Governance

Cano Petroleum, Inc. is dedicated to the conduct of its business and operations in accordance with the highest ethical standards and in accordance with all applicable laws, rules and regulations. Additionally, the Board and the senior management team remain focused on maintaining a high level of integrity and loyalty in the conduct of the business of the Company. In furtherance of these goals, the Company maintains and enforces specific directives and the Board maintains an independent Audit Committee, a Compensation Committee and is free to establish Special Committees to address specific issues as the need arises. The following policies and committees are currently in place regarding the foregoing:

1. Code of Ethics and Business Conduct for Officers, Directors and Employees of Cano Petroleum, Inc.
2. The establishment by the Chief Executive Officer of certain black out periods for insider trading activities
3. An Audit Committee, chaired by Director William O. Powell, III with the attached Charter
4. A Compensation Committee, chaired by Director Don W. Niemiec
5. Nominating and Corporate Governance Committee Charter chaired by Director Robert L. Gaudin, with the attached Charter

Reference is also made to the attached Bylaws of Cano Petroleum, Inc.

Inquiries regarding the foregoing or Communications to the Board or any of the Committees should be directed to: