Six New Oil Fields Discovered
Approximately 25 Direct Offset Locations
New Seismic Shoots to Cover Sixty-Six Square Miles
DENVER, May 8, 2012 (GLOBE NEWSWIRE) -- 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 updated its Kansas and Nebraska drilling project.
Michael D. Davis, Chief Executive Officer, stated, "We have recently discovered six new oil fields in Kansas and Nebraska which we expect to have a meaningful positive impact on Credo's reserves, production and cash flow. Our initial analysis of the new fields indicates potential for about 25 direct offset locations. In addition, successful offset drilling should generate step-out locations. Credo's working interest ownership in the new fields ranges from 49% to 75%. For proprietary business reasons, we are not releasing specific information, such as locations, tests and production rates.
Davis continued, "Nebraska is a relatively new oil play for Credo where there is more opportunity to apply our regional concepts to higher potential wildcat drilling compared to the Central Kansas Uplift. For the last three years, we have been working to prove our technical concepts prior to ramping-up drilling to a level similar to our Kansas project. Among other things, we have been refining our 3‑D seismic techniques and interpretations, and believe that we have made significant progress on cracking-the-code."
To date, Credo has shot over 200 square miles of 3-D seismic in Kansas and Nebraska and has drilled 110 wells in Kansas and 18 wells in Nebraska. The Company's drilling success rate is 40%, yielding "all in" risked adjusted internal rates of return (at current oil prices) of approximately 100%.
For fiscal 2012, the Company budgeted $9.8 million for drilling in Kansas and Nebraska, up 17% from last year. Forty five (45) additional oil wells are scheduled for the remainder of this year together with three new seismic shoots covering 66 square miles.
MANAGEMENT COMMENTS
Davis continued, "Our Kansas and Nebraska asset is generally over-shadowed by our Bakken and Texas Panhandle horizontal drilling plays, and we believe its value and growth potential are generally under-appreciated.
"There is an important place in our portfolio for this scalable and repeatable project because it reliably builds cash flow, production and reserves while yielding rates of return that are superior to horizontal drilling plays. Our Kansas and Nebraska asset is now providing about one-third of Credo's revenues, and we believe it will continue to be a significant growth driver in achieving our goal for oil to represent 75% of our production volume mix by year end."
About Credo Petroleum
Credo Petroleum Corporation is an independent oil and gas exploration, development and production company based in Denver, Colorado. The Company has significant operations in the Williston Basin of North Dakota, Kansas, Nebraska, the Anadarko Basin of the Texas Panhandle and northwest Oklahoma, and in southern Oklahoma. Credo uses advanced technologies to systematically explore for oil and gas and, through its patented Calliope Gas Recovery System, to recover additional reserves from largely depleted gas reservoirs. For more information, please visit our website at www.credopetroleum.com or contact us at 303-297-2200.
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 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.