CREDO REPORTS RECORD FIRST QUARTER EARNINGS
Natural Gas Production Increases 8% as Gas Price Surges

DENVER, COLORADO, March 13, 2003 – CREDO Petroleum Corporation (NASDAQ: CRED) today reported record financial and operating results for its first fiscal quarter ended January 31, 2003. Net income surged 226% to a record $685,000 on revenue of $1,791,000 compared to $210,000 on revenue of $1,181,000 last year. On a per diluted share basis, net income was $.21 compared to $.06 last year. Cash flow from operating activities (before working capital changes) increased 51% to $1,015,000 compared to $672,000 last year.

Fiscal 2003 net income includes $.02 per share related to a one-time credit for the cumulative effect of adopting Financial Accounting Standards Board Statement No. 143, Accounting for Asset Retirement Obligations.

James T. Huffman, President, said, "Successful drilling boosted gas production 8% in the first quarter following a 77% increase in the same period last year. Drilling last year significantly raised the bar for building on our production momentum, and we are pleased to report another gain this year. We are making every reasonable effort to maintain our record production levels during this very positive environment for natural gas prices."

Production from new wells drilled boosted overall first quarter production 6% to a record high 368 MMcfge (million cubic feet of gas-equivalent). This compares to 348 MMcfge last year. Natural gas production rose 8% to a record 313 MMcfg compared to 291 MMcfg last year while crude oil sales fell 4% to 9,200 barrels.

Net wellhead natural gas prices surged 66% to $3.95 per Mcf compared to $2.38 last year. Hedging transactions added $.36 per Mcf to first quarter gas price realizations compared to $.64 last year. As a result, total natural gas price realizations were $4.31 per Mcf compared to $3.02 last year. Wellhead oil prices rose 51% to $26.25 per barrel compared to $17.33 last year.

At January 31, 2003, the company’s open hedge positions totaled 110 MMcfg covering the month of March 2003 at an average price of $4.07. The hedge represents approximately 8% of the company’s estimated gas production for fiscal 2003.

"The outlook for natural gas prices is the best I have ever seen, Huffman said. "In the face of declining supplies, increased demand has drawn down gas storage levels to near-record lows. This imbalance in supply and demand will support gas prices through the remainder of the year as our industry attempts to rebuild adequate supplies in gas storage for next winter. Longer-term, very capital intensive projects to develop new gas supplies must be supported by a higher threshold of gas prices."

Capital spending in the first quarter totaled a record $1,298,000 as successful operations continued on the company's two core projects—natural gas drilling along the Anadarko Shelf of Oklahoma and application of the company’s patented Calliope gas recovery technology. A separate press release has been made today regarding new developments on both projects.

At January 31, 2003, working capital was $6,210,000. Total assets were $20,330,000 including cash and short-term investments of $7,038,000. Stockholders’ equity was $14,841,000. The company’s only debt is a $456,000 exclusive license obligation that is payable over eight years.

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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.

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