- Current report filing (8-K)
August 05 2009 - 3:45PM
Edgar (US Regulatory)
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)
March 31,
2009
Cano Petroleum, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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)
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(817)
698-0900
(Registrants 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 1.01. Entry into a Material Definitive Agreement.
As
a result of the termination of the Gas Purchase Agreement by and between Eagle
Rock Field Services, L.P. (Eagle Rock), and W.O. Operating Company Ltd. (W.O.)
and Pantwist, LLC dated April 1, 2007 (the Eagle Rock Agreement)
described below under Item 1.02 Termination of a Material Definitive
Agreement Eagle Rock, on August 4, 2009, W.O., an indirect wholly-owned
subsidiary of Cano Petroleum, Inc. (Cano), entered into a new Gas
Purchase Contract (the DCP Agreement) with DCP Midstream, L.P. (DCP)
effective on July 1, 2009, which supersedes the previous gas purchase contract,
as amended, with DCP as described below under Item 1.02 Termination of a
Material Definitive Agreement DCP. Previously, all of W.O.s leases and
wells were dedicated to DCP and Eagle Rock.
The new DCP Agreement dedicates all of W.O.s leases and wells in the
Texas Panhandle to DCP. Subject to
certain conditions, the term of the DCP Agreement runs until April 30,
2016 and, unless terminated upon 60 days prior notice, continues thereafter on
a year-to-year basis. Pursuant to the
terms of the DCP Agreement, W.O. will be paid on a sliding scale based upon the
volume of NGLs and natural gas it sells per each delivery point. W.O. will continue to sell, on a
month-to-month basis, natural gas and NGLs in the Texas Panhandle to Eagle Rock
until such time as any given well(s) is (are) added to new delivery points
on the DCP pipeline.
Item
1.02 Termination of a Material Definitive Agreement
.
Eagle
Rock
On
March 31, 2009, Cano and W.O. received notice from Eagle Rock that
pursuant to the terms of the Eagle Rock Agreement, it would be terminating the
Eagle Rock Agreement on May 1, 2009 due to the decrease in oil and natural
gas prices unless W.O. agreed to accept Eagle Rocks proposed new pricing
terms. The parties extended the
termination date to June 1, 2009 to continue negotiations, and the parties
continued negotiating into July; however, they were not able to reach a new
agreement. Through June 1, 2009,
W.O. sold natural gas production to Eagle Rock at the prices set forth in the
Eagle Rock Agreement. On June 2,
2009, W.O. began selling and will continue to sell natural gas production to
Eagle Rock on a sliding scale based upon the volume of fluid it sells per each
delivery point for both natural gas and NGLs.
The
Eagle Rock Agreement covered the sale of natural gas and NGLs from certain
portions of W.O.s properties located in the Texas Panhandle.
DCP
In
connection with entering into the DCP Agreement described above under Item
1.01 Entry into a Material Definitive Agreement, on August 4, 2009 and
effective on July 1, 2009, W.O. and DCP terminated the Gas Purchase Contract
between W.O. as Seller and Duke Energy Field Services, LP as Buyer dated November 1,
2003, as amended, which covered the sale of natural gas and NGLs from the
portion of W.O.s properties located in the Texas Panhandle that were not covered
by the Eagle Rock Agreement.
2
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:
August 5, 2009
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By:
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/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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3
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