EXHIBIT 10.2

                              RANCHER ENERGY CORP.

                         MANAGEMENT RETENTION AGREEMENT

      This Management Retention Agreement ("Agreement") is made and entered into
on October 27, 2009 (the "Effective Date") by and between Jon C. Nicolaysen (the
"Key Person") and Rancher Energy Corp. (the "Company").

                                 R E C I T A L S

         A. Key Person  is an officer,  director  or consultant of the  Company,
and is providing  valuable service to the Company,  the loss of which would have
an adverse effect on the Company and its shareholders.

         B. Due to Company's present financial  condition and difficulty meeting
its current obligations,  the Board of Directors of the Company (the "Board") is
considering  reorganization of the Company pursuant to Chapter 11 of Title 11 of
the United  States  Code or other  transactions  which may result in a Change in
Control (as defined below) of the Company.

         B. The Board has determined that the  possibilities of a reorganization
or other Change in Control  transaction and the uncertainty that they may raise,
may result in the departure or  distraction of key personnel to the detriment of
the Company.

         C. The Board  believes it is in the best  interests  of the Company and
its  stockholders to assure that the Company will have the continued  dedication
and objectivity of the Key Person,  notwithstanding  the possibility,  threat or
occurrence  of a  reorganization  in  bankruptcy  or  Change of  Control  of the
Company.

         D. The Board  believes  that it is imperative to provide the Key Person
with an  incentive to continue his or her service to the Company and to motivate
the Key  Person  to  maximize  the  value of the  Company  in the  event of such
occurrence for the benefit of its stockholders.

         E. Certain capitalized  terms  used in  this  Agreement are  defined in
Section 4 below.

      The parties hereto agree as follows:

      1. Term of Agreement.  This Agreement  shall terminate upon the earlier of
(i) one (1) year;  (ii) thirty (30) days after the  consummation  of a Change in
Control;  (iii) (30) days following the confirmation of a Reorganization Plan or
(iv) the date that all  obligations  of the parties  hereto with respect to this
Agreement have been satisfied.

      2. At-Will  Employment or  Consultancy  Services.  The Company and the Key
Person  acknowledge  that the Key  Person's  employment  or  consultancy  to the
Company is and shall  continue to be at will, as defined under  applicable  law,
and may be  terminated  by either  party at any time,  with or without  cause or
notice.

      3. Compensation Option. In consideration for entering into this Agreement,
Key Person shall receive special incentive compensation  consisting of an option
to purchase  2,500,000 shares of the Company's Common Stock,  $0.00001 par value
per  share  ("Option  Shares"),  exercisable  at a price  of  $0.035  per  share

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("Option"). The Option shall be exercisable as to ten (10%) of the Option Shares
immediately,  and as to the remaining ninety (90%) of the Option Shares upon the
earliest to occur of the following:

          (i) November 1, 2010; or

          (ii) the confirmation by the court of a Reorganization Plan filed with
          the United States  Bankruptcy Court in Colorado pursuant to Chapter 11
          of the United States Bankruptcy; or

          (iii)the  dismissal  from Chapter 11  Bankruptcy  with approval of the
          court; or

          (iv) an event of a  merger,  consolidation,  sale of  assets  or other
          transaction which results in the holders of the  Corporation's  Common
          Stock immediately  before such transaction owning less than 50% of the
          stock outstanding immediately before the transaction; or

          (v) any other  form of change of  control  as more  fully  defined  in
          Section 4(a) herein; or

          (vi) a Voluntary  Termination for Good Reason, as more fully set forth
          herein.

In  connection  with the grant of the Option,  the Company and Key Person  shall
enter into a written option agreement in the form attached hereto as Exhibit A.

      4.  Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:


          (a) Change of Control. "Change of Control" means the occurrence of any
          of the following events:

               (i) Any  "person"  (as such  term is used in  Sections  13(d) and
               14(d) of the Securities Exchange Act of 1934, as amended) becomes
               the "beneficial owner" (as defined in Rule 13d-3 under said Act),
               directly or indirectly, of securities of the Company representing
               fifty percent (50%) or more of the total voting power represented
               by the Company's  then-outstanding  voting  securities who is not
               already such as of the Effective Date of this Agreement; or

               (ii)  The  consummation  of the  sale,  exchange,  lease or other
               disposition  by  the  Company  of all or  substantially  all  the
               Company's  assets  to  a  person  or  group  of  related  persons
               (excluding any Company subsidiary),  as such terms are defined or
               described in Sections  3(a)(9) and 13(d)(3) of the Exchange  Act,
               in one transaction or a series of related transactions; or

               (iii)   The    consummation   of   a   merger,    reorganization,
               recapitalization,  consolidation,  or similar  transaction of the
               Company with any other  corporation or other business entity,  in
               one transaction or a series of related transactions, other than a
               merger, reorganization,  recapitalization, consolidation or other
               similar transaction which

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               would result in the persons who held the voting securities of the
               Company outstanding  immediately prior thereto continuing to hold
               voting securities that represent (either by remaining outstanding
               or by being  converted  into voting  securities  of the surviving
               entity or its parent) at least fifty  percent  (50%) of the total
               voting power  represented by the voting securities of the Company
               or such surviving  entity or its parent  outstanding  immediately
               after    such    merger,    reorganization,     recapitalization,
               consolidation or other similar transaction  (excluding any voting
               securities of the Company  beneficially  owned  immediately prior
               thereto  by  that  business   entity   engaging  in  the  merger,
               reorganization,   recapitalization,   consolidation   or  similar
               transaction with the Company or any person who is an affiliate of
               such business  entity  immediately  prior to the  consummation of
               such merger, reorganization,  recapitalization,  consolidation or
               other similar transaction); or

               (iv) A change in the composition of the Board occurring  within a
               one-year  period  beginning  with  the  Effective  Date  of  this
               Agreement,  as a result of which  fewer  than a  majority  of the
               directors are Incumbent  Directors.  "Incumbent  Directors" shall
               mean  directors who either (A) are directors of the Company as of
               the  Effective  Date,  or  (B)  are  elected,  or  nominated  for
               election,  to the Board with the affirmative  votes of at least a
               majority of those  directors whose election or nomination was not
               in connection with any transaction  described in subsections (i),
               (ii) or  (iii)  of this  Section  4(c) or in  connection  with an
               actual or threatened  proxy  contest  relating to the election of
               directors  to the  Board  following  the  Effective  Date of this
               Agreement.

          (b) Voluntary Termination for Good Reason.  "Voluntary Termination for
          Good Reason" means the Key Person's  voluntary  resignation  after the
          initial  occurrence of any of the following:  (i) a material reduction
          of the Key Person's duties, title,  authority or responsibilities (but
          excluding  a change  in  reporting  relationships  unaccompanied  by a
          material  reduction in the Key Person's  duties,  title,  authority or
          responsibilities)   relative  to  the  Key  Person's  duties,   title,
          authority or  responsibilities  as in effect  immediately prior to the
          Change of  Control  or  immediately  prior to such  reduction;  (ii) a
          material  reduction by the Company in the Key Person's  base salary or
          consultancy  fees as in  effect  immediately  prior to the  Change  of
          Control or immediately prior to such reduction; (iii) the Key Person's
          relocation  to a facility or working  location  more than  thirty-five
          (35) miles from the Key Person's  facility or working location at such
          time; (iv) a material  reduction by the Company in the aggregate level
          of Key Person  benefits,  if any, to which the Key Person was entitled
          immediately  prior to the Change of Control  or  immediately  prior to
          such  reduction  (other than a  reduction  that  generally  applies to
          Company  Key  Persons);  (v) the  failure of the Company to obtain the
          assumption of this Agreement by any successor  contemplated in Section
          6(a)  below;  or (vi)  the  material  breach  by the  Company  of this
          Agreement. The Key Person must provide the Company a written notice of
          the  occurrence of the foregoing  conditions no later than ninety (90)
          days after the initial  existence of such conditions.  The Company may
          remedy  the above  condition(s)  during  the  thirty  (30) day  period
          following  the  receipt of such notice from the Key Person and upon so
          doing,  a  termination  pursuant to a Voluntary  Termination  for Good
          Reason shall be deemed not to have occurred.

          (c) Reorganization  Plan.  "Reorganization  Plan" shall mean a written
          plan of  reorganization  filed with the United States Bankruptcy Court
          in  Colorado  pursuant to Chapter 11 of the United  States  Bankruptcy
          Code,  which  Reorganization  Plan is  confirmed  by the  court in the
          proceeding.

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      5. Non-Disclosure,  Non-Solicitation and Other Continuing Obligations.  In
consideration of any benefits the Key Person receives hereunder,  the Key Person
agrees to continue to abide by the terms of the  Confidentiality  Agreement,  if
any, and any related  agreements  that he or she executed in connection with his
or her employment or other position with the Company (including, but not limited
to, the confidentiality, return of confidential information and other materials,
invention assignment and non-solicitation provisions).

      6. Assignment.

            (a)  Company's  Successors.  Any  successor to the Company  (whether
      direct or  indirect  and  whether  by  purchase,  merger,  reorganization,
      recapitalization,  consolidation,  liquidation  or  otherwise)  to  all or
      substantially all of the Company's business and/or assets shall assume the
      obligations  under this  Agreement  and agree  expressly  to  perform  the
      obligations under this Agreement in the same manner and to the same extent
      as the  Company  would be  required  to perform  such  obligations  in the
      absence of a succession.  For all purposes under this Agreement,  the term
      "Company"  shall  include any such  successor  to the  Company's  business
      and/or  assets  which  executes  and  delivers  the  assumption  agreement
      described in this Section 6(a) or which becomes bound by the terms of this
      Agreement by operation of law.
            (b) Key Person's  Successors.  The terms of this  Agreement  and all
      rights of the Key Person  hereunder  shall inure to the benefit of, and be
      enforceable  by,  the Key  Person's  personal  or  legal  representatives,
      executors,  administrators,  successors, heirs, distributees, devisees and
      legatees.

      7. Notice.
            (a) General. All notices, requests, demands and other communications
      called for by this  Agreement  will be in writing and will be deemed given
      (i) on the date of  delivery  if  delivered  personally,  (ii) one (1) day
      after being sent by a well-established  commercial  overnight service,  or
      (iii) four (4) days after being mailed by  registered  or certified  mail,
      return  receipt  requested,  prepaid and addressed to the parties or their
      successors at the following  addresses,  or at such other addresses as the
      parties may later designate in writing:

        If to the Company:                  Rancher Energy Corp.
                                            999-18th St., Suite 3400
                                            Denver, Colorado 80202
                                            Attn: Jon C. Nicolaysen

        If to the Key Person:  at his or  her address set forth on the signature
        page hereof.

            (b)  Notice  of  Termination.  Any  termination  by the  Key  Person
      pursuant to a Voluntary  Termination  for Good Reason as  contemplated  by
      Section  3  of  this  Agreement  shall  be  communicated  by a  notice  of
      termination  to the other party  hereto given in  accordance  with Section
      7(a)  of  this   Agreement.   Such  notice  shall  indicate  the  specific
      termination  provision  in this  Agreement  relied on,  shall set forth in
      reasonable detail the facts and  circumstances  claimed to provide a basis
      for  termination  under the provision so indicated,  and shall specify the

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      termination  date (which shall be not more than thirty (30) days after the
      giving of such  notice).  The  failure by the Key Person to include in the
      notice  any  fact  or  circumstance  which  contributes  to a  showing  of
      Voluntary Termination for Good Reason shall not waive any right of the Key
      Person  hereunder or preclude the Key Person from  asserting  such fact or
      circumstance in enforcing his or her rights hereunder.

      8.  Miscellaneous Provisions.
            (a) No Duty to  Mitigate.  The Key Person  shall not be  required to
      mitigate the value of any benefits  contemplated  by this  Agreement,  nor
      shall any such  benefits be reduced by any  earnings or benefits  that the
      Key Person may receive from any other source.
            (b)  Amendment;  Waiver.  No  provision of this  Agreement  shall be
      modified,  waived  or  discharged  unless  the  modification,   waiver  or
      discharge  is agreed to in  writing  and signed by the Key Person and by a
      representative  of the  Company  on  behalf  of a  majority  of the  Board
      (excluding the Key Person, if he or she is also a Director).  No waiver by
      either  party of any breach  of, or  compliance  with,  any  condition  or
      provision  of this  Agreement  by the other  party shall be  considered  a
      waiver of any other  condition or  provision  or of the same  condition or
      provision at another time.
            (c) Entire Agreement.  This Agreement,  the Option Agreement and the
      agreements  evidencing  any other Company equity awards granted to the Key
      Person  represent  the entire  agreement  and  understanding  between  the
      Company and the Key Person  concerning the Key Person's  arrangements with
      the Company and  supersede  and replace any and all prior  agreements  and
      understandings concerning the Key Person's arrangements with the Company.
            (d) Choice of Law. The validity,  interpretation,  construction  and
      performance of this  Agreement  shall be governed by the laws of the State
      of Colorado (with the exception of conflict of laws provisions).
            (e)  Severability.  The parties hereto  expressly agree and contract
      that it is not the intention of any of them to violate any public  policy,
      statutory or common laws, rules, regulations, treaties or decisions of any
      government  or agency  thereof.  In the event  that any  provision  hereof
      becomes or is declared by a court of competent jurisdiction to be illegal,
      unenforceable  or void,  this  Agreement  will  continue in full force and
      effect  without  being  impaired or  invalidated  in any way.  The invalid
      portion of this Agreement  shall be deemed to conform to a valid provision
      most closely  approximating  the intent of the invalid  provision,  or, if
      such conformity is not possible, then the invalid part shall be deemed not
      to be a part of this Agreement at all.
            (f)  Counterparts.  This Agreement may be executed in  counterparts,
      each of which shall be deemed an original,  but all of which together will
      constitute one and the same instrument.

            (g) Legal Fees.  To the extent  permitted by law, the Company  shall
      pay all legal fees,  costs of litigation,  prejudgment  interest and other
      expenses  incurred  in good  faith by the Key  Person  as a result  of the
      Company's  refusal to provide the benefits to which the Key Person becomes
      entitled  under this  Agreement;  provided,  however,  that if the Company
      prevails on all material  issues of dispute in connection  with such legal
      action,  then the Company  shall not be  obligated  to  reimburse  the Key
      Person for any such fees and expenses.  The Key Person shall not be liable
      for the Company's fees or costs related to any such litigation.


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      9.  Effect of Section  409A of the Code.  Notwithstanding  anything to the
contrary in this Agreement,  if the Company  determines (i) that on the date the
Key Person's  employment with the Company  terminates or at such other time that
the  Company  determines  to be  relevant,  the Key Person is a  "specified  Key
Person"  (as such term is defined  under  Section  409A) of the Company and (ii)
that any  payments to be provided to the Key Person  pursuant to this  Agreement
are or may become subject to the additional tax under Section  409A(a)(1)(B)  of
the Code or any other taxes or penalties  imposed under Section 409A of the Code
("Section  409A Taxes") if provided at the time  otherwise  required  under this
Agreement,  then such  payments  shall be delayed until the date that is six (6)
months after date of the Key Person's "separation from service" (as such term is
defined under Section 409A of the Code) with the Company or such shorter  period
that,  as determined  by the Company,  is sufficient to avoid the  imposition of
Section 409A Taxes. In addition,  if any provision of this Agreement would cause
the Key Person to incur any penalty tax or interest  under  Section  409A of the
Code or any regulations or Treasury guidance promulgated thereunder, the Company
may reform such  provision  to maintain to the maximum  extent  practicable  the
original intent of the applicable  provision without violating the provisions of
Section 409A of the Code.

      IN WITNESS  WHEREOF,  each of the parties has executed this Agreement,  in
the case of the Company by its duly authorized  officer,  as of the day and year
set forth below.

                                   RANCHER ENERGY CORP.,
                                   a Nevada corporation

                                   By: ____________________________
                                       Jon C. Nicolaysen, President

                                   Date:___________________________


                                   KEY PERSON

                                   By:_______________________________________
                                                                      Date
                                   Name:  Jon C. Nicolaysen
                                   Address:  1134 South Wolcott
                                             Casper, Wyoming 82601