Re: Rancher Energy Corp. - Lock-Up Agreement

Rancher Energy Corp.

Dear Sirs:

This Lock-Up Agreement is being delivered to you in connection with the Securities Purchase Agreement (the " Purchase Agreement "), dated as of December 21, 2006 by and among Rancher Energy Corp. (the " Company ") and the investors party thereto (the " Buyers "), with respect to the issuance of (i) convertible notes of the Company (the " Notes ") which Notes shall be convertible into the common stock, par value $0.00001 per share, of the Company (the " Common Stock ") (ii) shares of Common Stock and (iii) warrants to acquire additional shares of Common Stock. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

In order to induce you to enter into the Purchase Agreement, the undersigned agrees that commencing on the date hereof and ending on the later of (i) the date 180 days from the Closing Date (as defined in the Purchase Agreement) and (ii) the date the Initial Registration Statement (as defined in the Registration Rights Agreement) filed by the Company pursuant to the Registration Rights Agreement is declared effective by the United States Securities and Exchange Commission, but in no event later than the one year anniversary of the Closing Date (the " Lock-Up Period" ), the undersigned will not, without the written consent of the Required Holders (as defined in the Registration Rights Agreement), (i) sell, offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of Common Stock, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any shares of Common Stock, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, (collectively, the " Undersigned’s Shares "). This Lock-Up Agreement shall not apply to any shares of Common Stock acquired by the undersigne