DENVER, COLORADO, December  20, 2004 – CREDO Petroleum Corporation (NASDAQ: CRED) today updated activities on its two core projects -- drilling along the Anadarko Shelf of Oklahoma and application of its Calliope Gas Recovery System.

Anadarko Shelf Drilling Program

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. Since last drilling information was released, several wells have been drilled and one previously announced well is currently being completed for production.

The previously announced Skyler #1-6 is the first well drilled on the company's 1,280-gross-acre Gage Prospect in Ellis County. The 9,175-foot well encountered 92 feet of productive Morrow sand and has commenced pipeline sales. The amount of productive sand has been significantly upgraded based on electrical logs and completion information. Due to the volume of potentially productive sand, the well is being completed in intervals. After fracture stimulation, the lower 52 feet of sand produced at stabilized daily rates ranging from 200 to 350 Mcfg (thousand cubic feet of gas) and 25 barrels of water. The second sand interval, totaling 35 feet, is currently producing approximately 900 Mcfg and seven barrels of water per day after acid breakdown. Fracture stimulation is being considered. Testing of the third, five-foot interval may be deferred due to good results from the first two intervals. CREDO owns a 50% working interest and is the operator. The company currently expects to drill three offset locations on the prospect.

Approximately 25 miles to the north, the company drilled the second well on its 3,840-gross-acre Glacier Prospect located in Harper County. This wildcat well targeted the Morrow and Chester formations at 7,500 feet and production casing has been set. The well is currently classified as a "tight hole," meaning that further information is not being released for competitive business reasons. CREDO is the operator and owns a 70% working interest. The first well encountered only two feet of porous Morrow channel sand and was plugged due to the likelihood of marginal production.

Approximately seven miles to the west, the company drilled the Ruth #1-4 well on its 17,000-gross-acre Sand Creek Prospect located in Harper and Ellis Counties, Oklahoma. The 7,500-foot well encountered six feet of relatively tight Morrow sand. It is currently testing gas and water and requires further evaluation for possible commercial production. Approximately two miles to the east, the company drilled the 7,740-foot Hickman #1-2 well to test the southeast side of the prospect. The well encountered tight Morrow sand and was plugged. CREDO owns 52% of both wells and is the operator.

Calliope Gas Recovery System

James T. Huffman, President, stated, "As previously reported, the company has retained highly qualified personnel to execute its strategies to install Calliope on more wells. Those strategies include joint venturing with larger companies that operate a significant number of wells which are potential Calliope candidates. Initial Calliope joint venture presentations have been made to a limited number of companies, all of which have expressed a keen interest in the technology."

The company's non-prototype Calliope wells have average reserves of 1.1 Bcfg and average initial daily production rates of 270 Mcfg, ranking them in the top 15% of all U.S. onshore producing wells. The company has proven that Calliope will effectively lift liquids in many varied applications, including wells with packers and depths to 18,400 feet.

During 2004, the company has built on Calliope's flexibility by continuing to expand Calliope's operating envelope and buttress its track record. One expansion project involves installing Calliope on wells where very small i.d. (inside diameter), 2.375-inch tubing is set with a packer. The initial prototype for this project appears to be a significant success. Although the small tubular compartments cause significant friction against gas flow, Calliope immediately restored production to over 210 Mcfg per day in the 10,000-foot Stover well, located in central Oklahoma. The well had produced 16.0 Bcfg (billion cubic feet of gas) and 24,000 barrel of oil and was non-commercial. The installation cost was approximately $310,000, and Calliope is expected to add about 1.0 Bcfg of gross recoverable reserves. CREDO is the operator and owns a 75% working interest.

A second 2.375-inch Calliope prototype application is being installed in the 10,000-foot Brown well, also located in central Oklahoma. This well had produced 11.3 Bcfg and 186,000 barrels of oil and was dead at the time Calliope was installed. The Calliope installation is complete except for delivery of the compressor which is delayed until early January. Calliope is expected to add about .5 Bcfg of gross recoverable reserves. CREDO owns a 68% working interest and is the operator.

James T. Huffman, President, said, "Based on our engineering projections and the outcome on the Stover well, we believe Calliope will work effectively on many wells where 2.375-inch tubing is set with a packer. We are particularly optimistic about wells where relatively minor amounts of fluid must be removed from the wellbore."

Another expansion project involves using Calliope to help overcome reservoir damage which is often caused by the "parting shots" of previous operators. This two-stage process first treats the well in an attempt to re-establish good communication between the reservoir and the wellbore. In the second stage, Calliope removes the treatment fluids from the wellbore to allow gas to flow. Without Calliope, many reservoir treatments are not viable for low-pressure reservoirs because there is no practical way to remove the treatment fluids.

Three wells with very significant reservoir damage are included in this project. To date, project results have been inconclusive due to the extent of the reservoir damage. Daily production on the Vierson well has been restored to 70 Mcfg, but reservoir damage persists in restricting gas flow. Workover of the Patterson well, including chemical treatment and fracture stimulation, was not successful in improving reservoir permeability to the wellbore. Workover of the third well is currently in progress. CREDO owns approximately 80% of the wells and is the operator.

The company has also recently installed a Calliope system on its 7,800-foot Jacobs well located in western Oklahoma. The well had produced 3.4 Bcfg but had been dead for four years at the time the company took over operations. Hook-up of a gas supply required for the Calliope start-up phase has been delayed until late this month. CREDO is the operator and owns a 70% working interest.

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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.