Cano Petroleum Completes Private Placement

Cano Petroleum says that it has sold in a private placement 2,603,864 shares of its common stock at a per-share price equal to $4.14, which was the closing price on September 13, 2005, on the American Stock Exchange. On September 13, 2005, Cano received written commitments for the private placement. The gross proceeds were $10,780,000, and the net proceeds of the issuance will be used for general corporate purposes and working capital.