Ownership Submission
FORM 3
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
  CARLSON CAPITAL L P
 2. Date of Event Requiring Statement (Month/Day/Year)
10/29/2008		 3. Issuer Name and Ticker or Trading Symbol
CANO PETROLEUM, INC [CFW]
(Last)
(First)
(Middle)
2100 MCKINNEY AVE, STE 1600		 4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director __X__ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
5. If Amendment, Date Original Filed(Month/Day/Year)
(Street)

DALLAS, TX 75201		 6. Individual or Joint/Group Filing(Check Applicable Line)
___ Form filed by One Reporting Person
_X_ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Beneficially Owned
1.Title of Security
(Instr. 4)		 2. Amount of Securities Beneficially Owned
(Instr. 4)		 3. Ownership Form: Direct (D) or Indirect (I)
(Instr. 5)		 4. Nature of Indirect Beneficial Ownership
(Instr. 5)
Common Stock (1) 3,132,746
I
See Footnote (1)
Common Stock 161,992
I
See Footnote (1)
Common Stock 1,499,933
I
See Footnote (1)
Common Stock 211,147
I
See Footnote (1)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. SEC 1473 (7-02)
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Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 4)		 2. Date Exercisable and Expiration Date
(Month/Day/Year)		 3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4)		 4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5)		 6. Nature of Indirect Beneficial Ownership
(Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
CARLSON CAPITAL L P
2100 MCKINNEY AVE
STE 1600
DALLAS, TX 75201		     X    
Asgard Investment Corp.
2100 MCKINNEY AVENUE
SUITE 1600
DALLAS, TX 75201		     X    
Carlson Clint Duane
2100 MCKINNEY AVENUE
SUITE 1600
DALLAS, TX 75201		     X    
Double Black Diamond Offshore LDC
UBS HOUSE, 227 ELGIN AVENUE
P.O. BOX 852
GRAND CAYMAN, E9 KY1-1103		     X    

Signatures

Clint D. Carlson, president of Asgard Investment Corp., general partner of Carlson Capital, L.P. 11/03/2008
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 5(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) 1 The shares of common stock of Cano Petroleum, Inc. reported herein are directly beneficially owned by Double Black Diamond Offshore Ltd., Black Diamond Offshore Ltd., and Black Diamond Relative Value Offshore Ltd. (together, the "Funds") and by a managed account (the "Account"). Carlson Capital, L.P. ("Carlson Capital") is the investment manager of the Funds and the Account. Asgard Investment Corp. ("Asgard") is the general partner of Carlson Capital. Clint D. Carlson is the President of Asgard and the Chief Executive Officer of Carlson Capital. The Reporting Persons disclaim beneficial ownership of any and all such shares in excess of their pecuniary interest therein, and the filing of this Form 3 shall not be deemed an admission that any such person or entity is the beneficial owner of or has a pecuniary interest in any such shares for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or any other purpose.

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