$289,332 Uses in Separation Payment Clause

Separation Payment from Separation Agreement and Release

This Separation Agreement and Release (this Agreement) is entered into by Cano Petroleum, Inc., a Delaware corporation (the Company), Resaca Exploitation, Inc., a Texas corporation (Resaca), and Benjamin L. Daitch (Executive) as of September 29, 2009. The Company and Executive are collectively referred to herein as the Parties and Resaca joins in this Agreement solely for the purposes set forth in Section 3(b), Section 7, and Section 27 and shall not be considered a Party for any other purpose. This Agreement cancels and supersedes all prior agreements relating to Executives employment with the Company, except as provided in this Agreement.

Separation Payment. Subject to Executives consent to and fulfillment of Executives obligations in this Agreement, and provided that Executive does not revoke this Agreement under Section 24, the Company shall pay, or cause to be paid, Executive severance pay equal to: (i) $500,000 in cash if the Separation Date occurs on or before December 31, 2009 or $578,666 in cash if the Separation Date occurs on or after January 1, 2010; and (ii) the number of whole shares of common stock, par value $0.01 per share, of Resaca (Resaca Common Stock) with a Fair Market Value on the Separation Date equal to $249,999 if the Separation Date occurs on or before December 31, 2009 or $289,332 if the Separation Date occurs on or after January 1, 2010 (collectively, subsections (i), and (ii), the Separation Payment). The Separation Payment shall be made in one lump sum on the first Business Day immediately following the date that is six (6) months and one (1) day following the Separation Date. The Separation Payment shall not be treated as compensation under the Companys 401(k) Plan or any other retirement plan. Executive recognizes and

Separation Payment from Separation Agreement and Release

This Separation Agreement and Release (this Agreement) is entered into by Cano Petroleum, Inc., a Delaware corporation (the Company), Resaca Exploitation, Inc., a Texas corporation (Resaca), and Benjamin L. Daitch (Executive) as of September 29, 2009. The Company and Executive are collectively referred to herein as the Parties and Resaca joins in this Agreement solely for the purposes set forth in Section 3(b), Section 7, and Section 27 and shall not be considered a Party for any other purpose. This Agreement cancels and supersedes all prior agreements relating to Executives employment with the Company, except as provided in this Agreement.

Separation Payment. Subject to Executives consent to and fulfillment of Executives obligations in this Agreement, and provided that Executive does not revoke this Agreement under Section 24, the Company shall pay, or cause to be paid, Executive severance pay equal to: (i) $500,000 in cash if the Separation Date occurs on or before December 31, 2009 or $578,666 in cash if the Separation Date occurs on or after January 1, 2010; and (ii) the number of whole shares of common stock, par value $0.01 per share, of Resaca (Resaca Common Stock) with a Fair Market Value on the Separation Date equal to $249,999 if the Separation Date occurs on or before December 31, 2009 or $289,332 if the Separation Date occurs on or after January 1, 2010 (collectively, subsections (i), and (ii), the Separation Payment). The Separation Payment shall be made in one lump sum on the first Business Day immediately following the date that is six (6) months and one (1) day following the Separation Date. The Separation Payment shall not be treated as compensation under the Companys 401(k) Plan or any other retirement plan. Executive recognizes and