Common use of Initial Test Well Clause in Contracts

Initial Test Well. 4.1 The Initial Test Well will be drilled from a surface location on Apache’s South Timbalier 308 A Platform to a bottomhole location on the Lease, pursuant to the well plan attached hereto as Exhibit “A” and to a depth sufficient to test the lowest Catinaster coalitus Sand as seen in the ST 308 #A-3 with top of sand at 20,750’ MD/19,604’ TVD and base at 20,868’ MD/19,720’ TVD (“Objective Depth”). 4.2 Apache will plan to enter into a contract for the platform rig to be utilized for the drilling of the Initial Test Well on or before December 1, 2007. Should Apache fail to contract the platform rig by such date, then at Ridgewood’s sole election, its participation commitment may be terminated immediately with no continuing liability obligation or penalty to either Party. For avoidance of doubt, in the event Apache fails, for any reason to contract the platform rig by December 1, 2007, Ridgewood’s sole remedy against Apache will be to terminate this Agreement and Ridgewood hereby waives any and all claims and damages of every kind whatsoever resulting from Apache’s failure to enter into a drilling contract on or before December 1, 2007. 4.3 Subject to permitting, rig availability, and events of Force Majeure, Apache shall use all commercially reasonable efforts to commence operations on the Initial Test Well within ninety (90) days of the Effective Date hereof. 4.4 In the event operations for the Initial Test Well are not commenced by Apache or another third party within ninety (90) days of the Effective Date hereof other than for reasons attributable to permitting, rig unavailability, or Force Majeure or if Apache is not the operator, then Ridgewood may, within thirty (30) days following such ninety (90) day period, elect to terminate this Agreement immediately with no continuing liability obligation or penalty to either party and Ridgewood hereby waives any and all claims and damages of every kind whatsoever arising out of this Agreement. 4.5 Apache shall provide Ridgewood with copies of all well information from the Initial Test Well as required under the Operating Agreement. 4.6 In the event the Initial Test 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) that prevent the operator from drilling the Initial Test Well to the Objective Depth, the Parties hereto, pursuant to the Operating Agreement, may cause the drilling of a substitute well (hereinafter “Substitute Well”) on or before ninety (90) days following the plugging and abandonment of the Initial Test 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 the Promoted Interest, provided for in Article 2.2 hereof, shall be carried over to the Substitute Well, but the Promoted Interest limitation provided for in Article 2.2 and Article 2.4 shall remain in effect.

Initial Test Well. 4.1 The Initial Test Well will 1. Subject to permitting and rig availability, Helis, as Operator, shall use commercially reasonable efforts to commence or cause to be drilled from commenced by August 31, 2008 the drilling and completion (subject to the casing point election) of a surface location on Apache’s South Timbalier 308 A Platform to well at a bottomhole location on the Lease, pursuant to Lease set out on the well plan Operator’s Authority for Expenditure (AFE) attached hereto as Exhibit “A” C”, the “Initial Test Well”. 2. The Parties agree to bear and to a depth sufficient to test pay their proportionate share as set forth below of all the lowest Catinaster coalitus Sand as seen cost, risk, expense and liability of any nature whatsoever incurred in the ST 308 #A-3 with top drilling, testing, logging, coring and evaluating the Initial Test Well (including plugging and abandonment costs, if a dry hole) and completion (subject to the casing point election), pursuant to the AFE attached hereto. By execution of sand at 20,750’ MD/19,604’ TVD this agreement, each party approves the AFE. The Initial Test Well shall be drilled pursuant to the terms of the Operating Agreement and base at 20,868’ MD/19,720’ TVD (“Objective Depth”). 4.2 Apache will plan to enter into a contract for the platform rig to be utilized all cost, risk, expense and liability for the drilling of the Initial Test Well on or before December 1to Production Casing Point and, 2007. Should Apache fail to contract if necessary, the platform rig plugging and abandonment cost shall be shared by such date, then at Ridgewood’s sole election, its participation commitment may be terminated immediately with no continuing liability obligation or penalty to either Party. For avoidance of doubt, the Parties hereto in the event Apache failsfollowing proportions: Helis 35.00 % Red Willow Offshore, for any reason to contract the platform rig by December 1, 2007, Ridgewood’s sole remedy against Apache will be to terminate this Agreement and L.L.C. 25.00 % Houston 5.00 % Ridgewood hereby waives any and all claims and damages of every kind whatsoever resulting from Apache’s failure to enter into a drilling contract on or before December 1, 2007. 4.3 Subject to permitting, rig availability, and events of Force Majeure, Apache shall use all commercially reasonable efforts to commence operations on 35.00 % 100.0000 % Production Casing Point is defined herein as that point when the Initial Test Well within ninety (90) days of has been drilled to Contract Depth and all logging, testing and evaluations have been conducted, and such information has been provided to the Effective Date hereofparticipating parties and the Operator recommends either that production casing be set for a completion attempt or that the well be plugged and abandoned, and through plugging and abandonment, if no completion attempt shall be made. After Prospect Payout, as hereinabove defined, HE&D, or its designee, shall be entitled to receive from each participating Party a proportionate 10% back-in working interest. 4.4 In 3. If the event operations well provided for the Initial Test Well are not commenced by Apache or another third party within ninety (90) days of the Effective Date hereof other than for reasons attributable herein should fail to permitting, rig unavailability, or Force Majeure or if Apache is not the operator, then Ridgewood may, within thirty (30) days following such ninety (90) day period, elect reach Contract Depth due to terminate this Agreement immediately with no continuing liability obligation or penalty to either party and Ridgewood hereby waives any and all claims and damages of every kind whatsoever arising out of this Agreement. 4.5 Apache shall provide Ridgewood with copies of all well information from the Initial Test Well as required under the Operating Agreement. 4.6 In the event the Initial Test Well does not reach the Objective Depth because of mechanical difficulties or Gulf Coast Conditions (i.e. rock saltbecause the well encounters excessive water flow, loss of circulation, excessive pressure, cavities, caprock, salt or salt dome material, heaving shale, excessive water flow, depleted sands, excessive pressure, base or other practically impenetrable matter) that prevent conditions which would, in the operator from opinion of a prudent operator, render further drilling the Initial Test Well to the Objective Depthimpracticable, then the Parties heretomay, pursuant at their election, commence, or cause to the Operating Agreementbe commenced, may cause the actual drilling of a substitute well at approximately the same location within sixty (hereinafter “Substitute Well”) on or before ninety (9060) days following the plugging and after abandonment of the Initial Test Well (or plugging back in the case of a proposed sidetrack)said well. 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 The substitute well shall be drilled to target considered and treated for all purposes hereof as though the same objective as were the Initial Test Wellwell for which it is a substitute. 4. If All participating Parties or their duly authorized representatives shall be allowed free access to the ▇▇▇▇▇▇▇ floor at their sole risk and expense and to any and all information, geological or otherwise, pertaining to the drilling of any well, substitute well and/or additional well. Prior to running any logging device, coring or taking any formation test or other similar type test, Helis shall first give all Parties elect notice in sufficient time to drill a Substitute Well, then the consideration allow their representative to be paid in accordance present to witness such test. Helis agrees to furnish each Party all information associated with the Promoted Interest, provided for in Article 2.2 hereof, shall be carried over drilling of the well and its operations thereof according to the Substitute Well, but the Promoted Interest limitation provided for in Article 2.2 and Article 2.4 shall remain in effecteach Party’s well information sheet.

Initial Test Well. 4.1 The Initial Test Well will be drilled from Magnetar has the option, but not the obligation, to spud a surface location well on Apache’s South Timbalier 308 A Platform to a bottomhole location on lands covered by the Lease, pursuant to the well plan attached hereto as Exhibit “A” and to a depth sufficient to test the lowest Catinaster coalitus Sand as seen in the ST 308 #A-3 with top of sand at 20,750’ MD/19,604’ TVD and base at 20,868’ MD/19,720’ TVD (“Objective Depth”). 4.2 Apache will plan to enter into a contract for the platform rig to be utilized for the drilling of the Initial Test Well Subject on or before December 1August 31, 20072025 (the “Initial Test Well”). Should Apache fail to contract If the platform rig well is not spudded by such date, then at Ridgewood’s sole electionMagnetar shall either pay delay rentals as defined in paragraph 4 coming due until December 31, its participation commitment may be terminated immediately with no continuing liability obligation 2025, or penalty surrender all right title and interest pursuant to either Partythis agreement; provided, however, that Magnetar will have the option to continue paying delay rentals until December 31, 2026. For avoidance of doubtIf the Initial Test Well is not spudded by December 31, 2026, then Magnetar will assign all right, title and interests in the event Apache failsSubject Leases to Next Bridge. If Magnetar elects to discontinue paying delay rentals at any time after December 31, for any reason 2025, it will provide to contract Next Bridge not less than ninety (90) days’ notice of such intention. The Initial Test Well is intended to be drilled to a depth below a depth of 17,000’ or the platform rig by December 1Base of the R▇▇ ▇ Sand (as defined in Next Bridge’s previous unit designation) whichever is shallower at legal location of Magnetar’s choice on lands in the AMI. The Initial Test Well shall be drilled diligently, 2007, Ridgewood’s sole remedy against Apache will be to terminate this Agreement and Ridgewood hereby waives any and all claims and damages of every kind whatsoever resulting from Apache’s failure to enter into a drilling contract on or before December 1, 2007. 4.3 Subject to permitting, rig availabilitywithout unnecessary delay, and events in a workmanlike manner and shall be completed, if a well capable of Force Majeureproduction in paying quantities, Apache shall use all commercially reasonable efforts or plugged and abandoned if a dry hole. The force majeure provision of the Operating Agreement is deemed applicable to commence the Initial Test Well as if expressed herein. Ninety (90) days prior to the intended commencement of operations on the Initial Test Well within ninety (90) days Well, Magnetar shall notify Next Bridge of the Effective Date hereof. 4.4 In the event operations plans for the Initial Test Well are not commenced by Apache or another third party within ninety (90) days of the Effective Date hereof other than for reasons attributable to permittingWell, rig unavailabilityi.e., or Force Majeure or if Apache is not the operatorits location and objective depth, then Ridgewood may, within thirty (30) days following such ninety (90) day period, elect to terminate this Agreement immediately with no continuing liability obligation or penalty to either party and Ridgewood hereby waives any and all claims and damages of every kind whatsoever arising out of this Agreement. 4.5 Apache shall provide Ridgewood with copies of all well information from to Next Bridge an authority for expenditure (“AFE”) setting forth the estimated dry hole and completion costs anticipated for the Initial Test Well as required under the Operating Agreement. 4.6 In the event the Initial Test Well does not reach the Objective Depth because of mechanical difficulties or Gulf Coast Conditions Well. No later than sixty (i.e. rock salt, heaving shale, excessive water flow, depleted sands, excessive pressure, base or other impenetrable matter60) that prevent the operator from drilling the Initial Test Well days prior to the Objective Depth, the Parties hereto, pursuant to the Operating Agreement, may cause the drilling of a substitute well (hereinafter “Substitute Well”) on or before ninety (90) days following the plugging and abandonment intended commencement date of the Initial Test Well Well, Next Bridge shall notify Magnetar of its election to participate (or plugging back the “Next Bridge Participation”) 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 Next Bridge elects to accept its Next Bridge Participation, its interest in the Parties elect Initial Test Well and its right to drill a Substitute Well, then the consideration participate in all subsequent w▇▇▇▇ to be paid undertaken on lands in accordance with the Promoted Interest, AMI will be subject to the terms and provisions of the Operating Agreement provided for in Article 2.2 hereofthe following section of this Agreement. In the event Next Bridge elects not to participate in the drilling the Initial Well undertaken on lands in the AMI, its right to the Next Bridge Participation shall be carried over deemed terminated with respect to the Substitute WellInitial Well and all subsequent w▇▇▇▇ in the AMI. In the event Next Bridge is in default with respect to its payment for its share of working interest expenses attributable to the Next Bridge Participation for a period of more than sixty (60) days, but its right to the Promoted Interest limitation provided for Next Bridge Participation in Article 2.2 Initial Well and Article 2.4 shall remain any subsequent w▇▇▇▇ on the lands in effectthe AMI will be deemed terminated.

Initial Test Well. 4.1 The No later than the end of 270 days following the date of Farmor’s execution of this Agreement, Farmee must commence the actual drilling, with a drilling rig located on the drillsite and capable of drilling to the objective depth, of a test well (hereinafter referred to as the “Initial Test Well will be drilled from Well”) for oil and/or gas at a surface legal location on Apache’s South Timbalier 308 A Platform to a bottomhole location on complying with New Mexico regulations within the Leaseboundaries of the Farmout Area, pursuant to the well plan attached hereto as Exhibit “A” and to a depth sufficient to test the lowest Catinaster coalitus Sand as seen in the ST 308 #A-3 with top of sand at 20,750’ MD/19,604’ TVD and base at 20,868’ MD/19,720’ TVD (“Objective Depth”). 4.2 Apache will plan to enter into a contract for the platform rig to be utilized for Farmee must thereafter continuously prosecute the drilling of the Initial Test Well on or before December 1with due diligence and dispatch in a good workmanlike manner, 2007. Should Apache fail to contract the platform rig by such date, then at RidgewoodFarmee’s sole electioncost, its participation commitment may be terminated immediately with no continuing liability obligation or penalty risk and expense, to either Party. For avoidance a minimum subsurface depth to reach the San A▇▇▇▇▇ formation, the top of doubt, which is found at approximately 4,949 feet measured depth in the event Apache fails, for any reason to contract the platform rig by December 1, 2007, Ridgewood’s sole remedy against Apache will be to terminate this Agreement and Ridgewood hereby waives any and all claims and damages of every kind whatsoever resulting from Apache’s failure to enter into a drilling contract on or before December 1, 2007. 4.3 Subject to permitting, rig availabilityFederal #33-2 well, and events of Force Majeure, Apache shall use all commercially reasonable efforts to commence operations on the Initial Test Well within ninety (90) days of the Effective Date hereof. 4.4 In the event operations for the Initial Test Well are not commenced by Apache or another third party within ninety (90) days of the Effective Date hereof other than for reasons attributable to permitting, rig unavailability, or Force Majeure or if Apache is not the operator, then Ridgewood may, within thirty (30) days following such ninety (90) day period, elect to terminate this Agreement immediately with no continuing liability obligation or penalty to either party and Ridgewood hereby waives any and all claims and damages of every kind whatsoever arising out of this Agreement. 4.5 Apache shall provide Ridgewood with copies of all well information from complete the Initial Test Well as required a producer of oil and/or gas in paying quantities or properly plug and abandon such well as a dry hole at its sole cost, risk and expense, but subject to Farmor’s rights provided under the Operating Clause 16. hereinafter provided for in this Agreement. 4.6 In the event . Farmee shall not be liable in damages to Farmor for failure to timely commence and drill the Initial Test Well and the only consequences of such failure shall be the termination of this Agreement, with no refund of any cash considerations or spud fee previously paid to Farmor by Farmee. If Farmee shall fail to reach the minimum subsurface depth within the San A▇▇▇▇▇ formation above specified in the Initial Test Well, or the first Substitute Well following thereafter as provided for under Clause 7. below, then this Agreement shall terminate, with no refund of any cash considerations or spud fees previously paid to Farmor by Farmee and with no interests to be earned by or assigned to Farmee, and Farmor shall then have the right to takeover any wellbores not drilled within the foregoing minimum specificaions, and if Farmor 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) that prevent the operator from drilling elect to take over the Initial Test Well wellbore or the wellbore drilled as its substitute, then Farmee shall be obligated to plug and abandon any such w▇▇▇▇ not taken over by Farmor, and restore the Objective Depthsurface damage related thereto, at Farmee’s sole expense. For the purposes of selection of drilling locations by Farmee for any w▇▇▇▇ drilled by Farmee, the Parties hereto, pursuant to the Operating Agreement, may cause the drilling of a substitute well (hereinafter “Substitute Well”) on or before ninety (90) days following the plugging and abandonment boundaries of the Initial Test 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 Subject Lease shall be drilled treated as property lines for the purpose of spacing of w▇▇▇▇ from property or lease lines in order to target comply with New Mexico regulations required to obtain regular drilling permits. The rights of Farmor and obligations of Farmee under this provision shall survive 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 the Promoted Interest, provided for in Article 2.2 hereof, shall be carried over to the Substitute Well, but the Promoted Interest limitation provided for in Article 2.2 and Article 2.4 shall remain in effecttermination of this Agreement.

Initial Test Well. 4.1 2.01 Walter plans to participate i▇ ▇▇▇ drilling of an initial test well on the Lease. The Initial Test Well initial test well will be drilled from a surface location on Apache’s South Timbalier 308 A Platform of approximately 5,625' FSL and 6,610' FEL of the Lease and drilled to a bottomhole location on depth of 15,800' TVD (hereinafter "Initial Test Well"). As consideration for the opportunity to earn a twenty-five percent (25%) working interest in the Lease, pursuant Ridgewood shall bear Thirty-Three and One-Third percent (33.33%) of the costs to drill the Initial Test Well to casing point and through plugging and abandonment, if the Initial Test Well is not saved for production. This disproportionate cost sharing obligation shall be referred to as the "Promote." The Promote will be applicable to the well plan attached hereto as Exhibit “A” and to a depth sufficient to test the lowest Catinaster coalitus Sand as seen in the ST 308 #A-3 with top of sand at 20,750’ MD/19,604’ TVD and base at 20,868’ MD/19,720’ TVD (“Objective Depth”). 4.2 Apache will plan to enter into a contract for the platform rig to be utilized for the drilling dry hole costs of the Initial Test Well and will be limited to 110% of the Initial Test Well's estimated dry hole cost as noted in the attached AFE. The Promote will also apply to any substitute well or sidetrack of the Initial Test Well until Walter has received 110% of t▇▇ ▇▇▇ginal AFE dry hole costs. Concurrent with Ridgewood's execution of this Agreement, Ridgewood will be deemed to have approved the attached AFE and well plan. 2.02 Subject only to rig availability and the ability to obtain the required governmental permits, Walter and Ridgewood agree th▇▇ if the Initial Test Well is not spudded on or before December 1, 2007. Should Apache fail to contract the platform rig 2005 ("Commencement Date"), and such date has not been extended by such dateRidgewood, then at Ridgewood’s sole electionthis Agreement shall ipso facto terminate. Within 10 days of such termination, its participation commitment may be terminated immediately with no continuing liability obligation or penalty to either Party. For avoidance of doubt, in the event Apache fails, Walter shall ▇▇▇▇burse Ridgewood for any reason to contract the platform rig by December 1, 2007, Ridgewood’s sole remedy against Apache will be to terminate payments it received in accordance with Paragraph 1.01 of this Agreement and Ridgewood hereby waives shall submit assignments to Walter re-conveying Ridgewood'▇ ▇▇% working interest in the Lease previously received from Walter, whi▇▇ ▇▇▇ignment shall be free and clear of any and all claims and damages liens, charges, or lease burdens, overriding royalty interest, or any other encumbrance created by Ridgewood. For clarification purposes only, there shall be no other penalty(ies) assessable to either party hereto for failure of every kind whatsoever resulting from Apache’s failure the Initial Test Well to enter into a drilling contract be spudded on or before December 1, 2007the Commencement Date. 4.3 Subject 2.03 It is understood and agreed that Newfield Exploration Company (`Newfield") will have a 50% working interest in the Lease and Initial Test Well and will be the designated operator. SECTION III Assignment and Assumption of Rights 3.01 Within ten (10) days from receipt of Ridgewood's payment described in 1.01 above, Walter shall assign to permittingRidgew▇▇▇ Twenty Five percent (25%) operating rights interest in the Lease. The interest assigned to Ridgewood in the Lease shall be subject to the existing royalty burden and a 2.25% of 8/8ths overriding royalty interest ("ORRI") to be reserved by Walter, rig availabilityall proportionately r▇▇▇▇▇▇ to Ridgewood's assigned interest. Walter represents to Ridgewoo▇ ▇▇▇▇ total Lease burdens created by, through and events under Walter as of Force Majeurethe effective date of this Agreement, Apache shall use all commercially reasonable efforts including lessor's royalty, are no greater than 18.917% (of 8/8ths). The form of Assignment is attached hereto as Exhibit "A." SECTION IV Operating Agreement 4.01 Contemporaneous with the execution of this Agreement, the parties hereto agree to commence execute a mutually agreeable operating agreement ("JOA"), naming Newfield operator of the Lease. Both parties hereto acknowledge that the JOA is a three-party agreement also requiring Newfield's signature. All operations on the Initial Test Well within ninety (90) days of the Effective Date hereof. 4.4 In the event operations for the Initial Test Well are not commenced by Apache or another third party within ninety (90) days of the Effective Date hereof other than for reasons attributable to permitting, rig unavailability, or Force Majeure or if Apache is not the operator, then Ridgewood may, within thirty (30) days following such ninety (90) day period, elect to terminate this Agreement immediately with no continuing liability obligation or penalty to either party and Ridgewood hereby waives any and all claims and damages of every kind whatsoever arising out of this Agreement. 4.5 Apache shall provide Ridgewood with copies of all well information from subsequent operations on the Initial Test Well as required under the Operating Agreement. 4.6 In the event the Initial Test 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) that prevent the operator from drilling the Initial Test Well to the Objective Depth, the Parties hereto, pursuant to the Operating Agreement, may cause the drilling of a substitute well (hereinafter “Substitute Well”) on or before ninety (90) days following the plugging and abandonment of the Initial Test 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 Lease 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 conducted in accordance with the Promoted Interestterms and provisions of the JOA. If there are any conflicts between this Agreement and the JOA, provided for in Article 2.2 hereof, the terms and provisions of this Agreement shall be carried over to the Substitute Well, but the Promoted Interest limitation provided for in Article 2.2 prevail and Article 2.4 shall remain in effectgovern.

Initial Test Well. 4.1 The Magnetar has the option, but not the obligation, to spud a well on lands covered by the Subject Leases on or before September 30, 2028 (the “Initial Test Well will be drilled from a surface location on Apache’s South Timbalier 308 A Platform Well). If M▇▇▇▇▇▇▇ fails to a bottomhole location on the Lease, pursuant to the well plan attached hereto as Exhibit “A” and to a depth sufficient to test the lowest Catinaster coalitus Sand as seen in the ST 308 #A-3 with top of sand at 20,750’ MD/19,604’ TVD and base at 20,868’ MD/19,720’ TVD (“Objective Depth”). 4.2 Apache will plan to enter into a contract for the platform rig to be utilized for the drilling of spud the Initial Test Well on or before December 1prior to September 30, 20072028, it will reassign to Next Bridge all leases covering lands within the Existing Unit, and this Agreement shall be deemed terminated and of no further force and effect. Should Apache fail The Initial Test Well shall be drilled to contract a depth of 15,100 feet below the platform rig by such datesurface or to the base of the Miogyp 4 Sand (as defined in Next Bridge’s previous unit designation), then whichever is shallower, at Ridgewoodlegal location of Magnetar’s sole election, its participation commitment may be terminated immediately with no continuing liability obligation or penalty to either Party. For avoidance of doubt, choice on lands in the event Apache failsExisting Unit. The Initial Test Well shall be drilled diligently, for any reason to contract the platform rig by December 1, 2007, Ridgewood’s sole remedy against Apache will be to terminate this Agreement and Ridgewood hereby waives any and all claims and damages of every kind whatsoever resulting from Apache’s failure to enter into a drilling contract on or before December 1, 2007. 4.3 Subject to permitting, rig availabilitywithout unnecessary delay, and events in a workmanlike manner and shall be completed, if a well capable of Force Majeureproduction in paying quantities, Apache shall use all commercially reasonable efforts or plugged and abandoned if a dry hole. The force majeure provision of the Operating Agreement is deemed applicable to commence the Initial Test Well as if expressed herein. Ninety (90) days prior to the intended commencement of operations on the Initial Test Well within ninety (90) days Well, Magnetar shall notify Next Bridge of the Effective Date hereof. 4.4 In the event operations plans for the Initial Test Well are not commenced by Apache or another third party within ninety (90) days of the Effective Date hereof other than for reasons attributable to permittingWell, rig unavailabilityi.e., or Force Majeure or if Apache is not the operatorits location and objective depth, then Ridgewood may, within thirty (30) days following such ninety (90) day period, elect to terminate this Agreement immediately with no continuing liability obligation or penalty to either party and Ridgewood hereby waives any and all claims and damages of every kind whatsoever arising out of this Agreement. 4.5 Apache shall provide Ridgewood with copies of all well information from to Next Bridge an authority for expenditure (“AFE”) setting forth the estimated dry hole and completion costs anticipated for the Initial Test Well as required under the Operating Agreement. 4.6 In the event the Initial Test Well does not reach the Objective Depth because of mechanical difficulties or Gulf Coast Conditions Well. No later than sixty (i.e. rock salt, heaving shale, excessive water flow, depleted sands, excessive pressure, base or other impenetrable matter60) that prevent the operator from drilling the Initial Test Well days prior to the Objective Depth, the Parties hereto, pursuant to the Operating Agreement, may cause the drilling of a substitute well (hereinafter “Substitute Well”) on or before ninety (90) days following the plugging and abandonment intended commencement date of the Initial Test Well Well, Next Bridge shall notify Magnetar of its election to participate (or plugging back the “Next Bridge Participation”) 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 Next Bridge elects to accept its Next Bridge Participation, its interest in the Parties elect Initial Test Well and its right to drill a Substitute Well, then the consideration participate in all subsequent w▇▇▇▇ to be paid undertaken on lands in accordance with the Promoted Interest, AMI will be subject to the terms and provisions of the Operating Agreement provided for in Article 2.2 hereofthe following section of this Agreement. In the event Next Bridge elects not to participate in the drilling the Initial Well undertaken on lands in the AMI, its right to the Next Bridge Participation shall be carried over deemed terminated with respect to the Substitute WellInitial Well and all subsequent w▇▇▇▇ in the AMI. In the event Next Bridge is in default with respect to its payment for its share of working interest expenses attributable to the Next Bridge Participation for a period of more than sixty (60) days, but its right to the Promoted Interest limitation provided for Next Bridge Participation in Article 2.2 Initial Well and Article 2.4 shall remain any subsequent w▇▇▇▇ on the lands in effectthe AMI will be deemed terminated.