UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 14, 2008
Cano Petroleum, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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001-32496 |
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77-0635673 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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801 Cherry Street, Suite 3200 |
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Fort Worth, Texas |
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76102 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(817) 698-0900
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events.
On November 14, 2008, Cano Petroleum, Inc. (“Cano”) sold to Union Bank of California, N.A. (“UBOC”) its “floor price” financial commodity contracts covering the period of November 2008 through July 2010 for $2.6 million. Cano will record a realized pre-tax gain of approximately $0.6 million and an unrealized gain of approximately $1.2 million based on the value of the contracts at September 30, 2008. UBOC was the counter-party to these contracts and is the administrative agent for the Credit Agreement dated as of November 29, 2005.
As a result of the sale of these contracts and the previously disclosed sale of the “floor price” financial commodity contracts covering the period of July 2010 through December 2010 for $0.6 million, Cano has sold all of its commodity derivative positions other than derivatives that are listed as “costless collar” financial contracts as reported in Cano’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.
As of November 14, 2008, Cano maintained the following derivative contracts, all of which are “costless collars” with the oil prices being per barrel and the natural gas prices being per Mcf:
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Time Period |
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Floor |
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Ceiling |
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Barrels |
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Floor |
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Ceiling |
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Mcf |
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Barrels of |
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4/1/08 - 12/31/08 |
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$ |
80.00 |
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$ |
117.50 |
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367 |
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$ |
7.75 |
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$ |
11.40 |
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1,867 |
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678 |
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1/1/09 - 12/31/09 |
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$ |
80.00 |
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$ |
110.90 |
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367 |
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$ |
7.75 |
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$ |
10.60 |
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1,667 |
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644 |
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1/1/10 - 12/31/10 |
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$ |
80.00 |
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$ |
108.20 |
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333 |
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$ |
7.75 |
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$ |
9.85 |
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1,567 |
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594 |
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1/1/11 - 3/31/11 |
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$ |
80.00 |
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$ |
107.30 |
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333 |
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$ |
7.75 |
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$ |
11.60 |
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1,467 |
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578 |
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4/1/08 - 12/31/08 |
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$ |
85.00 |
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$ |
110.60 |
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267 |
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$ |
8.00 |
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$ |
10.90 |
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1,233 |
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472 |
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1/1/09 - 12/31/09 |
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$ |
85.00 |
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$ |
104.40 |
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233 |
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$ |
8.00 |
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$ |
10.15 |
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1,133 |
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422 |
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1/1/10 - 12/31/10 |
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$ |
85.00 |
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$ |
101.50 |
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233 |
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$ |
8.00 |
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$ |
9.40 |
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1,033 |
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406 |
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1/1/11 - 3/31/11 |
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$ |
85.00 |
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$ |
100.50 |
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200 |
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$ |
8.00 |
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$ |
11.05 |
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967 |
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361 |
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* * * * *
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CANO PETROLEUM, INC. |
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Date: November 20, 2008 |
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By: |
/s/ Benjamin Daitch |
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Benjamin Daitch |
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Senior Vice President and |
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Chief Financial Officer |
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