SOURCE: Rancher Energy Corp.

August 07, 2006 09:00 ET

Rancher Energy Corp. Signs LOI for Wyoming East Teapot Dome Acquisition

DENVER, CO -- (MARKET WIRE) -- August 7, 2006 -- Rancher Energy Corp. (OTCBB: RNCH) (the "Company") is pleased to announce that it has signed a Letter of Intent ("LOI") with the Antelope Resources, Inc. of Casper, Wyoming towards the acquisition of interests in a prospective oil play in Wyoming's Powder River Basin.

The LOI confirms Rancher Energy's intent to purchase 100% of the ownership interests from the vendor (and 80% of the net revenue interests) in the East Teapot Dome Field. Antelope Resources leases cover approximately 1,200 acres out of the 2,500 acre field.

The East Teapot Dome field is situated in the southwest corner of the Powder River Basin, approximately 25 miles north and slightly east of Casper, Wyoming and eight miles southeast of Midwest, Wyoming. It is located in the Teapot Dome field, home of the U.S. Department of Energy's Naval Petroleum Reserve No. 3, as well as the Rocky Mountain Oilfield Testing Center.

According to a Reserve Evaluation dated August 8, 2005 commissioned by the Teapot Production Company, and undertaken by Jake Oil LLC, it is estimated that over 2 million barrels of oil may potentially be recovered through primary extraction methods principally in the Shannon Sandstone, Steele and Niobrara Formations. An additional estimated 1.5 million barrels of oil was identified as potentially recoverable through secondary and tertiary methods.

Rancher Energy's strategy is to concentrate resources and expertise in the Rocky Mountain region, particularly in Wyoming and Montana. The Company has already established a presence in the Powder River Basin, holding interests in 10,104 gross acres in the Burke Ranch Field prospect.

Of historical note, the Teapot Dome Field was at the center of a notorious scandal that rocked the administration of President Warren G. Harding in the early 1920s. The Teapot Dome scandal involved improper leasing of U.S. government land by the then Secretary of the Interior, who accepted cash gifts and no-interest loans from certain companies. Investigation revealed illegal actions by several government officials, who received fines and prison sentences. Following the scandal, wells were plugged and the field lay dormant for 30 years, until the Production Act of 1976 allowed production to resume.

The Letter of Intent includes provisions whereby the two parties will use their best efforts to move ahead to negotiate, execute, and deliver a definitive purchase & sale agreement within 30 days from the signing of the LOI. Additional information will be forthcoming as it becomes available.

ABOUT THE COMPANY

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 will determine the economics, and where viable, proceed with development of the assets into producing wells. Current high oil & gas prices alongside advances in technology make these assets an attractive source of potentially recoverable oil & gas reserves.

Forward-Looking Statements:

Except for statements of historical fact, the information presented herein may contain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Rancher Energy Corp. has little or no control.

ON BEHALF OF THE BOARD
Rancher Energy Corp.
John Works, President

Contact Information

  • Investor Relations Contact:
    Great Northwest Investor Relations Inc.
    1-866-375-RNCH (7624)
    Visit our website at www.rancherenergy.com