Document:

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.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    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”.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    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.

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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	 
	 	 	 	 

                    

                  

                

              

            

          

        

      

    

     

     

     

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    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)

     

     

     

     

     

     

     

     

    6Exhibit 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”. 

	
 

	
 

	
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          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. 

	
 

	
 

	
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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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          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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          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:

	
 

	
 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
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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]

	
 

	
 

	
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 Ridgewood Energy Corporation

	
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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]

	
 

	
 

	
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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]

	
 

	
 

	
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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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