PARTICIPATION AGREEMENT
between
GOM SHELF LLC
BY APACHE CORPORATION AS
MANAGING MEMBER
and
RIDGEWOOD ENERGY
CORPORATION
SALTAMONTES PROFUNDO PROSPECT
OCS-G 00839, 01497, 01498
BLOCKS 94, 95 and ▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 2
PARTICIPATION AGREEMENT
SALTAMONTES PROFUNDO PROSPECT BLOCKS 94, 95,
96, WEST DELTA AREA
GULF OF MEXICO
This Participation Agreement ("Agreement") is made and entered into effective as
of the 28th day of March, 2005 (the "Effective Date"), by and between GOM Shelf
LLC BY APACHE CORPORATION AS MANAGING MEMBER ("GOM"), a Delaware corporation,
and Ridgewood Energy Corporation ("Ridgewood"), a Delaware corporation sometimes
hereinafter referred to collectively as the "Parties" and individually as
"Party."
WITNESSETH:
WHEREAS, the Parties have entered into the Ridgewood/GOM Deep Shelf Initiative
(the "Initiative") dated March 24, 2005, that provides, among other things, for
the execution of this Agreement in the event Ridgewood elects to participate in
a Prospect, as hereinafter defined, presented by GOM pursuant to such
Initiative; and
WHEREAS, GOM is the owner of a portion of Federal Leases OCS-G 00839, OCS-G
01497, and OCS-G 01498, covering all of Blocks 94, 95 and 96, West Delta Area,
OCS Leasing Map No. 8, containing approximately 13,665.07 acres and further
limited to cover that area described on Exhibit "A" and outlined in red on the
plat attached hereto as Exhibit "A-1" containing approximately 7,134 acres, more
or less ("the Lease"); and
WHEREAS, the Parties believe the Prospect, as hereinafter defined and known as
the Saltamontes Profundo Prospect, is wholly contained within the Lease; and
WHEREAS, Ridgewood has elected pursuant to the Initiative and subject to the
terms and conditions contained herein to acquire a portion of the Lease from GOM
covering the Prospect Area, as hereinafter defined and described on Exhibit "A"
hereto and thereafter participate in certain operations on the Prospect Area, as
hereinafter defined, and assume all rights, duties, interests and obligations
arising thereunder.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the Parties agree as follows:
Participation Agreement dated March 28, 2005
Between GOM Shelf' LLC and Ridgewood Energy Corporation
Page 3
ARTICLE 1
Definitions
Affiliate means a legal entity which Controls, or is Controlled by, or which is
Controlled by an entity which Controls, a Party.
Casing Point means that point in time after the contract depth has been reached
in drilling the Initial Well, as hereinafter defined, said well has been fully
evaluated by the running of such logs and conducting such other open-hole
evaluation as the Parties hereto may deem appropriate, and after the results of
said logs and open-hole evaluation are known and delivered to the Parties
hereto, and a decision is made to attempt to complete or deepen the Initial Well
or to plug and abandon the well. However, should the decision be to plug and
abandon the well, it shall be deemed not to have reached "Casing Point" until
all operations are complete with respect to the plugging and abandoning of the
Initial Well.
Control means the ownership directly or indirectly of fifty percent (50%) or
more of the voting rights in a legal entity. "Controls", "Controlled by" and
other derivatives shall be construed accordingly.
Authorization for Expenditure (AFE) means an authorization to expend funds that
estimates costs to be incurred for an Operation pursuant to the Operating
Agreement as referenced herein.
Conditions Precedent has the meaning ascribed to it in Article 3.
Evaluation Data means geological or geophysical data and other data and
information relating to a Prospect including, without limitation, all relevant
geological and geophysical interpretations and information, including reports,
interpretations, models and maps and all specialty processing and analysis of
seismic data and may also include commercial, contractual and financial
information.
Force Majeure means an act of God, strike, lockout, or other industrial
disturbance, act of the public enemy, war, blockade, public riot, lightning,
fire, storm, flood, or other act of nature, explosion, governmental action or
restraint, unavailability of equipment, and any other cause, whether of the kind
specifically enumerated above or otherwise, that is not reasonably within the
control of the Party claiming suspension. It is, however, expressly agreed that
promptness of performance is of the essence under this Agreement and that every
reasonable effort will be made by the Parties to avoid delay or suspension of
any work or acts to be performed under this Agreement. The requirement that the
Force Majeure be remedied with all reasonable dispatch shall not require a Party
to settle strikes or other labor difficulties.
Initiative has the meaning ascribed to it in the Preamble.
Participation Agreement dated March 28, 2005
Between GOM Shelf' LLC and Ridgewood Energy Corporation
Page 4
Lease means an instrument issued by the United States of America by the Regional
Director, Gulf of Mexico OCS Region, Minerals Management Service ("MMS"),
granting certain rights including but not limited to rights to explore for and
produce Crude Oil and Natural Gas, as defined in the Initiative.
Net Revenue Interest means the, Working Interest, less applicable burdens,
proportionately reduced.
Operating Agreement has the meaning ascribed to it in Article 5.
Objective Depth has the meaning ascribed to it in Article 6,
Preferential Right to Purchase means obligations with respect to a Lease or its
related agreements that exist at the Effective Date and that may include
requirements to satisfy obligations, including, but not limited to, the
obligation to offer the terms and provisions of this Agreement or the Initiative
to a third party holding contractual rights applicable to a Lease,
Prospect means, in general, a geologic structural, stratigraphic trap or
combination thereof that is believed to have the potential for accumulations of
hydrocarbons, as defined in the Initiative, in commercial quantities and that
lies at a depth greater than or equal to fifteen thousand feet (15,000) subsea
and whose associated Lease may obtain royalty relief pursuant to 30 CFR 203 as
amended or a similar royalty relief provision contained in the Lease itself.
Prospect means, specifically as it relates to this Agreement, the Saltamontes
Profundo aspect.
Prospect Area means the geographic area encompassing the Prospect and any depth
limitation applicable thereto, as fully described on Exhibit "A" hereto, and
which shall be identified by legal description appropriate for recording
purposes with the MMS.
Working Interest means the undivided interest of a Party, expressed as a
percentage of the total interests of all Parties, in the rights and obligations
derived from this Agreement and also means the undivided interest of a party,
expressed as a percentage of the total interests of all Parties, in the rights
and obligations in and to a Lease.
ARTICLE 2
Assignment and Assumption of Rights
2.1 In exchange for the consideration stated herein, (SOM. hereby agrees to
assign and transfer to Ridgewood, concurrent with the execution of this
Agreement, and Ridgewood hereby agrees to accept, an assignment of an undivided
fifty three and one-third percent (53,33333%) of
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 5
GOM's undivided thirty seven and one-half percent (37.50000%) Working Interest
in the Lease insofar as it encompasses the Prospect Area, being a net undivided
Working Interest of twenty percent (20.00000%), with a corresponding Net Revenue
Interest of sixteen and two-thirds percent (16.66667%).
2.2 The Parties shall execute and deliver an assignment evidencing the above in
the form attached as Exhibit "F" to the Initiative. Following such assignment,
the net Working Interests in the Lease or portion thereof shall be:
GOM: 17.50%
Ridgewood: 20.00%
BP America Production Company: 37.50%
Chevron/Texaco Exploration & Production, Inc: 25.00%
Total 100.00%
ARTICLE 3
Conditions Precedent to Assignment
3.1 The validity of the assignment hereunder is subject to the satisfaction or
waiver of each of the following conditions, collectively called "Conditions
Precedent", that:
A. GOM obtains a waiver or other evidence in writing of the expiration or
non exercise of any Preferential Right to Purchase;
B. The Parties obtain any necessary approvals from the U.S. Government or
any appropriate division thereof to the assignment in writing, the
cost of which shall be borne by Ridgewood; and
C. The Parties obtain any other required third party consents for the
transfer of the Working Interest proposed to be transferred hereunder
in writing.
3.2 As soon as is reasonably practicable after execution of this Agreement, each
Party shall use commercially reasonable efforts to execute all documents, and do
and procure to be done all such acts and things as are reasonably within its
power to attempt to secure required consents or waivers in an effort to satisfy
the Conditions Precedent. Notwithstanding the above, in the event such
Conditions Precedent are not satisfied despite the Parties' commercial
reasonable efforts to overcome the same, then this Agreement shall terminate and
neither Party shall have any further obligation to the other Party with respect
to this Agreement.
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 6
ARTICLE 4 Consideration
4.1 In consideration for receiving the assignment of Working Interest hereunder,
Ridgewood agrees to pay one hundred sixty percent (160%) of its Working Interest
share of all costs and expenses associated with the drilling of the Initial Well
on the Saltamontes Profundo Prospect, up to Casing Point, including plugging and
abandonment costs in the event a completion attempt is not made in the Initial
Well.
4.2 Notwithstanding anything to the contrary herein, if costs associated with
the drilling of the Initial Well reach one hundred twenty percent (120%) of the
AFE gross dry hole cost, then Ridgewood shall thereafter bear only its Working
Interest share of remaining costs for the Initial Well as detailed in the AFE
attached hereto as Exhibit "B".
ARTICLE 5
Operating Agreement
5.1 Subject to Article 5.2 below, concurrent with the execution of this
Agreement, the Parties shall execute an offshore operating agreement in
substantially the same form attached as Exhibit "C" to the Initiative
("Operating Agreement") and which shall name GOM as operator. All operations
conducted pursuant to this Agreement shall be governed by the terms and
provisions of said Operating Agreement.
5.2 In the event there is an operating agreement in effect covering the Prospect
Area on the Effective Date, Ridgewood hereby ratifies, confirms, and accepts the
terms of such existing operating agreement and assumes the obligations thereto
with respect to the Working Interest assigned to Ridgewood and agrees to abide
by the terms of such operating agreement to the extent of its Working Interest
insofar and only insofar as said operating agreement is applicable to the
Prospect Area.
ARTICLE 6
Initial Well
6.1 The "Initial Well" will be drilled from a surface location of X= 2,481,386
and Y= 92,725 to a bottomhole location of X=2,481,386 and Y= 90,916, to a depth
sufficient to test the PD Sand Amplitude or to a depth of 18,350 feet MD and
17,900 feet TVD, whichever is lesser ("Objective Depth"), in accordance with the
AFE attached hereto as Exhibit "B".
6.2 Subject to permitting, rig availability and events of Force Majeure, GOM
shall use all commercially reasonable efforts to commence operations on the
Initial Well within one hundred fifty (150) days of the Effective Date hereof.
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 7
6.3 In the event operations for the Initial Well are not commenced by GOM or
other third party, if GOM is not the operator, within one hundred fifty (150)
days of the Effective Date hereof, other than for reasons attributable to
permitting, rig availability, or Force Majeure, then Ridgewood may, within
thirty (30) days following such one hundred fifty (150) day period, elect to
terminate this Agreement and Ridgewood hereby agrees, in the event of such
termination, to reassign to GOM the Working Interest assigned to Ridgewood
pursuant to this Agreement; provided, however, such assignment to GOM shall be
in substantially the same form of assignment as GOM's assignment to Ridgewood
and the Working Interest reassigned to GOM shall be free and clear of all liens,
claims, encumbrances and burdens created by, through or under Ridgewood.
6.4 In the event operations for the Initial Well are not commenced within three
hundred (300) days of the Effective Date hereof, other than for reasons
attributable to permitting, rig availability, or Force ▇▇▇▇▇▇, and the Agreement
has not been terminated per Article 6.3 above, then GOM, at its sole discretion,
may request a reassignment of the Working Interest assigned to Ridgewood
pursuant to this Agreement and Ridgewood hereby agrees under such circumstances
to promptly execute such reassignment. Such assignment to GOM shall be in
substantially the same form of assignment as GOM's assignment to Ridgewood and
the Working Interest reassigned to GOM shall be free and clear of all liens,
claims, encumbrances and burdens created by, through or under Ridgewood.
6.5 GOM shall provide Ridgewood with copies of all well information from the
Initial Well and any other well as indicated and required under the Operating
Agreement or any operating agreement in existence and covering the Prospect
which Ridgewood becomes a Party to in accordance with Article 5.2.
6.6 In the event the Initial Well does not reach the Objective Depth because of
mechanical difficulties or Gulf Coast Conditions (i.e. rock salt, heaving shale,
excessive water flow, depleted sands, excessive pressure, base or other
impenetrable matter) which prevent the operator from drilling the Initial Well
to Objective Depth, the Parties hereto may cause the drilling of a substitute
well on or before the earlier of the date occurring (a) one hundred twenty (120)
days after the release of the drilling rig for the Initial Well or (b) after the
lapse of a one hundred twenty (120) day period without the drilling of any
additional footage in the Initial Well (or plugging back in the case of a
proposed sidetrack). As between the Parties hereto, any substitute well shall
require the concurrence of one (1) or more of said Parties with at least fifty
percent (50%) Working Interest, proportionately reduced, and shall be drilled to
target the same objective as the Initial Test Well. If the Parties elect to
drill a substitute well, then the consideration to be paid in accordance with
Article 4.1 hereof shall be carried over to the substitute well, but the
limitation provided in Article 4.2 shall remain in effect.
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 8
ARTICLE 7
Representations and Warranties
7.1 Ridgewood makes the following representations and warranties to GOM as of
the Effective Date:
A. There are no material claims, demands, actions, suits, governmental
inquiries, or proceedings pending, or to Ridgewood's knowledge,
threatened, against Ridgewood which would have an adverse effect upon
the consummation of the transactions contemplated by this Agreement.
B. Ridgewood has sufficient cash, available lines of credit or other
sources of immediately available funds to enable it to fulfill all of
its obligations under this Agreement.
C. Each Party represents and warrants that it is duly qualified with the
MMS to do business in the Outer Continental Shelf.
D. Ridgewood has the technical capability, personnel and resources to
fulfill its obligations under this Agreement.
7.2 The Parties make the following representations and warranties to each other
as of the Effective Date:
A. Such Party is duly organized and validly existing under the laws of
the state where it is organized;
B. Such Party has all requisite corporate power and authority to enter
into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby; and
C. This Agreement has been duly executed and delivered by each Party and
constitutes a legal, valid and binding obligation of each Party,
enforceable against each Party in accordance with its terms.
7.3 GOM MAKES NO REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED, AS TO THE
QUALITY, ACCURACY AND COMPLETENESS OF THE INFORMATION INCLUDED IN A
PROSPECT PRESENTATION OR ANY OTHER EVALUATION DATA FURNISHED BY GOM TO
RIDGEWOOD PURSUANT TO THIS AGREEMENT AND RIDGEWOOD EXPRESSLY ACKNOWLEDGES
THE INHERENT RISK OF ERROR IN THE ACQUISITION, PROCESSING AND
INTERPRETATION OF GEOLOGICAL AND GEOPHYSICAL DATA. GOM, ITS AFFILIATED
COMPANIES, THEIR
Participation Agreement dated March 28, 2005
Between GOM She4'LLC and Ridgewood Energy Corporation
Page 9
OFFICERS, DIRECTORS AND EMPLOYEES SHALL HAVE NO LIABILITY WHATSOEVER WITH
RESPECT TO THE USE OF OR RELIANCE UPON THE EVALUATION DATA BY RIDGEWOOD OR
ITS REPRESENTATIVE.
ARTICLE 8
Confidentiality
The Evaluation Data covering the Prospect Area will be subject to the terms and
provisions of the Confidentiality Agreement dated January 12, 2005, signed in
accordance with the Initiative.
ARTICLE 9
Governing Law
The substantive law of the State of Texas, exclusive of any conflicts of laws
principles that could require the application of any other law, shall govern
this Agreement for all purposes, including the resolution of disputes between or
among Parties.
ARTICLE 10
Notices
Notice by one (1) Party to another under this Agreement shall be in writing and
shall be delivered by hand, registered mail, overnight mail, or sent by
facsimile to the respective Party at the address or facsimile number shown
below, or such other address or facsimile number as a Party may designate by
notice to the other Party, and shall be deemed to be delivered only when
received by the Party to whom such notice is directed:
GOM Shelf LLC RIDGEWOOD ENERGY
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTN: Land Manager-Gulf Coast Region ATTN: Mr. W. ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
ARTICLE 11
Public Announcements
Except as required by applicable law, rule or stock exchange regulation or a
third party agreement as referenced above, neither Party nor their Affiliates
will make any public comment, statement, or communication with respect to the
existence of this Agreement or any ongoing negotiations between the Parties
without the prior consent of the other Party. If a Party is
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 10
required by law, rule or stock exchange requirement to make any such disclosure,
it will provide advance written notice to the other Party specifying the content
of the proposed disclosure, the reasons that such disclosure is required, and
the time and place that the disclosure will be made and shall limit any
disclosure only to such information which the disclosing Party reasonable
believes upon advice of counsel, is required to be disclosed. Notwithstanding
anything to the contrary above, Ridgewood or its designated subsidiary, will not
be restricted or precluded from providing certain non-confidential information
about the program or a Prospect(s) in any marketing brochure, drilling fund
prospectus or related company website.
ARTICLE 12
Force Majeure
If a Party is unable, wholly or in part by Force Majeure, to carry out its
obligations under this Agreement, other than the obligation to make money
payments, that Party shall give the other Party prompt written notice of the
Force Majeure with full particulars about it. Thereupon, the obligations of
the Party giving the notice, so far as they are affected by the Force Majeure,
shall be suspended during, but no longer than, the continuance of the Force
Majeure.
ARTICLE 13
Internal Revenue Provision
It is not the purpose or intention of this Agreement to create any partnership,
mining partnership or association, and neither- this Agreement nor the
operations hereunder shall be construed as creating any such legal relationship;
however, for income tax purposes only, the Parties agree that this Agreement
shall be governed in accordance with the "Provisions Concerning Taxation"
attached as Exhibit "G" to the Operating Agreement.
ARTICLE 14
Term
This Agreement shall remain in effect for so long as the Lease or any portion
thereof covering the Prospect Area remains in effect or the Operating Agreement
as to the Prospect Area remains in effect, whichever is later; provided,
however, that the obligations under the Confidentiality Agreement shall survive
termination of this Agreement.
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 11
ARTICLE 15
General Provisions
15.1 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.
15.2 Subject to all matters hereof, this Agreement shall be binding upon
the Parties hereto and their respective successors and assigns.
15.3 Any capitalized term used in this Agreement and not specifically
defined in this Agreement shall have the same meaning as in the
Initiative.
15.4 In the event of any conflict between the provisions of the main body of
this Agreement and any of its exhibits, the provisions of the main body
of the Agreement shall prevail. In the event of any conflict between
the provisions of this Agreement and the Initiative or the Operating
Agreement, the provisions of this Agreement shall prevail, but only to
the extent of such conflict.
15.5 Failure by any Party to comply with any of its obligations, agreements
or conditions herein contained may be waived in writing, but not in any
other manner, by the Party to whom such compliance is owed. No waiver
of, or consent to a change in, any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of, or consent to a change
in, other provisions hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly
provided.
15.6 None of the rights or liabilities derived from this Agreement is
assignable by either Party except with the prior written consent of the
other Party, such consent not to be unreasonably withheld, except with
respect to assignments to an Affiliate.
15.7 This Agreement shall be binding upon, and shall inure to the benefit
of, the Parties hereto and their respective permitted successors and
assigns. This Agreement shall be a covenant running with the land and
shall bind any assignee of a Party's right, title or interest in this
Agreement.
15.8 The captions in this Agreement are for convenience only and shall not
be considered part of or affect the construction or interpretation of
any provision of this Agreement.
15.9 References herein to the singular include the plural, and vice versa.
15.10 The rights, duties, obligations and liabilities of the Parties under
this Agreement shall be individual, not joint or collective. It is not
the intention of the Parties to create, nor shall this Agreement be
deemed or construed to create, a mining or other partnership, joint
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 12
venture or association or a trust. This Agreement shall not be deemed or
construed to authorize any Party to act as an agent, servant or employee for any
other Party for any purpose whatsoever except as explicitly set forth in this
Agreement. In their relations with each other under this Agreement, the Parties
shall not be considered fiduciaries except as expressly provided in this
Agreement.
15.11 Each provision of this Agreement shall be construed as though all
Parties participated equally in the drafting of the same. Consequently,
the Parties acknowledge and agree that any rule of construction that a
document is to be construed against the drafting Party shall not be
applicable to this Agreement.
15.12 If and for so long as any provision of this Agreement shall be deemed
to be judged invalid for any reason whatsoever, such invalidity shall
not affect the validity or operation of any other provision of this
Agreement except only so far as shall be necessary to give effect to
the construction of such invalidity, and any such invalid provision
shall be deemed severed from this Agreement without affecting the
validity of the balance of this Agreement.
15.13 There shall be no modification of this Agreement except by written
consent of all Parties.
IN WITNESS WHEREOF, the Parties entered into this Agreement as of the Effective
Date.
GOM SHELF LLC RIDGEWOOD ENERGY CORPORATION
BY APACHE CORPORATION AS
MANAGING MEMBER
BY: /s/ ▇.▇. ▇▇▇▇▇▇ BY: /s/ W. ▇▇▇▇ ▇▇▇▇▇
------------------- -----------------
▇.▇. ▇▇▇▇▇▇ W. ▇▇▇▇ ▇▇▇▇▇
Attorney in Fact Executive Vice President
Participation Agreement dated March 28, 2005
Between GOM Shelf LLC and Ridgewood Energy Corporation
Page 13
EXHIBIT "A"
Attached to and made a part of that certain Participation Agreement dated
March 28, 2005, by and between GOM Shelf LLC and Ridgewood Energy
Corporation
DESCRIPTION OF PROSPECT AREA
OCS-G 00839 covering all of Block 94, West Delta Area, OCS Leasing Map,
Louisiana Map No. 8, containing 5,000 acres, more or less, limited as to depths
above 20,000 feet subsea; insofar and only insofar as said Lease covers the
S/2N/2, S/2N/2N/2 and N/2N/2S/2 and further described as being included within
the area outlined in red on the plat attached hereto as Exhibit "A-I" to that
certain Participation Agreement dated March 28, 2005 by and between GOM Shelf
LLC and Ridgewood Energy Corporation, containing approximately 1431.6774 acres,
more or less;
OCS-G 01497 covering all of Block 95, West Delta Area, OCS Leasing Map,
Louisiana Map No. 8, containing 5,000 acres, more or less, limited as to depths
above 20,000 feet subsea; insofar and only insofar as said Lease covers the
▇/▇▇▇/▇▇▇/▇, ▇/▇▇▇/▇, ▇▇/▇▇▇/▇, ▇/▇▇▇/▇▇▇/▇, NE/4SW/4NW/4, N/2S/2 and N/2S/2S/2
and further described as being included within the area outlined in red on the
plat attached hereto as Exhibit "A-I" to that certain Participation Agreement
dated March 28, 2005 by and between GOM Shelf LLC and Ridgewood Energy
Corporation, containing approximately 3203.0770 acres, more or less;
OCS-G 01498 covering all of Block 96, West Delta Area, OCS Leasing Map,
Louisiana Map No. 8, containing 3,665.07 acres, more or less, limited as to
depths above 20,000 feet subsea; insofar and only insofar as said Lease covers
the ▇/▇▇/▇▇▇/▇, ▇/▇▇▇/▇, ▇▇/▇▇/▇, ▇▇/▇▇▇/▇▇▇/▇ and NI2S/2S/2 and further
described as being included within the area outlined in red on the plat attached
hereto as Exhibit "A-I" to that certain Participation Agreement dated March 28,
2005 by and between GOM Shelf LLC and Ridgewood Energy Corporation, containing
approximately 2499.6584 acres, more or less.
EXHIBIT "B"
Attached to and made a part of that certain Participation
Agreement dated March 28, 2005, By and between GOM Shelf
LLC and Ridgewood Energy Corporation
[LOGO]
SAP NO: D&C X2-000NP, FAC Z1-00202
BP AMERICA PRODUCTION CO.
AUTHORIZATION FOR EXPENDITURE
DATE PREPARED: 2/7/2005 FINANCIAL MEMO NO:
OPERATOR: AFE NO: Little "e" Drilling ----
LEASE/UNIT/FACILITY: SURFACE LOCATION: X-2481386 Y:92725
LEASE FLAC IDENTIFIER: 678261-00 BOTTOM HOLE LOC: X-2481386 Y:90916
WELL NAME/NUMBER: WD 95 #5 Drill PROPOSED TOTAL DEPTH: 18350'MD OIL WELL (Exploratory)
OPERATION CENTER: COUNTRY/STATE:
BP WORKING INTEREST: OPERATING FIELD: GI 43 Field SINGLE COMPLETION
JOA NUMBER: VR-2519 HORIZON: PD Sand
(formation/prospect)
ANTICIPATED START: Jun-05
PROJECT DESCRIPTION/COMMENTS TO PARTNERS:
The Saltamontes Prolundo prospect is located in West Delta 95 block and is
planned at an open-water location to be drilled to a PTD of 17,800' SSTVD. The
prospect consists of a three way structural closure against a down-to-the-basin
expansion fault and targets Upper Miocene sands found in the Grand Isle 47
Grasshopper discovery. This AFE requests funds to drill, evaluate and P&A if
necessary. Funds are also requested to perform facilities engineering design
work on the tripod requirements for the success case. This design work will
improve the project schedule by 3-4 months. At the time logging and testing
indicate an economic well, additional CAPEX will be requested of approximately
17MM$ for mud-line suspension and completion, and 10MM$ for facilities.
EXPENSE/CAPITAL/PXA ESTIMATED COST
T-Tangible I-Intangible DESCRIPTION GROSS PRODUCER GROSS DRY HOLE
------------------------ ----------- -------------- --------------
Capital-I Shallow Hazard Survey and analysis $275,000.00 $275,000.00
Capital-I Mobilization $600,000.00 $600,000.00
Capital-I Drilling and Evaluation*** $15,955,000.00 $15,955,000.00
Capital-T Drilling and Evaluation $2,770,000.00 $2,770,000.00
Capital-I Plug and Abandonment $0.00 $450,000.00
Capital-I De-mobilization $180,000.00 $180,000.00
Capital-I Facility Design Engineering $900,000.00 $900,000.00
Capital-I Soil Boring $100,000.00 $100,000.00
Please note the GOM ShelfLLC elects to maintain its own
insurance, therefore, do not charge for insurance.
***Includes drilling($14,070,000), required drilling
specialists ($850,000), logging/testing ($910,000) and
geo-chemical sampling/analysis ($125,000).
TOTAL PROJECT COST: $20,780,000.00 $21,230,000.00
PROJECT CONTACTS: NAME TITLE PHONE NUMBER
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APPROVED BY: DATE:
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APPROVAL: YES[X] NO [_]
NOTICE TO NONOPERATOR: Costs shown on this form are estimates only. Nonoperators
should not consider these estimates as establishing any limit on the monies
which will be required to perform the proposed operation. Overhead will be
charged in accor COMPANY NAME/NONOPERATOR: GOM Shelf LLC by Apache Corp. as
Managing Member with the Joint Operating Agreement.
BY: ▇.▇. ▇▇▇▇▇▇▇▇ Date: 3/1/05
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Sr. Vice President, Gulf Coast Region
BY: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
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