Cano Petroleum, Inc. says that on October 1, 2008 it completed the previously announced sale of its subsidiary, Pantwist, LLC, to Legacy Reserves Operating L.P. for $42.7 million. Net proceeds to Cano, after expenses and other customary adjustments, were $41.7 million. Net proceeds were used to pay off all the senior debt of Cano. Cano’s Senior Credit facility borrowing base will not be reduced as a result of the transaction.

Jeff Johnson, Cano’s Chairman and CEO, stated, “The sale of Pantwist, along with our previously completed equity capital raise, leaves Cano debt free. As discussed during our earnings call, our energy and capital will continue to be focused on our two core waterflood assets, Cato and the Panhandle. We are on target to deliver projected production growth for the first quarter and are reaffirming our guidance for the second quarter.”

Tags: Cano Petroleum