---

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

FORM 10-K

xANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

oroTRANSITION 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.)

|                                                                 
|-----------------------------------------------------------------
|1314 King Street, Wilmington, Delaware 19801                     
|(Address
 of principal executive offices) (Zip code)             
|                                                                 
|(302) 888-7444                                                   
|(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 oNo 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 oNo 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 xNo 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) |   |  |                           |  

Indicated 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. At March 14, 2008, there are 933.06 shares outstanding.

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RIDGEWOOD ENERGY P FUND
2007 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

|         |  |         |  |                                                                                                                     |      |   
|-------- |  | ------- |  | ------------------------------------------------------------------------------------------------------------------- | ---- | --
|         |  |         |  |                                                                                                                     | PAGE
|         |  |         |  |                                                                                                                     |     
|PART I   |  |         |  |                                                                                                                     |      |   
|         |  | ITEM 1  |  | BUSINESS                                                                                                            |      | 2 
|         |  | ITEM 1A |  | RISK
 FACTORS                                                                                                       |      | 10
|         |  | ITEM 1B |  | UNRESOLVED
 STAFF COMMENTS                                                                                          |      | 10
|         |  | ITEM 2  |  | PROPERTIES                                                                                                          |      | 10
|         |  | ITEM 3  |  | LEGAL
 PROCEEDINGS                                                                                                  |      | 10
|         |  | ITEM 4  |  | SUBMISSION
 OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                |      | 10
|PART II  |  |         |  |                                                                                                                     |      |   
|         |  | ITEM 5  |  | MARKET
 FOR REGISTRANTS COMMON EQUITY, RELATED SECURITY HOLDER MATTERS, AND ISSUER
 PURCHASES OF EQUITY SECURITIES |      | 11
|         |  | ITEM 6  |  | SELECTED
 FINANCIAL DATA                                                                                            |      | 12
|         |  | ITEM 7  |  | MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                              |      | 12
|         |  | ITEM 7A |  | QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                         |      | 17
|         |  | ITEM 8  |  | FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA                                                                        |      | 17
|         |  | ITEM 9  |  | CHANGES
 IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                               |      | 17
|         |  | ITEM 9A |  | CONTROLS
 AND PROCEDURES                                                                                            |      | 18
|         |  | ITEM 9B |  | OTHER
 INFORMATION                                                                                                  |      | 18
|PART III |  |         |  |                                                                                                                     |      |   
|         |  | ITEM 10 |  | DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                             |      | 19
|         |  | ITEM 11 |  | EXECUTIVE
 COMPENSATION                                                                                             |      | 20
|         |  | ITEM 12 |  | SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SECURITY
 HOLDER MATTERS                |      | 20
|         |  | ITEM 13 |  | CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                           |      | 21
|         |  | ITEM 14 |  | PRINCIPAL
 ACCOUNTANT FEES AND SERVICES                                                                             |      | 21
|PART IV  |  |         |  |                                                                                                                     |      |   
|         |  | ITEM 15 |  | EXHIBITS
 AND FINANCIAL STATEMENT SCHEDULES                                                                         |      | 22

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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 within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended (the Securities Act) and Section 21E of the Securities Exchange
Act of 1934 (the Exchange Act). These forward-looking statements generally
are identified by the words believe, project, expect, anticipate,
estimate, intend, strategy, plan, target, pursue,
may, will,
would, will be, will continue, will likely result, and similar
expressions. Forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements. 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.

AVAILABLE INFORMATION

The Funds shares of LLC
membership interest (the Shares) are registered under Section 12(g) of the
Exchange Act. The Fund must therefore comply with, among other things, the
periodic reporting requirements of Section 13(a) of the Exchange Act. As a
result, the Fund prepares and files annual reports with the United States
Securities and Exchange Commission (SEC) on Form 10-K, quarterly reports on
Form 10-Q and, from time to time, current reports on Form 8-K. Moreover, the
Manager maintains a website at http://www.ridgewoodenergy.com that contains
important information about the Manager, including biographies of key
management personnel, as well as information about the oil and natural gas
investments made by the Fund and the other investment programs managed by the
Manager. Such information includes, without limitation, a map of the Gulf of
Mexico that provides the location of every well and project managed by the
Manager along with information as to whether the project is exploratory, in completion
or producing. This information is publicly available (i.e., not password
protected) and is updated regularly.

REPORTS TO SHAREHOLDERS

The Fund does not anticipate
providing annual reports to shareholders but will make available upon request
copies of the Funds periodic reports filed with the SEC on Form 10-K and on
Form 10-Q.

WHERE YOU CAN GET MORE INFORMATION

The Fund files annual,
quarterly and current reports and certain other information with the SEC.
Persons may read and copy any documents the Fund files at the SECs public
reference room at 100 F Street, NE, Washington D.C. 20549. Information may be
obtained 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. A copy of any such filings will be provided free of charge
to any shareholder upon written request to the Fund at its business address 947
Linwood Avenue, Ridgewood, New Jersey 07450, ATTN: General Counsel.

-1-

---



PART I

ITEM 1. BUSINESS

Overview

The Fund is a Delaware
limited liability company formed on March 21, 2005 to acquire interests
primarily in oil and natural gas projects located in the U.S. waters of the
Gulf of Mexico. Ridgewood Energy Corporation (Ridgewood Energy or the
Manager), a Delaware corporation, is the Manager. As the Manager, Ridgewood
Energy has direct and exclusive control over the management and control of Fund
operations.

The Fund initiated its
private placement offering on May 16, 2005, selling whole and fractional shares
of membership interests at $150 thousand per share. There is no public market
for these shares and one is not likely to develop. In addition, the shares are
subject to severe restrictions on transfer and resale and cannot be transferred
or resold except in accordance with the Funds limited liability company
agreement (LLC agreement) and applicable federal and state securities. The
offering was terminated on October 30, 2005. The Fund raised $138.3 million.
After payment of $22.2 million in offering fees, commissions and investment
fees, the Fund had $116.1 million for investments and operating expenses. As of
March 14, 2008, the Fund had 1,513 shareholders.

Manager

Ridgewood Energy was founded
in 1982 by Robert E. Swanson. As the Manager, Ridgewood Energy has direct and
exclusive control over the management of the Funds operations. With respect to
project investment, Ridgewood Energy locates potential projects, conducts
appropriate due diligence and negotiates and completes the transactions in
which the investments are made. This includes not only review of existing title
documents, reserve information, and other technical specifications regarding a
project, but also the review and preparation of participation agreements and
other agreements relating to an investment.

In addition, Ridgewood
Energy performs (or arranges for the performance of) the management and
administrative services required for Fund operations. Among other services,
Ridgewood Energy administers the accounts and handles relations with the
shareholders, including tax and other financial information. In addition,
Ridgewood Energy provides the Fund with office space, equipment and facilities
and other services necessary for its operation. Finally, Ridgewood Energy
manages and conducts the Funds relations with custodians, depositories,
accountants, attorneys, brokers-dealers, corporate fiduciaries, insurers, banks
and others, as required.

The Fund is required to pay
all other expenses it incurs, including 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,
if any, properly payable by us. The Fund is required to reimburse the Manager
for all such Fund expenses paid by them.

As compensation for their
management 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 expenses incurred by the Fund.
The Fund paid the Manager for its management services fees totaling $2.2
million and $3.5 million for the years ended December 31, 2007 and 2006,
respectively. Additionally, the Manager receives a 15% interest in the cash
distributions made by the Fund. The Manager was paid $0.2 million in
distributions in 2007. There were no cash distributions paid in 2006.

Business Strategy

The Funds primary
investment objective is to generate cash flow from the acquisition,
exploration, production and sale of crude oil and natural gas from oil and
natural gas projects. The Fund has invested and participates in exploration and
production projects located in the waters of the Gulf of Mexico offshore Texas,
Louisiana and Alabama 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 projects 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 a project. These investments may require the Fund to pay a
disproportionate part of the drilling costs on the exploratory well of a
project than its ownership interest would otherwise require. This is called a
promote and 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 has tried to invest 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.

-2-

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The Fund tries to focus on
projects that have significant reserve potential and are projected to have the
shortest time period from investment to first production. During 2007, the Fund
participated in one project, Walker Ridge 155, which is considered a deep-water
project that will have a longer drilling period as well as a longer period of
time between initial investment and first production, if successful. 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. Moreover, when performing due diligence with respect to a project,
the Fund must rely on the independent reservoir engineers who are hired and
paid, in most cases, by the operator. The Fund does engage certain consultants
to examine and review such reserve estimates and seismic information on its
behalf.

Managers Investment Committee and Investment Criteria

The New Jersey office has
five executives on the investment committee, three of whom have been working
together at Ridgewood Energy for over twenty years. The Houston office, which
opened in 2003, has four executives on the investment committee who provide
operational, scientific and technical oil and gas expertise. In considering
projects, the Manager and investment committee investigates each such project
against a list of factors that it believes will result in the selection of projects
that have the highest probability of success. These factors, in no particular
order, include, but are not limited to, the following (i) targeting projects
that have or are expected to have operators with significant resources and
experience in oil and gas exploration; (ii) targeting projects that have or are
expected to have partners that also have significant resources and experience
in oil and 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 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, as more fully described in this
filing; (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.

Properties

The Fund owns working
interests and has participated in the drilling of twelve wells, six of which
have been determined to be dry-holes, three that are currently drilling or
scheduled to drill, and three that have been determined to have proved
reserves.

|                                   |  |                   |       |          |  |                                         |  |                       |           |                               |  |                                                  |  |     |        |  |  |         | 
|---------------------------------- |  | ----------------- | ----- | -------- |  | --------------------------------------- |  | --------------------- | --------- | ----------------------------- |  | ------------------------------------------------ |  | --- | ------ |  |  | ------- | 
|Lease Block                        |  | Working
 Interest |       | Operator |  | Off-shore
 Location in
 Gulf of
 Mexico |  | Target
 Depth
 (Feet) |           | Drilling Risk
 (in thousands) |  | Total Spent
 through
 12/31/2007
 (in thousands) | 
|                                   |  |                   |       |          |  |                                         |  |                       |           |                               |  |                                                  | 
|                                   |  |                   |       |          |  |                                         |  |                       |           |                               |  |                                                  |  | (a) |        |  |  |        
|Currently Drilling/Future Projects |  |                   |       |          |  |                                         |  |                       |           |                               |  |                                                  |  |     |        | 
|Walker Ridge 155                   |  |                   | 1.00  | %        |  | Anadarko                                |  |                       | Louisiana |                               |  | 32,000                                           |  |     | $3,470 |  |  | $2,155  | 
|High Island 38                     |  |                   | 12.50 | %        |  | W
 & T Offshore                         |  |                       | Texas     |                               |  | 15,100                                           |  |     | $4,000 |  |  | $3,480  | 
|South Timbalier 287                |  |                   | 4.00  | %        |  | Apache                                  |  |                       | Louisiana |                               |  | 20,000                                           |  |     | $1,790 |  |  | $      | 
|Successful Projects                |  |                   |       |          |  |                                         |  |                       |           |                               |  |                                                  |  |     |        |  |  |         | 
|West Cameron 593                   |  |                   | 43.30 | %        |  | McMoRan                                 |  |                       | Louisiana |                               |  | 12,850                                           |  |     | N/A    |  |  | $14,079 | 
|Eugene Island 354                  |  |                   | 33.00 | %        |  | Devon                                   |  |                       | Louisiana |                               |  | 9,300                                            |  |     | N/A    |  |  | $5,125  | 
|Eugene Island 346/347              |  |                   | 10.00 | %        |  | McMoRan                                 |  |                       | Louisiana |                               |  | 12,900                                           |  |     | N/A    |  |  | $4,202  | 
|Dry Holes (b)                      |  |                   |       |          |  |                                         |  |                       |           |                               |  |                                                  |  |     |        |  |  |         | 
|South Marsh Island 231             |  |                   | 30.00 | %        |  | Stone
 Energy                           |  |                       | Louisiana |                               |  | 15,800                                           |  |     | N/A    |  |  | $8,359  | 
|West Cameron 265/266               |  |                   | 40.00 | %        |  | Marathon                                |  |                       | Louisiana |                               |  | 19,000                                           |  |     | N/A    |  |  | $22,114 | 
|West Cameron 109                   |  |                   | 22.50 | %        |  | Nexen
 Inc.                             |  |                       | Louisiana |                               |  | 17,200                                           |  |     | N/A    |  |  | $8,425  | 
|Green Canyon 246                   |  |                   | 8.30  | %        |  | Woodside                                |  |                       | Louisiana |                               |  | 17,000                                           |  |     | N/A    |  |  | $6,668  | 
|South Timbalier 135/136            |  |                   | 10.00 | %        |  | Chevron                                 |  |                       | Louisiana |                               |  | 17,000                                           |  |     | N/A    |  |  | $6,863  | 
|Mississippi Canyon 490             |  |                   | 8.33  | %        |  | LLOG                                    |  |                       | Louisiana |                               |  | 15,500                                           |  |     | N/A    |  |  | $3,229  | 

|    |                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Drilling risk represents the
 prospective estimated dry-hole costs, leasehold costs or sunk costs
 including promote for project participation per authorization for expenditure
 adjusted for current operating conditions (i.e. projected costs overruns,
 increased drilling rates, etc).
|    |                                                                                                                                                                                                                                                                                             
|(b) | Dry-hole costs represent
 wells that have been drilled but do not have commercially productive oil
 and/or natural gas reservoirs.                                                                                                                                                          

-3-

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Currently Drilling/Future Projects

Walker Ridge 155

In 2007 the Fund
acquired a 1.0% working interest in the exploratory project Walker Ridge 155
from Kerr-McGee Oil & Gas Corporation (Kerr McGee), a wholly owned
subsidiary of Anadarko Petroleum Corporation (Anadarko), the operator of the
project. Drilling for Walker Ridge 155, a deep-water project began in mid-August
2007.

While drilling the initial
well, the Anadarko found traces of oil throughout much of the 4,500-foot
interval as well as a thin section of high-quality oil. However, this initial
well did not encounter the sedimentary formations that had been targeted. As a
result, the working interest owners are evaluating additional three-dimensional
data gathered during the drilling phase as well as new data to determine
whether the operator should divert the well to a location more likely to
encounter commercial reservoirs. The operator plans to re-use the majority of
the initial well-bore in order to save time and money. Although encouraged by
the data gathered thus far, which confirms the presence of oil in the geologic
basin, the well has not been determined to be a successful property. Once
diverted to a new location, if the well is not deemed commercial, it will be
plugged and abandoned as a dry hole. Through December 31, 2007, the Fund has
spent $2.2 million related to this property, for which the total estimated
budget is $14.4 million.

High Island 38

In the fourth
quarter 2007, the Fund acquired a 12.5% working interest in the High Island 38
project, which is operated by W&T Offshore, Inc. (W&T Offshore).
Total budgeted expenditures for this project are $6.5 million, of which $3.5
million has been spent through December 31, 2007. Results for this property are
expected during the second quarter of 2008.

South Timbalier 287

In November 2007,
the Fund acquired a 4.0% working interest in the exploratory project South
Timbalier 287 from Apache Corporation (Apache), the operator. South Timbalier
287 is located southwest of the Mississippi River Delta in about 480 feet of
water. This project is expected to start drilling in April 2008. The total estimated
budget for South Timbalier 287 is $2.6 million. The Fund has not made any
expenditures toward this project at December 31, 2007.

Successful Projects

West Cameron 593

In July 2006, the
Fund acquired a 43.3% working interest in the exploratory project West Cameron
593 from Newfield Exploration Company (Newfield), the operator. On August 15,
2006, the Fund started drilling West Cameron 593, a 12,850 foot single well
project in approximately 257 feet of water offshore Louisiana. West Cameron 593
was deemed successful in mid-September 2006. 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.
In September 2007, the well was completed and production began. The total cost
of this property was $14.1 million.

Eugene Island 354

In May 2007, the
Fund acquired a 33% working interest in the exploratory project Eugene Island
354 from the operator, Devon Energy Production Company, L.P. (Devon). In June
2007, the well was deemed successful and classified as a proved property at
June 30, 2007. Completion efforts have concluded and production began in
November 2007. The total cost of this property was $5.1 million.

Eugene Island 346/347

In March 2007,
the Fund acquired a 10% working interest in the exploratory project Eugene
Island 346/347 from Newfield, the operator. In June 2007, the well was deemed
successful. 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. Completion is ongoing and production is expected in the second
quarter 2008. Through December 31, 2007, the Fund has spent $4.2 million
related to this property, for which the total estimated budget is $6.1 million.

-4-

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Dry Holes

South Marsh Island 231

In 2005, the Fund
acquired a 30% working interest in the exploratory project South Marsh Island
231 from Stone Energy Corporation (Stone), the Operator. In consideration for
this working interest, the Fund agreed to pay 50% of the drilling costs for the
first well. The target was two natural gas reservoirs between 15,000 feet and
15,800 feet. The well began drilling on February 18, 2006 and reached its total
depth of 15,800 feet on March 31, 2006, 44 days after the first day of
drilling. Attempts to evaluate the well with electric wireline logs failed. The
well was evaluated with logging while drilling (LWD) tools. The well was deemed
to be noncommercial. On April 5, 2006 the decision was made to plug and
abandoned the well. Dry-hole costs related to South Marsh Island 231, including
plug and abandonment expenses, incurred by the Fund for the year ended December
31, 2006 were $8.4 million.

West Cameron 265/266In 2005, the Fund
acquired a 40% working interest in the exploratory project West Cameron 265/266
from Marathon Oil Company (Marathon), the Operator. In consideration of this
interest, the Fund agreed to pay 60% of the drilling costs on the first well.
The well was deemed to be non-commercial. On May 16, 2006, the decision was
made to plug and abandon the well. Dry-hole costs related to West Cameron
265/266, including plug and abandonment expenses, incurred by the Fund for the
years ended December 31, 2007 and 2006, were $64 thousand and $21.5 million,
respectively.

West Cameron 109

In August 2006,
the fund acquired a 22.5% working interest in the exploratory project West
Cameron 109 from Nexen, Inc. (Nexen), the operator. On December 1, 2006, the
Fund was informed by Nexen, that the exploratory well being drilled in West
Cameron 109 lease block did not have commercially productive quantities of
either oil or natural gas and was therefore deemed an unsuccessful well or
dry-hole. In addition, the well was plugged and abandoned. Dry-hole costs
related to West Cameron 109, including plug and abandonment expenses, incurred
by the Fund for the years ended December 31, 2007 and 2006 were $0.2 million
and $8.2 million, respectively.

Green Canyon 246

In July 2006, the Fund
acquired a 5% working interest in the exploratory project Green Canyon 246 from
Marathon, the operator from acquisition date until December 28, 2006. In
December 2006, oil was discovered in one reservoir of the well, however, a
side-track operation would have to be performed to determine the commercial
viability of the well. Marathon elected not to participate in the side-track
and forfeited its 40% interest. Woodside Energy (USA) Inc. (Woodside) and the
Fund elected to proceed, taking over, on a pro-rated basis, Marathons 40%
interest. The Fund increased its ownership to 8.3%, and Woodside took over the
project as operator. Upon completion of the side-track, on January 24, 2007,
the Fund was informed that the exploratory well being drilled did not have
commercially productive quantities of either oil or natural gas and had
therefore been deemed an unsuccessful well or dry hole. Dry-hole costs related
to Green Canyon 246, including plug and abandonment expenses, incurred by the
Fund for the years ended December 31, 2007 and 2006 were $1.8 million and $4.8
million, respectively.

South Timbalier 135/136

On January 24,
2007, the Fund was informed by its operator, Chevron U.S.A., Inc. (Chevron),
that the exploratory well being drilled by Chevron in the South Timbalier
135/136 lease block did not have commercially productive quantities of either
oil or natural gas and has therefore been deemed an unsuccessful well or dry
hole. The Fund owns a 10% working interest in South Timbalier 135/136. Dry-hole
costs related to South Timbalier 135/136, including plug and abandonment
expenses, incurred by the Fund for the years ended December 31, 2007 and 2006
were $1.7 million and $5.2 million, respectively.

Mississippi Canyon 489/490

In the third quarter
2007, the Fund acquired an 8.33% working interest in the exploratory project
Mississippi Canyon 489/490 from LLOG Exploration Offshore, Inc. (LLOG), the
operator of the project. Drilling began in September 2007 and in November 2007,
the operator informed the Fund that Mississippi Canyon 489/490 did not have
commercially productive quantities of either oil or natural gas and had been
deemed an unsuccessful well, or dry hole. Dry-hole costs related to Mississippi
Canyon 489/490, including plug and abandonment expenses, incurred by the Fund
for the year ended December 31, 2007 were $3.2 million.

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.

-5-

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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.

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. 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 to
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.

Generally, working interests
in an offshore gas lease under the OCSLA pay a 16.67% royalty to the MMS for
shallow-water projects, and a 12.5% royalty to the MMS for deepwater projects,
such as Walker Ridge 155. Therefore, the net revenue interest of the holders of
100% of the working interest in the projects in which the Fund will invest is
83.33% for shallow-water projects and 87.5% for deepwater projects of the total
revenue of the project, and, is further reduced by any other royalty burdens
that apply to a lease block. However, as described below, the MMS has adopted royalty
relief for existing OCS leases for those who drill deep oil and natural gas
projects.

Mineral Management Services Deep Natural Gas Royalty
Incentive

On January 26, 2004, the MMS
promulgated a rule providing incentives for companies to increase deep oil and
natural gas production in the Gulf of Mexico (the Royalty Relief Rule). Under
the Royalty Relief Rule, lessees will be eligible for royalty relief on their
existing leases if they drill and perforate wells for new and deeper reserves
at depths greater than 15,000 feet subsea. In addition, an even larger royalty
relief would be available for wells drilled and perforated deeper than 18,000
feet subsea. It should be noted that the Royalty Relief Rule does not extend to
deep waters of the Gulf of Mexico off the continental shelf nor does it apply
if the price of natural gas exceeds $10.19 Million British Thermal Units
(mmbtu), adjusted annually for inflation. The Royalty Relief Rule is limited
to leases in a water depth less than 656 feet, or 200 meters. With respect to
the Funds projects that are currently drilling, the Fund will determine once
completed if the project will be able to claim relief under the Royalty Relief
Rule.

In addition to the Royalty
Relief Rule promulgated by the MMS, the Deep Water Royalty Relief Act of 1995
(the Deepwater Relief Act) was enacted to promote exploration and production
of natural gas and oil in the deepwater of the Gulf of Mexico and relieves
eligible leases from paying royalties to the U.S. Government on certain defined
amounts of deepwater production. The Deepwater Relief Act expired in the year
2000 but was extended by the MMS to promote continued interest in deepwater.
For purposes of royalty relief, the MMS defines deepwater as depths in excess
of 656 feet (200 meters). In order for a lease to be eligible for royalty
relief, it must be located in the Gulf of Mexico and west of 87 degrees and 30
minutes West longitude (essentially the Florida-Alabama boundary).

Currently, for leases
entered into after November 2000, the MMS assigns a lease a specific volume of
royalty suspension based on how the suspension amount would affect the
economics of the leases development. Any such royalty suspension applicable to
a particular lease is generally set forth in the lease auction materials
prepared by the MMS. The amount of the suspension, if any, is not determined by
water depth levels (as it had in the past) but rather based upon the MMS view
of the characteristics and economics of the project. For example, projects
deemed relatively secure and safe such as those near existing transportation
infrastructure may receive no royalty relief while a similar project far away
from any such infrastructure or in an area deemed more risky may receive
significant royalty relief. As a result, unlike the royalty relief associated
with deep drilling in shallow waters, there is no formulaic or predictable
means of determining in advance whether and to what extent royalty relief would
be available for a potential deepwater project.

-6-

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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 natural gas
to the public market. The Fund is receiving market prices for such 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 other projects will also have access to
pipeline transportation and can be marketed in a similar fashion. As mentioned
above in Managers Investment Committee and Investment Criteria, as part of the
Managers review of a potential project, access to existing transportation
infrastructure is an extremely important factor as the existence of such
infrastructure enables production from a successful well to get to market
quickly. The Fund is currently investing in one project, Walker Ridge 155, which, if successful, will need
to build additional infrastructure, thereby extending the amount of time from drilling to production.

Operator

The projects in which the
Fund has invested are operated and controlled by unaffiliated third-party
entities acting as operators (the Operators). The Operators are responsible
for drilling, administration and production activities for leases jointly owned
by working interest owners and acts on behalf of all working interest owners
under the terms of the applicable offshore operating agreements. 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 projects are operated by
Anadarko, W&T Offshore, Apache, McMoRan and Devon.

Because the Fund does not
operate any of the projects in which it has acquired an interest, shareholders
must 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 the 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. These projects are owned by affiliates of the
Fund. 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 become
exhausted and be insufficient to cover a claim made by the Fund in that 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, money to
help provide for the Funds proportionate share of the cost of dismantling
production platforms and facilities, plugging and abandoning the projects, and
removing the platforms, facilities and projects in respect of each of such
projects after their useful life, 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 the Fund
estimates to be sufficient to meet its potential requirements. If management
later determines the deposit and earned interest is not enough to cover the
Funds proportionate share of expense, the Fund will deposit payments from
operating income to make up any differences. Any portion of a salvage fund that
remains after the Fund pays its share of the actual salvage cost will be
distributed to the shareholders. There are no legal restrictions on the
withdrawal of the salvage fund.

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.

However, the Funds drilling, production and
transportation operations are subject to seasonal risks, such as hurricanes, that
may affect the Funds ability to bring such oil or natural gas to the market
and, consequently, affect the price for such oil and natural gas. The National
Hurricane Center defines hurricane season in the Atlantic Region, Caribbean,
and Gulf of Mexico to be from June 1 through November 30. During hurricane
season, the number and intensity of and resulting damage from hurricanes in the
Gulf of Mexico region could affect the gathering and processing infrastructure,
drilling platforms or the availability and price of repair equipment. As a
result, these factors may affect the supply and, consequently, the price of oil
and natural gas resulting in an increase in price if supplies are reduced.
However, even if commodity prices increase because of weather related
shortages, the Fund may not be in a position to take immediate advantage of any
such price increase if, as a result of such weather related incident, damage
occurred to its projects, the gathering infrastructure or in the transportation
network.

-7-

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The Manager has had past
experiences that indicate the typical interruption in operations resulting from
a hurricane that does not result in significant damage may be approximately
three to seven days. The Manager has experienced the range of possible interruptions
in operations due to hurricanes from as little as no damage and no
interruptions to significant damage and extended interruptions. However, it is
impossible to predict whether and to what extent hurricanes and damage may
occur and to what projects.

Customers

All of the oil and natural
gas production from the Funds producing property 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 third parties. 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. Also, 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 the lease acquisition of working interests 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, but 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.

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.

-8-

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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.

Sales
and Transportation of Natural Gas/Oil

The Fund sells the Funds
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 the Fund 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 us, 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.

-9-

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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 Operators
responsibility for compliance, in the event of an oil spill, the Fund, along
with the operator 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.

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, 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 there under. The Fund
does not believe that the costs of complying with environmental laws (federal,
state and local) will have a material adverse impact on the financial condition
and/or operations of the Fund.

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 under heading Properties in Item 1.
Business 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 (PW), 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 PW. Thereafter, PW 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.

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PART II

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

Market Price of Shares, Distributions and Related Shareholder
Matters

There is currently no
established public trading market for the Shares. As of the date of this
filing, there were 1,513 shareholders of record of the Fund. The Fund began
paying distributions in December 2007, which totaled $1.5 million.

Participation in Costs and Revenues

The Funds investment
objective is primarily to generate current cash flow for distribution to
shareholders from the operation of the Fund projects to the extent that such
distributions are consistent with the reserve requirements and operational
needs of those projects. If the Fund does make distributions, this section
describes how the Fund will:

| |   |                                                                               
| | - | ------------------------------------------------------------------------------
| |  | determine what cash flow
 will be available for distributions to shareholders,
| |   |                                                                               
| |  | distribute available cash
 flow,                                              
| |   |                                                                               
| |  | give the Manager a share
 of cash flow, if available,                         
| |   |                                                                               
| |  | handle returns of capital
 contributions,                                     
| |   |                                                                               
| |  | allocate income and
 deductions for tax purposes, and                         
| |   |                                                                               
| |  | maintain capital accounts
 for Investors.                                     

Available cash determines
what amounts in cash the Fund will be able to distribute in cash to Investors.
There are three types of available cash as follows:

Available
Cash from Capital Transactions is total cash received by the Fund from the
proceeds of the sale or other disposition of the Funds property (including
items such as insurance proceeds, refinancing proceeds, condemnation proceeds
and other amounts received out of the ordinary course of business), but
excluding dispositions of temporary investments of the Fund.

Available
Cash from Temporary Investments is cash from short-term investments (i.e. U.S.
Treasury securities, certificates of deposits) and other interest bearing cash
accounts.

Available
Cash from Operations is all other available cash.

There is no fixed
requirement to distribute available cash; instead, it will be distributed to
shareholders to the extent and at such times as the Manager believes is
advisable. Once the amount and timing of a distribution is determined, it shall
be made to shareholders as described below.

Distributions from Operations

At various times
during a calendar year, the Fund will determine whether there is enough
Available Cash from Operations for a distribution to shareholders. The amount
of Available Cash from Operations determined to be available, if any, will be
distributed to the shareholders. At all times, the Manager will be entitled to
15% and shareholders will be entitled to 85% of the Available Cash from
Operations distributed.

Distributions of Available Cash from Capital Transactions

Available Cash from
Capital Transactions that the Fund decides to distribute will be paid as
follows:

| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Before shareholders have
 received total distributions equal to their capital contributions, 99% of
 Available Cash from Capital Transactions will be distributed to shareholders
 and 1% to the Manager.
| |   |                                                                                                                                                                                                          
| |  | After shareholders have
 received total distributions equal to their capital contributions, 85% of
 Available Cash from Capital Transactions will be distributed to Investors and
 15% to the Manager.   

General Distribution Provisions

Distributions to
shareholders under the foregoing provisions will be apportioned among them in
proportion to their ownership of their shares. The Manager has the sole
discretion to determine the amount and frequency of any distributions;
provided, however, that a distribution may not be made selectively to one
shareholder or group of shareholders but must be made ratably to all
shareholders entitled to that type of distribution at that time. The Manager in
its discretion nevertheless may credit select persons with a portion of its
compensation from the Fund or distributions otherwise payable to the Manager.

-11-

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Because distributions are
dependent upon the earnings and financial condition of the Fund, its
anticipated obligations, the Managers discretion and other factors, there can
be no assurance as to the frequency or amounts of any distributions that the
Fund may make.

Return of Capital Contributions

If the Fund for any
reason at any time does not find it necessary or appropriate to retain or
expend all capital contributions, in its sole discretion it may return any or
all of such excess capital contributions ratably to shareholders. A return of
capital contributions is not treated as a distribution. The Fund and the
Manager will not be required to return any fees deducted from the original
capital contribution or any costs and expenses incurred and paid by the Fund.
Any such return of capital will decrease the shareholders capital
contributions.

Capital Accounts and Allocations

The tax consequences
of an investment in the Fund to a shareholder in the event of dissolution
depend on the shareholders capital account and on the allocations of profits
and losses to that account. The Funds taxable profits or losses are allocated
among the shareholders as described below and profits or losses are added to or
subtracted from the shareholders capital accounts. The amounts allocated to
each shareholder will generally not be equal to the distributions the
shareholder receives until final liquidating distributions are made to
shareholders.

The Fund does not currently
anticipate that any contributions or distributions of property will be made.
Certain additional adjustments to capital accounts will be made if necessary to
account for the effects of non-recourse debt incurred by the Fund, if any, or
contributions of property, if any, to the Fund.

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 is an independent
oil and natural gas producer. 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. Since inception in March 2005, the Fund has acquired an interest in
twelve offshore projects and has participated in the drilling of twelve wells, six
that were determined to be dry-holes, three that are currently drilling or
scheduled to drill, and three that have been determined to have proved
reserves. See also Item 1. Business . West Cameron 593 and Eugene Island 354
began producing in September 2007 and November 2007, respectively. Eugene
Island 346/347 is expected to begin producing in the second quarter of 2008.

The Manager performs certain
duties on the Funds behalf including the evaluation of potential projects for
investment and on-going 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. As compensation for the
above duties, the Manager was paid a one time investment fee (4.5%) for the
evaluation of projects on the Funds behalf and is paid an annual management
fee (2.5% of capital contributions, net of cumulative dry-hole costs), payable
monthly, for ongoing administrative and advisory duties as well as
reimbursement of expenses. The Manager also participates in distributions. See
also Item 1. Business.

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.

-12-

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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 U.S.
generally accepted accounting principles, or 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 the Funds 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 such differences may have a
material impact on the results of operations, financial position, or cash
flows. See Note 2  Summary of Significant Accounting Policies of Item 8.
Financial Statements and Supplementary Data contained in this Annual Report
for a discussion of the Funds significant accounting policies.

Accounting for Exploration and Development
Costs

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

The costs of exploratory
wells that find oil and gas reserves are capitalized pending determination of
whether proved reserves have been found. Exploratory 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. 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.

Proved Reserves

Annually, 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 natural gas and oil 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 revenues
to change. Estimates of proved reserves are key components of the Funds most
significant financial estimates involving the Funds rate for recording
depreciation, depletion and amortization.

Unproved Properties

Unproved
properties is comprised of capital costs incurred for undeveloped acreage,
wells and production facilities in progress, wells pending determination and
related capitalized interest. 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. The
Fund believes that substantially all of the costs included in its unproved
property balance will be evaluated in the next two years.

Asset Retirement Obligations

For 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 fair value of legally required asset retirement obligations
once it can be reasonably estimated. The Fund capitalizes the associated asset
retirement costs as part of the carrying amount of the long-lived assets. Plug
and abandonment costs associated with unsuccessful projects are expensed as
dry-hole costs.

Impairment of Long-Lived Assets

The Fund reviews
long-lived assets, including oil and natural gas fields, for impairment
whenever events or changes in circumstances indicate that the carrying amounts
may not be recovered. Long-lived assets are tested based on identifiable cash
flows (the field level for oil and natural gas assets) and are largely
independent of the cash flows of other assets and liabilities. If the carrying
amounts of the long-lived assets are not expected to be recovered by
undiscounted future net cash flow estimates, the assets are impaired and an
impairment loss is recorded. The amount of impairment is based on the estimated
fair value of the assets determined by discounting anticipated future net cash
flows.

-13-

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In the case of oil and
natural gas fields, the present value of future net cash flows is based on
managements best estimate of future prices, which is determined with reference
to recent historical prices and published forward prices, applied to projected
production volumes of individual fields and discounted at a rate commensurate
with the risks involved. The projected production volumes represent reserves,
including probable reserves, expected to be produced based on a stipulated
amount of capital expenditures. The production volumes, prices and timing of
production are consistent with internal projections and other externally
reported information. Oil and natural gas prices used for determining asset
impairments will generally differ from those used in the standardized measure
of discounted future net cash flows, since the standardized measure requires
the use of actual prices on the last day of the year.

Results of Operations

The following review
of operations for the years ended December 31, 2007 and 2006 should be read in
conjunction with the Funds financial statements and the notes thereto included
within Item 8. Financial Statements and Supplementary Data contained in this
Annual Report.

|                                          |  |                         |        |      |   |         |  
|----------------------------------------- |  | ----------------------- | ------ | ---- | - | ------- | -
|                                          |  | Year ended December 31, |       
|                                          |  | 2007                    |        | 2006 |  
|                                          |  |                         |        |      |  
|Revenue                                   |  |                         |        |      |   |         |  
|Oil and gas revenue                       |  | $                       | 4,191  |      | $ |        |  
|                                          |  |                         |        |      |   |         |  
|                                          |  |                         |        |      |   |         |  
|Expenses                                  |  |                         |        |      |   |         |  
|Depletion and amortization                |  |                         | 2,332  |      |   |        |  
|Dry-hole costs                            |  |                         | 6,959  |      |   | 48,118  |  
|Management fees to
 affiliate             |  |                         | 2,152  |      |   | 3,459   |  
|Lease operating expense                   |  |                         | 114    |      |   |        |  
|Other operating expense                   |  |                         | 167    |      |   |        |  
|General and administrative
 expenses      |  |                         | 724    |      |   | 817     |  
|                                          |  |                         |        |      |   |         |  
|Total expenses                            |  |                         | 12,448 |      |   | 52,394  |  
|                                          |  |                         |        |      |   |         |  
|Loss from operations                      |  |                         | (8,257 | )    |   | (52,394 | )
|Other income                              |  |                         |        |      |   |         |  
|Interest income                           |  |                         | 2,348  |      |   | 4,566   |  
|Realized loss on marketable
 securities   |  |                         |       |      |   | (18     | )
|                                          |  |                         |        |      |   |         |  
|Net loss                                  |  |                         | (5,909 | )    |   | (47,846 | )
|Other comprehensive loss                  |  |                         |        |      |   |         |  
|Unrealized loss on
 marketable securities |  |                         |       |      |   | (51     | )
|                                          |  |                         |        |      |   |         |  
|                                          |  |                         |        |      |   |         |  
|Total comprehensive loss                  |  | $                       | (5,909 | )    | $ | (47,897 | )
|                                          |  |                         |        |      |   |         |  

Year Ended December 31, 2007 compared to
the Year Ended December 31, 2006

Oil and Gas Revenue. The Fund had two wells come onto production
during 2007, West Cameron 593 in September 2007, and Eugene Island 354 in
November 2007. Prior to September 2007, the Fund had no operating revenue and
was considered an exploratory stage enterprise. Oil and gas revenue for the
year ended December 31, 2007 was $4.2 million.

During the year ended
December 31, 2007 the Funds wells produced approximately 26 thousand barrels
of oil and 247 thousand mcf of natural gas. Since the onset of production in
September 2007, oil prices have averaged $90 per barrel and natural gas prices
have averaged $6.64 per mcf.

Depletion and Amortization.
Depletion and amortization of the cost of proved oil and natural gas properties
are calculated using the units of production method. Proved developed reserves
are used as the base for depleting the cost of successful exploratory drilling
and development 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. For the year ended December 31, 2007 the Fund had recorded
depletion and amortization of $2.3 million relating to the onset of production
of two of the Funds properties, West Cameron 593 and Eugene Island 354. The
Fund had no producing properties during the year ended December 31, 2006 and
therefore had no depletion and amortization expense.

-14-

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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. The following table
summarizes dry-hole costs inclusive of plug and abandonment costs for the years
ended December 31, 2007 and 2006.

|                        |  |                                 |       |      |   |        | 
|----------------------- |  | ------------------------------- | ----- | ---- | - | ------ | 
|                        |  | For the year ended December 31, |      
|                        |  | 2007                            |       | 2006 |  
|                        |  |                                 |       |      |  
|                        |  | (in thousands)                  |      
|South Marsh 231         |  | $                               | (78   | )    | $ | 8,437  | 
|West Cameron 265        |  |                                 | 64    |      |   | 21,469 | 
|West Cameron 109        |  |                                 | 222   |      |   | 8,203  | 
|Green Canyon 246        |  |                                 | 1,825 |      |   | 4,843  | 
|South Timbalier 135/136 |  |                                 | 1,697 |      |   | 5,166  | 
|Mississippi Canyon 490  |  |                                 | 3,229 |      |   |       | 
|                        |  |                                 |       |      |   |        | 
|                        |  | $                               | 6,959 |      | $ | 48,118 | 
|                        |  |                                 |       |      |   |        | 

Management Fee.
For the years ended December 31, 2007 and 2006, the Fund incurred management
fees totaling $2.2 million and $3.5 million, respectively. Management fees are
charged by the Manager to cover expenses associated with overhead and on-going
management, administrative and advisory services. Such overhead expenses
include but are not limited to rent, payroll and benefits for employees of the
Manager, and other administrative costs. The decrease of $1.3 million in 2007
was attributable to a policy change by the Manager, reducing the calculation of
the fee for the amount of cumulative dry-hole costs incurred.

Lease Operating
Expense.Lease operating expenses represent the
day-to-day cost of operating and maintaining wells and related facilities. For
the year ended December 31, 2007 the Fund had recorded lease operating expense
of $0.1 million relating to the onset of production of two of the Funds
properties, West Cameron 593 and Eugene Island 354. The Fund had no producing
properties during the year ended December 31, 2006 and therefore had no lease
operating expense.

Other Operating
Expense. Other operating expenses for the year
ended December 31, 2007 were $167 thousand related to geological costs incurred
for Mississippi Canyon 489/490, Eugene Island 354 and Eugene Island 346/347
totaling $160 thousand. Accretion expense for the year ended December 31, 2007
was $7 thousand for the Funds proven properties, West Cameron 593 and Eugene
Island 354. There were no other operating expenses for the year ended December
31, 2006.

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

|                          |  |                                 |     |      |   |     | 
|------------------------- |  | ------------------------------- | --- | ---- | - | --- | 
|                          |  | For the year ended December 31, |    
|                          |  | 2007                            |     | 2006 |  
|                          |  |                                 |     |      |  
|                          |  | (in thousands)                  |    
|Accounting and legal fees |  | $                               | 202 |      | $ | 169 | 
|Trust fees                |  |                                 | 79  |      |   | 164 | 
|Insurance                 |  |                                 | 442 |      |   | 484 | 
|Other                     |  |                                 | 1   |      |   |    | 
|                          |  |                                 |     |      |   |     | 
|                          |  | $                               | 724 |      | $ | 817 | 
|                          |  |                                 |     |      |   |     | 

Accounting and
legal fees represent annual audit and tax preparation fees, quarterly reviews
and filing fees of the Fund. Trust fees represent bank fees associated with the
management of the Funds short-term investment portfolio in US Treasury
securities and have decreased in 2007 due to a reduction in investment activity
as the Funds cash is spent on oil and gas properties. Insurance expense
represents premiums related to well control insurance, which increases as
drilling activity increases, and directors and officers liability policy, which
is allocated by the Manager to the Fund based on capital raised by the Fund to
total capital raised by all oil and natural gas funds managed by the Manager.

Other Income.
Other income is comprised principally of interest income earned on money market
accounts and short-term US Treasury securities. Interest income earned for the
years ended December 31, 2007 and 2006, totaled $2.3 million and $4.6 million,
respectively. In 2007 interest income decreased as a result of a reduction in
cash and investment balances available partially offset by increased interest
rates in 2007.

-15-

---



Other Comprehensive
Loss.Other comprehensive loss is comprised solely
of the re-classification of previously recorded unrealized gains on
available-for-sale marketable debt securities. During 2006, the
available-for-sale security reached its maturity and the previously recorded
unrealized gain was reclassified to other income. As of December 31, 2007, all
investments in short-term US Treasury Notes are considered held-to-maturity
investments and are recorded at cost plus accrued interest.

Capital Resources and Liquidity

Operating Cash Flows

Cash flow
provided by operating activities for the year ended December 31, 2007 was $1.0
million, primarily related to revenue receipts of $2.7 million and interest
income received of $1.7 million. These amounts were partially offset by
payments for management fees of $2.2 million, general and administrative
expenses of $0.7 million, and other operating expenses of $0.2 million and a
decrease in working capital of $0.3 million.

Cash flow used
in operating activities for the year ended December 31, 2006 was $3.1 million,
primarily related to payments for management fees and general and
administrative expenses of $3.5 million and $0.8 million, respectively, and a
decrease in working capital of $0.6 million, offset by interest income received
of $1.8 million.

Investing Cash Flows

Cash flow used
in investing activities for the year ended December 31, 2007 was $9.3 million
principally related to capital expenditures for oil and gas properties of $34.4
million, investments in marketable securities totaling $23.6 million, inclusive
of salvage fund, and advances to operators for property expenditures of $1.9
million. These amounts were partially offset by proceeds from the maturity of a
marketable security totaling $50.6 million.

Cash flow
provided by investing activities for the year ended December 31, 2006 was $21.2
million. The Fund received proceeds of $130.1 million from marketable
securities that matured during 2006 and made investments in marketable
securities of $89.1 million. The Fund made capital expenditures of $19.7
million for oil and natural gas properties.

Financing Cash Flows

Cash flow used
in financing activities for the year ended December 31, 2007 was $1.5 million
related to the onset of distributions to the Manager and shareholders in
December 2007.

Cash flow used
in financing activities for the year ended December 31, 2006 was $2 thousand
related to cash expenditures for payment of syndication costs.

Estimated Capital Expenditures

The Fund has
entered into multiple offshore operating 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, 2007, the Fund had
commitments related to authorizations for expenditures totaling $18.6 million
for properties. If the properties were to be successful, the Fund would make
additional expenditures totaling $1.3 million related to the completion of these
properties.

Liquidity Needs

The Funds
primary short-term liquidity needs are to fund its 2008 operations, including
management fees and capital expenditures, with existing cash on-hand and income
earned from its short-term investments and cash and cash equivalents. The
Manager is entitled to receive an annual management fee from the Fund
regardless of whether the Fund is profitable in that year. The annual fee,
payable monthly, is equal to 2.5% of total capital contributed by shareholders,
net of cumulative dry-hole costs.

With respect
to the payment of management fees, until one of the Funds projects begins
producing, all or a portion of the management fee is paid generally from the
interest or dividend income generated by the Funds development capital that
has not been spent, although the management fee can be paid out of capital
contributions. Such interest and/or dividend income is expected to be
sufficient to cover Fund expenses, including the management fee. However in
periods of declining interest rates, and as the Fund expends its capital on
projects, interest and/or dividend income may not be sufficient, which would
require the Fund to use capital contributions to fund such expenses. Generally,
it can take anywhere from 18 to 24 months to bring a project to production.
Once a well is on production, the management fee and fund expenses are paid
from operating income. Over time, as a well produces, the Fund may recover some
or the entire management fee that may have been paid out of capital contributions.

-16-

---



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.

The capital
raised by the Fund in its private placement is more than likely all the capital
it will be able to obtain for investments in projects. The number of projects
in which the Fund can invest will naturally be limited and each unsuccessful
project the Fund experiences, if any, will not only reduce its ability to
generate revenue, but also exhaust its limited supply of capital. Typically for
a fund, the Manager seeks an investment portfolio that combines high and low
risk exploratory projects.

When the
Manager makes a decision for participation 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 that are
anticipated to be drilled. If the 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.

Off-Balance Sheet Arrangements

The Fund had
no off-balance sheet arrangements as of December 31, 2007 and 2006, 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 discuss or negotiate
any such contracts. No contractual obligations exist at December 31, 2007 and
2006.

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 and filed as part of this report.

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

As reported on
a Form 8-K filed with the SEC on June 14, 2006, the Manager of the Fund
dismissed Perelson Weiner, LLP as the Funds independent registered public
accountants effective June 8, 2006.

The Fund was
formed on March 21, 2005 and filed its Registration Statement on Form 10 in
April 2006; thus, the period beginning March 21, 2005 (Inception) and ended
December 31, 2005 was the Funds first audited reporting period. Perelson
Weiners audit report on the financial statements of the Fund for the period
March 21, 2005 (inception) through December 31, 2005 did not contain an adverse
opinion or disclaimer of opinion, nor was such report qualified or modified as
to uncertainty, audit scope or accounting principles.

From the date
of inception of the Fund through June 8, 2006, there were no disagreements with
Perelson Weiner on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Perelson Weiner, would have caused Perelson
Weiner to make reference to the subject matter of the disagreements in their
report on the Funds financial statements for such period.

From the date
of inception of the Fund through June 8, 2006, there were no reportable
events as defined in Item 304(a)(1)(v) of Regulation S-K.

As reported on
a Form 8-K filed with the SEC on July 13, 2006, the Manager of the Fund
appointed Deloitte & Touche LLP as the Funds independent registered public
accountants effective July 12, 2006.

-17-

---



ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls
and Procedures

Under 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, 2007. 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 Reporting

Management 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.

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, 2007. 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, 2007, 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
Controls over Financial Reporting

The 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, 2007 that have materially
affected, or are reasonably likely to materially affect, the Funds internal
control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

-18-

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PART
III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE

The Fund has
engaged Ridgewood Energy as Manager. The Manager has very broad authority, including
the election of executive officers of the Fund. Executive officers of Ridgewood
Energy and the Fund and their ages at December 31, 2007 are as follows:

|                                          |              
|----------------------------------------- | -------------
|Name, Age and Position with Registrant    | Officer Since
|                                          |              
|Robert E.
 Swanson, 60                    |              
|President and Chief Executive Officer     | 1982         
|                                          |              
|W. Greg
 Tabor, 47                        |              
|Executive Vice President and              |              
|Director of Business Development          | 2004         
|                                          |              
|Robert L.
 Gold, 49                       |              
|Executive Vice President                  | 1987         
|                                          |              
|Kathleen P.
 McSherry, 42                 |              
|Executive Vice President and              |              
|Chief Financial Officer                   | 2000         
|                                          |              
|Daniel V.
 Gulino, 47                     |              
|Senior Vice President and General Counsel | 2003         
|                                          |              
|Adrien
 Doherty, 55                       |              
|Executive Vice President                  | 2006         

Set forth
below are the names 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 Power and Ridgewood Capital, affiliates of
Ridgewood Energy. Mr. Swanson has been President and registered principal of
Ridgewood Securities 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.

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
is also Executive Vice President of Ridgewood Power. 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.

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.

-19-

---



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.

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.

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.

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, 2007, 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 SECURITY HOLDER MATTERS

The following
table sets forth information with respect to beneficial ownership of the shares
as of March 14, 2008 (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.           

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 14, 2008. Other than
as indicated below, no officer and director owns any of the Funds Shares.

|                                                              |  |                    |  |        
|------------------------------------------------------------- |  | ------------------ |  | -------
|Name of beneficial owner                                      |  | Number 
 of shares |  | Percent
|                                                              |  |                    |  |        
|Robert E.
 Swanson (1), President and Chief Executive Officer |  | 1.6667             |  | *      
|Executive
 officers as a group (1)                            |  | 1.6667             |  | *      

|                                                                                   
|-----------------------------------------------------------------------------------
|                                                                                   
|*         Represents
 less than one percent.                                       
|                                                                                   
|(1)       Includes
 shares owned by the spouse of Mr. Swanson or one of his Trusts.

-20-

---



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE

The Manager is
paid an annual management fee, payable monthly, equal to 2.5% of total capital
contributions, net of cumulative dry-hole costs incurred, for general and
administrative and management services supplied to the Fund. Additionally, when
distributions are made, the Manager is entitled to a portion of funds
distributed to shareholders. For the years ended December 31, 2007 and 2006 the
Fund paid the Manager management fees totaling $2.2 million and $3.5 million,
respectively. For the year ended December 31, 2007 the Manager received
distributions from the Fund of $0.2 million. No distributions were paid during
2006.

Profits and
losses are allocated in accordance with the LLC Agreement. In general, profits
and losses in any year are allocated 85% to shareholders and 15% to the
Manager. The primary exception to this treatment is that all items of expense,
loss, deduction and credit attributable to the expenditure of shareholders
capital contributions are allocated 99% to shareholders and 1% to the Manager.

From time to
time, short-term payables and receivables, which do not bear interest, arise
from transactions with affiliates in the ordinary course of business. As of
December 31, 2007 and 2006, there were no outstanding payables or receivables
related to these transactions.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES

The following
table presents fees for services rendered by Deloitte & Touche, LLP for the
years ended December 31, 2007 and 2006:

|                |  |                                 |     |                                |   |     | 
|--------------- |  | ------------------------------- | --- | ------------------------------ | - | --- | 
|                |  | Year ended 
 December 31,
 2007 |     | Year ended
 December 31,
 2006 |  
|                |  |                                 |     |                                |  
|                |  | (in thousands)                  |     |                                |  
|Audit Fees
 (1) |  | $                               | 125 |                                | $ | 125 | 
|Tax fees (2)    |  |                                 |    |                                |   | 38  | 
|                |  |                                 |     |                                |   |     | 
|Total           |  | $                               | 125 |                                | $ | 163 | 
|                |  |                                 |     |                                |   |     | 

|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Fees for audit
 of annual financial statements, reviews of the related quarterly financial
 statements, and reviews of documents filed with the SEC.
|    |                                                                                                                                                     
|(2) | Fees related
 to professional services for tax compliance, tax advice and tax planning.                                                             

-21-

---



PART
IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES.

|                                                            |                              
|----------------------------------------------------------- | -----------------------------
|(a) (1)                                                     | Financial Statements         
|                                                            |                              
|See Index
 to Financial Statements set forth on page F-1.
|                                                            |                              
|(a) (2)                                                     | Financial Statement Schedules
|                                                            |                              
|None.                                                      

Exhibit Index

|     |  |                                                                                                                                                                   
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Participation Agreement
 between Chevron U.S.A., Inc. and Ridgewood Energy Corporation as Manager for
 South Timbalier 135/136. (previously filed)                
|     |  |                                                                                                                                                                   
|10.2 |  | Participation Agreement
 between Newfield Exploration Company and Ridgewood Energy Corporation as
 Manager for West Cameron 593. (previously filed)               
|     |  |                                                                                                                                                                   
|10.3 |  | Participation Agreement
 between Newfield Exploration Company and Ridgewood Energy Corporation as
 Manager for Eugene Island 346/347. (previously filed)          
|     |  |                                                                                                                                                                   
|10.4 |  | Participation Agreement
 between Devon Energy Production Company L.P. and Ridgewood Energy Corporation
 as Manager for Eugene Island Block 337. (previously filed)
|     |  |                                                                                                                                                                   
|10.5 |  | Participation Agreement
 between Devon Energy Production Company L.P. and Ridgewood Energy Corporation
 as Manager for Eugene Island Block 354. (previously filed)
|     |  |                                                                                                                                                                   
|10.6 |  | Participation Agreement
 between LLOG Exploration Offshore, Inc. and Ridgewood Energy Corporation as
 Manager for Mississippi Canyon 489/490. (previously filed)  
|     |  |                                                                                                                                                                   
|10.7 |  | Participation Agreement
 between Kerr-McGee Oil & Gas Corporation and Ridgewood Energy Corporation
 as Manager for Walker Ridge 155. (previously filed)           
|     |  |                                                                                                                                                                   
|10.8 |  | Participation Agreement
 between Apache Corporation and Ridgewood Energy Corporation as Manager for
 South Timbalier 287.                                         
|     |  |                                                                                                                                                                   
|10.9 |  | Participation Agreement
 between W & T Offshore, Inc. and Ridgewood Energy Corporation as Manager
 for High Island Block 38.                                      
|     |  |                                                                                                                                                                   
|23.1 |  | Consent of Ryder Scott
 Company, L.P.                                                                                                                             
|     |  |                                                                                                                                                                   
|31.1 |  | Certification of Robert E.
 Swanson, Chief Executive Officer, pursuant to Securities Exchange Act Rule
 13a-14(a).                                                
|     |  |                                                                                                                                                                   
|31.2 |  | Certification of Kathleen
 P. McSherry, Chief Financial Officer, pursuant to Securities Exchange Act
 Rule 13a-14(a).                                             

-22-

---



|                                                                                                              |     
|------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                              | Page
|                                                                                                              |     
|                                                                                                              |     
|INDEX TO FINANCIAL STATEMENTS                                                                                 |     
|Report of Independent Registered Public Accounting Firm                                                       | F-2 
|Balance Sheets as of December 31, 2007 and 2006                                                               | F-3 
|Statements of Operations and Other Comprehensive Loss for the years
 ended December 31, 2007 and 2006         | F-4 
|Statements of Changes in Members Capital for the years ended
 December 31, 2007 and 2006                     | F-5 
|Statements of Cash Flows for the years ended December 31, 2007 and
 2006                                      | F-6 
|Notes to Financial Statements                                                                                 | F-7 
|Supplementary Financial Information  Information about Oil and
 Natural Gas Producing Activities - Unaudited | F-12

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, 2007 and 2006, the related statements of operations
and other comprehensive loss, changes in members capital, and cash flows for
the years ended December 31, 2007 and 2006. 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, 2007
and 2006, and the results of its operations and its cash flows for the years
ended December 31, 2007 and 2006, in conformity with accounting principles
generally accepted in the United States of America.

/s/ Deloitte
& Touche LLP

March 14, 2008
Parsippany, New Jersey

F-2

---



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

|                                                                                         |  |              |         |      |   |         |  
|---------------------------------------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------- | -
|                                                                                         |  | December 31, |        
|                                                                                         |  | 2007         |         | 2006 |  
|                                                                                         |  |              |         |      |  
|ASSETS                                                                                   |  |              |         |      |   |         |  
|Current
 assets:                                                                         |  |              |         |      |   |         |  
|Cash and cash equivalents                                                                |  | $            | 13,878  |      | $ | 23,667  |  
|Short-term investment in marketable
securities                                           |  |              | 19,630  |      |   | 45,490  |  
|Production receivable                                                                    |  |              | 1,449   |      |   |        |  
|Other current assets                                                                     |  |              | 502     |      |   | 638     |  
|                                                                                         |  |              |         |      |   |         |  
|Total current assets                                                                     |  |              | 35,459  |      |   | 69,795  |  
|                                                                                         |  |              |         |      |   |         |  
|                                                                                        
|Salvage
 fund                                                                            |  |              | 1,111   |      |   | 1,060   |  
|                                                                                         |  |              |         |      |   |         |  
|Oil
 and gas properties                                                                  |  |              |         |      |   |         |  
|Advances to operators for working interests and
expenditures                             |  |              | 1,866   |      |   |        |  
|Unproved properties                                                                      |  |              | 7,971   |      |   |        |  
|Proved properties                                                                        |  |              | 19,593  |      |   | 10,679  |  
|Less: accumulated depletion and
amortization                                             |  |              | (2,332  | )    |   |        |  
|                                                                                         |  |              |         |      |   |         |  
|Total oil and gas properties                                                             |  |              | 27,098  |      |   | 10,679  |  
|                                                                                         |  |              |         |      |   |         |  
|                                                                                        
|Total assets                                                                             |  | $            | 63,668  |      | $ | 81,534  |  
|                                                                                         |  |              |         |      |   |         |  
|                                                                                         |  |              |         |      |   |         |  
|LIABILITIES AND MEMBERS
CAPITAL                                                         |  |              |         |      |   |         |  
|Current
 liabilities:                                                                    |  |              |         |      |   |         |  
|Due to operators                                                                         |  | $            | 3,183   |      | $ | 14,020  |  
|Accrued expenses payable                                                                 |  |              | 121     |      |   | 94      |  
|                                                                                         |  |              |         |      |   |         |  
|Total current liabilities                                                                |  |              | 3,304   |      |   | 14,114  |  
|Asset retirement obligations                                                             |  |              | 454     |      |   | 97      |  
|                                                                                         |  |              |         |      |   |         |  
|Total liabilities                                                                        |  |              | 3,758   |      |   | 14,211  |  
|                                                                                         |  |              |         |      |   |         |  
|Commitments
 and contingencies (Note 8)                                                  |  |              |         |      |   |         |  
|Members
 capital:                                                                       |  |              |         |      |   |         |  
|Manager:                                                                                 |  |              |         |      |   |         |  
|Distributions                                                                            |  |              | (226    | )    |   |        |  
|Accumulated deficit                                                                      |  |              | (1,220  | )    |   | (1,340  | )
|                                                                                         |  |              |         |      |   |         |  
|Managers total                                                                          |  |              | (1,446  | )    |   | (1,340  | )
|                                                                                         |  |              |         |      |   |         |  
|Shareholders:                                                                            |  |              |         |      |   |         |  
|Capital contributions (1,335 shares authorized;
933.0600 shares issued
 and outstanding) |  |              | 138,344 |      |   | 138,344 |  
|Syndication costs                                                                        |  |              | (15,898 | )    |   | (15,898 | )
|Distributions                                                                            |  |              | (1,278  | )    |   |        |  
|Accumulated deficit                                                                      |  |              | (59,812 | )    |   | (53,783 | )
|                                                                                         |  |              |         |      |   |         |  
|Shareholders total                                                                      |  |              | 61,356  |      |   | 68,663  |  
|                                                                                         |  |              |         |      |   |         |  
|                                                                                        
|Total members capital                                                                   |  |              | 59,910  |      |   | 67,323  |  
|                                                                                         |  |              |         |      |   |         |  
|                                                                                        
|Total liabilities and members
capital                                                   |  | $            | 63,668  |      | $ | 81,534  |  
|                                                                                         |  |              |         |      |   |         |  

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

F-3

---



RIDGEWOOD ENERGY P FUND, LLCSTATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
(in thousands, except per share data)

|                                         |  |                         |        |      |   |         |  
|---------------------------------------- |  | ----------------------- | ------ | ---- | - | ------- | -
|                                         |  | Year ended December 31, |       
|                                         |  | 2007                    |        | 2006 |  
|                                         |  |                         |        |      |  
|Revenue                                  |  |                         |        |      |   |         |  
|Oil and gas revenue                      |  | $                       | 4,191  |      | $ |        |  
|                                         |  |                         |        |      |   |         |  
|Expenses                                 |  |                         |        |      |   |         |  
|Depletion and amortization               |  |                         | 2,332  |      |   |        |  
|Dry-hole costs                           |  |                         | 6,959  |      |   | 48,118  |  
|Management fees to affiliate (Note 6)    |  |                         | 2,152  |      |   | 3,459   |  
|Lease operating expense                  |  |                         | 114    |      |   |        |  
|Other operating expenses                 |  |                         | 167    |      |   |        |  
|General and administrative expenses      |  |                         | 724    |      |   | 817     |  
|                                         |  |                         |        |      |   |         |  
|Total expenses                           |  |                         | 12,448 |      |   | 52,394  |  
|                                         |  |                         |        |      |   |         |  
|Loss from operations                     |  |                         | (8,257 | )    |   | (52,394 | )
|Other
 income                            |  |                         |        |      |   |         |  
|Interest income                          |  |                         | 2,348  |      |   | 4,566   |  
|Realized loss on marketable securities   |  |                         |       |      |   | (18     | )
|                                         |  |                         |        |      |   |         |  
|Total other income                       |  |                         | 2,348  |      |   | 4,548   |  
|                                         |  |                         |        |      |   |         |  
|Net loss                                 |  |                         | (5,909 | )    |   | (47,846 | )
|Other
 comprehensive loss                |  |                         |        |      |   |         |  
|Unrealized loss on marketable securities |  |                         |       |      |   | (51     | )
|                                         |  |                         |        |      |   |         |  
|Total comprehensive loss                 |  | $                       | (5,909 | )    | $ | (47,897 | )
|                                         |  |                         |        |      |   |         |  
|                                         |  |                         |        |      |   |         |  
|Manager Interest                         |  |                         |        |      |   |         |  
|Net income (loss)                        |  | $                       | 120    |      | $ | (1,054  | )
|                                        
|Shareholder Interest                     |  |                         |        |      |   |         |  
|Net loss                                 |  | $                       | (6,029 | )    | $ | (46,792 | )
|Net loss per share                       |  | $                       | (6,462 | )    | $ | (50,149 | )

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 for share data)

|                                           |  |             |        |         |   |              |   |       |         |   |   |         |  
|------------------------------------------ |  | ----------- | ------ | ------- | - | ------------ | - | ----- | ------- | - | - | ------- | -
|                                           |  |             |       
|                                           |  | # of Shares |        | Manager |   | Shareholders |   | Total |        
|                                           |  |             |        |         |   |              |   |       |        
|                                           |  |             |        |         |   |              |   |       |        
|Balances,
  December 31, 2005              |  |             | 933.06 |         | $ | (286         | ) | $     | 115,506 |   | $ | 115,220 |  
|                                           |  |             |        |         |   |              |   |       |         |   |   |         |  
|Net loss incurred during exploratory
stage |  |             |       |         |   | (1,054       | ) |       | (46,792 | ) |   | (47,846 | )
|Other comprehensive loss                   |  |             |       |         |   |             |   |       | (51     | ) |   | (51     | )
|                                           |  |             |        |         |   |              |   |       |         |   |   |         |  
|Balances,
  December 31, 2006              |  |             | 933.06 |         |   | (1,340       | ) |       | 68,663  |   |   | 67,323  |  
|                                           |  |             |        |         |   |              |   |       |         |   |   |         |  
|Distributions                              |  |             |       |         |   | (226         | ) |       | (1,278  | ) |   | (1,504  | )
|Net income (loss)                          |  |             |       |         |   | 120          |   |       | (6,029  | ) |   | (5,909  | )
|                                           |  |             |        |         |   |              |   |       |         |   |   |         |  
|Balances,
  December 31, 2007              |  |             | 933.06 |         | $ | (1,446       | ) | $     | 61,356  |   | $ | 59,910  |  
|                                           |  |             |        |         |   |              |   |       |         |   |   |         |  

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, |        
|                                                                                                                        |  | 2007                    |         | 2006 |  
|                                                                                                                        |  |                         |         |      |  
|                                                                                                                        |  |                         |         |      |  
|Cash flows from operating activities                                                                                    |  |                         |         |      |   |         |  
|Net loss                                                                                                                |  | $                       | (5,909  | )    | $ | (47,846 | )
|Adjustments to reconcile net loss to net cash
provided by (used in)
  operating activities                              |  |                         |         |      |   |         |  
|Depletion and amortization                                                                                              |  |                         | 2,332   |      |   |        |  
|Dry-hole costs                                                                                                          |  |                         | 6,959   |      |   | 48,118  |  
|Accretion expense                                                                                                       |  |                         | 7       |      |   |        |  
|Interest earned on marketable securities                                                                                |  |                         | (1,193  | )    |   | (2,772  | )
|Loss on the sale of marketable securities                                                                               |  |                         |        |      |   | 18      |  
|Changes in assets and liabilities:                                                                                      |  |                         |         |      |   |         |  
|Increase in production receivable                                                                                       |  |                         | (1,449  | )    |   |        |  
|Decrease (increase) in other current
assets                                                                             |  |                         | 170     |      |   | (559    | )
|Decrease in due to affiliate                                                                                            |  |                         |        |      |   | (27     | )
|Increase in accrued expenses payable                                                                                    |  |                         | 79      |      |   | 5       |  
|                                                                                                                        |  |                         |         |      |   |         |  
|Net cash provided by (used in) operating
activities                                                                     |  |                         | 996     |      |   | (3,063  | )
|                                                                                                                        |  |                         |         |      |   |         |  
|                                                                                                                        |  |                         |         |      |   |         |  
|Cash flows from investing activities                                                                                    |  |                         |         |      |   |         |  
|Payments to operators for working interests and
expenditures                                                            |  |                         | (1,866  | )    |   |        |  
|Capital expenditures for properties                                                                                     |  |                         | (34,417 | )    |   | (19,738 | )
|Salvage fund investments                                                                                                |  |                         | (51     | )    |   | (46     | )
|Proceeds from the sale of marketable
securities                                                                         |  |                         | 50,553  |      |   | 130,070 |  
|Investment in marketable securities                                                                                     |  |                         | (23,500 | )    |   | (89,087 | )
|                                                                                                                        |  |                         |         |      |   |         |  
|Net cash (used in) provided by investing
activities                                                                     |  |                         | (9,281  | )    |   | 21,199  |  
|                                                                                                                        |  |                         |         |      |   |         |  
|                                                                                                                        |  |                         |         |      |   |         |  
|Cash flows from financing activities                                                                                    |  |                         |         |      |   |         |  
|Distributions                                                                                                           |  |                         | (1,504  | )    |   |        |  
|Syndication costs paid                                                                                                  |  |                         |        |      |   | (2      | )
|                                                                                                                        |  |                         |         |      |   |         |  
|Net cash used in financing activities                                                                                   |  |                         | (1,504  | )    |   | (2      | )
|                                                                                                                        |  |                         |         |      |   |         |  
|Net (decrease) increase in cash and cash
equivalents                                                                    |  |                         | (9,789  | )    |   | 18,134  |  
|                                                                                                                        |  |                         |         |      |   |         |  
|Cash and cash equivalents, beginning of
period                                                                          |  |                         | 23,667  |      |   | 5,533   |  
|                                                                                                                        |  |                         |         |      |   |         |  
|Cash and cash equivalents, end of period                                                                                |  | $                       | 13,878  |      | $ | 23,667  |  
|                                                                                                                        |  |                         |         |      |   |         |  
|                                                                                                                        |  |                         |         |      |   |         |  
|Supplemental schedule of non-cash investing activities                                                                  |  |                         |         |      |   |         |  
|Advances used for capital expenditures in oil and
gas properties
  reclassified to dry-hole costs and proved properties |  | $                       |        |      | $ | 24,942  |  
|                                                                                                                        |  |                         |         |      |   |         |  

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

F-6

---



RIDGEWOOD
ENERGY P FUND, LLC NOTES 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. Although
the date of formation is March 21, 2005, the Fund did not begin business
activities until May 16, 2005 when it began its private offering of shares of
LLC member interest (the Shares). There were no business activities prior to
May 16, 2005.

The Fund was
organized to acquire, drill, construct and develop oil and natural gas
properties located in the United States offshore waters of Texas, Louisiana and
Alabama in the Gulf of Mexico. The Fund has devoted most of its efforts to
raising capital and oil and natural gas exploration activities. During 2007,
the Fund began earning revenue and was determined to no longer be an
exploratory stage enterprise.

The Manager
performs (or arranges for the performance of) the management 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 Estimates

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 amounts advanced to and billed by
operators, determination of proved reserves, impairment allowances and asset
retirement obligations. Actual results may differ from those estimates.

Cash and Cash
Equivalents

All 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 federal insured limits. At December 31, 2007 and 2006, bank balances
inclusive of the salvage fund exceeded federally insured limits by $10.7
million and $23.5 million, respectively. The Fund maintains bank deposits with
accredited financial institutions to mitigate such risk.

Investments in Marketable
Securities

At times the
Fund may purchase short-term investments comprised of US Treasury Bills and
Notes with maturities greater than three months that are considered
held-to-maturity investments. Held-to-maturity securities are those investments
that the Fund has the ability and intent to hold to maturity. Held-to-maturity
investments are recorded at cost plus accrued income, adjusted for the
amortization of premiums and discounts, which approximate fair value. Interest
income is accrued as earned. At December 31, 2007, the Fund had
held-to-maturity investments totaling $19.6 million that matured in January and
February 2008.

Salvage Fund

Pursuant to
the Funds LLC Agreement, the Fund deposits in a separate interest-bearing
account, or a salvage fund, money to provide for dismantling production
platforms and facilities, plugging and abandoning the wells and removing the
platforms, facilities and wells after their useful lives, in accordance with
applicable federal and state laws and regulations.

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

Oil and Natural Gas
Properties

Investments in
oil and natural gas properties are operated by unaffiliated entities (the
Operators) 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 relating to the wells are advanced and
billed by Operators through authorization for expenditures.

F-7

---



The successful
efforts method of accounting for oil and gas producing activities is followed.
Acquisition costs are capitalized when incurred. Other oil and natural 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 natural crude oil and
natural 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. On the sale or retirement of an unproved
property, gain or loss on the sale is recognized, taking into consideration the
amount of any recorded impairment if the property had been assessed for
impairment. The Manager does not currently intend to sell any of the Funds
property interests.

Capitalized
acquisition costs of producing oil and natural gas properties after recognizing
estimated salvage values are depleted by the unit-of-production method.

As of December
31, 2007 and 2006 amounts recorded in due to operators totaling $3.1 million
and $14.0 million, respectively, related to the acquisition of oil and gas
property, both successful and unsuccessful. These liabilities were paid in the
first quarter of 2008 and 2007, respectively.

Advances to
Operators for Working Interests and Expenditures

The Funds
acquisition of a working interest in a well or a project requires it to make a
payment to the seller for the Funds rights, title and interest. The Fund is
required to advance its share of estimated cash outlay 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 transferred to unproved properties.

Asset Retirement
Obligations

For 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, an asset
retirement obligation is incurred. Plug and abandonment costs associated with
unsuccessful projects are expensed as dry-hole costs.

|                       |  |                |      |      |   |      |  
|---------------------- |  | -------------- | ---- | ---- | - | ---- | -
|                       |  | 2007           |      | 2006 |  
|                       |  |                |      |      |  
|                       |  | (in thousands) |     
|Balance - January 1,   |  | $              | 97   |      | $ |     |  
|                       |  |                |      |      |   |      |  
|Liabilities incurred   |  |                | 892  |      |   | 767  |  
|Liabilities settled    |  |                | (542 | )    |   | (670 | )
|Accretion expense      |  |                | 7    |      |   |     |  
|                       |  |                |      |      |   |      |  
|Balance - December 31, |  | $              | 454  |      | $ | 97   |  
|                       |  |                |      |      |   |      |  

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

Syndication Costs

Direct costs
associated with offering the Funds shares including professional fees, selling
expenses and administrative costs payable to the Manager, an affiliate of the
Manager and outside brokers are reflected as a reduction of shareholders
capital.

Revenue Recognition
and Production Receivable

Oil and
natural gas sales are recognized when delivery is made by the Operator to the
purchaser and title is transferred (i.e., production has been delivered to a
pipeline or transport vehicle). The Fund began earning revenue in September
2007.

The volume of
oil and natural gas sold on the Funds behalf may differ from the volume of oil
and natural gas the Fund is entitled to. The Fund will account for such oil and
natural gas production imbalances by the entitlements method. Under the
entitlements method, the Fund will recognize a receivable from other working
interest owners for volumes oversold by other working interest owners, and a
payable to other working interest owners for volumes oversold by the Fund. At
December 31, 2007 and 2006, there were no oil or natural gas balancing
arrangements between the Fund and other working interest owners.

F-8

---



Impairment of
Long-Lived Assets

In accordance
with the provisions of SFAS No. 144, Accounting for the Impairment of
Long-Lived Assets, long-lived assets, such as oil and natural gas properties,
are evaluated when events or changes in circumstances indicate the carrying
value of such assets may not be recoverable. The determination of whether
impairment has occurred is made by comparing the carrying values of long-lived
assets to the estimated future undiscounted cash flows attributable to the
asset. The impairment loss recognized is the excess of the carrying value over
the future discounted cash flows attributable to the asset or the estimated
fair value of the asset. No impairments have been recorded in the Fund since inception.

Depletion and
Amortization

Depletion and
amortization of the cost of proved oil and natural gas properties are
calculated using the units of production method. Proved developed reserves are
used as the base for depleting the cost of successful exploratory drilling and
development 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.

Income Taxes

No provision
is made for income taxes in the financial statements. The fund is a limited
liability company and as such the income or losses are passed through and
included in the tax returns of the individual shareholders.

Income and Expense Allocation

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, fiduciary fees, depletion and
amortization, which are allocated 99% to shareholders and 1% to the Manager.

3.Recent
Accounting Standards

In February
2007, the Financial Accounting Standards Board (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 is applied instrument by instrument, with a few
exceptions; the decision is irrevocable; and it 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 nonfinancial assets and liabilities. The Fund believes this
guidance will not have a material impact on the financial statements.

F-9

---



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, 2007
and 2006. As of December 31, 2007 and 2006, the Fund had no capitalized
exploratory well costs greater than one year.

|                                                                                               |  |                |        |      |   |         |  
|---------------------------------------------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------- | -
|                                                                                               |  | 2007           |        | 2006 |  
|                                                                                               |  |                |        |      |  
|                                                                                               |  | (in thousands) |       
|Balance - January 1,                                                                           |  | $              |       |      | $ |        |  
|Additions to capitalized exploratory well
  costs pending the determination of proved reserves |  |                | 16,534 |      |   | 10,582  |  
|Reclassifications to proved properties
  based on the determination of proved reserves         |  |                | (8,563 | )    |   | (10,582 | )
|Capitalized exploratory well costs charged
  to dry hole costs                                 |  |                |       |      |   |        |  
|                                                                                               |  |                |        |      |   |         |  
|Balance - December 31,                                                                         |  | $              | 7,971  |      | $ |        |  
|                                                                                               |  |                |        |      |   |         |  

Capitalization costs are
expensed as dry-hole costs in the event that reserves are not found or are not
in sufficient quantities to complete the well and develop the field. Dry-hole
costs are detailed in the table below.

|                          |  |                                 |       |      |   |        | 
|------------------------- |  | ------------------------------- | ----- | ---- | - | ------ | 
|                          |  | For the year ended December 31, |      
|                          |  | 2007                            |       | 2006 |  
|                          |  |                                 |       |      |  
|                          |  | (in thousands)                  |      
|South Marsh
  231         |  | $                               | (78   | )    | $ | 8,437  | 
|West Cameron
  265        |  |                                 | 64    |      |   | 21,469 | 
|West Cameron
  109        |  |                                 | 222   |      |   | 8,203  | 
|Green Canyon
  246        |  |                                 | 1,825 |      |   | 4,843  | 
|South
  Timbalier 135/136 |  |                                 | 1,697 |      |   | 5,166  | 
|Mississippi
  Canyon 490  |  |                                 | 3,229 |      |   |       | 
|                          |  |                                 |       |      |   |        | 
|                          |  | $                               | 6,959 |      | $ | 48,118 | 
|                          |  |                                 |       |      |   |        | 

5. Distributions

Distributions to
shareholders are allocated in proportion to the number of shares held.

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

In December 2007, the Fund
made its initial distributions to the Manager and shareholders totaling $0.2
million and $1.3 million, respectively. There were no distributions made by the
Fund during the year ended December 31, 2006.

6. Related Parties

The LLC Agreement provides
that the Manager render management, administrative and advisory services. For
such services, the Manager receives an annual management fee, payable monthly,
of 2.5% of total capital contributions, net of cumulative dry-hole costs
incurred. Management fees of $2.2 million and $3.5 million were incurred and
paid for the years ended December 31, 2007 and 2006, respectively.

From time to time,
short-term payables and receivables, which do not bear interest, arise from
transactions with affiliates in the ordinary course of business. There were no
such amounts payable or receivable at December 31, 2007 or 2006.

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.

F-10

---



7. Fair Value of Financial Instruments

At December 31, 2007 and
2006, the carrying value of cash and cash equivalents, short-term investments
in marketable securities, salvage fund, production receivable and accrued
expenses approximate fair value.

8. Commitments and Contingencies

Capital Commitments

The Fund has entered into
multiple offshore operating 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, 2007, the Fund had committed to spend an additional
$18.6 million relating to the properties.

Environmental Considerations

The exploration for and
development of oil and natural gas involves the extraction, production and
transportation of materials which, under certain conditions, can be hazardous
or cause environmental pollution problems. The Manager and the Operators 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. As of December 31, 2007 and 2006, there were no
known environmental issues that required the Fund to record a liability.

Insurance Coverage

The Fund is subject to all
risks inherent in the exploration for and development of oil and natural 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 which 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
Managers investment programs. Claims made by other such programs can reduce or
eliminate insurance for the Fund.

F-11

---



Supplemental Financial Information  Information about
Oil and Natural 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 natural gas exploration and producing activities of the Fund.

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

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

|                                                             |  |                |        |      |   |        | 
|------------------------------------------------------------ |  | -------------- | ------ | ---- | - | ------ | 
|                                                             |  | December 31,   |       
|                                                             |  | 2007           |        | 2006 |  
|                                                             |  |                |        |      |  
|                                                             |  | (in thousands) |       
|Proved oil and gas properties                                |  | $              | 19,593 |      | $ | 10,679 | 
|Unproved oil and gas properties                              |  |                | 7,971  |      |   |       | 
|Advances to operators for working interests and
expenditures |  |                | 1,866  |      |   |       | 
|                                                             |  |                |        |      |   |        | 
|Total oil and gas properties                                 |  |                | 29,430 |      |   | 10,679 | 
|Accumulated depletion and amortization - proved properties   |  |                | (2,332 | )    |   |       | 
|                                                             |  |                |        |      |   |        | 
|Oil and gas properties, net                                  |  | $              | 27,098 |      | $ | 10,679 | 
|                                                             |  |                |        |      |   |        | 

Table II - Costs Incurred in Exploration, Property
Acquisitions and Development

|                                         |  |                                 |        |      |   |        | 
|---------------------------------------- |  | ------------------------------- | ------ | ---- | - | ------ | 
|                                         |  | For the year ended December 31, |       
|                                         |  | 2007                            |        | 2006 |  
|                                         |  |                                 |        |      |  
|                                         |  | (in thousands)                  |       
|Exploratory drilling costs - capitalized |  | $                               | 18,402 |      | $ | 10,679 | 
|Exploratory drilling costs - expensed    |  |                                 | 6,959  |      |   | 23,177 | 
|                                         |  |                                 |        |      |  
|                                         |  | $                               | 25,361 |      | $ | 33,856 | 
|                                         |  |                                 |        |      |  

F-12

---



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., for the years ended December 31, 2007 and 2006. The reserve estimates
for December 31, 2007 and 2006 were based on estimated future reserves as of
December 31, 2007 and September 30, 2006, respectively provided by Ryder Scott
Company, L.P. These reserve disclosures have been prepared in compliance with the
Securities and Exchange Commission rules.

Proved reserves are
classified as either developed or undeveloped. Proved developed reserves are
the quantities expected to be recovered through existing wells with existing
equipment and operating methods. There were no proved undeveloped reserves at
December 31, 2007 and 2006.

|                                |  |                                   |         |                                   |  |            |   |           |         |  |  |           | 
|------------------------------- |  | --------------------------------- | ------- | --------------------------------- |  | ---------- | - | --------- | ------- |  |  | --------- | 
|                                |  | December 31, 2007
  United States |         | December 31, 2006
  United States | 
|                                |  |                                   |         |                                   |  |            |   |           |        
|                                |  | Oil (BBLS)                        |         | Gas (MCF)                         |  | Oil (BBLS) |   | Gas (MCF) |        
|                                |  |                                   |         |                                   |  |            |   |           |        
|                                |  |                                   |         |                                   |  |            |   |           |         |  |  |           | 
|Proved developed reserves:      |  |                                   |         |                                   |  |            |   |           |         |  |  |           | 
|Beginning of year               |  |                                   | 103,697 |                                   |  | 2,073,941  |   |           |        |  |  |          | 
|Discoveries                     |  |                                   | 102,545 |                                   |  | 105,000    |   |           | 103,697 |  |  | 2,073,941 | 
|Revisions of previous estimates |  |                                   | 55,445  |                                   |  | (475,613   | ) |           |        |  |  |          | 
|Production                      |  |                                   | (20,565 | )                                 |  | (239,328   | ) |           |        |  |  |          | 
|                                |  |                                   |         |                                   |  |            |   |           |         |  |  |           | 
|End of year                     |  |                                   | 241,122 |                                   |  | 1,464,000  |   |           | 103,697 |  |  | 2,073,941 | 
|                                |  |                                   |         |                                   |  |            |   |           |         |  |  |           | 

Due to the inherent
uncertainties and the limited nature of recovery data, estimates of reserve
information are subject to change as additional information becomes available.

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

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, development, site restoration and abandonment
costs are derived based on current costs assuming continuation of existing
economic conditions.

|                                                                     |  |                |        |      |   |        |  
|-------------------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                                                     |  | December 31,   |       
|                                                                     |  | 2007           |        | 2006 |  
|                                                                     |  |                |        |      |  
|                                                                     |  | (in thousands) |       
|Future estimated revenues                                            |  | $              | 33,433 |      | $ | 18,028 |  
|Future estimated production
  costs                                  |  |                | (1,637 | )    |   | (974   | )
|Future estimated
  development costs                                 |  |                | (1,155 | )    |   | (3,463 | )
|                                                                     |  |                |        |      |   |        |  
|Future net cash flows                                                |  |                | 30,641 |      |   | 13,591 |  
|10% annual discount for
  estimated timing of cash flows             |  |                | (3,745 | )    |   | (2,308 | )
|                                                                     |  |                |        |      |   |        |  
|Standardized measure of discounted
  future estimated net cash flows |  | $              | 26,896 |      | $ | 11,284 |  
|                                                                     |  |                |        |      |   |        |  

F-13

---



Table V - Changes in the Standardized Measure of Discounted
Future Net Cash Flows Related to Proved Oil and Gas Reserves

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, |       
|                                                                                    |  | 2007                    |        | 2006 |  
|                                                                                    |  |                         |        |      |  
|                                                                                    |  | (in thousands)          |       
|Standardized measure beginning of the year                                          |  | $                       | 11,283 |      | $ |       | 
|Sales of oil and gas production, net of production costs                            |  |                         | (4,077 | )    |   |       | 
|Net changes in prices and production costs                                          |  |                         | 7,986  |      |   |       | 
|Extensions, discoveries, and improved recovery and techniques, less
  related costs |  |                         | 7,487  |      |   | 11,001 | 
|Development costs incurred during the period                                        |  |                         | 3,463  |      |   |       | 
|Revisions of previous reserve quantities estimate                                   |  |                         | 710    |      |   |       | 
|Accretion of discount                                                               |  |                         | 1,907  |      |   | 282    | 
|Timing and other                                                                    |  |                         | (1,863 | )    |   |       | 
|                                                                                    |  |                         |        |      |   |        | 
|Standardized measure end of the year                                                |  | $                       | 26,896 |      | $ | 11,283 | 
|                                                                                    |  |                         |        |      |   |        | 

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-14

---



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
  14, 2008 | 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 |  | March 14, 2008
|                           |  | Officer)                                       |  |               
|Robert E.
  Swanson        |  |                                                |  |               
|                           |  |                                                |  |               
|                           |  |                                                |  |               
|/s/ KATHLEEN
  P. MCSHERRY |  | Executive
  Vice President and Chief Financial |  | March 14, 2008
|                           |  | Officer
  (Principal Accounting Officer)       |  |               
|Kathleen P.
  McSherry     |  |                                                |  |               
|                           |  |                                                |  |               
|RIDGEWOOD ENERGY           |  |                                                |  |               
|CORPORATION                |  |                                                |  |               
|/s/ ROBERT
  E. SWANSON    |  | Chief
  Executive Officer of Manager           |  | March 14, 2008
|                           |  |                                                |  |               
|Robert E.
  Swanson        |  |                                                |  |               

---