Rancher and Anadarko Strike CO2 Supply Deal

Rancher Energy Corp. announced the execution of an agreement with Anadarko Petroleum Corporation to procure the supply of carbon dioxide (CO2) for the Company's enhanced oil recovery (EOR) projects. Rancher Energy intends to use the CO2 in the Big Muddy, Cole Creek South, and South Glenrock B fields it plans to acquire in Wyoming's Powder River Basin. The Company expects to substantially enhance recovery of oil from these 3 projects by injecting CO2 into the reservoirs to stimulate oil production.

CO2 injection is a tertiary EOR method that can yield dramatic results. Traditional primary recovery efforts generally produce only 10% of a reservoir's original oil in place, leaving the remaining oil "stranded." CO2 acts as a powerful solvent to wash the residual oil saturation left in mature oil fields and enhance the movement of hydrocarbons through the formation after a secondary waterflood program has run its course.

The Company believes that CO2 injection has an environmental benefit as well. Geologic sequestration of CO2 involves capturing, compressing, and storing the greenhouse gas in subsurface environments including oil reservoirs. Utilizing CO2 flooding to develop its oil fields should enable Rancher Energy to generate substantial sequestration credits.

John Works, President & CEO of Rancher Energy, commented: "Securing a supply of CO2 through our agreement with Anadarko marks a highly significant milestone in the growth of Rancher Energy. CO2 injection into mature oil fields to prolong and extend their production is the cornerstone of our strategy for maximizing our assets in the Powder River Basin. We eagerly anticipate building a long and profitable relationship with Anadarko and increasing oil production in the State of Wyoming using this effective and environmentally friendly EOR technique."

Rancher Energy Corp. focuses on the oil & gas sector by specializing in evaluating older, historically productive fields in order to determine their potential for secondary and tertiary recovery. Management plans to determine the economics, and where viable, proceed with development of the assets into producing wells. Current high oil & gas prices alongside advances in technology are expected to make these assets an attractive source of potentially recoverable oil & gas reserves.