Cano Announces Fiscal Year 2008 Fourth Quarter Production and Provides First Half...

Cano Announces Fiscal Year 2008 Fourth Quarter Production and Provides First Half FY2009 Production Guidance

FORT WORTH, Texas--(Business Wire)--
Cano Petroleum, Inc. (AMEX:CFW) today announced it is projecting
quarter on quarter production growth of 7 - 8% for the first quarter
of FY2009 and quarter on quarter production growth of 10 - 12% for the
second quarter of FY2009.

For the three months ended June 30, 2008, Cano estimated
production of 1,453 barrels of oil equivalent per day (BOEPD), down
from 1,495 BOEPD, a decrease of 2.8% from the prior quarter. As
discussed on our July 23rd conference call, production was impacted by
unscheduled gas plant maintenance at the Panhandle and Cato fields,
downtime at the Desdemona field due to a lightning strike and the
release of the drilling rig at Cato in May to focus on building
waterflood infrastructure.

Jeff Johnson, Cano's Chairman and CEO stated, "We are looking
forward to our efforts providing meaningful production growth through
the end of the fiscal year. As the year progresses and we get a better
line of sight to receiving certain permits at our Cato and Panhandle
fields we would expect to continue to provide production guidance for
the balance of FY2009."

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.

Safe-Harbor Statement -- Except for the historical information
contained herein, the matters set forth in this news release are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The company intends that all such
statements be subject to the "safe-harbor" provisions of those Acts.
Many important risks, factors and conditions may cause the company's
actual results to differ materially from those discussed in any such
forward-looking statement. These risks include, but are not limited
to, estimates or forecasts of reserves, estimates or forecasts of
production, future commodity prices, exchange rates, interest rates,
geological and political risks, drilling risks, product demand,
transportation restrictions, the ability of Cano Petroleum, Inc. to
obtain additional capital, and other risks and uncertainties described
in the company's filings with the Securities and Exchange Commission.
The historical results achieved by the company are not necessarily
indicative of its future prospects. The company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Cano Petroleum, Inc.
Ben Daitch, 877-698-0900
Senior Vice President & CFO
INFO@canopetro.com

Copyright Business Wire 2008