Document:

Exhibit
10.4 

    

     

    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.

    

    
      
        
        

      

      
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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)

     

     

     

     

     

     

     

     

    6Exhibit
10.5 

    

     

    PARTICIPATION
AGREEMENT

    2008-2009
Drilling Package

    

    

    This
Participation Agreement (“Agreement”) is made and
entered into effective as of the 1st day of August, 2008 (the "Effective Date"), by and
between Newfield Exploration Company, a Delaware corporation (“Newfield”), whose address is
363 N. Sam Houston Parkway East, Suite 2020, Houston, Texas 77060 and Ridgewood
Energy Corporation, a Delaware corporation (“Ridgewood”), whose address is
11700 Katy Freeway, Suite 280, Houston, Texas 77079.  Newfield and
Ridgewood are also sometimes hereinafter referred to collectively as the
“Parties” or individually as a “Party”.

    

    WITNESSETH:

    

    WHEREAS, Newfield owns a 100%
Record Title Interest (as such term is defined hereafter) in and to each of the
following oil and gas leases (hereinafter individually referred to as a “Prospect Area” and
collectively referred to as the “Contract Area”):

    

    Oil and
Gas Lease bearing Serial No. [REDACTED], dated effective August 1, 2008, granted
by the United States of America, as Lessor, in favor of Newfield Exploration
Company, as Lessee, covering all of [REDACTED], containing approximately 5000
acres (“REDACTED
Lease”);

    

    Oil and
Gas Lease bearing Serial No. [REDACTED], dated effective August 1, 2008, granted
by the United States of America, as Lessor, in favor of Newfield Exploration
Company, as Lessee, covering all of [REDACTED, containing approximately 4999.17
acres (“REDACTED
Lease”); and

    

    Oil and
Gas Lease bearing Serial No. [REDACTED], dated effective August 1, 2008, granted
by the United States of America, as Lessor, in favor of Newfield Exploration
Company, as Lessee, covering all of [REDACTED], containing approximately 5000.00
acres (“REDACTED
Lease”);

    

    WHEREAS, Ridgewood would like
to participate in the drilling of a Test Well (as such term is defined
hereafter) on each Prospect Area;

    

    WHEREAS, Ridgewood agrees to
pay a disproportionate share of the drilling costs and expenses associated with
each Test Well in order to earn a Record Title Interest in each Prospect Area,
pursuant to the terms and conditions of this Agreement; and

    

    WHEREAS, the Parties desire to
enter into this Agreement to set forth the manner in which the costs and
expenses of drilling, producing and operating each Test Well and any subsequent
wells, as well as the ownership of the production from the Contract Area shall
be shared.

    

    NOW, THEREFORE, in
consideration of the mutual benefits and advantages accruing hereunder, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Article 1 – Interest of the
Parties

    

    The costs
and expenses 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 in this Agreement, and unless
otherwise agreed, by the Parties in accordance with the following percentage
Record Title Interests:

     

    
      
        	Party      	
                 Record
      Title Interests

              
	 	 
	Newfield 	
                66.66667%
      *

              
	Ridgewood  	
                33.33333%
      *

              

      

    

                                                                   

    *Subject to an obligation by Ridgewood
to pay a disproportionate share of the costs and expenses of each Test Well, as
further described in Article 3 of this Agreement.

    

    The term “Record Title Interests” as
used in this Agreement shall mean the right to drill for, produce, remove, own,
and dispose of oil, gas and/or condensate that may be found on and produced from
a Prospect Area.

    

    Article 2 - Operating
Agreement

    

    2.1           Newfield
shall be designated as the Operator of each Prospect Area, and all operations
conducted on a Prospect 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”).  Upon Ridgewood earning an Assignment (as such
term is defined hereafter), the Parties shall execute an Operating Agreement,
using the form attached hereto as Exhibit “A”, to govern operations on such
Prospect Area.  It is the intent of the Parties that there shall be a
separate Operating Agreement for each Prospect Area.

    

    2.2           Notwithstanding
anything herein to the contrary, the non-consent penalties set forth in the
Operating Agreement shall not be applicable to drilling operations on the Test
Well for a Prospect Area, or Substitute Well therefore, prior to the Parties
reaching Casing Point (as such term is defined hereafter) in such
well.

    

    

    Article 3 - Test
Well

    

    3.1           On
or before March 31, 2009 or a date mutually agreed to by the parties and subject
to Force Majeure (as such term is defined hereafter), Newfield will commence, or
cause to be commenced, drilling operations on (a) [REDACTED (“Redacted Test Well”), (b)
[REDACTED (“Redacted Test
Well”), and (c) [REDACTED] (“Redacted Test Well”) (the Redacted
Test Well, the Redacted Test Well, and the Redacted Test Well are sometimes
individually referred to as the “Test Well”) or collectively
referred to as the “Test
Wells”).  Each Test Well shall be drilled to the total depth
listed in the Authority for Expenditure (“AFE”) for such Test Well, or a
depth sufficient to test the stratigraphic equivalent of the formation listed in
AFE for such Test Well, whichever is lesser (“Objective
Depth”).

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    3.2(a)      Newfield
shall furnish to Ridgewood an AFE for the drilling and evaluation costs (“Dry
Hole Cost”) of a Test Well at least 30 days prior to the commencement of actual
drilling operations for such Test Well.  The AFE for each Test Well is
estimated to be as follows:

    

    $19,400,000.00 for the Redacted Test
Well; and,

    $9,400,000.00 for the Redacted Test
Well; and,

    $14,700,000.00 for the Redacted Test
Well.

    

    

       (b)         As
additional consideration for the opportunity to earn a Record Title Interest in
a Prospect Area, Ridgewood will pay a disproportionate share of the AFE Dry Hole
Cost for each Test Well.  Ridgewood shall pay a 44.443% share of the
Dry Hole Cost and expenses shown on an AFE for a Test Well, or a Substitute Well
therefore, until (i) the cumulative costs and expenses for such Test Well, or a
Substitute Well therefore, exceeds 110% of the AFE Dry Hole Cost for such Test
Well, or (ii) upon such Test Well reaching Casing Point, whichever occurs
first.  Thereafter, Ridgewood will pay a 33.333% share of the
subsequent costs and expenses of such Test Well, and all subsequent operations
on the Prospect Area, subject to the non-consent rights set out in the Operating
Agreement.

    

      
(c)         If the AFE for a
Test Well is greater than the amount listed above in Section 3.2 (a) (“Revised AFE”), then Ridgewood
will have thirty (30) days after receipt of the Revised AFE to elect to
participate in the drilling of such Test Well under the Revised
AFE.  If Ridgewood fails to timely provide written notice to Newfield
of its election to participate, then Ridgewood shall be deemed to have elected
to participate in the Revised AFE.  If Ridgewood participates in the
drilling of a Test Well under the Revised AFE, then Ridgewood shall pay a
44.443% share of the costs and expenses of such Revised AFE until (i) the
cumulative costs and expenses for such Test Well, or a Substitute Well
therefore, exceeds 110% of the Revised AFE for such Test Well, or (ii) upon such
Test Well reaching Casing Point, whichever occurs first.  Thereafter,
Ridgewood will pay a 33.333% share of the costs and expenses for such Test Well,
and all subsequent operations on the Prospect Area, subject to the non-consent
rights set out in the Operating Agreement.  Should Ridgewood elect not
to participate in a Revised AFE, then Ridgewood shall be deemed to have
relinquished all of its Record Title Interest earning rights in the associated
Prospect Area.

    

    

    3.3           In
the event Ridgewood participates in the drilling of a Test Well, Ridgewood shall
pay Newfield, within ten (10) business days prior to the commencement of actual
drilling operations on such Test Well, Ridgewood’s proportionate share of sunk
land and G&G costs for such Prospect Area, as set out below (“Sunk Costs”):

    

    $783,992.00 for Redacted Lease;
and,

    $1,214,988.00 for Redacted Lease;
and,

    $1,780,982.00 for Redacted
Lease.

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

       

    

    3.4           For
the purposes of this Agreement, the term “Casing Point” is defined as
that point in time when a Test Well, or Substitute Well therefore, has been
drilled to its Objective 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.

    

    3.5           If
a Test Well is either, (i) unable to reach its Objective 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 Newfield shall have the option, but not the obligation, to propose a
substitute well to be drilled to the Objective Depth of such Test Well (“Substitute
Well”).  Ridgewood shall have the option, but not the
obligation, to participate in such Substitute Well; however, if Ridgewood elects
not to participate in such Substitute Well, it shall relinquish all of its
right, title and interest in the associated Prospect Area and reassign to
Newfield all of its Record Title Interest in such Prospect Area under the terms
of this Agreement.  If actual drilling operations are commenced on the
Substitute Well within one hundred twenty (120) days from the date of rig
release from the Test Well, then such Substitute Well shall be considered the
Test Well for the Prospect Area for purposes of this Agreement.

    

    3.6           Newfield
shall have the right to require Ridgewood to pay in advance its share of the
costs and expenses of an AFE, or Revised AFE, pursuant to the terms and
conditions of the Operating Agreement.

    

    3.7           In
its sole discretion, Newfield shall elect whether to issue an AFE and/or propose
the drilling of a Test Well on a Prospect Area.   If Newfield
elects not to issue an AFE and/or drill a Test Well on a Prospect Area, then
Ridgewood’s only remedy shall be the return of any Sunk Costs paid by Ridgewood
to Newfield for such Prospect Area.

    

    

    Article 4 -
Assignment

    

    4.1           Within
ten (10) business days after Newfield’s receipt from Ridgewood of the Sunk Costs
for a Prospect Area, Newfield shall deliver to Ridgewood an assignment of an
undivided 33.33333% Record Title Interest in such Prospect Area, using the form
of assignment attached hereto as Exhibit “B” (“Assignment”).  The
Record Title Interest conveyed to Ridgewood will be subject to its proportionate
share of the lessor’s royalty and its proportionate share of an overriding
royalty interest equal to 2% of 6/6 to be reserved in favor of Newfield in the
Assignment.  The Record Title Interest conveyed to Ridgewood shall
otherwise be free and clear of any other overriding royalty interests,
production payments, or other burdens on production, subject to a special
limited warranty of title.

    

    4.2           In
the event that Ridgewood does not participate in the drilling of a Test Well, or
Substitute Well therefore, Ridgewood shall immediately reassign to Newfield, on
a form of assignment acceptable to Newfield, all of its right, title and
interest, including all of its Record Title Interest, in the Prospect Area for
such Test Well.  Such reassignment shall be made free and clear of all
overriding royalty interests, production payments, burdens, liens, and other
encumbrances.

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

    Article 5 - Ownership of
Production

    

    Production
from each well drilled on a Prospect Area will be owned pursuant to the terms of
this Agreement and the Operating Agreement for such Prospect Area.

    

    Article 6 -
Insurance

    

    In
connection with any drilling and/or production operations on a Prospect Area,
the Operator shall carry the type and amount of insurance required by the
Operating Agreement for such Prospect Area.  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, or as otherwise 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.

    

    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 – Force
Majeure

    

    In the event Newfield is rendered
unable, wholly or impart, by a Force Majeure event (as hereinafter defined) to
carry out its obligations under this Agreement, Newfield shall give Ridgewood
prompt written notice of the Force Majeure with reasonably full particulars
concerning it; thereupon the obligations of Newfield; and insofar as they are
affected by the Force Majeure, shall be suspended during the continuance of such
Force Majeure.  The term “Force Majeure” as here
employed, shall include, but not necessarily be limited to, an act of God,
strike, lockout or other industrial disturbance, act of public enemy, war,
blockade, public riot, lightning, fire, storm, flood, explosion, the inability
or unavoidable delay in obtaining lessor's approval for any drillsite locations
on a Prospect Area, governmental permits or authorizations for drilling or other
operations to be conducted hereunder, any other governmental action,
governmental delay, restraint or in action, or the unavailability of equipment
and any other cause, whether of the kind specifically enumerated above or
otherwise, which is not reasonably within the control of Newfield.

    

    Article 10 -
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:

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

      
      

       

      
        	 	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 11 - 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 12 - Successors and
Assigns

    

    The
rights and obligations of Ridgewood under this Agreement are not assignable, in
whole or in part, without the prior written consent of Newfield, which such
consent shall not be unreasonably withheld.  This Agreement shall be
binding upon each Party and their successors and assigns. Any assignment by a
Party of any lands affected by this Agreement shall be made expressly subject to
this Agreement, and the assignee shall expressly agree to assume and comply
with, the terms and provisions of this Agreement and the applicable Operating
Agreement.

    

    

    Article 13 -
Miscellaneous

    

    13.1         This
Agreement is not intended to create, and shall not be construed to create a
relationship of partnership.  Notwithstanding any provision herein,
the rights and liabilities of the Parties hereunder shall be several and not
joint or collective.

    

    13.2         THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.

    

    13.3         Ridgewood
understands that Newfield makes no express warranty and disclaims all implied
warranties and all statutory warranties as to (i) the accuracy or completeness
of the data furnished by Newfield as to the Contract Area, (ii) the presence of
hydrocarbons in the Contract Area, or (iii) the results which might be expected
from any exploration, development, production, and/or hydrocarbon marketing
activities contemplated in a Contract Area.  Nothing contained in the
technical information provided by Newfield shall be relied upon as a promise or
representation of warranty, whether as to the past or the future value of the
Contract Area.  Neither Newfield, nor its agents, representatives,
officers, directors or shareholders shall have any liability to Ridgewood or any
affiliate or associate of Ridgewood arising from the use by any person of such
technical information.

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

       

    

    13.4         This
Agreement and the exhibits attached hereto constitutes the entire Agreement
between the Parties with respect to the subject matter hereof, and supersedes
all prior oral or written agreements, commitments, or understandings between the
Parties, and there are no other representations or other agreements between the
Parties, except as expressly set forth herein.  No amendment shall be
binding unless in writing and signed by representatives of each
Party.

    

    13.5         The
Parties agree to execute any additional instruments, agreements or documents
that are necessary to effectuate the intentions of this Agreement.

    

    

    Article 14 -
Termination

    

    This Agreement shall terminate as to
each Prospect Area upon (i) the mutual agreement of the Parties; (ii) failure to
commence actual drilling operations on a Test Well for such Prospect Area within
the time period specified in this Agreement; (iii) failure to commence the
drilling of a Substitute Well for such Prospect Area within the time period
specified in this Agreement; or (iv) the bankruptcy or insolvency of
Ridgewood.

    

    Article 15 - 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.

    

    IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
Effective Date hereinabove first written.

     

    
      
        
          
            
              	NEWFIELD EXPLORATION
      COMPANY	 
	 	 	 
	 	 	 
	
                      By:
      

                    	    /s/ W.M.
      Blumenshine	 
	 	
                      W.M.
      Blumenshine

                    	 
	 	
                      Vice
      President - Land

                    	 
	 	 	 

            

          

        

      

    
      
        	RIDGEWOOD ENERGY
      CORPORATION	 
	 	 	 
	 	 	 
	
                By:
      

              	    /s/ W.
      Greg Tabor	 
	 	
                W.
      Greg Tabor

              	 
	 	
                Executive
      Vice President

              	 
	 	 	 

      

    

     

    

     

     -7-

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