Credo Petroleum Announces That Marlis E. Smith, Jr. Plans to Step Down as Chief Executive Officer Effective January 31, 2012
November 02 2011 - 7:00AM
Credo Petroleum Corporation (Nasdaq:CRED), an independent oil and
gas company headquartered in Denver, Colorado, with significant
assets in the North Dakota Bakken, Kansas, Nebraska, the Texas
Panhandle and Oklahoma, reported today that its Chief Executive
Officer, Marlis E. Smith, Jr., has advised the Company that he does
not intend to renew his two year employment agreement when it
expires on December 31, 2011, and that he plans to step down
effective January 31, 2012. Mr. Smith will return his full
attention to his personal business interests at SmithCo Properties,
Inc. and Smith Drummond Holdings, both private exploration and
production companies based in Denver, Colorado. Mr. Smith was
elected to Credo's Board of Directors in April 2009, and will
continue to serve as a director of Credo.
Mr. Smith stated, "At the time I became Chief Executive Officer,
I was forthcoming about my significant personal business interests
which consist of about 450 wells, including participation in most
of Credo's drilling projects over the past 10 years. During
the last two years, the activity in my personal businesses has
exploded with the ramp-up in drilling in the Bakken and Granite
Wash plays. Although I am committed to continuing to serve as
a director of Credo, my personal businesses now require my
full-time attention.
"Credo has established excellent drilling momentum, and our
seasoned staff will continue to build on that momentum while we
search for a new CEO," Smith said. "We are conducting the most
aggressive drilling program in the Company's history. Credo's
financial results for the third fiscal quarter ended July 31, 2011
clearly reflect the significance of this oil-focused drilling
ramp-up. For the quarter, oil production increased more than
50% and operating income increased more than 100% compared to the
same quarter last year. I expect that trend to continue.
"For the fiscal year ended October 31, 2011, we estimate that
capital expenditures increased 85% to a record $12,700,000
compared to last year, and the number of gross wells drilled
increased about 41%. As a result, we estimate that Credo's oil
production quantities for fiscal 2011 increased to 50% of total
production on an energy equivalent basis. More importantly,
due to the significant price differential between oil and natural
gas, we expect oil revenues for fiscal 2011 to represent about 75%
of total revenues."
Smith further stated, "For 2012, our Board of Directors has
approved another significant increase in the Company's drilling
budget. Capital expenditures for oil exploration and
development are projected to be approximately $29,000,000 next
year, representing a 127% increase over 2011. We currently
project that the Company will participate in 79 gross wells during
2012, a 65% increase over 2011. Approximately 60% of 2012
capital expenditures are expected to occur in the North Dakota
Bakken where the Company owns interests in more than 50 drilling
spacing units where we expect multiple wells to be drilled on most
of the spacing units. Based on current projections, we
anticipate that 2012 drilling will require the Company to borrow
funds beginning in the second fiscal quarter of 2012 and peaking
around $7,000,000. The Company is setting up a line of credit
with its primary bank to provide the financing."
James T. Huffman, Chairman of the Board, stated, "Marlis has
done an excellent job leading our exploration team, and has been
instrumental in our team's success in repositioning Credo as
primarily an oil producer. We are, of course, pleased that
Marlis' personal businesses are flourishing, and we wish him
continued success. At the same time, we look forward to
continuing to work with Marlis as a Board member."
Huffman further stated, "Looking forward, the Board plans to
initiate a search for a new Chief Executive Officer who will
continue to execute the Board's oil-focused business
strategy. The Board believes that Credo has several viable
go-forward options due to its excellent acreage positions in
multiple plays, track record of drilling success, and strong
financial position. Therefore, the Board will also take this
opportunity to carefully consider and evaluate other strategic
options which may be available to the Company."
About Credo Petroleum
Credo Petroleum Corporation is an independent oil and gas
exploration, development and production company based in Denver,
Colorado. The Company has significant operations in the
Williston Basin of North Dakota, Kansas, Nebraska, the Anadarko
Basin of the Texas Panhandle and northwest Oklahoma, and in
southern Oklahoma. Credo uses advanced technologies to
systematically explore for oil and gas and, through its patented
Calliope Gas Recovery System, to recover additional reserves from
largely depleted gas reservoirs. For more information, please
visit our website at www.credopetroleum.com or contact us at
303-297-2200.
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. Investors are encouraged to
read the "Forward-Looking Statements" and "Risk Factors" sections
included in the Company's Annual Report on Form 10‑ K for
more information. Although the Company may from time to time
voluntarily update its prior forward looking statements, it
disclaims any commitment to do so except as required by securities
laws.
CONTACT: Marlis E. Smith, Jr.
Chief Executive Officer
or
Alford B. Neely
Chief Financial Officer
303-297-2200
Website: www.credopetroleum.com
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