Exhibit 10.6

PARTICIPATION AGREEMENT

        This Participation Agreement is made and entered into this _____ day of
November 2007, but effective November 9, 2007, by and between W & T Offshore,
Inc., hereinafter referred to as (“W&T”) and Ridgewood Energy Corporation,
hereinafter referred to as (“Ridgewood”), and collectively referred to herein as
the Parties.

WITNESSETH:

         WHEREAS, W&T is an owner of certain record title interests and holds
contractual rights in and to certain Federal Oil and Gas Leases as fully
described on Exhibit “A”, attached hereto and the lands covered thereby,
hereinafter referred to as the “Leasehold Rights”, and

         WHEREAS, W&T and Merit Management Partners I, L.P., Merit Management
Partners II, L.P., Merit Management Partners III, L.P., Merit Energy Partners
D-III, L.P., Merit Energy E-III, L.P., and Merit Energy Partners F-III, L.P.
(“Merit”) and W & T Offshore, Inc. have executed that certain Co-Development
Agreement dated and effective August 31, 2007 which is attached hereto as
Exhibit “B” and made a part hereof (“Co-Development Agreement”) covering the
North-half of the North-half (N/2 N/2) of High Island Block 38, limited to those
depths below the stratigraphic equivalent of 12,900’ SSTVD, and the South-half
of the Southeast-quarter (S/2 SE/4) of Sabine Pass Block 18, limited to those
depths below the stratigraphic equivalent of 12, 900’ SSTVD (“the Co-development
Area”), and

        WHEREAS, under the terms of the Co-Development Agreement W&T and Merit
have committed to the drilling of the Initial Exploratory Well, which is defined
hereinafter in Article II.A.; and

        WHEREAS, W&T represents that it owns 100% of the rights in and to that
certain Farmout Agreement dated effective August 31, 2007 by and between El Paso
E&P Company, L.P and W&T Offshore, Inc., covering the South-half of the
Southeast-quarter (S/2 SE/4) of Sabine Pass Block 18, limited to those depths
below the stratigraphic equivalent of 12, 900’ SSTVD, which is attached hereto
and made a part hereof as Exhibit “C” (“Farmout”); and

         WHEREAS, W&T and Ridgewood have executed that certain Offer to
Participate effective November 9, 2007 by which Ridgewood may acquire a
twenty-five percent of eight-eighths (25% of 8/8ths) interest in and to the
Farmout and Co-Development Agreement;

        NOW AND THEREFORE, for and in consideration of the mutual promises
hereinafter contained, W&T and Ridgewood agree as follows:

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ARTICLE I

A.

 

Under the terms and conditions of the Co-Development Agreement, W&T represents
that it owns a 77.60% of 8/8ths working interest in and to the Initial
Exploratory Well and the Leasehold Rights within Co-Development Area; further,
the Co-Development Agreement, among other things, provides that W&T has full
power and authority to assign an interest to Ridgewood as to the rights and
obligations thereunder.

     

B.

 

W&T represents that it owns 100% of the rights in and to that certain Farmout,
which provides, among other things, that W&T has full power and authority to
assign an undivided interest to Ridgewood as to the rights and obligations
thereunder.

C.

 

W&T represents by, through and under its own acts that W&T’s interest in the
Farmout is free and clear of all liens and encumbrances, less and except
Lessor’s royalty, and the overriding royalty interest retained under the terms
of the Farmout.

D.

 

Upon the execution of this Participation Agreement, W&T hereby assigns and
conveys unto Ridgewood an undivided 85.22728% interest in and to the contractual
rights of the Farmout (which is equivalent to a twenty-five percent of
eight-eighths (25.00% of 8/8ths) interest in and to the Co-Development Area),
which interest is expressly subject to the terms and conditions of the
Co-development Agreement (hereinafter defined as the “Ridgewood Interest”).

E.

 

Upon the execution of this Participation Agreement, Ridgewood hereby ratifies,
adopts and accepts all of the terms and conditions of the Farmout and the
Co-Development Agreement.

F.

 

Within three (5) business days from the execution of this Participation
Agreement, Ridgewood agrees to wire transfer $6,960,395.00 which represents an
advance payment under the terms of the CDOA for its 33.33333% share of the Total
AFE Drilling & Evaluation costs. Such payment should be wired to:

  Account Name:  

W & T Offshore, Inc.

    Street Address:   Nine Greenway Plaza, Suite 300
Houston, TX 77046     Recipient Bank:   Amegy Bank     ABA Routing #  
113-011-258     Account #   51581996  

  W & T’s Tax I.D. Number is 72-1121985. W&T shall have the sole option to
terminate this Participation Agreement if such payment is not received timely.

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ARTICLE II

A.

 

Ridgewood acknowledges that the Ridgewood Interest is subject to the
Co-Development Agreement, which among other things, obligates Ridgewood to
participate in all of the costs, risk and expenses associated with the drilling
of the OCS-G 14878 Well No. 2 to a bottom hole location at 5,635.81’ FEL and
820’ FNL of High Island Block 38, to a depth of 15,994’ MD/15,130’ TVD, or to a
depth sufficient to test the Cristellaria “R” sand (the “Objective Depth”),
whichever is the lesser (such well hereinafter referred to as the “Initial
Exploratory Well”). Further, as consideration for right to acquire an undivided
twenty-five percent (25%) working interest in and to the Farmout and
Co-Development Area, Ridgewood agrees to pay thirty-three and one-third percent
of eight eighths (33 1/3% of 8/8ths) of all of the costs, risk and expenses in
the drilling of the Initial Exploratory Well to “casing point” (as provided by
the CDOA), or through plugging and abandonment, if applicable.

B.

 

The Initial Exploratory Well will be spud on or before December 31, 2007, and
will be drilled and operated in accordance with the terms of that certain
Co-development Operating Agreement as provided in the Co-development Agreement
(hereinafter referred to as “CDOA”).

C.

 

The estimated cost, risk and expense of drilling the Initial Exploratory Well to
the Objective Depth is set out in W&T’s AFE No. D07009, attached hereto as
Exhibit “D” (hereinafter referred to as the “AFE”). Concurrent with the
execution of this Agreement, Ridgewood agrees to execute the AFE.

D.

 

Subject to the terms of the Co-development Agreement and the CDOA, all actual
costs associated with the drilling of the Initial Exploratory Well to casing
point, or through plugging and abandonment, if applicable, shall be borne as
follows:

  Merit   22.40000% WI     W & T   44.26667% WI     Ridgewood   33.33333% WI    
   

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        100.00000% WI  

E.

 

At such time that the Initial Exploratory Well has reached casing point, or, if
prior to reaching casing point, the cumulative costs associated with the
drilling of the Initial Exploratory Well have exceeded 115% of the cost to drill
and evaluate the Initial Exploratory Well (or plug and abandon, if applicable)
set out on the AFE (the “DHC Cap”), Ridgewood’s disproportionate cost sharing
will cease and as to all further costs associated with the Initial Exploratory
Well, Ridgewood’s share of costs will be 25.00%. Ridgewood’s disproportionate
cost spending is applicable to the Initial Exploratory Well, or any Substitute
Well (as such term is defined in the Co-Development Agreement); thereafter,
subsequent wells or operations conducted under the terms of Co-development
Agreement will be borne as follows:

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  Merit   22.40000% WI     W & T   52.60000% WI     Ridgewood   25.00000% WI    
   

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        100.00000% WI  

F.

 

Upon the drilling and completion of the Initial Exploratory Well and
satisfaction of the terms set forth in (i) this Participation Agreement, (ii)
the Co-development Agreement and (iii) the Farmout, and within thirty (30) days
from receipt of an assignment from El Paso pursuant to the Farmout, W&T shall
deliver to Ridgewood an assignment of the Ridgewood Interest (as described
hereinabove), without warranty other than by, through and under W&T but with
full substitution and subrogation in and to all covenants and warranties of
W&T’s predecessors in title, in a form acceptable to the MMS, of the operating
rights interest in Lease OCS-G 04082 derived from the Ridgewood Interest. It is
understood and agreed that assignment of operating rights interest to be
conveyed to Ridgewood shall deliver a net revenue interest of seventy-five
percent, proportionately reduced (which equates to a net revenue interest of
18.75% of 8/8ths to the 25% working interest) of the production recovered from
operations conducted under the terms of the Co-development Agreement. Said
Assignment of the Ridgewood Interest shall be made subject to the terms of (i)
this Participation Agreement, (ii) the Co-development Agreement, (iii) the
Farmout, and (iv) the CDOA. Notwithstanding anything to the contrary contained
herein, if Ridgewood does not elect to set casing and complete the Initial
Exploratory Well for production of oil and/or gas, it shall not be entitled to
an assignment of the Ridgewood Interest as provided for herein and Ridgewood’s
plugging and abandonment liability shall be limited solely to the Initial
Exploratory Well.

ARTICLE III

A.

 

EXCEPT WITH RESPECT TO THE SPECIAL WARRANTY OF TITLE AS SET FORTH IN ARTICLE III
(F), W&T HAS NOT MADE, AND W&T HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY
REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, BY COMMON LAW, BY STATUTE, OR
OTHERWISE RELATING TO (i) THE TITLE OR CONDITION OF THE LEASES AND CONTRACTS
DESCRIBED HEREIN, AND (ii) ANY INFORMATION (WHETHER WRITTEN OR ORAL) FURNISHED
TO RIDGEWOOD BY OR ON BEHALF OF W&T (INCLUDING WITHOUT LIMITATION, IN RESPECT OF
GEOLOGICAL, GEOPHYSICAL AND SEISMIC DATA, THE EXISTANCE OR EXTENT OF OIL, GAS OR
OTHER MINERAL RESERVES, ANY PRODUCT PRICING ASSUMPTIONS, Ridgewood irrevocably
waives any and all claims it may have against W&T associated with same. This
provision does not apply to any specific representations or warranties set forth
herein.

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B.

 

Except as otherwise expressly provided herein, the provisions of this
Participation Agreement shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties hereto.

C.

 

Failure by W&T or Ridgewood to enforce any of the provisions of this
Participation Agreement shall not effect a waiver of any violation thereof nor
preclude enforcement of that or any other provisions hereof at that or any other
time.

D.

 

This Participation Agreement, including all Exhibits attached hereto,
constitutes the full and entire understanding and agreement between the Parties
relating to the matters herein, and except as otherwise provided herein,
supersedes any previous agreements or understandings, written or oral, in effect
between the Parties relating hereto. In the event of any conflict between the
Parties regarding the terms and conditions of this (i) Participation Agreement,
(ii) the Co-development Area, (iii) the Farmout and/or (iv) the CDOA, the terms
and conditions of this Participation Agreement shall prevail and control.

E.

 

For the purposes of notices pursuant to this Agreement:

            Ridgewood Energy Corporation W & T Offshore, Inc.   11700 Old Katy
Road, Suite 280 Nine Greenway Plaza, Suite 300   Houston, Texas 77079 Houston,
Texas 77046   Attention: W. Greg Tabor Attention: Jeanette Wilkins   Phone:
281.293.8488 Phone: 713.624.7307   Fax: 281.293.7391 Fax: 713.624.7378   E-mail:
gtabor@ridgewoodenergy.com E-mail: jwilkins@wtoffshore.com

  For the delivery of data recovered from operations conducted hereunder,
Ridgewood’s Well Information Requirements are attached hereto as Exhibit “D” and
made a part hereof.

F.

 

This Participation Agreement shall not be modified or amended except by mutual
agreement of the Parties in writing, and no action or failure to act on the part
of either Party hereto shall be construed as a modification or amendment to, or
a waiver of, any of the provisions of this Participation Agreement.

G.

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas, without giving effect to its conflicts of law provisions.
Venue for any claim or causes of action brought under this Participation
Agreement shall be in Harris County, Texas.

H.

 

This Agreement shall represent the full and final agreement between the Parties
and shall supersede any prior agreement, whether written or oral, regarding the
business transaction that is the subject hereof.

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I.

 

This Participation Agreement is not intended to and shall not be construed to
create any mining partnership, commercial partnership, any other partnership or
an association for profit between or among the Parties.

J.

 

All notices, requests, demands, and other communications provided for or
permitted hereunder shall be in writing (including telex and telecopy
communications) and shall be sent by mail, telex, telecopier or hand delivered
as provided in Exhibit “A”. Said notices, requests, demands and communications
shall be effective upon delivery.

IN WITNESS WHEREOF, THIS PARTICIPATION AGREEMENT IS MADE EFFECTIVE AS OF THE
EFFECTIVE DATE ABOVE WRITTEN.

        Witness:   W & T OFFSHORE, INC.             By:  

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      Jamie L. Vazquez

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    Vice-President             RIDGEWOOD ENERGY CORPORATION             By:  

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    Name: W. Greg Tabor

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  Its: Executive Vice President

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EXHIBIT “A”

Attached to and made a part of that certain Participation Agreement
dated the ______ of November 2007, but effective November 9, 2007
by and between
W & T Offshore, Inc. and Ridgewood Energy Corporation

I.

THE LEASES SUBJECT TO THE CO-DEVELOPMENT AGREEMENT, insofar and only insofar as
such Leases are located within the Co-Development Area as described in the
Co-development Area, being the North-half of the North-half (N/2 N/2) of High
Island Block 38, limited to those depths below the stratigraphic equivalent of
12,900’ SSTVD (representing a fixed 56% Co-Development Allocation Percentage);
and the South-half of the Southeast-quarter (S/2 SE/4) of Sabine Pass Block 18,
limited to those depths below the stratigraphic equivalent of 12, 900’ SSTVD
(representing a fixed 44% Co-Development Allocation Percentage):

 

(1)     OCS-G 14878: Oil, Gas and Mineral Lease dated November 30, 1999 issued
by the U. S. Department of Interior, as Lessor, to Nippon Oil Exploration U.S.A.
Limited and The Louisiana Land and Exploration Company, as Lessees, covering all
of Block 38, High Island Area, East Addition, as show on OCS Texas Leasing Map,
TX7A, and (2) OCS-G 04082: Oil, Gas and Mineral Lease dated October 1, 1979
issued by the U. S. Department of Interior, as Lessor to Pogo Production Company
and Tenneco Oil Company, as Lessees, covering that portion of Block 18 seaward
of the Three Marine League Line measured from the historic shoreline described
in the United States vs. Louisiana, No. 9 Original (394 U.X. 836), Sabine Pass
Area, as shown on OCS Official Leasing Map, Texas Map No. 8.

 

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EXHIBIT “B”

Attached to and made a part of that certain Participation Agreement
dated the ______ of November 2007, but effective November 9, 2007
by and between
W & T Offshore, Inc. and Ridgewood Energy Corporation

 

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EXHIBIT “C”

Attached to and made a part of that certain Participation Agreement
dated the ______ of November 2007, but effective November 9, 2007
by and between
W & T Offshore, Inc. and Ridgewood Energy Corporation

 

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EXHIBIT “D”

Attached to and made a part of that certain Participation Agreement
dated the ______ of November 2007, but effective November 9, 2007
by and between
W & T Offshore, Inc. and Ridgewood Energy Corporation

 

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