Exhibit 99.1
Cano Petroleum Provides Merger Status Update
FORT WORTH, Texas—(BUSINESS WIRE)—Cano Petroleum, Inc. (NYSE Amex: CFW) today provided a status update regarding its pending merger with Resaca Exploitation, Inc. (AIM: RSX and RSOX). As announced on September 30, 2009, Cano and Resaca executed an agreement and plan of merger on September 29, 2009. The merger is subject to the following closing conditions: (i) Resaca’s Registration Statement on Form S-4 becoming effective with the U.S. Securities and Exchange Commission (“SEC”), (ii) the approval of the merger by shareholders of both companies, (iii) Resaca becoming listed on a U.S. exchange, (iv) Resaca becoming approved and re-admitted for listing on the AIM, (v) the refinancing of existing bank debt, and (vi) other customary closing conditions.
Form S-4 Registration Statement Status
On October 23, 2009, Resaca filed a Form S-4, related to the merger, with the SEC for the SEC’s routine review and comment. Resaca received comments from the SEC regarding its Form S-4 filing on November 19, 2009. Resaca is currently preparing responses to these SEC comments and expects to file an amended Form S-4 the week of December 14, 2009. Once approved by the SEC, the Form S-4 will serve as a prospectus for Resaca shareholders as well as a joint proxy statement for both Resaca shareholders and Cano stockholders to vote on the proposed merger, in addition to other matters to be voted on as discussed therein. Those interested in reading the Form S-4 submission to the SEC can find it at www.sec.gov under Resaca Exploitation, Inc. filings or on Resaca’s website at www.resacaexploitation.com.
Stockholder Approval Status
The merger must be approved by a majority of Resaca’s common shareholders and by a majority of Cano’s common stockholders. In addition, a majority of Cano’s preferred stockholders must approve the merger. Cano received approval of the merger from a majority of its preferred stockholders in October 2009. Once the SEC registration process is finalized, stockholders of both companies will vote on the merger. The companies estimate that the vote will occur sometime in the first calendar quarter of 2010.
Listing Status
Resaca is in discussions with the NYSE Amex and the NASDAQ OMX to obtain a U.S. exchange listing. Both exchanges are reviewing the Company’s S-4 and monitoring the status of Resaca’s U.S. registration process. Resaca’s management is confident that Resaca will be able to obtain a U.S. exchange listing once the SEC registration process is completed.
AIM Readmission Status
Since the merger will constitute a reverse takeover under the AIM rules, Resaca is required to complete an Admission Document to be readmitted to the AIM and maintain its AIM listing. This Admission Document is currently being prepared in conjunction with the finalization of the Form S-4 Registration Statement.
Bank Refinancing Status
Resaca is working with the current bank groups for each company’s credit facility. Resaca anticipates that the combined bank group will enter into a new credit facility that will be effective in conjunction with the merger. This process is ongoing and Resaca anticipates a satisfactory result.
Integration
Since the announcement of the merger, the management teams of Resaca and Cano have been working closely together on cost reduction analysis, integration efforts and the sharing of best practices. These efforts have already identified cost savings in addition to those previously announced. In addition, the companies are currently reviewing development capital programs to select the highest impact projects to pursue in the near-term as a combined enterprise.
About Cano
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 NYSE Amex under the ticker symbol CFW. Additional information is available at www.canopetro.com.
About Resaca
Resaca is an independent oil and gas development and production company based in Houston, Texas. Resaca is focused on the acquisition and exploitation of long-life oil and gas properties, utilizing a variety of primary, secondary and tertiary recovery techniques. Resaca’s current properties are located in the Permian Basin of West Texas and Southeast New Mexico. Resaca trades on the AIM under the ticker symbols RSOX and RSX. Additional information is available at www.resacaexploitation.com.
Forward Looking Statements
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. Resaca and Cano intend 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 Resaca or Cano to obtain additional capital, and other risks and uncertainties described in Cano’s or Resaca’s filings with the Securities and Exchange Commission. The historical results achieved by Resaca and Cano are not necessarily indicative of its future prospects. Neither Resaca nor Cano undertakes any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
This communication is being made in respect of the proposed business combination involving Resaca and Cano. In connection with the proposed transaction, Resaca and Cano (a) filed documents with the SEC, including the filing by Resaca of a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus, (b) plan to publish an admission document for the purpose of admitting the issued common stock of the enlarged group to trading on AIM and (c) plan to file with AIM and the SEC other necessary documents regarding the proposed transaction. Investors and security holders of Resaca and Cano are urged to carefully read the Joint Proxy Statement/Prospectus and AIM admission document (when available) and other documents filed with AIM and the SEC by Resaca and Cano because they contain important information about the proposed transaction. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC by contacting Resaca Investor Relations at (713) 753-1441 or Cano Investor Relations at (817) 698-0900. Investors and security holders may obtain free copies of the documents filed with the SEC and published in connection with the admission to AIM on Resaca’s website at www.resacaexploitation.com or Cano’s website at www.canopetro.com. Information filed with the SEC will be available on the SEC’s website at www.sec.gov. Resaca, Cano and their respective directors and executive officers may be deemed participants in the solicitation of proxies with respect to the proposed transaction. Information regarding the interests of these directors and executive officers in the proposed transaction will be included in the Joint Proxy Statement/Prospectus and AIM admission document described above. Additional information regarding the directors and executive officers of Resaca is also included in Resaca’s website. Additional information regarding Cano is available under its periodic reports which are filed with the SEC.
