SecProbe.io

CORRESP
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August 8, 2005

VIA EDGAR AND

FACSIMLE (202) 772-9368

Division of Corporation Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC  20549

  Attn:

  H. Roger Schwall, Assistant Director

  Carmen Moncada-Terry, Esq.

  Re:

  Cano Petroleum, Inc.

  Registration Statement on Form SB-2

  Filed June 28, 2005

  File No. 333-126167

Ladies and Gentlemen:

The following responses address the comments of the reviewing Staff of
the Commission as set forth in a comment letter dated July 22, 2005
relating to the Registration Statement on Form SB-2 of Cano Petroleum, Inc.
(the “Company”).  On behalf of the
Company, we respond as follows.

Selling Shareholders, page 51

1.                                       Expand
the table to include the natural persons with power to vote or to dispose of
the securities offered for resale by the entities that are listed as selling
stockholders. See Interpretation 4S of the Regulation S-K portion of the March 1999
supplement to the CF telephone interpretation manual.

Response

Footnote 11 to the Selling
Stockholders table, which appears on pages 8 and 9 of the Form SB-2,
was revised to provide the name of the natural person with the power to vote
and dispose of the securities owned by Quartile LTD.  Please see the attached Exhibit A.

Regarding Spindrift Partners,
L.P. and Spindrift Investors (Bermuda), L.P., please see the memo attached
hereto as Exhibit B drafted on behalf of Wellington Management Company,
llp, a registered investment adviser that shares investment discretion and
shares voting power over the securities held by Spindrift Partners, L.P. and
Spindrift Investors (Bermuda), L.P.

2.                                       Identify
as underwriters all selling stockholders who are registered broker-dealers.
Otherwise, confirm to us that all securities being resold by registered
broker-dealers constitute compensation for investment banking services.
Identify as underwriters all affiliates of registered broker-dealers that are
listed as selling stockholders unless you can confirm to us that (1) each
purchased its securities in the ordinary course of business and (2) at the
time of purchase, the stockholder had no agreements or understandings, directly
or indirectly, with any party to distribute the securities.

Response

The Company has been advised
that none of the selling stockholders are registered broker-dealers and that
none of the selling stockholders are affiliates of registered broker-dealers.

We trust that the foregoing appropriately addresses the issues raised
by your recent comment letter.  Thank you
in advance for your prompt review and assistance.

  Very truly yours,

  /s/ David Schubauer

  David Schubauer

2

EXHIBIT A

SELLING STOCKHOLDERS

The following table sets forth the common stock ownership and other information relating to the selling stockholders as of August 8, 2005.  The selling stockholders acquired their securities: (1) pursuant to the Agreement and Plan of Merger entered into on May 28, 2004, the material terms of which are described beginning on page 13 of this prospectus; (2) pursuant to our March 24, 2005 financing, the material terms of which are described on page 33 of this prospectus; (3) pursuant to conversions of our Series B and Series C Convertible Preferred Stock; (4) as consideration for services rendered to us; or (5) pursuant to private transactions exempt from registration pursuant to Section 4(1) of the Securities Act of 1933, as amended.   Other than as set forth in the following table, the selling stockholders have not held any position or office or had any other material relationship with us or any of our predecessors or affiliates within the past three years.

  Number of Shares

  Beneficially Owned

  Number of Shares Offered

  Shares Beneficially Owned

  After the Offering (1)

  Name

  Prior to the Offering

  Pursuant to this Prospectus

  Number

  Percent

  S. Jeffrey Johnson (2)

  4,080,350

  2,040,175

  2,040,175

  10.0

  %

  Michael J. Ricketts (3)

  464,850

  464,850

  0

  0

  Tom Cochrane (4)

  464,850

  464,850

  0

  0

  Donnie Dale Dent (5)

  40,000

  40,000

  0

  0

  Jim McCaghren (6)

  38,737

  38,737

  0

  0

  Evelyn L. Harwell (7)

  30,990

  30,990

  0

  0

  Patricia Lee Huckabee (8)

  29,440

  29,440

  0

  0

  Spindrift Partners, L.P. (9)

  650,000

  650,000

  0

  0

  Spindrift Investors (Bermuda), L.P. (9)

  700,000

  700,000

  0

  0

  Lee Hornback (10)

  5,000

  5,000

  0

  0

  Imtiaz Razack (10)

  250,000

  250,000

  0

  0

  Ramrishna Singh (10)

  186,666

  186,666

  0

  0

  Ramcumar Singh (10)

  466,667

  466,667

  0

  0

  Sharon Da Costa (10)

  453,333

  453,333

  0

  0

  Paul Dominque Mouttet (10)

  426,666

  426,666

  0

  0

  Quartile LTD (11)

  483,333

  483,333

  0

  0

  Randall Boyd (12) (14)

  225,000

  200,000

  25,000

  < 1

  %

  Gerald Haddock (13) (14)

  101,500

  50,000

  51,500

  < 1

  %

  TOTAL
  SHARES OFFERED

  6,980,707

A-1

(1)                    Assumes that all securities
registered will be sold and that all shares of common stock underlying common
stock purchase warrants and outstanding preferred stock will be issued.

(2)                    Mr. Johnson acquired his
shares pursuant to the Agreement and Plan of Merger dated May 26,
2004.  Mr. Johnson’s shares are
currently held in escrow pursuant to a Management Stock Pool Agreement dated May 28,
2004 (described on page 14 of this prospectus).  The 2,040,175 shares offered by Mr. Johnson
in this prospectus are scheduled to be released from escrow on July 1,
2005.  Mr. Johnson is our Chairman
and Chief Executive Officer.  See “Certain
Relationships and Related Transactions” beginning on page 29 of this
prospectus.

(3)                    Mr. Ricketts acquired his
shares pursuant to the Agreement and Plan of Merger dated May 26,
2004.  Mr. Ricketts’ shares are
currently held in escrow pursuant to a Management Stock Pool Agreement dated May 28,
2004 (described on page 14 of this prospectus).  232,425 of the shares offered by Mr. Ricketts
in this prospectus are scheduled to be released from escrow on July 1,
2005.  The remaining 232,425 shares
offered hereby are will be released upon achieving certain performance goals
over the next year, which are described on page 14 of this
prospectus.  Mr. Ricketts is our
Chief Financial Officer, Principal Accounting Officer and Secretary.

(4)                    Mr. Cochrane acquired his
shares pursuant to the Agreement and Plan of Merger dated May 26,
2004.  Mr. Cochrane’s shares are
currently held in escrow pursuant to a Management Stock Pool Agreement dated May 28,
2004 (described on page 14 of this prospectus).  232,425 of the shares offered by Mr. Cochrane
in this prospectus are scheduled to be released from escrow on July 1,
2005.  The remaining 232,425 shares
offered hereby are will be released upon achieving certain performance goals
over the next year, which are described on page 14 of this
prospectus.  Mr. Cochrane is our
Executive Vice President of Oil & Gas Operations.

(5)                    Mr. Dent acquired his shares
pursuant to the Agreement and Plan of Merger dated May 26, 2004.  Mr. Dent’s shares are currently held in
escrow pursuant to a Management Stock Pool Agreement dated May 28, 2004
(described on page 14 of this prospectus).
The 40,000 shares offered by Mr. Dent in this prospectus are
scheduled to be released from escrow on July 1, 2006.  Mr. Dent serves as a member of our Board
of Directors.

(6)                    Mr. McCaghren acquired his
shares pursuant to the Agreement and Plan of Merger dated May 26,
2004.  Mr. McCaghren’s shares are
currently held in escrow pursuant to a Management Stock Pool Agreement dated May 28,
2004 (described on page 14 of this prospectus).  The 38,737 shares offered by Mr. McCaghren
in this prospectus are scheduled to be released from escrow on July 1,
2006.  Mr. McCaghren is employed as
our Controller.

(7)                    Ms. Harwell acquired her
shares pursuant to the Agreement and Plan of Merger dated May 26,
2004.  Ms. Harwell’s shares are
currently held in escrow pursuant to a Management Stock Pool Agreement dated May 28,
2004 (described on page 14 of this prospectus).  The 30,990 shares offered by Ms. Harwell
in this prospectus are scheduled to be released from escrow on July 1,
2006.  Ms. Harwell is employed as
our Office Manager.

(8)                    Ms. Huckabee acquired her
shares pursuant to the Agreement and Plan of Merger dated May 26,
2004.  Ms. Huckabee’s shares are
currently held in escrow pursuant to a Management Stock Pool Agreement dated May 28,
2004 (described on page 14 of this prospectus).  The 29,440 shares offered by Ms. Huckabee
in this prospectus are scheduled to be released from escrow on July 1,
2006.  Ms. Huckabee is employed by
us as an Executive Assistant.

(9)                    Spindrift Partners, L.P. purchased
650,000 shares of common stock and Spindrift Investors (Bermuda), L.P.
purchased 700,000 shares of common stock in our March 24, 2005
financing.  Wellington Management
Company, llp, an investment adviser registered under the Investment Advisors
Act of 1940, as amended, shares investment discretion and shares voting power
over the securities held by Spindrift Partners, L.P. and Spindrift Investors
(Bermuda), L.P. Wellington Management
is deemed to have beneficial ownership over 1,350,000 shares.

(10)              Shares were purchased in a private
transaction exempt from registration under Section 4(1) of the
Securities Act of 1933, as amended.

(11)              Quartile LTD acquired 83,333 shares of
common stock upon conversion of 250 shares of our Series B Convertible
Preferred Stock at a conversion price of $3.00 per share and 400,000 shares of
common stock upon conversion of 1,500 shares of our Series C Convertible
Preferred Stock at a conversion price of $3.75 per share.  Lester Turnquest makes the investment decisions on behalf of Quartile LTD and
has voting control over the securities beneficially owned by Quartile LTD.

A-2

(12)              Mr. Boyd acquired 200,000 shares of
common stock upon conversion of 750 shares of Series C Convertible
Preferred Stock at a conversion price of $3.75 per share.  Mr. Boyd is currently a member of our
Board of Directors.  See “Certain
Relationships and Related Transactions” beginning on page 29 of this
prospectus.

(13)              Includes 50,000 shares of common stock
issuable upon exercise of outstanding stock options with an exercise price of $4.00 per share.  These options
were issued to Mr. Haddock as consideration for management and financial
consulting services.  Mr. Haddock is
currently a member of our Board of Directors.  See “Certain Relationships and Related
Transactions” beginning on page 29 of this prospectus.

(14)              Number of shares beneficially owned prior
to the offering includes 25,000 shares of common stock issuable upon exercise
of outstanding stock options issued to each of Messrs. Boyd and Haddock
for their service as members of our Board of Directors.

A-3

Exhibit B

  Thomas J. LaFond
617.570.1990
tlafond@

  goodwinprocter.com

  Goodwin Procter LLP
Counsellors at Law
Exchange Place
Boston, MA 02109
T: 617.570.1000
F: 617.523.1231

MEMORANDUM

  To

  Julie A. Jenkins

  Gina M. DiMento

  Wellington
  Management Company, LLP

  From

  Thomas J. LaFond

  Date

  August 8, 2005

We
have prepared this memorandum at your request in connection with the review by
the staff of the Securities and Exchange Commission (“SEC”) of the registration
statement on Form SB-2 (the “Registration Statement”) of Cano Petroleum, Inc.
(the “Registrant”).  Certain investment
advisory client accounts (“Client Accounts”) advised by Wellington Management
Company, LLP (“Wellington”) are named as selling shareholders in the
Registration Statement.  The Registration
Statement discloses the names of the Client Accounts and the fact that
Wellington is the investment adviser to the Client Accounts.

We
understand from discussions with counsel to the Registrant that, in the course
of reviewing the Registration Statement, the SEC staff has orally requested a
written explanation of the legal basis as to why the Registrant is not required
to include, in the list of selling shareholders contained in the Registration
Statement, the names of “the natural persons with power to vote or to dispose
of the securities offered for resale” by the Client Accounts.  In its comment letter to the Registrant, the
SEC staff directs the Registrant to Interpretation 4S of the Regulation S-K
portion of the March 1999 supplement to the CF telephone interpretation
manual (the “1999 Interpretation”).

For
the reasons set forth below, we do not believe that the requested disclosure is
required under applicable law and related regulatory guidance.

Applicable Law

We
understand that the Registrant is a small business issuer as defined in SEC
rules.  Form SB-2 is the
registration statement used by small business issuers to register certain
offerings of securities.  Form SB-2
requires, among other things, disclosure of the matters covered by Regulation
S-B, Item 507.  Item 507 provides:  “If security holders of a small business
issuer are offering securities, name each selling security holder, state any
position, office, or other material relationship which the selling security
holder has had within the past three years with the small business issuer or
any of its predecessors or affiliates, and state the amount of securities of
the class owned by such security holder before the offering, the amount to be

offered
for the security holder’s account, the amount and (if one percent or more) the
percentage of the class to be owned by such security holder after the offering
is complete.”

The
1999 Interpretation provides:  “We were
asked whether identification of an entity as a selling shareholder in the
registration statement must include disclosure of the persons who have sole or
shared voting or investment power over the entity.  The company must identify in the registration
statement the person or persons who have voting or investment control over the
company’s securities that the entity owns.
Use Rule 13d-3 by analogy to make the determination.”

The
SEC’s 1997 telephone interpretation 60 (Regulation S-K) provides:  “The term “security holder”, as used in Item
507 of Regulation S-K, means beneficial holders, not nominee holders or other
such holders of record.”

Analysis

On
the basis of the above, it is our view that the selling shareholder disclosure
required by Item 507 of Regulation S-B should be disclosure of the “beneficial
owners” of the shares being sold and, accordingly, should be consistent with
what the selling shareholders would report under Section 13 of the
Securities Exchange Act of 1934 and Rule 13d-1 thereunder if the selling
shareholders were subject to such reporting requirements.  The appropriate filing form under Section 13
for a registered investment adviser such as Wellington is generally Schedule 13G.  Schedule 13G does not require disclosure
of natural persons having the power to vote or dispose of the securities
beneficially owned by an investment adviser.
Accordingly, based on and subject to the foregoing, we do not believe
Regulation S-B, Item 507 or the SEC staff’s interpretations thereof require
additional disclosure with respect to Wellington or the Client Accounts in the
Registration Statement.

This
result is consistent with the applicable rules and with the underlying
purpose of the disclosure requirements.
As we understand it, the suggestion has been made that the 1999
Interpretation requires Wellington (along with all other investment advisers)
to disclose the names of specific portfolio managers, proxy voting officers,
and similar officers who carry out inve