Exhibit
10.6 

     

    PARTICIPATION
AGREEMENT

    


    REDACTED,
SOUTH ADDITION

    


    


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

    


    WITNESSETH:

    


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

    


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

    


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

    


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

    


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

    


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

    


    


    


    Article 1 – Interest of the
Parties

    


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

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            	
                    Party

                  	
                    Working Interests

                  
	
                    Newfield

                  	
                    66.6666%

                  
	
                    Ridgewood

                  	
                    33.3333%*

                  


          

        

      



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

    


    Article 2 - Operating Agreement

    


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

    


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

    


    


    Article 3 - Test
Well

    


    3.1      
   Newfield will commence drilling operations for the Redacted, South
Addition (Redacted) No. 1 Well (“Test Well”) on or before February 1,
2009.  The Test Well is planned to be drilled in accordance with
Newfield’s AFE No. 18064 attached hereto as Exhibit “B” (“AFE”).  The
Test Well will be drilled to an approximate depth of 9,409’ MD 7,975’ TVD, or a
depth sufficient to test the “Redacted Sands”, whichever depth is shallower
(“Contract Depth”).

     

    3.2           As
additional consideration for the opportunity to earn its Working Interest in the
Contract Area, the Parties will pay the following percentages of the costs to
drill the Test Well to Casing Point (as described in Article 3.3
below):

     

    
      
        
          
            
              
                	
                        Newfield

                      	
                        46.67200%

                      
	 
      	 
      
	
                        Ridgewood

                      	
                        53.32800%

                      


              

            

          

        

      

    

     

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

    


    Additionally,
within 10 days prior to spud, but no earlier, Newfield shall invoice Ridgewood
and Ridgewood shall timely pay its proportionate share of lease sunk costs equal
to $1,651,502.00 ($4,955,000.00 x 33.33% Working Interest).  At such
time as Ridgewood pays it’s proportionate share of the lease sunk costs,
Newfield will assign Ridgewood 33.33% Record Title Interest.

     

    
      
        
        

      

      
        - 2 -

        
          

        

      

      
        
        

      

    

    


    3.3           Casing
Point is defined as that point in time when the Test Well, or substitute well
therefor, has been drilled to the Contract Depth, and all open-hole logs and all
appropriate tests have been performed and delivered to the Parties, and a
recommendation is made to (i) set casing and complete the well, (ii) plug and
abandon the well or (iii) conduct other operations as provided within the
priority of operations outlined within the Operating Agreement.

    


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

    


    


    Article 4 - Assignment and
Assumption of Rights

     

     

     

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

    


    


    Article 5 - Ownership of
Production

    


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

    


    


    Article 6 -
Insurance

    


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

     

    
 

    Article 7 -
Confidentiality

    


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

     

    
      
        
        

      

      
        - 3 -

        
          

        

      

      
        
        

      

    

    


    Article 8 -
Conflicts

    


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

    


    Article 9 -
Notices

    


    All notices, requests or
demands to be given under this Agreement shall be in writing and shall be deemed
to have been given (i) three (3) business days after being sent by registered
mail or certified mail, postage prepaid, or (ii) on the day sent, if hand
delivered or sent by facsimile, with receipt confirmed and verbal confirmation,
in each case addressed as follows or to such other address as may have been
furnished in writing to the other Parties hereto in accordance
herewith:

    
      
         

        
          	
                  If to
      Newfield:

                	
                  If to Ridgewood:

                
	
                  Newfield
      Exploration Company

                	
                  Ridgewood
      Energy Corporation

                
	
                  363
      N. Sam Houston Pkwy. E., Suite 2020

                	
                  11700  Katy
      Freeway, Suite 280

                
	
                  Houston,
      Texas  77060

                	
                  Houston,
      Texas  77079

                
	
                  Attention:  Ms.
      Christina Linscomb

                	
                  Attn:
      Mr. W. Greg Tabor

                
	
                  Office
      Phone:  (281) 847-6074

                	
                  Office
      Phone: (281) 293-8449

                
	
                  Fax
      Number:  (281) 405-4207

                	
                  Fax
      Number: (281) 293-7705

                


        

      

    

    
 

    Article 10 - Topical
Headings

    


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

    


    Article 11 - Successors and
Assigns

    


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

    


    


    


    


    Article 12 - Counterpart
Execution

    


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

     

    
      
        
        

      

      
        - 4 -

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
Effective Date hereinabove first written.

    


    


    
      
        
          
            
              
                	WITNESSES:  	 	NEWFIELD EXPLORATION
      COMPANY	 
	 	 	 	 
	 	 	 	 	 
	
                         

                      	 	
                        By:
      

                      	 /s/ W.M.
      Blumenshine	 
	 	 	Name: 	
                        W.M.
      Blumenshine

                      	 
	 	 	Title:  	
                        Vice
      President - Land

                      	
                         

                      
	 	 	 	 	 


              

            

          

        

      



                                                                  

     

    
      
        
          
            
              
                	WITNESSES:  	 	RIDGEWOOD ENERGY
      CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	
                         

                      	 	
                        By:
      

                      	 /s/ W.
      Greg Tabor	 
	 	 	Name: 	
                        W.
      Greg Tabor

                      	 
	 	 	Title:	
                        Executive
      Vice President

                      	 
	 	 	 	 	 


              

            

          

        

      

    

     

     

     

    
- 5 -