---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2008

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 000-51926

RIDGEWOOD ENERGY P FUND, LLC(Exact name of registrant as specified in its charter)

|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 86-1133315         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

947 Linwood Avenue, Ridgewood, NJ 07450
(Address of principal executive offices) (Zip code)

(800) 942-5550
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Shares of LLC Membership Interest

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.


Yes o   No x


Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Act.


Yes o    No x


Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days. Yes x   No o

Indicate by check mark if the
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained herein, to the best of the
registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. x

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 definitions of
large accelerated filer, accelerated filer, and smaller reporting company
in Rule 12b-2 of the Exchange Act. (Check one):

|                                               |  |   |                           |  
|---------------------------------------------- |  | - | ------------------------- | -
|Large accelerated filer                        |  | o | Accelerated filer         | o
|Non-accelerated filer                          |  | o | Smaller reporting company | x
|(Do not check if a smaller
 reporting company) |  |   |                           |  

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o   No x

There is no market for the
shares of LLC Membership Interest in the Fund. As of March 16, 2009 there are
933.06 shares outstanding.

---



RIDGEWOOD ENERGY P FUND, LLC
2008 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

|         |          |  |                                                                                                                |  |     
|-------- | -------- |  | -------------------------------------------------------------------------------------------------------------- |  | ----
|         |          |  |                                                                                                                |  | PAGE
|         |          |  |                                                                                                                |  |     
|         |          |  |                                                                                                                |  |     
|PART
 I  |          |  |                                                                                                                |  |     
|         | ITEM
 1  |  | BUSINESS                                                                                                       |  | 3   
|         | ITEM
 1A |  | RISK
 FACTORS                                                                                                  |  | 12  
|         | ITEM
 1B |  | UNRESOLVED
 STAFF COMMENTS                                                                                     |  | 12  
|         | ITEM
 2  |  | PROPERTIES                                                                                                     |  | 12  
|         | ITEM
 3  |  | LEGAL
 PROCEEDINGS                                                                                             |  | 12  
|         | ITEM
 4  |  | SUBMISSION
 OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                           |  | 12  
|PART
 II |          |  |                                                                                                                |  |     
|         | ITEM
 5  |  | MARKET
 FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
 PURCHASES OF EQUITY SECURITIES |  | 13  
|         | ITEM 6   |  | SELECTED FINANCIAL DATA                                                                                        |  | 13  
|         | ITEM 7   |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS                         |  | 13  
|         | ITEM 7A  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                     |  | 19  
|         | ITEM 8   |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                    |  | 19  
|         | ITEM 9   |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 FINANCIAL DISCLOSURE                          |  | 19  
|         | ITEM 9A  |  | CONTROLS AND PROCEDURES                                                                                        |  | 19  
|         | ITEM 9B  |  | OTHER INFORMATION                                                                                              |  | 20  
|PART III |          |  |                                                                                                                |  |     
|         | ITEM 10  |  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                         |  | 21  
|         | ITEM 11  |  | EXECUTIVE COMPENSATION                                                                                         |  | 22  
|         | ITEM 12  |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
 RELATED STOCKHOLDER MATTERS                |  | 22  
|         | ITEM 13  |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
 INDEPENDENCE                                     |  | 23  
|         | ITEM 14  |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                         |  | 23  
|PART IV  |          |  |                                                                                                                |  |     
|         | ITEM 15  |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                                        |  | 24  

1

---



FORWARD-LOOKING STATEMENTS

Certain
statements in this Annual Report on Form 10-K (Annual Report) and the
documents Ridgewood Energy P Fund, LLC (the Fund) has incorporated by
reference into this Annual 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.

WHERE YOU CAN GET MORE INFORMATION

The Fund files
annual, quarterly and current reports and certain other information with the
Securities and Exchange Commission (SEC). Persons may read and copy any
materials the Fund files with the SEC at the SECs public reference room at 100
F Street, NE, Washington D.C. 20549, on official business days during the hours
of 10 a.m. to 3 p.m. Eastern Time. Information may be obtained from the public
reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
internet site that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC at
http://www.sec.gov.

2

---



PART I

ITEM 1. BUSINESS

Overview

The Fund is a
Delaware limited liability company (LLC) formed on March 21, 2005 to acquire
interests primarily in oil and natural gas properties located in the United
States offshore waters of Texas, Louisiana, and Alabama in the Gulf of Mexico.

The Fund
initiated its private placement offering on May 16, 2005, selling whole and
fractional shares of LLC membership interest (Shares), primarily at $150
thousand per whole Share. There is no public market for the Shares and one is
not likely to develop. In addition, the Shares are subject to material
restrictions on transfer and resale and cannot be transferred or resold except
in accordance with the Funds limited liability company agreement (the LLC
Agreement) and applicable federal and state securities laws. The private
placement offering was terminated on October 30, 2005. The Fund raised $138.3
million, and after payment of $22.2 million in offering fees, commissions and
investment fees, the Fund had $116.1 million for investments and operating
expenses. See Item 13. Certain Relationships and Related Transactions, and
Director Independence for additional discussion.

Manager

Ridgewood
Energy Corporation (the Manager) or (Ridgewood Energy) was founded in 1982
by Robert E. Swanson. The Manager has direct and exclusive control over the
management of the Funds operations. With respect to project investment, the
Manager locates potential projects, conducts appropriate due diligence and
negotiates and completes the transactions in which the investments are made.
This includes review of existing title documents, reserve information, and
other technical specifications regarding a project, and review and preparation
of participation agreements and other agreements relating to an investment.

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.

The Fund is required
to pay all other expenses it may incur, including insurance premiums, expenses
of preparing and printing periodic reports for shareholders and the SEC,
commission fees, taxes, outside legal, accounting and consulting fees,
litigation expenses and other expenses. The Fund is required to reimburse the
Manager for all such expenses paid on its behalf.

As
compensation for their services, the Manager is entitled to an annual
management fee, payable monthly, equal to 2.5% of the total capital contributions
made by the Funds shareholders, net of cumulative dry-hole and related well
costs incurred by the Fund. Management fees for the years ended December 31,
2008 and 2007 were $1.9 million and $2.2 million, respectively. Additionally,
the Manager is entitled to receive a 15% interest in cash distributions made by
the Fund. For the years ended December 31, 2008 and 2007, the Manager was paid
distributions totaling $2.2 million and $0.2 million, respectively.

Business Strategy

The Funds
primary investment objective is to generate cash for distribution to the Funds
shareholders through the acquisition of working interests in the exploration,
production and sale of oil and natural gas. Distributions are funded from cash
flow from operations, and the frequency and amount are within the Managers
discretion, subject to available cash from operations, reserve requirements and
Fund operations. A working interest is a percentage of ownership in an oil
and natural gas lease granting its owner the right to explore, drill and
produce oil and natural gas from projects on that lease block. The Fund tries
to focus on projects that have significant reserve potential and which are
projected to have the shortest time period from investment to first production.
The Fund does not operate these projects, and although it has a vote, it is not
in control of the schedule pursuant to which its projects are developed and
completed. Working interest owners are obligated to pay a corresponding
percentage of the cost of leasing, drilling, producing and operating a well.
After royalties are paid, the working interest also entitles its owner to share
in production revenues with other working interest owners, based on the
percentage of working interest owned.

3

---



By virtue of
its acquisition of working interests in various leases, the Fund invests and
participates in exploration and production of oil and natural gas projects in
leases located in the waters of the Gulf of Mexico on the Outer Continental
Shelf (OCS). These activities are governed by the Outer Continental Shelf
Lands Act (OCSLA) enacted in 1953 and administered by the Mineral Management
Services (MMS). The Fund generally looks to invest in working interests that
have been proposed by larger independent oil and natural gas companies seeking
to minimize their risks by selling a portion of their interest in the working
interest. These investments may require the Fund to pay a disproportionate part
of the drilling costs on the exploratory well of a project than its working
interest would otherwise require. This is called a promote, which is common in
the oil and natural gas exploration industry. In addition, notwithstanding the
sale of an interest to the Fund, the seller may retain a right for some period
of time to payments from sales of oil and natural gas production from a well or
project. This is called an overriding interest, which is also common in this
industry. Notwithstanding any such promote or overriding interest, the Fund
invests in projects that it believes contain sufficient commercial quantities
of oil or natural gas and which are near (i) existing oil or natural gas
gathering and processing infrastructure and (ii) developed markets where the
Fund can sell its oil or natural gas.

For potential
project investments, the Manager reviews reserve analyses provided by the
operators. The Manager employs individuals in its Houston, Texas office that
can perform significant analysis of the operators information. However, if
necessary, the Fund may retain independent engineers to review the operators
reserve analysis and/or conduct an independent review. For producing
properties, the Manager engages independent petroleum engineers to examine and
provide reserve estimates on the Funds behalf.

Once the
Manager determines that a particular project (i.e., working interest in a lease
block) is an appropriate investment for the Fund, the Manager enters into a
participation agreement and a joint operating agreement with the other working
interest owners in a lease. Pursuant to the participation agreements and
operating agreements, proposals and decisions are made based on percentage
ownership approvals.

The Manager,
on behalf of the Fund, and other working interest owners retain the right to
make proposals involving certain operational matters associated with a project.
This limits the operators inclination to act on its own or against the
interests of the other working interest owners of the project. In accordance
with the Managers working interest, the Manager reviews, discusses and
consents to the details of the drilling plan, monitors progress under such
plan, contributes ideas to the design of and budget for production facilities
and then monitors the construction of those facilities. In addition, the
Manager retains the right to review and audit the operators financial records
related to the project to ensure the project is executed according to budget.
Once a well is in production, the Manager continually monitors, evaluates and
discusses the well production rate with the operator.

Managers Investment Committee and Investment
Criteria

The Manager
maintains an investment committee, consisting of six members, which provides
operational, scientific and technical oil and gas expertise to the Fund. Five
members of the investment committee are based out of the Managers Ridgewood,
New Jersey office and one member of the investment committee is based out of
the Managers Houston, Texas office. In considering projects, the investment
committee and other members of the investment team evaluate each project
against a list of factors that it believes will result in the selection of
those projects that have the highest probability of success. These factors, in
no particular order, include, but are not limited to (i) targeting projects
that have or are expected to have operators with significant resources and
experience in oil and natural gas exploration; (ii) targeting projects that
have or are expected to have partners that also have significant resources and
experience in oil and natural gas exploration; (iii) technical quality of the
project including its geology, seismic profile, locational trends, and whether
the project has potential for multiple prospects; (iv) oil or natural gas
reserve potential; (v) whether and the extent to which the operator
participates as a working interest owner in the project; (vi) economic factors,
such as potential revenues from the project, the rate of return, and estimated
time to first production; (vii) risk factors associated with exploration; (viii)
existence of drilling rigs, platforms and other infrastructure, at or nearby
the project; (ix) proposed drilling schedule; (x) terms of the proposed
transaction, including contractual restrictions and obligations and lease term;
and (xi) overall cost of the project.

4

---



Properties

The Fund owns
working interests and has participated in the drilling of fifteen wells, five
have been determined to be successful and ten have been determined to be dry
holes.

|                                           |  |                   |   |          |  |                                         |  |               |           |                     |        |                                         |  |  |     |  |   |        | 
|------------------------------------------ |  | ----------------- | - | -------- |  | --------------------------------------- |  | ------------- | --------- | ------------------- | ------ | --------------------------------------- |  |  | --- |  | - | ------ | 
|Lease
 Block                               |  | Working
 Interest |   | Operator |  | Off-shore
 Location in
 Gulf of
 Mexico |  | Target
 Depth |           | Drilling
 Risk
 (b) |        | Total Spent
 Through
 December 31, 2008 | 
|                                           |  |                   |   |          |  |                                         |  |               |           |                     |        |                                         | 
|                                           |  |                   |   |          |  |                                         |  | (feet)        |           | (in thousands)      |       
|Successful Projects                        |  |                   |   |          |  |                                         |  |               |           |                     |        |                                         |  |  |     |  |   |        | 
|Whistler Project                           |  | 11.00             | % |          |  | Helis                                   |  |               | Louisiana |                     | 4,400  |                                         |  |  | N/A |  | $ | 1,472  | 
|Eugene Island 346/347 Well #1              |  | 10.00             | % |          |  | McMoRan                                 |  |               | Louisiana |                     | 12,900 |                                         |  |  | N/A |  | $ | 7,146  | 
|Eugene Island 346/347 Well #2              |  | 10.00             | % |          |  | McMoRan                                 |  |               | Louisiana |                     | 7,800  |                                         |  |  | N/A |  | $ | 1,525  | 
|Eugene Island 354                          |  | 33.00             | % |          |  | Devon                                   |  |               | Louisiana |                     | 10,900 |                                         |  |  | N/A |  | $ | 5,099  | 
|West Cameron 593                           |  | 43.30             | % |          |  | McMoRan                                 |  |               | Louisiana |                     | 12,900 |                                         |  |  | N/A |  | $ | 13,079 | 
|                                           |  |                   |   |          |  |                                         |  |               |           |                     |        |                                         |  |  |     |  |   |        | 
|Dry Holes (Date determined dry) (a)        |  |                   |   |          |  |                                         |  |               |           |                     |        |                                         |  |  |     |  |   |        | 
|South Timbalier 287 (January 2009)         |  | 4.00              | % |          |  | Apache                                  |  |               | Louisiana |                     | 23,400 |                                         |  |  | N/A |  | $ | 3,858  | 
|High Island 38 (June 2008)                 |  | 12.50             | % |          |  | W
 & T Offshore                         |  |               | Texas     |                     | 15,100 |                                         |  |  | N/A |  | $ | 6,715  | 
|Eugene Island 346/347 Well #3 (June 2008)  |  | 10.00             | % |          |  | McMoRan                                 |  |               | Louisiana |                     | 5,400  |                                         |  |  | N/A |  | $ | 558    | 
|Walker Ridge 155 (June 2008)               |  | 1.00              | % |          |  | Anadarko                                |  |               | Louisiana |                     | 32,000 |                                         |  |  | N/A |  | $ | 2,234  | 
|Mississippi Canyon 489/490 (November 2007) |  | 8.33              | % |          |  | LLOG                                    |  |               | Louisiana |                     | 15,500 |                                         |  |  | N/A |  | $ | 3,555  | 
|Green Canyon 246 (January 2007)            |  | 8.30              | % |          |  | Woodside                                |  |               | Louisiana |                     | 17,000 |                                         |  |  | N/A |  | $ | 6,668  | 
|South Timbalier 135/136 (January 2007)     |  | 10.00             | % |          |  | Chevron                                 |  |               | Louisiana |                     | 17,000 |                                         |  |  | N/A |  | $ | 6,847  | 
|West Cameron 109 (December 2006)           |  | 22.50             | % |          |  | Nexen                                   |  |               | Louisiana |                     | 17,200 |                                         |  |  | N/A |  | $ | 8,831  | 
|West Cameron 265/266 (May 2006)            |  | 40.00             | % |          |  | Marathon                                |  |               | Louisiana |                     | 19,000 |                                         |  |  | N/A |  | $ | 22,062 | 
|South Marsh Island 231 (April 2006)        |  | 30.00             | % |          |  | Stone
 Energy                           |  |               | Louisiana |                     | 15,800 |                                         |  |  | N/A |  | $ | 8,359  | 

|    |                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Dry-hole costs represent
 costs incurred for wells that have been drilled but do not have commercially
 productive quantities of oil and/or natural gas reservoirs and have been
 plugged and abandoned.
|(b) | Drilling risk represents
 the prospective estimated dry-hole, leasehold and sunk costs, as applicable.                                                                                                  

Successful Projects Whistler ProjectIn July 2008, the Fund acquired an 11.0%
working interest in the Whistler Project, a developmental well from Helis Oil
& Gas Company, L.L.C. (Helis), the operator. The Whistler Project was
determined to be a commercial success in November 2008 and completion efforts
are ongoing. The well is expected to commence production during the third quarter
of 2009. Through December 31, 2008, the Fund has spent $1.5 million on this
well, for which the total estimated budget is $2.3 million.

Eugene Island
346/347Well #1In March 2007, the Fund acquired a 10.0% working interest in the
exploratory well Eugene Island 346/347 from Newfield Exploration Company
(Newfield), the operator. In June 2007, the well was determined to be
successful. In August 2007, Newfield sold its interest in this property to
McMoRan Exploration Co. (McMoRan). At that time, McMoRan assumed Newfields
responsibilities as the operator of this property. The well was completed and
production commenced in June 2008. The Fund has spent $7.1 million related to
this property.

5

---



Well #2As a result of the drilling success of the first
exploratory well for Eugene Island 346/347, the second and third wells
commenced drilling in May 2008. In late-May 2008, Eugene Island 346/347 well #2
was determined to be commercially successful and production commenced in July
2008. The Fund has spent $1.5 million related to this property.

Eugene Island 354In May 2007, the Fund acquired a 33.0% working
interest in the exploratory well Eugene Island 354 from Devon Energy Production
Company, L.P. (Devon), the operator. In June 2007, the well was determined to
be successful. In November 2007, the well was completed and production
commenced. The Fund has spent $5.1 million related to this property.

West Cameron 593In July 2006, the Fund acquired a 43.3% working
interest in the exploratory well West Cameron 593 from Newfield, the operator.
West Cameron 593 was determined to be successful in September 2006. In August
2007, Newfield sold its interest in this property to McMoRan. At that time,
McMoRan assumed Newfields responsibilities as the operator of this property.
In September 2007, the well was completed and production commenced. The Fund
has spent $13.1 million related to this property.

None of the
Funds wells, including Eugene Island 346/347 wells #1 and #2, Eugene Island
354 and West Cameron 593 were materially damaged as a result of third quarter
2008 hurricane activity in the Gulf of Mexico. However, the pipelines and
facilities utilized to transport and process these wells oil and gas
production have suffered severe damage thereby shutting down production for
these wells. As a result, production for the West Cameron 593 well was
suspended from August 2008 through mid-November 2008 and the Fund incurred $0.5
million of repair costs related to its processing facility. Additionally, the
Eugene Island properties have been shut-in until the pipeline repairs have been
completed by the owner. While there is no cost to the Fund related to the
Eugene Island repairs, these wells are not expected to resume production until
the second quarter 2009.

Dry HolesSouth Timbalier 287In November 2007, the Fund acquired a 4.0%
working interest in the exploratory well South Timbalier 287 from Apache
Corporation (Apache), the operator. This well began drilling in March 2008
and was determined to be an unsuccessful well, or dry hole, in January 2009.
For the year ended December 31, 2008, dry-hole costs related to this well were
$3.9 million. Additional dry-hole costs, including plug and abandonment
expenses, of $0.4 million were incurred during the first quarter 2009.

High Island 38In the fourth quarter 2007, the Fund acquired a
12.5% working interest in the High Island 38 well from W&T Offshore, Inc.
(W&T Offshore), the operator. In June 2008, the well was determined to be
unsuccessful, or a dry hole, and has been plugged and abandoned. For the year
ended December 31, 2008, dry-hole costs related to this well, including plug
and abandonment expenses, were $6.7 million.

Eugene Island
346/347Well #3In June 2008, the Fund was informed by McMoRan that Eugene Island
346/347 well #3 did not have commercially productive quantities of either gas
or oil and had been determined to be an unsuccessful well, or dry hole. For the
year ended December 31, 2008, dry-hole costs related to this well, including
plug and abandonment expenses, were $0.6 million.

Walker Ridge 155In 2007, the Fund acquired a 1.0% working interest
in the exploratory well Walker Ridge 155 from Kerr-McGee Oil & Gas
Corporation, a wholly owned subsidiary of Anadarko Petroleum Corporation
(Anadarko), the operator of the well. Drilling for Walker Ridge 155, a
deepwater well began in August 2007. In June 2008, the Fund was informed by
Anadarko that based upon its evaluation of the three-dimensional data
surrounding the Walker Ridge 155 lease block, they elected not to continue
drilling this well. The well has been determined to be unsuccessful, or a dry
hole, and has been plugged and abandoned. For the year ended December 31, 2008,
dry-hole costs related to this well, including plug and abandonment expenses,
were $2.2 million.

6

---



Working Interest in Oil and Natural Gas
Leases

Existing
projects, and future projects, if any, are expected to be located in the waters
of the Gulf of Mexico offshore from Texas, Louisiana and Alabama on the OCS.
The OCSLA, which was enacted in 1953, governs certain activities with respect
to working interests and the exploration of oil and natural gas in the OCS. See
further discussion under the heading Regulation in this Item 1. Business.

As part of the
leasing activity and as required by the OCSLA, the leases auctioned include
specified lease terms such as the length of the lease, the amount of royalty to
be paid, lease cancellation and suspension, and, to a degree, the planned
activities of exploration and production to be conducted by the lessee.

The winning
bidder(s) at the lease sale, or the lessee(s), are given a lease by the MMS
that grants such lessee(s) the exclusive right to conduct oil and natural gas
exploration and production activities within a specific lease block, or working
interest. Leases in the OCS are generally issued for a primary lease term of 5,
8 or 10 years depending on the water depth of the lease block. The 5-year lease
term is for blocks in water depths generally less than 400 meters, 8 years for
depths between 400 meters and 800 meters and 10 years for depths in excess of
800 meters. During this primary lease term, except in limited circumstances,
lessees are not subject to any particular requirements to conduct exploratory
or development activities. However, once a lessee drills a well and begins
production, the lease term is extended for the duration of commercial
production.

The lessee of
a particular block, for the term of the lease, has the right to drill and
develop exploratory wells and conduct other activities throughout the block. If
the initial well on the block is successful, a lessee, or third-party operator
for a project, may conduct additional geological studies and may determine to
drill additional or development wells. If a development well is to be drilled
in the block, each lessee owning working interests in the block must be offered
the opportunity to participate in, and cover the costs of, the development well
up to that particular lessees working interest ownership percentage.

7

---



Generally,
working interests in an offshore natural gas lease under the OCSLA pay a 16.67%
or 18.75% royalty to the MMS for shallow-water projects, dependent upon lease
date, and a 12.5% royalty to the MMS for deepwater projects. Therefore, the net
revenue interest of the holders of 100% of the working interest in the projects
in which the Fund will invest is between 81.25% and 83.33% of the total revenue
for shallow-water projects and 87.5% of the total revenue for deepwater
projects, and, such net revenue amount my be further reduced by any other
royalty burdens that apply to a lease block.

Oil and Natural Gas Agreements

The Fund has
entered into a short-term, month-to-month agreement with a third party marketer
who is currently marketing and selling the Funds proportionate share of oil
and natural gas to the public market. The Fund is receiving market prices for
oil and natural gas. All of the Funds current projects are near existing
transportation infrastructure and pipelines. The Manager believes that it is
likely that oil and natural gas from the Funds future projects will have
access to pipeline transportation and can be marketed in a similar fashion.

Operator

The projects
in which the Fund has invested are operated and controlled by unaffiliated
third-party entities acting as operators. The operators are responsible for
drilling, administration and production activities for leases jointly owned by
working interest owners and act on behalf of all working interest owners under
the terms of the applicable operating agreement. In certain circumstances,
operators will enter into agreements with independent third-party
subcontractors and suppliers to provide the various services required for
operating leases. Currently, the Funds ongoing projects are operated by Devon,
Helis, and McMoRan.

Because the
Fund does not operate any of the projects in which it has acquired an interest,
shareholders not only bear the risk that the Manager will be able to select
suitable projects, but also that once selected, such projects will be managed
prudently, efficiently and fairly by the operators.

Insurance

The Manager
has obtained hazard, property, general liability and other insurance in
commercially reasonable amounts to cover its projects, as well as general
liability and similar coverage for its business operations. However, there is
no assurance that such insurance will be adequate to protect the Fund from
material losses related to the projects. In addition, the Managers past
practice has been to obtain insurance as a package that is intended to cover
most, if not all, of the funds under its management. While the Manager believes
it has obtained adequate insurance in accordance with customary industry
practices, the possibility exists, depending on the extent of the incident,
that insurance coverage may not be sufficient to cover all losses. In addition,
depending on the extent, nature and payment of any claims to the Funds affiliates,
yearly insurance limits may be exhausted and become insufficient to cover a
claim made by the Fund in a given year.

Salvage Fund

As to projects
in which the Fund owns a working interest, the Fund deposits in a separate
interest-bearing account, or a salvage fund, which is in the nature of a
sinking fund, cash to help provide for the Funds proportionate share of the
cost of dismantling and removing production platforms and facilities and
plugging and abandoning the projects, in accordance with applicable federal and
state laws and regulations. There is no assurance that the salvage fund will
have sufficient assets to meet these requirements and any unfunded expenses,
and the Fund may be liable for such expenses. The Fund has deposited $1.0
million from capital contributions into a salvage fund, which, along with
interest earned on this account, the Fund estimates to be sufficient to meet
the Funds potential requirements. If the Manager determines the salvage fund
will not be sufficient to cover the Funds proportionate share of expense, the
Fund may transfer amounts from operating income to fund the deficit. Any
portion of a salvage fund that remains after the Fund pays its share of the
actual salvage costs will be distributed to the shareholders. There are no
legal restrictions on the withdrawal or use of the salvage fund.

8

---



Seasonality

Generally, the
Funds business operations are not subject to seasonal fluctuations in the
demand for oil and natural gas that would result in more of the Funds oil and
natural gas being sold, or likely to be sold, during one or more particular
months or seasons. Once a project is drilled and reserves of oil and natural
gas are determined to exist, the operator of the project extracts such reserves
throughout the year. Oil and natural gas, once extracted, can be sold at any
time during the year.

The Funds
properties are located in the Gulf of Mexico; therefore its operations and cash
flows may be significantly impacted by hurricanes and other inclement
weather. Such events may also have a
detrimental impact on third-party pipelines and processing facilities, upon
which the Fund relies upon to transport and process the crude oil and natural
gas it produces. The National Hurricane Center defines hurricane season in the
Gulf of Mexico as June 1st through November 30th. During the third quarter of
2008, two hurricanes struck in the Gulf of Mexico, which significantly impacted
the Funds operations. These two storms, Hurricanes Gustav and Ike, came ashore
in Louisiana and Texas, respectively, and caused production curtailments due to
damage to third-party pipelines and disrupted the operations of crews that
could assess and repair the damage. While the Funds platforms avoided major
damage, the Funds production was curtailed from the time personnel were
evacuated for safety purposes, until assessment and repair to Funds platforms
were completed and until repairs to third-party pipelines and facilities were
completed. The Fund incurred
approximately $0.5 million of workover costs related to processing facility
repairs relative to West Cameron 593.
In all, West Cameron 593 was shut-in for approximately two months, with
production resuming in November 2008 and the Funds Eugene Island properties
will be shut-in for approximately six months, with production expected to
resume during the second quarter 2009.

Customers

All of the oil
and natural gas production from the Funds producing properties is sold by a
third party on the Funds behalf. As a result, the Fund did not contract to
sell oil and natural gas to customers. Therefore, the Fund had no customers or
any one customer upon which the Fund depends for more than ten percent (10%) of
its revenue.

Energy Prices

Historically,
the markets for crude oil and natural gas have been extremely volatile, and
they are likely to continue to be volatile in the future. This volatility is
caused by numerous factors and market conditions that the Fund cannot control
or influence. Therefore, it is impossible to predict the future price of crude
oil and natural gas with any certainty. Low commodity prices could have an
adverse affect on the Funds future profitability. The Fund has not engaged in
any price risk management programs or hedges to date.

Competition

Strong
competition exists in the acquisition of oil and natural gas leases and in all
sectors of the oil and natural gas exploration and production industry.
Although the Fund does not compete for lease acquisitions from the MMS, it does
compete with other companies for the acquisition of percentage ownership
interests in oil and natural gas working interests in the secondary market.

In many
instances, the Fund competes for projects with large independent oil and
natural gas producers who generally have significantly greater access to
capital resources, have a larger staff, and more experience in oil and natural
gas exploration and production than the Fund. As a result, these larger
companies are in a position that they could outbid the Fund for a project.
However, because these companies are so large and have such significant
resources, they tend to focus more on projects that are larger, have greater
reserve potential, and cost significantly more to explore and develop. These
larger projects increasingly tend to be projects in the deepwater areas of the
Gulf of Mexico and the North Sea off the coast of Great Britain. However, the
focus of these companies on larger projects does not necessarily mean that they
will not investigate and/or acquire smaller projects in shallow waters for
which the Fund typically competes. Many of these larger companies have
participated in the auctions for lease blocks directly from the U.S.
Government. In such cases, these companies obtain from the U.S. Government 100%
of the leasehold of a particular lease block in the Gulf of Mexico. In order to
obtain even more resources to invest in other larger and more expensive
projects, they diversify current holdings, including projects they own in the
shallow waters of the Gulf of Mexico, by selling off percentage interests in
these lease blocks. As a result, very good projects in the shallow waters of
the Gulf of Mexico become available. The Fund, therefore, has opportunities to
acquire interests in these smaller, yet economically attractive projects.

9

---



Employees

The Fund has
no employees as the Manager operates and manages the Fund.

Offices

The Managers
principal executive offices are located at 947 Linwood Avenue, Ridgewood, NJ
07450, and its phone number is 800-942-5550. The Manager also leases additional
office space at 11700 Old Katy Road, Houston, TX 77079. In addition, the
Manager also maintains leases for other offices that are used for
administrative purposes.

Regulation

Oil and
natural gas exploration, development and production activities are subject to
extensive federal and state laws and regulations. Regulations governing
exploration and development activities require, among other things, the Funds
operators to obtain permits to drill projects and to meet bonding, insurance
and environmental requirements in order to drill, own or operate projects. In
addition, the location of projects, the method of drilling and casing projects,
the restoration of properties upon which projects are drilled and the plugging
and abandoning of projects are also subject to regulations.

Outer Continental Shelf Lands Act

The Funds
projects are located in the offshore waters of the Gulf of Mexico on the OCS.
The Funds operations and activities, therefore, are governed by, among other
things, the OCSLA.

Under OCSLA,
the United States federal government has jurisdiction over oil and natural gas
development on the OCS. As a result, the United States Secretary of the
Interior is empowered to sell exploration, development and production leases of
a defined submerged area of the OCS, or a block, through a competitive bidding
process. Such activity is conducted by the MMS, an agency of the United States
Department of Interior. The MMS administers federal offshore leases pursuant to
regulations promulgated under the OCSLA. Lessees must obtain MMS approval for
exploration, development and production plans prior to the commencement of
offshore operations. In addition, approvals and permits are required from other
agencies such as the U.S. Coast Guard, the Army Corps of Engineers and the
Environmental Protection Agency. Offshore operations are subject to numerous
regulatory requirements, including stringent engineering and construction specifications
related to offshore production facilities and pipelines and safety-related
regulations concerning the design and operating procedures of these facilities
and pipelines. MMS regulations also restrict the flaring or venting of
production and proposed regulations would prohibit the flaring of liquid
hydrocarbons and oil without prior authorization.

The MMS has
also imposed regulations governing the plugging and abandonment of wells
located offshore and the installation and removal of all production facilities.
Under certain circumstances, the MMS may require operations on federal leases
to be suspended or terminated. Any such suspension or termination could
adversely affect the Funds operations and interests.

The MMS
conducts auctions for lease blocks of submerged areas offshore. As part of the
leasing activity and as required by the OCSLA, the leases auctioned include
specified lease terms such as the length of the lease, the amount of royalty to
be paid, lease cancellation and suspension, and, to a degree, the planned
activities of exploration and production to be conducted by the lessee. In
addition, the OCSLA grants the Secretary of the Interior continuing oversight
and approval authority over exploration plans throughout the term of the lease.

10

---



Sales and Transportation of Oil and
Natural Gas

The Fund sells
its proportionate share of oil and natural gas to the market and receives
market prices from such sales. These sales are not currently subject to
regulation by any federal or state agency. However, in order for it to make
such sales, the Fund is dependent upon unaffiliated pipeline companies whose
rates, terms and conditions of transport are subject to regulation by the
Federal Energy Regulatory Commission (FERC). The rates, terms and conditions
are regulated by FERC pursuant to a variety of statutes including the OSCLA,
the Natural Gas Policy Act and the Energy Policy Act of 1992. Generally,
depending on certain factors, pipelines can charge rates that are either
market-based or cost-of-service. In some circumstances, rates can be agreed
upon pursuant to settlement. Thus, the rates that pipelines charge the Fund,
although regulated, are beyond the Funds control. Nevertheless, such rates
would apply uniformly to all transporters on that pipeline and, as a result,
management does not anticipate that the impact to the Fund of any changes in
such rates, terms or conditions would be materially different than the impact
upon other oil or natural gas producers and marketers.

Environmental Matters and Regulation

The Funds
operations are subject to pervasive environmental laws and regulations
governing the discharge of materials into the air and water and the protection
of aquatic species and habitats. However, although it shares the liability
along with its other working interest owners for any environmental damage, most
of the activities to which these environmental laws and regulations apply are
conducted by the operator on the Funds behalf. Nevertheless, environmental laws
and regulations to which its operations are subject may require the Fund, or
the operator, to acquire permits to commence drilling operations, restrict or
prohibit the release of certain materials or substances into the environment,
impose the installation of certain environmental control devices, require
certain remedial measures to prevent pollution and other discharges such as the
plugging of abandoned projects and, finally, impose in some instances severe
penalties, fines and liabilities for the environmental damage that is caused by
the Funds projects.

Some of the
environmental laws that apply to oil and natural gas exploration and production
are:

The Oil Pollution Act.
The Oil Pollution Act of 1990, as amended (OPA), amends Section 311 of the
Federal Water Pollution Control Act of 1972 (the Clean Water Act) and was
enacted in response to the numerous tanker spills, including the Exxon Valdez
that occurred in the 1980s. Among other things, the OPA clarifies the federal
response authority to and increases penalties for spills. The OPA establishes a
new liability regime for oil pollution incidents in the aquatic environment.
Essentially, the OPA provides that a responsible party for a vessel or facility
from which oil is discharged or that poses a substantial threat of a discharge
could be liable for certain specified damages resulting from a discharge of
oil, including clean-up and remediation, loss of subsistence use of natural
resources, real or personal property damages, as well as certain public and
private damages. A responsible party includes a lessee of an offshore facility.

The OPA also
requires a responsible party to submit proof of its financial responsibility to
cover environmental cleanup and restoration costs that could be incurred in
connection with an oil spill. Under the OPA, parties responsible for offshore
facilities must provide financial assurance of at least $35 million to address
oil spills and associated damages. In certain limited circumstances, that
amount may be increased to $150 million. As indicated earlier, the Fund has not
been required to make any such showing to the MMS as the operators are
responsible for such compliance. However, notwithstanding the operators
responsibility for compliance, in the event of an oil spill, the Fund, along
with the operators and other working interest owners, could be liable under the
OPA for the resulting environmental damage.

Clean Water Act.
Generally, the Clean Water Act imposes liability for the unauthorized discharge
of pollutants including petroleum products into the surface and coastal U.S.
waters except in strict conformance with discharge permits issued by the
federal (or state if applicable) agency. Regulations governing water discharges
also impose other requirements, such as the obligation to prepare spill
response plans. The Funds operators are responsible for compliance with the
Clean Water Act although the Fund may be liable for any failure of the
operators to do so.

11

---



Federal Clean Air Act.
The Federal Clean Air Act of 1970, as amended (the Clean Air Act), restricts
the emission of certain air pollutants. Prior to constructing new facilities,
permits may be required before work can commence and existing facilities may be
required to incur additional capital costs to add equipment to ensure and
maintain compliance. As a result, the Funds operations may be required to
incur additional costs to comply with the Clean Air Act.

Other Environmental Laws.
In addition to the above, the Funds operations may be subject to the Resource Conservation and Recovery
Act of 1976, as amended,
which regulates the generation, transportation, treatment, storage, disposal
and cleanup of certain hazardous wastes, as well as the Comprehensive Environmental
Response, Compensation and Liability Act which imposes joint and
several liability without regard to fault or legality of conduct on classes of
persons who are considered responsible for the release of a hazardous substance
into the environment.

The above
represents a brief outline of the major environmental laws that may apply to
the Funds operations. The Fund believes that its operators are in compliance
with each of these environmental laws and the regulations promulgated
thereunder. The Fund does not believe that the costs of complying with
environmental laws, including federal, state and local laws will have a
material adverse impact on its financial condition and/or operations.

ITEM 1A. RISK FACTORS

Not required.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not
applicable.

ITEM 2. PROPERTIES

The
information regarding the Funds properties that is contained in Item 1.
Business under the heading Properties of this Annual Report is incorporated
herein by reference.

ITEM 3. LEGAL PROCEEDINGS

On August 16,
2006, the Manager of the Fund filed a lawsuit against the former independent
registered public accounting firm for the Fund, Perelson Weiner, LLP
(Perelson), in New Jersey Superior Court, captioned Ridgewood Energy
Corporation v. Perelson Weiner, LLP, Docket No. L-6092-06. The suit alleged
professional malpractice and breach of contract in connection with audit and
accounting services performed for the Fund by Perelson. Thereafter, Perelson
filed a counterclaim against the Manager on October 20, 2006, alleging breach
of contract due to unpaid invoices in the amount of $326,554. Discovery is
ongoing and no trial date has been set.

Legal costs
related to this claim are borne by the Manager.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS

None.

12

---



PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There is
currently no established public trading market for the Shares. As of the date
of this filing, there were 1,519 shareholders of record of the Fund.

Distributions
are made in accordance with the provisions of the LLC Agreement. At various
times throughout the year, the Fund determines whether there is sufficient
available cash, as defined in the LLC Agreement, for distribution to
shareholders. There is, however, no requirement to distribute available cash
and as such, available cash is distributed to the extent and at such times as
the Manager believes is advisable. During the years ended December 31, 2008 and
2007, the Fund paid distributions totaling $14.9 million and $1.5 million,
repectively.

ITEM 6. SELECTED FINANCIAL DATA

Not required.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview of the Funds Business

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 Funds primary investment objective is to generate cash flow for
distribution to its shareholders through participation in oil and natural gas
exploration and development projects in the Gulf of Mexico. Distributions are
funded from cash flow from operations, 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 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. 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. See also Item 1. Business for additional information regarding
the projects of the Fund.

Revenues are
subject to the markets for crude oil and natural gas, which have been extremely
volatile, and are likely to continue to be volatile in the future. This
volatility is caused by numerous factors and market conditions that the Fund
cannot control or influence. Therefore, it is impossible to predict the future
price of crude oil and natural gas with any certainty. Low commodity prices
could have an adverse affect on the Funds future profitability.

Subsequent Events

South Timbalier 287In November 2007, the Fund acquired a 4.0% working
interest in the exploratory well South Timbalier 287 from Apache Corporation
(Apache), the operator. This well began drilling in March 2008 and was
determined to be an unsuccessful well, or dry hole, in January 2009. For the
year ended December 31, 2008, dry-hole costs related to this well were $3.9
million. Additional dry-hole costs, including plug and abandonment expenses, of
$0.4 million were incurred during the first quarter 2009.

Critical Accounting Estimates

The discussion
and analysis of the Funds financial condition and results of operations are
based upon its financial statements, which have been prepared in conformity
with accounting principles generally accepted in the United States of America
(GAAP). In preparing these financial statements, the Fund is required to make
certain estimates, judgments and assumptions. These estimates, judgments and
assumptions affect the reported amounts of the Funds assets and liabilities,
including the disclosure of contingent assets and liabilities, at the date of
the financial statements and the reported amounts of its revenues and expenses
during the periods presented. The Fund evaluates these estimates and
assumptions on an ongoing basis. The Fund bases its estimates and assumptions
on historical experience and on various other factors that the Fund believes to
be reasonable at the time the estimates and assumptions are made. However,
future events and actual results may differ from these estimates and
assumptions and such differences may have a material impact on the results of
operations, financial position or cash flows. See Note 2 of Notes to the
Financial Statements  Summary of Significant Accounting Policies in Item 8.
Financial Statements and Supplementary Data contained in this Annual Report
for a discussion of the Funds significant accounting policies.

13

---



Accounting for
Exploration and Development CostsExploration and production activities are accounted for using the
successful efforts method. Costs of acquiring unproved and proved oil and
natural gas leasehold acreage, including lease bonuses, brokers fees and other
related costs are capitalized. Annual lease rentals, exploration expenses and
dry-hole costs are expensed as incurred. Costs of drilling and equipping
productive wells and related production facilities are capitalized.

The costs of
exploratory and developmental wells are capitalized pending determination of
whether proved reserves have been found. Drilling costs remain capitalized
after drilling is completed if (1) the well has found a sufficient quantity of
reserves to justify completion as a producing well and (2) sufficient progress
is being made in assessing the reserves and the economic and operating
viability of the project. If either of those criteria is not met, or if there
is substantial doubt about the economic or operational viability of the
project, the capitalized well costs are charged to expense as dry-hole costs.
Indicators of sufficient progress in assessing reserves and the economic and
operating viability of a project include: commitment of project personnel;
active negotiations for sales contracts with customers; negotiations with
governments, operators and contractors; and firm plans for additional drilling
and other factors.

Unproved PropertyUnproved property is comprised of capital costs incurred for
undeveloped acreage, wells and production facilities in progress and wells
pending determination. These costs are initially excluded from the depletion
base until the outcome of the project has been determined, or generally until
it is known whether proved reserves will or will not be assigned to the
property. The Fund assesses all items in its unproved property balance on an
ongoing basis for possible impairment or reduction in value.

Proved ReservesAnnually, the Fund engages an independent
petroleum engineer, Ryder Scott Company, L.P., to perform a comprehensive study
of the Funds producing properties and dependent upon timing of discoveries,
certain successful properties, to determine the quantities of reserves and the
period over which such reserves will be recoverable. The Funds estimates of
proved reserves are based on the quantities of oil and natural gas that
geological and engineering data demonstrate, with reasonable certainty, to be
recoverable in future years from known reservoirs under existing economic and
operating conditions. However, there are numerous uncertainties inherent in
estimating quantities of proved reserves and in projecting future revenues,
rates of production and timing of development expenditures, including many
factors beyond the Funds control. The estimation process is very complex and
relies on assumptions and subjective interpretations of available geologic,
geophysical, engineering and production data and the accuracy of reserve
estimates is a function of the quality and quantity of available data,
engineering and geological interpretation, and judgment. In addition, as a
result of volatility and changing market conditions, commodity prices and
future development costs will change from period to period, causing estimates
of proved reserves and future net revenue to change. Estimates of proved
reserves are key components of the Funds most significant financial estimates
involving its rate for recording depreciation, depletion and amortization.

14

---



Asset Retirement
ObligationsFor oil and natural 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, a liability is recognized for the present value of asset
retirement obligations once reasonably estimable. The Fund capitalizes the
associated asset retirement costs as part of the carrying amount of its proved
properties. Plug and abandonment costs associated with unsuccessful projects
are expensed as dry-hole costs.

Impairment
of Long-Lived AssetsThe 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
fair value, which is determined using net discounted future cash flows from
the producing property. Different pricing assumptions, reserve data 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. 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.

Results of Operations

The following table summarizes the Funds results of
operations for the years ended December 31, 2008 and 2007 and should be read in
conjunction with the Funds financial statements and the notes thereto within
Item 8. Financial Statements and Supplementary Data in this Annual Report.

|                                    |  |                         |         |      |   |        |  
|----------------------------------- |  | ----------------------- | ------- | ---- | - | ------ | -
|                                    |  | Year ended December 31, |        
|                                    |  | 2008                    |         | 2007 |  
|                                    |  |                         |         |      |  
|                                    |  | (in thousands)          |        
|Revenue                             |  |                         |         |      |   |        |  
|Oil and gas revenue                 |  | $                       | 15,415  |      | $ | 4,191  |  
|                                    |  |                         |         |      |   |        |  
|Expenses                            |  |                         |         |      |   |        |  
|Depletion and amortization          |  |                         | 7,378   |      |   | 2,332  |  
|Dry-hole costs                      |  |                         | 14,028  |      |   | 6,959  |  
|Management fees to affiliate        |  |                         | 1,934   |      |   | 2,152  |  
|Operating expenses                  |  |                         | 986     |      |   | 281    |  
|Workover expenses                   |  |                         | 516     |      |   |       |  
|General and administrative expenses |  |                         | 619     |      |   | 724    |  
|                                    |  |                         |         |      |   |        |  
|Total expenses                      |  |                         | 25,461  |      |   | 12,448 |  
|                                    |  |                         |         |      |   |        |  
|Loss from operations                |  |                         | (10,046 | )    |   | (8,257 | )
|Other income                        |  |                         |         |      |   |        |  
|Interest income                     |  |                         | 523     |      |   | 2,348  |  
|                                    |  |                         |         |      |   |        |  
|Net loss                            |  | $                       | (9,523  | )    | $ | (5,909 | )
|                                    |  |                         |         |      |   |        |  

15

---



Year ended December
31, 2008 compared to the Year ended December 31, 2007

Overview. During the year ended December 31, 2008,
the Fund had four producing wells, West Cameron 593, Eugene Island 354 and
Eugene Island 346/347 well #1 and well #2, which came onto production in
September 2007, November 2007, June 2008 and July 2008, respectively, thereby
impacting the Funds revenue, depletion, amortization and lease operating
expenses. Prior to September 2007, the Fund had no producing properties and
was classified as an exploratory stage enterprise.

As previously
discussed in the Item 1. Business, hurricane activity in the third quarter of
2008 did not cause material damage to any of the Funds wells or facilities,
however, damage to certain pipelines, coastal refineries and gas processing
plants have caused its wells to be shut-in for several weeks or months.
Accordingly, revenue and depletion and amortization were affected in 2008
during these periods.

Oil and Gas Revenue.
Oil and gas revenue for the year ended December 31, 2008 was $15.4 million, an
$11.2 million increase from the year ended December 31, 2007. The increase is
attributable to an increase in sales volumes totaling $6.9 million and an
increase in the average prices totaling $4.3 million.

The Fund sold
72 thousand barrels of oil during the year ended December 31, 2008 compared to
26 thousand barrels of oil during the year ended December 31, 2007. The Funds
oil prices averaged $110 per barrel during the year ended December 31, 2008
compared to $90 per barrel during the year ended December 31, 2007.

The Fund sold
664 thousand mcf during the year ended December 31, 2008 compared to 247
thousand mcf, during the year ended December 31, 2007. During the year ended
December 31, 2008, the Funds gas prices, averaged $10.90 per mcf compared to
$6.64 per mcf during the year ended December 31, 2007.

The increase
in sales volumes for the year ended December 31, 2008 was principally
attributable to the onset of production for Eugene Island 346/347 well #1 and
well #2 and a full year of production for West Cameron 593 and Eugene Island
354.

Depletion and
Amortization. For the years ended December 31,
2008 and 2007, depletion and amortization was $7.4 million and $2.3 million,
respectively. The increase in depletion and amortization is resulted from the
onset of production for Eugene Island 346/347 well #1 and well #2 and a full
year of production for West Cameron 593 and Eugene Island 354.

Dry-hole Costs.
Dry-hole costs are those costs incurred to drill and develop a well that is
ultimately found to be incapable of producing either oil or natural gas in
sufficient quantities to justify completion of the well. During the years ended
December 31, 2008 and 2007, certain wells received credits from their
respective operators upon review and audit of the wells costs. The following
table summarizes dry-hole costs, inclusive of plug and abandonment costs and
credits:

|                              |  |                         |        |      |   |       |  
|----------------------------- |  | ----------------------- | ------ | ---- | - | ----- | -
|                              |  | Year ended December 31, |       
|Lease
 Block                  |  | 2008                    |        | 2007 |  
|                              |  |                         |        |      |  
|                              |  | (in thousands)          |       
|High Island 38                |  | $                       | 6,715  |      | $ |      |  
|South Timbalier 287           |  |                         | 3,858  |      |   |      |  
|Walker Ridge 155              |  |                         | 2,234  |      |   |      |  
|Eugene Island 346/347 well #3 |  |                         | 558    |      |   |      |  
|West Cameron 109              |  |                         | 406    |      |   | 222   |  
|Mississippi Canyon 489/490    |  |                         | 325    |      |   | 3,229 |  
|South Timbalier 135/136       |  |                         | (16    | )    |   | 1,697 |  
|Green Canyon 246              |  |                         |       |      |   | 1,825 |  
|Other wells                   |  |                         | (52    | )    |   | (14   | )
|                              |  |                         |        |      |   |       |  
|                              |  | $                       | 14,028 |      | $ | 6,959 |  
|                              |  |                         |        |      |   |       |  

16

---



Management Fees to
Affiliate. For
the years ended December 31, 2008 and 2007, the Fund incurred management fees
of $1.9 million and $2.2 million, respectively, representing 2.5% of total
capital contributions, net of cumulative dry-hole and related well costs
incurred by the Fund. See additional discussion in Item 1. Business.

Operating Expenses. Operating expenses include the costs of operating and maintaining wells and
related facilities, geological costs and accretion expense as detailed in the
table below.

|                         |  |                         |     |      |   |     | 
|------------------------ |  | ----------------------- | --- | ---- | - | --- | 
|                         |  | Year ended December 31, |    
|                         |  | 2008                    |     | 2007 |  
|                         |  |                         |     |      |  
|                         |  | (in thousands)          |    
|Lease operating expenses |  | $                       | 918 |      | $ | 114 | 
|Geological costs         |  |                         | 44  |      |   | 160 | 
|Accretion expense        |  |                         | 24  |      |   | 7   | 
|                         |  |                         |     |      |   |     | 
|                         |  | $                       | 986 |      | $ | 281 | 
|                         |  |                         |     |      |   |     | 

Lease
operating expenses for the year ended December 31, 2008 were related to West
Cameron 593, Eugene Island 354 and Eugene Island 346/347 well #1 and well #2.
For the year ended December 31, 2007 lease operating expenses were related to
the onset of production of West Cameron 593 and Eugene Island 354. Geological
costs for the year ended December 31, 2008 related primarily to the Whistler
project. Geological costs for year ended December 31, 2007 related to Eugene
Island 354, Mississippi Canyon 489/490 and Eugene Island 346/347 well #1.
Accretion expense is related to the asset retirement obligations established
for the Funds proved properties.

Workover Expenses.
Workover expenses for the year ended December 31, 2008 were $0.5 million. These
costs are related to the West Cameron 593 well, which incurred hurricane
related expenses to repair its processing facility.

General and
Administrative Expenses. General and administrative expenses represent costs
specifically identifiable or allocable to the Fund, as detailed in the table
below.

|                     |  |                         |     |      |   |     | 
|-------------------- |  | ----------------------- | --- | ---- | - | --- | 
|                     |  | Year ended December 31, |    
|                     |  | 2008                    |     | 2007 |  
|                     |  |                         |     |      |  
|                     |  | (in thousands)          |    
|Insurance expense    |  | $                       | 321 |      | $ | 442 | 
|Accounting fees      |  |                         | 250 |      |   | 202 | 
|Trust fees and other |  |                         | 48  |      |   | 80  | 
|                     |  |                         |     |      |   |     | 
|                     |  | $                       | 619 |      | $ | 724 | 
|                     |  |                         |     |      |   |     | 

Insurance
expense represents premiums related to producing well and well control
insurance, which varies dependent upon the number of wells producing and/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.

Interest Income. Interest income is comprised of interest
earned on money market accounts and investments in U.S. Treasury securities.
For the year ended December 31, 2008, interest income was $0.5 million, a $1.8
million decrease from the year ended December 31, 2007. The decrease was
attributable to a reduction in average outstanding balances earning interest
due to ongoing capital expenditures coupled with lower interest rates earned.

Capital Resources and Liquidity

Operating Cash Flows Cash flows provided by operating activities for
the year ended December 31, 2008 were $13.7 million, which were principally
attributable to revenue receipts of $16.6 million, interest income received of
$0.4 million and favorable working capital of $0.3 million. These amounts were
partially offset by management fees of $1.9 million, operating expenses
totaling $1.0 million, general and administrative expenses of $0.6 million and
payments of workover costs of $0.1 million.

17

---



Cash flows
provided by operating activities for the year ended December 31, 2007 were $1.0
million, which were principally attributable to revenue receipts of $2.7
million and interest income received of $1.7 million. These amounts were
partially offset by management fees of $2.2 million, general and administrative
expenses of $0.7 million, and operating expenses of $0.2 million and
unfavorable working capital of $0.3 million.

Investing Cash FlowsCash flows provided by investing activities for
the year ended December 31, 2008 were $5.2 million related to proceeds from the
maturity of U.S. Treasury securities totaling $29.8 million, partially offset
by $10.0 million reinvested in marketable securities and $14.6 million of
capital expenditures for oil and gas properties. Additionally, the Fund
increased its salvage fund investments by $28 thousand, which consisted of the
interest earned on this account.

Cash flows
used in investing activities for the year ended December 31, 2007 were $9.3
million, related to investments in capital expenditures for oil and gas
properties of $36.3 million, inclusive of advances to operators, and the
purchase of U.S. Treasury securities of $23.5 million, partially offset by
proceeds from the maturity of U.S. Treasury securities of $50.6 million.
Additionally, the Fund increased its salvage fund investments by $51 thousand,
which consisted of the interest earned on this account.

Financing Cash FlowsCash flows used in financing activities for the
year ended December 31, 2008 were $14.9 million related to the payment of
Manager and shareholder distributions.

Cash flows
used in financing activities for the year ended December 31, 2007 were $1.5
million related to the payment of Manager and shareholder distributions.

Estimated Capital Expenditures

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 December 31, 2008, the Fund had committed to
spend an additional $1.2 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, 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.

Liquidity Needs

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.

18

---



Distributions
are funded from cash flow from operations, and the frequency and amount are
within the Managers discretion subject to available cash from operations,
reserve requirements and the Funds operations.

Off-Balance Sheet Arrangements

The Fund had
no off-balance sheet arrangements as of December 31, 2008 and 2007 and does not
anticipate the use of such arrangements in the future.

Contractual Obligations

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 December 31, 2008 and 2007 other
than those discussed in Estimated Capital Expenditures above.

Recent Accounting Pronouncements

See Note 3 of
Notes to Financial Statements  Recent Accounting Standards in Item 8.
Financial Statements and Supplementary Data contained in this Annual Report
for a discussion of recent accounting pronouncements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA

All financial
statements meeting the requirements of Regulation S-X and the supplementary
financial information required by Item 302 of Regulation S-K are included in
the financial statements listed in Item 15. Exhibits, Financial Statement
Schedules and filed as part of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls
and ProceduresUnder the supervision and with the participation
of the Chief Executive Officer and Chief Financial Officer of the Fund,
management of the Fund and the Manager carried out an evaluation of the
effectiveness of the design and operation of the Funds disclosure controls and
procedures pursuant to the Exchange Act Rule 13a-15(e) as of December 31, 2008.
Based upon the evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Funds disclosure controls and procedures are
effective as of the end of the period covered by this report.

Managements Report
on Internal Control over Financial ReportingManagement of the Fund is responsible for
establishing and maintaining adequate internal control over financial reporting
(as defined in Exchange Act Rule 13a-15(f)). The Funds internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.

Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

19

---



Management of
the Fund, including its Chief Executive Officer and Chief Financial Officer,
assessed the effectiveness of the Funds internal control over financial
reporting as of December 31, 2008. In making this assessment, management of the
Fund used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (the COSO) in Internal
Control  Integrated Framework. Based on their assessment using
those criteria, management of the Fund concluded that, as of December 31, 2008,
the Funds internal control over financial reporting is effective.

This annual
report does not include an attestation report of the Funds registered public
accounting firm regarding internal control over financial reporting. The Funds
report was not subject to attestation by the Funds registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Fund to provide only managements report in this
annual report.

Changes in Internal
Control over Financial ReportingThe Chief Executive Officer and Chief Financial Officer of the Fund have
concluded that there have not been any changes in the Funds internal control
over financial reporting during the quarter ended December 31, 2008 that have
materially affected, or are reasonably likely to materially affect, the Funds
internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

20

---



PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE

The Fund has
engaged Ridgewood Energy as the Manager. The Manager has very broad authority,
including the authority to appoint the executive officers of the Fund.
Executive officers of Ridgewood Energy and the Fund and their ages at December
31, 2008 are as follows:

|                                          |  |                                                  
|----------------------------------------- |  | -------------------------------------------------
|Name, Age and Position with Registrant    |  | Officer of
 Ridgewood
 Energy
 Corporation
 Since
|                                          |  |                                                  
|Robert E. Swanson, 61                     |  |                                                  
|President and Chief Executive Officer     |  | 1982                                             
|                                          |  |                                                  
|W. Greg Tabor, 48                         |  |                                                  
|Executive Vice President and              |  |                                                  
|Director of Business Development          |  | 2004                                             
|                                          |  |                                                  
|Robert L. Gold, 50                        |  |                                                  
|Executive Vice President                  |  | 1987                                             
|                                          |  |                                                  
|Kathleen P. McSherry, 43                  |  |                                                  
|Executive Vice President and              |  |                                                  
|Chief Financial Officer                   |  | 2000                                             
|                                          |  |                                                  
|Daniel V. Gulino, 48                      |  |                                                  
|Senior Vice President and General Counsel |  | 2003                                             
|                                          |  |                                                  
|Adrien Doherty, 56                        |  |                                                  
|Executive Vice President                  |  | 2006                                             

The officers
in the above table have also been officers of the Fund since March 21, 2005,
the date of inception of the Fund, with the exception of Mr. Doherty, who
became an officer of the Fund in 2006. The officers are employed by and paid
exclusively by the Manager. Set forth below are the names of, and certain biographical
information regarding the executive officers of Ridgewood Energy and the Fund:

Robert E. Swanson
has served as the President, Chief Executive Officer, sole director, and sole
stockholder of Ridgewood Energy since its inception. Mr. Swanson is also the
controlling member of Ridgewood Renewable Power, LLC and Ridgewood Capital
Corporation, affiliates of Ridgewood Energy. Mr. Swanson has been President and
registered principal of Ridgewood Securities Management, LLC and has served as
the Chairman of the Board of Ridgewood Capital since its organization in 1998.
Mr. Swanson is a member of the New York State and New Jersey State Bars, the
Association of the Bar of the City of New York and the New York State Bar
Association. He is a graduate of Amherst College and Fordham University Law
School.

W. Greg Tabor has
served as the Executive Vice President and Director of Business Development for
Ridgewood Energy since January 2004. Mr. Tabor was senior business development
manager for El Paso Production Company from December 2001 to December 2003.
From April 2000 to December 2001, Mr. Tabor was Vice President, Business
Development for Madison Energy Advisors. Mr. Tabor is a graduate of the
University of Houston.

Robert L. Gold has
served as the Executive Vice President of Ridgewood Energy since 1987. Mr. Gold
has also served as the President and Chief Executive Officer of Ridgewood
Capital since its inception in 1998. Mr. Gold is a member of the New York State
Bar. He is a graduate of Colgate University and New York University School of
Law.

21

---



Kathleen P. McSherry
has served as the Executive Vice President and Chief Financial Officer of
Ridgewood Energy since 2000. Ms. McSherry has been employed by Ridgewood Energy
since 1987, first as the Assistant Controller and then as the Controller before
being promoted to Chief Financial Officer in 2000. Ms. McSherry also serves as
Vice President of Systems and Administration of Ridgewood Power. Ms. McSherry
holds a Bachelor of Science degree in Accounting.

Daniel V. Gulino has
served as Senior Vice President and General Counsel of Ridgewood Energy since
August 2003. Mr. Gulino also serves as Senior Vice President and General
Counsel of Ridgewood Power Management, Ridgewood Power, and Ridgewood Capital
and has done so since 2000. Mr. Gulino is a member of the New Jersey State and
Pennsylvania State Bars. He is a graduate of Fairleigh Dickinson University and
Rutgers School of Law.

Adrien Doherty has
served as Executive Vice President of Ridgewood Energy since 2006. Mr. Doherty
joined Ridgewood Energy after a thirty year career in investment banking, most
recently as Head of Barclays Capitals oil and gas banking effort. Mr. Doherty
is a graduate of Amherst College and the Wharton Graduate Division of the
University of Pennsylvania.

Board of Directors and Board Committees

The Fund does
not have its own board of directors or any board committees. The Fund relies
upon the Manager to provide recommendations regarding dispositions and
financial disclosure. Officers of the Fund are not compensated by the Fund, and
all compensation matters are addressed by the Manager, as described in Item 11.
Executive Compensation of this Annual Report. Because the Fund does not
maintain a board of directors and because officers of the Fund are compensated
by the Manager, the Manager believes that it is appropriate for the Fund to not
have a nominating or compensation committee.

Code of Ethics

The Manager of
the Fund has adopted a code of ethics for all employees, including the
Managers principal executive officer and principal financial and accounting
officer. If any amendments are made to the code of ethics or the Manager of the
Fund grants any waiver, including any implicit waiver, from a provision of the
code to any the Managers executive officers, the Fund will disclose the nature
of such amendment or waiver on our website or in a current report on Form 8-K.
Copies of the code of ethics are available, without charge, on the Managers
website at www.ridgewoodenergy.com and in print upon written request to the
business address of the Manager at 947 Linwood Avenue, Ridgewood, New Jersey
07450, ATTN: General Counsel.

Section 16(a) Beneficial Ownership Reporting
Compliance

Section 16(a)
of the Exchange Act, as amended, requires the Funds executive officers and
directors, and persons who own more than 10% of a registered class of the
Funds equity securities, to file reports of ownership and changes in ownership
with the SEC. Based on a review of the copies of reports furnished or otherwise
available to the Fund, the Fund believes that during the year ended December
31, 2008, all filing requirements applicable to its officers, directors and 10%
beneficial owners were met.

ITEM 11. EXECUTIVE COMPENSATION

The executive
officers of the Fund do not receive compensation from the Fund. The Manager, or
its affiliates, compensates the officers without additional payments by the
Fund. See Item 13. Certain Relationships and Related Transactions, and
Director Independence for more information regarding Manager compensation and
payments to affiliated entities.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following
table sets forth information with respect to beneficial ownership of the shares
as of March 16, 2009 (no person owns more than 5% of the shares) by:

|  |                                                      
|- | -----------------------------------------------------
| | each
 executive officer (there are no directors); and
| | all of the
 executive officers as a group.           

22

---



Beneficial
ownership is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to the securities. Except as indicated
by footnote, and subject to applicable community property laws, the persons
named in the table below have sole voting and investment power with respect to
all shares shown as beneficially owned by them. Percentage of beneficial
ownership is based on 933.0600 shares outstanding at March 16, 2009. Other than
as indicated below, no officer of the Manager or the Fund owns any of the
Funds Shares.

|                                                              |  |                   |  |         |   |  | 
|------------------------------------------------------------- |  | ----------------- |  | ------- | - |  | 
|Name of beneficial owner                                      |  | Number
 of shares |  | Percent |  
|                                                              |  |                   |  |         |  
|Robert E.
 Swanson, President and Chief Executive Officer (1) |  | 3.6667            |  |         | * |  | 
|Executive
 officers as a group (1)                            |  | 3.6667            |  |         | * |  | 

|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|*   | Represents less than one
 percent.                                                   
|(1) | Includes shares owned by
 Mr. Swansons family members and trusts, which he controls.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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
years ended December 31, 2008 and 2007 were $1.9 million and $2.2 million,
respectively.

The Manager is
entitled to receive a 15% interest in cash distributions made by the Fund. For
the years ended December 31, 2008 and 2007, the Manager was paid distributions
totaling $2.2 million and $0.2 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 December
31, 2008 and 2007, there were no such amounts outstanding.

None of the
compensation to be received by 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.

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.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND
SERVICES

The following
table presents fees for services rendered by Deloitte & Touche LLP for the
years ended December 31, 2008 and 2007.

|                                                                                                                                                       |  |                         |     |      |   |     | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------- | --- | ---- | - | --- | 
|                                                                                                                                                       |  | Year ended December 31, |    
|                                                                                                                                                       |  | 2008                    |     | 2007 |  
|                                                                                                                                                       |  |                         |     |      |  
|                                                                                                                                                       |  | (in thousands)          |    
|Audit fees (1)                                                                                                                                         |  | $                       | 130 |      | $ | 125 | 
|                                                                                                                                                       |  |                         |     |      |   |     | 
|(1) Fees for audit of annual financial statements, reviews of the
related quarterly financial statements, and reviews of documents filed with the
SEC.

23

---



PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES

(a) (1) Financial Statements

See Index to
Financial Statements set forth on page F-1.

(a) (2) Financial Statement Schedules

None.

(a) (3)

|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|--------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------
|EXHIBIT
 NUMBER |  | TITLE OF
 EXHIBIT                                                                                                                                                                                                                                            |  | METHOD OF
 FILING                                                             
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|3.1             |  | Articles of Formation of
 Ridgewood Energy P Fund, LLC dated March 21, 2005.                                                                                                                                                                                 |  | Incorporated by reference
 to the Funds Form 10 filed on April 21, 2006.     
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|3.2             |  | Limited Liability Company
 Agreement between Ridgewood Energy Corporation and Investors of Ridgewood
 Energy P Fund, LLC dated May 16, 2005.                                                                                                                 |  | Incorporated by reference
 to the Funds Form 10 filed on April 21, 2006.     
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.1            |  | Participation Agreement
 between Helis Oil & Gas Company, L.L.C., Houston Energy, L.P. and Ridgewood
 Energy Corporation as Manager for Whistler Project.                                                                                                    |  | Incorporated by reference
 to the Funds Form 10-Q filed on November 10, 2008.
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|23.1            |  | Consent of Ryder Scott
 Company, L.P.                                                                                                                                                                                                                        |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|31.1            |  | Certification of Robert E.
 Swanson, Chief Executive Officer, pursuant to Securities Exchange Act Rule
 13a-14(a).                                                                                                                                           |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|31.2            |  | Certification of Kathleen
 P. McSherry, Chief Financial Officer, pursuant to Securities Exchange Act
 Rule 13a-14(a).                                                                                                                                        |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|32              |  | Certifications pursuant to
 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The
 Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief Executive
 Officer of the Fund and Kathleen P. McSherry, Chief Financial Officer of the
 Fund. |  | Filed herewith.                                                               

24

---



INDEX TO FINANCIAL STATEMENTS

|                                                                                                    |  |     
|--------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                    |  | PAGE
|                                                                                                    |  |     
|Report of Independent Registered Public Accounting Firm                                             |  | F-2 
|Balance Sheets as of December 31, 2008 and 2007                                                     |  | F-3 
|Statements of Operations for the years ended December 31, 2008 and
 2007                            |  | F-4 
|Statements of Changes in Members Capital for the years ended
 December 31, 2008 and 2007           |  | F-5 
|Statements of Cash Flows for the years ended December 31, 2008 and
 2007                            |  | F-6 
|Notes to Financial Statements                                                                       |  | F-7 
|Supplementary Financial Information - Information about Oil and Gas
 Producing Activities-Unaudited |  | F-13

F-1

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and
Manager of Ridgewood Energy P Fund, LLC:

We have audited the
accompanying balance sheets of Ridgewood Energy P Fund, LLC (the Fund) as of
December 31, 2008 and 2007, and the related statements of operations, changes
in members capital, and cash flows for the years ended December 31, 2008 and
2007. These financial statements are the responsibility of the Funds
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Fund is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Funds
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, such
financial statements present fairly, in all material respects, the financial
position of Ridgewood Energy P Fund, LLC as of December 31, 2008 and 2007, and
the results of its operations and its cash flows for the years ended December
31, 2008 and 2007, in conformity with accounting principles generally accepted
in the United States of America.

|                          | 
|------------------------- | 
|/s/ Deloitte & Touche
LLP | 
|                          | 

Parsippany, New Jersey 
March 16, 2009

F-2

---



RIDGEWOOD ENERGY P FUND, LLCBALANCE SHEETS 
(in thousands, except share data)

|                                                                                  |  |              |         |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------- | -
|                                                                                  |  | December 31, |        
|                                                                                  |  | 2008         |         | 2007 |  
|                                                                                  |  |              |         |      |  
|ASSETS                                                                            |  |              |         |      |   |         |  
|Current assets:                                                                   |  |              |         |      |   |         |  
|Cash and cash equivalents                                                         |  | $            | 17,782  |      | $ | 13,878  |  
|Short-term investments in marketable
 securities                                  |  |              |        |      |   | 19,630  |  
|Production receivable                                                             |  |              | 223     |      |   | 1,449   |  
|Other current assets                                                              |  |              | 156     |      |   | 502     |  
|                                                                                  |  |              |         |      |   |         |  
|Total current assets                                                              |  |              | 18,161  |      |   | 35,459  |  
|Salvage fund                                                                      |  |              | 1,139   |      |   | 1,111   |  
|Oil and gas properties:                                                           |  |              |         |      |   |         |  
|Advances to operators for working interests
 and expenditures                     |  |              |        |      |   | 1,866   |  
|Unproved properties                                                               |  |              |        |      |   | 7,971   |  
|Proved properties                                                                 |  |              | 29,246  |      |   | 19,593  |  
|Less: accumulated depletion and
 amortization                                     |  |              | (9,710  | )    |   | (2,332  | )
|                                                                                  |  |              |         |      |   |         |  
|Total oil and gas properties, net                                                 |  |              | 19,536  |      |   | 27,098  |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                 
|Total assets                                                                      |  | $            | 38,836  |      | $ | 63,668  |  
|                                                                                  |  |              |         |      |   |         |  
|LIABILITIES AND MEMBERS CAPITAL                                                  |  |              |         |      |   |         |  
|Current liabilities:                                                              |  |              |         |      |   |         |  
|Due to operators                                                                  |  | $            | 2,338   |      | $ | 3,183   |  
|Accrued expenses                                                                  |  |              | 78      |      |   | 121     |  
|                                                                                  |  |              |         |      |   |         |  
|Total current liabilities                                                         |  |              | 2,416   |      |   | 3,304   |  
|                                                                                 
|Asset retirement obligations                                                      |  |              | 957     |      |   | 454     |  
|                                                                                  |  |              |         |      |   |         |  
|Total liabilities                                                                 |  |              | 3,373   |      |   | 3,758   |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                 
|Commitments and contingencies (Note 8)                                            |  |              |         |      |   |         |  
|Members capital:                                                                 |  |              |         |      |   |         |  
|Manager:                                                                          |  |              |         |      |   |         |  
|Distributions                                                                     |  |              | (2,464  | )    |   | (226    | )
|Accumulated earnings (deficit)                                                    |  |              | 291     |      |   | (1,220  | )
|                                                                                  |  |              |         |      |   |         |  
|Managers total                                                                   |  |              | (2,173  | )    |   | (1,446  | )
|                                                                                  |  |              |         |      |   |         |  
|                                                                                 
|Shareholders:                                                                     |  |              |         |      |   |         |  
|Capital contributions (1,335 shares
 authorized; 933.0600 issued and outstanding) |  |              | 138,344 |      |   | 138,344 |  
|Syndication costs                                                                 |  |              | (15,898 | )    |   | (15,898 | )
|Distributions                                                                     |  |              | (13,964 | )    |   | (1,278  | )
|Accumulated deficit                                                               |  |              | (70,846 | )    |   | (59,812 | )
|                                                                                  |  |              |         |      |   |         |  
|Shareholders total                                                               |  |              | 37,636  |      |   | 61,356  |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                 
|Total members capital                                                            |  |              | 35,463  |      |   | 59,910  |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                 
|Total liabilities and members capital                                            |  | $            | 38,836  |      | $ | 63,668  |  
|                                                                                  |  |              |         |      |   |         |  

The accompanying notes are an integral part
of these financial statements.

F-3

---



RIDGEWOOD ENERGY P FUND, LLCSTATEMENTS OF OPERATIONS 
(in thousands, except share data)

|                                      |  |                         |         |      |   |        |  
|------------------------------------- |  | ----------------------- | ------- | ---- | - | ------ | -
|                                      |  | Year ended December 31, |        
|                                      |  | 2008                    |         | 2007 |  
|                                      |  |                         |         |      |  
|Revenue                               |  |                         |         |      |   |        |  
|Oil and gas revenue                   |  | $                       | 15,415  |      | $ | 4,191  |  
|                                      |  |                         |         |      |   |        |  
|Expenses                              |  |                         |         |      |   |        |  
|Depletion and amortization            |  |                         | 7,378   |      |   | 2,332  |  
|Dry-hole costs                        |  |                         | 14,028  |      |   | 6,959  |  
|Management fees to affiliate (Note 6) |  |                         | 1,934   |      |   | 2,152  |  
|Operating expenses                    |  |                         | 986     |      |   | 281    |  
|Workover expenses                     |  |                         | 516     |      |   |       |  
|General and administrative expenses   |  |                         | 619     |      |   | 724    |  
|                                      |  |                         |         |      |   |        |  
|Total expenses                        |  |                         | 25,461  |      |   | 12,448 |  
|                                      |  |                         |         |      |   |        |  
|Loss from operations                  |  |                         | (10,046 | )    |   | (8,257 | )
|Other income                          |  |                         |         |      |   |        |  
|Interest income                       |  |                         | 523     |      |   | 2,348  |  
|                                      |  |                         |         |      |   |        |  
|Net loss                              |  | $                       | (9,523  | )    | $ | (5,909 | )
|                                      |  |                         |         |      |   |        |  
|                                      |  |                         |         |      |   |        |  
|Manager Interest                      |  |                         |         |      |   |        |  
|Net income                            |  | $                       | 1,511   |      | $ | 120    |  
|                                     
|Shareholder
 Interest                 |  |                         |         |      |   |        |  
|Net loss                              |  | $                       | (11,034 | )    | $ | (6,029 | )
|Net loss per share                    |  | $                       | (11,826 | )    | $ | (6,462 | )

The accompanying notes are an integral part of these financial
statements.

F-4

---



RIDGEWOOD ENERGY P FUND, LLCSTATEMENTS OF CHANGES IN MEMBERS CAPITAL
(in thousands, except share data)

|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|--------------------------- |  | ----------- | -------- | ------- | - | ------------ | - | ----- | ------- | - | - | ------- | -
|                            |  | # of Shares |          | Manager |   | Shareholders |   | Total |        
|                            |  |             |          |         |   |              |   |       |        
|                            |  |             |          |         |   |              |   |       |        
|Balances, December 31, 2006 |  |             | 933.0600 |         |   | (1,340       | ) |       | 68,663  |   |   | 67,323  |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Distributions               |  |             |          |         |   | (226         | ) | $     | (1,278  | ) | $ | (1,504  | )
|Net income (loss)           |  |             |         |         |   | 120          |   |       | (6,029  | ) |   | (5,909  | )
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|                           
|Balances, December 31, 2007 |  |             | 933.0600 |         | $ | (1,446       | ) | $     | 61,356  |   | $ | 59,910  |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Distributions               |  |             |          |         |   | (2,238       | ) |       | (12,686 | ) |   | (14,924 | )
|Net income (loss)           |  |             |         |         |   | 1,511        |   |       | (11,034 | ) |   | (9,523  | )
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Balances, December 31, 2008 |  |             | 933.0600 |         | $ | (2,173       | ) | $     | 37,636  |   | $ | 35,463  |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  

The accompanying notes are an integral part
of these financial statements.

F-5

---



RIDGEWOOD ENERGY P FUND, LLCSTATEMENTS OF CASH FLOWS
(in thousands)

|                                                                                                 |  |                         |         |      |   |         |  
|------------------------------------------------------------------------------------------------ |  | ----------------------- | ------- | ---- | - | ------- | -
|                                                                                                 |  | Year ended December 31, |        
|                                                                                                 |  | 2008                    |         | 2007 |  
|                                                                                                 |  |                         |         |      |  
|Cash flows from operating activities                                                             |  |                         |         |      |   |         |  
|Net loss                                                                                         |  | $                       | (9,523  | )    | $ | (5,909  | )
|Adjustments to reconcile net loss to net
 cash provided by (used in) operating activities        |  |                         |         |      |   |         |  
|Depletion and amortization                                                                       |  |                         | 7,378   |      |   | 2,332   |  
|Dry-hole costs                                                                                   |  |                         | 14,028  |      |   | 6,959   |  
|Accretion expense                                                                                |  |                         | 24      |      |   | 7       |  
|Interest earned on marketable securities                                                         |  |                         | (185    | )    |   | (1,193  | )
|Changes in assets and liabilities:                                                               |  |                         |         |      |   |         |  
|Decrease (increase) in production receivable                                                     |  |                         | 1,226   |      |   | (1,449  | )
|Decrease in other current assets                                                                 |  |                         | 324     |      |   | 170     |  
|Increase in due to operators                                                                     |  |                         | 429     |      |   | 52      |  
|Increase in accrued expenses                                                                     |  |                         | (43     | )    |   | 27      |  
|                                                                                                 |  |                         |         |      |   |         |  
|Net cash provided by operating activities                                                        |  |                         | 13,658  |      |   | 996     |  
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Cash flows from investing activities                                                             |  |                         |         |      |   |         |  
|Payments to operators for working interests
 and expenditures                                    |  |                         |        |      |   | (1,866  | )
|Capital expenditures for oil and gas
 properties                                                 |  |                         | (14,617 | )    |   | (34,417 | )
|Interest reinvested in salvage fund                                                              |  |                         | (28     | )    |   | (51     | )
|Proceeds from the maturity of marketable
 securities                                             |  |                         | 29,815  |      |   | 50,553  |  
|Investment in marketable securities                                                              |  |                         | (10,000 | )    |   | (23,500 | )
|                                                                                                 |  |                         |         |      |   |         |  
|Net cash provided by (used in) investing
 activities                                             |  |                         | 5,170   |      |   | (9,281  | )
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Cash flows from financing activities                                                             |  |                         |         |      |   |         |  
|Distributions                                                                                    |  |                         | (14,924 | )    |   | (1,504  | )
|                                                                                                 |  |                         |         |      |   |         |  
|Net cash used in financing activities                                                            |  |                         | (14,924 | )    |   | (1,504  | )
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                
|Net increase (decrease) in cash and cash
 equivalents                                            |  |                         | 3,904   |      |   | (9,789  | )
|Cash and cash equivalents, beginning of
 period                                                  |  |                         | 13,878  |      |   | 23,667  |  
|                                                                                                 |  |                         |         |      |   |         |  
|Cash and cash equivalents, end of period                                                         |  | $                       | 17,782  |      | $ | 13,878  |  
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Supplemental schedule of non-cash investing
 activities                                          |  |                         |         |      |   |         |  
|                                                                                                
|Advances used for capital expenditures in
 oil and gas properties reclassified to dry-hole costs |  | $                       | 1,866   |      | $ |        |  
|                                                                                                 |  |                         |         |      |   |         |  

The accompanying notes are an integral part
of these financial statements.

F-6

---



RIDGEWOOD ENERGY P FUND, LLCNOTES TO FINANCIAL STATEMENTS

1. Organization and Purpose

The Ridgewood Energy P Fund,
LLC (the Fund), a Delaware limited liability company, was formed on March 21,
2005 and operates pursuant to a limited liability company agreement (the LLC
Agreement) dated as of May 16, 2005 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.
During 2007, the Fund began earning revenue and was determined by the Manager
to no longer be an exploratory stage enterprise.

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 outside custodians, depositories, accountants, attorneys,
broker-dealers, corporate fiduciaries, insurers, banks and others as required.
See Notes 2, 6 and 8.

2. Summary of Significant Accounting Policies

Use of EstimatesThe preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America (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 revenues and expenses 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.

Cash and Cash EquivalentsAll highly liquid
investments with maturities, when purchased, of three months or less are
considered as cash and cash equivalents. At times, bank deposits may be in
excess of federally insured limits. At December 31, 2008 bank balances exceeded
federally insured limits by $4.4 million. At December 31, 2008, $3.5 million of
the Funds uninsured balances were invested in money market accounts that
invest solely in U.S. Treasury bills and notes. Effective October 2008 through
December 31, 2009, 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 during this period.

Investments in Marketable SecuritiesAt times the Fund may invest
in U.S. Treasury bills and notes. These investments are considered short-term
when their maturities are greater than three months and one year or less, and
long-term when their maturities are in excess of one year. At December 31,
2007, the Fund had short-term, held-to-maturity investments totaling $19.6
million. There were no short-term held-to-maturity investments at December 31,
2008. 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.

For all investments,
interest income is accrued as earned and amortization of premium or discount, if
any, is included in interest income.

Salvage FundThe 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 December 31, 2008, the
Fund had held-to-maturity investments within its salvage fund totaling $1.1
million, which mature in February 2012.

F-7

---



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

Oil and Gas PropertiesThe 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
unit-of-production method.

As of December 31, 2008 and
2007 amounts recorded in due to operators totaling $1.9 million and $3.1
million, respectively, related to capital expenditures for oil and gas
properties.

Advances to Operators for Working Interests
and ExpendituresThe 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 right, 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.

Asset Retirement ObligationsFor 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 years ended December 31, 2008 and 2007.

|                                 |  |                |     |      |   |     | 
|-------------------------------- |  | -------------- | --- | ---- | - | --- | 
|                                 |  | 2008           |     | 2007 |  
|                                 |  |                |     |      |  
|                                 |  | (in thousands) |    
|Balance - January 1,             |  | $              | 454 |      | $ | 97  | 
|Liabilities incurred             |  |                | 426 |      |   | 350 | 
|Liabilities settled              |  |                |    |      |   |    | 
|Accretion expense                |  |                | 24  |      |   | 7   | 
|Revisions to previous
 estimates |  |                | 53  |      |   |    | 
|                                 |  |                |     |      |   |     | 
|Balance - December 31,           |  | $              | 957 |      | $ | 454 | 
|                                 |  |                |     |      |   |     | 

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

F-8

---



Syndication CostsSyndication 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.

Revenue Recognition and ImbalancesOil 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 under produced 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.

As of December 31, 2008 and 2007, there were no material oil or gas balancing
arrangements between the Fund and other working interest owners.

Impairment of Long-Lived Assets
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
fair value, which is determined using net discounted future cash flows from
the producing property. Different pricing assumptions, reserve data 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. 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 AmortizationDepletion 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. The Fund began
production during the third quarter 2007.

Income TaxesNo provision is
made for income taxes in the financial statements. The Fund is a limited
liability company, and as such, the Funds income or loss is passed through and
included in the tax returns of the Funds shareholders.

Income and Expense AllocationProfits 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.

3. Recent Accounting Standards

In December 2008, the
Securities and Exchange Commission (SEC) announced final approval of new
requirements for reporting oil and gas reserves. 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 new rule is expected to be effective for fiscal years ending on
or after December 31, 2009. The Fund had not yet evaluated the effects of these
new requirements on its financial statements and disclosures.

F-9

---



In May 2008, the Financial
Accounting Standards Board (FASB) issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles, (SFAS No.162), which identifies
the sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements that are presented
in conformity with GAAP. SFAS No. 162 will be effective sixty days following
the SECs approval of the Public Company Accounting Oversight Board amendments
to AU Section 411. The Fund does not expect the adoption of SFAS No. 162 will
have a material impact on its financial condition or results of operation.

In February 2007, the FASB
issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities (SFAS No. 159), which permits entities to measure many financial
instruments and certain other items at fair value that are not currently
required to be measured at fair value. An entity would report unrealized gains
and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. The decision about whether to elect the fair value option (i) is
applied instrument by instrument, with a few exceptions; (ii) is irrevocable;
and (iii) is applied only to entire instruments and not to portions of
instruments. The statement requires disclosures that facilitate comparisons (a)
between entities that choose different measurement attributes for similar
assets and liabilities and (b) between assets and liabilities in the financial
statements of an entity that selects different measurement attributes for
similar assets and liabilities. SFAS No. 159 is effective for financial
statements issued for fiscal years beginning after November 15, 2007. The
adoption of SFAS No. 159 will not have a material impact on its financials. The
Fund did not elect to measure existing assets and liabilities at fair value on
the date of adoption.

In September 2006, the FASB
issued SFAS No. 157, Fair Value Measurements, (SFAS No.157), which applies
under most other accounting pronouncements that require or permit fair value
measurements. SFAS No. 157 provides a common definition of fair value as the
price that would be received to sell an asset or paid to transfer a liability
in a transaction between market participants. The new standard also provides
guidance on the methods used to measure fair value and requires expanded
disclosures related to fair value measurements. SFAS No. 157 had originally
been effective for financial statements issued for fiscal years beginning after
November 15, 2007, however the FASB has agreed on a one year deferral for all
non-financial assets and liabilities. On January 1, 2008, the Fund adopted SFAS
No. 157 for financial assets and liabilities.

4. Unproved Properties - Capitalized Exploratory Well Costs

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.

The following table reflects
the net changes in unproved properties for the years ended December 31, 2008
and 2007. At December 31, 2008, the Fund had no capitalized exploratory well
costs greater than one year.

|                                                                                              |  |                |        |      |   |        |  
|--------------------------------------------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                                                                              |  | 2008           |        | 2007 |  
|                                                                                              |  |                |        |      |  
|                                                                                              |  | (in thousands) |       
|Balance - Beginning of the period                                                             |  | $              | 7,971  |      | $ |       |  
|Additions to capitalized exploratory well costs pending the
 determination of proved reserves |  |                | 5,444  |      |   | 16,534 |  
|Reclassifications to proved properties based on the determination of
 proved reserves         |  |                | (9,646 | )    |   | (8,563 | )
|Capitalized exploratory well costs charged to dry-hole costs                                  |  |                | (3,769 | )    |   |       |  
|                                                                                              |  |                |        |      |   |        |  
|                                                                                              |  |                |        |      |   |        |  
|Balance - End of the period                                                                   |  | $              |       |      | $ | 7,971  |  
|                                                                                              |  |                |        |      |   |        |  

F-10

---



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.
During the years ended December 31, 2008 and 2007, the Fund received credits on
certain wells from their respective operators upon review and audit of the
wells costs. Dry-hole costs, inclusive of credits, are detailed in the table
below.

|                              |  |                         |        |      |   |       |  
|----------------------------- |  | ----------------------- | ------ | ---- | - | ----- | -
|                              |  | Year ended December 31, |       
|Lease Block                   |  | 2008                    |        | 2007 |  
|                              |  |                         |        |      |  
|                              |  | (in thousands)          |       
|High Island 38                |  | $                       | 6,715  |      | $ |      |  
|South Timbalier 287           |  |                         | 3,858  |      |   |      |  
|Walker Ridge 155              |  |                         | 2,234  |      |   |      |  
|Eugene Island 346/347 well #3 |  |                         | 558    |      |   |      |  
|West Cameron 109              |  |                         | 406    |      |   | 222   |  
|Mississippi Canyon 489/490    |  |                         | 325    |      |   | 3,229 |  
|South Timbalier 135/136       |  |                         | (16    | )    |   | 1,697 |  
|Green Canyon 246              |  |                         |       |      |   | 1,825 |  
|Other wells                   |  |                         | (52    | )    |   | (14   | )
|                              |  |                         |        |      |   |       |  
|                              |  | $                       | 14,028 |      | $ | 6,959 |  
|                              |  |                         |        |      |   |       |  

5. Distributions

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 Funds LLC Agreement, which range from approximately $6 thousand
to $12 thousand per share.

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

Available cash from
dispositions, as defined in the Funds 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.

The Fund began making
distributions to eligible early investors in December 2007 and to all investors
in October 2008. During the year ended December 31, 2008, Manager and
shareholders distributions totaled $2.2 million and $12.7 million,
respectively. During the year ended December 31, 2007, Manager and shareholders
distributions totaled $0.2 million and $1.3 million, respectively.

6. Related Parties

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 years ended December
31, 2008 and 2007 were $1.9 million and $2.2 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 December 31, 2008 and
2007 there were no such amounts outstanding.

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 gas
projects with other entities that are likewise managed by the Manager.

7. Fair Value of Financial Instruments

At December 31, 2008 and 2007,
cash and cash equivalents, short-term investments in marketable securities,
production receivable, salvage fund and accrued expenses
approximate fair value due to their short-term nature.

F-11

---



8. Commitments and Contingencies

Capital CommitmentsThe 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 December 31, 2008, the Fund had committed to spend an additional
$1.2 million related to its investment properties.

Environmental ConsiderationsThe 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 natural 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 December 31, 2008 and 2007,
there were no known environmental contingencies that required the Fund to
record a liability.

Insurance CoverageThe 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.

9. Subsequent Events

South Timbalier 287In November 2007,
the Fund acquired a 4.0% working interest in the exploratory well South
Timbalier 287 from Apache Corporation (Apache), the operator. This well began
drilling in March 2008 and was determined to be an unsuccessful well, or dry
hole, in January 2009. For the year ended December 31, 2008, dry-hole costs
related to this well were $3.9 million. Additional dry-hole costs, including
plug and abandonment expenses, of $0.4 million were incurred during the first
quarter 2009.

F-12

---



Ridgewood Energy P Fund, LLC Supplementary Financial Information
Information about Oil and Gas Producing Activities - Unaudited

In accordance with Statement
of Financial Accounting Standards No. 69, Disclosures about Oil and Gas
Producing Activities, this section provides supplemental information on oil
and gas exploration and producing activities of the Fund.

The Fund is engaged solely
in oil and gas activities, all of which are currently located in the United
States offshore waters of Louisiana in the Gulf of Mexico.

Table I - Capitalized Costs Relating to Oil and Gas Producing
Activities

|                                                             |  |                |        |      |   |        |  
|------------------------------------------------------------ |  | -------------- | ------ | ---- | - | ------ | -
|                                                             |  | December 31,   |       
|                                                             |  | 2008           |        | 2007 |  
|                                                             |  |                |        |      |  
|                                                             |  | (in thousands) |       
|Advances to operators for working interests and expenditures |  | $              |       |      | $ | 1,866  |  
|Unproved properties                                          |  |                |       |      |   | 7,971  |  
|Proved properties                                            |  |                | 29,246 |      |   | 19,593 |  
|                                                             |  |                |        |      |   |        |  
|Total oil and gas properties                                 |  |                | 29,246 |      |   | 29,430 |  
|Accumulated depletion and amortization                       |  |                | (9,710 | )    |   | (2,332 | )
|                                                             |  |                |        |      |   |        |  
|Oil and gas properties, net                                  |  | $              | 19,536 |      | $ | 27,098 |  
|                                                             |  |                |        |      |   |        |  

Table II -
Costs Incurred in Oil and Gas Property Acquisition, Exploration, and
Development Activities

|                                         |  |                         |        |      |   |        | 
|---------------------------------------- |  | ----------------------- | ------ | ---- | - | ------ | 
|                                         |  | Year ended December 31, |       
|                                         |  | 2008                    |        | 2007 |  
|                                         |  |                         |        |      |  
|                                         |  | (in thousands)          |       
|Exploratory drilling costs - capitalized |  | $                       | 4,143  |      | $ | 18,402 | 
|Development drilling costs- capitalized  |  |                         | 1,309  |      |   |       | 
|Exploratory drilling costs - expensed    |  |                         | 8,393  |      |   | 6,959  | 
|Geological costs                         |  |                         | 44     |      |   | 160    | 
|                                         |  |                         |        |      |   |        | 
|                                         |  | $                       | 13,889 |      | $ | 25,521 | 
|                                         |  |                         |        |      |   |        | 

F-13

---



Table III - Reserve Quantity Information

Oil and gas reserves of the
Fund have been estimated by an independent petroleum engineer, Ryder Scott
Company, L.P. at December 31, 2008. At December 31, 2008, the Fund had one
non-producing property for which reserve data is based upon internal estimates.
These reserve disclosures have been prepared in compliance with the Securities
and Exchange Commission rules. Due to inherent uncertainties and the limited
nature of recovery data, estimates of reserve information are subject to change
as additional information becomes available.

|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|------------------------------------------ |  | ----------------- | ------- | ----------------- |  | ---------- | - | --------- | ------- | - |  | --------- | -
|                                           |  | December 31, 2008 |         | December 31, 2007 | 
|                                           |  |                   |         |                   | 
|                                           |  | United States     |        
|                                           |  | Oil (BBLS)        |         | Gas (MCF)         |  | Oil (BBLS) |   | Gas (MCF) |        
|                                           |  |                   |         |                   |  |            |   |           |        
|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|Proved developed and undeveloped reserves: |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|Beginning of year                          |  |                   | 241,122 |                   |  | 1,464,000  |   |           | 103,697 |   |  | 2,073,941 |  
|Discoveries                                |  |                   | 45,073  |                   |  | 1,011,286  |   |           | 102,545 |   |  | 105,000   |  
|Revisions of previous estimates            |  |                   | (47,131 | )                 |  | (293,149   | ) |           | 55,445  |   |  | (475,613  | )
|Production                                 |  |                   | (72,376 | )                 |  | (663,841   | ) |           | (20,565 | ) |  | (239,328  | )
|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|End of year                                |  |                   | 166,688 |                   |  | 1,518,296  |   |           | 241,122 |   |  | 1,464,000 |  
|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|Proved developed reserves:                 |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|Beginning of year                          |  |                   | 241,122 |                   |  | 1,464,000  |   |           | 103,697 |   |  | 2,073,941 |  
|Discoveries                                |  |                   | 45,073  |                   |  | 705,486    |   |           | 102,545 |   |  | 105,000   |  
|Revisions of previous estimates            |  |                   | (47,131 | )                 |  | (293,149   | ) |           | 55,445  |   |  | (475,613  | )
|Production                                 |  |                   | (72,376 | )                 |  | (663,841   | ) |           | (20,565 | ) |  | (239,328  | )
|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  
|End of year                                |  |                   | 166,688 |                   |  | 1,212,496  |   |           | 241,122 |   |  | 1,464,000 |  
|                                           |  |                   |         |                   |  |            |   |           |         |   |  |           |  

Table IV - Standardized Measure of Discounted Future Net Cash
Flows Relating to Proved Oil and Gas Reserve

Summarized in the following
table is information for the Fund with respect to the standardized measure of
discounted future net cash flows relating to proved oil and gas reserves.
Future cash inflows are computed by applying year-end prices of oil and gas
relating to the Funds proved reserves to the year-end quantities of those
reserves. Future production and development costs are derived based on current
costs assuming continuation of existing economic conditions.

|                                                                   |  |                |        |      |   |        |  
|------------------------------------------------------------------ |  | -------------- | ------ | ---- | - | ------ | -
|                                                                   |  | December 31,   |       
|                                                                   |  | 2008           |        | 2007 |  
|                                                                   |  |                |        |      |  
|                                                                   |  | (in thousands) |       
|Future estimated revenues                                          |  | $              | 15,990 |      | $ | 33,433 |  
|Future estimated production costs                                  |  |                | (2,052 | )    |   | (1,637 | )
|Future estimated development costs                                 |  |                | (2,115 | )    |   | (1,155 | )
|                                                                   |  |                |        |      |   |        |  
|Future net cash flows                                              |  |                | 11,823 |      |   | 30,641 |  
|10% annual discount for estimated timing of cash flows             |  |                | (1,650 | )    |   | (3,745 | )
|                                                                   |  |                |        |      |   |        |  
|Standardized measure of discounted future estimated net cash flows |  | $              | 10,173 |      | $ | 26,896 |  
|                                                                   |  |                |        |      |   |        |  

F-14

---



Table V - Changes in the Standardized Measure of Discounted
Future Net Cash Flows Relating to Proved Oil and Gas Reserve Quantities

The changes in present values
between years, which can be significant, reflect changes in estimated proved
reserve quantities and prices and assumptions used in forecasting production
volumes and costs.

|                                                                                   |  |                         |         |      |   |        |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------ | -
|                                                                                   |  | Year ended December 31, |        
|                                                                                   |  | 2008                    |         | 2007 |  
|                                                                                   |  |                         |         |      |  
|                                                                                   |  | (in thousands)          |        
|Standardized measure beginning of the year                                         |  | $                       | 26,896  |      | $ | 11,283 |  
|Sales of oil and gas production, net of production costs                           |  |                         | (14,497 | )    |   | (4,077 | )
|Net changes in prices and production costs                                         |  |                         | (4,238  | )    |   | 7,986  |  
|Extensions, discoveries, and improved recovery and techniques, less
 related costs |  |                         | 6,334   |      |   | 7,487  |  
|Development costs incurred during the period                                       |  |                         |        |      |   | 3,463  |  
|Revisions of previous reserve quantities estimate                                  |  |                         | (5,696  | )    |   | 710    |  
|Accretion of discount                                                              |  |                         | 1,834   |      |   | 1,907  |  
|Timing and other                                                                   |  |                         | (460    | )    |   | (1,863 | )
|                                                                                   |  |                         |         |      |   |        |  
|Standardized measure end of the year                                               |  | $                       | 10,173  |      | $ | 26,896 |  
|                                                                                   |  |                         |         |      |   |        |  

It is necessary to emphasize
that the data presented should not be viewed as representing the expected cash
flow from, or current value of, existing proved reserves as the computations
are based on a large number of estimates. Reserve quantities cannot be measured
with precision and their estimation requires many judgmental determinations and
frequent revisions. The required projection of production and related
expenditures over time requires further estimates with respect to pipeline
availability, rates and governmental control. Actual future prices and costs
are likely to be substantially different from the current price and cost
estimates utilized in the computation of reported amounts. Any analysis or
evaluation of the reported amounts should give specific recognition to the
computational methods utilized and the limitation inherent therein.

F-15

---



SIGNATURES

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.

|                     |                               |                               
|-------------------- | ----------------------------- | ------------------------------
|                     | RIDGEWOOD
 ENERGY P FUND, LLC
|                     |                               |                               
|                     |                               |                               
|Date: March 16, 2009 | By:                           | /s/ ROBERT E. SWANSON         
|                     |                               |                               
|                     |                               | Robert E. Swanson             
|                     |                               | Chief Executive Officer       
|                     |                               | (Principal Executive
 Officer)

Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

|                              |  |                                                                                      |  |                
|----------------------------- |  | ------------------------------------------------------------------------------------ |  | ---------------
|Signature                     |  | Capacity                                                                             |  | Date           
|                              |  |                                                                                      |  |                
|                             
|/s/ ROBERT E. SWANSON         |  | Chief Executive Officer
 (Principal Executive Officer)                               |  | March
 16, 2009
|                              |  |                                                                                      | 
|Robert E. Swanson             |  |                                                                                      | 
|                              |  |                                                                                      |  |                
|/s/ KATHLEEN P. McSHERRY      |  | Executive Vice President
 and Chief Financial Officer (Principal Accounting Officer) |  | March
 16, 2009
|                              |  |                                                                                      | 
|Kathleen P. McSherry          |  |                                                                                      | 
|                              |  |                                                                                      |  |                
|RIDGEWOOD
 ENERGY CORPORATION |  |                                                                                      |  |                
|                              |  |                                                                                      |  |                
|/s/ ROBERT E. SWANSON         |  | Chief Executive Officer of
 Manager                                                  |  | March
 16, 2009
|                              |  |                                                                                      | 
|Robert E. Swanson             |  |                                                                                      |  |                

F-16

---