TAX SHARING AGREEMENT

EXHIBIT 10.3

EXECUTION VERSION

PIONEER NATURAL RESOURCES COMPANY

AND

PIONEER SOUTHWEST ENERGY PARTNERS L.P.

May 6, 2008

TAX SHARING AGREEMENT
BY AND AMONG
PIONEER NATURAL RESOURCES COMPANY AND
PIONEER SOUTHWEST ENERGY PARTNERS L.P.

     Tax Sharing Agreement (the “Agreement”), dated this 6 ^th day of May, 2008, by and among PIONEER NATURAL RESOURCES COMPANY (“Pioneer”), a Delaware corporation, and PIONEER SOUTHWEST ENERGY PARTNERS L.P. (the “Partnership”), a Delaware limited partnership.

RECITALS

     WHEREAS, Pioneer is the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Code (as defined below), which currently files a consolidated federal income tax return;

     WHEREAS, the Partnership Group (as defined below) includes various entities that may be required to join with Pioneer in the filing of a consolidated, combined or unitary state tax return;

     WHEREAS, the Parties wish to set forth the general principles under which they will allocate and share various Taxes (as defined below) and related liabilities;

     WHEREAS, Pioneer, on behalf of itself and its present and future subsidiaries other than the Partnership Group (“Pioneer Group”), and the Partnership, on behalf of itself and its present and future subsidiaries (the “Partnership Group”), are entering into this Agreement to provide for the allocation among the Pioneer Group and the Partnership Group of all responsibilities, liabilities and benefits relating to any Tax for which a Combined Return (as defined herein) is filed for a taxable period including or beginning on or after the Effective Date (as defined herein) and to provide for certain other matters;

     NOW, THEREFORE, in consideration of the mutual agreements, provisions, and covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.01 Definitions . The following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):

     “ Accounting Referee ” is defined in Section 6.11 herein.

     “ Code ” means the Internal Revenue Code of 1986, as amended, or any successor thereto, as in effect for the taxable period in question.

     “ Combined Group ” means a group of corporations or other entities that files a Combined Return.

     “ Combined Return ” means any Tax Return (other than a Tax Return for Federal income taxes) filed on a consolidated, combined (including nexus combination, worldwide combination, domestic combination, line of business combination or any other form of combination), or unitary basis that includes activities of any member of the Pioneer Group and any member of the Partnership Group.

     “ Effective Date ” means 7:00 a.m. on May 1, 2008.

     “ Final Determination ” means the final resolution of any Tax (or other matter) for a taxable period, including related interest or penalties, that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise, including (i) by the expiration of a statute of limitations or a period for the filing of claims for refunds, amending Tax Returns, appealing from adverse determinations, or recovering any refund (including by offset), (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable, (iii) by a closing agreement, an accepted offer in compromise, or a comparable agreement under laws of the particular Tax Authority, (iv) by execution of a form under the laws of a Tax Authority that is comparable to an Internal Revenue Service Form 870 or 870-AD (excluding, however, with respect to a particular Tax Item for a particular taxable period any such form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the Tax Authority to assert a further deficiency with respect to such Tax Item for such period), or (v) by any allowance of a refund or credit, but only after the expiration of all periods during which such refund may be adjusted.

     “ Notice ” is defined in Section 6.01 herein.

     “ Partnership Group ” is defined in the Recitals to this Agreement.

     “ Partnership Group Combined Tax Liability ” means, with respect to any Tax, the Partnership Group’s liability for such Tax owed with respect to a Combined Return for a taxable period, as determined under Section 3.02 of this Agreement.

     “ Partnership Group Deposit ” is defined in Section 3.04 herein.

     “ Partnership Group Members ” means those entities included in the Partnership Group.

     “ Partnership Group Pro Forma Combined Return ” means a pro forma Combined Return or other schedule prepared pursuant to Section 3.02 of this Agreement.

     “ Party ” means each of Pioneer and the Partnership, and solely for purposes of this definition, “Pioneer” includes the Pioneer Group and the “Partnership” includes the Partnership Group. Each of Pioneer and the Partnership shall cause the Pioneer Group and the Partnership Group, respectively, to comply with this Agreement.

     “ Pioneer Group ” is defined in the Recitals to this Agreement.

     “ Tax ” means any of the Taxes.

     “ Tax Attribute ” means a Tax Item of a member of the Partnership Group reflected on a Combined Return that is comparable to one or more of the following attributes with respect to a Federal income tax consolidated tax return: a net operating loss, a net capital loss, an unused investment credit, an unused foreign tax credit, an excess charitable contribution, a U.S. federal minimum tax credit or a U.S. federal general business credit (but not tax basis or earnings and profits).

     “ Tax Authority ” means a domestic governmental authority (other than the United States) or any subdivision, agency, commission or authority thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (excluding the U.S. Internal Revenue Service).

     “ Tax Controversy ” means any audit, examination, dispute, suit, action, litigation or other judicial or administrative proceeding initiated by Pioneer or the Partnership or any Tax Authority.

     “ Tax Item ” means any item of income, gain, loss, deduction or credit, or other item reflected on a Tax Return or any Tax Attribute.

     “ Tax Return ” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, amended Tax Return, claim for refund or declaration of estimated tax) required to be supplied to, or filed with, a Tax Authority in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

     “ Taxes ” means all forms of taxation, whenever created or imposed, and whether imposed by a domestic, local, municipal, governmental, state, federation or other body, but excluding taxes imposed by the United States, and without limiting the generality of the foregoing, shall include net income, alternative or add-on minimum, gross income, sales, use, ad valorem, gross receipts, value added, franchise, profits, license, transfer, recording, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profit, custom duty, or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any related interest, penalties, or other additions to tax, or additional amounts imposed by any such Tax Authority.

     Any term used but not capitalized herein that is defined in the Code or in the Treasury Regulations thereunder shall, to the extent required by the context of the provision at issue, have the meaning assigned to it in the Code or such regulation.

ARTICLE II

PREPARATION AND FILING OF TAX RETURNS

     Section 2.01 Manner of Filing .

     (a) For periods that include the Effective Date and periods after the Effective Date, Pioneer shall have the sole and exclusive responsibility for the preparation and filing of, and shall prepare and file, all Combined Returns or cause to be prepared and filed all Combined Returns. Pioneer shall be authorized to take any and all action necessary or incidental to the preparation and filing of a Combined Return, including, without limitation, (i) making elections and adopting accounting methods, (ii) filing all extensions of time, including extensions of time for payment of tax, (iii) filing claims for refund or credit, or (iv) giving waivers or bonds.

     (b) For periods that include the Effective Date and periods after the Effective Date, the Partnership Group shall have the sole and exclusive responsibility for the preparation and filing of, and shall prepare and file or cause to be prepared and filed, all Tax Returns of the Partnership Group Members that are not Combined Returns.

     (c) Pioneer shall have sole discretion to include, or cause to be included, in a Combined Return for any Tax any member of the Partnership Group for which inclusion in such Combined Return is elective; provided, however, that the Partnership Group Combined Tax Liability for any period shall not exceed the aggregate of (x) each such elective Partnership Group Member’s liability for such Tax for such period, computed as if such Partnership Group Member were not included in such Combined Return and (y) the Partnership Group Combined Tax Liability calculated for the Partnership Group Members for which inclusion is not elective. Pioneer shall provide pro forma Tax Returns pursuant to Section 3.05 of this Agreement to support the calculation of the amount of any decrease in the Partnership Group Combined Tax Liability pursuant to this Section 2.01(c).

     Section 2.02 Franchise Tax Taxable Period . References to “taxable period” for any franchise or other doing business Tax shall mean the taxable period during which the income, operations, assets or capital comprising the base of such Tax is measured, regardless of whether the right to do business for another taxable period is obtained by the payment of such franchise Tax.

ARTICLE III

ALLOCATION OF TAXES

     Section 3.01 Liability of the Partnership Group for Combined Taxes . For each Tax for each taxable period that includes or begins on or after the Effective Date and for which a Combined Return is filed, the Partnership Group Members included in such Combined Return shall be liable to Pioneer for an amount equal to the Partnership Group Combined Tax Liability in respect of such Tax.

     Section 3.02 Partnership Group Combined Tax Liability . With respect to each Tax for each taxable period that includes or begins on or after the Effective Date and for which a

member of the Partnership Group is included in a Combined Return, the Partnership Group Combined Tax Liability for such Tax for such taxable period shall be the Tax for such taxable period as determined on a Partnership Group Pro Forma Combined Return prepared:

     (a) by including only the Tax Items of the members of the Partnership Group that are included in the Combined Return and computing the liability of the Partnership Group Members for such Tax as if such Partnership Group Members were included in a separate consolidated or unitary group;

     (b) except as provided in Section 3.02(e) hereof, using all elections, accounting methods and conventions used on the Combined Return for such period;

     (c) applying the Tax rate in effect for the Combined Return of the Combined Group for such taxable period;

     (d) assuming that the Partnership Group elects not to carry back any net operating losses; and

     (e) assuming that the Partnership Group’s utilization of any Tax Attribute carryforward or carryback is limited to the Tax Attributes of the Partnership Group that would be available if the Partnership Group Combined Tax Liability for each taxable period ending after January 1, 2008 were determined in accordance with this Section 3.02.

     Section 3.03 Preparation and Delivery of Pro Forma Tax Returns . Not later than 90 days following the date on which a Combined Return is filed with the appropriate Tax Authority, Pioneer shall prepare and deliver to the Partnership the related Partnership Group Pro Forma Combined Return calculating the Partnership Group Combined Tax Liability attributable to the period covered by such filed Combined Return.

     Section 3.04 Payment of Tax . Pioneer shall timely pay (or shall cause to be timely paid) any Tax reflected on a Combined Return and hold harmless the Partnership for all liability for such Tax. In the event Pioneer is required to make an estimated payment or deposit of any Tax of any Combined Group which includes any member of the Partnership Group, Pioneer shall calculate the portion, if any, of such estimated payment or deposit attributable to the Partnership Group using a methodology similar to that described in Section 3.02 (the “Partnership Group Deposit”) and shall present such calculation to the Partnership. Within 5 days thereafter, the Partnership shall pay the Partnership Group Deposit to Pioneer. Within 30 days after delivery by Pioneer of a Partnership Group Pro Forma Combined Return to the Partnership calculating the Partnership Group Combined Tax Liability with respect to a Combined Return, the Partnership shall pay to Pioneer such Partnership Group Combined Tax Liability less the amount of any Partnership Group Deposit relating to the same Combined Return.

     Section 3.05 Subsequent Changes in Treatment of Tax Items . With respect to any Combined Return for any taxable period beginning on or after the Effective Date, in the event of a change in the treatment of any Tax Item of any member of a Combined Group as a result of a Final Determination, within 30 days following such Final Determination (i) Pioneer shall calculate the change, if any, to the Partnership Gro