CREDO REPORTS RECORD NINE-MONTH EARNING
Increased Production Propels Earnings Growth

DENVER, COLORADO--September 14, 2004--CREDO Petroleum Corporation (NASDAQ:  CRED) today reported record financial results for the nine months ended July 31, 2004. Net income rose 39% to a record $2,757,000 on revenue of $7,562,000 compared to $1,984,000 on revenue of $5,718,000 last year. On a per diluted share basis, net income was $.45 compared to $.33 last year. Cash flow from operating activities (before changes in operating assets and liabilities) jumped 40% to $4,915,000.

James T. Huffman, President, said, "For the nine months, we established significant new records in most operational and financial categories, highlighted by strong production growth and a 21% annualized return on equity without using leverage."

For the third quarter ended July 31, 2004, net income increased to a record $806,000. Fully diluted per share earnings in both periods were $.13.

Huffman further stated, "Fiscal 2004 drilling resulted in significant third quarter production growth. However, third quarter results were suppressed primarily because $429,000 was left-on-the-table due to hedging transactions."

PRODUCTION VOLUMES SET ANOTHER NEW RECORD

Nine-month production surged 30% to a record 1.48 Bfge (billion cubic feet of gas-equivalent) compared to 1.14 Bfge last year. Natural gas production rose 29% to a record 1.28 Bcfg and oil production rose 27% to 32,900 barrels. Natural gas accounts for 87% of the company's total production.

Third quarter production rose 19% to 487 MMcfge (million cubic feet of gas-equivalent) compared to 408 MMcfge last year. Natural gas production rose 17% to 417 MMcfg and oil production rose 36% to 11,700 barrels.

PRODUCT PRICES SHOW CONTINUED STRENGTH

Net wellhead natural gas prices for the nine months rose 25% to $4.96 per Mcf compared to $3.96 last year. Hedging transactions reduced wellhead prices $.38 per Mcf in the nine-month period compared to a reduction of $.39 per Mcf last year. As a result, total natural gas price realizations rose 5% to $4.58 per Mcf compared to $4.35 last year. Wellhead oil prices rose 18% to $32.66 per barrel compared to $27.65 last year.

For the third quarter, net wellhead natural gas prices rose 13% to $5.40 per Mcf compared to $4.77 last year. Hedging transactions reduced wellhead prices $1.03 per Mcf this year and increased them by $.14 per Mcf last year. As a result, total natural gas price realizations fell 11% to $4.37 per Mcf compared to $4.91 last year. Wellhead oil prices rose 31% to $34.63 per barrel compared to $26.41 last year.

At third quarter-end, the company had open hedge positions totaling 200 MMcfg covering the months of September and October 2004 at an average NYMEX price of $4.80 per Mcf. Also at third quarter-end, the August hedge was closed and a deferred loss of $112,000 was realized. Subsequent to third quarter end, the September hedge was closed and a deferred loss of $31,000 was realized. The only remaining hedge is for the month of October 2004. Average gas prices in the company's market areas are expected to be 15% to 17% below NYMEX prices due to basis differentials and transportation costs.

RECORD CAPITAL SPENDING

Capital spending for the nine months totaled a record $4,129,000 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 updating those results.

STRONG FINANCIAL CONDITION PROVIDES SOLID FOUNDATION FOR GROWTH

At July 31, 2004, working capital was $6,942,000. Total assets were $27,945,000 including cash and short-term investments of $7,417,000. Stockholders' equity was $20,200,000. The company's only long-term debt is a $355,000 exclusive license obligation that is payable over seven years.

                      CREDO PETROLEUM CORPORATION
                         FINANCIAL HIGHLIGHTS

                          Nine       Nine
                         Months     Months      Quarter      Quarter
                         Ended      Ended        Ended        Ended
Condensed Operating     July 31,    July 31,    July 31,     July 31,
Information              2004        2003        2004         2003
(Unaudited)             --------    --------    --------     -------

Revenue:
 Oil and Gas Sales    $6,932,000  $5,014,000   $2,226,000  $1,980,000
   Operating             444,000     386,000      152,000     135,000
   Investment Income
    and Other            186,000     318,000       61,000     128,000
                      ----------  ----------   ----------  ----------
                       7,562,000   5,718,000    2,439,000   2,243,000
                      ----------  ----------   ----------  ----------
Expenses:
   Oil and Gas
    Production         1,464,000   1,159,000      532,000     467,000
   Depreciation,
    Depletion and
    Amortization       1,227,000     930,000      436,000     325,000
   General and
    Administrative     1,011,000     939,000      344,000     333,000
   Interest               30,000      34,000        7,000      11,000
                      ----------  ----------   ----------  ----------
                       3,732,000   3,062,000    1,319,000   1,136,000
                      ----------  ----------   ----------  ----------
Income Before Income
 Taxes and Accounting
 Change                3,830,000   2,656,000    1,120,000   1,107,000

Income Taxes          (1,073,000)   (744,000)    (314,000)   (310,000)
                      ----------  ----------   ----------  ----------
Income Before
 Accounting Change     2,757,000   1,912,000      806,000     797,000

Cumulative Effect of
 Change in Accounting
  Principle                 -         72,000         -           -
                      ----------  ----------   ----------  ----------
Net Income            $2,757,000  $1,984,000    $ 806,000   $ 797,000
                      ==========   =========   ==========  ==========
Basic Income Per Share
 Before Accounting
 Change                    $ .46       $ .32        $ .14       $ .13
Cumulative Effect of
 Change in Accounting
 Principle                   -           .01          -           -
                      ----------  ----------   ----------  ----------
Basic Income Per Share     $ .46       $ .33        $ .14       $ .13
                      ==========   =========   ==========  ==========
Diluted Income Per
 Share Before Accounting
 Change                    $ .45       $ .32        $ .13       $ .13
Cumulative Effect of
 Change in Accounting
 Principle                   -           .01          -           -
                      ----------  ----------   ----------  ----------
Diluted Income
 Per Share                 $ .45       $ .33        $ .13       $ .13
                      ==========   =========   ==========  ==========


Condensed Balance
 Sheet Information              July 31, 2004         October 31, 2003
                                -------------         ----------------
Cash and Short-Term Investments  $ 7,417,000              $ 6,663,000
Other Current Assets               2,334,000                1,900,000
Oil and Gas Properties, Net       16,938,000               14,061,000
Exclusive License Agreement, Net     425,000                  478,000
Other Assets                         831,000                  470,000
                                 -----------              -----------
                                 $27,945,000              $23,572,000
                                 ===========              ===========
Current Liabilities              $ 2,809,000              $ 1,986,000
Deferred Income Taxes              4,289,000                3,358,000
Exclusive License Agreement
 Obligation                          355,000                  355,000
Asset Retirement Obligation          292,000                  238,000
Stockholders' Equity              20,200,000               17,635,000
                                 -----------              -----------
                                 $27,945,000              $23,572,000
                                 ===========              ===========