<PAGE>
PROXY STATEMENT
PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE
ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240-14a-11(c)
or 240.14a-12.
CREDO PETROLEUM CORPORATION
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Names of Person(s) Filing Proxy Statement)
<PAGE>
CREDO PETROLEUM CORPORATION
- ----------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 11, 1999
- ----------------------------------------------------------------
You are invited to attend or to be represented by proxy at
the Annual Meeting of Stockholders of CREDO Petroleum
Corporation, a Colorado corporation, to be held at the Norwest
Bank Denver, Forum Room, Seventeenth and Broadway, Denver,
Colorado, on March 11, 1999 at 2:30 p.m., MST, for the purposes
set forth below.
1. To elect two Class III directors to serve until the year
2002 Annual Meeting of Stockholders.
2. To ratify the appointment of independent auditors for
the fiscal year 1999.
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Stockholders of record at the close of business on February
3, 1999 are entitled to vote at the meeting. You are cordially
invited to attend the meeting in person.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, IT IS
IMPORTANT THAT YOU RETURN YOUR SIGNED PROXY. YOUR VOTE IS
IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
BY ORDER OF THE BOARD OF DIRECTORS
William F. Skewes
Secretary and General Counsel
February 3, 1999
Denver, Colorado
- ----------------------------------------------------------------
PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN
IT PROMPTLY SO THAT YOUR VOTE CAN BE RECORDED WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
You May Revoke Your Proxy And Vote In Person
If You Attend The Meeting.
- ----------------------------------------------------------------
<PAGE>
CREDO PETROLEUM CORPORATION
1801 BROADWAY, SUITE 900, DENVER, COLORADO 80202
_______________________
PROXY STATEMENT
_______________________
ANNUAL MEETING OF STOCKHOLDERS, MARCH 11, 1999
Your proxy in the enclosed form is solicited by the Board of
Directors of CREDO Petroleum Corporation for use at the Annual
Meeting of Stockholders to be held on Thursday, March 11, 1999 at
2:30 p.m., MST, at the Norwest Bank Denver, Forum Room,
Seventeenth and Broadway, Denver, Colorado, and any adjournment
thereof. This proxy material was mailed to stockholders on or
about February 7, 1999.
Only stockholders of record at the close of business on
February 3, 1999 will be entitled to vote at the meeting. On
that date, there were 2,991,777 shares of common stock
outstanding and entitled to vote, excluding 686,585 shares held
in the Company's treasury.
All shares represented by properly executed, unrevoked
proxies timely received in proper form will be voted in
accordance with the directions specified thereon. Any such proxy
on which no direction is specified will be voted in favor of the
election of the nominees named herein to the Board of Directors
and for ratification of the appointment of Hein + Associates as
independent auditors for the Company for fiscal 1999. In
addition, all proxies will be voted in accordance with the
judgement of the proxy holders with respect to any other matter
which may properly come before the meeting. Any stockholder
giving a proxy may revoke that proxy at any time before it is
voted at the meeting by executing a later dated proxy, by voting
by ballot at the meeting, or by filing with the Election Judge an
instrument of revocation.
VOTING SHARES AND PRINCIPAL STOCKHOLDERS
The $.10 par value common stock of the Company is the only
class of capital stock outstanding. Each outstanding share of
common stock is entitled to one vote with respect to each matter
to be voted on by the stockholders, which vote may be given in
person or by proxy duly authorized in writing. Cumulative voting
is not permitted. A majority of the shares of outstanding common
stock will constitute a quorum for transaction of business at the
meeting. The affirmative vote of the majority of the total
number of shares represented and voted at the meeting, assuming a
quorum is present, is necessary for the approval of each of the
matters being voted upon. Shares that either abstain from voting
on the proposals presented as to a nominee for director or which
lack authority to vote will have no effect in the tabulation of
votes although both will be counted toward the presence of a
quorum.
The only persons known to own of record or beneficially more
than 5% of the Company's common stock as of February 3, 1999 are
set forth below.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
---------------- -------------------- --------
<S> <C> <C> <C>
James T. Huffman
2100 Green Oaks Drive
Littleton, Colorado 80121 380,925 (1) 12.7%
R. K. O'Connell
P.O. Box 2003
Casper, Wyoming 82602 169,419 (2) 5.7%
_______________
(1) Includes 129,280 shares owned by members of
Mr. Huffman's family and 33,333 shares subject to
currently exercisable stock options.
(2) Includes 12,817 shares owned by Mr. O'Connell's wife and
by a corporation for which he serves as an officer.
</TABLE>
<PAGE>
DIRECTORS AND OFFICERS
ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)
The Articles of Incorporation, as amended, classify members
of the Board of Directors into three classes having staggered
terms of three years each. The Board of Directors consists of
six directors. The directors to be elected to the Board in Class
III at the 1999 Annual Meeting of Stockholders will serve until
the 2002 Annual Meeting and until their successors are duly
elected and qualified. Class II and Class I directors will
continue to serve until the 2000 and 2001 Annual Meetings of
Stockholders, respectively, and until their successors are duly
elected and qualified.
The two Class III nominees named below are presently members
of the Board of Directors. Unless your proxy contains contrary
instructions, it will be voted for the nominees. Should any
nominee become unable to serve, which is not anticipated, the
proxies will vote for such substitute nominees as recommended by
the Board of Directors. Any vacancy occurring in a class
following the election of that class may be filled by the Board
of Directors. A director selected to fill a vacancy in a class
will hold office for a term expiring at the annual meeting at
which the term of that class expires and until a successor is
duly elected and qualified.
The following table sets forth certain information with
respect to each nominee and each director whose term of office
will continue after the meeting.
<TABLE>
<CAPTION>
INFORMATION CONCERNING DIRECTOR NOMINEES
AND CONTINUING DIRECTORS
NAME, AGE, SHARES OF COMMON
POSITION STOCK OWNED
WITH COMPANY BUSINESS EXPERIENCE AND BENEFICIALLY
AND TERM DIRECTORSHIPS IN OTHER AND PERCENT
AS DIRECTOR PUBLIC OR INVESTMENT COMPANIES OF CLASS (1)
- ------------ --------------------------------- ---------------
<S> <C> <C> <C>
CLASS III - NOMINEES FOR ELECTION AT THE 1999 ANNUAL MEETING
WHOSE TERMS WILL EXPIRE AT THE 2002 ANNUAL MEETING
William N. Beach Independent oil operator and 60,000 (2.0%)(3)
Age: 74; President of Beach
Director Exploration, Inc. since 1975
since 1980
Richard B. Stevens Independent businessman and oil 125,687 (4.2%)(3)
Age: 69; Director operator since 1987; President
since 1987 of SECO Energy Corporation from
1981 to 1987
CLASS II - DIRECTORS WHOSE TERMS WILL EXPIRE AT THE
2000 ANNUAL MEETING
James T. Huffman Chairman and President since 380,925 (12.7%) (2)
Age: 51; Chairman 1981
of the Board,
President;
Director since 1978
William Howell Independent petroleum engineer 20,000 (.7%) (3)
Age: 64; Director and businessman since 1986;
since 1987 Vice President and Manager of
Denver office of Keplinger &
Associates, Inc. from 1981
to 1986
CLASS I - DIRECTORS WHOSE TERMS WILL EXPIRE AT THE
2001 ANNUAL MEETING
Otto P. Butterly Independent businessman since 25,530 (.9%) (3)
Age: 81; Director 1978; previously a Price
since 1983 Waterhouse partner
William F. Skewes Attorney in private practice 29,930 (1.0%) (3)
Age: 53; Corporate since 1988; previously a
Secretary and partner in the Denver law
General firm of Kelly, Stansfield &
Counsel; Director O'Donnell from 1977 to 1988
since 1980
All Directors and Officers as a Group (seven persons) 647,072 (21.6%)
- ---------------
(1) Owned of record and beneficially unless otherwise indicated.
(2) Includes 129,280 shares owned by members of Mr. Huffman's family
and 33,333 shares subject to currently exercisable stock options.
(3) Includes 20,000 shares subject to currently exercisable stock options.
</TABLE>
<PAGE>
INFORMATION CONCERNING MEETINGS OF THE
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors met four times during fiscal 1998.
All directors were present for not less than 75% of the meetings.
Effective in October 1997, the Board established an Audit
Committee (consisting of Messrs. Butterly, Huffman, and Skewes)
to recommend the engagement of independent accountants and to
monitor their work and findings including the scope of their
work, their independence from the Company and its management, and
the results of their work. The Audit Committee will meet with
the independent accountants at least once each year. Prior to
October 1997, the above procedures were conducted by the Board of
Directors. The Board also has an Executive Committee consisting
of Messrs. Butterly, Huffman and Skewes. The Executive Committee
met two times during fiscal 1998. There are no compensation or
nominating committees. Such matters are considered by the
Executive Committee or the Board of Directors.
COMPENSATION OF AND AGREEMENTS WITH NON-EMPLOYEE DIRECTORS
Non-employee directors, except Mr. Butterly, receive $1,000
plus reimbursement of out-of-pocket expenses for each meeting of
the Board of Directors attended and may be paid $100 per hour for
committee meeting attendance or for consulting services provided
at the request of the majority of the Board of Directors. Mr.
Butterly receives compensation for consulting services, including
time expended in his capacity as a director, at the rate of $100
per hour with a guaranteed minimum annual compensation of $10,000
which includes board and committee meeting attendance.
Each non-employee director has been granted a stock option
to purchase 30,000 shares of the Company's common stock at the
price on the date of grant ($1.94). The option vests in
one-third increments beginning on the date of grant and then on
each anniversary thereafter until fully vested and it expires on
the fifth anniversary of the date of grant.
The Company has entered into indemnification agreements with
each of its non-employee directors. Those agreements require the
Company to indemnify such directors to the fullest extent
permitted by Colorado Law and to advance expenses in connection
with certain claims against the directors.
INFORMATION CONCERNING OTHER EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES
In addition to the directors, executive officers and control
person listed above, the following persons are executive officers
or significant employees as defined by Securities and Exchange
Commission regulations.
<TABLE>
<CAPTION>
NAME POSITION AGE WORK EXPERIENCE
- -------- ----------- ---- --------------------------------
<S> <C> <C> <C>
Kenneth Manager- 49 Prior to joining the Company,
J. Petroleum Senior Reservoir Engineer for Axem
DeFehr Engineering Resources, Inc. from 1982 to 1990.
since Previously reservoir engineer for
October 1990 Phillips Petroleum Company.
Registered Professional Engineer.
Alford Vice 53 Prior to joining the Company, Vice
B. Neely President President Finance of Unidata, Inc.
and Chief from 1992 to 1997. Prior to 1992
Financial Director of Sprint Corporation,
Officer Senior Vice President Finance &
since Administration of Technical Oil
April 1998 Tool Corporation, and Senior Staff
Auditor with Deloitte & Touche.
Certified Public Accountant.
</TABLE>
<PAGE>
EXECUTIVE COMPENSATION
The following table shows, for the fiscal year ended October
31, 1998, the compensation paid or accrued by the Company for
services in all capacities to the chief executive officer of the
Company. No other executive officer had salary and bonus in
excess of $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------- -------------------------
AWARDS PAYOUTS
----------------- -------
SECURITIES
OTHER RE- UNDER- ALL
NAME AND ANNUAL STRICTED LYING OTHER
PRINCIPAL COMPEN- STOCK OPTIONS LTIP COMPEN-
POSITION YEAR SALARY BONUS SATION AWARD(S) (SHARES) PAYOUTS SATION
- ---------- ---- -------- ----- ------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James T. 1998 $111,000 - $15,000(2) - - - $6,000(1)
Huffman, 1997 $108,000 - - - 100,000 - $9,614(1)
Chief 1996 $102,000 - - - - - $5,676(1)
Executive
Officer
___________________
(1) Of this amount, approximately one-half represents life insurance
premiums and approximately one-half represents Mr. Huffman's share
of employer matching contributions to the Company's 401(K)
Retirement Plan.
(2) Of this amount, approximately 80% represents health insurance
premiums.
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
There were no stock options or stock appreciation rights
("SARs") granted to the named executive during the fiscal year.
Aggregate stock option and SAR exercises in the fiscal year and
the year-end values thereof are set forth in the following table.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
NUMBER OF AT FY-END AT FY-END(1)
SHARES ACQUIRED VALUE (EXERCISABLE/ (EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE) UNEXERCISABLE)
- ------------- --------------- -------- -------------- --------------
<S> <C> <C> <C> <C>
James T. Huffman 33,333 $35,000 33,333/33,333 -0- / -0-
___________________
(1) The fair market value of the Company's common stock at the close of
business on October 30, 1998 ($1.78 per share) was less than the
exercise price of the option.
</TABLE>
<PAGE>
SELECTION OF INDEPENDENT AUDITORS
(ITEM 2 ON PROXY CARD)
The Board of Directors has appointed, subject to
ratification by the stockholders, Hein + Associates as the
independent certified public accountants of the Company for
fiscal 1999. Representatives of Hein + Associates will be
present at the Annual Meeting to make any statement they so
desire and to answer appropriate stockholder questions.
In the absence of contrary instructions by a stockholder,
the shares represented by the proxies will be voted FOR the
ratification of the appointment of Hein + Associates as the
Company's independent accountants for fiscal 1999.
The Board of Directors recommends a vote FOR this proposal
and will be governed by the decision of a majority of shares
voting.
MANNER AND EXPENSES OF SOLICITATION
Solicitation of proxies will be by mail. The total expenses
of such solicitation will be borne by the Company and will
include reimbursement of brokerage firms and others for their
expenses in forwarding solicitation material regarding the
meeting to beneficial owners. Solicitation of proxies may be
made by telephone or oral communication by regular employees of
the Company who will not be directly compensated. In addition,
the Company may employ a proxy solicitor. Costs of a proxy
solicitor, if any, will be paid by the Company and will not
exceed $50,000.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any proposal which a stockholder intends to present for
consideration and action at the next annual meeting of
stockholders must be received in writing by the Company no later
than October 12, 1999 and must conform to applicable Securities
and Exchange Commission rules and regulations.
OTHER MATTERS
The Company knows of no other matters to be brought before
the Annual Meeting. However, if other matters come to their
attention before the meeting, it is the intention of the persons
named in the proxy to vote such proxy in accordance with their
judgement on such matters.
A copy of the Company's Annual Report for the fiscal year
ended October 31, 1998, which includes financial statements, is
enclosed for your information. The Annual Report is not a part
of the proxy solicitation material.
<PAGE>
PROXY CREDO PETROLEUM CORPORATION PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of CREDO Petroleum Corporation
(the "Company") acknowledges receipt of the Notice of Annual
Meeting of the Stockholders to be held March 11, 1999, at 2:30
p.m., MST, in the Norwest Bank Denver, Forum Room, Seventeenth
and Broadway, Denver, Colorado, and hereby appoints James T.
Huffman and William F. Skewes, and each of them, with the power
of substitution, as Proxies to vote all the shares of the
undersigned at said Annual Meeting of Stockholders and at all
adjournment thereof, hereby ratifying and confirming all that
said Proxies may do or cause to be done by virtue thereof. The
above named Proxies are instructed to vote all of the
undersigned's shares as follows:
1. Election of Directors: ___ FOR all Class III nominees
(except as marked to the
contrary below)
___ WITHHOLD AUTHORITY to vote for
all Class III nominees listed
below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST)
Class III - William N. Beach Richard B. Stevens
2. Proposal to ratify appointment of Hein + Associates as the
independent auditors of the Company for fiscal 1999:
___ FOR ___ AGAINST ___ ABSTAIN
3. In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the
meeting.
THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED AS DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
Dated this _____ day of
_______________, 1999.
__________________________________
Signature
__________________________________
Signature
Please sign your name exactly as it
appears on your stock certificate.
If shares are held jointly, each
holder should sign. Executors,
trustees and other fiduciaries
should so indicate when signing.
