CREDO PETROLEUM CORPORATION
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held March 13, 2003
________________________________________________________________
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 Wells
Fargo Bank West, N.A., Forum Room, Seventeenth and Broadway,
Denver, Colorado, on March 13, 2003 at 2:30 p.m., MST, for the
purposes set forth below.
1. To elect two Class II directors to serve until the
year 2006 Annual Meeting of Stockholders.
2. To ratify the appointment of independent auditors for
the fiscal year 2003.
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 January
31, 2003 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
January 31, 2003
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.
________________________________________________________________
CREDO PETROLEUM CORPORATION
1801 Broadway, Suite 900, Denver, Colorado 80202
_______________________
PROXY STATEMENT
_______________________
ANNUAL MEETING OF STOCKHOLDERS, MARCH 13, 2003
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 13, 2003 at
2:30 p.m., MST, at the Wells Fargo Bank West, N.A., Forum Room,
Seventeenth and Broadway, Denver, Colorado, and any adjournment
thereof. This proxy material was mailed to stockholders on or
about February 7, 2003.
Only stockholders of record at the close of business on
January 31, 2003 will be entitled to vote at the meeting. On
that date, there were 3,279,674 shares of common stock
outstanding and entitled to vote, excluding 398,688 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 LLP
as independent auditors for the Company for fiscal 2003. 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 withhold votes for a
nominee for director or shares that either abstain from voting on
other proposals presented or which lack authority to vote will
have no effect in the tabulation of votes although they 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 January 31, 2003 are
set forth below.
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
---------------- -------------------- --------
James T. Huffman
6919 S. Steele Street
Littleton, Colorado 80122 461,429(1) 14.1%
R. K. O'Connell
P.O. Box 2003
Casper, Wyoming 82602 169,419(2) 5.2%
______________________
(1) Includes 149,780 shares owned by members of
Mr. Huffman's family.
(2) Includes 12,817 shares owned by Mr. O'Connell's wife
and by a corporation for which he serves as an officer.
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, including five outside directors, who have
particular expertise in areas considered essential to the
Company's business--namely geology, land, petroleum engineering,
legal and accounting.
The directors to be elected to the Board in Class II at the
2003 Annual Meeting of Stockholders will serve until the 2006
Annual Meeting and until their successors are duly elected and
qualified. Class I and Class III directors will continue to
serve until the 2004 and 2005 Annual Meetings of Stockholders,
respectively, and until their successors are duly elected and
qualified.
The Class II 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 the
nominees become unable to serve, which is not anticipated, the
proxies will vote for such substitute nominee 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.
Information Concerning Director Nominees and Continuing Directors
Shares of Common
Stock Owned
Name, Age, Position Beneficially
with Company Business Experience and Directorships and Percent
and Term as Director in Other Public or Investment Companies of Class (1)
-------------------- --------------------------------------- ------------------
CLASS II - NOMINEES FOR ELECTION AT THE 2003 ANNUAL MEETING
WHOSE TERMS WILL EXPIRE AT THE 2006 ANNUAL MEETING
James T. Huffman Chairman and President since 461,429 (14.1%)(2)
Age: 55; Chairman 1981
of the Board,
President;
Director since 1978
Clarence H. Brown Independent businessman and 25,000 (0.8%)(3)
Age: 68; Director oil operator since December 2000;
since 2000 Executive Vice President, Chief
Operating Officer and Director
of Columbus Energy, Inc. from
1989 to November 2000; previously
Chairman and Chief Executive Officer
of Kimbark Oil and Gas Company
CLASS I - DIRECTORS WHOSE TERMS WILL EXPIRE AT THE
2004 ANNUAL MEETING
Oakley Hall Independent businessman since 26,000 (0.8%)(4)
Age: 56; Director 2000; previously a Pricewaterhouse
since 2000 Coopers partner
William F. Skewes Attorney in private practice 40,130 (1.2%)
Age: 57; Corporate since 1988; previously a
Secretary and partner in the Denver law
General Counsel; firm of Kelly, Stansfield &
Director since 1980 O'Donnell from 1977 to 1988
CLASS III - DIRECTORS WHOSE TERMS WILL EXPIRE AT THE
2005 ANNUAL MEETING
William N. Beach Independent oil operator and 65,000 (2.0%)(5)
Age: 78; Director President of Beach Exploration,
since 1980 Inc. since 1975
Richard B. Stevens Independent businessman and oil 130,687 (4.0%)
Age: 73; Director operator since 1987; President
since 1987 of SECO Energy Corporation from
1981 to 1987
All Directors and Officers as a Group (seven persons) 758,246 (23.1%)
______________________
(1) Owned of record and beneficially unless otherwise indicated.
(2) Includes 149,780 shares owned by members of Mr. Huffman's family.
(3) Includes 22,900 shares subject to currently exercisable stock options.
(4) Includes 25,000 shares subject to currently exercisable stock options.
(5) Includes 10,000 shares owned by members of Mr. Beach's family.
Information Concerning Meetings of the
Board of Directors and Board Committees
The Board of Directors met four times during fiscal 2002.
All directors were present for 100% of the meetings.
The Board has an Executive Committee consisting of Messrs.
Hall, Huffman and Skewes. The Executive Committee did not meet
during fiscal 2002. There are no compensation or nominating
committees because such matters were considered by the Executive
Committee or the Board of Directors.
The Audit Committee of the Board of Directors consists of
three members: Mr. Hall, a CPA; Mr. Brown, a former oil company
executive; and Mr. Skewes, an attorney. Mr. Skewes, an attorney
in private practice, serves as the Company's General Counsel and
Corporate Secretary although he is not an employee of the Company
and has not received consulting services compensation from the
Company for the past three years. Because he is an officer of
the Company, Mr. Skewes does not technically meet the definition
of an "independent" director under the applicable National
Association of Securities Dealers' listing standards.
Nevertheless, the Board of Directors believes that Mr. Skewes is
independent from management of the Company and that his legal
background and his knowledge of financial statements qualify him
for membership on the Audit Committee.
Audit Committee Report
The responsibilities of the Audit Committee are set forth in
the Audit Committee Charter which has been adopted by the Board
of Directors. A copy of the Charter was included as an Appendix
to the 2001 Proxy Statement and will be included at least once
every three years in future Proxy Statements.
The Audit Committee met three times during fiscal 2002 and
has met twice since fiscal 2002 year-end. The Committee reviewed
and discussed the Company's audited financial statements for
fiscal 2002 with management and the Company's independent
auditors, and discussed with the Company's independent auditors
the matters required by Statement of Auditing Standards No. 61.
The Committee has received from the independent auditors
appropriate disclosures regarding the auditors' independence as
required by Independence Standards Board Standard No. 1. Based
on these reviews and discussions, the Audit Committee recommended
to the Board of Directors that the Company's audited financial
statements for the year ended October 31, 2002 be included in the
Company's Annual Report on Form 10-KSB.
Submitted by the Audit Committee of the Board of Directors
Oakley Hall, Chairman
Clarence H. Brown
William F. Skewes
Compensation of and Agreements with Non-Employee Directors
Non-employee directors receive $2,000 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.
Non-employee directors also receive director compensation in
the form of stock options granted under the Company's Stock
Option Plan. The option price is the price of the Company's
common stock on the option grant date. The options vest in
one-third increments beginning on the date of grant and then on
each anniversary thereafter until fully vested, and they expire
on the fifth anniversary of the date of grant. Mr. Brown was
granted a stock option on July 27, 2000 to purchase 25,000 shares
at $4.94. He has exercised 2,100 stock options and has 22,900
currently exercisable stock options. Mr. Hall was granted a
stock option on December 21, 2000 to purchase 25,000 shares at
$5.00 and has 25,000 currently exercisable stock options.
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 and executive officers listed
above, the following persons are executive officers or
significant employees as defined by Securities and Exchange
Commission regulations.
Name Position Age Work Experience
-------- ---------- ----- ------------------------------------
John A. Vice 61 Prior to joining the Company,
Alsko President Secretary/Treasurer and Director
and Chief of Bishop Capital Corporation from
Financial 1995 to 2000. Previously, Vice
Officer since President-Finance of Metro Capital
June 2000 Corporation from 1987 to 1995.
Certified Public Accountant.
Kenneth J. Manager- 53 Prior to joining the Company,
DeFehr Petroleum Senior Reservoir Engineer for
Engineering Axem Resources, Inc. from 1982 to
since 1990. Previously Reservoir Engineer
October 1990 for Phillips Petroleum Company.
Registered Professional Engineer.
Torie A. Manager- 48 Prior to joining the Company, Regional
Vandeven Geology and Geologist for Key Production Company
Exploration from 1997 to 1998. Previously Senior
since Staff Geologist and Regional
August 1999 Exploitation Geologist for Amoco
Production Company from 1995 to 1997
and from 1998 to 1999, respectively.
Prior to 1995, Senior Staff Geologist
for Santa Fe Minerals, Inc.
Certified Petroleum Geologist.
Executive Compensation
The following table shows, for the fiscal year ended
October 31, 2002, 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.
Summary Compensation Table
Annual Compensation Long Term Compensation
----------------------------- ------------------------------
Awards Payouts
--------------------- -------
Securities All
Other Restricted Underlying Other
Name and Principal Annual Stock Options LTIP Compen-
Position Year Salary Bonus Compensation Award(s) (Shares) Payouts sation
------------------ ---- -------- ------- ------------ --------- --------- ------- --------
James T. Huffman, 2002 $120,000 $30,000 $21,500(1) - - - $50,300(2)
Chief Executive 2001 $120,000 $30,000 $25,800(1) - - - $17,800(2)
Officer 2000 $120,000 $15,000 $22,400(1) - - - $14,600(2)
__________________
(1) Of this amount, approximately 82% represents health insurance premiums.
(2) Of this amount, approximately 15% in 2002 and 28% in 2001 and 2000
represents life insurance premiums, approximately 11% in 2002, 29% in
2001 and 36% in 2000 represents employer matching 401(K) plan
contributions, and the remainder represents payments from overriding
royalty interests.
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.
Aggregated Option/SAR Exercises In Last
Fiscal Year And Fiscal Year End Option/SAR Values
There were no stock options or SARs exercised by the named
executive in the last fiscal year and there are no unexercised
options or SARs at fiscal year-end.
SELECTION OF INDEPENDENT AUDITORS
(Item 2 on Proxy Card)
The Board of Directors has appointed, subject to
ratification by the stockholders, Hein + Associates LLP as the
independent auditors of the Company for fiscal 2003.
Representatives of Hein + Associates LLP 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 LLP as the
Company's independent auditors for fiscal 2003.
Audit Fees
The aggregate fees billed for professional services rendered
by Hein + Associates LLP for its audit of the Company's annual
financial statements for the fiscal year ending October 31, 2002,
and its reviews of the financial statements included in the
Company's Form 10-QSB for that fiscal year, were $36,500.
Financial Information Systems Design and Implementation
Hein + Associates LLP billed no fees to the Company for
financial information systems design and implementation during
the most recent fiscal year.
All Other Fees
The aggregate fees billed for other services provided by
Hein + Associates LLP in the 2002 fiscal year were $2,000. This
included $1,600 of audit-related fees for accounting consultation
and $400 related to tax consulting. The Audit Committee has
reviewed such fees and found that the provision of such other
services is compatible with maintaining the principal
accountant's independence.
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, 2003 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, 2002, which includes financial statements, is
enclosed for your information. The Annual Report is not a part
of the proxy solicitation material.