EXHIBIT 10.6

                             PARTICIPATION AGREEMENT
                           EUGENE ISLAND 357 PROSPECT
                               OFFSHORE, LOUISIANA

     This Participation Agreement ("Agreement") is made and entered into
effective as of the 1st day of July, 2005 by and between Walter Oil & Gas
Corporation ("Walter"), and Ridgewood Energy Corporation ("Ridgewood").

                                    RECITALS

     WHEREAS, Walter has identified a prospect on Eugene Island block 357 and
has acquired Oil & Gas Lease OCS-G 23884 dated June 1, 2002 covering block 357
from the United States of America; and,

     WHEREAS, Walter plans to drill or participate in the drilling of an initial
test well on Eugene Island block 357, OCS-G 23884; and,

     WHEREAS, Walter has offered to Ridgewood the opportunity to participate in
the drilling of the initial test well and to acquire a 25% working interest in
block 357, OCS-G23884, less and except the NE/4 of the lease from the surface to
11,500' subsea (hereafter "Lease"), and Ridgewood has accepted Walter's offer
all in accordance with the terms set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreement
herein contained, the parties hereto agree as follows:


                                    SECTION I
                                    ---------
                                  Initial Costs

1.01 Within ten (10) days of Ridgewood's execution of this Agreement, Ridgewood
     agrees to pay Walter $141,203.00 (which represents Ridgewood's 25% share of
     the Lease bonus, rental and shallow hazard survey costs incurred by
     Walter).

                                   SECTION II
                                   ----------
                                Initial Test Well

2.01 Walter plans to participate in the drilling of an initial test well on the
     Lease. The initial test well will be drilled from a surface location of
     approximately 5,625' FSL and 6,610' FEL of the Lease and drilled to a depth
     of 15,800' TVD (hereinafter "Initial Test Well"). As consideration for the
     opportunity to earn a twenty-five percent (25%) working interest in the
     Lease, Ridgewood shall bear Thirty-Three and One-Third percent (33.33%) of
     the costs to drill the Initial Test Well to casing point and through
     plugging and abandonment, if the Initial Test Well is not saved for
     production. This disproportionate cost sharing obligation shall be referred
     to as the "Promote." The Promote will be applicable to the dry hole costs
     of the Initial Test Well and will be limited to 110% of the Initial Test
     Well's estimated dry hole cost as noted in the attached AFE. The Promote
     will also apply to any substitute well or sidetrack of the Initial Test
     Well until Walter has received 110% of the original AFE dry hole costs.
     Concurrent with Ridgewood's execution of this Agreement, Ridgewood will be
     deemed to have approved the attached AFE and well plan.


<PAGE>

2.02 Subject only to rig availability and the ability to obtain the required
     governmental permits, Walter and Ridgewood agree that if the Initial Test
     Well is not spudded on or before December 1, 2005 ("Commencement Date"),
     and such date has not been extended by Ridgewood, then this Agreement shall
     ipso facto terminate. Within 10 days of such termination, Walter shall
     reimburse Ridgewood for any payments it received in accordance with
     Paragraph 1.01 of this Agreement and Ridgewood shall submit assignments to
     Walter re-conveying Ridgewood's 25% working interest in the Lease
     previously received from Walter, which assignment shall be free and clear
     of any liens, charges, or lease burdens, overriding royalty interest, or
     any other encumbrance created by Ridgewood. For clarification purposes
     only, there shall be no other penalty(ies) assessable to either party
     hereto for failure of the Initial Test Well to be spudded on or before the
     Commencement Date.

2.03 It is understood and agreed that Newfield Exploration Company ("Newfield")
     will have a 50% working interest in the Lease and Initial Test Well and
     will be the designated operator.


                                   SECTION III
                                   -----------
                       Assignment and Assumption of Rights

3.01 Within ten (10) days from receipt of Ridgewood's payment described in 1.01
     above, Walter shall assign to Ridgewood Twenty Five percent (25%) operating
     rights interest in the Lease. The interest assigned to Ridgewood in the
     Lease shall be subject to the existing royalty burden and a 2.25% of 8/8ths
     overriding royalty interest ("ORRI") to be reserved by Walter, all
     proportionately reduced to Ridgewood's assigned interest. Walter represents
     to Ridgewood that total Lease burdens created by, through and under Walter
     as of the effective date of this Agreement, including lessor's royalty, are
     no greater than 18.917% (of 8/8ths). The form of Assignment is attached
     hereto as Exhibit "A."

                                   SECTION IV
                                   ----------
                               Operating Agreement

4.01 Contemporaneous with the execution of this Agreement, the parties hereto
     agree to execute a mutually agreeable operating agreement ("JOA"), naming
     Newfield operator of the Lease. Both parties hereto acknowledge that the
     JOA is a three-party agreement also requiring Newfield's signature. All
     operations on the Initial Test Well and any and all subsequent operations
     on the Lease shall be conducted in accordance with the terms and provisions
     of the JOA. If there are any conflicts between this Agreement and the JOA,
     the terms and provisions of this Agreement shall prevail and govern.

                                    SECTION V
                                    ---------
                                     Notices

5.01 All notices, requests or demands to be given under this Agreement shall be
     in writing and governed and directed to the representatives as specified
     below:

     Ridgewood Energy Corporation           Walter Oil & Gas Corporation
     11700 Old Katy Rd., Suite 280          1100 Louisiana Street, Suite 200
     Houston, Texas 77079                   Houston, TX 77002
     Attn: Mr. W. Greg Tabor                Attn: Mr. Ron Wilson
     Phone: 281-293-8449                    Phone: 713-659-1221
     Fax:   281-293-7705                    Fax:   713-756-1177


<PAGE>

                                   SECTION VI
                                   ----------
                      GOVERNING LAW AND BREACH OF CONTRACT

6.01 This Agreement shall be governed by the laws of the State of Texas except
     where the Maritime Laws of the United States of America are applicable. In
     the event that any dispute results in formal legal action, venue shall be
     appropriate in the federal or state courts of Harris County, Texas.

6.02 In the event of a breach of this Agreement by any party hereto, the non
     breaching party shall be entitled to all remedies available at law or
     equity, including but not limited to, specific performance, monetary
     damages and injunctive relief.


                                   SECTION VII
                                   -----------
                                  MISCELLANEOUS


7.01 Walter shall provide Ridgewood with full and complete access to Walter's
     files, records and data, so that Ridgewood may perform its due diligence
     review of Walter's acquisition, ownership and obligations associated with
     the Lease. Additionally, Walter shall provide Ridgewood with access to its
     technical data associated with the Lease, including seismic, maps, well
     data and geological data, subject however, to all confidentiality and data
     licensing restrictions.

7.02 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 any 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.

7.03 This Agreement, together with all of its exhibits, is intended by the
     parties to be a complete and final statement of the agreement of the
     parties with respect to the subject matter hereof, and supersedes any prior
     oral or written statements or agreements between the parties hereto.

7.04 The terms and provisions hereof shall be binding upon and inure to the
     benefit of Walter and Ridgewood, and their respective heirs, legal
     representatives, successors and assigns, and shall be covenants running
     with the Lease.


<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.


WITNESSES
                                         WALTER OIL & GAS CORPORATION

/s/
------------------------------           /s/ Ron A. Wilson
                                         ------------------------------
/s/ Melissa Coronado                         Ron A. Wilson
------------------------------               Vice President
Melissa Coronado



                                         RIDGEWOOD ENERGY CORPORATION

/s/ Ken Webb
------------------------------           /s/ W. Greg Taber
Ken Webb                                 ------------------------------
                                             W. Greg Taber
/s/ Randy Bennett                            Executive Vice President
------------------------------
Randy Bennett







<PAGE>





                                   EXHIBIT "A"

       Attached to and made a part of that certain Participation Agreement
      dated July 1, 2005 between Walter Oil & Gas Corporation and Ridgewood
                               Energy Corporation.



ASSIGNMENT OF OPERATING RIGHTS TO OIL AND GAS LEASE

                                                               OCS-G 23884
UNITED STATES OF AMERICA    ss.

OUTER CONTINENTAL SHELF     ss.

OFFSHORE LOUISIANA          ss.



     For and in consideration of the sum of One Hundred Dollars ($100.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Walter Oil & Gas Corporation, a Texas Corporation, whose
mailing address is 1100 Louisiana, Suite 200, Houston, Texas 77002 (hereinafter
called "Assignor"), does SELL, TRANSFER, ASSIGN, SET OVER AND CONVEY unto
Ridgewood Energy Corporation, a_________________________________ Company, whose
mailing address is 11700 Old Katy Rd., Suite 280, Houston, TX 77079,
(hereinafter called "Assignee"), a 25.0000% operating rights interest in and to
the following federal oil and gas Lease ("Lease"):

     Oil and Gas Lease No. OCS-G 23884 dated June 1, 2002 from the United States
     of America, as Lessor, to Walter Oil & Gas Corporation, as Lessee,
     covering Eugene Island Area, Block 357, OCS Leasing Map, Louisiana Map No.
     4A, containing 4999.88 acres;

     LESS AND EXCEPT the Northeast Quarter (NE/4) of the Lease from the surface
     down to 11,500' subsea (hereinafter referred to as ("Assigned Interest").


Subject to the matters set forth herein, this Assignment is made without
warranty of title, express, implied or statutory, even for return of any
consideration paid therefor; provided only that Assignor warrants that it has
not heretofore granted or conveyed to any other party any interest in or any
lien or encumbrance on the interest being assigned hereunder in the Lease except
as described herein.


<PAGE>

WITH RESPECT TO ANY PERSONALTY OR CHATTELS CONVEYED HEREBY, ASSIGNOR HEREBY
NEGATES AND DISCLAIMS THE IMPLIED WARRANTY OF MERCHANTABILITY AND THE IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY OF
CONFORMITY TO MODELS OR SAMPLES OF MODELS. ASSIGNEE AND ASSIGNOR AGREE THAT, TO
THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF
CERTAIN WARRANTIES CONTAINED IN THIS INSTRUMENT ARE "CONSPICUOUS" DISCLAIMERS.


     TO HAVE AND TO HOLD the Assigned Interests hereby conveyed, together with
all and singular rights and appurtenances thereto in anyway belonging unto
Assignee, its successors and assigns.

     This Assignment is made by Assignor and accepted by Assignee subject to the
following:

1}   the terms, provisions and conditions of the Lease and any limitation on or
     contained in the Lease;

2)   That certain Participation Agreement dated July 1, 2005 by and between
     Assignor and Assignee and covering the Assigned Interest;

3)   That certain Offshore Operating Agreement dated July 1, 2005 by and between
     Newfield Exploration Company, as Operator, and Assignor and Assignee, as
     Non-Operators, and covering the Assigned Interest;

4)   Assignor reserves unto itself, and retains an overriding royalty interest
     equal to 2.25% of eight-eights (8/8ths) in and to all hydrocarbons that are
     produced, saved, and sold from the Lease. Said overriding royalty shall be
     free of all costs of any kind whatsoever including but not limited to costs
     associated with exploration, development, production or operating, but
     shall bear its proportionate share of severance and production taxes unless
     provided otherwise in the Lease. Said overriding royalty shall be
     calculated and paid or delivered to Assignee in the same manner as provided
     in the Lease affected thereby for the calculation and payment or delivery
     of royalties therein reserved to the Lessor.

     a) It is understood that the overriding royalty interest reserved
     hereinabove is an 8/8ths number and that Assignee shall bear its
     proportionate share of such overriding royalty interest based on the
     Assigned Interest herein.

4)   The terms and conditions of this Assignment shall extend to and be binding
     upon the successors and assigns of the parties.


<PAGE>

     IN WITNESS WHEREOF, this Assignment of Operating Rights Interest is
executed and effective this ____ day of _________, 2005.




WITNESSES:                                        ASSIGNOR:

                                         Walter Oil & Gas Corporation


______________________________
______________________________
                                         By:______________________________
                                             Ron A. Wilson
                                             Vice President




WITNESSES:                                        ASSIGNEE:

                                         Ridgewood Energy Corporation


______________________________
______________________________
                                         By:______________________________
                                             W. Greg Tabor
                                             Executive Vice President

STATE OF TEXAS

COUNTY OF HARRIS

     On this _____ day of _________, 2005 before me appeared W. Greg Tabor, to
me personally known, who, being by me duly sworn, did say that he is the
Executive Vice President of Ridgewood Energy Corporation, and that the foregoing
instrument was signed on behalf of said company, and said W. Greg Tabor
acknowledged said instrument to be the free act and deed of said corporation.


                                             ______________________________
                                                      NOTARY PUBLIC

My Commission Expires __________________.


<PAGE>

STATE OF TEXAS

COUNTY OF HARRIS

     On this _____ day of ________, 2005 before me appeared Ron A. Wilson, to me
personally known, who, being by me duly sworn, did say that he is the Vice
President of Walter Oil & Gas Corporation, and that the foregoing instrument was
signed on behalf of said partnership, and said Ron A. Wilson acknowledged said
instrument to be the free act and deed of said corporation.


                                             ______________________________
                                                      NOTARY PUBLIC

My Commission Expires __________________.