**Exhibit
      10.5**


**NITEC** **LLC**








June
      7,
      2006








John
      Works


Rancher
      Energy Corporation


1050
      17 th Street,
      Suite 1700


Denver,
      CO 80202








**RE:
      Burke Ranch - Recoverable Oil Project**








Dear
      John,





Based
      upon meetings in NITEC’s offices with Walter Merschat on January 9 and in Casper
      on May 16 with Walter, Topr Bob and Mike Zwickl, we offer this proposal for
      your
      approval.





The
      scope
      of work for this study will address only the tertiary recovery (CO2 injection)
      potential (Recoverable Oil) for the Dakota formation in the Burke Ranch
      Unit.





We
      define
      the scope of work in this Study to be as follows:





• Review
      all relevant data you have provided


• Acquire
      additional data as required


• Estimate
      OOIP in the Dakota formation


• Estimate
      remaining oil in place in the Dakota formation


• Estimate
      Recoverable Oil in the Dakota formation under a CO2 recovery
      mechanism


• Prepare
      and present a project report





In
      this
      document and subsequent study reports, it is anticipated that the term **Recoverable
      Oil** will
      at a
      minimum be consistent with the term probable or possible reserves. This is
      certainly the case for the tertiary recovery from the Dakota formation at this
      time. Subsequent studies of the Dakota formation may “convert” reserves from
      lesser categories into the proven category based upon operational changes and
      new data.





Based
      on
      information found in the public domain on the Burke Ranch Field, it is clear
      that the Burke Ranch Unit and Burke Ranch East Unit are in direct communication.
      Burke Ranch East was discovered in 1973 and was at a pressure level
      significantly less than Burke Ranch’s initial pressure at similar depth. It is
      our understanding that water injection continues in the Burke Ranch East Unit
      today and increased fluid levels have been observed in numerous Burke Ranch
      wells.














475
      Seventeenth Street, 14 th Floor
      Denver, Colorado 80202


Tel:
      303
      292-9595 Fax: 303 292-9585 nitec@NITECLLC.com











Based
      on
      this information, it is highly recommended that the two units (the entire
      reservoir) are studied as a whole. This will necessitate that data be found
      for
      the Burke Ranch East Unit in addition to the Burke Ranch Unit.





The
      Burke
      Ranch Unit operator has acquired and prepared a large amount of historical
      data.
      We have been provided with a base map with well locations, well files, well
      log
      image files, Burke Ranch Unit production histories (1978 to date), and a
      structure map and a gross interval isopach map on the Dakota formation and
      other
      miscellaneous data. No data has been provided for the Burke Ranch East
      Unit.





There
      are
      some significant data items that have not been compile and provided to us.
      Production data needs to be assembled by well for each well in the field (both
      units). These data are available online from the Wyoming Oil and Gas
      Conservation commission from 1978 to date. Pre-1978 data are available at the
      Commission in paper form on a by well monthly basis. In addition, water
      injection data by well are required to properly assess current saturations
      levels in the field. (This is important for CO2 recovery
      performance.)





Digital
      well log data are not available. Typically, NITEC would recommend that
      petrophysical analysis be carried out on a few wells in the field for porosity
      and saturation determination. However, due to the apparent large amount of
      core
      data and reports that are available, we currently do not believe that
      petrophysical analysis of the well logs will be required. Hence, digital well
      log data will not be required.





NITEC
      understands that formal certification of the reserves in this project may be
      required. NITEC provides reserve evaluation and development services. NITEC
      will
      have completed all the work necessary for certification to be carried. We
      recommend that NITEC coordinate with your selected reserve certification company
      during the project to minimize any unnecessary duplication of work. No budget
      has been provided in the cost estimate for reserve certification
      work.





NITEC
      can
      provide the typical economic analysis of the Unit’s development under CO2
      operations for use by the certifying organization. This is offered as an
      optional task.





**TECHNICAL
      APPROACH**





The
      project will be divided into 3 stages.





Stage  Description


1  Geology


2  Basic
      Engineering


3  Dakota
      Recoverable Oil





Geology





The
      existing data will be organized for efficient use by the project team. The
      team
      geologist will


utilize
      the available well logs to validate and refine the existing structure and gross
      thickness


isopach
      maps of the Dakota formation. Significant use will be made of the geological
      work














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      2 of
      5














previously
      conducted and made available in the files. Full-field volumetric estimates
      of
      OOIP based
      on
      these maps, initial fluid saturations and porosities will be prepared for the
      Dakota formation.
      Initial saturation and porosity values and distributions will be developed
      from
      the core analysis
      reports and the various studies available in the project files. If adequate
      production data are
      available (pre and post 1978), material balance will be used to verify these
      volumetric OOIP estimates.
      This also assumes that adequate pressure data exist to conduct the material
      balance calculations.
      (It is not clear at this time how much pressure data is available over the
      life
      of the field.)





Basic
      Engineering





It
      appears that the production and injection records in the project files are
      incomplete. No production
      data for the Burke Ranch East Unit wells have bee provided. It is our
      understanding that
      only
      the Dakota formation has been produced in the field. Any missing data will
      either be copied
      from the Wyoming Conservation Commission archives or acquired from production
      data services.
      Production histories for the Dakota formation will be prepared for each well.
      These will be
      used
      to calculate total remaining oil in place for the Dakota formation and for
      the
      Burke Ranch Unit
      alone.





One
      oil
      PVT analysis was found during the initial review of the data files. Assuming
      that it is a valid,
      representative sample, it will be used in the characterization of the Dakota
      oil
      for all material
      balance and simulation work. This will eliminate the need to hypothesize the
      oil properties
      based on industry correlations.





We
      understand that two phases of water injection have been carried out in the
      Burke
      Ranch Unit, as
      well
      as a phase in the Burke Ranch East Unit. Water injection records will be used
      to
      develop and
      understand water flood performance and estimate remaining oil saturations.
      Water
      flood performance
      will be a strong guide to reservoir continuity. These data will significantly
      improve the
      reliability of the reservoir simulations to follow. This data will be acquired,
      as appropriate, through
      the services of a Casper group experienced in locating and copying Wyoming Conservation
      Commission records. Water injection data is not maintained in digital form
      by
      the ommission.





Dakota
      Recoverable Oil





Reservoir
      simulation will be used to characterize existing saturation levels in the Dakota
      sand and forecast
      CO2 displacement efficiencies. Because the number of wells in the total field
      are relatively
      small, the data is of newer vintage and the east and west ends of the field
      are
      in communication,
      we believe that a full-field simulation model will be more accurate and
      efficient to
      work
      with than a sector model (as was used in the Big Muddy project). Production
      and pressure
      records will be used to calibrate the model and estimate saturation levels.
      “History matching”
      of historical data to calibrate the simulation model will be approximate, but
      should provide
      a
      reasonable estimation of fluid saturations and their areal distribution in
      the
      reservoir. Based
      on
      the possible vertical discontinuity of the Dakota sand in various areas of
      the
      field, at least
      2-4
      simulation model layers will likely be used. These layers may have uniform
      properties depending
      on our ability to characterize the formation from the available data. The
      full-field model
      will also provide an estimate of the remaining oil distribution in the field.
      This may


indicate
      areas of by-passed oil which can be accessed through water injection or CO2
      operations.








Page
      3 of
      5

















It
      is
      unlikely that additional primary oil potential will be found due to current
      reservoir pressure levels.





Minimum
      miscibility pressure is often critical in the design of a CO2 displacement
      process, as miscible
      displacement is a more efficient process than immiscible displacement. We
      believe that miscibility
      can likely be achievable in the Burke Ranch field due to the Dakota formation’s
      depth and
      temperature. Our experience with estimating the MMP in the Big Muddy Wall Creek
      project should
      allow us to make a better MMP estimate in this field. However, an oil sample,
      CO2-oil swelling
      tests and a rising bubble miscibility test would be more definitive. If
      possible, we recommend
      that an oil sample be taken as soon as possible and the noted tests carried
      out
      in a


reputable
      laboratory. Results should be made available to NITEC within 6 weeks if they
      are
      to be used
      in
      the simulation work.





Note
      that
      the simulation model will also be used to investigate process, well spacing
      and
      injection pattern
      sensitivities A WAG and a slug injection process will be evaluated. A few
      sensitivities to WAG
      ratios and slug sizes will also be investigated. This will be important data
      for
      future economic
      analyses. If time and budget permit the simulation model can be used to
      investigate new
      well
      locations and secondary recovery under closer well spacing.





The
      Dakota recovery potential (Recoverable Oil) under CO2 operations in the Burke
      Ranch Unit area
      will
      be forecast using the simulation model. This will require some assumptions
      about operations
      in the Burke Ranch East area. Reserve certification will likely classify this
      recoverable oil
      as
      probable or possible reserves.





A
      report
      will be prepared at the end of the study to document all data sources,
      assumptions made and
      simulation results. This report will be complete enough to provide a guide
      for
      reserve certification,
      and future detailed design studies for field implementation.


NITEC
      will provide a one day project presentation in its Denver office if
      required.





**ESTIMATED
      TIME AND COST**





NITEC
      will undertake this work on a time and materials basis. We believe that this
      study can be completed
      in 3-4 months at an estimated cost of $95,000. NITEC will charge for its
      services based
      on
      the attached standard price schedule. Invoices will be issued monthly based
      on
      work completed.
      Payment is due within 30 days of receipt. Should NITEC find that this cost
      estimate may
      be
      exceeded, we will advise you in advance and mutually agree upon a course of
      action. NITEC
      is
      available to perform economic analyses of the appropriate production development scenarios
      resulting from the simulations, if appropriate. We would rely on Wyoming
      Mineral


Exploration
      to provide cost information associated with well completions, pipelines,
      treating facilities,
      oil prices, etc. We believe that information gathered for the Big Muddy Wall
      Creek project
      will be useful in this regard. We estimate that only 1-2 weeks would be required
      to carry out
      this
      work once all the economic data have been provided. This work would be at an
      additional cost
      of
      approximately $8,000.

















Page
      4 of
      5














We
      appreciate the opportunity to provide this proposal to you. Please feel free
      to
      contact us with any
      questions you may have. We are prepared to start work on the project
      immediately. If you are
      in
      agreement with this proposal and the estimated cost to complete the scope of
      work, please sign
      below and fax this document to us.





Sincerely,





/s/
      Bill Savage


Bill
      Savage


Director








Agreed:
      ________________________





Name:
      __________________________





Title:
      ___________________________







Rancher
      Energy Corp.





Date:
      _____________, 2006





























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