Exhibit 10.8
 
PARTICIPATION AGREEMENT

REDACTED, SOUTH ADDITION

This Participation Agreement (“Agreement”) is made and entered into effective as
of the 1st day of December, 2008 (the "Effective Date"), by and between Newfield
Exploration Company (“Newfield”) and Ridgewood Energy Corporation
(“Ridgewood”).  Newfield and Ridgewood are also sometimes hereinafter referred
to collectively as the “Parties” or individually as a “Party”.

WITNESSETH:

WHEREAS, Newfield owns 100% record title interest in Redacted, South Addition,
Block Redacted and Ridgewood would like to participate in the drilling of the
Redacted No. 1 Well.

WHEREAS, the Agreement covers the following oil and gas lease and area,
hereinafter referred to as the “Contract Area”:

Oil and Gas Lease effective August 1, 2008 by and between the United States of
America as Lessor, and Newfield Exploration Company, as Lessee, covering all of
Redacted, South Addition OCS Leasing Map,.Redacted containing approximately 5000
acres.

WHEREAS, Ridgewood agrees to bear a disproportionate share of drilling costs
associated with the Test Well (defined in Article 4 hereinbelow) in order to
earn an interest in the Contract Area, pursuant to the terms and conditions of
this Agreement.

WHEREAS, the Parties desire to enter into this Agreement to set forth the manner
in which the cost of drilling, producing and operating wells, and the production
from the Contract Area and interest in the Contract Area shall be shared and/or
owned.

NOW, THEREFORE, for the consideration, being the mutual benefits and advantages
accruing hereunder, the sufficiency of which is hereby acknowledged, the Parties
agree as follows:

Article 1 – Interest of the Parties

The costs, risk and liabilities associated with the exploration and development
of the Contract Area (including all wells, platforms, pipelines, facilities and
equipment associated directly with the specified operations herein) and all oil
and gas produced from wells drilled pursuant to the terms hereof, shall be borne
and owned, subject to the terms and conditions set out herein, and unless
otherwise agreed, by the Parties in accordance with the following percentage
working interests (“Working Interests”):

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Party
Working Interests
Newfield
66.6666%
Ridgewood
33.3333%*

*Subject to an obligation to pay a disproportionate share of Test Well costs, as
further described in Article 3.

Article 2 - Operating Agreement

2.1           Newfield is designated as the Operator of the Contract Area, and
all operations conducted on the Contract Area shall be performed in accordance
with and shall be subject to the terms and provisions of this Agreement, and the
Operating Agreement attached hereto as Exhibit “A” (“Operating Agreement”).  The
Parties shall execute the Operating Agreement simultaneously with this
Agreement.

2.2           Notwithstanding anything herein to the contrary, the non-consent
penalties set forth in Article 13 of the Operating Agreement shall not be
applicable to drilling operations on the Test Well, or substitute therefore,
prior to the Parties drilling an Earning Well (as hereinafter defined).

Article 3 - Test Well

3.1          Newfield will commence drilling operations for the Redacted, South
Addition (Redacted) No. 1 Well (“Test Well”) on or before February 1, 2009.  The
Test Well is planned to be drilled in accordance with Newfield’s AFE No. 18064
attached hereto as Exhibit “B” (“AFE”).  The Test Well will be drilled to an
approximate depth of 9,409’ MD 7,975’ TVD, or a depth sufficient to test the
“Redacted Sands”, whichever depth is shallower (“Contract Depth”).
 
3.2           As additional consideration for the opportunity to earn its
Working Interest in the Contract Area, the Parties will pay the following
percentages of the costs to drill the Test Well to Casing Point (as described in
Article 3.3 below):
 
Newfield
46.67200%
   
Ridgewood
53.32800%

 
The dry hole well cost for the Test Well is estimated to be $13,610,736.00 (“Dry
Hole Cost”) as outlined on the above referenced drilling AFE.  Ridgewood’s
disproportionate cost sharing will cease once cumulative costs and expenses for
the Test Well, and if drilled, the substitute well therefore, exceeds 110% of
$10,700,000.00 as outlined in Letter Agreement dated July 29, 2008 or upon
reaching Casing Point, whichever occurs first.  Thereafter Newfield will bear
its 66.67% and Ridgewood will bear its 33.33% share of subsequent costs, subject
to the non-consent rights set out in the Operating Agreement.

Additionally, within 10 days prior to spud, but no earlier, Newfield shall
invoice Ridgewood and Ridgewood shall timely pay its proportionate share of
lease sunk costs equal to $1,651,502.00 ($4,955,000.00 x 33.33% Working
Interest).  At such time as Ridgewood pays it’s proportionate share of the lease
sunk costs, Newfield will assign Ridgewood 33.33% Record Title Interest.
 
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3.3           Casing Point is defined as that point in time when the Test Well,
or substitute well therefor, has been drilled to the Contract Depth, and all
open-hole logs and all appropriate tests have been performed and delivered to
the Parties, and a recommendation is made to (i) set casing and complete the
well, (ii) plug and abandon the well or (iii) conduct other operations as
provided within the priority of operations outlined within the Operating
Agreement.

3.4           If the Test Well is either, i) unable to reach the Contract Depth
due to encountering domal material, heaving shale, saltwater, salt or other
impenetrable substance, or suffers any adverse condition (mechanical,
structural, stratigraphic or otherwise) in drilling said well, which substance
or condition cannot be overcome at a reasonable cost by means considered
customary or ordinary in the industry; or, ii) plugged and abandoned as a dry
hole, then any Party shall have the right to propose a substitute well in the
same manner as provided for hereinabove. Ridgewood shall have the option, but
not the obligation, to participate in such substitute well; however, if
Ridgewood elects not to participate in a substitute well, it shall relinquish
all of its right, title and intrest in the Contract Area and reassign to
Newfield all of its Record Title Interest in the Contract Area.  If actual
drilling operations are commenced on the substitute well within ninety (90) days
from the date of rig release of the Test Well, then said well shall be
considered the Test Well for purposes of this Agreement.

Article 4 - Assignment and Assumption of Rights
 
 
 
4.1           The interest assigned to Ridgewood pursuant hereto will be subject
to its proportionate share of the federal 18.75% royalty and a proportionately
reduced 2% ORRI in favor of Newfield Exploration Company.  The interest shall be
free and clear of any other overriding royalty interest, production payments, or
other burdens on production.

Article 5 - Ownership of Production

Production from each well drilled on the Contract Area will be owned pursuant to
the terms of this Agreement and the Operating Agreement.

Article 6 - Insurance

In connection with any drilling and/or production operations on the Contract
Area, the Operator shall carry the type and amount of insurance required by the
Operating Agreement.  No other insurance shall be required of the Operator
hereunder.
 

 
Article 7 - Confidentiality

Except for required disclosures, including but not limited to disclosures to
governmental agencies and/or stock exchanges, as provided in the Operating
Agreement, no Party shall release any geological, geophysical, or reservoir
information or any logs or other information pertaining to the progress, tests,
or results of any well drilled pursuant to this Agreement, without the prior
approval of the other Party.
 
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Article 8 - Conflicts

In the event of any conflict between the terms and conditions as set forth
herein and the terms and conditions set forth in the Operating Agreement, the
terms and condition set forth herein shall control.

Article 9 - Notices

All notices, requests or demands to be given under this Agreement shall be in
writing and shall be deemed to have been given (i) three (3) business days after
being sent by registered mail or certified mail, postage prepaid, or (ii) on the
day sent, if hand delivered or sent by facsimile, with receipt confirmed and
verbal confirmation, in each case addressed as follows or to such other address
as may have been furnished in writing to the other Parties hereto in accordance
herewith:
 
If to Newfield:
If to Ridgewood:
Newfield Exploration Company
Ridgewood Energy Corporation
363 N. Sam Houston Pkwy. E., Suite 2020
11700  Katy Freeway, Suite 280
Houston, Texas  77060
Houston, Texas  77079
Attention:  Ms. Christina Linscomb
Attn: Mr. W. Greg Tabor
Office Phone:  (281) 847-6074
Office Phone: (281) 293-8449
Fax Number:  (281) 405-4207
Fax Number: (281) 293-7705

 
Article 10 - Topical Headings

Topical headings appearing at the top of each numbered article have been
inserted for convenience only and are to be given no force or affect whatsoever
in the interpretation of this Agreement.

Article 11 - Successors and Assigns

This Agreement shall be binding upon each Party and their successors and
assigns. An assignment by a Party of any lands affected by this Agreement shall
be made expressly subject to, and the assignee shall expressly agree to assume
and comply with, the terms and provisions of this Agreement and the Operating
Agreement.

Article 12 - Counterpart Execution

This Agreement may be executed by signing the original or a counterpart
thereof.  If this Agreement is executed in counterparts, all counterparts taken
together shall have the same effect as if all the Parties had signed the same
instrument.  However, this Agreement shall not be effective as to any Party,
until it has been executed by all Parties.
 
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
Effective Date hereinabove first written.

WITNESSES:     NEWFIELD EXPLORATION COMPANY                    
 
 
By:
 /s/ W.M. Blumenshine       Name: 
W.M. Blumenshine
      Title:  
Vice President - Land
 
         

                                                              
 

WITNESSES:     RIDGEWOOD ENERGY CORPORATION                      
 
 
By:
 /s/ W. Greg Tabor       Name: 
W. Greg Tabor
      Title:
Executive Vice President
           

 
 
 

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