Exhibit
10.3


PARTICIPATION
AGREEMENT


          This
Participation Agreement is made and entered into this 19th day of May 2008, but
effective January 1 2008, by and between W & T Offshore, Inc., hereinafter
referred to as (“W&T”) and Ridgewood Energy Corporation, hereinafter
referred to as (“REC”), and collectively referred to herein as the Parties
(“Agreement”).


WITNESSETH:


          WHEREAS, W&T is the owner of certain
record title interests in and to certain Federal Oil and Gas Leases as fully
described on Exhibit “A”, attached hereto and the lands covered thereby,
hereinafter referred to as the “Leases”, and      W&T
is the owner and holder of certain leasehold interests in federal leases
currently effective as to Main Pass Block 283 (OCS-G 13662), W/2W/2W/2 of
Viosca Knoll Block 734 (OCS-G 13672) and Main Pass Block 279 (OCS-G 26168); and


          WHEREAS, W&T and REC have executed that
certain Offer to Participate dated May 8, 2008 by which REC may acquire a
twenty-five percent of eight-eighths (25% of 8/8ths) working interest in and to
the Main Pass 283 and Viosca Knoll 734 leases and a fifteen percent of
eight-eighths (15% of 8/8ths) working interest in the Main Pass 279 lease. 


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

ARTICLE I


	
 

	
 


	
A.

	
W&T represents that it is the owner of 100% of
  the Record Title Interest in Main Pass Block 283 (OCS-G 13662), 100% of the
  Record Title Interest in the W/2W/2W/2 of Viosca Knoll Block 734 (OCS-G
  13672) and 90% of the Record Title Interest in Main Pass Block 279 (OCS-G
  26168), and that W&T has full power and authority to assign an interest
  to REC as to the rights and obligations under the Leases. 


	
 

	
 


	
B.

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


	
 

	
 


	
C.

	
By its execution of this Participation Agreement,
  REC and W&T agrees to execute (1) an operating agreement providing for
  joint operations as to Main Pass Block 283 and the W/2W/2W/2 of Viosca Knoll
  Block 734 in substantially the same form as that attached hereto as Exhibit
  “B” (“the MP 283/VK 734 OA”), (2) an amendment and ratification of that
  certain Operating Agreement dated June 1, 2005 by and between W&T and
  Magnum Hunter Production, Inc. covering Main Pass Block 279 attached hereto
  as Exhibit “C” (“the MP 279 OA”), (3) a production handling agreement as to production processed at the Main
  Pass Block 283 “A” Platform (“Platform”) from the Leases, in substantially
  the same form as that attached hereto as Exhibit “D” (“the PHA”). In the
  event, any of the agreements are not finally executed on or before May 23,
  2008 by W&T and REC, the attached exhibits will be deemed to be in force
  and effect as to all matters provided for therein.






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ARTICLE
II


	
 

	
 


	
A.

	
By execution of this Participation Agreement, REC
  acknowledges its obligation to participate in the three (3) wells described
  in Exhibit “E” (the “Wells”) and the rig mobilization/demobilization to the
  Main Pass “A” Platform (the “Platform”). Concurrently with execution hereof,
  REC will execute and return to W&T each Authority for Expenditure (“AFE”)
  attached hereto as Exhibits “E-1, E-2, E-3 and E-4”, each AFE describing the
  drilling and evaluation of three (3) Test Wells and the cost associated the
  mobilization and demobilization of the H&P Rig No. 206 to the Platform as
  listed below:








	
 

	
 

	
 


	
 

	
AFE #D07021: Main Pass 283 – OCS-G 13662 Well A-1
  ST-2

	
 


	
 

	
AFE #D07019: Main Pass 279 - OCS-G 26168 Well A-6
  ST-1

	
 


	
 

	
AFE #D07020: Main Pass 279 - OCS-G 26168 Well A-5
  ST-1

	
 


	
 

	
AFE #D07018: Rig Mobilization/Demobilization

	
 








	
 

	
 


	
B.

	
As consideration for the right to acquire interest in
  the Leases, being (1) a twenty-five percent of eight-eighths (25% of 8/8ths)
  working interest in and to Main Pass 283 and the W/2W/2W/2 of Viosca Knoll
  734 and (2) a fifteen-percent of eight-eighths (15% of 8/8ths) working
  interest in Main Pass 279, REC agrees to pay thirty-three and one-third
  percent of eight-eighths (33 1/3% of 8/8ths) of all of the costs, risk and
  expenses in the drilling and evaluation of the MP 283 A-1 ST2 Well as set out
  in AFE #D07021, and twenty percent of eight-eighths (20% of 8/8ths) of all of
  the costs, risk and expenses in the drilling and evaluation of the MP 279 A-6
  Well as set out in AFE #D07019 (the “Promoted Wells”). 


	
 

	
 


	
C.

	
W&T has contracted for the H&P 206 platform
  rig for the drilling of the Wells, and subject to any elections under
  applicable operating agreement, agrees that upon success will complete and
  hook-up the Wells in a successive “back-to-back” order. For the use of any
  existing wellbore or slot on the Main Pass “A” Platform for operations
  conducted under this Agreement or for future joint operations conducted on
  the Leases, a $250,000 per well slot fee will be borne by the well
  participants in proportion to their working interests; such fee to be billed
  by separate invoice.


	
 

	
 


	
D.

	
Within five (5) business days from the execution of
  this Participation Agreement, REC agrees to remit to W&T by wire transfer
  the amount of $$2,106,480.00 representing an advance payment of REC’s
  Promoted Interest share under the MP 283 A-1 ST2 Well AFE. Such payment
  should be wired to:








	
 

	
 

	
 

	
 


	
 

	
Account Name:

	
W & T Offshore, Inc.

	
 


	
 

	
Street Address:

	
Nine Greenway Plaza, Suite 300

	
 


	
 

	
 

	
Houston, TX 77046

	
 


	
 

	
Recipient Bank:

	
Amegy Bank 

	
 


	
 

	
 

	
ABA Routing # 113-011-258

	
 


	
 

	
 

	
Account # 51581996

	
 


	
 

	
W & T’s Tax I.D. Number is 72-1121985. 

	
 


	
 

	
 

	
 


	
If such payment is not received timely, W&T
  shall have the option in its sole discretion to terminate this Participation
  Agreement.








	
 

	
 


	
E.

	
At such time that a Promoted Well reaches Casing
  Point (defined for purposes herein as such time as Promoted Well has been
  drilled to its Objective Depth and evaluated) or, if prior to reaching Casing
  Point, the cumulative costs associated with the drilling of the Promoted Well
  has exceeded 115% of the AFE drill and evaluation cost (the “Promote Cap”),
  REC’s disproportionate cost sharing will cease and as to all further costs
  associated with that Test Well, REC’s working interest share of costs will
  thereafter be 25.00% WI for the MP 283 A-1 ST2 or 15% WI for the MP 279 A-6.
  For clarification purposes, REC’s disproportionate cost spending is
  applicable to the Promoted Wells only in accordance with Article II.B above;
  all other operations including the Main Pass 279 A-5 ST-1, and the
  mobilization or demobilization of the H&P 206 platform rig will be borne
  on a non-promoted basis.






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F.

	
Within ten (10) business days after the Main Pass
  283 Well A-1 ST-2 has reached Casing Point and REC has completed the earning
  requirements (Promoted Well participation to Casing Point and made written
  request for an assignment of the earned interest), W&T shall deliver an
  assignment in favor of REC of operating rights equal to twenty-five percent
  of eight-eighths (25% of 8/8ths) in and to the Main Pass Block 283 lease
  (OCS-G 13662) and an assignment of operating rights equal to twenty-five percent
  of eight-eighths (25% of 8/8ths) in and to the W/2W/2W/2 of Viosca Knoll
  Block 734 lease (OSC-G 13672). Within ten (10) business days after the Main
  Pass 279 Well A-6 ST-1 has reached Casing Point and REC has completed the
  earning requirements (Promoted Well participation to Casing Point,
  reimbursement of sunk costs attributable to 15% of the Main Pass 279 lease,
  and made written request for an assignment of the earned interest) W&T
  shall deliver an assignment in favor of REC of record title interest equal to
  fifteen-percent of eight-eighths (15% of 8/8ths) in the Main Pass Block 279
  lease (OSC-G 26168). It is understood however that any rights assigned
  hereunder shall specifically except any existing wellbores (unless utilized
  for REC and W&T joint operations), the Platform and existing pipelines,
  existing production, proven behind pipe reserves, and/or reservoirs which are
  in pressure communication with W&T’s existing production. Such assignment
  shall be in a form acceptable to the Parties and to the MMS and shall be made
  without warranty other
  than by, through and under W&T but with full substitution and  subrogation in and to all
  covenants and warranties of W&T’s predecessors in title, and shall be made subject to the terms
  of (i) this Participation Agreement, (ii) the MP 279 OA, (iii) the MP 283/VK
  734 OA, and (iv) the PHA (which shall provide, among other terms, for fees of
  $.017 per MCF for handling and processing of gas, $1.00 per barrel of oil and
  water, and $0.07 per MCF per stage for compression, and the allocation of
  platform operating expenses among the wells served by the host processing
  facility), and (v) the retention of an overriding royalty by W&T equal to
  the difference between existing lease burdens and eighty percent (80%).


	
 

	
 


	
G.

	
It is understood and agreed that the assignments to
  be conveyed to REC shall deliver a net revenue interest equal to eighty
  percent (80%) proportionately reduced as to REC’s interest as set out below
  of the production recovered from operations conducted under the terms of this
  Participation Agreement.








	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
i.

	
 

	
MP 283

	
 

	
25% x 80% = 20% NRI


	
 


	
 

	
ii.

	
 

	
VK 734 (portion)

	
 

	
25% x 80% = 20% NRI


	
 


	
 

	
iii.

	
 

	
MP 279

	
 

	
15% x 80% = 12% NRI





Article
III


	
 

	
 


	
A.

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


	
 

	
 


	
B.

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


	
 

	
 


	
C.

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





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D.

	
This Participation Agreement, including all Exhibits
  attached hereto, constitutes the full and entire understanding and agreement
  between the Parties relating to the matters herein, and except as otherwise
  provided herein, supersedes any previous agreements or understandings,
  written or oral, in effect between the Parties relating hereto. In the event
  of any conflict between the Parties regarding the terms and conditions of (i)
  this Participation Agreement, (ii) the MP 279 OA, (iii) the MP 283/VK 734 OA,
  and (iv) the PHA, the terms and conditions of this Participation Agreement
  shall prevail and control. The Parties agree to execute any such ancillary
  documents as may be necessary to effect the purposes of this agreement, or as
  may be required by the MMS.


	
 

	
 


	
E.

	
For the purposes of notices pursuant to this
  Agreement:








	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
REC Energy Corporation

	
 

	
W & T Offshore, Inc.


	
 

	
11700 Katy Freeway Suite 280

	
 

	
Nine Greenway Plaza, Suite 300


	
 

	
Houston, Texas 77079

	
 

	
Houston, Texas 77046


	
 

	
Attention:

	
W. Greg Tabor

	
 

	
Attention:

	
Jeanette Wilkins


	
 

	
Phone:

	
281.293.8488

	
 

	
Phone:

	
713.624.7307


	
 

	
Fax:

	
281.293.7391

	
 

	
Fax:

	
713.624.7378


	
 

	
E-mail:

	
gtabor@ridgewoodenergy.com

	
 

	
E-mail:

	
jwilkins@wtoffshore.com








	
 

	
 


	
 

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


	
 

	
 


	
F.

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


	
 

	
 


	
G.

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


	
 

	
 


	
H.

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


	
 

	
 


	
I.

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


	
 

	
 


	
J.

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





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


	
 

	
 

	
 

	
 


	
Witness:

	
 

	
W & T OFFSHORE, INC.


	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 


	


	
 

	
 

	



	
 

	
 

	
 

	
Jamie L. Vazquez


	


	
 

	
 

	
Vice-President


	
 

	
 

	
 

	
 


	
 

	
 

	
RIDGEWOOD ENERGY CORPORATION


	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 


	


	
 

	
 

	



	
 

	
 

	
Name:

	
W. Greg Tabor


	


	
 

	
Its: 

	
Executive Vice President






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EXHIBIT
“A”


Attached
to and made part of that certain Participation Agreement dated the 19th
date of May 2008, but effective January 1, 2008, by and between W & T
Offshore, Inc., and Ridgewood Energy Corporation.


IDENTIFICATION
OF LANDS SUBJECT TO AGREEMENT


I.     All
of Block 279 Main Pass Area


	
 

	
 


	
 

	
That certain Oil and Gas Lease of Submerged Lands
  under the Outer Continental


	
 

	
 


	
 

	
Shelf Lands Act OCS-G 26168 dated effective as of
  July 1, 2004, between the United States of America, as Lessor, and W & T
  Offshore, Inc. as Lessee, covering all of Block 279 Main Pass Area, South and
  East Addition, OCS Leasing Map, Louisiana Map No. 10A, containing
  approximately 4994.55 acres, more or less.





II.     All
of Block 283 Main Pass Area


	
 

	
 


	
 

	
That certain Oil and Gas Lease of Submerged Lands
  under the Outer Continental


	
 

	
 


	
 

	
Shelf Lands Act OCS-G 13662 dated effective as of
  September 1, 1992, between the United States of America, as Lessor, and W
  & T Offshore, Inc. as Lessee, covering all of Block 283 Main Pass Area,
  South and East Addition, OCS Leasing Map, Louisiana Map No. 10A, containing
  approximately 4560.81 acres, more or less.






	
 

	
 


	
III.

	
All of Block 734 Viosca Knoll Area


	
 

	
 


	
 

	
That certain Oil and Gas Lease of Submerged Lands
  under the Outer Continental


	
 

	
 


	
 

	
Shelf Lands Act OCS-G 13672 dated effective as of
  August 1, 1992, between the United States of America, as Lessor, and W &
  T Offshore, Inc. as Lessee, covering all of Block 734 Viosca Knoll Area, OCS
  Official Protraction Diagram, NH 16-7, containing approximately 4195.78
  acres, more or less.





6






EXHIBIT
“E”


Attached to and made part of that certain
Participation Agreement dated the 19th day of May 2008, but effective January
1, 2008, by and between W & T Offshore, Inc., and Ridgewood Energy
Corporation.


WELLS


	
 

	
 

	
 


	
 

	
1.

	
Main Pass 283 – OCS-G 13662 Well A-1 ST-2


	
 


	
 

	
2.

	
Main Pass 279 – OCS-G 26168 Well A-6 ST-1


	
 


	
 

	
3.

	
Main Pass 279 – OCS-G 26168 Well A-5 ST-1





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