DENVER, COLORADO, Thursday, June 13, 2002 – CREDO Petroleum Corporation (NASDAQ:  CRED) reported that natural gas production volumes surged 82% in the second quarter of fiscal 2002 and 79% for the first half of the fiscal year.

"Successful drilling resulted in production records for the first half of the year," said James T. Huffman, President. "We expect further production gains as three recently drilled wells come on-stream and the previously announced Redfearn #1 well contributes for a full reporting period compared to only one month this quarter."

For the six months ended April 30, 2002, net income was $537,000 on revenue of $2,493,000 compared to $1,132,000 on revenue of $3,042,000 last year. On a per diluted share basis, net income was $.16 compared to $.35 last year. Cash flow from operating activities (before working capital changes) was $1,190,000 compared to $1,690,000 last year.

For the second quarter ended April 30, 2002, net income was $327,000, or $.10 per diluted share, compared to $530,000, or $.16 per diluted share last year.

"Product prices have a more direct effect on the company’s bottom line than production because production is encumbered by depletion and lease operating expenses," Huffman said. "Our first half results are lagging last year because the positive financial effect of increased production has been more than offset by sharply lower product prices."

Recently drilled wells boosted first half production 51% to a record high 728 MMcfge (million cubic feet of gas-equivalent) compared to 483 MMcfge last year. Natural gas production surged 79% to a record 620 MMcfg compare to 346 MMcfg last year while crude oil sales fell 21% to 17,900 barrels compared to 22,800 barrels last year.

Second quarter production volumes rose 54% to 379 MMcfge compared to 247 MMcfge last year. Natural gas production rose 82% to 330 MMcfg while crude oil sales fell 24%.

Net wellhead natural gas prices for the first half of 2002 fell 58% to $2.42 per Mcf compared to $5.80 last year. Hedging transactions added $.54 per Mcf to 2002 natural gas price realizations compared to $.19 last year. As a result, total natural gas price realizations were $2.96 per Mcf compared to $5.99 last year. Wellhead oil prices fell 32% to $19.06 per barrel compared to $28.02 last year.

For the quarter ended April 30, 2002, net wellhead natural gas prices fell 55% to $2.45 per Mcf compared to $5.43 last year. Hedging transactions added $.45 per Mcf to 2002 natural gas price realizations compared to $.37 last year. As a result, total natural gas price realizations were $2.90 per Mcf compared to $5.80 last year. Wellhead oil prices fell 19% to $21.06 per barrel compared to $26.06 last year.

The company’s recent natural gas hedge data for months subsequent to second quarter-end shows 920 MMcfg hedged for the months of May 2002 through February 2003 at an average NYMEX (Henry Hub, Louisiana delivery point) price of $3.78 per Mcf. This represents approximately 91% of the company’s total estimated gas production for those months. The hedge relates only to the company’s Oklahoma production where the "basis" for its pipeline index prices is generally $.15 to $.30 below the Henry Hub.

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

The 82% increase in second quarter natural gas production resulted from new wells drilled late in fiscal 2001 and during fiscal 2002. The primary contributor was the previously announced Glendena #1-5 well which commenced sales in October of 2001 and has produced at rates of 2.5 to 3.0 MMcfg per day for all of fiscal 2002. A previously announced confirmation well, the Redfearn #1-33, commenced sales at similar rates in April 2002, contributing to only the final month of the reporting periods.

Drilling activity is updated in a separate press release dated today.

The company has recently acquired two wells for installation of its patented Calliope Gas Recovery System and is actively seeking to acquire additional wells. The 18,400-foot Green Estate #1 well located in Beckham County, Oklahoma produced 28.8 Bcfg and has been dead for over a year. This well will provide a rigorous test for Calliope in terms of both extreme depth and the challenge of reviving a dead well. A second well, the Horn #1, produced 12.9 Bcfg and has also been dead for over a year. This 12,400-foot well is located in Grady County, Oklahoma. CREDO will own approximately 70% of both wells and will be the operator. Negotiations are in progress to purchase several additional wells for Calliope applications.

CREDO is nearing completion of a sophisticated multimedia presentation detailing information about the Calliope system. The presentation is designed to introduce Calliope to other companies with the objective of entering into joint venture or other arrangements to install Calliope on more wells.

"We had a good quarter and we are pleased with the progress on both our drilling and Calliope projects," Huffman said. "We expect new drilling to add significant production and reserves throughout fiscal 2002, and we anticipate several successful Calliope installations during the next six months."

For a more detailed discussion of current operations, refer to the company’s Form 10-QSB for the fiscal quarter ended April 30, 2002 and its Form 10-KSB for fiscal year ended October 31, 2001.

STRONG FINANCIAL CONDITION PROVIDES
SOLID FOUNDATION FOR GROWTH

At April 30, 2002, working capital was $6,225,000, up 8% from October 31, 2001 fiscal year-end. Total assets were $17,111,000 including cash and short-term investments of $6,655,000. Stockholders’ equity was $13,381,000. 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.

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.