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Forestar To Acquire Credo Petroleum

“This transaction and the ability to operate enhances our ability to report additional reserve categories on existing mineral acreage, and provides additional transparency and disclosure related to their long-term potential value. This acquisition establishes a meaningful oil and gas platform and a strong oil and gas team that is well positioned to deliver shareholder value for years to come.”

CREDO Petroleum Corporation

Credo is an independent oil and gas exploration, development and production company based in Denver, Colorado. Credo owns leasehold interests in approximately 125,000 net mineral acres and has operations in the Bakken and Three Forks formations of North Dakota, the Lansing – Kansas City formation in Kansas and Nebraska, and the Tonkawa and Cleveland formations in the Texas Panhandle. Credo owns working interests in approximately 340 producing wells and overriding royalty interests in about 1,200 wells and acts as operator for approximately 108 of the working interest wells.

Combination Summary

Following the acquisition of Credo, the scale of Forestar’s oil and gas business will increase considerably, including the following key operating highlights:

($ in millions)

YE 2011 Metrics



Production Production (BOE) 422,200 301,000 723,200
% Oil 36% 49% 41%

Reserves (MMBOE) 3.0 4.1 7.1
PV-10 Proven Reserves $81 $62 $143
Future Net Cash Flow $134 $116 $250

Interests *
Mineral & Leasehold Acres 594,000 125,000 719,000
Basins 5 5 10
States 7 7 14

Note: Data based on Credo Form 10-K for year ended 10/31/11 and Forestar Form 10-K for year ended 12/31/11

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