NEWS RELEASE

FOR IMMEDIATE RELEASE

CREDO PETROLEUM UPDATES DRILLING ACTIVITIES

Drilling Budget Doubles for Fiscal 2012

Two-Thirds of Drilling Budget Earmarked for Bakken and Three Forks

Four New North Dakota Wells Drilling or Completing


DENVER, COLORADO, December 8, 2011 - CREDO Petroleum Corporation (NASDAQ: CRED), an independent oil and gas exploration and production company with significant assets in North Dakota, Kansas, Nebraska, Texas and Oklahoma, today provided an operations update.

Marlis E. Smith, Jr., Chief Executive Officer, stated, "Credo successfully executed the most aggressive drilling program in its history in 2011 with a 100% increase in our drilling budget. As a result, we have successfully transitioned Credo from producing virtually all natural gas to being primarily an oil producer. That strategically important milestone was achieved in the fourth quarter when oil production rose to 56% of production volumes. We made this transition because we believe that oil will continue to command a significant Btu price premium over natural gas. Today that price premium stands at almost five to one.

"We will build on our transition to oil by again doubling our capital expenditures for 2012. The Board has authorized a budget of $30,000,000 to drill 80 gross (34 net) wells, representing a 70% increase in net wells over last year.

"This press release highlights significant new oil drilling activity in the Company's Bakken and Three Forks play. Activity is surging in this premier oil play as good drilling results continue to get better with additional experience and advances in innovative technology."

Bakken and Three Forks Activity Accelerating; Two More Bakken Wells Reach Total Depth; Three Forks Well Reaches Total Depth and Drilling Under Way on Second Well

Credo owns approximately 8,000 gross (6,000 net) acres in the Bakken and Three Forks play, and is continuing to add to its acreage position and make strategic trades to diversify its acreage position. As a result, the Company estimates that its total number of Bakken and Three Forks spacing units has increased by 24% to 62.

It is not unreasonable to expect that 250 to 500 wells could ultimately be drilled on Credo's acreage. Several of the more active operators in the play are predicting that up to four Bakken and four Three Forks wells will ultimately be drilled on 1,280 acre spacing units. In addition, there are plans to test lower benches of the Three Forks formation.

Credo has participated in nine completed Bakken wells during the past two years. All of the wells are high rate producers, and they have collectively produced almost 1,000,000 barrels of oil to date. For fiscal 2012, the company expects to participate in 20 wells as operators on the Fort Berthold Reservation continue to ramp-up drilling. Accordingly, Credo has allocated two-thirds of its 2012 drilling budget to Bakken and Three Forks drilling.

Credo recently participated with Marathon Oil Company in drilling two significant Bakken wells in Dunn County, North Dakota on a large, 2,560 acre spacing unit. The first well was drilled to a measured depth of 19,900 feet, including a 10,600-foot horizontal lateral. Marathon has reported an early production rate of about 1,300 BOEPD (barrels of oil equivalent per day). The second well is currently awaiting fracture stimulation. Credo owns approximately 15% working interest in each well. The wells are located about four miles southeast of the Company's previously announced Enerplus Ethan Hall, an outstanding Bakken well that has produced approximately 188,000 BOE in ten months.

Credo's initial Three Forks well has reached total depth and is awaiting fracture stimulation. Petro