STRONG FINANCIAL CONDITION CONTINUES TO PROVIDE
A SOLID FOUNDATION FOR GROWTH
The company's financial condition continues to be very strong with ample cash. In addition, the company expects operating cash flow to remain strong in 2011. This provides the company great flexibility to increase capital spending as opportunities arise. At October 31, 2010, total assets were $53,405,000 and working capital was $9,661,000, including cash and short-term investments of $9,169,000. The company has no debt and has ample cash flow to fund its aggressive drilling program.
Earnings Increase 277% Versus Comparable Prior Year Earnings
Revenue Increases 15% Driven by the Company's Transition to Drilling for Oil Reserves
(149 billion barrels of oil in place within the Bakken Formation and new data in late 2010 says 8 billion barrels will be recoverable not the 2 billion that was originally estimated)
DENVER, Jan. 6, 2011 (GLOBE NEWSWIRE) -- Credo Petroleum Corporation (Nasdaq:CRED - News), an oil and gas exploration and production company with significant assets in the North Dakota Bakken, Kansas, Nebraska, the Texas Panhandle and Oklahoma, today reported financial results for the fiscal year ended October 31, 2010.For the year, net income increased 277% to $2,203,000, or $.22 per diluted share
Marlis E. Smith, Jr., Chief Executive Officer, stated, "Credo encountered two difficult challenges in fiscal year 2010: replacing flush production from last year's Huslig Field discovery and well completion timing delays caused by shortages of fracture stimulation equipment. These timing delays moved the well completions into the first quarter of 2011. More importantly, during 2010, we built great momentum in a number of new oil projects including the North Dakota Bakken and Texas Panhandle horizontal drilling plays. I believe these plays will produce a significant positive impact on Credo's financial and operating results in 2011."
Smith continued, "Credo's drilling program for 2011 is the most aggressive in company history, as we continue to focus on oil in order to exploit the huge value gap between oil and natural gas. On an energy-equivalent basis, oil is currently worth three times more than natural gas. While significant transitions take time, the reward is now in plain sight -- capturing oil's superior return on investment.
"Low natural gas price environments have historically provided good opportunities for application of the company's patented Calliope Gas Recovery System. Accordingly, we plan to intensify our efforts to realize the kind of values that we believe Calliope will generate for Credo.
"We plan to issue press releases shortly, updating our drilling and completion activities in the North Dakota Bakken and Texas Panhandle projects."
Bakken Oil Drilling ResultsCredo Petroleum Completes Third Consecutive High Rate Bakken Discovery
New Well Yields 1,367 BOEPD from 24-Hour Test on Small Choke
Five Total Bakken Wells Drilled to Date
The company anticipates drilling at least nine wells on its Bakken acreage during 2011.
In North Dakota's Bakken oil resource play, the company has assembled approximately 8,000 gross (6,000 net) acres in the core of the play which are located primarily on the Fort Berthold Reservation, south and west of the Parshall Field. The acreage consists of approximately 50 initial well spacing units. The company expects that more than one well will be drilled on many spacing units. The project targets horizontal drilling for the Bakken and Sanish/Three Forks formations. Vertical well depths on the company's acreage are approximately 10,000 feet and the horizontal legs are generally expected to range between 5,000 and 10,000 feet. The company's interests range from very small to 56% depending on the size of the spacing unit.
To date, five wells have been drilled on the company's acreage. Three of the wells are producing and two that are awaiting completion for production.