DENVER, COLORADO, March 14, 2002 – CREDO Petroleum Corporation (NASDAQ: CRED) today reported that natural gas production volumes surged 77% in the first quarter of fiscal 2002 to a record high for the company. However, lower product prices more than offset the production increase, driving down earnings.

For the first quarter ended January 31, 2002, net income was $210,000 on revenue of $1,181,000 compared to $602,000 on revenue of $1,577,000 last year. On a per diluted share basis, net income was $.06 compared to $.19 last year. Cash flow from operating activities (before working capital changes) remained strong at $672,000 for the first quarter 2002 compared to $891,000 last year.

James T. Huffman, said, "Successful drilling significantly increased our first quarter production, and we expect further production gains as additional wells are drilled during the year. We are also optimistic about natural gas prices because of improving supply and demand fundamentals." "First quarter results were hurt by the combination of much lower product prices, lower investment returns, and the high cost of a major well workover. However, our optimism about both natural gas prices and our ability to further increase production volumes causes us to be encouraged about the remainder of the year," Huffman said.

Production from new wells drilled boosted first quarter production 48% to a record high 348 MMcfge (million cubic feet of gas-equivalent). This compares to 236 MMcfge last year. Natural gas production surged 77% to a record 291 MMcfg compared to 165 MMcfg last year while crude oil sales fell 19% to 9,600 barrels compared to 11,900 barrels last year.

Net wellhead natural gas prices fell 62% to $2.38 per Mcf compared to $6.20 last year. However, hedging transactions added $.64 per Mcf to first quarter gas price realizations. As a result, total natural gas price realizations were $3.02 per Mcf compared to $6.20 last year. There were no hedging transactions last year. Wellhead oil prices fell 42% to $17.33 per barrel compared to $29.82 last year.

At January 31, 2002, the company’s open hedge positions totaled 310 MMcfg covering the months of March through July 2002 at an average price of $3.20. Subsequent to first quarter end, 70 MMcfg was added to the hedge at a price of $3.04 per Mcf. The hedge represents approximately 78% of the company’s estimated gas production for those months.

The company’s growth strategy focuses on two core projects – drilling along the Anadarko Shelf of Oklahoma and application of its patented Calliope gas recovery technology.

The 77% increase in natural gas production resulted from new wells drilled during fiscal 2001. The most important of those wells was the 7,600-foot Glendena #1-5 which tested the Morrow formation on the company’s 1,960-acre Sand Creek Prospect in Ellis and Harper Counties, Oklahoma. The well was completed naturally (without acid or fracture treatments) from one of two productive Morrow sands. Pipeline sales commenced in late October, 2001 and the well has since produced on choke at an average daily rate of about 3.0 MMcfg, six barrels of condensate, and no water. The second sand will be developed at a future date. The Glendena well contributed approximately 32% of first quarter production and accounted for 74% of the first quarter production increase. CREDO is operator of the well and owns a 40% working interest.

A north offset to the Glendena well has been drilled and is awaiting completion. The well is currently classified by the company as a "tight hole", meaning that for proprietary business reasons the company is not releasing information about the well. The company anticipates that additional wells will be drilled on the prospect.

Also in Harper County, Oklahoma, the company has commenced an exploratory well on its 1,320-acre Two Springs Prospect located approximately six miles north of the Glendena well. The well is on the same Morrow sand trend and targets both the Morrow and Chester formations at 7,450 feet. In Ellis County, Oklahoma, the company is preparing to drill a second well on its 640-acre Thurmond Prospect. The well targets the Morrow formation at 8,650 feet.

The company has installed its patented Calliope Gas Recovery System on eight wells ranging in depth from 6,500 to 18,600 feet. Each of these applications was a rigorous test for Calliope. Three applications were on dead wells – one for five years – that were scheduled to be plugged and abandoned. After being reinvigorated by Calliope, these three wells are currently CREDO's second, third and seventh most valuable producing properties. Calliope wells accounted for 16% of the company's gas production volume in the first quarter of fiscal 2002, and they represent 24% of the company's estimated proved reserve quantities at fiscal 2001 year-end.

The company is actively seeking to acquire wells, or enter into arrangements with other companies, for application of its Calliope Gas Recovery System. The run-up in gas prices during 2000 and 2001 severely hindered the company's efforts to purchase wells for Calliope. However, the recent sharp decline in gas prices appears to have improved acquisition opportunities. The purchase of two Calliope wells is currently being finalized, and negotiations are in progress to purchase several other wells.

In addition, the company is considering other strategies to install Calliope on more wells such as joint venturing with certain large companies, and is developing a highly sophisticated multimedia presentation to market Calliope.

For a more detailed discussion of current operations, refer to the company’s Form 10-QSB for the fiscal quarter ended January 31, 2002 and its Form 10-KSB for fiscal year ended October 31, 2001.

At January 31, 2002, working capital was $6,502,000, up 12% from October 31, 2001 fiscal year-end. Total assets were $17,031,000 including cash and short-term investments of $6,540,000. Stockholders’ equity was $13,285,000. The company’s only long-term 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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