DENVER, COLORADO, December 17, 2003—CREDO Petroleum Corporation (NASDAQ: CRED) today reported record production and reserves for its fiscal year ended October 31, 2003. The company also updated its drilling and Calliope Gas Recovery System operations and natural gas hedging activities.

Proved reserves surged 41% to a record 16.1 billion cubic feet of natural gas equivalent (Bcfge) at year-end 2003. Natural gas accounted for 86% of total reserves. The company added 5.8 Bcfge of new reserves, replacing 350% of its 2003 production.

Virtually all reserves are classified in the proved developed category. The company generally does not add proved reserves for offset drilling locations or Calliope candidate wells.

Estimated fiscal 2003 production rose 9% to a record 1.65 Bcfge. Fourth quarter production jumped 48% to 516 million cubic feet of gas equivalent (MMcfge), as new wells came on line.

James T. Huffman, President, stated, "The significant reserve value added in 2003 was created entirely by successful drilling and Calliope operations. Because these two core projects have proven to be repeatable and scaleable, our company is well positioned for another record year in 2004."

The company expects to report fiscal 2003 financial results in early January 2004. Reserve values, finding costs and operating performance information will also be reported at that time.

The company has hedged approximately 80% of its estimated fiscal 2004 production for the months of November through March and approximately 40% of its estimated April through October production. The average NYMEX price for the entire hedge was $5.04 per MMbtu. Futures contracts for the production months of November and December have expired and were closed with an approximate $200,000 hedging gain. Average prices in the company’s market areas are expected to be 15% to 17% below NYMEX prices due to basis differentials and transportation costs.

For 2003, capital spending increased over 220% compared to last year and reached, by far, the highest level in company history.

Drilling Activities. During fiscal 2003, the company drilled 21 wells in its core northern Oklahoma drilling program with an 85% completion success rate. The company’s working interest in those wells ranged up to 60%. Well completion information and production rates have previously been reported for all wells except the Ronnie #1-6 located in Beaver County, Oklahoma. The Ronnie came on line in November 2003, after fiscal year-end. Initial daily production rates were about 1.0 MMcfg and 100 barrels of oil per day. The well is currently producing approximately 0.9 MMcfg per day and 70 barrels of oil. CREDO owns 60% of the well and is the operator.

The company plans to drill five new wells during the first few months of 2004 as rig availability permits.

Calliope Gas Recovery System. During fiscal 2003, the company installed its patented Calliope Gas Recovery System on six dead or uneconomic wells with a 100% success rate. The only unreported Calliope well is the Endicott #1-25 located in Blaine County, Oklahoma. The 8,750-foot well had produced 8.5 Bcfg but was dead at the time the company took over operations. Calliope immediately restored daily production to about 220 thousand cubic feet of gas equivalent (Mcfge). The cost to install Calliope was approximately $350,000, including a new compressor. Estimated proved reserves total 1.0 Bcfge. CREDO owns a 77% working interest and is the operator.

A successful Calliope installation was previously reported on the 18,400-foot Green Estate well located in Beckham County, Oklahoma. This deep well had produced 28.8 Bcfg and, at the time Calliope was installed, had been dead for three years. Testing and well data indicated that significant reservoir damage was caused by a previous workover. Although the company expected Calliope production to be compromised, it proceeded with the installation in anticipation of strong gas prices and the well’s high reserve potential. Calliope immediately restored the Green Estate’s production to about 300 Mcfge per day. Subsequently, production has more than doubled to about 650 Mcfge per day as Calliope has "cleaned-up" reservoir damage caused by the previous workover. Estimated total proved reserves exceed 2.0 Bcfg. CREDO owns a 65% working interest and is the operator.

The company is in various stages of preparing to install new Calliope systems on four additional gas wells located in Oklahoma.

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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.