Exhibit
10.6 

    

     

    PARTICIPATION
AGREEMENT

    [REDACTED]

    


    This Participation Agreement (“Agreement”) is made and
entered into effective as of the 11th day of
November, 2008 by and between LLOG Exploration Offshore, Inc. (“LLOG”), and Ridgewood Energy
Corporation (“Ridgewood”).  LLOG
and Ridgewood are sometimes hereafter referred to collectively as “Parties” and individually as
“Party.”

    


    


    RECITALS

    


    WHEREAS, LLOG has identified a
prospect on the REDACTED (“Contractually Pooled Area” or
“CPA”);
and,

    


    WHEREAS, LLOG has acquired Oil
& Gas Lease [Redacted} (“Redacted Lease”) covering all of
Galveston Area, Redacted and has entered into an Option Agreement (“Option Agreement”) with Apache
Corporation (“Apache”)
on Oil & Gas Lease OCS-G [Redacted] (“Redacrted Lease”) covering the Redacted
and the Redacted of Galveston Area, {Redacted].  Both the Redacted
Lease and the Redacted Lease are further described on the attached Exhibit “A”; and,

    


    WHEREAS, under the terms of
the Option Agreement, Apache and LLOG created the CPA from the surface of ocean
down to 11,500 feet TVD and, in lieu of farming out, Apache has elected to
participate with a 50% contractual working interest in the CPA.  LLOG
currently owns the other 50% contractual working interest in the CPA;
and,

    


    WHEREAS, LLOG and Apache plan
to drill the OCS-G Redacted (“Initial Test Well” or “ITW”) to a depth of 10,500
feet TVD to test the Redacted formations (“Objective
Depth”).  The ITW shall be drilled as a straight hole at a
surface location of 900’ FNL and 7,444’ FWL of the Redacted Lease;
and,

    


    WHEREAS, LLOG has offered to
Ridgewood the opportunity to participate in the drilling of the ITW, and
Ridgewood has accepted LLOG’s offer and has agreed to bear thirty-three and
1/3rd percent
(33.3333%) of the drilling costs (“Participating Interest”) of
the ITW in order to earn a fifty percent (50%) record title interest in the
Redacted Lease and a twenty-five percent (25%) contractual working interest in
the ITW and CPA.

    


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

    


    


    1.        
    REIMBURSABLE LAND
COSTS

    


    Within
five (5) business days after the execution of this Agreement, Ridgewood shall
reimburse LLOG $254,400 for its 50% share of the “Sunk Land Costs”. The Sunk
Land Costs for the Lease are $250,000 to acquire the Redacted Lease, $28,800 in
rentals, $30,000 for a license on the Shallow Hazard Data and $200,000 for
G&G costs.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.        
    ASSIGNMENT OF RECORD
TITLE

    


    Within
three (3) business days from receipt of the Sunk Land Costs, LLOG shall execute
and deliver to Ridgewood an Assignment of Record Title Interest delivering to
Ridgewood a 50% of 6/6ths Record
Title Interest in the Redacted Lease.  The Assignment shall be without
warranty of title, either express or implied, except by, through and under LLOG,
but not otherwise. Additionally, such Assignment shall be subject to the
approval of the authorized officer of the U.S. Mineral Management Service
(“MMS”). The Assignment
shall be prepared with an attached Exhibit “A” thereto, with said Exhibit “A”
being a mutually acceptable assignment form which can be executed by the parties
and recorded in the appropriate County/Parish, as applicable.  The
Assignment shall be subject to;

    


    
      	
              1.  

            	
              The
      Option Agreement (attached hereto as Exhibit
      “B”).

            


    

    
      	
              2.  

            	
              The
      September 1, 2008 Offshore Operating Agreement (“OOA”) between LLOG and
      Apache, covering the CPA, and ratified by
  Ridgewood.

            


    

    
      	
              3.  

            	
              A
      1% overriding royalty interest in favor of Seitel Data, Ltd
      proportionately reduced amongst the participating parties in the CPA
      and/or Redacted Lease outside the CPA.  By letter dated July 22,
      2008, Seitel agreed to pool their overriding royalty interest in the CPA,
      giving them a 0.5% in the CPA and a 1% in the redacted Lease outside the
      CPA.  Ridgewood’s net revenue interest in the CPA and the
      Redacted Lease is set forth on Exhibit
“A”.

            


    

    


    LLOG and
Ridgewood agree to execute any necessary documents and take all other actions
reasonably necessary, if any, to assist in the MMS approval
process.

     

    


    3.         
   INITIAL TEST
WELL

    


    Ridgewood
agrees to assume their Participating Interest in the costs to drill and evaluate
the ITW to “Casing Point”.  The Authority for Expenditure (“AFE”) to drill the ITW is
attached hereto as Exhibit
“C”.  Concurrent with the execution of this Agreement, the
parties agree to approve and execute the formal AFE.  As used in this
Agreement, "Casing
Point" shall mean that point in time when the ITW has been drilled to
Objective Depth and after all logs, cores and other approved tests contemplated
in the AFE have been conducted which are necessary to reach the decision for
further operations in the ITW, and the results thereof have been furnished to
all of the Parties, along with Operator’s recommendation.

    


    Ridgewood
will pay its Participating Interest in the ITW until such time as the ITW
reaches Casing Point or the actual costs to drill and evaluate the ITW reaches
110% of the AFE (“Promote
Cap”), whichever occurs first. Thereafter, Ridgewood’s costs in the ITW,
completion, facility, pipeline, and or plugging and abandonment (if applicable)
shall be based on a twenty-five percent (25%) working interest.

    


    LLOG, as
Operator, shall have the right to require Ridgewood to pay advances in
accordance with the terms of the COPAS attached to the Offshore Operating
Agreement described herein.

    


    
      
        
        

      

      
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    4.      
      SUBSTITUTE
WELL

    


    If during
the drilling of the ITW, LLOG encounters impenetrable substances or conditions,
including loss of hole due to mechanical difficulties, which in the opinion of a
reasonably prudent operator under the same or similar conditions, would render
further drilling impracticable or hazardous and the condition prevents further
drilling of the ITW, LLOG may commence a “Substitute Well”, provided the
drilling operations on such Substitute Well are commenced within one hundred
eighty (180) days after release of the drilling rig from the
ITW.  However, with respect to such Substitute Well, the Promote Cap
applicable to the original AFE shall not be adjusted upward in the event the
cumulative costs of the ITW and the Substitute Well, as the case may be, exceed
the original Promote Cap.

    


    


    5.       
     OFFSHORE OPERATING
AGREEMENT

    


    The ITW
shall be drilled in accordance with the OOA which is attached hereto as Exhibit “D”.  Sent
in conjunction with, and as a condition to this Agreement is a Ratification and
Joinder of Offshore Operating Agreement (“Ratification”).  Contemporaneously
with the execution of this Agreement, Ridgewood agrees to execute the
Ratification and return three (3) signature pages to LLOG.  LLOG shall
endeavor to obtain Apache’s signature on the Ratification and shall furnish
Ridgewood with one fully executed original.  All operations on the
Initial Test Well and any and all subsequent operations on the CPA shall be
conducted in accordance with the terms and provisions of the OOA.  As
between LLOG and Ridgewood, if there are any conflicts between this Agreement
and the OOA, the terms and provisions of this Agreement shall prevail and
govern.  As to that portion of the Redacted Lease not within the CPA,
LLOG and Ridgewood shall be deemed to be bound under the terms of an Operating
Agreement identical in terms to the OOA with an Exhibit “A” covering that
portion of the Redacted Lease not within the CPA and with the Parties being LLOG
50% and Ridgewood 50%.

    


    


    6.         
   OPTION
AGREEMENT

    


    The
Option Agreement attached hereto also gives LLOG the right, subject to capacity,
to take production from the CPA to Apache’s facility in Redacted.  The
terms and fees are defined therein.  Also, the Option Agreement gives
LLOG the right to  earn  i) 50% of Apache’s right, title and
interest in and to the REDACTEd of  Redacted, limited from the surface
down to 11,500’ TVD, and ii) the Redacted by drilling an Additional Well either
on that tract or the Redacted.  Such Additional Well is to be drilled
to the Redacted.  Ridgewood shall be subject to all of the terms and
conditions of the Option Agreement and shall be entitled to their share of any
and all benefits granted in the Option Agreement including the aforementioned
production handling arrangement, the earning rights, and the option to
participate in any proposed Additional Well.

    


    


    7.         
   INFORMATION
REQUIREMENTS

    


    During
the drilling of the ITW, LLOG shall deliver to Ridgewood the information shown
on the attached Exhibit
“E”.

     

    
      
        
        

      

      
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    8.      
      TIMELY
OPERATIONS

    


    Ridgewood
understands that the [Redacted] Lease is beyond its primary term and is subject
to a Suspension of Operations (“SOO”) granted by the
MMS.  Said SOO expires November 30, 2008 and LLOG shall attempt to get
an extension of said SOO through December 2008.  LLOG will use the
Noble Lester Pettus rig to drill the ITW as soon as such rig is finished with
its operations on another LLOG owned block.  LLOG shall not be liable
to Ridgewood or suffer any penalties for failure to spud the ITW before the
expiration of the SOO (or any extensions thereof).  Notwithstanding
anything contained herein to the contrary, should LLOG not spud the ITW prior to
the expiration of the SOO (or any extensions thereof), all commitments and
obligations will herein will cease and Ridgewood will reassign all of its
interest to LLOG and LLOG will refund to Ridgewood all Sunk Land Costs
previously paid by Ridgewood to LLOG.

    


    9.        
    TERM

    


    This
Agreement shall terminate at such time as 1.) the ITW has reached Objective
Depth, and 2.) the Assignment provided for in Article 4 has been filed and
accepted by the Minerals Management Service.  Thereafter all
operations to be conducted for the joint benefit of the Parties shall be subject
to the OOA.

    


    10.           MISCELLANEOUS

    


    This
agreement shall be deemed for all purposes as prepared through the joint efforts
of the parties and shall not be construed against one party or the other as a
result of the preparation, submittal, or other event of negotiation, drafting,
or execution hereof.

    


    The
section headings used herein are for convenience only and shall not be construed
as having any substantive significance or as indicating that all of the
provisions of this Agreement relating to any particular topic are to be found in
any particular section.

    


    In the
event this Agreement or the operations, or any part thereof, contemplated hereby
are found to be inconsistent with or contrary to any laws, rules, regulations or
orders, the laws, rules, regulations or orders shall be deemed to control and
this Agreement shall be regarded as modified accordingly and as so modified
shall continue in full force and effect.

    


    Any
amendments, changes or modifications to the rights and obligations of the
Parties shall be in writing and shall be effective only when agreed in writing
by all Parties.

    


    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.

    


    This
Agreement is subject to that certain Offer to Participate dated November 6,
2008, and Conditional Letter of Acceptance dated November 6, 2008, between
Ridgewood and LLOG.

    


    
      
        
        

      

      
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    11.           NOTICES

    


    
      All
notices, requests or demands to be given under this Agreement shall be in
writing and
directed to the persons at the  following address/contact
information:

    

    


    


    LLOG
Exploration Offshore, Inc.

    11700
Katy Freeway, Suite 295

    Houston,
Texas  77079

    Attn:  Mr.
K. Scott Spence

    Phone:  (281)
752-1106

    Fax:  (281)
752-1190

    Email:
scotts@llog.com                                                                           

    


    


    Ridgewood
Energy Corporation

    11700
Katy Freeway, Suite 280

    Houston,
TX 77079

    Attention:  Mr.
W. Greg Tabor

    Phone:
(281) 293-8449

    Fax:  (281)
293-7705

    Email:
gtabor@ridgewoodenergy.com

    


    


    12.           BINDING
EFFECT

    


    The terms
and provisions hereof shall be binding upon and inure to the benefit of LLOG and
Ridgewood, and their respective heirs, legal representatives, successors and
assigns, and shall be covenants running with the [Redacted] Lease, the
[Redacted] Lease and/or the CPA, as applicable.

    


    


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

     

     

    
      
        
          
            
              
                
                  
                    
                      	 	LLOG EXPLORATION OFFSHORE,
      INC.	 
	 	 	 
	 	 	 
	
                               

                            	/s/ K. Scott Spence	 
	 	K.
      Scott Spence	 
	 	Land
      Manager – GOM Shelf	 
	 	 	 	 


                    

                     

                     

                  

                

              

            

          

        

      

      
        
          
            
              
                
                  
                    
                      	 	RIDGEWOOD ENERGY
      CORPORATION	 
	 	 	 
	 	 	 
	
                               

                            	/s/ W. Greg Tabor	 
	 	W.
      Greg Tabor	 
	 	Executive
      Vice President	 
	 	 	 	 


                    

                  

                

              

            

          

        

      

    

     

     

     

     

     

     

    
      
        
        

      

      
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    EXHIBIT
“A”

    Attached
to and made a part of that certain

    Participation
Agreement dated November 11, 2008

    by
and between LLOG Exploration Offshore, Inc.,

    Ridgewood
Energy Corporation 

    
      

    

    


     

    Description
of Leases:

     

    REDACTED

     

     

    Description
of Contractually Pooled Area:

     

    
      REDACTED

    

     

    


    Net
Revenue Interest:

     

    82.8333%
of 6/6ths in the Contractually Pooled Area (1/6 Royalty to MMS and 0.5%
overriding royalty to Seitel)

    


    82.3333%
of 6/6ths in the Redacted Lease outside the Contractually Pooled Area (1/6
Royalty to MMS and 1.0% overriding royalty to Seitel)

     

     

     

     

     

     

     

     

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