Credo Petroleum Updates Kansas and Nebraska Drilling Activities
May 08 2012 - 8:00AM
Six New Oil Fields
Discovered
Approximately 25 Direct
Offset Locations
New Seismic Shoots to Cover
Sixty-Six Square Miles
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.
CONTACT: Michael D. Davis
Chief Executive Officer (Interim)
or
Alford B. Neely
Chief Financial Officer
303-297-2200
Website: www.credopetroleum.com
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