**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE
      COMMISSION**





**Washington,
      D.C. 20549**





**FORM
      10-Q**




ý
                **QUARTERLY
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934**For
                    the quarterly period ended June 30, 2007
 or
 
 o
                **TRANSITION
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934**For
                    the transition period from
                    _______________________to____________________________


**Commission
      File Number 000-51267**





**RIDGEWOOD
      ENERGY L FUND, LLC**


(Exact
      name of registrant as specified in its charter)








**Delaware**
              (State
                or other jurisdiction of
              incorporation
                or organization)
            
            **11-3719724**
              (I.R.S.
                Employer
              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)


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  ýNo  o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
      Exchange Act.  (Check one) :





Large
      accelerated filer  o                                                                Accelerated
      filer  o                          Non-accelerated
      filer  ý





Indicate
      by check mark whether the
      registrant is a shell company (as defined in Rule 12b-2 of the Exchange
      Act).  YesoNoý




As
      of
      July 31, 2007 there were 350.1081 shares of membership interest of the
      registrant outstanding.
















**Table
                of Contents****Part
                I - FINANCIAL INFORMATION**
            
            **Page**Item
                1.  Financial Statements:Unaudited
                Condensed Balance Sheets as of June 30, 2007 and December 31,
                2006
            
            3Unaudited
                Condensed Statements of Operations for the three and six months
                ended
              June
                30, 2007 and 2006
            
            4Unaudited
                Condensed Statements of Cash Flows for the six months ended June
                30, 2007
                and 2006
            
            5Notes
                to Unaudited Condensed Financial Statements
            
            6Item
                2.  Management's Discussion and Analysis of Financial Condition
                and Results of Operations
            
            11Item
                3.  Quantitative and Qualitative Disclosures About Market
                Risk
            
            18Item
                4.  Controls and Procedures
            
            18**Part
                II - OTHER INFORMATION**Item
                1.  Legal Proceedings
            
            19Item
                1A. Risk Factors
            
            19Item
                2.  Unregistered  Sales of Equity Securities and Use
                of Proceeds
            
            19Item
                3.  Defaults Upon Senior Securities
            
            19Item
                4.  Submissions of Matters to a Vote of Security
                Holders
            
            19Item
                5.  Other Information
            
            19Item
                6.  Exhibits
            
            19SIGNATURES
            
            20





2




**RIDGEWOOD
                  ENERGY L FUND, LLC****UNAUDITED
                  CONDENSED BALANCE SHEETS****(in
                  thousands, except number of shares)****June
                  30, 2007**
              
              
              **December
                  31, 2006****Assets**Current
                  assets:Cash
                  and cash equivalents
              
              $
              8,837
              
              
              $
              13,215Production
                  receivable
              
              
              320
              
              
              
              251Insurance
                  receivable
              
              
              1,400
              
              
              
              2,534Due
                  from operators
              
              
              11
              
              
              
              247Due
                  from affiliate (Note 5)
              
              
              -
              
              
              
              196Other
                  current assets
              
              
              39
              
              
              
              14Total
                  current assets
              
              
              10,607
              
              
              
              16,457Salvage
                  fund
              
              
              1,130
              
              
              
              1,112Oil
                  and gas properties:Proved
                  properties
              
              
              15,375
              
              
              
              9,379Unproved
                  properties
              
              
              1,880
              
              
              
              3,670Less:
                  accumulated depletion and amortization-proved properties
              
              
              (9,333
              )
              
              
              (9,082
              )Total
                  oil and gas properties, net
              
              
              7,922
              
              
              
              3,967Total
                  assets
              
              $
              19,659
              
              
              $
              21,536**Liabilities
                  and Members' Capital**Current
                  liabilities:Due
                  to operators
              
              $
              130
              
              
              $
              540Accrued
                  expenses payable
              
              
              166
              
              
              
              142Total
                  current liabilities
              
              
              296
              
              
              
              682Asset
                  retirement obligations
              
              
              408
              
              
              
              349Total
                  liabilities
              
              
              704
              
              
              
              1,031Commitments
                  and contingencies (Note 7)Members'
                  capital:Manager:Distributions
              
              
              (1,585
              )
              
              
              (1,477
              )Retained
                  earnings
              
              
              1,147
              
              
              
              1,092Manager's
                  total
              
              
              (438
              )
              
              
              (385
              )Shareholders:Capital
                  contributions (670 shares authorized;  350.1081
                issued
                  and outstanding)
              
              
              51,401
              
              
              
              51,401Distributions
              
              
              (8,982
              )
              
              
              (8,371
              )Syndication
                  costs
              
              
              (5,502
              )
              
              
              (5,502
              )Accumulated
                  deficit
              
              
              (17,524
              )
              
              
              (16,638
              )Shareholders'
                  total
              
              
              19,393
              
              
              
              20,890Total
                  members' capital
              
              
              18,955
              
              
              
              20,505Total
                  liabilities and members' capital
              
              $
              19,659
              
              
              $
              21,536The
                  accompanying notes are an integral part of these unaudited condensed
                  financial statements.
  3
 **RIDGEWOOD
                  ENERGY L FUND, LLC****UNAUDITED
                  CONDENSED STATEMENTS OF OPERATIONS****(in
                  thousands, except per share amounts)****For
                  the three months endedJune 30,**
              
              
              **For
                  the six months endedJune 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Revenue**Oil
                  and gas revenues
              
              $
              851
              
              
              $
              2,155
              
              
              $
              1,287
              
              
              $
              4,389**Expenses**Dry-hole
                  costs
              
              
              (14
              )
              
              
              5,044
              
              
              
              8
              
              
              
              6,852Depletion
                  and amortization
              
              
              206
              
              
              
              967
              
              
              
              251
              
              
              
              3,697Casualty
                  loss
              
              
              1,134
              
              
              
              -
              
              
              
              1,134
              
              
              
              -Lease
                  operating expenses
              
              
              124
              
              
              
              182
              
              
              
              264
              
              
              
              306Management
                  fees to affiliate (Note 5)
              
              
              231
              
              
              
              321
              
              
              
              462
              
              
              
              642Other
                  operating expenses
              
              
              19
              
              
              
              4
              
              
              
              24
              
              
              
              7General
                  and administrative expenses
              
              
              117
              
              
              
              58
              
              
              
              257
              
              
              
              101Total
                  expenses
              
              
              1,817
              
              
              
              6,576
              
              
              
              2,400
              
              
              
              11,605Loss
                  from operations
              
              
              (966
              )
              
              
              (4,421
              )
              
              
              (1,113
              )
              
              
              (7,216
              )**Other
                  Income**Interest
                  income
              
              
              131
              
              
              
              236
              
              
              
              282
              
              
              
              447**Net
                  loss**
              
              $
              (835
              )
              
              $
              (4,185
              )
              
              $
              (831
              )
              
              $
              (6,769
              )**Manager
                  Interest**Net
                  income
              
              $
              65
              
              
              $
              181
              
              
              $
              55
              
              
              $
              400**Shareholder
                  Interest**Net
                  loss
              
              $
              (900
              )
              
              $
              (4,366
              )
              
              $
              (886
              )
              
              $
              (7,169
              )Net
                  loss per share
              
              $
              (2,571
              )
              
              $
              (12,472
              )
              
              $
              (2,531
              )
              
              $
              (20,478
              )The
                  accompanying notes are an integral part of these unaudited condensed
                  financial statements.
  4


**RIDGEWOOD
                ENERGY L FUND,
                LLC****UNAUDITED
                CONDENSED STATEMENTS OF CASH FLOWS****(in
                thousands)****For
                the six months ended**
              **June
                30,****2007**
            
            
            **2006****Cash
                flows from operating activities**Net
                loss
            
            $
            (831
            )
            
            $
            (6,769
            )Adjustments
                to reconcile net loss to net  cash
              provided
                by operating activities:Dry-hole
                costs
            
            
            8
            
            
            
            6,852Depletion
                and amortization
            
            
            251
            
            
            
            3,697Accretion
                expense
            
            
            9
            
            
            
            7Casualty
                loss on oil and gas properties
            
            
            1,134
            
            
            
            -Changes
                in assets and liabilities:(Increase)
                decrease in production receivable
            
            
            (69
            )
            
            
            4,718Decrease
                (increase) in due from operators
            
            
            247
            
            
            
            (218
            )(Increase)
                decrease in other current assets
            
            
            (25
            )
            
            
            14(Decrease)
                increase  in due to operators
            
            
            (3
            )
            
            
            80Increase
                in accrued expenses payable
            
            
            24
            
            
            
            84Decrease
                in due to affiliate
            
            
            -
            
            
            
            (5
            )Net
                cash provided by operating activities
            
            
            745
            
            
            
            8,460**Cash
                flows from investing activities**Capital
                expenditures for oil and gas properties
            
            
            (4,386
            )
            
            
            (1,246
            )Funding
                of salvage fund
            
            
            -
            
            
            
            (30
            )Interest
                income reinvested - salvage fund
            
            
            (18
            )
            
            
            (22
            )Net
                cash used in investing activities
            
            
            (4,404
            )
            
            
            (1,298
            )**Cash
                flows from financing activities**Distributions
                paid
            
            
            (719
            )
            
            
            (7,006
            )Net
                cash used in financing activities
            
            
            (719
            )
            
            
            (7,006
            )Net
                (decrease) increase in cash and cash equivalents
            
            
            (4,378
            )
            
            
            156Cash
                and cash equivalents, beginning of period
            
            
            13,215
            
            
            
            21,964Cash
                and cash equivalents, end of period
            
            $
            8,837
            
            
            $
            22,120**Supplemental
                schedule of non-cash investing activities**Advances
                used for capital expenditures in oil and
              gas
                properties reclassified to dry-hole costs
            
            $
            -
            
            
            $
            1,256The
                accompanying notes are an integral part of these unaudited condensed
                financial statements.




5






**RIDGEWOOD
      ENERGY L FUND, LLC**


**NOTES
      TO UNAUDITED CONDENSED FINANCIAL STATEMENTS**




**1.**
            **Organization
                and Purpose**





The
      Ridgewood Energy L Fund, LLC (the “Fund”), a Delaware limited liability company,
      was formed on May 27, 2004 and operates pursuant to a limited liability company
      agreement (“Agreement”) dated July 6, 2004 by and among Ridgewood Energy
      Corporation (the “Manager”), and the shareholders of the Fund.





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.  The Fund began earning revenue in September 2005 from
      these operations.





The
      Manager performs (or arranges for the performance of) the management,
      administrative and advisory 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
      (Notes 2, 5 and 7).





**2.**
            **Summary
                of Significant Accounting
                Policies**





***Basis
      of presentation***


These
      unaudited interim condensed financial statements have been prepared by the
      Fund’s management, in accordance with accounting principles generally accepted
      in the United States of America (“GAAP”) and in the opinion of management,
      contain all adjustments (consisting of only normal recurring adjustments)
      necessary to present fairly the Fund’s financial position, results of operations
      and cash flows for the periods presented. Certain information and note
      disclosures normally included in annual financial statements prepared in
      accordance with GAAP have been omitted in these unaudited interim condensed
      financial statements.  The results of operations, financial position,
      and cash flows for the periods presented herein are not necessarily indicative
      of future financial results. These unaudited interim condensed financial
      statements should be read in conjunction with the annual financial statements
      and the notes thereto for the year ended December 31, 2006 included in the
      Fund’s Annual Report on Form 10-K filed with the Securities and Exchange
      Commission (“SEC”).





***Use
      of Estimates***


The
      preparation of financial statements in conformity with GAAP requires management
      to make estimates and assumptions that affect the reported amounts of assets
      and
      liabilities and disclosure of contingent assets and liabilities as of the date
      of the financial statements and the reported amounts of 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
      environmental liabilities.  Actual results may differ from those
      estimates.





***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 right, title and
      interest.  The Fund is required to advance its share of estimated cash
      expenditures for the succeeding month’s operation. The Fund accounts for such
      payments as advances to operators for working interests and
      expenditures.  As drilling costs are incurred, the advances are
      transferred to unproved properties.





***Oil
      and natural gas properties***


Investments
      in oil and natural gas properties are operated by unaffiliated entities
      ("Operators") who 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.







6


The
      successful efforts method of accounting for oil and natural 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 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 (i.e. a producing well), the cost and
      related accumulated depletion and amortization will be eliminated from the
      property accounts, and the resulting gain or loss is recognized.  On
      the sale or retirement of an unproved property, gain or loss on the sale is
      recognized.  Currently, it is not the Manager’s intention 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
      June 30, 2007 and December 31, 2006, amounts recorded in due to operators
      totaling approximately $0.1 million and $0.5 million, respectively, related
      to
      the acquisition of oil and gas property and/or drilling costs.  The
      balance at December 31, 2006 in due to operators related to the acquisition
      of
      oil and gas properties was paid during the first quarter of 2007.





***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).  At the time of transfer a production
      receivable is recorded.





The
      volume of oil and natural gas sold on the Fund’s behalf may differ from the
      volume of oil and natural gas to which the Fund is entitled.  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.  For volumes oversold by the Fund, a
      payable to other working interest owners will be recorded.  As of June
      30, 2007 and December 31, 2006, there were no material oil or natural gas
      balancing arrangements between the Fund and other working interest
      owners.





***Syndication
      Costs***


Direct
      costs associated with offering the Fund’s shares including professional fees;
      such as outside due diligence costs, legal advice with regard to the offering,
      selling expenses and administrative costs relating to broker-dealer
      relationships, payable to the Manager, an affiliate of the Manager and outside
      brokers are reflected as a reduction of shareholders’ capital.





***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 recorded. Plug and abandonment costs associated
      with unsuccessful projects are expensed as dry-hole costs.




**For
                  the six months ended June 30,**
              
              
              **For
                  the year ended December 31,****2007**
              
              
              **2006****(in
                  thousands)**Balance
                  - Beginning of period
              
              $
              349
              
              
              $
              333Liabilities
                  incurred
              
              
              50
              
              
              
              237Liabilities
                  settled
              
              
              -
              
              
              
              (237
              )Accretion
                  expense
              
              
              9
              
              
              
              16Balance
                  - End of period
              
              $
              408
              
              
              $
              349


7





***Impairment
      of Long-Lived Assets***


In
      accordance with the provisions of Statement of Financial Accounting Standards
      (“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.  For the three and six months ended June 30, 2007 and 2006, no
      impairments were recorded.





***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.  Because the Fund is a limited liability company (“LLC”),
      the income or losses are passed through and included in the tax returns of
      the
      individual shareholders.





***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 June 30, 2007 and December 31,
      2006, bank balances exceeded federally insured limits by approximately $8.7
      million and $13.0 million, respectively. The Fund maintains bank deposits with
      accredited financial institutions to mitigate such risk.





***Salvage
      Fund***


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 on the withdrawal from the salvage fund.





***Short-term
      Investment in Marketable Securities***


At
      times
      the Fund may purchase short-term investments comprised of US Treasury Notes
      with
      maturities greater than three months and as such are considered held-to-maturity
      investments.  Held-to-maturity securities are those investments that
      the Fund has the ability and intent to hold until
      maturity.  Held-to-maturity investments are recorded at cost plus
      accrued income, adjusted for the amortization of premiums and discounts, which
      approximate market value.  Interest income is accrued as
      earned.  There were no held to maturity investments at June 30,
      2007.





***Income
      and Expense Allocation***


Profits
      and losses are to be allocated 85% to shareholders in proportion to their
      relative capital contributions and 15% to the Manager, except for items of
      expense, loss, deduction and credit that are attributable to the expenditure
      of
      shareholders’ capital contributions, which are allocated 99% to shareholders and
      1% to the Manager.





**3.**
            **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.  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.





8





The
      following table reflects the net changes in unproved properties for the periods
      ending June 30, 2007 and December 31, 2006.  At June 30, 2007, the
      Fund had no capitalized exploratory well costs greater than one
      year.





**For
                  the six months ended June 30,**
              
              
              **For
                  the year ended December 31,****2007**
              
              
              **2006****(in
                  thousands)**Balance
                  - Beginning of the period
              
              $
              3,670
              
              
              $
              197Additions
                  to capitalized exploratory well costs pending the
                determination
                  of proved reserves
              
              
              4,015
              
              
              
              3,542Reclassification
                  to proved properties based on the
                determination
                  of proved reserves
              
              
              (5,805
              )
              
              
              -Capitalized
                  exploratory well costs charged to dry-hole costs
              
              
              -
              
              
              
              (69
              )Balance
                  - End of the period
              
              $
              1,880
              
              
              $
              3,670


Dry-hole
      costs are detailed in the table below for the three and six months ended June
      30, 2007 and 2006.




**For
                    the three months endedJune 30,**
                
                
                **For
                    the six months endedJune 30,****2007**
                
                
                **2006**
                
                
                **2007**
                
                
                **2006****(in
                    thousands)**West
                    Cameron 103
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                4Main
                    Pass 155
                
                
                (12
                )
                
                
                -
                
                
                
                (11
                )
                
                
                11East
                    Cameron 48
                
                
                -
                
                
                
                29
                
                
                
                -
                
                
                
                29East
                    Breaks 157
                
                
                -
                
                
                
                -
                
                
                
                8
                
                
                
                1,793West
                    Cameron 78/95
                
                
                (2
                )
                
                
                5,015
                
                
                
                11
                
                
                
                5,015$
                (14
                )
                
                $
                5,044
                
                
                $
                8
                
                
                $
                6,852


**4.**
            **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 Agreement, is to be distributed. Such distribution would be allocated
      85%
      to the shareholders and 15% to the Manager, as defined in the Fund's
      Agreement.





Available
      Cash from Dispositions, as defined in the Fund's Agreement, will be paid 99%
      to
      shareholders and 1% to the Manager until the shareholders have received total
      distributions equal to their capital contributions. After shareholders have
      received distributions equal to their capital contributions, 85% of Available
      Cash from Dispositions will be distributed to shareholders and 15% to the
      Manager.





The
      shareholders received distributions of approximately $0.6 million and $6.0
      million for the six months ended June 30, 2007 and 2006,
      respectively.





The
      Manager received distributions of approximately $0.1 million and $1.1 million
      for the six months ended June 30, 2007 and 2006, respectively.





**5.**
            **Related
                Parties**





A
      management agreement provides that the Manager render management, administrative
      and advisory services.  For such services, the Manager originally
      received an annual management fee, payable monthly, of 2.5% of total capital
      contributions.  Effective September 1, 2006, the Manager has changed
      its policy regarding the annual management fee.  Under
      the new policy, the management fee will be equal to 2.5% of the total
      shareholder capital contributions, net of cumulative dry-hole costs incurred
      by
      the Fund.  Management fees of approximately $0.2 million and $0.5
      million were incurred for the three and six months ended June 30, 2007, compared
      to approximately $0.3 million and $0.6 million for the three and six months
      ended June 30, 2006, respectively.





9




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.  At June 30, 2007 and December 31, 2006 no amounts were
      outstanding.





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





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





**6.  Fair
      Value of Financial Instruments**





At
      June
      30, 2007 and December 31, 2006, the carrying value of cash and cash equivalents
      and salvage fund approximate fair value.





**7.  Commitments
      and Contingencies**





***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.  At June 30, 2007 and December 31,
      2006, there were no known environmental contingencies 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.





On
      May
      22, 2006, the Fund reported a claim to its insurance carrier for costs related
      to insured damages to the West Cameron 78/95 project.  During the
      fourth quarter 2006, the Fund recorded $2.5 million for insurance recovery
      receivable related to the project.  On an ongoing basis, management
      reviews the collectibility of this insurance receivable.  During the
      second quarter 2007, the Fund, based upon discussions with its insurance carrier
      and currently known facts, revised its recovery receivable estimate for the
      project from $2.5 million to $1.4 million, resulting in an additional casualty
      loss of $1.1 million for the three and six months ended June 30, 2007. The
      Fund
      expects to receive payment for this insurance receivable in the third quarter
      of
      2007.  The Fund records receivables for insured losses when the
      expected insurance proceeds are probable and reasonably estimable based upon
      assumptions and estimates derived from currently known facts.





10




I**tem
      2.  Management’s Discussion and Analysis of Financial Condition and Results
      of Operations**





**Cautionary
      Statement Regarding Forward-Looking Statements**





This
      Quarterly Report on Form 10-Q, including all documents incorporated by
      reference, includes "forward-looking" statements within the meaning of Section
      27A of the Securities Act of 1933, as amended (the "Securities Act") and Section
      21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and
      the Private Securities Litigation Reform Act of 1995, and the "safe harbor"
      provisions thereof. These forward-looking statements are usually accompanied
      by
      the words "anticipates," "believes," "plan," "seek," "expects," "intends,"
      "estimates," "projects," "will likely result," "future" and similar terms and
      expressions or variations thereof.  The forward-looking statements in
      this Quarterly Report on Form 10-Q reflect the Fund’s current views with respect
      to future events and financial performance.  These forward-looking
      statements are subject to certain risks and uncertainties, including, among
      other things, the high-risk nature of oil and natural gas exploratory
      operations, the fact that the Fund’s drilling activities are managed by third
      parties, the volatility of natural gas prices and extraction, and those other
      risks and uncertainties discussed in the Fund’s 2006 Annual Report on Form 10-K
      filed with the Securities and Exchange Commission that could cause actual
      results to differ materially from historical results or those
      anticipated.  You are urged to carefully consider all such
      factors.





In
      light
      of these risks and uncertainties, there can be no assurance that the
      forward-looking information contained in this Quarterly Report on Form 10-Q
      will
      in fact occur or prove to be accurate.  Readers should not place undue
      reliance on the forward-looking statements contained herein, which speak only
      as
      of the date of this filing.  The Fund undertakes no obligation to
      publicly revise these forward-looking statements to reflect events or
      circumstances that may arise after the date of this filing.  All
      subsequent written or oral forward-looking statements attributable to the Fund
      or persons acting on its behalf are expressly qualified in their entirety by
      this section.





**Critical
      Accounting Policies and Estimates**





The
      following discussion and analysis of the Fund’s financial condition and
      operating results is based on its financial statements.  The
      preparation of this Quarterly Report on Form 10-Q requires the Fund to make
      estimates and assumptions that affect the reported amount of assets and
      liabilities, disclosure of contingent assets and liabilities at the date of
      our
      financial statements, and the reported amount of revenue and expenses during
      the
      reporting period. Actual results may differ from those estimates and
      assumptions.  See “Notes to Unaudited Condensed Financial Statements”
in Part I of this Quarterly Report on Form 10-Q for a presentation of the Fund’s
      significant accounting principles.  No changes have been made to the
      Fund’s critical accounting policies and estimates disclosed in its 2006 Annual
      Report on Form 10-K.





**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 the Fund’s shareholders
      through participation in oil and natural gas exploration and development
      projects in the Gulf of Mexico.





The
      Manager performs certain duties on the Fund’s behalf including the evaluation of
      potential projects for investment and ongoing 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 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.





**Business
      Update**





As
      of
      June 30, 2007 the Fund has participated in the drilling of twelve wells, of
      which three wells are currently producing and four wells were determined to
      have
      natural gas and oil reserves in commercial quantities such that these properties
      are in the process of being completed to facilitate production.  Five
      of the Fund’s wells were deemed
      dry-holes and plugged and abandoned in prior years.  The Fund has
      working interests in two additional new projects expected to be drilled over
      the
      next three months.





11




**Recent
      Developments**





***LLOG
      Projects***


In
      October 2006, the Fund acquired a working interest in six exploratory wells
      to
      be drilled by LLOG Exploration Company (“LLOG”) off the coast of
      Louisiana.  During the first quarter of 2007, the Fund decided not to
      participate in the Galveston 248 project with LLOG due to
      economics.  Each of the projects is viewed as lower risk projects as
      they are being drilled in relatively shallow depths ranging from 10,000 to
      13,000 feet and the projects reveal three dimensional seismic data indicative
      of
      producing fields in close proximity to the drilling
      sites.   Since the projects are not very deep, they can be
      drilled and completed quickly.  Construction of minimal facilities in
      order to tie the well to nearby production platforms also facilitates turning
      the project to production quickly.    During the first half
      of 2007, three of the projects operated by LLOG were determined to have
      successful discoveries. The Fund plans to participate in the remaining two
      LLOG
      projects with drilling expected within the next three months.  Below
      is a summary of the wells operated by LLOG:





**Well
                  Name**
              **Operator**
              **Offshore**
              
              **Working
                  Interest %**
              
              
              **Drilling
                  Risk (in thousands)**
              
              **Status**South
                  Marsh Island 111
              LLOG
              LA
              
              
              7.50%
              
              
              
              n/a
              
              Successful
                  - productionexpected 2nd quarter 2008Vermilion
                  344
              LLOG
              LA
              
              
              7.50%
              
              
              
              n/a
              
              Successful
                  - productionexpected 1st quarter 2008West
                  Delta 68
              LLOG
              LA
              
              
              7.50%
              
              
              
              n/a
              
              Successful
                  - productionexpected 1st quarter 2008Ship
                  Shoal 81
              LLOG
              LA
              
              
              7.50%
              
              
              $
              500
              
              3rd
                  quarter 2007 drilling dateWest
                  Delta 67
              LLOG
              LA
              
              
              7.50%
              
              
              $
              600
              
              3rd
                  quarter 2007 drilling date




***Eugene Island
      337***


The
      Fund’s 20% ownership in Eugene Island 337 operated by Devon Energy Corporation
      (“Devon”) which was determined to be a commercial success in July 2006 has been
      completed and production is anticipated to begin in the third quarter of
      2007.





***West
      Cameron 78/95 Dry Hole***


The
      Fund
      acquired a 20% working interest from the Operator, El Paso Production Company
      (“El Paso”).  The well began drilling on April 21,
      2006.  Drilling went according to plan until the well reached a depth
      of 10,781 feet on May 17, 2006 when the drill string became
      stuck.  The smaller drill pipe was recovered and the well was
      sidetracked (re-drilled) at a depth of 4,880 feet.  Drilling continued
      to 14,500 feet at which point the well was determined to be a
      dry-hole.  On July 6, 2006 the decision was made to plug and abandon
      the well.  Dry-hole costs including plug and abandonment expenses
      incurred by the Fund for the year ended December 31, 2006, totaled $2.9 million,
      net of insurance recovery amounts.  An insurance recovery receivable
      of $1.4 million is recorded at June 30, 2007, which is approximately $1.1
      million less than the Fund’s previous recorded receivable of $2.5 million at
      December 31, 2006.  The Fund records receivables for insured losses
      when the expected insurance proceeds are probable and reasonably estimable
      based
      upon assumptions and estimates derived from currently known facts.





**Producing
      Properties**





***Main Pass
      275***


In
      late
      2006 the Fund acquired a 10% interest in the Main Pass 275 project being drilled
      by Newfield, Inc. (“Newfield”) from an existing production
      platform.  The well was declared a commercial success in February 2007
      and completed in March 2007.  Due to the existing production platform,
      gas processing equipment and pipeline the well
      was
      put on production in late April 2007.  In its first quarter of
      production, the Fund generated revenue approximating $0.2 million on
      approximately 110 thousand MCF of natural gas and 4,700 barrels of
      oil.





12




***South
      Timbalier 77***


In
      2004,
      the Fund acquired from Millennium Offshore Group (“MOGI”) a 20% working interest
      in the South Timbalier 77 (“ST77”) field of which two wells were drilled and now
      operated by ATP Oil and Gas Corporation (“ATP”).  In total, the
      project has six reservoirs to be produced.  ST77 well #4 is producing
      from the project’s primary target reservoir at 15,500 feet.  In the
      first half of 2007, the #4 well has been the Funds’ primary producing
      well.  Production from the #4 well began to trail off at the end of
      2006.  Although production increased for the first four months of
      2007, it began to decline again in the later half of the second
      quarter.  The operator, ATP, believes that the cause for the decline
      in production is due to a build-up of minerals on the walls of the production
      tubing that is preventing the flow of gas.  The operator is currently
      performing maintenance on the inside of the tubing to clean out the buildup
      which should again improve production late in the third quarter.





ST77
      well
      #5 is currently off production after depleting the first two intermediate depth
      reservoirs at 13,000 feet.  Well #5 will need to be recompleted in
      order to extract the remaining reserves in the reservoirs. Although
      budgeted costs have not been received from the Operator through the date of
      this
      filing, the Fund has estimated approximately $0.1 million of capital
      expenditures to be spent over the next twelve months.





As
      of
      June 30, 2007 total unamortized costs related to the South Timbalier 77 project
      are approximately $0.2 million.  The Fund anticipates to fully recover
      these costs based upon current reserve estimates and prevailing market
      prices.





**Results
      of Operations**





The
      following review of operations for the three and six months ended June 30,
      2007
      and 2006 should be read in conjunction with the Fund’s financial statements and
      the notes thereto.  The following table summarizes the Fund’s results
      of operations (in thousands):




**For
                  the three months endedJune 30,**
              
              
              **For
                  the six months endedJune 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Revenue**Oil
                  and gas revenues
              
              $
              851
              
              
              $
              2,155
              
              
              $
              1,287
              
              
              $
              4,389**Expenses**Dry-hole
                  costs
              
              
              (14
              )
              
              
              5,044
              
              
              
              8
              
              
              
              6,852Depletion
                  and amortization
              
              
              206
              
              
              
              967
              
              
              
              251
              
              
              
              3,697Casualty
                  loss
              
              
              1,134
              
              
              
              -
              
              
              
              1,134
              
              
              
              -Lease
                  operating expenses
              
              
              124
              
              
              
              182
              
              
              
              264
              
              
              
              306Management
                  fees to affiliate
              
              
              231
              
              
              
              321
              
              
              
              462
              
              
              
              642Other
                  operating expenses
              
              
              19
              
              
              
              4
              
              
              
              24
              
              
              
              7General
                  and administrative expenses
              
              
              117
              
              
              
              58
              
              
              
              257
              
              
              
              101Total
                  expenses
              
              
              1,817
              
              
              
              6,576
              
              
              
              2,400
              
              
              
              11,605Loss
                  from operations
              
              
              (966
              )
              
              
              (4,421
              )
              
              
              (1,113
              )
              
              
              (7,216
              )**Other
                  Income**Interest
                  income
              
              
              131
              
              
              
              236
              
              
              
              282
              
              
              
              447**Net
                  loss**
              
              $
              (835
              )
              
              $
              (4,185
              )
              
              $
              (831
              )
              
              $
              (6,769
              )




***Operating
      Revenues.*******Oil and gas revenues for the three
      and six months ended June 30, 2007 were approximately $0.9 million and $1.3
      million, respectively.  Oil and gas revenues for the three and six
      months ended June 30, 2006 were approximately $2.2 million and $4.4 million,
      respectively.  The decrease in oil and gas revenues is due to a steady
      decline in the production from the ST77 #4 well.  The ST77 #5 well had
      minimal production during the first  quarter of 2007 and in March 2007
      ceased production completely.  ST77 well #5 will be brought back on
      production once it is recompleted into the third intermediate
      reservoir.  Declining production volumes for the ST77 wells were
      partially offset by the start-up of production for the Main Pass 275 well and
      higher gas prices.





13




Natural
      gas prices increased during the second quarter of 2007 as compared to the second
      quarter of 2006, from approximately $7.03 per MCF to $8.17 per
      MCF.  Oil prices during the second quarter of 2007 averaged
      approximately $65.30 per barrel as compared to $69.38 per barrel for the
      second quarter of 2006.





**Operating
      and Other Expenses**





***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 three and six months ended June 30, 2007
      and 2006.




**For
                  the three months endedJune 30,**
              
              
              **For
                  the six months endedJune 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****(in
                  thousands)**West
                  Cameron 103
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              4Main
                  Pass 155
              
              
              (12
              )
              
              
              -
              
              
              
              (11
              )
              
              
              11East
                  Cameron 48
              
              
              -
              
              
              
              29
              
              
              
              -
              
              
              
              29East
                  Breaks 157
              
              
              -
              
              
              
              -
              
              
              
              8
              
              
              
              1,793West
                  Cameron 78/95
              
              
              (2
              )
              
              
              5,015
              
              
              
              11
              
              
              
              5,015$
              (14
              )
              
              $
              5,044
              
              
              $
              8
              
              
              $
              6,852


***Depletion
        and amortization.***  Depletion and amortization for the
        three and six months ended June 30, 2007 was approximately $0.2 million and
        $0.3
        million respectively.  Depletion and amortization for the three and
        six months ended June 30, 2006 was approximately $1.0 million and $3.7 million
        respectively.  This decrease is the result of decreased production
        volumes for the ST77 wells in 2007 compared to 2006, partially offset by
        the
        commencement of depletion on the Main Pass 275 well.





***Casualty
      Loss.***For the three and six months ended June 30, 2007
      the Fund recorded casualty losses of $1.1 million related to the West Cameron
      78/95 insurance claim.  Based upon ongoing discussions with its
      insurance carriers, the Fund has reduced its estimates related to the
      recoverability of certain of its costs associated with this claim.  To
      date, the Fund has recorded a total casualty loss of $1.3 million related to
      its
      portion of the deductible for casualty losses associated with West Cameron
      78/95, as well as a revision to its estimate of recoverable
      costs.  The Fund incurred recovery expenses of $2.7 million for West
      Cameron 78/95, of which the Fund expects to recover $1.4 million from its
      insurance carrier.





***Lease
      operating expenses.***  Lease operating expenses represent
      the day to day cost of operating and maintaining wells and related facilities.
      For the three and six months ended June 30, 2007, lease operating expenses
      were
      approximately $0.1 million and $0.3 million, respectively.  For the
      three and six months ended June 30, 2006 lease operating expenses were
      approximately $0.2 million and $0.3 million, respectively.





***Management
      Fee*****.**The Manager originally received
      an annual management fee, payable monthly, of 2.5% of total capital
      contributions.  Management fees are charged to cover expenses
      associated with overhead incurred by the Manager for its 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.  Commencing in September 1, 2006, the
      management fee, payable monthly, is equal to 2.5% of the total shareholder
      capital contributions, net of dry-hole expenses incurred by the
      Fund.  Management fees for the three and six months ended June 30,
      2007 were approximately $0.2 million and $0.5 million,
      respectively.  Management fees for the three and six months ended June
      30, 2006 were approximately $0.3 million and $0.6 million,
      respectively.





***General
      and Administrative Expenses.***Accounting, legal, and
      insurance expenses represent costs specifically identifiable or allocable to
      the
      Fund. Accounting and legal fees represent annual audit and tax preparation
      fees,
      quarterly reviews and filing fees of the Fund.  Insurance expense
      represents premiums related to well control insurance, production insurance
      and
      directors and officers’ liability policy.  The directors and officers’
liability policy 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.  The significant increase in insurance expense for the
      three and six months ended June 30, 2007 as compared to the same periods in
      2006
      is a result of increased drilling activities of the Fund primarily related
      to
      Main Pass 275 and the LLOG projects.





14




The
      following table summarizes general and administrative expenses for the three
      and
      six months ended June 30, 2007 and 2006.




**For
                  the three months endedJune 30,**
              
              
              **For
                  the six months endedJune 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****(in
                  thousands)**Accounting
                  and legal fees
              
              $
              43
              
              
              $
              50
              
              
              $
              98
              
              
              $
              85Insurance
              
              
              74
              
              
              
              7
              
              
              
              157
              
              
              
              14Other
                  general and administrative expenses
              
              
              -
              
              
              
              1
              
              
              
              2
              
              
              
              2$
              117
              
              
              $
              58
              
              
              $
              257
              
              
              $
              101




***Interest
      Income.***  Interest income for the three and six months
      ended June 30, 2007 was approximately $0.1 million and $0.3 million,
      respectively.  Interest income for the three and six months ended June
      30, 2006 was approximately $0.2 million and $0.4 million,
      respectively.  Declining cash balances in 2007 offset by increased
      interest rates resulted in a decrease in interest income for the three and
      six
      months ended June 30, 2007.





**Capital
      Resources and Liquidity**





***Operating
      s***


Cash
      flows provided by operating activities for the six months ended June 30, 2007
      and 2006 were approximately $0.8 million and $8.5 million, respectively,
      primarily related to production revenue and interest income, offset by
      management fees, lease operating expenses and general and administrative
      expenses.  The significant decrease in 2007 operating cash flows is
      primarily the result of lower production volumes and thus a decrease in revenue
      receipts.





***Investing
      Cash Flows***


Cash
      flows used in investing activities for the six months ended June 30, 2007 and
      2006 were approximately $4.4 million and $1.3 million, respectively, primarily
      related to capital expenditures for oil and gas properties. Investing activities
      relate to the actual purchase of wells, infrastructure and other capital items
      unrelated to operating activities occurring after a well has begun
      producing.  The significant increase in investing activities in 2007
      primarily relates to the exploratory LLOG projects drilling expenditures and
      completion activities surrounding Main Pass 275 and Eugene Island
      337.





***Financing
      Cash Flows***


Cash
      flows used in financing activities for the six months ended June 30, 2007 and
      2006 were approximately $0.7 million and $7.0 million, respectively, related
      to
      distributions to shareholders and the Manager.  The significant
      decrease in financing cash flows is due to the decrease in production of the
      ST77 wells.  The Fund did not pay any distributions for the three
      months ended June 30, 2007.  Modest distributions are expected to
      resume in July and August and should improve in the future as Main Pass 275
      ramps up production.





**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 June 30, 2007,
      such estimated capital expenditures approximate $5.3 million, all of which
      is
      expected to be paid out of unspent cash within the following 12
      months.





The
      table
      below presents exploration and development capital expenditures incurred to
      date
      for projects currently drilling or expected to be drilled in the near future
      as
      well as their estimated budgeted amounts for the next twelve
      months.  Remaining unspent cash will be reallocated to one or more new
      unspecified projects.





15





**Estimated
              Capital Expenditures****As
              of June 30, 2007****Spent
                throughJune 30, 2007**
            
            
            **To
                be Spent Next12 Months****(in
                thousands)**Eugene
                Island 337 (i)
            
            $
            3,979
            
            
            $
            30Main
                Pass 275 (ii)
            
            
            1,933
            
            
            
            97Ship
                Shoal 81(iii)*
            
            
            43
            
            
            
            1,364South
                Marsh Island 111 (v)
            
            
            434
            
            
            
            1,223Vermilion
                344 (iv)
            
            
            637
            
            
            
            1,005West
                Delta 67 (iii) *
            
            
            -
            
            
            
            1,098West
                Delta 68 (iv)
            
            
            765
            
            
            
            370South
                Timbalier 77 Recompletion
            
            
            -
            
            
            
            120$
            7,791
            
            
            $
            5,307




(i)
                Project
                    successful, production expected in August 2007.(ii)
                Project
                    successful, production started in April 2007.(iii)
                Drilling
                    expected 3rd quarter 2007.(iv)
                Project
                    successful, production expected in 1st quarter 2008.(v)
                Project
                    successful, production expected in 2nd quarter 2008.*
                Total
                    estimated capital expenditures assume that the wells are commercially
                    successful.  If one or more of the budgeted exploratory projects
                    are unsuccessful, budgeted development capital will be reallocated
                    to one
                    or more new unspecified
                    projects.





**Liquidity
      Needs**





The
      Fund’s primary short-term liquidity needs are to fund its 2007 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.
      Effective September 1, 2006, the Manager changed its policy regarding the annual
      management fee.  Commencing in September 2006, the management fee
      payable is equal to 2.5% of the total shareholder capital contributions, net
      of
      cumulative dry-hole expenses incurred by the Fund.  For the Fund, the
      management fee will be reduced from approximately $1.3 million for 2006 to
      approximately $0.9 million for 2007, or approximately $33 thousand per month
      based on cumulative dry-hole expenses as of June 30, 2007.


Distributions,
        if any, 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.








16





**Off-Balance
      Sheet Arrangements**





The
      Fund
      had no off-balance sheet arrangements as of June 30, 2007 and December 31,
      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 June 30, 2007 and December 31, 2006.








17





**Item
      3.  Quantitative and Qualitative Disclosures about Market
      Risk**





Projects
      drilled may not have commercially productive oil and natural gas reservoirs.
      In
      such an event, the Fund’s revenue, future results of operations and financial
      condition would be adversely impacted.





The
      Fund
      does not have or use, any derivative instruments nor does it have any plans
      to
      enter into such derivative arrangements. The Fund will generally invest cash
      in
      high-quality credit instruments consisting primarily of money market funds,
      bankers acceptance notes and government agency securities with maturities of
      six
      months or less. The Fund does not expect any material loss from cash equivalents
      and therefore believes its potential interest rate exposure is not material.
      The
      Fund has no plan to conduct any international activities and therefore believes
      it is not subject to foreign currency risk.





The
      principal market risks to which the Fund is exposed that may adversely impact
      the Fund's results of operations and financial position are changes in oil
      and
      natural gas prices.





Low
      commodity prices could have an adverse affect on the Fund’s future profitability
      and, in such an event the Fund may be required by accounting rules to write
      down
      the carrying value of the Fund’s projects.  Revenue to the Fund will
      be sensitive to changes in price to be received for oil and natural gas
      production. Prevailing market prices fluctuate in response to many factors
      that
      are outside of the Fund's control such as the supply and demand for oil and
      natural gas. Availability of alternative fuels as well as seasonal risks such
      as
      hurricanes can also impact the supply and demand.





High
      oil
      and natural gas prices have resulted in a strong demand for and a tight supply
      of drilling rigs necessary to drill new projects. The increased cost in daily
      rig rates could have a negative impact on the return to shareholders in the
      Fund. The shortage of drilling rigs could delay the application of capital
      to
      such projects and thus delay revenue from operations.





**Item
      4.  Controls and Procedures**





***Evaluation
      of Disclosure Controls and Procedures***


The
      Fund
      maintains "disclosure controls and procedures", as such term is defined under
      Securities and Exchange Act of 1934 (“Exchange Act”) Rule 13a-15(e), that
      are designed to ensure that information required to be disclosed in the Fund’s
      Exchange Act reports is recorded, processed, summarized and reported within
      the
      same time periods specified in the SEC's rules and forms, and that such
      information is accumulated and communicated to its management, including its
      Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
      timely decisions regarding required disclosures. In designing and evaluating
      the
      disclosure controls and procedures, the Fund’s management recognized that any
      controls and procedures, no matter how well designed and operated, can provide
      only reasonable assurance of achieving the desired control objectives and its
      management necessarily was required to apply its judgment in evaluating the
      cost-benefit relationship of possible controls and procedures. The Fund has
      carried out an evaluation, as of June 30, 2007, under the supervision and with
      the participation of its management, including its Chief Executive Officer
      and
      Chief Financial Officer, of the effectiveness of the design and operation of
      the
      Fund’s disclosure controls and procedures.  Based upon their
      evaluation and subject to the foregoing, such procedures were
      effective.





Because
      the Fund is not an “Accelerated Filer” as defined in Rule 12b-2 of the Exchange
      Act, the Fund is not presently required to file Management’s annual report on
      internal control over financial reporting and the Attestation report of the
      registered public accounting firm required by Item 308(a) and (b) of Regulation
      S-K promulgated under the Securities Act.  Under current rules,
      because the Fund is neither a “large accelerated filer” nor an “accelerated
      filer”, the Fund is not required to provide management’s report on internal
      control over financial reporting until the Fund files its annual report for
      2007
      and compliance with the auditor’s attestation report requirement is not required
      until the Fund files its annual report for 2008.  The Fund currently
      expects to comply with these requirements at such time as the Fund is required
      to do so.





***Changes
      in Internal Controls over Financial Reporting***


The
      Fund
      continually reviews its disclosure controls and procedures and makes changes
      as
      necessary, to ensure the quality of its financial reporting.  There
      were no changes in the Fund’s internal control over financial reporting
      identified in connection with the evaluation required by paragraph (d) of
      Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended
      June
      30, 2007 that have materially affected, or are reasonably likely to materially
      affect, our internal control over financial reporting.





18




**Part
      II.  OTHER INFORMATION**





**Item
      1. LEGAL PROCEEDINGS**





There
      have been no changes to the legal proceedings disclosed in the Fund’s most
      recent Annual Report on Form 10-K.





**Item
      1A. RISK FACTORS**





For
      information regarding factors that could affect the Fund’s results of
      operations, financial condition and liquidity, see risk factors discussed under
      “Management’s Discussion and Analysis of Financial Condition and Results of
      Operations”  in Item 7 of the Fund’s 2006 Annual Report on Form
      10-K.  There have been no material changes from the risk factors
      previously disclosed in the Fund’s most recent Annual Report on Form
      10-K.





**Item
      2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





None.





**Item
      3.  DEFAULTS UPON SENIOR SECURITIES**





None.





**Item
      4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**Item
      5. OTHER INFORMATION**





None.





**Item
      6. EXHIBITS**





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).32
              
              Certifications
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  The Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief
                  Executive Officer of the Company and Kathleen P. McSherry, Chief
                  Financial Officer of the
                  Company.







19





**SIGNATURES**







Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto
      duly authorized.




Dated:
              July
                  31, 2007
              
              
              RIDGEWOOD
                  ENERGY L FUND, LLCBy:
              /s/
              ROBERT
                  E. SWANSONName:
              Robert
                  E. SwansonTitle:
              President
                  and Chief Executive Officer(Principal
                  Executive Officer)Dated:
              July
                   31, 2007By:
              /s/
              KATHLEEN
                  P. MCSHERRYName:
              Kathleen
                  P. McSherryTitle:
              Senior
                  Vice President and Chief Financial Officer(Principal
                  Financial and Accounting Officer)




20