|--------|---------------------|
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
|                                                          |                                                        |   |                |                | Year Ended December 31, |
|                                                          |                                                        |   |                |                |                    | 2010           |                |   | 2009           |                |   | 2008           |
| Revenues:                                                     |                                                        |   |                |                |                    |                |                |   |                |
|                                                          | Oil and gas                                                 |   | $                   |  183,758  |                    | $                   |  168,717  |   | $                   |  193,394  |
|                                                          | Interest and other                                          |   |                |  -        |                    |                |  210      |   |                |  192      |
|                                                          |                                                        |   |                |                |                    |  183,758  |                |   |  168,927  |                |   |  193,586  |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
| Costs and expenses:                                           |                                                        |   |                |                |                    |                |                |   |                |
|                                                          | Oil and gas production                                      |   |                |  38,334   |                    |                |  34,749   |   |                |  38,807   |
|                                                          | Production and ad valorem taxes                             |   |                |  12,119   |                    |                |  9,547    |   |                |  14,213   |
|                                                          | Depletion, depreciation and amortization                    |   |                |  12,577   |                    |                |  13,016   |   |                |  11,582   |
|                                                          | General and administrative                                  |   |                |  6,330    |                    |                |  4,790    |   |                |  6,227    |
|                                                          | Accretion of discount on asset retirement obligations       |   |                |  546      |                    |                |  484      |   |                |  144      |
|                                                          | Interest                                                    |   |                |  1,543    |                    |                |  1,160    |   |                |  621      |
|                                                          | Derivative loss, net                                        |   |                |  5,431    |                    |                |  78,265   |   |                |  -        |
|                                                          | Other, net                                                  |   |                |  -        |                    |                |  549      |   |                |  890      |
|                                                          |                                                        |   |                |                |                    |  76,880   |                |   |  142,560  |                |   |  72,484   |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
| Income before taxes                                           |                                                        |   |  106,878  |                |                    |  26,367   |                |   |  121,102  |
| Income tax provision                                          |                                                        |   |  (1,045)       |                |                    |  (46)          |                |   |  (1,326)       |
| Net income                                                    |                                                        | $      |  105,833  |                | $                       |  26,321   |                | $      |  119,776  |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
| Allocation of net income:                                     |                                                        |   |                |                |                    |                |                |   |                |
|                                                          | Net income (loss) applicable to the Partnership Predecessor |   | $                   |  -        |                    | $                   |  (1,598)       |   | $                   |  59,038   |
|                                                          | Net income applicable to the Partnership                    |   |                |  105,833  |                    |                |  27,919   |   |                |  60,738   |
|                                                          | Net income                                                  |   | $                   |  105,833  |                    | $                   |  26,321   |   | $                   |  119,776  |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
| Allocation of net income applicable to the Partnership:       |                                                        |   |                |                |                    |                |                |   |                |
|                                                          | General partner's interest in net income                    |   | $                   |  106      |                    | $                   |  28       |   | $                   |  61       |
|                                                          | Limited partners' interest in net income                    |   |                |  105,649  |                    |                |  27,891   |   |                |  60,677   |
|                                                          | Unvested participating securities' interest in net income   |   |                |  78       |                    |                |  -        |   |                |  -        |
|                                                          | Net income applicable to the Partnership                    |   | $                   |  105,833  |                    | $                   |  27,919   |   | $                   |  60,738   |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
| Net income per common unit - basic and diluted                |                                                        | $      |  3.19     |                | $                       |  0.92     |                | $      |  2.02     |
|                                                          |                                                        |   |                |                |                    |                |                |   |                |                |   |                |
| Weighted average common units outstanding - basic and diluted |                                                        |   |  33,114   |                |                    |  30,399   |                |   |  30,009   |

----

|                                                 |                                   |           |          |               |          |          |                |          |        |            |          |   |                |          |          |                | Accumulated         |   |                |                |
|------------------------------------------------------|----------------------------------------|----------------|---------------|--------------------|---------------|---------------|---------------------|---------------|-------------|-----------------|---------------|--------|---------------------|---------------|---------------|---------------------|---------------------|--------|---------------------|---------------------|
|                                                 |                                   |           |          | General            |          | Limited       |                |          |        |            | General       |   | Limited             |          | Other         |                | Total               |
|                                                 |                                   |           |          | Partner Units      |          | Partner Units |                |          | Owner's Net |            | Partner's     |   | Partners'           |          | Comprehensive |                | Partners'           |
|                                                 |                                   |           |          | Outstanding        |          | Outstanding   |                |          | Equity      |            | Equity        |   | Equity              |          | Income        |                | Equity              |
|                                                 |                                   |           |          |               |          |          |                |          |        |            |          |   |                |          |          |                |                |
| Balance as of December 31, 2007                      |                                   |  -   |          |  -       |          | $             |  207,569  |          | $           |  -    |          | $      |  -        |          | $             |  -        |                | $      |  207,569  |
|                                                 |                                   |           |          |               |          |          |                |          |        |            |          |   |                |          |          |                |                |   |                |                |   |
| Net income applicable to the Partnership Predecessor |                                   |  -   |          |  -       |          |          |  59,038   |          |        |  -    |          |   |  -        |          |          |  -        |                |   |  59,038   |
| Net income applicable to the Partnership             |                                   |  -   |          |  -       |          |          |  -        |          |        |  61   |          |   |  60,677   |          |          |  -        |                |   |  60,738   |
| Net distributions to owner                           |                                   |  -   |          |  -       |          |          |  (61,604)      |          |        |  -    |          |   |  -        |          |          |  -        |                |   |  (61,604)      |
| Cash distributions to partners                       |                                   |  -   |          |  -       |          |          |  -        |          |        |  (24)      |          |   |  (24,307)      |          |          |  -        |                |   |  (24,331)      |
| Allocation of owner's net equity                     |                                   |  -   |          |  20,521  |          |          |  (142,274)     |          |        |  142  |          |   |  142,132  |          |          |  -        |                |   |  -        |
| Proceeds from initial public offering, net           |                                   |  -   |          |  9,488   |          |          |  -        |          |        |  -    |          |   |  163,045  |          |          |  -        |                |   |  163,045  |
| Partner contributions                                |                                   |  30  |          |  -       |          |          |  -        |          |        |  24   |          |   |  -        |          |          |  -        |                |   |  24       |
| Acquisition of carrying value                        |                                   |  -   |          |  -       |          |          |  -        |          |        |  (24)      |          |   |  (142,250)     |          |          |  -        |                |   |  (142,274)     |
| Acquisition in excess of carrying value              |                                   |  -   |          |  -       |          |          |  -        |          |        |  -    |          |   |  (20,795)      |          |          |  -        |                |   |  (20,795)      |
| Novation of derivative obligations                   |                                   |  -   |          |  -       |          |          |  -        |          |        |  -    |          |   |  (37,249)      |          |          |  -        |                |   |  (37,249)      |
| Working capital contribution                         |                                   |  -   |          |  -       |          |          |  -        |          |        |  -    |          |   |  2,027    |          |          |  -        |                |   |  2,027    |
| Other comprehensive income, net of tax:              |                                   |           |          |               |          |          |                |          |        |            |          |   |                |          |          |                |                |   |                |
|                                                 | Hedge fair values changes, net         |           |  -  |               |  -  |          |                |  -  |        |            |  -  |   |                |  -  |          |                |  156,284  |   |                |  156,284  |
|                                                 | Net hedge gains included in net income |           |  -  |               |  -  |          |                |  -  |        |            |  -  |   |                |  -  |          |                |  (14,641)      |   |                |  (14,641)      |
| Balance as of December 31, 2008                      |                                   |  30  |          |  30,009  |          | $             |  62,729   |          | $           |  179  |          | $      |  143,280  |          | $             |  141,643  |                | $      |  347,831  |
|                                                 |                                   |           |          |               |          |          |                |          |        |            |          |   |                |          |          |                |                |   |                |                |   |

----

|                                                 |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                | Accumulated        |   |                |               |
|------------------------------------------------------|----------------------------------------|----------------|---------------|--------------------|---------------|---------------|--------------------|---------------|-------------|-----------------|---------------|--------|---------------------|---------------|---------------|---------------------|--------------------|--------|---------------------|--------------------|
|                                                 |                                   |           |          | General            |          | Limited       |               |          |        |            | General       |   | Limited             |          | Other         |                | Total              |
|                                                 |                                   |           |          | Partner Units      |          | Partner Units |               |          | Owner's Net |            | Partner's     |   | Partners'           |          | Comprehensive |                | Partners'          |
|                                                 |                                   |           |          | Outstanding        |          | Outstanding   |               |          | Equity      |            | Equity        |   | Equity              |          | Income        |                | Equity             |
|                                                 |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |
| Balance as of December 31, 2008                      |                                   |  30  |          |  30,009  |          | $             |  62,729  |          | $           |  179  |          | $      |  143,280  |          | $             |  141,643  |               | $      |  347,831  |
|                                                 |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |   |                |               |   |
| Net income applicable to the Partnership Predecessor |                                   |  -   |          |  -       |          |          |  (1,598)      |          |        |  -    |          |   |  -        |          |          |  -        |               |   |  (1,598)       |
| Net income applicable to the Partnership             |                                   |  -   |          |  -       |          |          |  -       |          |        |  28   |          |   |  27,891   |          |          |  -        |               |   |  27,919   |
| Net distributions to owner                           |                                   |  -   |          |  -       |          |          |  (7,814)      |          |        |  -    |          |   |  -        |          |          |  -        |               |   |  (7,814)       |
| Cash distributions to partners                       |                                   |  -   |          |  -       |          |          |  -       |          |        |  (60)      |          |   |  (60,018)      |          |          |  -        |               |   |  (60,078)      |
| Deferred income tax assets on acquisition step-up    |                                   |  -   |          |  -       |          |          |  1,399   |          |        |  -    |          |   |  -        |          |          |  -        |               |   |  1,399    |
| Allocation of owner's net equity                     |                                   |  -   |          |  -       |          |          |  (54,716)     |          |        |  -    |          |   |  54,716   |          |          |  -        |               |   |  -        |
| Proceeds from offering, net                          |                                   |  3   |          |  3,105   |          |          |  -       |          |        |  -    |          |   |  60,983   |          |          |  -        |               |   |  60,983   |
| Partner contributions                                |                                   |  -   |          |  -       |          |          |  -       |          |        |  64   |          |   |  -        |          |          |  -        |               |   |  64       |
| Acquisition of carrying value                        |                                   |  -   |          |  -       |          |          |  -       |          |        |  -    |          |   |  (54,716)      |          |          |  -        |               |   |  (54,716)      |
| Acquisition in excess of carrying value              |                                   |  -   |          |  -       |          |          |  -       |          |        |  -    |          |   |  (113,512)     |          |          |  -        |               |   |  (113,512)     |
| Other comprehensive income, net of tax:              |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |   |                |
|                                                 | Hedge fair values changes, net         |           |  -  |               |  -  |          |               |  -  |        |            |  -  |   |                |  -  |          |                |  11,509  |   |                |  11,509  |
|                                                 | Net hedge gains included in net income |           |  -  |               |  -  |          |               |  -  |        |            |  -  |   |                |  -  |          |                |  (70,714)     |   |                |  (70,714)     |
|                                                 |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |   |                |               |   |
| Balance as of December 31, 2009                      |                                   |  33  |          |  33,114  |          | $             |  -       |          | $           |  211  |          | $      |  58,624   |          | $             |  82,438   |               | $      |  141,273  |
|                                                 |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |   |                |               |   |
| Cash distributions to partners                       |                                   |  -   |          |  -       |          |          |  -       |          |        |  (66)      |          |   |  (66,228)      |          |          |  -        |               |   |  (66,294)      |
| Net income applicable to the Partnership             |                                   |  -   |          |  -       |          |          |  -       |          |        |  106  |          |   |  105,727  |          |          |  -        |               |   |  105,833  |
| Contribution of unit-based services                  |                                   |  -   |          |  -       |          |          |  -       |          |        |  -    |          |   |  210      |          |          |  -        |               |   |  210      |
| Other comprehensive income, net of tax:              |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |   |                |
|                                                 | Net hedge gains included in net income |           |  -  |               |  -  |          |               |  -  |        |            |  -  |   |                |  -  |          |                |  (46,277)     |   |                |  (46,277)     |
|                                                 |                                   |           |          |               |          |          |               |          |        |            |          |   |                |          |          |                |               |   |                |               |   |
| Balance as of December 31, 2010                      |                                   |  33  |          |  33,114  |          | $             |  -       |          | $           |  251  |          | $      |  98,333   |          | $             |  36,161   |               | $      |  134,745  |

----

|                                                 |                                                          |                                                                              |                                                  |                                                |   | Year Ended December 31, |
|------------------------------------------------------|---------------------------------------------------------------|-----------------------------------------------------------------------------------|-------------------------------------------------------|-----------------------------------------------------|--------|-------------------------|
|                                                 |                                                          |                                                                              |                                                  |                                                |   | 2010               |   | 2009  |   | 2008  |
| Cash flows from operating activities:                |                                                          |                                                                              |                                                  |                                                |   |                    |   |   |   |
|                                                 | Net income                                                    |                                                                              | $                                                     |  105,833                                  |   | $                       |  26,321  |   | $ |  119,776  |
|                                                 |                                                          | Adjustments to reconcile net income to net cash provided by operating activities: |                                                  |                                                |   |                    |   |   |   |   |   |
|                                                 |                                                          |                                                                              | Depletion, depreciation and amortization              |                                                |   |  12,577       |   |   |  13,016  |   |   |  11,582  |
|                                                 |                                                          |                                                                              | Deferred income taxes                                 |                                                |   |  552          |   |   |  (470) |   |   |  278  |
|                                                 |                                                          |                                                                              | Accretion of discount on asset retirement obligations |                                                |   |  546          |   |   |  484  |   |   |  144  |
|                                                 |                                                          |                                                                              | Inventory valuation adjustment                        |                                                |   |  -            |   |   |  -  |   |   |  159  |
|                                                 |                                                          |                                                                              | Amortization of debt issuance costs                   |                                                |   |  182          |   |   |  200  |   |   |  155  |
|                                                 |                                                          |                                                                              | Amortization of unit-based compensation               |                                                |   |  210          |   |   |  -  |   |   |  -  |
|                                                 |                                                          |                                                                              | Derivative related activity                           |                                                |   |  (21,816)          |   |   |  51,254  |   |   |  (11,349) |
|                                                 |                                                          | Changes in operating assets and liabilities:                                      |                                                  |                                                |   |                    |   |   |   |   |   |
|                                                 |                                                          |                                                                              | Accounts receivable                                   |                                                |   |  (1,662)           |   |   |  (1,556) |   |   |  5,786  |
|                                                 |                                                          |                                                                              | Inventories                                           |                                                |   |  (32)              |   |   |  1,090  |   |   |  (1,152) |
|                                                 |                                                          |                                                                              | Prepaid expenses                                      |                                                |   |  -            |   |   |  (155) |   |   |  (105) |
|                                                 |                                                          |                                                                              | Accounts payable                                      |                                                |   |  1,329        |   |   |  (6,853) |   |   |  7,550  |
|                                                 |                                                          |                                                                              | Interest payable                                      |                                                |   |  4            |   |   |  26  |   |   |  -  |
|                                                 |                                                          |                                                                              | Income taxes payable to affiliate                     |                                                |   |  32           |   |   |  (32) |   |   |  (196) |
|                                                 |                                                          |                                                                              | Asset retirement obligations                          |                                                |   |  (898)             |   |   |  (803) |   |   |  (173) |
|                                                 |                                                          |                                                                              |                                                  | Net cash provided by operating activities           |   |                    |  96,857  |   |   |  82,522  |   |   |  132,455  |
| Cash flows from investing activities:                |                                                          |                                                                              |                                                  |                                                |   |                    |   |   |   |
|                                                 | Payments of acquisition carrying value                        |                                                                              |                                                  |  -                                        |   |                    |  (54,716) |   |   |  (142,274) |
|                                                 | Additions to oil and gas properties                           |                                                                              |                                                  |  (45,281)                                      |   |                    |  (3,760) |   |   |  (15,625) |
|                                                 |                                                          |                                                                              |                                                  | Net cash used in investing activities               |   |                    |  (45,281) |   |   |  (58,476) |   |   |  (157,899) |
| Cash flows from financing activities:                |                                                          |                                                                              |                                                  |                                                |   |                    |   |   |   |
|                                                 | Borrowings under credit facility                              |                                                                              |                                                  |  63,574                                   |   |                    |  150,000  |   |   |  -  |
|                                                 | Principal payments on credit facility                         |                                                                              |                                                  |  (49,374)                                      |   |                    |  (83,000) |   |   |  -  |
|                                                 | Proceeds from issuance of common units, net of issuance costs |                                                                              |                                                  |  -                                        |   |                    |  60,983  |   |   |  163,045  |
|                                                 | Partner contributions                                         |                                                                              |                                                  |  -                                        |   |                    |  64  |   |   |  24  |
|                                                 | Payments for acquisition in excess of carrying value          |                                                                              |                                                  |  -                                        |   |                    |  (113,512) |   |   |  (20,795) |
|                                                 | Payments of financing fees                                    |                                                                              |                                                  |  -                                        |   |                    |  -  |   |   |  (960) |
|                                                 | Distributions to unitholders                                  |                                                                              |                                                  |  (66,294)                                      |   |                    |  (60,078) |   |   |  (24,331) |
|                                                 | Net distributions to owner                                    |                                                                              |                                                  |  -                                        |   |                    |  (7,814) |   |   |  (61,604) |
|                                                 |                                                          |                                                                              |                                                  | Net cash provided by (used in) financing activities |   |                    |  (52,094) |   |   |  (53,357) |   |   |  55,379  |
| Net increase (decrease) in cash and cash equivalents |                                                          |                                                                              |  (518)                                           |                                                |   |  (29,311)          |   |   |  29,935  |
| Cash and cash equivalents, beginning of period       |                                                          |                                                                              |  625                                        |                                                |   |  29,936       |   |   |  1  |
| Cash and cash equivalents, end of period             |                                                          | $                                                                                 |  107                                        |                                                | $      |  625          |   | $ |  29,936  |
|                                                 |                                                          |                                                                              |                                                  |                                                |   |                    |   |   |   |   |   |   |   |

----

|                                    |                        |                                   |                | Year Ended December 31, |
|-----------------------------------------|-----------------------------|----------------------------------------|---------------------|-------------------------|
|                                    |                        |                                   |                | 2010               |   | 2009  |   | 2008  |
|                                    |                        |                                   |                |                    |   |   |   |   |   |   |   |
| Net income                              |                        | $                                      |  105,833  |                    | $ |  26,321  |   | $ |  119,776  |
| Other comprehensive income, net of tax: |                        |                                   |                |                    |   |   |   |   |   |
|                                    |                        | Hedge fair value changes, net          |                |                    |  -  |   |   |  11,509  |   |   |  156,284  |
|                                    |                        | Net hedge gains included in net income |                |                    |  (46,277) |   |   |  (70,714) |   |   |  (14,641) |
|                                    |                        | Other comprehensive income (loss)      |                |                    |  (46,277) |   |   |  (59,205) |   |   |  141,643  |
|                                    | Comprehensive income (loss) |                                   | $                   |  59,556       |   | $ |  (32,884) |   | $ |  261,419  |
|                                    |                        |                                   |                |                    |   |   |   |   |   |   |   |

----

----

----

----

----

| Accounts receivable                                   | $      |  2,122    |
|-------------------------------------------------------|--------|---------------------|
| Inventories                                           |   |  73       |
| Proved oil and gas properties                         |   |  80,186   |
| Accumulated depletion, depreciation and amortization  |   |  (20,145)      |
| Accounts payable - trade                              |   |  (1,396)       |
| Accounts payable - affiliate                          |   |  (1,285)       |
| Asset retirement obligations                          |   |  (741)         |
| Deferred income tax liability                         |   |  (272)         |
| Deferred income tax asset on acquisition step-up      |   |  1,399    |
| Derivative obligations, net                           |   |  (5,225)       |
| Total net asset carrying values as of August 31, 2009 |   |  54,716   |
|                                                  |   |                |
| Cash paid for net assets                              |   |  168,228  |
| Value in excess of carrying value                     | $      |  113,512  |

----

| ·   | Level 1 – quoted prices for identical assets or liabilities in active markets. |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | Level 2 – quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs derived principally from or corroborated by observable market data by correlation or other means. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3 – unobservable inputs for the asset or liability. |
|--------|-----------------------------------------------------------------|

----

|         |                           |   |           | Fair Value Measurements at Reporting Date Using |   |   |               |
|--------------|--------------------------------|--------|----------------|-------------------------------------------------|--------|--------|--------------------|
|         |                           |   |           | Quoted Prices In                                |   |   | Significant        |   |   |   |   |   |   |
|         |                           |   |           | Active Markets                                  |   |   | Other              |   |   | Significant |   |   |   |
|         |                           |   |           | for Identical                                   |   |   | Observable         |   |   | Unobservable |   |   | Fair Value at |
|         |                           |   |           | Assets                                          |   |   | Inputs             |   |   | Inputs |   |   | December 31, |
|         |                           |   |           | (Level 1)                                       |   |   | (Level 2)          |   |   | (Level 3) |   |   | 2010  |
|         |                           |   | (in thousands) |
| Assets:      |                           |   |           |                                            |   |   |               |   |   |   |   |   |
|         | Commodity derivative contracts |   | $              |  -                                    |   | $      | 22,536        |   | $ |  -  |   | $ |  22,536  |
| Liabilities: |                           |   |           |                                            |   |   |               |   |   |   |   |   |
|         | Commodity derivative contracts |   | $              |  -                                    |   | $      |  35,284  |   | $ |  6,102  |   | $ |  41,386  |
|         | Credit facility                |   | $              |  -                                    |   | $      |  77,241  |   |   |  -  |   |   |  77,241  |

|                                      |                              |         | Year Ended     |
|-------------------------------------------|-----------------------------------|--------------|----------------|
| Fair Value Measurements Using Significant |                              | December 31, |
| Unobservable Inputs (Level 3)             | 2010                         |
|                                      |                              |         | (in thousands) |
|                                      |                              |         |           |
| Beginning liability balance               |                              | $            |  (4,906)  |
| Net settlement receipts                   |                              |         |  (1,933)  |
| Fair value changes (a):                   |                              |         |           |
|                                      | Included in earnings - realized   |         |           |  (3,813) |
|                                      | Included in earnings - unrealized |         |           |  4,550  |
| Ending liability balance                  |                              | $            |  (6,102)  |

| (a) | Changes in fair value are included in net derivative loss in the accompanying consolidated statements of operations.  See Note B for a description of the Partnership's derivative accounting methods. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                  | December 31, 2010    |               | December 31, 2009 |
|-----------------------|----------------------|--------------------|-------------------|
|                  | Carrying             |               |              |   |   | Carrying |   |   |   |
|                  | Value                |               | Fair Value        |   | Value |   | Fair Value |
|                  |  (in thousands) |
| Assets:               |                 |               |              |   |   |   |   |   |   |   |   |
| Commodity derivatives | $                    |  22,536  |              | $ |  22,536  |   | $ |  39,826  |   | $ |  39,826  |
|                  |                 |               |              |   |   |   |   |   |   |   |   |
| Liabilities:          |                 |               |              |   |   |   |   |   |   |   |   |
| Commodity derivatives | $                    |  41,386  |              | $ |  41,386  |   | $ |  33,811  |   | $ |  33,811  |
| Credit facility       | $                    |  81,200  |              | $ |  77,241  |   | $ |  67,000  |   | $ |  68,495  |

----

----

----

----

----

|                                               | Year Ended December 31, |
|----------------------------------------------------|-------------------------|
|                                               | 2010               |   | 2009  |   | 2008  |
|                                               | (in thousands)          |
|                                               |                    |   |   |   |   |   |   |   |
| Producing well overhead (COPAS) fees               | $                       |  10,256  |   | $ |  8,926  |   | $ |  5,476  |
| Payment of lease operating and supervision charges |                    |  8,099  |   |   |  7,004  |   |   |  3,715  |
| Drilling and completion related charges            |                    |  4,312  |   |   |  246  |   |   |  134  |
| General and administrative expenses                |                    |  4,198  |   |   |  1,933  |   |   |  1,567  |
| Total                                              | $                       |  26,865  |   | $ |  18,109  |   | $ |  10,892  |

----

| Approved and authorized awards    |   |  3,000,000  |
|-----------------------------------|--------|-----------------------|
| Awards issued after May 6, 2008   |   |  (69,401)        |
| Awards available for future grant |   |  2,930,599  |

|                             |   | Restricted Unit Awards |   | Phantom Unit Awards |
|----------------------------------|--------|------------------------|--------|---------------------|
|                             |   |                   |   | Weighted            |   |   |   | Weighted |
|                             |   | Number                 |   | Average             |   | Number |   | Average |
|                             |   | Of Units               |   | Price               |   | Of Units |   | Price |
|                             |   |                   |   |                |   |   |   |   |   |   |
| Outstanding at beginning of year |   |  17,121      |   | $                   | 18.45  |   |  -  |   | $ | -  |
| Units granted                    |   | 8,744             |   | $                   | 22.87  |   | 35,118  |   | $ | 22.74  |
| Lapse of restrictions            |   |  (13,653)         |   | $                   | 18.24  |   |  -  |   | $ | -  |
| Outstanding at end of year       |   | 12,212            |   | $                   | 21.84  |   | 35,118  |   | $ | 22.74  |

----

----

|                 |                              |                  |      |                     |               |   |              |               |   |              |               |
|----------------------|-----------------------------------|-----------------------|-----------|--------------------------|--------------------|--------|-------------------|--------------------|--------|-------------------|--------------------|
|                 |                              |                  |      | Year Ending December 31, |
|                 |                              |                  |      | 2011                |               |   | 2012         |               |   | 2013         |
| Oil Derivatives (a): |                              |                  |      |                     |               |   |              |               |
|                 | Swap contracts:                   |                  |      |                     |               |   |              |               |   |
|                 |                              | Volume (Bbls per day) |      |  750           |               |   |  3,000  |               |   |  3,000  |
|                 |                              | Price per Bbl         | $         |  77.25         |               | $      |  79.32  |               | $      |  81.02  |
|                 | Collar contracts:                 |                  |      |                     |               |   |              |               |   |
|                 |                              | Volume (Bbls per day) |      |  2,000         |               |   |  -      |               |   |  -      |
|                 |                              | Price per Bbl         |      |                     |               |   |              |               |   |              |
|                 |                              |                  | Ceiling   | $                        |  170.00  |   | $                 |  -       |   | $                 |  -       |
|                 |                              |                  | Floor     | $                        |  115.00  |   | $                 |  -       |   | $                 |  -       |
|                 | Collar contracts with short puts: |                  |      |                     |               |   |              |               |   |
|                 |                              | Volume (Bbls per day) |      |  1,000         |               |   |  1,000  |               |   |  1,000  |
|                 |                              | Price per Bbl         |      |                     |               |   |              |               |   |              |
|                 |                              |                  | Ceiling   | $                        |  99.60   |   | $                 |  103.50  |   | $                 |  111.50  |
|                 |                              |                  | Floor     | $                        |  70.00   |   | $                 |  80.00   |   | $                 |  83.00   |
|                 |                              |                  | Short put | $                        |  55.00   |   | $                 |  65.00   |   | $                 |  68.00   |

| (a) | Subsequent to December 31, 2010, the Partnership entered into additional collar contracts with short puts for 2,000 Bbls per day of the Partnership's 2014 production with a ceiling price of $133.00 per Bbl, a floor price of $90.00 per Bbl and a short put price of $75.00 per Bbl. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                            |   | Year Ended December 31, |
|-------------------------------------------------|--------|-------------------------|
|                                            |   | 2010               |   | 2009  |   | 2008  |
|                                            |   |                    |   |   |   |   |   |   |   |
| Average price reported per Bbl                  |   | $                       |  103.60  |   | $ | 100.35  |   | $ | 107.79  |
| Average price realized per Bbl                  |   | $                       |  77.56  |   | $ | 58.05  |   | $ | 99.71  |
| Increase to oil revenue from                    |   | $                       | 37,100  |   | $ | 56,863  |   | $ | 11,654  |
|   hedging activity (in thousands) (a) |

| (a)   | The Partnership discontinued hedge accounting effective February 1, 2009.  The increase to oil revenue from hedging activity after February 1, 2009 represents the transfer of net deferred hedge gains that were included in AOCI – Hedging as of February 1, 2009 to oil and gas revenues.  See "AOCI – Hedging" below for additional information. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|             |            |                  |   |   | Year Ending December 31, |
|------------------|-----------------|-----------------------|--------|--------|--------------------------|
|             |            |                  |   |   | 2011                |   | 2012  |
| NGL Derivatives: |            |                  |   |   |                     |   |
|             | Swap contracts: |                  |   |   |                     |   |   |
|             |            | Volume (Bbls per day) |   |   | 750                 |   |   | 750  |
|             |            | Price per Bbl         |   | $      | 34.65               |   | $ | 35.03  |

|                                            |   | Year Ended December 31, |
|-------------------------------------------------|--------|-------------------------|
|                                            |   | 2010               |   | 2009  |   | 2008  |
|                                            |   |                    |   |   |   |   |   |   |   |
| Average price reported per Bbl                  |   | $                       |  44.31  |   | $ | 41.61  |   | $ | 48.41  |
| Average price realized per Bbl                  |   | $                       |  32.91  |   | $ | 25.56  |   | $ | 45.84  |
| Increase to NGL revenue from                    |   | $                       | 6,688  |   | $ | 8,320  |   | $ | 1,220  |
|   hedging activity (in thousands) (a) |

| (a)   | The Partnership discontinued hedge accounting effective February 1, 2009.  The increase to NGL revenue from hedging activity after February 1, 2009 represents the transfer of net deferred hedge gains that were included in AOCI – Hedging as of February 1, 2009 to oil and gas revenues.  See "AOCI – Hedging" below for additional information. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|             |                  |                                         |   | Year Ending December 31, |
|------------------|-----------------------|----------------------------------------------|--------|--------------------------|
|             |                  |                                         |   | 2011                |   | 2012  |   | 2013  |
| Gas Derivatives: |                  |                                         |   |                     |   |   |   |   |
|             | Swap contracts:       |                                         |   |                     |   |   |   |   |   |
|             |                  | Volume (MMBtus per day)                      |   |  2,500         |   |   |  5,000  |   |   |  2,500  |
|             |                  | Price per MMBtu                              | $      |  6.65          |   | $ | 6.43  |   | $ |  6.89  |
|             | Basis Swap contracts: |                                         |   |                     |   |   |   |   |   |
|             |                  | Permian Basin index swaps - (MMBtus per day) |   |  -             |   |   |  2,500  |   |   |  2,500  |
|             |                  | Price differential ($/MMBtu)                 | $      |  -             |   | $ |  (0.30) |   | $ |  (0.31) |

|                                            |   | Year Ended December 31, |
|-------------------------------------------------|--------|-------------------------|
|                                            |   | 2010               |   | 2009  |   | 2008  |
|                                            |   |                    |   |   |   |   |   |   |   |
| Average price reported per Mcf                  |   | $                       | 4.66  |   | $ | 5.37  |   | $ | 7.06  |
| Average price realized per Mcf                  |   | $                       |  3.33  |   | $ | 2.81  |   | $ | 6.24  |
| Increase to gas revenue from                    |   | $                       | 2,892  |   | $ | 5,848  |   | $ | 1,767  |
|   hedging activity (in thousands) (a) |

| (a)   | The Partnership discontinued hedge accounting effective February 1, 2009.  The increase to gas revenue from hedging activity after February 1, 2009 represents the transfer of net deferred hedge gains that were included in AOCI – Hedging as of February 1, 2009 to oil and gas revenues.  See "AOCI – Hedging" below for additional information. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Fair Value of Derivative Instruments |
|--------------------------------------|
| as of December 31, 2010              |
|                                 |   |   |   |   |   |   |   |   |
| Asset Derivatives                    |   | Liability Derivatives |
| Balance Sheet                        |   | Fair |   | Balance Sheet |   | Fair |
| Location                             | Value | Location | Value |
|                                 |   | (in thousands) |   |   |   | (in thousands) |
|                                 |   |   |   |   |   |   |   |   |
| Derivatives - current                |   | $ |  18,753  |   | Derivatives - current |   | $ |  9,673  |
| Derivatives - noncurrent             |   |   |  3,783  |   | Derivatives - noncurrent |   |   |  31,713  |
| Total derivatives not designated as  |   |   |   |   |   |   |   |
|  hedging instruments            |   | $ |  22,536  |   |   |   | $ |  41,386  |

----

| Fair Value of Derivative Instruments |
|--------------------------------------|
| as of December 31, 2009              |
| Asset Derivatives                    |   | Liability Derivatives |
|                                 |   |   |   |   |   |   |   |   |
| Balance Sheet                        |   | Fair |   | Balance Sheet |   | Fair |
| Location                             | Value | Location | Value |
|                                 |   | (in thousands) |   |   |   | (in thousands) |
|                                 |   |   |   |   |   |   |   |   |
| Derivatives - current                |   | $ |  16,042  |   | Derivatives - current |   | $ |  3,606  |
| Derivatives - noncurrent             |   |   |  23,784  |   | Derivatives - noncurrent |   |   |  30,205  |
| Total derivatives not designated as  |   |   |   |   |   |   |   |
|  hedging instruments            |   | $ |  39,826  |   |   |   | $ |  33,811  |

| Effect of Derivative Instruments on the Consolidated Statement of Operations |
|------------------------------------------------------------------------------|
|                                                                         |   |   |   |   |   |   |   |   |   |
|                                                                         |   | Amount of Gain (Loss) Recognized in OCI on Derivatives |
|                                                                         |   |  (Effective Portion) |
|                                                                         |   |   |   |   |   |
| Derivatives in Cash Flow                                                     |   | Year Ended December 31, |
| Hedging  Relationships                                             |   | 2010  |   | 2009  |   | 2008  |
|                                                                         |   | (in thousands) |
|                                                                         |   |   |   |   |   |   |   |   |   |
| Commodity contracts                                                          |   | $ |  -  |   | $ |  11,235  |   | $ |  157,606  |
|                                                                         |   |   |   |   |   |   |   |   |   |
|                                                                         |   |   |   |   |   |   |   |   |   |
|                                                                         |   | Amount of Gain (Loss) Reclassified from AOCI into Income |
| Location of Gain (Loss)                                                      |   | (Effective Portion) |
| Reclassified from Accumulated                                                |   |   |   |   |   |
| OCI into Income                                                              |   | Year Ended December 31, |
| (Effective Portion)                                                          |   | 2010  |   | 2009  |   | 2008  |
|                                                                         |   | (in thousands) |
|                                                                         |   |   |   |   |   |   |   |   |   |
| Oil and gas revenues                                                         |   | $ |  46,681  |   | $ |  71,030  |   | $ |  14,641  |

|                  |   |                    |   | Amount of (Gain) Loss Recognized in Income on Derivatives |
|-----------------------|--------|-------------------------|--------|-----------------------------------------------------------|
| Derivatives Not       |   | Location of Loss        |   |                                                      |   |   |
| Designated as Hedging |   | Recognized in Income on |   | Year Ended December 31,                                   |
| Instruments           |   | Derivatives             |   | 2010                                                 |   |   | 2009  |   |   | 2008  |
|                  |   |                    |   | (in thousands)                                            |
|                  |   |                    |   |                                                      |   |   |   |   |   |   |
| Commodity contracts   |   | Derivative loss, net    | $      |  5,431                                          |   | $ |  78,265  |   | $ |  -  |

----

|                        |   | Year Ended December 31, |
|-----------------------------|--------|-------------------------|
|                        |   | 2010               |   | 2009  |   | 2008  |
|                        |   |                    |   |   |   |   |
| Plains Marketing L.P.       |   | 53%                     |   | 56% |   | 56% |
| Occidental Energy Marketing |   | 17%                     |   | 15% |   | 16% |
| Enterprise Crude Oil LLC    |   | 10%                     |   | 10% |   | 9% |

|                   |   | Assets             |               | Liabilities |
|------------------------|--------|--------------------|--------------------|-------------|
|                   |   | (in thousands)     |
|                   |   |               |               |        |   |   |
| JP Morgan Chase        | $      |  16,875  |               | $           |  -  |
| Societe Generale       |   |  -       |               |        |  6,110  |
| Citibank, N.A.         |   |  2,798   |               |        |  4,773  |
| Toronto Dominion       |   |  2,863   |               |        |  856  |
| Wells Fargo Bank, N.A. |   |  -       |               |        |  29,647  |
|                   | Total  | $                  |  22,536  |        | $ |  41,386  |

----

|                                   |                           |   | Year Ended December 31, |
|----------------------------------------|--------------------------------|--------|-------------------------|
|                                   |                           |   | 2010               |   | 2009  |   | 2008  |
|                                   |                           |   | (in thousands)          |
|                                   |                           |   |                    |   |   |   |   |   |   |   |
| Beginning asset retirement obligations |                           | $      |  7,105        |   | $ |  6,427  |   | $ |  1,957  |
|                                   | New wells placed on production |   |                    |  184  |   |   |  35  |   |   |  -  |
|                                   | Changes in estimates           |   |                    |  5,621  |   |   |  962  |   |   |  4,499  |
|                                   | Liabilities settled            |   |                    |  (898) |   |   |  (803) |   |   |  (173) |
|                                   | Accretion of discount          |   |                    |  546  |   |   |  484  |   |   |  144  |
| Ending asset retirement obligation     |                           | $      |  12,558       |   | $ |  7,105  |   | $ |  6,427  |

|                           |   | Year Ended December 31, |
|--------------------------------|--------|-------------------------|
|                           |   | 2010               |   | 2009  |   | 2008  |
|                           |   | (in thousands)          |
| Current provisions:            |   |                    |   |   |   |   |   |   |   |
| U.S. state                     |   | $                       |  493  |   | $ |  516  |   | $ |  1,048  |
| Deferred provisions (benefit): |   |                    |   |   |   |   |   |   |   |
| U.S. state                     |   |                    |  552  |   |   |  (470) |   |   |  278  |
|                           |   | $                       |  1,045  |   | $ |  46  |   | $ |  1,326  |

----

----

|                    |                                                      |   | December 31,   |
|-------------------------|-----------------------------------------------------------|--------|----------------|
|                    |                                                      |   | 2010      |   | 2009  |
|                    |                                                      |   | (in thousands) |
| Oil and gas properties: |                                                      |   |           |   |   |   |
|                    | Proved properties                                         |   | $              |  364,237  |   | $ |  311,730  |
|                    | Less accumulated depletion, depreciation and amortization |   |           |  (125,963) |   |   |  (113,386) |
|                    | Net capitalized cost for oil and gas properties           |   | $              |  238,274  |   | $ |  198,344  |

|                              |   | Year Ended December 31, |
|-----------------------------------|--------|-------------------------|
|                              |   | 2010               |   | 2009  |   | 2008  |
|                              |   | (in thousands)          |
|                              |   |                    |   |   |   |   |   |   |   |
| Acquisition of carrying value (a) |   | $                       |  -  |   | $ |  60,041  |   | $ |  141,770  |
| Development costs (b)             |   |                    |  52,507  |   |   |  6,655  |   |   |  16,410  |
| Total costs incurred              |   | $                       |  52,507  |   | $ |  66,696  |   | $ |  158,180  |

| (a) | See Notes A and B for information about the 2009 Acquisition and the 2008 IPO Acquisitions. |
|-----|---------------------------------------------------------------------------------------------|

| (b) | Includes increases to asset retirement obligations for 2010, 2009 and 2008 of $5.8 million, $1.0 million and $4.5 million, respectively.  Excludes $1.0 million of development costs incurred prior to the Offering in 2008 that are included in the acquisition of carrying value on May 6, 2008. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Expanding the definition of oil- and gas-producing activities to include the extraction of saleable hydrocarbons, in the solid, liquid or gaseous state, from oil sands, coalbeds or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Amending the definition of proved oil and gas reserves to require the use of an average of the first-day-of-the-month commodity prices during the 12-month period ending on the balance sheet date rather than the period-end commodity prices; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Adding to and amending other definitions used in estimating proved oil and gas reserves, such as "reliable technology" and "reasonable certainty;" |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Broadening the types of technology that a registrant may use to establish reserves estimates and categories; and |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | Changing disclosure requirements and providing formats for tabular reserve disclosures. |
|--------------------|-----------------------------------------------------------------------------------------|

----

|                             |                       |                            |               | Oil                |               | NGL                |               | Gas                |               | Total              |
|----------------------------------|----------------------------|---------------------------------|--------------------|--------------------|--------------------|--------------------|--------------------|--------------------|--------------------|--------------------|
|                             |                       |                            | (MBbls)            |               | (MBbls)            |               | (MMcf)             |               | (MBOE)             |
|                             |                       |                            |               |               |               |               |               |               |               |               |
| Total Proved Reserves:           |                       |                            |               |               |               |               |               |               |
|                             | Balance, December 31, 2007 |                            |  34,059  |               |  12,664  |               |  53,212  |               |  55,591  |
|                             |                       | Revisions of previous estimates |               |  (7,359)      |               |  (2,993)      |               |  (12,970)     |               |  (12,514)     |
|                             |                       | Production                      |               |  (1,441)      |               |  (476)        |               |  (2,133)      |               |  (2,272)      |
|                             | Balance, December 31, 2008 |                            |  25,259  |               |  9,195   |               |  38,109  |               |  40,805  |
|                             |                       | Revisions of previous estimates |               |  3,724   |               |  1,144   |               |  4,724   |               |  5,656   |
|                             |                       | Extensions and discoveries      |               |  102     |               |  26      |               |  112     |               |  147     |
|                             |                       | Production                      |               |  (1,344)      |               |  (518)        |               |  (2,281)      |               |  (2,243)      |
|                             | Balance, December 31, 2009 |                            |  27,741  |               |  9,847   |               |  40,664  |               |  44,365  |
|                             |                       | Revisions of previous estimates |               |  4,881   |               |  3,252   |               |  11,116  |               |  9,985   |
|                             |                       | Production                      |               |  (1,425)      |               |  (587)        |               |  (2,181)      |               |  (2,375)      |
|                             | Balance, December 31, 2010 |                            |  31,197  |               |  12,512  |               |  49,599  |               |  51,975  |
|                             |                       |                            |               |               |               |               |               |               |               |               |
| Proved Developed Reserves:       |                       |                            |               |               |               |               |               |               |
|                             | December 31:               |                            |               |               |               |               |               |               |               |
|                             |                       | 2007                       |               |  26,736  |               |  10,382  |               |  43,414  |               |  44,354  |
|                             |                       | 2008                       |               |  18,015  |               |  6,936   |               |  28,822  |               |  29,755  |
|                             |                       | 2009                       |               |  19,726  |               |  7,396   |               |  30,548  |               |  32,213  |
|                             |                       | 2010                       |               |  23,682  |               |  9,966   |               |  39,032  |               |  40,153  |
|                             |                       |                            |               |               |               |               |               |               |               |               |
| Proved Undeveloped Reserves (a): |                       |                            |               |               |               |               |               |               |
|                             | December 31:               |                            |               |               |               |               |               |               |               |
|                             |                       | 2007                       |               |  7,323   |               |  2,282   |               |  9,798   |               |  11,237  |
|                             |                       | 2008                       |               |  7,244   |               |  2,259   |               |  9,287   |               |  11,050  |
|                             |                       | 2009                       |               |  8,015   |               |  2,451   |               |  10,116  |               |  12,152  |
|                             |                       | 2010                       |               |  7,515   |               |  2,546   |               |  10,567  |               |  11,822  |

|  (a) | As of December 31, 2010, the Partnership had 127 proved undeveloped well locations (all of which are expected to be developed within the five year period ending December 31, 2015), representing a decrease of 43 proved undeveloped well locations (25 percent) since December 31, 2009.  The Partnership's proved undeveloped well locations as of December 31, 2010 include 48 proved undeveloped well locations that have remained undeveloped for five years or more.  Prior to the 2009 Acquisition, all of the Partnership's proved undeveloped well locations were part of the Partnership Predecessor and, as such, they were part of Pioneer's inventory of undeveloped well locations in the Spraberry field. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                   |   | Year Ended December 31, |
|--------------------------------------------------------|--------|-------------------------|
|                                                   |   | 2010               |   | 2009  |   | 2008  |
|                                                   |   | (in thousands)          |
|                                                   |   |                    |   |   |   |   |   |   |   |
| Oil and gas producing activities:                      |   |                    |   |   |   |   |   |   |   |
| Future cash inflows                                    |   | $                       |  3,062,739  |   | $ |  2,048,674  |   | $ |  1,448,040  |
| Future production costs                                |   |                    |  (1,431,805) |   |   |  (1,223,278) |   |   |  (807,178) |
| Future development costs (a)                           |   |                    |  (286,058) |   |   |  (184,156) |   |   |  (144,236) |
| Future income tax expense                              |   |                    |  (9,613) |   |   |  (2,742) |   |   |  (2,809) |
|                                                   |   |                    |  1,335,263  |   |   |  638,498  |   |   |  493,817  |
| 10% annual discount for estimated timing of cash flows |   |                    |  (771,497) |   |   |  (376,202) |   |   |  (306,598) |
| Standardized measure of discounted future net          |   | $                       |  563,766  |   | $ |  262,296  |   | $ |  187,219  |
|   cash flows                                      |

| (a) | Includes $72.8 million ($63.5 million net of salvage value), $29.3 million ($21.0 million net of salvage value) and $20.8 million ($10.3 million net of salvage value) of undiscounted future asset retirement expenditures estimated as of December 31, 2010, 2009 and 2008, respectively, using current estimates of future abandonment costs. See Note J for corresponding information regarding the Partnership's discounted asset retirement obligations. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                               |   | Year Ended December 31, |
|----------------------------------------------------|--------|-------------------------|
|                                               |   | 2010               |   | 2009  |   | 2008  |
|                                               |   | (in thousands)          |
|                                               |   |                    |   |   |   |   |   |   |   |
| Oil and gas sales, net of production costs         |   | $                       |  (86,625) |   | $ |  (53,391) |   | $ |  (125,733) |
| Net changes in prices and production costs         |   |                    |  236,859  |   |   |  47,526  |   |   |  (707,519) |
| Extensions and discoveries                         |   |                    |  -  |   |   |  530  |   |   |  -  |
| Development costs incurred during the period       |   |                    |  42,294  |   |   |  2,857  |   |   |  11,299  |
| Revisions of estimated future development costs    |   |                    |  (105,028) |   |   |  (20,831) |   |   |  (11,879) |
| Revisions of previous quantity estimates           |   |                    |  128,710  |   |   |  39,663  |   |   |  (52,141) |
| Accretion of discount                              |   |                    |  26,341  |   |   |  18,800  |   |   |  99,684  |
| Changes in production rates, timing and other      |   |                    |  61,796  |   |   |  40,257  |   |   |  (22,557) |
| Change in present value of future net revenues     |   |                    |  304,347  |   |   |  75,411  |   |   |  (808,846) |
| Net change in present value of future income taxes |   |                    |  (2,877) |   |   |  (334) |   |   |  8,716  |
|                                               |   |                    |  301,470  |   |   |  75,077  |   |   |  (800,130) |
| Balance, beginning of year                         |   |                    |  262,296  |   |   |  187,219  |   |   |  987,349  |
| Balance, end of year                               |   | $                       |  563,766  |   | $ |  262,296  |   | $ |  187,219  |

|                          |                                         |   |   |               | Quarter                              |
|-------------------------------|----------------------------------------------|--------|--------|--------------------|--------------------------------------|
|                          |                                         |   |   |               | First                                |   | Second |   | Third |   | Fourth |
|                          |                                         |   |   |               | (in thousands, except per unit data) |
| Year ended December 31, 2010: |                                         |   |   |               |                                 |   |   |   |   |   |   |   |
|                          | Oil and gas revenues                         |   | $      |  45,508  |                                 | $ |  44,319  |   | $ |  44,907  |   | $ |  49,024  |
|                          | Total revenues                               |   | $      |  45,508  |                                 | $ |  44,319  |   | $ |  44,907  |   | $ |  49,024  |
|                          | Total costs and expenses                     |   | $      |  5,676   |                                 | $ |  (11,461) |   | $ |  38,332  |   | $ |  44,333  |
|                          | Net income                                   |   | $      |  39,446  |                                 | $ |  55,233  |   | $ |  6,515  |   | $ |  4,639  |
|                          | Basic and diluted net income per common unit |   | $      |  1.19    |                                 | $ |  1.66  |   | $ |  0.20  |   | $ |  0.14  |

|                          |                                                |   |   |               | Quarter                              |
|-------------------------------|-----------------------------------------------------|--------|--------|--------------------|--------------------------------------|
|                          |                                                |   |   |               | First                                |   | Second |   | Third |   | Fourth |
|                          |                                                |   |   |               | (in thousands, except per unit data) |
| Year ended December 31, 2009: |                                                |   |   |               |                                 |   |   |   |   |   |   |   |
|                          | Oil and gas revenues                                |   | $      |  36,769  |                                 | $ |  39,834  |   | $ |  43,574  |   | $ |  48,540  |
|                          | Total revenues                                      |   | $      |  36,887  |                                 | $ |  39,890  |   | $ |  43,609  |   | $ |  48,541  |
|                          | Total costs and expenses                            |   | $      |  23,831  |                                 | $ |  40,312  |   | $ |  18,562  |   | $ |  59,855  |
|                          | Net income (loss)                                   |   | $      |  12,961  |                                 | $ |  (445) |   | $ |  24,936  |   | $ |  (11,131) |
|                          | Basic and diluted net income (loss) per common unit |   | $      |  0.40    |                                 | $ |  (0.06) |   | $ |  0.96  |   | $ |  (0.35) |

----

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS AND PROCEDURES |
|----------|-------------------------|

----

----

| ITEM 9B. | OTHER INFORMATION |
|----------|-------------------|

----

|   | PART III |
|--------|----------|

| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
|----------|--------------------------------------------------------|

| Name               |   | Age    |   | Position                                                                  |
|--------------------|--------|--------|--------|---------------------------------------------------------------------------|
|               |   |   |   |                                                                      |
| Phillip A. Gobe    |   | 58     |   | Director                                                                  |
| Alan L. Gosule     |   | 70     |   | Director                                                                  |
| Royce W. Mitchell  |   | 56     |   | Director                                                                  |
| Arthur L. Smith    |   | 58     |   | Director                                                                  |
| Scott D. Sheffield |   | 58     |   | Chairman of the Board of Directors and Chief Executive Officer            |
| Richard P. Dealy   |   | 44     |   | Executive Vice President, Chief Financial Officer, Treasurer and Director |
| Danny L. Kellum    |   | 56     |   | Executive Vice President, Permian Operations and Director                 |
| Timothy L. Dove    |   | 54     |   | President and Chief Operating Officer                                     |
| Mark S. Berg       |   | 52     |   | Executive Vice President, General Counsel                                 |
| Chris J. Cheatwood |   | 50     |   | Executive Vice President, Geoscience                                      |
| Frank W. Hall      |   | 60     |   | Vice President and Chief Accounting Officer                               |

----

----

----

----

----

| ITEM 11. | EXECUTIVE COMPENSATION |
|----------|------------------------|

| Name         |   | Fees Earned orPaid in Cash (1)($)  | Unit Awards (2),(3)($)  | Total($)  |   |
|-------------------|--------|-----------------------------------------|------------------------------|----------------|--------|
| Phillip A. Gobe   |   | $                                       | 65,701                       |           | $      | 49,994 |   | $ | 115,695 |   |
| Alan L. Gosule    |   | $                                       | 58,756                       |           | $      | 49,994 |   | $ | 108,750 |   |
| Royce W. Mitchell |   | $                                       | 66,256                       |           | $      | 49,994 |   | $ | 116,250 |   |
| Arthur L. Smith   |   | $                                       | 66,256                       |           | $      | 49,994 |   | $ | 116,250 |   |

| (1) | Amounts represent fees earned or paid in cash for services as a director during 2010, including the cash portion of the annual base retainer fee and committee chairmanship or membership fees incurred in connection with service on the Board of Directors or any committee of the Board. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The amounts in this column represent the aggregate grant-date fair value of restricted unit awards made to the directors during 2010, calculated in accordance with Financial Accounting Standards Board of Accounting Standards Codification Topic 718 ("FASB ASC 718"). The grant-date fair value is based on the closing price of the Partnership's common units as of the most recent trading day prior to the date the grants are awarded.  The grant-date fair value of each unit award granted computed in accordance with ASC 718 was $22.87. Additional detail regarding the Partnership's unit-based awards is included in Note F of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data." |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Aggregate director unit awards for which restrictions had not lapsed as of December 31, 2010, totaled 12,212 units. |
|-----|---------------------------------------------------------------------------------------------------------------------|

|   | • | Each non-employee director receives an annual base retainer fee of $45,000, and an annual fee of $10,000 for service on one or more committees. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Audit Committee members receive an additional $7,500 annual fee. |
|--------|---------|------------------------------------------------------------------|

|   | • | Each non-employee director receives an annual equity award of $50,000 in restricted units, which vests one year following the date of the award. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The chairmen of the Audit and Conflicts Committees receive an additional $7,500 annual fee. |
|--------|---------|---------------------------------------------------------------------------------------------|

|   | • | A newly-elected non-employee director receives an initial equity award of $40,000 in restricted units at the time of his or her election to the board, which vests ratably over a three-year period on each anniversary of the grant date. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | Base salary, which is a stable and fixed amount near the median level as compared to Pioneer's peers; |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | Annual cash bonus incentive target levels, which generally are targeted to be near the median level as compared to Pioneer's peers, with payouts determined based on Pioneer and individual performance during the year; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Long-term incentive awards, which generally are targeted to be valued at or near the median level as compared to Pioneer's peers, with payout determined by the performance of Pioneer's stock over a three-year period. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|               |                    | Allocation Among Awards                                     |
|--------------------|-------------------------|-------------------------------------------------------------|
|   NEO    |   Total Value |  Restricted Stock Awards                               |   Performance Units |   Stock Options |
| Scott D. Sheffield | $ 5,500,000             |         $ 2,750,000 |         $  1,375,000 |        $  1,375,000 |
| Richard P. Dealy   | 1,500,000               |        750,000           |         375,000 |       375,000 |
| Danny L. Kellum    | 900,000                 | 450,000                                                     | 225,000 | 225,000 |

----

|   | NEO                   |   | Number of Phantom Units |
|--------|-----------------------|--------|-------------------------|
|   | Scott D. Sheffield    |   |  24,144            |
|   | Richard P. Dealy |   |    6,585      |
|   | Danny L. Kellum       |   |    3,950      |

----

----

----

| Name and Principal Position                                 | Year   |   | Salary($) |   | Bonus($) |   | StockAwards (1)($) |   | OptionAwards($) |   | Change inNon-qualified Deferred Compensation Earnings($) |   | All Other Compensation($) |   | Total($) |
|-------------------------------------------------------------|--------|--------|-----------|--------|----------|--------|--------------------|--------|-----------------|--------|----------------------------------------------------------|--------|---------------------------|--------|----------|
| (a)                                                         | (b)    |   | (c)       |   | (d)      |   | (e)                |   | (f)             |   | (h)                                                      |   | (i)                       |   | (j)      |
| Scott D. Sheffield                                          | 2010   |   | N/A       |   | N/A      | $      | 549,035            |   | N/A             |   | N/A                                                      |   | N/A                       | $      | 549,035  |
| Chairman of the Board Directors and Chief Executive Officer |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |     |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |     |
| Richard P. Dealy                                            | 2010   |   | N/A       |   | N/A      | $      | 149,743            |   | N/A             |   | N/A                                                      |   | N/A                       | $      | 149,743  |
| Executive Vice President and Chief Financial Officer        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |     |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |     |
| Danny L. Kellum                                             | 2010   |   | N/A       |   | N/A      | $      | 89,823             |   | N/A             |   | N/A                                                      |   | N/A                       | $      | 89,823   |
| Executive Vice President, Permian Operations                |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |     |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |
|                                                        |   |   |      |   |     |   |               |   |            |   |                                                     |   |                      |   |     |

|   | (1) | Amounts reported for stock awards represent the grant date fair value of phantom unit awards in accordance with FASB ASC 718.  Pursuant to SEC rules, the amounts shown exclude the effect of estimated forfeitures related to service-based vesting conditions. The Partnership valued its phantom unit awards based on the market-quoted closing price of the Partnership's common units on the last business day prior to the grant date of the awards. Additional detail regarding the Partnership's unit-based awards is included in Note F of Notes to Consolidated Financial Statements included in "Item 8. Financial Statements and Supplementary Data" and under the 2010 Grants of Plan-Based Awards table below. For additional information regarding phantom units owned by the NEOs as of December 31, 2010, see below under "2010 Outstanding Equity Awards at Fiscal Year End." |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name      (a) | Grant Date      (b) | All Other Stock Awards: Number of Shares of Stockor Units (1)(#)(i) |   | Grant Date FairValue of Stock and OptionAwards (2)($)  (l) |
|---------------------------------------------|---------------------------------------------------|---------------------------------------------------------------------|--------|----------------------------------------------------------------------|
|                                        |
|  Scott D. Sheffield                    | 03/4/2010                                         | 24,144                                                              | $      | 549,035                                                              |
|   Richard P. Dealy                | 03/4/2010                                         | 6,585                                                               | $      |  149,743                                                        |
|  Danny L. Kellum                       | 03/4/2010                                         | 3,950                                                               | $      | 89,823                                                               |

| (1)   | The amounts reported in this column are the number of phantom units granted to each NEO in 2010. |
|-----------------|--------------------------------------------------------------------------------------------------|

| (2)   | Amounts for phantom unit awards represent their grant date fair value in accordance with FASB ASC 718. |
|-----------------|--------------------------------------------------------------------------------------------------------|

|   | Narrative Disclosure for the 2010 Grants of Plan-Based Awards Table |
|--------|---------------------------------------------------------------------|

----

----

|               |                                    |   |                                           |
|--------------------|-----------------------------------------|--------|------------------------------------------------|
|               | Equity Awards                           |
| Name               | Number of Units that have not Vested(#) |   | Market Valueof Unitsthat havenot Vested (1)($) |
| (a)                | (g)                                     |   | (h)                                            |
| Scott D. Sheffield | 24,144 (2)                              | $      | 725,044                                        |
|               |                                    |   |
|               |                                    |   |
| Richard P. Dealy   | 6,585 (2)                               | $      | 197,748                                        |
|               |                                    |   |
|               |                                    |   |
| Danny L. Kellum    | 3,950 (2)                               | $      | 118,619                                        |
|               |                                    |   |

| (1)   | Based on the closing price of $30.03 of the Partnership's common units on December 31, 2010. |
|-----------------|----------------------------------------------------------------------------------------------|

| (2) | This award of phantom units vests in full on March 3, 2013, which is the third anniversary of the grant date.  The vesting of this award will accelerate in full upon a change in control.  In addition, the termination of the NEO's employment prior to the vesting date will affect the vesting of the award as described above in the section entitled "–  Narrative Disclosure for the 2010 Grants of Plan Based Awards Table." |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS |
|----------|-------------------------------------------------------------------------------------------------|

| Name of Person or Identity of Group                |   | Number of Units |   | Percentageof Class (a) |
|----------------------------------------------------|--------|----------------------|--------|------------------------|
|                                               |   |                 |   |                   |
| Pioneer Natural Resources USA, Inc. (b)            |   | 20,521,200           |   | 62.0                   |
| 5205 N. O'Connor Blvd.                             |   |                 |   |                   |
| Suite 200                                          |   |                 |   |                   |
| Irving, Texas 75039                                |   |                 |   |                   |
|                                               |   |                 |   |                   |
| Scott D. Sheffield                                 |   | 12,000               |   | (c)                    |
|                                               |   |                 |   |                   |
| Richard P. Dealy                                   |   | 20,000               |   | (c)                    |
|                                               |   |                 |   |                   |
| Danny L. Kellum                                    |   | -               |   | (c)                    |
|                                               |   |                 |   |                   |
| Phillip A. Gobe (d)                                |   | 16,560               |   | (c)                    |
|                                               |   |                 |   |                   |
| Alan L. Gosule (d)                                 |   | 10,741               |   | (c)                    |
|                                               |   |                 |   |                   |
| Royce W. Mitchell (d)                              |   | 9,241                |   | (c)                    |
|                                               |   |                 |   |                   |
| Arthur L. Smith (d)                                |   | 9,241                |   | (c)                    |
|                                               |   |                 |   |                   |
| All directors and officers as a group (11 persons) |   | 107,777              |   | (c)                    |
|                                               |   |                 |   |                   |

| (a) | Based on 33,113,700 common units outstanding. |
|-----|-----------------------------------------------|

| (b) | Pioneer Natural Resources USA, Inc. is a wholly-owned subsidiary of Pioneer, and therefore Pioneer also beneficially owns these common units. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Does not exceed one percent of class. |
|-----|---------------------------------------|

| (d) | Includes restricted units awarded to the General Partner's independent directors under the Pioneer Southwest Energy Partners L.P. 2008 Long-Term Incentive Plan. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name of Person or Identity of Group                                                   |   | Number of Shares |   | Percentageof Class (a) |
|---------------------------------------------------------------------------------------|--------|-----------------------|--------|------------------------|
|                                                                                  |   |                  |   |                   |
| Scott D. Sheffield (c) (e) (f) (g)                                               |   | 711,878               |   | (b)                    |
|                                                                                  |   |                  |   |                   |
| Richard P. Dealy (c) (d) (e) (g)                                                      |   | 138,904               |   | (b)                    |
|                                                                                  |   |                  |   |                   |
| Danny L. Kellum (e) (g)                                                          |   | 105,647               |   | (b)                    |
|                                                                                  |   |                  |   |                   |
| Phillip A. Gobe                                                                       |   | -                     |   | -                      |
|                                                                                  |   |                  |   |                   |
| Alan L. Gosule                                                                        |   | -                     |   | -                      |
|                                                                                  |   |                  |   |                   |
| Royce W. Mitchell                                                                     |   | -                     |   | -                      |
|                                                                                  |   |                  |   |                   |
| Arthur L. Smith                                                                       |   | -                     |   | -                      |
|                                                                                  |   |                  |   |                   |
| All directors and executive officers as a group (11 persons) (c) (d) (e) (f) (g) |   | 1,378,117             |   | 1.2                    |
|                                                                                  |   |                  |   |                   |

| (a) | Based on 116,452,149 shares of common stock outstanding. |
|-----|----------------------------------------------------------|

| (b) | Does not exceed one percent of class. |
|-----|---------------------------------------|

| (c) | Includes the following number of unvested restricted shares: Mr. Sheffield, 166,075; Mr. Dealy, 63,617; Mr. Kellum, 36,819; and all directors and executive officers as a group, 465,266. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Mr. Dealy's beneficial ownership includes 1,750 shares subject to exercisable stock options. |
|-----|----------------------------------------------------------------------------------------------|

| (e) | Includes the following number of shares held in each respective officer's 401(k) account:  Mr. Sheffield, 22,086; Mr. Dealy, 311; Mr. Kellum, 531; and all directors and executive officers as a group, 34,522. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Mr. Sheffield's beneficial ownership includes 37,827 shares held in his investment retirement account, but excludes 25,704 shares underlying unvested restricted stock units. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | Excludes the performance units that will vest if and to the extent predetermined performance targets are achieved. |
|-----|--------------------------------------------------------------------------------------------------------------------|

----

|                                    |   | Number of Securitiesto be Issued UponExercise ofOutstanding Options(a) |   |   | Weighted AverageExercise Price ofOutstanding Options |   | Number of SecuritiesRemaining Available forFuture Issuance Under EquityCompensation Plans(Excluding SecuritiesReflectedin the First Column) (b) |   |
|-----------------------------------------|--------|------------------------------------------------------------------------|--------|--------|------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                    |   |                                                                   |   |   |                                                 |   |                                                                                                                                            |   |
| Pioneer Southwest Energy Partners L.P.: |   |                                                                   |   |   |                                                 |   |                                                                                                                                            |   |
| 2008 Long-Term Incentive Plan           |   | —                                                                |   | $      | —                                              |   | 2,930,599                                                                                                                                       |   |

| (a) | There were no outstanding options, warrants or equity rights awarded under the Partnership's equity compensation plans as of December 31, 2010. The securities do not include restricted units awarded under the 2008 Long-Term Incentive Plan. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | All equity compensation plans have been approved by security holders.                                                                                                                                                                           |   |

| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
|----------|---------------------------------------------------------------------------|

| Ongoing Operations                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|---------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Distributions of available cash to the General Partner and its affiliates | The Partnership makes cash distributions to its partners, including the General Partner and its affiliates, as the holders of common units and general partner units. During 2010, Pioneer received a total of $41.1 million in distributions from the Partnership in respect of its common units and general partner units.                                                                                                                                                                                                                                                                                                                                                   |
| Payments to the General Partner and its affiliates                        | The Partnership Agreement requires the Partnership to reimburse the General Partner and its affiliates for all actual direct and indirect expenses they incur or actual payments they make on the Partnership's behalf and all other expenses allocable to the Partnership or otherwise incurred by the General Partner and its affiliates in connection with operating the Partnership's business. These expenses include salary, bonus, incentive compensation (including equity compensation) and other amounts paid to persons who perform services for the Partnership or on its behalf. Pioneer is entitled to determine in good faith the expenses that are allocable to the |

----

|                                         | Partnership. To implement part of this Partnership Agreement requirement, the Partnership and Pioneer have entered into the Administrative Services Agreement, which establishes a formula by which a portion of Pioneer's overhead expenses is allocated to the Partnership. See "— Administrative Services Agreement" below. The Partnership is charged an operating overhead fee pursuant to operating agreements with Pioneer. See " — Operating Agreements" below. Additionally, Pioneer is a minority owner of certain gas processing plants that process a portion of the Partnership's wet gas and retain as compensation a portion of the Partnership's dry gas residue and NGL value. See "— Gas Processing Arrangements" below. The Partnership has agreed to pay Pioneer for the Partnership's share of state and local income and other taxes. See "— Tax Sharing Arrangement" below.  |
|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Withdrawal or removal of the General Partner | If the General Partner withdraws or is removed, its general partner interest will either be sold to the new general partner for cash or converted into common units, in each case for an amount equal to the fair market value of those interests.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Liquidation Stage                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Liquidation                                  | If the Partnership were to be liquidated, the partners, including the General Partner, would be entitled to receive liquidating distributions according to their particular capital account balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

----

| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
|----------|----------------------------------------|

----

|                   | 2010  |                | 2009  |
|------------------------|------------|---------------------|------------|
|                   |       |                |       |   |   |
| Audit fees (a)         | $          |  341,234  |       | $ |  959,142  |
| Audit-related fees (b) |       |  -        |       |   |  -  |
| Tax fees (b)           |       |  -        |       |   |  -  |
| All other fees (b)     |       |  -        |       |   |  -  |
|                   | $          | 341,234        |       | $ | 959,142  |

| (a) | Audit fees represent fees for professional services provided in connection with the (i) the audit of the Partnership's annual consolidated financial statements included in this Annual Report on Form 10-K, (ii) reviews of the Partnership's quarterly financial statements included in its Quarterly Reports on Form 10-Q, and (iii) services in connection with the Partnership's other filings with the SEC, including review and preparation of registration statements, comfort letters, consents and research necessary to comply with generally accepted auditing standards. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | There were no audit-related fees, tax fees or other fees paid to Ernst & Young LLP for services in 2010 or 2009. |
|-----|----------------------------------------------------------------------------------------------------------------------|

----

| ·   | Report of Independent Registered Public Accounting Firm |
|--------------------|---------------------------------------------------------|

| ·   | Consolidated Balance Sheets as of December 31, 2010 and 2009 |
|--------------------|--------------------------------------------------------------|

| ·   | Consolidated Statements of Operations for the Years Ended December 31, 2010, 2009 and 2008 |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Consolidated Statements of Partners' Equity for the Years Ended December 31, 2010, 2009 and 2008 |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008 |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2010, 2009 and 2008 |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | Notes to Consolidated Financial Statements |
|--------------------|--------------------------------------------|

| ·   | Unaudited Supplementary Information |
|--------------------|-------------------------------------|

----

| ExhibitNumber |   |   |    |  Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------------|--------|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.1           |   |   | — | Contribution Agreement, dated May 6, 2008, by and among the Partnership, Pioneer Natural Resources USA, Inc. and Pioneer Natural Resources GP LLC (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                           |
| 2.2           |   |   | — | Membership Interest Sale Agreement, dated May 6, 2008, between the Partnership and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 2.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                                                      |
| 2.3           | *      |   | — | Purchase and Sale Agreement, dated May 6, 2008, by and among Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources USA, Inc. and Pioneer Retained Properties Company LLC (incorporated by reference to Exhibit 2.3 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                     |
| 2.4           | *      |   | — | Omnibus Agreement, dated May 6, 2008, by and among the Partnership, Pioneer Natural Resources GP LLC, Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources Company and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 2.4 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                       |
| 2.5           | *      |   | — | Agreement and Plan of Merger, dated May 1, 2008, by and among Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources USA, Inc., Pioneer Retained Properties Company LLC and Pioneer Limited Natural Resources Properties LLC (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 2, 2008).                                                                                                                                  |
| 2.6           | *      |   | — | First Amendment to Omnibus Agreement entered into as of December 31, 2008, to be effective as of May 6, 2008 among the Partnership, Pioneer Natural Resources GP LLC, Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources Company and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 2.6 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2008, File No. 001-34032).                                                                                     |
| 2.7           | *      |   | — | Purchase And Sale Agreement By And Among Pioneer Natural Resources USA, Inc., Pioneer Southwest Energy Partners USA LLC and the Partnership (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on September 3, 2009).                                                                                                                                                                                                                                |
| 3.1           |   |   | — | Certificate of Limited Partnership of Pioneer Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Partnership's Registration Statement on Form S-1 (File No. 333-144868)).                                                                                                                                                                                                                                                                                                                                      |
| 3.2           |   |   | — | Certificate of Amendment to Certificate of Limited Partnership of Pioneer Resource Partners L.P. (incorporated by reference to Exhibit 3.2 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                  |
| 3.3           |   |   | — | First Amended and Restated Agreement of Limited Partnership of Pioneer Southwest Energy Partners L.P. dated May 6, 2008, between Pioneer Natural Resources GP LLC, as the General Partner, and Pioneer Natural Resources USA, Inc., as the Organizational Limited Partner, together with any other persons who become Partners (as defined in such agreement) in the Partnership (incorporated by reference to Exhibit 3.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008). |
| 4.1           |   |   | — | Form of Senior Indenture (incorporated by reference to Exhibit 4.1 to the Partnership's Registration Statement on Form S-3 (Registration No. 333-162566)).                                                                                                                                                                                                                                                                                                                                                                          |
| 4.2           |   |   | — | Form of Subordinated Indenture (incorporated by reference to Exhibit 4.2 to the Partnership's Registration Statement on Form S-3 (Registration No. 333-162566)).                                                                                                                                                                                                                                                                                                                                                                    |
| 10.1          |   | H      | — | Pioneer Southwest Energy Partners L.P. 2008 Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                             |
| 10.2          |   |   | — | Administrative Services Agreement, dated May 6, 2008, among the Partnership, Pioneer Natural Resources GP LLC, Pioneer Southwest Energy Partners USA LLC, and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                               |

----

| 10.3  |   |   | — | Tax Sharing Agreement, dated May 6, 2008, by and between the Partnership and Pioneer Natural Resources Company (incorporated by reference to Exhibit 10.3 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                                                                               |
|-------|--------|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.4  |   |   | — | Omnibus Operating Agreement, dated May 6, 2008, by and between Pioneer Southwest Energy Partners USA LLC and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 10.4 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                                             |
| 10.5  |   |   | — | First Amendment dated August 31, 2009 to Omnibus Operating Agreement dated May 6, 2008, between Pioneer Natural Resources USA, Inc. and Pioneer Southwest Energy Partners USA LLC (incorporated by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on September 3, 2009).                                                                                                                                                                                                           |
| 10.6  |   | H      | — | Form of Restricted Unit Award Agreement for Initial Grants to Non-Employee Directors (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 2, 2008).                                                                                                                                                                                                                                                                                                              |
| 10.7  |   | H      | — | Form of Restricted Unit Award Agreement for Annual Grants to Non-Employee Directors (incorporated by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 2, 2008).                                                                                                                                                                                                                                                                                                               |
| 10.8  |   |   | — | Indemnification Agreement between the Partnership and Phillip A. Gobe, together with a schedule identifying other substantially identical agreements between the Partnership and each non-employee director of the Partnership's general partner identified on the schedule and identifying the material differences between each of those agreements and the filed Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on August 19, 2009). |
| 10.9  |   |   | — | Credit Agreement entered into as of October 29, 2007, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.1 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                            |
| 10.10 |   |   | — | Amendment to Credit Agreement dated as of December 14, 2007, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.8 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                     |
| 10.11 |   |   | — | Second Amendment to Credit Agreement dated as of February 15, 2008, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.13 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                             |
| 10.12 |   |   | — | Third Amendment to Credit Agreement dated as of April 15, 2008, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.15 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                 |
| 10.13 |   |   | — | Limited Waiver Regarding Credit Agreement, entered into as of March 26, 2009, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and the other lenders signatory thereto (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on March 31, 2009).                                                                                                                                                                                  |
| 10.14 |   |   | — | Crude Oil Purchase Contract (incorporated by reference to Exhibit 10.9 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.15 |   |   | — | Natural Gas Liquids Purchase Contract  (incorporated by reference to Exhibit 10.10 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                  |
| 10.16 |   |   | — | Crude Oil Purchase Contract (incorporated by reference to Exhibit 10.11 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.17 |   |   | — | Crude Oil Purchase Contract (incorporated by reference to Exhibit 10.12 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.18 |   |   | — | Omnibus Operating Agreement dated August 31, 2009, between Pioneer Natural Resources USA, Inc. and Pioneer Southwest Energy Partners USA LLC (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on September 3, 2009).                                                                                                                                                                                                                                                |

----

| 10.19  |   |   | — | Amendment to Crude Oil Purchase Contract filed as Exhibit 10.9 to the Partnership's Registration Statement on Form S-1 (incorporated by reference to Exhibit 10.19 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.20  |   |   | — | Amendment to Natural Gas Liquids Purchase Contract filed as Exhibit 10.10 to the Partnership's Registration Statement on Form S-1 (incorporated by reference to Exhibit 10.20 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                  |
| 10.21  |   |   | — | Amendment to Crude Oil Purchase Contract filed as Exhibit 10.11 to the Partnership's Registration Statement on Form S-1(incorporated by reference to Exhibit 10.21 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                             |
| 10.22  |   |   | — | Amendment to Crude Oil Purchase Contract filed as Exhibit 10.12 to the Partnership's Registration Statement on Form S-1 (incorporated by reference to Exhibit 10.22 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                            |
| 10.23  |   |   | — | Crude Oil Contracts with Occidental Energy Marketing, Inc. (incorporated by reference to Exhibit 10.23 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032)                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.24  |   | (a)    | — | Amendment to Crude Oil Purchase Contract with Occidental Energy Marketing, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.25  |   | H      | — | Form of Phantom Unit Award Agreement between the General Partner and Scott D. Sheffield, with respect to awards of phantom units made under the 2008 Long-Term Incentive Plan, together with a schedule identifying other substantially identical agreements between the General Partner and each of its other recipients of phantom unit awards and identifying the material differences between those agreements and the filed Phantom Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K, File No. 001-34032, filed with the SEC on March 9, 2010). |
| 21.1   |   | (a)    | — | Subsidiaries of the registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 23.1   |   | (a)    | — | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 23.2   |   | (a)    | — | Consent of Netherland, Sewell & Associates, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.1   |   | (a)    | — | Chief Executive Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 31.2   |   | (a)    | — | Chief Financial Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.1   |   | (b)    | — | Chief Executive Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.2   |   | (b)    | — | Chief Financial Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.1   |   | (a)    | — | Report of Netherland, Sewell & Associates, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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|                    | PIONEER SOUTHWEST ENERGY PARTNERS L.P. |
|-------------------------|---------------------------------------------|
|                    | By:                                    | Pioneer Natural Resources GP LLC, its general partner |
|  February 25, 2011 |                                        |   |
|                    |                                        |   |
|                    | By:                                    | /s/  Scott D. Sheffield                                   |
|                    |                                        | Scott D. Sheffield, |
|                    |                                        | Chairman of the Board of Directors andChief Executive Officer |
|                    |                                        |   |

| Signature                                     |   | Title                                                                                                        | Date                    |
|-----------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|-------------------------|
|  /s/  Scott D. Sheffield  |   |  Chairman of the Board of Directors and Chief Executive Officer (principal executive officer) |  February 25, 2011 |
| Scott D. Sheffield                            |   |
|  /s/  Richard P. Dealy         |   |  Executive Vice President, ChiefFinancial Officer, Treasurer and Director (principal financialofficer)  |  February 25, 2011 |
| Richard P. Dealy                              |
|  /s/  Frank W. Hall            |   |  Vice President and Chief Accounting Officer(principal accounting officer)                         |  February 25, 2011 |
| Frank W. Hall                                 |
|  /s/  Phillip A. Gobe          |   |  Director                                                                                               |  February 25, 2011 |
| Phillip A. Gobe                               |   |                                                                                                         |                    |
|  /s/  Alan L. Gosule           |   |  Director                                                                                               |  February 25, 2011 |
| Alan L. Gosule                                |
|  /s/  Danny L. Kellum          |   |  Director                                                                                               |  February 25, 2011 |
| Danny L. Kellum                               |
|  /s/  Royce W. Mitchell        |   |  Director                                                                                               |  February 25, 2011 |
| Royce W. Mitchell                             |
|  /s/  Arthur L. Smith          |   |  Director                                                                                               |  February 25, 2011 |
| Arthur L. Smith                               |

----

| ExhibitNumber |   |   |    |  Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|---------------|--------|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |   |   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 2.1           |   |   | — | Contribution Agreement, dated May 6, 2008, by and among the Partnership, Pioneer Natural Resources USA, Inc. and Pioneer Natural Resources GP LLC (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                           |
| 2.2           |   |   | — | Membership Interest Sale Agreement, dated May 6, 2008, between the Partnership and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 2.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                                                      |
| 2.3           | *      |   | — | Purchase and Sale Agreement, dated May 6, 2008, by and among Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources USA, Inc. and Pioneer Retained Properties Company LLC (incorporated by reference to Exhibit 2.3 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                     |
| 2.4           | *      |   | — | Omnibus Agreement, dated May 6, 2008, by and among the Partnership, Pioneer Natural Resources GP LLC, Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources Company and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 2.4 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                       |
| 2.5           | *      |   | — | Agreement and Plan of Merger, dated May 1, 2008, by and among Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources USA, Inc., Pioneer Retained Properties Company LLC and Pioneer Limited Natural Resources Properties LLC (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 2, 2008).                                                                                                                                  |
| 2.6           | *      |   | — | First Amendment to Omnibus Agreement entered into as of December 31, 2008, to be effective as of May 6, 2008 among the Partnership, Pioneer Natural Resources GP LLC, Pioneer Southwest Energy Partners USA LLC, Pioneer Natural Resources Company and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 2.6 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2008, File No. 001-34032).                                                                                     |
| 2.7           | *      |   | — | Purchase And Sale Agreement By And Among Pioneer Natural Resources USA, Inc., Pioneer Southwest Energy Partners USA LLC and the Partnership (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on September 3, 2009).                                                                                                                                                                                                                                |
| 3.1           |   |   | — | Certificate of Limited Partnership of Pioneer Resource Partners L.P. (incorporated by reference to Exhibit 3.1 to the Partnership's Registration Statement on Form S-1 (File No. 333-144868)).                                                                                                                                                                                                                                                                                                                                      |
| 3.2           |   |   | — | Certificate of Amendment to Certificate of Limited Partnership of Pioneer Resource Partners L.P. (incorporated by reference to Exhibit 3.2 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                  |
| 3.3           |   |   | — | First Amended and Restated Agreement of Limited Partnership of Pioneer Southwest Energy Partners L.P. dated May 6, 2008, between Pioneer Natural Resources GP LLC, as the General Partner, and Pioneer Natural Resources USA, Inc., as the Organizational Limited Partner, together with any other persons who become Partners (as defined in such agreement) in the Partnership (incorporated by reference to Exhibit 3.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008). |
| 4.1           |   |   | — | Form of Senior Indenture (incorporated by reference to Exhibit 4.1 to the Partnership's Registration Statement on Form S-3 (Registration No. 333-162566)).                                                                                                                                                                                                                                                                                                                                                                          |
| 4.2           |   |   | — | Form of Subordinated Indenture (incorporated by reference to Exhibit 4.2 to the Partnership's Registration Statement on Form S-3 (Registration No. 333-162566)).                                                                                                                                                                                                                                                                                                                                                                    |
| 10.1          |   | H      | — | Pioneer Southwest Energy Partners L.P. 2008 Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                             |
| 10.2          |   |   | — | Administrative Services Agreement, dated May 6, 2008, among the Partnership, Pioneer Natural Resources GP LLC, Pioneer Southwest Energy Partners USA LLC, and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                               |

----

| 10.3  |   |   | — | Tax Sharing Agreement, dated May 6, 2008, by and between the Partnership and Pioneer Natural Resources Company (incorporated by reference to Exhibit 10.3 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                                                                               |
|-------|--------|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.4  |   |   | — | Omnibus Operating Agreement, dated May 6, 2008, by and between Pioneer Southwest Energy Partners USA LLC and Pioneer Natural Resources USA, Inc. (incorporated by reference to Exhibit 10.4 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 9, 2008).                                                                                                                                                                                                                                             |
| 10.5  |   |   | — | First Amendment dated August 31, 2009 to Omnibus Operating Agreement dated May 6, 2008, between Pioneer Natural Resources USA, Inc. and Pioneer Southwest Energy Partners USA LLC (incorporated by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on September 3, 2009).                                                                                                                                                                                                           |
| 10.6  |   | H      | — | Form of Restricted Unit Award Agreement for Initial Grants to Non-Employee Directors (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 2, 2008).                                                                                                                                                                                                                                                                                                              |
| 10.7  |   | H      | — | Form of Restricted Unit Award Agreement for Annual Grants to Non-Employee Directors (incorporated by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on May 2, 2008).                                                                                                                                                                                                                                                                                                               |
| 10.8  |   |   | — | Indemnification Agreement between the Partnership and Phillip A. Gobe, together with a schedule identifying other substantially identical agreements between the Partnership and each non-employee director of the Partnership's general partner identified on the schedule and identifying the material differences between each of those agreements and the filed Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on August 19, 2009). |
| 10.9  |   |   | — | Credit Agreement entered into as of October 29, 2007, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.1 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                            |
| 10.10 |   |   | — | Amendment to Credit Agreement dated as of December 14, 2007, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.8 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                     |
| 10.11 |   |   | — | Second Amendment to Credit Agreement dated as of February 15, 2008, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.13 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                             |
| 10.12 |   |   | — | Third Amendment to Credit Agreement dated as of April 15, 2008, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and certain other lenders (incorporated by reference to Exhibit 10.15 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                 |
| 10.13 |   |   | — | Limited Waiver Regarding Credit Agreement, entered into as of March 26, 2009, among the Partnership, as the Borrower, Bank of America, N.A., as Administrative Agent, and the other lenders signatory thereto (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on March 31, 2009).                                                                                                                                                                                  |
| 10.14 |   |   | — | Crude Oil Purchase Contract (incorporated by reference to Exhibit 10.9 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                                        |
| 10.15 |   |   | — | Natural Gas Liquids Purchase Contract  (incorporated by reference to Exhibit 10.10 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                  |
| 10.16 |   |   | — | Crude Oil Purchase Contract (incorporated by reference to Exhibit 10.11 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.17 |   |   | — | Crude Oil Purchase Contract (incorporated by reference to Exhibit 10.12 to the Partnership's Registration Statement on Form S-1 (Registration No. 333-144868)).                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.18 |   |   | — | Omnibus Operating Agreement dated August 31, 2009, between Pioneer Natural Resources USA, Inc. and Pioneer Southwest Energy Partners USA LLC (incorporated by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K, File No. 001-34032, filed with the SEC on September 3, 2009).                                                                                                                                                                                                                                                |

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| 10.19  |   |   | — | Amendment to Crude Oil Purchase Contract filed as Exhibit 10.9 to the Partnership's Registration Statement on Form S-1 (incorporated by reference to Exhibit 10.19 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.20  |   |   | — | Amendment to Natural Gas Liquids Purchase Contract filed as Exhibit 10.10 to the Partnership's Registration Statement on Form S-1 (incorporated by reference to Exhibit 10.20 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                  |
| 10.21  |   |   | — | Amendment to Crude Oil Purchase Contract filed as Exhibit 10.11 to the Partnership's Registration Statement on Form S-1(incorporated by reference to Exhibit 10.21 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                             |
| 10.22  |   |   | — | Amendment to Crude Oil Purchase Contract filed as Exhibit 10.12 to the Partnership's Registration Statement on Form S-1 (incorporated by reference to Exhibit 10.22 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032).                                                                                                                                                                                                                                                                                                                                            |
| 10.23  |   |   | — | Crude Oil Contracts with Occidental Energy Marketing, Inc. (incorporated by reference to Exhibit 10.23 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2009, File No. 001-34032)                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.24  |   | (a)    | — | Amendment to Crude Oil Purchase Contract with Occidental Energy Marketing, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.25  |   | H      | — | Form of Phantom Unit Award Agreement between the General Partner and Scott D. Sheffield, with respect to awards of phantom units made under the 2008 Long-Term Incentive Plan, together with a schedule identifying other substantially identical agreements between the General Partner and each of its other recipients of phantom unit awards and identifying the material differences between those agreements and the filed Phantom Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K, File No. 001-34032, filed with the SEC on March 9, 2010). |
| 21.1   |   | (a)    | — | Subsidiaries of the registrant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 23.1   |   | (a)    | — | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 23.2   |   | (a)    | — | Consent of Netherland, Sewell & Associates, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.1   |   | (a)    | — | Chief Executive Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 31.2   |   | (a)    | — | Chief Financial Officer certification under Section 302 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.1   |   | (b)    | — | Chief Executive Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.2   |   | (b)    | — | Chief Financial Officer certification under Section 906 of Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 99.1   |   | (a)    | — | Report of Netherland, Sewell & Associates, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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