Results of the Annual Stockholder Meeting

The stockholders elected S. Jeffrey Johnson, Randall Boyd, Robert L. Gaudin, Gerald W. Haddock, Donald W. Niemiec, William O. Powell, III and David Wehlmann to the Board of Directors who will serve for a term of one (1) year and who shall hold office until their successors are elected and qualified.

The stockholders also ratified the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2008.

Departure of Donnie D. Dent from the Board of Directors

Cano Petroleum announced today that its longtime director, Mr. Donnie D. Dent, stepped down from Cano Petroleum’s board of directors. He had previously announced that he was not standing for re-election. Mr. Dent, an accomplished attorney and petroleum engineer, served on Cano Petroleum’s board of directors since the inception of the Company in 2004.

Jeff Johnson, Cano Petroleum’s Chairman and CEO, stated, “Don Dent has been an outstanding member of Cano’s board of directors. Through his extensive experience in the energy sector, he has provided to Cano the leadership and insight necessary to grow and expand the Company.” Mr. Johnson continued, “Cano will surely miss Don Dent’s presence, yet we wish him all the best in his future endeavors.”

Mr. Dent’s board seat was filled by newly elected director, Mr. David Wehlmann. Mr. Wehlmann, the Executive Vice President and Chief Financial Officer of Grey Wolf, Inc. (GW), a publicly traded oil and gas service company, is a certified public accountant. Mr. Wehlmann brings 27 years of oil and gas related experience to Cano’s board of directors.

Filing of a Universal Shelf Registration Statement

Cano Petroleum announced the filing of a registration statement on Form S-3 with the Securities and Exchange Commission. The universal shelf registration statement, when effective, will allow Cano Petroleum to issue common stock, preferred stock, warrants, senior debt and subordinated debt up to an aggregate amount of $150 million.

The registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Upon effectiveness of the registration statement, Cano Petroleum may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if the securities are offered. At the time any of the securities covered by the registration statement are offered for sale, a prospectus supplement will be prepared and filed with the Securities and Exchange Commission containing specific information about the terms of any such offering. When available, such a written prospectus may be obtained by contacting the underwriters which will be named in any such prospectus supplement or by contacting Cano Investor Relations at info@canopetro.com.

Management Comments

Jeff Johnson, Chairman and CEO, commented, “This registration statement, commonly known as a universal shelf registration statement, when declared effective by the SEC should increase Cano’s financial flexibility and allow us to act more quickly when potential acquisition or other business opportunities might require us to access capital. There are no immediate plans to utilize this shelf.”

ABOUT CANO PETROLEUM:

Cano Petroleum Inc. is an independent Texas-based energy producer with properties in the mid-continent region of the United States. Led by an experienced management team, Cano’s primary focus is on increasing domestic production from proven fields using enhanced recovery methods. Cano trades on the American Stock Exchange under the ticker symbol CFW. Additional information is available at www.canopetro.com.