Cano Petroleum lacks borrowing capacity after forbearance termination

By Caroline Salls

Pittsburgh, Nov. 15 - Cano Petroleum, Inc. has no available borrowing capacity under its senior and subordinated credit agreements after consent and forbearance agreements were terminated on Sept. 24, according to a 10-Q filed with the Securities and Exchange Commission.

In addition, Cano said it has limited access to capital.

According to the 10-Q, the consent and forbearance agreements waived potential covenant compliance issues for the periods ended June 30 and Sept. 30, set deadlines for the execution of the company's strategic alternatives process and allowed Cano to sell some natural gas commodity derivative contracts for $800,000 in cash proceeds.

As of Monday, the lenders had not taken any actions related to the termination of the agreements.

Cano said it is still working with its lenders and advisers as it considers strategic alternatives.

Cano is a Fort Worth-based oil and natural gas company.

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