Note: All reserve data before income taxes

*Includes both fee and leasehold interests; Forestar acres as of first quarter end 2012.

“Credo has been successfully transitioning from a natural gas to oil focused strategy and increasing exploration and drilling activity as hundreds of drilling locations have been de-risked,” said Mr. DeCosmo. “Credo is just beginning to benefit from its ownership in the prolific Bakken and Three Forks formations, with only 1.3 million BOE of reserves associated with this interest at fiscal year-end 2011. Going forward, we expect to see meaningful growth in production and reserves in the Bakken given Credo’s 8% average working interest position in approximately 50 total units. There is the potential for Forestar to participate in as many as 400 total wells in the primary Bakken and Three Forks zones.”

Transaction Summary

The transaction is structured as a reverse subsidiary merger, with a total equity value of approximately $146 million, or $14.50 per share of Credo common stock. Forestar has obtained a commitment for financing provided by Key Bank National Association that, combined with available liquidity, is sufficient to fund the acquisition. Forestar intends to pursue amendments to its existing credit facilities to fund a significant portion of the purchase price. The transaction is subject to customary closing conditions, including approval by Credo’s stockholders, and is expected to close in the second half of 2012. In connection with the merger agreement, Forestar entered into voting agreements with James T. Huffman, Chairman of the Board of Directors of Credo, RCH Energy Opportunity Fund III, LP and RCH Energy SSI Fund, LP to vote the shares of Credo common stock held by them in favor of the merger agreement, and the transactions contemplated thereby subject to the terms and conditions of the voting agreements.

Following the transaction, Forestar expects to maintain a solid balance sheet and ample liquidity. This acquisition is expected to be accretive to Forestar’s earnings in the first full year of ownership.

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