Cano Petroleum Announces Results of Annual Stockholder Meeting.

FORT WORTH, Texas -- Cano Petroleum (AMEX:CFW) announced the results of the voting at its Annual Stockholder Meeting held today in Fort Worth, Texas.

The Stockholders overwhelmingly re-elected S. Jeffrey Johnson, Donnie D. Dent, Gerald W. Haddock, Randall Boyd, Morris B. "Sam" Smith, and Dr. Jim Underwood to the Board of Directors who will serve for a term of one (1) year and who shall hold office until their successors are elected and qualified.

The Stockholders also ratified the appointment of Hein & Associates LLP as the Company's independent registered public accounting firm for the fiscal year ending June 30, 2006. Further, the Stockholders approved the 2005 Cano Petroleum, Inc. Long Term Incentive Plan.

Jeff Johnson, Cano's Chairman and CEO, stated, "Our first Annual Stockholder Meeting culminates an exceptional first 18 months of our Company's history. Cano's significant accomplishments during this short period are a testament to our management team and staff. We remain focused on continuing to add stockholder value through the diligent application of our corporate strategy and look forward to an outstanding year ahead."

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 onshore fields using secondary and enhanced recovery methods. Cano trades on the American Stock Exchange under the ticker symbol CFW. Additional information is available at www.canopetro.com.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS: Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, volatility of natural resource prices, product demand, market competition, and risks inherent in our operations. These and other risks are described in our Annual Report on Form 10-KSB and other filings with the Securities and Exchange Commission.