Oil Stock Report

[OilStockReport]

Cano Petroleum (CFW) has seen better times. The one analyst covering it has Cano losing 15 cents/share this year. It has missed earnings for four straight quarters. Each quarterly miss was at least 100%, with the largest miss being 300%.

Cano has acquired a series of assets over the years, for the purpose of using secondary and enhanced oil recovery methods to obtain resource. Its assets are located in New Mexico, Oklahoma and Texas.

These acquisitions have been paid for through the issuance of stock. This stock dilution has been part of the reason Cano trades for 18 cents per share, down from $1.13 two years ago. Third quarter of 2011 results saw operating quarterly revenues increase 16% year over year.

Cano saw oil sales volumes decrease, but realized a higher sales price. It lost 11 cents per share for the quarter. The problems with Cano's business seem to be too large to be optimistic about its future.

I would not normally buy Cano as it will have to continue to cut shares to maintain its business even if oil prices continue to improve. However I agree a solid management team and make things happen and bring the value back in so I am keeping this one as a super spec play for now.