8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 22, 2008

Rancher Energy Corp.

(Exact name of registrant as specified in its charter)

Nevada	000-51425	98-0422451
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

999-18^th Street, Suite 3400, Denver, Colorado 80202

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (303) 629-1125

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On October 22, 2008, Rancher Energy Corp. (“Rancher Energy”) and GasRock Capital LLC (“GasRock”) entered into a First Amendment to Term Credit Agreement (“First Amendment”) that amends certain provisions of the Term Credit Agreement dated as of October 16, 2007 pursuant to which Rancher Energy borrowed $12,240,000 from GasRock.

The First Amendment extends for six months the maturity date under the Term Credit Agreement of October 31, 2008 to April 30, 2009. In consideration of the amendments contemplated by the First Amendment, Rancher Energy made a principal payment to GasRock in the amount of $2,240,000, resulting in a new loan balance of $10,000,000, and granted an increase in the proportionate overriding royalty interests (“ORRI”) payable to GasRock from 2% to 3%. Under the terms of the First Amendment, Rancher Energy has the right to buy back one-third (1/3) of the ORRI.

The First Amendment has been filed as Exhibit 10.1 to this Current Report on Form 8-K and the foregoing is qualified by the terms of the First Amendment as reflected therein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information included in Item 1.01 above is hereby incorporated by reference into this Item 2.03.

Item 7.01 Regulation FD Disclosure.

On October 23, 2008, Rancher Energy issued a press release entitled “Rancher Energy Corp. Announces Extension and Revised Terms of GasRock Loan.” The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is furnished pursuant to the rules and regulations of the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

Exhibit 10.1First Amendment to Term Credit Agreement.

Exhibit 10.2Conveyance of Overriding Royalty Interest.

Exhibit 99.1Press release dated October 23, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RANCHER ENERGY CORP.

Signature:  /s/ John Works                                        

Name:         John Works

Title:           President and Chief Executive Officer

Dated:October 23, 2008

EXHIBIT INDEX

Exhibit Number	Description
Exhibit 10.1	First Amendment to Term Credit Agreement.
Exhibit 10.2	Conveyance of Overriding Royalty Interest.
Exhibit 99.1	Press release dated October 23, 2008.

EX-10.1

EXHIBIT 10.1

FIRST AMENDMENT TO

TERM CREDIT AGREEMENT

THIS FIRST AMENDMENT TO TERM CREDIT AGREEMENT (this “FirstAmendment”) is entered into effective as of October 22, 2008 between RANCHER ENERGY CORP., a Nevada corporation (“Borrower”), and GASROCK CAPITAL LLC, a Delaware limited liability company (“Lender”). Capitalized terms used but not defined in this First Amendment have the meaning given them in the Credit Agreement (defined below).

RECITALS

A.Borrower and Lender entered into that certain Term Credit Agreement dated as of October 16, 2007 (as amended, restated or supplemented from time to time, the “Credit Agreement”).

B.Borrower and Lender have agreed to amend the Credit Agreement, subject to the terms and conditions of this First Amendment.

AGREEMENT

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned hereby agree as follows:

1.Amendments to Credit Agreement.

Section 1.1, Defined Terms of the Credit Agreement is hereby amended by revising the following definition in its entirety to read as follows:

“Maturity Date” means the earliest of (a) April 30, 2009, (b) the date on which all Obligations (other than the obligations under any ORRI Conveyance and indemnity obligations and similar obligations that expressly survive the termination of the Loan Documents) have been paid in full and this Agreement has terminated, and (c) the date on which Lender notifies Borrower of the acceleration of payments of all or any portion of the Obligations based on the occurrence of an Event of Default.

Section 2.6(c) is hereby amended to add the following text immediately following the last sentence thereof:

In addition to the foregoing and to the extent any portion of the Interest Reserve remains unapplied on the Repayment Dates as set forth below, Borrower hereby instructs Lender, and Lender hereby agrees, to apply the balance of such Interest Reserve, if any, against the accrued and unpaid interest due on the Principal Amount on the Repayment Dates as follows: (i) first, the amount of the Interest Reserve in excess of $300,000 against the accrued and unpaid interest payable on the January 2009 Repayment Date; (ii) second, the

amount of Interest Reserve in excess of $206,666.67, if any, against the accrued and unpaid interest payable on the February 2009 Repayment Date; (iii) third, the amount of the Interest Reserve in excess of $100,000, if any, against the accrued and unpaid interest payable on the March 2009 Repayment Date; and (iv), fourth, the remainder of such Interest Reserve, if any, against the accrued and unpaid interest payable on the April 2009 Repayment Date; provided that in the event Lender applies the balance of such Interest Reserve, if any, in accordance with the foregoing, Borrower shall not be required to deposit additional funds into the Lender Account sufficient to eliminate any such deficit in the Interest Reserve created thereby. If, on the Maturity Date and after applying the foregoing accrued interest payments, any excess Interest Reserve amount exists, such excess shall be applied to the outstanding Principal Amount.

Section 7.1(d) is hereby amended to add the following subsection (v) immediately following subsection (iv) thereof:

(v) Subject to clause (ii) above, Borrower shall permit Lender or its representatives to consult directly with any of Borrower’s advisors or consultants that are hired or employed from time to time in connection with Borrower’s assets, business or operations and the acquisition and divestitures or financing in connection with any of its assets, business or operation, including, without limitation, Growth Capital Partners and Borrower agrees to promptly notify Lender of any such newly hired or employed advisors or consultants.

Sections 8.4(a) and 8.4(b) are hereby deleted in their entirety and replaced with the following:

(a) On the Closing Date, Borrower shall grant to Lender an ORRI covering the Leases more particularly described on Exhibit A attached hereto, pursuant to the ORRI Conveyance, equal to 2% of 8/8ths proportionately reduced to Borrower’s Working Interest. Additionally, effective as of October 1, 2008, Borrower shall grant to Lender an ORRI covering the Leases more particularly described on Exhibit A attached hereto, pursuant to the ORRI Conveyance, equal to 1% of 8/8ths proportionately reduced to Borrower’s Working Interest (which is in addition to the ORRI described above).

(b) After the Closing Date, during the term of this Agreement or so long as the Obligations remain outstanding, Borrower shall assign to Lender an ORRI (pursuant to an ORRI Conveyance) covering each Lease acquired by Borrower after the Closing Date, which ORRI shall be equal to 2% of 8/8ths proportionately reduced to Borrower’s Working Interest; providedthat, from and after October 1, 2008, any such ORRI shall be 3% of 8/8ths proportionately reduced to Borrower’s Working Interest.

Sections 8.5(a) and 8.5(d) are hereby deleted in their entirety and replaced with the following:

(a) Prior to the Maturity Date, the Borrower may purchase from Lender one-third (1/3rd) of the entire ORRI granted or assigned to Lender under the ORRI Conveyances in accordance with Section 8.4, so that, after giving effect to such purchase, Lender’s ORRI

(b)on all Borrower’s Leases and Wells will be equal to 2.0% of 8/8ths proportionately reduced to Borrower’s Working Interest.

(c)The amount of the purchase price for the repurchased ORRI shall be the “supplemental amount” needed to cause the following equation to equal 1.4: (i) the sum of (A) the Principal Amount paid to Lender, plus (B) all accrued interest on the Principal Amount paid to Lender, plus (C) all payments in respect of the ORRI paid to Lender, plus (D) the supplemental amount, divided by (ii) 12,240,000.

Section 10.1(a) is hereby deleted in its entirety and replaced with the following:

(a)Borrower fails to (i) pay any portion of the Obligations (principal, interest, fees or expenses) when the same is due and payable, whether on a Repayment Date, at a date for the payment of an installment, or at a date fixed for prepayment thereof; provided that Borrower shall not be deemed to have failed to pay an interest payment on a Repayment Date if Lender debits such interest payment from the Lender Account on such Repayment Date, or (ii) except as otherwise provided in Section 2.6(c), replenish the Interest Reserve in the Lender Account within 3 Business Days after Lender debits an interest payment from the Lender Account on a Repayment Date;

2.Conditions to Closing First Amendment. This First Amendment shall be effective once each of the following conditions precedent have been satisfied, unless specifically waived in writing by Lender:

(a)Lender shall have received the following documentation, each in form and substance satisfactory to Lender and its legal counsel, in their sole discretion:

     (i)this First Amendment executed by Borrower and Lender;

     (ii)the ORRI Conveyance executed by Borrower and Lender; and

     (iii)such other documents as Lender may reasonably request.

(b)Borrower shall have paid to Lender the amount of $2,240,000 as a principal repayment.

3.Representations and Warranties. Borrower represents and warrants to Lender that (a) it possesses all requisite power and authority to execute, deliver and comply with the terms of this First Amendment, (b) this First Amendment has been duly authorized and approved by all requisite corporate action on the part of Borrower, (c) no other consent of any Person (other than Lender) is required for this First Amendment to be effective, (d) the execution and delivery of this First Amendment does not violate its organizational documents, (e) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date of this First Amendment as though made on the date of this First Amendment (except to the extent that such representations and warranties speak to a specific date), (f) it is in full compliance with all covenants and agreements contained in each Loan Document to which it is a party, and (g) no Default or Event of Default has occurred and is continuing.

4.The representations and warranties made in this First Amendment shall survive the execution and delivery of this First Amendment. No investigation by Lender is required for Lender to rely on the representations and warranties in this First Amendment.

5.Scope of Amendment; Reaffirmation; Release. All references to the Credit Agreement shall refer to the Credit Agreement as amended by this First Amendment. Except as affected by this First Amendment, the Loan Documents are unchanged and continue in full force and effect. However, in the event of any inconsistency between the terms of the Credit Agreement (as amended by this First Amendment) and any other Loan Document, the terms of the Credit Agreement shall control and such other document shall be deemed to be amended to conform to the terms of the Credit Agreement. Borrower hereby reaffirms its obligations under the Loan Documents to which it is a party and agrees that all Loan Documents to which they are a party remain in full force and effect and continue to be legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this First Amendment). Borrower hereby releases Lender from any liability for actions or omissions in connection with the Credit Agreement and the other Loan Documents prior to the date of this First Amendment.

6.Miscellaneous.

(a)No Waiver of Defaults. This First Amendment does not constitute (i) a waiver of, or a consent to, (A) any provision of the Credit Agreement or any other Loan Document not expressly referred to in this First Amendment, or (B) any present or future violation of, or default under, any provision of the Loan Documents, or (ii) a waiver of Lender’s right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents.

(b)Form. Each agreement, document, instrument or other writing to be furnished Lender under any provision of this First Amendment must be in form and substance satisfactory to Lender and its counsel.

(c)Headings. The headings and captions used in this First Amendment are for convenience only and will not be deemed to limit, amplify or modify the terms of this First Amendment, the Credit Agreement, or the other Loan Documents.

(d)Costs, Expenses and Attorneys’ Fees. Borrower agrees to pay or reimburse Lender on demand for all its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation, and execution of this First Amendment, including, without limitation, the reasonable fees and disbursements of Lender’s counsel.

(e)Successors and Assigns. This First Amendment shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns.

(f)Multiple Counterparts. This First Amendment may be executed in any number of counterparts with the same effect as if all signatories had signed the same document. All counterparts must be construed together to constitute one and the same instrument. This First

(g)Amendment may be transmitted and signed by facsimile or portable document format (PDF). The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually-signed originals and shall be binding on Borrower and Lender. Lender may also require that any such documents and signatures be confirmed by a manually-signed original; provided that the failure to request or deliver the same shall not limit the effectiveness of any facsimile or PDF document or signature.

(h)Governing Law. This First Amendment and the other Loan Documents must be construed, and their performance enforced, under Texas law.

(i)Arbitration. Upon the demand of any party to this First Amendment, any dispute shall be resolved by binding arbitration as provided for in Section 12.1 of the Credit Agreement.

(j)Entirety. The Loan Documents (as amended hereby) Represent the Final Agreement Between Borrower and Lender and May Not Be Contradicted by Evidence of Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There Are No Unwritten Oral Agreements among the Parties.

[Signatures appear on the next page.]

IN WITNESS WHEREOF, this First Amendment is executed as of the date first written above.

BORROWER:

RANCHER ENERGY CORP.,

a Nevada corporation

By:      /s/ John Works                                      

John Works

President & Chief Executive Officer

LENDER:

GASROCK CAPITAL LLC,

a Delaware limited liability company

By:      /s/ Marshall Lynn Bass                         

Marshall Lynn Bass

Principal

Signature Page to the First Amendment to

Term Credit Agreement

GUARANTOR’S CONSENT AND AGREEMENT

TO

FIRST AMENDMENT TO TERM CREDIT AGREEMENT

Guarantor executes this First Amendment for purposes of acknowledging and agreeing to the Credit Agreement, as amended by this First Amendment, and hereby expressly ratifies and confirms its liability under its Guaranty dated October 16, 2007 executed in favor of Lender and confirms that such liability continues in full force and effect with respect to the indebtedness of Borrower covered by the Credit Agreement, as amended by this First Amendment, as same may be further restated, amended, modified, renewed, or rearranged from time to time.

RANCHER ENERGY WYOMING, LLC

a Wyoming limited liability company

By: RANCHER ENERGY CORP.,

its sole Manager

By:      /s/ John Works                                       

John Works

President & Chief Executive Officer

EX-10.2

EXHIBIT 10.2

Prepared by and when recorded, please return to:

Porter & Hedges, LLP

1000 Main, 36^th Floor

Houston, Texas 77002

Attention: Ephraim del Pozo

CONVEYANCE OF OVERRIDING ROYALTY INTEREST

THIS CONVEYANCE OF OVERRIDING ROYALTY INTEREST (“Conveyance”) dated as of October 22, 2008, to be effective as of the Effective Time, is made by RANCHER ENERGY CORP., a Nevada corporation doing business in the State of Wyoming as RANCHER ENERGY OIL & GAS CORP. (the “Grantor”), to and in favor of GASROCK CAPITAL LLC, a Delaware limited liability company (the “Grantee”).

ARTICLE I

Defined Terms

Section 1.1. Defined Terms. When used in this Conveyance or in any exhibit or schedule hereto (unless otherwise defined in any such exhibit or schedule), the following terms have the respective meanings assigned to them in this section or in the sections, subsections, exhibits and schedules referred to below:

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Control,” for purposes of further defining “Affiliate,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. For the purposes of this definition, and without limiting the generality of the foregoing, any Person that owns directly or indirectly 10% or more of the equity interests having ordinary voting power for the election of the directors or other governing body of a Person will be deemed to “control” such other Person. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Agreement” means that certain Term Credit Agreement dated October 16, 2007 between Grantor, as borrower, and Grantee, as lender, as amended by the First Amendment thereto dated October 22, 2008 and as the same may be further amended, restated or supplemented from time to time.

“Effective Time” means 7:00 a.m. M.S.T. on October 1, 2008.

“Fixed Rate” means, for any day, the rate that is the lesser of (a) twelve percent (12%) per annum, based on actual days elapsed and a year of 360 days or (b) the maximum of interest allowed by applicable Law.

“Hydrocarbons” means oil, gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom

“Law” means any statute, law, regulation, ordinance, rule, treaty, judgment, order, decree, permit, concession, franchise, license, agreement or other governmental restriction of the United States or any state or political subdivision thereof or of any foreign country or any department, province or other political subdivision thereof. Any reference to a Law includes any amendment or modification to such Law, and all regulations, rulings, and other Laws promulgated under such Law.

“Leasehold Interest” means an interest in Hydrocarbons arising from ownership relating to an oil, gas and/or mineral lease.

“Option to Repurchase” means Grantor’s option to repurchase one-third of the aggregate combined overriding royalty interest consisting of the Overriding Royalty Interest granted hereunder and the Original Overriding Royalty Interest granted under the Original Conveyance of Overriding Royalty Interest, pursuant to the Credit Agreement. Grantor’s option must be exercised, if at all, no later than April 30, 2009 or such earlier date as may be provided in the Credit Agreement.

“Original Conveyance of Overriding Royalty Interest” means that certain Conveyance of Overriding Royalty dated October 16, 2007 made by Grantor to and in favor of Grantee which was duly recorded at #941798, Book 1321, Page 792 of the official public records of Converse County, Wyoming and at #831005 of the official public records of Natrona County, Wyoming.

“Original Overriding Royalty Interest” means the two percent (2.0%) of 8/8ths overriding royalty interest (proportionately reduced to Grantor’s Working Interest), granted by Grantor to and in favor of Grantee pursuant to the Original Conveyance of Overriding Royalty Interest, in and to all Hydrocarbons produced and saved from the Subject Interests described on Exhibit A attached thereto.

“Overriding Royalty Interest” has the meaning assigned to such term in Section 2.1.

“Overriding Royalty Interest Hydrocarbons” means the Hydrocarbons attributable to the Overriding Royalty Interest.

“Permitted Encumbrances” means:

(a) the contracts, agreements, burdens, encumbrances and other matters set forth as being applicable to certain of the Subject Interests in the descriptions of such Subject Interests on Exhibit A hereto;

(b) liens for taxes, assessments or other governmental charges or levies which are not due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted and for the payment of which Grantor has reserved adequate funds;

(c) liens of vendors, contractors, subcontractors, carriers, warehousemen, mechanics, laborers or materialman or other like liens arising by law or contract in the ordinary course of business for sums which are not due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted and for the payment of which Grantor has reserved adequate funds;

(d) covenants, restrictions, easements, servitudes, permits, conditions, exceptions, reservations, minor rights, minor encumbrances, minor irregularities in title or conventional rights of reassignment prior to abandonment which do not materially interfere with the occupation, use and enjoyment by Grantor or Grantee of their respective interests in the Subject Interests in the normal course of business as presently conducted or to be conducted, materially impair the value thereof for the purpose of such business, or impair the value of the Overriding Royalty Interests;

(e) liens and security interests in favor of Grantee or its Affiliates; and

(f) liens of operators under joint operating agreements or similar contractual arrangements with respect to Grantor’s proportionate share of the expense of exploration, development and operation of Hydrocarbon leasehold or fee interests owned jointly with others, to the extent that such liens secure sums which are not due or which are being contested in good faith by appropriate action promptly initiated and diligently conducted and for the payment of which Grantor has reserved adequate funds.

“Person” means an individual, corporation, general partnership, limited partnership, limited liability company, association, joint stock company, trust or trustee thereof, estate or executor thereof, court or governmental unit or any agency or authority thereof, or any other legally recognizable entity.

“Specified Costs” means Specified Taxes, Specified Marketing Costs, and Specified Transportation Costs.

“Specified Marketing Costs” means a charge for marketing the Overriding Royalty Interest Hydrocarbons that is equal to the fair and reasonable costs which would have been charged at the time, and in the same geographical area, in arm’s-length dealings with parties other than Affiliates of Grantor.

“Specified Taxes” means all ad valorem or property taxes assessed against the Overriding Royalty Interests and all conservation taxes, severance taxes or similar taxes assessed against or measured by production and severance of Overriding Royalty Interest Hydrocarbons or the value thereof. To the extent that any jurisdiction in which the Subject Lands are located also requires Grantor to withhold income taxes or similar taxes payable by Grantee, the taxes so withheld shall also be “Specified Taxes.”

“Specified Transportation Costs” means all costs paid by Grantor (or any other operator of Subject Interests on behalf of Grantor) to gatherers, processors or transporters for transporting Overriding Royalty Interest Hydrocarbons from the applicable lease to the point of sale or for processing Overriding Royalty Interest Hydrocarbons off of the Subject Lands to meet pipeline or transporter specifications and qualifications, provided however, that no such costs shall exceed fair and reasonable costs for the area which would have been charged at the time in arm’s-length dealings with parties other than Affiliates of Grantor.

“Subject Hydrocarbons” means that portion of the Hydrocarbons in and under and that may be produced from (or to the extent pooled or unitized, allocated to) the Subject Interests.

“Subject Interests” means:

(a) All right, title and interest of Grantor in the leases described in Exhibit A; and

(b) All right, title and interest of Grantor in and to, or otherwise derived from, all presently existing and valid Hydrocarbon unitization, pooling, or communitization agreements, declarations or orders and in and to the properties covered and the units created thereby (including all units formed under orders, rules, regulations, or other official acts of any federal, state, or other authority having jurisdiction, voluntary unitization agreements, designations or declarations, and so-called “working interest units” created under operating agreements or otherwise) relating to the properties described in subsection (a) above in this definition.

“Subject Interests” does not include any overriding royalty interest, royalty interest, and/or mineral interest currently owned by Grantor in the leases described on Exhibit A.

“Subject Lands” means the lands described or referred to in Exhibit A or in the leasesdescribed in Exhibit A.

“Subject Wells” means all wells now or hereafter located or pooled or unitized with the Subject Lands.

“Unit” means, in respect of each Subject Well or group of related Subject Wells, Grantor’s interest in Leasehold Interests covering the lands attributed to each such respective Subject Well or group of related Subject Wells for pooling, unitization and/or proration purposes, from time to time, whether so attributed to such Subject Well or group of related Subject Wells in order to comply with the terms of the applicable deed, oil and gas leases, pooling or unitization agreements, unit operating agreements or the like or in order to comply with the applicable rules and regulations of applicable governmental authorities related to pooling, unitization, well spacing or the like and, including without limitation any pooled (compulsory or voluntary) unit, production unit, regulatory unit, field-wide unit, or other similar designation or allocation of lands to such Subject Well or group of related Subject Wells.

“Working Interest” and “WI” means Grantor’s share of the costs of operations conducted thereon (less applicable carried interests and non-consent working interests).

Section 1.2. Rules of Construction. All references in this Conveyance to articles, sections, subsections and other subdivisions refer to corresponding articles, sections, subsections and other subdivisions of this Conveyance unless expressly provided otherwise. Titles appearing at the beginning of any of such subdivisions are for convenience only and shall not constitute part of such subdivisions and shall be disregarded in construing the language contained in such subdivisions. The words “this Conveyance”, “this instrument”, “herein”, “hereof”, “hereunder” and words of similar import refer to this Conveyance as a whole and not to any particular subdivision unless expressly so limited. Unless the context otherwise requires: “including” and its grammatical variations mean “including without limitation”; “or” is not exclusive; words in the singular form shall be construed to include the plural and vice versa; words in any gender include all other genders; references herein to any instrument or agreement refer to such instrument or agreement as it may be from time to time amended or supplemented; and references herein to any Person include such Person’s successors and assigns. All references in this Conveyance to exhibits and schedules refer to exhibits and schedules to this Conveyance unless expressly provided otherwise, and all such exhibits and schedules are hereby incorporated herein by reference and made a part hereof for all purposes.

ARTICLE II

Granting Provisions

Section 2.1.Granting Clause. For a good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor does hereby GRANT, BARGAIN, SELL, TRANSFER, ASSIGN, CONVEY, WARRANT and DELIVER to Grantee a one percent (1.0%) of 8/8ths overriding royalty interest (proportionately reduced to Grantor’s Working Interest) in and to all Hydrocarbons produced and saved from the Subject Interests described on Exhibit A (the “Overriding Royalty Interests”). In the event any Lease covers less than the full oil and gas estate in the Lands covered by the Lease, the Overriding Royalty Interests shall be reduced in the proportion that the oil and gas estate covered by the applicable Lease bears to the full and undivided oil and gas estate in the Lands.

TO HAVE AND TO HOLD the Overriding Royalty Interests unto Grantee, its successors and assigns, forever. This Conveyance is made with full substitution and subrogation of Grantee in and to all covenants and warranties by others heretofore given or made.

Section 2.2. Non-Cost-Bearing Interest. Except for Specified Costs and except as otherwise specifically provided herein, the Overriding Royalty Interests shall be free and clear of, and shall bear no burden or part of, all “costs of production” as defined in the Wyoming Royalty Payment Act, W.S. § 30-5-301 through 305.

Section 2.3. Measurement: Hydrocarbons Lost or Used. The Overriding Royalty Interests shall not apply to any Hydrocarbons that are unavoidably lost in the production thereof or in the compression, processing or transportation of Subject Hydrocarbons prior to the applicable point of sale or which are used by Grantor or the operator of any Subject Well for the production of Subject Hydrocarbons or for the compression or transportation thereof prior to the applicable point of sale, in each case only to the extent the same are lost or used in the course of operations which are being conducted prudently and in a good and workmanlike manner.

Section 2.4Renewals and Extensions. This Conveyance and any overriding royalty interest granted hereunder shall apply to Grantor’s and any Affiliate’s, successor’s, assign’s, agent’s or representative’s of Grantor interests in all renewals and extensions, whether such renewals and extensions have heretofore been obtained or are hereafter obtained and whether or not the same are described in Exhibit A.

For the purposes of the preceding paragraph, a new Hydrocarbon lease (as used in this paragraph, “lease”) that covers the same interest (or any part thereof) covered by a prior lease, and which is acquired within one year after the expiration, termination, or release of such prior lease, shall be treated as a renewal or extension of such prior lease. If a court of competent jurisdiction determines that, due to the acquisition or ownership by Grantor or any of its Affiliates, successors, assigns, agents or representatives of the Grantor, all or a portion of the fee interest associated with any of the leases (the “Grantor Fee”), the Overriding Royalty Interest associated with such lease has terminated, then Grantor or any of its Affiliates, successors, assigns, agents or representatives, as the case may be, shall immediately convey to Grantee a non-participating royalty interest in the Grantor Fee equal to the overriding royalty interests set forth in Section 2.1 with respect to the Grantor Fee. Such overriding royalty interest shall be reduced on a property-by-property basis in the proportion which the percentage of the oil and gas estate covered by the Grantor Fee in that property bears to one hundred percent (100%) of the oil and gas estate in that property. To the fullest extent allowed by applicable law, the royalty interest shall be conveyed by Grantor to Grantee with the same provisions, representations, warranties and covenants that are in this Conveyance.

ARTICLE III

Marketing of Overriding Royalty Interest Hydrocarbons and Distribution of Proceeds

Section 3.1 Nature of Marketing Arrangements. Grantor shall have the obligation to prudently market, or cause to be prudently marketed, the Overriding Royalty Interest Hydrocarbons on behalf of and for the account of Grantee in transactions with reputable purchasers, with each such marketing arrangement, including those arrangements relating to sales, treating, transportation, compression and processing, to be made upon terms and conditions (the “Marketing Terms and Conditions”) that, in the case of an arms-length sale to a third party, are the same terms and conditions under which Grantor sells its share of produced Hydrocarbons (with Grantee receiving the same consideration as Grantor and Grantor’s Affiliates receive), or in the case of any other sale (a) are the best reasonably obtainable in the general field or area, (b) are at least as favorable as Grantor or any Affiliate of Grantor obtains for Grantor’s share of the Hydrocarbons attributable to the Subject Interests or attributable to any other properties in the same field or general area, and (c) take into account and give due regard to the best interests of Grantee. No Overriding Royalty Interest Hydrocarbons are or will become subject to any sales arrangement whereby (i) payment for Overriding Royalty Interest Hydrocarbons is or can be deferred for a substantial period after the Month in which the Overriding Royalty Interest Hydrocarbons are delivered (i.e., in excess of 60 days), or (ii) payments may be made other than by checks, drafts, wire transfer or similar communications for the immediate payment of money. Grantor shall duly and prudently perform all obligations performable by it under any arrangements by which Overriding Royalty Interest Hydrocarbons are sold or otherwise marketed, and shall take all appropriate measures to enforce the performance under each such arrangement of the obligations of the other parties thereto. As to any third parties, all acts of Grantor in marketing the Overriding Royalty Interest Hydrocarbons and all sales or other marketing agreements executed by Grantor in accordance herewith shall be binding on Grantee and the Overriding Royalty Interests; it being understood that the right and obligation to market the Overriding Royalty Interest Hydrocarbons is at all times vested in Grantor, and Grantee does not have any such right or obligation. Accordingly, it shall not be necessary for Grantee to join in any production sales or marketing agreements or any amendments to existing production sales or marketing agreements.

Section 3.2 Distribution of Funds. Grantee shall receive all payments for (or on account of) Overriding Royalty Interest Hydrocarbons on or before noon on the last business day of each month in which proceeds from sale are received by Grantor, net of Specified Costs. All payments shall be sent to Grantee by the purchaser of the Hydrocarbons from the Subject Interests by wire transfer or check to such account or location as Grantee may direct from time to time in writing. If any proceeds are received by Grantor for or on account of Overriding Royalty Interest Hydrocarbons, such proceeds shall immediately be paid to Grantee. Grantor shall cause to be prepared and executed such division orders, transfer orders, or instructions in lieu thereof, as may be necessary to cause payments to be made directly to Grantee by the purchaser of the Hydrocarbons from the Subject Interests.

Section 3.3 Production Records, Statements and Payments. Grantor shall keep full, true, and correct records of: (a) the Hydrocarbons produced from or attributable to the Subject Interests, and the portion attributable to the Overriding Royalty Interests, (b) all costs of production as defined in W.S. § 30-5-304, and all costs of marketing the Hydrocarbons produced from or attributable to the Subject Interests, and (c) any other records necessary to keep proper accounts in accordance with the provisions of this Conveyance. Such records may be inspected by Grantee or its authorized representatives and copies made thereof at all reasonable times. On or before noon on the last business day of each month in which proceeds from sale are received by Grantor, Grantor or Grantor’s oil and gas purchaser shall send to Grantee a statement setting forth: (i) the production from the Subject Interests for the applicable month, (ii) the portion of such production attributable to the Overriding Royalty Interests, (iii) to the extent Grantee does not receive direct payment of proceeds from sale of Overriding Royalty Interest Hydrocarbons pursuant to Section 3.2 above, the gross proceeds attributable to the sale of Overriding Royalty Interest Hydrocarbons and the Specified Costs allocable thereto, and (iv) such other data as Grantee may reasonably request in writing.

ARTICLE IV

Representations, Warranties and Covenants

Grantor hereby represents, warrants and covenants for the benefit of Grantee as follows:

Section 4.1 Operations. The Subject Interests and properties unitized therewith are being (and, to the extent the same could adversely affect the ownership or operation of the Subject Interests after the date hereof, have during Grantor’s tenure of ownership been) maintained, operated and developed in a good and workmanlike manner, in accordance with prudent industry standards and in conformity with all applicable laws, rules, regulations and orders of all duly constituted authorities having jurisdiction and in conformity with all Hydrocarbon leases, deeds and other contracts and agreements forming a part of or pertaining to the Subject Interests. Grantor, directly or through appropriate agreements with the operator of the Subject Interests, has all governmental licenses and permits necessary or appropriate to own and operate the Subject Interests, and Grantor has not received any notices of any material violations in respect of any such licenses or permits. Grantor shall develop, operate and maintain the Subject Interests as would a prudent operator. Decisions with regard to the conduct of operations will be made by Grantor without considering the effect of the Overriding Royalty Interests as burdens on the Subject Interests. As to any portions of the Subject Interests as to which Grantor is not the operator, Grantor shall take all actions and exercise all legal rights and remedies as are available to it to cause the operator to so develop, maintain and operate such portions of the Subject Interests in accordance with this Section 4.1.

Section 4.2. Title; Permitted Encumbrances. Grantor has good and defensible title to the Subject Interests, free and clear of all liens, security interests, and encumbrances except for Permitted Encumbrances. Such qualification as to Permitted Encumbrances is made for the sole purpose of limiting the representations and warranties of Grantor made herein, and is not intended to restrict the description of the Subject Interests, nor is it intended that reference herein to any Permitted Encumbrance shall subordinate the Overriding Royalty Interests to such Permitted Encumbrance or otherwise cause this Conveyance or any rights of Grantee hereunder to be made subject to, or reduced or encumbered by, such Permitted Encumbrance. Grantor hereby binds itself to WARRANT and FOREVER DEFEND all and singular title to the Overriding Royalty Interests unto Grantee, its successors and assigns, against every Person lawfully claiming or to claim the same or any part thereof. This Conveyance is made with full substitution and subrogation of Grantee in and to all covenants, representations and warranties by others heretofore given or made with respect to the Subject Interests.

Section 4.3. Leases, Deeds and Contracts; Performance of Obligations. The Hydrocarbon leases, contracts, servitudes, fees, deeds, and other agreements forming a part of the Subject Interests, to the extent the same cover or otherwise relate to the Subject Interests, are in full force and effect, and Grantor agrees to so maintain them, or to cause them to be so maintained, in full force and effect to the extent a prudent operator, without giving effect to the Overriding Royalty Interests or this Conveyance, would do so.

Section 4.4 Ad Valorem and Severance Taxes. Grantor shall timely pay and discharge (or cause to be paid and discharged) (a) all ad valorem taxes assessed against or with respect to the Subject Interests or any part thereof, and (b) all production, severance, excise and other taxes assessed against, or measured by, the Overriding Royalty Interest Hydrocarbons or the value, or proceeds, of the Overriding Royalty Interest Hydrocarbons.

Section 4.5. Imbalances.

(a) Definitions. As used herein, “undertake” means that an owner of production from a Subject Well takes a lesser share of Hydrocarbons produced from such Subject Well than the share which such owner is entitled to take by virtue of its ownership interest, determined without regard to any rights under any production balancing agreement or similar arrangement or any rights under common law with respect to production balancing, and “overtake” means that an owner of production from a Subject Well takes a greater share of Hydrocarbons produced from such Subject Well than the share which such owner is entitled to take by virtue of its ownership interest, again determined without regard to any rights under any production balancing agreement or similar arrangement or any rights under common law with respect to production balancing. If an owner undertakes, the amount of production not taken is “underproduction” and if an owner overtakes, the extra share of production taken is “overproduction”.

(b) No Undertakes Without Consent. Grantor will not undertake or overtake from a Subject Well (either for itself or on behalf of Grantee) if an Affiliate of Grantor is the party that would thereby be the party which overtakes or undertakes. Grantor may otherwise elect to undertake or overtake in its reasonable business judgment exercised for the benefit of itself and Grantee. If any undertake by Grantor occurs in violation of this subsection (b), the quantity of Overriding Royalty Interest Hydrocarbons for which Grantor must account to Grantee hereunder shall be determined (to the maximum extent allowed under applicable law) without regard thereto.

(c) No Balancing From Other Properties. Grantor will not allow any Subject Interest to be subject to any production balancing arrangement under which one or more third Persons may overtake a portion of the production attributable to such Subject Interest as a result of undertakes or overtakes (or other actions or inactions) with respect to properties other than such Subject Interest. If, however, any overtake by any such third Person occurs in violation of this subsection (c), the quantity of Overriding Royalty Interest Hydrocarbons for which Grantor must account to Grantee hereunder shall be determined (to the maximum extent allowed under applicable law) without regard thereto. For the purposes of this subsection (c), a production unit in which all parties have uniform interests shall be considered to be a single Subject Interest.

ARTICLE V

Assignments and Transfers

Section 5.1. Assignment and Transfer by Grantee. Subject to Grantor’s Option to Repurchase, Grantee may sell, convey, assign, mortgage or otherwise dispose of any Overriding Royalty Interest (including its rights, titles, interests, estates, remedies, powers and privileges appurtenant or incident to such Overriding Royalty Interest under this Conveyance), in whole or in part. No change of ownership of any Overriding Royalty Interest shall be binding upon Grantor, however, until Grantor is furnished with copies of the original documents evidencing such change.

Section 5.2. Assignment and Transfer by Grantor. The Conveyance shall inure to the benefit of and be binding to the parties and their respective heirs, legal representatives, successors and assigns.

Section 5.3. Covenants Running With the Subject Interests. All covenants and agreements of Grantor herein contained shall be deemed to be covenants running with the Subject Interests. All of the provisions hereof shall inure to the benefit of Grantee and its Affiliates, heirs, legal representatives, successors and assigns.

ARTICLE VI

Miscellaneous Provisions

Section 6.1. Further Assurances. Grantor agrees to execute and deliver to Grantee, and, to the extent it is within Grantor’s power to do so, to cause any third parties to execute and deliver to Grantee, all such other and additional instruments and to do all such further acts and things as may be necessary or appropriate to more fully vest in and assure to Grantee, from time to time, all of the rights, titles, interests, remedies, powers and privileges herein granted or intended so to be.

Section 6.2. No Waiver. The failure of Grantee to insist upon strict performance of a covenant hereunder or of any obligation hereunder, irrespective of the length of time for which such failure continues, shall not be a waiver of Grantee’s right to demand strict compliance in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation hereunder shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation hereunder. No provision of this Conveyance shall be deemed a waiver by Grantee of any rights granted to Grantee under applicable Law governing overriding royalty interests and the rights and privileges of the owners thereof.

Section 6.3. Applicable Law. WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, THIS CONVEYANCE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF WYOMING.

Section 6.4. Severability. Every provision in this Conveyance is intended to be severable. If any term or provision hereof is determined to be invalid, illegal or unenforceable for any reason whatsoever, such invalidity, illegality or unenforceability shall not affect the validity, legality and enforceability of the remainder of this Conveyance.

Section 6.5. Notices. Unless otherwise stated herein, all notices authorized or required by the terms of this Conveyance shall be in writing and shall be delivered by United States Postal Service, courier or facsimile to the party to be notified, or by delivering such notice in person to such party. Notice shall be deemed effective only upon receipt by the party to whom such notice is directed. Any party may change its address for notice at any time by giving written notice of the new address to the other party in the manner set forth herein. For purposes of notice, the addresses of Grantor and Grantee shall be as follows:

GRANTOR	GRANTEE
Rancher Energy Corp.	GasRock Capital LLC
999 18th Street, Suite 3400	1301 McKinney Street, Suite 2800
Denver, Colorado 80202	Houston, Texas 77010-2026
Attention: John Works	Attention: Marshall Lynn Bass
Facsimile: (702) 904-5698	Facsimile: (713) 300-1401

Section 6.6. NO LIABILITY OF GRANTEE; INDEMNITY. EXCEPT AS EXPRESSLY PROVIDED HEREIN WITH RESPECT TO DEDUCTION OR REIMBURSEMENTS OF SPECIFIED COSTS, NO GRANTEE INDEMNITEE SHALL EVER BE RESPONSIBLE FOR ANY PART OF THE COSTS, EXPENSES OR LIABILITIES INCURRED IN CONNECTION WITH:

(A) THE EXPLORING, DEVELOPING, OPERATING, OWNING, MAINTAINING, REWORKING OR RECOMPLETING OF THE SUBJECT INTERESTS OR SUBJECT LANDS, ANY OBLIGATIONS OF GRANTOR WITH RESPECT TO ANY TAX PARTNERSHIPS BURDENING THE SUBJECT INTERESTS, THE PHYSICAL CONDITION OF THE SUBJECT INTERESTS OR THE SUBJECT LANDS, OR THE HANDLING, TREATING OR TRANSPORTING OF HYDROCARBONS PRODUCED FROM THE SUBJECT INTERESTS (INCLUDING ANY COSTS, EXPENSES, LOSSES OR LIABILITIES RELATED TO COMPLIANCE WITH OR VIOLATION OF AN ENVIRONMENTAL LAW OR OTHERWISE RELATED TO DAMAGE TO OR REMEDIATION OF THE ENVIRONMENT, WHETHER THE SAME ARISE OUT OF GRANTEE’S OWNERSHIP OF AN INTEREST IN PROPERTY OR OUT OF THE ACTIONS OF GRANTOR OR GRANTEE OR OF THIRD PARTIES OR ARISE OTHERWISE), OR

(B) THE FAILURE BY GRANTOR TO HAVE GOOD AND DEFENSIBLE TITLE TO THE SUBJECT INTERESTS FREE AND CLEAR OF ALL BURDENS, ENCUMBRANCES, LIENS AND TITLE DEFECTS (INCLUDING ANY COSTS, EXPENSES, LOSSES OR LIABILITIES SUFFERED BY ANY GRANTEE INDEMNITEE AS A RESULT OF ANY CLAIM THAT SUCH GRANTEE INDEMNITEE MUST DELIVER OR PAY OVER TO ANY PERSON ANY PART OF THE OVERRIDING ROYALTY INTEREST HYDROCARBONS OR ANY PROCEEDS THEREOF AT ANY TIME PREVIOUSLY RECEIVED OR THEREAFTER TO BE RECEIVED BY SUCH GRANTEE INDEMNITEE),

AND GRANTOR AGREES TO INDEMNIFY, DEFEND AND HOLD EACH GRANTEE INDEMNITEE HARMLESS FROM AND AGAINST ALL COSTS, EXPENSES, LOSSES AND LIABILITIES INCURRED BY ANY GRANTEE INDEMNITEE (I) IN CONNECTION WITH ANY OF THE FOREGOING OR (II) IN CONNECTION WITH THIS CONVEYANCE, OR THE TRANSACTIONS, ACTIVITIES AND EVENTS (INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF OR HEREOF) AT ANY TIME ASSOCIATED WITH OR CONTEMPLATED IN ANY OF THE FOREGOING OR (III) IN CONNECTION WITH ANY TAX PARTNERSHIP BURDENING ANY OF THE SUBJECT INTERESTS. SUCH INDEMNITY SHALL ALSO COVER ALL REASONABLE COSTS AND EXPENSES OF ANY GRANTEE INDEMNITEE, INCLUDING REASONABLE LEGAL FEES AND EXPENSES, WHICH ARE INCURRED INCIDENT TO THE MATTERS INDEMNIFIED AGAINST. AS USED IN THIS ARTICLE VI, “GRANTEE INDEMNITEES” MEANS GRANTEE AND GRANTEE’S SUCCESSORS AND ASSIGNS AND PURCHASERS (INCLUDING ANY PERSON WHO AT ANY TIME PURCHASES OVERRIDING ROYALTY INTEREST HYDROCARBONS), ALL OF THEIR RESPECTIVE AFFILIATES, AND ALL OF THE OFFICERS, DIRECTORS, AGENTS, BENEFICIARIES, TRUSTEES, ATTORNEYS AND EMPLOYEES OF THEMSELVES AND THEIR AFFILIATES.

THE FOREGOING INDEMNITY SHALL SURVIVE ANY TERMINATION OF THIS CONVEYANCE.

(Signatures and acknowledgments are on the following pages)

IN WITNESS WHEREOF, this Conveyance is executed as of the acknowledgement date of each of the parties hereto, but shall be effective as of the Effective Time.

GRANTOR:

RANCHER ENERGY CORP.,

a Nevada corporation d/b/a

RANCHER ENERGY OIL & GAS CORP.

By:    /s/ John Works                                             

John Works

President and Chief Executive Officer

Signature Page to Conveyance of Overriding Royalty Interest

IN WITNESS WHEREOF, this Conveyance is executed as of the acknowledgement date of each of the parties hereto, but shall be effective as of the Effective Time.

GRANTEE:

GASROCK CAPITAL LLC,

a Delaware limited liability company

By:        /s/ Marshall Lynn Bass                           

Marshall Lynn Bass

Principal

Signature Page to Conveyance of Overriding Royalty Interest

STATE OF COLORADO	§
	§
COUNTY OF DENVER	§

The foregoing instrument was acknowledged before me this 22nd day of October 2008, by John Works, the President and Chief Executive Officer of Rancher Energy Corp., a Nevada corporation doing business in the State of Wyoming as Rancher Energy Oil & Gas Corp., on behalf of said corporation.

/s/Alyssa Bodden                                   

Notary Public

My Commission Expires: 11/10/2008

(SEAL)

Acknowledgement Page to Conveyance of Overriding Royalty Interest

STATE OF TEXAS	§
	§
COUNTY OF HARRIS	§

This instrument was acknowledged before me on October 22, 2008 by Marshall Lynn Bass, Principal of GasRock Capital LLC, a Delaware limited liability company on behalf of said limited liability company.

 /s/ Linda J. Rose                                              

Notary Public, State of Texas

My Commission Expires: October 21, 2011

(SEAL)

Acknowledgement Page to Conveyance of Overriding Royalty Interest

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE:	NEWS
October 23, 2008	OTCBB: RNCH

Rancher Energy Corp. Announces Extension and Revised Terms of GasRock Loan

DENVER, Colorado - Rancher Energy Corp. (OTCBB: RNCH) today announced it has negotiated a six-month extension of its debt financing with GasRock Capital LLC, and as part of the extension has agreed to pay down $2.24 million of principal, resulting in a new loan balance of $10 million.

The loan remains a senior obligation at an annual interest rate of 12% or one-month LIBOR plus 600 basis points, whichever is greater. The term has been extended from October 31, 2008, to April 30, 2009, or upon repayment of all outstanding interest and principal. There is no prepayment penalty and interest is payable monthly. Additionally, GasRock’s overriding royalty interest (ORRI) in all current Rancher Energy leases as well as any additional leases acquired by the Company during the term of the loan has been increased from 2% to 3%, although Rancher Energy retains the right to buy back one third of that ORRI at or before final maturity. For additional details on the financing, please refer to the term credit agreement and first amendment filed on Form 8-K Reports with the SEC.

About Rancher Energy Corp.

Rancher Energy is an innovative oil & gas exploration & development company with a targeted strategy to reinvigorate older, historically productive oil fields in the hydrocarbon-rich Rocky Mountain region of the United States. Using waterflood injection and CO₂ flooding, coupled with other leading edge hydrocarbon recovery techniques such as 3-D seismic data and directional drilling, Rancher Energy expects to extract proven in-place oil that remains behind in mature fields. Rising energy demand and strong oil & gas prices combined with advances in oil recovery have made this strategy profitable. Rancher Energy is taking advantage of this convergence by acquiring low risk, high quality, historically productive plays with under-exploited reserves and developing customized enhanced recovery strategies to maximize production.

About GasRock

GasRock Capital LLC is the investment arm of Weisser, Johnson & Co. specializing in direct mezzanine debt and project equity investments in high-growth energy companies. The Houston-based fund invests in oil & gas development drilling and midstream natural gas energy projects in sizes ranging between $5 million and $100 million, or larger. GasRock was founded in June 2005 and has facilities in place exceeding $450 million.

Forward-Looking Statements

This press release includes forward-looking statements as determined by the U.S. Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the Company's ability to obtain financing to implement its waterflood plan, to construct pipeline and other infrastructure, and for other operational and working capital purposes, the uncertainty of recovery factors for the enhanced oil recovery projects, the volatility of oil prices, general economic and business conditions, and other factors over which the Company has little or no control. The Company does not intend (and is not obligated) to update publicly any forward-looking statements. The contents of this press release should be considered in conjunction with the warnings and cautionary statements contained in the Company's recent filings with the SEC.

Contacts:

Jay Pfeiffer

Pfeiffer High Investor Relations, Inc.

303-393-7044

John Works

Chief Executive Officer

Rancher Energy Corp.

303-629-1125