INTERCREDITOR
      AGREEMENT

     

    THIS
      INTERCREDITOR AGREEMENT (this “Agreement”)
      is
      dated effective as of October 16, 2007, among BP
      CORPORATION NORTH AMERICA, INC.,
      an
      Indiana corporation (“Swap
      Counterparty”),
      RANCHER
      ENERGY CORP.,
      a
      Nevada corporation (“Borrower”),
      and
GASROCK
      CAPITAL LLC,
      a
      Delaware limited liability company (“GasRock”).

     

    RECITALS:

     

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

     

    B. Borrower
      is also entering into that certain ISDA Master Agreement dated as of October
      16,
      2007, between Borrower and Swap Counterparty (the “October
      2007 ISDA”),
      and
      GasRock has consented to Borrower entering into the October 2007 ISDA and agrees
      that such agreement is a Permitted Swap Agreement (defined below).

     

    C. GasRock,
      Swap Counterparty and Borrower desire to memorialize their agreement as to
      the
      relative priorities of the Loan Obligations (defined below), the Swap
      Obligations (defined below), and provide for the sharing of liens to secure
      those obligations.

     

    AGREEMENTS:

     

    In
      consideration of the mutual covenants and promises of this Agreement, and for
      other consideration, the receipt and adequacy of which are hereby acknowledged,
      Borrower, Swap Counterparty, and GasRock agree as follows:

     

    
      	1.	
              Definitions.
                As used in this Agreement,

            


    

     

    Business
      Day
      means
      any day other than a Saturday, Sunday or other day in which banking institutions
      in New York, New York are authorized or obligated by law or executive order
      to
      close.

     

    Collateral
      means,
      collectively, all the properties and rights described in the Security Documents
      as security for any of the Loan Obligations, and shall include all real property
      of Borrower, including but not limited to hydrocarbon leases, royalty interests,
      overriding royalty interests, production payments or similar interests in real
      property, and all amounts on deposit in any deposit account or securities
      account which have been pledged to secure all or any portion of the Loan
      Obligations.

     

    Crude
      Oil
      means
      all crude oil and condensate.

     

    Debtor
      Relief Law
      means
      any applicable liquidation, conservatorship, bankruptcy, insolvency,
      rearrangement, moratorium, reorganization, or similar debtor relief laws
      affecting the rights of creditors generally from time to time in
      effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Default
      means
      either a Payment Default or a Non-Payment Default.

     

    GAAP
      means
      generally accepted accounting principles recognized as such by the Financial
      Accounting Standards Board (or generally recognized successor) consistently
      applied and maintained throughout the period indicated and consistent with
      applicable laws, except for changes mandated by the Financial Accounting
      Standards Board or any similar accounting authority of comparable standing.
      Whenever any accounting term is used herein which is not otherwise defined,
      it
      shall be interpreted in accordance with GAAP.

     

    GasRock
      Lien
      has the
      meaning given to that term in Section
      2(b).

     

    Governmental
      Authority
      means
      the government of the United States of America, any other nation or any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government over Borrower,
      any affiliate, or any of their properties.

     

    Hedging
      Agreement
      means
      any swap agreement, cap, collar, floor, exchange transaction, forward agreement
      or the exchange or protection agreement related to Crude Oil, Natural Gas or
      other Hydrocarbons or any option with respect to such transaction, in each
      instance between Borrower and Swap Counterparty.

     

    Hydrocarbons
      means
      all Crude Oil, Natural Gas, distillate and sulphur, natural gas liquids and
      all
      products recovered in the processing of natural gas liquids, including, without
      limitation, natural gasoline, isobutane, normal butane, propane and ethane
      (including such methane allowable in commercial ethane), produced from or
      attributable to the leases comprising the Collateral.

     

    Lender
      has
      the
      meaning given to that term in the Credit Agreement.

     

    Lien
      means
      any interest in property (real or personal) securing an obligation owed to,
      or a
      claim by, a Person other than the owner of the property, whether such interest
      is based on the common law, statute or contract, and whether such obligation
      or
      claim is fixed or contingent, and including but not limited to (a) the lien
      or
      security interest arising from a mortgage, encumbrance, pledge, deed of trust,
      conditional sale or trust receipt or a lease, consignment or bailment for
      security purposes or (b) production payments and the like payable out of oil
      and
      gas properties. The term “Lien”
shall
      include easements, restrictions, servitudes, permits, conditions, covenants,
      exceptions or reservations. For the purposes of this Agreement, Borrower shall
      be deemed to be the owner of any real property which it has acquired or holds
      subject to a conditional sale agreement, or leases under a financing lease
      or
      other arrangement pursuant to which title to the real property has been retained
      by or vested in some other Person in a transaction intended to create a
      financing.

     

    Loan
      Documents
      means
      the “Loan Documents” as defined in the Credit Agreement, and includes the Credit
      Agreement and each of the Security Documents.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Loan
      Obligations
      means
      (a) the “Obligations” under the Credit Agreement, and (b) all other amounts due
      under the Loan Documents or any of the Security Documents, in each case whether
      now existing or hereafter incurred, whether direct, indirect, fixed, contingent,
      liquidated, unliquidated, joint, several, or joint and several, now or hereafter
      existing, due or to become due whether evidenced in writing or not, together
      with all costs, expenses, and attorneys’ fees incurred in the enforcement or
      collection thereof, and including, without limitation, interest thereon after
      the commencement of any proceedings under any Debtor Relief Laws.

     

    Natural
      Gas
      means
      all natural gas, and any natural gas liquids and all products recovered in
      the
      processing of natural gas (other than condensate) including, without limitation,
      natural gasoline, casinghead gas, iso-butane, normal butane, propane and ethane
      (including such methane allowable in commercial ethane) produced from or
      attributable to the Collateral.

     

    Non-Payment
      Default means
      a
      default including but not limited to an “Additional Termination Event” as
      defined in Swap Agreement (after any applicable grace period) other than a
      Payment Default, under the Credit Agreement or Permitted Swap Agreement, as
      applicable.

     

    Payment
      Default means
      a
      failure to pay principal, interest, fees or any other payment when due (or
      within any applicable grace period) under the Loan Documents or the Swap
      Documents, as applicable.

     

    Permitted
      Swap Agreement
      means a
      Swap Agreement (i)
      provided in those certain master swap agreements or International Swaps and
      Derivatives Association forms and the other Swap Documents related thereto
      which
      Borrower enters into with counterparties acceptable to Lender, as evidenced
      by
      Lender’s prior written approval (which approval will not be unreasonably
      withheld or delayed) and (ii)
      on
      terms reasonably satisfactory to Lender. For the avoidance of all doubt, the
      October 2007 ISDA is a Permitted Swap Agreement, and all references to
“Permitted Swap Agreement” in this Agreement will be deemed to refer to the
      October 2007 ISDA.

     

    Person
      means
      any individual, partnership, limited partnership, corporation, limited liability
      company, business trust, joint stock company, trust, unincorporated association,
      joint venture, syndicate, Governmental Authority or other entity or
      organization.

     

    Proceeds
      includes
      any and all cash proceeds and other property received by GasRock, or any other
      lender, from or for the account of Borrower, from or with respect to the
      Security Documents, or from any sale, exchange, destruction, condemnation,
      foreclosure, liquidation under any Debtor Relief Law or other disposition of
      any
      of the Collateral; provided,
      however,
      that
      such term will not include sales of any Hydrocarbons produced from or
      attributable to the Collateral in the ordinary course of the Borrower’s
      business.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Ratably
      or
Ratable
      means,
      with respect to any amount to be allocated between GasRock and Swap
      Counterparty, the allocation of a portion of such amount to (a) GasRock such
      that the ratio that the amount allocated to GasRock bears to the total amount
      to
      be so allocated equals the ratio of the Loan Obligations to the Total
      Obligations and (b) Swap Counterparty such that the ratio that the amount
      allocated to Swap Counterparty bears to the total amount to be so allocated
      equals the ratio of the Swap Obligations to the Total Obligations.

     

    Right
      or
Rights
      means
      rights, remedies, powers, privileges and benefits.

     

    Security
      Documents
      means
      the deeds of trust, mortgages, security agreement, and all other documents
      listed on Annex 1 hereto.

     

    Swap
      Agreement
      means
      (i)
      any
      interest rate or currency swap, rate cap, rate collar, forward agreement and
      other exchange or rate protection agreements or any option with respect to
      any
      such transaction and (ii)
      any
      swap agreement, cap, collar, floor, exchange transaction, forward agreement
      or
      exchange or protection agreement related to Hydrocarbons or any option with
      respect to such transaction.

     

    Swap
      Documents
      means
      the Permitted Swap Agreement together with each confirmation of trade under
      such
      Permitted Swap Agreement.

     

    Swap
      Obligations
      means
      all amounts owed or to become owing by Borrower to Swap Counterparty under
      the
      Swap Documents, together with all costs, expenses, and attorneys’ fees incurred
      in the enforcement or collection thereof, and including, without limitation,
      interest thereon after the commencement of any proceedings under any Debtor
      Relief Laws.

     

    Total
      Obligations
      means,
      as of the date of the determination, an amount equal to the Loan Obligations
      plus
      the Swap
      Obligations.

     

    UCC
      means
      the Uniform Commercial Code as adopted in Texas and as amended from time to
      time.

     

    
      	2.	
              Obligations
                and Liens are Pari
                Passu.

            


    

     

    (a) The
      Loan
      Obligations shall be pari
      passu
      with the
      Swap Obligations.

     

    (b) GasRock
      shall have a Lien (the “GasRock
      Lien”)
      on the
      Collateral to secure the Loan Obligations for the benefit of GasRock and the
      Swap Obligations for the benefit of Swap Counterparty. If any separate Lien
      is
      granted to secure all or any part of the Swap Obligations for the benefit of
      Swap Counterparty, the GasRock Lien shall be pari
      passu with
      any
      such Lien now or hereafter existing in favor of Swap Counterparty to secure
      all
      or any part of the Swap Obligations notwithstanding (i) the
      date, manner, or order of any grant, attachment, or perfection of such Lien
      on
      the Collateral, (ii)
      any
      provision of the UCC, other applicable law, the Loan Documents, or the Swap
      Documents or (iii)
      any
      manner of enforcement of any Lien or other Rights.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (c) GasRock
      hereby acknowledges and agrees that (i) Swap Counterparty is an “Approved
      Counterparty” as such term is defined in the Credit Agreement, (ii) the October
      2007 ISDA, together with all transactions entered into thereunder, is a
      Permitted Swap Agreement, and (iii) Borrower is authorized to enter into the
      Swap Documents with Swap Counterparty in accordance with Section 7.2(s) of
      the
      Credit Agreement.

     

    3.    Appointment
      of GasRock as Agent.
      Swap
      Counterparty hereby appoints GasRock to act as its agent (in such capacity,
      the
“Agent”),
      in
      its name and on its behalf, in and under each of the Security Documents, to
      hold
      the Lien on the Collateral, with power of sale, in its name for the benefit
      and
      security of GasRock and Swap Counterparty and for enforcement and payment of
      the
      Loan Obligations and the Swap Obligations, respectively; to take such action
      on
      behalf of GasRock and Swap Counterparty under the terms and provisions of the
      Security Documents and to exercise such rights and remedies under the Security
      Documents as are specifically delegated to or required of GasRock under the
      terms and provisions of this Agreement. Agent shall, as soon as commercially
      practical, distribute to GasRock and Swap Counterparty their Ratable share
      of
      all Proceeds in accordance with Section
      6
      below.

     

    4.    Release
      of Collateral.
      Agent,
      in its capacity as beneficiary and mortgagee under the Security Documents,
      may
      not release any Collateral from the Lien created under any of the Security
      Documents unless such release (i) is in accordance with Section 6.3 of the
      Credit Agreement or otherwise is in accordance with the terms and conditions
      of
      the Credit Agreement and the Security Documents, and in no event may releases
      of
      Borrower’s fee or leasehold interest in any Hydrocarbons included as Collateral
      during any twelve (12) consecutive months exceed five percent (5%) of the
      discounted present value of all proved Hydrocarbons included as Collateral
      without the prior written consent of GasRock and Swap Counterparty, or (ii)
      occurs in connection with the indefeasible payment in full of all Loan
      Obligations (other than obligations under any royalty interest or overriding
      royalty interest or any indemnity obligations which survive the termination
      of
      the Credit Agreement) while no Default has occurred or is continuing, but only
      to the extent that Borrower has provided to the Swap Counterparty a first
      priority lien on replacement Collateral (or alternate form of acceptable credit
      support) in support of all Swap Obligations in form, substance and amount
      acceptable to the Swap Counterparty.

     

    5.    Termination
      of Agent’s Authority.
      Upon
      becoming aware of a Default, Swap Counterparty or GasRock shall notify the
      other
      in writing. Swap Counterparty’s notification of GasRock shall constitute the
      Agent’s notification hereunder so long as Agent and GasRock are one in the same.
      A Default notification by Swap Counterparty shall contain a request that action
      be taken by Agent pursuant to the Security Documents. If Agent fails to take
      any
      reasonably requested action under the Security Documents following a Default
      under the Swap Documents and within a reasonable time after being requested
      to
      do so by Swap Counterparty, or if Agent fails to diligently pursue such action
      to the reasonable satisfaction of Swap Counterparty, Agent’s authority to act on
      behalf of Swap Counterparty may be terminated by Swap Counterparty upon thirty
      (30) days written notice to Agent and to Borrower. After any such termination
      (but not before), Swap Counterparty may file such Liens and take such other
      actions as it may deem necessary or advisable to secure and enforce the Swap
      Obligations owed
      to
      Swap Counterparty. To the extent that any such Swap Counterparty files and
      perfects any Lien on all or any portion of the Collateral to secure all or
      any
      portion of the Swap Obligations owed to it, the Lien held by Agent on the
      Collateral to secure the Loan Obligations shall be pari passu
      with any
      Lien hereafter existing in favor of such Swap Counterparty to secure all or
      any
      part of the Swap Obligations owed to it, notwithstanding (i) the date, manner
      or
      order of any grant, attachment, or perfection of any such Lien on the
      Collateral, (ii) any provision of the UCC, other applicable law, the Loan
      Documents, or the Swap Documents, or (iii) any manner of enforcement of any
      Lien
      or other rights.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    6.    Proceeds.
      All
      Proceeds received by Swap Counterparty or GasRock, individually or in its
      capacity as Agent under this Agreement, shall be applied in accordance with
      this
Section
      6.
      To the
      extent either GasRock or Swap Counterparty ever receives any portion of such
      proceeds in excess of its Ratable share (or to the extent GasRock, in its
      capacity as Agent, receives reimbursement in excess of expenses actually
      incurred), the party receiving those excess Proceeds agrees to promptly make
      all
      necessary transfers to the other so as to give full effect to this Section
      6.
      Notwithstanding anything to the contrary in any other Loan Document, all
      Proceeds received by Agent shall be applied in the following order:

     

    (a) First,
      to
      reimburse Agent for expenses in accordance with Section
      7
      below;

     

    (b) Second,
      Ratably
      to GasRock and Swap Counterparty; and

     

    (c) Third,
      to the
      extent that any Proceeds remain after the full and indefeasible payment of
      all
      of the Loan Obligations (other than obligations under any royalty interest
      or
      overriding royalty interest or any indemnity obligations which survive the
      termination of the Credit Agreement) and the Swap Obligations, to
      Borrower.

     

    7.    Expenses.
      GasRock
      and Swap Counterparty shall each bear their Ratable share of any reasonable
      expenses incurred by Agent in taking action on behalf of GasRock and Swap
      Counterparty in connection with its investigation, evaluation or enforcement
      of
      any Rights under the Security Documents, but only to the extent Agent does
      not
      receive reimbursement for such expenses from any other source(s) (excluding
      GasRock) within a reasonable time after such expenses are incurred; provided
      that, to
      the extent Swap Counterparty reimburses Agent for such expenses, Swap
      Counterparty will be entitled to receive its Ratable share of any reimbursement
      subsequently received by Agent from any other source(s) (excluding GasRock).
      Upon request by GasRock or Swap Counterparty, Agent shall provide such
      requesting party with sufficient supporting information (i.e., itemized invoices
      and supporting third party invoices) as may be required by GasRock or Swap
      Counterparty to determine the reasonableness of the expenses.

     

    8.    Limitation
      of Liability - Agent.
      Neither
      Agent nor any of its representatives shall be liable for any action taken or
      omitted to be taken by it or them hereunder or under any of the Security
      Documents in good faith and reasonably believed by it or them to be within
      the
      discretion or power conferred upon it or them by this Agreement and the Security
      Documents or be responsible for the consequences of any error of judgment,
      except to the extent arising solely from its gross negligence or willful
      misconduct. Agent shall not be responsible in any manner to any other party
      for
      the effectiveness, enforceability, genuineness, validity or the due execution
      of
      any of the Security Documents or for any representation, warranty, document,
      certificate, report or statement made in or in connection with any of the
      Security Documents or be under any obligation to any other party to ascertain
      or
      inquire as to the performance or observation of any of the terms, covenants
      or
      conditions of any of the Loan Documents or the Swap Documents on the part of
      Borrower. GasRock and Swap Counterparty agree to Ratably indemnify Agent and
      hold it harmless from and against any and all liabilities, obligations, losses,
      damages, penalties, actions, judgments, suits, costs, reasonable expenses,
      and/or reasonable disbursements of any kind or nature whatsoever which may
      be
      imposed on, asserted against or incurred by Agent in any way relating to or
      arising out of any of the Security Documents or any action taken or omitted
      by
      Agent under any of the Security Documents, except to the extent the same results
      solely from the gross negligence or willful misconduct of Agent.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    9.    Limitation
      of Liability - GasRock and Swap Counterparty.
      Neither
      Swap Counterparty nor GasRock, acting in its individual lending capacity, shall
      incur any liability to the other except for acts or omissions in bad faith.
      Neither Swap Counterparty nor GasRock, acting as Agent or in its individual
      lending capacity, shall incur any liability to Borrower or any other Person
      for
      any act or omission of any other party.

     

    10.    Term.
      Subject
      to Section
      22
      below,
      this Agreement shall terminate upon (i)
      the
      full and indefeasible payment of the Loan Obligations (other than obligations
      under any royalty interest or overriding royalty interest or any indemnity
      obligations which survive the termination of the Credit Agreement) and the
      Swap
      Obligations, (ii)
      the
      execution and delivery of a written termination notice signed by each of the
      parties, or (iii)
      if the
      Loan Obligations (other than obligations under any royalty interest or
      overriding royalty interest or any indemnity obligations which survive the
      termination of the Credit Agreement) are fully and indefeasibly paid, and the
      Swap Obligations remain in effect, this Agreement shall terminate if Borrower
      provides to the Swap Counterparty a first priority lien in replacement
      Collateral (or alternate form of acceptable credit support) in support of all
      Swap Obligations in form, substance and amount acceptable to the Swap
      Counterparty.

     

    11.    Removal
      of Agent.
      GasRock
      shall not be removed as Agent for Swap Counterparty under this Agreement except
      pursuant to Section
      5
      of this
      Agreement. GasRock and Swap Counterparty agree to promptly notify Borrower
      of
      any removal of Agent.

     

    12.    Survival
      of Rights.
      All of
      the respective rights and interests of GasRock and Swap Counterparty under
      this
      Agreement (and the respective obligations and agreements of Swap Counterparty
      and GasRock under this Agreement), shall remain in full force and effect
      regardless of:

     

    (a) any
      lack
      of validity or enforceability of any of the Loan Documents, the Swap Documents
      or any other agreement or instrument related thereto; or

     

    (b) any
      other
      circumstance which might otherwise constitute a defense available to, or
      discharge of, Borrower with respect to the Loan Obligations (other than
      obligations under any royalty interest or overriding royalty interest or any
      indemnity obligations which survive the termination of the Credit Agreement)
      or
      the Swap Obligations (in each case, other than the defense that such obligations
      have been fully satisfied).

     

    13.    Representations
      and Warranties.
      GasRock, Borrower, and Swap Counterparty each represent and warrant to the
      other
      that:

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (a) neither
      the execution and delivery of this Agreement nor its performance of or
      compliance with the terms and provisions hereof will conflict with, or result
      in
      a breach of the terms, conditions or provisions of, or constitute a default
      under, any other credit agreement or similar instrument to which it is now
      subject to, including without limitation any of the Loan Documents;

     

    (b) it
      has
      all requisite authority to execute, deliver and perform its obligations under
      this Agreement; and

     

    (c) this
      Agreement constitutes its legal, valid, and binding obligation, enforceable
      against it in accordance with its terms, subject only to applicable bankruptcy,
      insolvency or similar laws and general principles of equity.

     

    14.    Further
      Assurances.
      GasRock
      and Swap Counterparty each covenant that, as long as this Agreement remains
      in
      effect, they will execute and deliver any and all other instruments reasonably
      requested by the other to give effect to the terms and conditions of this
      Agreement.

     

    15.    Assignment;
      Agreement Binding on Successors and Assigns.
      As long
      as this Agreement remains in effect, neither GasRock nor Swap Counterparty
      will
      sell, assign, or otherwise transfer all or any part of the Loan Obligations
      or
      Swap Obligations, respectively, unless such sale, assignment or transfer is
      made
      expressly subject to the terms and conditions of this Agreement. This Agreement
      shall inure to the benefit of, and shall be binding upon and enforceable against
      Borrower, GasRock and Swap Counterparty and their respective successors and
      assigns.

     

    16.    Notice.
      Unless
      otherwise provided, any consent, request, notice, or other communication under
      or in connection with this Agreement must be in writing to be effective and
      shall be deemed to have been given (a) if by regular mail, on the third
      Business Day after it is enclosed in an envelope and properly addressed,
      stamped, sealed, certified return receipt requested, and deposited in the
      appropriate official postal service; (b) if by next day mail, on the first
      Business Day after the Business Day it is delivered to an overnight carrier
      during normal business hours, or (c) if by courier, electronic
      transmissions, or facsimile transmission, when sending party receives evidence
      that the notice was successfully delivered. Until changed by a subsequent notice
      delivered in accordance with this Section
      16,
      notices
      for each party are to be directed to:

     

    For
      delivery to Swap Counterparty:

    


    BP
      Corporation North America Inc.

    501
      WestLake Park Blvd.

    Houston,
      Texas 77079

    Attn:
      BPCNA Contracts Dept.

    Telephone:
      (713) 366-2000

    Telecopy:
      (713) 366-0203

    


    For
      delivery to Borrower:

    


    
      	 	
              Rancher
                Energy Corp.

            


    

    
      	 	
              Attn:
                John Works

            


    

    
      	 	
              999
                18th
                Street, Suite 3400

            


    

    
      	 	
              Denver,
                Colorado 80202

            


    

    
      	 	
              Telephone:
                (303) 629-1122

            


    

    Telecopy:
      (720) 904-5698

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    


    with
      copies to:

    


    Holme
      Roberts & Owen LLP

    Attn:
      Phillip Clarke

    1700
      Lincoln Street, Suite 4100

    Denver,
      Colorado 80203

    Telephone:
      (303) 861-7000

    Telecopy:
      (303) 866-0200

    


    For
      delivery to GasRock either in its capacity as Agent or otherwise:

    


    
      	 	
              GasRock
                Capital LLC

            


    

    
      	 	
              Attn:
                Marshall Lynn Bass

            


    

    1301
      McKinney St., Suite 2800

    Houston,
      Texas 77010-2026

    
      	 	
              Telephone:
                (713) 300-1400

            


    

    
      	 	
              Telecopy:
                (713) 300-1401

            


    

     

    with
      copies to:

    


    
      	 	
              Porter
                & Hedges, L.L.P.

            


    

    
      	 	
              Attn:
                Ephraim del Pozo

            


    

    
      	 	
              1000
                Main Street, 36th Floor

            


    

    Houston,
      Texas 77002

    
      	 	
              Telephone:
                (713) 226-6660

            


    

    
      	 	
              Telecopy:
                (713) 226-6260

            


    

     

    17.    Amendment.
      This
      Agreement may only be waived, amended, modified, or terminated by a written
      agreement signed by the party against whom enforcement of any such waiver,
      amendment, modification, or termination is sought.

     

    18.    Governing
      Law.
      This
      Agreement must be construed, and its performance enforced, under Texas
      law.

     

    19.    Invalid
      Provisions.
      If any
      part of this Agreement is for any reason found to be unenforceable, all other
      portions nevertheless remain enforceable. However, if the provision held to
      be
      unenforceable is a material part of the Agreement, such unenforceable provision
      may, to the extent permitted by law, be replaced by a clause or provision
      judicially construed and interpreted to be as similar in substance and content
      to the original terms of such provision as the context would reasonably allow,
      so that such clause or provision would thereafter be enforceable.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    20.    Multiple
      Counterparts.
      This
      Agreement may be executed in any number of counterparts with the same effect
      as
      if all signatories had signed the same document. All counterparts will, taken
      together, constitute one and the same instrument.

     

    21.    Jury
      Waiver.
      GasRock,
      Swap Counterparty And Borrower Hereby Voluntarily, Knowingly, Irrevocably And
      Unconditionally Waive Any Right To Have A Jury Participate In Resolving Any
      Dispute (Whether Based Upon Contract, Tort Or Otherwise) Between GasRock, Swap
      Counterparty and Borrower (or any of them) Arising Out Of Or In Any Way Related
      To This Agreement.

     

    22.    Reinstatement;
      Termination.
      If at
      any time any payment of the Loan Obligations or Swap Obligations is rescinded
      or
      must be restored or returned upon the insolvency, bankruptcy or reorganization
      of Borrower or otherwise, the obligations of Borrower, GasRock and Swap
      Counterparty under this Agreement, with respect to that payment, shall be
      reinstated as though the payment had been due but not made at that
      time.

     

    23.    This
      Agreement to Control.
      Notwithstanding Section 11.12 of the Credit Agreement or other similar
      provisions in other Loan Documents or the Swap Documents, to the extent the
      terms of this Agreement directly conflict with a provision in either the Loan
      Documents or the Swap Documents, the terms of this Agreement shall control.
      

     

    24.    Entirety.
      The
      Agreement and all documents and instruments referenced herein Represent the
      Final Agreement among GasRock, Swap Counterparty and Borrower with respect
      to
      the subject matter of this Agreement 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.

     

    25.    Recitals
      Incorporated Into Agreement.
      The
      recitals at the beginning of this Agreement are incorporated into this Agreement
      for all purposes.

     

    (Signatures
      are on following pages)

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	
              SWAP
                COUNTERPARTY:

              


              BP
                CORPORATION NORTH AMERICA, INC.,

              an
                Indiana corporation

            
	 	 	 
	 	By: 	/s/
              Steve Provenzano 
	 	Name: 	Steve
              Provenzano 
	 	Title: 	Vice-President-Financial
              Products
              Origination


    

     

    

      Signature
        Page to Intercreditor Agreement

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	GASROCK:
	 	 
	 	
              GASROCK
                CAPITAL LLC,

              a
                Delaware limited liability company

            
	 
 	 
 	 
 
	 	By:  	/s/
              Marshall Lynn Bass 
	 	
              
Marshall
              Lynn Bass
	 	Principal


    

    

       

      Signature
        Page to Intercreditor Agreement
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	BORROWER:
	 	 
	 	
              RANCHER
                ENERGY CORP.,

              a
                Nevada corporation

            
	 
 	 
 	 
 
	 	By:  	/s/
              John Works 
	 	
              
John
              Works
	 	President
              and Chief Executive Officer


    

     

    

      Signature
        Page to Intercreditor Agreement

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    ANNEX
      1

    


    Security
      Documents

     

     

    
      	1.	
              Mortgage,
                Security Agreement, Financing Statement and Assignment of Production
                and
                Revenues dated October 16,
                2007, executed by Rancher Energy Corp.,
                as Mortgagor and Debtor, in favor of GasRock Capital,
                LLC, as Mortgagee and Secured Party, for
                the benefit of GasRock Capital, LLC, as Lender, and
                BP Corporation North America, Inc., as Swap
                Counterparty.

            


    

     

    
      	2.	
              Security
                Agreement dated October 16,
                2007, by Rancher Energy Corp., as Debtor, in favor of GasRock
                Capital,
                LLC, as Secured Party,
                for the benefit of GasRock Capital, LLC, as Lender, and BP Corporation
                North America, Inc., as Swap Counterparty.

            


    

     

    
      	3.	
              Guaranty
                dated October 16, 2007, executed by Rancher Energy Wyoming, LLC,
                a Wyoming
                limited liability company, as Guarantor, for the benefit of GasRock
                Capital LLC, as Lender.

            


    

     

    
      	4.	
              Restricted
                Account and Securities
                Account Control Agreement dated October 16,
                2007, by and among Rancher Energy Corp., as
                account debtor, Wells
                Fargo Bank, National Association, as depositary bank, and
                GasRock Capital LLC, as Secured Party.

            


    

     

    
      	5.	
              All
                Letters in Lieu of Transfer Orders relating to Overriding Royalty
                Interest
                Conveyance, prepared and delivered by GasRock Capital LLC,
                under the Mortgage (described above) and in connection with
                the
                Credit Agreement.

            


    

     

    
      	6.	
              All
                Letters in Lieu of Transfer Orders - Mortgage, prepared and delivered
                by
                GasRock Capital LLC,
                under the Mortgage (described above) and in connection with
                the
                Credit Agreement.