Cano Petroleum Announces Receipt of Delisting Notice from NYSE Amex

On December 8, 2011, Cano Petroleum, Inc. (NYSE Amex: CFW) (“Cano”) announced that it received a letter from NYSE Amex LLC (the “Exchange”) confirming its intent to strike the common stock of Cano from the Exchange by filing a delisting application with the Securities and Exchange Commission (the “SEC”) pursuant to Section 1009(d) of the Exchange’s Company Guide (the “Company Guide”).

As Cano previously reported, on October 26, 2011, the Exchange Staff (the “Staff”) notified Cano that is was not in compliance with the following sections of the Company Guide:

• Section 1003(a)(i) – stockholders’ equity of less than $2,000,000 and net losses in two of its three most recent fiscal years;
• Section 1003(a)(ii) – stockholders’ equity of less than $4,000,000 and net losses in three of its four most recent fiscal years;
• Section 1003(a)(iii) – stockholders’ equity of less than $6,000,000 and net losses in five consecutive years; and
• Section 1003(a)(iv) – Cano has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Cano will be able to continue operations and/or meet its obligations as they mature.

Additionally, as Cano previously reported, on November 22, 2011, the Staff determined that Cano’s securities had been selling for a low price per share for a substantial period of time and, pursuant to Section 1003(f)(v) of the Company Guide, Cano’s continued listing was predicated on it effecting a reverse stock split of its common stock within a reasonable period of time.

Pursuant to Section 1009 of the Company Guide, Cano was given the opportunity to submit a plan of compliance (a “Plan”) by November 28, 2011 advising the Exchange of actions it had taken, or would take, to regain compliance with Section 1003(a)(iv) of the Company Guide by January 26, 2012, Section 1003(f)(v) of the Company Guide by May 22, 2012 and Section 1003(a)(i), Section 1003(a)(ii) and Section 1003(a)(iii) of the Company Guide by October 26, 2012. Cano submitted its Plan on November 30, 2011. In its December 2, 2011 letter, the Staff stated that upon a review of the Plan, the Staff determined that the Plan did not sufficiently address how Cano intended to regain compliance. Accordingly, the Staff determined that it was appropriate to initiate delisting proceedings (the “Staff Determination”). The Staff Determination constitutes notice of a failure to satisfy certain continued listing standards.

In accordance with Sections 1203 and 1009(d) of the Company Guide, Cano has a limited right to appeal the Staff Determination by requesting an oral hearing or a hearing based on a written submission before a Listing Qualifications Panel. Cano’s written request for a hearing must be received by the Exchange by December 9, 2011. Cano intends to appeal the Staff Determination. However, there can be no assurance Cano’s request for continued listing will be granted. Cano is also taking action to have its common stock eligible to be quoted on the OTC Pink market. However, Cano can provide no assurance that its common stock will be quoted on the OTC Pink market or continue to trade in any other forum.

Forward Looking Statements

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. Cano intends that all such statements be subject to the “safe-harbor” provisions of those Acts. Many important risks, factors and conditions may cause Cano’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 Cano’s filings with the Securities and Exchange Commission. The historical results achieved by Cano are not necessarily indicative of its future prospects. Cano undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.