CREDO Updates Calliope Fluid Lift Technology Results.

Business Editors

DENVER--(BUSINESS WIRE)--May 15, 2001

CREDO Petroleum Corporation (Nasdaq: CRED) today announced major advances in application of its patented fluid lift technology known as Calliope Production Systems(TM).

For the first time, the company successfully installed Calliope systems inside standard 2-7/8-inch tubing. Installations were completed on two wells at depths of 12,600 and 12,800 feet. Both wells had ceased producing and were scheduled to be plugged and abandoned. Calliope immediately restored both wells to commercial production rates between 185 to 200 Mcfgd (thousand cubic feet of gas per day) per well.

The company estimates gross additional reserves recoverable from the two wells using Calliope technology to be 1.2 to 2.0 Bcfg (billion cubic feet of gas). CREDO owns a 75% working interest (60% net revenue interest) in both wells, and its share of the estimated Calliope reserves is 720 million to 1.2 billion cubic feet of gas having a gross value (at $4.00 per Mcf) of $2,900,000 to $4,800,000. The company's share of costs to install Calliope on the two wells was approximately $380,000, yielding a finding cost of $0.32 to $0.54 per Mcfg.

James T. Huffman, President, stated: "This is the most significant advance to date in the application of our Calliope technology. Installing Calliope inside standard tubing significantly reduces workover risks on wellbores with packers, drives down the installation costs, and eliminates the need to rely on old casing which is often prone to corrosion leaks." Huffman also said: "Since packers are used in most deep wells, installing Calliope inside standard tubing opens a much larger population of wells as viable Calliope candidates. Wells with 2-7/8-inch tubing and packers now pose no impediment to Calliope."

Calliope's mission is to enhance the recovery of gas reserves from existing low pressure reservoirs using a repeatable, cost-effective, and low-risk process. Calliope is proven to work in a wide range of depths (down to 18,600 feet) and applications, including the most rigorous scenario of completely dead wells. CREDO controls the Calliope technology through an unrestricted, exclusive license with an initial term of 10 years together with an option to extend the license term to the remaining life of the patent(s).

Excluding prototype applications, Calliope is currently installed on five company-owned wells. Four were dead at the time Calliope was installed and one was producing an uneconomic amount of gas. Combined production from those wells is now approximately 1,100 Mcfgd, and their remaining economic lives range from seven to 20 years. Calliope wells contributed 22% of CREDO's gas production for its first fiscal quarter ended January 31, 2001.

"We are very pleased with recent advances in applying Calliope to a wider range of wells while driving down costs and reducing risks," Huffman said. "Calliope is a repeatable, low-risk and cost-effective means to significantly increase CREDO's reserves and cash flow."

CREDO Petroleum Corporation is a publicly traded independent energy company headquartered in Denver, Colorado. The company is engaged in the exploration for and the acquisition, development and marketing of natural gas and crude oil in the Mid-Continent and Rocky Mountain regions. The company's stock is traded on the NASDAQ System under the symbol "CRED" and is quoted daily in the "NASDAQ Small-Cap Issues" section of The Wall Street Journal.

This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements included in this press release, other than statements of historical facts, address matters that the company reasonably expects, believes or anticipates will or may occur in the future. Such statements are subject to various assumptions, risks and uncertainties, many of which are beyond the control of the company. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those described in the forward-looking statements.