merit get rancher co2

I found this on US securities and exchange commission website posted 24/03/09

On March
18, 2009, Rancher Energy Corp., a Nevada corporation (“Rancher Energy”), entered
into an Assignment Agreement (the “Assignment”) with Merit Energy Company, LLC,
a Delaware limited liability company (“Merit”), for the assignment by Rancher
Energy of a portion of its right, title and interest in and to, and the
assumption by Merit of Rancher Energy’s obligations related thereto, the Carbon
Dioxide Sale & Purchase Agreement dated as of February 1, 2008 (the
“Contract”) by and between Rancher Energy and ExxonMobil Gas & Power
Marketing Company (“ExxonMobil”). ExxonMobil has consented to the
Assignment. The Contract is included as Exhibit 10.1 to Rancher
Energy’s Current Report on Form 8-K filed on February 14, 2008.

Under the
terms of the Assignment, Merit may purchase up to 37.5 MMCF per day of
carbon dioxide from ExxonMobil for a two-year term beginning on the Start-up Date, as
defined in the Contract (the “Initial Merit Term”). ExxonMobil will deliver
the contract quantities to the existing delivery point at the interconnect of
the ExxonMobil and Merit pipelines near Bairoil, Wyoming.

The terms
of the Assignment also provide Merit with an option to purchase an additional
6.5 MMCF per day during the Initial Merit Term. Following the Initial
Merit Term, to the extent Rancher Energy is not using for its own tertiary
recovery purposes any volumes of carbon dioxide Rancher
Energy is otherwise obligated, or able to purchase from ExxonMobil under the
Contract, Merit has the option to purchase from Rancher Energy so much of such
volumes as is elected by Merit on a monthly basis. If, during any
period in which Merit is purchasing carbon dioxide volumes
under either of these options, an Event of Default (as defined in the
Assignment) occurs, Rancher Energy will be required, at Merit’s sole discretion
but subject to ExxonMobil’s rights and remedies under the Contract, to assign
it’s remaining rights under the Contract to Merit.