Fort Worth-based Cano to sell Pantwist for $42.7 million

by PegNews wire

FORT WORTH — Cano Petroleum, Inc. announced today that it has entered into an agreement to sell its 100% membership interest in Pantwist, LLC to Legacy Reserves LP for $42.7 million cash, subject to closing adjustments. The sale, effective July 1, 2008, is expected to close on October 1, 2008. The company states that proceeds from the transaction will initially pay down all outstanding debt.

Pantwist was created in April 2006 for the sole purpose of acquiring certain leases in Carson, Gray, Hutchinson, Moore, Wheeler, and Sherman counties of the Texas Panhandle. Pantwist was producing 322 net BOEPD, with 2.4 MMBOE net proved reserves (78% proved developed producing) at June 30, 2008. Cano will record approximately a $20 million gain on the transaction. The company will use its NOL balance to offset any cash taxes associated with the gain.

Jeff Johnson, Cano’s Chairman and Chief Executive Officer stated, “The divestiture of Pantwist enables us to eliminate all of our debt while continuing to invest in our core waterflood assets at Panhandle and Cato.”

Cano Petroleum Inc. is an independent Texas-based energy producer with properties in the mid-continent region of the United States.

Source: Cano Petroleum