CREDO PETROLEUM REPORTS RECORD FIRST HALF 2007 EARNINGS

Six-Month Earnings Rise to All Time High on Record Production
Second Quarter Earnings Surge 42% to All Time High
Profitability per Unit of Production Rises to an All Time High in the Second Quarter 

DENVER, COLORADO, June 11, 2007 - CREDO Petroleum Corporation (NASDAQ: CRED), today reported financial results for the six months and quarter ended April 30, 2007.

For the first six months of 2007, earnings rose 8% to an all time high. For the period, net income was $3,346,000 compared to $3,087,000. On a per diluted share basis, net income was $.36 for the first six months compared to $.33 last year. Revenue increased 8% to a record $8,946,000 compared to $8,286,000 last year. Earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA") increased 11% to $6,594,000 compared to $5,964,000 last year.

Net income surged 42% in the second quarter to an all time high. For the period, net income was $1,982,000 compared to $1,392,000 last year. On a per diluted share basis, net income was $.21 for the second quarter compared to $.15 last year. Revenue increased 25% to a record $4,891,000 compared to $3,921,000 last year.

James T. Huffman, President, said, "Following record setting performance in each of the past four years, we are continuing to achieve outstanding financial and operating results. The surge in second quarter earnings more than offset the year-to-year earnings shortfall in the first quarter, driving net income for the full six months to a new record. Production rose 8% to a new all time high for the six month period, as we continued to meet the challenge of increasing production to reap the full benefit of higher product prices."

Huffman further stated, "CREDO has previously been recognized by John S. Herold, Inc. as one of the most profitable oil and gas producers on a unit of production basis. In light of this outstanding past performance, we are particularly gratified to see CREDO's net income per unit of production in the second quarter rise to $3.45 per Mcfe and establish a new quarterly record."

PRODUCTION VOLUMES SET SIX MONTH RECORD

Production increased 8% in the first half of 2007 to a new record high, on the heels of a 13% increase in the same period last year. For the first six months, production was 1.18 Bcfe (billion cubic feet of gas equivalent) compared to 1.08 Bcfe last year. Natural gas production rose 6% to a first half record of 1.02 Bcf compared to .97 Bcf last year. Oil production rose 27% to 25,100 barrels compared to 19,800 barrels last year. Natural gas accounted for 87% of the company's first half 2007 production.

For the second quarter, production fell 3% from last year's record high. Production was 574 MMcfe (million cubic feet of gas equivalent) compared to 590 MMcfe last year. Natural gas production declined 6% to 495 MMcf compared to 528 MMcf last year while oil production rose 28% to 13,200 barrels compared to 10,300 barrels last year.

MIXED PRODUCT PRICES BUTTRESSED BY HEDGING GAINS

Net wellhead natural gas prices for the first six months fell 16% to $6.03 per Mcf compared to $7.18 last year. Hedging transactions increased wellhead prices by $.96 per Mcf. In comparison, hedging transactions reduced wellhead prices $.27 per Mcf last year. As a result, CREDO's total natural gas price realizations increased to $6.99 per Mcf compared to $6.91 last year. Wellhead oil prices fell 9% to $53.73 per barrel compared to $59.37 last year. There were no oil hedging transactions.

For the second quarter, net wellhead natural gas prices rose 16% to $6.80 per Mcf compared to $5.85 per Mcf last year. Hedging transactions increased wellhead prices by $1.19 per Mcf to $7.99. There were no hedging transactions in the second quarter of last year. As a result, total natural gas price realizations increased 37% to $7.99 per Mcf compared to $5.85 last year. Wellhead oil prices declined 10% to $55.24 per barrel compared to $61.63 last year.

Hedges covering the production months of May 2007 through March 2008 currently total 1.50 Bcf. The average monthly hedge price (NYMEX basis) ranges from $7.80 per Mcf in the summer to $9.53 in the winter. These hedges are intended to cover between 75% and 88% of the company's current production base without taking into consideration estimates of new production from future operations.

Hedges include contracts indexed to the NYMEX (85%) and to Panhandle Eastern Pipeline Company for Texas, Oklahoma mainline (15%). For comparative purposes, hedges indexed to Panhandle Eastern Pipeline Company are expressed on a NYMEX basis. For those hedges indexed to Panhandle Eastern Pipeline Company, the average individual month price (basis) differentials between the NYMEX and Panhandle Eastern Pipeline Company is minus $.93.

CAPITAL SPENDING REMAINS ROBUST

Capital spending for the first six months totaled $4,367,000 compared to $5,361,000 last year. Several wells planned for the second quarter were delayed until the third quarter.

"The cost of field services, particularly the cost of drilling wells, has increased dramatically during the past several years, driven by higher energy prices," Huffman said. "Concurrently, there has been degradation in the quality of those services due to manpower shortages. The combination of much higher costs and diminished quality of the services produces a negative impact on our drilling economics. Accordingly, we continue to diligently high-grade our drilling prospects in order to achieve our economic goals, in some cases postponing less robust projects until we see improvement in the field services sector."

STRONG FINANCIAL CONDITION CONTINUES TO PROVIDE A SOLID FOUNDATION FOR GROWTH

At April 30, 2007, working capital was $11,175,000, a 27% increase over last year. Total assets were $50,597,000 including cash and short-term investments of $11,291,000. Stockholders' equity was a record $37,473,000. The company's long-term debt totals only $163,000 and is related to an exclusive license obligation.

*     *     *     *     *

Contact:     James T. Huffman
                    President 
                             or
                    David E. Dennis
                    Chief Financial Officer
                    303-297-2200

Website:     www.credopetroleum.com

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 Global Market” section of The Wall Street Journal.

EBITDA is not a GAAP measure of operating performance. The company uses this non-GAAP performance measure primarily to compare its performance with other companies in the industry that make a similar disclosure. The company believes that this performance measure may also be useful to investors for the same purpose. Investors should not consider this measure in isolation or as a substitute for operating income or any other measure for determining the company's operating performance that is calculated in accordance with GAAP. In addition, because EBITDA is not a GAAP measure, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation between EBITDA and net income is provided in the table below:

                                         Six Months Ended April 30,
                                       -------------------------------
                                            2007            2006
                                       --------------- ---------------
RECONCILIATION OF EBITDA:
  Net Income                               $3,346,000      $3,087,000
  Add Back:
  Interest Expense                             14,000          18,000
  Income Tax Expense                        1,334,000       1,230,000
Depreciation, Depletion and
 Amortization Expense                       1,900,000       1,629,000
                                       --------------- ---------------
EBITDA                                     $6,594,000      $5,964,000
                                       =============== ===============

This press release includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements included in this press release, other than statements of historical facts, address matters that the company reasonably expects, believes or anticipates will or may occur in the future.  Such statements are subject to various assumptions, risks and uncertainties, many of which are beyond the control of the company.  Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those described in the forward-looking statements.  Investors are encouraged to read the “Forward-Looking Statements” and “Risk Factors” sections included in the company’s 2006 Annual Report on Form 10-K for more information.  Although the company may from time to time voluntarily update its prior forward looking statements, it disclaims any commitment to do so except as required by securities laws.

(table follows)

           CREDO PETROLEUM CORPORATION FINANCIAL HIGHLIGHTS



                         Six Months Ended        Three Months Ended
                            April 30,                April 30,
                     ------------------------ ------------------------
                        2007        2006         2007        2006
                     ----------- ------------ ----------- ------------


REVENUES:
  Oil and gas sales  $8,493,000   $7,843,000  $4,685,000   $3,723,000
  Investment income
   and other            453,000      443,000     206,000      198,000
                     ----------- ------------ ----------- ------------
                      8,946,000    8,286,000   4,891,000    3,921,000
                     ----------- ------------ ----------- ------------

COSTS AND EXPENSES:
  Oil and gas
   production         1,708,000    1,743,000     796,000      739,000
  Depreciation,
   depletion and
   amortization       1,900,000    1,629,000     942,000      891,000
  General and
   administrative       644,000      579,000     366,000      319,000
  Interest               14,000       18,000       7,000        9,000
                     ----------- ------------ ----------- ------------
                      4,266,000    3,969,000   2,111,000    1,958,000
                     ----------- ------------ ----------- ------------

INCOME BEFORE INCOME
 TAXES                4,680,000    4,317,000   2,780,000    1,963,000

INCOME TAXES         (1,334,000)  (1,230,000)   (798,000)   (571,000 )
                     ----------- ------------ ----------- ------------

NET INCOME           $3,346,000   $3,087,000  $1,982,000   $1,392,000
                     =========== ============ =========== ============

EARNINGS PER SHARE
 OF COMMON STOCK -
 BASIC                     $.36         $.34        $.21         $.15
                     =========== ============ =========== ============

EARNINGS PER SHARE
 OF COMMON STOCK -
 DILUTED                   $.36         $.33        $.21         $.15
                     =========== ============ =========== ============

Weighted average
 number of shares of
 Common Stock and
 dilutive
 securities:
   Basic              9,261,000    9,171,000   9,261,000    9,207,000
                     =========== ============ =========== ============

   Diluted            9,395,000    9,498,000   9,395,000    9,506,000
                     =========== ============ =========== ============


Condensed Balance                 April 30,               October 31,
 Sheet Information                   2007                     2006
                                 ------------             ------------

Cash and Short-Term
 Investments                     $11,291,000              $10,201,000
Other Current Assets               2,988,000                3,708,000
Oil and Gas
 Properties, Net                  34,480,000               32,092,000
Exclusive License
 Agreement, Net                      233,000                  268,000
Other Assets                       1,605,000                1,490,000
                                 ------------             ------------
                                 $50,597,000              $47,759,000
                                 ============             ============

Current Liabilities               $3,104,000               $3,836,000
Deferred Income
 Taxes                             8,873,000                8,039,000
Exclusive License
 Agreement
 Obligation                          163,000                  163,000
Asset Retirement
 Obligation                          984,000                  954,000
Stockholders' Equity              37,473,000               34,767,000
                                 ------------             ------------
                                 $50,597,000              $47,759,000
                                 ============             ============