Document:

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 -Exhibit 10.7 

PARTICIPATION AGREEMENT 

[Redacted] PROSPECT

This Participation Agreement (“Agreement”) is entered into and made
effective this 1st day of July, 2008 (“Effective Date”) by and between Newfield Exploration Company
(“NEWFIELD”),
whose mailing address is 363 N. Sam Houston Pkwy E., Suite 2020 Houston, Texas
77060, and Ridgewood Energy Corporation (“RIDGEWOOD”),
whose mailing address is 11700 Katy Freeway, Suite 280 Houston, Texas 77079,
herein referred to collectively as “Parties” and individually as a “Party”. 

WITNESSETH

WHEREAS, NEWFIELD is
the owner of an undivided seventy-five percent (75%) record title interest in
and to each of the Oil and Gas Leases (collectively, the “Leases”) described as
follows: 

	
 

	
 

	
 

	
 

	
Oil and Gas Lease bearing [Redacted], effective [redacted], by and
 between the United States of America, as Lessor, and Newfield Exploration
 Company and Stone Energy Corporation, as Lessee, covering all of [Redacted],
 containing 5,760.00 acres more or less (hereinafter referred to as the “[Redacted
 Lease”), and 

	
 

	
 

	
 

	
 

	
 

	
Oil and Gas Lease bearing [Redacted], effective [redacted], by and
 between the United States of America, as Lessor, and Newfield Exploration
 Company and Stone Energy Corporation, as Lessee, covering all of [Redacted]
 containing 5,760.00 acres more or less (hereinafter referred to as the
 “[Redacted] Lease”), and 

	
 

	
 

	
 

	
 

	
 

	
Oil and Gas Lease bearing[Redacted], by and between the United States
 of America, as Lessor, and Newfield Exploration Company and Stone Energy
 Corporation, as Lessee, covering all of [Redacted], containing 5,760.00 acres
 more or less (hereinafter referred to as the “[Redacted] Lease”). 

	
 

WHEREAS, pursuant to
that certain Confidentiality Agreement dated effective September 4, 2008 by and
between NEWFIELD and RIDGEWOOD covering the Leases (the “Prospect CA”),
RIDGEWOOD reviewed certain confidential information supplied by NEWFIELD
relating to its [Redacted] Prospect that lies within the Leases (hereinafter
referred to as the “Prospect”) and RIDGEWOOD has advised NEWFIELD of its
election to participate in the drilling of the initial exploratory well on the
Prospect, subject to the receipt and approval of the formal authorization for
expenditure, and 

WHEREAS, NEWFIELD
and RIDGEWOOD desire to set forth the terms and conditions under which
RIDGEWOOD shall participate in certain operations to be conducted on the
Prospect to earn and be assigned an undivided 15% record title interest from
Newfield in and to the Leases; 

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
1 

	
Participation Agreement

	
 

NOW, THEREFORE, for
and in consideration of the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowled and confessed, together with the mutual covenants, conditions, and
obligations contained herein, NEWFIELD and RIDGEWOOD do hereby enter into this
Agreement under the following terms and conditions: 

ARTICLE I 

EXHIBITS

          The
following Exhibits are attached hereto and made a part of this Agreement: 

	
 

	
 

	
 

	
 

	
 

	
Exhibit
 “A-1”

	
 

	
Redacted

	
 

	
Exhibit
 “A-2”

	
 

	
Redactedl

	
 

	
Exhibit “B”

	
 

	
Operating
 Agreement

	
 

	
Exhibit “C”

	
 

	
Geologic and
 data information requirements of RIDGEWOOD

	
 

	
Exhibit “D”

	
 

	
Form of
 Assignment

Article II 

Initial Test Well

          2.1
          Initial Test Well.
NEWFIELD, as operator under the Operating Agreement (defined in Article III
below), and subject to rig availability and obtaining all requisite permits,
agrees to use reasonable efforts to commence, or cause to be commenced, on or
before [Redacted], actual drilling of the [Redacted] (“ITW”) at an approximate
surface coordinate location of[Redacted]. The ITW is to be drilled as an
Exploratory Well (as such term is used in the Operating Agreement) to 22,000’
MD / TVD or a depth sufficient to test the stratigraphic equivalent of the
‘21,000’ and 22,000’ Sand’ (the “Objective Depth”), whichever is the lesser
depth. An Authority for Expenditure (“AFE”) for the ITW is attached to this
Agreement as Exhibit “A-1” (the “Approved AFE”) and by the execution hereof,
each of NEWFIELD and RIDGEWOOD agrees to participate in the drilling of the ITW
in accordance with the terms hereof. Contemporaneously with the execution of
this Agreement, RIDGEWOOD agrees to execute and deliver to NEWFIELD a
counterpart copy of the Approved AFE. 

          The failure
to timely commence the drilling of the ITW and the Parties agreement to
terminate this Agreement, shall result in the termination of this Agreement,
the return of the Cash Consideration by NEWFIELD to RIDGEWOOD and the
reassignment from RIDGEWOOD to NEWFIELD of all of its record title interest in
and to the Leases. Otherwise, there shall be no penalty for failure to timely
commence the drilling of the ITW. 

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
2 

	
Participation Agreement

	
 

          2.2
          Substitute Well.
In the event the ITW should encounter rock salt, heaving shale, excessive water
flow, excessive pressure, igneous or other impenetrable formation or other
conditions which would render further drilling impracticable or uneconomic and
preclude the ITW from reaching the Objective Depth, then and in such event
NEWFIELD shall have the exclusive option to propose within sixty (60) days
following the abandonment of the ITW drilling of a substitute well (“Substitute
Well”) therefore, provided same is drilled to the Objective Depth and under the
same terms and conditions as the ITW. RIDGEWOOD shall have no obligation to
participate in the Substitute Well; provided RIDGEWOOD shall have thirty (30)
days, or forty-eight (48) hours in the event that a rig is on location, from
receipt of the AFE for the Substitute Well to elect whether it shall
participate in such Substitute Well. Failure to respond within the time period
allowed shall be deemed to be an election not to participate in the Substitute
Well. In the event NEWFIELD does not propose a Substitute Well within the time
period provided for above, then RIDGEWOOD may propose the drilling of a
Substitute Well pursuant to the terms of the Operating Agreement. NEWFIELD or
Ridgewood shall have the continuing option to drill additional Substitute
Wells, provided that no more than sixty (60) days elapse between the date the
drilling rig was released from the last operation on such Substitute Well and
the commencement date of drilling operations for the next Substitute Well
drilled therefor. 

	
 

	
 

	
 

	
 

	
          2.2.1 If
 the ITW fails to reach its Objective Depth, and RIDGEWOOD’s share of costs
 and expenses incurred in connection with the ITW has not yet reached the
 Promote Cap, then: 

	
 

	
 

	
 

	
 

	
 

	
          (i) if a
 Substitute Well is proposed and RIDGEWOOD elects not to participate therein,
 then RIDGEWOOD shall pursuant to Article 4.3, reconvey to NEWFIELD a 15%
 record title interest in and to the Leases and this Agreement shall terminate
 and neither Party shall have any further obligations or liabilities
 hereunder, except with respect to the fulfillment of payment and indemnity
 obligations accrued prior to such termination; 

	
 

	
 

	
 

	
 

	
 

	
          (ii) if a
 Substitute Well is proposed and RIDGEWOOD does elect to participate therein, this
 Agreement shall remain in full force and effect as though the Substitute Well
 was the ITW; and 

	
 

	
 

	
 

	
 

	
 

	
          (iii) if
 a Substitute Well is proposed and RIDGEWOOD elects to participate therein, but
 such well is not drilled, RIDGEWOOD shall retain its undivided fifteen
 percent (15%) record title interest in and to the Leases previously conveyed
 by the Assignment hereunder and any future operations on the Prospect by the
 Parties shall be governed by the Operating Agreement. 

	
 

	
 

	
 

	
 

	
          2.2.2 If
 the ITW fails to reach its Objective Depth and RIDGEWOOD’s share of costs and
 expenses incurred in connection with the ITW has reached the Promote Cap,
 RIDGEWOOD shall retain its record title interest in and to the Leases
 received by the Assignment pursuant to Section 4.2 hereof, and the
 consequences of RIDGEWOOD’s election to participate or not to participate in
 the Substitute Well shall be governed by the provisions of Article 16 of the
 Operating Agreement as described below. 

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
3

	
Participation Agreement

	
 

Subject to Sections 2.2.1 and 2.2.2, in the event that a Substitute
Well is proposed by RIDGEWOOD and drilled in accordance with this Agreement,
the interest of any non-participating Party in the drilling of such Substitute Well
shall be subject to the terms and conditions of Article 16 of the Operating
Agreement as described below; however, notwithstanding anything to the contrary
in this Agreement, in the event NEWFIELD elects not to participate in the
drilling of a Substitute Well, and RIDGEWOOD bears all or a portion of such
Party’s interest in the Substitute Well, the acquired interest shall not be
subject to the acreage forfeiture provisions of the Operating Agreement, but
instead will be subject to the non-consent penalty percentages applicable to
Exploratory Operations as defined in the Operating Agreement Article 16.5.1.
Regardless of whether RIDGEWOOD elects to participate or not to participate in
a Substitute Well, NEWFIELD shall retain the Cash Consideration, as such term
is hereafter defined. 

          2.3
          ITW Drilling Costs.
RIDGEWOOD shall bear and pay thirty percent (30.0%) of the actual costs to
drill and test the ITW to Casing Point ; however, if prior to reaching Casing
Point the actual aggregate cost of the ITW, and any Substitute Well therefor,
exceeds one hundred percent (100%) of the dry hole cost estimate provided for
in the Approved AFE (“ Promote Cap”), RIDGEWOOD shall bear and pay fifteen
percent (15%) of the actual costs to drill and test the ITW thereafter. Casing
Point shall be defined as that point in time when the ITW (or Substitute Well
therefor) has reached its Objective Depth and all open hole logs and tests have
been conducted in accordance with the Approved AFE. If RIDGEWOOD elects to
participate in a Substitute Well, any cost to drill the ITW will be carried
over to the Substitute Well to calculate the Promote Cap for purposes of
determining when RIDGEWOOD’s cost-bearing interest reduces to fifteen percent
(15%). Subject to the terms and conditions of this Agreement, all operations in
the ITW subsequent to Casing Point, shall be conducted in accordance with the
terms and provisions of the Operating Agreement and, subject to participation
elections, shall be shared 15% by RIDGEWOOD and 85% by NEWFIELD et al, its
co-owner, and their successors and assigns. 

Article III 

Operating Agreement

          3.1
          Operating
Agreement. The Leases will be subject to that certain
Offshore Operating Agreement by and between NEWFIELD, as Operator, and the
Non-Operators designated therein, dated effective July 1, 2008 (the “Operating
Agreement”), which is attached hereto as Exhibit “B”, and which will govern operations
upon the Leases (subject to RIDGEWOOD’s right to earn an interest in the Leases
per this Agreement). At the time RIDGEWOOD executes this Agreement, RIDGEWOOD
shall also execute and deliver the Operating Agreement, at which time it shall
be deemed to be a party thereto. If there is a conflict between the terms and
conditions of this Agreement and the terms and conditions of the Operating
Agreement prior to the earlier of: (a) reaching the Objective Depth in the ITW
or (b) RIDGEWOOD’s costs and expenses incurred in the ITW and any Substitute
Well therefor reaching the Promote Cap, then the terms and conditions of this
Agreement shall control. Thereafter, the Operating Agreement shall control.
Notwithstanding the foregoing, the provisions of Article 27 of the Operating
Agreement (Area of Mutual Interest) will be applicable to the Parties hereto
from and after the Effective Date and should RIDGEWOOD be required to reassign
its interest in accordance with Article 4.3 of this Agreement then the Reassignment
will also include any and all rights or interest acquired by RIDGEWOOD, as
applicable, pursuant to said Article 27.

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
4

	
Participation Agreement

	
 

          3.2
          Prospect
Information. NEWFIELD, as Operator of the ITW, shall
provide RIDGEWOOD with any and all raw well data and information obtained
and/or results of analyses performed through the conduct of the drilling of any
wells by NEWFIELD on the Prospect in which RIDGEWOOD is a participant, as
further provided for in Exhibit “C”, and any additional data and/or information
that RIDGEWOOD may become entitled to pursuant to the terms of the Operating
Agreement. All data delivered to RIDGEWOOD as provided in this Section 3.2
shall be delivered to RIDGEWOOD pursuant to the Operating Agreement. 

Article IV. 

Cash Consideration and Assignment of Interest in Lease

          4.1
          Cash Consideration.
Within five (5) business days after the complete execution of this Agreement by
all Parties, RIDGEWOOD shall pay to NEWFIELD the sum of Two Million Four
Hundred and Thirty-two Thousand, Two Hundred and Fifty ($2,432,250.00) (the
“Cash Consideration”) by wire transfer to the account designated by NEWFIELD in
writing to RIDGEWOOD. Such Cash Consideration shall be nonrefundable in all
circumstances, except as otherwise provided for in Section 2.1 of this
Agreement.  

          4.2
          Assignment.
Within ten (10) business days after receipt by NEWFIELD of the Cash
Consideration, NEWFIELD shall deliver to RIDGEWOOD an assignment of an
undivided fifteen percent (15.00%) record title interest in and to the Leases
(the “Assignment”), subject to the
following: 

          (a)
          The Assignment
shall be free and clear of any burdens, liens or encumbrances by, through or
under NEWFIELD, but not otherwise, subject only to (i) a proportionate part of
the lessors’ reserved royalty under the Lease, (ii) a 2.0% of 8/8ths overriding
royalty interest reserved in favor of NEWFIELD, proportionately reduced by the
record title interest being conveyed by NEWFIELD , (iii) the Operating
Agreement and (iv) this Agreement. 

          (b)
          The Assignment
shall be effective [redacted], subject to Minerals Management Service (“MMS”) approval, and the
Parties shall use
the form of assignment attached hereto as Exhibit “D”. 

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
5

	
 Participation Agreement

	
 

          The
Assignment requires approval by the MMS. The assignee of the Assignment shall
promptly (i) file of record the Assignment in the adjacent parish or county
courthouse and (ii) file for approval with the MMS (or other applicable
governmental agencies) the Assignment. Should approval of the MMS (or any other
similar governmental agency having jurisdiction) be denied, the Party receiving
notice of such denial agrees to provide the other Party with written notice of
such occurrence, along with a copy of all associated written communications,
and the Parties agree to develop a revised form of assignment in an effort to
meet the MMS’ or other appropriate agency’s requirements for approval. In the
alternative, each Party shall execute and deliver, or cause to be executed and
delivered, such other documents and take such other actions as a Party may
reasonably request in an effort to comply with any such approval requirements. 

          4.3          Reassignment.
Subject to Article 2.2.1(i), RIDGEWOOD shall reconvey to NEWFIELD all of its
undivided fifteen percent (15%) record title interest in and to the Leases,
using a form of assignment similar to the Assignment (the “Reassignment”), in
the event the ITW fails to reach Objective Depth and RIDGEWOOD’s share of costs
and expenses incurred in connection with the ITW has not reached the RIDGEWOOD
Promote Cap, and a Substitute Well is not proposed within one (1) year from
abandonment of the ITW on the Leases. 

          The
Reassignment shall be made using the form of assignment attached hereto as
Exhibit “D” and shall be made free and clear of any burdens, liens or
encumbrances by, through, or under RIDGEWOOD, but not otherwise. The
Reassignment shall be delivered by RIDGEWOOD to NEWFIELD within fifteen (15)
days after receipt by RIDGEWOOD of a request from NEWFIELD for the
Reassignment. 

          4.4          Earning
Events. The Reassignment shall not be due, and
RIDGEWOOD shall be deemed to have earned its record title interest in and to
Leases, when the Promote Cap has been reached or upon the ITW being drilled to
Casing Point, whichever is the earliest to occur. 

Article V

Assignability

          5.            Rights
to Assign. In the event a Party is granted consent to
a proposed assignment, the assignment will be made expressly subject to this
Agreement and the assignee must agree in writing to be expressly bound by this
Agreement. The assignor of an assignment made under this Agreement shall remain
primarily liable for its obligations which have accrued prior to the latter of
i) the effective date of the assignment, or ii) the date the assignment is
physically delivered to the assignee. 

          After the
ratification of the Operating Agreement by RIDGEWOOD pursuant to Section 3.1 of
the Agreement, a Party’s right to assign its rights under this Agreement and in
the Leases shall be governed by the Operating Agreement. 

          Subject to
the restrictions on assignment as contained herein, the terms and conditions of
this Agreement shall inure to the benefit of and will be binding upon NEWFIELD
and RIDGEWOOD, and their respective successors and assigns. This Agreement
shall constitute a covenant running with the Leases. 

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
6

	
Participation Agreement

	
 

Article VI

Miscellaneous Provisions

          6.1          Governing
Law. THE PARTIES HERETO HEREBY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO RULES CONCERNING CONFLICTS OF LAW. VENUE FOR ANY ACTION SHALL BE IN HARRIS
COUNTY, TEXAS. 

          6.2          Notices.
Any notices or provision of notices or disclosure, or
other communications that may be required or permitted hereunder shall be in
writing and shall be delivered by facsimile, in person or sent by United States
Mail, certified mail, postage prepaid, return receipt requested, or an
equivalent delivery service, addressed to the Parties at the following
respective addresses: 

	
 

	
 

	
 

	
 

	
Newfield Exploration Company

	
 

	
363 North Sam Houston Parkway East, Suite 2020

	
 

	
Houston, Texas 77060

	
 

	
Attention:

	
John D. Hamilton

	
 

	
Telephone:

	
(281) 847-6105

	
 

	
Facsimile:

	
(281) 847-6134

	
 

	
 

	
 

	
 

	
Ridgewood Energy Corporation

	
 

	
11700 Katy Freeway, Suite 280,

	
 

	
Houston, Texas 77079,

	
 

	
Attention:

	
Mr. W. Greg Tabor

	
 

	
Telephone:

	
(281) 293-8449

	
 

	
Facsimile

	
(281) 293-7705

          6.3          Relationship
of the Parties. It is not the
purpose or intention of this Agreement to create, and this Agreement will never
be construed as creating, a joint venture, mining partnership or other
relationship whereby any Party will be held liable for the acts, either of
omission or commission, of any other Party, and the liabilities of each of the
Parties hereto shall be several and not joint or collective. Solely for
purposes of federal income taxation and purposes of certain state income tax
laws which incorporate or follow federal income tax principals as to tax
partnerships, however, Each of the Parties hereto agrees not to elect, under
the authority of Section 761(a) of the Internal Revenue Code of 1986, to be
excluded from all the provisions of Subchapter K of Chapter I of Subtitle A of
said Internal Revenue Code of 1986. With regard to the resulting tax
partnership, the Parties hereby incorporate by this reference, as if set forth
herein in full, the tax partnership provisions set forth on Exhibit “J” to the
Operating Agreement, with the tax partners in such tax partnership being
NEWFIELD, RIDGEWOOD and the other parties to the Operating Agreement with the
Tax Reporting Partner being NEWFIELD. This Agreement and operations hereunder
relate solely to the Prospect, and no Party hereto shall have any obligation of
any kind to any other Party hereto as to any other lease, land or minerals
(whether in the vicinity of the Lease or not) by virtue of this Agreement or
such operations or otherwise except as may be provided in the Operating
Agreement, Article III hereof or evidenced by written agreement of such
Parties.  

	
 

	
 

	
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Participation Agreement

	
 

          6.4          Rentals.
To the best of NEWFIELD’s knowledge, as of the
effective date of the assignment, all rentals and any other payments due
pursuant to the terms of the Leases subject to this Agreement have been
properly and timely paid and said Leases are now in full force and effect as of
the Effective Date. As of the Effective Date of this Agreement, RIDGEWOOD will
be responsible for its prorata share of the rentals on the Leases. 

          6.5          Further
Assurances. Following execution of the Assignment,
each Party agrees to execute and deliver to the other any instruments or other
documents necessary to carry out the intent and obligations of this Agreement. 

          6.6          Conflicts.
Except as provided for in Article 3.1, in the event of any conflicts or
inconsistencies between the provisions of this Agreement and any other
agreement, including any agreement referenced herein to be executed by the
Parties hereafter, the provisions of this Agreement shall control to the extent
of such conflict. 

          6.7          Entire
Agreement. This Agreement together with the
instruments referred to herein and the Exhibits attached hereto, embody the
entire agreement between the Parties with regard to the subject matter hereof,
and supersede all other prior agreements, arrangements, understandings,
negotiations and discussions, whether oral or written between the Parties
relating to the subject matter hereof, including without limitation, the
Prospect CA executed by the Parties. There are no warranties, representations
or other agreements between the Parties in connection with the subject matter
hereof except as specifically set forth in this Agreement or in subsequent
documents delivered pursuant thereto. This Agreement may be supplemented,
altered, amended, modified or revoked only in writing, signed by all Parties
hereto. 

          6.8          Arbitration:
This Agreement is subject to the arbitration
provisions of the Operating Agreement.

          6.9          Severability.
If any provision of this Agreement is held invalid,
the remainder of the Agreement shall not be affected thereby unless the effect
thereof would be to materially alter the burdens or benefits intended by the
Parties by the express language of this Agreement. 

          6.10        Captions.
The captions in this Agreement are for convenience only and shall not be
considered a part hereof of affect the construction or interpretation of any
provision of this Agreement. 

	
 

	
 

	
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          6.11          Force
Majeure. All obligations imposed by this Agreement on
each Party, except for payment of money, shall be suspended and all periods of
time for exercising any rights hereunder shall be extended while compliance is
prevented, in whole or in part, by Force Majeure. “Force Majeure” shall mean a
labor dispute; explosion; fire; storm, hurricane, loop currents, and high seas;
floods; wars; civil disturbance; act of god; laws; governmental rules,
regulations, orders, action or delay; inability to secure materials after
reasonable efforts; or any other similar cause beyond the reasonable control of
the Party claiming relief hereunder; provided, however, that such Party shall
promptly take all reasonable action to remove the Force Majeure, and provided
that no Party shall be required against its will to settle any labor dispute. 

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

          6.13          Wavier
Period. No wavier by any Party or any default,
misrepresentation, or breach of warranty, or covenant will be deemed to extend
to any prior or subsequent default, misrepresentation or breach of warranty or
covenant. 

          6.14          Counterpart
Execution. This Agreement may be executed in
counterparts and each such counterpart shall have the same force and effect as
the original hereof, provided, however, that none of said counterparts shall be
effective until all parties hereto have executed a counterpart hereof. 

	
 

	
 

	
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Participation Agreement

	
 

          IN WITNESS WHEREOF, the
Parties hereto have
executed this Agreement as of the date first hereinabove written. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
WITNESSES:

	
 

	
Newfield Exploration Company

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ W. M.  BLUMENSHINE

	
 

	
 

	 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name:

	
W. M.  Blumenshine

	
 

	
 

	 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
Vice
 President

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
WITNESSES:

	
 

	
RIDGEWOOD ENERGY CORPORATION

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By

	
/s/ W. GREG TABOR

	
 

	 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Name:

	
W. Greg  Tabor

	
 

	 

	
 

	
 

	
 

	 
	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Title:

	
Executive Vice President

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
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Participation Agreement

	
 

Exhibit “A-1”
Attached to and made a part of that certain
Participation Agreement
effective

November 1, 2008 by and between Newfield Exploration Company and Ridgewood
Energy Corporation 

[Redacted]

[AFE to Come]

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
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Participation Agreement

	
 

Exhibit “A-2”
Attached to and made a part of that certain
Participation Agreement
effective

November 1, 2008 by and between Newfield Exploration Company and Ridgewood
Energy Corporation 

[Redacted]

[Well Plan to Come]

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
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Participation Agreement

	
 

Exhibit “B”

Attached to and made a part of that certain Participation Agreement effective

November 1, 2008 by and between Newfield Exploration Company and Ridgewood
Energy Corporation

OPERATING AGREEMENT

[Operating Agreement to Come]

	
 

	
 

	
[Redacted] Prospect
 Ridgewood Energy Corporation

	
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 Participation Agreement

	
 

Exhibit “C” 

Attached to and made a part of that certain Participation Agreement effective 

November 1, 2008 by and between Newfield Exploration Company and Ridgewood
Energy Corporation

GEOLOGIC AND DATA INFORMATION
REQUIREMENTS OF RIDGEWOOD
ENERGY

CORPORATION

WELL INFORMATION REQUIREMENTS

FOR:

Ridgewood Energy Corporation

11700 Katy Freeway,
Suite 280

Houston, Texas 77079

Phone: (281) 293-8449 Fax: (281) 293-7705

WELL NAME: [Redacted] 

	
 

	
 

	
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Participation
 Agreement

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