FORESTAR PETROLEUM CORP 
By FOR IMMEDIATE RELEASE
CREDO PETROLEUM REPORTS RECORD RESERVES FOR FISCAL 2011
Total Proved Reserves Increase 25%
Undiscounted Reserve Value Increases 66%
Production Replacement at 372%
DENVER, COLORADO, January 4, 2012 - Credo Petroleum Corporation (NASDAQ: CRED) today reported that total proved reserves increased 25% to a record 4,095,000 barrels of oil equivalent (BOE) as of its fiscal year ended October 31, 2011. This compares to 3,277,000 BOE as of October 31, 2010.
Oil reserves represent 48% of the Company's total proved reserves for fiscal 2011 compared to 29% last year, as the Company continues its successful transition from natural gas to oil. For fiscal 2011, oil reserves increased 106% on record capital spending and successful completions in the Company's North Dakota Bakken and Three Forks, Kansas, Nebraska and Texas Panhandle drilling projects. No gas wells were drilled during fiscal 2011, and natural gas reserves decreased approximately 8% primarily due to normal production declines.
Several years ago, the Company initiated a strategic transition from being almost exclusively a gas producer to becoming primarily an oil producer. The following table shows the success of that transition with oil reserves steadily increasing to 48% of total reserves in fiscal 2011 from only 17% in 2007.
| Fiscal Year Ended | Oil Reserves (Bbls) | YOY Percentage Change | Oil as % of Total Reserves |
| 2007 | 591,000 | 40% | 17% |
| 2008 | 710,000 | 20% | 21% |
| 2009 | 876,000 | 23% | 26% |
| 2010 | 954,000 | 9% | 29% |
| 2011 | 1,963,000 | 106% | 48% |
For fiscal 2011, Credo replaced 372% of its total production. At October 31, 2011, the undiscounted value of reserves was $116,316,000, an increase of 66% versus fiscal 2010. The discounted value (at 10%) was $62,348,000. Average fiscal year
