**Exhibit
        10.4**


**LOAN
      AGREEMENT**






**THIS
      AGREEMENT** ,
      dated
      for reference the 6 th day of
      June, 2006, is made




**BETWEEN:**


**ENEREX
      CAPITAL, CORP.,** a
      company incorporated under the laws of the Province of British Columbia, having
      an office at Suite 2410, 650 West Georgia Street, Vancouver, British Columbia,
      V6B 4N7





(hereinafter
      referred to as the “Lender”)





**AND:**


**RANCHER
      ENERGY CORP.** ,
      a
      company incorporated under the laws of the State of Nevada, having an office
      at
      Suite 1700, 1050 17 th Street,
      Denver, Colorado, USA, 90265





(hereinafter
      referred to as the “Borrower”)




**WHEREAS** the
      Borrower wishes to borrow and the Lender is willing to lend to the Borrower
      the
      sum of One Hundred Fifty Thousand Dollars in US funds (US$150,000) on the terms
      hereinafter set out.




**NOW
      THEREFORE THIS AGREEMENT WITNESSES** that in
      consideration of the premises and the mutual covenants and agreements
      hereinafter set forth, the parties hereto agree as follows:




**1.**  **DEFINITIONS**




Where
      used in this Agreement, the following words and phrases shall have the following
      meaning:




(a)
            “Agreement”
                means this Agreement and the schedules hereto, as at any time amended
                or
                modified and in effect;




(b)
            “Charter”
                means the Memorandum and Articles, the Articles and By-Laws or other
                constating documents of the Borrower, as at any time amended or modified
                and in effect;




(c)
            “Event
                of Default” means any event specified in subsection
                7.1;




(d)
            “Lender’s
                Security” means the Note;




(e)
            “Loan”
                means the loan by the Lender to the Borrower established pursuant
                to
                subsection 3.1; and




(f)
            “Note”
                means the non-interest bearing promissory note to be made by the
                Borrower
                to the Lender as evidence of the Loan which shall substantially be
                in the
                form set out in Schedule “A”.




**2.**  **INTERPRETATION**




**2.1**  **Governing
      Law**




This
      Agreement is governed by the laws of the State of Nevada and the parties attorn
      to the non-exclusive jurisdiction of the courts of Province
      of British Columbia for the
      resolution of all disputes under this Agreement.


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**2.2** **Severability**




If
      any
      one or more of the provisions contained in this Agreement is found to be
      invalid, illegal or unenforceable in any respect, the validity, legality and
      enforceability of the remaining provisions contained herein will not in any
      way
      be affected or impaired thereby.




**2.3**  **Parties
      in Interest**




This
      Agreement enures to the benefit of and is binding on the parties hereto and
      their respective successors and permitted assigns.




**2.4** **Headings
      and Marginal References**




The
      division of this Agreement into sections, subsections, paragraphs and
      subparagraphs and the insertion of headings are for convenience of reference
      only and do not affect the construction or interpretation of this
      Agreement.




**2.5** **Currency**




All
      statements of, or references to, dollar amounts in this Agreement means lawful
      currency of the United States of America.




**3.** **THE
      LOAN**




**3.1** **Establishment
      of the Loan**




The
      Lender agrees, on the terms and conditions set forth in this Agreement, to
      lend
      to the Borrower the sum of One Hundred Fifty Thousand Dollars
      ($150,000).




**3.2** **Evidence
      of Indebtedness**




Indebtedness
      of the Borrower to the Lender in respect of the Loan will be evidenced by the
      Note, which will be made by the Borrower to the Lender at the time funds are
      advanced, a copy of which form is attached hereto as Schedule “A”.




**3.3** **Repayment
      of the Loan**




The
      Borrower will repay the Loan on or before June 30, 2006. The Loan will be
      subject to interest payable to a Two Percent (2%) lender’s fee payable to the
      Lender at maturity. The lender’s fee will be payable concurrently with repayment
      of the Loan.




**3.4** **Repayment
      of the Loan**




The
      Borrower may repay the Loan at any time without penalty, bonus or charges.




**3.5** **Conversion
      into Securities**




During
      the term of the Agreement or upon maturity, the Lender will have the option
      to
      convert the Loan, or any portion thereof, into securities of the Company.




In
      the
      event the Lender wishes to convert the loan into shares, the shares will be
      offered at a price per share equal to the closing price of the Company’s shares
      on the OTC.BB market on the day preceding notice from the Lender
      of


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its
      intent to convert the Loan, or any portion thereof, into shares of the Company,
      subject only to the following:




In
      the
      event the Borrower is offering a financing opportunity to the general public,
      the Lender will be granted the opportunity to convert the Loan into shares
      or
      units of the Borrower, whichever is being offered, at such price as is being
      offered to the general investing public.




A
      Notice
      of Conversion is attached hereto as Schedule “B”.









**4.** **SECURITY
      FOR THE LOAN**




**4.1** **Costs,
      Charges and Expenses**




The
      Borrower will assume and pay all costs, charges and expenses, including
      reasonable solicitors’ costs, charges and expenses on a special costs basis,
      which may be incurred by the Lender in respect of this Agreement or the Lender’s
      Security or which may be incurred by the Lender in respect of any proceedings
      taken or things done by the Lender in connection therewith to collect, protect,
      realize or enforce the Lender’s Security.




**5.**  **REPRESENTATIONS
      AND WARRANTIES**




**5.1**  **Representations
      and Warranties**




The
      Borrower represents and warrants to the Lender that:




(a)
            the
                Borrower is a corporation duly incorporated, validly existing and
                in good
                standing under the laws of the State of
                Nevada;




(b)
            the
                Borrower has all requisite corporate power and authority to enter
                into
                this Agreement and to grant the Lender’s Security and to carry out the
                obligations contemplated herein and
                therein;




(c)
            this
                Agreement and the Lender’s Security have been duly and validly authorized,
                executed and delivered by the Borrower and are valid obligations
                of it;
                and




(d)
            no
                Event of Default and no event which, with the giving of notice or
                lapse of
                time would become an Event of Default, has occurred or is
                continuing.




**5.2**  **Survival
      of Representations and Warranties**




All
      representations and warranties made herein will survive the delivery of this
      Agreement to the Lender and no investigation at any time made by or on behalf
      of
      the Lender shall diminish in any respect whatsoever its rights to rely on those
      representations and warranties. All statements contained in any certificate
      or
      other instrument delivered by or on behalf of the Borrower under or pursuant
      to
      this Agreement will constitute representations and warranties made by the
      Borrower thereunder.




**6.**  **COVENANTS
      OF THE BORROWER**




The
      Borrower covenants and agrees with the Lender that, at all times during the
      currency of this Agreement, it will:




(a)
            pay
                the Loan and all other monies required to be paid to the Lender pursuant
                to this Agreement in the manner set forth
                herein;


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(b)
            duly
                observe and perform each and every of its covenants and agreements
                set
                forth in this Agreement and the Lender’s
                Security;




(c)
            provide
                the Lender with immediate notice of any Event of Default;
                and




(d)
            do
                all things necessary to obtain and maintain the Lender’s Security in good
                standing and make payment of all fees and charges in respect
                thereto.




**7.**  **EVENT
      OF DEFAULT**




**7.1**  **Definition
      of Event of Default**




The
      Loan,
      costs and any other money owing to the Lender under this Agreement will
      immediately become payable upon demand by the Lender or, unless otherwise waived
      in writing by the Lender, in any of the following events:




(a)
            if
                the Borrower defaults in any payment when due under this
                Agreement;




(b)
            if
                the Borrower commits any default under any of the Lender’s Security
                instruments;




(c)
            if
                the Borrower becomes insolvent or makes a general assignment for
                the
                benefit of its creditors, or if any order is made or an effective
                resolution is passed for the winding-up, merger or amalgamation of
                the
                Borrower or if the Borrower is declared bankrupt or if a custodian
                or
                receiver be appointed for the Borrower under the applicable bankruptcy
                or
                insolvency legislation, or if a compromise or arrangement is proposed
                by
                the Borrower to its creditors or any class of its creditors, or if
                a
                receiver or other officer with like powers is appointed for the
                Borrower;




(d)
            if
                the Borrower defaults in observing or performing any other covenant
                or
                agreement of this Agreement on its part to be observed or performed
                and
                such default has continued for a period of seven (7) days after notice
                in
                writing has been given by the Lender to the Borrower specifying the
                default.




**8.**  **GENERAL**




**8.1**  **Waiver
      or Modification**




No
      failure on the part of the Lender in exercising any power or right hereunder
      will operate as a waiver of power or right nor will any single or partial
      exercise of such right or power preclude any other right or power hereunder.
      No
      amendment, modification or waiver of any condition of this Agreement or consent
      to any departure by the Borrower therefrom will be effective unless it is in
      writing signed by the Lender. No notice to or demand on the Borrower will
      entitle the Borrower to any other further notice or demand in similar or other
      circumstances unless specifically provided for in this Agreement.




**8.2**  **Time**




Time
      is
      of the essence of this Agreement.




**8.3** **Further
      Assurances**




The
      parties to this Agreement will do, execute and deliver or will cause to be
      done,
      executed and delivered all such further acts, documents and things as may be
      reasonably required for the purpose of giving effect to this
      Agreement.




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**8.4**  **Assignment**




The
      Borrower may not assign this Agreement or its interest herein or any part hereof
      except with the prior written consent of the Lender.




**9.**  **NOTICES**




9.1 Any
      notice under this Agreement will be given in writing and may be sent by fax,
      telex, telegram or may be delivered or mailed by prepaid post addressed to
      the
      party to which notice is to be given at the address indicated above, or at
      another address designated by that party in writing.




9.2 If
      notice
      is sent by fax, telex, telegram or is delivered, it will be deemed to have
      been
      given at the time of transmission or delivery.




9.3 If
      notice
      is mailed, it will be deemed to have been received 48 hours following the date
      of mailing of the notice.




9.4 If
      there
      is an interruption in normal mail service due to strike, labour unrest or other
      cause at or before the time a notice is mailed the notice will be sent by fax,
      telex, telegram or will be delivered.




**10.**  **AMENDMENTS**




This
      Agreement may be amended, waived, discharged, or terminated only by instrument
      in writing signed by the party against whom enforcement of the amendment,
      waiver, discharge or termination is sought.









**11.** **EXECUTION
      IN COUNTERPART**





This
      Agreement may be signed in counterpart and each such counterpart, whether in
      original or facsimile form, together shall constitute a true original and
      provide satisfactory evidence that this Agreement has been duly executed by
      the
      parties hereto.




**IN
      WITNESS WHEREOF** the
      Lender and the Borrower have executed and delivered this Agreement as of the
      day
      and year first written above.








**ENEREX
      CAPITAL, CORP.**








/s/
      William Frieson


Per:  William
      Frieson, President











**RANCHER
      ENERGY CORP.**














/s/
      John Works


Per:  John
      Works, President


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**SCHEDULE
      “A”**




to
      the
      Loan Agreement dated for reference the 6 th day of
      June, 2006




between
      Enerex Capital, Corp. and Rancher Energy Corp.







**PROMISSORY
      NOTE**




Principal
      Amount: **US
      $150,000**





For
      value
      received, **Rancher
      Energy Corp.** (the
      "Borrower") hereby promises to pay to **Enerex
      Capital, Corp.** (the
      "Lender") the principal sum of One Hundred Fifty Thousand Dollars in US funds
      (US$150,000) on the earlier of:




(i)  June
      30,
      2006 :




(ii)  any
      change of control of the Borrower ("control" being defined as ownership of
      or
      control of direction over, directly or indirectly, 20% or more of the
      outstanding voting securities of the Borrower); and




(iii)  the
      occurrence of an Event of Default (as defined in the Loan Agreement between
      the
      Borrower and the Lender dated for reference June 6, 2006),





together
      with lender’s fee calculated at a rate of Two Percent (2%) payable upon
      repayment of the Loan. All payments under this promissory note will be made
      by
      cheque, bank draft or wire transfer (pursuant to wire transfer instructions
      provided by the Lender from time to time) and delivered to the Lender.





The
      undersigned is entitled to prepay this promissory note, in whole or in part,
      without notice or penalty. The undersigned waives demand and presentment for
      payment, notice of non-payment, protest, notice of protest and notice of
      dishonor. This promissory note will be governed by and construed in accordance
      with the laws of the State of Nevada.





Dated:
      June 6 ,
      2006.





**RANCHER
      ENERGY CORP.**




















/s/
      John Works


Per:  John
      Works, President





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**SCHEDULE
      “B”**







to
      the
      Loan Agreement dated for reference the 6 th day of
      June, 2006




between
      Enerex Capital, Corp. and Rancher Energy Corp.










**CONVERSION
      FORM**











TO:  **Rancher
      Energy Corp.** (Company)








The
      undersigned Holder of a Loan in the amount of One Hundred Fifty Thousand Dollars
      in US funds (US$150,000) hereby irrevocably elects to convert the said Loan
      (or
      $ ______________ principal thereof) into securities in accordance with the
      Terms
      and Conditions of the Loan Agreement and directs that the securities issuable
      and deliverable upon the conversion be issued and delivered to the address
      indicated below.

















Dated:


*(Signature
      of Holder)*







*(Name
      of Holder)*










*(Address
      of Holder)*


















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