CREDO Petroleum Corporation Announces Closing of Strategic Investment in the Company by RCH Energy

  
    
  
  
    
      CREDO Petroleum Corporation (NASDAQ:CRED), an independent oil and gas 
      company, reported today that the previously announced transaction with 
      RCH Energy closed on July 3, 2008, and that Alford B. Neely has been 
      elected to serve as the company’s Vice 
      President and Chief Financial Officer.
    
    
      RCH ENERGY INVESTMENT IN CREDO CLOSED
    
    
      AND TWO RCH REPRESENTATIVES ELECTED TO THE BOARD OF DIRECTORS
    
    
      RCH Energy Opportunity Fund II, LP and RCH Energy Opportunity Fund III, 
      LP (“RCH” or the “Funds”) 
      have acquired 17.5% of CREDO’s outstanding 
      common stock, or 1,837,000 shares, at a price of $14.50 per share. The 
      Funds are public/private oil and gas exploration and production equity 
      investment funds based in Dallas, Texas.
    
    
      All of the shares acquired by RCH will initially be restricted and not 
      freely tradable in the open market, however, RCH has certain future 
      registration rights. The stock purchase agreement contains a standstill 
      provision providing that RCH will not purchase additional CREDO stock 
      for a period of two years from the date of the agreement without the 
      consent of the Board of Directors.
    
    
      Pursuant to the agreements, CREDO’s Board of 
      Directors has been expanded to seven members including two directors 
      nominated by RCH, W. Mark Meyer and John A. Rigas, who have been elected 
      to the Board. Mr. Meyer is President of RR Advisors, LLC, the General 
      Partner of the Funds, and he is a Principal of the Funds. Mr. Meyer 
      graduated from Texas A&M University in 1986 with a Bachelor of Science 
      Degree (cum laude) in Petroleum Engineering. His industry career 
      involved domestic and international operational engineering and 
      managerial assignments with Exxon, Chevron and Union Texas Petroleum. 
      After receiving his MBA from the University of Chicago in 1996, he 
      worked as a management consultant with A.T. Kearney. More recently, Mr. 
      Meyer was an energy Portfolio Manager for CastleArk Management, a 
      Chicago-based investment counsel, and a Senior Equity Research Analyst 
      of the exploration and production sector for Simmons & Company 
      International and Goldman Sachs. Mr. Meyer is a past director of GFI Oil 
      & Gas Corp. and is currently a director of several RCH Energy portfolio 
      companies.
    
    
      Mr. Rigas is Vice President of RR Advisors, LLC and a Partner in the 
      Funds. He graduated from Texas A&M University in 1986 with a Petroleum 
      Engineering degree. His industry career has involved oil and gas 
      operation and energy trading assignments with Atlantic Richfield Company 
      (ARCO) and Vastar Oil and Gas. In 1998, Mr. Rigas served on the senior 
      management team of the energy capital group at Mirant Energy. While at 
      Mirant he was responsible for originating, structuring, closing and 
      managing upstream mezzanine debt and equity facilities. More recently, 
      Mr. Rigas was a principal in Odyssey Energy Capital I, LP, managing a 
      portfolio of oil and gas mezzanine loans and an independent consultant 
      in business development for various oil and gas companies. He is 
      currently a director of several RCH Energy portfolio companies.
    
    
      James T. Huffman, CREDO’s Chief Executive 
      Officer and Chairman of the Board of Directors, stated, “The 
      RCH transaction represents the culmination of an extensive evaluation 
      process started last year whereby the company’s 
      management and directors, in consultation with Merrill Lynch & Co., have 
      thoroughly reviewed and explored strategic options and alternatives 
      available to CREDO. In addition to new capital, this transaction brings 
      directors to CREDO’s Board who have extensive 
      oil and gas engineering backgrounds as well as financial and capital 
      market experience in the oil and gas industry. RCH is a successful and 
      highly regarded investor in oil and gas companies, both public and 
      private. We are excited about the knowledge and experience they will 
      bring to our business, and we are pleased to have RCH as a strategic 
      partner.”
    
    
      “CREDO has a strong asset base with excellent 
      growth potential in both its conventional oil and gas and intellectual 
      property assets,” Huffman said. “The 
      RCH transaction will allow us to accelerate development of our oil and 
      gas properties and to consolidate our Calliope ownership. Both CREDO and 
      RCH expect this relationship to substantially increase CREDO’s 
      opportunities to monetize Calliope.”
    
    
      ALFORD B. NEELY ELECTED VICE PRESIDENT
    
    
      AND CHIEF FINANCIAL OFFICER
    
    
      Effective immediately, Alford B. Neely has been elected as the company’s 
      Vice President and Chief Financial Officer. Mr. Neely has served as the 
      company’s Manager of Regulatory Compliance 
      since July 2006 and was formerly the company’s 
      Vice President and Chief Financial Officer from 1998 to 2000. Mr. Neely 
      replaces David E. Dennis who has been serving on a part time basis as 
      the company’s interim Chief Financial Officer.
    
    
      Huffman further stated, “Al Neely served as 
      CREDO’s Vice President and Chief Financial 
      Officer until he left to join his family business. He returned to CREDO 
      in 2006 just as we were implementing Sarbanes-Oxley regulations and he 
      has managed the company’s regulatory 
      compliance during the critical period of SOX implementation. We are very 
      confident in Al’s capabilities and we are 
      pleased to elevate him back to the position of Chief Financial Officer.”
    
    
      Mr. Neely was previously Vice President Finance of Unidata, Inc. He also 
      served as a Director of Sprint Corporation and Senior Vice President 
      Finance and Administration of Technical Oil Tool Corporation (a 
      subsidiary of Baker Oil Tools). He graduated with a B. S. Degree in 
      Accounting from California State Polytechnic University and initially 
      joined the audit staff at Deloitte & Touche.
    
    
      About CREDO Petroleum Corporation — CREDO 
      Petroleum Corporation is a publicly traded independent energy company 
      headquartered in Denver, Colorado. The company is engaged in the 
      exploration for and the acquisition, development and marketing of 
      natural gas and crude oil and in application of its patented Calliope 
      Gas Recovery System. CREDO owns working and royalty interests in 
      approximately 1,445 wells. The company’s 
      stock is traded on the NASDAQ System under the symbol “CRED” 
      and is quoted daily in the “NASDAQ Global 
      Market” section of The Wall Street Journal.
    
    
      About RCH Energy Opportunity Fund II, LP and RCH Energy 
      Opportunity Fund III, LP — RCH Energy 
      Opportunity Fund II, LP and RCH Energy Opportunity Fund III, LP are 
      private investment funds headquartered in Dallas, Texas that focus 
      exclusively on the oil and gas sector. The Funds’ 
      investments in CREDO Petroleum Corporation are managed by John A. Rigas 
      and W. Mark Meyer, both of whom have extensive operating, technical and 
      financial experience in the oil and gas industry.
    
    
      For more information about the company, visit http://www.credopetroleum.com.
    
    
      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 
      2007 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.