EXHIBIT 10.1



                       Exploration Participation Agreement




                        South Timbalier/West Delta Area




                                 By and Between


                               Chevron U.S.A. Inc.

                                       And

                          Ridgewood Energy Corporation

                                    Effective

                                September 1, 2006





                                                             South Timbalier 135
                                                                    Mussel beach








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                                TABLE OF CONTENTS

ARTICLE                                                                                      PAGE

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1.     SUBJECT MATTER, DEFINITIONS, EXHIBITS AND CONSTRUCTION .................................2
       ------------------------------------------------------

   1.1    Subject Matter and Purpose ..........................................................2
   1.2    Defined Terms .......................................................................2
   1.3    Exhibits ............................................................................8
   1.4    Rules of Construction ...............................................................8

2.     CONTRACT ACREAGE .......................................................................9
       ----------------

   2.1    Contract Acreage ....................................................................9
   2.2    Primary Prospect ....................................................................9
   2.3    Additional Opportunities Prospects ..................................................9
   2.4    Area of Mutual Interest ............................................................10
   2.5    Subsequent Well Timing .............................................................11

3.     ASSIGNMENT OF INTEREST ................................................................11
       ----------------------

   3.1    Leasehold Earning and Assignment ...................................................11
   3.2    Assignment Timing ..................................................................12
   3.3    Additional Earning Option ..........................................................12

4.     PROSPECT EVALUATION ...................................................................13
       -------------------

   4.1    Primary Prospect Well Cost Sharing .................................................13
   4.2    Additional Opportunities Prospect Well Cost Sharing ................................15
   4.3    Well Over-expenditure Limitation ...................................................16
   4.4    Rights Limitation on Use of Existing Wells .........................................17
   4.5    Well Takeover Provisions (Deleted) .................................................17
   4.6    Protection from Drainage ...........................................................17

5.     FARMOUT OPTION ........................................................................17
       --------------

   5.1    Exhibits ...........................................................................17
   5.2    Chevron's Participation Options and Overriding Royalties ...........................18
   5.3    General Farmout Agreement Terms and Conditions .....................................19
   5.4    Impenetrable Substances ............................................................22
   5.5    Overriding Royalties  ..............................................................22

6.      PRESSURE COMMUNICATION AND COMMON RESERVOIRS .........................................23
        --------------------------------------------

   6.1    Pressure Communication Restriction .................................................23

7.     OPERATING AGREEMNT ....................................................................24
       ------------------

   7.1    Offshore Operating Agreement .......................................................24


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   7.2    Designation of Operator ............................................................24

8.     ADDITIONAL PARTNERS/CO-VENTURERS ......................................................25
       --------------------------------

   8.1    Chevron's Right to Transfer Its Interest ...........................................25

9.     ACREAGE RELEASE .......................................................................25
       ---------------

   9.1    Option to Release Acreage ..........................................................25
   9.2    Rights Termination .................................................................25
   9.3    Automatic Release ..................................................................25

10.    NOTICES ...............................................................................26
       -------

   10.1   Notices ............................................................................26
   10.2   Change in Designated Representative ................................................27

11.    EXISTING AGREEMENTS ...................................................................27
       -------------------

  11.1    Existing Agreements ................................................................27

12.    RIGHTS RESERVED .......................................................................27
       ---------------

    12.1 Lease Rights Reservations ...........................................................27

13.    PRODUCTION PROCESSING AND CONTRACT OPERATIONS .........................................28
       ---------------------------------------------

   13.1   Production Processing ..............................................................28
   13.2   Contract Operations ................................................................29
   13.3   Use of Existing Facilities .........................................................29
   13.4   No Duty to Replace Existing Facilities .............................................30

14.    TAX MATTERS ...........................................................................30
       -----------

   14.1   Tax Partnership Provision ..........................................................30
   14.2   Internal Revenue Provision .........................................................30
   14.3   Allocation of Tax Liabilities ......................................................31

15.    GEOPHYSICAL DATA ......................................................................31
       ----------------

   15.1   Proprietary Seismic Data ...........................................................31
   15.2   Speculative Seismic Data ...........................................................32

16.    MINIMUM ROYALTY AND LEASE MAINTENANCE .................................................32
       -------------------------------------

   16.1   Annual Rental and Minimum Royalty Payments .........................................32
   16.2   Royalty Relief .....................................................................33
   16.3   Net Profit Provision ...............................................................34
   16.4   Take-in-Kind Election ..............................................................35

17.    MEDIA RELEASES .... ...................................................................35
       --------------

   17.1   Public Announcements ...............................................................35
   17.2   Media Releases .....................................................................36

18.    FILES .................................................................................36
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   18.1   Access to Files ....................................................................36

19.    ASSIGNMENTS AND TRANSFER OF INTEREST ..................................................37
      -------------------------------------

   19.1   Assignment of this Agreement .......................................................37
   19.2   Lease or Prospect Successors and Assigns ...........................................38

20.    CONFIDENTIALITY .......................................................................38
       ---------------

   20.1   Confidentiality ....................................................................38
   20.2   Speculative Seismic Data ...........................................................39
   20.3   Disclosure of Confidential Data ....................................................39
   20.4   Risk of Use of Confidential Data ...................................................40

21.    GOVERNING LAW .........................................................................40
       ------------

   21.1   Choice of Law.......................................................................40
   21.2   Future Litigation and Claims .......................................................40

22.    FORCE MAJEURE .........................................................................41
       -------------

   22.1   Force Majeure .....................................................................41

23.    DISPUTE RESOLUTION ....................................................................42
       ------------------

   23.1   Dispute Resolution .................................................................42
24.    TERMINATION ...........................................................................42
       -----------
   24.1   Termination ........................................................................42
   24.2   Lease Expiration or Termination ....................................................42
   24.3   Agreement Extension ................................................................43

25.    INDEMNITY .............................................................................43
       --------

   25.1   Indemnity ..........................................................................43

26.    BREACH ................................................................................44
       ------

   26.1   Breach .............................................................................44

27.    DISCLAIMER OF WARRANTY ................................................................44
       ----------------------

   27.1   Disclaimer of Warranty .............................................................44

28.    GENERAL PROVISIONS ....................................................................45
       ------------------

   28.1   Prospects Treated Separately .......................................................45
   28.2   Non-Interference ...................................................................45
   28.3   Governmental Approvals .............................................................45
   28.4   Amendments .........................................................................46
   28.5   Declaration of Agreement ...........................................................46
   28.6   Other Rights, Remedies Reserved ....................................................46
   28.7   No Waiver ..........................................................................46
   28.8   No New Lease Burdens ...............................................................46

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   28.9   Permitting Cost Sharing ............................................................47
   28.10  Audit Rights .......................................................................47
   28.11  Severability .......................................................................47
   28.12  Entire Agreement ...................................................................47
   28.13  Further Assurances .................................................................48
   28.14  Surviving Obligation................................................................48
   28-15  Conflict of Terms ... ..............................................................48
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                                      LIST OF EXHIBITS
                                      ----------------

                 Exhibit "A"         Primary Prospect(s)

                 Exhibit "B"         Additional Opportunities Prospect(s)

                 Exhibit "C"         List of Existing Agreements, Restrictions,
                                     Exceptions and Obligations

                 Exhibit "D-1"       Form of Operating Rights Assignment

                 Exhibit "D-2"       Form of Assignment with Reservation of ORRI

                 Exhibit "E"         Offshore Operating Agreement

                 Exhibit "F"         Dispute Resolution Procedure

                 Exhibit "G"         Declaration of Agreement

                 Exhibit "H"         Processing Agreement

                 Exhibit "I"         Area(s) of Mutual Interest




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                                        V


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                       EXPLORATION PARTICIPATION AGREEMENT


         THIS EXPLORATION PARTICIPATION AGREEMENT ("Agreement") is made and
entered into effective the 1st day of September, 2006, by and between Chevron
U.S.A. Inc., a Pennsylvania corporation hereinafter sometimes referred to as
"Chevron" and Ridgewood Energy Corporation, a Delaware corporation hereinafter
sometimes referred to as "Ridgewood or "Company". Chevron and Company are
sometimes hereinafter referred to individually as "Party" and/or collectively as
"Parties."


                                   WITNESSETH:


         WHEREAS, Company has expressed a desire to secure the right to earn and
subsequently own certain leasehold interests currently owned by Chevron in the
Outer Continental Shelf, Offshore in the Gulf of Mexico; and


         WHEREAS, Chevron is desirous of having an entity with proven expertise
in oil and gas operations the United States to evaluate, through exploratory
drilling, the hydrocarbon potential on a portion of 1 leasehold currently owned
by Chevron in such area; and


         WHEREAS, Company has demonstrated its ability to find commercial
quantities of hydrocarbons various locations throughout the United States and is
willing to commit financial and personnel resources now and in the future to
explore and develop the acreage of Chevron as described herein; and


         WHEREAS, Chevron is agreeable to grant Company the right and option to
explore certain Chevy leasehold along with Chevron to earn an interest in such
leasehold all as more particularly set forth below.


         NOW THEREFORE, for and in consideration of the mutual advantages and
benefits accruing to 1 Parties hereto, the sufficiency of which is hereby
acknowledged, the Parties hereto agree that the following v constitute the
agreement between Chevron and Company concerning the drilling of various wells
hereinafter described on the "Contract Acreage" hereinafter identified and, upon
the satisfaction of certain conditions contained herein, the acquisition of
interests by Company from Chevron. This Agreement upon execution Chevron and
Company will terminate, supersede and replace all prior agreements and oral
conversations between Chevron and Company regarding the transaction set forth
herein including, but not limited to, that certain Letter intent from Company to
Chevron dated August 10, 2006.


                                     Page 1
<PAGE>

                                    ARTICLE 1

1.      SUBJECT MATTER, DEFINITIONS EXHIBITS AND CONSTRUCTION
        ---------------------------------------------------


        1.1   Subject Matter and Purpose.
              ---------------------------
        The subject matter of this Agreement is the exploration and development
of the Contract Acreage, defined below, by Company and Chevron pursuant to the
terms and conditions hereinafter provided together with the rights and
obligations of Company and Chevron concerning such exploration and development
of the Contract Acreage.


        The purpose of this Agreement is to provide a means whereby Chevron is
to make available I Company acreage for the drilling of Exploratory Wells by
Chevron and Company and possible Third Parties in an attempt to find and develop
economic reserves for the benefit of the Parties. It is contemplated that
situations will arise during the term of this Agreement that is not specifically
covered herein. In the event the, situations do arise the Parties agree, in the
spirit of cooperation, to use all reasonable efforts to resolve such situations
to the mutual benefit of all Parties.


        1.2   Defined Terms.
              --------------

        For purposes of this Agreement, including the Exhibits, except as
otherwise expressly provided, the terms defined in this Section 1.2 have the
meanings assigned to them herein and the capitalized terms defined elsewhere in
the Agreement by inclusion in quotation marks and parentheses have the meanings
so ascribed to them.


        "AFE" means the formal Authority for Expenditure prepared by a Party to
this Agreement, for the purpose of estimating and fixing the participation
interests of the Parties for the Well Costs to be incurred in connection with a
proposal to drill, deepen, or sidetrack a well hereunder.


        "Additional Opportunities Prospects" mean the Prospects identified by
the Parties listed on Exhibit "B".


        "Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling c controlled by, or under common control with, such
Person. For purposes of this definition, the term "control] (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control ( with") as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
such Person, whether through ownership of voting securities, by contract or


                                     Page 2
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otherwise, and specifically with respect to a corporation, partnership or
limited liability company means 1) ownership of fifty percent (50%) or more of
the voting stock in such corporation or of the voting interest as partner in
such partnership or as a member of such limited liability company, or 2) a
limited liability company whereby a Party is its designated general manager
having full, exclusive and complete discretion in the management and control of
said entity.


        "Agreement" means this Exploration Participation Agreement between
Chevron and Company including the Exhibits attached hereto or referred to
herein.


        "Area of Mutual Interest" or "AMI" means the area(s) and block(s) listed
on Exhibits "A", B" an "I" attached hereto.


        "Available Acreage" means Chevron's interest in the acreage and those
aliquots and depths describe on Exhibits "A" and "B" attached hereto and made a
part hereof.


        "Business Day" means a day on which the Minerals Management Service New
Orleans Region, Office is open for business.


        "Casing Point" means that point in time when a well has reached the
Objective Depth, and all log cores and other tests have been completed, the
results thereof have been furnished to all Parties, and operator has made its'
recommendation for further operations at Objective Depth under the terms of the
applicable Operating Agreement.


        "Chevron ACP Interest" means the interest of Chevron and any Third
Parties in the Prospect(s) an Lease(s) as listed on Exhibits "A" and "B"
entitled "CHEVRON Interest AFTER Casing Point."


        "Chevron BCP Interest" means the interest of Chevron and any Third
Parties in the Prospect(s) an Lease(s) as listed on Exhibits "A" and "B"
entitled "CHEVRON Interest BEFORE Casing Point."


        "Company ACP Interest" means the interest of Company in the Prospect(s)
and Lease(s) as listed o Exhibits "A" and "B" under the column titled "COMPANY
Interest AFTER Casing Point" for any Prospect in which it participates and
earns.


                                    Page 3
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        "Company BCP Interest" means the interest of Company in the Prospect(s)
and Lease(s) as listed on Exhibits "A" and "B" under the column titled "COMPANY
Interest BEFORE Casing Point" for any Prospect in which it participates and
earns.


        "Contract Acreage" means collectively those aliquots and depths of the
Lease(s) and lands described as Available Acreage on Exhibits "A" and "B"
attached hereto and made a part hereof plus any acreage that becomes jointly
owned pursuant to Section 2.4, LESS AND EXCEPT THE EXCLUDED PROPERTY as defined
herein.


        "Effective Date" means the effective date of this Agreement, being 7:00
a.m., Central Standard Time, September 1, 2006.


        "Emma Beach Sand" means that certain geologic interval, the earning well
for which will be drilled to a depth of 18,000 feet TVD SS, and being the
primary objective and Objective Depth for the Initial Test Well for Emma Beach
Prospect as shown in that Prospect's AFE.


        "Excluded Property" means all of Chevron's right, title and interest in
and to the following for each of the Primary and Additional Prospect
Opportunities: (1) the oil and gas lease(s) issued by the United States of
America and listed on Exhibits "A" and "B" as to all lands and depths covered
thereby, which are not described as available for earning by Company for that
particular Prospect on Exhibits "A" and "B" hereto, and those aliquots and
depths of the Leases(s) which are described as available for earning by Company
for that particular Prospect on Exhibits "A" and "B" hereto, but were not earned
by Company prior to expiration of that particular Prospect's time period allowed
for earning under the terms of this Agreement; (2) all Existing Facilities; and,
(3) all production from or through the lease(s), Lease(s), lands, depths, wells
and facilities described in (1) and (2) of this definition, produced and sold
prior to and after the Effective Date; and, (4) all revenues received by Chevron
from the sale of production or otherwise derived by Chevron therefrom, described
in items (1), (2) and (3) of this definition. The Parties do hereby agree and
acknowledge that it is the intent of this Agreement to expressly exclude any and
all earning rights for Company to earn or have in any reservoir(s) strata or
sands currently producing or producible from any existing wellbore(s) located on
the lease(s) or Leases(s), and that such determination shall be made solely by
Chevron, in good faith. Any reservoir(s), strata or sands currently producing or
producible from any existing wellbore(s) located on the Leases(s) shall be
deemed Excluded Property.


                                     Page 4
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        "Existing Facilities" means all property located on or associated with
the Contract Acreage as of the Effective Date used or held for use in connection
with the production, treatment, gathering, storage and compression of oil and/or
gas from, on, or attributable to the Lease(s) listed on Exhibits "A" or `B",
including but not limited to, (1) platforms, wells, caissons, fixtures, tanks,
pumps, pipelines, appurtenances and improvements, (2) all equipment or material
permanently or temporarily located on the Contract Acreage; and, (3) other
structures located on or used in connection with the Lease(s); together with any
future items described in (1), (2) and/or (3) hereinabove installed for or used
in connection with any rights reserved unto Chevron under this Agreement,
including but not limited to, the drilling, reworking, recompleting,
sidetracking or deepening of any wells, current or future, by or on the behalf
of Chevron to depths comprising the Excluded Property and for the use or benefit
of the Excluded Property.


        "Exploratory Objective" means any zone, interval or horizon not in
pressure communication with a zone, interval or horizon that is currently
producing or is currently known to be capable of producing oil and/or gas from
an existing wellbore located on a Lease.

        "Exploratory Well" means a well proposed to be drilled to evaluate an
Exploratory Objective. A well will be considered an Exploratory Well if any bona
fide objective in a well is an Exploratory Objective, even if other objectives
in the well do not qualify as Exploratory Objectives. Any substitute well for a
previously drilled Exploratory Well will be considered an Exploratory Well if
and only if the substitute well is proposed to be drilled to not less than the
Objective Depth of the unsuccessful Exploratory Well it is replacing.


        "Farmout Agreement" means a mutually acceptable form of agreement to be
entered into by the Parties for a Prospect in the event Chevron elects not to
participate in the Initial Test Well, and Company agrees to assume and bear,
either solely or with any Third Parties, one hundred percent (100%) of the costs
and risks of said operation.


        "Holly Beach Sand" means that certain geologic interval, the earning
well for which shall be drilled to a depth of 21,000 feet TVD SS, and being the
primary objective and Objective Depth for the Initial Test Well for Holly Beach
Prospect as shown in that Prospect's AFE.


        "Initial Test Well" will be the Exploratory Well proposed by Chevron or
Company and drilled after the Effective Date of this Agreement on each Prospect
located on the Exhibit "A" or Exhibit "B" Lease(s).


                                     Page 5
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        "Lease(s)" means the oil and gas Lease(s) issued by the United States of
America as listed on Exhibits "A" and "B", but as may be depth, aliquot or
interest limited thereby.


        "Mussel Beach Sand" means that certain geologic interval, the earning
well for which will be drill to a depth of 19,600 feet TVD SS or to a depth
sufficient to adequately test the Tex-X Sand, as seen on the TGS Deep Resolve
PSTM seismic data, in line 9770, cross line 9753, 4320 ms,, whichever is the
lesser, and being the primary objective and Objective Depth for the Initial Test
Well for Mussel Beach Prospect as shown in that Prospect's AFE.


        "Objective Depth" means the total depth of an Initial Test Well or
Substitute Well(s) as specified the formal drilling AFE for such well for each
Prospect as shown on Exhibits "A" and "B".


        "Operating Agreement" means the offshore operating agreement to be
entered into or ratified by the Parties in accordance with the provisions of
this Agreement to govern and bear upon notice requirements and well operations,
but not the participation elections, for the Available Acreage until reaching
Casing Point, of the Parties on wells drilled under this Agreement. No grant of
any operating agreement interest is intended in or the Available Acreage until
earned under this Agreement.


        "Operating Rights" means all of the rights, obligations, liabilities and
attributes of a working interest ownership covering less than all depths, and
potentially less than the entire surface area, in and on a Lease.


        "Person" means, and will be interpreted broadly to include, without
limitation, any individual corporation, association, company, limited liability
company, trust, estate, partnership, joint venture unincorporated organization,
other business entity, any government or any department or agency thereof or any
other legal entity.


        "Primary Prospect(s)" means that certain Prospect identified by Chevron
and listed on Exhibit "A".


        "Prospect" means an area believed to encompass an accumulation(s) of
hydrocarbons having one or more productive formations. The area encompassing
these accumulations will be described on a surface acreage or aliquot basis and
subject to any depth limitations as specified on Exhibits "A" or "B" or as
agreed' by the Parties.


                                     Page 6
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        "Record Title" means all of the Chevron rights, obligations, liabilities
and attributes of a working interest ownership covering all depths in and on a
Lease.


        "Representatives" means the directors, officers, supervisors, employees,
partners, lender, consultants, attorneys and legal counsel, financial advisors,
accountants, marketing representatives and other agents of the Parties.


        "Reservoir" means a subsurface porous, permeable rock body that contains
or is thought to contain an accumulation of oil and/or gas, separated by
faulting or other subsurface anomaly from other areas containing accumulations
of oil and/or gas in the same or different strata.


        "Skipper's Canyon Sand" means that certain geologic interval, the
earning well for which will be drilled to a depth of 19,520 feet TVD SS or to a
depth sufficient to adequately test the Skipper's Canyon Sand as seen on the TGS
Deep Resolve PSTM seismic data in line 9851, cross line 9381, 4516 ms, whichever
is the (lesser, and being the primary objective and Objective Depth for the
Initial Test Well for Skipper's Canyon Prospect as shown in that Prospect's AFE.


        "Substitute Well" means a well proposed by a Party to the Objective
Depth of a Prospect as listed or Exhibits "A" or "B", as a result of the Initial
Test Well, or a previous Substitute Well, on such Prospect no reaching its
Objective Depth.


        "Successful Well" means a well determined by the Minerals Management
Service (or meeting the requirements of the Minerals Management Service without
a written determination as mutually agreed by the Parties) to be a producible
well pursuant to 30 CFR Part 250, Subpart A, or any successor regulation, for
the (Lease(s) located in Federal offshore waters, as used in Articles 3, 4 and 5
and if actually completed for. production by a Party hereto.


        "Third Parties" means a Person not a Party to this Agreement.

        "Well Costs" means the costs and expenses of all services and materials
shown on the AFE and use (and associated with drilling, sidetracking, deepening
and testing a well hereunder, including, but not limited t0 (the costs and
expenses associated with the following items: (1) permitting with applicable
government agencies (2) drill site preparation and facility modifications
(including removal of existing conductors due to structural load requirements,
but excluding hazard surveys, which are provided for in Section 15.2 of this
Agreement); (3) actual drilling, deepening or sidetracking operations


                                     Page 7
<PAGE>

(including mobilization and demobilization of the rig to the( drill site); (4)
logging, coring and testing of the well for the presence of oil and/or gas; (5)
the costs of plugging and abandonment if the well is not completed for
production; and (6) the cost to temporarily abandon a well. Al such costs and
expenses will be determined in accordance with the accounting procedure attached
to the applicable Operating Agreement.


        1.3   Exhibits.
              ----------
        The following Exhibits are attached hereto and incorporated herein by
        reference:

              Exhibit "A"       Primary Prospect

              Exhibit "B"       Additional Opportunities Prospect(s)

              Exhibit "C"       List of Existing Agreements, Restrictions,
                                Exceptions and Obligations For Primary Prospect

              Exhibit "D-1"     Form of Operating Rights Assignment

              Exhibit "D-2"     Form of Assignment with Reservation of ORRI

              Exhibit "E"       Offshore Operating Agreement

              Exhibit "F"       Dispute Resolution Procedure

              Exhibit "G"       Declaration of Agreement

              Exhibit "H"       Processing Agreement

              Exhibit "I"       Area(s) of Mutual Interest


        1.4   Rules of Construction.
              ----------------------

        For purposes of this Agreement:
        (a) Unless the context otherwise requires: (1) "or" is not exclusive;
        (2) an accounting term not otherwise defined has the meaning assigned to
        it in accordance with accounting principles generally accepted in the
        United States of America; (3) words in the singular include the plural,
        and words in the plural include the singular; (4) words in the masculine
        include the feminine, words in the feminine include the masculine and
        words with appropriate correlative meanings include such correlative
        meanings; (5) any date specified for any action that is not a Business
        Day will be deemed to mean the first Business Day after such date; (6)
        reference to a Person includes such Person's successors and assigns and,
        in the case of governmental bodies, Persons succeeding to their
        respective functions and capacities; (7) any amounts due or payable
        under this Agreement will be paid in United States currency and (8) the
        use of the words "contribute, contributing or contribution" will refer
        to a payment due from one Party to the other as specified herein or in
        the applicable Operating Agreement.


                                     Page 8
<PAGE>

        (b) References to Articles and Sections are, unless otherwise specified,
        to Articles and Sections o this Agreement. Neither the captions to
        Articles or Sections thereof nor the Table of Contents will bi deemed to
        be a part of this Agreement but are added for convenience only.
        (c) References herein to any agreement or other instrument will, unless
        the context otherwise( requires (or the definition thereof otherwise
        specifies), be deemed references to the same as it may from time to time
        be changed, modified, supplemented, amended or extended. There is no
        incorporation b, reference herein unless expressly so stated.




                                    ARTICLE 2

2.      CONTRACT ACREAGE
        ----------------


            2.1   Contract Acreage.
                  -----------------
            This Agreement will cover only the Available Acreage as described in
Exhibits "A" and "B". Should an3 acreage be jointly acquired pursuant to the
provisions of this Agreement as stated in Section 2.4 below, then said newly
acquired acreage will automatically become part of the Contract Acreage.


            2.2   Primary Prospect
                  ----------------
            Attached hereto as Exhibit "A" is the Prospect Chevron has
identified covering a portion of the Lease(s; subject to this Agreement. Prior
to the execution of this Agreement, a technical presentation was given to
Company by Chevron covering the Prospect. No acreage associated with the
Prospect listed on Exhibit "A" will be expanded or contracted without the
mutual consent of the Parties. Notwithstanding the above, no approval by the
Parties will be required for the expansion of a Prospect as a result of acreage
acquired by Chevron pursuant to the provisions stated in Section 2.4; it being
understood that any such acreage acquired by Chevron pursuant to the provisions
stated in Section 2.4 would automatically be included in the affected Prospect,
but limited as to depth: available for earning in that particular Prospect
pursuant to Exhibit "A".


            2.3   Additional Opportunities Prospects.
                  -----------------------------------
            Exhibit "B" consists of a list of the Prospects, other than the
Primary Prospect, associated with the Lease(s), where a technical presentation
has been given to Company by Chevron. In accordance with the provisions stated
in this Agreement, it is anticipated the Parties may, under the terms hereof
evaluate the hydrocarbon potential on these Exhibit "B" Prospects to determine
whether or not the Parties are interested in drilling an Initial Test Well on
these Prospects. Unless mutually agreed by the Parties before, during or
subsequent to the evaluation described herein regarding the Prospects listed on
Exhibit "B", each Prospect on Exhibit "B" will not be expanded or contracted to



                                     Page 9
<PAGE>

include or exclude acreage. Notwithstanding the above, approval of any expansion
to a Prospect will not apply to acreage acquired by Chevron pursuant to the
provisions stated in Section 2.4; it being understood that any such acreage
acquired by Chevron pursuant to the provisions stated in Section 2.4 would
automatically be included in the affected Prospect, but limited as to depths
available for earning in that particular Prospect pursuant to Exhibit "B".


            2.4   Area of Mutual Interest.
                  ------------------------
            Should Company either (i) acquire an interest in an oil and gas
lease covering any of the blocks or acreage in such Prospect identified on
Exhibits "A", "B" or "I," or any portion of such blocks or acreage, or (ii)
acquire the right to acquire an interest in an oil and gas lease covering any of
the blocks or acreage identified in such Prospect, or (iii) acquire an interest
in an oil and gas lease covering any of the blocks or acreage identified on
Exhibit "A", "B" or "I" for such Prospect should the original Lease expire or
terminate before termination of this Agreement, then Chevron shall have the
right but not the obligation to acquire from Company up to seventy-five percent
(75%) interest and/or right(s) acquired by Company covering any of the blocks or
acreage identified on Exhibit "A", "B" or "I". Chevron shall be notified in
writing by Company within thirty (30) days of such acquisition and will provide
all of the terms and conditions of the offer to Chevron with said notice, and
Chevron shall have thirty (30) days after receipt of such notice to advise
Company whether or not Chevron elects to acquire its proportionate share of the
interest and/or rights acquired by Company. If Chevron elects to exercise its
right under this Agreement, the consideration owed by Chevron to Company will be
equal to all the consideration paid and/or tendered by Company for such interest
and/or right attributable to Chevron's proportionate share. Should Chevron
acquire any interest, or acquires a right to acquire any interest in any acreage
listed on Exhibits "A", "B" or "I" prior to Company earning an interest in the
Leases included in the Prospect covering such acreage, Chevron shall include the
acquired acreage, or right to acquire acreage, in such Prospect for all purposes
under this Agreement, but said inclusion shall be limited as to depths available
for earning in that particular Prospect pursuant to the applicable Exhibit "A"
or "B".


            After earning an interest in the Leases in a Prospect by Company,
the applicable Operating Agreement will control the obligations between the
Parties in the AMI for such Prospect established under the Operating Agreement,
which will consist of the acreage identified on Exhibits "A", "B" and "I" for
such Prospect, plus any acreage added to such Prospect pursuant to this
Agreement, if any.


            This AMI obligation will be binding upon and will inure to the
Parties hereto, for the longer period of either (i) this Agreement or (ii) the
applicable Operating Agreement, or (iii) December 31, 2008.


                                    Page 10
<PAGE>

2.5  Subsequent Well Timing
     ----------------------

        Notwithstanding the applicable Operating Agreement under Article 7 of
this Agreement or a Farmout Agreement pursuant to Article 5, Chevron and Company
agree that, in connection with Company earning an interest in any Prospect,
whether pursuant to this Agreement or a Farmout Agreement pursuant to Article 5,
no subsequent proposal will be made by Chevron or Company to drill or sidetrack
another well in or to that Prospect until the earlier of one (1) year after
drilling rig de-mobilization from that Prospect's earning well or after ninety
(90) days of production from that Prospect's earning well, except with consent
of Chevron; Company, and any Third Party similarly bound by Chevron with respect
to that Prospect, or unless required to be drilled by the United States
government or to prevent expiration of an oil, gas and mineral lease in that
Prospect.




                                    ARTICLE 3

3.      ASSIGNMENT OF INTEREST
        ----------------------


        3.1 Leasehold Earning and Assignment.
        -------------------------------------
        Exhibit "A" lists the current ownership interests of Chevron in the
Primary Prospect Lease(s). Exhibit "A" also lists the portions of Chevron's
interest, based on 100% leasehold working interest in the Lease(s), that Chevron
shall assign to Company subject to satisfaction by Company of the earning
provisions stated in this Article 3 during the term of this Agreement. The
rights of Company to earn interests in the Primary Prospect under the terms of
this Agreement shall not extend beyond December 31, 2007, and no Initial Test
Well or Substitute Well for a Primary Prospect may be proposed by either Party
after said date. Prospect acreage earned and the assignment(s) due will cover
Operating Rights Interest as to the Company ACP Interest in and to the acreage
and depths listed on Exhibit "A" in that portion of the Lease(s) in the
Prospect, and on a form of assignment as shown on Exhibits "D-1"or "D-2", as
applicable, and subject to the reversionary rights of Chevron as stated in said
assignment(s), for recordation by the Parties in the public records of the
adjacent parish. Company shall promptly file any and all assignments made
pursuant to this Agreement or a Farmout Agreement in the public records of the
adjacent parish and as a non-required filing (for any assignment of a Prospect
which is included in or subject to a federal unit agreement), or required fling,
for any assignment of a Prospect which is not included in or subject to a
federal unit agreement), whichever is applicable, with the Minerals Management
Service for the Lease(s) assigned hereunder and timely provide Chevron a
certified copy with recordation data. Any assignment earned by Company and made
by Chevron for an Additional Opportunities Prospect(s) as shown on Exhibit "B"
will be under the terms and conditions as provided for herein. Any assignment
made by Chevron as a result of this Agreement will be made specifically subject
to this Agreement, and to the restrictions, exceptions, limitations and


                                    Page 11
<PAGE>

obligations stated in the agreements listed on Exhibit "C", as applicable, for
that portion of the Lease(s) to be assigned. These agreements will be referenced
in any assignment made. An assignment will only be earned by Company:

       (a)    Upon (i) Company's participation in an Initial Test Well on a
              Prospect, (ii) which reaches its Casing Point for the Objective
              Depth, and (iii) regardless if the well is a Successful Well or
              not in the Available Acreage for that Prospect, then Company will
              be entitled to an assignment of the Company ACP Interest in that
              portion of the Lease(s) included in the Prospect as to the
              Available Acreage for that Prospect;

              or

       (b)    Upon (i) Company's participation in an Initial Test Well on a
              Prospect, (ii) which fails to reach its Casing Point for the
              Objective Depth, and (iii) and the Parties mutually agree to cease
              furher drilling operations in the Initial Test Well, then Company
              will retain the right to earn an assignment of the Company ACP
              Interest in that portion of the Lease(s) included in the Prospect,
              provided Company satisfes the requirements for earning in
              accordance with the provisions of Section 4.1 or 4.2 covering the
              drilling of a Substitute Well for such Prospect.


       3.2    Assignment Timing.
              ------------------

       As soon as reasonably possible, but no later than thirty (30) days after
any earning event as specifed in Article 3.1, Chevron shall forward to Company
the applicable executed assignments of and for that earned portion and depth of
the Lease(s) in the Prospect as provided in Article 3.1. Should Company fail to
meet its fnancial obligations as described in this Agreement, or under the
applicable Operating Agreement, Chevron shall have the right and option to
withhold execution and delivery of the earned assignments until any funds owed
have been properly paid.

       3.3    Additional Earning Option.
              --------------------------

       During the term of this Agreement, and subject to Company's obligation to
participate in the drilling of the Initial Test Well for the Primary Prospect
under the terms of this Agreement,, Company will have the option to elect to
participate in the drilling of an Initial Test Well on the Prospects listed on
Exhibit "B" and to earn rights hereunder by approving a formal drilling AFE for
each Prospect within thirty (30) days of its receipt. Failure to approve a
formal AFE will be deemed an election not to participate as of the date upon
which the thirty (30) day election period expires. In no event will this right
to participate continue to exist afer December 31, 2007 (said date shall be
extended to December 31, 2008, but only upon Company's formal election to
participate in the drilling of the Initial Test Well for either Skipper's


                                     Page 12
<PAGE>

Canyon or Holly Beach) and no Exhibit "B" Initial Test Well may be proposed by
either Party after said date, unless mutually agreed to by the Parties. Upon
Company's election not to participate in a particular Prospect listed on Exhibit
"B", any and all earning rights for that Prospect will terminate as of the date
of Company's election and the particular Prospect will thereafter be excluded
from this Agreement.


In no event will Company have the right to propose the drilling of an Initial
Test Well for any Additional Opportunities Prospect prior to the time that it
has earned an interest in the Primary Prospect under the terms of this
Agreement.


                                    ARTICLE 4

4.      PROSPECT EVALUATION
        -------------------


        4.1     Primary Prospect Well Cost Sharing.
                -----------------------------------
        Chevron shall have the sole right and obligation to propose to Company
the operations for the drilling of an Initial Test Well on the Primary Prospect
listed on Exhibit "A". It is anticipated drilling operations will commence on or
before December 1, 2006 for said Primary Prospect (Mussel Beach), subject,
however, to receipt of all regulatory and permitting approvals, weather delay,
delivery of materials, (e.g. pipe) and rig availability. When proposing an
Initial Test Well for the Primary Prospect, Chevron shall provide Company, a
formal AFE detailing the specifications of the well to be drilled for Company's
information on or before thirty (30) days prior to commencement of actual
drilling operations.


The Parties will have and each undertakes, by the execution of this Agreement,
the obligation to participate in the proportions provided for herein, but
subject to those certain provisions of the applicable Operating Agreement and
this Agreement, for the drilling of an Initial Test Well of the Primary Prospect
listed on Exhibit "A" and further subject to Company's receipt of a formal
Chevron AFE to drill the Initial Test Well for the Primary Prospect.


For the Primary Prospect listed in Exhibit "A", Company will have and undertakes
the obligation of paying a disproportionate share of the Well Costs for the
Initial Test Well based on the Company BCP Interest for that Prospect as listed
on Exhibit "A" until Casing Point or until one hundred twenty percent (120%) of
the estimated funds to drill the Initial Test Well, whichever occurs first, as
stated in the AFE provided by Chevron under this Article 4.1, have been spent in
the drilling of the Initial Test Well. Upon the earlier of the two conditions
stated directly above being met by Company, Company will have and will undertake
the obligation of paying and bearing its share of any additional or further
cost, risk or expense associated with the Initial Test Well to Casing


                                    Page 13
<PAGE>

Point, based on the Company ACP Interest for the Primary Prospect, upon which
the Initial Test Well is located, and subject to Company retaining all of its
Company BCP Interest obligations for that Prospect, including the obligation of
Company to bear its share of the plug and abandonment costs at the Company BCP
Interest if the Initial Test Well is not completed for production.


The Parties will each have the option and election to participate in the
drilling of a Substitute Well(s) for the Primary Prospect. Either Party may
timely propose such Substitute Well. Should Company elect to participate in the
drilling of a Substitute Well, Company's disproportionate spending obligation
for that Prospect, as described in Article 4.1 above, will continue until Casing
Point or until the cumulative and combined costs of the Initial Test Well and
Substitute Well exceed one hundred twenty percent (120%) of the estimated funds
to drill the Initial Test Well, whichever occurs first, as stated in the AFE
provided by Chevron. The cost of any operation conducted thereafter will be
shared by the participating Parties in the Substitute Well in accordance with
the respective Company ACP Interest in the Substitute Well, except for the
obligation of Company to bear its share of the plug and abandonment costs at the
Company BCP Interest if the Substitute Well is not completed for production.


        Upon Company earning an Operating Rights interest assignment as
described in Article 3.1 in the Primary Prospect, the provisions of the
applicable Operating Agreement will control the rights, obligations, options and
elections of the Parties thereafter for that particular Prospect.


        Should Company elect not to participate in the drilling of a Substitute
Well for the Primary Prospect before earning rights in and to the Primary
Prospect, as provided herein, Company's rights to earn an interest in that
Prospect and this Agreement will terminate, effective with such election, and
without the obligation of Chevron to drill such well, and Company will forfeit
all unearned rights.


        Should Chevron or Company propose and should Chevron and Company elect
to participate in a Substitute Well for the Primary Prospect, Chevron shall bear
and pay only its Chevron BCP Interest share of the Well Cost of the Substitute
Well for the Primary Prospect until Casing Point or until the Company's
cumulative and combined costs of the Initial Test Well and Substitute Well
exceed one hundred twenty percent (120%) of the estimated funds to drill the
Initial Test Well, whichever occurs first, as stated in the AFE provided by
Chevron. Thereafter Chevron's costs and risks will be borne in accord with the
Chevron ACP Interest. Should Chevron elect not to participate in the drilling of
a Substitute Well for the Initial Test Well for the Primary Prospect for a
Substitute Well in which Company elects to participate, it shall offer to
farmout as applicable, all of its interest in the Primary Prospect, as specified
in Article 5, for that Primary Prospect. Failure by Chevron to timely make an


                                    Page 14
<PAGE>

election pursuant to the response periods provided in the applicable Operating
Agreement will be deemed an election by Chevron to not participate in such
operation and to farmout under Article 5.


        4.2     Additional Opportunities Prospect Well Cost Sharing.
                ---------------------------------------------------
        Rights to earn any interest on and in the Exhibit "B" Additional
Opportunities Prospects will not vest in Company, until it has earned an
interest in the Primary Prospect (Mussel Beach). Subject to the provisions of
Article 3.3, should either Party propose the drilling of an Initial Test Well on
an Exhibit "B" Prospect, it will provide the other Party with an AFE detailing
the specifications of the well to be drilled. Either Party will have the option,
but not the obligation, to elect to participate in the drilling of an Initial
Test Well on any such Prospect listed on Exhibit "B" for thirty (30) days from
the receipt of the formal AFE. Should each of the Parties timely elect to drill
an Initial Test Well on any Prospect listed on Exhibit "B", Company and Chevron
will each have and bear the obligation of paying its share of the Well Cost as
set out in Exhibit "A", on the same terms and conditions as for the Primary
Prospect, and, except for Holly Beach and Skipper's Canyon Prospects, subject to
the level of interest participation actually elected and assumed by Company in
such Additional Opportunities Prospect. Company's level of interest
participation elected and assumed by Company for a particular Additional
Opportunities Prospect Initial Test Well must conform to the conditions that (i)
Company's ACP Interest may not exceed an undivided twenty-five percent (25%) in
that well, and (ii) Company's BCP Interest in that well shall be one hundred
sixty-eight percent (168%) of Company's ACP Interest in that well, unless
mutually agreed otherwise by the Parties. Notwithstanding anything to the
contrary, it is stipulated and agreed to by Chevron and Company that Chevron
shall not propose an Initial Test Well for Skipper's Canyon Prospect for
Company's consideration prior to reaching total depth drilled in the Initial
Test Well including any subsequent operations such as sidetracking or deepening
of said well and the results of all logging and testing operations being
furnished to the Parties.


        The Parties have the option to elect to participate, for thirty (30)
days from the receipt of the formal AFE, in the drilling of a Substitute Well(s)
for the Additional Opportunities Prospects under the terms of this Agreement.
Should Company elect to participate in a Substitute Well for the Additional
Opportunities Prospects, the terms of this Agreement will apply and upon earning
an interest as described in Article 3.1 herein, the provisions of the applicable
Operating Agreement will then control the rights, obligations, elections and
options of the Parties thereafter for that particular Prospect.


        Should Company elect not to participate in the drilling of a Substitute
Well before earning the available rights in a Prospect identified as an
Additional Opportunities Prospect and as provided herein, Company's rights to


                                    Page 15
<PAGE>

earn an interest in that Prospect will terminate effective with such election,
and without the obligation of Chevron to drill such well.


        Should Chevron or Company propose and should Chevron and Company elect
to participate in a Substitute Well for the Additional Opportunities Prospects,
Chevron shall pay its Chevron BCP Interest share of the Well Cost of the
Substitute Well until Casing Point or until the Company's cumulative and
combined costs of the Initial Test Well and Substitute Well exceed one hundred
twenty percent (120%) of the estimated funds to drill the Initial Test Well,
whichever occurs first, as stated in the AFE provided by Chevron. Thereafter
costs and risk will be bore in accord with the Chevron ACP Interest. Should
Chevron elect not to participate in the drilling of a Substitute Well for the
Initial Test Well for a Substitute Well in which Company participates, Chevron
shall offer to farmout its interest in that Additional Opportunities Prospect,
as specified in Article 5.


        Should Company elect not to participate in the drilling of an Initial
Test Well drilled on a Prospect listed on Exhibit "B", the Lease(s) associated
with that Prospect will be excluded from this Agreement and Company will no
longer have any rights or options associated with earning an interest in that
Prospect or the Lease(s).


        Should Chevron elect not to participate in the drilling of an Initial
Test Well on a Prospect listed on Exhibit "B" that is proposed to be drilled to
the Casing Point for the Objective Depth, Chevron shall offer to farmout its
interest in that specific Prospect, as specified in Article 5,. Should Chevron
elect not to participate in the drilling of an Initial Test Well on an Exhibit
"B" Prospect, the earning provisions for Company as described in Article 3 and
this Section 4.2, will not apply and the earning provisions under the farmout
will control.


        4.3     Well Over-expenditure Limitation.
                ---------------------------------
        Each Prospect or right earned by Company will be treated as a distinct
area under distinct ownership under the Operating Agreement executed pursuant to
this Agreement and the Operating Agreement will include an over-expenditure
provision that requires a new AFE and provides the right of election on certain
well operations to participate for the then-proposed well operation or
substitute well operation, if it appears that anticipated expenditures will
exceed the original well AFE estimate by twenty percent (20%), allowing the
Parties to elect not to participate in further operations on the well. However,
this over-expenditure provision with rights to participation elections, will not
become effective until Company earns an interest as to each individual Prospect
under the terms of this Agreement.


                                    Page 16
<PAGE>

        4.4     Rights Limitation on Use of Existing Wells.
                -------------------------------------------
        Notwithstanding anything to the contrary in this Agreement, without the
express approval of Chevron, Company will not have the right and/or option to
propose or use any well bore existing in or on the Contract Acreage prior to the
Effective Date, unless otherwise mutually and expressly agreed to by the Parties
and the owners of the well bore.


        4.5     Well Takeover Provisions (Deleted)
                ----------------------------------


        4.6     Protection from Drainsage.
                --------------------------
        No Party will produce a completion in a well in any particular
productive sand or horizon on the Leases(s) or Excluded Property if that
completion in that sand or horizon is or would be within a horizontal distance
of one thousand feet (1000') of a previous well's penetration through that sand
or horizon on the Lease(s) or Excluded Property, provided that the other Party
was or is a participating party in such previous well and owns a working
interest right to production from that sand or horizon in the previous well, and
provided that the previous well is completed in, or is capable of being
completed in, or has not yet been fully depleted in, and has not yet been
abandoned in that sand or horizon, except with the express written consent of
each Party who was or is a participating party in such previous well and owns or
will own any working interest rights to production which is or might become
recoverable from that sand or interval by an existing or future completion in
the previous well. In the absence of said consent, the previous well, as the
first well through that sand or horizon, has the full opportunity to produce
from that sand or horizon until abandoned or fully depleted in that sand or
horizon without drainage by a completion in the later drilled well. This Article
4.6 does not apply to any particular two (2) wells which are subject to the same
Offshore Operating Agreement; it being the intent of the Parties hereto that the
applicable minimum spacing and distance limitations between wells drilled and
produced under that Offshore Operating Agreement will be controlled by the terms
of that Offshore Operating Agreement. This Article 4.6 does not apply to any
well in the north half (N/2) of South Timbalier Block 35 OCS-G3336.




                                    ARTICLE 5

        5.      FARMOUT OPTION
                --------------
        5.1     Exhibits "A" and "B" Farmout Option.
                ------------------------------------
        In the event Chevron elects not to participate in the drilling proposal
of a Substitute Well on an Exhibit "A" Prospect, or the drilling proposal of an
Initial Test Well or Substitute Well on an Exhibit "B" Prospect, Chevron shall
offer to farmout its interest in that Prospect to Company and any Third Parties
having a contractual right to earn an interest in the Prospect, in equal



                                     Page 17
<PAGE>

proportions, and only if Company and said Third Parties agree to pay and bear
one hundred percent (100%) of the costs and risks of the operations (the
"Participating Parties"), pursuant to a mutually agreeable separate Farmout
Agreement, containing the provisions set forth herein and such additional
provisions as shall be mutually agreed upon. The acreage to be covered by the
Farmout Agreement will consist of the Available Acreage as to the respective
Prospect on Exhibit "A" or Exhibit "B". The Chevron election to farmout is
independent as to each such Prospect and is on an Exhibit "A" or Exhibit "B"
Prospect by Prospect basis.


       5.2    Chevron's Participation Options and Overriding Royalties.
              ---------------------------------------------------------

       All the terms and conditions for each farmout executed pursuant to the
provisions of this Agreement will be found in this Article 5 and the applicable
Farmout Agreement; provided however, operations for the conduct of any farmout
well may not be commenced until the formal Farmout Agreement is fully executed
by the Participating Parties. The Parties agree to negotiate in good faith, but
the Article 3.3 timing limitation on rights to earn will continue to apply.
Should the Parties fail to execute a Farmout Agreement, within sixty (60) days
of the Chevron election, the well proposal will be deemed null and as if never
offered. Under any Farmout Agreement contemplated pursuant to this Agreement ,
Chevron shall retain the continuing rights, options and elections as follows:


       For the Initial Test Well or Substitute Well on a Primary or Additional
Opportunities Prospect for which Chevron elects to farmout its interest (the
"Farmout Well"), upon completion of the Farmout Well, Chevron shall retain and
have from the Participating Parties a ten percent of eight-eighths (10% of
8/8ths) overriding royalty interest, with an option at payout of the Farmout
Well (recouping those well costs actually borne by the Participating Parties) to
either escalate the overriding royalty interest to twelve and one-half percent
of eight eighths (12.5% of 8/8ths) or convert Chevron's override to a thirty
percent of eight-eighths (30% of 8/8ths) working interest. Chevron's overriding
royalty interest (or the working interest if so elected after payout), shall,
where it owns less than one hundred percent (100%) of the leasehold interest as
of the Effective Date of this Agreement be proportionately reduced, based on the
Chevron interest shown on Exhibit "A" or Exhibit "B" under the column entitled
"Chevron Leasehold Interest." Company recognizes and acknowledges that the
Chevron Leasehold Interests are not listed on Exhibit "B" for any of the
Additional Opportunities Prospect(s). The Chevron Leasehold Interest will be
added to and included on Exhibit "B" for any Additional Opportunities Prospect
at the time of and in the event of an Initial Test Well proposal or Farmout
Agreement for that Additional Opportunities Prospect.


                                     Page 18
<PAGE>

       5.3    General Farmout Agreement Terms and Conditions.
              -----------------------------------------------

       Except as otherwise provided in this Agreement, the following terms and
conditions will be applicable to all the Farmout Agreements executed by the
Parties hereto pursuant to the provisions of this Agreement.


       5.3.1 Within one hundred and eighty (180) days from the execution of a
       Farmout Agreement, Company will have the option to, at its sole cost,
       risk and expense, and subject to rig availability and the obtaining of
       required permits, commence the drilling of the Initial Test Well under
       the Farmout Agreement, expressly subject to the following terms and
       conditions.


       (a)    Well Location and Objective Maintained. The surface location,
              bottomhole location and primary objective for the Initial Test
              Well will be the locations and objective proposed and under which
              Chevron elected to not participate, unless otherwise mutually
              agreed upon between Chevron and Company,


       (b)    Drilling Contractor and Drilling Contract. Within sixty (60) days
              receipt of Chevron's election notice to farmout rather than
              participate in a well drilled under this Agreement, Company must
              furnish Chevron a complete copy of its drilling or turn-key
              drilling contract for the drilling of the subject well, together
              with the name and address of the proposed drilling contractor.
              Chevron shall, within ten (10) days after receipt of said notice
              and information, provide Company with its approval and comments
              relevant thereto. If Chevron disapproves of the proposed drilling
              contractor or the drilling or turn-key drilling contract, or any
              portion thereof for the drilling of the subject well; or, if
              Company does not agree to incorporate or alter its submitted
              proposed drilling contractor or the drilling or turn-key drilling
              contract, in accordance with comments furnished by Chevron
              relating thereto, the Parties agree to negotiate in good faith in
              an attempt to arrive at a resolution thereto mutually acceptable
              to both Parties, but the Chevron decision shall be final authority
              as Chevron is owner of the Existing Facilities. In such event the
              Parties recognize and agree that the subject farmout well will not
              be drilled as described above, and Chevron shall not be liable to
              Company in any manner whatsoever for such event.


       (c)    Plan of Operations. Further, no farmout well will be drilled from
              the Existing Facilities without a plan of operations (meaning
              platform activities and operations conducted on the Lease(s),
              including but not limited to a pre-approved drilling company or
              contractor, pre approved drilling or turn-key drilling contract,
              sym-ops, safety guidelines and policies of Chevron, "stop-work"


                                     Page 19
<PAGE>

              authority, etc.) mutually approved by Chevron and Company. Should
              Chevron and Company mutually agree as to the drilling contractor
              and the drilling or turn-key drilling contract as set forth above,
              Chevron shall not less than sixty (60) days prior to commencement
              of actual drilling provide Company a proposed plan of operations
              for Company's approval and comments relevant thereto. Company
              will, within ten (10) days after receipt of said notice and
              information, provide Chevron with its approval and comments
              relevant thereto. If Company disapproves of the proposed plan of
              operations, or, if Chevron does not agree to incorporate or alter
              its submitted plan of operations in accordance with comments
              furnished by Company relating thereto, the Parties agree to
              negotiate in good faith in an attempt to arrive at a resolution
              thereto mutually acceptable to both Parties, but the Chevron
              decision shall be final authority as Chevron is owner of the
              Existing Facilities. In such event the Parties recognize and agree
              that the subject farmout well will not be drilled., Chevron shall
              not be liable to Company in any manner whatsoever for such event.


       (d)    Standards and Manner of Operations. Company will conduct the well
              operation in the farmout well in the same manner and conduct as
              operator under the Operating Agreement, (as such term is defined
              in the Operating Agreement).


       (e)    Costs and Reimbursements. Company will be responsible for and pay
              one hundred percent (100%) of all Well Costs, risks and expenses
              incurred in the performance of all well operations conducted by
              Company for the interests to be earned and in accord with Article
              5.1. Expenditures, accounting procedures, maintenance of records,
              reimbursement of costs and payment of invoices by Company to
              Chevron will be conducted in accordance with the terms of the
              Operating Agreement, including but not limited to, Article 5.5
              (Records), Article 8 (Expenditures) and the Accounting Procedure
              in Exhibit "C" thereto, in the same manner as if the farmout well
              had been a well drilled under the terms of the Operating
              Agreement.


       (f)    The well commencement deadlines will be reflected in the
              appropriate Farmout Agreements and will be subject to rig
              availability and the obtaining of required permits.


       5.3.2 If prior to reaching the Objective Depth on any well drilled
       pursuant to the provisions stated in a Farmout Agreement, conditions are
       encountered in such well which render further drilling operations
       impractical, Company will have sixty (60) days in which to advise Chevron


                                    Page 20
<PAGE>

       of its election to drill a substitute well. In the event Company elects
       to drill a substitute well, the well must be commenced within sixty (60)
       days after the date the rig is released from the previous well, subject
       to rig availability and the obtaining of any required permits. Any
       substitute well drilled will be drilled under the same terms and
       conditions as the well it is replacing.


              If, after reaching the Objective Depth on any well drilled
       pursuant to the provisions stated in a Farmout Agreement, the well fails
       to satisfy the standards stated in Subsection 5.3.3 below, and is
       abandoned by Company, Company will not have earned any interest in the
       acreage farmed-out. Company's right to earn an interest in the acreage
       farmed-out will terminate forty-five (45) days after the date of the
       release of the drilling rig from such well, without further notice or
       demand from Chevron, unless within said forty-five (45) day period,
       Company advises Chevron in writing that Company elected to commence,
       within one hundred twenty (120) days after said release of the drilling
       rig from such well, actual drilling operations for a substitute well at a
       location selected by Company in the acreage farmed-out. If Company makes
       such election, Company's right to ear an interest in the acreage
       farmed-out by a substitute well will terminate one hundred twenty (120)
       days after said release of the drilling rig from such substitute well
       without further notice or demand from Chevron, unless within such one
       hundred twenty (120) day period, Company commences operations for
       drilling said substitute well.


              Until Company ears an Operating Rights Interest in the acreage
       farmed-out, Company will have the continuing right to drill successive
       substitute wells in the acreage farmed-out so long as Company complies
       with the applicable time periods and provisions as stated above relative
       to the drilling of the first such substitute well. All provisions of the
       Farmout Agreement relating to the said Initial Test Well will also,
       unless clearly inappropriate, be applicable to each such substitute well.


              The only consequences for Company's failure to drill any well
       under the Farmout Agreement will be the forfeiture of its right to drill
       such well and the forfeiture of any unearned rights still remaining under
       this Agreement. Company will not be liable to Chevron for any other
       costs, expenses or damages related to such failure to drill such well.


                                    Page 21
<PAGE>

       5.3.3 In the event the initial test well or its substitute on any
       individual Prospect is drilled under a farmout to the Objective Depth,
       all required logs and tests are completed and the results furnished to
       the Parties, and only if the well is a Successful Well, Company will have
       earned an assignment from Chevron of Chevron's Operating Rights Interest,
       as specified in the Farmout Agreement, in that portion, aliquots and
       depths of the Contract Acreage associated with the Prospect drilled,
       subject to the reservations stated in Section 5.2 above.


       5.3.4 Unless otherwise specifically stated in this Agreement, any
       Operating Rights Interest assignment made by Chevron in favor of Company
       where Chevron has made an election to retain an overriding royalty
       interest, pursuant to the provisions stated in the applicable Farmout
       Agreement(s), will be made subject to Chevron retaining the overriding
       royalty specified in Section 5.2 in and to all production from the
       farmed-out acreage.


       5.3.5 Company will not earn or have the right to earn any interest in nor
       be responsible or liable for any existing wells, platforms, facilities or
       flowlines or environmental conditions which are located on any portion of
       the Contract Acreage prior to the effective date of the applicable
       Farmout Agreement. In addition, notwithstanding anything herein to the
       contrary, under no circumstances will Company be allowed to earn or
       complete in or produce from any productive sand segment in pressure
       communication with Chevron's wells located in or around any acreage
       covered by any Farmout Agreement executed pursuant hereto except as
       otherwise mutually and expressly agreed. The pressure communication and
       common reservoir restrictions are found under Article 6 below.


        5.4     Impenetrable Substances.
                ------------------------
        If Company drills a farmout well to a depth shallower than the agreed
upon Objective Depth and encounters impenetrables, including any formation which
cannot be penetrated, or any adverse condition which cannot be overcome, by
means considered reasonable and appropriate in the industry and at reasonable
cost, Company will have the right to drill a substitute well in accordance with
Subsection 5.3.2 above.


        5.5     Overriding Royalties.
                ---------------------
        Chevron's reserved overriding royalty as described in Section 5.2 above
shall be free and clear of all costs of exploring, operating, and developing on,
and producing from, the acreage farmed-out, and maintaining said Lease(s) in
force and effect, as well as all cost for plugging, abandoning, clean-up and
restoration, but shall bear its proportionate share of all severance, production
and other taxes which are now or which may hereafter become applicable thereto.
Said overriding royalty shall be computed and paid to or taken in kind by
Chevron, whichever Chevron prefers, from time to time, at the same time and in


                                    Page 22
<PAGE>

the same manner as royalties are computed and paid to or taken in kind by the
lessor under the Leases(s), except that said overriding royalty shall be paid to
or taken in kind by Chevron regardless of any applicable lessor royalty relief.





                                   ARTICLE 6

6.      PRESSURE COMMUNICATION AND COMMON RESERVOIRS
        --------------------------------------------


        6.1     Pressure Communication Restriction.
                -----------------------------------
        Notwithstanding anything herein to the contrary in this Agreement or any
other agreement entered into pursuant to this Agreement, any productive sand
interval encountered in any well drilled or caused to be drilled by the Parties
under this Agreement that is in a Reservoir or pressure communication with a
productive sand interval that is producing or is capable of producing from or
behind pipe in an existing well in paying quantities from such sand interval
drilled on a lease(s) by Chevron is excluded from this Agreement and
specifically reserved by Chevron. If at any time a Party proposes to drill a
well which could encounter a sand interval(s) which could potentially be in a
Reservoir or pressure communication with a productive sand interval(s) that is
producing or capable of producing in or behind pipe in an existing well as
described above, prior to drilling such well Chevron and Company will establish
the criteria for determining whether the well once drilled would be in a
Reservoir or pressure communication. In the event the Parties drill a well and
encounter a sand interval(s) not originally anticipated to contain hydrocarbons
in paying quantities but, upon review by either Party is believed to potentially
be in a Reservoir or pressure communication with a productive sand interval(s)
that is producing or capable of producing in or behind pipe in an existing well
as described above, then upon determination that such sand interval(s) could
potentially be in a Reservoir or pressure communication, the Parties hereto will
meet as soon as reasonably possible to establish the criteria for determining
whether or not the well in question is actually in a Reservoir or pressure
communication.


        In the event there is a disagreement between Chevron and Company as to
whether or not a Chevron well and/or interval(s) is potentially in a Reservoir
or pressure communication with the new well and/or interval(s), then within
ninety (90) days after rig release from such well, Chevron and Company will
furnish all available geological, geophysical and engineering data, including
bottom hole pressure data and Reservoir characteristics, to an engineering firm
approved by Chevron to determine, with reasonable confidence, whether a
Reservoir or pressure communication does or does not exist between the wells.
The decision of the engineering firm will be final and binding on the Parties


                                    Page 23
<PAGE>

hereto. The cost of the work performed by the engineering firm will be shared
between Chevron and Company, at the ACP Interests.




                                    ARTICLE 7

7.      OPERATING AGREEMENT
        -------------------

        7.1     Offshore Operating Agreement.
                -----------------------------
        Chevron and Company will execute the Operating Agreement, on the form
set out as Exhibit "E", before the Initial Test Well is commenced on the Primary
Prospect. Exhibit "A" to the Operating Agreement will be amended between the
Parties for each Exhibit "B" Prospect no later than ten (10) Business Days
before the Initial Test Well is commenced on such Prospect, unless Chevron
elects to farmout. All of the Prospect will be covered and governed by the
Operating Agreement for that Prospect.


        In the event an existing Operating Agreement is already in place
covering one or more Leases in the Prospect, Chevron shall provide a copy of
such Operating Agreement to Company. Company will be required to accept and
ratify such existing Operating Agreement prior to participating in the drilling
of the Initial Test Well on such Prospect, but only if the applicability or use
of said existing Operating Agreement is required by or insisted on by the
Minerals Management Service in the case of an Operating Agreement for a Minerals
Management Service approved unit, or by a working interest party (ies) to said
existing Operating Agreement other than a Party hereto.


        Notwithstanding anything to the contrary herein, the terms of the
applicable Operating Agreement apply to all operations conducted for that
Prospect and to all payments made and obligations arising thereunder with
respect to such Prospect and under this Agreement or the applicable Operating
Agreement, unless specifically in conflict with the terms of this Agreement, in
which event the terms of this Agreement will control as provided under Section
28.15 below.


        7.2     Designation of Operator.
                ------------------------
        As between the Parties, Chevron shall be designated as operator for the
Initial Test Well for each Prospect listed on Exhibits "A" and "B" and under the
Operating Agreement.


        The Parties will, if required, execute the appropriate Designation of
Operator forms, under the terms hereof, naming Chevron as operator. Chevron
shall also assume the responsibility of the Designated Applicant for oil spill


                                    Page 24
<PAGE>

financial responsibility purposes; however no Party is released from any of its
liabilities for expenses, losses or damages by such assumption by Chevron. The
Parties will execute as soon as requested all necessary forms to reflect the
selection of operator and Designated Applicant for oil spill financial
responsibility purposes.




                                    ARTICLE 8

8.      ADDITIONAL PARTNERS/CO-VENTURERS
        --------------------------------

        8.1     Chevron's Right to Transfer Its Interest.
                -----------------------------------------
        Nothing in this Agreement will be construed to limit Chevron's right to
sell, assign, transfer, exchange, burden or deliver rights, in whole or in part
to the Lease(s) or this Agreement, as long as such delivery is made specifically
subject to this Agreement and the applicable Operating Agreement.




                                   ARTICLE 9

9.      ACREAGE RELEASE
        ---------------

        9.1     Option to Release Acreage.
                --------------------------
        At any time during the term of the Company's right to earn under this
Agreement, Company will have the right and option to relinquish its right to
earn any Prospect listed on Exhibit "B" by notifying Chevron in writing at any
time.


        9.2     Rights Termination.
                -------------------
        Upon receipt by Chevron of the Company release notification, the rights
and options granted Company under this Agreement as to the released Prospect
will terminate. Notwithstanding anything herein to the contrary, in no event
will the notification of a release as described in this Article 9 relieve
Company of any financial obligation that has been incurred or accrued pursuant
to this Agreement or any Operating Agreement.


        9.3     Automatic Release.
                ------------------
        If, under the operation of any provisions of this Agreement an interest
in the Contract Acreage or acreage made subject to this Agreement pursuant to
Section 2.4 is excluded or relinquished or expire or is or becomes no longer
subject to this Agreement, including but not limited to the Lease(s) terminating
under the provisions stated in said Lease(s), the excluded or relinquished


                                    Page 25
<PAGE>

or expired Lease(s), or any portion thereof will automatically be deemed to be
released by Company and no longer subject to earning by Company under this
Agreement.


        After the release or relinquishment by Company or automatic release
under Section 9.3 of the Lease(s) or any portion thereof subject to this
Agreement as provided under this Article 9, Chevron shall be free to drill,
sell, farmout, joint venture or dispose of in any manner it so chooses, the
released acreage. Company hereby agrees and releases Chevron from any liability
whatsoever with regard to the released acreage relating to the activities of
Company and any information and/or data Company may have given to Chevron in
regard thereto. In the event Chevron discloses Company-owned confidential data
obtained under and through this Agreement to any Third Party within two (2)
years of the release of acreage, Chevron shall require the Third Party to
execute an appropriate confidentiality agreement.




                                   ARTICLE 10

10.     NOTICES
        -------
        10.1    Notices.
                --------
        All notices authorized or required between the Parties by any of the
provisions of this Agreement, unless otherwise specifically provided, will be in
writing and delivered in person or by United States mail, overnight express
delivery, courier service or facsimile (with receipt confirmed), postage or
charges prepaid, and addressed to such Parties at the addresses set forth below:


     Chevron U.S.A. Inc.                          Ridgewood Energy Corporation
     935 Gravier Street                           11700 Old Katy Road, Suite 280
     New Orleans, LA 70112                        Houston, Texas 77079
     Attention: Gulf of Mexico - Land Manager     Attention: W. Greg Tabor
     Fax: (504) 592-7110                          Fax: (281) 293-7391


        Any originating notice and/or response thereto given under any provision
hereof will be deemed given only when received by the Person to whom such notice
is directed, except that; (1) any notice or response by certified U.S. mail,
return receipt requested, properly addressed pursuant to this Article 10, and
with all postage and charges prepaid, will be deemed received on the date that
the Person to whom it was directed has received it, (2) any notice or response
given by facsimile to the above facsimile phone number will be deemed received
as of the time of confirmed receipt or (3) by overnight express delivery or
courier will be deemed received upon acknowledgement of receipt by the Person to
whom it was directed, or within 72 hours of delivery of such notice whichever is
sooner.


                                    Page 26
<PAGE>

        10.2    Change in Designated Representative.
                ------------------------------------
        Each Party will have the right to change its address, facsimile number
and it's designated Representative at any time, and from time to time, by giving
prior written notice thereof to the other Party.




                                   ARTICLE 11

11.     EXISTING AGREEMNTS
        ------------------

        11.1    Existing Agreements.
                --------------------
        Company recognizes and acknowledges that the Lease(s) is subject to
certain agreements and other contracts that may affect the rights, obligations
and/or options granted to Company under this Agreement. These existing
agreements are listed on Exhibit "C" for the Primary Prospect and will be added
and included for each of the Additional Opportunities Prospect(s) prior to the
drilling of the Initial Test Well for such Prospect. It is understood between
the Parties hereto that the rights and option of Company will be specifically
subject to these existing agreements as those agreements apply to the Contract
Acreage. Company will, upon execution of this Agreement, become bound by all
existing agreements, whether in Chevron's records or of Public records, relating
to the affected Prospects to the extent of any interest undertaken or earned by
Company. Company will have the right of access to and review of copies of such
agreements, subject to any contractual restrictions therein and any
confidentiality agreements or arrangements required. Provided however, Company
will be released from such agreements in the event Company, when not in breach,
does not drill or is unable to drill or to cause to be drilled any well governed
under this Agreement.



                                   ARTICLE 12

12.     RIGHTS RESERVED
        ---------------


        12.1    Lease Rights Reservations.
                --------------------------
        Chevron EXPRESSLY RETAINS AND RESERVES EXCLUSIVELY UNTO ITSELF THE
FOLLOWING:

        (a)     All rights of ingress, egress, use, occupancy, and any and all
                other rights granted by, through and under the federal leases
                subject hereto, necessary or convenient to exercise and enjoy
                all oil, gas and mineral rights reserved to Chevron, including
                but not limited to, drill, complete and produce wells,
                construct, maintain and operate facilities, platforms and
                pipelines on and across Leases, subject to Company's rights to
                earn the assignment(s) as provided hereunder.
        (b)     All rights of ownership and use held by Chevron's Affiliates in
                any pipeline or rights of ways.


                                    Page 27
<PAGE>

        (c)     The right of ownership and/or operatorship of the Existing
                Facilities and the revenues realized therefrom.
        (d)     Chevron also reserves any platform, facilities, wellbores,
                pipelines or rights-of-way installed, drilled or obtained in the
                future located on or in the vicinity of the Contract Acreage
                related to Chevron's operations on the Lease(s) subject hereto,
                in which Company does not own an interest or related to
                Chevron's operations on other Chevron leases.
        (e)     Any and all rights and interests not expressly granted to
                Company in and to those Lease(s) listed on Exhibits "A" and "B"
                outside of the portions and depths listed and actually earned by
                Company.


        Nothing contained in this Agreement will or is intended to grant,
deliver or assign to the Company any interest in or right to earn an interest
in, nor any obligation to be responsible or liable for, any wells, Existing
Facilities or environmental conditions which are located on any portion of the
Lease(s) existing prior to the Effective Date, including but not limited to the
Excluded Property. All such existing wells, Existing Facilities, Excluded
Property and other equipment owned by Chevron located on and/or crossing the
Lease(s) will remain the sole property of Chevron and are specifically excluded
from this Agreement. In addition, Company will not earn an interest in, nor
assume any obligation to be responsible or liable for, any future wells,
platforms, flowlines or environmental conditions which are located on any
portion of the Lease(s) in connection or associated with Chevron's continued
operations involving the aforementioned excluded wells, Existing Facilities and
other equipment located on and/or crossing the Lease(s) after the Effective Date
associated with or in connection to any activities of Chevron solely involving
the Excluded Property. All future wells, platforms, flowlines and other
equipment installed and solely owned by Chevron in connection with its exclusive
operations, located on or crossing the Lease(s) and not associated with or used
in connection with the Contract Area of any Prospect in which Company may earn
or has earned an interest will be and remain the sole property of Chevron and
will be specifically excluded from this Agreement. Any required right-of-way or
servitude for new pipelines located on and/or crossing the Contract Lease(s)
servicing any Prospect area in which Company earns or has earned an interest
will require Chevron's express written approval.



                                   ARTICLE 13

13.     PRODUCTION PROCESSING AND CONTRACT OPERATIONS
        ---------------------------------------------


        13.1    Production Processing.
                ----------------------
        Company will, subject to 13.3, execute a mutually acceptable Processing
Agreement, on the form set out as Exhibit "H" no later than thirty (30) days
following the completion for production of the Initial Test Well for a
particular Prospect if notified in writing by Chevron that the Initial Test Well
production will be processed by Chevron at certain Chevron's facilities as


                                    Page 28
<PAGE>

provided in the Processing Agreement. All processing operations performed by
Chevron, as processor, will be under the terms of the Processing Agreement.


        13.2    Contract Operations.
                --------------------
        If an earning well is drilled from, and completed for production on, an
existing Chevron solely own platform under a Chevron farmout of its interest to
Company in any Primary or Additional Opportunities Prospect, then, while Chevron
is operating that platform during the time that Chevron has no working interest
the well, and to the extent that the conditions of the well, the well's
production and the well's equipment a acceptable to Chevron, the well will be
operated as follows: (a) Chevron shall perform routine operations of, and
perform, arrange or procure repairs, maintenance, materials, parts, supplies,
chemicals, and annual inspections for, the well and the well's equipment, and
Chevron shall invoice Company for, and Company shall reimburse Chevron for,
Company's working interest share of the applicable costs, expenses and overhead
and the terms of that certain Accounting Procedure, which is attached as Exhibit
"C" to that certain Operating Agreement, which is attached as Exhibit "E" to
this Agreement; (b) Any individual project exceeding a gross charge of Twenty
Five Thousand Dollars ($25,000) for the well or the well's equipment shall be
subject to prior written approval by Company and the other working interest
owner(s) therein, and Company and those other working interest owners may elect
for one (1) of them to perform any such project in excess of Twenty Five
Thousand Dollars ($25,000) gross charge at their sole cost, risk and expense,
provided that the project applies solely to that earning well or that earning
well's equipment and that the project is accomplished to Chevron satisfaction;
(c) The terms and conditions of the Processing Agreement, if any, for processing
the well production pursuant to Article 13.1 shall additionally apply.


        13.3    Use of Existing Facilities.
                ---------------------------
        Chevron is agreeable to assisting Company with access to an Existing
Facility, if excess capacity available or projected to be available and not
planned to be utilized by Chevron; provided Company agrees to pay the reasonable
fees and charges set out in the said Processing Agreement for the use of the
Processing Agreement facilities pursuant to Article 13.1 and the Processing
Agreement attached hereto as Exhibit "H", and, for any other Existing Facility
and the services, if any, provided therewith, Company's working interest share
of applicable costs and expenses pursuant to the Accounting Procedure, attached
as Exhibit "C" to the Operating Agreement which is attached to this Agreement as
Exhibit "E". In no event will Company have any other liability obligation with
respect to any Existing Facility except as specifically provided in a separate
written agreement between Company and Chevron as the owner of said Existing
Facility.


                                    Page 29
<PAGE>

        13.4    No Duty to Replace Existing Facilities.
                ---------------------------------------
        Notwithstanding Article 22.1, upon damage or destruction of Existing
Facilities or Processing Agreement facilities, or any property or equipment
located thereon, located on the Lease(s) or other lease(s) or acreage, for any
reason whatsoever, or upon expiration of the Lease(s) or lease(s) upon which the
Existing Facilities or Processing Agreement facilities are located, Chevron
shall have no obligation to Company to replace or repair such platform, Existing
Facilities, Processing Agreement facilities, property and/or equipment located
thereon.


                                   ARTICLE 14

14.     TAX MATTERS
        -----------

        14.1    Tax Partnership Provision.
                --------------------------
        For each Prospect fr which the farmout option is not elected by Chevron
pursuant to Section 5 above, the Parties hereby elect not to be excluded from
the application of all or any part of the provisions of Subchapter K, Chapter 1,
Subtitle A, of the Internal Revenue Code of 1986, as amended ("the Code"), or
similar provisions of applicable state laws. For each Prospect for which the
farmout option is not elected by Chevron pursuant to Section 5 above, provisions
substantially similar to those which are stated under Exhibit "F" of Exhibit "E"
shall control the tax treatment of the Parties' participation in the wells
described herein with respect to those Prospects. It is agreed each Prospect
shall have a separate tax partnership and that the partnership shall apply to
all the. Leases in the respective Prospect. If the farmout option is elected by
Chevron pursuant to Section 5 above for any Prospect, the relationship between
the Parties will be that of lessor-lessee and/or lessee-sublessee and the tax
partnership provisions of Exhibit "F" of Exhibit "E" will not apply.


        14.2    Internal Revenue Provision
                --------------------------
        Notwithstanding each Party having elected pursuant to Section 14.1 above
to form a separate tax partnership with respect to each Prospect for which the
farmout option was not elected by Chevron pursuant to Section 5 above, the
Parties understand and agree that their legal relationship to each other is not
one of partnership; that their rights and liabilities hereunder are several and
not joint or collective. If, for federal income tax purposes, the Agreement and
the operations hereunder, in their entirety, are regarded as a single
partnership, each Party hereby elects to be excluded from the application of all
or any part of the provisions of Subchapter K, Chapter 1, Subtitle A, of the
Internal Revenue Code of 1986, as amended ("the Code"), or similar provisions of
applicable state laws with respect to this Agreement. For purposes of clarity it
is understood that the Agreement will cause the operations hereunder to be
treated as subject to multiple partnerships, one with respect to each Prospect.
Notwithstanding any provision herein, the Parties agree that the transaction(s)


                                    Page 30
<PAGE>

contemplated herein is not considered to be a sale for federal income tax
purposes under the Code, or any similar provisions of applicable state laws. If
for federal income tax purposes, any Prospect for which the farmout option was
elected by Chevron pursuant to Section 5 above is regarded as a partnership for
federal income tax purposes, each Party hereby elects to be excluded from the
application of all or any part of the provisions of Subchapter K, Chapter 1,
Subtitle A, of the Internal Revenue Code of 1986.


        14.3    Allocation of Tax Liabilities
                -----------------------------
        All taxes and similar obligations ("Taxes") pertaining to the Contract
Acreage are the responsibility of the owner thereof if incurred prior to the
Effective Date. After the Effective Date each Party hereto shall be responsible
for all taxes and similar obligations pertaining to its interest in the Contract
Acreage. Each Party shall also be responsible for its own state or federal
income taxes or franchise taxes. After the Effective Date, each Party shall
supply the other Party all information and documents reasonably necessary to
comply with tax and financial reporting requirements and audits. Each Party
shall be responsible for its own local, state and federal income tax reporting,
recognition of gain or loss, if any, and the taxes, if any, payable with respect
to the transaction.


                                   ARTICLE 15

15.     GEOPHYSICAL DATA
        ----------------


        15.1    Proprietary Seismic Data.
                -------------------------
        Should at any time prior to or during the term of this Agreement,
Company or Chevron acquire any proprietary seismic data covering a portion of
the Contract Acreage, the acquiring Party will notify and will allow the other
Party access to this proprietary seismic data subject to any contractual
limitations or restrictions bearing upon such data. The acquiring Party may
grant the other Party a license covering that portion of the acquiring Party's
proprietary seismic data covering the Contract Acreage upon the other Party's
request. The fee to be paid to license the seismic data, and the licensing
agreement to be executed between the Parties, will be negotiated at the time the
Party elects to license the data. Company or Chevron must submit a written
proposal to the acquiring Party prior to the termination of this Agreement
proposing the license of a portion of the acquiring Party's data. Failure of
Company or Chevron to submit such a proposal, or in the event the Parties are
unable to negotiate a mutually agreeable licensing fee and/or licensing
agreement, will terminate the acquiring Party's option to consider licensing its
data to the other Party. The acquiring Party makes no representation and will
have no liability to the other Party regarding the accuracy or completeness of
any data disclosed to the other Party hereunder. Any such information or


                                    Page 31
<PAGE>

data provided hereunder is provided as a convenience only and an reliance on or
use by Company or Chevron is at Company's or Chevron's sole risk.


        15.2    Speculative Seismic Data.
                -------------------------
        The Parties hereto may have in their possession certain seismic data
licensed from Third Parties ("Speculative Seismic Data") which impose various
restrictions and limitations on either Party's right to use disclose and/or
display such data relating to the properties identified in Exhibit "A" or
Exhibit "B". Treatment of this Speculative Seismic Data will be controlled under
confidentiality provisions specified in Section 20.2 below.




                                   ARTICLE 16

16.     MINIMUM ROYALTY AND LEASE MAINTENANCE
        -------------------------------------


        16.1    Annual Rental and Minimum Royalty Payments.
                -------------------------------------------
        Company will be responsible for contributing a portion of any annual
rental or minimum royalty payment(s) that comes due and payable, for the
Lease(s) it is assigned as provided herein commencing on the effective date of
each such assignment. The share of the payment(s) Company will owe is
twenty-five percent (25%) of the amount due, unless Chevron has no operating
rights interest in any of the wells then producing of the Lease(s), in which
case Company and any Third Parties will bear their proportionate share of the
entire payment due and Chevron will bear no share of said payment. This
responsibility will continue until the first to occur of the following: (a)
Company relinquishes its right to earn an interest in the affected Lease(s) in
accordance with this Agreement or the applicable Operating Agreement, or (b) the
Lease(s) terminates Chevron shall pay or cause to be paid the annual rental or
minimum royalty payments on the Lease(s) Company agrees to contribute its
proportionate share of such annual rental or minimum royalty payment(s within
thirty (30) days after receipt of written notice from Chevron for same. However,
pursuant to Section 9. 1 of this Agreement, Company, at its sole option and
discretion, will have the right to relinquish to Chevron it rights in the
Lease(s) and thereby relieving itself of its obligation to reimburse Chevron.
Should Company elect to relinquish its interest to Chevron, but fail to provide
Chevron with the required notice under Section 9.1 of this Agreement, Company
will remain liable for the next ensuing annual rental or minimum royalty payment
of which proper notification was not received.


        Chevron shall not be liable for failure to make a proper payment during
the time in which it is responsible for doing so, but agrees to use the same
degree of care used in making such payments under its other leases. Thy
termination of this Agreement will not relieve Company of its obligations to
contribute to any payments so made during the period this Agreement was in


                                    Page 32
<PAGE>

effect, and during the period that said Lease(s) is subject to this Agreement,
the right of such termination to be an additional right reserved by Chevron and
not a limitation of at of Chevron's rights herein.


16.2    Royalty Relief
        --------------

     16.2.1 Royalty Relief Qualification
            ----------------------------

     Chevron reserves to itself any and all royalty relief, any and all royalty
     suspension supplement ("RSS") under 30 CFR 203 as may from time to time be
     amended or revised ("30 CFR 203") for a certified unsuccessful well drilled
     to at least 18,000 feet TVD SS, and any and all royalty suspension volume
     ("RSV") under 30 CFR 203 earned on or which become hereafter applicable to
     any or all of the Lease(: whether pursuant to this Agreement or a Farmout
     Agreement, any or all of the Excluded Property or other Chevron leases,
     except as expressly entitled to Company under Article 16.2.2 below. Chevron
     shall make all royalty relief flings and notifications with the MMS in
     consultation with Company but each will h equally responsible for the
     timely exchange of information and status. Chevron shall maintain a
     accounting for RSV and RSS volumes produced by and entitled to each Party's
     individual account.


     16.2.2 Eligibility
            -----------

     If, under this Agreement or a Farmout Agreement, Company earns an operating
     Rights Interest in Lease(s), then Company will be entitled to a certain
     portion of any RSV initially earned by a qualified we as confirmed by the
     MMS., if and only if Company participated with a working interest in the
     particular well which initially earned that particular RSV for said
     Lease(s). Company's said certain portion of an RSV initially earned for a
     Lease(s) by a qualified well in which Company participated with a working
     interest will be limited to Company's earned working interest share of all
     gas production volumes from a qualified wells to which so earned RSV
     applies on said Lease(s) and further limited to only gas production volumes
     produced from wells in which company participates. Company will not be
     entitled to any RS' initially earned for a Lease(s) by a well in which
     Company does not participate with a working interest in the drilling and
     completing. For example:


          (a) If an Initial Test Well drilled by Company initially qualifies for
          15 bcf RSV for a Lease prior to the time that any RSV has been earned
          on said Lease, and if Company has a twenty-five percent (25%)
          working interest in the production from said well and in the
          production from a subsequently drilled an qualified well to which said
          15 bcf RSV also applies on said Lease, and if Company had no working
          interest in the drilling and completing of another subsequently
          drilled and qualified well to which such 15 bcf RSV also applies,
          then:


                                    Page 33
<PAGE>

               i. Said 15 bcf RSV will apply, without pro-ration or allocation
               except upon Company's month] entitlement under (a) ii immediately
               below, to all gas production from said three wells until the 15
               bcf RSV is produced.
               ii. Company's monthly entitled portion of said RSV until said RSV
               is so produced will be limited to Company's entitled twenty-five
               percent (25%) working interest share of gas production from only
               said two (2) wells in which Company has a twenty-five percent
               (25%)working interest.
               iii. Company will not be entitled to any RSV which applies to gas
               production from that third well in which Company did not
               participate in drilling and completing with a working interest.


          (b) If a well in which Company did not participate in drilling and
          completing with a working interest: initially ears an RSV for a Lease
          before a well in which Company participated with a working interest;
          in drilling and completing subsequently qualifies to have said certain
          amount of RSV also apply to ii production, then Company will not be
          entitled to any portion of the RSV initially earned by the well in
          which Company did not participate with a working interest, even though
          some of that RSV may apply to some of Company's production.


     16.2.3 Allocation for Additional Royalty Relief
            ----------------------------------------

     If any RSV applies to Company's production above and beyond the amount of
     RSV which Company is entitled pursuant to Article 16.2.2, and/or if any RSS
     applies to Company's production, and/or if any other form of royalty relief
     applies to Company' s production, then, in addition to any other overriding
     royalty interest that Chevron may have in Company's production pursuant to
     this Agreement, Company will thereupon pay to Chevron, and Chevron shall
     thereupon have and receive from Ridgewood, a monthly payment equal to the
     full amount of royalty relief above and beyond the amount of RSV to which
     Company is entitled under Article 16.2.2, if any, plus the full amount of
     royalty relief if any, afforded by such RSS or other form of royalty relief
     Company and Chevron shall jointly monitor and reconcile said account an
     payments in accordance with the payment terms of the COPAS Procedures
     attached hereto as Exhibit "C to the Exhibit "E" Offshore Operating
     Agreement.



        16.3    Net Profit Provision
                --------------------
Certain of the Lease(s) for the Exhibits "A" and "B" Prospects are subject to
that certain one-tenth (1/10) net profits obligation applicable to that certain
net profits premises pursuant to SECTION II of that certain Concurrent Agreement


                                    Page 34
<PAGE>

dated effective July 1, 1959, between Humble Oil & Refining Company and Gulf Oil
Corporation. Chevron hereby assigns to Company, and Company and Chevron hereby
agree to assume, bear, be subject to and pay the net profits interest owner,
their respective shares of the net profits obligation under Section II of the
Concurrent Agreement in accordance with their participations in costs, expense
and revenues of and from each well drilled to or produced from, or otherwise
subject to the net profits obligation of, the net profits premises under this
Agreement or any agreement entered into pursuant to this Agreement including,
but not limited to, any applicable Operating Agreement or Farmout Agreement.
Notwithstanding the foregoing, Company hereby agrees, to the extent that Company
has the right to do so, that Company's share of costs and expenses incurred on
or for any such well not completed for production in which Company participates
shall be allocated to Chevron solely for purposes of Chevron deducting those
costs and expenses in determining and paying Chevron's share of the net profits
obligation; provided, however, that Company is not participating in any
production from the net profits premises within eighteen (18) months after the
well reached total depth, and further provided that said share of costs shall
remain borne by Company and shall remain Company's for all other purposes
including, but not limited to, income tax purposes. If the drilling of such well
not completed for production is operated by Company or its successor or
designated operator other than Chevron, then within said eighteen (18) month
period Company will provide Chevron with, or cause or require its successor or
designated operator to provide Chevron with, an accounting of the costs and
expenses incurred on and for that well and shall assure availability of and
access to the supporting documentation and invoices as may be required in the
event of an audit by or on behalf of the net profits interest owner pursuant to
the Concurrent Agreement.



        16.4    Take-in-Kind Election
                ---------------------
Any overriding royalty owed to Chevron pursuant to the provisions of this
Article 16 shall be computed and paid to or taken in kind by Chevron, whichever
Chevron prefers from time to time, at the same time and in the same manner as
royalties are computed and paid to or taken in kind by the lessor under the
Leases(s), except that said overriding royalty shall be paid to or taken in kind
by Chevron regardless of the lessor royalty relief.




                                   ARTICLE 17

17.     MEDIA RELEASES
        --------------


        17.1    Public Announcements.
                ---------------------
        The Parties hereto agree that prior to making any public announcement or
statement with respect to the transaction contemplated by this Agreement, the
Party desiring to make such public announcement or statement will provide


                                    Page 35
<PAGE>

the other Party with a copy of the proposed announcement or statement at least
three (3) Business Days prior to the intended release date of such announcement.
Release of Chevron reserve estimates is never permitted. The other Party will
thereafter consult with the Party desiring to make the release, and the Parties
will exercise their reasonable best efforts to (i) agree upon the text of a
joint public announcement or statement to be made by both such Parties or (ii)
in the case of a statement to be made solely by one Party, obtain approval of
the other Party hereto to the text of a public announcement or statement.
Nothing contained in this paragraph will be construed to require either Party to
obtain approval of the other Party hereto to disclose information with respect
to the transaction contemplated by this Agreement to any state or federal
governmental authority of agency to the extent required by applicable law or
necessary to comply with disclosure requirements of the New York Stock Exchange
or any other regulated stock exchange, or affiliate of Company or for Ridgewood
Energy Fund LLC investment consideration.


        17.2    Media Releases.
                ---------------
        Except as may be otherwise authorized by the applicable Operating
Agreement, if any, neither Party will make any press release or other public
announcement regarding operations conducted pursuant to this Agreement without
the prior written consent of the other, which consent will not be unreasonably
withheld, Each Party will have three (3) Business Days within which to review
and comment prior to public disclosure, Release of reserves estimates is never
permitted. The foregoing, however, will not restrict disclosures by either Party
which are required by applicable securities or other laws or regulations or the
applicable rules of any stock exchange having jurisdiction over the disclosing
Party or its Affiliates.




                                   ARTICLE 18

18.     FILES
        -----

        18.1    Access to Files.
                ----------------
        During the term of the Company's right to earn under this Agreement,
either Party ("disclosing Party") will permit, to the extent it has the right to
do so, a Party ("reviewing Party") and its Representatives al reasonable times
during normal business hours to examine, in the disclosing Party's offices at
their actual locations, the Prospect and land files (excluding all economic and
risk evaluations, reserve information, all legal files, attorney-client
communications or attorney work product, records and documents subject to
confidentiality provisions and auditor's reports) pertaining to the Prospect(s)
listed on Exhibit "A". In addition. to the extent it has the right to do so,
reviewing Party will be allowed access to the disclosing Party's geological,
geophysical, engineering and land files, subject to the same exclusions listed
above, covering the Lease(s) hereto in support of the development of the


                                    Page 36
<PAGE>

Lease(s) and Prospects listed on Exhibit "B". The reviewing Party will be
obligated to maintain the confidentiality of such files and information in
accordance with the provisions and limitations described in Article 20 below.
The disclosing Party and its Representatives make no representation or warranty
as to, and will have no liability to reviewing Party regarding, the accuracy or
completeness of the information disclosed to the reviewing Party hereunder. Any
information or data furnished hereunder by the disclosing Party is provided as a
convenience only and any reliance on or use of same is at the reviewing Party's
sole risk. The inadvertent disclosure by the disclosing Party to the reviewing
Party of attorney-client communications, attorney work product, legal files or
other confidential information will not be deemed to be a waiver of the
attorney-client privilege, the attorney work-product privilege, or any other
privilege or right protecting the confidentiality of data or information.
Anything in this Agreement to the contrary notwithstanding, however, the
disclosing Party and their Representatives will have no liability to the
reviewing Party for failing to allow the reviewing Party to examine, or to grant
the reviewing Party access to any of the files or materials referred herein.
Access to a disclosing Party's Prospect files is strictly and solely as an
accommodation to the reviewing Party.




                                   ARTICLE 19


19.     ASSIGNMENTS AND TRANSFER OF INTEREST
        ------------------------------------


        19.1    Assignment of this Agreement.
                -----------------------------
        It is agreed that Company will not assign, mortgage or pledge, either in
whole or in part, its rights and interest in this Agreement without the prior
written consent of Chevron, which may be reasonably withheld. However, such
Consent is not required should Company wish to assign to a Ridgewood Energy LLC
Fund in which Ridgewood Energy is the General Partner. Upon receipt of Chevron's
written consent, which consent can be conditioned on, but not limited to,
requesting adequate security for the future performance by assignee or mortgagor
or pledgor, payment of all delinquent accounts and resolving all outstanding
disputes, any rights delivery made by Company hereof will 1) contain a
limitation in favor of Chevron requiring that Chevron's written consent must
also be obtained prior to any future assignments of this Agreement in whole or
in part or any prior assignment, mortgage or pledge of any interest in this
Agreement, 2) that said instrument contain a provision indicating said
assignment, mortgage or pledge is made subject and subordinate to this
Agreement, and 3) the assignee or mortgagor or pledgor agrees in writing to be
bound by or subordinated to, in the case of mortgage or pledge, all the terms
and conditions of this Agreement.


                                    Page 37
<PAGE>

        19.2    Lease or Prospect Successors and Assigns
                ----------------------------------------
        It is agreed that Company, before or after earning an interest under
this Agreement, will not assign, mortgage or pledge, either in whole or in part,
its interest or rights to interest in and to the Lease(s) or any Prospect
without the written consent of Chevron, which may be reasonably withheld.
However, such consent is not required should Company wish to assign to a
Ridgewood Energy LLC Fund in which Ridgewood Energy is the General Partner. Upon
receipt of Chevron's written consent, which consent can be conditioned on, but
not limited to, requesting adequate security for the future performance by
assignee or mortgagor or pledgor, payment of all delinquent accounts and
resolving all outstanding disputes, any rights delivery made by Company hereof
will 1) contain a limitation in favor of Chevron requiring that Chevron's
written consent must also be obtained prior to any future assignments of
interest in whole or in part or any prior assignment, mortgage or pledge of any
interest earned under this Agreement, 2) that said instrument contain a
provision indicating said assignment, mortgage or pledge is made subject to and
subordinate to this Agreement, and 3) the assignee or mortgagor or pledgor
agrees in writing to be bound by or subordinated to, in the case of mortgage or
pledge, all the terms and conditions of this Agreement. It will be fully
understood that in the event the assigning party encumbers or burdens the
Contract Acreage or any portion thereof after earning an interest herein, the
assigning party will indemnify, defend and hold the non-assigning party free and
clear of any and all obligations, liability and/or responsibility for such
encumbrance(s) or burden(s). Any assignment made pursuant to this Section 19.2
will be in accordance with and in compliance to the accepted practices,
guidelines and policies of the governmental agencies that may claim
jurisdiction. After Company receives an assignment in the Lease(s), future
restrictions, if any, on subsequent assignments will be covered in the
applicable Operating Agreement.




                                   ARTICLE 20

20.     CONFIDENTIALITY
        ---------------


        20.1    Confidentiality.
                ----------------
        It is understood and agreed that no Party to this Agreement, for a
period of thirty six (36) months from the Effective Date hereof, will divulge to
any Third Party any geophysical, geological or engineering information that is
disclosed or received from the other Party on the Contract Acreage without first
obtaining the written consent of such other Party to this Agreement to release
any such information that it disclosed or received. Such consent, however, will
not be necessary for a Party to divulge such information to any part(y)ies from
whom said Party to this Agreement may receive a contribution for the drilling of
a well under any Farmout agreement, to a financial institution (or similar
entity i.e. Ridgewood Energy Fund LLC) from whom a Party is attempting to secure


                                    Page 38
<PAGE>

funds or financing, or to a pipeline company for the purpose of securing a
pipeline connection. Notwithstanding the above, either Party may disclose
confidential data to its Affiliate(s), consultants or other Representatives
provided that such Affiliate, consultant or Representative agrees to maintain
the confidentiality of such confidential under the same conditions as stated
herein.

        Subject to disclosures that may be authorized by any Operating Agreement
applicable to the Lea any and all data revealed and disclosed by Chevron to
Company and Company to Chevron will be treated by the Party receiving the data
as confidential, less and except any data that now or hereafter becomes
generally available to the public, was known by Chevron or Company prior to the
Effective Date of this Agreement already in Chevron's or Company's possession
prior to the Effective Date of this Agreement, or her comes into Chevron's or
Company's possession from a Third Party who has the right to disclose
information, as applicable.


        20.2    Speculative Seismic Data.
                -------------------------
        The Parties hereto have in their possession certain seismic data
licensed from Third Parties which impose various restrictions and limitations on
either Party's right to use, disclose and/or display such data relating Lease(s)
identified in Exhibit "A" or Exhibit "B". Notwithstanding any other provision in
this Agreement contrary, Chevron and Company both agree that neither Party will
remove from each other's office, copy or reveal to any Third Party, any
Speculative Seismic Data disclosed by one Party to the other Party. Each agrees
it will only view such Speculative Seismic Data for no other purpose other than
necessary to review work product generated as a result of the purpose of this
Agreement. Under no circumstances will the Party who views the Speculative
Seismic Data be allowed to use the Speculative Seismic Data for any other
purpose what viewing the data was intended unless the viewing Party has first
obtained a license from the Third owner of such Speculative Seismic Data or the
disclosing Party, or the owner of the Speculative Seismic advises the Parties
that such data is no longer to be held confidential.



        20.3    Disclosure of Confidential Data.
                --------------------------------
        In the event a Party hereto, or its Representatives, are required by any
court or legislative or administrative body (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigation demand, or
any similar process) to disclose any confidential information or data not owned
by said Party, the required to make such disclosure will provide the owner of
the confidential information or data with prompt notice of such requirement in
order to afford the owner of such information or data the opportunity to seek an
appropriate protective order. However, if the owner of such information or data
is unable to obtain or does not seek protective order and the Party that is
required to make such disclosure, or its Representatives, are, in the opinion


                                    Page 39
<PAGE>

of counsel, compelled to disclose confidential information or data under pain of
liability for contempt or other censure penalty, disclosure of such information
or data may be made without liability.




        20.4    Risk of Use of Confidential Data.
                ---------------------------------
        It is understood by the Parties hereto that any confidential information
or data, both oral and written, furnished by one Party to the other is to be
considered accurate, however, neither Party hereto makes any representations or
warranties, express, implied, statutory or otherwise, with respect to the
accuracy or completeness of the confidential information or data disclosed or
any condition or aspect thereof. To the best of its knowledge, the Party making
such disclosure represents that it has full legal or contractual authorization
or right to disclose such information and data to the other Party. Each Party
hereto agrees that it will use such confidential information and data at its
sole peril and risk, and the disclosing Party will have no liability whatsoever
with respect to the use by the receiving Party of any information or data,
whether confidential or otherwise, furnished by the disclosing Party to the
receiving Party. Any decision or action taken by the receiving Party of such
disclosed confidential information and data will be based solely on the
receiving Party's independent evaluation, judgment and decisions.




                                   ARTICLE 21

21.     GOVERNING LAW
        -------------


        21.1    Choice of Law.
                --------------
        The terms and conditions of this Agreement will be governed and
interpreted under the LAWS OF THE STATE OF LOUISIANA.


        21.2    Future Litigation and Claims.
                -----------------------------
        Company acknowledges and agrees that Chevron and its Affiliates will
have full and unfettered discretion in the handling and settling of any such
claim, demand, action, cause of action, or lawsuit for events which occurred, or
alleged to have occurred prior to the Effective Date pursuant to any future
litigation as they relate to the Chevron Lease(s), and Company specifically
waives any claim it may otherwise have against Chevron arising out of or
relating to the handling or settling of any such claim, demand, action, cause of
action, or lawsuit asserted under future litigation; provided, however, that in
the event that such claim contemplated by this Section 21.2 covers periods after
the Effective Date, Company may assist in defending the litigation. Chevron
agrees that no such claim, demand, action, or cause of action, or lawsuit
arising out of or related to acts or omissions occurring prior to the Effective


                                    Page 40
<PAGE>

Date will impair or affect any interest to be assigned to Company under this
Agreement or will impose any cost or liability on Company.



                                   ARTICLE 22

22.     FORCE MAJEURE
        -------------


        22.1    Force Majeure.
                --------------
        Should either Party be prevented from complying with any express or
implied covenant of this Agree (other than the obligation to make monetary
payments), or from meeting any deadline under this Agreement reason of "Force
Majeure," as hereinafter defined, the express or implied covenant or deadline so
affected will automatically be extended so long as the cause or causes for such
delays or interruptions continue and I additional sixty (60) days following the
cessation of such delay or interruption. "Force Majeure" is herein defined as an
act of God, adverse weather conditions, inability to obtain materials in the
open market or transportation thereof, war, strikes, lockouts, riots,
insurrections or any other conditions or circumstances not wholly with control
of a Party hereto (other than financial) or any federal, state or municipal law,
order, permit, rule or regulation. The Party subject to the Force Majeure event
will not be liable to the other Party in damages for failure to perform as
required hereunder or to comply with any covenant, agreement or requirement
hereof during the time the Party subject to the Force Majeure event is relieved
from its obligations hereunder, provided that the Party subject to the Force
Majeure event has given written notice to the other Party within thirty (30)
days after occurrence of the cause relied upon to suspend the obligations of the
Party subject to the Force Majeure event. The Party subject to the Force Majeure
event will not be relieved from any express or implied obligations under the
Lease(s) by operation of Force Majeure hereunder, unless said Lease(s) also
suspends such obligations for the same cause. Further, if the Lease(s) provides
for a time for the suspension of obligations less than sixty (60) the provisions
of said Lease(s) will control. The Parties recognize that time is of the essence
in the performance of the obligations under this Agreement, and every reasonable
effort should be made by the Party affected by the Force Majeure event to avoid
delay or suspension of any work or acts to be performed under this Agreement and
to make all reasonable efforts to overcome the impact of the Force Majeure as
soon as possible. The requirement that the Force Majeure be remedied with all
reasonable dispatch will not require a Party to settle strikes or labor
difficulties.


                                    Page 41
<PAGE>

                                   ARTICLE 23

23.     DISPUTE RESOLUTION.
        -------------------


        23.1    Dispute Resolution.
                -------------------
        Notwithstanding anything contained heretofore in this Agreement to the
contrary, with the exceptions of decisions made by engineering firms or
consultants as provided under Article 6, the Parties specifically acknowledge
and agree that any claim, controversy or dispute arising out of relating to, or
in connection with this Agreement, including the interpretation, validity,
termination or breach thereof will be resolved solely accordance with the
Dispute Resolution Procedure set forth in Exhibit "F" attached hereto and made a
part hereof. Disputes related to pressure communication or common reservoir
issues will be addressed accordance with the procedures stated under Article 6
as applicable and not Exhibit "F".


                                   ARTICLE 24

24.     TERMINATION
        -----------


        24.1    Termination.
                ------------
        This Agreement will begin on the Effective Date, will remain in effect
as to earned and un-reverted portions of each Lease and unless terminated
pursuant to another provision in this Agreement or unless extent pursuant to
another provision, the Company right to earn will remain in effect until
December 31, 2007, at which time this Agreement will automatically terminate
without any other action by any Party hereto as to any unearned interests. As to
each Prospect listed on Exhibits "A" and "B", and any acreage made subject to
this Agreement pursuant to Section 2.4, as each such interest or right to earn
an interest expires or terminates, it will no longer subject to this Agreement.
It is understood between the Parties hereto that after termination of the
Company's right to earn under this Agreement, the only acreage Company will have
rights to will be that acreage it has already earned or has committed to drill
under this Agreement as provided under Section 24.3 belt Notwithstanding the
termination of the Company right to earn under this Agreement, each Party will
continue be obligated to fulfill its existing commitments, obligations,
liabilities, both financial and otherwise, and of undertakings theretofore
incurred hereunder or incurred under the terms of those agreements attached
Exhibits hereto.


        24.2    Lease Expiration or Termination.
                --------------------------------
        Although Chevron shall use business-like efforts to monitor ongoing
activities on the Lease(s), Chevron shall not be liable to Company for the
Lease(s) termination and/or Chevron's failure to maintain the Lease during the
term of this Agreement but Chevron shall attempt, so long as Chevron owns Record


                                    Page 42
<PAGE>

Title or Operating Rights Interest in the Lease(s), to notify Company at least
thirty (30) days before said Lease(s) will terminate.


        24.3    Agreement Extension.
                --------------------
        At the termination of this Agreement, should operations for the drilling
of an Initial Test Well o Substitute Well have been commenced on a Prospect,
this Agreement will continue in effect so long operations are continuously
prosecuted on such well. On the expiration of such period this Agreement v
automatically terminate without any further action from any Party hereto as to
any unearned interest. As stated in Section 24.1 above, each Party will continue
to be obligated to fulfill its existing commitments, obligations, liabilities
both financial and otherwise, and other undertakings theretofore incurred
hereunder or incurred under the terms of those agreements attached as Exhibits
hereto.




                                   ARTICLE 25

25.     INDEMNITY
        ---------


        25.1    Indemnity.
               ----------
        Company, to the extent of the obligations undertaken herein, agrees to
protect, indemnify, and save Chevron, its parent, subsidiaries, affiliates,
and/or successors and the directors, officers, employees or agents each
("Chevron Company Group") free and harmless from all obligations, business
dealings, liabilities, del charges, claims, damages, demands, costs (including
attorneys' fees and court costs), penalties and causes of act arising directly
or indirectly out of all of Company's actions or inactions under this Agreement,
and related to a dealing with any Third Party that Company has or may have with
regard to financing or the assignment of, whole or in part, any rights under
this Agreement, and to relieve the Chevron Company Group from any and liability
(exclusive of business debts and charges) incurred as a result of such actions.
The indemnities a covenants of this Section 25.1 will be effective whether or
not such obligations, business dealings, liabilities, debts, charges, claims,
damages, demands, costs (including attorneys' fees and court costs), penalties
and causes action aforesaid are caused wholly or partly by negligence attributed
to the Chevron Company Group, or by any other means, excepting those occurrences
involving the gross negligence or willful misconduct of the Chevron Company
Group.


                                    Page 43
<PAGE>

                                   ARTICLE 26

26.    BREACH


        26.1    Breach.
                -------

        Anything herein to the contrary notwithstanding, any failure by Company
to comply with any material obligation hereunder will be considered a breach of
this Agreement. In the event of any such breach, Chevron shall notify Company of
such breach and if Company does not correct or is not in good faith attempting
to correct such breach within thirty (30) days of receipt of such notice,
Chevron may terminate this Agreement in whole or in part by notifying Company in
writing of such termination, without prior notice or demand being made upon
Company and without the necessity of placing Company in default; provided,
however, the failure by Chevron to exercise at any time or from time to time
such right of termination will not effect a waiver of any breach or of Chevron's
right subsequently to terminate this Agreement.



                                   ARTICLE 27

27.     DISCLAIMER OF WARRANTY
        ----------------------


        27.1    Disclaimer of Warranty.
                -----------------------

        THIS AGREEMENT IS MADE WITHOUT ANY WARRANTY OF TITLE TO THE LEASE(S).
CHEVRON DOES NOT WARRANT EITHER EXPRESS, STATUTORY OR IMPLIED, AS TO TITLE,
MERCHANTABILITY, CONDITION, QUALITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO
THE CHEVRON LEASE(S), AND ALL OTHER PROPERTY COVERED BY THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO THE WELL BORES, EQUIPMENT AND FACILITIES UTILIZED
BY THE PARTIES HEREUNDER, OR ANY OTHER SORT OF WARRANTY AND IS WITHOUT RECOURSE
AGAINST CHEVRON WHATSOEVER, EVEN AS TO THE RETURN OF CONSIDERATION. CHEVRON
MAKES NO REPRESENTATIONS OR WARRANTIES REGARDING COMPANY'S RIGHT OF INGRESS TO
AND EGRESS FROM THE CHEVRON LEASE(S) ACROSS ADJACENT OR ADJOINING LANDS.


        CHEVRON SPECIFICALLY DISCLAIMS, AND COMPANY EXPRESSLY WAIVES THE IMPLIED
WARRANTY OF TITLE NOTED IN LA. R. S. 31:120 WITH RESPECT TO THE CHEVRON
LEASE(S). COMPANY ACKNOWLEDGES THAT THIS EXPRESS WAIVER WILL BE CONSIDERED A
MATERIAL AND INTEGRAL PART OF THIS AGREEMENT AND PART OF THE CONSIDERATION GIVEN
THEREFOR. COMPANY FURTHER ACKNOWLEDGES THAT THIS WAIVER HAS BEEN SPECIFICALLY
BROUGHT TO COMPANY'S ATTENTION AND THAT COMPANY HAS VOLUNTARILY AND KNOWINGLY


                                     Page 44
<PAGE>

CONSENTED TO THIS WAIVER. THE PARTIES AGREE TH, FOR THE PURPOSES OF THIS WAIVER
OF THE IMPLIED WARRANTY OF TITLE, CHEVRON AT THEIR AFFILIATES WILL BE CONSIDERED
AS THE SELLER HEREUNDER AND COMPAI EXPRESSLY WAIVES ALL RIGHTS OF SUBROGATION IN
WARRANTY OF THE SELLER AGAIN OTHER PERSONS GRANTED TO A BUYER BY LOUISIANA CIVIL
CODE ARTICLE 2503.

        COMPANY ACKNOWLEDGES THAT (i) IT IS A SOPHISTICATED INVESTOR AND
OPERATOR IN THE OIL AND GAS BUSINESS; (ii) IT UNDERSTANDS THE RISKS INVOLVED IN
OIL AND GAS EXPLORATION AND DEVELOPMENT; AND (iii) IT UNDERSTANDS THAT ITS
PARTICIPATION THIS AGREEMENT IS A HGHLY RISKY UNDERTAKING AND THAT COMPANY MIGHT
NOT RECOVER ANY OF ITS INVESTMENT MADE HEREUNDER.




                                   ARTICLE 28

28.     GENERAL PROVISIONS
        ------------------


        28.1    Prospects Treated Separately.
                -----------------------------
        Unless otherwise provided, the terms and provisions stated herein will
apply separately to each Prospect listed on Exhibit "A" or Exhibit "B".


        28.2    Non-Interference.
                -----------------
        Any and all operations conducted and/or performed on the Lease(s) for
which Company is or becomes the well operator, if any, will be conducted and
performed with due diligence and in a workmanlike manner a will be coordinated
and scheduled so as not to unreasonably interfere with existing or anticipated
operatic located on the interests in the Lease(s) and Excluded Property not
transferred hereunder by Chevron, applicable. In the event that the proposed
drilling of an Initial Test Well on any Prospect is delayed because potential
interference with operations on the Lease(s) or Excluded Property by Chevron,
then Chevron a Company agree that the period to commence operations on the
Initial Test Well will be extended, if request by Company, for the duration of
the interference plus a reasonable amount of time for Company to coordinate its
activities after cessation of operations by Chevron.


        28.3    Governmental Approvals.
                -----------------------
        From and after the execution hereof, each of the Parties hereto, without
further consideration, will use its business-like efforts to execute, deliver,
submit, gain approvals of and record (or cause to be executed, delivered,


                                    Page 45
<PAGE>

submitted, and recorded) good and suffcient permits, designations, other
regulatory documents, and instruments of conveyance and transfer (as
applicable), and take such other action as may be reasonably required to carry
out the purposes of this Agreement and to give effect to the covenants,
stipulations and obligations of the Parties hereto.


        28.4    Amendments.
                -----------

        This Agreement will not be modifed or amended except by mutual agreement
of the Parties in writing. No action or failure to act on the part of either
Party hereto will be construed as a modifcation or amendment to, or a waiver of,
any of the provisions of this Agreement.


        28.5    Declaration of Agreement.
                -------------------------

        Should either Party request a Declaration of Agreement be executed for
fling in the applicable public records, both Parties agree to execute a
Declaration of Agreement similar in form as that which is attached hereto as
Exhibit "G". Either Party will have the right and option, at its own expense, of
fling such Declaration of record in the appropriate State and/or Federal offces.


        28.6    Other Rights, Remedies Reserved.
                --------------------------------

        No provision contained herein providing for the termination of this
Agreement will be construed as precluding, nor will it preclude, Chevron from
asserting its respective rights to specifc performance, damages, or any other
rights or remedies to which it may be entitled.


        28.7    No Waiver.
                ----------

        Chevron's or Company's failure to enforce any of the provisions of this
Agreement will not efect a waiver of any violation thereof nor preclude
enforcement of that or any other provisions hereof at that or any other time.


        28.8    No New Lease Burdens.
               ---------------------

        As to the Lease(s) that are subject to this Agreement, until Company has
earned and received an assignment of an interest, or relinquishes its rights to
earn any interest therein, or until this Agreement terminates, Chevron agrees
not to create any additional lease burdens, marketing commitments, or other
contractual obligations on such Lease(s) as to the Available Acreage. Prior to
Company receiving an assignment of an interest in a Prospect, Chevron shall not
create or allow the creation of any additional lease burdens afecting the
Contract Acreage which Company has a right to earn hereunder. During the term of
the Company's right to ear under this Agreement, Chevron shall use business-like


                                     Page 46
<PAGE>

efforts not to unnecessarily prejudice the rights and options Company as
stipulated hereunder.


        28.9    Permitting Cost Sharing.
                ------------------------
        In addition to the obligations under Section 3.2, Company will be
obligated to contribute Company's Interest share of all direct permitting and
regulatory costs incurred by Chevron subsequent to the Effective Date of this
Agreement on the Lease(s) subject hereto. This contribution will only come due
once Company agrees to participate in the drilling of the Initial Test Well on a
Prospect. Payment will be due upon receipt of Chevron written notice of all such
costs.


        28.10   Audit Rights.
                -------------
        Upon written notice to the other Party, any Party ("requesting Party")
may examine the accounts records of the other Party from time to time during
normal business hours required to verify a Party's compliance with the financial
obligations assumed by that Party in this Agreement. Such examinations will be
made din by the requesting Party at its expense or through an independent
accounting firm of the requesting Party's choice retained at the requesting
Party's expense. If performed, the requesting Party will commence its initial
audit of the other Party's accounts and records pursuant hereto, within
twenty-four (24) months from the Effective Date of Agreement. After the initial
audit has been conducted or the initial audit period has expired without such
being commenced, the requesting Party may commence subsequent audits only
covering those periods following, the end of the previous twenty-four (24) month
period.


        28.11   Severability.
                -------------
        Every provision in this Agreement is intended to be severable. If any
term or provision hereof is held court of competent jurisdiction to be illegal
or invalid for any reason whatsoever, all other conditions and provisions of
this Agreement will nevertheless remain in full force and effect.


        28.12   Entire Agreement.
                -----------------
        This Agreement constitutes the entire understanding between the Parties
with respect to the subject matter hereof, superseding all negotiations, prior
discussions and prior agreements and understandings rely to the subject matter
hereof including that certain Letter from Company to Chevron dated August 10,
2006.


                                    Page 47
<PAGE>

        28.13   Further Assurances.
                -------------------
        Each Party agrees to execute and deliver all such additional documents,
instruments and assurances to perform such additional acts as may be necessary
or appropriate to effectuate and perform all of the t and conditions of this
Agreement.


        28.14   Surviving Obligation.
                ---------------------
        THE TERMINATION OF THIS AGREEMENT WILL NOT RELIEVE ANY PARTY HER FROM
ANY EXPENSE, LIABILITY OR OTHER OBLIGATION OR ANY REMEDY THEREFOR WH HAS ACCRUED
OR ATTACHED PRIOR TO THE DATE OF SUCH TERMINATION.


        28.15   Conflict of Terms.
                ------------------
        In the event of any conflict between the main body of this Agreement and
attached Exhibits, provisions of the main body of this Agreement will control.



        IN WITNESS WHEREOF, this Agreement is executed and made effective by the
Parties hereto the Effective Date as defined herein.


WITNESSES:
----------

                                             CHEVRON U.S.A. INC.


                                             By:    /s/ J.G. Larre
--------------------------                          --------------------
                                             Name:  J. G. LARRE
                                                    -------------------
                                             Title: Assistant Secretary
--------------------------                          -------------------


                                             RIDGEWOOD ENERGY CORPORATION



 (Signature Illegible)                       By:    /s/ W. Greg Tabor
--------------------------                          ------------------------
                                             Name:  W. Greg Tabor
                                                    ------------------------
 (Signature Illegible)                       Title: Executive Vice President
--------------------------                          ------------------------


                                    Page 48
<PAGE>

                                 ACKNOWLEDGMNTS
                                 --------------


STATE OF LOUISIANA

PARISH OF ORLEANS

        BEFORE ME, the undersigned authority, a Notary Public in and for said
Parish and State, on this day personally appeared J.G LARRE, Assistant Secretary
of Chevron U.S.A. Inc., a Pennsylvania corporation, known to me to be the person
whose name is subscribed to the foregoing instrument, and who acknowledged to me
that he executed the same as the act and deed of said corporation, for the
purposes and consideration therein expressed, in the capacity therein stated.


        GIVEN under my hand and seal of office this 9th day of October, 2006.



                             ---------------------------------------------------
                             Notary Public in and for the State of Louisiana

My commission is for life.


STATE OF TEXAS

COUNTY OF HARRIS

        BEFORE ME, the undersigned authority, a Notary Public in and for said
Parish and State, on this day personally appeared, W. Greg Tabor, Executive Vice
President of Ridgewood Energy Corporation, a Delaware corporation, known to me
to be the person whose name is subscribed to the foregoing instrument, and who
acknowledged to me that he executed the same as the act and deed of said
corporation, for the purposes and consideration therein expressed, in the
capacity therein stated.


        GIVEN under my hand and seal of office this 19th day of October, 2006.





[SEAL]    DONNA ERMIS                /s/ Donna ermis
   Notary Public, State of Texas    --------------------------------------------
     MY Commission Expires          Notary Public in and for the State of Texas.
       October 01, 2008


                                    Page 49
<PAGE>

                                   EXHIBIT "A"
                                   -----------

                                PRIMARY PROSPECT
                                ----------------

Attached to and made a part of that certain Exploration Participation Agreement
   dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
   Inc. and Ridgewood Energy Corporation


                              Mussel Beach Prospect
                              ---------------------


OCS Block: A portion of South Timbalier Block 135
Lease: OCS 0462
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty, further subject to an Overriding
Royalty Interest of 1/12 of 8/8ths OR a Net Profit Interest of 10% of 8/8ths due
to ExxonMobil and an ORRI of 0.01 due to various parties collectively referred
to MPT.


OCS Block: A portion of South Timbalier Block 136
Lease: OCS-G 26097
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty

<TABLE>
<CAPTION>

<S>                                                                             <C>                    <C>
Chevron Interest Before-Casing Point Chevron BCP Interest:                      Fifty-eight percent    (58%)
---------------------------------------------------------
* Ridgewood Interest Before Casing Point (Ridgewood BCP Interest):              Forty-two Percent      (42%)
-----------------------------------------------------------------

* Ridgewood will have and bear the obligation of paying its
disproportionate BCP Interest share of the Well Costs stated
above until Casing Point or until one hundred twenty percent
(120%) of the associated AFE to drill the Initial Test Well,
whichever occurs first, have been spent in the drilling of said
Well and any Substitute Well(s).

Chevron Interest After Casing Point (Chevron ACP Interest):                     Seventy-five percent   (75%)
----------------------------------------------------------
Ridgewood Interest After Casing Point (Ridgewood ACP Interest):                 Twenty-five Percent    (25%)
--------------------------------------------------------------
</TABLE>


Operator: Chevron U.S.A. Inc.


Description of Exploratory Well, Objective Depth and Primary Objective for
--------------------------------------------------------------------------
Mussel Beach Prospect:
----------------------

The Initial Exploratory Well shall be drilled to: (1) a True Vertical Depth of
19,600 feet subsea, or (2) a depth sufficient to adequately test the Mussel
Beach Sand, whichever is the lesser depth, with a surface location of the
Initial Exploratory Well on MMS Lease OCS 0462, South Timbalier Area, Block 135,
Offshore Louisiana being approximately X =  _________ and Y = ________ and
bottom hole location target of the Initial Exploratory Well being approximately
X = __________ and Y = ___________.




                                   Page 1 of 2

Chevron/Ridgewood EPA 2006
Exhibit A - ST/WD EPA EXHIBIT A.doc


<PAGE>

Mussel Beach Prospect - Available Acreage for an Assignment of Operating Rights
-------------------------------------------------------------------------------
Interest that May Be Earned for a well to be drilled and logged to Objective
----------------------------------------------------------------------------
Depth:
------

Mussel Beach Prospect shall consist of the following:

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by S No. OCS 0462, South Timbalier Area, Block 135, dated
effective January 1, 1955 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers W/2 of NW/4 of South Timbalier Block 135, A FURTHER LIMITED WITHIN SAID
AREA as to those depths located on the Lease from below the of the stratigraphic
equivalent of the J-8 Sand, as seen at 17,810' measured depth in the electrical
log of Great Western Offshore Company's OCS-G 8720 Well No. 1 in South Timbalier
Block 136, to one hundred feet (100') below the deepest depth drilled and logged
in the Earning Well, and

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Serial No. OCS-G 26097, South Timbalier Area, Block 136, dated
effective June 1, 2004 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers NE/4 of South Timbalier Block 136, AND FURTHER LIMITED WITHIN SAID AREA
as to those depths located on the Lease from below the base of stratigraphic
equivalent of the J-8 Sand, as seen at 17,810' measured depth in the electrical
log of the Great Western Offshore Company's OCS-G 8720 Well No. 1 in South
Timbalier Block 136, to one hundred (100') below the deepest depth drilled and
logged in the Earning Well, and

Ridgewood expressly agrees that Chevron will reserve and except unto itself all
rights, title and interest in to the Excluded Property, less and except the
rights of ingress, egress and access to the earned area.



                                   Page 2 of 2


<PAGE>

                                   EXHIBIT "B"
                                   -----------

                      ADDITIONAL OPPORTUNITIES PROSPECT(S)
                      ------------------------------------

Attached to and made a part of that certain Exploration Participation Agreement
  dated effective the 1st of September, 2006, by and between Chevron U.S.A. Inc.
  and Ridgewood Energy Corporation

                              Holly Beach Prospect
                              --------------------

OCS Block: A portion of West Delta Block 109
Lease: OCS-G 2937
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty

<TABLE>
<CAPTION>

<S>                                                                             <C>                    <C>
Chevron/Other Interest Before Casing Point (Chevron BCP Interest):              Fifty-eight percent    (58%)
-----------------------------------------------------------------
* Ridgewood Interest Before Casing Point (Ridgewood BCP Interest):              Forty-two Percent      (42%)
-----------------------------------------------------------------

* Ridgewood will have and bear the obligation of paying its disproportionate BCP
Interest share of the Well Costs stated above until Casing Point or until one
hundred twenty percent (120%) of the associated AF drill the Initial Test Well,
whichever occurs first, have been spent in the drill said Well and Substitute
Well(s).



Chevron/Other Interest After Casing Point (Chevron ACP Interest:                Seventy-five percent   (75%)
---------------------------------------------------------------
Ridgewood Interest After Casing Point (Ridgewood ACP Interest):                 Twenty-five Percent    (25%)
--------------------------------------------------------------
</TABLE>


Operator: Chevron U.S.A. Inc.


Description of Exploratory Well, Objective Depth and Primary Objective for Holy
-------------------------------------------------------------------------------
Beach Prosper
-------------

The Initial Exploratory Well shall be drilled to: True Vertical Depth of 21,000
feet subsea, with a surface location of the Initial Exploratory Well on MMS
Lease OCS-G 2937, West Delta Area, Block 109 Offshore Louisiana being
approximately X = __________ and Y = ___________ and bottom hole location to of
the Initial Exploratory Well being approximately X = _________ and
Y = ___________.

Holly Beach Prospect - Available Acreage for an Assignment of Operating Rights
------------------------------------------------------------------------------
Interest that May Be Earned for a well to be drilled and logged to Objective
-----------------------------------------------------------------------------
Depth:
------

Holly Beach Prospect shall consist of the following:

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Si\erial No. OCS-G 2937, West Delta Area, Block 109, dated
effective November 1, 1974 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers SW/4; S/2 of SE/4; and SW/4 of N/2 of SE/4 of West E Block 109, AND
FURTHER LIMITED WITHIN SAID AREA as to those depths located on the Lease between
a depth of 16,500 feet true vertical depth subsea to one hundred feet (100')
below the deepest depth drilled and logged in the Earning Well.

Ridgewood expressly agrees that Chevron will reserve and except unto itself all
rights, title and interest in to the Excluded Property, less and except the
rights of ingress, egress and access to the earned area.


                                   Page 1 of 5

Chevron/Ridgewood EPA 2006
Exhibit B - ST/WD EPA EXHIBIT B.doc


<PAGE>

                            Skipper's Canyon Prospect
                            -------------------------


OCS Block: A portion of South Timbalier Block 151
Lease: OCS 0463
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty, further subject to Net Profit Interest
of 10% of 8/8ths due t, ExxonMobil and an ORRI of 0.01 due to various parties
collectively referred to MPT.

<TABLE>
<CAPTION>

<S>                                                                             <C>                    <C>
Chevron/Other Interest Before Casing Point (Chevron BCP Interest:               Fifty-eigh percent    (58%)
-----------------------------------------------------------------
* Ridgewood Interest Before Casing Point (Ridgewood BCP Interest:               Forty-two Percent      (42%)
----------------------------------------------------------------



* Ridgewood will have and bear the obligation of paying its disproportionate BCP
Interest share of the Well Costs stated above until Casing Point or until one
hundred twenty percent (120%) of the associated AFE drill the Initial Test Well,
whichever occurs first, have been spent in the drilling of said Well and
Substitute Well(s).

Chevron/Other Interest After Casing Point (Chevron ACP Interest:                Seventy-five percent   (75%)
---------------------------------------------------------------
Ridgewood Interest After Casing Point (Ridgewood ACP Interest):                 Twenty-five Percent    (25%)
--------------------------------------------------------------
</TABLE>


Operator: Chevron U.S.A. Inc.



Description of Exploratory Well, Objective Depth and Primary Objective for
--------------------------------------------------------------------------
Skipper's Canyon Prospect:
--------------------------

The Initial Exploratory Well shall be drilled to: (1) a True Vertical Depth of
19,520 feet subsea, or (2) a depth sufficient to adequately test the Skipper's
Canyon Sand, whichever is the lesser depth, with a surface location of the
Initial Exploratory Well on MMS Lease OCS 0463, South Timbalier Area, Block 151,
Offshore Louisiana being approximately X = ________ and Y = ________ and bottom
hole location target of the Initial Exploratory Well being approximately
X = __________ and Y = ___________.

Skipper's Canyon Prospect - Available Acreage for an Assignment of Operating
----------------------------------------------------------------------------
Rights Interest May Be Earned for a well to be drilled and logged to Objective
------------------------------------------------------------------------------
Depth:
------

Skipper's Canyon Prospect shall consist of the following:

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Serial No. OCS 0463, South Timbalier Area, Block 151, dated
effective January 1, 1955 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers NW/4; N/2 of SW/4; and W/2 of W/2 of NE/4 of South Timbalier Block 151,
AND FURTHER LIMITED WITHI SAID AREA as to those depths located or. Lease from
below the base of the stratigraphic equivalent of the J-7 Sand, as seen at
12,811' measured depth in the electrical log of the Gulf Oil Corporation's OCS
0463 Well No. G-1 in South Timbalier Block to one hundred feet (100') below the
deepest depth drilled and logged in the Earning Well, and

Ridgewood expressly agrees that Chevron will reserve and except unto itself all
rights, title and interest in to the Excluded Property, less and except the
rights of ingress, egress and access to the earned area.


                                    Page 2 of 5


<PAGE>

                               Emma Beach Prospect
                               -------------------

OCS Block: A portion of South Timbalier Block 132
Lease: OCS-G 24965
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty

OCS Block: A portion of South Timbalier Block 133
Lease: OCS 0459
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty and an ORRI of 0.01 due to various
parties collectively referred to MPT.

OCS Block: A portion of Grand Isle Block 86
Lease: OCS-G 5660
Chevron Leasehold Interest: Ninety and Four-Tenths Percent (90.4%)
Lease Burdens: 1/6 of 8/8ths MMS royalty

OCS Block: A portion of Grand Isle Block 88
Lease: OCS-G 26127
Chevron Leasehold Interest: One Hundred Percent (100%)
Lease Burdens: 1/6 of 8/8ths MMS royalty

<TABLE>
<CAPTION>

<S>                                                                             <C>                    <C>
Chevron Interest Before Casing Point (Chevron BCP Interest):                    Fifty-eight percent    (58%)
-----------------------------------------------------------
* Ridgewood Interest Before Casing Point (Ridgewood BCP Interest):              Forty-two Percent      (42%)
-----------------------------------------------------------------


* Ridgewood will have and bear the obligation of paving its disproportionate BCP
Interest share of the Well Costs stated above until Casing Point or until one
hundred twenty percent (120%) of the associated AF drill the Initial Test Well,
whichever occurs first, have been spent in the drilling of said Well and
Substitute Well(s).

Chevron Interest After Casing Point (Chevron ACP Interest):                     Seventy-five percent   (75%)
----------------------------------------------------------
Ridgewood Interest After Casing Point (Ridgewood ACP Interest):                 Twenty-five Percent    (25%)
--------------------------------------------------------------
</TABLE>


Operator: Chevron U.S.A. Inc.


Description of Exploratory Well, Objective Depth and Primary Objective for Emma
-------------------------------------------------------------------------------
Beach Prospect:
---------------

The Initial Exploratory Well shall be drilled to: a True Vertical Depth of
14,000 feet subsea, with a surface location of the Initial Exploratory Well on
MMS Lease OCS-G 5660, Grand Isle Area, Block 86, Offshore Louisiana being
approximately X = _________ and Y = _________ and bottom hole location target of
Initial Exploratory Well being approximately X = _________ and Y = ____________.

Emma Beach Prospect - Available Acreage for an Assignment of Operating Rights
-----------------------------------------------------------------------------
Interest that May Be Earned for a well to be drilled and logged to Objective
---------------------------------------------------------------------------
Depth:
------

Emma Beach Prospect shall consist of the following:

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Serial No. OCS-G 24965, South Timbalier Area, Block 132, dated
effective July 1, 2003 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease


                                   Page 3 of 5


<PAGE>

covers the S/2; S/2 of N/2; E/2 of N/2 of N/2 of South Timbalier Block 132, AND
FURTHER LIMITED WITHN SAID AREA as to those depths located on the Lease from
13,000' TVD SS to one hundred feet (100') below the deepest depth drilled and
logged in the Earning Well, and

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Serial No. OCS 0459, South Timbalier Area, Block 133, dated
effective January 1, 1955 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers the SE/4; SE/4 of NE/4 of South Timbalier Block 133, AND FURTHER LIMITED
WITHIN SAID AREA as to those depths located on the Lease from 13,000' TVD SS to
one hundred feet (100') below the deepest depth drilled and logged in the
Earning Well, and

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Serial No. OCS-G 5660, Grand Isle Area, Block 86, dated
effective July 1, 1983 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers the SW/4; S/2 of SE/4; NW/4 of SE/4 of Grand Isle Block 86, AND FURTHER
LIMITED WITHIN SAID AREA as to those depths located on the Lease from 13,000'
TVD SS to one hundred feet (100') below the deepest depth drilled and logged in
the Earning Well, and

The Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands
Act designated by Serial No. OCS-G 26127, Grand Isle Area, Block 88, dated
effective June 1, 2004 (the "Lease"), INSOFAR AND ONLY INSOFAR as said Lease
covers the NW/4; NW/4 of NE/4 of Grand Isle Block 88, AND FURTHER LIMITED WITHIN
SAID AREA as to those depths located on the Lease from 13,000' TVD SS to one
hundred feet (100') below the deepest depth drilled and logged in the Earning
Well.

Ridgewood expressly agrees that Chevron will reserve and except unto itself all
rights, title and interest in and to the Excluded Property, less and except the
rights of ingress, egress and access to the earned area.

                                    Page 4 of 5


<PAGE>

                                Mt. Hood Prospect
                                -----------------

Earning rights limited from depths below 15,000' TVD SS to 100' below the
  deepest depth drilled and logged in the Initial Test Well, in the following
  Lease(s):

              South Timbalier Block 134 (W/2); OCS-0461: (Portion)
              South Timbalier Block 135 (E/2); OCS-0462: (Portion)


                                 Wahoo Prospect
                                 --------------

Earning rights limited from depths starting at ten feet (10') above the
stratigraphic equivalent of the E-10 Sand, as seen at 15,352' MD in the array
induction/gamma ray/sp wireline log of the Walter Oil and Gas Corporation OCS-G
3336 Well No. 7 in South Timbalier Block 35, API # 177154116800, to 100' below
the deepest depth drilled and logged in the Initial Test Well, in the
                               followingLease(s):

              South Timbalier Block 35 (S/2); OCS-G 3336: (Portion)


                                Kapolei Prospect
                                ----------------

Earning rights limited from depths below 15,000' TVD SS to 100' below the
  deepest depth drilled and logged in the Initial Test Well, in the
                              following Lease(s):

              South Timbalier Block 129 (N/2), OCS 0465: (Portion)


                               Simon Says Prospect
                               -------------------

Earning rights limited from depths starting at ten feet (10') above the
stratigraphic equivalent of the J-6 Sand, as seen at 15,912' MD in the______ log
of the Chevron U.S.A. Inc. OCS 0498 Well No. X-3 in South Timbalier Block 128,
API # _________ , to 100' below the deepest depth drilled and logged in the
                 Initial Test Well, in the following Lease(s):

South Timbalier Block 128, OCS 0498: S/2 NW/4, SW/4 NE/4, N/2 SW/4, SW/4 SW/4,
               NW/4 SE/4 SW/4, N/2 NW/4 SE/4, and SW/4 NW/4 SE/4


                              Lewes Beach Prospect
                              --------------------

Earning rights limited from depths below 15,000' TVD SS to 100' below the
deepest depth drilled and logged in the Initial Test Well, in the
                              following Lease(s):

                South Timbalier Block 127, OCS-G 24964: (Portion)




                                   Page 5 of 5


<PAGE>

                                   EXHIBIT "C"
                                   -----------

 Attached to and made a part of that certain Exploration Participation Agreement
 dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
                     Inc. and Ridgewood Energy Corporation

      List of Existing Agreements, Restrictions, Exceptions and Obligations
      ---------------------------------------------------------------------
                              For Primary Prospect
                              --------------------

                              MUSSEL BEACH PROSPECT
                              ---------------------

                       OCS 0462 South Timbalier Block 135
                       ----------------------------------


LIS No. 822630    Confidentiality Agreement dated June 16, 2006 between Chevron
                  U.S.A. Inc. and Ridgewood Energy Corporation.

LIS No. 109141    OCS 0462 Lease Agreement dated January 1,1955  between Gulf
                  Refining Company and The United States, as it may have been
                  amended.

LIS No. 109141    Assignment of Overriding Royalty Interest dated effective
                  September 8, 1955 from Gulf Refining Company, as Assignor, to
                  San Jacinto Petroleum Corporation, as Assignee.

LIS No. 109141    Assignment of Overriding Royalty Interest dated effective May
                  28, 1956 from Gulf Refining Company, as Assignor, to Marine
                  Instrument Company, as Assignee.

LIS No. 109141    Assignment of Overriding Royalty Interest dated effective May
                  28, 1956 from Gulf Oil Corporation, as Assignor, to Marine
                  Petroleum Corporation, as Assignee.

LIS No. 109141    Assignment dated effective July 1, 1959 between Humble Oil &
                  Refning Company and Gulf Oil Corporation, as it may have been
                  amended.

LIS No. 159837    Concurrent Agreement dated effective July 1, 1959 between
                  Humble Oil & Refining Company and Gulf Oil Corporation, as it
                  may have been amended.

LIS No. 002229    Block 135 South Timbalier Area Federal Unit Agreement dated
                  effective December 16, 1959 between Gulf Oil Corporation and
                  the United States Geological Survey, as it may have been
                  amended.

LIS No. 023795    Venice Natural Gas Gathering Agreement (the "VGGA") and that
                  certain Venice Gas Processing Agreement (the "VGPA") -- both
                  dated effective November 1, 1996 between Chevron U.S.A. Inc.
                  and Venice Energy Services Company ("VESCO"), and that certain
                  Venice Reserve Commitment Agreement (the "VRCA") dated
                  effective December 10, 1997 between Chevron U.S.A. Inc. and
                  Venice Gathering System, L.L.C. ("VGS"), as they may have been
                  amended, renewed or replaced. Any interest assigned in the
                  Lease will be subject to the VGGA, the VGPA and the VRCA,
                  unless the assignee enters into separate agreements with VESCO

                                   Page 1 of 2

Chevron/Ridgewood EPA 2006
Exhibit C - ST/WD EPA EXHIBIT C.doc


<PAGE>

                  and VGS, or their successors or assigns, containing terms and
                  provisions similar to those in, and replacing, the VGGA, the
                  VGPA and the VRCA as between that assignee in the Lease and
                  VESCO and VGS, or their successors or assigns.

LIS No. 161657    Natural Gas Processing Agreement - Gulf of Mexico dated
                  effective March 1, 2002 between Chevron U.S.A. Inc., Texaco
                  Exploration and Production Inc. and Dynegy Midstream Services,
                  Limited Partnership (the "Dynegy GPA"), as it may have been
                  amended, renewed or replaced. The Dynegy GPA commitment
                  applies to gas from the Lease only if that gas is not
                  processed pursuant to the VGPA, in which case, any assignee
                  in the lease shall enter into a separate Natural Gas
                  Processing Agreement with Dynegy Midstream Services, Limited
                  Partnership, or its successors or assigns, covering the
                  assigned interest and containing terms and provisions similar
                  to those in the Dynegy GPA for the processing of gas that is
                  not processed pursuant to the VGPA.


                      OCS-G 26097 South Timbalier Block 136
                      -------------------------------------



LIS No. 822630    Confidentiality Agreement dated June 16, 2006 between Chevron
                  U.S.A. Inc. and Ridgewood Energy Corporation.

LIS No. 697315    OCS-G 26097 Lease Agreement dated June 1, 2004 between
                  Chevron U.S.A. Inc. and The United States, as it may have been
                  amended.

LIS No. 023795    Venice Natural Gas Gathering Agreement (the "VGGA") and that
                  certain Venice Gas Processing Agreement (the "VGPA") - both
                  dated effective November 1, 1996 between Chevron U.S.A. Inc.
                  and Venice Energy Services Company ("VESCO"), and that certain
                  Venice Reserve Commitment Agreement (the "VRCA") dated
                  effective December 10, 1997 between Chevron U.S.A. Inc. and
                  Venice Gathering System, L.L.C. ("VGS"), as they may have been
                  amended, renewed or replaced. Any interest assigned in the
                  Lease will be subject to the VGGA, the VGPA and the VRCA,
                  unless the assignee enters into separate agreements with VESCO
                  and VGS, or their successors or assigns, containing terms and
                  provisions similar to those in, and replacing, the VGGA, the
                  VGPA and the VRCA as between that assignee in the Lease and
                  VESCO and VGS, or their successors or assigns.

LIS No. 161657    Natural Gas Processing Agreement -- Gulf of Mexico dated
                  effective March 1, 2002 between Chevron U.S.A. Inc., Texaco
                  Exploration and Production Inc. and Dynegy Midstream Services,
                  Limited Partnership (the "Dynegy GPA"), as it may have been
                  amended, renewed or replaced. The Dynegy GPA commitment
                  applies to gas from the Lease only if that gas is not
                  processed pursuant to the VGPA, in which case, any assignee in
                  the lease shall enter into a separate Natural Gas Processing
                  Agreement with Dynegy Midstream Services, Limited Partnership,
                  or its successors or assigns, covering the assigned interest
                  and containing terms and provisions similar to those in the
                  Dynegy GPA for the processing of gas that is not processed
                  pursuant to the VGPA.


                                   Page 2 of 2


<PAGE>

                                  EXHIBIT "D-1"
                                  -------------

Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation


STATE OF LOUISIANA
OFFSHORE LOUISIANA

                     PARTIAL ASSIGNMENT OF OPERATING RIGHTS

THIS PARTIAL ASSIGNMENT OF OPERATING RIGHTS ("this Assignment") effective from
and after ________ , 200_______ by and between Chevron U.S.A. Inc., a
Pennsylvania  corporation, with a mailing address of 935 Gravier Street, New
Orleans, Louisiana 70112, hereinafter called "ASSIGNOR"; and Ridgewood Energy
Corporation, a Delaware limited liability corporation, with a mailing address of
11700 Old Katy Road, Suite 280, Houston, Texas 77079, hereinafter called
"ASSIGNEE"; individually, a "Party" and collectively, the "Parties";

                                   WITNESSETH:
                                   -----------

That for and in consideration of the mutual advantages and benefits accruing to
the Parties hereto, including the express assumption of obligations made
hereinafter by ASSIGNEE, the sufficiency of which is hereby acknowledged,
ASSIGNOR, the present legal owner and holder of one-hundred per cent (100%)
right, title and interest in and to the hereinafter identified oil and gas
lease, does hereby transfer, assign, sublease, set over and deliver to ASSIGNEE
an undivided TWENTY-FIVE PERCENT (25%) of ASSIGNOR's interest in the operating
rights in and to the following identified oil and gas lease and well:

                OCS ______ , effective___________ , ____________ , by the United
                States Department of the Interior, covering all of the Federal
                portion of Block ___, __________ Area (the "Lease"),

                INSOFAR AND ONLY INSOFAR as said operating rights cover and
                affect the _________ QUARTER of said ___________ Block______,
                limited as to depths from _______ feet total vertical depth
                subsea to ___________ feet total vertical depth subsea,
                being one hundred feet below the deepest depth drilled by
                ASSIGNEE'S earning well, the OCS _____ Well No.__________ (API
                No. ________).

The above assigned interest in the aforementioned portion and depths within and
under the Lease, have been earned by ASSIGNEE pursuant to and subject to that
certain Exploration Participation Agreement by and between ASSIGNOR and ASSIGNEE
dated ____________, 2006.

TO HAVE AND TO HOLD exclusively unto ASSIGNEE, its heirs, successors, sublessees
and assigns, and subject to the following reservations, terms and conditions,
to-wit:

1.      This Partial Assignment of Operating Rights is delivered, accepted and
        made expressly subject to and with the express assumption of all of the
        obligations under (i) that certain Exploration Participation Agreement
        between ASSIGNOR and ASSIGNEE dated effective ____________ , 2006, and
        any amendments thereto, said agreement being made a part hereof by
        reference for all purposes. Additionally, each of the Parties agrees and
        accepts to be bound by the terms and provisions of the Lease and the
        certain agreements identified on Exhibit "A", attached hereto and made a


                                   Page 1 of 6

Chevron/Ridgewood EPA 2006
Exhibit D-1 - ST/WD EPA EXHIBIT D-1.doc


<PAGE>

        part hereof for all purposes. In case of any conflict between the terms
        and provisions of said Exploration Participation Agreement and the terms
        and provisions of this Assignment, the said Exploration Participation
        Agreement shall prevail.

2.      This Partial Assignment of Operating Rights is given without warranty of
        any kind, express implied, except against ASSIGNOR's own acts and
        omissions, but does grant and transfer ASSIGNEE full subrogation and
        substitution in and to all of ASSIGNOR's rights and actions warranty
        which ASSIGNOR has or may have against all former owners or vendors of
        said operating rights.

3.      ASSIGNOR retains all rights in and to all depths and portions of the
        said OCS _______ , Block _______, _______Area, not herein expressly
        assigned to ASSIGNEE. ASSIGNOR expressly excel and reserves from this
        Assignment all rights necessary to drill to, produce from, and operate
        in said, depths and portions not assigned to ASSIGNEE herein or earned
        by Assignee pursuant to the Exploration Participation Agreement, but
        insofar and only insofar as these retained rights of Assignor do not
        interfere or negatively impact Assignee's earned interest or production
         associated therewith.

4.      ASSIGNOR retains and reserves to itself and shall own, from and after
        the effective date of this Partial Assignment, as defined in the
        aforementioned Exploration Participation Agreement, undivided
        seventy-five percent (75%) of the operating rights interest in the
        earning well, the production therefrom and the assigned portion of the
        Lease, all as more particularly described in said Exploration
        Participation Agreement dated effective________, 2006, any amendments
        thereto, a one hundred percent (100%) of the ownership of all wells,
        equipment, facilities, structures a platforms on or serving the Lease.

5.      ASSIGNEE warrants that it has not caused any liens, production payments
        or other burdens encumbrances to become attached to the Lease, pursuant
        to its rights or interest in any well(s) drill under the Exploration
        Participation Agreement or and the assigned portion of said Lease.
        ASSIGN] further warrants that any overriding royalty interest,
        production payment or obligation or other encumbrance of any kind, that
        it creates or allows or has created or allowed to become a burden any
        production from an earning well or and the assigned portion or any
        portion of the assign portion of the Lease will not be a burden on
        ASSIGNOR'S interest, on any production from earning well(s) or other
        wells drilled in or to the assigned portion of the Lease, pursuant to
        the Exploration Participation Agreement. ASSIGNEE shall indemnify,
        defend and hold ASSIGNC harmless for any such obligations, encumbrances
        or burdens.

6.      ASSIGNEE hereby agrees, with respect to the said operating rights herein
        assigned, to comply with all applicable governmental laws, orders and
        regulations (specifically, in connection with the performance of
        operations under this Assignment, ASSIGNEE agrees to comply with all
        provisions of Section 202(1) through (7), inclusive, of Executive Order
        11246, dated September 24, 1965 (30 CFR 12319), as amended, which are
        hereby incorporated by reference) and to perform all of the duties and
        obligations of the Lessee under said Lease.

7.      ASSIGNEE agrees to protect, indemnify and save ASSIGNOR free and
        harmless from all claims, damages, defenses, demands and causes of
        action arising directly or indirectly in connection with ASSIGNEE'S
        operations on the Lease and to relieve ASSIGNOR from any and all
        liability incurred as a result of such operations, whether caused by
        ASSIGNOR's negligence or by any other means.

8.      This Assignment is a covenant running with the land and shall inure to
        the benefit of and be binding upon the heirs, successors, sublessees and
        assigns of the Parties hereto. ASSIGNEE may not transfer or assign in
        whole or in part its interest in the operating rights herein assigned,
        without first obtaining ASSIGNOR's written consent, which consent shall
        not be unreasonably withheld. However, such Consent is not required

                                   Page 2 of 6


<PAGE>

        should Company wish to assign to a Ridgewood Energy LLC Fund in which
        Ridgewood Energy Corporation is the General Partner.

9.      ASSIGNEE through its Manager, Ridgewood Energy Corporation, represents
        and warrants ASSIGNOR that the participants and owners in or comprising
        the Ridgewood Energy _____ Fund, LLC are experienced and knowledgeable
        investors and operators in the oil and gas business and that each such
        party is entering is accepting this Partial Assignment for its/their own
        account and not with a view to, or for offer or resale in connection
        with, a distribution thereof, within the meaning of the Securities Act
        of 1933, 15 U.S.C. Section 77a et seq., and any other rules,
        regulations, and laws pertaining to the distribution of securities. In
        the event of an assignment, transfer or conveyance interest by
        ASSIGNEE's aforementioned Manager, Ridgewood Energy Corporation, to a
        subsequent assignee, including any individual participant(s) and /or
        owner(s) in or comprising the Ridgewood Energy _____ Fund, LLC, such
        assignment, transfer or conveyance made by ASSIGNEE hereof must (1)
        contain a limitation in favor of ASSIGNOR requiring that ASSIGNOR's
        written consent must also be obtained prior to any future assignment,
        transfer or conveyance of interest whole or in part; (2) that said
        instrument must contain a provision indicating said assignment, transfer
        or conveyance is made subject to the Agreement and this Assignment; (3)
        the assignee, transferee conveyee expressly agree(s), in writing, to be
        bound by all the terms and conditions of the aforementioned Exploration
        Participation Agreement, that certain Operating Agreement dated _______,
        20 ________ described on Exhibit "A" hereto, and this Partial
        Assignment; and (4) the assignee, transferee or conveyee represent(s)
        that it is an experienced and knowledgeable investor a operator in the
        oil and gas business and that such assignee, transferee or conveyee is
        entering into agreement with ASSIGNEE for its own account and not with a
        view to, or for offer or resale connection with, a distribution thereof
        within the meaning of the Securities Act of 1933, 15 U.S. Section 77a et
        seq., and any other rules, regulations, and laws pertaining to the
        distribution of securities.

        10. Notwithstanding anything contained herein to the contrary, ASSIGNEE
        agrees and recognizes for itself, its successors and assigns, that
        ASSIGNOR hereby retains and possesses a reversionary right in and the
        interest assigned hereunder. If, at any time, production of oil, gas
        and/or gas condensate in paying quantities shall cease from any and all
        well(s) located on and producing from the assigned tract(s) a; depths
        covered hereby (the "Assigned Premises"), ASSIGNOR, if operator) shall
        thereafter notify Assignee of such fact, in writing. Unless (1)
        production of oil, gas and/or gas condensate from such we a replacement
        or substitute well therefore, within one hundred eighty (180) days after
        such cessation production therefrom is restored to paying quantities
        status, or actual drilling operations are commenced on the ASSIGNED
        PREMISES AND (2) ASSIGNEE participates as "Participating Party", as such
        term is defined in the aforementioned Operating Agreement, in said
        operations to restore such production, ASSIGNEE shall, upon ASSIGNOR's
        written request, immediately but, in no event later than thirty (30)
        days of the receipt of said request from ASSIGNOR, execute and deliver
        to ASSIGNOR an instrument recordable form to be prepared by ASSIGNOR, at
        no cost to ASSIGNOR, duly reassigning and re-conveying all rights, title
        and interests assigned hereunder. Should ASSIGNEE fail, neglect or
        refuse participate in any operation conducted and/or permitted under the
        aforementioned Operating Agreement in an attempt restore production from
        the Assigned Premises, ASSIGNEE shall immediately, but, in event later
        than thirty (30) days of written request from ASSIGNOR, execute and
        deliver to ASSIGNC an instrument in recordable form to be prepared by
        ASSIGNOR, at no cost to ASSIGNOR, duly reassigning and re-conveying all
        rights, title and interests assigned hereunder. Should ASSIGNEE
        obligated to reassign and re-convey ASSIGNEE's interest in the Assigned
        Premises as required hereunder, ASSIGNEE's interest shall be reassigned
        or re-conveyed to ASSIGNOR shall be free a clear of any overriding
        royalty(ies), payment(s) out of production, net profit obligation(s) or
        carried interest(s), or any obligation(s) to which it may have been
        subjected by ASSIGNEE. All such obligations created or made by ASSIGNEE
        shall automatically cease, terminate and be of no further force and
        effect as to the Assigned Premises reassigned or re-conveyed,
        notwithstanding that ASSIGNOR may have expressly or impliedly consented
        to the assignment or the instrument in which such obligation(s)


                                   Page 3 of 6
<PAGE>

        was(were) reserved or created. Furthermore, any reassignment or
        re-conveyance by ASSIGNEE as required hereunder shall not relieve
        ASSIGNEE from any liabilities or obligations which ASSIGNEE had already
        accrued.


IN WITNESS WHEREOF, this instrument is signed by the Parties hereto in the
presence of the indicated witnesses.


 WITNESSES:                              ASSIGNOR:

_________________________                Chevron U.S.A. Inc.

 _________________________               By: _________________________

                                         Title: Assistant Secretary


WITNESSES:                               ASSIGNEE:

_________________________                Ridgewood Energy Corporation

_________________________                By:_________________________

                                         Title:______________________







                                   Page 4 of 6


<PAGE>

                                 ACKNOWLEDGMENTS

STATE OF LOUISIANA

PARISH OF ORLEANS

        On this _____ day of ________, 200___, before me appeared to me
personally known, who being by me duly sworn, did say that he is the Assistant
Secretary of Chevron U.S.A. Inc., a Pennsylvania corporation, and that said
instrument was signed on behalf of said corporation by authority of its Board of
Directors, and said appearer acknowledged that he executed the same as the free
act and deed of said corporation.

        IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.


                                              __________________________________
                                              Notary Public in and for Louisiana
My Commission expires at death.




STATE OF TEXAS

COUNTY OF ___________

        On this _____ day of __________ , 200___, before me personally came and
appeared to me personally known, who being by me duly sworn, did say that he is
the _______________ of Ridgewood Energy Corporation, a Delaware corporation,
acting on behalf of and for Ridgewood Energy ____ Fund, LLC, a Delaware limited
liability company, and said appearer acknowledged to me, Notary, that the
foregoing instrument was executed on behalf of said corporation by authority of
its Board of Directors for uses, purposes and consideration therein recited and
said appearer acknowledged said instrument to be the free act and deed of said
corporation.

        IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.


                                                        ________________________
                                                        Notary Public in and for
                                                        __________ County, Texas

My Commission expires__________________.



                                   Page 5 of 6
<PAGE>


                                   EXHIBIT "A"

  Attached to and made a part of that certain PARTIAL ASSIGNMENT OF OPERATING
 RIGHTS from Chevron U.S.A. Inc., as Assignor, to Ridgewood Energy Corporation,
              as Assignee, dated effective ______________, 2O_____.


                               Existing Contracts










                                   Page 6 of 6

<PAGE>

                                  EXHIBIT "D-2"
                                  -------------

Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation


STATE OF LOUISIANA
OFFSHORE LOUISIANA

                     PARTIAL ASSIGNMENT OF OPERATING RIGHTS

THIS PARTIAL ASSIGNMENT OF OPERATING RIGHTS ("this Assignment") effective from
and after ____, 200__ by and between Chevron U.S.A. Inc.., a Pennsylvania
corporation, with a mailing address of 935 Gravier Street, New Orleans,
Louisiana 70112, hereinafter called "ASSIGNOR"; and Ridgewood Energy
Corporation, a Delaware limited liability corporation, with a mailing address of
11700 Old Katy Road, Suite 280, Houston, Texas 77079, hereinafter called
"ASSIGNEE"; individually, a "Party" and collectively, the "Parties";

                                   WITNESSETH:
                                   -----------

That for and in consideration of the mutual advantages and benefts accruing to
the Parties hereto, including the express assumption of obligations made
hereinafer by ASSIGNEE, the suffciency of which is hereby acknowledged,
ASSIGNOR, the present legal owner and holder of one-hundred per cent (100%)
right, title and interest in and to the hereinafer identifed oil and gas lease,
does hereby transfer, assign, sublease, set over and deliver to ASSIGNEE an
undivided ____ PERCENT (___%) of ASSIGNOR's interest in the operating rights in
and to the following identifed oil and gas lease and well:

                OCS ____, effective _____, _____, by the United States
                Department of the Interior, covering all of the Federal portion
                of Block _______, ________ Area (the "Lease"),

                INSOFAR AND ONLY INSOFAR as said operating rights cover and
                affect the______ QUARTER of said _____ Block ____, limited as to
                depths from feet total vertical depth subsea to _____ feet total
                vertical depth subsea, being one hundred feet (100') below the
                deepest depth drilled by ASSIGNEE'S earning well, the OCS _____
                Well No. _____ (API No. ______________________ ).

The above assigned interest in the aforementioned portion and depths within and
under the Lease, have been earned by ASSIGNEE pursuant to and subject to that
certain Exploration Participation Agreement by and between ASSIGNOR and ASSIGNEE
dated __________, 2006.

TO HAVE AND TO HOLD exclusively unto ASSIGNEE, its heirs, successors, sublessees
and assigns, subject to the following reservations, terms and conditions,
to-wit:

1.      This Partial Assignment of Operating Rights is delivered, accepted and
        made expressly subject to and with the express assumption of all of the
        obligations under that certain Exploration Participation Agreement
        between ASSIGNOR and ASSIGNEE dated effective , 2006, and any amendments
        thereto, said agreements being made a part hereof by reference for all
        purposes. Additionally, each of the Parties agrees and accepts to be
        bound by the terms and provisions of the Lease and the certain
        agreements identifed on Exhibit "A", attached hereto and made a part

                                   Page 1 of 6

Chevron/Ridgewood EPA 2006
Exhibit D-2 - ST/WD EPA EXHIBIT D-2.doc

<PAGE>

        hereof for all purposes. In case of any conflict between the terms and
        provisions of said Exploration Participation Agreement and the terms and
        provisions of this Assignment, the said Exploration Participation
        Agreement shall prevail.

2.      This Partial Assignment of Operating Rights is given without warranty of
        any kind, express or implied, except against ASSIGNOR's own acts and
        omissions, but does grant and transfer to ASSIGNEE full subrogation and
        substitution in and to all of ASSIGNOR's rights and actions in warranty
        which ASSIGNOR has or may have against all former owners or vendors of
        said operating rights.

3.      ASSIGNOR retains all rights in and to all depths and portions of the
        said OCS _______, Block ________, _________ Area, not herein expressly
        assigned to ASSIGNEE. ASSIGNOR expressly excepts and reserves from this
        Assignment all rights necessary to drill to, produce from, and operate
        in said depths and portions not assigned to ASSIGNEE herein or earned by
        Assignee pursuant to the Exploration Participation Agreement, but
        insofar and only insofar as these retained rights of Assignor do not
        interfere or negatively impact Assignee's earned interest or production
        associated therewith.

4.      ASSIGNOR retains and reserves to itself and shall own, from and after
        the effective date of this Partial Assignment, as defined in the
        aforementioned Exploration Participation Agreement, an overriding
        royalty of_____ percent of one hundred percent (____% of 100%) of the
        total production produced from or attributable to the said Lease as
        provided for in the aforementioned Exploration Participation Agreement,
        all as more particularly described in said Exploration Participation
        Agreement dated effective __________, 2006, any amendments thereto, and
        one hundred percent (100%) of the ownership of all wells, equipment,
        facilities, structures and platforms on or serving the Lease prior to
        the effective date hereof. Total production shall include all gas,
        condensate, oil, casinghead gas and all other hydrocarbon substances
        produced from or used and sold from or attributable to the operating
        rights assigned hereunder in said Lease. Assignor's reserved overriding
        royalty shall be free and clear of all costs, including, but not limited
        to, exploring, operating, developing on and production from, and
        maintaining said Lease in force and effect, as well as all costs for
        plugging, abandoning, clean-up and restoration. Said overriding royalty
        shall be computed and paid at the same time and in the same manner as
        royalties are computed and paid to the Lessor under said Lease.

5.      ASSIGNEE warrants that it has not caused any liens, production payments
        or other burdens or encumbrances to become attached to the Lease,
        pursuant to its rights or interest in any well(s) drilled under the
        Exploration Participation Agreement or and the assigned portion of said
        Lease. ASSIGNEE further warrants that any overriding royalty interest,
        production payment or obligation or other encumbrance of any kind, that
        it creates or allows or has created or allowed to become a burden on any
        production from an earning well or and the assigned portion or any
        portion of the assigned portion of the Lease will not be a burden on
        ASSIGNOR'S interest, on any production from an earning well(s) or other
        wells drilled in or to the assigned portion of the Lease, pursuant to
        the Exploration Participation Agreement. ASSIGNEE shall indemnify,
        defend and hold ASSIGNOR harmless for any such obligations, encumbrances
        or burdens.

6.      ASSIGNEE hereby agrees, with respect to the said operating rights herein
        assigned, to comply with all applicable governmental laws, orders and
        regulations (specifically, in connection with the performance of
        operations under this Assignment, ASSIGNEE agrees to comply with all
        provisions of Section 202(1) through (7), inclusive, of Executive Order
        11246, dated September 24, 1965 (30 CFR 12319), as amended, which are
        hereby incorporated by reference) and to perform all of the duties and
        obligations of the Lessee under said Lease.

7.      ASSIGNEE agrees to protect, indemnify and save ASSIGNOR free and
        harmless from all claims, damages, defenses, demands and causes of
        action arising directly or indirectly in connection with ASSIGNEE'S

                                   Page 2 of 6


<PAGE>

        operations on the Lease and to relieve ASSIGNOR from any and all
        liability incurred as a result of such operations, whether caused by
        ASSIGNOR's negligence or by any other means.

8.      This Assignment is a covenant running with the land and shall inure to
        the benefit of and be binding upon the heirs, successors, sublessees and
        assigns of the Parties hereto. ASSIGNEE may not transfer or assign in
        whole or in part its interest in the operating rights herein assigned,
        without first obtaining ASSIGNOR's written consent, which consent shall
        not be unreasonably withheld. However, such Consent is not required
        should Company wish to assign to a Ridgewood Energy LLC Fund in which
        Ridgewood Energy Corporation is the General Partner.

9.      ASSIGNEE through its Manager, Ridgewood Energy Corporation, represents
        and warrants to ASSIGNOR that the participants and owners in or
        comprising the Ridgewood Energy _____ Fund, LLC are experienced and
        knowledgeable investors and operators in the oil and gas business and
        that each such party is entering is accepting this Partial Assignment
        for its/their own account and not with a view to, or for offer or resale
        in connection with, a distribution thereof within the meaning of the
        Securities Act of 1933, 15 U.S.C. Section 77a et seq., and any other
        rules, regulations, and laws pertaining to the distribution of
        securities. In the event of an assignment, transfer or conveyance of
        interest by ASSIGNEE's aforementioned Manager, Ridgewood Energy
        Corporation, to any subsequent assignee, including any individual
        participant(s) and /or owner(s) in or comprising the Ridgewood Energy
        _____ Fund, LLC, such assignment, transfer or conveyance made by
        ASSIGNEE hereof must (1) contain a limitation in favor of ASSIGNOR
        requiring that ASSIGNOR's written consent must also be obtained prior to
        any future assignment, transfer or conveyance of interest in whole or in
        part; (2) that said instrument must contain a provision indicating said
        assignment, transfer or conveyance is made subject to the Agreement and
        this Assignment; (3) the assignee, transferee or conveyee expressly
        agree(s), in writing, to be bound by all the terms and conditions of the
        aforementioned Exploration Participation Agreement, that certain Side
        Letter Agreement, that certain Operating Agreement dated ______, 20___
        described on Exhibit "A" hereto, and this Partial Assignment; and (4)
        the assignee, transferee or conveyee represent(s) that it is an
        experienced and knowledgeable investor and operator in the oil and gas
        business and that such assignee, transferee or conveyee is entering into
        an agreement with ASSIGNEE for its own account and not with a view to,
        or for offer or resale in connection with, a distribution thereof within
        the meaning of the Securities Act of 1933, 15 U.S.C. Section 77a et
        seq., and any other rules, regulations, and laws pertaining to the
        distribution of securities.

10.     Notwithstanding anything contained herein to the contrary, ASSIGNEE
        agrees and recognizes for itself its successors and assigns, that
        ASSIGNOR hereby retains and possesses a reversionary right in and to the
        interest assigned hereunder. If, at any time, production of oil, gas
        and/or gas condensate in paying quantities shall cease from any well
        located on and producing from the assigned tract(s) and depths covered
        hereby (the "Assigned Premises"), ASSIGNOR, if operator) shall promptly
        thereafter notify Assignee of such fact, in writing. Unless (1)
        production of oil, gas and/or gas condensate from such well, a
        replacement or substitute well therefore, within one hundred eighty
        (180) days after such cessation of production therefrom is restored to
        paying quantities status, or actual drilling operations are commenced on
        the ASSIGNED PREMISES AND (2) ASSIGNEE participates as "Participating
        Party", as such term is defined in the aforementioned Operating
        Agreement, in said operations to restore such production, ASSIGNEE
        shall, upon ASSIGNOR's written request, immediately but, in no event
        later than thirty (30) days of the receipt of said request from
        ASSIGNOR, execute and deliver to ASSIGNOR an instrument in recordable
        form to be prepared by ASSIGNOR, at no cost to ASSIGNOR, duly
        reassigning and re-conveying all rights, title and interests assigned
        hereunder. Should ASSIGNEE fail, neglect or refuse to participate in any
        operation conducted and/or permitted under the aforementioned Operating
        Agreement in an attempt restore production from the Assigned Premises,
        ASSIGNEE shall immediately, but, in no event later than thirty (30) days
        of written request from ASSIGNOR, execute and deliver to ASSIGNOR an
        instrument in recordable form to be prepared by ASSIGNOR, at no cost to
        ASSIGNOR, duly reassigning and re-conveying all rights, title and
        interests assigned hereunder. Should ASSIGNEE be obligated to reassign

                                   Page 3 of 6


<PAGE>

        and re-convey ASSIGNEE's interest in the Assigned Premises as required
        hereunder, ASSIGNEE's interest shall be reassigned or re-conveyed to
        ASSIGNOR shall be free and clear of any overriding royalty (ies),
        payment(s) out of production, net profit obligation(s) or carried
        interest(s), or any obligation(s) to which it may have been subjected by
        ASSIGNEE. All such obligations created or made by ASSIGNEE shall
        automatically cease, terminate and be of no further force and effect as
        to the Assigned Premises reassigned or re-conveyed, notwithstanding that
        ASSIGNOR may have expressly or impliedly consented to the assignment or
        the instrument in which such obligation(s) was(were) reserved or
        created. Furthermore, any reassignment or re-conveyance by ASSIGNEE as
        required hereunder shall not relieve ASSIGNEE from any liabilities or
        obligations which ASSIGNEE had already accrued.


IN WITNESS WHEREOF, this instrument is signed by the Parties hereto in the
presence of the indicated witnesses.


WITNESSES:                                        ASSIGNOR:

________________________                          Chevron U.S.A. Inc.

                                                  By: ______________________

________________________                          Title: Assistant Secretary


WITNESSES:                                        ASSIGNEE:

________________________                          Ridgewood Energy Corporation

                                                  By: ________________________

________________________                          Title: _____________________




                                   Page 4 of 6


<PAGE>

                                 ACKNOWLEDGMENTS

STATE OF LOUISIANA

PARISH OF ORLEANS

        On this _________ day of  __________________, 200___, before me appeared
______________________ to me personally known, who being by me duly sworn, did
say that he is the Assistant Secretary of Chevron U.S.A. Inc., A Pennsylvania
corporation, and that said instrument was signed on behalf of said corporation
by authority of its Board of Directors, and said appearer acknowledged that he
executed the same as the free act and deed of said corporation.

        IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.


                                                       -------------------------
                                                       Notary Public in and for
                                                       Orleans Parish, Louisiana

My Commission expires at death.




STATE OF TEXAS

COUNTY OF ______________

        On this _______________ day of ______________, 200___, before me
personally came and appeared ______________________ to me personally known, who
being by me duly sworn, did say that he is the ________________________ of
Ridgewood Energy Corporation. a Delaware corporation, acting on behalf of and
for Ridgewood Energy ____ Fund, LLC, a Delaware limited liability company, and
said appearer acknowledged to me, Notary, that the foregoing instrument was
executed on behalf of said corporation by authority of its Board of Directors
for uses, purposes and consideration therein recited and said appearer
acknowledged said instrument to be the free act and deed of said corporation.

        IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.


                                                        ------------------------
                                                        Notary Public in and for
                                                        __________County, Texas

My Commission expires ___________________.




                                   Page 5 of 6


<PAGE>

                                   EXHIBIT "A"

  Attached to and made a part of that certain PARTIAL ASSIGNMENT OF OPERATING
 RIGHTS from Chevron U.S.A. Inc., as Assignor, to Ridgewood Energy Corporation,
                          as Assignee, dated effective
                            ______________, 2O_____.


                               Existing Contracts










                                   Page 6 of 6


<PAGE>

                                   EXHIBIT "E"
                                   -----------

Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation


                          OFFSHORE OPERATING AGREEMENT
                          ----------------------------






Chevron/Ridgewood EPA 2006
Exhibit E - ST/WD EPA EXHIBIT E.doc


<PAGE>

                                   Exhibit "E"


                          OFFSHORE OPERATING AGREEMENT

                      SOUTH TIMBALIER AND WEST DELTA AREAS


                                 By and between


                              Chevron U.S.A. Inc.,


                     Dominion Exploration & Production, Inc.


                                       And


                          Ridgewood Energy Corporation


                                    Effective


                            ___________________,2006






ST/WDJOA


                                        1


<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>       <C>                                                                                                   <C>
 ARTICLE 1. APPLICATION ... ....................................................................................1

    1.1      Application to Contract Area ..................................................................... 1

 ARTICLE 2. DEFINITIONS ... ....................................................................................2

    2.1      Additional Testing ... ............................................................................2
    2.2      Affiliate ... .....................................................................................2
    2.3      Authorization For Expenditure .....................................................................2
    2.4      Complete, Completing, Completion ..................................................................2
    2.5      Completion Equipment ..............................................................................2
    2.6      Confidential Data .................................................................................2
    2.7      Contract Area......................................................................................3
    2.8      Deepen, Deepening .................................................................................3
    2.9      Development Facilities ... ........................................................................3
    2.10     Development Operation .............................................................................3
    2.11     Development Well ..................................................................................3
    2.12     Exploratory Operation .............................................................................3
    2.13     Exploratory Well ..................................................................................3
    2.14     Export Pipelines ..................................................................................3
    2.15     Force Majeure .....................................................................................4
    2.16     Hydrocarbons ......................................................................................4
    2.17     Joint Account .....................................................................................4
    2.18     Lease(s) ..........................................................................................4
    2.19     MMS ... ...........................................................................................4
    2.20     Non-consent Operation .............................................................................4
    2.21     Non-consent Platform ..............................................................................4
    2.22     Non-consent Well ..................................................................................4
    2.23     Non-operator ......................................................................................4
    2.24     Non-participating Party ...........................................................................4
    2.25     Non-participating Party's Share ... ...............................................................4
    2.26     Objective Depth ...................................................................................4
    2.27     Objective Horizon .................................................................................5
    2.28     Operator ..........................................................................................5
    2.29     Participating Interest ............................................................................5
    2.30     Participating Party ...............................................................................5
    2.31     Platform ..........................................................................................5
    2.32     Producible Reservoir ..............................................................................5
    2.33     Producible Well ...................................................................................5
    2.34     Production Interval ...............................................................................6
    2.35     Recomplete, Recompleting, Recompletion ............................................................6
    2.36     Rework, Reworking .................................................................................6
    2.37     Sidetrack, Sidetracking ...........................................................................6
    2.38     Take-in-Kind Facilities ...........................................................................6
    2.39     Transfer of Interest ..............................................................................6
    2.40     Working Interest ..................................................................................6

 ARTICLE 3. EXHIBITS............................................................................................7

    3.1      Exhibits ..........................................................................................7

       3.1.1    Exhibit A.-- Operator, Description of Leases, etc ..............................................7
       3.1.2    Exhibit B -  Insurance Provisions ..............................................................7
       3.1.3    Exhibit C -- Accounting Procedure ..............................................................7
       3.1.4    Exhibit D -- Non-discrimination Provisions .....................................................7
</TABLE>

                                        i


<PAGE>

<TABLE>
<CAPTION>
<S>    <C>                                                                                                     <C>
       3.1.5    Exhibit E-  Gas Balancing Agreement ............................................................7
       3.1.6    Exhibit F - Tax Partnership Provision ..........................................................7
       3.1.7    Exhibit G - Memorandum of Operating Agreement and Financing Statement ..........................7
       3.1.8    Exhibit H - Dispute Resolution Procedure .......................................................7
       3.1.9    Exhibit I - Security Rights, Default, Unpaid Charges, Carved-out Interests .....................7

    3.2      Conflicts .........................................................................................7

ARTICLE 4.  OPERATOR ...........................................................................................8

    4.1      Operator ..........................................................................................8
    4.2      Substitute Operator ...............................................................................8
       4.2.1    Circumstances Under Which the Operator Must Conduct a Non-Consent Operation ....................8
       4.2.2    Operator's Conduct of a Non-Consent Operation in Which it is a Non participating Party .........9
       4.2.3    Appointment of a Substitute Operator ...........................................................9
       4.2.4    Redesignation of Operator ......................................................................9
    4.3      Resignation of Operator ...........................................................................9
    4.4      Removal of Operator ...............................................................................9
    4.5      Selection of Successor Operator ..................................................................10
    4.6      Effective Date of Resignation or Removal .........................................................10
    4.7      Delivery of Property .............................................................................11

ARTICLE 5.  AUTHORITY AND DUTIES OF OPERATOR ..................................................................11

    5.1      Exclusive Right to Operate .......................................................................11
    5.2      Workmanlike Conduct ..............................................................................12
    5.3      Liens and Encumbrances ...........................................................................12
    5.4      Employees and Contractors ........................................................................12
    5.5      Records ..........................................................................................12
    5.6      Compliance .......................................................................................13
    5.7      Contractors ......................................................................................13
    5.8      Governmental Reports .............................................................................13
    5.9      Information to Participating Parties .............................................................13
    5.10     Information to Non-participating Parties .........................................................14

ARTICLE 6.  VOTING AND VOTING PROCEDURES ......................................................................14

    6.1     Voting Procedures .................................................................................14
       6.1.1    Voting Interest ...............................................................................14
       6.1.2    Vote Required .................................................................................14
       6.1.3    Votes .........................................................................................14
       6.1.4    Meetings ......................................................................................15

ARTICLE 7.  ACCESS 5 ..........................................................................................15

    7.1      Access to Contract Area ..........................................................................15
    7.2      Reports ..........................................................................................15
    7.3      Confidentiality ..................................................................................15
    7.4      Limited Disclosure ...............................................................................16
    7.5      Limited Releases to Offshore Scout Association ...................................................16
    7.6      Media Releases ...................................................................................16

ARTICLE 8.  EXPENDITURES ......................................................................................17

    8.1      Basis of Charge to the Parties ...................................................................17
    8.2      AFEs .............................................................................................17
    8.3      Emergency and Required Expenditures ..............................................................17
    8.4      Advance Billings .................................................................................18
    8.5      Commingling of Funds .............................................................................18
    8.6      Security Rights (LA) .............................................................................18
    8.7      Overexpenditures .................................................................................18
</TABLE>

                                       ii


<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                                                                   <C>
ARTICLE 9.  NOTICES ...........................................................................................19

    9.1      Giving and Receiving Notices .....................................................................19
    9.2      Content of Notice ................................................................................19
    9.3      Response to Notices ..............................................................................20
       9.3.1    Platform and/or Development Facilities Proposals ..............................................20
       9.3.2    Well Proposals ................................................................................20
       9.3.3    Proposal for Multiple Operations ..............................................................20
       9.3.4    Other Matters .................................................................................20
    9.4      Failure to Respond ...............................................................................21
    9.5      Response to Counterproposals .....................................................................21
    9.6      Timely Well Operations ...........................................................................21
    9.7      Timely Platform/Development Facilities Operations ................................................21

ARTICLE 10. EXPLORATORY OPERATIONS ............................................................................22

    10.1     Proposing Operations .............................................................................22
    10.2     Counterproposals .................................................................................22
    10.3     Operations by All Parties ........................................................................22
    10.4     Second Opportunity to Participate ................................................................22
    10.5     Operations by Fewer Than All Parties .............................................................22
    10.6     Expenditures Approved ............................................................................23
    10.7     Conduct of Operations ............................................................................23
    10.8     Course of Action After Reaching Objective Depth ..................................................23
       10.8.1   Election by Participating Parties .............................................................23
       10.8.2   Priority of Operations ........................................................................24
       10.8.3   Second Opportunity to Participate .............................................................24
       10.8.4   Operations by Fewer Than All Parties ..........................................................25
       10.8.5   Subsequent Operations .........................................................................25
   10.9      Wells Proposed Below Deepest Producible Reservoir ................................................26

ARTICLE 11. DEVELOPMENT OPERATIONS ............................................................................27

    11.1     Proposing Operations .............................................................................27
    11.2     Counterproposals .................................................................................27
    11.3     Operations by All Parties ........................................................................27
    11.4     Second Opportunity to Participate ................................................................27
    11.5     Operations by Fewer Than All Parties .............................................................27
    11.6     Expenditures Approved ............................................................................28
    11.7     Conduct of Operations ............................................................................28
    11.8     Course of Action After Reaching Objective Depth ..................................................28
       11.8.1   Election by Fewer Than All Parties ............................................................28
       11.8.2   Priority of Operations ........................................................................29
       11.8.3   Second Opportunity to Participate .............................................................29
       11.8.4   Operations by Fewer Than All Parties ..........................................................30
       11.8.5   Subsequent Operations .........................................................................30

  ARTICLE 12. PLATFORM AND DEVELOPMENT FACILITIES .............................................................31

    12.1     Proposal .........................................................................................31
    12.2     Counterproposals .................................................................................31
       12.2.1   Operations by All Parties .....................................................................31
       12.2.2   Second Opportunity to Participate .............................................................32
       12.2.3   Operations by Fewer Than All Parties ..........................................................32
    12.3     Ownership and Use of the Development Facilities ..................................................32
    12.4     Rights to Take in Kind ...........................................................................33
    12.5     Expansion or Modification of a Platform and/or Development Facilities ............................34
</TABLE>

                                       iii


<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                                                                   <C>
ARTICLE 13. NON-CONSENT OPERATIONS ............................................................................34

    13.1     Non-consent Operations ...........................................................................34
       13.1.1   Non-interference ..............................................................................34
       13.1.2   Multiple Completion Limitation ................................................................35
       13.1.3   Metering ......................................................................................35
       13.1.4   Non-consent Well ..............................................................................35
       13.1.5   Cost Information ..............................................................................35
       13.1.6   Completions ...................................................................................36
    13.2     Relinquishment of Interest .......................................................................36
       13.2.1   Production Reversion Recoupment ...............................................................36
       13.2.2    Non production Reversion .....................................................................37
    13.3     Deepening or Sidetracking of Non-consent Well ....................................................37
    13.4     Deepening or Sidetracking Cost Adjustments .......................................................38
    13.5     Subsequent Operations in Non-consent Well ........................................................38
    13.6     Operations in a Production Interval ..............................................................38
    13.7     Operations  Utilizing  a  Non-consent  Platform  and/or  Development  Facilities .................39
    13.8     Discovery or Extension from Non-consent Drilling .................................................39
    13.9     Allocation of Platform/Development Facilities Costs to Non-consent Operations ....................40
       13.9.1   Investment Usage Fees .........................................................................40
       13.9.2   Operating and Maintenance Charges .............................................................43
    13.10    Allocation of Costs Between Zones ................................................................43
    13.11    Maintenance Operations ...........................................................................43
       13.11.1  Participation in Contract Area Maintenance Operations .........................................44
       13.11.2  Accounting for Non participation ..............................................................44
    13.12    Retention of Contract Area by Non-consent Well ...................................................45
    13.13    Non-Consent Premiums .............................................................................45

ARTICLE 14. ABANDONMENT, SALVAGE AND SURPLUS ..................................................................46

    14.1     Platform Salvage and Removal Costs ...............................................................46
    14.2     Abandonment of Platforms, Development Facilities or Wells ........................................46
    14.3     Assignment of Interest ...........................................................................46
    14.4     Abandonment Operations Required by Governmental Authority ........................................46
    14.5     Disposal of Surplus Material .....................................................................47

ARTICLE 15. WITHDRAWAL ........................................................................................47

    15.1     Right to Withdraw ................................................................................47
    15.2     Response to Withdrawal Notice ....................................................................47
       15.2.1   Unanimous Withdrawal ..........................................................................48
       15.2.2   No Additional Withdrawing Parties .............................................................48
       15.2.3   Acceptance of the Withdrawing Parties' Interests ..............................................48
       15.2.4   Effects of Withdrawal .........................................................................48
    15.3     Limitation Upon and Conditions of Withdrawal .....................................................49
       15.3.1   Prior Expenses ................................................................................49
       15.3.2   Confidentiality ...............................................................................50
       15.3.3   Emergencies and Force Majeure .................................................................50

 ARTICLE 16. RENTALS, ROYALTIES AND OTHER PAYMENTS ............................................................50

    16.1     Overriding Royalty and Other Burdens .............................................................50
    16.2     Subsequently Created Interest ....................................................................51
    16.3     Payment of Rentals and Minimum Royalties .........................................................51
    16.4     Non-participation in Payments ....................................................................51
    16.5     Royalty Payments .................................................................................52
</TABLE>

                                       iv


<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                                                                   <C>
ARTICLE 17. TAXES .............................................................................................52

    17.1     Property Taxes ...................................................................................52
    17.2     Contest of Property Tax Valuation ................................................................52
    17.3     Production and Severance Taxes ...................................................................52
    17.4     Other Taxes and Assessments ......................................................................52

ARTICLE 18. INSURANCE .........................................................................................53

    18.1     Insurance ........................................................................................53
    18.2     Bonds ............................................................................................53

ARTICLE 19. LIABILITY, CLAIMS AND LAWSUITS ....................................................................53

    19.1     Individual Obligations ...........................................................................53
    19.2     Notice of Claim or Lawsuit .......................................................................53
    19.3     Settlements ......................................................................................54
    19.4     Defense of Claims and Lawsuits ...................................................................54
    19.5     Liability for Damages ............................................................................54
    19.6     Indemnification for Non-Consent Operations .......................................................55
    19.7     Damage to Reservoir, Loss of Reserves and Profit .................................................55
    19.8     Non-Essential Personnel ..........................................................................55
    19.9     Dispute Resolution Procedure .....................................................................56

ARTICLE 20. INTERNAL REVENUE PROVISION ........................................................................56

    20.1     Internal Revenue Provision .......................................................................56

ARTICLE 21  CONTRIBUTIONS .....................................................................................56

    21.1     Notice of Contributions Other Than Advances for Sale of Production ...............................56
    21.2     Cash Contributions ...............................................................................56
    21.3     Acreage Contributions ............................................................................57

ARTICLE 22. DISPOSITION OF PRODUCTION .........................................................................57

    22.1     Take-in-Kind Facilities ..........................................................................57
    22.2     Duty to Take-in-Kind .............................................................................57
    22.3     Failure to Take Oil and Condensate in-Kind .......................................................58
    22.4     Failure to Take Gas in-Kind ......................................................................58
    22.5     Expenses of Delivery in-Kind .....................................................................58

ARTICLE 23. APPLICABLE LAW ....................................................................................58

    23.1     Applicable Law ...................................................................................58

ARTICLE 24. LAWS, REGULATIONS AND NON-DISCRIMINATION ..........................................................59

    24.1     Laws and Regulations .............................................................................59
    24.2     Non-discrimination ...............................................................................59

ARTICLE 25. FORCE MAJEURE .....................................................................................59

    25.1     Force Majeure ....................................................................................59

ARTICLE 26. SUCCESSORS, ASSIGNS AND PREFERENTIAL RIGHTS .......................................................60

    26.1     Successors and Assigns ...........................................................................60
    26.2     Transfer of Interest .............................................................................60
    26.3     Consent to Assign ................................................................................60
    26.4     Transfers Between Parties ........................................................................61
    26.5     Division of Interest .............................................................................61
    26.6     Preferential Rights ..............................................................................61
</TABLE>

                                        V


<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                                                                   <C>
ARTICLE 27. ADMINISTRATIVE PROVISIONS .........................................................................62

    27.1     Term .............................................................................................62
    27.2     Waiver ...........................................................................................63
    27.3     Waiver of Right to Partition .....................................................................63
    27.4     Compliance With Laws and Regulations .............................................................63
       27.4.1   Severance of Invalid Provisions ...............................................................63
       27.4.2   Fair and Equal Employment .....................................................................63
    27.5     Construction and Interpretation of this Agreement ................................................64
       27.5.1   Headings for Convenience ......................................................................64
       27.5.2   Article References ............................................................................64
       27.5.3   Gender and Number .............................................................................64
       27.5.4   Future References .............................................................................64
       27.5.5   Currency ......................................................................................64
       27.5.6   Optional Provisions ...........................................................................64
       27.5.7   Joint Preparation .............................................................................64
       27.5.8   Integrated Agreement ..........................................................................65
       27.5.9   Binding Effect ................................................................................65
       27.5.10  Further Assurances ............................................................................65
       27.5.11  Counterpart Execution .........................................................................65
    27.6     Restricted Bidding ...............................................................................65
    27.7     Conflict of Terms ................................................................................65
</TABLE>

                                       vi


<PAGE>

                          OFFSHORE OPERATING AGREEMENT


THIS OFFSHORE OPERATING AGREEMENT ("Agreement"), made effective the _______ day
of ______________ 2006, by and between Chevron U.S.A. Inc. ("Chevron"), Dominion
Exploration & Production, Inc. ("Dominion") and Ridgewood Energy Corporation
("Ridgewood"), their respective heirs, successors, legal representatives, and
assigns, herein referred to collectively as the "Parties" and individually as a
 "Party."


                                   WITNESSETH:

WHEREAS, the Parties will, with an earning of interests by Dominion and
Ridgewood, co-own operating rights interests in one or more oil and gas
Lease(s), as to one or more Contract Areas, as identified in Exhibit "A" and
desire to explore an area governed by the "Dominion EPA" and the "Ridgewood
EPA", as defined hereafter, and under limited application this Agreement, but to
develop, produce, and operate those Contract Areas pursuant to this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants in
this Agreement, the Parties agree as follows:


                                    ARTICLE 1

                                   APPLICATION


1.1     Application to Contract Area

        This Agreement applies independently to the entirety of each Contract
        Area. For purposes of this Agreement, activities or operations affecting
        one Contract Area are considered activities or operations affecting only
        that Contract Area. Unless otherwise provided in this Agreement, the
        Parties, according to their respective Working Interests, own and hold
        all rights and obligations in and under each of the listed Contract
        Area(s) and, all property acquired with funds from the Joint Account,
        and all Hydrocarbons from or attributed to that Contract Area. Until an
        earning by Dominion in and to each of the Contract Area(s) cited on
        Exhibit "A" attached hereto, in accordance with the terms of that
        certain Exploration Participation Agreement ("Dominion EPA") dated
        September 1, 2006 between Chevron U.S.A. Inc. and Dominion Exploration &
        Production, Inc., and/or an earning by Ridgewood in and to each of the
        listed Contract Area(s) under that certain Exploration Participation
        Agreement ("Ridgewood EPA") dated September 1, 2006 between Chevron
        U.S.A. Inc. and Ridgewood Energy Corporation, the application of the
        terms and provisions of this Agreement shall be limited to and shall
        govern and bear solely upon the operations of and conducted for the well
        or wells drilled under that EPA. The parties agree that the execution of


ST/WD EPA JOA
                                        1


<PAGE>

        this Agreement effective as of _________, 2006 is not intended to grant
        or recognize any right to interest in ownership in the Contract Area by
        Dominion or Ridgewood and that full application of this Agreement become
        effective only with an earning under the EPA.


                                    ARTICLE 2

                                   DEFINITIONS


2.1     Additional Testing

        An operation not previously approved in the AFE and proposed for the
        specific purpose of obtaining additional subsurface data.

2.2     Affiliate

        For a person, another person that controls, is controlled by, or is
        under common control with that person. In this definition, (a) "control"
        means the ownership by one person, directly or indirectly, of more than
        fifty percent (50%) of the voting securities of a corporation or, for
        other persons, the equivalent ownership interest (such as partnership
        interests), and (b) "person" means an individual, corporation,
        partnership, trust, estate, unincorporated organization, association, or
        other legal entity.

2.3     Authorization For Expenditure (AFE)

        An authority to expend funds prepared by a Party to estimate the costs
        to be incurred in conducting an operation under this Agreement.

2.4     Complete, Completing, Completion

        An operation to complete a well for initial Hydrocarbon production in
        one or more Producible Reservoirs, including, but not limited to,
        setting production casing, perforating the casing, stimulating the well,
        installing Completion Equipment, and/or conducting production tests.

2.5     Completion Equipment

        That certain equipment on an Exploratory Well or a Development Well
        required to be installedprior to the movement of a well-completion rig
        of that well

        (a)     under 30 CFR 250.502, or any succeeding order or regulation
                issued by the MMS, up to and including the tree, and
        (b)     by any other regulatory agency having jurisdiction, including,
                but not limited to, a caisson and navigational aids.

2.6     Confidential Data

        The information and data obtained under this Agreement, including, but
        not limited to, geological, geophysical, and reservoir information;
        originals and copies of logs; core and core analysis; and other well
        information including, but not limited to, the progress, tests, or
        results of a well drilled or an operation conducted under this
        Agreement, except data or information that becomes public other than by
        breach of this Agreement or as agreed to in writing by the Participating
        Parties.


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<PAGE>

2.7     Contract Area

        The portions, area and depths of the Lease(s) but solely within the
        Contract Area, listed on Exhibit "A" to this Agreement.

2.8     Deepen, Deepening

        A drilling operation conducted in an existing wellbore below the
        Objective Depth to which the well was previously drilled.

2.9     Development Facilities

        Production equipment, other than Completion Equipment, that is acquired
        under this Agreement under an approved AFE and installed on or outside
        the Contract Area. Development Facilities include, but are not limited
        to,

        (a)     proposed to Complete an Exploratory Well;
        (b)     the flowlines, gathering lines or lateral lines that deliver
                Hydrocarbons and water

                1       from the Completion Equipment to the Platform or to
                        offsite host facilities, or
                2       from the Platform to Export Pipelines; and

        (c)     injection and disposal wells.
                Development Facilities include Export Pipelines.

2.10    Development Operation
        An operation on the Contract Area other than an Exploratory Operation.

2.11    Development Well

        A well or portion of a well proposed as a Development Operation.

2.12    Exploratory Operation

        An operation that is conducted on the Contract Area and that is any of
        the following:

        (a)     proposed for an Objective Horizon that is not a Producible
                Reservoir; or
        (b)     proposed for an Objective Horizon that has a Producible Well,
                but that will be penetrated at a location where the distance
                between the midpoint of the Objective Horizon to be penetrated
                by the proposed operation and the midpoint of the same Objective
                Horizon where it is actually penetrated by a Producible Well
                will be at least three thousand five hundred (3,500) feet from a
                Gas Completion or one thousand seven hundred fifty (1,750) feet
                from an Oil Completion.

2.13    Exploratory Well

        A well or portion of a well proposed as an Exploratory Operation.

2.14    Export Pipelines

        Pipelines installed after the effective date hereof for the benefit of a
        Contract Area and to which a gathering line or lateral line downstream
        of the Platform and/or Development Facilities or, if there is no
        Platform, the Completion Equipment, is connected and which are used to
        transport Hydrocarbons or produced water to shore.


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                                        3


<PAGE>

2.15    Force Majeure

        An event or cause that is reasonably beyond the control of the Party
        claiming the existence of such event or cause, which includes, but is
        not limited to, a flood, storm, hurricane, loop current/eddy, or other
        act of God, a fire, loss of well control, oil spill, or other
        environmental catastrophe, a war, terrorist act, a civil disturbance, a
        labor dispute, a strike, a lockout, compliance with a law, order, rule,
        or regulation, governmental action or delay in granting necessary
        permits or permit approvals, and the inability to secure materials or a
        rig.

2.16    Hydrocarbons

        Oil and/or gas and associated liquid and gaseous by-products (except
        helium) which may be produced from a wellbore located on and in the
        Contract Area.

2.17    Joint Account

        This term has the same definition as the defined term "Joint Account" in
        Exhibit "C" (Accounting Procedure).

2.18    Lease(s)

        That portion of the oil and gas Lease(s) identified in Exhibit "A" and
        the lands covered by that Contract Area.

2.19    MMS

        The Minerals Management Service, United States Department of Interior,
        or its successor agency. Where appropriate, the reference to MMS shall
        include the appropriate state agency.

2.20    Non-consent Operation

        An operation conducted on the Contract Area by fewer than all Parties,
        which subjects the Nonparticipating Party to Article 13 (Non-Consent
        Operations).

2.21    Non-consent Platform

        A Platform installed after the effective date hereof for the benefit of
        a Contract Area and owned by fewer than all Parties.

2.22    Non-consent Well

        An Exploratory Well or a Development Well owned by fewer than all
        Parties.

2.23    Non-operator

        A Party other than the Operator.

2.24    Non-participating Party

        A Party other than a Participating Party.

2.25    Non-participating Party's Share

        The Participating Interest that a Non-participating Party would have had
        if all Parties had participated in the operation.

2.26    Objective Depth

        A depth sufficient to test the lesser of the Objective Horizon or the
        specific footage depth stated in the AFE and approved by the
        Participating Parties.


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                                        4


<PAGE>

2.27    Objective Horizon

        The interval consisting of the deepest zone, formation, or horizon to be
        tested in an Exploratory Well, Development Well, Deepening operation, or
        Sidetracking operation, as stated in the AFE and approved by the
        Participating Parties.

2.28    Operator

        The Party designated in Article 4.1 (Designation of the Operator), a
        successor Operator selected under Article 4.5 (Selection of Successor
        Operator), and, if applicable, a substitute Operator selected under
        Article 4.2 (Substitute Operator).

2.29    Participating Interest

        The percentage of the costs and risks of conducting an operation under
        this Agreement that a Participating Party agrees, or is otherwise
        obligated, to pay and bear.

2.30    Participating Party

        A Party that executes an AFE for a proposed operation or otherwise
        agrees, or becomes liable, to pay and bear a share of the costs and
        risks of conducting an operation under this Agreement.

2.31    Platform

        An offshore structure installed after the effective date hereof and for
        the benefit of a Contract Area that supports Wells, Completion
        Equipment, or Development Facilities, whether fixed, compliant, or
        floating, and the components of that structure, including, but not
        limited to, caissons or well protectors to the extent same are not
        Completion Equipment, rising above the water line and used for the
        exploration, development, or production of Hydrocarbons. The term
        "Platform" shall also mean any offshore equipment or template (excluding
        templates used for drilling operations) and any component thereof, other
        than Completion Equipment (including, but not limited to, flow lines and
        control systems), that is resting on or attached to the sea floor and
        used to obtain production of Hydrocarbons.

2.32    Producible Reservoir

        An underground accumulation of Hydrocarbons (a) in a single and separate
        natural pool characterized by a distinct pressure system, (b) not in
        Hydrocarbon communication with another accumulation of Hydrocarbons, and
        (c) into which a Producible Well has been drilled.

2.33    Producible Well

        A well that is drilled under this Agreement and that (a) is producing
        Hydrocarbons; (b) is determined to be, or meets the criteria for being
        determined to be, capable of producing Hydrocarbons in paying quantities
        under an applicable order or regulation issued by the governmental
        authority having jurisdiction; or (c) is determined to be a Producible
        Well by two (2) or more Participating Parties having a combined Working
        Interest of fifty percent (50%) or more, even if the well has been
        plugged and permanently or temporarily abandoned.


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2.34    Production Interval

        A zone or interval producing or capable of producing Hydrocarbons from a
        well without Reworking operations.

2.35    Recomplete, Recompleting, Recompletion

        An operation whereby a Completion in one Producible Reservoir is
        abandoned in order to attempt a Completion in a different Producible
        Reservoir within the existing wellbore.

2.36    Rework, Reworking

        An operation conducted in a well, after it has been Completed in one or
        more Producible Reservoirs, to restore, maintain, or improve Hydrocarbon
        production from one or more of those Producible Reservoirs, but
        specifically excluding drilling, Sidetracking, Deepening, Completing, or
        Recompleting the well.

2.37    Sidetrack, Sidetracking

        The directional control and intentional deviation of a well to change
        the bottom-hole location, whether it be to the original Objective Depth
        or formation or another bottom-hole location not deeper than the
        stratigraphic equivalent of the initial Objective Depth, unless the
        intentional deviation is done to straighten the hole or to drill around
        junk in the hole or to overcome other mechanical difficulties.

2.38    Take-in-Kind Facilities

        Facilities which (i) are not paid for by the Joint Account and (ii) are
        installed and intended to be used for the benefit of a Contract Area on
        a Platform but for the benefit and use of a particular Party or Parties
        to take its or their share of Hydrocarbon production in kind.

2.39    Transfer of Interest

        A conveyance, assignment, transfer, farm out, exchange, or other
        disposition of all or part of a Party's Working Interest.

2.40    Working Interest

        The record title interest, or where applicable, the leasehold interest
        or the operating rights of each Party in and to each Contract Area
        (expressed as the percentage provided in Exhibit "A"). If a Party's
        record title interest is different from its operating rights, the
        Working Interest of each Party is the interest provided in Exhibit "A".


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                                    ARTICLE 3

                                    EXHIBITS


        3.1     Exhibits

                        The following exhibits are attached to this Agreement
                        and incorporated into this Agreement by reference:


        3.1.1   Exhibit "A"

                        Operator, Description of the Lease and Contract Area(s),
                        Division of After Casing Point Interests, and
                        Notification Addresses

        3.1.2   Exhibit "B "

                        Insurance Provisions.

        3.1.3   Exhibit "C"

                        Accounting Procedure.

        3.1.4   Exhibit "D"

                        Non-discrimination Provisions.

        3.1.5   Exhibit "E"

                        Gas Balancing Agreement.

        3.1.6   Exhibit "F"

                        Tax Partnership Provision.

        3.1.7   Exhibit "G"

                        Memorandum of Operating Agreement and Financing
                        Statement.

        3.1.8   Exhibit "H"

                        Dispute Resolution Procedure.

        3.1.9   Exhibit "I"

                        Security Rights; Default' Unpaid Charges' Carved-out
                        Interests


3.2     Conflicts.

        If a provision of this Agreement is inconsistent with a provision of the
        Dominion EPA or the Ridgewood EPA, the provision in the EPA shall
        prevail If a provision of an exhibit, except Exhibits "D", "E", or "F",
        is inconsistent with a provision in the body of this Agreement, the
        provision in the body of this Agreement shall prevail. If a provision of
        Exhibit "D", "E", or "F", is inconsistent with a provision in the body
        of this Agreement, however, the provision of the exhibit shall prevail.


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                                    ARTICLE 4

                                    OPERATOR


4.1     Operator

        Chevron U.S.A. Inc. is designated as the Operator of the Contract Area
        covered by this Offshore Operating Agreement. The Parties shall promptly
        execute and provide Operator with all documents required by the MMS in
        connection with the designation of Chevron as Operator or with the
        designation of any other Party as a substitute or successor Operator.
        Unless agreed to the contrary by all Parties hereto, Operator shall also
        be classified as the designated applicant for oil spill financial
        responsibility purposes and each Non-operating Party shall promptly
        execute the appropriate documentation reflecting this designation and
        promptly provide same to Operator for filing with MMS.

4.2     Substitute Operator

        Except as otherwise provided in Article 4.2.1 (Circumstances Under Which
        the Operator Must Conduct a Non-Consent Operation), if the Operator
        becomes a Non-participating Party in a Non-consent Operation, the
        Participating Parties may approve the designation of any Participating
        Party as the substitute Operator by the vote of one (1) or more of the
        Participating Parties having a combined fifty percent (50%) or more of
        the Participating Interests. The substitute Operator shall serve only
        (a) for the Non-consent Operation, (b) on the Contract Area, or that
        portion of the Contract Area governed hereby, affected by the
        Non-consent Operation, and (c) with the same authority, rights,
        obligations, and duties as the Operator. If a Non-operator is the only
        Participating Party in a Non-consent Operation, then the Non-operator
        shall be designated as the substitute Operator for that Non-consent
        Operation, with no vote required, unless the Non-operator elects not to
        accept the designation. No Non-operator shall ever be designated as a
        substitute Operator against its will. If a substitute Operator is not
        designated under the foregoing procedures, the Operator shall, upon the
        unanimous agreement of the Participating Parties and the Operator,
        conduct the Non-consent Operation on behalf of the Participating Parties
        and at the Participating Parties' sole cost and risk under Article 13
        (Non Consent Operations).

        4.2.1   Circumstances Under Which the Operator Must Conduct a
                Non-Consent Operation

                If:

                (a)     a drilling rig is on location and the Operator becomes a
                        Non-participating Party in a supplemental AFE for an
                        Exploratory Operation, or Development Operation, or

                (b)     the Operator becomes a Non-participating Party in an
                        operation to be conducted from a Platform operated by
                        the Operator,


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                the Operator, as a Non-participating Party, shall conduct the
                Non-consent Operation on behalf of the Participating Parties and
                at the Participating Parties' sole cost and risk under Article
                13 (Non-Consent Operations).

        4.2.2   Operator's Conduct of a Non-Consent Operation in Which it is a
                Non-participating Party

                When, under Article 4.2 (Substitute operator) or Article 4.2.1
                (Circumstances Under Which the Operator Must Conduct a
                Non-Consent Operation), the Operator conducts a Non-consent
                Operation in which it is a Non-participating Party, it shall
                follow the practices and standards in Article 5 (Authorities and
                Duties of Operator). Notwithstanding anything to the contrary in
                Exhibit "C", the Operator shall not be required to proceed with
                the Non consent Operation until the Participating Parties have
                advanced the total estimated costs of the Non-consent Operation
                to the Operator. The Operator shall never be obligated to expend
                any of its own funds for the Non-consent Operation in which it
                is a Non participating Party.

        4.2.3   Appointment of a Substitute Operator

                After expiration of all applicable response periods for the
                Non-consent Operation and selection of a substitute Operator,
                each Party shall promptly provide the substitute Operator with
                the appropriate MMS designation of operator forms and
                designation of oil spill responsibility forms. The Operator and
                the substitute Operator shall coordinate the change of
                operatorship to avoid interfering with ongoing activities and
                operations, if any, including but not limited to, Contract Area
                maintenance activities and operations.

        4.2.4   Redesignation of Operator Within five (5) days after conclusion
                of the Non-consent Operation, all Parties shall execute and
                provide the Operator with the appropriate MMS designation of
                operator forms and designation of oil spill responsibility forms
                to return operatorship to the Operator, thereby superseding the
                Parties' designation of the substitute Operator under Article
                4.2.3 (Appointment of a Substitute Operator).

        4.3     Resignation of Operator

                Subject to Article 4.5 (Selection of Successor), the Operator
                may resign at any time by giving written notice to the Parties,
                except that the Operator may not resign during a Force Majeure
                or an emergency that poses a threat to life, safety, property,
                or the environment. If the Operator ceases to own a Working
                Interest, the Operator automatically shall be deemed to have
                resigned as the Operator without any action by the
                Non-operators.

        4.4     Removal of Operator

                Operator may be removed by an affirmative vote of the Parties
                owning a combined Working Interest of fifty percent (50%) or
                more of the remaining Working Interest after excluding the
                Operator's Working Interest if:


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<PAGE>

          (a)  Operator becomes insolvent or unable to pay its debts as they
               mature, makes an assignment for the benefit of creditors, commits
               an act of bankruptcy, or seeks relief under laws providing for
               the relief of debtors;

          (b)  a receiver is appointed for Operator or for substantially all of
               its property or affairs;

          (c)  a Transfer of Interest by the Operator which reduces the
               Operator's Working Interest to less than twenty five percent
               (25%), whether accomplished by one or more Transfer of Interest;
               or

          (d)  Operator commits a substantial breach of a material provision of
               this Agreement and fails to cure the breach within sixty (60)
               days after notice of the breach. If a petition for relief under
               the federal bankruptcy laws is filed by or against Operator, and
               if a federal bankruptcy court prevents the removal of Operator,
               all Non-operators and Operator shall comprise an interim
               operating committee to operate until Operator has elected to
               reject or assume this Agreement under the Bankruptcy Code. An
               election by Operator as a debtor-in-possession or by a trustee in
               bankruptcy to reject this Agreement shall be deemed to be a
               resignation by Operator without any action by the Non-operators,
               except the selection of a successor. To be effective, a vote to
               remove Operator for any cause described above must be taken
               within sixty (60) days after a Non-operator receives actual
               knowledge of the cause. A change of corporate name or structure
               of Operator shall not be deemed to be a resignation or basis for
               removing Operator.

4.5  Selection of Successor

     Upon resignation or removal of Operator, a successor Operator shall be
     selected from among the Parties by an affirmative vote of one (1) or more
     Parties having a combined Working Interest of fifty percent (50%) or more.
     If the resigned or removed Operator is not entitled to vote, fails to vote,
     or votes only to succeed itself, then the successor Operator shall be
     selected by the affirmative vote of the Parties owning a combined Working
     Interest of fifty percent (50%) or more of the remaining Working Interest
     after excluding the Working Interest of the resigned or removed Operator.
     If the Operator assigns all or a part of its Working Interest, then under
     Article 4.3 (Resignation of Operator) or Article 4.4. (c), the Party who
     acquired all or a part of the former Operator's Working Interest shall not
     be excluded from voting for a successor Operator. If there are only two
     Parties to this Agreement when the Operator resigns or is removed, then the
     Nonoperator automatically has the right, but not the obligation, to become
     the Operator. If no Party is willing to become the Operator, this Agreement
     shall terminate under Article 27.1 (Term).

4.6  Effective Date of Resignation or Removal

     The resignation or removal of the Operator shall become effective as soon
     as practical but no later than 7:00 a.m. on the first day of the month
     following a period of ninety (90) days after the date of resignation or
     removal, unless a longer period is required for the Parties to obtain
     approval of the designation of the successor Operator, and designated
     applicant for oil spill financial responsibility purposes, by the MMS;


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<PAGE>

     however, in no event shall the resignation or removal of Operator become
     effective until a successor Operator has assumed the duties of Operator.
     The resignation or removal of the outgoing Operator shall not prejudice any
     rights, obligations, or liabilities resulting from its operatorship. The
     successor Operator may charge the Joint Account for reasonable costs
     incurred in connection with copying or obtaining the former Operator's
     records, information or data except when the change of Operator results
     from a merger, consolidation, reorganization or sale or transfer to an
     Affiliate of the Operator.

4.7  Delivery of Property

     On the effective date of resignation or removal of the Operator, the
     outgoing Operator shall deliver or transfer to the successor Operator
     custodianship of the Joint Account and possession of all items purchased
     for the Joint Account under this Agreement, all Hydrocarbons that are not
     the separate property of a Party, all equipment, materials, and
     appurtenances purchased for the Joint Account under this Agreement, which
     are not already in the possession of the successor Operator, and all books,
     records, and inventories relating to the Joint Account (other than those
     books, records, and inventories maintained by the outgoing Operator as the
     owner of a Working Interest). The outgoing Operator shall distribute or
     return all funds related to the Joint Account to the Parties who
     contributed the funds or are otherwise entitled to receive the funds under
     this Agreement. The outgoing Operator shall further use its reasonable
     efforts to transfer to the successor Operator, as of the effective date of
     the resignation or removal, its rights as Operator under all contracts
     exclusively relating to the activities or operations conducted under this
     Agreement, and the successor Operator shall assume all obligations of the
     Operator that are assignable under the contracts. The Parties may audit the
     Joint Account and conduct an inventory of all property and all Hydrocarbons
     that are not the separate property of a Party, and the inventory shall be
     used in the accounting to all Parties by the outgoing Operator of the
     property and the Hydrocarbons that are not the separate property of a
     Party. The inventory and audit shall be conducted under Exhibit "C".



                                    ARTICLE 5

                        AUTHORITY AND DUTIES OF OPERATOR

5.1  Exclusive Right to Operate

     Unless otherwise provided in this Agreement, Operator shall have the
     exclusive right and duty to conduct operations (or cause them to be
     conducted) under this Agreement. In performing services under this
     Agreement for the Non-operators, Operator shall be an independent
     contractor, not subject to the control or direction of Non-operators,
     except for the type of operation to be undertaken in accordance with the
     voting and election procedures in this Agreement. No Party shall be


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       deemed to be, or hold itself out as, the agent or fiduciary of another
       Party.

5.2    Workmanlike Conduct

       Operator shall timely commence and conduct all operations in a good and
       workmanlike manner, as would a prudent operator under the same or similar
       circumstances. OPERATOR SHALL NOT BE LIABLE TO NON-OPERATORS FOR LOSSES
       SUSTAINED OR LIABILITIES INCURRED, EXCEPT AS MAY RESULT FROM OPERATOR'S
       GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Operator shall never be required
       under this Agreement to conduct an operation that it believes would be
       unsafe or would endanger persons, property or the environment. Unless
       otherwise provided in this Agreement, Operator shall consult with
       Non-operators and keep them informed of all important matters.

5.3    Liens and Encumbrances

       Operator shall endeavor to keep the Contract Area, wells, Platforms,
       Development Facilities, and other equipment free from all liens and other
       encumbrances occasioned by operations hereunder, except those provided in
       Article 8.6 (Security Rights).

5.4    Employees and Contractors

       Operator shall select employees and contractors and determine their
       number, hours of labor, and compensation. The employees shall be
       employees of Operator.

5.5    Records

       The Operator shall keep or cause to be kept accurate books, accounts, and
       records of activities or operations under this Agreement in compliance
       with the Accounting Procedure in Exhibit "C". Unless otherwise provided
       in this Agreement, all records of the Joint Account shall be available to
       a Non-operator as provided in Exhibit "C". The Operator shall use
       good-faith efforts to ensure the settlements, billings, and reports
       rendered to each Party under this Agreement are complete and accurate.
       The Operator shall notify the other Parties promptly upon the discovery
       of any error or omission pertaining to the settlements, billings, and
       reports rendered to each Party.

5.6    Compliance

       Operator shall comply, and shall require all agents and contractors to
       comply, with all applicable laws, rules, regulations, and orders of
       governmental authorities having jurisdiction.

5.7    Contractors

       Operator may enter into contracts with qualified and responsible
       independent contractors for the design, construction, installation,
       drilling, production or operation of wells, Platforms and Development
       Facilities. Insofar as possible, Operator shall use competitive bidding
       to procure goods and services for the benefit of the Parties. All
       drilling operations conducted under this Agreement shall be conducted by
       properly qualified and responsible drilling contractors under current
       competitive contracts. A drilling contract will be deemed to be a
       current competitive contract if it (a) was made within twelve (12)
       months before the commencement of the well and (b) contains terms,


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<PAGE>

       rates, and provisions that, when the contract was made, did not exceed
       those generally prevailing in the area for operations involving
       substantially equivalent rigs that are capable of conducting the
       drilling operation. At its election, Operator may use its own or an
       Affiliate's drilling equipment, derrick barge, tools, or machinery to
       conduct drilling operations, but the work shall be (i) performed by
       Operator or its Affiliate acting as an independent contractor, (ii)
       approved by written agreement with the Participating Parties before
       commencement of operations, and (iii) conducted under the same terms and
       conditions and at the same rates as are customary and prevailing in
       competitive contracts of third parties doing work of similar nature.

5.8    Governmental Reports

       Operator shall make reports to governmental authorities it has a duty to
       make as Operator and shall furnish copies of the reports to the
       Participating Parties. The Operator shall provide each Non-operating
       Party with a copy of each notice, order, and directive received from the
       MMS. As soon as reasonably practicable, each Party shall give written
       notice to the other Parties before each meeting with government
       authorities of which it has notice and that affects the Contract Area.

5.9    Information to Participating Parties

       Except as provided in Article 8.6, Operator shall furnish each
       Participating Party the following information, if applicable, for each
       activity or operation conducted by Operator:

       5.9.1  A copy of the application for permit to drill and all amendments
              thereto.

       5.9.2  A daily drilling report (or Reworking report or Recompletion
              report, if applicable), giving the depth, corresponding
              lithological information, data on drilling fluid characteristics,
              information about drilling or operational difficulties or delays,
              if any, and other pertinent information, by facsimile transmission
              or electronic mail within twenty-four (24) hours (inclusive of
              Saturdays, Sundays, and federal holidays) for well operations
              conducted in the preceding twenty-four (24) hour period.

       5.9.3  A complete report of each core analysis.

       5.9.4  A copy of each electrical survey, currently as it is run; all data
              for each radioactivity log, temperature survey, deviation or
              directional survey, caliper log, and other log or survey obtained
              during the drilling of the well; and, upon completion of the well,
              a composite of all electrical-type logs, insofar as is reasonable
              and customary.

       5.9.5  A copy of all well test results, bottom-hole pressure surveys, and
              fluid analyses.

       5.9.6  Upon written request received by Operator before commencement of
              drilling, samples of cuttings and cores taken from the well (if
              sufficient cores are retrieved), packaged in containers furnished
              by Operator at the expense of the requesting Party, marked as to
              the depths from which they were taken, and shipped at the expense
              of the requesting Party by express courier to the address
              designated by the requesting Party.


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       5.9.7  To the extent possible, twenty-four (24) hours' advance notice of,
              and access to, logging, coring, and testing operations.

       5.9.8  A monthly report on the volume of Hydrocarbons and water produced
              from each well; however, Operator shall provide reports more often
              if feasible.

       5.9.9  A copy of each report made to a governmental authority having
              jurisdiction.

       5.9.10 Upon written request, other pertinent information available to
              Operator, including, but not limited to, those portions of the
              contracts to be used for the benefit of the Joint Account and
              which pertain to the Contract Area, but excluding the Operator's
              proprietary or secret information and its subsurface
              interpretations that have been independently developed at
              Operator's sole cost and expense.

5.10   Information to Non-participating Parties

       Operator shall furnish each Non-participating Party a copy of each
       Operator's governmental report that is available to the public and
       associated with the applicable Non-consent Operation. Until the
       applicable recoupment under Article 13 (Non-consent Operations) is
       complete, a Nonparticipating Party shall not receive or review any other
       information specified by Article 5.9 (Information to Participating
       Parties), except as may be necessary for a payout audit of the
       Non-consent Operation.



                                    ARTICLE 6

                          VOTING AND VOTING PROCEDURES

6.1    Voting Procedures

       Unless otherwise provided in this Agreement, each matter requiring
       approval of the Parties shall be determined as follows:

       6.1.1  Voting Interest

              Subject to Article 8.6 (Security Rights), each Party shall have a
              voting interest equal to its Working Interest or its Participating
              Interest, as applicable.

       6.1.2  Vote Required

              Unless expressly stated to the contrary herein, a matter requiring
              approval of the Parties shall be decided by the affirmative vote
              of two (2) or more Parties having a combined voting interest of
              fifty-one percent (51 %) or more.

       6.1.3  Votes

              The Parties may vote at a meeting; by telephone, promptly
              confirmed in writing to Operator; or by facsimile transmission.
              Operator shall give each Party prompt notice of the results of the
              voting.


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       6.1.4  Meetings

              Meetings of the Parties may be called by Operator upon its own
              motion or at the request of a Party having a voting interest of
              not less than twenty-five percent (25%). Except in an emergency,
              no meeting shall be called on less than ten (10) days' advance
              written notice, and the notice of meeting shall include the
              meeting agenda prepared by the Operator or the requesting Party.
              The representative of Operator shall be chairman of each meeting.
              Only matters included in the agenda may be discussed at a meeting,
              but the agenda and items included in the agenda may be amended
              prior to or during the meeting by unanimous agreement of all
              Parties.



                                    ARTICLE 7

                                     ACCESS

7.1    Access to Contract Area

       Except as provided in Article 8.6, each Party shall have access, at its
       sole risk and expense and at all reasonable times, to the Contract Area,
       Platform, Development Facilities and Joint Account assets to inspect
       activities, operations and wells in which it participates, and to
       pertinent records and data. A Non-operator shall give Operator at least
       twenty-four (24) hours' notice of the Non-operator's intention to visit
       the Contract Area. To protect Operator and the Non-operators from
       unnecessary lawsuits, claims, and legal liability, if it is necessary for
       a person who is not performing services for Operator directly related to
       the joint operations, but is performing services solely for a
       Non-operator or pertaining to the business or operations of a
       Non-operator, to visit, use, or board a rig, well, Platform, or
       Development Facilities subject to this Agreement, the Non-operator shall
       give Operator advance notice of the visit, use, or boarding, and shall
       secure from that person an agreement, in a form satisfactory to Operator,
       indemnifying and holding Operator and Non-operators harmless, or shall
       itself provide the same hold harmless and indemnification in favor of
       Operator and other Non-operators before the visit, use, or boarding.

7.2    Reports

       On written request, Operator shall furnish a requesting Party any
       information not otherwise furnished under Article 5 (Authority and Duties
       of Operator) to which that Party is entitled under this Agreement. The
       costs of gathering and furnishing information not furnished under Article
       5 shall be charged to the requesting Party. Operator is not obligated to
       furnish interpretative data that was generated by Operator at its sole
       cost.

7.3    Confidentiality

       Except as otherwise provided in Article 7.4 (Limited Disclosure), Article
       7.5 (Limited Releases to Offshore Scout Association), Article 7.6 (Media
       Releases), and Article 21.1 (Notice of Contributions Other Than Advances


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<PAGE>

       for Sale of Production), and except for necessary disclosures to
       governmental authorities having jurisdiction, or except as agreed in
       writing by all Participating Parties, no Party or Affiliate shall
       disclose Confidential Data to a third party. This Article 7.3 shall be in
       force and effect for a term of two (2) years after termination of this
       Agreement.

7.4    Limited Disclosure

       A Party may make Confidential Data to which it is entitled under this
       Agreement available to:

       (a)    outside professional consultants and reputable engineering firms
              for the purpose of evaluations and/or submitting bids;

       (b)    gas transmission companies for Hydrocarbon reserve or other
              technical evaluations;

       (c)    reputable financial institutions for study before commitment of
              funds;

       (d)    governmental authorities having jurisdiction or the public, to the
              extent required by applicable laws or by those governmental
              authorities;

       (e)    the public, to the extent required by the regulations of a
              recognized stock exchange;

       (f)    third parties with whom a Party is engaged in a bona fide effort
              to effect a merger or consolidation, sell all or a controlling
              part of that Party's stock, or sell all or substantially all
              assets of that Party or an Affiliate of that Party; and

       (g)    an Affiliate of a Party.

       (h)    such limited well information that is typically disclosed by
              Operator's representative during meetings of the Offshore Oil
              Scouts Association.

       (i)    third parties with whom a Party is engaged in a bona fide effort
              to sell, farm out, or trade all or a portion of its interest in
              the Contract Area;

       Confidential Data made available under Articles 7.4(f) and 7.4(i) shall
       not be removed from the custody or premises of the Party making the
       Confidential Data available to third parties described in those Articles.
       A third party permitted access under Articles 7.4, (a), (b), (c), (f),
       and (i) shall first agree in writing neither to disclose the Confidential
       Data to others nor to use the Confidential Data, except for the purpose
       for which it was disclosed. The disclosing Party shall give prior notice
       to the other Parties that it intends to make the Confidential Data
       available.

7.5    Limited Releases to Offshore Scout Association

       The Operator may disclose Confidential Data to the Offshore Oil Scouts
       Association at their regularly scheduled meetings. The Confidential Data
       that may be disclosed is limited to information concerning well
       locations, well operations, and well completions to the extent reasonable
       and customary in industry practice or required under the by-laws of the
       Offshore Oil Scouts Association.

7.6    Media Releases

       Without the prior written consent of the other Participating Parties, no
       Party shall issue a news or media release about operations on the
       Contract Area. In an emergency involving extensive property or
       environmental damage, operations failure, loss of human life, or other
       clear emergency, and for which there is insufficient time to obtain the


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<PAGE>

       prior approval of the Parties, Operator may furnish the minimum, strictly
       factual, information necessary to satisfy the legitimate public interest
       of the media and governmental authorities having jurisdiction. Operator
       shall then promptly advise the other Parties of the information furnished
       in response to the emergency. The foregoing, however, shall not restrict
       disclosures by either Party which are required by applicable securities
       or other laws or regulations or the applicable rules of any stock
       exchange having jurisdiction over the disclosing Party or its Affiliates.



                                    ARTICLE 8

                                  EXPENDITURES

8.1    Basis of Charge to the Parties

       Subject to the other provisions of this Agreement, Operator shall pay all
       costs incurred under this Agreement, and each Party shall reimburse
       Operator in proportion to its Participating Interest. All charges,
       credits, and accounting for expenditures shall be made and done pursuant
       to Exhibit "C".

8.2    AFEs

       Before undertaking an operation or making a single expenditure to be in
       excess of Two Hundred and Fifty Thousand Dollars ($250,000), and before
       conducting an activity or operation to drill, Sidetrack, Deepen,
       Complete, Rework or Recomplete a well (regardless of the estimated cost),
       Operator shall submit an AFE for the operation or expenditure to the
       Parties for approval. Operator shall also furnish an informational AFE to
       all Parties for an operation or single expenditure estimated to cost Two
       Hundred and Fifty Thousand Dollars ($250,000) or less, but in excess of
       One Hundred Thousand Dollars ($100,000), if Operator prepares same for
       its own use.

8.3    Emergency and Required Expenditures

       Notwithstanding anything in this Agreement to the contrary, Operator is
       hereby authorized to conduct operations and incur expenses that in its
       opinion are reasonably necessary to safeguard life, property, and the
       environment in case of an actual or imminently threatened blowout,
       explosion, accident, fire, flood, storm, hurricane, catastrophe, or other
       emergency, and the expenses shall be borne by the Participating Parties
       in the affected operation. Operator shall report to the Participating
       Parties, as promptly as possible, the nature of the emergency and the
       action taken. Operator is also authorized to conduct operations and incur
       expenses reasonably required by statute, regulation, order, or permit
       condition or by a governmental authority having jurisdiction, which
       expenses shall be borne by the Participating Parties in the affected
       operation, subject to Exhibit "C".


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8.4    Advance Billings

       Operator may require each Party to advance its respective share of
       estimated expenditures pursuant to Exhibit "C".

8.5    Commingling of Funds

       Funds received by Operator under this Agreement may be commingled with
       its own funds.

8.6    Security Rights (LA)

       Exhibit "I" (LOUISIANA) if applicable, applies.

8.7    Overexpenditures

       Operator shall notify the Participating Parties when it appears that
       actual expenditures for an approved operation in an Exploratory or
       Development Well or for the design, construction, and installation of a
       Platform or Development Facilities will exceed the AFE estimate (the
       excess being an "Overexpenditure") by more than twenty percent (20%),
       hereinafter referred to as the "Allowable Variance". Except for
       Exploratory Well operations after Casing Point on an Initial Test Well or
       its Substitute Well, as such terms are defined in the Dominion EPA and
       the Ridgewood EPA, Operator's notice shall be forwarded for information
       only.
       For an Exploratory Well operation after Casing Point on an Initial Test
       Well or its Substitute Well, as such terms are defined in the Dominion
       EPA and the Ridgewood EPA, if Operator determines that the
       Overexpenditure will exceed the Allowable Variance, Operator shall submit
       a new AFE for the current operation ("Supplemental AFE") for approval of
       the Participating Parties. The Participating Parties may then elect
       whether to continue to participate within thirty (30) days or forty-eight
       (48) hours if a rig is on location, inclusive of Saturdays, Sundays, and
       federal holidays, after receipt of the Supplemental AFE. If one (1) or
       more Participating Parties elect to continue to participate in the
       current operation and agree to pay and bear one hundred percent (100%) of
       the costs and risks of conducting it, Operator shall continue to conduct
       the current operation. Otherwise, the operation shall cease. A
       Participating Party that elects not to continue to participate in the
       current operation shall become a Non-participating Party in the
       operation, from and after the date when the Overexpenditure exceeds the
       Allowable Variance, not including emergency expenditures, and Article
       13.2 (Relinquishment of Interest) shall apply to the Party only to the
       extent that the costs of the operation exceed the Allowable Variance.
       Unless otherwise agreed by the Participating Parties, each Participating
       Party electing to continue to participate in the current operation may,
       but is not obligated to, pay and bear that portion of the costs and risks
       attributable to the interests of the Non-participating Parties in the
       ratio that the Participating Party's interest bears to the total
       interests of all Participating Parties electing to continue participating
       in the current operation. If it appears to Operator that actual
       expenditures for an approved operation will exceed the Supplemental AFE
       estimate, Operator shall again repeat the procedure of this Article 8.7,
       using the estimate in the most recently approved Supplemental AFE as the
       basis for determining the Overexpenditure and Allowable Variance. An



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       initial Participating Party in an operation shall remain responsible for
       its share of all costs and risks for plugging, replugging, capping,
       burying, disposing, abandoning, removing, and restoring associated with
       the operation, subject to Article 14 (Abandonment, Salvage, and Surplus),
       regardless of its subsequent election on a Supplemental AFE, except to
       the extent such costs were increased by subsequent operations in which it
       elected not to participate. Notwithstanding anything in this Article to
       the contrary, if expenditures exceed the Allowable Variance for an
       emergency, as provided in Article 8.3 (Emergency and Required
       Expenditures), Operator shall not be required to secure the approval of
       the Participating Parties, as the expenditures will be borne by all
       Participating Parties. However, once stabilization takes place and
       emergency expenditures are no longer being incurred, Operator shall
       promptly furnish a Supplemental AFE to the Participating Parties for
       their review and election, as provided above.


                                    ARTICLE 9

                                     NOTICES

9.1    Giving and Receiving Notices

       Except as otherwise provided in this Agreement, all AFEs and notices
       required or permitted by this Agreement shall be in writing and shall be
       delivered in person or by mail, courier service, or facsimile
       transmission, with postage and charges prepaid, addressed to the Parties
       at the addresses in Exhibit "A". When a drilling rig is on location and
       standby charges are accumulating, however, notices pertaining to the rig
       shall be given orally or by telephone. All telephone or oral notices
       permitted by this Agreement shall be confirmed immediately thereafter by
       written notice. A notice shall be deemed to have been delivered only when
       received by the Party to whom it was directed, and the period for a Party
       to deliver a response thereto begins on the date the notice is received.
       "Receipt", for oral or telephone notice, means actual and immediate
       communication to the Party to be notified, and for written notice, means
       actual delivery of the notice to the address of the Party to be notified,
       as specified in this Agreement, or to the facsimile machine of that
       Party. A responsive notice shall be deemed to have been delivered when
       the Party to be notified is in receipt of same. When a response is
       required in forty-eight (48) hours or less, however, the response shall
       be given orally or by telephone or facsimile transmission within that
       period. If a Party is unavailable to accept delivery of a notice required
       to be given orally or by telephone, the notice may be delivered by any
       other method specified in this Article 9.1. A message left on an
       answering machine or with an answering service or other third person
       shall not be deemed to be adequate telephonic or oral notice.

9.2    Content of Notice

       An AFE or notice requiring a response shall indicate the maximum response
       time specified in Article 9.3 (Response to Notices). A proposal for a
       Platform and/or Development Facilities shall include an AFE, containing


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       a description of the Platform and/or Development Facilities, including,
       but not limited to, location, and the estimated costs of design,
       fabrication, transportation, and installation. A proposal for a well
       operation shall include an AFE, describing the estimated commencement
       date, the proposed depth, the objective formation or formations to be
       penetrated or tested, the Objective Horizon, the surface and bottomhole
       locations, proposed directional or horizontal drilling operations, the
       type of equipment to be used, and the estimated costs of the operation,
       including, but not limited to, the estimated costs of drilling, testing,
       and plugging and abandoning the well, if applicable. If a proposed
       operation is subject to Article 13.11 (Contract Area Maintenance
       Operations), the notice shall specify that the proposal is a Contract
       Area Maintenance Operation. A proposal for multiple operations on more
       than one well location by the same rig shall contain separate AFEs or
       notices for each operation and shall specify in writing in what order the
       operations will be conducted. Each Party shall respond to each proposed
       multiple operation in the manner provided in Article 9.3.3 (Proposal for
       Multiple Operations).

9.3    Response to Notices

       Except as provided in Article 9.1, each Party's response to a proposal
       shall be in writing to the proposing Party. Unless otherwise provided in
       this Agreement, the response time shall be as follows:

       9.3.1  Platform and/or Development Facilities Proposals
              Each Party shall respond within ninety (90) days after its receipt
              of the AFE or notice for a Platform and forty-five (45) days for
              Development Facilities.

       9.3.2  Well Proposals
              Except as provided in Article 9.3.3 (Proposal for Multiple
              Operations), each Party shall respond within thirty (30) days
              after receipt of the well, Rework or Recompletion proposal, but if
              (a) a drilling rig is on location, (b) the proposal relates to the
              same well or its substitute, and (c) standby charges are
              accumulating, a response shall be made within forty-eight (48)
              hours after receipt of the proposal, inclusive of Saturdays,
              Sundays, and federal holidays.

       9.3.3  Proposal for Multiple Operations
              When a proposal is made to conduct multiple Development Operations
              at separate well locations using the same rig, each Party shall
              respond (a) to the well operation taking precedence, within thirty
              (30) days after receipt of the proposal; and (b) to each
              subsequent well location, within forty-eight (48) hours after
              completion of approved operations at the prior location and
              notification thereof by Operator.

       9.3.4  Other Matters
              For all other matters requiring notice, each Party shall respond
              within thirty (30) daysafter receipt of notice.


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9.4    Failure to Respond

       Failure of a Party to respond to a proposal or notice, to vote, or to
       elect to participate within the period required by this Agreement shall
       be deemed to be a negative response, vote, or election.

9.5    Response to Counterproposals

       Should a counterproposal be allowed under this Agreement, responses to
       that counterproposal must be made within the response period for the
       original proposal.

9.6    Timely Well Operations

       Unless otherwise provided, an approved well shall be commenced within one
       hundred eighty (180) days after the date when the last applicable
       election on that well may be made. Wells shall be deemed to have
       commenced on the day charges commence under the drilling contract for
       that well. If the Operator fails to commence actual drilling operations
       on an approved well within one hundred eighty (180) days from the
       proposal of the approved well, the proposal of the well and its approval
       will be deemed to have been withdrawn. Subject to Exhibit "C", if a
       proposal for a well is deemed to have been withdrawn, all costs incurred
       in the preparation for or in furtherance of that well will be chargeable
       to the Parties who voted to participate in the well proposal for that
       well. Notwithstanding the above, each one hundred eighty (180) day period
       set forth above shall be three hundred sixty-five days in the case of an
       approved operation for a well on Chevron's existing Platform "A" on West
       Delta Block 109.

9.7    Timely Platform/Development Facilities Operations

       Unless otherwise provided, Operator shall commence, or cause to commence,
       the construction, acquisition, or refurbishment of an approved proposal
       for a Platform and/or Development Facilities within one hundred eighty
       (180) days after the date when the last applicable election on that
       Platform and/or Development Facilities may be made. The construction,
       acquisition, or refurbishment of an approved Platform and/or Development
       Facilities proposal shall be deemed to have commenced on the date the
       contract is awarded for the design, acquisition, fabrication, or
       refurbishment of the Platform and/or Development Facilities. If the
       Operator does not commence the construction, acquisition, or
       refurbishment of an approved Platform and/or Development Facilities
       proposal within the one hundred eighty (180) day time frame, the other
       Participating Parties in that Platform and/or Development Facilities
       proposal may select a substitute Operator to commence the Platform and/or
       Development Facilities. In all events, including the occurrence of a
       Force Majeure, if the substitute Operator fails to commence the
       construction, acquisition, or refurbishment of an approved Platform
       and/or Development Facilities within two hundred forty (240) days from
       the proposal of the approved Platform and/or Development Facilities, the
       proposal of the Platform and/or Development Facilities and their approval
       will be deemed to have been withdrawn. Subject to Exhibit "C", regardless
       of whether or not the construction, acquisition, or refurbishment of a
       Platform and/or Development Facilities is commenced, all costs incurred
       by Operator, attributable to that activity, shall be paid by the
       Participating Parties.


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                                   ARTICLE 10

                             EXPLORATORY OPERATIONS

10.1   Proposing Operations

       Subject to the limitations and provisions of the Dominion EPA and the
       Ridgewood EPA for an Additional Opportunities Prospect's Initial Test
       Well, as those terms are defined in the respective Dominion EPA and
       Ridgewood EPA, any Party may propose an Exploratory Operation in
       accordance with Article 9 (Notices) to the other Parties who are entitled
       to vote or make an election in regard to that operation.

10.2   Counterproposals

       When an Exploratory Operation is proposed, a Party may, within ten (10)
       days after receipt of the AFE or notice for the original proposal, make a
       counterproposal to conduct an alternative Exploratory Operation by
       sending an AFE or notice to such Parties in accordance with Article 9
       (Notices). The AFE or notice shall indicate that the proposal is a
       counterproposal to the original proposal. If one or more counterproposals
       are made, such Parties shall elect to participate in either the original
       proposal, one counterproposal, or neither the original proposal nor a
       counterproposal. If two or more proposals receive the approval of the
       number of Parties and combined Working Interests required by Article 10.5
       (Operations by Fewer Than All Parties), the proposal receiving the
       largest percentage of Working Interest approval shall take precedence,
       and in the event of a tie between two (2) or more approved proposals, the
       proposal first received by the Parties shall take precedence. Except for
       the response period provided in this Article 10.2, a counterproposal
       shall be subject to the same terms and conditions as the original
       proposal.

10.3   Operations by All Parties

       If all Parties elect to participate in the proposed operation, Operator
       shall conduct the operation at their cost and risk.

10.4   Second Opportunity to Participate

       If fewer than all but two (2) or more Parties having a combined Working
       Interest of fifty-one percent (51 %) or more elect to participate, then
       the proposing Party shall notify the Parties of the elections made,
       whereupon a Party originally electing not to participate may then elect
       to participate by notifying the proposing Party within forty eight (48)
       hours, exclusive of Saturdays, Sundays, and federal holidays, after
       receipt of such notice. If all Parties elect to participate in the
       proposed operation, Operator shall conduct the operation at their cost
       and risk.

10.5   Operations by Fewer Than All Parties

       If after the election (if applicable) made under Article 10.4 (Second
       opportunity to Participate), fewer than all but two (2) or more Parties
       having a combined Working Interest of fifty-one percent (51%) or more
       have elected to participate in the proposed operation, the proposing
       Party shall notify the Participating Parties, and each Participating
       Party shall have forty eight (48) hours, exclusive of Saturdays, Sundays,



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       and federal holidays, after receipt of the notice to notify the proposing
       Party of the portion of the costs and risks attributable to the total
       Non-participating Parties' interests it elects to pay and bear. Unless
       otherwise agreed by the Participating Parties, each Participating Party
       may, but shall not be obligated to, pay and bear that portion of costs
       and risks attributable to the total Non-participating Parties' interests
       in the ratio that the Participating Party's interest bears to the total
       interests of all Participating Parties who elect to pay and bear a
       portion of the costs and risks attributable to the total
       Non-participating Parties' interests. Failure to respond shall be deemed
       to be an election not to pay or bear any additional costs or risks. If
       the Participating Parties agree to pay and bear one hundred percent
       (100%) of the costs and risks of the operation, Operator, subject to
       Article 4.2 (Substitute Operator) shall conduct the operation as a
       Non-consent Operation for the benefit of the Participating Parties, and
       the provisions of Article 13 (Non-consent Operations) shall apply. If
       such agreement is not obtained, however, the operation shall not be
       conducted and the effect shall be as if the proposal had not been made.


10.6   Expenditures Approved

       Approval of an Exploratory Operation shall cover all necessary
       expenditures associated with the operation proposed in the AFE or notice
       that are incurred by Operator in connection with (a) preparations for
       drilling, including site preparation and facility modifications; (b) the
       actual drilling; (c) evaluations, such as testing, coring, and logging;
       and (d) plugging and abandonment, subject to any limitation that may
       exist as provided under Article 8 above.

10.7   Conduct of Operations

       After commencement of drilling an Exploratory Well, Operator shall
       diligently conduct the operation without unreasonable delay until the
       well reaches the Objective Depth, unless the well encounters, at a lesser
       depth, impenetrable conditions or mechanical difficulties that cannot be
       overcome by reasonable and prudent operations and that render further
       operations impracticable.


10.8   Course of Action After Reaching Objective Depth

       When an Exploratory Well has been drilled to its Objective Depth and
       reasonable testing, coring, and logging have been completed as set forth
       in the approved AFE and the results have been furnished to the
       Participating Parties, Operator shall notify the Participating Parties of
       Operator's recommendation for further operations in the well, and the
       following provisions shall apply:

       10.8.1 Election by Participating Parties
              A Participating Party shall have the right to propose another
              operation by notifying the Operator and the other Participating
              Parties of its proposed operation within twenty-four (24) hours,
              inclusive of Saturdays, Sundays, and federal holidays, of receipt
              of the Operator's notice. The Participating Parties shall notify
              Operator within forty-eight (48) hours, inclusive of Saturdays,


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              Sundays, and federal holidays, of receipt of the Operator's
              proposal whether the Participating Parties elect to (a)
              participate in Operator's recommended operation, (b) participate
              in another proposed operation, or (c) not participate in any
              operation. Failure to respond shall be deemed to be an election
              not to participate in any of the proposed operations. The
              Participating Parties shall respond to all proposals within the
              period allotted to the original proposal.

       10.8.2 Priority of Operations
              If all Participating Parties elect to participate in the same
              proposed operation, Operator shall conduct the operation at their
              cost and risk. If more than one (1) operation is approved by two
              (2) or more Participating Parties having a combined Working
              Interest of fifty-one percent (51%) or more, then the approved
              operation with the lowest number as indicated below shall take
              precedence:

              (Indicate the order of preference.)

              1      Additional Testing, coring, or logging. (If conflicting
                     proposals are approved, the proposal receiving the largest
                     percentage of Working Interest approval shall take
                     precedence, and in the event of a tie between two (2) or
                     more approved proposals, the approved proposal first
                     received by the Parties shall take precedence.)

              2      Complete at the Objective Horizon

              3      Complete above the Objective Horizon. (If conflicting
                     proposals are approved, the operation proposed at the
                     deepest depth shall take precedence.)

              4      Deepen. (If conflicting proposals are approved, the
                     proposal receiving the largest percentage Working Interest
                     approval shall take precedence, and in the event of a tie
                     between two (2) or more approved proposals, the approved
                     proposal first received by the Parties shall take
                     precedence.)

              5      Sidetrack. (If conflicting proposals are approved, the
                     proposal receiving the largest percentage Working Interest
                     approval shall take precedence, and in the event of a
                     tie between two (2) or more approved proposals, the
                     approved proposal first received by the Parties shall take
                     precedence.)

              6      Other operations: (If conflicting proposals are approved,
                     the proposal receiving the largest percentage Working
                     Interest approval shall take precedence, and in the event
                     of a tie between two (2) or more approved proposals, the
                     approved proposal first received by the Parties shall take
                     precedence.)

              7      Temporarily abandon.

              8      Plug and abandon.

       10.8.3 Second Opportunity to Participate If fewer than all but two (2) or
              more Participating Parties having a combined Working Interest of
              fifty-one percent (51%) or more elect to participate in an
              operation, the proposing Party shall notify the Participating


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              Parties of the elections made, whereupon a Party originally
              electing not to participate in the proposed operation may then
              elect to participate by notifying the proposing Party within
              twenty four (24) hours, inclusive of Saturdays, Sundays, and
              federal holidays, after receipt of such notice. If all Parties
              elect to participate in the proposed operation, Operator shall
              conduct the operation at their cost and risk.

       10.8.4 Operations by Fewer Than All Parties

              If, after the election (if applicable) made under Article 10.8.3
              (Second Opportunity to Participate), fewer than all but one (2) or
              more Parties having a combined Working Interest of fifty-one
              percent (51%) or more elect to participate in the proposed
              operation that takes precedence, the proposing Party shall notify
              the Participating Parties and each Participating Party shall have
              twenty four (24) hours, inclusive of Saturdays, Sundays, and
              federal holidays, after receipt of the notice to notify the
              proposing Party of the portion of the costs and risks attributable
              to the total Non-participating Parties' interests it elects to pay
              and bear. Unless otherwise agreed by the Participating Parties,.
              each Participating Party may, but shall not be obligated to, pay
              and bear that portion of the costs and risks attributable to the
              total Non-participating Parties' interests in the ratio that the
              Participating Party's interest bears to the total interests of all
              Participating Parties who elect to pay and bear a portion of costs
              and risks attributable to the Non-participating Parties'
              interests. Failure to respond shall be deemed to be an election
              not to pay or bear any additional costs or risks. If the
              Participating Parties agree to pay and bear one hundred percent
              (100%) of the costs and risks of the operation, Operator, subject
              to Article 4.2 (Substitute Operator), shall conduct the operation
              as a Non-consent Operation for the benefit of the Participating
              Parties, and the provisions of Article 13 (Non-consent Operations)
              shall apply. If such agreement is not obtained, however, the
              operation shall not be conducted and the effect shall be as if the
              proposal had not been made. If a Participating Party in a well
              elects not to participate in the Deepening or Sidetracking
              operation in the well, such non-consenting Party shall become a
              Non-participating Party in all operations conducted in the
              Deepened or Sidetracked portion of the well after that election.
              If the Non-consent Operation is an Additional Testing, coring, or
              logging operation, Article 13 (Non-consent Operations) shall not
              apply, however, a Party electing not to participate in the
              Additional Testing, coring, or logging shall not be entitled to
              information resulting from the operation.

       10.8.5 Subsequent Operations

              Upon completion of an operation conducted under Article 10.8
              (Course of Action After Reaching Objective Depth), if the well is
              not either (a) Completed as a Producible Well, or


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              (b) temporarily abandoned or permanently plugged and abandoned,
              Operator shall notify the Participating Parties of Operator's
              recommendation for further operations in the well under Articles
              10.8.1 through 10.8.4, which again shall apply. If sufficient
              approval is not obtained to conduct a subsequent operation in a
              well or if all Participating Parties elect to plug and abandon the
              well, subject to Article 14 (Abandonment, Salvage, and Surplus),
              Operator shall permanently plug and abandon the well at the cost
              and risk of all Participating Parties. Each Participating Party
              shall be responsible for its proportionate share of the plugging
              and abandonment costs associated with the operation in which it
              participated.

10.9   Wells Proposed Below Deepest Producible Reservoir

       If a proposal is made to conduct an Exploratory Operation involving the
       drilling of a well to an Objective Horizon below the base of the deepest
       Producible Reservoir, a Party may elect within the applicable period to
       limit its participation in the operation down to the base of the deepest
       Producible Reservoir. For purposes of this Article 10.9, a Party who
       elects to limit its participation in the operation down to the base of
       the deepest Producible Reservoir shall be referred to as "Shallow
       Participant" and a Party who elects to participate in the entire
       operation shall be referred to as "Deep Participant". If a Party elects
       to limit its participation to the base of the deepest Producible
       Reservoir, Operator shall prepare and submit to the Shallow Participant,
       for informational purposes, a separate AFE covering operations down to
       the deepest Producible Reservoir. The Shallow Participant shall be a
       Participating Party in, and shall pay and bear the costs and risks of,
       each operation to the base of the deepest Producible Reservoir, according
       to its Participating Interest. The Shallow Participant shall be a
       Non-participating Party in each operation below the deepest Producible
       Reservoir, and the operation shall be considered a Non consent Operation,
       and the provisions of Article 13 (Non-consent Operations) shall apply. If
       the well is Completed and produces Hydrocarbons from a horizon below the
       deepest Producible Reservoir, the Deep Participant shall reimburse the
       Shallow Participant for its share of the actual well costs to the base of
       the deepest Producible Reservoir. Payment shall be due within thirty days
       after receipt of notice of the well being completed below the deepest
       Producible Reservoir. If the well is Completed and produces Hydrocarbons
       from a horizon below the deepest Producible Reservoir, the Shallow
       Participant shall reimburse the Deep Participant for its Working Interest
       share of the actual well costs to the base of the deepest Producible
       Reservoir in accordance with Article 13.4 (Deepening or Sidetracking Cost
       Adjustments), upon the earlier of the time that (a) the well is plugged
       back to a horizon above the base of the deepest Producible Reservoir, as
       determined when the original well was proposed, (b) the well is plugged
       and abandoned, or (c) the amount to be recouped by the Deep Participant
       under Article 13 (Non consent Operations) is recovered.


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                                   ARTICLE 11

                             DEVELOPMENT OPERATIONS

11.1   Proposing Operations

       A Party may propose a Development Operation in accordance with Article 9
       (Notices) to the other Parties who are entitled to vote or make an
       election in regard to that operation.

11.2   Counterproposals

       When a Development Operation is proposed, a Party may, within ten (10)
       days after receipt of the AFE or notice for the original proposal, make a
       counterproposal to conduct an alternative Development Operation by
       sending an AFE or notice to such Parties in accordance with Article 9
       (Notices). The AFE or notice shall indicate that the proposal is a
       counterproposal to the original proposal. If one or more counterproposals
       are made, such Parties shall elect to participate in either the original
       proposal, one counterproposal, or neither the original proposal nor a
       counterproposal. If two or more proposals receive the approval of the
       number of Parties and combined Working Interests required by Article 11.5
       (Operations By Fewer Than All Parties), the proposal receiving the
       largest percentage Working Interest approval shall take precedence, and
       in the event of a tie between two (2) or more approved proposals, the
       approved proposal first received by the Parties shall prevail. Except for
       the response period provided in this Article.11.2, a counterproposal
       shall be subject to the same terms and conditions as the original
       proposal.

11.3   Operations by All Parties If all Parties elect to participate in the
       proposed operation, Operator shall conduct the operation at their cost
       and risk.

11.4 Second Opportunity to Participate

       If fewer than all but two (2) or more Parties having a combined Working
       Interest of fifty-one (51 %) or more elect to participate, then the
       proposing Party shall notify the Parties of the elections made, whereupon
       a Party originally electing not to participate may then elect to
       participate by notifying the proposing Party within forty eight (48)
       hours, exclusive of Saturdays, Sundays, and federal holidays, after
       receipt of such notice. If all Parties elect to participate in the
       proposed operation, Operator shall conduct the operation at their cost
       and risk.

11.5 Operations by Fewer Than All Parties

       If after the election (if applicable) made under Article 11.4 (Second
       Opportunity to Participate), fewer than all but two (2) or more Parties
       having a combined Working Interest of fifty-one percent (51%) or more
       have elected to participate in the proposed operation, the proposing
       Party shall notify the Participating Parties, and each Participating
       Party shall have forty eight (48) hours, exclusive of Saturdays, Sundays,
       and federal holidays, after receipt of the notice to notify the proposing
       Party of the portion of the costs and risks attributable to the total
       Non-participating Parties' interests it elects to pay and bear. Unless
       otherwise agreed by the Participating Parties, each Participating Party


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       may, but shall not be obligated to, pay and bear that portion of costs
       and risks attributable to the total Non-participating Parties' interests
       in the ratio that the Participating Party's interest bears to the total
       interests of all Participating Parties who elect to pay and bear a
       portion of the costs and risks attributable to the total
       Non-participating Parties' interests. Failure to respond shall be deemed
       to be an election not to pay or bear any additional costs or risks. If
       the Participating Parties agree to pay and bear one hundred percent
       (100%) of the costs and risks of the operation, Operator, subject to
       Article 4.2 (Substitute Operator) shall conduct the operation as a
       Non-consent Operation for the benefit of the Participating Parties, and
       the provisions of Article 13 (Non-consent Operations) shall apply. If
       such agreement is not obtained, however, the operation shall not be
       conducted and the effect shall be as if the proposal had not been made.

11.6   Expenditures Approved

       Approval of a Development Operation shall cover all necessary
       expenditures associated with the operation proposed in the AFE or notice
       that are incurred by Operator in connection with (a) preparations for
       drilling; (b) the actual drilling; (c) evaluations, such as testing,
       coring, and logging; and (d) plugging and abandonment, subject to any
       limitation that may exist as provided under Article 8 above.

11.7   Conduct of Operations

       After commencement of a Development Well, Operator shall diligently
       conduct the operation without unreasonable delay until the well reaches
       the Objective Depth, unless the well encounters, at a lesser depth,
       impenetrable conditions or mechanical difficulties that cannot be
       overcome by reasonable and prudent operations and render further
       operations impracticable, except as may otherwise be provided in optional
       provision Article 8.7 (Overexpenditures), if elected.

11.8   Course of Action After Reaching Objective Depth

       When a Development Well has been drilled to its Objective Depth and
       reasonable testing, coring, and logging have been completed and the
       results have been furnished to the Participating Parties, Operator shall
       notify the Participating Parties of Operator's recommendation for further
       operations in the well and the following provisions shall apply:

       11.8.1 Election by Fewer Than All Parties

              A Participating Party shall have the right to propose another
              operation by notifying the Operator and the other Participating
              Parties of its proposed operation within twenty-four (24) hours,
              inclusive of Saturdays, Sundays, and federal holidays, of receipt
              of the Operator's notice. The Participating Parties shall notify
              Operator within forty-eight (48) hours, inclusive of Saturdays,
              Sundays, and federal holidays, of receipt of the Operator's
              proposal whether the Participating Parties elect to (a)
              participate in Operator's recommended operation, (b) participate
              in another proposed operation, or (c) not participate in any


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              operation. Failure to respond shall be deemed to be an election
              not to participate in any of the proposed operations. The
              Participating Parties shall respond to all proposals within the
              period allotted to the original proposal.

       11.8.2 Priority of Operations

              If all Participating Parties elect to participate in the same
              proposed operation, Operator shall conduct the operation at their
              cost and risk. If more than one (1) operation is approved by two
              (2) or more Participating Parties having a combined Working
              Interest of fifty-one percent (51 %) or more, then the approved
              operation with the lowest number as indicated below shall take
              precedence:
              (indicate the order of preference.)

               1    Additional Testing, coring, or logging. (If conflicting
                    proposals are approved, the proposal receiving the largest
                    percentage of Working Interest approval shall take
                    precedence, and in the event of a tie between two (2) or
                    more approved proposals, the approved proposal first
                    received by the Parties shall take precedence.)

               2    Complete at the Objective Horizon.

               3    Complete above the Objective Horizon, (If conflicting
                    proposals are approved, the operation proposed to the
                    deepest depth shall take precedence.)

               4    Deepen. (If conflicting proposals are approved, the proposal
                    receiving thelargest percentage of Working Interest approval
                    shall take precedence, and inthe event of a tie between two
                    (2) or more approved proposals, the approved proposal first
                    received by the Parties shall take precedence.)

               5    Sidetrack. (If conflicting proposals are approved, the
                    proposal receiving the largest percentage of Working
                    Interest approval shall take precedence, and in the event of
                    a tie between two (2) or more approved proposals, the
                    approved proposal first received by the Parties shall take
                    precedence.)

               6    Other operations: (If conflicting proposals are approved,
                    the proposal receiving the largest percentage of Working
                    Interest approval shall take precedence, and in the event of
                    a tie between two (2) or more approved proposals, the
                    approved proposal first received by the Parties shall take
                    precedence.)

               7    Temporarily abandon.

               8    Plug and abandon.

       11.8.3 Second Opportunity to Participate

              If fewer than all but two (2) or more Participating Parties having
              a combined Working Interest of fifty-one percent (51%) or more
              elect to participate in an operation, the proposing Party shall
              notify the Participating Parties of the elections made, whereupon



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              a Party originally electing not to participate in the proposed
              operation may then elect to participate by notifying the proposing
              Party within twenty four (24) hours, inclusive of Saturdays,
              Sundays, and federal holidays, after receipt of such notice. If
              all Parties elect to participate in the proposed operation,
              Operator shall conduct the operation at their cost and risk.

       11.8.4 Operations by Fewer Than All Parties

              If, after the election (if applicable) made under Article 11.8.3
              (Second Opportunity to Participate), fewer than all but two (2) or
              more Parties having a combined Working Interest of fifty-one
              percent (51%) or more elect to participate in the proposed
              operation that takes precedence, the proposing Party shall notify
              the Participating Parties and each Participating Party shall have
              twenty four (24) hours, inclusive of Saturdays, Sundays, and
              federal holidays, after receipt of the notice to notify the
              proposing Party of the portion of the costs and risks attributable
              to the total Non-participating Parties' interests it elects to pay
              and bear. Unless otherwise agreed by the Participating Parties,
              each Participating Party may, but shall not be obligated to, pay
              and bear that portion of the costs and risks attributable to the
              total Non-participating Parties' interests in the ratio that the
              Participating Party's interest bears to the total interests of all
              Participating Parties who elect to pay and bear a portion of costs
              and risks attributable to the Non-participating Parties'
              interests. Failure to respond shall be deemed to be an election
              not to pay or bear any additional costs or risks. If the
              Participating Parties agree to pay and bear one hundred percent
              (100%) of the costs and risks of the operation, Operator, subject
              to Article 4.2 (Substitute Operator), shall conduct the operation
              as a Non-consent Operation for the benefit of the Participating
              Parties, and the provisions of Article 13 (Non-consent Operations)
              shall apply. If such agreement is not obtained, however, the
              operation shall not be conducted and the effect shall be as if the
              proposal had not been made. If a Participating Party in a well
              elects not to participate in the Deepening or Sidetracking
              operation in the well, such non-consenting Party shall become a
              Non-participating Party in all operations conducted in the
              Deepened or Sidetracked portion of the well after that election.
              If the Non-consent Operation is an Additional Testing, coring, or
              logging operation, Article 13 (Non-consent Operations) shall not
              apply, however, a Party electing not to participate in the
              Additional Testing, coring, or logging shall not be entitled to
              information resulting from the operation.

       11.8.5 Subsequent Operations

              Upon the completion of an operation conducted under Article 11.8
              (Course of Action After Reaching Objective Depth), if the well is
              not either (a) Completed as a well capable of producing
              Hydrocarbons in paying quantities, or (b) temporarily abandoned or


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              permanently plugged and abandoned, Operator shall notify the
              Participating Parties of Operator's recommendation for operations
              in the well under Articles 11.8.1 through 11.8.4, which again
              shall apply. If sufficient approval is not obtained to conduct a
              subsequent operation in a well, or if all Participating Parties
              elect to plug and abandon the well, subject to Article 14
              (Abandonment, Salvage, and Surplus), Operator shall permanently
              plug and abandon the well at the expense of all Participating
              Parties. Each Participating Party shall be responsible for its
              proportionate share of the plugging and abandonment costs
              associated with the operation in which it participated.


                                   ARTICLE 12

                       PLATFORM AND DEVELOPMENT FACILITIES

12.1   Proposal

       A Party may propose the fabrication or acquisition and installation of a
       Platform and/or Development Facilities, by sending an AFE or notice to
       the other Parties in accordance with Article 9 (Notices). Any proposal by
       a Party for a Platform and/or Development Facilities shall not provide
       for excess capacity and/or space which is greater than ten percent (10%)
       of what is required for such Platform and/or Development Facilities based
       upon the expected size of the Producible Reservoir(s); the number of
       existing Producible Wells; the quality of Hydrocarbons to be produced,
       processed, and transported; and the number of scheduled Development
       Wells.

12.2   Counterproposals

       When a Platform and/or Development Facilities is proposed under Article
       12.1, a Party may, within thirty (30) days after receipt of the AFE or
       notice for the original proposal, make a counterproposal to fabricate or
       otherwise acquire and install said Platform and/or Development Facilities
       by sending an AFE or notice to the other Parties in accordance with
       Article 9 (Notices). The AFE or notice shall indicate that the proposal
       is a counterproposal to the original proposal. If one or more
       counterproposals are made, each Party shall elect to participate in
       either the original proposal, one counterproposal, or neither the
       original proposal nor a counterproposal. If two or more proposals receive
       the approval of the number of Parties and combined Working Interests
       required by Article 12.2.3 (Operations By Fewer Than All Parties), the
       proposal receiving the largest percentage Working Interest approval shall
       be deemed approved, and in the event two (2) or more approved proposals
       receive the same Working Interest approval, the approved proposal first
       received by the Parties shall be deemed approved.

       12.2.1 Operations by All Parties

              If all Parties elect to participate in the proposed operation,
              Operator shall conduct the operation at their cost and risk.


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       12.2.2 Second Opportunity to Participate

              if fewer than all but two (2) or more Parties having a combined
              Working Interest of fifty-one percent (51%) or more elect to
              participate in the platform and/or Development Facilities, then
              the proposing Party shall notify the Parties of the elections
              made, whereupon a Party originally electing not to participate may
              then elect to participate by notifying the proposing Party within
              forty eight (48) hours, inclusive of Saturdays, Sundays, and
              federal holidays, after receipt of such notice. If all Parties
              elect to participate in the Platform and/or Development
              Facilities, Operator shall timely commence the fabrication and
              installation of the Platform and/or Development Facilities at
              their cost and risk.

       12.2.3 Operations by Fewer Than All Parties

              If after the election (if applicable) made under Article 12.2.2
              (Second Opportunity to Participate), fewer than all but two (2) or
              more Parties having a combined Working Interest of fifty-one
              percent (51%) or more elect to participate in the Platform and/or
              Development Facilities, the proposing Party shall notify the
              Participating Parties, and each Participating Party shall have
              forty eight (48) hours, inclusive of Saturdays, Sundays, and
              federal holidays, after receipt of the notice to notify the
              proposing Party of the portion of the costs and risks attributable
              to the total Non-participating Parties' interests it elects to pay
              and bear. Unless otherwise agreed by the Participating Parties,
              each Participating Party may, but shall not be obligated to, pay
              and bear that portion of costs and risks attributable to the total
              Non-participating Parties' interests in the ratio that the
              Participating Party's interest bears to the total interests of all
              Participating Parties who elect to pay and bear a portion of the
              costs and risks attributable to the total Nonparticipating
              Parties' interests. Failure to respond shall be deemed to be an
              election not to pay or bear any additional costs or risks. If the
              Participating Parties agree to pay and bear one hundred percent
              (100%) of the costs and risks of the operation, the Operator,
              subject to Article 4.2 (Substitute Operator), shall conduct the
              operation as a Non-consent Operation for the benefit of the
              Participating Parties, and except as provided in Article 12.4
              (Rights to Take in Kind), the provisions of Article 13.2.1. (b)
              shall apply. If such agreement is not obtained, however, the
              fabrication and installation of the Platform and/or Development
              Facilities shall not be commenced, and the effect shall be as if
              the proposal had not been made.

12.3   Ownership and Use of the Development Facilities

       The Participating Parties in the Development Facilities own all of the
       excess capacity of the Development Facilities. Each Participating Party
       in the Development Facilities shall have the right to use its
       Participating Interest share of the excess capacity for hydrocarbon
       production from outside the Contract Area and shall indemnify and hold
       harmless the other Participating Parties or such use, subject to the


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       successful negotiation of a mutually agreeable arrangement addressing
       the usage of such excess capacity. This right is subject to outside
       production compatibility and non-interference with Contract Area
       production, and further subject to the requirement that the Party
       exercising this right shall bear its share of costs pursuant to Article
       13.9.2 as though the outside production were from a Non-consent Well.

12.4   Rights to Take in Kind

       Nothing in this Article 12 shall act to limit a Party's rights under
       Article 22 (Disposition of Production), or to otherwise separately
       dispose of its share of Hydrocarbon production. If a Party elects (a) not
       to participate in an approved Development Facilities proposal and (b) to
       separately dispose of its share of Hydrocarbon production (the
       "Separately Disposing Party"), the Separately Disposing Party shall not
       be subject to the provisions of Article 13.2.1.(b), but must provide
       proof to the Participating Parties in the approved Development Facilities
       proposal, within sixty (60) days from the last applicable response date
       to the Development Facilities proposal that it has entered into
       fabrication and transportation contracts to separately dispose of its own
       share of Hydrocarbon production. If a Separately Disposing Party fails to
       provide such proof by that deadline and if there is sufficient capacity
       for the Development Facilities to accommodate the Separately Disposing
       Party's share of the Hydrocarbons, it shall immediately (I) become a
       Participating Party in the Development Facilities and utilize the
       Development Facilities for its share of Hydrocarbon production, (II) pay
       to the Participating Parties in the approved Development Facilities
       proposal an amount equal to one hundred fifty percent (150%) of what
       would have been the Separately Disposing Party's share of the costs and
       expense of the Development Facilities had it elected to participate in
       the Development Facilities under Article 12.1 or 12.2, and (III) assume
       its share of the risks and liabilities associated with the construction
       and ownership of the Development Facilities as of the date of
       commencement of the operations to construct same. The Participating
       Parties in the original Development Facilities and the Separately
       Disposing Party, which becomes a Participating Party in the original
       Development Facilities under Article 12.4 (1), shall own the original
       Development Facilities based on their Participating Interest share in the
       original Development Facilities. If a Separately Disposing Party fails to
       provide such proof by that deadline and if there is insufficient capacity
       for the Development Facilities to accommodate the Separately Disposing
       Party's share of the Hydrocarbons, the Separately Disposing Party shall
       (i) become a Participating Party in the original Development Facilities
       and utilize the available capacity in the original Development
       Facilities, if any, for its share of Hydrocarbon production, (ii) pay one
       hundred percent (100%) of the costs of an expansion or modification of
       the Development Facilities, which is required to accommodate all or a
       portion of its share of the Hydrocarbons, and assume one hundred percent
       (100%) of the risks and liabilities associated with (A) the construction,
       installation and commissioning of the expanded or modified Development
       Facilities and (B) the utilization of the expanded or modified


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       Development Facilities for seven (7) days subsequent to the commencement
       of Hydrocarbon production through same, (iii) pay to the Participating
       Parties in the approved Development Facilities proposal an amount equal
       to one hundred fifty percent (150%) of what would have been the
       Separately Disposing Party's share of the costs and expense of the
       original Development Facilities had it elected to participate in the
       original Development Facilities under Article 12.1 or 12.2, (iv) assume
       its share of the risks and liabilities associated with the construction
       and ownership of the original Development Facilities as of the date of
       commencement of the operations to construct the original Development
       Facilities. The Participating Parties in the original Development
       Facilities and the Separately Disposing Party, which becomes a
       Participating Party in the original Development Facilities under Article
       12.4(i), shall own the expanded or modified Development Facilities based
       on their Participating Interest share in the original Development
       Facilities, and the Participating Parties in the original Development
       Facilities shall assume their Participating Interest share of the risks
       and liabilities associated with the ownership of the expanded or modified
       Development Facilities seven (7) days after that the expanded or modified
       Development Facilities have been utilized.

12.5 Expansion or Modification of a Platform and/or Development Facilities

       After installation of a Platform and/or Development Facilities, any
       Participating Party in that Platform and/or Development Facilities may
       propose the expansion or modification of that Platform and/or Development
       Facilities by written notice (along with its associated AFE) to the other
       Participating Parties in that Platform and/or Development Facilities.
       That proposal requires approval by two of more of the Participating
       Parties in the Platform and/or Development Facilities with more than
       seventy five percent (75%) of the Participating Interest in the Platform
       and/or Development Facilities. If approved, that proposal will be binding
       on all Participating Parties in that Platform and/or Development
       Facilities, and the Operator shall commence that expansion or
       modification at the sole cost and risk of all of the Participating
       Parties in that Platform and/or Development Facilities unless otherwise
       agreed.


                                   ARTICLE 13

                             NON-CONSENT OPERATIONS

13.1   Non-consent Operations

       Operator or substitute Operator under Article 4.2 (Substitute Operator)
       shall conduct Non-consent Operations at the sole cost and risk of the
       Participating Parties in accordance with the following provisions:

       13.1.1 Non-interference

              Non-consent Operations shall not interfere unreasonably with
              operations approved by all of the Parties.


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       13.1.2 Multiple Completion Limitation

              Subject to Article 10.9, a Non-consent Operation shall not be
              conducted in a well having multiple Completions unless (a) each
              Completion is owned by the same Parties in the same proportions;
              (b) the well is incapable of producing from any Completion; or (c)
              all Participating Parties in the well consent to the operation.

       13.1.3 Metering

              In Non-consent Operations, Hydrocarbon production shall be
              determined upon the basis of appropriate well tests, unless
              separate metering devices are required by a governmental authority
              having jurisdiction.

       13.1.4 Non-consent Well

              Operations on a Non-consent Well shall not be conducted in a
              Producible Reservoir without approval of all Parties unless (a)
              the Producible Reservoir is designated in the notice as a
              Completion objective; (b) Completion of the well in the Producible
              Reservoir will not increase the rates of Hydrocarbon production
              that are prescribed and approved for the Producible Reservoir by
              the governmental authority having jurisdiction; and (c) the
              horizontal distance between the vertical projections of the
              midpoint of the Producible Reservoir in the well and an existing
              well currently completed in and producing from the same Producible
              Reservoir will be at least three thousand fve hundred (3,500) feet
              from another Gas Completion or one thousand seven hundred fifty
              (1,7500) feet from another Oil Completion.

       13.1.5 Cost Information

              Operator shall, within one hundred twenty (120) days after
              completion of a Non-consent Operation, furnish the Parties either
              (a) an inventory and an itemized statement of the cost of the
              Non-consent Operation and equipment pertaining thereto, or (b) a
              detailed statement of the monthly billings. Each month thereafter,
              while the Participating Parties are being reimbursed under Article
              13.2.1 (Production Reversion Recoupment), Operator shall furnish
              the Non-participating Parties a monthly statement detailing all
              costs and liabilities incurred in the Non-consent Operation,
              together with a statement of the quantities of Hydrocarbons
              produced from it and the amount of the proceeds from the sale of
              the Non-participating Parties' relinquished Hydrocarbon production
              from the Nonconsent Operation for the preceding month. Operator
              shall prepare the monthly statement of the quantities of
              Hydrocarbons produced and the amounts of the proceeds from the
              sale of Non-participating Parties' relinquished Hydrocarbon
              production based on the proceeds received for the Operator's share
              of Hydrocarbon production. When Operator's payout calculation
              indicates that payout has occurred, Operator shall promptly notify
              all Parties. The Participating Parties who assumed a portion of


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              the Non-participating Parties' relinquished interest shall then
              provide Operator all information pertaining to the cumulative
              proceeds received from the sale of the Non-participating Parties'
              relinquished Hydrocarbon production. Operator shall revise the
              payout date using the actual proceeds from the sale of the
              Non-participating Parties' relinquished Hydrocarbon production and
              administer any subsequent adjustments between the Parties.

       13.1.6 Completions

              For determinations under Article 13.1 (Non-consent Operations),
              each Non-consent Operation in a single wellbore shall be accounted
              for separately.

13.2   Relinquishment of Interest

       Upon commencement of Non-consent Operations, other than Non-consent
       Operations governed by Article 13.7 (Operations Utilizing a Non-consent
       Platform and/or Development Facilities), each Non-participating Party's
       interest and Contract Area operating rights in the Non-consent Operation
       and title to Hydrocarbon production resulting therefrom; and if Article
       13.8 (Discovery or Extension from Non-consent Drilling) is efective,
       one-half (1/2) of each Non-participating Party's interest and Contract
       Areahold operating rights and title to Hydrocarbon production from wells
       mentioned in Article 13.8 (Discovery or Extension from Non-consent
       Drilling); shall be owned by and vested in each Participating Party in
       proportion to its Participating Interest, or in the proportions otherwise
       agreed by the Participating Parties, for as long as the Non-Consent
       Operation is being conducted or Hydrocarbon production is obtained
       therefrom, subject to the following:

       13.2.1 Production Reversion Recoupment

              When the Participating Parties have recouped out of Hydrocarbon
              production from the Non-consent Operations attributable to the
              Non-participating Party's interest an amount, which when added to
              amounts received under Article 13.3 (Deepening or Sidetracking of
              Non-consent Well), equals the sum of the following:

              a)     Six hundred percent (600%) of the Non-participating Party's
                     share of the costs of the following Non-consent Exploratory
                     Operations, or four hundred percent (400%) of the
                     Non-participating Party's share of the costs of the
                     following Non consent Development Operations: drilling,
                     testing, Completing, Recompleting, Deepening, Sidetracking,
                     Reworking, plugging back, and temporarily abandoning a
                     well, reduced by the Non-participating Party's Share of a
                     cash contribution received under Article 21.2 (Cash
                     Contributions);

              (b)    Three hundred percent (300%) of Non-participating Party's
                     Share of the cost of Platforms and/or Development
                     Facilities approved under Article 12.1 (Proposal) or
                     Article 12.2 (Counterproposals); such recoupment is limited
                     to the Non-participating Party's Share of the Hydrocarbon

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                     production that utilize such Platform and/or Development
                     Facilities;

              (c)    One hundred percent (100%) of the Non-participating Party's
                     Share of the cost charged in accordance with Article 13.9
                     (Allocation of Platform/Development Facilities Costs to
                     Non-consent Operations) of using an existing
                     Platform/Development Facilities; and

              (d)    the Non-participating Party's Share of the costs of
                     operation, maintenance, treating, processing, gathering,
                     and transportation, including, but not limited to, an
                     ofsite host facilities' handling fees, as well as lessor's
                     royalties and severance, Hydrocarbon production, and excise
                     taxes,

              then, the relinquished interests of the Non-participating Party
              shall automatically revert to the Non-participating Party as of
              7:00 a.m. of the day after the recoupment occurs. Thereafter, the
              Non-participating Party shall own the same interest in the
              Non-consent Well, equipment pertaining thereto, including, but not
              limited to, any Platform or Development Facilities, and the
              Hydrocarbon production therefrom as the Non participating Party
              would have owned or been entitled to if it had participated in the
              Non consent Operation. Upon reversion, the Non-participating Party
              shall become a Participating Party and, as such, shall become
              liable for its proportionate share of the further costs of the
              operation as set forth in this Agreement and Exhibit "C".

       13.2.2 Non-production Reversion

              If the Non-consent Operation fails to obtain Hydrocarbon
              production or if the operation results in Hydrocarbon production
              that ceases before complete recoupment by the Participating
              Parties under Article 13.2.1 (Production Reversion Recoupment),
              such Contract Areahold operating rights shall revert to each
              Non-participating Party, except that all Non-consent Wells,
              Platforms, and Development Facilities shall remain vested in the
              Participating Parties (but the salvage value in excess of the sum
              remaining under Article 13.2.1 shall be credited to all Parties).

13.3   Deepening or Sidetracking of Non-consent Well

       If a Participating Party proposes to Deepen or Sidetrack a Non-consent
       Well, a Non-participating Party may then elect to participate in the
       Deepening or Sidetracking operation by notifying Operator within thirty
       (30) days, or within forty-eight (48) hours, inclusive of Saturdays,
       Sundays, and federal holidays, if a rig is on location and standby
       charges are being incurred, after receiving notice of the proposal. A
       Non-participating Party that elects to participate in Deepening or
       Sidetracking the well, as proposed, shall immediately pay the
       Participating Parties, in accordance with Article 13.4 (Deepening or
       Sidetracking Cost Adjustments), its Working Interest share of actual well
       costs (excluding logging, coring, testing, and Completion costs other
       than the cost of setting any casing or Completion Equipment that is used
       in the Deepening or Sidetracking), less all amounts recovered by the



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       Participating Parties from the proceeds of Hydrocarbon production from
       the well, as if the Non-participating Party had originally participated
       to the initial objective depth or formation, in the case of a Deepening
       operation, or the depth at which the Sidetracking operation is initiated.
       Thereafter, the Non-participating Party shall be deemed to be a
       Participating Party for the Deepening or Sidetracking operations, and
       Article 13.2.1(a) shall not apply to that Party for the Deepened or
       Sidetracked portion of the well. The initial Participating Parties,
       however, shall continue to recoup out of the proceeds of Hydrocarbon
       production from the non-consent portion of the well any balance for the
       Non-consent Well remaining to be recovered under Article 13.2.1
       (Production. Reversion Recoupment), less the amounts paid by the
       Non-participating Party under this Article 13.3.

13.4   Deepening or Sidetracking Cost Adjustments

       If a proposal is made to Deepen or Sidetrack a Non-consent Well, a well
       cost adjustment will be performed as follows:

       (a)    Intangible drilling will be valued at the actual cost incurred by
              the Participating Parties.

       (b)    Tangible materials will be valued at the actual cost incurred by
              the Participating Parties.

       (c)    For Sidetracking operations, the values determined in Articles
              13.4(a) and 13.4(b) shall be reduced by the amount allocated to
              that portion of the well from the surface to one hundred feet
              (100') below the point at which the Sidetracking was initiated.
              Such allocations shall be consistent with the guidelines
              recommended by the applicable Council of Petroleum Accountants
              Societies ("COPAS") Guideline, as amended from time to time.

       (d)    Amortization/depreciation shall be applied to both intangible and
              tangible values at the rate of ten percent (10%) per annum from
              the date the well commenced Hydrocarbon production to the date
              operations commence to Deepen or Sidetrack the well, provided
              however, the value of tangible materials after applying
              depreciation shall never be less than fifty percent (50%) of the
              value determined in Article 13.4(b).

13.5   Subsequent Operations in Non-consent Well

       Except as provided in Article 13.3 (Deepening or Sidetracking of
       Non-consent Well), an election not to participate in the drilling,
       Sidetracking, or Deepening of a well shall be deemed to be an election
       not to participate in any subsequent operations in the well before full
       recovery by the Participating Parties of the Non-participating Party's
       recoupment amount.

13.6   Operations in a Production Interval

       A Participating Party in a Production Interval may propose Rework or
       Sidetrack operations within that Production Interval, or to permanently
       plug and abandon that Production Interval in a well; however, no
       Production Interval in a well shall be abandoned without the unanimous
       approval I the Participating Parties in the Production Interval. If a
       proposal, estimated to exceed the amount specified in Article 8.2
       (Authorization), is made to Rework or Sidetrack a Production Interval and
       the Participating Parties elect to participate


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       in the proposed operation, Operator shall conduct the operation at their
       sole cost and risk. If fewer than all but two (2) or more Parties having
       a combined Participating Interest of fifty-one percent (51%) or more
       elect to participate in the proposed operation, Operator shall conduct
       the Reworking or Sidetracking operation at the cost and risk of the
       Participating Parties owning an interest in the Production Interval. A
       proposal to Rework an interval, other than a Production Interval, shall
       be made and approved in accordance with Article 11.5 (Operations by Fewer
       Than All Parties).

13.7   Operations Utilizing a Non-consent Platform and/or Development Facilities

       Except as otherwise provided in Article 12.4 (Rights to Take in Kind) and
       this Article 13.7, if applicable, a Party that did not originally
       participate in a Platform and/or Development Facilities shall be a
       Non-participating Party for all operations utilizing the Platform and/or
       Development Facilities and shall be subject to Article 13.2
       (Relinquishment of Interest). Notice, in accordance with Article 9
       (Notices), shall be given to the Non-participating Party for all wells
       proposed to be drilled from or tied-back to the Non-consent Platform
       and/or handled by non-consent Development Facilities. If a
       Non-participating Party in a Non-consent Platform and/or Development
       Facilities desires to participate in the drilling of any such well
       proposed by the Participating Parties in the Platform and/or Development
       Facilities, the Non-participating Party desiring to join in the proposed
       well shall first pay the Participating Parties in the Platform and/or
       Development Facilities its proportionate share of the cost of the
       Platform and/or Development Facilities, including, but not limited to,
       costs of material, fabrication, transportation, and installation plus any
       remaining amounts to be recouped under Article 13.2.1(b). The
       Non-participating Party shall remit payment to Operator and Operator
       shall (a) reimburse the Participating Parties in the Platform and/or
       Development Facilities in the same proportions they are sharing in the
       Platforms and/or Development Facilities recoupment account, and (b)
       credit the applicable payout account. Upon payment of that amount, the
       original Non-participating Party shall become an owner and a
       Participating Party in the Platform and/or Development Facilities in the
       same manner as if recoupment had occurred under Article 13.2.1
       (Production Reversion Recoupment), and may participate in all future
       wells drilled from or tied back to the Platform. As to well operations
       conducted from the Platform and/or Development Facilities prior to
       payment under this Article 13.7, the original Non-participating Party
       shall remain a Non-participating Party in such Non consent Operations
       until such time as the entire recoupment balance applicable to all such
       Non consent Operations in the aggregate has occurred, as provided for in
       Articles 13.2.1 (a) and 13.2.1 (d).

13.8   Discovery or Extension from Non-consent Drilling

       If a Non-consent Well (a) discovers a new Producible Reservoir or (b)
       extends an existing Producible Reservoir beyond its recognized
       boundaries, as unanimously agreed by the Participating Parties in all
       existing wells currently producing from the existing Producible Reservoir


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       before commencement of drilling operations, the recoupment of costs for
       the well shall be governed by Article 13.2 (Relinquishment of Interest)
       and shall be recovered by the Participating Parties in one of the
       following ways:

       (a)    if the Non-consent Well is not completed and produced, recoupment
              shall be out of one half (1/2) of each Non-participating Party's
              interest in Hydrocarbon production from all subsequently drilled
              and completed wells on the Contract Area that are completed in the
              Producible Reservoir discovered, or in that portion extended, by
              the Non-consent Well and in which the Non-participating Party has
              a Participating Interest; or

       (b)    if the Non-consent Well is completed and produced, recoupment
              shall be out of the Non participating Party's Share of all
              Hydrocarbon production from the Non-consent Well and one-half
              (1/2) of the Non-participating Party's interest in Hydrocarbon
              production from all subsequently drilled and completed wells on
              the Contract Area that are completed in the Producible Reservoir
              discovered, or in that portion extended, by the Non-consent Well
              and in which the Non-participating Party has a Participating
              Interest.

13.9   Allocation of Platform/Development Facilities Costs to Non-consent
       Operations

       In the event a well is drilled from or produced through a Platform or is
       produced through Development Facilities which are owned by the
       Participating Parties in different proportions than the ownership of the
       Non-consent well, the rights of the Participating Parties in such well
       and the costs to utilize such Platform or Development Facilities for such
       well shall be determined as follows:

       13.9.1 Investment Usage Fees

              The Participating Parties in such well shall pay to the Operator,
              for credit to the owners of the Platform and/or Development
              Facilities, a one-time usage fee for the right to use the Platform
              and/or Development Facilities. Such usage fees shall be determined
              in accordance with paragraphs (a) and (b) below:

              (a)    A fee for slot usage will be determined as follows:

                     (i)    In the event the well uses a platform with well
                            slots and such platform has no Development
                            Facilities installed on it, the slot usage fee shall
                            be an amount equal to the ratio which one Platform
                            slot bears to the total number of slots on the
                            Platform times the total cost of the Platform.

                     (ii)   In the event the well uses a Platform with well
                            slots and such Platform has Development Facilities
                            installed on it, the slot usage fee shall be an
                            amount equal to the ratio which one Platform slot
                            bears to the total number of slots on the Platform
                            times the total cost of the Platform attributable to
                            well slot area, determined as follows:


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       Slot Usage Fee = (one platform slot divided by total platform slots) x
              [(Total Cost of Platform - Any Cost of Development Facilities
              Included In the Total Cost of Platform) x Well Slot Area %]

       Well Slot Area % = Deck Space Dedicated to Well Slots divided by
              (Deck Space Dedicated to Well Slots + Deck Space Dedicated to
              Development Facilities)

       The cost of Development Facilities [as used in Article 13.9.1 (a) and
       (b)] shall include the cost of design, material, fabrication,
       transportation, installation, repairs and modifications of such
       Development Facilities.

       For purposes of calculating the slot usage fee [under Article 13.9.1 (a)
       (1) or (ii)], the total cost of the Platform shall be reduced by 0.83333%
       per month, commencing on the first day of the month following the date
       the Platform was installed and continuing every month thereafter until
       the month actual drilling operations on such well is commenced; however,
       the total cost of the Platform shall not be reduced by more than
       twenty-five percent (25%) of the total Platform costs. The cost of
       additions to the Platform shall be reduced in the same manner commencing
       the first day of the month after the addition is installed

       If such well is abandoned, having never produced, the right of the
       Participating Parties in such well to utilize the Platform slot through
       which such well was drilled shall terminate unless such Parties commence
       drilling a substitute well for the abandoned well through the same slot
       within ninety (90) days of the abandonment. If such substitute well is
       abandoned, having never produced, the right of the Participating Parties
       in such well to utilize the Platform slot through which such well was
       drilled shall terminate.

       No refund or credit of the slot usage fee shall be given or due if a
       subsequent well operation is conducted through the same slot or if that
       Platform slot is restored to a usable condition.

       If subsequent Non-consent Operations (such as Workover, Recompletion,
       Deepening, or Sidetracking operations) are conducted in any wellbore
       where either all Parties to this agreement participated in the original
       well drilling costs or a previous Non-consent Operation was conducted,


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       no slot usage fee shall be charged to the Participating Parties in the
       subsequent Non-consent Operation.

       (b)    The Participating Parties in such well shall pay to the owners of
              the Development Facilities a sum equal to that portion of the
              total cost of such Development Facilities which the throughput
              volume of the Non-consent Operation bears to the total design
              throughput volume of the Development Facilities at the time such
              well is connected. Throughput volume shall be estimated by the
              Operator using an average daily volume of the first three months
              of production from the Non consent Operation.

       The Total Cost of Development Facilities shall include the cost of
       design, material, fabrication, transportation, installation, repairs and
       modifications of Development Facilities plus that portion of the cost of
       the Platform attributable to Development Facilities Area. The Development
       Facilities Usage Fee shall be based on the following:

       Development Facilities Usage Fee =Total Cost of Development Facilities x
              Throughput Volume of Non-consent Well divided by Total Design
              Throughput of Facilities

       Total  Cost of Development Facilities = Cost of Development Facilities +
              [(Total Cost of Platform - Any Cost of Development Facilities
              Included In the Total Cost of Platform) x Development Facilities
              Area %]

       Development Facilities Area % = Deck Space Dedicated to Development
              Facilities divided by (Deck Space Dedicated to Well Slots + Deck
              Space Dedicated toDevelopment Facilities)

       For purposes of calculating the Development Facilities usage fee, the
       total cost of the Development Facilities, shall be reduced by 0.83333%
       per month, commencing from the first day of the month following the date
       when the Development Facilities where installed and continuing every
       month thereafter until the first day of the month during which production
       from the Non-consent Operation is commenced; however, the total cost of
       the Development Facilities shall not be reduced more than twenty-five
       percent (25%). If modifications, expansions or additions to the
       Development Facilities are made after commencing first production and
       prior to the connection of the Non-consent Operation to the Development
       Facilities, such Development Facilities investment shall be reduced in
       the same manner as described above, from the first day of the month the


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       Development Facilities modification, expansion or addition is completed
       until the first day of the month during which production from the
       Non-consent Operation is commenced.

       If modifications, expansions or additions are made to the Development
       Facilities after connection of the Non-consent Well which benefit the
       Non-consent Well, such costs shall be shared by the Non-consent Well
       based on that portion which the throughput volume of the Non-consent Well
       bears to the total design throughput volume of the Development Facilities
       at the time of completion of such modification, expansion or addition.
       The Non-consent well's throughput volumes shall be determined in the same
       manner as described above.

       Payment of sums under this Article 13.9.1 is not a purchase of an
       additional interest in the Platform or the Development Facilities. Such
       payment shall be included in the total amount that the Participating
       Parties are entitled to recoup out of Hydrocarbon production from the
       Non-consent Well.

       13.9.2 Operating and Maintenance Charges

              The Participating Parties shall pay all costs necessary to connect
              a Non-consent Well to the Platform and/or Development Facilities
              and that proportionate part of the costs of operating and
              maintaining the Platform and/or Development Facilities applicable
              to the Non-consent Well. Platform operating and maintenance costs
              that are costs not directly attributable to a wellbore shall be
              allocated equally to all actively producing Completions. Operating
              and maintenance costs for the Development Facilities shall be
              allocated on a volume throughput basis, that is, in the proportion
              that the volume throughput of the well bears to the total volume
              throughput of all wells connected to the Development Facilities.
              Operating and maintenance expense for support facilities (e.g.,
              electrical systems and living quarters which do not handle
              production) shall be allocated by applying a usage basis
              appropriate for that support facility.

       13.10  Allocation of Costs Between Zones

              Except as provided in Article 10.9 (Wells Proposed Below Deepest
              Producible Reservoir), if for any reason the Participating
              Interests of the Parties in a well are not the same for the entire
              depth or the Completion thereof, the costs of drilling,
              Completing, and equipping the well shall be allocated in an
              equitable manner, as agreed by the Parties, based on the value and
              allocation recommended in the applicable COPAS Guideline, as
              amended from time to time.

       13.11  Maintenance Operations

              An operation proposed within the last six (6) months of the
              primary term or, subsequent thereto, an operation proposed to
              perpetuate the Contract Area or portion thereof at its expiration
              date or otherwise, including, but not limited to, well operations,


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       regulatory relief (for example, course of action necessary to satisfy the
       statutory or regulatory requirements of the governmental authority having
       jurisdiction), and other Contract Area operations, shall be deemed to be
       a "Contract Area Maintenance Operation." To invoke this Article 13.11, a
       notice or AFE that proposes an operation must state that the proposed
       operation is a Contract Area Maintenance Operation.

       13.11.1 Participation in Contract Area Maintenance Operations

              A Party may propose a Contract Area Maintenance Operation by
              giving notice to the other Parties. If fewer than all Parties
              elect to participate in the proposed Contract Area Maintenance
              Operation, the proposing Party shall notify the Parties of the
              elections made. Each Party electing not to participate shall then
              have a second opportunity to participate in the proposed operation
              by notifying the other Parties of its election within forty-eight
              (48) hours after receipt of the notice. A Contract Area
              Maintenance Operation shall not require minimum approval, either
              of the number of Parties or the percentage of the voting interests
              of the Parties otherwise required in Article 6.1.2 (Vote
              Required). For a Contract Area Maintenance Operation to be
              conducted, the Participating Parties must agree to pay and bear
              one hundred percent (100%) of the costs and risks of the
              operation. If more than one Contract Area Maintenance Operation is
              proposed, the operation with the greatest percentage approval
              shall be conducted. Notwithstanding the recoupment provisions of
              this Agreement, a Party electing not to participate in a well
              operation proposed as a Contract Area Maintenance Operation shall
              promptly assign, effective as of the date the operation commences,
              to the Participating Parties all of its right, title, and interest
              in and to that portion of the Contract Area, being the affected
              Contract Area, that would otherwise expire and the property and
              equipment attributable thereto, in accordance with Article 26
              (Successors, Assigns, [and Preferential Rights]). If more than one
              Contract Area Maintenance Operation is proposed and there is a tie
              between two proposed operations, both operations shall be
              conducted and the costs and risks of conducting both operations
              shall be paid and borne by the Participating Parties. If the
              drilling of a well is undertaken as a Contract Area Maintenance
              Operation, further operations conducted by the Participating
              Parties in the well shall be governed by Article 10.9 (Course of
              Action After Reaching Objective Depth) or Article 11.9 (Course of
              Action After Reaching Objective Depth), whichever applies. If more
              than one well operation is conducted, any of which would
              perpetuate the Contract Area or such portion thereof, an
              assignment shall not be required from a Party participating in any
              such well operation.

       13.11.2 Accounting for Non-participation

              If after one (1) year from completion of a well operation
              conducted as a Contract Area Maintenance Operation, the Contract
              Area or portion thereof is being perpetuated by a Contract Area
              Maintenance Operation, as provided in Article 13.11.1
              (Participation in Contract Area Maintenance Operations),


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              Operator shall render a final statement, if applicable, to the
              assigning Party for its share of all expenses attributed to the
              assigned interest before the effective date of the assignment,
              plus any credit or deficiency in salvage value calculated under
              Article 15.3.1 (Prior Expenses). The assigning Party shall settle
              any deficiency owed the non-assigning Parties within thirty (30)
              days after receipt of Operator's statement.

13.12  Retention of Contract Area by Non-consent Well

       If, at the expiration of the primary term of the Contract Area, one or
       more Non-consent Wells are the only wells perpetuating that lease,
       Operator shall give written notice to each Non-participating Party that
       the Non-consent Wells are serving to perpetuate the lease. Each
       Non-participating Party shall, within thirty (30) days after receipt of
       Operator's written notice, elect one of the following:

       (a)    to assign its entire interest in the Contract Area to the
              Participating Parties in the proportions in which the Non-consent
              Wells are owned; or

       (b)    to pay the Participating Parties, within sixty (60) days after its
              election, the lesser of its proportionate share of the actual well
              costs of the wells, as if the Non-participating Party had
              originally participated, or the balance of the recoupment account.
              The payment shall be made to Operator and credited to the account
              of each Participating Party. The Nonparticipating Party shall
              remain as a Non-participating Party until full recoupment is
              obtained, but the payment shall be credited against the total
              amount to be recouped by the Participating Parties.

      A Non-participating Party that fails to make the required election shall
       be deemed to have elected under Article 13.12(a) to relinquish its entire
       interest in the Contract Area. If a Non-participating Party elects to
       make payment under Article 13.12(b) but fails to make the required
       payment within sixty (60) days after its election, the Non-participating
       Party shall either remain liable on the obligation to pay or, by
       unanimous vote of the Participating Parties, be deemed to have elected
       under Article 13.12 (a) to relinquish its entire interest in the Contract
       Area. Each relinquishing Non-participating Party shall promptly execute
       and deliver an assignment of its interest to the Participating Parties,
       in accordance with Article 26 (Successors, Assigns, [and Preferential
       Rights]).

13.13 Non-Consent Premiums

       A non-consent premium paid by a Non-Participating Party to the
       Participating Parties shall be allocated to the Participating Parties
       based on their original Participating Interest share in the Non-consent
       Operation which generated the non-consent premium.


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                                   ARTICLE 14

                        ABANDONMENT, SALVAGE, AND SURPLUS

14.1   Platform Salvage and Removal Costs

       When the Parties owning wells, Platforms and/or Development Facilities
       unanimously agree to dispose of the wells, Platforms and/or Development
       Facilities, it shall be disposed of by Operator in the time and manner
       approved by the Parties. The costs, risks, and net proceeds, if any, for
       the disposal shall be shared by the Parties in proportion to their
       Participating Interests therein.

14.2   Abandonment of Platforms, Development Facilities or Wells

       Except as provided in Article 10 (Exploratory Operations) and Article 11
       (Development Operations), a Participating Party may propose the
       abandonment of a Platform and Development Facilities or wells by
       notifying the other Participating Parties. No Platform and Development
       Facilities or wellbore shall be abandoned without the unanimous approval
       of the Participating Parties. If the Participating Parties do not approve
       abandoning the Platform and Development Facilities or wells, the Operator
       shall prepare a statement of the abandoning Party's share of estimated
       wellbore plugging and abandonment costs, Platform and Development
       Facilities removal costs and/or any related reclamation costs, less its
       share of estimated salvage value, as determined by the Operator pursuant
       to Exhibit "C". The Party desiring to abandon it shall pay the operator,
       on behalf of the Participating Parties for that Party's share of the
       estimated abandonment costs, less its share of estimated salvage value,
       within thirty (30) days after receipt of the Operator's statement. If an
       abandoning Party's respective share of the estimated salvage value is
       greater than its share of the estimated costs, Operator, on behalf of the
       Participating Parties, shall pay a sum equal to the deficiency to the
       abandoning Party within thirty (30) days after the abandoning Party's
       receipt of the Operator's statement.

14.3   Assignment of Interest.

       Each Participating Party desiring to abandon a Platform and Development
       Facilities or wells under Article 14.2 (Abandonment of Platforms,
       Development Facilities or Wells) shall assign, effective as of the last
       applicable election date, to the non-abandoning Parties, in proportion to
       their Participating Interests, its interest in the Platform and
       Development Facilities or wells and the equipment therein and its
       ownership in the Hydrocarbon production from the wells. A Party so
       assigning shall be relieved from further liability for the Platform and
       Development Facilities or wells, except liability for payments under
       Article 14.2 (Abandonment of Platforms, Development Facilities or Wells).

14.4   Abandonment Operations Required by Governmental Authority

       A well abandonment or Platform and Development Facilities removal
       required by a governmental authority having jurisdiction shall be
       accomplished by Operator with the costs, risks, and net proceeds, if any,
       to be shared by the Parties owning the well or Platform and Development


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       Facilities in proportion to their Participating Interests therein. No
       approval by the Parties will be necessary for Operator to proceed with
       the government required well abandonment, or Platform and Development
       Facilities removal. The Operator shall provide the Parties with an
       informational AFE prior to commencing such an abandonment or removal.

14.5   Disposal of Surplus Material

       Material and equipment acquired hereunder may be classified as surplus by
       Operator when deemed no longer needed in present or foreseeable
       operations. Operator shall determine the value and cost of disposing of
       the materials in accordance with Exhibit "C". If the material is
       classified as junk or if the value, less cost of disposal, is less than
       or equal to One Hundred Thousand Dollars ($100,000), Operator shall
       dispose of the surplus materials in any manner it deems appropriate. If
       the value, less the cost of disposal of the surplus material, is greater
       than One Hundred Thousand Dollars ($100,000), Operator shall give written
       notice thereof to the Parties owning the material. Unless purchased by
       Operator, the surplus material shall be disposed of in accordance with
       the method of disposal approved by the Parties owning the material.
       Proceeds from the sale or transfer of surplus material shall be promptly
       credited to each Party in proportion to its ownership of the material at
       the time of retirement or disposition.



                                   ARTICLE 15

                                   WITHDRAWAL

15.1   Right to Withdraw

       Subject to this Article 15.1, any Party may withdraw from this Agreement
       as to one or more Contract Areas (the "Withdrawing Party") by giving
       prior written notice to all other Parties stating its decision to
       withdraw ("the withdrawal notice"). The withdrawal notice shall specify
       an effective date of withdrawal that is at least sixty (60) days, but not
       more than one hundred twenty (120) days, after the date of the withdrawal
       notice. Within thirty (30) days of receipt of the withdrawal notice, the
       other Parties may join in the withdrawal by giving written notice of that
       fact to the Operator ("written notice to join in the withdrawal") and
       upon giving written notice to join in the withdrawal are "Other
       Withdrawing Parties". The withdrawal notice and the written notice to
       join in the withdrawal are unconditional and irrevocable offers by the
       Withdrawing Party and the Other Withdrawing Parties to convey to the
       Parties who do not join in the withdrawal ("the Remaining Parties") the
       Withdrawing Party's and the Other Withdrawing Parties' entire Working
       Interest in all of the Contract Area or Contract Areas, Hydrocarbon
       production, and other property and equipment owned under this Agreement.

15.2   Response to Withdrawal Notice

       Failure to respond to a withdrawal notice is deemed a decision not to
       join in the withdrawal.


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       15.2.1 Unanimous Withdrawal

              If all the other Parties join in the withdrawal,

              (a)    no assignment of Working Interests shall take place;

              (b)    subject to Article 14.4, no further operations may be
                     conducted under this Agreement unless agreed to by all
                     Parties;

              (c)    the Parties shall abandon all activities and operations
                     within the Contract Area and relinquish all of their
                     Working Interests to the MMS within fifteen (15) days of
                     the conclusion of the thirty (30) day joining period; and

              (d)    notwithstanding anything to the contrary in Article 14
                     (Abandonment, Salvage and Surplus), the Operator shall:

                     1)     furnish all Parties a detailed abandonment plan, if
                            applicable, and a detailed cost estimate for the
                            abandonment within thirty (30) days after the
                            conclusion of the thirty (30) day joining period;
                            and

                     2)     cease operations and begin to permanently plug and
                            abandon all wells and remove all Facilities in
                            accordance with the abandonment plan.

       15.2.2 No Additional Withdrawing Parties

              If none of the other Parties join in the withdrawal, then the
              Remaining Parties must accept an assignment of their Participating
              Interest share of the Withdrawing Party's Working Interest.

       15.2.3 Acceptance of the Withdrawing Parties' Interests.

              If one or more but not all of the other Parties join in the
              withdrawal and become Other Withdrawing Parties, then within
              forty-eight (48) hours (exclusive of Saturdays, Sundays, and
              federal holidays) of the conclusion of the thirty (30) day joining
              period, each of the Remaining Parties shall submit to the Operator
              a written rejection or acceptance of its Participating Interest
              share of the Withdrawing Party's and Other Withdrawing Parties'
              Working Interest. Failure to make that written rejection or
              acceptance shall be deemed a written acceptance. If the Remaining
              Parties are unable to select a successor Operator, if applicable,
              or if a Remaining Party submits a written rejection and the other
              Remaining Parties do not agree to accept one hundred percent
              (100%) of the Withdrawing Party's and Other Withdrawing Parties'
              Working Interest within ten (10) days of the conclusion of the
              forty-eight (48) hour period to submit a written rejection or
              acceptance, the Remaining Parties will be deemed to have joined in
              the withdrawal, and Article 15.2.1 (Unanimous Withdrawal) will
              apply.

       15.2.4 Effects of Withdrawal

              Except as otherwise provided in this Agreement, after giving a
              withdrawal notice or a written notice to join in the withdrawal,
              the Withdrawing Party and Other Withdrawing Parties are not
              entitled to approve or participate in any activity or operation in



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              the Contract Area, other than those activities or operations for
              which they retain a financial responsibility. The Withdrawing
              Party and Other Withdrawing Parties shall take all necessary steps
              to accomplish their withdrawal by the effective date referred to
              in Article 15.1 (Right to Withdraw) and shall execute and deliver
              to the Remaining Parties all necessary instruments to assign their
              Working Interest to the Remaining Parties. A Withdrawing Party and
              Other Withdrawing Parties shall bear all expenses associated with
              their withdrawal and the transfer of their Working Interest.

15.3   Limitation Upon and Conditions of Withdrawal

       15.3.1 Prior Expenses

              The Withdrawing Party and Other Withdrawing Parties remain liable
              for their Participating Interest share of the costs of all
              activities, operations, rentals, royalties, taxes, damages,
              Hydrocarbon imbalances, or other liability or expense accruing or
              relating to (i) obligations existing as of the effective date of
              the withdrawal, (ii) operations conducted before the effective
              date of the withdrawal, (iii) operations approved by the
              Withdrawing Party and Other Withdrawing Parties before the
              effective date of the withdrawal, or (iv) operations commenced by
              the Operator under one of its discretionary powers under this
              Agreement before the effective date of the withdrawal. Before the
              effective date of the withdrawal, the Operator shall provide a
              statement to the Withdrawing Party and Other Withdrawing Parties
              for (1) their respective shares of all identifiable costs under
              this Article 15.3.1 and (2) their respective Participating
              Interest shares of the estimated current costs of plugging and
              abandoning all wells and removing all Platforms, Development
              Facilities, and other materiel and equipment owned by the Joint
              Account, less their respective Participating Interest Shares of
              the estimated salvage value of the assets at the time of
              abandonment, as approved by vote. This statement of expenses,
              costs, and salvage value shall be prepared by the Operator under
              Exhibit "C". Before withdrawing, the Withdrawing Party and Other
              Withdrawing Parties shall either pay the Operator, for the benefit
              of the Remaining Parties, the amounts allocated to them as shown
              in the statement, or provide security satisfactory to the
              Remaining Parties for all obligations and liabilities they have
              incurred and all obligations and liabilities attributable to them
              before the effective date of the withdrawal. All liens, charges,
              and other encumbrances, including but not limited to overriding
              royalties, net profits interest and production payments, which the
              Withdrawing Party and Other Withdrawing Parties placed (or caused
              to be placed) on their Working Interest shall be fully satisfied
              or released prior to the effective date of its withdrawal (unless
              the Remaining Parties are willing to accept the Working Interest
              subject to those liens, charges, and other encumbrances).


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       15.3.2 Confidentiality

              The Withdrawing Party and Other Withdrawing Parties will continue
              to be bound by the confidentiality provisions of Article 7.3
              (Confidentiality) after the effective date of the withdrawal but
              will have no further access to technical information relating to
              activities or operations under this Agreement. The Withdrawing
              Party and Other Withdrawing Parties are not required to return to
              the Remaining Parties Confidential Data acquired prior to the
              effective date of the withdrawal.

       15.3.3 Emergencies and Force Majeure

              No Party may withdraw during a Force Majeure or emergency that
              poses a threat to life, safety, property or the environment but
              may withdraw from this Agreement after termination of the Force
              Majeure or emergency. The Withdrawing Party and Other Withdrawing
              Parties remain liable for their share of all costs and liabilities
              arising from the Force Majeure or emergency, including but not
              limited to the drilling of relief wells, containment and cleanup
              of oil spills and pollution, and all costs of debris removal made
              necessary by the Force Majeure or emergency.




                                   ARTICLE 16


                      RENTALS, ROYALTIES AND OTHER PAYMENTS

16.1   Overriding Royalty and Other Burdens

       If the Working Interest or Participating Interest of a Party is subject
       to an overriding royalty, Hydrocarbon production payment, net profits
       interest, mortgage, lien, security interest, or other burden or
       encumbrance, other than lessor's royalty and other burdens listed in
       Exhibit "A" to this Agreement or in Exhibits "A", "B" or "C" of the
       Dominion EPA or the Ridgewood EPA, the Party so burdened shall pay and
       bear all liabilities and obligations created or secured by the burden or
       encumbrance and shall indemnify and hold the other Parties harmless from
       all claims and demands for payment asserted by the owners of the burdens
       or encumbrances. If a Party becomes entitled to an assignment under this
       Agreement, or as a result of Non-consent Operations hereunder becomes
       entitled to receive a relinquished interest, as provided in Article 13.2
       (Relinquishment of Interest), otherwise belonging to a Non-participating
       Party whose Working Interest in the operations is so burdened or
       encumbered, the Party entitled to receive the assignment from the
       Non-participating Party or the relinquished interest of the
       Non-participating Party's Hydrocarbon production shall receive same free
       and clear of all such burdens and encumbrances, and the Non-participating
       Party whose interest is subject to the burdens and encumbrances shall
       hold the Participating Parties harmless for the burdens and encumbrances,
       and will bear same at its own expense.


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16.2   Subsequently Created Interest

       Notwithstanding anything in this Agreement to the contrary, if a Party,
       after execution of this Agreement, creates an overriding royalty,
       Hydrocarbon production payment, net profits interest, carried interest,
       or any other interest out of its Working Interest which the Parties do
       not unanimously agree to list on Exhibit "A", (hereinafter called
       "Subsequently Created Interest"), the Subsequently Created Interest shall
       be made specifically subject to this Agreement. If the Party owning the
       interest from which the Subsequently Created Interest was established
       fails to pay, when due, its share of costs, and if the proceeds from the
       sale of Hydrocarbon production under Article 8.6 (Security Rights) are
       insufficient for that purpose, or elects to abandon a well, or elects to
       relinquish its interest in the Contract Area, the Subsequently Created
       Interest shall be chargeable with a pro rata portion of all costs in the
       same manner as if the Subsequently Created Interest were a Working
       Interest, and Operator may enforce against the Subsequently Created
       Interest the lien and other rights granted or recognized under this
       Agreement to secure and enforce collection of costs chargeable to the
       Subsequently Created Interest. The rights of the owner of the
       Subsequently Created Interest shall be, and hereby are, subordinated to
       the rights granted or recognized by Article 8.6 (Security Rights).

16.3   Payment of Rentals and Minimum Royalties

       Operator shall pay in a timely manner, for the joint account of the
       Parties, all rentals, minimum royalties, and other similar payments
       accruing under the Contract Area and shall, on request, submit evidence
       of each such payment to the Parties. Operator shall not be held liable to
       the other Parties in damages for loss of the Contract Area or interest
       therein if, through mistake oversight, a rental, minimum royalty, or
       other payment is not paid or is erroneously paid. The loss of a Contract
       Area or interest therein resulting from the Operator's failure to pay, or
       erroneous payment of rental or minimum royalty shall be a joint loss, and
       there shall be no readjustment of interests. For Hydrocarbon production
       delivered in kind by Operator to a Non-operator or to another for the
       account of a Non-operator, the Non-operator shall provide Operator with
       information about the Non-operator's proceeds received or the value of
       the Hydrocarbon production taken in kind in order that Operator may make
       payments of minimum royalties due.

16.4   Non-participation in Payments

       A Party that desires not to pay its share of a rental, minimum royalty,
       or similar payment shall notify the other Parties in writing at least
       sixty (60) days before the payment is due. Operator shall then make the
       payment for the benefit of the Parties that do desire to maintain the
       Contract Area. In such event, the Non-participating Party shall assign to
       the Participating Parties, upon their request, the portions of its
       interest in the Contract Area maintained by the payment. The assigned
       interest shall be owned by each Participating Party in proportion to its
       Participating Interest. The assignment shall be made in accordance


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       with Article 27 (Successors, Assigns, [and Preferential Rights]).

16.5   Royalty Payments

       Each Party shall be responsible for and shall separately bear and
       properly pay or cause to be paid all royalty and other amounts due on its
       share of Hydrocarbon production taken in accordance with state or federal
       regulations, as may be amended from time-to-time. Adjustments shall be
       made among the Parties in accordance with Exhibit "E" (Gas Balancing
       Agreement). During a period when Participating Parties in a Non-consent
       Operation are receiving a Nonparticipating Party's share of Hydrocarbon
       production, the Participating Parties shall bear and properly pay, or
       cause to be paid, the Contract Area royalty on the Hydrocarbon production
       taken, and shall hold the Non-participating Parties harmless from
       liability for the payment.



                                   ARTICLE 17

                                      TAXES

17.1   Property Taxes

       Operator shall render property covered by this Agreement for ad valorem
       taxation, if applicable, and shall pay the property taxes for the benefit
       of each Party. Operator shall charge each Party its share of the tax
       payments. If the ad valorem taxes are based in whole or in part upon
       separate valuations of each Party's Working Interest, then
       notwithstanding anything in this Agreement to the contrary, each Party's
       share of property taxes shall be in proportion to the tax value generated
       by that Party's Working Interest.

17.2   Contest of Property Tax Valuation

       Operator shall timely and diligently protest to a final determination
       each tax valuation it deems unreasonable. Pending such determination,
       Operator may elect to pay under protest. Upon final determination,
       Operator shall pay the taxes and the interest, penalties, and costs
       accrued as a result of the protest. In either event, Operator shall
       charge each Party its share of any amounts due, and each Party shall be
       responsible for reimbursing Operator for any such amounts paid.

17.3   Production and Severance Taxes

       Each Party shall pay, or cause to be paid, all production and severance
       taxes due on Hydrocarbon production that it receives under this
       Agreement.

17.4   Other Taxes and Assessments

       Operator shall pay other applicable taxes (other than income taxes,
       excise taxes, or other similar types of taxes) or assessments and charge
       each Party its share.


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                                   ARTICLE 18

                                   INSURANCE

18.1   Insurance

       Operator shall provide and maintain the insurance prescribed in Exhibit
       "B" and charge those costs to the Joint Account. No other insurance shall
       be carried for the benefit of the Parties or separately by the Parties
       under this Agreement, except as provided in Exhibit "B".

18.2   Bonds

       Operator shall obtain and maintain all bonds or financial guarantees
       required by an applicable law, regulation or rule. The costs of those
       bonds or financial guarantees acquired exclusively for the conduct of
       activities and operations under this Agreement shall be charged to the
       Joint Account, including an amount equivalent to the reasonable cost of
       that bond or financial guarantee if Operator provides that bond or
       guarantee itself and does not engage a third party to do so. Operator
       shall require all contractors to obtain and maintain all bonds required
       by an applicable law, regulation or rule.



                                   ARTICLE 19

                         LIABILITY, CLAIMS, AND LAWSUITS

19.1   Individual Obligations

       The obligations, duties, and liabilities of the Parties under this
       Agreement are several, not joint or collective. Nothing in this Agreement
       shall ever be construed as creating a partnership of any kind, joint
       venture, agency relationship, association, or other character of business
       entity recognizable in law for any purpose. In their relations with each
       other under this Agreement, the Parties shall not be considered to be
       fiduciaries or to have established a confidential relationship, except as
       specifically provided in Article 7.3 (Confidentiality) and Article 7.4
       (Limited Disclosure), but rather shall be free to act at arm's length in
       accordance with their own respective self-interests. Each Party shall
       hold all other Parties harmless from liens and encumbrances on the
       Contract Area arising as a result of its acts.

19.2   Notice of Claim or Lawsuit

       If, on account of a matter involving activities or operations under this
       Agreement, or affecting the Contract Area, a claim is made against a
       Party, or if a party outside of this Agreement files a lawsuit against a
       Party, or if a Party files a lawsuit, or if a Party receives notice of a
       material administrative or judicial hearing or other proceeding, that
       Party shall give written notice of the claim, lawsuit, hearing, or
       proceeding ("Claim") to the other Parties as soon as reasonably
       practicable.


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19.3   Settlements

       The Operator may settle a Claim, or multiple Claims arising out of the
       same incident, involving activities or operations under this Agreement or
       affecting the Contract Area, if the aggregate expenditure does not exceed
       Two Hundred Fifty Thousand Dollars ($250,000) and if the payment is in
       complete settlement of these Claims. If the amount required for
       settlement exceeds this amount, the Parties shall determine the further
       handling of the Claims under Article 19.4 (Defense of Claims and
       Lawsuits).

19.4   Defense of Claims and Lawsuits

       The Operator shall supervise the handling, conduct, and prosecution of
       all Claims involving activities or operations under this Agreement or
       affecting the Contract Area. Claims may be settled in excess of the
       amount specified in Article 19.3 (Settlements) if the settlement is
       approved by vote of the Participating Parties (in accordance with Article
       6.1.2) in the activity or operation out of which the Claim arose, but a
       Party may independently settle a Claim or the portion of a Claim which is
       attributable to its Participating Interest share alone as long as that
       settlement does not directly adversely affect the interest or rights of
       the other Participating Parties. Charges for services performed by the
       legal. staff of a Party shall be made in accordance with Exhibit "C", but
       all other expenses incurred by the Operator in the prosecution or defense
       of Claims for the Parties, together with the amount paid to discharge a
       final judgment, are costs and shall be paid by the Parties in proportion
       to their Participating Interest share in the activity or operation out of
       which the Claim arose. The employment of outside counsel, but not the
       selection of that counsel, requires unanimous approval by the Parties
       involved in the activity or operation out of which the Claim arose. If
       the use of outside counsel is approved, the fees and expenses incurred as
       a result thereof shall be charged to the Parties in proportion to their
       Participating Interest share in the activity or operation out of which
       that Claim arose. Each Party has the right to hire its own outside
       counsel at its sole cost with respect to its own defense in which case
       the Party would not be obligated to participate in the cost of retaining
       outside counsel selected by Operator.

19.5   Liability for Damages

       UNLESS SPECIFICALLY PROVIDED OTHERWISE IN THIS AGREEMENT, LIABILITY FOR
       LOSSES, DAMAGES, COSTS, EXPENSES OR CLAIMS INVOLVING ACTIVITIES OR
       OPERATIONS UNDER THIS AGREEMENT OR AFFECTING THE CONTRACT AREA WHICH ARE
       NOT COVERED BY OR IN EXCESS OF THE INSURANCE CARRIED FOR THE JOINT
       ACCOUNT SHALL BE BORNE BY EACH PARTY IN PROPORTION TO ITS PARTICIPATING
       INTEREST SHARE IN THE ACTIVITY OR OPERATION OUT OF WHICH THAT LIABILITY
       ARISES, EXCEPT TO THE EXTENT LIABILITY RESULTS FROM THE GROSS NEGLIGENCE
       OR WILLFUL MISCONDUCT OF A PARTY, IN WHICH CASE THAT PARTY SHALL BE


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       SOLELY RESPONSIBLE FOR LIABILITY RESULTING FROM ITS GROSS NEGLIGENCE OR
       WILLFUL MISCONDUCT.

19.6   Indemnification for Non-Consent Operations

       TO THE EXTENT ALLOWED BY LAW, THE PARTICIPATING PARTIES WILL HOLD THE
       NON-PARTICIPATING PARTIES (AND THEIR AFFILIATES, AGENTS, INSURERS,
       DIRECTORS, OFFICERS, AND EMPLOYEES) HARMLESS AND RELEASE, DEFEND, AND
       INDEMNITY THEM AGAINST ALL CLAIMS, DEMANDS, LIABILITIES, REGULATORY
       DECREES, AND LIENS FOR ENVIRONMENTAL POLLUTION AND PROPERTY DAMAGE OR
       PERSONAL INJURY, INCLUDING SICKNESS AND DEATH, CAUSED BY OR OTHERWISE
       ARISING OUT OF NON-CONSENT OPERATIONS, AND ANY LOSS AND COST SUFFERED BY
       A NON-PARTICIPATING PARTY AS AN INCIDENT THEREOF, EXCEPT WHERE THAT LOSS
       OR COST RESULTS FROM THE SOLE, CONCURRENT, OR JOINT NEGLIGENCE, FAULT OR
       STRICT LIABILITY OF THAT NON-PARTICIPATING PARTY, IN WHICH CASE EACH
       PARTY SHALL PAY OR CONTRIBUTE TO THE SETTLEMENT OR SATISFACTION OF
       JUDGMENT IN THE PROPORTION THAT ITS NEGLIGENCE, FAULT OR STRICT LIABILITY
       CAUSED OR CONTRIBUTED TO THE INCIDENT. IF AN INDEMNITY IN THIS AGREEMENT
       IS DETERMINED TO VIOLATE LAW OR PUBLIC POLICY, THAT INDEMNITY SHALL THEN
       BE ENFORCEABLE ONLY TO THE MAXIMUM EXTENT ALLOWED BY LAW.

19.7   Damage to Reservoir, Loss of Reserves and Profit

       NOTWITHSTANDING ANY CONTRARY PROVISION OF THIS AGREEMENT, OTHER THAN
       ARTICLES 10.8.6 AND 11.8.6, IF SELECTED, NO PARTY IS LIABLE TO ANY OTHER
       PARTY FOR DAMAGE TO A RESERVOIR, LOSS OF HYDROCARBONS, LOSS OF PROFITS,
       OR OTHER CONSEQUENTIAL DAMAGES, DAMAGES FOR BUSINESS INTERRUPTION, OR
       PUNITIVE DAMAGES, EXCEPT TO THE EXTENT THAT THE DAMAGE OR LOSS ARISES
       FROM A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN WHICH CASE THAT
       PARTY SHALL BE SOLELY RESPONSIBLE FOR DAMAGE OR LOSS ARISING FROM ITS
       GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; NOR DOES A PARTY INDEMNIFY ANY
       OTHER PARTY FOR THAT DAMAGE OR LOSS.

19.8   Non-Essential Personnel

       A NON-OPERATOR THAT REQUESTS TRANSPORTATION OR ACCESS TO A DRILLING RIG,
       PLATFORM, VESSEL, OR OTHER FACILITY USED FOR ACTIVITIES OR OPERATIONS
       UNDER THIS AGREEMENT SHALL HOLD THE OTHER PARTIES HARMLESS AND SHALL
       RELEASE, DEFEND, AND INDEMNIFY THEM AGAINST (I) ALL CLAIMS, DEMANDS, AND
       LIABILITIES FOR PROPERTY DAMAGE AND (1I) ALL CLAIMS, DEMANDS, AND
       LIABILITIES FOR ANY LOSS OR COST SUFFERED BY A PARTY AS AN INCIDENT
       THEREOF, INCLUDING, BUT NOT LIMITED TO, INJURY, SICKNESS AND DEATH,
       CAUSED BY OR OTHERWISE ARISING OUT OF THAT TRANSPORTATION OR ACCESS, OR


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       BOTH, EXCEPT TO THE EXTENT THAT LOSS OR COST RESULTS FROM THE GROSS
       NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SO INDEMNIFIED AND
       PROTECTED.

19.9   Dispute Resolution Procedure

       Any claim, controversy or dispute arising out of, relating to, or in
       connection with this Agreement or an activity or operation conducted
       under this Agreement shall be resolved under the Dispute Resolution
       Procedure in Exhibit "H" to this Agreement.



                                   ARTICLE 20

                           INTERNAL REVENUE PROVISION

20.1   Internal Revenue Provision

       Notwithstanding any provision in this Agreement to the effect that the
       rights and liabilities of the Parties are several, not joint or
       collective, and that this Agreement and the activities and operations
       under this Agreement do not constitute a partnership under state law;
       however, the Parties agree that the activities and operations under this
       Agreement shall constitute a partnership for federal and, to the extent
       allowable, state and local income tax law and shall be governed for such
       purposes by the terms of Exhibit F hereto.



                                   ARTICLE 21

                                  CONTRIBUTIONS

21.1   Notice of Contributions Other Than Advances for Sale of Production

       Each Party shall promptly notify the other Parties of all offers of
       contributions that it may obtain, or contributions it is attempting to
       obtain, for the drilling of a well or the conducting of an operation on
       the Contract Area. Payments received as consideration for entering into a
       contract for the sale of Hydrocarbon production from the Contract Area,
       loans, and other financial arrangements shall not be considered
       contributions for the purpose of this Article 21. No Party shall release
       or obligate itself to release Confidential Data in return for a
       contribution from a third party without prior written consent of the
       Participating Parties or Parties having the right to participate in the
       well.

21.2   Cash Contributions

       If a Party receives a cash contribution for drilling a well on the
       Contract Area or conducting an activity or operation on the Contract
       Area, the cash contribution shall be paid to Operator, and Operator shall
       credit the amount thereof to the Parties in proportion to their
       Participating Interests in the well or the Platform and/or Development


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       Facilities. If the well is a Non-consent Well, the amount of the
       contribution shall be deducted from the cost specified in Article
       13.2.1(a) before computation of the amount to be recouped out of
       Hydrocarbon production.

21.3   Acreage Contributions

       If a Party receives an acreage contribution for the drilling of a well on
       the Contract Area, the acreage contribution shall be shared by each
       Participating Party that accepts it in proportion to its Participating
       Interest in the well. As between the Participating Parties, this
       Agreement shall apply separately to the acreage.



                                   ARTICLE 22

                            DISPOSITION OF PRODUCTION

22.1   Take-in-Kind Facilities

       Subject to Article 22.2, a Party may, at its sole cost and risk,
       construct Take-in-Kind Facilities to take its share of Hydrocarbon
       production in kind.

22.2   Duty to Take in Kind

       Each Party shall own and, at its own cost and risk, shall take in kind or
       separately dispose of its share of the oil, gas, and condensate produced
       and saved from the Contract Area, exclusive of Hydrocarbon production
       used by Operator in activities or operations conducted under this
       Agreement, subject to this Article 22. In order to avoid interference
       with operations on or regarding the Platform, the Development Facilities,
       and the Contract Area, a Party exercising its right to construct Take-in
       Kind Facilities ("the Take in Kind Party") shall provide the Operator
       with a list of equipment it deems necessary for its Take in Kind
       Facilities ("the components") along with its notice informing the
       Operator of its election to take in kind. If the Operator agrees to
       install and operate the Take-in Kind Facilities, the Operator shall
       purchase the components and install it on behalf of the Take in Kind
       Party at the Take in Kind Party's sole risk and cost, including, but not
       limited to, any fees, penalties or other costs incurred as a result of
       any cancellation of placed orders as may be requested by the Take in Kind
       Party. The Operator shall provide the Take in Kind Party with monthly
       updates on the progress of the ordering and installation of the Take in
       Kind Facilities. The Operator, based on the instructions of Take in Kind
       Party, shall install and operate all of the components. The Operator
       shall not be responsible for any losses or damages to the components or
       the Take in Kind Party's Hydrocarbon production metered, treated,
       processed or transported by the components unless such losses or damages
       are the result of the Operator's gross negligence or willful misconduct.
       If the Operator refuses or fails to commence the installation of the
       Take-in Kind Facilities by thirty (30) days prior to the deadline
       provided in Section 12.4, the Take-in Kind Party shall have the right to


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       install and operate the Take-in Kind Facilities providing that such
       operations do not interfere with existing operations or proposed
       operations that have been approved under terms of this Agreement.

22.3   Failure to Take Oil and Condensate in Kind

       Notwithstanding Article 22.2 (Duty to Take in Kind), if a Party fails to
       take in kind or dispose of its share of the oil or condensate, Operator
       shall have the right, but not the obligation, subject to revocation at
       will by the Party owning the Hydrocarbon production, to purchase for its
       own account, sell to others, or otherwise dispose of all or part of the
       Hydrocarbon production at the same price at which Operator calculates and
       pays lessor's royalty on its own portion of the oil or condensate.
       Operator shall notify the non-taking Party when the option is exercised.
       A purchase or sale by Operator of any other Party's share of the oil or
       condensate shall be for such reasonable periods of time as are consistent
       with the minimum needs of the industry under the circumstances, but in no
       event shall a contract be for a period in excess of one (1) year.
       Proceeds of the oil or condensate purchased, sold, or otherwise disposed
       of by Operator under this Article 22.3 shall be paid to the Party that
       had, but did not exercise, the right to take in kind and separately
       dispose of the oil or condensate. Operator, in disposing of another
       Party's oil or condensate, shall not be responsible for making any filing
       with regulatory agencies not required by law to be made by it in respect
       to another Party's share of oil or condensate. Unless required by
       governmental authority having jurisdiction or by judicial process, no
       Party shall be forced to share an available market with a non-taking
       Party.

22.4   Failure to Take Gas in Kind

       Article 22.3 (Failure to Take Oil and Condensate in Kind) shall not apply
       to gas produced from the Contract Area. In no event shall Operator be
       responsible for, or obligated to dispose of, another Party's share of gas
       production. If for any reason a Party fails to take or market its full
       share of gas as produced, that Party may later take, market, or receive a
       cash accounting for its full share in accordance with Exhibit "E".

22.5   Expenses of Delivery in Kind

       A cost that is incurred by Operator in making delivery of a Party's share
       of Hydrocarbons or disposing of same shall be paid by the Party.



                                   ARTICLE 23

                                 APPLICABLE LAW

23.1   Applicable Law

       THIS AGREEMENT AND THE RELATIONSHIP OF THE PARTIES UNDER THIS AGREEMENT
       SHALL BE GOVERNED BY AND INTERPRETED UNDER FEDERAL LAWS AND LAWS OF THE
       STATE OF LOUISIANA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF


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       LAWS THAT WOULD OTHERWISE REFER THE MATTER TO THE LAWS OF ANOTHE
       JURISDICTION.



                                   ARTICLE 24

                    LAWS, REGULATIONS AND NON-DISCRIMINATION

24.1   Laws and Regulations

       This Agreement and operations under this Agreement are subject to all
       applicable laws, rules, regulations, and orders by all governmental
       authorities claiming jurisdiction now and in the future. A provision of
       this Agreement found to be contrary to or inconsistent with any such law,
       rule, regulation, or order shall be deemed to have been modified
       accordingly.

24.2   Non-discrimination

       In performing work under this Agreement, the Parties shall comply and
       Operator shall require each independent contractor to comply with the
       governmental requirements in Exhibit "D" and with Articles 202(1) to (7),
       inclusive of Executive Order 11246, as amended.



                                   ARTICLE 25

                                  FORCE MAJEURE

25.1   Force Majeure

       If a Party is unable, wholly or in part because of a Force Majeure, to
       carry out its obligations under this Agreement, other than the obligation
       to make money payments, that Party shall give the other Parties prompt
       written notice of the Force Majeure with full particulars about it.
       Effective upon the date notice is given, the obligations of the Party, so
       far as they are affected by the Force Majeure, shall be suspended during,
       but no longer than, the continuance of the Force Majeure. Time is of the
       essence in the performance of this Agreement, and every reasonable effort
       will be made by the Party to avoid delay or suspension of any work or
       acts to be performed under this Agreement. The requirement that the Force
       Majeure be remedied with all reasonable dispatch shall not require a
       Party to settle strikes or other labor difficulties.


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                                   ARTICLE 26

                   SUCCESSORS, ASSIGNS AND PREFERENTIAL RIGHTS

26.1   Successors and Assigns

       This Agreement binds and inures to the benefit of the Parties and their
       respective heirs, successors, and assigns and shall constitute a covenant
       running with the Contract Area. Each Party shall incorporate in each
       assignment of an interest in the Contract Area a provision that the
       assignment is subject to this Agreement.

26.2   Transfer of Interest

       No transfer, assignment, or other disposition of interest by a Party
       shall relieve the Party of liabilities and obligations it has incurred or
       that are attributable to the interest transferred before the date of the
       transfer, and the obligation to pay and bear all costs and risks
       attributable to an operation in which the Party was a Participating Party
       before making the transfer, and the lien and security rights granted by
       Section 8.6 (Security Rights) shall continue to burden the interest
       transferred to secure payment of the obligations. The transferor shall be
       liable for all costs, expenses, and liabilities for well plugging and
       abandonment, Platform and Development Facilities removal and disposal,
       and site clearance for property and equipment attributable to the
       assigned interest before the date of the transfer, net of salvage
       proceeds.

26.3   Consent to Assign

       Dominion, Ridgewood and their successors-in-interest may not sell,
       transfer, farm out, assign, or otherwise dispose of all or part of its
       Working Interest in the Contract Area without the prior written consent
       of Chevron, which consent shall not be unreasonable withheld. Said
       consent shall not be unreasonably withheld and in the event Ridgewood
       desires to assign to a Ridgewood Energy LLC Fund this Article 26.3 and
       Article 26.4 and 26.6 below shall not apply. No Party may sell, transfer,
       farm out, assign, or otherwise dispose of all or part of its Working
       Interest in the Contract Area unless:

       (a)    the transferee is financially capable of assuming the obligations
              hereunder and, in accordance with Subsection 26.3(c), the
              transferor furnishes the Parties with proof of such financial
              capability that, in the case of Outer Continental Shelf Contract
              Areas, shall be proof that the transferee is currently qualified
              by the Minerals Management Service, an agency of the United States
              Department of the Interior, or a successor agency having
              jurisdiction (hereinafter "MMS"), to own Outer Continental Shelf
              Contract Areas and that the transferee would not be required by
              the MMS to post a supplemental bond pursuant to 30 CFR ss.
              256.53(d) & (e) if such transferee owned 100% of the Working
              Interest in the Contract Area.

       (b)    the transferee agrees in writing to assume all obligations and
              liabilities under this Agreement related to the interest acquired
              arising from and after the effective date of the transfer; and


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       (c)    the transferor has given the other Parties written notice of the
              transfer at least fifteen (15) days before the date of the
              transfer, such notice to include the name of each proposed
              transferee, a description of the interests to be transferred, and
              the proof set forth in Subsection 26.3(a).

       The requirements of this Section 26.3 shall not apply to a merger,
       consolidation, reorganization, sale or transfer to an Affiliate, a
       mortgage by a Party of its interest in the Contract Area, a sale of all,
       or substantially all, of a Party's domestic exploration and production
       properties, or a transfer or disposition between the Parties hereto.

26.4   Transfers Between Parties

       A transfer, relinquishment, or other disposition of interests in the
       Contract Area between Parties under the Acreage Out Option (if selected)
       under Section 10.5 (Operations by Fewer Than All Parties); Section 13.11
       (Contract Area Maintenance Operations); Section 13.12 (Retention of
       Contract Area by Non-consent Well); Article 15 (Withdrawal); or Section
       16.4 (Non-participation in Payments) shall be made without warranty of
       title. Any such transfer between the Parties, if applicable, shall be
       free and clear of all Subsequently Created Interests, as defined in
       Section 16.2 (Subsequently Created Interest), and all mortgages, liens,
       and encumbrances.

26.5   Division of Interest

       If, at any time, the interest of a Party is divided among and owned by
       four (4) or more co-owners, Operator, at its discretion, may require the
       co-owners to appoint a single trustee or agent with full authority to
       receive notices, approve expenditures, receive billings for, and approve
       and pay the Party's share of the joint expenses, and to deal generally
       with, and with power to bind the co owners of the Party's interest within
       the scope of the operations embraced in this Agreement. All such
       co-owners may separately dispose of their respective shares of the oil,
       gas, and condensate produced from the Contract Area and may receive,
       separately, payment of the sale proceeds thereof.

26.6   Preferential Rights

       If any Party or any of their successors-in-interest, desires to transfer,
       sell, farm out, assign, or otherwise dispose of all or part of its
       Working Interest ("Disposing Party"), it shall promptly give written
       notice to the other Parties and any of the other Parties'
       successors-in-interest ("Acquiring Party(ies)") with full information
       about the proposed transaction, including, but not limited to, the name
       and address of the prospective transferee (who must be ready, willing,
       and able to acquire the interest and deliver the stated consideration
       therefore), the consideration for the transfer, farm out terms, and all
       other terms of the offer. In the case of a package sale of oil and gas
       interests that includes all or part of the Disposing Party's Working
       Interest, or if the proposed transaction is structured as a
       non-simultaneous, like-kind exchange under Section 1031 of the Internal
       Revenue Code of 1986, as amended ("Code"), the Working Interest that is
       subject to this preferential right shall be separately valued in good
       faith and the notice shall state the value attributed to the interest by
       the prospective transferee. The Acquiring Party (ies) shall then have


ST/WD EPA JOA
                                       61


<PAGE>

       an optional prior right, for a period of thirty (30) days after receipt
       of the notice, to elect to purchase or acquire on the same terms and
       conditions, or on equivalent terms for a non-cash transaction, all of the
       Working Interest that the Disposing Party is proposing to transfer. If
       this preferential right is exercised by an Acquiring Party (ies), the
       purchasing or Acquiring Party (ies) shall share the purchased or acquired
       interest in the proportions that the Working Interest of each bears to
       the total Working Interest of all Acquiring Party (ies), or in such
       proportions as the Acquiring Party (ies) otherwise agree. This
       preferential right shall apply separately to each Working Interest or
       part thereof covered by this Agreement, regardless of whether it is
       included in the proposed transaction along with other oil and gas
       interests, whether as a sale, farm out, or non-simultaneous, like-kind
       exchange, and no provision in this Agreement shall be interpreted to
       defeat this preferential right. Upon exercise of this preferential right,
       the acquiring Party (ies) shall agree to perform all obligations of the
       prospective transferee under the proposed transaction only for the
       Working Interest subject to the proposed transaction. This preferential
       right, however, shall not exist or apply when a Party proposes (a) to
       mortgage its interest; (b) to dispose of or transfer its interest to a
       third party by (i) merger, (ii) reorganization, or (iii) consolidation;
       (c) to sell all of its exploration and production properties located in
       the Gulf of Mexico, Outer Continental Shelf of the United States of
       America; or (d) to transfer the interest under a property exchange
       transaction other than a non-simultaneous, like-kind exchange under
       Section 1031 of the Code. If the proposed transaction is not consummated
       within six (6) months after receipt of the notice by the other Parties,
       the Working Interest shall again be governed by this Section 26.6 and the
       preferential right shall again arise for the offered interest as herein
       described.



                                   ARTICLE 27

                            ADMINISTRATIVE PROVISIONS

27.1   Term

       This Agreement shall remain in effect so long as any Contract Area
       remains in effect and thereafter until (a) all wells have been abandoned
       and plugged or turned over to the Parties owning an interest in the
       Contract Area on which the wells are located; (b) all Platforms,
       Development Facilities, and equipment have been disposed by the Operator
       in accordance with Article 14 (Abandonment, Salvage, and Surplus); (c)
       all Claims as defined in Article 19 (Liability, Claims, and Lawsuits)
       have been settled or otherwise disposed of; and (d) there has been a
       final accounting and settlement by all Parties. In accordance with
       Article 4.5 (Selection of Successor Operator), this Agreement will
       terminate if no Party is willing to become Operator, effective after all
       conditions in clauses (a) through (d) above have been completed. In
       accordance with Article 15.2.1 (Unanimous Withdrawal), this Agreement
       will terminate if all Parties elect to withdraw, effective after all


ST/WD EPA JOA
                                       62


<PAGE>

       conditions in clauses (a) through (d) above have been completed.
       Termination of this Agreement shall not relieve a Party of a liability or
       obligation accrued or incurred before termination and is without
       prejudice to all continuing confidentiality obligations or other
       obligation in this Agreement.

27.2   Waiver

       A term, provision, covenant, representation, warranty, or condition of
       this Agreement may be waived only by written instrument executed by the
       Party waiving compliance. The failure or delay of a Party in the
       enforcement or exercise of the rights granted under this Agreement shall
       not constitute a waiver of said rights nor shall it be considered as a
       basis for estoppel. Time is of the essence in the performance of this
       Agreement and all time limits shall be strictly construed and enforced.

27.3   Waiver of Right to Partition

       Each Party waives the right to bring an action for partition of its
       interest in the Contract Area, wells, Platform, Development Facilities,
       and other equipment held under this Agreement, and covenants that during
       the existence of this Agreement it shall not resort at any time to an
       action at law or in equity to partition any or all of the Contract Areas
       and lands or personal property subject to this Agreement.

27.4   Compliance With Laws and Regulations

       This Agreement, and all activities or operations conducted by the Parties
       under this Agreement, are expressly subject to, and shall comply with,
       all laws, orders, rules, and regulations of federal, state, and local
       governmental authorities having jurisdiction over the Contract Area.

       27.4.1 Severance of Invalid Provisions

              If, for any reason and for so long as, a clause or provision of
              this Agreement is held by a court of competent jurisdiction to be
              illegal, invalid, unenforceable or unconscionable under a present
              or future law (or interpretation thereof), the remainder of this
              Agreement will not be affected by that illegality or invalidity.
              An illegal or invalid provision will be deemed severed from this
              Agreement, as if this Agreement had been executed without the
              illegal or invalid provision. The surviving provisions of this
              Agreement will remain in full force and effect unless the removal
              of the illegal or invalid provision destroys the legitimate
              purposes of this Agreement; in which event this Agreement shall be
              null and void.

       27.4.2 Fair and Equal Employment

              Each of the Parties is an Equal Opportunity Employer, and the
              equal opportunity provisions of 30 CFR 270 and 41 CFR 60-1, as
              amended or modified, are incorporated in this Agreement by
              reference. The affirmative action clauses concerning disabled
              veterans and veterans of the Vietnam era (41 CFR 60-250) and the
              affirmative action clauses concerning employment of the
              handicapped (41 CFR 60-741) are also incorporated in this


ST/WD EPA JOA
                                       63


<PAGE>

              Agreement by reference. In performing work under this Agreement,
              the Parties shall comply with (and the Operator shall require each
              independent contractor to comply with) the governmental
              requirements in Exhibit "E" that pertain to non-segregated
              facilities.

27.5   Construction and Interpretation of this Agreement

       27.5.1 Headings for Convenience

              Except for the definition headings in Article 2 (Definitions), all
              the table of contents, captions, numbering sequences, and
              paragraph headings in this Agreement are inserted for convenience
              only and do not define, expand or limit the scope, meaning, or
              intent of this Agreement.

       27.5.2 Article References

              Except as otherwise provided in this Agreement, each reference to
              an article of this Agreement includes all of the referenced
              article and its sub-articles.

       27.5.3 Gender and Number

              The use of pronouns in whatever gender or number is a proper
              reference to the Parties to this Agreement though the Parties may
              be individuals, business entities, or groups thereof. Reference in
              this Agreement to the singular of a noun or pronoun includes the
              plural and vice versa.

       27.5.4 Future References

              A reference to a Party includes such Party's successors and
              assigns and, in the case of governmental bodies, persons
              succeeding to their respective functions and capacities.

       27.5.5 Currency

              Any amounts due or payable under this Agreement shall be paid in
              United States currency.

       27.5.6 Optional Provisions

              In the event that any "Optional" provision of this Agreement is
              not adopted by the Parties to this Agreement by a typed, printed
              or handwritten indication, such provision shall not form a part of
              this Agreement, and no inference shall be made concerning the
              intent of the Parties in regard to the subject matter of the
              "Optional" provision

       27.5.7 Joint Preparation

              This Agreement shall be deemed for all purposes to have been
              prepared through the joint efforts of the Parties and shall not be
              construed for or against one Party or the other as a result of the
              preparation, submittal, drafting, execution or other event of
              negotiation hereof.


ST/WD EPA JOA
                                       64


<PAGE>

       27.5.8 Integrated Agreement

              This Agreement contains the final and entire agreement of the
              Parties for the matters covered by this Agreement and, as such,
              supersedes all prior written or oral communications and
              agreements. This Agreement may not be modified or changed except
              by written amendment signed by the Parties.

       27.5.9 Binding Effect

              To the extent it is assignable, this Agreement shall bind and
              inure to the benefit of the Parties and their respective
              successors and assigns, and shall constitute a covenant running
              with the land comprising the Contract Area. This Agreement does
              not benefit or create any rights in a person or entity that is not
              a Party to this Agreement.

       27.5.10 Further Assurances

              Each Party will take all actions necessary and will sign all
              documents necessary to implement this Agreement. Except as
              otherwise provided in this Agreement, within (30) days after their
              receipt of a valid written request for those documents from a
              Party, all other Parties shall prepare and execute the documents.

       27.5.11 Counterpart Execution

              This Agreement may be executed by signing the original or a
              counterpart. If this Agreement is executed in counterparts, all
              counterparts taken together shall have the same effect as if all
              Parties had signed the same agreement. No Party shall be bound to
              this Agreement until all Parties have executed a counterpart or
              the original of this Agreement. This Agreement may also be
              ratified by a separate instrument that refers to this Agreement
              and adopts by reference all provisions of this Agreement. A
              ratification shall have the same effect as an execution of this
              Agreement.

27.6   Restricted Bidding

       If more than one Party is ever on the list of restricted joint bidders
       for Outer Continental Shelf ("OCS") lease sales, as issued by the MMS
       under 30 CFR 256.44, as amended, the Parties shall comply with all
       statutes and regulations regarding restricted joint bidders on the OCS.

27.7   Conflict of Terms

       Chevron and Dominion hereby agree and acknowledge that this Agreement is
       made subject and subordinate to that certain Exploration Participation
       Agreement (EPA) dated _____, 2006 between Chevron U.S.A. Inc. and
       Dominion, and that in the event of a conflict between the terms and
       provisions of this Agreement and the Dominion EPA, the terms and
       provisions of the EPA shall control. Chevron and Ridgewood hereby agree
       and acknowledge that this Agreement is made subject and subordinate to
       that certain Exploration Participation Agreement (EPA) dated _____, 2006
       between Chevron and Ridgewood, and that in the event of a conflict


ST/WD EPA JOA
                                       65


<PAGE>

       between the terms and provisions of this Agreement and the Ridgewood EPA,
       the terms and provisions of the EPA shall control.




IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the
day and year first above written.


WITNESSES:                             Chevron U.S.A. Inc.

                                       By:    /S/ J.G. Larre
-------------------------------              -------------------------------
                                       Title: ASSISTANT SECRETARY
-------------------------------              -------------------------------



                                       Dominion  Exploration  & Production, Inc

                                        By:
-------------------------------              -------------------------------
                                       Title:
-------------------------------              -------------------------------



                                       Ridgewood Energy Corporation

 /s/ [ILLEGIBLE SIGNATURE]             By:    /s/ W.G. Tabor
-------------------------------              -------------------------------
 /s/ [ILLEGIBLE SIGNATURE]             Title: EXECUTIVE VICE PRESIDENT
-------------------------------              -------------------------------





ST/WD EPA JOA


                                       66

<PAGE>


                                  Exhibit "A"


 Attached to and made a part of that certain Offshore Operating Agreement dated
 effective as of the ____ day of _________, 20___, between Chevron U.S.A. inc.,
    Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
  covering ______________ Block ___________ , Federal Offshore, Gulf of Mexico


1.   Chevron U.S.A. Inc. (Chevron) is designated as Operator.

2.   Contract Area:

     That portion of that certain Oil and Gas Lease of Submerged Lands bearing
Serial No. OCS ______, dated effective __________, _________, by and between
the United States of America, as Lessor, and ____________  as Lessee, covering
all or a portion of Block ________, ___________ Area, insofar and only insofar
as it covers and affects Prospect " ______ ", as defined in Exhibit " ___ " of
that certain Exploration Participation Agreement dated effective ___________,
20___ between Chevron and Dominion Exploration & Production, Inc. and in Exhibit
"___" of that certain Exploration Participation Agreement dated effective
____________, 20____ between Chevron and Ridgewood Energy Corporation.

3.   Division of Interest

     Company                     *After Casing Point Working Interest Percentage
     ---------------------------------------------------------------------------
     Chevron U.S.A. Inc. (Chevron)                                    50.000%
     Dominion Exploration & Production, Inc. (Dominion)               25.000%
     Ridgewood Energy Corporation (Ridgewood)                         25.000%
                                                                      -------
                                                                     100.000%

     * The Parties' respective interest is subject to that certain Exploration
     Participation Agreement (Dominion EPA) dated September 1, 2006 between
     Chevron and Dominion and that certain Exploration Participation Agreement
     (Ridgewood EPA) dated September 1, 2006 between Chevron and Ridgewood. The
     working interests shown represent the After Casing Point interest in the
     Contract Area as referenced in the respective EPA.


4.   Notification Addressees

     Chevron U.S.A. Inc.                 Dominion Exploration & Production, Inc.
     935 Gravier Street                  1250 Poydras Street, Suite 2000
     New Orleans, LA 70112               New Orleans, LA 70113
     Attention: Mr. Gordon R. Cain       Attention: Mr. Mitch Ackel
     Tel.: (504) 592-6356                Tel.: (504)
     Fax: (504) 592-7110                 Fax: (504)

     Ridgewood Energy Corporation
     11700 Old Katy Road, Suite 280
     Houston, Texas 77079
     Attention: Mr. W. Greg Tabor
     Tel: (281) 293-8449
     Fax: (281)

STWDJOA Exhibit "A"

                                        1


<PAGE>

                                   Exhibit "B"


 Attached to and made a part of that certain Offshore Operating Agreement dated
 effective as of the _____ day of _________, 20__, between Chevron U.S.A. Inc.,
   Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
       covering __________ Block _____, Federal Offshore, Gulf of Mexico


                             INSURANCE REQUIREMENTS
                             ----------------------


1.   Operator shall carry insurance as follows for the benefit and protection of
     the Parties to this Agreement:

     a)   Worker's Compensation Insurance in accordance with laws of
          governmental bodies having jurisdiction including, if applicable,
          United States Longshore and Harbor Workers' Compensation Act with
          Outer Continental Shelf Extension, Maritime Employers' Liability
          (including, but not limited to, the Jones Act and Death on the High
          Seas Act) and Employers' Liability Insurance. Employers' Liability
          Insurance shall provide coverage of $10,000,000 per accident.

     b)   Any other insurance or surety bond that may be required elsewhere in
          this agreement or by applicable federal, state and local laws and
          regulations.

     Operator may include the aforesaid risks under its qualified self-insurance
     program provided Operator complies with applicable laws, and in such event
     Operator shall charge to the Joint Account a premium determined by applying
     manual insurance rates to the payroll.


2.   Each Party to this Agreement shall carry the following insurance for their
     percentage interest:

     a)   Commercial General Liability (Bodily Injury and Property Damage)
          Insurance, including coverage for; premises-operations, products and
          completed operations, independent contractors liability, contractual
          liability to cover liabilities assumed under this Agreement, coverage
          for explosion, collapse and underground hazards, and sudden and
          accidental pollution. The limits of such insurance shall not be less
          than $25,000,000 combined single limit per occurrence.

     b)   Operator's Extra Expense Insurance including, but not limited to:
          coverage for control of well (including underground control of well);
          redrill and extra expense; extended and unlimited redrill; seepage,
          pollution, clean-up and contamination; evacuation expense; making
          wells save and care custody and control. The limits for such insurance
          shall not be less than $25,000,000 combined single limit per
          occurrence.

     The above insurance shall contain waivers of subrogation in favor of the
     other Parties to this Agreement.

     Each Party shall provide evidence of the above insurance, satisfactory to
     Operator, prior to commencement of any work under this Agreement and
     subsequently with each policy's renewal date.

     Alternatively, prior to the commencement of any drilling or work under this
     Agreement and subsequently with any policy renewal, each Party may
     affirmatively elect to self insure this Article 2 insurance where such
     Party holds and maintains a market capitalization, or has provided
     Operator, annually, as of the effective anniversary date, evidence of
     ownership of unencumbered assets, in excess of One Billion
     ($1,000,000,000.00) Dollars (U.S.) or shall provide evidence of the above
     insurance under policies and with insurers, satisfactory to Operator.

STWDJOA - Exhibit "B"

                                        1


<PAGE>

3.   Operator shall not be obligated or authorized to obtain or carry on behalf
     of the Joint Account any additional insurance covering the Parties or the
     operations to be conducted hereunder. Each Party individually may acquire
     at its own expense such insurance as it deems proper to protect itself
     against claims, losses, damage to or destruction of property of third
     parties, or personal injury or death of third persons arising out of the
     joint operations. All uninsured losses and all damages to jointly owned
     property shall be borne by the Parties in proportion to their respective
     interests.

4.   Operator shall require all contractors engaged in operations under this
     Agreement to comply with the applicable Worker's Compensation and
     Employers' Liability laws and to maintain such other insurance and in such
     amounts as Operator deems necessary.

5.   In the event less than all Parties participate in an operation conducted
     under the terms of this Agreement, then the insurance requirement and
     costs, as well as all losses, liabilities and expenses incurred as the
     result of such operation, shall be the burden of the Party or Parties
     participating therein.




STWDJOA - Exhibit "B"

                                        2


<PAGE>

                                                 2005 COPAS Accounting Procedure



                         COPAS 2005 ACCOUNTING PROCEDURE

                           INSTRUCTIONS FOR COMPLETING
                     ACCOUNTING PROCEDURE - JOINT OPERATIONS

These instructions and guidelines refer to every blank and optional or
alternative provision in the model form to be considered by users in preparation
of their agreements. Users should seek the advice of counsel to ensure that the
selections and completed provisions are applicable, reflect the actual intent of
the Parties, and are proper under the prevailing business circumstances.

The first two paragraphs of Section I (General Provisions) provide that if the
Parties fail to select either one of competing "Alternative" provisions, or
select all the competing "Alternative" provisions, Alternative 1 in each such
instance shall be deemed to have been adopted by the Parties as a result of any
such omission.

If an Option is not selected by a typed, printed or handwritten indication, it
will not form part of the Accounting Procedure.

It is suggested that the optional or alternative provisions not desired in the
agreement be deleted in their entirety.


Title - Fill in the pertinent information (e.g. the name/type of agreement to
which this Accounting Procedure is attached, the date, and the Parties). The
date on the heading should be consistent with the date on the Agreement to which
it is attached; however, if this Accounting Procedure is an amendment to an
existing agreement, include the effective date of the amendment.

Section I.5.E (Optional) -- Select the optional provision if the Parties wish to
impose additional penalties for failure to meet audit resolution deadlines.

Section I.6.B - Fill in the blanks with the number of Parties and percentages
required to approve amendments to this Accounting Procedure.

Section II.6.A - Insert the interest rate on the undepreciated facility
investment amount.

Section II.7 A&B - Insert the thresholds for the level of authority required to
charge Affiliate goods and services.

Section II.13 (Alternative) - Select the preferred alternative for the
treatment of Off-site ecological, environmental, and safety costs.

Section III.1 (Alternative) - Select the preferred alternative provision for
assessing drilling and producing overhead - either through the use of the Fixed
Rate Basis or the Percentage Basis.

STWDJOA - Exhibit "C"



                                        i
<PAGE>

                                                 2005 COPAS Accounting Procedure


Section II.1.A.i (Alternative) - Select the preferred alternative for the
treatment of On-site Technical Services as either direct or overhead.

Section III.1.A.ii (Alternative) - Select the preferred alternative for the
treatment of Off-site Technical Services as either All Overhead, All Direct, or
Drilling Direct.

Section III.1.B - Insert the drilling and producing well overhead rates, if
using the Fixed Rate method of assessing overhead.

Section III.1.C - Insert the Development and Operating overhead rates if using
the Percentage Basis method of assessing overhead.

Section III.2 A&B - Insert the Major Construction and Catastrophe overhead
rates.




STWDJOA - Exhibit "C"


                                       ii
<PAGE>

                                                 2005 COPAS Accounting Procedure


                                   EXHIBIT "C"
                            _____________ BLOCK _____
                              ACCOUNTING PROCEDURE
                                JOINT OPERATIONS

 Attached to and made a part of that certain Offshore Operating Agreement dated
effective as of the ______ day of __________, 20__, between Chevron U.S.A. Inc.,
   Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
    covering _____________ Block _________, Federal Offshore, Gulf of Mexico


                  I. GENERAL PROVISIONS - ACCOUNTING PROCEDURE

IF THE PARTIES FAIL TO SELECT EITHER ONE OF COMPETING "ALTERNATIVE" PROVISIONS,
OR SELECT ALL THE COMPETING "ALTERNATIVE" PROVISIONS, ALTERNATIVE 1 IN EACH SUCH
INSTANCE SHALL BE DEEMED TO HAVE BEEN ADOPTED BY THE PARTIES AS A RESULT OF ANY
SUCH OMISSION OR DUPLICATE NOTATION.

IN THE EVENT THAT ANY "OPTIONAL" PROVISION OF THIS ACCOUNTING PROCEDURE IS NOT
ADOPTED BY THE PARTIES TO THE AGREEMENT BY A TYPED, PRINTED OR HANDWRITTEN
INDICATION, SUCH PROVISION SHALL NOT FORM A PART OF THIS ACCOUNTING PROCEDURE,
AND NO INFERENCE SHALL BE MADE CONCERNING THE INTENT OF THE PARTIES IN SUCH
EVENT.

1.   DEFINITIONS

     All terms used in this Accounting Procedure shall have the following
     meaning, unless otherwise expressly defined in the Agreement:

     "Affiliate" means for a person, another person that controls, is controlled
     by, or is under common control with that person. In this definition, (a)
     control means the ownership by one person, directly or indirectly, of more
     than fifty percent (50%) of the voting securities of a corporation or, for
     other persons, the equivalent ownership interest (such as partnership
     interests), and (b) "person" means an individual, corporation, partnership,
     trust, estate, unincorporated organization, association, or other legal
     entity.

     "Agreement" means the operating agreement, farmout agreement, or other
     contract between the Parties to which this Accounting Procedure is
     attached.

     "Controllable Material" means Material that, at the time of acquisition or
     disposition by the Joint Account, as applicable, is so classified in the
     Material Classification Manual most recently recommended by the Council of
     Petroleum Accountants Societies (COPAS).

     "Equalized Freight" means the procedure of charging transportation cost to
     the Joint Account based upon the distance from the nearest Railway
     Receiving Point to the property.

     "Excluded Amount" means a specified excluded trucking amount most recently
     recommended by COPAS.

STWDJOA - Exhibit "C"
                                        1


<PAGE>

                                                 2005 COPAS Accounting Procedure


     "Field Office" means a structure, or portion of a structure, whether a
     temporary or permanent installation, the primary function of which is to
     directly serve daily operation and maintenance activities of the Joint
     Property and which serves as a staging area for directly chargeable field
     personnel.

     "First Level Supervision" means those employees whose primary function in
     Joint Operations is the direct oversight of the Operator's field employees
     and/or contract labor directly employed On-site in a field operating
     capacity. First Level Supervision functions may include, but are not
     limited to:

          o    Responsibility for field employees and contract labor engaged in
               activities that can include field operations, maintenance,
               construction, well remedial work, equipment movement and drilling
          o    Responsibility for day-to-day direct oversight of rig operations
          o    Responsibility for day-to-day direct oversight of construction
               operations
          o    Coordination of job priorities and approval of work procedures
          o    Responsibility for optimal resource utilization (equipment,
               Materials, personnel)
          o    Responsibility for meeting production and fled operating expense
               targets
          o    Representation of the Parties in local matters involving
               community, vendors, regulatory agents and landowners, as an
               incidental part of the supervisor's operating responsibilities
          o    Responsibility for all emergency responses with field staff
          o    Responsibility for implementing safety and environmental
               practices
          o    Responsibility for field adherence to company policy
          o    Responsibility for employment decisions and performance
               appraisals for field personnel
          o    Oversight of sub-groups for field functions such as electrical,
               safety, environmental, telecommunications, which may have group
               or team leaders.

     "Joint Account" means the account showing the charges paid and credits
     received in the conduct of the Joint Operations that are to be shared by
     the Parties, but does not include proceeds attributable to hydrocarbons and
     by-products produced under the Agreement.

     "Joint Operations" means all operations necessary or proper for the
     exploration, appraisal, development, production, protection, maintenance,
     repair, abandonment, and restoration of the Joint Property.

     "Joint Property" means the real and personal property subject to the
     Agreement.

     "Laws" means any laws, rules, regulations, decrees, and orders of the
     United States of America or any state thereof and all other governmental
     bodies, agencies, and other authorities having jurisdiction over or
     affecting the provisions contained in or the transactions contemplated by
     the Agreement or the Parties and their operations, whether such laws now
     exist or are hereafter amended, enacted, promulgated or issued.

     "Material" means personal property, equipment, supplies, or consumables
     acquired or held for use by the Joint Property.

     "Non-Operators" means the Parties to the Agreement other than the Operator.

     "Offshore Facilities" means platforms, surface and subsea development and
     production systems, and other support systems such as oil and gas handling
     facilities, living quarters, offices, shops, cranes, electrical supply

STWDJOA- Exhibit "C"
                                        2


<PAGE>

                                                 2005 COPAS Accounting Procedure


     equipment and systems, fuel and water storage and piping, heliport, marine
     docking installations, communication facilities, navigation aids, and other
     similar facilities necessary in the conduct of offshore operations, all of
     which are located offshore.

     "Off-site" means any location that is not considered On-site as defined in
     this Accounting Procedure.

     "On-site" means on the Joint Property when in direct conduct of Joint
     Operations. The term "On-site" shall also include that portion of Offshore
     Facilities, Shore Base Facilities, fabrication yards, and staging areas
     from which Joint Operations are conducted, or other facilities that
     directly control equipment on the Joint Property, regardless of whether
     such facilities are owned by the Joint Account.

     "Operator" means the Party designated pursuant to the Agreement to conduct
     the Joint Operations.

     "Parties" means legal entities signatory to the Agreement or their
     successors and assigns. Parties shall be referred to individually as
     "Party."

     "Participating Interest" means the percentage of the costs and risks of
     conducting an operation under the Agreement that a Party agrees, or is
     otherwise obligated, to pay and bear.

     "Participating Party" means a Party that approves a proposed operation or
     otherwise agrees, or becomes liable, to pay and bear a share of the costs
     and risks of conducting an operation under the Agreement.

     "Personal Expenses" means reimbursed costs for travel and temporary living
     expenses.

     "Railway Receiving Point" means the railhead nearest the Joint Property for
     which freight rates are published, even though an actual railhead may not
     exist.

     "Shore Base Facilities" means onshore support facilities that during Joint
     Operations provide such services to the Joint Property as a receiving and
     transshipment point for Materials; debarkation point for drilling and
     production personnel and services; communication, scheduling and
     dispatching center; and other associated functions serving the Joint
     Property.

     "Supply Store" means a recognized source or common stock point for a given
     Material item.

     "Technical Services" means services providing specific engineering,
     geoscience, or other professional skills, such as those performed by
     engineers, geologists, geophysicists, and technicians, required to handle
     specific operating conditions and problems for the benefit of Joint
     Operations; provided, however, Technical Services shall not include those
     functions specifically identified as overhead under the second paragraph of
     the introduction of Section III (Overhead). Technical Services may be
     provided by the Operator, Operator's Affiliate, Non-Operator, Non-Operator
     Affiliates, and/or third parties.

     "Well DECC" (Well Design & Execution Collaboration Center) means a drilling
     operation center with technology to plan, design, monitor, advise, and
     control a drilling well or wells on a real time/online basis. Operator
     shall have the right but not the obligation to use a drilling operation
     center for planning, drilling, re-drilling, sidetracking, or deepening of a
     well, plugback or workover operations, plugging and abandonment,
     monitoring, and control of wells.

STWDJOA - Exhibit "C"
                                        3


<PAGE>

                                                 2005 COPAS Accounting Procedure



2.   STATEMENTS AND BILLIGS

     The Operator shall bill Non-Operators on or before the last day of the
     month for their proportionate share of the Joint Account for the preceding
     month. Such bills shall be accompanied by statements that identify the AFE
     (authority for expenditure), lease or facility, and all charges and credits
     summarized by appropriate categories of investment and expense.
     Controllable Material shall be separately identified and fully described in
     detail, or at the Operator's option, Controllable Material may be
     summarized by major Material classifications. Intangible drilling costs,
     audit adjustments, and unusual charges and credits shall be separately and
     clearly identified.

     The Operator may make available to Non-Operators any statements and bills
     required under Section I.2 and/or Section I.3.A (Advances and Payments by
     the Parties) via email, electronic data interchange, internet websites or
     other equivalent electronic media in lieu of paper copies. The Operator
     shall provide the Non-Operators instructions and any necessary information
     to access and receive tht statements and bills within the timeframes
     specified herein. A statement or billing shall be deemed as delivered
     twenty-four (24) hours (exclusive of weekends and holidays) after the
     Operator notifies the Non-Operator that the statement or billing is
     available on the website and/or sent via email or electronic data
     interchange transmission.

3.   ADVANCES AND PAYMENTS BY THE PARTIES

     A.   Unless otherwise provided for in the Agreement, the Operator may
          require the Non-Operators to advance their share of the estimated cash
          outlay for the succeeding month's operations within fifteen (15) days
          after receipt of the advance request or by the first day of the month
          for which the advance is required, whichever is later. The Operator
          shall adjust each monthly billing to reflect advances received from
          the Non-Operators for such month. If a refund is due, the Operator
          shall apply the amount to be refunded to the subsequent month's
          billing or advance, unless the Non-Operator sends the Operator a
          written request for a cash refund. The Operator shall remit the refund
          to the Non-Operator within fifteen (15) days of receipt of such
          written request.

     B.   Except as provided below, each Party shall pay its proportionate share
          of all bills in full within fifteen (15) days of receipt date. If
          payment is not made within such time, the unpaid balance shall bear
          interest compounded monthly at the prime rate published by the Wall
          Street Journal on the first day of each month the payment is
          delinquent, plus three percent (3%), per annum, or the maximum
          contract rate permitted by the applicable usury Laws governing the
          Joint Property whichever is the lesser, plus attorney's fees, court
          costs, and other costs in connection with the collection of unpaid
          amounts. If the Wall Street Journal ceases to be published or
          discontinues publishing a prime rate, the unpaid balance shall bear
          interest compounded monthly at the prime rate published by the Federal
          Reserve plus three percent (3%) per annum. Interest shall begin
          accruing on the first day of the month in which the payment was due.
          Payment shall not be reduced or delayed as a result of inquiries or
          anticipated credits unless the Operator has agreed. Notwithstanding
          the foregoing, the Non-Operator may reduce payment, provided it
          furnishes documentation and explanation to the Operator at the time
          payment is made, to the extent such reduction is caused by:

          (1)  being billed at an incorrect working interest or Participating
               Interest that is higher than such Non-Operator's actual working
               interest or Participating Interest, as applicable; or

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          (2)  being billed for a project or AFE requiring approval of the
               Parties under the Agreement that the Non-Operator has not
               approved or is not otherwise obligated to pay under the
               Agreement; or
          (3)  being billed for a property in which the Non-Operator no longer
               owns a working interest, provided the Non-Operator has furnished
               the Operator a copy of the recorded assignment letter in-lieu.
               Notwithstanding the foregoing, the Non-Operator shall remain
               responsibly paying bills attributable to the interest it sold or
               transferred for any bills rendered during thirty (30) day period
               following the Operator's receipt of such written notice; or
          (4)  charges outside the adjustment period, as provided in Section 1.4
               (Adjustments).


4.   ADJUSTMENTS

     A.   Payment of any such bills shall not prejudice the right of any Party
          to protest or question the correctness thereof; however, all bills and
          statements, including payout statements, rendered during any calendar
          year shall conclusively be presumed to be true and correct, with
          respect only to expenditures, after twenty-four (24) months following
          the end of any such calendar year, unless within said period a Party
          takes specific detailed written exception thereto making a claim for
          adjustment. The Operator shall provide a response to all written
          exceptions, whether or not contained in an audit report, within the
          time periods prescribed in Section 1.5 (Expenditure Audits).

     B.   All adjustments initiated by the Operator, except those described in
          items (1) through (4) of this Section I.4.B, are limited to the
          twenty-four (24) month period following the end of the calendar year
          in which the original charge appeared or should have appeared on the
          Operator's Joint Account statement or payout statement. Adjustments
          that may be made beyond the twenty-four (24) month period are limited
          to adjustments resulting from the following:

          (1)  a physical inventory of Controllable Material as provided for in
               Section V (Inventories of Controllable Material), or
          (2)  an offsetting entry (whether in whole or in part) that is the
               direct result of a specific joint interest audit exception
               granted by the Operator relating to another property, or
          (3)  a government/regulatory audit, or
          (4)  a working interest ownership or Participating Interest
               adjustment.

5.   EXPENDITURE AUDITS

     A.   Except for the audit of payout accounts, this Article 5 does not apply
          to revenue items or rev audits. A Non-Operator, upon written notice to
          the Operator and all other Non-Operators shall have the right to
          conduct an audit the Operator's expenditure accounts and records
          relating to the Joint Account within the twenty-four (24) month period
          following the end of such calendar year which such bill was rendered;
          however, conducting an audit shall not extend the time for the taking
          of written exception to and the adjustment of accounts as provided for
          in Section 1.4 (Adjustments). Any Party that is subject to payout
          accounting under the Agreement shall have the right to audit the
          accounts and records of the Party responsible for preparing the payout
          statements, or of the party furnishing information to the Party
          responsible for preparing payout statements. Audits of payout accounts
          may include the volumes of hydrocarbons produced and saved and
          proceeds received for such hydrocarbons as they pertain to payout
          accounting required under the Agreement. Unless otherwise provided in
          the Agreement, audits of a payout account shall be conducted within
          the twenty-four (24) month period following the end of the calendar
          year in which the payout statement was rendered.

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          Where there are two or more Non-Operators, the Non-Operators shall
          make every reasonable effort to conduct a joint audit in a manner that
          will result in a minimum of inconvenience to the Operator. The
          Operator shall bear no portion of the Non-Operators' audit cost
          incurred under this paragraph unless agreed to by the Operator. The
          audits shall not be conducted more than once each year without prior
          approval of the Operator, except upon the resignation or removal of
          the Operator, and shall be made at the expense of those Non-Operators
          approving such audit.

          The Non-Operator leading the audit (hereinafter "lead audit company")
          shall issue the audit report within ninety (90) days after completion
          of the audit testing and analysis; however, the ninety (90) day time
          period shall not extend the twenty-four (24) month requirement for
          taking specific detailed written exception as required in Section
          I.4.A (Adjustments) above. All claims shall be supported with
          sufficient documentation.

          A timely filed written exception or audit report containing written
          exceptions (hereinafter "written exceptions") shall, with respect to
          the claims made therein, preclude the Operator from asserting a
          statute of limitations defense against such claims, and the Operator
          hereby waives its right to assert any statute of limitations defense
          against such claims for so long as any Non-Operator continues to
          comply with the deadlines for resolving exceptions provided in this
          Accounting Procedure. If the Non-Operators fail to comply with the
          additional deadlines in Section I.5.C, the Operator's waiver of its
          rights to assert a statute of limitations defense against the claims
          brought by the Non-Operators shall lapse, and such claims shall then
          be subject to the applicable statute of limitations; provided that
          such waiver shall not lapse in the event that the Operator has failed
          to comply with the deadlines in Section I.5.B or I.5.C.

     B.   The Operator shall provide a written response to all exceptions in an
          audit report within one hundred eighty (180) days after Operator
          receives such report. Denied exceptions should be accompanied by a
          substantive response.

     C.   The lead audit company shall reply to the Operator's response to an
          audit report within ninety (90) days of receipt, and the Operator
          shall reply to the lead audit company's follow-up response within
          ninety (90) days of receipt; provided however, each Non-Operator shall
          have the right to represent itself if it disagrees with the lead audit
          company's position or believes the lead audit company is not
          adequately fulfilling its duties.

     D.   If any Party fails to meet the deadlines in Sections I.5.B or I.5.C or
          if any audit issues are outstanding fifteen (15) months after Operator
          receives the audit report, the Operator or any Non Operator
          participating in the audit has the right to call a resolution meeting,
          as set forth in this Section I.5.D or it may invoke the dispute
          resolution procedures included in the Agreement, if applicable. The
          meeting will require one month's written notice to the Operator and
          all Non-Operators participating in the audit. The meeting shall be
          held at the Operator's office or mutually agreed location, and shall
          be attended by representatives of the Parties with authority to
          resolve such outstanding issues. Any Party who fails to attend the
          resolution meeting shall be bound by any resolution reached at the
          meeting. The lead audit company will make good faith efforts to
          coordinate the response and positions of the Non-Operator participants
          throughout the resolution process; however, each Non-Operator shall
          have the right to represent itself. Attendees will make good faith


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          efforts to resolve outstanding issues, and each Party will be required
          to present substantive information supporting its position. A
          resolution meeting may be held as often as agreed to by the Parries.
          Issues unresolved at one meeting may be discussed at subsequent
          meetings until each such issue is resolved.

          If the Agreement contains no dispute resolution procedures and the
          audit issues cannot be resolved by negotiation, the dispute shall be
          submitted to mediation. In such event, promptly following one Party's
          written request for mediation, the Parties to the dispute shall choose
          a mutually acceptable mediator and share the costs of mediation
          services equally. The Parties shall each have present at the mediation
          at least one individual who has the authority to settle the dispute.
          The Parties shall make reasonable efforts to ensure that the mediation
          commences within sixty (60) days of the date of the mediation request.
          Notwithstanding the above, any Party may file a lawsuit or complaint
          (1) if the Parties are unable after reasonable efforts, to commence
          mediation within sixty (60) days of the date of the mediation request,
          (2) for statute of limitations reasons, or (3) to seek a preliminary
          injunction or other provisional judicial relief, if in its sole
          judgment an injunction or other provisional relief is necessary to
          avoid irreparable damage or to preserve the status quo. Despite such
          action, the Parties shall continue to try to resolve the dispute by
          mediation.

     E.   (X) Optional Provision -Forfeiture Penalties)

          If the Non-Operators fail to meet the deadline in Section I. 5. C, any
          unresolved exceptions that were not addressed by the Non-Operators
          within one (1) year following receipt of the last substantive response
          of the Operator shall be deemed to have been withdrawn by the
          Non-Operators. If the Operator fails to meet the deadlines in Section
          I.5.B or I.5.C, any unresolved exceptions that were not addressed by
          the Operator within one (1) year following receipt of the audit report
          or receipt of the last substantive response of the Non-Operators,
          whichever is later, shall be deemed to have been granted by the
          Operator and adjustments shall be made, without interest, to the Joint
          Account.

6.   APPROVAL BY PARTIES

A.   General Matters


          Where an approval or other agreement of the Parties is expressly
          required under other Sections of this Accounting Procedure and if the
          Agreement to which this Accounting Procedure is attached contains no
          contrary provisions in regard thereto, the Operator shall notify all
          Parties of the Operator's proposal and the agreement or approval of
          two ( 2 ) or more Parties owing at least fifty-one percent (51%)
          working interest or Participating Interest shall be controlling on all
          Parties, provided however, the approval of at least one Non-Operator
          shall be required. Failure of a Party to respond to a matter within
          thirty (30) days from receipt of notice or within the time prescribed
          in the Agreement for general voting matters, whichever is later, shall
          be deemed an affirmative vote by that Party in favor of the proposal.

          This Section I.6.A applies to specific situations of limited duration
          where a Party proposes to change the accounting for charges from that
          prescribed in this Accounting Procedure. This provision does not apply
          to amendments to this Accounting Procedure, which are covered by
          Section I.6.B.

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                                                 2005 COPAS Accounting Procedure


     B.   Amendments

          If the Agreement to which this Accounting Procedure is attached
          contains no contrary provisions in regard thereto, this Accounting
          Procedure can be amended by an affirmative vote of two (2) or more
          Parties, one of which is the Operator, having a combined working
          interest of at least eighty percent (80%), which approval shall be
          binding on all Parties, provided, however, approval of at least one
          (1) Non-Operator shall be required.

     C.   Affiliates

          For the purpose of administering the voting procedures of Sections
          I.6.A and I.6.B, if Parties to this Agreement are Affiliates of each
          other, then such Affiliates shall be combined and treated as a single
          Party having the combined working interest or Participating Interest
          of such Affiliates.

          For the purposes of administering the voting procedures in Section
          I.6.A, if a Non-Operator is an Affiliate of the Operator, votes under
          Section I.6.A shall require the approval of at least one Non-Operator
          that is not an Affiliate of Operator.


                               II. DIRECT CHARGES

The Operator shall charge the Joint Account with the following items:

1.   RENTALS AND ROYALTIES

     Lease rentals and royalties paid by the Operator, on behalf of all Parties,
     for the Joint Operations.

2.   LABOR

     A.   Salaries and wages, including incentive compensation programs as set
          forth in COPAS MFI-37 ("Chargeability of Incentive Compensation
          Programs"), for:

          (1)  Operator's field employees directly employed On-site in the
               conduct of Joint Operations,

          (2)  Operator's employees directly employed on Shore Base Facilities,
               Offshore Facilities, or other facilities serving the Joint
               Property if such costs are not charged under Section II.6
               (Equipment and Facilities Furnished by Operator) or are not a
               function covered under Section III (Overhead),

          (3)  Operator's employees providing First Level Supervision,

          (4)  Operator's employees providing On-site Technical Services for the
               Joint Property if such charges are excluded from the overhead
               rates in Section III (Overhead),

          (5)  Operator's employees providing Off site Technical Services for
               the Joint Property if such charges are excluded from the overhead
               rates in Section III (Overhead).

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          Charges for the Operator's employees identified in Section II.2.A may
          be made based on the employee's actual salaries and wages, or in lieu
          thereof a day rate representing the Operator's average salaries and
          wages of the employee's specific job category.

          Charges for personnel chargeable under this Section II.2.A who are
          foreign nationals shall not exceed comparable compensation paid to an
          equivalent U.S. employee pursuant to this Section II.2, unless
          otherwise approved by the Parties pursuant to Section I.6.A (General
          Matters).

     B.   Operator's cost of holiday, vacation, sickness, and disability
          benefits, and other customary allowances paid to employees whose
          salaries and wages are chargeable to the Joint Account under Section
          II.2.A, excluding severance payments or other termination allowances.
          Such costs under this Section II.2.B may be charged on a "when and
          as-paid basis" or by "percentage assessment" on the amount of salaries
          and wages chargeable to the Joint Account under Section II.2.A. If
          percentage assessment is used, the rate shall be based on the
          Operator's cost experience.

     C.   Expenditures or contributions made pursuant to assessments imposed by
          governmental authority that are applicable to costs chargeable to the
          Joint Account under Sections 11.2.A and B.

     D.   Personal Expenses of personnel whose salaries and wages are chargeable
          to the Joint Account under Section II.2.A when the expenses are
          incurred in connection with directly chargeable activities.

     E.   Reasonable relocation costs incurred in transferring to the Joint
          Property personnel whose salaries and wages are chargeable to the
          Joint Account under Section II.2.A. Notwithstanding the foregoing,
          relocation costs that result from reorganization or merger of a Party,
          or that are for the primary benefit of the Operator, shall not be
          chargeable to the Joint Account. Extraordinary relocation costs, such
          as those incurred as a result of transfers from remote locations, such
          as Alaska or overseas, shall not be charged to the Joint Account
          unless approved by the Parties pursuant to Section I.6.A (General
          Matters).

     F.   Training costs as specified in COPAS MFI-35 ("Charging of Training
          Costs to the Joint Account") for personnel whose salaries and wages
          are chargeable under Section II.2.A. This training charge shall
          include the wages, salaries, training course cost, and Personal
          Expenses incurred during the training session. The training cost shall
          be charged or allocated to to the property or properties directly
          benefiting from the training. The cost of the training course shall
          not exceed prevailing commercial rates, where such rates are
          available.

     G.   Operator's current cost of established plans for employee benefits, as
          described in COPAS MFI-27 ("Employee Benefits Chargeable to Joint
          Operations and Subject to Percentage Limitation"), applicable to the
          Operator's labor costs chargeable to the Joint Account under Sections
          II.2.A and B based on the Operator's actual cost not to exceed the
          employee benefits limitation percentage most recently recommended by
          COPAS.

     H.   Award payments to employees, in accordance with COPAS MFI-49 ("Awards
          to Employees and Contractors") for personnel whose salaries and wages
          are chargeable under Section II.2.A.

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3.   MATERIAL

     Material purchased or furnished by the Operator for use on the Joint
     Property in the conduct of Joint Operations as provided under Section IV
     (Material Purchases, Transfers, and Dispositions). Only such Material shall
     be purchased for or transferred to the Joint Property as may be required
     for immediate use or is reasonably practical and consistent with efficient
     and economical operations. The accumulation of surplus stocks shall be
     avoided.

4.   TRANSPORTATION

     A.   Transportation of the Operator's, Operator's Affiliate's, or
          contractor's personnel necessary for Joint Operations.

     B.   Transportation of Material between the Joint Property and another
          property, or from the Operator's warehouse or other storage point to
          the Joint Property, shall be charged to the receiving property using
          one of the methods listed below. Transportation of Material from the
          Joint Property to Operator's warehouse or other storage point shall be
          paid for by the Joint Property using one of the methods listed below.

          (1)  If the actual trucking charge is less than or equal to the
               Excluded Amount the Operator may charge actual trucking cost or a
               theoretical charge from the Railway Receiving Point to the Joint
               Property. The basis for the theoretical charge is the per hundred
               weight charge plus fuel surcharges from the Railway Receiving
               Point to the Joint Property. The Operator shall consistently
               apply the selected alternative.

          (2)  If the actual trucking charge is greater than the Excluded
               Amount, the Operator shall charge Equalized Freight. Accessorial
               charges such as loading and unloading costs, split pick-up costs,
               detention, call out charges, and permit fees shall be charged
               directly to the Joint Property and shall not be included when
               calculating the Equalized Freight.

5.   SERVICES

     The cost of contract services, equipment, and utilities used in the conduct
     of Joint Operations, except for contract services, equipment, and utilities
     covered by Section III (Overhead), or Section II.7 (Affiliates), or
     excluded under Section II.9 (Legal Expense). Awards paid to contractors
     shall be chargeable pursuant to COPAS MFI- 49 ("Awards to Employees and
     Contractors").

     The costs of third party Technical Services are chargeable to the extent
     excluded from the overhead rates under Section III (Overhead).

6.   EQUIPMENT AND FACILITIES FURNISHED BY OPERATOR

     In the absence of a separately negotiated agreement, equipment and
     facilities furnished by the Operator will be charged as follows:

     A.   Operator shall charge the Joint Account for use of Operator-owned
          equipment and facilities, including but not limited to production
          facilities, Shore Base Facilities, Offshore Facilities, and Field
          Offices, at rates commensurate with the costs of ownership and
          operation. The cost of Field Offices shall be chargeable to the

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                                                 2005 COPAS Accounting Procedure


          extent the Field Offices provide direct service to personnel who are
          chargeable pursuant to Section II.2.A (Labor). Such rates may include
          labor, maintenance, repairs, other operating expense, insurance,
          taxes, depreciation using straight line depreciation method, and
          interest on gross investment less accumulated depreciation not to
          exceed twelve percent (12%) per annum; provided, however, depreciation
          shall not be charged when the equipment and facilities investment have
          been fully depreciated. The rate may include an element of the
          estimated cost for abandonment, reclamation, and dismantlement. Such
          rates shall not exceed the average commercial rates currently
          prevailing in the immediate area of the Joint Property.

     B.   In lieu of charges in Section II.6.A above, the Operator may elect to
          use average commercial rates prevailing in the immediate area of the
          Joint Property. If equipment and facilities are charged under this
          Section II.6.B, the Operator shall adequately document and support
          commercial rates and shall periodically review and update the rate and
          the supporting documentation. For automotive equipment, the Operator
          may elect to use rates published by the Petroleum Motor Transport
          Association (PMTA) or such other organization recognized by COPAS as
          the official source of rates.

     C.   Operator may, under COPAS Accounting Guideline 25 ("Allocation of Rig
          Related Expenditures"), charge the Joint Account an allocated portion
          of any drillship or rig related commissioning and/or modification
          costs pursuant to the provisions of Paragraphs 6.A. and 6.B. above,
          provided such drillship or rig related commissioning and/or
          modification costs are not included in the drillship or rig rate
          charged by the drilling contractor.

     D.   Operator may charge the Joint Account an allocated portion of Well
          DECC costs for planning, designing, drilling, and/or completion of a
          well pursuant to the provisions of Paragraphs 6.A. and 6. B. above.
          Such charges shall include but are not limited to the following:
          facilities, communications, computers, software, system support, and
          Well DECC personnel provided by the Operator, contract services, or
          Affiliates.

7.   AFFILIATES

     A.   Charges for an Affiliate's goods and/or services used in operations
          requiring an AFE or other authorization from the Non-Operators may be
          made without the approval of the Parties provided the total costs for
          such Affiliate's goods and services billed to such individual project
          do not exceed $500,000 per calendar year. If the total costs for an
          Affiliate's goods and services charged to such individual project are
          not specifically detailed in the approved AFE or authorization or
          exceed such amount, charges for such Affiliate shall require approval
          of the Parties, pursuant to Section I.6.A (General Matters).

     B.   For an Affiliate's goods and /or services used in operations not
          requiring an AFE or other authorization from the Non-Operators,
          charges for such Affiliate's goods and services shall require approval
          of the Parties, pursuant to Section I.6.A (General Matters), if the
          charges exceed $500,000.00 in a given calendar year.

     C.   Affiliate services shall be charged to the Joint Account on a standard
          daily/hourly rate or actual cost basis as charged by the Affiliate for
          personnel and/or services. Affiliate charges may also include any
          direct purchases for Materials required for the services rendered as


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                                                 2005 COPAS Accounting Procedure


          well as any charges for the use of Affiliate-owned equipment and
          facilities including computer applications, software and associated
          computer time utilized.

          Charges to the Joint Account for any Materials, facilities, or
          services provided by an Affiliate shall not exceed average commercial
          rates, when such rates are available. In the event a Party determines
          such charges to be excessive compared with third-party rates, that
          Party must substantiate that such charges exceed average commercial
          rates and shall provide sufficient documentation to support all such
          claims in accordance with Section I, Paragraph 5. The Parties agree
          that Affiliates' records relating to the Materials, facilities, or
          services provided by the Affiliates will not be made available for
          audit. Notwithstanding the foregoing, direct charges for
          Affiliate-owned communication facilities or systems shall be made
          pursuant to Section II.12 (Communications).

8.   DAMAGES AND LOSSES TO JOINT PROPERTY

     All costs or expenses necessary for the repair or replacement of Joint
     Property resulting from damages or losses incurred, except to the extent
     such damages or losses result from a Party's or Parties' gross negligence
     or willful misconduct, in which case such Party or Parties shall be solely
     liable.

     The Operator shall furnish the Non-Operator written notice of damages or
     losses incurred as soon as practicable after a report has been received by
     the Operator.

9.   LEGAL EXPENSE

     Recording fees and costs of handling, settling, or otherwise discharging
     litigation, claims, and liens incurred in or resulting from operations
     under the Agreement, or necessary to protect or recover the Joint Property,
     to the extent permitted under the Agreement. Costs of the Operator's or
     Affiliate's legal staff or outside attorneys, including fees and expenses,
     are not chargeable unless approved by the Parties pursuant to Section I.6.A
     (General Matters) or otherwise provided for in the Agreement.

     Notwithstanding the foregoing paragraph, costs for procuring abstracts,
     fees paid to outside attorneys for title examinations (including
     preliminary, supplemental, shut-in royalty opinions, division order title
     opinions), and curative work shall be chargeable to the extent permitted as
     a direct charge in the Agreement.

10.  TAXES AND PERMITS

     All taxes and permitting fees of every kind and nature, assessed or levied
     upon or in connection with the Joint Property, or the production therefrom,
     and which have been paid by the Operator for the benefit of the Parties,
     including penalties and interest, except to the extent the penalties and
     interest result from the Operator's gross negligence or willful misconduct.

     If ad valorem taxes paid by the Operator are based in whole or in part upon
     separate valuations of each Party's working interest, then notwithstanding
     any contrary provisions, the charges to the Parties will be made in
     accordance with the tax value generated by each Party's working interest.

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     Costs of tax consultants or advisors, the Operator's employees, or
     Operator's Affiliate employees in matters regarding ad valorem or other tax
     matters, are not permitted as direct charges unless approved by the Parties
     pursuant to Section I.6.A (General Matters).

     Charges to the Joint Account resulting from sales/use tax audits, including
     extrapolated amounts and penalties and interest, are permitted, provided
     the Non-Operator shall be allowed to review the invoices and other
     underlying source documents which served as the basis for tax charges and
     to determine that the correct amount of taxes were charged to the Joint
     Account. If the Non-Operator is not permitted to review such documentation,
     the sales/use tax amount shall not be directly charged unless the Operator
     can conclusively document the amount owed by the Joint Account.

11.  INSURANCE

     Net premiums paid for insurance required to be carried for Joint Operations
     for the protection of the Parties. If Joint Operations are conducted at
     locations where the Operator acts as self-insurer in regard to its worker's
     compensation and employer's liability insurance obligation, the Operator
     shall charge the Joint Account manual rates for the risk assumed in its
     self-insurance program as regulated by the jurisdiction governing the Joint
     Property. In the case of offshore operations in federal waters, the manual
     rates of the adjacent state shall be used for personnel performing work
     On-site, and such rates shall be adjusted for offshore operations by the
     U.S. Longshoreman and Harbor Workers (USL&H) or Jones Act surcharge, as
     appropriate.

12.  COMMUNICATIONS

     Costs of acquiring, leasing, installing, operating, repairing, and
     maintaining communication facilities or systems, including satellite, radio
     and microwave facilities, between the Joint Property and the Operator's
     office(s) directly responsible for field operations in accordance with the
     provisions of COPAS MFI-44 ("Field Computer and Communication Systems"). If
     the communications facilities or systems serving the Joint Property are
     Operator-owned, charges to the Joint Account shall be made as provided in
     Section II.6 (Equipment and Facilities Furnished by Operator). If the
     communication facilities or systems serving the Joint Property are owned by
     the Operator's Affiliate, charges to the Joint Account shall not exceed
     average commercial rates prevailing in the area of the Joint Property.

13.  ECOLOGICAL, ENVIRONMNTAL, AND SAFETY


     Costs incurred for Technical Services and drafting to comply with
     ecological, environmental and safety Laws or standards recommended by
     Occupational Safety Hazards Act (OSHA) or other regulatory authorities. All
     other labor and functions incurred for ecological, environmental and safety
     matters, including management, administration, and permitting, shall be
     covered by Sections II.2 (Labor), II.5 (Services), or Section III
     (Overhead), as applicable.

     Costs to provide or have available pollution containment and removal
     equipment plus actual costs of control and cleanup and resulting
     responsibilities of oil and other spills as well as discharges from
     permitted outfalls as required by applicable Laws, or other pollution
     containment and removal equipment deemed appropriate by the Operator for
     prudent operations, are directly chargeable.

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                                                 2005 COPAS Accounting Procedure


14.  ABANDONMENT AND RECLAMATION

     Costs incurred for abandonment and reclamation of the Joint Property,
     including costs required by lease agreements or by Laws.

15.  OTHER EXPENDITURES

     Any other expenditure not covered or dealt with in the foregoing provisions
     of this Section II (Direct Charges), or in Section III (Overhead) and which
     is of direct benefit to the Joint Property and is incurred by the Operator
     in the necessary and proper conduct of the Joint Operations. Charges made
     under this Section II.15 shall require approval of the Parties, pursuant to
     Section I.6.A (General Matters).


                                  III. OVERHEAD

     As compensation for costs not specifically identified as chargeable to the
     Joint Account pursuant to Section II (Direct Charges), the Operator shall
     charge the Joint Account in accordance with this Section III.

     Functions included in the overhead rates regardless of whether performed by
     Operator, Operator's Affiliates or third parties and regardless of
     location, shall include, but not be limited to, costs and expenses of:

          o    warehousing, other than for warehouses that are jointly owned
               under this Agreement
          o    design and drafting (except when allowed as a direct charge under
               Sections II. 13, III.1.A(ii), and III.2 Option B)
          o    inventory costs not chargeable under Section V (Inventories of
               Controllable Material)
          o    procurement
          o    administration
          o    accounting and auditing
          o    gas dispatching and gas chart integration
          o    human resources
          o    management
          o    supervision not directly charged under Section II.2 (Labor)
          o    legal services not directly chargeable under Section II.9 (Legal
               Expense)
          o    taxation, other than those costs identified as directly
               chargeable under Section II.10 (Taxes and Permits)
          o    preparation and monitoring of permits and certifications;
               preparing regulatory reports; appearances before or meetings with
               governmental agencies or other authorities having jurisdiction
               over the Joint Property, other than On-site inspections;
               reviewing, interpreting, or submitting comments on or lobbying
               with respect to Laws or proposed Laws.

     Overhead charges shall include the salaries or wages plus applicable
     payroll burdens, benefits, and Personal Expenses of personnel performing
     overhead functions, as well as office and other related expenses of
     overhead functions.

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1.   OVERHEAD-DRILLING AND PRODUCING OPERATIONS

     As compensation for costs incurred but not chargeable under Section II
     (Direct Charges) and not covered by other provisions of this Section III,
     the Operator shall charge on either:

          (_)  (Alternative 1) Fixed Rate Basis, Section III.1.B.

          (X)  (Alternative 2) Percentage Basis, Section III.1.C.

     A.   Technical Services

     (i) Except as otherwise provided in Section II.13 (Ecological
     Environmental, and Safety) and Section III.2 (Overhead - Major Construction
     and Catastrophe), or by approval of the Parties pursuant to Section I.6.A
     (General Matters), the salaries, wages, related payroll burdens and
     benefits, and Personal Expenses for On-site Technical Services, including
     third party Technical Services:

          (X)  (Alternative 1- Direct) shall be charged direct to the Joint
               Account.

          (_)  (Alternative 2 - Overhead) shall be covered by the overhead
               rates.

     (ii) Except as otherwise provided in Section II.13 (Ecological,
     Environmental, and Safety) and Section III.2 (Overhead - Major Construction
     and Catastrophe), or by approval of the Parties pursuant to Section I.6.A
     (General Matters), the salaries, wages, related payroll burdens and
     benefits, and Personal Expenses for Off site Technical Services, including
     third party Technical Services:

          (_)  (Alternative 1- All Overhead) shall be covered by the overhead
               rates.

          (_)  (Alternative 2 - All Direct) shall be charged direct to the Joint
               Account.

          (X) (Alternative 3 - Drilling Direct) shall be charged direct to the
          Joint Account, only to the extent such Technical Services are directly
          attributable to drilling, redrilling, deepening, or sidetracking
          operations, through completion, temporary abandonment, or abandonment
          if a dry hole. Off-site Technical Services for all other operations,
          including workover, Recompletion, abandonment of producing wells, and
          the construction or expansion of fixed assets not covered by Section
          III.2 (Overhead - Major Construction and Catastrophe) shall be covered
          by the overhead rates.

     Notwithstanding anything to the contrary in this Section III, Technical
     Services provided by Operator's Affiliates are subject to limitations set
     forth in Section II.7 (Affiliates). Charges for Technical personnel
     performing non-technical work shall not be governed by this Section
     III.1.A, but instead governed by other provisions of this Accounting
     Procedure relating to the type of work being performed.

     B.   Overhead-Fixed Rate Basis

          (1)  The Operator shall charge the Joint Account at the following
               rates per well per month:

               Drilling Well Rate per month $ ______________(prorated for less
               than a full month)

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                                                 2005 COPAS Accounting Procedure


               Producing Well Rate per month $___________________________

          (2)  Application of Overhead-Drilling Well Rate shall be as follows:

               (a)  Charges for onshore drilling wells shall begin on the spud
                    date and terminate on the date the drilling and/or
                    completion equipment used on the well is released, whichever
                    occurs later. Charges for offshore and inland waters
                    drilling wells shall begin on the date the drilling or
                    completion equipment arrives on location and terminate on
                    the date the drilling or completion equipment moves off
                    location, or is released, whichever occurs frst. No charge
                    shall be made during suspension of drilling and/or
                    completion operations for ffeen (15) or more consecutive
                    calendar days.

               (b)  Charges for any well undergoing any type of workover,
                    recompletion, and/or abandonment for a period of fve (5) or
                    more consecutive workdays shall be made at the Drilling Well
                    Rate. Such charges shall be applied for the period from date
                    operations, with rig or other units used in operations,
                    commence through date of rig or other unit release, except
                    that no charges shall be made during suspension of
                    operations for ffeen (15) or more consecutive calendar days.

          (3)  Application of Overhead-Producing Well Rate shall be as follows:

               (a)  An active well that is produced, injected into for recovery
                    or disposal, or used to obtain water supply to support
                    operations for any portion of the month shall be considered
                    as a one-well charge for the entire month.

               (b)  Each active completion in a multi-completed well shall be
                    considered as a one-well charge provided each completion is
                    considered a separate well by the governing regulatory
                    authority.

               (c)  A one-well charge shall be made for the month in which
                    plugging and abandonment operations are completed on any
                    well, unless the Drilling Well Rate applies, as provided in
                    Sections III. 1.B.(2)(a) or (b). This one-well charge shall
                    be made whether or not the well has produced.

               (d)  An active gas well shut in because of overproduction or
                    failure of a purchaser, processor, or transporter to take
                    production shall be considered as a one-well charge provided
                    the gas well is directly connected to a permanent sales
                    outlet.

               (e)  Any well not meeting the criteria set forth in Sections
                    I1.1.B.(3) (a), (b), (c), or (d) shall not qualify for a
                    producing overhead charge.

          (4)  The well rates shall be adjusted on the first day of April each
               year following the effective date of the Agreement; provided
               however, if this Accounting Procedure is attached to or otherwise
               governing the payout accounting under a farmout agreement, the
               rates shall be adjusted on the first day of April each year
               following the effective date of such farmout agreement. The
               adjustment shall be computed by applying the adjustment factor
               most recently published by COPAS. The adjusted rates shall be the
               initial or amended rates agreed to by the Parties increased or
               decreased by the adjustment factor described herein, for each
               year from the effective date of such rates, in accordance with
               COPAS MFI-47 ("Adjustment of Overhead Rates").


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                                                 2005 COPAS Accounting Procedure


     C.   Overhead Percentage Basis

     (1)  Operator shall charge the Joint Account at the following rates:

          (a)  Development Rate three Percent (3%) of the cost of development of
               the Joint Property, exclusive of costs provided under Section
               II.9 (Legal Expense) and all Material salvage credits.

          (b)  Operating Rate thirteen Percent (13%) of the cost of operating
               the Joint Property, exclusive of costs provided under Sections
               II.1 (Rentals and Royalties) and II.9 (Legal Expense); all
               Material salvage credits; the value of substances purchased for
               enhanced recovery; all property and ad valorem taxes, and any
               other taxes and assessments that are levied, assessed, and paid
               upon the mineral interest in and to the Joint Property.

(2)  Application of Overhead-Percentage Basis shall be as follows:

     (a)  The Development Rate shall be applied to all costs in connection with:

          [i]  drilling, redrilling, sidetracking, or deepening of a well
          [ii] a well undergoing plugback or workover operations for a period of
               five (5) or more consecutive work-days
          [iii]preliminary expenditures necessary in preparation for drilling
          [iv] expenditures incurred in abandoning when the well is not
               completed as a producer
          [v]  construction or installation of fixed assets, the expansion of
               fixed assets and any other project clearly discernible as a fixed
               asset, other than Major Construction or Catastrophe as defined in
               Section III.2 (Overhead-Major Construction and Catastrophe).

     (b)  The Operating Rate shall be applied to all other costs in connection
          with Joint Operations, except those subject to Section III.2
          (Overhead-Major Construction and Catastrophe).

2.   OVERHEAD-MAJOR CONSTRUCTION AND CATASTROPHE

     To compensate the Operator for overhead costs incurred in connection with a
     Major Construction project or Catastrophe, the Operator shall either
     negotiate a rate prior to the beginning of the project, or shall charge the
     Joint Account for overhead based on the following rates for any Major
     Construction project in excess of the Operator's expenditure limit under
     the Agreement, or for any Catastrophe regardless of the amount. If the
     Agreement to which this Accounting Procedure is attached does not contain
     an expenditure limit, Major Construction Overhead shall be assessed for any
     single Major Construction project costing in excess of $100,000 gross.

     Major Construction shall mean the construction and installation of fixed
     assets, the expansion of fixed assets, and any other project clearly
     discernible as a fixed asset required for the development and operation of
     the Joint Property, or in the dismantlement, abandonment, removal, and
     restoration of platforms, production equipment, and other operating
     facilities.

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                                                 2005 COPAS Accounting Procedure


     Catastrophe is defined as a sudden calamitous event bringing damage, loss,
     or destruction to property or the environment, such as an oil spill,
     blowout, explosion, fire, storm, hurricane, or other disaster. The overhead
     rate shall be applied to those costs necessary to restore the Joint
     Property to the equivalent condition that existed prior to the event.

     A.   If the Operator absorbs the engineering, design and drafting costs
          related to the project:

          (1)  __6___% of total costs if such costs are less than $100,000; plus

          (2)  __4___% of total costs in excess of $100,000 but less than
               $1,000,000; plus

          (3)  __3___% of total costs in excess of $1,000,000.

     B.   If the Operator charges engineering, design and drafting costs related
          to the project directly to the Joint Account:

          (1)  __5___% of total costs if such costs are less than $100,000; plus

          (2)  __3___% of total costs in excess of $100,000 but less than
               $1,000,000; plus

          (3)  __2___% of total costs in excess of $1,000,000.

     Total cost shall mean the gross cost of any one project. For the purpose of
     this paragraph, the component parts of a single Major Construction project
     shall not be treated separately, and the cost of drilling and workover
     wells and purchasing and installing pumping units and downhole artificial
     lift equipment shall be excluded. For Catastrophes, the rates shall be
     applied to all costs associated with each single occurrence or event.

     For the purposes of calculating Catastrophe Overhead, the cost of drilling
     relief wells, substitute wells, or conducting other well operations
     directly resulting from the catastrophic event shall be included.
     Expenditures to which these rates apply shall not be reduced by salvage or
     insurance recoveries. Expenditures that qualify for Major Construction or
     Catastrophe Overhead shall not qualify for overhead under any other
     overhead provisions.

     In the event of any conflict between the provisions of this Section III.2
     and the provisions of Sections II.2 (Labor), II.5 (Services), or II.7
     (Affiliates), the provisions of this Section III.2 shall govern.

3.   AMENDMENT OF OVERHEAD RATES

     The overhead rates provided for in this Section III may be amended from
     time to time if, in practice, the rates are found to be insufficient or
     excessive, in accordance with the provisions of Section I.6.B (Amendments).

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                                                 2005 COPAS Accounting Procedure


              IV. MATERIAL PURCHASES, TRANSFERS, AND DISPOSITIONS

The Operator is responsible for Joint Account Material and shall make proper and
timely charges and credits for direct purchases, transfers, and dispositions.
The Operator shall provide all Material for use in the conduct of Joint
Operations; however, Material may be supplied by the Non-Operators, at the
Operator's option. Material furnished by any Party shall be furnished without
any express or implied warranties as to quality, fitness for use, or any other
matter.

1.   DIRECT PURCHASES

     Direct purchases shall be charged to the Joint Account at the price paid by
     the Operator after deduction of all discounts received. The Operator shall
     make good faith efforts to take discounts offered by suppliers, but shall
     not be liable for failure to take discounts except to the extent such
     failure was the result of the Operator's gross negligence or willful
     misconduct. A direct purchase shall be deemed to occur when an agreement is
     made between an Operator and a third party for the acquisition of Material
     for a specific well site or location. Material provided by the Operator
     under "vendor stocking programs," where the initial use is for a Joint
     Property and title of the Material does not pass from the manufacturer,
     distributor, or agent until usage, is considered a direct purchase. If
     Material is found to be defective or is returned to the manufacturer,
     distributor, or agent for any other reason, credit shall be passed to the
     Joint Account within sixty (60) days after the Operator has received
     adjustment from the manufacturer, distributor, or agent.

2.   TRANSFERS

     A transfer is determined to occur when the Operator (i) furnishes Material
     from or a storage facility from another operated property, (ii) has assumed
     liability for the storage costs and changes in value, and (iii) has
     previously secured and held title to the transferred Material. Similarly,
     the removal of Material from the Joint Property to a storage facility or to
     another operated property is also considered a transfer; provided, however
     Material that is moved from the Joint Property to a storage location for
     safe-keeping pending disposition may remain charged to the Joint Account
     and is not considered a transfer. Material shall be disposed of in
     accordance with Section IV.3 (Disposition of Surplus) and the Agreement to
     which this Accounting Procedure is attached.

     A.   PRICING

          The value of Material transferred to/from the Joint Property should
          generally reflect the market value on the date of physical transfer.
          Regardless of the pricing method used, the Operator shall make
          available to the Non-Operators sufficient documentation to verify the
          Material valuation. When higher than specification grade or size
          tubulars are used in the conduct of Joint Operations, the Operator
          shall charge the Joint Account at the equivalent price for well design
          specification tubulars, unless such higher specification grade or
          sized tubulars are approved by the Parties pursuant to Section I.6.A
          (General Matters). Transfers of new Material will be priced using one
          of the following pricing methods; provided, however, the Operator
          shall use consistent pricing methods, and not alternate between
          methods for the purpose of choosing the method most favorable to the
          Operator for a specific transfer:

          (1)  Using published prices in effect on date of movement as adjusted
               by the appropriate COPAS Historical Price Multiplier (HPM) or
               prices provided by the COPAS Computerized Equipment Pricing
               System (CEPS).

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                                                 2005 COPAS Accounting Procedure


               (a)  For oil country tubulars and line pipe, the published price
                    shall be based upon eastern mill carload base prices
                    (Houston, Texas, for special end) adjusted as of date of
                    movement, plus transportation cost as defned in Section
                    IV.2.B (Freight).

               (b)  For other Material, the published price shall be the
                    published list price in effect at date of movement, as
                    listed by a Supply Store nearest the Joint Property where
                    like Material is normally available, or point of manufacture
                    plus transportation costs as defned in Section IV.2.B
                    (Freight).

          (2)  Based on a price quotation from a vendor that reflects a current
               realistic acquisition cost.

          (3)  Based on the amount paid by the Operator for like Material in the
               vicinity of the Joint Property within the previous twelve (12)
               months from the date of physical transfer.

          (4)  As agreed to by the Participating Parties for Material being
               transferred to the Joint Property, and by the Parties owning the
               Material for Material being transferred from the Joint Property.

     B.   FREIGHT

          Transportation costs shall be added to the Material transfer price
          using the method prescribed by the COPAS Computerized Equipment
          Pricing System (CEPS). If not using CEPS, transportation costs shall
          be calculated as follows:

          (1)  Transportation costs for oil country tubulars and line pipe shall
               be calculated using the distance from eastern mill to the Railway
               Receiving Point based on the carload weight basis as recommended
               by the COPAS MFI-3 8 ("Material Pricing Manual") and other COPAS
               MFIs in effect at the time of the transfer.

          (2)  Transportation costs for special mill items shall be calculated
               from that mill's shipping point to the Railway Receiving Point.
               For transportation costs from other than eastern mills, the
               30,000-pound interstate truck rate shall be used. Transportation
               costs for macaroni tubing shall be calculated based on the
               interstate truck rate per weight of tubing transferred to the
               Railway Receiving Point.

          (3)  Transportation costs for special end tubular goods shall be
               calculated using the interstate truck rate from Houston, Texas,
               to the Railway Receiving Point.

          (4)  Transportation costs for Material other than that described in
               Sections IV.2.B.(1) through (3), shall be calculated from the
               Supply Store or point of manufacture, whichever is appropriate,
               to the Railway Receiving Point.

          Regardless of whether using CEPS or manually calculating
          transportation costs, transportation costs from the Railway Receiving
          Point to the Joint Property are in addition to the foregoing, and may
          be charged to the Joint Account based on actual costs incurred. All
          transportation costs are subject to Equalized Freight as provided in
          Section II.4 (Transportation) of this Accounting Procedure.

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                                                 2005 COPAS Accounting Procedure


C.   TAXES

     Sales and use taxes shall be added to the Material transfer price using
     either the method contained in the COPAS Computerized Equipment Pricing
     System (CEPS) or the applicable tax rate in effect for the Joint Property
     at the time and place of transfer. In either case, the Joint Account shall
     be charged or credited at the rate that would have governed had the
     Material been a direct purchase.

D.   CONDITION

     (1)  Condition "A" - New and unused Material in sound and serviceable
          condition shall be charged at one hundred percent (100%) of the price
          as determined in Sections IV.2.A (Pricing), JV.2.B (Freight), and
          IV.2.C (Taxes). Material transferred from the Joint I that was not
          placed in service shall be credited as charged without gain or loss;
          provided, however, any unused Material that was charged to the Joint
          Account through a direct purchase will be credited to the Joint
          Account at the original cost paid less restocking fees charged by the
          vendor. New and unused Material transferred from the Joint Property
          may be credited at a price other than the price originally charged to
          the Joint Account provided such price is approved by the Parties
          owning such Material, pursuant to Section I.6.A (General Matters). All
          refurbishing costs required or necessary to return the Material to
          original condition or to correct handling, transportation, or other
          damages will be borne by the divesting property. The Joint Account is
          responsible for Material preparation, handling, and transportation
          costs for new and unused Material charged to the Joint Property either
          through a direct purchase or transfer. Any preparation costs incurred,
          including any internal or external coating and wrapping, will be
          credited on new Material provided these services were not repeated for
          such Material for the receiving property.

     (2)  Condition "B" - Used Material in sound and serviceable condition and
          suitable for reuse without reconditioning shall be priced by
          multiplying the price determined in Sections IV.2.A (Pricing), IV.2.B
          (Freight), and N.2.C (Taxes) by seventy-five percent (75%).

          Except as provided in Section N.2.D (3), all reconditioning costs
          required to return the Material to Condition "B" or to correct
          handling, transportation or other damages will be borne by the
          divesting property.

          If the Material was originally charged to the Joint Account as used
          Material and placed in service for the Joint Property, the Material
          will be credited at the price determined in sections IV.2.A (Pricing),
          IV.2.B (Freight), and IV.2.C (Taxes) multiplied by sixty-five percent
          (65%).

          Unless otherwise agreed to by the Parties that paid for such Material,
          used Material transferred from the Joint Property that was not placed
          in service on the property shall be credited as charged without gain
          or loss.

     (3)  Condition "C" - Material that is not in sound and serviceable
          condition and not suitable for its original function until after
          reconditioning shall be priced by multiplying the price determined in
          Sections IV.2.A (Pricing), IV.2.B (Freight), and IV.2.C (Taxes) by
          fifty percent (50%).

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                                                 2005 COPAS Accounting Procedure



          The cost of reconditioning may be charged to the receiving property to
          the extent Condition "C" value, plus cost of reconditioning, does not
          exceed Condition "B" value.

     (4)  Condition "D" - Material that (i) is no longer suitable for its
          original purpose but useable some other purpose, (ii) is obsolete, or
          (iii) does not meet original specifications but still has value and
          can be used in other applications as a substitute for items with
          different specifications, is considered Condition "D" Material.
          Casing, tubing, or drill pipe line pipe shall be priced as Grade A and
          B seamless line pipe of comparable size and weight. Used casing,
          tubing, or drill pipe used as line pipe shall be priced at used line
          pipe Casing, tubing, or drill pipe used as higher pressure service
          lines than standard line pipe, e.g., power oil lines, shall be priced
          under normal pricing procedures for casing, tubing, or drill pipe.
          Upset tubular goods shall be priced on a non-upset basis. For other
          items, the price used should result in the Joint Account being charged
          or credited with the value of the service rendered or use of the
          Material, or as agreed to by the Parties pursuant to section 1.6. A
          (General Matters).

     (5)  Condition "E" - Junk shall be priced at prevailing scrap value prices.


E.   OTHER PRICING PROVISIONS

     (1)  Preparation Costs

          Subject to Section II (Direct Charges) and Section III (Overhead) of
          this Accounting Procedure, costs incurred by the Operator in making
          Material serviceable including inspection, third party surveillance
          services, and other similar services will be charged to the Joint
          Account at prices which reflect the Operator's actual costs of the
          services. Documentation must be provided to the Non-Operators upon
          request to support the cost of service. New coating and/or wrapping
          shall be considered a component of the Materials and priced in
          accordance with Sections IV.1 (Direct Purchases) or IV.2.A (Pricing),
          as applicable. No charges or credits shall be made for used coating or
          wrapping. Charges and credits for inspections shall be made in
          accordance with COPAS MFI-38 ("Material Pricing Manual").

     (2)  Loading and Unloading Costs

          Loading and unloading costs related to the movement of the Material to
          the Joint Property shall be charged in accordance with the methods
          specified in COPAS MFI-38 ("Material Pricing Manual").

3.   DISPOSITION OF SURPLUS

     Surplus Material is that Material, whether new or used, that is no longer
     required for Joint Operations. The Operator may purchase, but shall be
     under no obligation to purchase, the interest of the Non-Operators in
     surplus Material.

     Dispositions for the purpose of this procedure are considered to be the
     relinquishment of title of the Material from the Joint Property to either a
     third party, a Non-Operator, or to the Operator. To avoid the accumulation

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                                                 2005 COPAS Accounting Procedure


     of surplus Material, the Operator should make good faith efforts to dispose
     of surplus within twelve (12) months through buy/sale agreements, trade,
     sale to a third party, division in kind, or other dispositions as agreed to
     by the Parties.

     Disposal of surplus Materials shall be made in accordance with the terms of
     the Agreement to which this Accounting Procedure is attached. If the
     Agreement contains no provisions governing disposeal of surplus Material,
     the following terms shall apply:

          o    The Operator may, through a sale to an unrelated third party or
               entity, dispose of surplus Material having a gross sale value
               that is less than or equal to the Operator's expenditure limit as
               set forth in the Agreement to which this Accounting Procedure is
               attached without the prior approval of the Parties owning such
               Material.

          o    If the gross sale value exceeds the Agreement expenditure limit,
               the disposal must be agreed to by the Parties owning such
               Material.

          o    Operator may purchase surplus Condition "A" or "B" Material
               without approval of the Parties owning such Material, based on
               the pricing methods set forth in Section IV.2 (Transfers).

          o    Operator may purchase Condition "C" Material without prior
               approval of the Parties owning such Material if the value of the
               Materials, based on the pricing methods set forth in section IV.2
               (Transfers), is less than or equal to the Operator's expenditure
               limitation set forth in the Agreement. The Operator shall provide
               documentation supporting the classification of the Material as
               Condition C.

          o    Operator may dispose of Condition "D" or "E" Material under
               procedures normally utilized by Operator without prior approval
               of the Parties owning such Material.

4.   SPECIAL PRICING PROVISIONS

     A.   PREMIUM PRICING

          Whenever Material is available only at inflated prices due to national
          emergencies, strikes, government imposed foreign trade restrictions,
          or other unusual causes over which the operator has no control, for
          direct purchase the Operator may charge the Joint Account for the
          required Material at the Operator's actual cost incurred in providing
          such Material, making it suitable for use, and moving it to the Joint
          Property. Material transferred or disposed of during premuim pricing
          situations shall be valued in accordance with Section IV.2 (Transfers)
          or Section IV.3 (Disposition of Surplus), as applicable.

     B.   SHOP-MADE ITEMS

          Items fabricated by the Operator's employees, or by contract laborers
          under the direction of the Operator, shall be priced using the value
          of the Material used to construct the item plus the cost of labor to
          fabricate the item. If the Material is from the Operator's scrap or
          junk account, the Material shall be priced at either twenty-five
          percent (25%) of the current price as determined in Section IV.2.A
          (Pricing) or scrap value, whichever is higher. In no event shall the
          amount charged exceed the value of the item commensurate with its use.

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     C.   MILL REJECTS

          Mill rejects purchased as "limited service" casing or tubing shall be
          priced at eighty percent (80%) of K-55/J-55 price as determined in
          Sections JV.2 (Transfers). Line pipe converted to casing or tubing
          with casing or tubing couplings attached shall be priced as K-55/J-55
          casing or tubing at the nearest size and weight.



                     V. INVENTORIES OF CONTROLLABLE MATERIAL

The Operator shall maintain records of Controllable Material charged to the
Joint Account, with sufficient detail to perform physical inventories.

Adjustments to the Joint Account by the Operator resulting from a physical
inventory of Controllable Material shall be made within twelve (12) months
following the taking of the inventory or receipt of Non-Operator inventory
report. Charges and credits for overages or shortages will be valued for the
Joint Account in accordance with Section IV.2 (Transfers) and shall be based on
the Condition "B" prices in effect on the date of physical inventory unless the
inventorying Parties can provide sufficient evidence another Material condition
applies.

1.   DIRECTED INVENTORIES

     Physical inventories shall be performed by the Operator upon written
     request of a majority in working interests of the Non-Operators
     (hereinafter, "directed inventory"); provided, however, the Operator shall
     not be required to perform directed inventories more frequently than once
     every five (5) years. Directed inventories shall be commenced within one
     hundred eighty (180) days after the Operator receives written notice that a
     majority in interest of the Non-Operators has requested the inventory. All
     Parties shall be governed by the results of any directed inventory.

     Expenses of directed inventories will be borne by the Joint Account;
     provided, however, costs associated with any post-report follow-up work in
     settling the inventory will be absorbed by the Party incurring such costs.
     The Operator is expected to exercise judgment in keeping expenses within
     reasonable limits. Any anticipated disproportionate or extraordinary costs
     should be discussed and agreed upon prior to commencement of the inventory.
     Expenses of directed inventories may include the following:

     A.   A per diem rate for each inventory person, representative of actual
          salaries, wages, and payroll burdens and benefits of the personnel
          performing the inventory or a rate agreed to by the Parties pursuant
          to Section I.6.A (General Matters). The per diem rate shall also be
          applied to a reasonable number of days for pre-inventory work and
          report preparation.

     B.   Actual transportation costs and Personal Expenses for the inventory
          team.

     C.   Reasonable charges for report preparation and distribution to the
          Non-Operators.

STWDJOA - Exhibit "C"
                                       24


<PAGE>

                                                 2005 COPAS Accounting Procedure


2.   NON-DIRECTED INVENTORIES

     A.   OPERATOR INVENTORIES

          Physical inventories that are not requested by the Non-Operators may
          be performed by the Operator, at the Operator's discretion. The
          expenses of conducting such Operator-initiated inventories shall not
          be charged to the Joint Account.

     B.   NON-OPERATOR INVENTORIES

          Subject to the terms of the Agreement to which this Accounting
          Procedure is attached, the Non-Operators may conduct a physical
          inventory at reasonable times at their sole cost and risk after giving
          the Operator at least ninety (90) days prior written notice. The
          Non-Operator inventory report shall be furnished to the Operator in
          writing within ninety (90) days of completing the inventory field
          work.

     C.   SPECIAL INVENTORIES

          The expense of conducting inventories other than those described in
          Sections V.1 (Directed Inventories), V.2.A (Operator Inventories), or
          V.2.B (Non-Operator Inventories), shall be charged to the Party
          requesting such inventory; provided, however, inventories required due
          to a change of Operator shall be charged to the Joint Account in the
          same manner as described in Section V.1 (Directed Inventories).




STWDJOA - Exhibit "C"
                                       25


<PAGE>

                                   Exhibit "D"


 Attached to and made a part of that certain Offshore Operating Agreement dated
effective as of the ______ day of _________, 20___, between Chevron U.S.A. Inc.,
 Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
      covering __________ Block _______, Federal Offshore, Gulf of Mexico



                            NONDISCRIMINATION CLAUSE
                            ------------------------

During the performance of this Agreement, the "contractor" (meaning and
referring separately to each party hereto) agrees, unless exempt therefrom to
comply with all provisions of Executive Order 11246 which are incorporated
herein by reference, and (a) if contractor has more than 50 employees or
contracts with another party hereto in excess of $10,000, contractor must file
Standard Form 100 (EEO-1), (b) if contractor has 50 or more employees and a
contract of $50,000 or more, contractor is required to develop a written
"Affirmative Action Compliance Program" for each of its establishments according
to the Rules and Regulations published by the United States Department of Labor
in 41 CFR, Chapter 60. Further, contractor hereby certifies that it does not now
and will not maintain any facilities provided for its employees in a segregated
manner or permit its employees to perform their services at any location under
its control where segregated facilities are maintained, as such segregated
facilities are defined in Title 41, Chapter 60-1.8, Code of Federal Regulations,
revised as of January 1, 1969, unless exempt therefrom. Contractor further
warrants that no other law, regulation or ordinance of the United States, or any
state, or any governmental authority or agency has been violated in the
manufacture, procurement or sale of any good furnished, work performed or
service rendered pursuant to this contract. Unless exempt by rules, regulations
or orders of the United States Secretary of Labor, issued pursuant to Section
204 of Executive Order 11246, dated September 24, 1965, during the performance
of this contract, the contractor agrees as follows:

     "(1) The contractor will not discriminate against any employee or applicant
          for employment because of race, color, religion, sex or national
          origin. The contractor will take affirmative action to ensure that
          applicants are employed and that employees are treated during
          employment, without regard to their race, color, religion, sex or
          national original. Such action shall include, but not be limited to,
          the following: Employment, upgrading, demotion, transfer, recruitment
          or recruitment advertising; layoff or termination; rates of pay or
          other forms of compensation; and selection for training, including
          apprenticeship. The contractor agrees to post in conspicuous places,
          available to employees and applicants for employment, notices to be
          provided by the contracting officer setting forth the provisions of
          this nondiscrimination clause."

     "(2) The contractor will, in all solicitations or advertisements for
          employees placed by or on behalf of the contractor, state that all
          qualified applicants will receive consideration for employment without
          regard to race, color, religion, sex or national origin."

     "(3) The contractor will send to each labor union or representative of
          workers with which he has a collective bargaining agreement or other
          contract or understanding, a notice to be provided by the agency
          contracting officer, advising the labor union or workers'
          representative of the contractor's commitments under Section 202 of
          Executive Order 11246 of September 24, 1965, and shall post copies of
          the notice in conspicuous places available to employees and applicants
          for employment."
     "(4) The contractor will comply with all provisions of Executive Order
          11246 of September 24, 1965, and of the rules, regulations and
          relevant orders of the Secretary of Labor."

     "(5) The contractor will furnish all information and reports required by
          Executive Order 11246 of September 24, 1965, and by the rules,
          regulations and orders of the Secretary of Labor, or pursuant thereto,
          and will permit access to his books, records and accounts by the
          contracting agency and the Secretary of Labor for purposes of
          investigating to ascertain compliance with such rules, regulations and
          orders."

     "(6) In the event of the contractor's noncompliance with the
          nondiscrimination clauses of this contract or with any of such rules,
          regulations or orders, this contract may be canceled, terminated or
          suspended in whole or in part and the contractor may be declared
          ineligible for further Government contracts in accordance with
          procedures authorized in Executive Order 11246 of September 24, 1965,
          or by rule, regulation or order of the Secretary of Labor, or as
          otherwise provided by law."

STWDJOA - Exhibit "D"

                                        1
<PAGE>


     "(7) The contractor will include the provisions of paragraph (1) through
          (8) in every subcontract or purchase order unless exempted by rules,
          regulations or orders of the Secretary of Labor issued pursuant to
          Section 204 of Executive Order 11246 of September 24, 1965, so that
          such provisions will be binding upon each subcontractor or vendor. The
          contractor will take such action with respect to any subcontract or
          purchase order as the contracting agency may direct as a means of
          enforcing such provisions including sanctions for noncompliance;
          provided, however, that in the event the contractor becomes involved
          in, or is result of such direction by the contracting agency, the
          contractor may request the United States to enter into such litigation
          to protect the interests of the United States."

     "(8) Contractor agrees and covenants that none of its employees or
          employees of its subcontractors who provided services pursuant to this
          contract are unauthorized aliens, as defined in the Immigration,
          Reform and Control Act of 1986."




STWDJOA - Exhibit "D"


                                        2
<PAGE>

                                   Exhibit "E"


 Attached to and made a part of that certain Offshore Operating Agreement dated
  effective as of the ______ day of ___________, 20___, between Chevron U.S.A.
Inc., Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
   covering ____________Block _____________, Federal Offshore, Gulf of Mexico


                      GAS BALANCING AGREEMENT ("AGREEMENT")


Definitions


     The following definitions shall apply to this Agreement:

     o    "Arm's Length Agreement" shall mean any gas sales agreement with an
          unaffiliated purchaser or any gas sales agreement with an affiliated
          purchaser where the sales price and delivery conditions under such
          agreement are representative of prices and delivery conditions
          existing under other similar agreements in the area between
          unaffiliated parties at the same time for natural gas of comparable
          quality and quantity.

     o    "Balancing Area" shall mean all of the acreage and depths subject to
          the Offshore Operating Agreement.

     o    "Full Share of Current Production" shall mean the Percentage Interest
          of each Party in the Gas actually produced from the Balancing Area
          during each month.

     o    "Gas" shall mean all hydrocarbons produced or producible from the
          Balancing area, whether from a well classified as an oil well or gas
          well by the regulatory agency having jurisdiction in such matters,
          which are or may be made available for sale or separate disposition by
          the Parties, excluding oil, condensate and other liquids recovered by
          field equipment operated for the joint account. "Gas" does not include
          gas used in joint operations, such as for fuel, recycling or
          reinjection, or which is vented or lost prior to its sale or delivery
          from the Balancing Area.

     o    "Makeup Gas" shall mean any Gas taken by an Underproduced Party from
          the Balancing Area in excess of its Full Share of Current Production,
          whether pursuant to Section 2.3. or Section 3.1. hereof.

     o    "Mcf' shall mean one thousand cubic feet. A cubic foot of Gas shall
          mean the volume of gas contained in one cubic foot of space at a
          standard pressure base and at a standard temperature base.

     o    "MMBtu" shall mean one million British Thermal Units. A British
          Thermal Unit shall mean the quantity of heat required to raise one
          pound avoirdupois of pure water from 58.5 degrees Fahrenheit to 59.5
          degrees Fahrenheit at a constant pressure of 14.73 pounds per square
          inch absolute.

     o    "Operator" shall mean the individual or entity designated under the
          terms of the Offshore Operating Agreement or, in the event this
          Agreement is not employed in connection with an operating agreement,

STWDJOA - Exhibit "E"


                                       -1-
<PAGE>

          the individual or entity designated as the operator of the well(s)
          located in the Balancing Area.

     o    "Overproduced Party' shall mean any Party having taken a greater
          quantity of Gas from the Balancing Area than the Percentage Interest
          of such Party in the cumulative quantity of all Gas produced from the
          Balancing Area.

     o    "Overproduction" shall mean the cumulative quantity of Gas taken by a
          Party in excess of its Percentage Interest in the cumulative quantity
          of all Gas produced from the Balancing Area.

     o    "Party" shall mean those individuals or entities subject to this
          Agreement, and their respective heirs, successors, transferees and
          assigns.

     o    "Percentage Interest" shall mean the percentage or decimal interest of
          each Party in the Gas produced from the Balancing Area pursuant to the
          Offshore Operating Agreement covering the Balancing Area.

     o    "Royalty" shall mean payments on production of Gas from the Balancing
          Area to all owners of royalties, overriding royalties, production
          payments or similar interests.

     o    "Underproduced Party" shall mean any Party having taken a lesser
          quantity of Gas from the Balancing Area than the Percentage Interest
          of such Party in the cumulative quantity of all Gas produced from the
          Balancing Area.

     o    "Underproduction" shall mean the deficiency between the cumulative
          quantity of gas taken by a Party and its percentage Interest in the
          cumulative quantity of all Gas produced from the Balancing Area.

     o    "Winter Period" shall mean the months of November and December in one
          calendar year and the months of January, February and March in the
          succeeding calendar year.

1.   Balancing Area

     1.1. If this Agreement covers more than one Balancing Area, it shall be
          applied as if each Balancing Area were covered by separate but
          identical agreements. All Balancing hereunder shall be on the basis of
          Gas taken from the Balancing Area measured in MMBtus.

     1.2. In the event that all or part of the Gas deliverable from a Balancing
          Area is or becomes subject to one or more lawful prices, any Gas not
          subject to price controls shall be considered as produced from a
          single Balancing Area and Gas subject to each price category shall be
          considered produced from a separate Balancing Area.

2.   Right of Parties to Take Gas

     2.1. Each Party desiring to take Gas will notify the Operator, or cause the
          Operator to be notified, of the volumes nominated, the name of the
          transporting pipeline and the pipeline contract number (if available)
          and meter station relating to such delivery, sufficiently in advance
          for the Operator, acting with reasonable diligence, to meet all
          nomination and other requirements. Operator is authorized to deliver
          the volumes so nominated and confirmed (if confirmation is required)
          to the transporting pipeline in accordance with the terms of this
          Agreement.

STWDJOA - Exhibit "E"


                                       -2-
<PAGE>

     2.2. Each Party shall make a reasonable, good faith effort to take its Full
          Share of Current Production each month, to the extent that such
          production is required to maintain leases in effect, to protect the
          producing capacity of a well or reservoir, to preserve correlative
          rights, or to maintain oil production.

     2.3. When a Party fails for any reason to take its full Share of Current
          Production (as such Share may be reduced by the right of the other
          parties to make up for Underproduction as provided herein), the other
          Parties shall be entitled to take any Gas which such Party fails to
          take. To the extent practicable, such Gas shall be made available
          initially to each Underproduced Party in the proportion that its
          Percentage Interest in the Balancing Area bears to the total
          Percentage Interests of all Underproduced Parties desiring to take
          such Gas. If all such Gas is not taken by the Underproduced Parties,
          the portion not taken shall then be made available to the other
          Parties in the proportion that their respective Percentage Interests
          in the Balancing Area bear to the total Percentage Interests of such
          Parties.

     2.4. All Gas taken by a Party in accordance with the provisions of this
          Agreement, regardless of whether such Party is underproduced or
          overproduced, shall be regarded as Gas taken for its own account with
          title thereto. being in such taking Party.

     2.5. Notwithstanding the provisions of Section 2.3. hereof, no Overproduced
          Party shall be entitled in any month to take any Gas in excess of
          three hundred percent (300%) of its Percentage Interest of the
          Balancing Area's then-current Maximum Monthly Availability; provided,
          however, that this limitation shall not apply to the extent that it
          would preclude production that is required to maintain lease in
          effect, to protect the producing capacity of a well or reservoir, to
          preserve correlative rights, or to maintain oil production. "Maximum
          Monthly Availability" shall mean the maximum average monthly rate of
          production at which Gas can be delivered from the Balancing Area, as
          determined by the Operator, considering the maximum efficient well
          rate for each well within the Balancing Area, the maximum allowable(s)
          set by the appropriate regulatory agency, mode of operation,
          production facility capabilities and pipeline pressures.

     2.6. In the event that a Party fails to make arrangements to take its Full
          Share of Current Production required to be produced to maintain leases
          in effect, to protect the producing capacity of a well or reservoir,
          to preserve correlative rights, or to maintain oil production, the
          Operator may sell any part of such Party's Full Share of Current
          Production that such Party fails to take for the account of such Party
          and render to such Party, on a current basis, the full proceeds of the
          sale, less any reasonable marketing, compression, treating, gathering
          or transportation costs incurred directly in connection with the sale
          of such Full Share of Current Production. In making the sale
          contemplated herein, the Operator shall be obligated only to obtain
          such price and conditions for the sale as are reasonable under the
          circumstances and shall not be obligated to share any of its markets.
          Any such sale by Operator under the terms hereof shall be only for
          such reasonable periods of time as are consistent with the minimum
          needs of the industry under the particular circumstances, but in no
          event for a period in excess of one year. Notwithstanding the
          provisions of Article 2.4. hereof, Gas sold by Operator for a Party
          under the provisions hereof shall be deemed to be Gas taken for the
          account of such Party.

3.   In-Kind Balancing

     3.1. Effective the first day of any calendar month following at least
          thirty (30) days' prior written notice to the Operator, any
          Underproduced Party may begin taking, in addition to its Full Share of
          Current Production and any Makeup Gas taken pursuant to Section 2.3.
          of this Agreement, a share of current production determined by
          multiplying thirty-seven and one-half percent (37.5%) of the Full

STWDJOA - Exhibit "E"


                                       -3-
<PAGE>

          Shares of Current Production of all Overproduced Parties by a
          fraction, the numerator of which is the Percentage Interest of such
          Underproduced Party and the denominator of which is the total of the
          Percentage Interests of all Underproduced Parties desiring to take
          Makeup Gas. In no event will an Overproduced Party be required to
          provide more than thirty-seven and one-half percent (37.5%) of its
          Full Share of Current Production for Makeup Gas. The Operator will
          promptly notify all Overproduced Parties of the election of an
          Underproduced Party to begin taking Makeup Gas.

     3.2. Notwithstanding the provisions of Section 3.1., the average monthly
          amount of Makeup Gas taken by an Underproduced Party during the Winter
          Period pursuant to Section 3.1. shall not exceed the average monthly
          amount of Makeup Gas taken by such Underproduced Party during the six
          (6) months immediately preceding the Winter Period.

4.   Statement of Gas Balances

     4.1. The Operator will maintain appropriate accounting on a monthly and
          cumulative basis of the volumes of Gas that each Party is entitled to
          receive and the volumes of Gas actually taken or sold for each Party's
          account. Within forty-five (45) days after the month of production,
          the Operator will furnish a statement for such month showing (1) each
          Party's Full Share of Current Production, (2) the total volume of Gas
          actually taken or sold for each Party's account, (3) the difference
          between the volume taken by each Party and that Party's Full Share of
          Current Production, (4) the Overproduction or Underproduction of each
          Party, and (5) other data as recommended by the provisions of the
          Council of Petroleum Accountants Societies Bulletin No. 24, as amended
          or supplemented hereafter. Each Party taking Gas will promptly provide
          to the Operator any data required by the Operator for preparation of
          the statements required hereunder.

     4.2. If any Party fails to provide the data required herein for four (4)
          consecutive production months, the Operator, or where the Operator has
          failed to provide data, another Party, may audit the production and
          Gas sales and transportation volumes of the non-reporting Party to
          provide the required data. Such audit shall be conducted only after
          reasonable notice and during normal business hours in the office of
          the Party whose records are being audited. All costs associated with
          such audit will be charged to the account of the Party failing to
          provide the required data.

5.   Payments on Production

     5.1. Each Party taking Gas shall pay or cause to be paid all production and
          severance taxes due on all volumes of Gas actually taken by such
          Party.

     5.2. [X]  (Alternative 1 - Sales) Each Party shall pay or cause to be paid
               Royalty due with respect to Royalty owners to whom it is
               accountable based on the volume of Gas actually taken for its
               account.

          [_]  (Alternative 2 - Entitlements) Each Party shall pay or cause to
               be paid all Royalty due with respect to Royalty owners to whom it
               is accountable as if such Party were taking its Full Share of
               Current Production, and only its Full Share of Current
               Production.

     5.3. In the event that any governmental authority requires that Royalty
          payments be made on any other basis than that provided for in this
          Section 5., each Party agrees to make such Royalty payments
          accordingly, commencing on the effective date required by such
          governmental authority, and the method provided for herein shall be
          thereby superseded.

STWDJOA - Exhibit "E"


                                       -4-
<PAGE>

6.   Cash Settlements

     6.1. Upon the earlier of the plugging and abandonment of the last producing
          interval in the Balancing Area, the termination of the Offshore
          Operating Agreement or any pooling or unit agreement covering the
          Balancing Area, or at any time no Gas is taken from the Balancing Area
          for a period of twelve (12) consecutive months, any Party may give
          written notice calling for cash settlement of the Gas production
          imbalances among the Parties. Such notice shall be given to all
          Parties in the Balancing Area.

     6.2. Within sixty (60) days after the notice calling for cash settlement
          under Section 6.1., the Operator will distribute to each Party a Final
          Gas Settlement Statement detailing the quantity of Overproduction owed
          by each Overproduced Party to each Underproduced Party and identifying
          the month to which such Overproduction is attributed, pursuant to the
          methodology set out in Section 6.4.

     6.3. Within sixty (60) days after receipt of the Final Gas Settlement
          Statement, each Overproduced Party will pay to each Underproduced
          Party entitled to settlement the appropriate cash settlement,
          accompanied by appropriate accounting detail. At the time of payment,
          the Overproduced Party will notify the Operator of the Gas imbalance
          settled by the Overproduced Party's payment.

     6.4. The amount of the cash settlement will be based on the proceeds
          received by the Overproduced Party under an Arm's Length Agreement for
          the Gas taken from time to time by the Overproduced Party in excess of
          the Overproduced Party's Full Share of Current Production. Any Makeup
          Gas taken by the Underproduced Party prior to monetary settlement
          hereunder will be applied to offset Overproduction chronologically in
          the order of accrual.

     6.5. The values used for calculating the cash settlement under Section 6.4.
          will include all proceeds received for the sale of the Gas by the
          Overproduced Party calculated at the Balancing Area, after deducting
          any production or severance taxes paid and any Royalty actually paid
          by the Overproduced Party to an Underproduced Party's Royalty
          owner(s), to the extent said payments amounted to a discharge of said
          Underproduced Party's Royalty obligation, as well as any reasonable
          marketing, compression, treating, gathering or transportation costs
          incurred directly in connection with the sale of the Overproduction.

     6.6. For Overproduction processed for the account of the Overproduced Party
          at a gas processing plant for the extraction of liquid hydrocarbons,
          the full quantity of the Overproduction will be valued for purposes of
          cash settlement at the prices received by the Overproduced Party for
          the sale of the residue gas attributable to the Overproduction without
          regard to proceeds attributable to liquid hydrocarbons which may have
          been extracted from the Overproduction.

     6.7. To the extent the Overproduced Party did not sell all Overproduction
          under an Arm's Length Agreement, the cash settlement will be based on
          the weighted average price received by the Overproduced Party for any
          gas sold from the Balancing Area under Arm's Length Agreements during
          the months to which such Overproduction is attributed. In the event
          that no sales under Arm's Length Agreements were made during any such
          month, the cash settlement for such month will be based on the spot
          sales prices published for the applicable geographic area during such
          month in a mutually acceptable pricing bulletin.

STWDJOA - Exhibit "E"


                                       -5-
<PAGE>

     6.8. Interest per annum at the then-current prime rate of Citibank N.A.,
          New York, New York, as published under "Money Rates" by the Wall
          Street Journal, or the maximum lawful rate of interest applicable to
          the Balancing Area, whichever is less, will accrue for all amounts due
          under Section 6.1., beginning the first day following the date payment
          is due pursuant to Section 6.3. Such interest shall be borne by the
          Overproduced Party in the proportion that its respective delays beyond
          the deadlines set out in Sections 6.2. or 6.3. contributed to the
          accrual of the interest.

     6.9. In lieu of the cash settlement required by Section 6.3., an
          Overproduced Party may deliver to the Underproduced Party an offer to
          settle its Overproduction in-kind and at such rates, quantities, times
          and sources as may be agreed upon by the Underproduced Party. If the
          Parties are unable to agree upon the manner in which such in-kind
          settlement gas will be furnished within sixty (60) days after the
          Overproduced Party's offer to settle in kind, which period may be
          extended by agreement of said Parties, the Overproduced Party shall
          make a cash settlement as provided in Section 6.3. The making of an
          in-kind settlement offer under this Section 6.9. will not delay the
          accrual of interest on the cash settlement should the Parties fail to
          reach agreement on an in-kind settlement.

     6.10. At any time during the term of this Agreement, any Overproduced Party
          may, in its sole discretion, make cash settlement(s) with the
          Underproduced Parties covering all or part of its outstanding Gas
          imbalance, provided that such settlements must be made with all
          Underproduced Parties proportionately based on the relative imbalances
          of the Underproduced Parties, and provided further that such
          settlements may not be made more often than once every twenty-four
          (24) months. Such settlements will be calculated in the same manner
          provided above for final cash settlements. The Overproduced Party will
          provide Operator a detailed accounting of any such cash settlement
          within thirty (30) days after the settlement is made.

7.   Testing

     Notwithstanding any provision of this Agreement to the contrary, any Party
     shall have the right, from time to time, to produce and take up to one
     hundred percent (100%) of a well's entire Gas stream to meet the reasonable
     deliverability test(s) required by such Party's Gas purchaser, and the
     right to take any Makeup Gas shall be subordinate to the right of any Party
     to conduct such tests; provided, however, that such tests shall be
     conducted in accordance with prudent operating practices only after thirty
     (30) days' prior written notice to the Operator and shall last no longer
     than twenty-four (24) hours.

8.   Operating Costs

     Nothing in this Agreement shall change or affect any Party's obligation to
     pay its proportionate share of all costs and liabilities incurred in
     operations on or in connection with the Balancing Area, as its share
     thereof is set forth in the Operating Agreement, irrespective of whether
     any party is at any time selling and using Gas or whether such sales or use
     are in proportion to its Percentage Interest in the Balancing Area.

9.   Liquids

     The Parties shall share proportionately in and own all liquid hydrocarbons
     recovered with Gas by field equipment operated for the joint account in
     accordance with their Percentage Interests in the Balancing Area.

STWDJOA - Exhibit "E"


                                       -6-
<PAGE>

10.  Audit Rights

     Notwithstanding any provision in this Agreement or any other agreement
     between the Parties hereto, and further notwithstanding any termination or
     cancellation of this Agreement, for a period of two (2) years from the end
     of the calendar year in which any information to be furnished under Section
     4. or 6. hereof is supplied, any Party shall have the right to audit the
     records of any other Party regarding quantity, including but not limited to
     information regarding Btu content. Any Underproduced Party shall have the
     right for a period of two (2) years from the end of the calendar year in
     which any cash settlement is received pursuant to Section 6. to audit the
     records of any Overproduced Party as to all matters concerning values,
     including but not limited to information regarding prices and disposition
     of Gas from the Balancing Area. Any such audit shall be conducted at the
     expense of the Party or Parties desiring such audit, and shall be
     conducted, after reasonable notice, during normal business hours in the
     ofice of the Party whose records are being audited. Each Party hereto
     agrees to maintain records as to the volumes and prices of Gas sold each
     month and the volumes of Gas used in its own operations, along with the
     Royalty paid on any such Gas used by a Party in its own operations. The
     audit rights provided for in this Section 10. shall be in addition to those
     provided for in Section 4.2. of this Agreement.

11.  Miscellaneous

     11.1. As between the Parties, in the event of any conflict between the
          provisions of this Agreement and the provisions of any gas sales
          contract, or in the event of any conflict between the provisions of
          this Agreement and the provisions of the Operating Agreement, the
          provisions of this Agreement shall govern.

     11.2. Each Party agrees to defend, indemnify and hold harmless all other
          Parties from and against any and all liabilities for any claims, which
          may be asserted by any third party which now or hereafter stands in a
          contractual relationship with such indemnifying Party and which arise
          out of the operation of this Agreement or any activities of such
          indemnifying Party under the provisions of this Agreement, and does
          further agree to save the other Parties harmless from all judgments or
          damages sustained and costs incurred in connection therewith.

     11.3. Except as otherwise provided in this Agreement, Operator is
          authorized to administer the provisions of this Agreement, but shall
          have no liability to the other Parties for losses sustained or
          liability incurred which arise out of or in connection with the
          performance of Operator's duties hereunder, except such as may result
          from Operator's gross negligence or willful misconduct. Operator shall
          not be liable to any Underproduced Party for the failure of any
          Overproduced Party (other than Operator) to pay any amounts owed
          pursuant to the terms hereof.

     11.4. This Agreement shall remain in full force and efect for as long as
          the Ofshore Operating Agreement shall remain in force and efect as to
          the Balancing Area, and thereafter until the Gas accounts between the
          Parties are settled in full, and shall inure to the benefit of and be
          binding upon the Parties hereto, and their respective heirs,
          successors, legal representatives and assigns, if any. The Parties
          hereto agree to give notice of the existence of this Agreement to any
          successor in interest of any such Party and to provide that any such
          successor shall be bound by this Agreement, and shall further make any
          transfer of any interest subject to the Operating Agreement, or any
          part thereof, also subject to the terms of this Agreement.

     11.5. Unless the context clearly indicates otherwise, words used in the
          singular include the plural, the plural includes the singular, and the
          neuter gender includes the masculine and the feminine.


STWDJOA - Exhibit "E"


                                       -7-
<PAGE>

     11.6. This Agreement shall bind the Parties in accordance with the
          provisions hereof, and nothing herein shall be construed or
          interpreted as creating any rights in any person or entity not a
          signatory hereto, or as being a stipulation in favor of any such
          person or entity.

     11.7. If contemporaneously with this Agreement becoming effective, or
          thereafter, any Party requests that any other Party execute an
          appropriate memorandum or notice of this Agreement in order to give
          third parties notice of record of same and submits same for execution
          in recordable form, such memorandum or notice shall be duly executed
          by the Party to which such request is made and delivered promptly
          thereafer to the Party making the request. Upon receipt, the Party
          making the request shall cause the memorandum or notice to be duly
          recorded in the appropriate real property or other records afecting
          the Balancing Area.

     11.8. The Parties to this Agreement agree to abide by the requirements of
          Treas. Reg. Sec. 1.761-2(d)(2). This regulation requires that all
          co-producers of natural gas operating under the same operating
          agreement must use the cumulative gas balancing method, as described
          under Treas. Reg. Sec. 1.761-2(d)(3), to compute and report gross
          income from sales of natural gas for tax purposes. In the event of a
          conflict between the provisions of this Section and any other
          provisions of this Agreement, the provisions of this Section shall
          control.

12.  Assignment and Rights upon Assignment

     12.1. Subject to the provisions of Section 12.2. and 12.3. hereof, and
          notwithstanding anything in this Agreement or in the Ofshore Operating
          Agreement to the contrary, if any Party assigns (including any sale,
          exchange or other transfer) any of its working interest in the
          Balancing Area when such Party is an Underproduced or Overproduced
          Party, the assignment or other act of transfer shall, insofar as the
          Parties hereto are concerned, include all interest of the assigning or
          transferring Party in the Gas, all rights to receive or obligations to
          provide or take Makeup Gas and all rights to receive or obligations to
          make any monetary payment which may ultimately be due hereunder, as
          applicable. Operator and each of the other Parties hereto shall
          thereafter treat the assignment accordingly, and the assigning or
          transferring Party shall look solely to its assignee or other
          transferee for any interest in the Gas or monetary payment that such
          Party may have or to which it may be entitled, and shall cause its
          assignee or other transferee to assume its obligations hereunder.

     12.2. Notwithstanding anything in this Agreement (including but not limited
          to the provisions of Section 12.1. hereof) or in the Ofshore Operating
          Agreement to the contrary, and subject to the provisions of Section
          12.3. hereof, in the event an Overproduced Party intends to sell,
          assign, exchange or otherwise transfer any of its interest in a
          Balancing Area, such Overproduced Party shall notify in writing the
          other working interest owners who are Parties hereto in such Balancing
          Area of such fact at least sixty (60) days prior to closing the
          transaction. Thereafter, any Underproduced Party may demand from such
          Overproduced Party in writing, within thirty (30) days afer receipt of
          the Overproduced Party's notice, a cash settlement of its
          Underproduction from the Balancing Area. The Operator shall be
          notified of any such demand and of any cash settlement pursuant to
          this Section 12., and the Overproduction and Underproduction of each
          Party shall be adjusted accordingly. Any cash settlement pursuant to
          this Section 12. shall be paid by the Overproduced Party, accompanied
          by appropriate accounting detail, on or before the earlier to occur
          (1) of sixty (60) days after receipt of the Underproduced Party's
          demand or (2) at the closing of the transaction in which the
          Overproduced Party sells, assigns, exchanges or otherwise transfers
          its interest in a Balancing Area on the same basis as otherwise set
          forth in Sections 6.3. through 6.7., and shall bear interest at the


STWDJOA - Exhibit "E"


                                       -8-
<PAGE>

          rate set forth in Section 6.8. hereof, beginning sixty (60) days after
          the Overproduced Party's sale, assignment, exchange or transfer of its
          interest in the Balancing Area for any amounts not paid. Provided,
          however, if any Underproduced Party does not so demand such cash
          settlement of its Underproduction from the Balancing Area, such
          Underproduced shall look exclusively to the assignee or other
          successor in interest of the Overproduced Party giving notice
          hereunder for the satisfaction of such Underproduced Party's
          Underproduction in accordance with the provisions of Section 12.1.
          hereof.

     12.3. The provisions of this Section 12. shall not be applicable in the
          event any Party mortgages its interest or disposes of its interest by
          merger, reorganization, consolidation or sale of substantially all of
          its assets to a subsidiary or parent company, or to any company in
          which any parent or subsidiary of such party owns a majority of the
          stock of such company.

13.  Counterparts

     This Agreement may be executed in counterparts, each of which when taken
     with all other counterparts shall constitute a binding agreement between
     the Parties hereto; provided, however, that if a Party or Parties owning a
     Percentage Interest in the Balancing Area equal to or greater than
     [percent] percent therein fail(s) to execute this Agreement on or before
     [date], this Agreement shall not be binding upon any Party and shall be of
     no further force and effect.

     IN WITNESS WHEREOF, this agreement shall be effective as of [date].

     ATTEST OR WITNESS:                     OPERATOR

                                            -----------------------------------
                                            By:
 --------------------------                    --------------------------------

 --------------------------                 -----------------------------------

                                            Type or print name

                                            Title
                                                  -----------------------------
                                            Date
                                                 ------------------------------
                                            Tax ID or S.S. No.
                                                              -----------------

     ATTEST OR WITNESS:                     NON-OPERATOR(S)

                                            -----------------------------------
                                            By:
---------------------------                    --------------------------------

---------------------------                 -----------------------------------

                                            Type or print name

                                            Title
                                                 ------------------------------
                                            Date
                                                 ------------------------------
                                            Tax ID or S.S. No.
                                                              -----------------


STWDJOA - Exhibit "E"


                                       -9-
<PAGE>

                                   Exhibit "F"

 Attached to and made a part of that certain Offshore Operating Agreement dated
 effective as of the ________day of ______, 20____, between Chevron U.S.A. Inc.,
   Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
    covering ____________Block __________, Federal Offshore, Gulf of Mexico


                           TAX PARTNERSHIP PROVISIONS
   OF THE ________PROSPECT PARTNERSHIP (For Name of Tax Reporting Partner and
                      Special Elections, See Secs. 8 and 9)
<TABLE>
<CAPTION>
Table of Contents

                                                                                                    <C>
1. GENERAL PROVISIONS ..................................................................................1
   1.1 DESIGNATION OF DOCUMENTS ........................................................................1
   1.2 RELATIONSHIP OF THE PARTIES .....................................................................1
   1.3 PRIORITY OF PROVISIONS OF THIS EXHIBIT ..........................................................1
   1.4 SURVIVORSHIP ....................................................................................1
2. TAX REPORTING PARTNER AND TAX MATTERS PARTNER .......................................................2
   2.1 TAX REPORTING PARTNER . .........................................................................2
   2.2 IF SMALL PARTNERSHIP EXCEPTION FROM TEFRA NOT APPLICABLE ........................................2
3. INCOME TAX COMPLIANCE AND CAPITAL ACCOUNTS ..........................................................3
   3.1 TAX RETURNS .....................................................................................3
   3.2 FAIR MARKET VALUE CAPITAL ACCOUNTS ..............................................................3
   3.3 INFORMATION REQUESTS ............................................................................3
   3.4 BEST EFFORTS WITHOUT LIABILITY ..................................................................3
4. TAX AND FMV CAPITAL ACCOUNT ELECTIONS ...............................................................4
   4.1 GENERAL ELECTIONS ...............................................................................4
   4.2 DEPLETION .......................................................................................4
   4.3 ELECTION OUT UNDER CODE ss761(a) ................................................................4
   4.4 CONSENT REQUIREMENTS FOR SUBSEQUENT TAX OR FMV CAPITAL ACCOUNT ELECTIONS.........................4
5. CAPITAL CONTRIBUTIONS AND FMV CAPITAL ACCOUNTS ......................................................5
   5.1 CAPITAL CONTRIBUTIONS ...........................................................................5
   5.2 FMV CAPITAL ACCOUNTS ............................................................................5
6. PARTNERSHIP ALLOCATIONS .............................................................................6
   6.1 FMV CAPITAL ACCOUNT ALLOCATIONS .................................................................6
   6.2 TAX RETURN AND TAX BASIS CAPITAL ACCOUNT ALLOCATIONS ............................................6
7. TERMINATION AND LIQUIDATING DISTRIBUTION ............................................................7
   7.1 TERMINATION OF THE PARTNERSHIP ..................................................................7
   7.2 BALANCING OF FMV CAPITAL ACCOUNTS ...............................................................8
   7.3 DEEMED SALE GAIN/LOSS CHARGE BACK ...............................................................8
   7.4 DEFICIT MAKE-UP OBLIGATION AND BALANCING CASH CONTRIBUTIONS .....................................8
   7.5 DISTRIBUTION TO BALANCE CAPITAL ACCOUNTS ........................................................8
   7.6 FMV DETERMINATION ...............................................................................8
   7.7 FINAL DISTRIBUTION ..............................................................................8
8. TRANSFERS, INDEMNIFICATION, AND CORRESPONDENCE ......................................................9
   8.1 TRANSFER OF PARTNERSHIP INTERESTS ...............................................................9
   8.2 CORRESPONDENCE ..................................................................................9
9. ELECTIONS AND CHANGES TO ABOVE PROVISIONS ...........................................................9
</TABLE>

STW DJOA - Exhibit "F"
                                        i


<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                    <C>
   9.1 OPERATOR NOT THE TRP ............................................................................9
   9.2 SPECIAL TAX ELECTIONS ...........................................................................9
   9.3 CHANGE OF MAJORITY FOR OTHER TAX ELECTIONS .....................................................10
</TABLE>




JOA - Exhibit "F"
                                       ii


<PAGE>

1.   GENERAL PROVISIONS

1.1  DESIGNATION OF DOCUMENTS.

This exhibit is referred to in, and is part of, that Agreement identified above
and, if so provided, a part of any agreement to which the Agreement is an
exhibit. Such agreement(s) (including all exhibits thereto, other than this
exhibit) shall be hereinafter referred to as the "Agreement;" and this exhibit
is hereinafter referred to as the "Exhibit" or the "Tax Partnership Provisions"
(the "TPPs"). Except as may be otherwise provided in this Exhibit, terms defined
and used in the Agreement shall have the same meaning when used herein.

1.2  RELATIONSHIP OF THE PARTIES.

The parties to the Agreement shall be hereinafter referred to as "Party" or
"Parties." The Parties understand and agree that the arrangement and
undertakings evidenced by the Agreement result in a partnership for purposes of
Federal income taxation and certain State income tax laws which incorporate or
follow Federal income tax principles as to tax partnerships. Such partnership
for tax purposes is hereinafter referred to as the "Partnership." For every
other purpose of the Agreement the Parties understand and agree that their legal
relationship to each other under applicable State law with respect to all
property subject to the Agreement is one of tenants in common, or undivided
interest owners, or lessee(s)-sublessee(s) and not a partnership; that the
liabilities of the Parties shall be several and not joint or collective; and
that each Party shall be responsible solely for its own obligations.

1.3  PRIORITY OF PROVISIONS OF THIS EXHIBIT.

If there is a conflict or inconsistency, whether direct or indirect, actual or
apparent, between the terms and conditions of this Exhibit and the terms and
conditions of the Agreement, or any other exhibit or any part thereof, the terms
and conditions of this Exhibit shall govern and control.

1.4  SURVIVORSHIP.

1.4.1 Any termination of the Agreement shall not affect the continuing
application of the TPPs for the termination and liquidation.

1.4.2 Any termination of the Agreement shall not affect the continuing
application of the TPPs for the resolution of all matters regarding Federal and
State income tax reporting.

1.4.3 These TPPs shall inure to the benefit of, and be binding upon, the Parties
hereto and their successors and assigns.

1.4.4 The effective date of these TPPs shall be the commencement of well cost
sharing on the Prospect under the Agreement. The Partnership shall continue in
full force and effect from, and after such date, until termination and
liquidation.

JOA - Exhibit "F"

                                        1


<PAGE>

2.   TAX REPORTING PARTNER AND TAX MATTERS PARTNER


2.1  TAX REPORTING PARTNER.

The Operator (or the Party listed in Sec. 9.1) as the Tax Reporting Partner
("TRP") is responsible for compliance with all tax reporting obligations of the
Partnership, see Sec. 3.1, below. In the event of any change in the TRP, the
Party serving as TRP at the beginning of a given taxable year shall continue as
TRP with respect to all matters concerning such year.

     2.2  IF SMALL PARTNERSHIP EXCEPTION FROM TEFRA NOT APPLICABLE.

     If the Partnership does not qualify for the "small partnership exception"
     from, or if the Partnership elects (see infra Elections at Secs. 4.1 and
     9.2) to be subject to, ss.ss.6221 et seq., Subchapter C of Chapter 53 of
     Subtitle A (the "TEFRA rules") of the Internal Revenue Code (the "Code")
     the TRP shall also be the Tax Matters Partner as defined in Code ss.6231(a)
     (the "TMP") and references to the TRP shall then include references to the
     TMP and vice versa.

     2.2.1 The TMP shall not be required to incur any expenses for the
     preparation for, or pursuance of, administrative or judicial proceedings,
     unless the Parties agree on a method for sharing such expenses.

     2.2.2 The Parties shall furnish the TMP, within two weeks from the receipt
     of the request, the information the TMP may reasonably request to comply
     with the requirements on furnishing information to the Internal Revenue
     Service.

     2.2.3 The TMP shall not agree to any extension of the statute of
     limitations for making assessments on behalf of the Partnership without
     first obtaining the written consent of all Parties. The TMP shall not bind
     any other Party to a settlement agreement in tax audits without obtaining
     the written concurrence of any such Party.

     2.2.4 Any other Party who enters in a settlement agreement with the
     Secretary of the Treasury with respect to any partnership items, as defined
     in Code ss.6231(a)(3), shall notify the other Parties of the terms within
     ninety (90) days from the date of such settlement.

     2.2.5 If any Party intends to file a notice of inconsistent treatment under
     Code ss.6222(b), such Party shall, prior to the filing of such notice,
     notify the TMP of the (actual or potential) inconsistency of the Party's
     intended treatment of a partnership item with the treatment of that item by
     the Partnership. Within one week of receipt the TMP shall remit copies of
     such notification to the other Parties. If an inconsistency notice is fled
     solely because a Party has not received a Schedule K-1 in time for filing
     of its income tax return, the TMP need not be notified.

     2.2.6 No Party shall file pursuant to Code ss.6227 a request for an
     administrative adjustment of partnership items (the "RFAA") without first
     notifying all other Parties. If all other Parties agree with the requested
     adjustment, the TMP shall file the RFAA on behalf of the Partnership. If
     unanimous consent is not obtained within thirty (30)

JOA - Exhibit "F"


                                        2
<PAGE>

     days from such notice, or within the period required to timely file the
     RFAA, if shorter, any Party, including the TMP, may file a RFAA on its own
     behalf.

     2.2.7 Any Party intending to file with respect to any partnership item, or
     any other tax matter involving the Partnership, a petition under Code
     ss.ss.6226, 6228, or any other provision, shall notify the other Parties
     prior to such filing of the nature of the contemplated proceeding. In the
     case where the TMP is the Party intending to file such petition, such
     notice shall be given within a reasonable time to allow the other Parties
     to participate in the choice of the forum for such petition. If the Parties
     do not agree on the appropriate forum, then the forum shall be chosen by
     majority vote. Each Party shall have a vote in accordance with its
     percentage interest in the Partnership for the year under audit, If a
     majority cannot agree, the TMP shall choose the forum. If a Party intends
     to seek review of any court decision rendered as a result of such
     proceeding, the Party shall notify the other Parties prior to seeking such
     review.


3.   INCOME TAX COMPLIANCE AND CAPITAL ACCOUNTS


3.1  TAX RETURNS.

The TRP shall prepare and file all required Federal and State partnership income
tax returns. Not less than thirty (30) days prior to the return due date
(including extensions), the TRP shall submit to each Party for review a copy of
the return as proposed.

3.2  FAIR MARKET VALUE CAPITAL ACCOUNTS.

The TRP shall establish and maintain for each Party fair market value ("FMV")
capital accounts and tax basis capital accounts. Upon request, the TRP shall
submit to each Party along with a copy of any proposed partnership income tax
return an accounting of such Party's FMV capital accounts as of the end of the
return period.

3.3  INFORMATION REQUESTS.

In addition to any obligation under Sec. 2.2.2, each Party agrees to furnish to
the TRP not later than sixty (60) days before the return due date .(including
extensions) such information relating to the operations conducted under the
Agreement as may be required for the proper preparation of such returns.
Similarly, each Party agrees to furnish timely to the TRP, as requested, any the
information and data necessary for the preparation and/or filing of other
required reports and notifications, and for the computation of the capital
accounts. As provided in Code ss.6050K(c), a Party transferring its interest
must notify the TRP to allow compliance with Code ss.6050K (a) (see also Sec.
8.1).

3.4  BEST EFFORTS WITHOUT LIABILITY.

The TRP and the other Party(ies) shall use its/their best efforts to comply with
responsibilities outlined in this Section, and with respect to the service as
TMP as outlined Sec. 2.2, and in doing so shall incur no liability to any other
Party.

JOA - Exhibit "F"


                                        3
<PAGE>

4. TAX AND FMV CAPITAL ACCOUNT ELECTIONS


4.1  GENERAL ELECTIONS.

For both income tax return and capital account purposes, the Partnership shall
elect:
a) to deduct when incurred intangible drilling and development costs ("IDC");
b) to use the maximum allowable accelerated tax method and the shortest
permissible tax life for depreciation;
c) the accrual method of accounting;
d) to report income on a calendar year basis; and the Partnership shall also
make any elections as specially noted in Sec. 9.2, below.

4.2  DEPLETION.

Solely for FMV capital account purposes, depletion shall be calculated by using
simulated cost depletion within the meaning of Treas. Reg. s.s. 1.704-1
(b)(2)(iv)(k)(2), unless the use of simulated percentage depletion is elected in
Sec. 9.2, below. The simulated cost depletion allowance shall be determined
under the principles of Code s.s.612 and be based on the FMV capital account
basis of each Lease. Solely for purposes of this calculation, remaining reserves
shall be determined consistently by the TRP.

4.3  ELECTION OUT UNDER CODE s.s.761(a).

4.3.1 The TRP shall notify all Parties of an intended election to be excluded
from the application of Subchapter K of Chapter 1 of the Code not later than
sixty (60) days prior to the filing date or the due date (including extensions)
for the Federal partnership income tax return, whichever comes earlier. Any
Party that does not consent must provide the TRP with written objection within
thirty (30) days of such notice. Even after an efective election-out the TRP's
rights and obligations, other than the relief from tax return filing obligations
of the partnership, continue.

4.3.2 After an election-out, to avoid an unintended impairment of the
election-out: The Parties will avoid, without prior coordination, any
operational changes which would terminate the qualification for the election-out
status; all Parties will monitor the continuing qualification of the Partnership
for the election-out status and will notify the other Parties if, in their
opinion, a change in operations will jeopardize the election-out; and, all
Parties will use, unless agreed to by them otherwise, the cumulatve gas
balancing method as described in Treas. Reg. s.s. 1.761-2(d)(2).


4.4  CONSENT REQUIREMENTS FOR SUBSEQUENT TAX OR FMV CAPITAL ACCOUNT ELECTIONS.

Unless stipulated diferently in Sec. 9.3, future elections, in addition to or in
amendment of those in this agreement, must be approved by the afirmative vote of
two (2) or more Parties owning a majority of the working interest based upon
post-Payout ownership.


JOA - Exhibit "F"


                                        4
<PAGE>

5.   CAPITAL CONTRIBUTIONS AND FMV CAPITAL ACCOUNTS

The provisions of this Sec. 5 and any other provisions of the TPPs relating to
the maintenance of the capital accounts are intended to comply with Treas. Reg.
ss.1.704-1(b) and shall be interpreted and applied in a manner consistent with
such regulations.

5.1  CAPITAL CONTRIBUTIONS.

The respective capital contributions of each Party to the Partnership shall be
(a) each Party's interest in the oil and gas lease(s), including all associated
lease and well equipment, committed to the Partnership, and (b) all amounts of
money paid by each Party in connection with the acquisition, exploration,
development, and operation of the lease(s), and all other costs characterized as
contributions or expenses borne by such Party under the Agreement. The
contribution of the leases and any other properties committed to the Partnership
shall be made by each Party's agreement to hold legal title to its interest in
such leases or other property as nominee of the Partnership.

5.2  FMV CAPITAL ACCOUNTS.

The FMV capital accounts shall be increased and decreased as follows:

5.2.1 The FMV capital account of a Party shall be increased by:
(i) the amount of money and the FMV (as of the date of contribution) of any
property contributed by such Party to the Partnership (net of liabilities
assumed by the Partnership or to which the contributed property is subject);
(ii) that Party's share of Partnership items of income or gain, allocated in
accordance with Sec. 6.1; and
(iii) that Party's share of any Code ss.705(a)(1)(B) item.

5.2.2 The FMV capital account of a Party shall be decreased by:
(i) the amount of money and the FMV of property distributed to a Party (net of
liabilities assumed by such Party or to which the property is subject);
(ii) that Party's Sec. 6.1 allocated share of Partnership loss and deductions,
or items thereof; and,
(iii) that Party's share of any Code ss.705(a)(2)(B) item.

5.2.3 "FMV" when it applies to property contributed by a Party to the
Partnership shall be assumed, for purposes of 5.2.1, to equal the adjusted tax
basis, as defined in Code ss.1011, of that property unless the Parties agree
otherwise as indicated in Sec. 9.2.

5.2.4 As provided in Treas. Reg. ss.1.704-1(b)(2)(iv)(e), upon distribution of
Partnership property to a Party the capital accounts will be adjusted to reflect
the manner in which the unrealized income, gain, loss and deduction inherent in
distributed property (not previously reflected in the capital accounts) would be
allocated among the Parties if there were a disposition of such property at its
FMV as of the time of distribution. Furthermore, if so agreed to in Sec. 9.2,
under the rules of Treas. Reg. ss. 1.7041 (b)(2)(iv)(f), the FMV capital
accounts shall be revalued at certain times to reflect value changes of the
Partnership property.

JOA - Exhibit "F"


                                        5
<PAGE>

6.   PARTNERSHIP ALLOCATIONS


6.1  FMV CAPITAL ACCOUNT ALLOCATIONS.
Each item of income, gain, loss, or deduction shall be allocated to each Party
as follows:

6.1.1 Actual or deemed income from the sale, exchange, distribution or other
disposition of production shall be allocated to the Party entitled to such
production or the proceeds from the sale of such production. The amount received
from the sale of production and the amount of the FMV of production taken in
kind by the Parties are deemed to be identical; accordingly, such items may be
omitted from the adjustments made to the Parties' FMV capital accounts.

6.1.2 Exploration cost, IDC, operating and maintenance cost shall be allocated
to each Party in accordance with its respective contribution, or obligation to
contribute, to such cost.

6.1.3 Depreciation shall be allocated to each Party in accordance with its
contribution, or obligation to contribute, to the cost of the underlying asset.

6.1.4 Simulated depletion shall be allocated to each Party in accordance with
its FMV capital account adjusted basis in each oil and gas property of the
Partnership.

6.1.5 Loss (or simulated loss) upon the sale, exchange, distribution,
abandonment or other disposition of depreciable or depletable property shall be
allocated to the Parties in the ratio of their respective FMV capital account
adjusted bases in the depreciable or depletable property.

6.1.6 Gain (or simulated gain) upon the sale, exchange, distribution, or other
disposition of depreciable or depletable property shall be allocated to the
Parties so that the FMV capital account balances of the Parties will most
closely reflect their respective percentage or fractional interests under the
Agreement.

6.1.7 Costs or expenses of any other kind shall be allocated to each Party in
accordance with its respective contribution, or obligation to contribute, to
such costs or expense.

6.1.8 Any other income item shall be allocated to the Parties in accordance with
the manner in which such income is realized by each Party.

6.2  TAX RETURN AND TAX BASIS CAPITAL ACCOUNT ALLOCATIONS.

6.2.1 Unless otherwise expressly provided in this Sec. 6.2, the allocations of
the Partnership's items of income, gain, loss, or deduction for tax return and
tax basis capital account purposes shall follow the principles of the
allocations under Sec. 6.1. However, the Partnership's gain or loss on the
taxable disposition of a Partnership property in excess of the gain or loss
under Sec. 6.1, if any, is allocated to the contributing Party to the extent of
such Party's pre-contribution gain or loss.

JOA - Exhibit "F"


                                        6
<PAGE>

6.2.2 The Parties recognize that under Code ss.613A(c)(7)(D) the depletion
allowance is to be computed separately by each Party. For this purpose, each
Party's share of adjusted tax basis in each oil and gas property shall be equal
to its contribution to adjusted tax basis of such property.

6.2.3 Under Code ss.613A(c)(7)(D) gain or loss on the disposition of an oil and
c property is to be computed separately by each Party. According to Treas. Reg.
ss.1.701-(b)(4)(v), the amount realized shall be allocated as follows: (i) An
amount It represents recovery of adjusted simulated depletion basis is allocated
(without be credited to the capital accounts) to the Parties in the same
proportion as the aggregate; simulated depletion basis was allocated to such
Parties under Sec. 5.2; and (ii) remaining realization is allocated in
accordance with Sec. 6.1.6.

6.2.4 Depreciation shall be allocated to each Party in accordance with its
contribution to the adjusted tax basis of the depreciable asset.

6.2.5 In accordance with Treas. Reg. ss.1.1245-1(e), depreciation recapture
shall allocated, to the extent possible, among the Parties to reflect their
prior sharing of depreciation.

6.2.6 In accordance with the principles of Treas. Reg. ss.1.1254-5, any
recapture of II is determined and reported by each Party separately. Similarly,
any recapture depletion shall be computed separately by each Party, in
accordance with its depletion allowance computed pursuant to Sec. 6.2.2.

6.2.7 For Partnership properties with FMV capital account values different from
their adjusted tax bases the Parties intend that the allocations described in
this Section 6.2 constitute a "reasonable method" of allocating gain or loss
under Treas. Reg. ss.1.704-3(a)(1).

6.2.8 Take-in-kind.
If checked "Yes" in Sec. 9.2, below, each Party has the right to determine the
market its proportionate share of production. All items of income, deductions,
and credits arising from such marketing of production shall be recognized by the
Partnership c shall be allocated to the Party whose production is so marketed.

7.   TERMINATION AND LIQUIDATING DISTRIBUTION

7.1  TERMINATION OF THE PARTNERSHIP.

7.1.1 Upon termination, as provided in Code ss.708(b)(1)(A), the business shall
wound-up and concluded, and the assets shall be distributed to the Parties as
described below by the end of such calendar year (or, if later, within ninety
(90) days after the d of such termination). The assets shall be valued and
distributed to the Parties in order provided in Secs. 7.1.2, 7.5, and 7.7.

7.1.2 First, all cash representing unexpended contributions by any Party and
property in which no interest has been earned by any other Party under the
Agreement shall be returned to the contributor.

JOA - Exhibit "F"


                                        7
<PAGE>

7.2  BALANCING OF FMV CAPITAL ACCOUNTS.

Second, the FMV capital accounts of the Parties shall be determined as described
hereafter. The TRP shall take the actions specified under Secs. 7.2 through 7.5
in on to cause the ratios of the Parties' FMV capital accounts to reflect as
closely as possible their interests under the Agreement. The ratio of a Party's
FMV capital account represented by a fraction, the numerator of which is the
Party's FMV capital account balance and the denominator of which is the sum of
all Parties' FMV capital account balances. This is hereafter referred to as the
"balancing of the FMV capital accounts" and, when completed, the FMV capital
accounts of the Parties shall be referred to "balanced."

7.3  DEEMED SALE GAIN/LOSS CHARGE BACK.

The FMV of all Partnership properties shall be determined and the gain or loss
for each property, which would have resulted if sold at such FMV, shall be
allocated accordance with Secs. 6.1.5 and 6.1.6.

7.4 DEFICIT MAKE-UP OBLIGATION AND BALANCING CASH CONTRIBUTIONS.

If hereafter a Party has a negative FMV capital account balance, that is a
balance less than zero, in accordance with of Treas. Reg.
ss.1.704-1(b)(2)(ii)(b)(3) such Part obligated to contribute, by the end of the
taxable year or, if later, within 90 days from Partnership's liquidation, an
amount of money to the Partnership sufficient to achieve zero balance FMV
capital account (the "Deficit Make-Up Obligation"). Moreover, Party may
contribute an amount of cash to the Partnership to facilitate the balancing the
FMV capital accounts. If after these adjustments the FMV capital accounts are
balanced, Secs. 7.5 shall apply.

7.5  DISTRIBUTION TO BALANCE CAPITAL ACCOUNTS.

7.5.1 If all Parties agree, any cash or an undivided interest in certain
selected properties shall be distributed to one or more Parties as necessary for
the purpose balancing the FMV capital accounts.

7.5.2 Distribution of undivided interests.
Unless Sec. 7.5.1 applies, an undivided interest in each and every property
shall distributed to one or more Parties in accordance with the ratios of their
FMV cap accounts.

7.6  FMV DETERMINATION.

If a property is to be valued for purposes of balancing the capital accounts and
making a distribution under this Sec. 7, the Parties must first attempt to agree
on the FMV of property; failing such an agreement, the TRP shall cause a
nationally recognized independent engineering firm to prepare an appraisal of
the FMV of such property.

7.7  FINAL DISTRIBUTION.

After the FMV capital accounts of the Parties have been adjusted pursuant to
Secs. 7 to 7.5, all remaining property and interests then held by the
Partnership shall be distributed to the Parties in accordance with their
positive FMV capital account balances.

JOA - Exhibit "F"


                                        8
<PAGE>

8.   TRANSFERS, INDEMNIFICATION, AND CORRESPONDENCE

8.1  TRANSFER OF PARTNERSHIP INTERESTS.

Transfers of Partnership interests shall be governed by the Agreement. A Party
transferring its interest, or any part thereof, shall notify the TRP in writing
within weeks after such transfer.

8.2  CORRESPONDENCE.

All correspondence relating to the preparation and filing of the Partnership's
income tax returns and capital accounts shall be sent to:

                      (Attach separate list, if necessary)
================================================================================

 TRP                                           "Attention to:" reference
--------------------------------------------------------------------------------
 Chevron U.S.A. Inc.                           Attention: Partnership Compliance
 P. O. Box 6028
 San Ramon, CA 94583-0728
================================================================================
 Other Parties:
================================================================================
 Company                                       Attention:
--------------------------------------------------------------------------------
================================================================================




9.   ELECTIONS AND CHANGES TO ABOVE PROVISIONS


9.1 OPERATOR NOT THE TRP.

With respect to Sec. 2.1, (insert name of Party to be TRP instead of Operator,
or indicate "N/A") _______________ N/A______________ is designated as TRP.

9.2 SPECIAL TAX ELECTIONS.

With respect to Sec. 4.1, the Parties agree (if not applicable insert "N/A" or
strike):

<TABLE>
<CAPTION>

=========================================================================================================
<S>                                                                                           <C>
e) that the Partnership shall elect to account for dispositions of depreciable                NO
assets under the general asset method to the extent permitted by Code ss. 168(i)(4);
---------------------------------------------------------------------------------------------------------
f) that the Partnership shall elect under Code ss.754 to adjust the basis                     Upon
of Partnership property, with the adjustments provided in Code ss.734 for a                   any
distribution of property and in Code ss.743 for a transfer of a partnership                   Party's
interest. In case of distribution of property the TRP shall adjust all tax basis              written
capital accounts. In the case of a transfer of a partnership interest the                     requet
acquiring party (ies) shall establish and maintain its (their) tax basis capital
account(s);
---------------------------------------------------------------------------------------------------------
g) that the Partnership shall elect under Code ss.6231 to be subject to the TEFRA rules.      NO
=========================================================================================================
=========================================================================================================
With respect to Sec. 4.2, Depletion the Parties agree that the Partnership shall              NO
use simulated percentage depletion instead of simulated cost depletion.
=========================================================================================================
</TABLE>

JOA - Exhibit "F"


                                        9
<PAGE>

<TABLE>
<CAPTION>
=========================================================================================================
<S>                                                                                           <C>
With respect to Sec. 5.2.4, under the rules of Treas. Reg. ss. 1.704-1                   NO
(b)(2)(IV)(f) the N Parties agree that the FMV capital accounts shall be
revalued to reflect value changes of the Partnership property upon the
occurrence of the events specified in (5)(i) through (iii) of said -1
(b)(2)(iv) (f) regulations.
---------------------------------------------------------------------------------------------------------
With respect to Sec. 6.2.8, the income attributable to take-in-kind                      NO
production will be reflected on the tax return.
=========================================================================================================
     With respect to Sec. 5.2.3 the FMV for the listed properties are
     determined as follows (mark as "N/A" if not applicable; use separate
     sheet if necessary)
=========================================================================================================
Property Description                                                                     FMV
---------------------------------------------------------------------------------------------------------
N/A                                                                                     $_________
---------------------------------------------------------------------------------------------------------
=========================================================================================================
</TABLE>


     9.3  CHANGE OF MAJORITY FOR OTHER TAX ELECTIONS.

     Instead of the Sec. 4.4 majority for other tax elections, a majority shall
     be considered if consisting of (specify or line out blanks) ==============
     ======================




                                     THE END






JOA - Exhibit "F"


                                       10
<PAGE>

                                   Exhibit "G"

 Attached to and made a part of that certain Offshore Operating Agreement dated
effective as of the ______day of _________, 20____, between Chevron U.S.A. Inc.,
   Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
 covering ________________Block _____________, Federal Offshore, Gulf of Mexico


                        MEMORANDUM OF OPERATING AGREEMENT
                        ---------------------------------
                             AND FINANCING STATEMENT
                             -----------------------
                                   (LOUISIANA)

                To be filed in the conveyance records and in the
                mortgage records and as a non-standard financing
               statement in accordance with Paragraph 6.0 herein.


1.0  This Memorandum of Operating Agreement and Financing Statement (Louisiana)
     (this "Memorandum") is effective as of the effective date of the Offshore
     Operating Agreement referred to in Paragraph 2.0 below and is executed by
     the undersigned, duly authorized representative of ___________________, a
     ____________________ corporation, whose taxpayer identification number is
     ____________________ and whose address is ________________________(the
     "Operator"), and the undersigned, duly authorized representative of
     ____________________, a ________________ limited liability company, whose
     taxpayer identification number is ____________________ and whose address
     is _____________________ and the undersigned, duly authorized
     representative of ______________, a __________________ limited liability
     company, whose taxpayer identification number is ___________________ and
     whose address is  _______________________ (the "Non-Operating Parties").

2.0  The Operator and the Non-Operating Parties are parties to that certain
     Offshore Operating Agreement dated effective ________________ (the
     "Operating Agreement") which Operating Agreement provides for the
     development and production of crude oil, natural gas and associated
     substances from the OCS block(s), or portions thereof, described in Exhibit
     "A" of the Operating Agreement and in Attachment "1" to this Memorandum, or
     covered by the Leases (hereinafter called the "Contract Area") and which
     designates ________________, as the Operator, to conduct such operations
     for itself and the Non-Operating Parties.

3.0  Among other provisions, the Operating Agreement (a) provides for certain
     liens, mortgages, pledges and security interests to secure payment by the
     parties of their respective share of costs and performance of other
     obligations under the Operating Agreement, (b) contains an Accounting
     Procedure, which establishes, among other things, interest to be charged on
     indebtedness, certain costs, and other expenses under the Operating
     Agreement at the rate set forth therein, (c) includes non-consent clauses
     which establish that parties who elect not to participate in certain
     operations shall be deemed to have relinquished their interest in
     production until the carrying consenting parties recover their costs of
     such operations plus a specified amount, (d) grants each party to the
     Operating Agreement the right to take in kind its proportionate share of
     all oil and gas produced from the Contract Area, and (e) includes a
     volumetric Gas Balancing Agreement which is attached as Exhibit "E" to the
     Operating Agreement.

4.0  The Operator hereby certifies that a true and correct copy of the Operating
     Agreement is on file and is available for inspection by third parties at
     the offices of the Operator at the address set forth in this Memorandum.

5.0  In addition to any other security rights and remedies provided for by law
     with respect to services rendered or materials and equipment furnished
     under the Operating Agreement, for and in consideration of the covenants

STWDJOA - Exhibit "G

                                        1
<PAGE>

     and mutual undertakings of the Operator and the Non-Operating Parties set
     forth in the Operating Agreement, the Operator and the Non-Operating
     Parties hereby agree as follows:



     5.1  Each Non-operator hereby grants to the Operator a mortgage, hypotheca,
          and pledge of and over all of its rights, titles, and interests in and
          to (a) the Contract Area, (b) the Hydrocarbons in, on, under, and that
          may be produced from the lands within the Contract Area, and (c) all
          other immovable property susceptible of mortgage situated within the
          Contract Area. This mortgage is given to secure the complete and
          timely performance of and payment by each Non-operator of all
          obligations and indebtedness of every kind and nature, whether now
          owed by such Non-operator or hereafter arising, pursuant to this
          Agreement. To the extent susceptible under applicable law, this
          mortgage and the security interests granted in favor of the Operator
          herein shall secure the payment of all costs and other expenses
          properly charged to such Party, together with (A) interest on such
          indebtedness, costs, and other expenses at the rate set forth in the
          Accounting Procedure or the maximum rate allowed by law, whichever is
          the lesser, (B) reasonable attorneys' fees, (C) court costs, and (D)
          other directly related collection costs. If any Non operator does not
          pay such costs and other expenses or perform its obligations under the
          Operating Agreement when due, the Operator shall have the additional
          right to notify the purchaser or purchasers of the defaulting
          Non-operator's Hydrocarbon production and collect such costs and other
          expenses out of the proceeds from the sale of the defaulting
          Non-operator's share of Hydrocarbon production until the amount owed
          has been paid. The Operator shall have the right to offset the amount
          owed against the proceeds from the sale of such defaulting
          Non-operator's share of Hydrocarbon production. Any purchaser of such
          production shall be entitled to rely on the Operator's statement
          concerning the amount of costs and other expenses owed by the
          defaulting Non-operator and payment made to the Operator by any
          purchaser shall be binding and conclusive as between such purchaser
          and such defaulting Non-operator.

          The maximum amount for which the mortgage herein granted by each
          Non-operator shall be deemed to secure the obligations and
          indebtedness of such Non-operator to the Operator as stipulated herein
          is hereby fixed in an amount equal to $25,000,000.00 (the "Limit of
          the Mortgage of each Non-operator"). Except as provided in the
          previous sentence (and then only to the extent such limitations are
          required by law), the entire amount of obligations and indebtedness of
          each Non-operator to the Operator is secured hereby without
          limitation. Notwithstanding the foregoing Limit of the Mortgage of
          each Non-operator, the liability of each Non-operator under this
          Agreement and the mortgage and security interest granted hereby shall
          be limited to (and the Operator shall not be entitled to enforce the
          same against such Non-operator for, an amount exceeding) the actual
          obligations and indebtedness [including all interest charges, costs,
          attorneys' fees, and other charges provided for in the Operating
          Agreement] outstanding and unpaid and that are attributable to or
          charged against the interest of such Non-operator pursuant to the
          Operating Agreement.


     5.2  To secure the complete and timely performance of and payment by each
          Non-operator of all obligations and indebtedness of every kind and
          nature, whether now owed by such Non-operator or hereafter arising,
          pursuant to the Operating Agreement, each Non operator hereby grants
          to the Operator a continuing security interest in and to all of its
          rights, titles, interests, claims, general intangibles, proceeds, and
          products thereof, whether now existing or hereafter acquired, in and
          to (a) all Hydrocarbons produced from the lands or offshore blocks
          covered by the Contract Area or attributable to the Contract Area when
          produced, (b) all accounts receivable accruing or arising as a result
          of the sale of such Hydrocarbons (including, without limitation,
          accounts arising from gas imbalances or from the sale of Hydrocarbons
          at the wellhead), (c) all cash or other proceeds from the sale of such
          Hydrocarbons once produced, and (d) all Platforms and Development
          Facilities, wells, fixtures, other corporeal property, whether movable


STWDJOA - Exhibit "G"


                                        2
<PAGE>

          or immovable, whether now or hereafter placed on the lands or offshore
          blocks covered by the Contract Area or maintained or used in
          connection with the ownership, use or exploitation of the Contract
          Area, and other surface and sub-surface equipment of any kind or
          character located on or attributable to the Contract Area and the cash
          or other proceeds realized from the sale, transfer, disposition or
          conversion thereof. The interest of the Non operators in and to the
          oil and gas produced from or attributable to the Contract Area when
          extracted and the accounts receivable accruing or arising as the
          result of the sale thereof shall be financed at the wellhead of the
          well or wells located on the Contract Area. To the extent susceptible
          under applicable law, the security interest granted by each Non
          operator hereunder covers: (A) all substitutions, replacements, and
          accessions to the property of such Non-operator described herein and
          is intended to cover all of the rights, titles and interests of such
          Non-operator in all movable property now or hereafter located upon or
          used in connection with the Contract Area, whether corporeal or
          incorporeal; (B) all rights under any gas balancing agreement, farmout
          rights, option farmout rights, acreage and cash contributions, and
          conversion rights of such Non-operator in connection with the Contract
          Area, or the Hydrocarbons produced from or attributable to the
          Contract Area, whether now owned and existing or hereafter acquired or
          arising, including, without limitation, all interests of each
          Non-operator in any partnership, tax partnership, limited partnership,
          association, joint venture, or other entity or enterprise that holds,
          owns, or controls any interest in the Contract Area; and (C) all
          rights, claims, general intangibles, and proceeds, whether now
          existing or hereafter acquired, of each Non-operator in and to the
          contracts, agreements, permits, licenses, rights-of-way, and similar
          rights and privileges that relate to or are appurtenant to the
          Contract Area, including the following:


          (1)  all of its rights, titles, and interests, whether now owned and
               existing or hereafter acquired or arising, in, to, and under or
               derived from any present or future operating, farmout, bidding,
               pooling, unitization, and commoditization agreements,
               assignments, and subleases, whether or not described on
               Attachment "1," to the extent, and only to the extent, that such
               agreements, assignments, and subleases cover or include any of
               its rights, titles, and interests, whether now owned and existing
               or hereafter acquired or arising, in and to all or any portion of
               the Contract Area, and all units created by any such pooling,
               unitization, and commoditization agreements and all units formed
               under orders, regulations, rules, or other official acts of any
               governmental authority having jurisdiction, to the extent and
               only to the extent that such units cover or include all or any
               portion of the Contract Area;

          (2)  all of its rights, titles, and interests, whether now owned and
               existing or hereafter acquired or arising, in, to, and under or
               derived from all presently existing and future advance payment
               agreements, and oil, casinghead gas, and gas sales, exchange, and
               processing contracts and agreements, including, without
               limitation, those contracts and agreements that are described on
               Attachment "1," to the extent, and only to the extent, those
               contracts and agreements cover or include all or any portion of
               the Contract Area; and

          (3)  all of its rights, titles, and interests, whether now owned and
               existing or hereafter acquired or arising, in, to, and under or
               derived from all existing and future permits, licenses,
               rights-of-way, and similar rights and privileges that relate to
               or are appurtenant to the Contract Area.

     5.3  This Memorandum (including a carbon, photographic, or other
          reproduction thereof and hereof) shall constitute a non-standard form
          of financing statement under the terms of Chapter 9 of the Louisiana
          Commercial Laws, La. R.S. 10:9-101 et seq. (the "Uniform Commercial
          Code," as adopted in the State of Louisiana) and, as such, for the
          purposes of the security interest in favor of the Operator, may be
          filed for record in the office of the Clerk of Court of any parish in
          the State of Louisiana, with the Operator being the secured party and
          the Non-Operating Parties being the debtors with respect to such
          filing.

STWDJOA - Exhibit "G"


                                        3
<PAGE>

     5.4  The Operator hereby grants to each Non-operator a mortgage, hypothec,
          and pledge of and over all of its rights, titles, and interests in and
          to (a) the Contract Area; (b) the Hydrocarbons in, on, under, and that
          my be produced from the lands within the Contract Area; and (c) all
          other immovable property or other property susceptible of mortgage
          situated within the Contract Area. This mortgage is given to secure
          the complete and timely performance of and payment by the Operator of
          all obligations and indebtedness of every kind and nature, whether now
          owed by the Operator or hereafter arising, pursuant to this Agreement.
          To the extent susceptible under applicable law, this mortgage and the
          security interests granted in favor of each Non-operator herein shall
          secure the payment of all costs and other expenses properly charged to
          the Operator, together with (A) interest on such indebtedness, costs,
          and other expenses at the rate set forth in the Accounting Procedure
          or the maximum rate allowed by law, whichever is the lesser, (B)
          reasonable attorneys' fees, (C) court costs, and (D) other directly
          related collection costs. if the operator does not pay such costs and
          other expenses or perform its obligations under the Operating
          Agreement when due, the Non-operators shall have the additional right
          to notify the purchaser or purchasers of the Operator's Hydrocarbon
          production and collect such costs and other expenses out of the
          proceeds from the sale of the Operator's share of Hydrocarbon
          production until the amount owed has been paid. The Non operators
          shall have the right to offset the amount owed against the proceeds
          from the sale of the Operator's share of Hydrocarbon production. Any
          purchaser of such production shall be entitled to rely on the
          Non-operators' statement concerning the amount of costs and other
          expenses owed by the Operator and payment made to the Non-operators by
          any purchaser shall be binding and conclusive as between such
          purchaser and the Operator.

          The maximum amount for which the mortgage herein granted by the
          Operator shall be deemed to secure the obligations and indebtedness of
          the Operator to all Non-operators as stipulated herein is hereby fixed
          in an amount equal to $25,000,000.00 in the aggregate (the "Limit of
          the Mortgage of the Operator"). Except as provided in the previous
          sentence (and then only to the extent such limitations are required by
          law), the entire amount of obligations and indebtedness of the
          Operator to the Non-operators is secured hereby without limitation.
          Notwithstanding the foregoing Limit of the Mortgage of the Operator,
          the liability of the Operator under the Operating Agreement and the
          mortgage and security interest granted hereby shall be limited to (and
          the Non-operators shall not be entitled to enforce the same against
          the Operator for, an amount exceeding) the actual obligations and
          indebtedness [including all interest charges, costs, attorneys' fees,
          and other charges provided for in the Operating Agreement] outstanding
          and unpaid and that are attributable to or charged against the
          interest of the Operator pursuant to this Agreement.

     5.5  To secure the complete and timely performance of and payment by the
          Operator of all obligations and indebtedness of every kind and nature,
          whether now owed by the Operator or hereafter arising, pursuant to the
          Operating Agreement, the Operator hereby grants to each Non-operator a
          continuing security interest in and to all of its rights, titles,
          interests, claims, general intangibles, proceeds, and products
          thereof, whether now existing or hereafter acquired, in and to (a) all
          Hydrocarbons produced from the lands or offshore blocks covered by the
          Contract Area or included within the Contract Area or attributable to
          the Contract Area when produced, (b) all accounts receivable accruing
          or arising as a result of the sale of such Hydrocarbons (including,
          without limitation, accounts arising from gas imbalances or from the
          sale of Hydrocarbons at the wellhead), (c) all cash or other proceeds
          from the sale of such Hydrocarbons once produced, and (d) all
          Platforms and Development Facilities, wells, fixtures, other corporeal
          property whether movable or immovable, whether now or hereafter placed
          on the offshore blocks covered by the Contract Area or maintained or
          used in connection with the ownership, use or exploitation of the
          Contract Area, and other surface and sub-surface equipment of any kind

STWDJOA - Exhibit "G"


                                        4
<PAGE>

          or character located on or attributable to the Contract Area and the
          cash or other proceeds realized from the sale, transfer, disposition
          or conversion thereof. The interest of the Operator in and to the
          Hydrocarbons produced from or attributable to the Contra Area when
          extracted and the accounts receivable accruing or arising as the
          result of the sale thereof shall be financed at the wellhead of the
          well or wells located on the Contra Area. To the extent susceptible
          under applicable law, the security interest granted by the Operator
          hereunder covers: (A) all substitutions, replacements, and accessions
          to the property of the Operator described herein and is intended to
          cover all of the rights, titles, and interests of the Operator in all
          movable property now or hereafter located upon used in connection with
          the Contract Area, whether corporeal or incorporeal; (B) all rights
          under any gas balancing agreement, farmout rights, option farmout
          rights, acreage and cash contributions, and conversion rights of the
          Operator in connection with the Contra Area, the Hydrocarbons produced
          from or attributable to the Contract Area, whether now owned. and
          existing or hereafter acquired or arising, including, without
          limitation, interests of the Operator in any partnership, tax
          partnership, limited partnership association, joint venture, or other
          entity or enterprise that holds, owns, or controls a interest in the
          Contract Area; and (C) all rights, claims, general intangibles, and
          proceeds, whether now existing or hereafter acquired, of the Operator
          in and to the contras agreements, permits, licenses, rights-of-way,
          and similar rights and privileges that rely to or are appurtenant to
          the Contract Area, including the following:


          (1)  all of its rights, titles, and interests, whether now owned and
               existing or hereafter acquired or arising, in, to, and under or
               derived from any present or future operating, farmout, bidding,
               pooling, unitization, and communitization agreements,
               assignments, and subleases, whether or not described Attachment
               "1," to the extent, and only to the extent, that such agreements,
               assignments, and subleases cover or include any of its rights,
               titles, and interests, whether now owned and existing or
               hereafter acquired or arising, in and to all any portion of the
               Contract Area, and all units created by any such pooling,
               unitization, and communitization agreements and all units formed
               under order regulations, rules, or other official acts of any
               governmental authority having jurisdiction, to the extent and
               only to the extent that such units cover or include or any
               portion of the Contract Area;

          (2)  all of its rights, titles, and interests, whether now owned and
               existing or hereafter acquired or arising, in, to, and under or
               derived from all presently existing a future advance payment
               agreements, and oil, casinghead gas, and gas salt exchange, and
               Development contracts and agreements, including, without
               limitation, those contracts and agreements that are described on
               Attachment "1" to the extent, and only to the extent, those
               contracts and agreements cover include all or any portion of the
               Contract Area; and

          (3)  all of its rights, titles, and interests, whether now owned and
               existing or hereafter acquired or arising, in, to, and under or
               derived from all existing and future permits, licenses,
               rights-of-way, and similar rights and privileges that relate to
               are appurtenant to any of the Contract Area.

     5.6  For the purposes of the security interest in favor of each
          Non-Operating Party, this Memorandum (including a carbon,
          photographic, or other reproduction thereof a hereof) may be filed as
          a non-standard form of financing statement pursuant to t Uniform
          Commercial Code in the office of the Clerk of Court of any parish in
          the State Louisiana, with each Non-Operating Party being the secured
          parties and the Opera being the debtor with respect to such filing.

6.0  To serve as notice of the existence of the Operating Agreement as a burden
     on the title of the Operator and for the Non-Operating Parties to their
     interests in and to the Contract Area and purposes of satisfying otherwise
     relevant recording and filing requirements of applicable law, this
     Memorandum is to be filed or recorded, as the case may be, in (a) the


STWDJOA - Exhibit "G"



                                        5
<PAGE>

     conveyance records of the parish or parishes in which the offshore blocks
     covered by the Contract Area are located or adjacent pursuant to La. R.S.
     9:2731 et seq., (b) the mortgage records of such parish or parishes, and
     (c) the appropriate Uniform Commercial Code records. All parties to the
     Operating Agreement are identified on Attachment "1" hereto.

7.0  If performance of any obligation under the Operating Agreement or payment
     of any indebtedness created thereunder does not occur or is not made when
     due under the Operating Agreement or upon default of any covenant or
     condition of the Operating Agreement, in addition to any other remedy
     afforded by law, each party to the Operating Agreement and any successor to
     such par by assignment, operation of law, or otherwise, shall have, and is
     hereby given and vested with, the power and authority to foreclose the
     mortgage, pledge, and security interest established in its favor herein and
     in the Operating Agreement in the manner provided by law and to exercise
     rights of a secured party under the Uniform Commercial Code.

8.0  Upon expiration of the Operating Agreement and the satisfaction of all
     obligations and indebtedness arising thereunder, the Operator, on behalf of
     all parties to the Operating Agreement, shall file of record an appropriate
     release and termination of all security and other rights created under the
     Operating Agreement and this Memorandum executed by all parties to the
     Operating Agreement. Upon the filing of such release and termination
     instrument, all benefits and obligations under this Memorandum shall
     terminate as to all parties who have executed or ratified this Memorandum.
     In addition, at any time prior to the filing of such release an termination
     instrument, each of the Operator and the Non-Operating Parties shall have
     the right to (i) file a continuation statement pursuant to the Uniform
     Commercial Code with respect to any financing statement filed in their
     favor under the terms of this Memorandum and (ii) reinscribe this act in
     the appropriate mortgage records.

9.0  It is understood and agreed by the parties hereto that if any part, term,
     or provision of this Memorandum is held by the courts to be illegal or in
     conflict with any law of the state where made, the validity of the
     remaining portions or provisions shall not be affected, and the rights and
     obligations of the parties shall be construed and enforced as if the
     Memorandum did not contain the particular part, term, or provision held to
     be invalid.

10.0 This Memorandum shall be binding upon and shall inure to the benefit of the
     parties hereto and their respective legal representatives, successors and
     permitted assigns. The failure of one or more persons owning an interest in
     the Contract Area to execute this Memorandum shall not in any manner affect
     the validity of the Memorandum as to those persons who execute this
     Memorandum.

11.0 A party having an interest in the Contract Area may ratify this Memorandum
     by execution and delivery of an instrument of ratification, adopting and
     entering into this Memorandum, and such ratification shall have the same
     effect as if the ratifying party had executed this Memorandum or a
     counterpart thereof. By execution or ratification of this Memorandum, such
     party hereby consents to its ratification and adoption by any party who
     acquires or may acquire any interest in the Contract Area.

12.0 This Memorandum may be executed or ratified in one or more counterparts and
     all of the executed or ratified counterparts shall together constitute one
     instrument. For purposes of recording in each of the records described in
     Paragraph 6 above, duplicate copies of this Memorandum with individual
     signature pages attached thereto may be filed of record, one copy of each
     to be indexed in the name of the Operator, as grantor, and one copy of each
     to be indexed in the name of each Non-Operating Party, as grantor, and
     duplicate copies of this Memorandum with individual signature pages
     attached thereto may be fled in the appropriate Uniform Commercial Code
     records, one filing for the Operator, as secured party, and another filing
     for the Non-Operating Parties, as secured parties. The respective addresses
     of the Operator, as both secured party and debtor, and the Non-Operating
     Parties, as both debtors and secured parties, at which information with
     respect to the security interests created in the Operating Agreement may be
     obtained, are set forth in Paragraph 1.0 of this Memorandum.

STWDJOA - Exhibit "G"


                                        6
<PAGE>

13.0 The Operator and the Non-Operating Parties hereby agree to execute,
     acknowledge and deliver or cause to be executed, acknowledged and
     delivered, any instrument or take any action necessary or appropriate to
     effectuate the terms of the Operating Agreement or any Exhibit, instrument,
     certificate or other document pursuant thereto.

14.0 Whenever the context requires, reference herein made to the single number
     shall be understood to include the plural, and the plural shall likewise be
     understood to include the singular, an specific enumeration shall not
     exclude the general, but shall be construed as cumulative.




STWDJOA - Exhibit "G"


                                        7
<PAGE>

EXECUTED on the dates set forth below each signature but effective as of the
____day of 20___.

                                                OPERATOR:
                                                ---------

WITNESSES:

                                                ---------------------------

                                                By:
---------------------                               -----------------------
                                                Title:
                                                      ---------------------
                                                Date:
 --------------------                                ----------------------


                                                NON-OPERATING PARTY:
                                                ---------------------------

WITNESSES:


                                                By:
---------------------                               -----------------------
                                                Title:
                                                      ---------------------
                                                Date:
---------------------                                ----------------------


                                                NON-OPERATING PARTY:
                                                ---------------------------

WITNESSES:


                                                By:
---------------------                              ------------------------
                                                Title:
                                                      ---------------------
                                                Date:
---------------------                                ----------------------




STWDJOA - Exhibit "G"


                                        8
<PAGE>

                                 ACKNOWLEDGMENT

                                    OPERATOR:

STATE OF ___________

PARISH/COUNTY OF ___________

     On this _______________ day of __________, 200 _______, before me, appeared
_______________, to me personally known, who, being by me duly sworn, did say
that he is the _______________ of ____________, a _______________ corporation,
and that the foregoing instrument was signed on behalf of the corporation by
authority of its Board of Directors and that _______________ acknowledged the
instrument to be the free act and deed of the corporation.




                                                   ---------------------------
                                                   NOTARY PUBLIC in and for
                                                   the State of _______________

My Commission expires:
                       -------------------



                                 ACKNOWLEDGMENT

                               NON-OPERATING PARTY


STATE OF ____________

PARISH/COUNTY OF _________


     On this _________ day of __________, 20 _____, before me, appeared ______
_______________, to me personally known, who, being by me duly sworn, did say
that he is the _______________________ of ___________________, a ____________
limited liability company, and that the foregoing instrument was signed on
behalf of the company by authority of its members and that ____________
acknowledged the instrument to be the free act and deed of the limited liability
company.





                                                  ---------------------------
                                                  NOTARY PUBLIC in and for
                                                  the State of _______________


My Commission expires:
                       -------------------




STWDJOA - Exhibit "G"


                                        9
<PAGE>

                               NON-OPERATING PARTY



STATE OF ___________

PARISH/COUNTY OF ___________



     On this _________ day of __________, 20 _____, before me, appeared ______
_______________, to me personally known, who, being by me duly sworn, did say
that he is the _______________________ of ___________________, a ____________
limited liability company, and that the foregoing instrument was signed on
behalf of the company by authority of its members and that ____________
acknowledged the instrument to be the free act and deed of the limited liability
company.




                                                  ---------------------------
                                                  NOTARY PUBLIC in and for
                                                  the State of _______________

My Commission expires:
                       -------------------




STWDJOA - Exhibit "G


                                       10
<PAGE>

                          ATTACHMENT "1" TO EXHIBIT "G"

                       Attached to and made a part of the
      Memorandum of Operating Agreement and Financing Statement (Louisiana)
                  effective ___________________, by and between
                       _________________, as Operator, and
                   _________________________, as Non-Operator.


1.   DESCRIPTION OF LANDS AND LEASES WITHIN THE CONTRACT AREA
     --------------------------------------------------------


II.  OPERATOR
     ---------


III. PARTIES, REPRESENTATIVES, ADDRESSES, AND INTERESTS CONTRIBUTED
     --------------------------------------------------------------




STWDJOA - Exhibit "G"


                                       11
<PAGE>

                                   Exhibit "H"


 Attached to and made a part of that certain Offshore Operating Agreement dated
  effective as of the _____day of ______, 20____, between Chevron U.S.A. Inc.,
   Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
  covering _____________Block _____________, Federal Offshore, Gulf of Mexico


                          Dispute Resolution Procedure
                          ----------------------------



1.   OVERVIEW
     --------

     A. Description and Goals. Arbitration as used in this statement is a
procedure whereby an Arbitration Panel ("Panel") resolves any claim(s),
controversy(ies) or dispute(s) between Chevron U.S.A. Inc., Dominion Exploration
& Production, Inc. and Ridgewood Energy Corporation (hereinafter referred to
singularly as "Party" and collectively as "Parties") arising out of, relating to
or in connection with each Party's respective Exploration Participation
Agreement (hereinafter "Agreement") including the interpretation, validity,
termination or breach thereof.

          (i) Binding. The arbitration process is binding on the Parties and
     this arbitration is intended to be a final resolution of the dispute(s)
     between the Parties as described above, to the same extent as a final
     judgment of a court of competent jurisdiction. Each Party hereby expressly
     covenants that it shall not resort to court remedies except as provided for
     herein, and for preliminary relief in aid of arbitration.

          (ii) Violation. A Party who violates the covenants in Section IA. (i)
     shall pay all legal costs incurred by the other Party in connection with
     the enforcement thereof. Suits, actions or proceedings in connection with
     violations of the covenants in Section IA. (i) shall be instituted in the
     United States District Court for the Eastern District of Louisiana, and
     pursuant to Title IX of the United States Code. Each Party waives any
     option or objection which it may now or thereafter have to the laying of
     the venue in any such suit, action or proceeding and irrevocably submits to
     the jurisdiction of such court in any such suit, action or proceeding.

     B. Duty to Negotiate. The Parties shall inform one another promptly
following the occurrence or discovery of any item or event which might
reasonably be expected to result in a dispute in connection with the Agreement.
The Parties will attempt to resolve satisfactorily any such matters.

     C. Notice of Unresolved Dispute. Should a dispute arise which the Parties
cannot resolve satisfactorily, either Party may deliver to the other Party a
written notice of the dispute with supporting documentation as to the
circumstances leading to the dispute (the "Notice of Dispute"). The Parties,
within ten (10) Business Days from delivery of such notice, shall then each
appoint a management representative ("Management Representative") who has no
prior direct involvement with the subject matter of the Notice of Dispute and
who is duly authorized to investigate, negotiate and settle the dispute. The
Management Representative for each Party shall meet and confer as often as they
deem reasonably necessary for a period not exceeding thirty (30) days following
the delivery of the Notice of Dispute in good faith negotiations to resolve the
dispute amicably. The parties in their sole discretion may also agree to utilize
the service of a mediator pursuant to a joint engagement. Unless otherwise
provided herein, all such notices shall be served in accordance with the
provisions of the Agreement.

STWDJOA - Exhibit "H"


                                        1
<PAGE>

II.  ARBITRATION PROCESS
     -------------------

     A. Arbitration. If the Parties are unable to resolve the dispute within
thirty (30) days following the receipt of the Notice of Dispute, the matter
shall be submitted to arbitration in accordance with the procedures set forth
below.

     B. Initiation of Arbitration. The arbitration shall be initiated by either
party delivering to the other aNotice of Intention to Arbitrate as provided for
in Section 6 of the Commercial Arbitration Rules and the Supplementary
Procedures for Large, Complex Disputes of the American Arbitration Association
(collectively, the "AAA Guidelines")

     C. Governing Procedures. Except as expressly provided herein, the
arbitration shall be conducted in accordance with applicable New York law
regarding arbitration. To the extent that a matter is not addressed by this
Agreement or New York law, the arbitration shall be conducted with reference to
the AAA Guidelines. The action of a majority of the members of the arbitration
Panel shall govern and their decision in writing shall be final and binding on
the Parties hereto.

          (i) Conflicts. In the event of a conflict between the AAA Guidelines
     and this Dispute Resolution Procedure, this Procedure shall govern.

          (ii) Governing Law. The Panel shall apply the governing substantive
     law chosen by the Parties the Agreement.

     D. Arbitration Panel. There shall be three arbitrators, all of whom shall
be independent and impartial, and experienced in arbitration proceedings. For
those disputes involving the transfer of, or title to, any real property rights
or interests, including but not limited to mineral rights, or involving the
development of a mineral interest or the marketing of mineral production, each
arbitrator shall be experienced in the oil and gas industry and knowledgeable or
specializing as to the subject matter involved in the dispute. The arbitrators
shall be chosen as follows: each Party shall have thirty (30) days from the
delivery of a Notice of Intention to Arbitrate to designate an arbitrator and
notify the other Party of the name of such arbitrator. If such other Party shall
fail to name a second arbitrator within thirty (30) days, then the Party who
first served the notice may, within three (3) days after written notice to the
other Party, apply to the American Arbitration Association as the Appointing
Authority, for the appointment of such second arbitrator for or on behalf of the
other Party, and in such case the arbitrator appointed by the Appointing
Authority shall meet the criteria set forth in this Section II.D. and shall act
as if named by the other Party.

          (1) Selection of Third Arbitrator. The two (2) arbitrators chosen as
     provided for above shall, within thirty (30) days after the appointment of
     the second arbitrator, choose the third arbitrator who shall meet the
     criteria set forth in this Section II.D., and in the event of their failure
     to do so within said thirty (30) days, either of the Parties hereto may in
     like manner, within three (3) days after written notice to the other Party,
     apply to the Appointing Authority for the appointment of a third
     arbitrator. The third arbitrator shall then disclose any and all conflicts
     of interest and any business relationship that he or she has with any
     Party. Following that disclosure, the Parties shall agree to appoint the
     chosen third arbitrator or to continue the selection process in the same
     manner. The three (3) arbitrators selected shall constitute the Panel. The
     third arbitrator shall serve as Chairman of the Panel.

          (ii) Conflicts. All arbitrators, prior to their appointment shall
     disclose to the Parties, and to the other members of the Panel all actual
     or perceived conflicts of interest and business relationships involving the
     dispute or the Parties, including but not limited to, any professional c
     relationships, present or past, with any Party (or its affiliates),
     including any Party's (or its affiliates) directors, officers, and
     supervisory personnel and counsel. Any Party may challenge in writing the
     appointment or continued service of any arbitrator for lack of
     independence, partiality, or any other cause likely to impair such
     arbitrator's ability to effectively participate in the proceedings or
     render a fair and equitable decision. Where such challenge is made, the
     Appointing Authority shall uphold or dismiss the challenge. In the event a
     challenge is upheld, the arbitrator as to whom the challenge was upheld



STWDJOA - Exhibit "H"


                                        2
<PAGE>

     shall cease to be a member of the Panel. A replacement will be selected in
     the same manner as the original arbitrator was selected. If an arbitrator
     resigns or becomes unable or unwilling to continue to serve on the Panel, a
     replacement shall be selected in the same manner as that arbitrator was
     chosen.

          (iii) Multi-Party Arbitrations. Where more than two Parties are
     involved in the dispute ("Multi-Party Arbitration"), all Parties shall
     jointly name and agree as the appointment of the two arbitrators meeting
     the criteria set forth in Section II.D. above. The third arbitrator shall
     be appointed as set forth in Section ll.b. (i) above. If the Parties cannot
     agree as to the choice of the two arbitrators within the said thirty (30)
     days, either of the Parties hereto may in like manner, within three (3)
     days after written notice to the other Party, apply to the Appointing
     Authority for the appointment of the two arbitrators meeting the criteria
     set forth in Section II.D. above.

          (iv) Management of the Arbitration. The Panel shall actively manage
     the proceedings as it deems best so as to make the same expeditious,
     economical, and less burdensome and adversarial than litigation.

     E. Confidentiality. All documents, briefs, testimony, transcripts, as well
as, all Panel decisions shall be confidential, except that, upon prior written
consent of both Parties, such information may be divulged to third parties who
agree in writing to keep such information confidential if such disclosure is
deemed necessary pursuant to common business practice or is required by law.
Likewise, the views, suggestions, admissions, proposals, and other information
exchanged in the arbitration are confidential and are inadmissible in any other
proceeding.

     F. Costs and Expenses. Each side shall be solely responsible for all costs,
fees and expenses incurred by its party-appointed arbitrator. The fees, costs,
and expenses of the third arbitrator and any other incidental costs incurred in
connection with the arbitration proceeding shall be borne equally by the
Parties. Each Party is solely responsible for its own attorneys' fees and
expenses incurred in the arbitration. In the event of a Multi-Party arbitration,
all costs and expenses shall be borne equally by all Parties.

     G. Submissions. Within thirty (30) days after the selection of the Panel,
each Party shall provide the Panel with a short and plain submission defining
the issues to be decided and the nature of the relief that the Panel may award
(the "Submission"). This Submission shall explicitly authorize the Arbitration
Panel to decide these issues. This authorization shall stay in force for six (6)
months from this Submission. If the Parties are unable to reach consensus as to
the issues involved, the Panel in its sole discretion shall frame the issues
through a reasonable procedure. The Panel will render decisions on the specific
issues established and shall fashion any remedy that the Panel deems appropriate
so long as that remedy is consistent with the Parties' Submissions hereunder.
Any money judgment entered by the Panel shall be payable in U.S. dollars.

     H. Transcriptions. The presentations and argument will be transcribed for
the benefit of the Panel and the Parties.

     I. Discovery. Commencing thirty (30) days after the receipt of the opposing
Party's Submission, each Party may serve upon the other Party up to fifteen (15)
requests for the production of documents, including sub-parts. The requests
shall be made in good faith and not be served for the purpose of delay or
harassment. Each request shall describe the type of document(s) sought and each
request shall be limited to documents that are relevant to a claim or defense in
the arbitration proceeding, or reasonably calculated to lead to the discovery of
admissible evidence. The requests need not be served all at once but may be
served in stages.

          (i) The Party served with a request under this provision shall provide
     the adverse Party with copies of the requested documents, and identify the
     request to which each document is responsive, within twenty (20) days of
     the receipt of the request. If the Party served with a request objects to

STWDJOA - Exhibit "H"


                                        3
<PAGE>

     the production of any of the requested documents, it shall nevertheless
     produce within the permitted time all documents responsive to any request
     that is not objected to by that Party.

          (ii) A Party that is served with a request may challenge the propriety
     of the request within the time permitted for response by a short written
     objection which shall be forwarded to the adverse Party and to each member
     of the Panel. The adverse Party shall submit its response, if any, to the
     objecting Party and each member of the Panel within five (5) days of
     receipt of the objection. The Panel shall consider the request, the
     objection, and the response, if any, and decide whether the production
     shall be allowed or denied or whether the request should be modified within
     ten (10) days after the submission of the adverse Party's response.

     J. Presentations. No later than twenty-five (25) days prior to the date
that presentations to the Panel are to begin, each Party will submit to the
Panel and serve on the other Party a written position statement. The original
statement of each Party shall not exceed thirty-five (35) typewritten
letter-sized pages. Each Party shall have the right to submit reply statements
no later than fifteen (15) days prior to the date of the presentation. Such
reply statements shall not exceed fen (15) typewritten letter-sized pages.

          (i) All documents and affidavits that a Party intends to use during
     its presentation shall be submitted to the Panel and served on the other
     Party with the position and reply statements. All demonstrative exhibits
     shall be exchanged five (5) days in advance of the presentations.

          (ii) The presentations to the Panel shall extend for such time as the
     Panel agrees to be appropriate. In the absence of any agreement, the
     presentations for both Parties shall extend for no longer than two (2) days
     and shall be concluded within six (6) months after selection of the Panel.
     Presentations of each Party shall occur successively with no intervening
     delay.

          (iii) Each Party shall make an oral and/or documentary presentation of
     its position in such order and in accordance with the time schedule
     established by the Panel. The Panel may question each of the presenters
     during or following any and all presentations.

The Panel shall determine a reasonable time and location for the presentations.

     K. Decision and Award. The Panel shall promptly (within sixty (60) days of
conclusion of the presentations or such longer period as the Parties may
mutually agree) determine the claims of the Parties and render their final
decision in writing. All decisions and awards shall be decided by a majority of
the Panel. The decision shall state with specificity the findings of fact and
conclusions of law on which it rests. The decision rendered by the Panel may be
enforced in any federal court having jurisdiction to do so and may only be
appealed pursuant to Section L below. The decision shall be served upon each of
the Parties by facsimile transmission and by first class mail. If there be no
majority as to any part of the award, such part of the award shall be made by
the third arbitrator.

          (i) If applicable law allows pre-award interest, the Panel may, in
     their discretion, grant pre-award interest and, if so, such interest may be
     at commercial rates during the relevant period. The Panel may award all or
     a part of a Party's reasonable attorney's fees and costs of arbitration,
     taking into account the final result of the arbitration, the conduct of the
     Parties and their counsel in the course of the arbitration, and other
     relevant factors. The Panel shall not award consequential or punitive
     damages.

          (ii) Within ten (10) days of receipt of the award either side may
     submit a Motion to Modify the award. A response shall be due within fifteen
     (15) days thereafter and the Panel shall rule thereon within fifteen (15)
     days after receipt of the response.

          (iii) Judgment on the award may be entered in a United States District
     Court for the federal district within which the decision was made at any
     time within one year after the decision is made.



STWDJOA - Exhibit "H"


                                        4
<PAGE>

     L. Vacation of Award and Appeal. The Parties agree that an award made by
the Panel may only be vacated or confirmed by a federal court of proper
jurisdiction as established above. The Parties agree that an award made by the
Panel may be vacated by a court only if the award was procured by or through
fraud or corruption or because the Panel refused to hear evidence material to
the controversy or otherwise so conducted the hearing as to substantially
prejudice the rights of a Party. An appeal from an order or judgment pursuant to
this Section II.L. shall be instituted in the United States District Court for
the Eastern District of Louisiana. Each Party waives any option or objection
which it may now or thereafter have to the laying of the venue of any such suit,
action or proceeding and irrevocably submits to the jurisdiction of the court in
any such suit, action or proceeding. Each Party agrees that a remedy at law for
a violation of this Section II.L. may not be adequate and therefore agrees that
the remedies of specific performance and injunctive relief shall be available in
the event of any violation in addition to any other right or remedy at law or in
equity to which any Party may be entitled.

     M. Res Judicata. To the extent permitted by law, any decision of the Panel
shall not be res judicata or have any binding effect in any unrelated litigation
or arbitration.




STWDJOA - Exhibit "H"


                                        5
<PAGE>

                                   Exhibit "I"


 Attached to and made a part of that certain Offshore Operating Agreement dated
effective as of the _________day of _____ , 20 ___, between Chevron U.S.A. Inc.,
   Dominion Exploration & Production, Inc. and Ridgewood Energy Corporation,
 covering ________________Block _____________, Federal Offshore, Gulf of Mexico


                               ARTICLE 8.6 ET SEQ.
                            SHELF OPERATING AGREEMENT
                                   (LOUISIANA)

         Security Rights; Default; Unpaid Charges; Carved-out Interests.

8.6  Security Rights (LA).

     In addition to any other security rights and remedies provided by law with
     respect to services rendered or materials and equipment furnished under
     this Agreement, for and in consideration of the covenants and mutual
     undertakings of the Operator and the Non-operators herein, the Parties
     shall have the following security rights:

     8.6.1 Mortgage in Favor of the Operator.

     Each Non-operator hereby grants to the Operator a mortgage, hypothec, and
     pledge of and over all of its rights, titles, and interests in and to (a)
     the Contract Area, (b) the Hydrocarbons in, on, under, and that may be
     produced from the lands within the Contract Area, and (c) all other
     immovable property susceptible of mortgage situated within the Contract
     Area.
     This mortgage is given to secure the complete and timely performance of and
     payment by each Non-operator of all obligations and indebtedness of every
     kind and nature, whether now owed by such Non-operator or hereafter
     arising, pursuant to this Agreement. To the extent susceptible under
     applicable law, this mortgage and the security interests granted in favor
     of the Operator herein shall secure the payment of all costs and other
     expenses properly charged to such Party, together with (A) interest on such
     indebtedness, costs, and other expenses at the rate set forth in Exhibit
     "C" attached hereto (the "Accounting Procedure") or the maximum rate
     allowed by law, whichever is the lesser, (B) reasonable attorneys' fees,
     (C) court costs, and (D) other directly related collection costs. If any
     Non-operator does not pay such costs and other expenses or perform its
     obligations under this Agreement when due, the Operator shall have the
     additional right to notify the purchaser or purchasers of the defaulting
     Non-operator's Hydrocarbon production and collect such costs and other
     expenses out of the proceeds from the sale of the defaulting Non-operator's
     share of Hydrocarbon production until the amount owed has been paid. The
     operator shall have the right to offset the amount owed against the
     proceeds from the sale of such defaulting Non-operator's share of
     Hydrocarbon production. Any purchaser of such production shall be entitled
     to rely on the Operator's statement concerning the amount of costs and
     other expenses owed by the defaulting Non-operator and payment made to the
     Operator by any purchaser shall be binding and conclusive as between such
     purchaser and such defaulting Non-operator.

STWDJOA - Exhibit "I"


                                        1
<PAGE>

     The maximum amount for which the mortgage herein granted by each
     Non-operator shall be deemed to secure the obligations and indebtedness of
     such Non-operator to the Operator as stipulated herein is hereby fixed in
     an amount equal to $25,000,000.00 (the "Limit of the Mortgage of each
     Non-operator"). Except as provided in the previous sentence (and then only
     to the extent such limitations are required by law), the entire amount of
     obligations and indebtedness of each Non-operator to the Operator is
     secured hereby without limitation. Notwithstanding the foregoing Limit of
     the Mortgage of each Non-operator, the liability of each Non-operator under
     this Agreement and the mortgage and security interest granted hereby shall
     be limited to (and the Operator shall not be entitled to enforce the same
     against such Non-operator for, an amount exceeding) the actual obligations
     and indebtedness [including all interest charges, costs, attorneys' fees,
     and other charges provided for in this Agreement or in the Memorandum of
     Operating Agreement and Financing Statement (Louisiana), as such term is
     defined in Article 8.6.1.4 (Recordation) hereof] outstanding and unpaid and
     that are attributable to or charged against the interest of such
     Non-operator pursuant to this Agreement.

          8.6.1.1 Security Interest in Favor of the Operator.

          To secure the complete and timely performance of and payment by each
          Non-operator of all obligations and indebtedness of every kind and
          nature, whether now owed by such Non-operator or hereafter arising,
          pursuant to this Agreement, each Non-operator hereby grants to the
          Operator a continuing security interest in and to all of its rights,
          titles, interests, claims, general intangibles, proceeds, and products
          thereof, whether now existing or hereafter acquired, in and to (a) all
          Hydrocarbons produced from the lands or offshore blocks covered by the
          Contract Area or attributable to the Contract Area when produced, (b)
          all accounts receivable accruing or arising as a result of the sale of
          such Hydrocarbons (including, without limitation, accounts arising
          from gas imbalances or from the sale of Hydrocarbons at the wellhead),
          (c) all cash or other proceeds from the sale of such Hydrocarbons once
          produced, and (d) all Platforms and Development Facilities, wells,
          fixtures, other corporeal property, whether movable or immovable,
          whether now or .hereafter placed on the lands or offshore blocks
          covered by the Contract Area or maintained or used in connection with
          the ownership, use or exploitation of the Contract Area, and other
          surface and sub-surface equipment of any kind or character located on
          or attributable to the Contract Area and the cash or other proceeds
          realized from the sale, transfer, disposition or conversion thereof.
          The interest of the Non-operators in and to the oil and gas produced
          from or attributable to the Contract Area when extracted and the
          accounts receivable accruing or arising as the result of the sale
          thereof shall be financed at the wellhead of the well or wells located
          on the Contract Area. To the extent susceptible under applicable law,
          the security interest granted by each Non-operator hereunder covers:
          (A) all substitutions, replacements, and accessions to the property of
          such Non-operator described herein and is intended to cover all of the

STWDJOA - Exhibit "I"


                                        2
<PAGE>

          rights, titles and interests of such Non-operator in all movable
          property now or hereafter located upon or used in connection with the
          Contract Area, whether corporeal or incorporeal; (B) all rights under
          any gas balancing agreement, farmout rights, option farmout rights,
          acreage and cash contributions, and conversion rights of such
          Non-operator in connection with the Contract Area, or the Hydrocarbons
          produced from or attributable to the Contract Area, whether now owned
          and existing or hereafter acquired or arising, including, without
          limitation, all interests of each Non-operator in any partnership, tax
          partnership, limited partnership, association, joint venture, or other
          entity or enterprise that holds, owns, or controls any interest in the
          Contract Area; and (C) all rights, claims, general intangibles, and
          proceeds, whether now existing or hereafter acquired, of each
          Non-operator in and to the contracts, agreements, permits, licenses,
          rights-of-way, and similar rights and privileges that relate to or are
          appurtenant to the Contract Area, including the following:

               1)   all of its rights, titles, and interests, whether now owned
                    and existing or hereafter acquired or arising, in, to, and
                    under or derived from any present or future operating,
                    farmout, bidding, pooling, unitization, and communitization
                    agreements, assignments, and subleases, whether or not
                    described in Exhibit "A," to the extent, and only to the
                    extent, that such agreements, assignments, and subleases
                    cover or include any of its rights, titles, and interests,
                    whether now owned and existing or hereafter acquired or
                    arising, in and to all or any portion of the Contract Area,
                    and all units created by any such pooling, unitization, and
                    communitization agreements and all units formed under
                    orders, regulations, rules, or other official acts of any
                    governmental authority having jurisdiction, to the extent
                    and only to the extent that such units cover or include all
                    or any portion of the Contract Area;

               2)   all of its rights, titles, and interests, whether now owned
                    and existing or hereafter acquired or arising, in, to, and
                    under or derived from all presently existing and future
                    advance payment agreements, and oil, casinghead gas, and gas
                    sales, exchange, and processing contracts and agreements,
                    including, without limitation, those contracts and
                    agreements that are described on Exhibit "A," to the extent,
                    and only to the extent, those contracts and agreements cover
                    or include all or any portion of the Contract Area; and 3)
                    all of its rights, titles, and interests, whether now owned
                    and existing or hereafter acquired or arising, in, to, and
                    under or derived from all existing and future permits,
                    licenses, rights-of-way, and similar rights and privileges
                    that relate to or are appurtenant to the Contract Area.

          8.6.1.2 Mortgage in Favor of the Non-operators.

          The Operator hereby grants to each Non-operator a mortgage, hypothec,


STWDJOA - Exhibit "I"


                                        3
<PAGE>

          and pledge of and over all of its rights, titles, and interests in and
          to (a) the Contract Area; (b) the Hydrocarbons in, on, under, and that
          my be produced from the lands within the Contract Area; and (c) all
          other immovable property or other property susceptible of mortgage
          situated within the Contract Area.

               This mortgage is given to secure the complete and timely
               performance of and payment by the Operator of all obligations and
               indebtedness of every kind and nature, whether now owed by the
               Operator or hereafter arising, pursuant to this Agreement. To the
               extent susceptible under applicable law, this mortgage and the
               security interests granted in favor of each Non-operator herein
               shall secure the payment of all costs and other expenses properly
               charged to the Operator, together with (A) interest on such
               indebtedness, costs, and other expenses at the rate set forth in
               Exhibit "C" or the maximum rate allowed by law, whichever is the
               lesser, (B) reasonable attorneys' fees, (C) court costs, and (D)
               other directly related collection costs. If the Operator does not
               pay such costs and other expenses or perform its obligations
               under this Agreement when due, the Non operators shall have the
               additional right to notify the purchaser or purchasers of the
               Operator's Hydrocarbon production and collect such costs and
               other expenses out of the proceeds from the sale of the
               Operator's share of Hydrocarbon production until the amount owed
               has been paid. The Non operators shall have the right to offset
               the amount owed against the proceeds from the sale of the
               Operator's share of Hydrocarbon production. Any purchaser of such
               production shall be entitled to rely on the Non-operators'
               statement concerning the amount of costs and other expenses owed
               by the Operator and payment made to the Non-operators by any
               purchaser shall be binding and conclusive as between such
               purchaser and the Operator. The maximum amount for which the
               mortgage herein granted by the Operator shall be deemed to secure
               the obligations and indebtedness of the Operator to all
               Non-operators as stipulated herein is hereby fixed in an amount
               equal to $25,000,000.00 in the aggregate (the "Limit of the
               Mortgage of the Operator"). Except as provided in the previous
               sentence (and then only to the extent such limitations are
               required by law), the entire amount of obligations and
               indebtedness of the Operator to the Non-operators is secured
               hereby without limitation. Notwithstanding the foregoing Limit of
               the Mortgage of the Operator, the liability of the Operator under
               this Agreement and the mortgage and security interest granted
               hereby shall be limited to (and the Non-operators shall not be
               entitled to enforce the same against the Operator for, an amount
               exceeding) the actual obligations and indebtedness [including all
               interest charges, costs, attorneys' fees, and other charges
               provided for in this Agreement or in the Memorandum of Operating
               Agreement and Financing Statement (Louisiana), as


STWDJOA - Exhibit "I"

                                        4

<PAGE>

               such term is defined in Article 8.6.1.4 hereof] outstanding and
               unpaid and that are attributable to or charged against the
               interest of the Operator pursuant to this Agreement.

          8.6.1.3 Security Interest in Favor of the Non-operators.

               To secure the complete and timely performance of and payment by
               the Operator of all obligations and indebtedness of every kind
               and nature, whether now owed by the Operator or hereafter
               arising, pursuant to this Agreement, the Operator hereby grants
               to each Non-operator a continuing security interest in and to all
               of its rights, titles, interests, claims, general intangibles,
               proceeds, and products thereof, whether now existing or hereafter
               acquired, in and to (a) all Hydrocarbons produced from the lands
               or ofshore blocks covered by the Contract Area or included within
               the Contract Area or attributable to the Contract Area when
               produced, (b) all accounts receivable accruing or arising as a
               result of the sale of such Hydrocarbons (including, without
               limitation, accounts arising from gas imbalances or from the sale
               of Hydrocarbons at the wellhead), (c) all cash or other proceeds
               from the sale of such Hydrocarbons once produced, and (d) all
               Platforms and Development Facilities, wells, fixtures, other
               corporeal property whether movable or immovable, whether now or
               hereafter placed on the ofshore blocks covered by the Contract
               Area or maintained or used in connection with the ownership, use
               or exploitation of the Contract Area, and other surface and
               sub-surface equipment of any kind or character located on or
               attributable to the Contract Area and the cash or other proceeds
               realized from the sale, transfer, disposition or conversion
               thereof. The interest of the Operator in and to the Hydrocarbons
               produced from or attributable to the Contract Area when extracted
               and the accounts receivable accruing or arising as the result of
               the sale thereof shall be financed at the wellhead of the well or
               wells located on the Contract Area. To the extent susceptible
               under applicable law, the security interest granted by the
               Operator hereunder covers: (A) all substitutions, replacements,
               and accessions to the property of the Operator described herein
               and is intended to cover all of the rights, titles and interests
               of the Operator in all movable property now or hereafter located
               upon or used in connection with the Contract Area, whether
               corporeal or incorporeal; (B) all rights under any gas balancing
               agreement, farmout rights, option farmout rights, acreage and
               cash contributions, and conversion rights of the Operator in
               connection with the Contract Area, the Hydrocarbons produced from
               or attributable to the Contract Area, whether now owned and
               existing or hereafter acquired or arising, including, without
               limitation, all interests of the Operator in any partnership, tax
               partnership, limited partnership, association, joint venture, or
               other entity or enterprise that holds, owns, or controls any
               interest in the Contract Area, and (C) all rights, claims,
               general intangibles, and proceeds, whether now existing or
               hereafter acquired, of the Operator in and to the contracts,
               agreements, permits, licenses, rights-of-way, and similar rights
               and privileges that relate to or are appurtenant to the Contract
               Area, including the following:


STWDJOA - Exhibit "I"


                                        5
<PAGE>

               (a}  all of its rights, titles, and interests, whether now owned
                    and existing or hereafter acquired or arising, in, to, and
                    under or derived from any present or future operating,
                    farmout, bidding, pooling, unitization, and communitization
                    agreements, assignments, and subleases, whether or not
                    described in Exhibit "A," to the extent, and only to the
                    extent, that such agreements, assignments, and subleases
                    cover or include any of its rights, titles, and interests,
                    whether now owned and existing or hereafter acquired or
                    arising, in and to all or any portion of the Contract Area,
                    and all units created by any such pooling, unitization, and
                    communitization agreements and all units formed under
                    orders, regulations, rules, or other official acts of any
                    governmental authority having jurisdiction, to the extent
                    and only to the extent that such units cover or include all
                    or any portion of the Contract Area;

               (b)  all of its rights, titles, and interests, whether now owned
                    and existing or hereafter acquired or arising, in, to, and
                    under or derived from all presently existing and future
                    advance payment agreements, and oil, casinghead gas, and gas
                    sales, exchange, and Development contracts and agreements,
                    including, without limitation, those contracts and
                    agreements that are described on Exhibit "A," to the extent,
                    and only to the extent, those contracts and agreements cover
                    or include all or any portion of the Contract Area; and

               (c)  all of its rights, titles, and interests, whether now owned
                    and existing or hereafter acquired or arising, in, to, and
                    under or derived from all existing and future permits,
                    licenses, rights-of-way, and similar rights and privileges
                    that relate to or are appurtenant to any of the Contract
                    Area.

     8.6.1.4 Recordation.

          To provide evidence of, and to further perfect the Parties' security
          rights created hereunder, upon request, each Party shall execute and
          acknowledge the Memorandum of Operating Agreement and Financing
          Statement (Louisiana) attached as Exhibit "G" (the "Memorandum of
          Operating Agreement and Financing Statement (Louisiana)") in multiple
          counterparts as appropriate. The Parties authorize the Operator to
          file the Memorandum of Operating Agreement and Financing Staterrient
          (Louisiana) in the public records set forth below to serve as notice
          of the existence of this Agreement as a burden on the title of the
          Operator and the Non-operators to their interests in the Contract Area
          and for purposes of satisfying otherwise relevant recording and filing
          requirements of applicable law and to attach an original of the
          Memorandum of Operating Agreement and Financing Statement (Louisiana)
          to a standard UCC-1 in mutually agreeable forms for filing in the UCC
          records set forth below to perfect the security interests created by
          the Parties in this Agreement. Upon the acquisition of a leasehold
          interest in the Contract Area, the Parties shall, within five business


STWDJOA - Exhibit "I"


                                        6
<PAGE>

          days following request by one of the Parties hereto, execute and
          furnish to the requesting Party for recordation such a Memorandum of
          Operating Agreement and Financing Statement (Louisiana) describing
          such leasehold interest. Such Memorandum of Operating Agreement and
          Financing Statement (Louisiana) shall be amended from time to time
          upon acquisition of additional leasehold interests in the Contract
          Area, and the Parties shall, within five business days following
          request by one of the Parties hereto, execute and furnish to the
          requesting Party for recordation any such amendment.
          The Memorandum of Operating Agreement and Financing Statement
          (Louisiana) is to be filed or recorded, as the case may be, in (a) the
          conveyance records of the parish or parishes adjacent to the lands or
          offshore blocks covered by the Contract Area or contained within the
          Contract Area pursuant to La. R.S. 9:2731 et seq., (b) the mortgage
          records of such parish or parishes, and (c) the appropriate Uniform
          Commercial Code records.

     8.6.2 Default.

     If any Party does not pay its share of the charges authorized under this
     Agreement when due, the Operator may give the defaulting Party notice that
     unless payment is made within thirty (30) days from delivery of the notice,
     the non-paying Party shall be in default. A Party in default shall have no
     further access to the rig, Platform or Development Facilities, any
     Confidential Data or other maps, records, data, interpretations, or other
     information obtained in connection with activities or operations hereunder
     or be allowed to participate in meetings. A Party in default shall not be
     entitled to vote or to make an election until such time as the defaulting
     Party is no longer in default. The voting interest of each non-defaulting
     Party shall be counted in the proportion its Participating Interest share
     bears to the total non-defaulting Participating Interest shares. As to any
     operation approved during the time a Party is in default, such defaulting
     Party shall be deemed to be a Non-participating Party, except where such
     approval is binding on all Parties or Participating Parties, as applicable.
     In the event a Party believes that such statement of charges is incorrect,
     the Party shall nevertheless pay the amounts due as provided herein, and
     the Operator shall attempt to resolve the issue as soon as practicable, but
     said attempt shall be made no later than sixty (60) days after receiving
     notice from the Party of such disputed charges.

     8.6.3 Unpaid Charges.

     If any Participating Party fails to pay its share of the costs and other
     expenses authorized under this Agreement in accordance with Exhibit "C" or
     to otherwise perform any of its obligations under this Agreement when due,
     the Party to whom such payment is due, in order to take advantage of the
     provisions of this Article 8.6, shall notify the other Party by certified
     or registered U.S. Mail that it is in default and has thirty (30) days from
     the receipt of such notice to pay. if such payment is not made timely by
     the non-paying Party after the issuance of such notice to pay, the Party
     requesting such payment may take immediate steps to diligently pursue
     collection of the unpaid costs and other expenses owed by such
     Participating Party and to exercise the mortgage and security rights


STWDJOA - Exhibit "I"


                                        7
<PAGE>

     granted by this Agreement. The bringing of a suit and the obtaining of a
     judgment by any Party for the secured indebtedness shall not be deemed an
     election of remedies or otherwise afect the security rights granted herein.
     In addition to any other remedy afforded by law, each Party shall have, and
     is hereby given and vested with, the power and authority to foreclose the
     lien, mortgage, pledge, and security interest established hereby in its
     favor in the manner provided by law, to exercise the Power of Sale provided
     for herein, if applicable, and to exercise all rights of a secured party
     under the Uniform Commercial Code as adopted by the state in which the
     Contract Area is located or such other states as such Party may deem
     appropriate. The Operator shall keep an accurate account of amounts owed by
     the nonperforming Party (plus interest and collection costs) and any
     amounts collected with respect to amounts owed by the nonperforming Party.
     In the event there become three or more Parties to this Agreement, then if
     any nonperforming Party's share of costs remains delinquent for a period of
     sixty (60) days, each other Participating Party shall, upon the Operator's
     request, pay the unpaid amount of costs in the proportion that its Working
     interest bears to the total non-defaulting Working Interests. Each
     Participating Party paying its share of the unpaid amounts of a
     nonperforming Party shall be subrogated to the Operator's mortgage and
     security rights to the extent of the payment made by such Participating
     Party.

     8.6.4 Carved-out Interests.

     Any agreements creating any overriding royalty, production payment, net
     proceeds interest, net profits interest, carried interest or any other
     interest carved out of a Working Interest in the Contract Area shall
     specifically make such interests inferior to the rights of the Parties to
     this Agreement. If any Party whose Working Interest is so encumbered does
     not pay its share of costs and other expenses authorized under this
     Agreement, and the proceeds from the sale of its Hydrocarbon production
     pursuant to this Article 8.6 are insuficient to pay such costs and
     expenses, then subject to the provisions of Article 16.2, the security
     rights provided for in this Article 8.6 may be applied against the
     carved-out interests with which the defaulting or nonperforming Party's
     interest in the Contract Area is burdened. In such event, the rights of the
     owner of such carved-out interest shall be subordinated to the security
     rights granted by this Article 8.6.






STWDJOA - Exhibit"I"


                                        8
<PAGE>

                                   EXHIBIT "F"
                                   -----------


Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation

                          Dispute Resolution Procedure
                          ----------------------------



I.   OVERVIEW
     --------

     A. Description and Goals. Arbitration as used in this statement is a
procedure whereby an Arbitration Panel ("Panel") resolves any claim(s),
controversy(ies) or dispute(s) between Chevron U.S.A. Inc and Ridgewood Oil &
Gas Corporation (hereinafter referred to singularly as "Party" and collectively
as "Parties") arising out of, relating to or in connection with the Exploration
Participation Agreement (hereinafter "Agreement") including the interpretation,
validity, termination or breach thereof.

          (i) Binding. The arbitration process is binding on the Parties and
     this arbitration is intended to be a final resolution of the dispute(s)
     between the Parties as described above, to the same extent as a final
     judgment of a court of competent jurisdiction. Each Party hereby expressly
     covenants that it shall not resort to court remedies except as provided for
     herein, and for preliminary relief in aid of arbitration.

          (ii) Violation. A Party who violates the covenants in Section I.A.(i)
     shall pay all legal costs incurred by the other Party in connection with
     the enforcement thereof. Suits, actions or proceedings in connection with
     violations of the covenants in Section I.A.(i) shall be instituted in the
     United States District Court for the Eastern District of Louisiana, and
     pursuant to Title IX of the United States Code. Each Party waives any
     option or objection which it may now or thereafter have to the laying of
     the venue in any such suit, action or proceeding and irrevocably submits to
     the jurisdiction of such court in any such suit, action or proceeding.

     B. Duty to Negotiate. The Parties shall inform one another promptly
following the occurrence or discovery of any item or event which might
reasonably be expected to result in a dispute in connection with the Agreement.
The Parties will attempt to resolve satisfactorily any such matters.

     C.   Notice of Unresolved Dispute. Should a dispute arise which the Parties
          cannot resolve satisfactorily, either Party may deliver to the other
          Party a written notice of the dispute with supporting documentation as
          to the circumstances leading to the dispute (the "Notice of Dispute").
          The Parties, within ten (10) Business Days from delivery of such
          notice, shall then each appoint a management representative
          ("Management Representative") who has no prior direct involvement with
          the subject matter of the Notice of Dispute and who is duly authorized
          to investigate, negotiate and settle the dispute. The Management
          Representative for each Party shall meet and confer as often as they
          deem reasonably necessary for a period not exceeding thirty (30) days
          following the delivery of the Notice of Dispute in good faith
          negotiations to resolve the dispute amicably. The parties in their
          sole discretion may also agree to utilize the service of a mediator
          pursuant to a joint engagement. Unless otherwise provided herein, all
          such notices shall be served in accordance with the provisions of the
          Agreement.

                                   Page 1 of 5

Chevron/Ridgewood EPA 2006
Exhibit F - ST/WD EPA EXHIBIT F.doc


<PAGE>

II.  ARBITRATION PROCESS
     -------------------

     A. Arbitration. If the Parties are unable to resolve the dispute within
thirty (30) days following the receipt of the Notice of Dispute, the matter
shall be submitted to arbitration in accordance with the procedures set forth
below.

     B. Initiation of Arbitration. The arbitration shall be initiated by either
party delivering to the other a Notice of Intention to Arbitrate as provided for
in Section 6 of the Commercial Arbitration Rules and the Supplementary
Procedures for Large, Complex Disputes of the American Arbitration Association
(collectively, the "AAA Guidelines")

     C. Governing Procedures. Except as expressly provided herein, the
arbitration shall be conducted in accordance with applicable New York law
regarding arbitration. To the extent that a matter is not addressed by this
Agreement or New York law, the arbitration shall be conducted with reference to
the AAA Guidelines. The action of a majority of the members of the arbitration
Panel shall govern and their decision in writing shall be final and binding on
the Parties hereto.

               (i) Conflicts. In the event of a conflicts between the AAA
          Guidelines and this Dispute Resolution Procedure, this Procedure shall
          govern.

               (ii) Governing Law. The Panel shall apply the governing
          substantive law chosen by the Parties to the Agreement.

     D. Arbitration Panel. There shall be three arbitrators, all of whom shall
be independent and impartial, and experienced in arbitration proceedings. For
those disputes involving the transfer of, or title to, any real property rights
or interests, including but not limited to mineral rights, or involving the
development of a mineral interest or the marketing of mineral production, each
arbitrator shall be experienced in the oil and gas industry and knowledgeable or
specializing as to the subject matter involved in the dispute. The arbitrators
shall be chosen as follows: each Party shall have thirty (30) days from the
delivery of a Notice of Intention to Arbitrate to designate an arbitrator and
notify the other Party of the name of such arbitrator. If such other Party shall
fail to name a second arbitrator within thirty (30) days, then the Party who
first served the notice may, within three (3) days after written notice to the
other Party, apply to the American Arbitration Association as the Appointing
Authority, for the appointment of such second arbitrator for or on behalf of the
other Party, and in such case the arbitrator appointed by the Appointing
Authority shall meet the criteria set forth in this Section II.D. and shall act
as if named by the other Party.

               (i) Selection of Third Arbitrator. The two (2) arbitrators chosen
          as provided for above shall, within thirty (30) days after the
          appointment of the second arbitrator, choose the third arbitrator who
          shall meet the criteria set forth in this Section II.D., and in the
          event of their failure to do so within said thirty (30) days, either
          of the Parties hereto may in like manner, within three (3) days after
          written notice to the other Party, apply to the Appointing Authority
          for the appointment of a third arbitrator. The third arbitrator shall
          then disclose any and all conflicts of interest and any business
          relationship that he or she has with any Party. Following that
          disclosure, the Parties shall agree to appoint the chosen third
          arbitrator or to continue the selection process in the same manner.
          The three (3) arbitrators selected shall constitute the Panel. The
          third arbitrator shall serve as Chairman of the Panel.

               (ii) Conflicts. All arbitrators, prior to their appointment shall
          disclose to the Parties, and to the other members of the Panel all
          actual or perceived conflicts of interest and business relationships
          involving the dispute or the Parties, including but not limited to,
          any professional or social relationships, present or past, with any
          Party (or its affiliates), including any Party's (or its affiliates)


                                   Page 2 of 5


<PAGE>

          directors, officers, and supervisory personnel and counsel. Any Party
          may challenge in writing the appointment or continued service of any
          arbitrator for lack of independence, partiality, or any other cause
          likely to impair such arbitrator's ability to effectively participate
          in the proceedings or render a fair and equitable decision. Where such
          challenge is made, the Appointing Authority shall uphold or dismiss
          the challenge. In the event a challenge is upheld, the arbitrator as
          to whom the challenge was upheld shall cease to be a member of the
          Panel. A replacement will be selected in the same manner as the
          original arbitrator was selected. If an arbitrator resigns or becomes
          unable or unwilling to continue to serve on the Panel, a replacement
          shall be selected in the same manner as that arbitrator was chosen.

               (iii) Multi-Party Arbitrations. Where more than two Parties are
          involved in the dispute ("Multi-Party Arbitration"), all Parties shall
          jointly name and agree as the appointment of the two arbitrators
          meeting the criteria set forth in Section II.D. above. The third
          arbitrator shall be appointed as set forth in Section II.D.(i) above.
          If the Parties cannot agree as to the choice of the two arbitrators
          within the said thirty (30) days, either of the Parties hereto may in
          like manner, within three (3) days after written notice to the other
          Party, apply to the Appointing Authority for the appointment of the
          two arbitrators meeting the criteria set forth in Section II.D. above.

               (iv) Management of the Arbitration. The Panel shall actively
          manage the proceedings as it deems best so as to make the same
          expeditious, economical, and less burdensome and adversarial than
          litigation.

     E. Confidentiality. All documents, briefs, testimony, transcripts, as well
as, all Panel decisions shall be confidential, except that, upon prior written
consent of both Parties, such information may be divulged to third parties who
agree in writing to keep such information confidential if such disclosure is
deemed necessary pursuant to common business practice or is required by law.
Likewise, the views, suggestions, admissions, proposals, and other information
exchanged in the arbitration are confidential and are inadmissible in any other
proceeding.

     F. Costs and Expenses. Each side shall be solely responsible for all costs,
fees and expenses incurred by its party-appointed arbitrator. The fees, costs,
and expenses of the third arbitrator and any other incidental costs incurred in
connection with the arbitration proceeding shall be borne equally by the
Parties. Each Party is solely responsible for its own attorneys' fees and
expenses incurred in the arbitration. In the event of a Multi-Party arbitration,
all costs and expenses shall be borne equally by all Parties.

     G. Submissions. Within thirty (30) days after the selection of the Panel,
each Party shall provide the Panel with a short and plain submission defining
the issues to be decided and the nature of the relief that the Panel may award
(the "Submission"). This Submission shall explicitly authorize the Arbitration
Panel to decide these issues. This authorization shall stay in force for six (6)
months from this Submission. If the Parties are unable to reach consensus as to
the issues involved, the Panel in its sole discretion shall frame the issues
through a reasonable procedure. The Panel will render decisions on the specific
issues established and shall fashion any remedy that the Panel deems appropriate
so long as that remedy is consistent with the Parties' Submissions hereunder.
Any money judgment entered by the Panel shall be payable in U.S. dollars.

     H. Transcriptions. The presentations and argument will be transcribed for
the benefit of the Panel and the Parties.

     I. Discovery. Commencing thirty (30) days after the receipt of the opposing
Party's Submission, each Party may serve upon the other Party up to fifteen (15)
requests for the production of documents, including sub-parts. The requests
shall be made in good faith and not be served for the purpose of delay or
harassment. Each request shall describe the type of document(s) sought and each
request shall be limited to documents that are relevant to a claim or defense


                                   Page 3 of 5


<PAGE>

in the arbitration proceeding, or reasonably calculated to lead to the discovery
of admissible evidence. The requests need not be served all at once but may be
served in stages.

               (i) The Party served with a request under this provision shall
          provide the adverse Party with copies of the requested documents, and
          identify the request to which each document is responsive, within
          twenty (20) days of the receipt of the request. If the Party served
          with a request objects to the production of any of the requested
          documents, it shall nevertheless produce within the permitted time all
          documents responsive to any request that is not objected to by that
          Party.

               (ii) A Party that is served with a request may challenge the
          propriety of the request within the time permitted for response by a
          short written objection which shall be forwarded to the adverse Party
          and to each member of the Panel. The adverse Party shall submit its
          response, if any, to the objecting Party and each member of the Panel
          within five (5) days of receipt of the objection. The Panel shall
          consider the request, the objection, and the response, if any, and
          decide whether the production shall be allowed or denied or whether
          the request should be modified within ten (10) days after the
          submission of the adverse Party's response.

     J. Presentations. No later than twenty-five (25) days prior to the date
that presentations to the Panel are to begin, each Party will submit to the
Panel and serve on the other Party a written position statement. The original
statement of each Party shall not exceed thirty-five (35) typewritten
letter-sized pages. Each Party shall have the right to submit reply statements
no later than fifteen (15) days prior to the date of the presentation. Such
reply statements shall not exceed fifteen (15) typewritten letter-sized pages.

               (i) All documents and affidavits that a Party intends to use
          during its presentation shall be submitted to the Panel and served on
          the other Party with the position and reply statements. All
          demonstrative exhibits shall be exchanged five (5) days in advance of
          the presentations.

               (ii) The presentations to the Panel shall extend for such time as
          the Panel agrees to be appropriate. In the absence of any agreement,
          the presentations for both Parties shall extend for no longer than two
          (2) days and shall be concluded within six (6) months after selection
          of the Panel. Presentations of each Party shall occur successively
          with no intervening delay.

               (iii) Each Party shall make an oral and/or documentary
          presentation of its position in such order and in accordance with the
          time schedule established by the Panel. The Panel may question each of
          the presenters during or following any and all presentations.

The Panel shall determine a reasonable time and location for the presentations.

     K. Decision and Award. The Panel shall promptly (within sixty (60) days of
conclusion of the presentations or such longer period as the Parties may
mutually agree) determine the claims of the Parties and render their final
decision in writing. All decisions and awards shall be decided by a majority of
the Panel. The decision shall state with specificity the findings of fact and
conclusions of law on which it rests. The decision rendered by the Panel may be
enforced in any federal court having jurisdiction to do so and may only be
appealed pursuant to Section L below. The decision shall be served upon each of
the Parties by facsimile transmission and by first class mail. If there be no
majority as to any part of the award, such part of the award shall be made by
the third arbitrator.

               (i) If applicable law allows pre-award interest, the Panel may,
          in their discretion, grant pre-award interest and, if so, such
          interest may be at commercial rates during the relevant period. The
          Panel may award all or a part of a Party's reasonable attorney's fees
          and costs of arbitration, taking into account the final result of the


                                   Page 4 of 5


<PAGE>

          arbitration, the conduct of the Parties and their counsel in the
          course of the arbitration, and other relevant factors. The Panel shall
          not award consequential or punitive damages.

               (ii) Within ten (10) days of receipt of the award either side may
          submit a Motion to Modify the award. A response shall be due within
          fifteen (15) days thereafter and the Panel shall rule thereon within
          fifteen (15) days after receipt of the response.

               (iii) Judgment on the award may be entered in a United States
          District Court for the federal district within which the decision was
          made at any time within one year after the decision is made.

     L. Vacation of Award and Appeal. The Parties agree that an award made by
the Panel may only be vacated or confirmed by a federal court of proper
jurisdiction as established above. The Parties agree that an award made by the
Panel may be vacated by a court only if the award was procured by or through
fraud or corruption or because the Panel refused to hear evidence material to
the controversy or otherwise so conducted the hearing as to substantially
prejudice the rights of a Party. An appeal from an order or judgment pursuant to
this Section II.L. shall be instituted in the United States District Court for
the Eastern District of Louisiana. Each Party waives any option or objection
which it may now or thereafter have to the laying of the venue of any such suit,
action or proceeding and irrevocably submits to the jurisdiction of the court in
any such suit, action or proceeding. Each Party agrees that a remedy at law for
a violation of this Section II.L. may not be adequate and therefore agrees that
the remedies of specific performance and injunctive relief shall be available in
the event of any violation in addition to any other right or remedy at law or in
equity to which any Party may be entitled.

     M. Res Judicata. To the extent permitted by law, any decision of the Panel
shall not be res judicata or have any binding effect in any unrelated litigation
or arbitration.




                                   Page 5 of 5


<PAGE>

                                   EXHIBIT "G"
                                   -----------


Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation

                            Declaration of Agreement
                            ------------------------


THE UNITED STATES OF AMERICA         ss.
STATE OF LOUISIANA                   ss. KNOW ALL MEN BY THESE PRESENT
OUTER CONTINENTAL SHELF              ss.


     Pursuant to LSA-R.S. 9:2732, Chevron U.S.A. Inc.. ("Chevron") whose address
is 935 Gravier Street, New Orleans, Louisiana 70112 and Ridgewood Energy
Corporation ("Ridgewood") whose address is 11700 Old Katy Road, Suite 280,
Houston, Texas 77079, file this Declaration in Lieu of Agreement.
     WHEREAS, Chevron and Ridgewood have entered into a certain Exploration
Participation Agreement dated _____________, 2006, (the "Exploration
Agreement"); and
     WHEREAS, the Exploration Agreement involves, among other things, the
ownership of and the exploration for oil and gas on certain leasehold interests
in the Outer Continental Shelf Offshore; and
     WHEREAS, Chevron and Ridgewood are desirous of placing all third parties on
notice of the Exploration Agreement and its impact on the leasehold interests
described herein.
     NOW THEREFORE, Chevron and Ridgewood file the following declaration for the
purpose of placing all third parties on notice of the Exploration Agreement and
its effect on the leasehold interests described herein.

     1. Lands Affected. The lands affected by the operating rights that are the
subject of the Exploration Agreement are those described below:

============================================================================
                                                          CHEVRON'S
   AREA & BLOCK          OCS #        GROSS                CURRENT
                                      ACRES                INTEREST
-----------------------------------------------------------------------------


============================================================================


Chevron/Ridgewood EPA 2006
Exhibit G - ST/WD EPA EXHIBIT G.doc


                                   Page 1 of 3


<PAGE>

     2. Nature of the Exploration Agreement. Pursuant to the terms of the
Exploration Agreement, Ridgewood is entitled to earn assignments of leasehold
rights from Chevron with respect to certain real property interests covering the
lands described herein.

     3. Location of the Exploration Agreement. Original, executed copies of the
Exploration Agreement are maintained at the offices of Chevron located at 935
Gravier Street, New Orleans, Louisiana 70112, and at the offices of Ridgewood
located at 11700 Old Katy Road - Suite 280, Houston TX, 77079.

     4. It is Chevron's and Ridgewood's intention that this Declaration serves
as full and complete notice of the Exploration Agreement to the same extent as
if the original Exploration Agreement had been fled and recorded.


     IN WITNESS WHEREOF, this Declaration of Agreement is executed by the
parties hereto as of this ___________ day of ______ 200____.


WITNESSES:                                    Chevron U.S.A. Inc.


                                              By:
----------------------------                     ------------------------------

                                              Title:
----------------------------                        ---------------------------




WITNESSES:                                    Ridgewood Energy Corporation


                                              By:
----------------------------                     ------------------------------

                                              Title:
----------------------------                        ---------------------------




                                   Page 2 of 3


<PAGE>

STATE OF LOUISIANA   }

PARISH OF ORLEANS    }


     On this ___________ day of _______, 200___, before me appeared ___________,
to me personally known, who, being by me duly sworn, did say that he is the
Assistant Secretary of CHEVRON U.S.A. INC., and that the foregoing instrument
was signed on behalf of the corporation by authority of its Board of Directors,
and that he acknowledged the instrument to be the free act and deed of the
corporation.


     WITNESS my hand and official seal this __________day of _________, 200__.


My Commission Is For Life.
                                        ----------------------------
                                                Notary Public







STATE OF ____________}

COUNTY OF __________ }


     On this day of _________, 200 ___ , before me appeared __________________,
 to me personally known, who, being by me duly swore, did say that he is the
 __________________ of RIDGEWOOD ENERGY CORPORATION, a Delaware corporation, and
that the foregoing instrument was signed on behalf of the corporation
by authority of its Board of Directors, and that he acknowledged the
instrument to be the free act and deed of the corporation.


     WITNESS my hand and official seal this __________ day of ________ 200 ___.


My Commission Expires _________________.    ____________________________




                                   Page 3 of 3


<PAGE>

                                   EXHIBIT "H"
                                   -----------

Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation



                              PROCESSING AGREEMENT
                              --------------------




Chevron/Ridgewood EPA 2006
Exhibit H - ST/WD EPA EXHIBIT H.doc



<PAGE>

                                  EXHIBIT "I"
                                  -----------


Attached to and made a part of that certain Exploration Participation Agreement
dated effective the 1st day of September, 2006, by and between Chevron U.S.A.
Inc. and Ridgewood Energy Corporation






                           "Area of Mutual Interest"
                           -------------------------

                                 Wahoo Prospect
                                 --------------

===============================================================================
===============================================================================
     Block No.                    OCS Serial No.            Lease Status
     ---------                    --------------            ------------

South Timbalier 50                   G-4119                     SOP

===============================================================================


                                Kapolei Prospect
                                ----------------

===============================================================================
===============================================================================
     Block No.                    OCS Serial No.            Lease Status
     ---------                    --------------            ------------

South Timbalier 125                 G-24963                 Primary Term

===============================================================================


                              Lewes Beach Prospect
                              --------------------

===============================================================================
===============================================================================
     Block No.                    OCS Serial No.            Lease Status
     ---------                    --------------            ------------

South Timbalier 107                  G-15319                    HBP

===============================================================================




                                        1
Chevron/Ridgewood EPA 2006
Exhibit J - ST/WD EPA EXHIBIT I.doc