Cano Petroleum today announced it has sold its Rich Valley, Oklahoma asset to a private company for $7.0 million, subject to customary closing conditions and purchase price adjustments. The sale closed yesterday.
The Rich Valley asset is currently producing approximately 120 boepd net and as of July 2006 there were approximately 600,000 boe reserves, all proved. Randall and Dewey, Inc. marketed the asset for the Company.
Cano plans to use the proceeds from the sale to pay down debt on its senior credit facility.
Jeff Johnson Cano's CEO said, "The sale of this non strategic asset will allow us to concentrate on our core activities and will give us some additional financial flexibility."
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.
Contact:
Cano Petroleum, Inc.
Sam Smith, 877-698-0900
Senior Vice President & CFO
ior@canopetro.com
Source: Cano Petroleum
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