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EXHIBIT 10.97

FORM OF RESTRICTED STOCK AWARD

CANO PETROLEUM, INC.
2005 LONG-TERM INCENTIVE PLAN

        Pursuant to the Cano Petroleum, Inc. 2005 Long-Term Incentive Plan (the
"Plan") for key employees, key consultants, and outside directors of Cano
Petroleum, Inc., a Delaware corporation (the "Company") and its Subsidiaries,

__________
(the "Participant")

has been granted a Restricted Stock Award in accordance with Section 6.4 of the
Plan.

1.Terms of Award. The number of shares of Common Stock awarded under this Award
Agreement (this "Agreement") is            shares (the "Awarded Shares"). The
Date of Grant of this Award is                 , 20    .

2.Subject to Plan. This Agreement is subject to the terms and conditions of the
Plan, and the terms of the Plan shall control to the extent not otherwise
inconsistent with the provisions of this Agreement. The capitalized terms used
herein that are defined in the Plan shall have the same meanings assigned to
them in the Plan. This Agreement is subject to any rules promulgated pursuant to
the Plan by the Board or the Committee and communicated to the Participant in
writing.

3.Vesting. Except as specifically provided in this Agreement and subject to
certain restrictions and conditions set forth in the Plan, the Awarded Shares
shall be vested as follows:

[Vesting information to be provided in each individual agreement].

Notwithstanding the foregoing, in the event that a Change in Control occurs,
then immediately prior to the effective date of such Change in Control, the
total restricted stock not previously vested shall thereupon immediately become
vested.

4.Forfeiture of Awarded Shares. Awarded Shares that are not vested in accordance
with Section 3 shall be forfeited on the date of the Participant's Termination
of Service. Upon forfeiture, all of the Participant's rights with respect to the
forfeited Awarded Shares shall cease and terminate, without any further
obligations on the part of the Company.

5.Restrictions on Awarded Shares. Awarded Shares that are not vested in
accordance with Section 3 and which are subject to forfeiture in accordance with
Section 4 shall be subject to the terms, conditions, provisions, and limitations
of this Section 5.

a.Subject to the provisions of the Plan and the other terms of this Agreement,
from the Date of Grant until the date the Awarded Shares are vested in
accordance with Section 3 and no longer subject to forfeiture in accordance with
Section 4 (the "Restriction Period"), the Participant shall not be permitted to
sell, transfer, pledge or assign shares any of the Awarded Shares.

b.Except as provided in paragraph (a) above, the Participant shall have, with
respect to his or her Awarded Shares, all of the rights of a stockholder of the
Company, including the right to vote the shares, and the right to receive any
dividends thereon.

6.Legend. The following legend shall be placed on all certificates representing
Awarded Shares:

On the face of the certificate:

"Transfer of this stock is restricted in accordance with conditions printed on
the reverse of this certificate."

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On the reverse:

"The shares of stock evidenced by this certificate are subject to and
transferable only in accordance with that certain Cano Petroleum, Inc. 2005
Long-Term Incentive Plan, a copy of which is on file at the principal office of
the Company in Fort Worth, Texas. No transfer or pledge of the shares evidenced
hereby may be made except in accordance with and subject to the provisions of
said Plan. By acceptance of this certificate, any holder, transferee or pledgee
hereof agrees to be bound by all of the provisions of said Plan."

The following legend shall be inserted on a certificate evidencing Common Stock
issued under the Plan if the shares were not issued in a transaction registered
under the applicable federal and state securities laws:

"Shares of stock represented by this certificate have been acquired by the
holder for investment and not for resale, transfer or distribution, have been
issued pursuant to exemptions from the registration requirements of applicable
state and federal securities laws, and may not be offered for sale, sold or
transferred other than pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to the Company."

All Awarded Shares owned by the Participant shall be subject to the terms of
this Agreement and shall be represented by a certificate or certificates bearing
the foregoing legend.

7.Delivery of Certificates. Certificates for Awarded Shares free of restriction
under this Agreement shall be delivered to the Participant promptly after, and
only after, the Restriction Period shall expire without forfeiture in respect of
such shares of Common Stock. Certificates for shares of Common Stock forfeited
pursuant to Section 4 shall be promptly returned to the Company by the
Participant. In connection with the issuance of a certificate for Restricted
Stock, the Participant shall endorse such certificate in blank or execute a
stock power in a form satisfactory to the Company in blank and deliver such
certificate and executed stock power to the Company. The parties acknowledge
that remedies at law will be inadequate remedies for breach of this Section 7
and consequently agree that this Section 7 shall be enforceable by specific
performance. The remedy of specific performance shall be cumulative of all of
the rights and remedies at law or in equity of the parties under this Section 7.

8.Voting. The Participant, as record holder of the Awarded Shares, has the
exclusive right to vote, or consent with respect to, such Awarded Shares until
such time as the Awarded Shares are transferred in accordance with this
Agreement; provided, however, that this Section 8 shall not create any voting
right where the holders of such Awarded Shares otherwise have no such right.

9.Representations, Etc. Each spouse individually is bound by, and such spouse's
interest, if any, in any Awarded Shares is subject to, the terms of this
Agreement. Nothing in this Agreement shall create a community property interest
where none otherwise exists.

10.Participant's Representations. Notwithstanding any of the provisions hereof,
the Participant hereby agrees that he will not acquire any Awarded Shares, and
that the Company will not be obligated to issue any Awarded Shares to the
Participant hereunder, if the issuance of such shares shall constitute a
violation by the Participant or the Company of any provision of any law or
regulation of any governmental authority. Any determination in this connection
by the Company shall be final, binding, and conclusive. The obligations of the
Company and the rights of the Participant are subject to all applicable laws,
rules, and regulations.

11.Participant's Acknowledgments. The Participant acknowledges receipt of a copy
of the Plan and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this

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Award subject to all the terms and provisions thereof. The Participant hereby
agrees to accept as binding, conclusive, and final all decisions or
interpretations of the Board or the Committee upon any questions arising under
the Plan or this Agreement.

12.Law Governing. This Agreement shall be governed by, construed, and enforced
in accordance with the laws of the State of Texas (excluding any conflict of
laws rule or principle of Texas law that might refer the governance,
construction, or interpretation of this agreement to the laws of another state).

13.Legal Construction. In the event that any one or more of the terms,
provisions, or agreements that are contained in this Agreement shall be held by
either a court of competent jurisdiction, with respect to claims under
Section 7, or by an arbitrator, with respect to all other claims under the
Agreement, to be invalid, illegal, or unenforceable in any respect for any
reason, the invalid, illegal, or unenforceable term, provision, or agreement
shall not affect any other term, provision, or agreement that is contained in
this Agreement and this Agreement shall be construed in all respects as if the
invalid, illegal, or unenforceable term, provision, or agreement had never been
contained herein.

14.Covenants and Agreements as Independent Agreements. Each of the covenants and
agreements that is set forth in this Agreement shall be construed as a covenant
and agreement independent of any other provision of this Agreement. The
existence of any claim or cause of action of the Participant against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants and agreements that
are set forth in this Agreement.

15.Entire Agreement. This Agreement together with the Plan supersede any and all
other prior understandings and agreements, either oral or in writing, between
the parties with respect to the subject matter hereof and constitute the sole
and only agreements between the parties with respect to the said subject matter.
All prior negotiations and agreements between the parties with respect to the
subject matter hereof are merged into this Agreement. Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement or the Plan and
that any agreement, statement or promise that is not contained in this Agreement
or the Plan shall not be valid or binding or of any force or effect.

16.Parties Bound. The terms, provisions, and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to the benefit of the
parties and their respective heirs, executors, administrators, legal
representatives, and permitted successors and assigns, subject to the limitation
on assignment expressly set forth herein. No person or entity shall be permitted
to acquire any Awarded Shares without first executing and delivering an
agreement in the form satisfactory to the Company making such person or entity
subject to the restrictions on transfer contained in Section 5 hereof.

17.Modification. No change or modification of this Agreement shall be valid or
binding upon the parties unless the change or modification is in writing and
signed by the parties; provided, however, that the Company may change or modify
this Agreement without the Participant's consent or signature if the Company
determines, in its sole discretion, that such change or modification is
necessary for purposes of compliance with or exemption from the requirements of
Section 409A of the Code or any regulations or other guidance issued thereunder.
Notwithstanding the preceding sentence, the Company may amend the Plan to the
extent permitted by the Plan.

18.Headings. The headings that are used in this Agreement are used for reference
and convenience purposes only and do not constitute substantive matters to be
considered in construing the terms and provisions of this Agreement.

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19.Gender and Number. Words of any gender used in this Agreement shall be held
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.

20.Notice. Any notice required or permitted to be delivered hereunder shall be
deemed to be delivered only when actually received by the Company or by the
Participant, as the case may be, at the addresses set forth below, or at such
other addresses as they have theretofore specified by written notice delivered
in accordance herewith:

(a)Notice to the Company shall be addressed and delivered as follows:

Cano Petroleum, Inc.
Burnett Plaza
801 Cherry Street
Suite 3200, Unit 25
Fort Worth, Texas 76102
Attn: General Counsel
Facsimile: (817) 698-0796

(b)Notice to the Participant shall be addressed and delivered as set forth on
the signature page.

21.Tax Requirements. The Participant is hereby advised to consult immediately
with his or her own tax advisor regarding the tax consequences of this
Agreement, the method and timing for filing an election to include this
Agreement in income under Section 83(b) of the Code, and the tax consequences of
such election. By execution of this Agreement, the Participant agrees that if
the Participant makes such an election, the Participant shall provide the
Company with written notice of such election in accordance with the regulations
promulgated under Code Section 83(b). The Company or, if applicable, any
Subsidiary (for purposes of this Section 21, the term "Company" shall be deemed
to include any applicable Subsidiary), shall have the right to deduct from all
amounts paid in cash or other form in connection with the Plan, any Federal,
state, local, or other taxes required by law to be withheld in connection with
this Award. The Company may, in its sole discretion, also require the
Participant receiving shares of Common Stock issued under the Plan to pay the
Company the amount of any taxes that the Company is required to withhold in
connection with the Participant's income arising with respect to this Award.
Such payments shall be required to be made when requested by Company and may be
required to be made prior to the delivery of any certificate representing shares
of Common Stock. Such payment may be made (i) by the delivery of cash to the
Company in an amount that equals or exceeds (to avoid the issuance of fractional
shares under (iii) below) the required tax withholding obligations of the
Company; (ii) if the Company, in its sole discretion, so consents in writing,
the actual delivery by the exercising Participant to the Company of shares of
Common Stock that the Participant has not acquired from the Company within six
(6) months prior to the date of exercise, which shares so delivered have an
aggregate Fair Market Value that equals or exceeds (to avoid the issuance of
fractional shares under (iii) below) the required tax withholding payment;
(iii) if the Company, in its sole discretion, so consents in writing, the
Company's withholding of a number of shares to be delivered upon the exercise of
this Award, which shares so withheld have an aggregate fair market value that
equals (but does not exceed) the required tax withholding payment; or (iv) any
combination of (i), (ii), or (iii). The Company may, in its sole discretion,
withhold any such taxes from any other cash remuneration otherwise paid by the
Company to the Participant.

[Signature Page to Follow]

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        IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and the Participant, to evidence his consent and
approval of all the terms hereof, has duly executed this Agreement, as of the
date specified in Section 1 hereof.

    COMPANY:
 
 
CANO PETROLEUM, INC.
 
 
By:
    

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    Name:     

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    Title:     

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PARTICIPANT:
 
 
Signature:
    

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    Name:     

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    Address:     

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FORM OF RESTRICTED STOCK AWARD CANO PETROLEUM, INC. 2005 LONG-TERM INCENTIVE
PLAN