CREDO Updates Drilling and Calliope Gas Recovery System Activities.

DENVER -- CREDO Petroleum Corporation (NASDAQ:CRED) today updated its drilling and Calliope Gas Recovery System activities.

DRILLING RESULTS

The company drills primarily for natural gas on its 40,000-gross-acre inventory located along the northern shelf of the Anadarko Basin of Oklahoma. To date, the company has drilled approximately 50 wells on its Harper and Ellis County acreage, of which 62% have been completed as producers. A substantial number of additional wells are anticipated for the area, including five wells scheduled for this summer. In addition, the company has recently expanded into South Texas through an exploration program using 3-D seismic to define Vicksburg and Frio prospects in Hidalgo, Jim Hogg and Starr Counties.

The previously announced 9,200-foot Skyler well is located on the company's 1,280-gross-acre Gage Prospect in Ellis County, Oklahoma. Two of three Morrow sand intervals have been tested. Production from the second, 35-foot interval continues to exceed expectations with daily rates of approximately 2.3 MMcf (million cubic feet of gas), 14 barrels of oil, and seven barrels of water. Because the second sand interval was not placed on production until mid-January, the well did not make a significant production contribution to the first fiscal quarter ended January 31, 2005. The third sand interval had the best gas show during drilling and will be tested at a later date. CREDO owns a 51% working interest and is the operator.

The Skyler well has already produced approximately 200 MMcfe (million cubic feet of gas equivalent) and appears to be an excellent well. Three offset wells have been scheduled on the Gage Prospect, including the Connor #1-6, which is currently drilling below 2,000 feet.

Approximately 25 miles to the north, a second exploratory well, Glacier #1-34, was drilled on the company's 4,500-gross-acre Glacier Prospect located in Harper County. The company previously reported that the well had virgin pressure, tested high rates of gas from 11 feet of productive Morrow sands, and was shut-in awaiting pipeline construction.

In mid-February, production commenced at approximate daily rates of 3.7 MMcf and seven barrels of oil. Subsequently, production and pressures have declined sharply, with current daily production at approximately 400 Mcfg (thousand cubic feet of gas). The well's performance indicates either a down-hole mechanical problem or sands that are boundary restricted at this location. Testing will be performed to assess the cause of the rapid decline.

James T. Huffman, President, said, "CREDO has drilled 50 wells in Harper and Ellis Counties, and the Glacier #1-34 contains the best sand quality we have encountered, as is confirmed by the well's high initial production rates. We are obviously disappointed about the rapid decline in production."

Huffman further stated, "This is only the beginning of exploration on the 4,500-gross-acre wildcat prospect. We have found a Morrow channel system that contains superb sand quality and virgin pressure. We are uncertain as to why the sands may be boundary restricted at the Glacier #1-34 location. However, we believe from our experience that similar high-quality sands will extend over a much larger area within this channel system. Accordingly, two offset wells are scheduled to be drilled this summer to further define the prospect's potential."

In South Texas, the company recently finalized an agreement to use 3-D seismic to define Vicksburg and Frio drilling prospects in Hidalgo, Jim Hogg and Starr Counties. The company has committed $1,500,000 over two years primarily to purchase, interpret and reprocess seismic and acquire leasehold interests on drillable prospects. CREDO will own 75% of the venture before payout and 37.5% after payout. In addition to the cost of seismic and leases, the company expects to participate in drilling the prospects that are identified with all, or a portion, of its ownership interest.

Huffman further stated, "Our expansion into South Texas combines our financial resources and operating expertise with an exploration team that has many years of experience and a proven record of success in the area. This new project will complement our Northern Anadarko Shelf exploration program with the objective of sustaining our rapid production and reserve growth."

CALLIOPE GAS RECOVERY SYSTEM

CREDO's Calliope business is currently focused on increasing the number of Calliope installations by joint venturing with larger companies. It was previously reported that the company has hired two highly qualified professionals to spearhead the project. Both had very successful careers in operations and high-level management with major companies.

Huffman said, "Management's top priority is to expand our Calliope business through joint ventures with much larger companies. To that end, initial presentations have been made to several very large companies which have expressed a keen interest in the technology. We are engaged in ongoing discussions with those companies, and presentations are scheduled to be made to other companies."

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.