Five Bakken and Three Forks Wells Placed on Production in Fiscal First Half

Nine Wells Currently Drilling or Being Completed

Nine Additional Wells Planned for the Remainder of Fiscal 2012


Credo Petroleum Corporation (Nasdaq:CRED), an oil and gas exploration and production company with significant assets in the North Dakota Bakken and Three Forks, Kansas, Nebraska, the Texas Panhandle and Oklahoma, today updated its Bakken and Three Forks operations.

Michael D. Davis, interim Chief Executive Officer stated, "This press release updates our Bakken and Three Forks drilling project where we have the potential to drill up to 400 wells in the primary Bakken and Three Forks zones. In addition, some operators are having success testing the "lower" Three Forks benches, which adds additional upside to our position in the play. We currently estimate that the Bakken and Three Forks represent about 50% of Credo's resource potential based on only four wells per spacing unit."

Credo has participated in 25 Bakken and Three Forks wells to date. As shown in the tables below, 16 of the wells have been completed and all are high rate producers. Five of the producers were placed on production during the first half of fiscal 2012. Nine wells are currently in various stages of drilling or completion. Another nine wells are on the drilling schedule for the remainder of fiscal 2012, bringing the Company's expected Bakken and Three Forks well count to 34 by fiscal year end.

Producing—16 Wells (Average 6.4% Working Interest)
         
Well Name Operator Formation WI IP BOEPD
PetroHunt 147-94-3A-10-1H PetroHunt Bakken 18.75% 769
GoodBear 21-14H Marathon  Bakken 14.61% 1,280
GoodBear 31-14H Marathon  Bakken 14.61% 1,357
PetroHunt 148-94-17D 1-H PetroHunt  Bakken 10.00% 1,486
PetroHunt 148-94-17D 2H PetroHunt  Three Forks 10.00% 1,697
Sorenson B-155-94-35-26-H1 Hess Bakken 6.25% Not Released
Sorenson B-155-94-35-26-H2 Hess Bakken 6.25% Not Released
Weisz 11-14-1H Brigham Bakken 6.05% 2,278
MHA 1-32-31H-150-90 QEP Bakken 3.57% 1,520
State of ND 10-3H WPX Bakken 3.13% 2,141
FBIR Beaks 24X-08 XTO Bakken 3.13% 1,168
Debbie Baklenko 12-26H Marathon  Bakken 1.56% 1,352
Mary R. Smith 5-8H WPX Bakken 1.56% 821
Ethan Hall 6B-31-30-1H Enerplus Bakken 1.48% 3,732
Spotted Rabbit 14-23H WPX Bakken 1.17% 1,524
PetroHunt 151-94-26B-35-1H PetroHunt Bakken 0.63% 2,937
         
         
Drilling or Completing—9 Wells (Average 11.3% Working Interest)
         
Well Name Operator Formation WI IP BOEPD
Fort Berthold 148-95-23D-14-1H PetroHunt Three Forks 20.05% Completing
Fort Berthold 148-94-30A-31-1H PetroHunt Three Forks 19.37% Completing
Fort Berthold 148-94-30A-31-2H PetroHunt Three Forks 19.37% Completing
Fort Berthold 153-93-18B-19-1H PetroHunt Three Forks 12.99% Completing
Fort Berthold 148-95-22D-15-1H PetroHunt Bakken 12.24% Drilling
Fettig 6-7 HC WPX Bakken 6.73% Drilling
Fort Berthold 148-95-26A-35-1H PetroHunt Bakken 6.01% Drilling
FBIR Black Medicine 24X-21 XTO Bakken 3.13% Drilling
Goodbird 36-25 HC WPX Bakken 1.56% Completing
         
         
Scheduled For Remainder of Fiscal Year—9 Wells (Average 11.5% Working Interest)
         
Well Name Operator Formation WI Expected Spud Date
Fort Berthold 148-94-29B-32-1H PetroHunt Bakken 18.75% 6/15/2012
Fort Berthold 148-94-29B-32-2H PetroHunt Three Forks 18.75% 8/15/2012
Fort Berthold 152-93-18B-19-2H PetroHunt Bakken 12.99% 7/15/2012
Fort Berthold 152-93-18B-19-3H PetroHunt Three Forks 12.99% 9/15/2012
Fort Berthold 148-95-24C-13-1H PetroHunt Three Forks 12.50% 5/15/2012
QEP 150-92-26-27 QEP Bakken 11.25% 8/15/2012
Fettig 6-7 HB WPX Bakken 6.73% 5/15/2012
Linseth 149-95-12-13-1H WPX Three Forks 5.30% 6/15/2012
WPX 148-92-30-31 WPX Bakken 4.08% 9/15/2012

Credo's leases are located in the core of the play on the Fort Berthold Reservation and consist of approximately 73,000 gross (6,300 net) acres based on the Company's ownership in 57 spacing units averaging 1,280 acres. The Company's average working interest in the spacing units is approximately 9%. Drilling activity in the area of the Company's Bakken and Three Forks acreage has significantly increased as operators crack the technical code for drilling and completion success. As a result, the Company increased its fiscal 2012 Bakken and Three Forks drilling budget by almost 400% to $22.4 million compared to $5.7 million last year.

The following table illustrates Credo's estimated Bakken and Three Forks resource potential depending on the number of wells that are drilled in each spacing unit.

Credo Bakken and Three Forks Resource Potential(1)
         
Number of Prime Spacing Units 50 50 50 50
Number of Wells per Spacing Unit(2) 2 4 6 8
Number of Drilling Locations 100 200 300 400
         
Estimated EUR per Well (BOE) 600,000 600,000 600,000 600,000
Credo's Average Working Interest 9% 9% 9% 9%
Company Net EUR per Well (BOE) 54,000 54,000 54,000 54,000
Credo Resource Potential (BOE) 5,400,000 10,800,000 16,200,000 21,600,000
         
(1) Data is for illustrative purposes only and is based on management assumptions. EUR refers to management's internal estimates of reserves potentially recoverable from successful drilling of wells.
 
(2) Assumes equal number of Bakken and Three Forks wells. For example, the first column assumes one Bakken and one Three Forks well.

MANAGEMENT COMMENT

"Oil is currently worth about eight times more than natural gas on an energy equivalent basis," Davis continued. "That unprecedented price differential validates our timely and successful transition to becoming primarily an oil producer. At our January 2012 first quarter-end, oil represented 61% of Credo's production quantities and 85% of its oil and gas sales. We expect oil to increase to around 75% of our total production quantities in the fourth quarter of this year, as we aggressively drill on our North Dakota, Kansas, Nebraska and Texas Panhandle projects.

"The Bakken is the premier oil resource play in North America, and will provide an excellent growth platform for many years. To put our Bakken opportunity into perspective, the 25 wells we have drilled to date have only scratched the surface of our development potential which may range up to 400 wells. Resource potential up to 21.6 million barrels adds another growth perspective considering that our total Bakken and Three Forks reserves at year-end 2011 were only 1.3 million barrels, and Credo's total reserves at year-end 2011 were 4.1 million barrels.

"Our drilling projects in Kansas, Nebraska and the Texas Panhandle are also very exciting in terms of resource potential, diversification, economics, and contribution to growing our Company. In Kansas and Nebraska we have several potentially significant new field discoveries, and in the Texas Panhandle, we are drilling our first horizontal well to test the Cleveland formation. We will update those operating areas in future press releases."

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: Michael D. Davis
         Chief Operating Officer
         and CEO (Interim)
         or
         Alford B. Neely
         Chief Financial Officer
         303-297-2200
         Website: www.credopetroleum.com
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