Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

The Ridgewood Energy X Fund, LLC (the “Fund”), a Delaware limited liability company, was formed on August 30, 2007 and operates pursuant to a limited liability company agreement (the “LLC Agreement”) dated as of January 2, 2008 by and among Ridgewood Energy Corporation (the “Manager”) and the shareholders of the Fund.  The Fund was organized to acquire interests in oil and natural gas properties located in the United States offshore waters of Texas, Louisiana, and Alabama in the Gulf of Mexico.

The Manager has direct and exclusive control over the management of the Fund’s operations.  With respect to project investments, the Manager locates potential projects, conducts appropriate due diligence and negotiates and completes the transactions in which the investments are made.  The Manager performs, or arranges for the performance of, the management, advisory and administrative services required for Fund operations.  Such services include, without limitation, the administration of shareholder accounts, shareholder relations and the preparation, review and dissemination of tax and other financial information.  In addition, the Manager provides office space, equipment and facilities and other services necessary for Fund operations.  The Manager also engages and manages the contractual relations with unaffiliated custodians, depositories, accountants, attorneys, broker-dealers, corporate fiduciaries, insurers, banks and others as required. See Notes 2, 6 and 8.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period.  On an ongoing basis, the Manager reviews its estimates, including those related to property balances, determination of proved reserves, impairments and asset retirement obligations. Actual results may differ from those estimates.

      

All highly liquid investments with maturities, when purchased, of three months or less, are considered cash and cash equivalents.  At times, bank deposits may be in excess of federally insured limits.  At JuneSeptember 30, 2009, bank balances exceeded federally insured limits by $4.8$3.0 million, of which $4.6$2.8 million was invested in money market accounts that invest solely in U.S. Treasury bills and notes.  Effective October 2008 through December 31, 2013, federally insured limits have been increased from $0.1 million to $0.25 million for interest bearing deposits.  Additionally, non-interest bearing deposits are fully insured through December 31, 2009, after which they will be included in the $0.25 million limits.

At times, the Fund may invest in U.S. Treasury bills and notes.  These investments are considered short-term when their maturities are one year or less, and long-term when their maturities are greater than one year.  TheAt September 30, 2009, the Fund currently hashad short-term investments, which mature in AugustDecember 2009 and February 2010, that are classified as held-to-maturity.  Held-to-maturity investments are those securities that the Fund has the ability and intent to hold until maturity, and are recorded at cost plus accrued income, adjusted for the amortization of premiums and discounts, which approximates fair value.

The Fund deposits in a separate interest-bearing account, or a salvage fund, money to provide for the dismantling and removal of production platforms and facilities and plugging and abandoning its wells at the end of their useful lives, in accordance with applicable federal and state laws and regulations.  At JuneSeptember 30, 2009, the Fund had a held-to-maturity investmentinvestments in U.S. Treasury securities within its salvage fund that are classified as held-to-maturity, totaling $1.0 million, which maturesmature in August 2013.

Interest earned on the account will become part of the salvage fund.  There are no legal restrictions on withdrawals from the salvage fund.

The Fund invests in oil and gas properties, which are operated by unaffiliated entities that are responsible for drilling, administering and producing activities pursuant to the terms of the applicable operating agreements with working interest owners.  The Fund’s portion of exploration, drilling, operating and capital equipment expenditures is billed by operators.

The successful efforts method of accounting for oil and gas producing activities is followed.  Acquisition costs are capitalized when incurred.  Other oil and gas exploration costs, excluding the costs of drilling exploratory wells, are charged to expense as incurred.  The costs of drilling exploratory wells are capitalized pending the determination of whether the wells have discovered proved commercial reserves.  If proved commercial reserves have not been found, exploratory drilling costs are expensed to dry-hole expense.  Costs to develop proved reserves, including the costs of all development wells and related facilities and equipment used in the production of oil and gas, are capitalized.  Expenditures for ongoing repairs and maintenance of producing properties are expensed as incurred.

Upon the sale or retirement of a proved property, the cost and related accumulated depletion and amortization will be eliminated from the property accounts, and the resultant gain or loss is recognized. Upon the sale or retirement of an unproved property, gain or loss on the sale is recognized.  The Manager does not currently intend to sell any of the Fund’s property interests.

Capitalized acquisition costs of producing oil and gas properties are depleted by the units-of-production method.

As of JuneSeptember 30, 2009 and December 31, 2008, amounts recorded in due to operators totaling $2.7$1.2 million and $6.3 million, respectively, related to capital expenditures for oil and gas properties.

The Fund’s acquisition of a working interest in a well or a project requires it to make a payment to the seller for the Fund’s rights, title and interest.  The Fund may be required to advance its share of estimated cash expenditures for the succeeding month’s operation.  The Fund accounts for such payments as advances to operators for working interests and expenditures.  As drilling costs are incurred, the advances are reclassified to unproved properties.

For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired.  When a project reaches drilling depth and is determined to be either proved or dry, an asset retirement obligation is incurred.  Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.  The following table presents changes in asset retirement obligations for the sixnine months ended JuneSeptember 30, 2009 and the year ended December 31, 2008.

As indicated above, the Fund maintains a salvage fund to provide for the funding of future asset retirement obligations.

Syndication costs are direct costs incurred by the Fund in connection with the offering of the Fund’s shares, including professional fees, selling expenses and administrative costs payable to the Manager, an affiliate of the Manager and unaffiliated broker-dealers, which are reflected on the Fund’s balance sheet as a reduction of shareholders’ capital.

Oil and gas revenues are recognized when oil and gas is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred, and if collectibility of the revenue is probable.

The Fund uses the sales method of accounting for gas production imbalances.  The volumes of gas sold may differ from the volumes to which the Fund is entitled based on its interests in the properties.  These differences create imbalances that are recognized as a liability only when the properties’ estimated remaining reserves net to the Fund will not be sufficient to enable the underproduced owner to recoup its entitled share through production.  The Fund’s recorded liability, if any, would be reflected in other liabilities.  No receivables are recorded for those wells where the Fund has taken less than its share of production.

The Fund reviews the value of its oil and gas properties whenever management determines that events and circumstances indicate that the recorded carrying value of properties may not be recoverable. Impairments of producing properties are determined by comparing future net undiscounted cash flows to the net book value at the end of each period. If the net book value exceeds the future net undiscounted cash flows, the carrying value of the property is written down to “fairfair value,” which is determined using net discounted future cash flows from the producing property. Different pricing assumptions, reserve estimates or discount rates could result in a different calculated impairment. The Fund provides for impairments on unproved properties when it determines that the property will not be developed or a permanent impairment in value has occurred.  The fair value determinations require considerable judgment and are sensitive to change.  Different pricing assumptions, reserve estimates or discount rates could result in a different calculated impairment. Given the volatility of oil and gas prices, it is reasonably possible that the Fund’s estimate of discounted future net cash flows from proved oil and gas reserves could change in the near term. If oil and gas prices decline significantly, even if only for a short period of time, it is possible that write-downs of oil and gas properties could occur.

Depletion and amortization of the cost of proved oil and gas properties are calculated using the units-of-production method.  Proved developed reserves are used as the base for depleting capitalized costs associated with successful exploratory well costs.  The sum of proved developed and proved undeveloped reserves is used as the base for depleting or amortizing leasehold acquisition costs, the costs to acquire proved properties and platform and pipeline costs.

Profits and losses are allocated 85% to shareholders in proportion to their relative capital contributions and 15% to the Manager, except for interest income and certain expenses such as dry-hole costs, trust fees, depletion and amortization, which are allocated 99% to shareholders and 1% to the Manager.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”),guidance on subsequent events, which sets forth general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165The guidance was adopted effective for the second quarter of 2009 and did not have a material impact on the Fund’s financial statements.

In April 2009, the FASB issued FASB Staff Position No. SFAS 107-1 and APB No. 28-1, “Interim Disclosuresguidance on interim disclosures about Fair Valuefair value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”),financial instruments, which requires quarterly disclosure of information about the fair value of financial instruments within the scope of SFAS No. 107, “Disclosures about Fair Value of Financial Instruments.” FSP FAS 107-1 and APB 28-1instruments.  The guidance was adopted effective for the second quarter of 2009 and did not have a material impact on the Fund’s financial statements.

In December 2008, the SEC issued Release No. 33-8995, “Modernization of Oil and Gas Reporting,”Reporting” (“Release No. 33-8995”), amending oil and gas reporting requirements under Rule 4-10 of Regulation S-X and Industry Guide 2 in Regulation S-K.  The new requirements provide for consideration of new technologies in evaluating reserves, allow companies to disclose their probable and possible reserves to investors, report oil and gas reserves using an average price based on the prior 12-month period rather than year-end prices, and revise the disclosure requirements for oil and gas operations.  The final rules are effective for fiscal years ending on or after December 31, 2009.

Leasehold acquisition and exploratory drilling costs are capitalized pending determination of whether the well has found proved reserves.  Unproved properties are assessed on a quarterly basis by evaluating and monitoring if sufficient progress is made on assessing the reserves.  At JuneSeptember 30, 2009 the Fund had no unproved properties with capitalized exploratory well costs in excess of one year.  The following table reflects the net changes in unproved properties for the sixnine months ended JuneSeptember 30, 2009 and the year ended December 31, 2008.

Capitalized exploratory well costs are expensed as dry-hole costs in the event that reserves are not found or are not in sufficient quantities to complete the well and develop the field.  Dry-hole costs, inclusive of plug and abandonment expenses, for the nine months ended September 30, 2009 and 2008 are detailed in the following table.   There were no dry-hole costs for the three months ended September 30, 2009 and 2008.

Distributions to shareholders are allocated in proportion to the number of shares held. Certain shares have early investment incentive and advance distribution rights, as defined in the LLC Agreement, which range from approximately $8 thousand to $16 thousand per share.  The Fund began making distributions to eligible early investors in December 2008.

The Manager determines whether available cash from operations, as defined in the LLC Agreement, will be distributed. Such distributions are allocated 85% to the shareholders and 15% to the Manager, as required by the LLC Agreement.

Available cash from dispositions, as defined in the LLC Agreement, will be paid 99% to shareholders and 1% to the Manager until the shareholders have received total distributions equal to their capital contributions.  After shareholders have received distributions equal to their capital contributions, 85% of available cash from dispositions will be distributed to shareholders and 15% to the Manager.

In 2008, the Fund incurred a one-time investment fee of approximately 4.5% of initial capital contributions, payable to the Manager.  FeesSuch fees were payable for services of investigating and evaluating investment opportunities and effecting transactions and were expensed as incurred.  For the sixnine months ended JuneSeptember 30, 2008, investment fees were $4.3 million.

In 2008, the Fund incurred an offering fee, payable to the Manager, totaling $3.3 million, which approximated 3.5% of capital contributions directly related to the offer and sale of shares of the Fund.  Such offering fee is included in syndication costs of $11.1 million.

In 2008, Ridgewood Securities Corporation, a registered broker-dealer affiliated with the Manager, was paid commissions and placement fees for shares sold of the Fund totaling $1.0 million which are reflected in syndication costs.

The LLC Agreement provides that the Manager render management, administrative and advisory services.  For such services, the Manager is paid an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund.  Management fees for the three months ended JuneSeptember 30, 2009 and 2008 were $0.5$0.4 million and $0.6 million, respectively.  Management fees for the sixnine months ended JuneSeptember 30, 2009 and 2008 were $1.0$1.4 million and $0.9$1.5 million, respectively.

At times, short-term payables and receivables, which do not bear interest, arise from transactions with affiliates in the ordinary course of business.  At JuneSeptember 30, 2009, the Fund had no such receivables or payables.  At December 31, 2008, the Fund had a receivable from the Manager of $17 thousand, which was included in other current assets.

None of the compensation paid to the Manager has been derived as a result of arm’s length negotiations.

The Fund has working interest ownership in certain projects to acquire and develop oil and natural gas projects with other entities that are likewise managed by the Manager.

At JuneSeptember 30, 2009 and December 31, 2008, the carrying value of cash and cash equivalents, short-term investments in marketable securities, production receivable, salvage fund and accrued expenses approximate fair value.

The Fund has entered into multiple agreements for the drilling and development of its investment properties.  The estimated capital expenditures associated with these agreements vary depending on the stage of development on a property-by-property basis.  As of JuneSeptember 30, 2009, the Fund had committed to spend an additional $18.7$6.3 million related to its investment properties.

The exploration for and development of oil and natural gas involves the extraction, production and transportation of materials which, under certain conditions, can be hazardous or cause environmental pollution problems.  The Manager and operators of the Fund’s properties are continually taking action they believe appropriate to satisfy applicable federal, state and local environmental regulations and do not currently anticipate that compliance with federal, state and local environmental regulations will have a material adverse effect upon capital expenditures, results of operations or the competitive position of the Fund in the oil and gas industry.  However, due to the significant public and governmental interest in environmental matters related to those activities, the Manager cannot predict the effects of possible future legislation, rule changes, or governmental or private claims.  At JuneSeptember 30, 2009 and December 31, 2008, there were no known environmental contingencies that required the Fund to record a liability.

The Fund is subject to all risks inherent in the exploration for and development of oil and gas. Insurance coverage as is customary for entities engaged in similar operations is maintained, but losses may occur from uninsurable risks or amounts in excess of existing insurance coverage.  The occurrence of an event that is not insured or not fully insured could have an adverse impact upon earnings and financial position.  Moreover, insurance is obtained as a package covering all of the funds managed by the Manager.  Claims made by other funds can reduce or eliminate insurance for the Fund.  During the nine months ended September 30, 2009, the Fund was notified that the operator of the Aspen Project had filed an insurance claim relative to an insurable event that had occurred during the drilling of the Aspen well.  At September 30, 2009, the Fund has recorded a receivable of $0.4 million, based on its estimate of insurance recoveries.  The Fund records receivables for insured losses when the expected insurance proceeds are probable and reasonably estimable.

Certain statements in this Quarterly Report on Form 10-Q (“Quarterly Report”) and the documents Ridgewood Energy X Fund, LLC (the “Fund”) has incorporated by reference into this Quarterly Report, other than purely historical information, including estimates, projections, statements relating to the Fund’s business plans, strategies, objectives and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements.  These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “target,” “pursue,” “may,” “will likely result,” and similar expressions.  Examples of such events that could cause actual results to differ materially from historical results or those anticipated include weather conditions, such as hurricanes, changes in market conditions affecting the pricing of oil and natural gas, the cost and availability of equipment, and changes in governmental regulations.  The Fund undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The following discussion and analysis of the Fund’s financial condition and operating results is based on its financial statements.  The preparation of this Quarterly Report requires the Fund to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Fund’s financial statements, and the reported amount of revenue and expense during the reporting period. Actual results may differ from those estimates and assumptions.  See “Notes to Unaudited Condensed Financial Statements” in Part I of this Quarterly Report for a presentation of the Fund’s significant accounting policies.  No changes have been made to the Fund’s critical accounting policies and estimates disclosed in its Registration Statement on Form 10 filed on March 5, 2009.

The Fund is a Delaware limited liability company formed on August 30, 2007 to acquire interests in oil and natural gas properties located in the United States offshore waters of Texas, Louisiana and Alabama in the Gulf of Mexico.  Ridgewood Energy Corporation (“Ridgewood Energy” or the “Manager”) a Delaware corporation, is the Manager.  As the Manager, Ridgewood Energy has direct and exclusive control over the management of the Fund’s operations.  The Fund’s primary investment objective is to generate cash for distribution to its shareholders through the acquisition of “working interests” in the exploration, production and sale of oil and natural gas. 

The Manager performs certain duties on the Fund’s behalf including the evaluation of potential projects for investment and ongoing management, administrative and advisory services associated with these projects.  For these services, the Manager receives an annual management fee equal to 2.5% of capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund, payable monthly.  The Fund does not currently, nor is there any plan to operate any project in which the Fund participates. The Manager enters into operating agreements with third-party operators for the management of all exploration, development and producing operations, as appropriate.  The Manager also participates in distributions.

The Fund owns working interests and has participated in the drilling of sevensix wells; two resulted in discoveries one is currently drilling and four have been determined to be dry holes, two of which were determined to be dry-holesdry holes during 2009.

In July 2008, the Fund acquired a 2.33% working interest in the Aspen, Project, an exploratory well.  Theproject.  In April 2009, the first well of the Aspen Project was determined to be a discoveryfound hydrocarbons in April 2009three separate zones.  Second and a secondthird delineation well beganwells were drilled from July - September 2009.  Once the results from this additional drilling in July 2009.  Results for the second well are expected in October 2009, at which timehave been analyzed, the operator and working interest owners will evaluate thepossible development plans and determine the economics of the completion.  Thecompletion and further drilling.  Aspen Project is a deepwater wellproject that requires significant infrastructure construction.  Through JuneSeptember 30, 2009, the Fund has spent $3.5$4.4 million, net of estimated insurance recoveries, related to this project, for which the total estimated budget is $22.2$10.7 million, which includes two additional wells.  During the nine months ended September 30, 2009, the Fund was notified that the operator of the Aspen Project had filed an insurance claim relative to an insurable event that had occurred during the drilling of the Aspen well.  At September 30, 2009, the Fund has recorded a receivable of $0.4 million, based on its estimate of insurance recoveries.

In May 2008, the Fund acquired a 14.0% working interest in the exploratory project Main Pass 283/279 Wellwell #1.  This project began drilling in April 2008 and was determined to be successful in July 2008.  Production for this well commenced in August 2008.  The Fund has spent $4.2$4.0 million related to this well.

In August 2008, the Fund acquired a 28.0% working interest in the Luna Project, an exploratory well.  The Luna Project began drilling in May 2009 and was determined to be an unsuccessful well, or dry-hole,dry hole, in June 2009.  Dry-hole costs of $5.6 million were incurred during the sixnine months ended JuneSeptember 30, 2009.

In November 2007, the Fund acquired an 11.0% working interest in the exploratory project South Timbalier 287.  This project began drilling in March 2008 and was determined to be an unsuccessful well, or dry hole, in January 2009. Dry-hole costs related to this well totaled $11.8 million, of which $1.2 million were incurred during the sixnine months ended JuneSeptember 30, 2009.

The following table summarizes the Fund’s results of operations for the three and sixnine months ended JuneSeptember 30, 2009 and 2008, and should be read in conjunction with the Fund’s financial statements and notes thereto included within Item 1 “Financial Statements” in Part I of this Quarterly Report.

 

Oil sales volumes were approximately 34 thousand barrels at an average price of $56 per barreland 3 hundred barrels for the three months ended JuneSeptember 30, 2009.  2009 and 2008, respectively.  The Fund’s oil prices averaged $67 per barrel during the three months ended September 30, 2009 compared to $103 per barrel during the three months ended September 30, 2008.

Oil sales volumes were approximately 711 thousand barrels at an average price of $46and 3 hundred barrels for the nine months ended September 30, 2009 and 2008, respectively.  The Fund’s oil prices averaged $54 per barrel forduring the sixnine months ended JuneSeptember 30, 2009.2009 compared to $103 per barrel during the nine months ended September 30, 2008.

Gas sales volumes were 6156 thousand mcf at an average price of $3.47 perand 4 thousand mcf for the three months ended JuneSeptember 30, 2009.  2009 and 2008, respectively.  The Fund’s gas prices averaged $3.14 per mcf during the three months ended September 30, 2009 compared to $7.51 per mcf during the three months ended September 30, 2008.

Gas sales volumes were 115171 thousand mcf at an average price of $4.15 perand 4 thousand mcf for the sixnine months ended JuneSeptember 30, 2009.  Processing revenue was $43 thousand2009 and $0.1 million for2008, respectively.  The Fund’s gas prices averaged $3.81 per mcf during the three and sixnine months ended JuneSeptember 30, 2009 respectively.compared to $7.51 per mcf during the nine months ended September 30, 2008.

 

Lease operating expensesexpense for the three and sixnine months ended JuneSeptember 30, 2009 related to Main Pass 283/279 well # 1.  There were no lease operating expenses during the three and sixnine months ended JuneSeptember 30, 2008.  Geological costs for the three and sixnine months ended JuneSeptember 30, 2009 related to the Aspen Project and Main Pass 283/279 well # 1.#1.  Geological costs for the three and sixnine months ended JuneSeptember 30, 2008 related to South Timbalier 287.

Insurance expense represents premiums related to producing well and control of well insurance, which varies dependent upon the number of wells producing or drilling and director’s and officers’ liability insurance.  Accounting fees represent annual audit and tax preparation fees, quarterly reviews and filing fees incurred by the Fund.  Trust fees represent bank fees associated with the management of the Fund’s cash accounts.

Cash flows used in operating activities for the sixnine months ended JuneSeptember 30, 2009 were $86 thousand,$0.4 million, primarily related to revenue receipts of $0.9$1.4 million and favorable working capital of $0.2 million, partially offset by management fees of $1.0$1.4 million, and general and administrative expenses of $0.3$0.4 million and operating expenses of $0.2 million.

Cash flows used in operating activities for the sixnine months ended JuneSeptember 30, 2008 were $5.3$5.9 million, primarily related to payments of investment andfees of $4.3 million, management fees totaling $5.2of $1.5 million and general and administrative expenses of $0.6 million, partially offset by interest income received of $0.3 million and favorable working capital of $0.2 million.

Cash flows provided by investing activities for the sixnine months ended JuneSeptember 30, 2009 were $5.0$7.5 million, primarily related to proceeds from the maturity of investmentsU.S. Treasury securities of $59.5$99.6 million, partially offset by investments in held-to-maturitymarketable securities of $40.0$75.0 million and capital expenditures for oil and gas properties of $14.5$17.1 million.  Additionally, the Fund increased its salvage fund investments by $14$21 thousand, which consisted of the interest earned on this account.

Cash flows used in investing activities for the sixnine months ended JuneSeptember 30, 2008 were $12.3$72.1 million, primarily related to investments in marketable securities of $59.0 million, capital expenditures for oil and gas properties inclusive of advances.$12.0 million, and investments in salvage fund of $1.1 million.

Cash flows used in financing activities for the sixnine months ended JuneSeptember 30, 2009 were $0.9$1.2 million related to distributions paid.manager and shareholder distributions.

Cash flows provided by financing activities for the sixnine months ended JuneSeptember 30, 2008 were $83.5$83.6 million related to capital contributions received of $94.6$94.7 million, partially offset by syndication costs paid of $11.1 million.

The Fund has entered into multiple agreements for the drilling and development of its investment properties.  The estimated capital expenditures associated with these agreements can vary depending on the stage of development on a property-by-property basis.  As of JuneSeptember 30, 2009, the Fund had committed to spend an additional $18.7$6.3 million related to its investment properties.

When the Manager makes a decision to participate in a particular project, it assumes that the well will be successful and allocates enough capital to budget for the completion of that well and the additional development wells and infrastructure anticipated.  If an exploratory well is deemed a dry hole or if it is un-economical, the capital allocated to the completion of that well and to the development of additional wells is then reallocated to a new project or used to make additional investments.

Capital expenditures for investment properties are funded with the capital raised by the Fund in its private placement offering, which is more than likely, all the capital it will be able to obtain.  The number of projects in which the Fund can invest will naturally be limited, and each unsuccessful project the Fund experiences will reduce its ability to generate revenue and exhaust its capital.  Typically, the Manager seeks an investment portfolio that combines high and low risk exploratory projects.

The Fund’s primary short-term liquidity needs are to fund its operations, inclusive of management fees, and capital expenditures for its investment properties.  Operations are funded utilizing operating income, existing cash on-hand, short-term investments and income earned therefrom. 

The Manager is entitled to receive an annual management fee from the Fund regardless of the Fund’s profitability in that year.  Generally, all or a portion of the management fee is paid from operating income and interest income, although the management fee can be paid out of capital contributions; however, this is not the Fund’s intent.

Distributions are funded from available cash flow from operations, as defined in the Fund’s limited liability company agreement, and the frequency and amount are within the Manager’s discretion subject to available cash from operations, reserve requirements and the Fund’s operations.

The Fund had no off-balance sheet arrangements at JuneSeptember 30, 2009 and December 31, 2008 and does not anticipate the use of such arrangements in the future.

The Fund enters into operating agreements with operators.  On behalf of the Fund, an operator enters into various contractual commitments pertaining to exploration, development and production activities.  The Fund does not negotiate any such contracts.  No contractual obligations exist at JuneSeptember 30, 2009 and December 31, 2008 other than those discussed in “Estimated Capital Expenditures” above.

See Note 3 of Notes to Unaudited Condensed Financial Statements – “Recent Accounting Standards” contained in this Quarterly Report for a discussion of recent accounting pronouncements.

Not required.

In accordance with Exchange Act Rules 13a-15 and 15d-15, the Fund carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Fund’s disclosure controls and procedures as of the end of the period covered by this report.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Fund’s disclosure controls and procedures were effective as of JuneSeptember 30, 2009.

There has been no change in the Fund’s internal control over financial reporting that occurred during the three months ended JuneSeptember 30, 2009 that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

None.

None.

None.

None.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.