Cano Petroleum Announces Appointment of New Directors.

FORT WORTH, Texas -- Cano Petroleum, Inc. (AMEX:CFW), an oil and gas producer specializing in secondary and enhanced oil recovery, today announced the appointment of William O. Powell III, Robert L. Gaudin and Donald W. Niemiec to its Board of Directors, with Mr. Powell being appointed as Chairman of the Company's Audit Committee.

Board Member, Audit Committee Chairman: William Powell is a senior financial leader with a track record of successfully creating and executing business strategies. As a former partner at PricewaterhouseCoopers, Mr. Powell gained extensive public company experience in SEC and corporate governance issues as well as business development on a global scale. From 1974 to 2002 Mr. Powell held various positions, including Worldwide Engagement Leader-Partner with PricewaterhouseCoopers, focusing on energy companies. From 2003 to 2004, Mr. Powell was the Vice President and Chief Accounting Officer for La Quinta Corporation and served as Senior Vice President/Chief Financial Officer and Treasurer of ABS Group of Companies from 2005 to 2006. Mr. Powell, a former carrier jet pilot, received his B.S. in Engineering from the U.S. Naval Academy and a B.A. in Accounting from the University of West Florida.

Board Member: Robert Gaudin maintains over thirty years of exploration and land management experience in the oil and gas industry and for the last nine years has been the owner of Grande Energy Company and is also an owner of Holland Acquisitions and Extra Energy in Fort Worth, Texas. Mr. Gaudin holds a bachelor's degree from the State University of New York and is an active member in oil and gas industry associations, including the Society of Petroleum Engineers, the American Association of Petroleum Geologists and the American Association of Petroleum Landmen.

Board Member: Donald W. Niemiec brings extensive oil and gas experience to the Board. From 1982 to 2000, Mr. Niemiec was employed in various capacities by Union Pacific Resources Group, Inc., including President of Union Pacific Fuels, Inc. and Vice President, Marketing & Corporate Development. From 2000 to the present, he has served as President of WR Energy, LLC, a strategic consulting company for the energy industry and since 2005 has served as CEO and Managing Partner of Avery Taylor Custom Homes. Mr. Niemiec received his Bachelor of Science in Engineering from Princeton University and has attended the Advanced Management Program and the Advanced Marketing Management Program at the Harvard Business School.

Messrs. Powell, Gaudin and Niemiec were appointed to replace departing Directors Patrick Tolbert and Dennis McCuistion.

Jeff Johnson, Cano's Chairman and CEO, stated, "We are very pleased and fortunate to have such extensive oil and gas industry experience with the recent additions to our Board of Directors. The quality of these new members is a testament to the confidence they have placed both in our business model and our ability to execute it."

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.