CREDO ASSURES EXCELLENT PRICES ON A PORTION OF ITS WINTER AND SPRING PRODUCTION

DENVER--October 7, 2004--CREDO Petroleum Corporation (NASDAQ:  CRED)  today updated information related to prices to be received for its future natural gas production.

James T. Huffman, stated: "Despite the current bullishness about natural gas prices, fundamental data such as storage statistics strongly indicate that there is ample gas available and that storage levels are likely to end the injection season at record levels. As a result, prior to Hurricane Ivan, natural gas prices were declining rapidly. Based on this fundamental data and absent anomalous events, prices appear to be vulnerable to downside pressure. We, therefore, believe it is prudent to assure excellent prices for a portion of our production."

In late September, the company hedged approximately 45% of its estimated November and December gas-equivalent production. These hedges cover 140 MMcfge (million cubic feet of gas-equivalent) and were implemented by forward selling November and December production at $5.60 and $6.39, respectively.

For the first and second calendar quarters of 2005, the company has used "collars" to bracket the minimum and maximum prices it will receive on approximately 38% of its estimated equivalent gas production. For the first calendar quarter, the company bracketed 180 MMcfge at a floor price of $6.13 per Mcf and a ceiling price of $7.85. For the second calendar quarter, 180 MMcfge was bracketed at a $5.50 floor and a $6.75 ceiling.

As of September 24, 2004, natural gas storage inventories stood at 3.011 Tcf (trillion cubic feet). According to Citigroup's energy research, inventories have only been higher once in the last ten years. Injections need only average 38 Bcf (billion cubic feet) a week to reach a record level of 3.2 Tcf by the end of October. Citigroup believes that 3.2 Tcf is easily obtainable and that 3.25 to 3.30 Tcf is not out of the question. For perspective, despite production curtailments due to Hurricane Ivan, 69 Bcf was injected for the week ending September 24, and Citigroup predicts another 65 to 75 Bcf will be injected for the week ending October 1.

Huffman further stated: "Natural gas prices are the single most important driver of our financial performance. A unit of price has approximately 30% more impact on our bottom line than a unit of production. Accordingly, the company has a long-standing and well publicized policy of actively managing this most critical element of our business."

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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.