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

FORM 10-K

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

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

For the transition period from _____ to _____

Commission File No. 000-51924

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

|                                                                 |                                       
|---------------------------------------------------------------- | --------------------------------------
|Delaware                                                         | 76-0774429                            
|(State
 or other jurisdiction of
 incorporation or organization) | (I.R.S.
 Employer
 Identification No.)

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

(800)
942-5550(Registrants telephone number,
including area code)

Securities registered pursuant to Section
12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Shares of LLC Membership Interest

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.   Yes  o  No  x

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Act.   Yes  o  No  x

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

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

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of
large accelerated filer, accelerated filer, and smaller reporting company
in Rule 12b-2 of the Exchange Act. (Check one):

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

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

There is no market for the
shares of LLC Membership Interest in the Fund. As of March 12, 2009 there are
870.6486 shares outstanding.

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

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

1

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FORWARD-LOOKING STATEMENTS

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

WHERE YOU CAN GET MORE INFORMATION

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

2

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PART I

ITEM
1. BUSINESS

Overview

The Fund is a Delaware
limited liability company (LLC) formed on December 21, 2004 to acquire
interests primarily in oil and natural gas properties located in the United
States offshore waters of Texas, Louisiana, and Alabama in the Gulf of Mexico.

The Fund initiated its
private placement offering on February 16, 2005, selling whole and fractional
shares of LLC membership interest (Shares), primarily at $150 thousand per
whole Share. There is no public market for the Shares and one is not likely to
develop. In addition, the Shares are subject to material restrictions on
transfer and resale and cannot be transferred or resold except in accordance
with the Funds limited liability company agreement (the LLC Agreement) and
applicable federal and state securities laws.
The private placement offering was terminated on June 30, 2005. The Fund
raised $129.0 million and after payment of $20.6 million in offering fees,
commissions and investment fees, the Fund had $108.4 million for investments
and operating expenses. See Item 13. Certain Relationships and Related
Transactions, and Director Independence for additional discussion.

Manager

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

The Manager performs, or
arranges for the performance of, the management, advisory and administrative
services required for Fund operations. Such services include, without
limitation, the administration of shareholder accounts, shareholder relations
and the preparation, review and dissemination of tax and other financial
information. In addition, the Manager provides office space, equipment and
facilities and other services necessary for Fund operations. The Manager also
engages and manages the contractual relations with unaffiliated custodians,
depositories, accountants, attorneys, broker-dealers, corporate fiduciaries,
insurers, banks and others as required.

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

As compensation for their
services, the Manager is entitled to an annual management fee, payable monthly,
equal to 2.5% of the total capital contributions made by the Funds
shareholders, net of cumulative dry-hole and related well costs incurred by the
Fund. Management fees for the years
ended December 31, 2008 and 2007 were $2.1 million and $2.3 million,
respectively. Additionally, the Manager
is entitled to receive a 15% interest in cash distributions made by the Fund. For the years ended December 31,
2008 and 2007, the Manager was paid distributions totaling $1.1 million and $73
thousand, respectively.

Business Strategy

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

3

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

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

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

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

Managers Investment Committee and Investment
Criteria

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

4

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Properties

The Fund owns working
interests and has participated in the drilling of nineteen wells, thirteen have
been determined to be dry holes, five have been determined to be successful and
one is currently drilling.

|                                           |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|------------------------------------------ |  | ----------------- | - | -------- |  | --------------------------------------- |  | ------------- | --------- | -------------------- | ------ | --------------------------------------- |  | - | ----- |  | - | ------ | 
|Lease
 Block                               |  | Working
 Interest |   | Operator |  | Off-shore
 Location in
 Gulf of
 Mexico |  | Target
 Depth |           | Drilling 
 Risk
 (b) |        | Total Spent
 Through
 December 31, 2008 | 
|                                           |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         | 
|                                           |  |                   |   |          |  |                                         |  | (feet)        |           | (in thousands)       |       
|                                           |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|Currently
 Drilling                        |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|Aspen Project                              |  | 2.00              | % |          |  | Newfield                                |  |               | Louisiana |                      | 22,000 |                                         |  | $ | 3,900 |  | $ |       | 
|                                           |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|Successful
 Projects                       |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|Cobalt Project                             |  | 4.00              | % |          |  | Newfield                                |  |               | Louisiana |                      | 17,000 |                                         |  |   | N/A   |  | $ | 1,001  | 
|Liberty Project                            |  | 5.00              | % |          |  | LLOG                                    |  |               | Louisiana |                      | 15,500 |                                         |  |   | N/A   |  | $ | 2,859  | 
|South Pelto 9                              |  | 16.67             | % |          |  | McMoRan                                 |  |               | Louisiana |                      | 17,700 |                                         |  |   | N/A   |  | $ | 4,927  | 
|Eugene Island
 346/347 Well #1             |  | 5.00              | % |          |  | McMoRan                                 |  |               | Louisiana |                      | 12,900 |                                         |  |   | N/A   |  | $ | 3,573  | 
|Eugene Island
 346/347 Well #2             |  | 5.00              | % |          |  | McMoRan                                 |  |               | Louisiana |                      | 7,800  |                                         |  |   | N/A   |  | $ | 763    | 
|                                           |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|Dry
 Holes (Date determined dry) (a)       |  |                   |   |          |  |                                         |  |               |           |                      |        |                                         |  |   |       |  |   |        | 
|South Timbalier
 287 (January 2009)        |  | 4.00              | % |          |  | Apache                                  |  |               | Louisiana |                      | 23,400 |                                         |  |   | N/A   |  | $ | 3,858  | 
|Bison Project
 (January 2009)              |  | 3.00              | % |          |  | LLOG                                    |  |               | Texas     |                      | 10,500 |                                         |  |   | N/A   |  | $ | 215    | 
|Eos Project
 (November 2008)               |  | 3.00              | % |          |  | Mariner                                 |  |               | Louisiana |                      | 17,400 |                                         |  |   | N/A   |  | $ | 2,472  | 
|Ruby Project
 (August 2008)                |  | 10.00             | % |          |  | PetroQuest                              |  |               | Louisiana |                      | 16,000 |                                         |  |   | N/A   |  | $ | 1,924  | 
|High Island 38
 (June 2008)                |  | 12.50             | % |          |  | W&T Offshore                            |  |               | Texas     |                      | 15,800 |                                         |  |   | N/A   |  | $ | 6,715  | 
|Eugene Island
 346/347 Well #3 (June 2008) |  | 5.00              | % |          |  | McMoRan                                 |  |               | Louisiana |                      | 5,400  |                                         |  |   | N/A   |  | $ | 279    | 
|Walker Ridge 155
 (June 2008)              |  | 1.00              | % |          |  | Anadarko                                |  |               | Louisiana |                      | 32,000 |                                         |  |   | N/A   |  | $ | 2,234  | 
|South Marsh
 Island 213 (April 2008)       |  | 5.50              | % |          |  | El Paso                                 |  |               | Louisiana |                      | 16,500 |                                         |  |   | N/A   |  | $ | 1,688  | 
|West Cameron 296
 (November 2007)          |  | 16.67             | % |          |  | Newfield                                |  |               | Louisiana |                      | 13,500 |                                         |  |   | N/A   |  | $ | 2,568  | 
|West Delta 95
 (February 2007)             |  | 28.05             | % |          |  | Apache                                  |  |               | Louisiana |                      | 17,900 |                                         |  |   | N/A   |  | $ | 16,128 | 
|West Cameron
 78/95 (July 2006)            |  | 30.00             | % |          |  | El Paso                                 |  |               | Louisiana |                      | 14,500 |                                         |  |   | N/A   |  | $ | 4,339  | 
|Eugene Island 334
 (May 2006)              |  | 33.33             | % |          |  | Devon                                   |  |               | Louisiana |                      | 17,000 |                                         |  |   | N/A   |  | $ | 9,136  | 
|Eugene Island 357
 (March 2006)            |  | 18.00             | % |          |  | Newfield                                |  |               | Louisiana |                      | 15,500 |                                         |  |   | N/A   |  | $ | 4,379  | 

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

Currently Drilling


Aspen Project
In
July 2008, the Fund acquired a 2.0% working interest in the Aspen Project, an
exploratory well, from Newfield Exploration Company (Newfield), the
operator. The Aspen Project began
drilling in February 2009 and results are expected during the second quarter of
2009. The total estimated budget for
this project is $18.0 million. At
December 31, 2008, the Fund had not incurred costs related to this well.


Successful Projects


Cobalt Project
In
August 2008, the Fund acquired a 4.0% working interest in the Cobalt Project,
an exploratory well, from Newfield, the operator. The Cobalt Project was determined to be a commercial success in
January 2009 and completion efforts are ongoing. The well is expected to commence production in May 2009. Through December 31, 2008,
the Fund has
spent $1.0 million related to this property, for which the total estimated
budget is $1.9 million.


5

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Liberty Project
In
April 2008, the Fund acquired a 5.0% working interest in the Liberty Project,
an exploratory well, from LLOG Exploration Offshore, Inc. (LLOG), the
operator. This project began drilling
in May 2008 and was determined to be successful on July 4, 2008. Completion efforts are ongoing and
production is expected in the first quarter 2010. Through December 31, 2008, the Fund has spent $2.9 million on
this well, for which the total estimated budget is $4.3 million.

South Pelto 9
In July 2006, the Fund acquired a 16.67% working interest from
Newfield, the operator. South Pelto 9
was determined to be successful in late-2006 and production commenced in September
2007. In August 2007, Newfield sold its
interest in this property to McMoRan Exploration Co. (McMoRan). At that time, McMoRan assumed Newfields
responsibilities as the operator of this property. The South Pelto 9 well did not produce for approximately two
months due to hurricane activity during late-August 2008 and September
2008. Production resumed for South
Pelto 9 in mid-October 2008. The Fund
has spent $4.9 million related to this property.

Eugene Island
346/347Well #1In March 2007, the
Fund acquired a 5.0% working interest in the exploratory well Eugene Island
346/347, from Newfield, the operator.
In June 2007, the well was determined to be successful. In August 2007,
Newfield sold its interest in this property to McMoRan Exploration Co.
(McMoRan). At that time, McMoRan
assumed Newfields responsibilities as the operator of this property. The well was completed and production
commenced in June 2008. The Fund has spent $3.6 million related to this
property.

Well #2As a result of the
drilling success of the first exploratory well for Eugene Island 346/347, the
second and third wells commenced drilling in May 2008. In late-May 2008, Eugene Island 346/347 well
#2 was determined to be commercially successful and production commenced in
July 2008. The Fund has spent $0.8 million related to this property.

None of the Funds wells,
including Eugene Island 346/347 wells #1 and #2, were materially damaged as a
result of third quarter 2008 hurricane activity in the Gulf of Mexico. However, the pipeline utilized to transport
these wells oil and natural gas production has suffered severe damage thereby
shutting down production for these wells.
As a result, these wells have been shut-in until the pipeline repairs
are completed by its owner. There is no
cost to the Fund related to these repair activities, however, these wells will
not produce oil and natural gas or earn revenue during this repair period. The
Eugene Island properties are currently expected to resume production during the
second quarter 2009.

Dry Holes


South Timbalier
287
In November 2007, the Fund
acquired a 4.0% working interest in the exploratory well South Timbalier 287,
from Apache Corporation (Apache), the operator. This project began
drilling in March 2008 and was determined to be an unsuccessful well, or dry
hole, in January 2009. For the year
ended December 31, 2008, dry-hole costs related to this well, including
plug and abandonment expenses, were $3.9 million. Additional dry-hole costs of $0.3 million were incurred during
the first quarter 2009.


Bison Project
In
November 2008, the Fund acquired a 3.0% working interest in the Bison Project,
an exploratory well, from LLOG, the operator.
The project, which is located in the Galveston region of the Gulf of
Mexico, began drilling in December 2008 and was determined to be an
unsuccessful well, or dry hole, in January 2009. For the year ended December
31, 2008, dry-hole costs
related to this well were $0.2 million.
Additional dry-hole costs of $0.1 million, inclusive of plug and
abandonment expenses, were incurred during the first quarter 2009.

Eos Project
In
August 2008, the Fund acquired a 3.0% interest in the Eos Project, an
exploratory well, from Mariner Energy (Mariner), the operator. The project, which is located in the Garden
Banks region of the Gulf of Mexico, began drilling in August 2008 and was
determined to be an unsuccessful well, or dry hole, in November 2008. For the year ended December 31, 2008, dry-hole costs related to
this well, including
plug and abandonment expenses, were $2.5 million.

6

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Ruby Project
In
May 2008, the Fund acquired a 10.0% working interest in the Ruby Project, an
exploratory well, from PetroQuest Energy, L.L.C. (PetroQuest), the
operator. The project, which is located
in the Eugene Island region of the Gulf of Mexico, began drilling in June 2008
and was determined to be an unsuccessful well, or dry hole, in August
2008. For the year ended December 31,
2008, dry-hole costs
related to this well, including plug and abandonment expenses, were $1.9
million.

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

Eugene Island
346/347Well #3In June 2008, the
Fund was informed by McMoRan that Eugene Island 346/347 well #3 did not have
commercially productive quantities of either oil or natural gas and had been
determined to be an unsuccessful well, or dry hole. For the year ended
December 31, 2008, dry-hole costs related to this well, including plug
and abandonment expenses, were $0.3 million.

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

South Marsh Island 213
In February 2008, the Fund
acquired a 5.5% working interest in the exploratory well South Marsh Island 213
from El Paso E&P Company, L.P.
(El Paso), the operator. This
project began drilling in March 2008.
In April 2008 the Fund was informed by El Paso that the well being
drilled on the South Marsh Island 213 lease block did not have commercially
productive quantities of either gas or oil and had been determined to be an
unsuccessful well, or dry hole. For the year ended December 31, 2008, dry-hole
costs related to this well, including plug and abandonment expenses, were $1.7
million.

West Cameron 296
In the third quarter 2007,
the Fund acquired a 16.67% working interest in the exploratory well West Cameron
296 from Newfield, the operator. The
property began drilling in September 2007. On November 5, 2007, the Fund was
informed by Newfield that the exploratory well being drilled on the West
Cameron 296 lease block did not have commercially productive quantities of
either gas or oil and had been determined to be an unsuccessful well or dry
hole. Dry-hole costs related to this
well, including plug and abandonment expenses, were $2.6 million.

West Delta 95
The Fund acquired a 28.0%
working interest in West Delta 95 from Apache and BP America Production Co.
(BP). BP was the operator of West
Delta 95 until July 26, 2006, at which time Apache took over the project as
operator. The property began drilling
in May 2005 and in August 2005, before reaching its target depth, the project
was evacuated in preparation for Hurricane Katrina. As a result of Hurricane Katrina, the well sustained damage. Recovery operations
totaling $12.9 million
were completed and drilling resumed in January 2007. The Fund filed a claim with its insurance carrier and received
$11.2 million of insurance proceeds.
During 2007, the Fund recorded a casualty loss of $1.7 million as a
result of changes in estimates to, and the ultimate settlement of, the
insurance claim. In February 2007, the
well was determined to not have commercially productive quantities of either
natural gas or oil and therefore was deemed to be a dry-hole. Dry-hole costs related to this well,
including plug and abandonment expenses, were $16.1 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 in this Item 1. Business.

7

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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.

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

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

Generally, working interests
in an offshore natural gas lease under the OCSLA pay a 16.67% or 18.75% royalty
to the MMS for shallow-water projects, dependent upon lease date, and a 12.5%
royalty to the MMS for deepwater projects. Therefore, the net revenue interest
of the holders of 100% of the working interest in the projects in which the
Fund will invest is between 81.25% and 83.33% of the total revenue for
shallow-water projects and 87.5% of the total revenue for deepwater projects,
and, such net revenue amount may be 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
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 $10.37 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.

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, under
the Deepwater Relief Act, the MMS defines deepwater as depths in excess of 656
feet (200 meters). In order for a lease
to be eligible for royalty relief, under the Deepwater Relief Act, 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.

8

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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 oil
and natural gas to the public market.  The Fund is receiving market prices
for oil and natural gas. All of the
Funds current projects are near existing transportation infrastructure and
pipelines. The Manager believes that it
is likely that oil and natural gas from the Funds future projects will have
access to pipeline transportation and can be marketed in a similar
fashion.

Operator

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

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

Insurance

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

Salvage Fund

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

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 Gulf
of Mexico as June 1st through November 30th. 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. 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.

9

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The effect of hurricanes on
operations can range from no damage and little or no interruptions in
operations to significant damage with extended interruptions in
operations. As such, it is impossible
to predict what impact, if any, a hurricane may have on the Funds projects. During September 2008, hurricane activity in
the Gulf of Mexico did not cause material damage to any of the Funds
properties, however; the Fund has experienced production interruptions relative
to its South Pelto 9 and Eugene Island 346/347 #1 and #2 wells.

Customers

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

Energy Prices

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

Competition

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

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

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.

10

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Regulation

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

Outer Continental Shelf Lands
Act

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

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

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

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

Sales and Transportation of Oil and Natural Gas

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

Environmental
Matters and Regulation

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

11

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

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

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

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

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

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

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

ITEM
1A. RISK FACTORS

Not
required.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not
applicable.

12

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ITEM
2. PROPERTIES

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

ITEM 3. LEGAL
PROCEEDINGS

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

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

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

None.

PART II

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

There is currently no
established public trading market for the Shares. As of the date of this filing, there were 1,619 shareholders of
record of the Fund.

Distributions are made in
accordance with the provisions of the LLC Agreement. At various times throughout the year, the Fund determines whether
there is sufficient available cash, as defined in the LLC Agreement, for
distribution to shareholders. There is,
however, no requirement to distribute available cash and as such, available
cash is distributed to the extent and at such times as the Manager believes is
advisable. During the years ended
December 31, 2008 and 2007, the Fund paid distributions totaling $7.4 million
$0.5 million, respectively.

ITEM
6. SELECTED FINANCIAL DATA

Not
required.

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

Overview of the Funds Business

The Fund was organized to
acquire interests in oil and natural gas properties located in the United
States offshore waters of Texas, Louisiana and Alabama in the Gulf of
Mexico. The Funds primary investment
objective is to generate cash flow for distribution to its shareholders through
participation in oil and natural gas exploration and development projects in
the Gulf of Mexico. Distributions are
funded from cash flow from operations, and the frequency and amount are within
the Managers discretion subject to available cash from operations, reserve
requirements and the Funds operations.

The Manager performs certain
duties on the Funds behalf including the evaluation of potential projects for
investment and ongoing management, administrative and advisory services
associated with these projects. The Fund does not currently, nor is there any
plan, to operate any project in which the Fund participates. The Manager enters
into operating agreements with third-party operators for the management of all
exploration, development and producing operations, as appropriate. See also Item 1. Business for additional
information regarding the projects of the Fund.

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

13

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Subsequent Events

South Timbalier
287
In November 2007, the Fund
acquired a 4.0% working interest in the exploratory well South Timbalier 287,
from Apache Corporation (Apache), the operator. This project began
drilling in March 2008 and was determined to be an unsuccessful well, or dry
hole, in January 2009. For the year
ended December 31, 2008, dry-hole costs related to this well were $3.9
million. Additional dry-hole costs of
$0.3 million, including plug and abandonment expenses, were incurred during the
first quarter 2009.

Bison Project
In
November 2008, the Fund acquired a 3.0% working interest in the Bison Project,
an exploratory well, from LLOG, the operator.
The Bison Project, located in the Galveston region of the Gulf of
Mexico, began drilling in December 2008 and was determined to be an
unsuccessful well, or dry hole, in January 2009. For the year ended December 31, 2008, dry-hole costs related to this well, were $0.2
million. Additional dry-hole costs of
$0.1 million, including plug and abandonment expenses, were incurred during the
first quarter 2009.

Critical Accounting Estimates

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

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 natural gas leasehold acreage, including
lease bonuses, brokers fees and other related costs are capitalized. Annual
lease rentals, exploration expenses and dry-hole costs are expensed as
incurred. Costs of drilling and equipping productive wells and related
production facilities are capitalized.

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

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

14

---



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

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 present value of asset retirement obligations
once reasonably estimable. The Fund
capitalizes the associated asset retirement costs as part of the carrying
amount of its proved properties. Plug and abandonment costs associated with
unsuccessful projects are expensed as dry-hole costs.

Impairment of
Long-Lived Assets
The Fund reviews long-lived
assets, including oil and natural gas properties, 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 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.

In the case of oil and
natural gas properties, the present value of future net cash flows is based on
the Manager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. Fair value determinations require considerable judgment and are sensitive
to changes in the factors described above, thus impairments could occur in
future periods.

15

---



Results of Operations

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

|                                    |  |                          |         |      |   |        |  
|----------------------------------- |  | ------------------------ | ------- | ---- | - | ------ | -
|                                    |  | Year
 ended December 31, |        
|                                    |  | 2008                     |         | 2007 |  
|                                    |  |                          |         |      |  
|                                    |  | (in
 thousands)          |        
|Revenue                             |  |                          |         |      |   |        |  
|Oil and gas revenue                 |  | $                        | 11,229  |      | $ | 1,883  |  
|                                    |  |                          |         |      |   |        |  
|Expenses                            |  |                          |         |      |   |        |  
|Depletion and amortization          |  |                          | 3,537   |      |   | 701    |  
|Dry-hole costs                      |  |                          | 18,879  |      |   | 3,808  |  
|Management fees to affiliate        |  |                          | 2,062   |      |   | 2,300  |  
|Casualty loss                       |  |                          |        |      |   | 3,193  |  
|Operating expenses                  |  |                          | 360     |      |   | 107    |  
|General and administrative expenses |  |                          | 766     |      |   | 603    |  
|                                    |  |                          |         |      |   |        |  
|Total expenses                      |  |                          | 25,604  |      |   | 10,712 |  
|                                    |  |                          |         |      |   |        |  
|Loss from operations                |  |                          | (14,375 | )    |   | (8,829 | )
|Other income                        |  |                          |         |      |   |        |  
|Interest income                     |  |                          | 932     |      |   | 2,627  |  
|                                    |  |                          |         |      |   |        |  
|Net loss                            |  | $                        | (13,443 | )    | $ | (6,202 | )
|                                    |  |                          |         |      |   |        |  

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

Overview. During the year ended December 31, 2008, the
Fund had three producing wells, South Pelto 9, Eugene Island 346/347 well #1
and well #2, which came onto production in September 2007, June 2008 and July
2008, respectively, thereby impacting the Funds revenue, depletion,
amortization and lease operating expenses.
Prior to September 2007, the Fund had no producing properties and was
classified as an exploratory stage enterprise.

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

Oil and Gas Revenue. Oil
and gas revenue for the year ended December 31, 2008 was $11.2 million, a $9.3
million increase from the year ended December 31, 2007. The increase is
attributable to an increase in production and sales volumes totaling $7.0
million and an increase in the average prices totaling $2.4 million.

The Funds wells produced 32
thousand barrels of oil during the year ended December 31, 2008 compared to 8
thousand barrels of oil during the year ended December 31, 2007. The Funds oil prices averaged approximately
$100 per barrel during the year ended December 31, 2008 compared to approximately
$85 per barrel during the year ended December 31, 2007.

Gas production during the
year ended December 31, 2008 was 691 thousand mcf compared to 137 thousand mcf,
during the year ended December 31, 2007.
During the year ended December 31, 2008, the Funds gas prices,
inclusive of processing revenue, averaged $11.57 per mcf compared to $8.84 per
mcf during the year ended December 31, 2007.

The increase in production
and sales volumes for the year ended December 31, 2008 was attributable to the
onset of production for Eugene Island 346/347 well #1 and well #2 and a full
year of production for South Pelto 9.

Depletion and
Amortization. For the years ended December 31, 2008 and
2007, depletion and amortization was $3.5 million and $0.7 million, respectively. The increase in depletion and amortization
resulted from the onset of production for Eugene Island 346/347 well #1 and
well #2 and a full year of production for South Pelto 9.

16

---



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

|                              |  |                         |        |      |   |       |  
|----------------------------- |  | ----------------------- | ------ | ---- | - | ----- | -
|                              |  | Year ended December 31, |       
|Lease
 Block                  |  | 2008                    |        | 2007 |  
|                              |  |                         |        |      |  
|                              |  | (in thousands)          |       
|High Island 38                |  | $                       | 6,715  |      | $ |      |  
|South Timbalier 287           |  |                         | 3,858  |      |   |      |  
|Eos Project                   |  |                         | 2,472  |      |   |      |  
|Walker Ridge 155              |  |                         | 2,234  |      |   |      |  
|Ruby Project                  |  |                         | 1,924  |      |   |      |  
|South Marsh Island 213        |  |                         | 1,688  |      |   |      |  
|Bison Project                 |  |                         | 215    |      |   |      |  
|Eugene Island 346/347 well #3 |  |                         | 279    |      |   |      |  
|West Cameron 296              |  |                         | (112   | )    |   | 2,680 |  
|West Delta 95                 |  |                         | (380   | )    |   | 1,342 |  
|Other wells                   |  |                         | (14    | )    |   | (214  | )
|                              |  |                         |        |      |   |       |  
|                              |  | $                       | 18,879 |      | $ | 3,808 |  
|                              |  |                         |        |      |   |       |  

Management Fees
to Affiliate. For
the years ended December 31, 2008 and 2007, the Fund incurred management fees
of $2.1 million and $2.3 million, respectively, representing 2.5% of total
capital contributions, net of cumulative dry-hole and related well costs
incurred by the Fund. See additional
discussion in Item 1. Business.

Casualty Loss. For the year ended December 31, 2007, the
Fund recorded a casualty loss of $3.2 million as a result of the settlement of
its two insurance claims for West Delta 95 and West Cameron 78/95 wells. West Delta 95 recorded a casualty loss of
$1.7 million for the year ended December 31, 2007 as a result of damages
sustained from Hurricane Katrina. West
Cameron 78/95 recorded a casualty loss of $1.5 million for the year ended
December 31, 2007 as a result of damages sustained during drilling.

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

|                        |  |                          |     |      |   |     | 
|----------------------- |  | ------------------------ | --- | ---- | - | --- | 
|                        |  | Year
 ended December 31, |    
|                        |  | 2008                     |     | 2007 |  
|                        |  |                          |     |      |  
|                        |  | (in
 thousands)          |    
|Lease operating expense |  | $                        | 245 |      | $ | 61  | 
|Geological costs        |  |                          | 107 |      |   | 44  | 
|Accretion expense       |  |                          | 8   |      |   | 2   | 
|                        |  |                          |     |      |   |     | 
|                        |  | $                        | 360 |      | $ | 107 | 
|                        |  |                          |     |      |   |     | 

Lease operating expense for
the year ended December 31, 2008 related to South Pelto 9 and the onset of
production of Eugene Island 346/347 well #1 and well #2. For the year ended December 31, 2007 lease
operating expenses related to the onset of production of South Pelto 9. Geological costs for the year ended December
31, 2008 related primarily to the Liberty, Ruby, Eos and Cobalt projects. Geological costs for the year December 31,
2007 primarily related to South Pelto 9.
Accretion expense is related to the asset retirement obligations
established for the Funds proved properties.

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

|                  |  |                          |     |      |   |     | 
|----------------- |  | ------------------------ | --- | ---- | - | --- | 
|                  |  | Year
 ended December 31, |    
|                  |  | 2008                     |     | 2007 |  
|                  |  |                          |     |      |  
|                  |  | (in
 thousands)          |    
|Insurance expense |  | $                        | 444 |      | $ | 304 | 
|Accounting fees   |  |                          | 233 |      |   | 198 | 
|Trust fees        |  |                          | 89  |      |   | 101 | 
|                  |  |                          |     |      |   |     | 
|                  |  | $                        | 766 |      | $ | 603 | 
|                  |  |                          |     |      |   |     | 

17

---



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

Interest Income.Interest income is comprised of interest earned on money market
accounts and investments in U.S. Treasury securities. For the year ended
December 31, 2008, interest income was $0.9 million, a $1.7 million decrease
from the year ended December 31, 2007.
The decrease was attributable to a reduction in average outstanding
balances earning interest due to ongoing capital expenditures coupled with
lower interest rates earned.

Capital Resources and Liquidity

Operating Cash
Flows
Cash
flows provided by operating activities for the year ended December 31, 2008
were $7.3 million, principally attributable to revenue receipts of $11.3
million and interest income received of $0.4 million. These amounts were partially offset by management fees of $2.1
million, MMS royalty prepayments totaling $0.5 million, payments to affiliates
of $0.7 million for amounts outstanding at December 31, 2007, general and
administrative expenses of $0.8 million and operating expenses of $0.4 million.

Cash
flows used in operating activities for the year ended December 31, 2007 were
$0.4 million, attributable to management fees of $2.3 million, general and
administrative and other expenses of $0.7 million. Partially offsetting these payments were revenue receipts of $1.3
million, interest income received of $1.1 million and favorable working capital
of $0.2 million.

Investing Cash
Flows
Cash
flows provided by investing activities for the year ended December 31, 2008
were $2.4 million related to proceeds from the maturity of U.S. Treasury
securities totaling $69.1 million, partially offset by capital expenditures for
oil and gas properties totaling $18.6 million and investments in U.S. Treasury
securities of $48.0 million.
Additionally, the Fund increased its salvage fund investments by $29
thousand, which consisted of the interest earned on this account.

Cash
flows used in investing activities for the year ended December 31, 2007 were
$17.7 million related to capital expenditures for oil and gas properties of
$17.9 million and investments in U.S. Treasury securities of $65.3 million,
partially offset by proceeds from the maturity of U.S. Treasury securities of
$51.6 million as well as insurance proceeds of $13.9 million related to the
West Delta 95 and West Cameron 78/95 claims. Additionally, the Fund increased
its salvage fund investments by $50 thousand, which consisted of the interest
earned on this account.

Financing Cash
Flows
Cash
flows used in financing activities were $7.4 million for the year ended
December 31, 2008 related to the payment of Manager and shareholder
distributions.

Cash
flows used in financing activities were $0.5 million for the year ended
December 31, 2007 related to the payment of Manager and shareholder
distributions.

Estimated Capital Expenditures

The Fund has entered into
multiple agreements for the drilling and development of its investment
properties. The estimated capital
expenditures associated with these agreements can vary depending on the stage
of development on a property-by-property basis. As of December 31, 2008, the Fund had committed to spend an
additional $20.7 million related to its investment properties.

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

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

18

---



Liquidity Needs

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

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

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

Suspension of MMS Royalty Relief

Under MMS rules, the Fund is
eligible for annual royalty relief provided that the average New York
Mercantile Exchange (NYMEX) sales price for shallow water, deep gas
(Average NYMEX Price) does not exceed price thresholds established by the
MMS, which were published during the first quarter of 2009. Rising prices early in 2008 created
uncertainty as to whether or not the South Pelto 9 would be eligible for the
royalty relief and accordingly, the Fund previously disclosed this contingency. Ultimately, however, the NYMEX sales price
did not exceed the price thresholds established by the MMS and the Fund had no
obligation to pay royalties for those properties which qualify for royalty
relief.

Off-Balance Sheet Arrangements

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

Contractual Obligations

The Fund enters into
operating agreements with operators. On
behalf of the Fund, an operator enters into various contractual commitments pertaining
to exploration, development and production activities. The Fund does not negotiate any such
contracts. No contractual obligations
exist at December 31, 2008 and 2007 other than those discussed in Estimated
Capital Expenditures above.

Recent Accounting Pronouncements

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

ITEM
7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Not
required.

ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA

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

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

None.

19

---



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, 2008. Based upon the
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Funds disclosure controls and procedures are effective as of the end
of the period covered by this report.

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

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

Changes in
Internal Control over Financial 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, 2008 that have materially affected, or are
reasonably likely to materially affect, the Funds internal control over
financial reporting.

ITEM 9B. OTHER
INFORMATION

None.

20

---



PART III

ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE

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

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

The officers in the above
table have also been officers of the Fund since December 21, 2004, the date of
inception of the Fund, with the exception of Mr. Doherty, who became an officer
of the Fund in 2006. The officers are
employed by and paid exclusively by the Manager. Set forth below are the names of, and certain biographical
information regarding the executive officers of Ridgewood Energy and the Fund:

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

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

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

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.

21

---



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

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

Board of Directors and Board
Committees

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

Code of Ethics

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

Section 16(a) Beneficial Ownership
Reporting Compliance

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

ITEM
11. EXECUTIVE COMPENSATION

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

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

The following table sets
forth information with respect to beneficial ownership of the shares as of
March 12, 2009 (no person owns more than 5% of the shares) by:

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

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 870.6486 Shares outstanding at March 12, 2009. Other than as
indicated below, no officer of the Manager or the Fund owns any of the Funds
Shares.

22

---



|                                                              |  |                   |  |        
|------------------------------------------------------------- |  | ----------------- |  | -------
|Name of beneficial owner                                      |  | Number of
 shares |  | Percent
|                                                              |  |                   |  |        
|Robert E. Swanson,
 President and Chief Executive Officer (1) |  | 2.6667            |  | *      
|Executive officers as a
 group (1)                            |  | 2.6667            |  | *      

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

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

The LLC Agreement provides
that the Manager render management, administrative and advisory services. For such
services, the Manager is paid an annual management fee, payable monthly,
of 2.5% of total capital contributions, net of cumulative dry-hole and related
well costs incurred by the Fund.
Management fees for the years ended December 31, 2008 and 2007 were $2.1
million and $2.3 million, respectively.

The Manager is entitled to
receive a 15% interest in cash distributions made by the Fund. For the years ended December 31,
2008 and 2007, the Manager was paid distributions totaling $1.1 million and $73
thousand, respectively.

At times, short-term
payables and receivables, which do not bear interest, arise from transactions
with affiliates in the ordinary course of business. At December 31, 2008 there were no such amounts outstanding. At December 31,
2007, the Fund owed
affiliates $0.7 million related to insurance proceeds and revenue allocations.

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

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

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

ITEM 14. PRINCIPAL
ACCOUNTING FEES AND SERVICES

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

|               |  |                          |     |      |   |     | 
|-------------- |  | ------------------------ | --- | ---- | - | --- | 
|               |  | Year
 ended December 31, |    
|               |  | 2008                     |     | 2007 |  
|               |  |                          |     |      |  
|               |  | (in
 thousands)          |    
|Audit fees (1) |  | $                        | 130 |      | $ | 125 | 

|                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) Fees for audit of annual financial
 statements, reviews of the related quarterly financial statements, and
 reviews of documents filed with the SEC.

PART IV

ITEM
15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES

(a) (1) Financial Statements

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

(a) (2) Financial Statement
Schedules

None.

23

---



(a) (3)

|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|--------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------
|EXHIBIT
 NUMBER |  | TITLE OF EXHIBIT                                                                                                                                                                                                                                             |  | METHOD OF FILING                                                              
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|3.1             |  | Articles of Formation of
 Ridgewood Energy O Fund, LLC dated December 21, 2004.                                                                                                                                                                              |  | Incorporated by reference
 to the Funds Form 10 filed on April 21, 2006.     
|               
|3.2             |  | Limited Liability Company
 Agreement between Ridgewood Energy Corporation and Investors of Ridgewood
 Energy O Fund, LLC dated February 16, 2005.                                                                                                            |  | Incorporated by reference
 to the Funds Form 10 filed on April 21, 2006.     
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.1            |  | Participation Agreement
 between El Paso E&P Company, L.P. and Ridgewood Energy Corporation as
 Manager and LLOG Exploration Offshore, Inc. for South Marsh Island Block 213.                                                                                |  | Incorporated by reference
 to the Funds Form 10-Q filed on May 6, 2008.      
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.2            |  | Participation Agreement
 between LLOG Exploration Offshore, Inc. and Ridgewood Energy Corporation as
 Manager for Liberty Project.                                                                                                                           |  | Incorporated by reference to
 the Funds Form 10-Q filed on August 1, 2008.   
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.3            |  | Participation Agreement
 between PetroQuest Energy, L.L.C. and Ridgewood Energy Corporation as Manager
 for Ruby Project.                                                                                                                                    |  | Incorporated by reference
 to the Funds Form 10-Q filed on August 1, 2008.   
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.4            |  | Participation Agreement
 between LLOG Exploration Offshore, Inc., Mariner Energy, Inc., Stone Energy
 Corporation and Ridgewood Energy Corporation as Manager for Eos Project.                                                                               |  | Incorporated by reference
 to the Funds Form 10-Q filed on November 10, 2008.
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.5            |  | Participation Agreement
 between Newfield Exploration Company and Ridgewood Energy Corporation as
 Manager for Cobalt Project.                                                                                                                               |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.6            |  | Participation Agreement
 between LLOG Offshore, Inc. and Ridgewood Energy Corporation as Manager for
 Bison Project.                                                                                                                                         |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|10.7            |  | Participation Agreement
 between Newfield Exploration Company and Ridgewood Energy Corporation as
 Manager for Aspen Project.                                                                                                                                |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|23.1            |  | Consent of Ryder Scott
 Company, L.P.                                                                                                                                                                                                                        |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|31.1            |  | Certification of Robert E.
 Swanson, Chief Executive Officer, pursuant to Securities Exchange Act Rule
 13a-14(a).                                                                                                                                           |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|31.2            |  | Certification of Kathleen
 P. McSherry, Chief Financial Officer, pursuant to Securities Exchange Act
 Rule 13a-14(a).                                                                                                                                        |  | Filed herewith.                                                               
|                |  |                                                                                                                                                                                                                                                              |  |                                                                               
|32              |  | Certifications pursuant to
 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The
 Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief Executive
 Officer of the Fund and Kathleen P. McSherry, Chief Financial Officer of the
 Fund. |  | Filed herewith.                                                               

24

---



INDEX TO FINANCIAL STATEMENTS

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

F-1

---



REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

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

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

|                          | 
|------------------------- | 
|/s/ Deloitte & Touche LLP | 
|                          | 
|                          | 
|Parsippany,
 New Jersey   | 
|March 12, 2009            | 

F-2

---



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

|                                                                                |  |              |         |      |   |         |  
|------------------------------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------- | -
|                                                                                |  | December 31, |        
|                                                                                |  | 2008         |         | 2007 |  
|                                                                                |  |              |         |      |  
|ASSETS                                                                          |  |              |         |      |   |         |  
|Current assets:                                                                 |  |              |         |      |   |         |  
|Cash and cash equivalents                                                       |  | $            | 16,818  |      | $ | 14,546  |  
|Short-term investments in marketable
 securities                                |  |              | 20,100  |      |   | 40,602  |  
|Production receivable                                                           |  |              | 530     |      |   | 598     |  
|Prepaid royalties                                                               |  |              | 517     |      |   |        |  
|Other current assets                                                            |  |              | 186     |      |   | 372     |  
|                                                                                |  |              |         |      |   |         |  
|Total current assets                                                            |  |              | 38,151  |      |   | 56,118  |  
|                                                                                |  |              |         |      |   |         |  
|Salvage fund                                                                    |  |              | 1,139   |      |   | 1,110   |  
|                                                                                |  |              |         |      |   |         |  
|Oil and gas
 properties:                                                        |  |              |         |      |   |         |  
|Advances to operators for working interests
 and expenditures                   |  |              | 128     |      |   | 1,866   |  
|Unproved properties                                                             |  |              | 984     |      |   | 5,961   |  
|Proved properties                                                               |  |              | 12,525  |      |   | 5,603   |  
|Less:
 accumulated depletion and amortization                                   |  |              | (4,238  | )    |   | (701    | )
|                                                                                |  |              |         |      |   |         |  
|Total oil and gas properties                                                    |  |              | 9,399   |      |   | 12,729  |  
|                                                                                |  |              |         |      |   |         |  
|                                                                                |  |              |         |      |   |         |  
|Total assets                                                                    |  | $            | 48,689  |      | $ | 69,957  |  
|                                                                                |  |              |         |      |   |         |  
|LIABILITIES AND MEMBERS CAPITAL                                                |  |              |         |      |   |         |  
|Current
 liabilities:                                                           |  |              |         |      |   |         |  
|Due to operators                                                                |  | $            | 1,965   |      | $ | 2,070   |  
|Accrued expenses payable                                                        |  |              | 97      |      |   | 126     |  
|Due to affiliates (Note 6)                                                      |  |              |        |      |   | 652     |  
|                                                                                |  |              |         |      |   |         |  
|Total current liabilities                                                       |  |              | 2,062   |      |   | 2,848   |  
|                                                                                |  |              |         |      |   |         |  
|Asset retirement obligations                                                    |  |              | 415     |      |   | 39      |  
|                                                                                |  |              |         |      |   |         |  
|Total liabilities                                                               |  |              | 2,477   |      |   | 2,887   |  
|                                                                                |  |              |         |      |   |         |  
|Commitments
 and contingencies (Note 8)                                         |  |              |         |      |   |         |  
|Members
 capital:                                                              |  |              |         |      |   |         |  
|Manager:                                                                        |  |              |         |      |   |         |  
|Distributions                                                                   |  |              | (1,185  | )    |   | (73     | )
|Accumulated deficit                                                             |  |              | (428    | )    |   | (1,447  | )
|                                                                                |  |              |         |      |   |         |  
|Managers total                                                                 |  |              | (1,613  | )    |   | (1,520  | )
|                                                                                |  |              |         |      |   |         |  
|Shareholders:                                                                   |  |              |         |      |   |         |  
|Capital contributions (935 shares authorized;
 870.6486 issued and outstanding) |  |              | 128,990 |      |   | 128,990 |  
|Syndication costs                                                               |  |              | (14,742 | )    |   | (14,742 | )
|Distributions                                                                   |  |              | (6,717  | )    |   | (414    | )
|Accumulated deficit                                                             |  |              | (59,706 | )    |   | (45,244 | )
|                                                                                |  |              |         |      |   |         |  
|Shareholders total                                                             |  |              | 47,825  |      |   | 68,590  |  
|                                                                                |  |              |         |      |   |         |  
|                                                                                |  |              |         |      |   |         |  
|Total members capital                                                          |  |              | 46,212  |      |   | 67,070  |  
|                                                                                |  |              |         |      |   |         |  
|                                                                                |  |              |         |      |   |         |  
|Total liabilities and members capital                                          |  | $            | 48,689  |      | $ | 69,957  |  
|                                                                                |  |              |         |      |   |         |  

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

F-3

---



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

|                                      |  |                         |         |      |   |        |  
|------------------------------------- |  | ----------------------- | ------- | ---- | - | ------ | -
|                                      |  | Year ended December 31, |        
|                                      |  | 2008                    |         | 2007 |  
|                                      |  |                         |         |      |  
|Revenue                               |  |                         |         |      |   |        |  
|Oil and gas revenue                   |  | $                       | 11,229  |      | $ | 1,883  |  
|                                      |  |                         |         |      |   |        |  
|Expenses                              |  |                         |         |      |   |        |  
|Depletion and amortization            |  |                         | 3,537   |      |   | 701    |  
|Dry-hole costs                        |  |                         | 18,879  |      |   | 3,808  |  
|Management fees to affiliate (Note 6) |  |                         | 2,062   |      |   | 2,300  |  
|Casualty loss                         |  |                         |        |      |   | 3,193  |  
|Operating expenses                    |  |                         | 360     |      |   | 107    |  
|General and administrative expenses   |  |                         | 766     |      |   | 603    |  
|                                      |  |                         |         |      |   |        |  
|Total expenses                        |  |                         | 25,604  |      |   | 10,712 |  
|                                      |  |                         |         |      |   |        |  
|Loss from operations                  |  |                         | (14,375 | )    |   | (8,829 | )
|Other income                          |  |                         |         |      |   |        |  
|Interest income                       |  |                         | 932     |      |   | 2,627  |  
|                                      |  |                         |         |      |   |        |  
|Net loss                              |  | $                       | (13,443 | )    | $ | (6,202 | )
|                                      |  |                         |         |      |   |        |  
|                                      |  |                         |         |      |   |        |  
|Manager Interest                      |  |                         |         |      |   |        |  
|Net income (loss)                     |  | $                       | 1,019   |      | $ | (199   | )
|                                      |  |                         |         |      |   |        |  
|Shareholder
 Interest                 |  |                         |         |      |   |        |  
|Net loss                              |  | $                       | (14,462 | )    | $ | (6,003 | )
|Net loss per share                    |  | $                       | (16,611 | )    | $ | (6,895 | )

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

F-4

---



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



|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|--------------------------- |  | ----------- | -------- | ------- | - | ------------ | - | ----- | ------- | - | - | ------- | -
|                            |  | # of Shares |          | Manager |   | Shareholders |   | Total |        
|                            |  |             |          |         |   |              |   |       |        
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Balances, December 31, 2006 |  |             | 870.6486 |         | $ | (1,248       | ) | $     | 75,007  |   | $ | 73,759  |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Distributions               |  |             |          |         |   | (73          | ) |       | (414    | ) |   | (487    | )
|Net loss                    |  |             |         |         |   | (199         | ) |       | (6,003  | ) |   | (6,202  | )
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Balances, December 31, 2007 |  |             | 870.6486 |         |   | (1,520       | ) |       | 68,590  |   |   | 67,070  |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Distributions               |  |             |          |         |   | (1,112       | ) |       | (6,303  | ) |   | (7,415  | )
|Net income (loss)           |  |             |         |         |   | 1,019        |   |       | (14,462 | ) |   | (13,443 | )
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  
|Balances, December 31, 2008 |  |             | 870.6486 |         | $ | (1,613       | ) | $     | 47,825  |   | $ | 46,212  |  
|                            |  |             |          |         |   |              |   |       |         |   |   |         |  

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

F-5

---



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

|                                                                                                 |  |                         |         |      |   |         |  
|------------------------------------------------------------------------------------------------ |  | ----------------------- | ------- | ---- | - | ------- | -
|                                                                                                 |  | Year ended December 31, |        
|                                                                                                 |  | 2008                    |         | 2007 |  
|                                                                                                 |  |                         |         |      |  
|                                                                                                 |  |                         |         |      |   |         |  
|Cash flows from operating activities                                                             |  |                         |         |      |   |         |  
|Net loss                                                                                         |  | $                       | (13,443 | )    | $ | (6,202  | )
|Adjustments to reconcile net loss to net
 cash provided by (used in) operating activities        |  |                         |         |      |   |         |  
|Depletion and amortization                                                                       |  |                         | 3,537   |      |   | 701     |  
|Dry-hole costs                                                                                   |  |                         | 18,879  |      |   | 3,808   |  
|Casualty loss                                                                                    |  |                         |        |      |   | 3,193   |  
|Accretion expense                                                                                |  |                         | 8       |      |   | 2       |  
|Interest earned on marketable securities                                                         |  |                         | (605    | )    |   | (1,712  | )
|Changes in assets and liabilities:                                                               |  |                         |         |      |   |         |  
|Decrease (increase) in production
 receivable                                                    |  |                         | 68      |      |   | (598    | )
|Increase in prepaid royalties                                                                    |  |                         | (517    | )    |   |        |  
|Decrease in other current assets                                                                 |  |                         | 7       |      |   | 142     |  
|Increase in due to operators                                                                     |  |                         | 5       |      |   | 43      |  
|(Decrease) increase in accrued expenses
 payable                                                 |  |                         | (29     | )    |   | 29      |  
|(Decrease) increase in due to affiliates                                                         |  |                         | (652    | )    |   | 177     |  
|                                                                                                 |  |                         |         |      |   |         |  
|Net cash provided by (used in) operating
 activities                                             |  |                         | 7,258   |      |   | (417    | )
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                
|Cash flows from investing activities                                                             |  |                         |         |      |   |         |  
|Payments to operators for working interests
 and expenditures                                    |  |                         | (128    | )    |   | (1,866  | )
|Capital expenditures for oil and gas
 properties                                                 |  |                         | (18,521 | )    |   | (16,025 | )
|Proceeds from insurance recovery                                                                 |  |                         |        |      |   | 13,908  |  
|Interest reinvested in salvage fund                                                              |  |                         | (29     | )    |   | (50     | )
|Proceeds from the sale of marketable
 securities                                                 |  |                         | 69,107  |      |   | 51,613  |  
|Investment in marketable securities                                                              |  |                         | (48,000 | )    |   | (65,318 | )
|                                                                                                 |  |                         |         |      |   |         |  
|Net cash provided by (used in) investing
 activities                                             |  |                         | 2,429   |      |   | (17,738 | )
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Cash flows from financing activities                                                             |  |                         |         |      |   |         |  
|Distributions                                                                                    |  |                         | (7,415  | )    |   | (487    | )
|                                                                                                 |  |                         |         |      |   |         |  
|Net cash used in financing activities                                                            |  |                         | (7,415  | )    |   | (487    | )
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Net increase (decrease) in cash and cash
 equivalents                                            |  |                         | 2,272   |      |   | (18,642 | )
|Cash and cash equivalents, beginning of
 period                                                  |  |                         | 14,546  |      |   | 33,188  |  
|                                                                                                 |  |                         |         |      |   |         |  
|Cash and cash equivalents, end of period                                                         |  | $                       | 16,818  |      | $ | 14,546  |  
|                                                                                                 |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Supplemental schedule of non-cash investing activities                                           |  |                         |         |      |   |         |  
|                                                                                                 |  |                         |         |      |   |         |  
|Advances used for capital expenditures in
 oil and gas properties reclassified to dry-hole costs |  | $                       | 1,866   |      | $ |        |  
|                                                                                                 |  |                         |         |      |   |         |  

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

F-6

---



RIDGEWOOD
ENERGY O FUND, LLCNOTES TO FINANCIAL STATEMENTS

1. Organization and Purpose

The Ridgewood
Energy O Fund, LLC (the Fund), a Delaware limited liability company, was
formed on December 21, 2004 and operates pursuant to a limited liability
company agreement (the LLC Agreement) dated February 16, 2005 by and among
Ridgewood Energy Corporation (the Manager), and the shareholders of the Fund.
The Fund was organized to acquire interests in oil and natural gas properties
located in the United States offshore waters of Texas, Louisiana and Alabama in
the Gulf of Mexico. During 2007, the
Fund began earning revenue and was determined by the Manager to no longer be an
exploratory stage enterprise.

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

2. Summary of Significant Accounting Policies

Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (GAAP) requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as of the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an ongoing basis, the Manager reviews
its estimates, including those related to property balances, determination of
proved reserves, impairments and asset retirement obligations. Actual results may differ from those
estimates.

Cash and Cash 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 federally insured limits. At December 31, 2008 bank balances exceeded
federally insured limits by $6.5 million.
At December 31, 2008, $5.7 million of the Funds uninsured balances were
invested in money market accounts that invest solely in U.S. Treasury bills and
notes. Effective October 2008 through December 31, 2009, federally
insured limits have been increased from $0.1 million to $0.25 million for
interest bearing deposits.
Additionally, non-interest bearing deposits are fully insured during
this period.

Investments in
Marketable Securities
At times the
Fund may invest in U.S. Treasury bills and notes. These investments are considered short-term when their maturities
are greater than three months and one year or less, and long-term when their
maturities are in excess of one year.
At December 31, 2008, the Fund had short-term, held-to-maturity
investments totaling $20.1 million, which mature in the first and second
quarter of 2009. At December 31, 2007
the Fund had short-term, held-to-maturity investments totaling $40.6 million. Held-to-maturity investments are those
securities that the Fund has the ability and intent to hold until maturity, and
are recorded at cost plus accrued income, adjusted for the amortization of
premiums and discounts, which approximates fair value.

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

Salvage
Fund
The Fund
deposits in a separate interest-bearing account, or a salvage fund, money to
provide for the dismantling and removal of production platforms and facilities
and plugging and abandoning its wells at the end of their useful lives, in
accordance with applicable federal and state laws and regulations. At December 31, 2008, the Fund had held-to-maturity
investments within its salvage fund totaling $1.1 million, which mature in
February 2012.

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

F-7

---



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

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

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

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

As of December
31, 2008 and 2007 amounts recorded in due to operators totaling $1.9 million
and $2.0 million, respectively, related to capital expenditures for oil and gas
properties.

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 may be required to advance its
share of estimated cash expenditures for the succeeding months operation. The Fund accounts for such payments as
advances to operators for working interests and expenditures. As drilling costs are incurred, the advances
are reclassified to unproved properties.

Asset
Retirement Obligations
For oil and
gas properties, there are obligations to perform removal and remediation
activities when the properties are retired.
When a project reaches drilling depth and is determined to be either
proved or dry, an asset retirement obligation is incurred. Plug and abandonment
costs associated with unsuccessful projects are expensed as dry-hole
costs. The following table presents
changes in asset retirement obligations for the years ended December 31, 2008
and 2007.

|                                 |  |                |     |      |   |    | 
|-------------------------------- |  | -------------- | --- | ---- | - | -- | 
|                                 |  | 2008           |     | 2007 |  
|                                 |  |                |     |      |  
|                                 |  | (in thousands) |    
|Balance -
 January 1,            |  | $              | 39  |      | $ | 37 | 
|Liabilities
 incurred            |  |                | 268 |      |   |   | 
|Liabilities
 settled             |  |                |    |      |   |   | 
|Accretion
 expense               |  |                | 8   |      |   | 2  | 
|Revisions to
 previous estimates |  |                | 100 |      |   |   | 
|                                 |  |                |     |      |   |    | 
|Balance -
 December 31,          |  | $              | 415 |      | $ | 39 | 
|                                 |  |                |     |      |   |    | 

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

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

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

F-8

---



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

Impairment
of Long-Lived Assets
In accordance
with the provisions of the Statement of Financial Accounting Standards (SFAS)
No. 144, Accounting for the Impairment of Long-Lived Assets, long-lived
assets, such as oil and 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. During the years ended December 31, 2008 and 2007, no impairments
were recorded. Fair value
determinations require considerable judgment and are sensitive to changes in
the factors described above, thus impairments could occur in future periods.

Depletion
and Amortization
Depletion and
amortization of the cost of proved oil and gas properties are calculated using
the units-of-production method. Proved
developed reserves are used as the base for depleting capitalized costs
associated with successful exploratory well costs. The sum of proved developed and proved undeveloped reserves is
used as the base for depleting, or amortizing, leasehold acquisition costs, the
costs to acquire proved properties and platform and pipeline costs. The Fund began production during the third
quarter 2007.

Income
Taxes
No provision
is made for income taxes in the financial statements. The Fund is a limited liability company, and as such, the Funds
income or loss is passed through and included in the tax returns of the Funds
shareholders.

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

3. Recent Accounting
Standards

In December
2008, the Securities and Exchange Commission (SEC) announced final approval
of new requirements for reporting oil and gas reserves. The new requirements provide for
consideration of new technologies in evaluating reserves, allow companies to
disclose their probable and possible reserves to investors, report oil and gas
reserves using an average price based on the prior 12-month period rather than
year-end prices, and revise the disclosure requirements for oil and gas
operations. The new rule is expected to
be effective for fiscal years ending on or after December 31, 2009. The Fund had not yet evaluated the effects
of these new requirements on its financial statements and disclosures.

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

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

F-9

---



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

4.
Unproved Properties - Capitalized Exploratory Well Costs

Leasehold
acquisition and exploratory drilling costs are capitalized pending
determination of whether the well has found proved reserves.  Unproved
properties are assessed on a quarterly basis by evaluating and monitoring if
sufficient progress is made on assessing the reserves.

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

|                                                                                               |  |                |        |      |   |        |  
|---------------------------------------------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                                                                               |  | 2008           |        | 2007 |  
|                                                                                               |  |                |        |      |  
|                                                                                               |  | (in thousands) |       
|Balance -
 January 1,                                                                          |  | $              | 5,961  |      | $ |       |  
|                                                                                               |  |                |        |      |   |        |  
|Additions to
 capitalized exploratory well costs pending the determination of proved
 reserves |  |                | 5,635  |      |   | 7,647  |  
|Reclassifications
 to proved properties based on the determination of proved reserves          |  |                | (6,843 | )    |   | (1,686 | )
|Capitalized
 exploratory well costs charged to dry-hole costs                                  |  |                | (3,769 | )    |   |       |  
|                                                                                               |  |                |        |      |   |        |  
|                                                                                               |  |                |        |      |   |        |  
|Balance -
 December 31,                                                                        |  | $              | 984    |      | $ | 5,961  |  
|                                                                                               |  |                |        |      |   |        |  

Capitalized exploratory well costs are expensed as
dry-hole costs in the event that reserves are not found or are not in
sufficient quantities to complete the well and develop the field. During the years ended December 31, 2008 and
2007, the Fund received credits on certain wells from their respective operators
upon review and audit of the wells costs.
Dry-hole costs, inclusive of credits, are detailed in the table below.

|                               |  |                         |        |      |   |       |  
|------------------------------ |  | ----------------------- | ------ | ---- | - | ----- | -
|                               |  | Year ended December 31, |       
|Lease Block                    |  | 2008                    |        | 2007 |  
|                               |  |                         |        |      |  
|                               |  | (in thousands)          |       
|High Island
 38                |  | $                       | 6,715  |      | $ |      |  
|South
 Timbalier 287           |  |                         | 3,858  |      |   |      |  
|Eos Project                    |  |                         | 2,472  |      |   |      |  
|Walker Ridge
 155              |  |                         | 2,234  |      |   |      |  
|Ruby Project                   |  |                         | 1,924  |      |   |      |  
|South Marsh
 Island 213        |  |                         | 1,688  |      |   |      |  
|Bison
 Project                 |  |                         | 215    |      |   |      |  
|Eugene
 Island 346/347 well #3 |  |                         | 279    |      |   |      |  
|West Cameron
 296              |  |                         | (112   | )    |   | 2,680 |  
|West Delta 95                  |  |                         | (380   | )    |   | 1,342 |  
|Other wells                    |  |                         | (14    | )    |   | (214  | )
|                               |  |                         |        |      |   |       |  
|                               |  | $                       | 18,879 |      | $ | 3,808 |  
|                               |  |                         |        |      |   |       |  

F-10

---



5. Distributions

Distributions
to shareholders are allocated in proportion to the number of shares held. Certain shares have early investment incentive
and advance distribution rights, as defined in the Funds LLC Agreement, which
range from approximately $5 thousand to $10 thousand per share.

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

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

The Fund began
making distributions to eligible early investors in December 2007 and to all
investors in October 2008. During the
year ended December 31, 2008, Manager and shareholders distributions totaled
$1.1 million and $6.3 million, respectively.
During the year ended December 31, 2007, Manager and shareholders
distributions totaled $0.1 million and $0.4 million, respectively.

6. Related Parties

The LLC
Agreement provides that the Manager render management, administrative and
advisory services. For such services,
the Manager is paid an annual management fee, payable monthly, of 2.5% of total
capital contributions, net of cumulative dry-hole and related well costs
incurred by the Fund. Management fees
for the years ended December 31, 2008 and 2007 were $2.1 million and $2.3
million, respectively.

At times,
short-term payables and receivables, which do not bear interest, arise from
transactions with affiliates in the ordinary course of business. At December 31, 2008 there were no such
amounts outstanding. At December 31,
2007, the Fund owed affiliates $0.7 million related to insurance proceeds and
revenue allocations.

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

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

7.
Fair Value of Financial Instruments

At December
31, 2008 and 2007, the carrying value of cash and cash equivalents, short-term
investments in marketable securities, salvage fund, production receivable and
accrued expenses approximated fair value.

8. Commitments and Contingencies

Capital Commitments
The Fund has entered
into multiple agreements for the drilling and development of its investment
properties. The estimated capital expenditures associated with these agreements
vary depending on the stage of development on a property-by-property basis. As
of December 31, 2008, the Fund had committed to spend an additional $20.7
million related to its investment 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
operators of the Funds properties are continually taking action they believe
appropriate to satisfy applicable federal, state and local environmental
regulations and do not currently anticipate that compliance with federal, state
and local environmental regulations will have a material adverse effect upon
capital expenditures, results of operations or the competitive position of the
Fund in the oil and natural gas industry.
However, due to the significant public and governmental interest in
environmental matters related to those activities, the Manager cannot predict
the effects of possible future legislation, rule changes, or governmental or
private claims. At December 31, 2008
and 2007, there were no known environmental contingencies that required the
Fund to record a liability.

F-11

---



Insurance Coverage
The Fund is
subject to all risks inherent in the exploration for and development of oil and
gas. Insurance coverage as is customary
for entities engaged in similar operations is maintained, but losses may occur
from uninsurable risks or amounts in excess of existing insurance coverage. The
occurrence of an event that is not insured or not fully insured could have an
adverse impact upon earnings and financial position. Moreover, insurance is obtained as a package covering all of the
funds managed by the Manager. Claims
made by other funds can reduce or eliminate insurance for the Fund.

West Delta 95
In 2005, the
Fund acquired a 28.05% working interest in West Delta 95. In August 2005, before reaching its target
depth, the project was evacuated in preparation for Hurricane Katrina. As a result of Hurricane Katrina, the well
sustained damage. On April 15, 2006,
recovery operations began, but were suspended in July 2006 as a result of the
onset of hurricane season. Recovery
operations totaling $12.9 million were completed and drilling resumed in
January 2007. The Fund filed a claim with
its insurance carrier for these recovery amounts and, in 2007, received $11.2
million as settlement of the claim.
During 2007, the Fund recorded a casualty loss of $1.7 million as a
result of changes in estimates to, and the ultimate settlement of, the
insurance claim. In February 2007, the
well was determined to not have commercially productive quantities of either
natural gas or oil and therefore was deemed to be a dry-hole.

West
Cameron 78/95
In 2006, the
Fund acquired a 30% working interest in West Cameron 78/95. The well began drilling on April 21,
2006. Drilling went according to plan
until the drill string became stuck.
The smaller drill pipe was recovered and the well was sidetracked, or
re-drilled. Drilling continued until
the well was determined to be a dry-hole.
In July 2006 the decision was made to plug and abandon the well. During 2006, the Fund recorded a casualty
loss of $0.2 million related to the insurance deductible for this claim. During 2007, the Fund recorded an additional
casualty loss of $1.5 million as a result of changes in estimates to, and the
ultimate settlement of, the insurance claim. The Fund received proceeds of $2.3
million for the settlement of this claim during the fourth quarter of 2007.

Suspension
of MMS Royalty Relief
Under Mineral
Management Services (MMS) rules, the Fund is eligible for annual royalty
relief provided that the average New York Mercantile Exchange
(NYMEX) sales price for shallow water, deep gas (Average NYMEX Price)
does not exceed price thresholds established by the MMS, which were published
during the first quarter of 2009.
Rising prices early in 2008 created uncertainty as to whether or not
South Pelto 9 would be eligible for the royalty relief and accordingly, the
Fund previously disclosed this contingency.
Ultimately, however, the NYMEX sales price did not exceed the price
thresholds established by the MMS and the Fund had no obligation to pay
royalties for those properties which qualify for royalty relief.

9. Subsequent Events

South Timbalier 287
In November
2007, the Fund acquired a 4.0% working interest in the exploratory well South
Timbalier 287, from Apache Corporation, the operator. This project began
drilling in March 2008 and was determined to be an unsuccessful well, or dry
hole, in January 2009. For the year
ended December 31, 2008, dry-hole costs related to this well, including
plug and abandonment expenses, were $3.9 million. Additional dry-hole costs of $0.3 million, including of plug and
abandonment expenses, were incurred during the first quarter 2009.

Bison
Project
In November 2008, the Fund acquired a 3.0% working interest in the
Bison Project, an exploratory well, from LLOG Exploration Offshore, Inc., the
operator. The Bison Project, located in
the Galveston region of the Gulf of Mexico, began drilling in December 2008 and
was determined to be an unsuccessful well, or dry hole, in January 2009. For the year ended December 31, 2008, dry-hole
costs related to this well were $0.2 million.
Additional dry-hole costs of $0.1 million, including plug and
abandonment expenses, were incurred during the first quarter 2009.

F-12

---



Ridgewood
Energy O Fund, LLCSupplementary Financial Information
Information about Oil and Gas Producing Activities - Unaudited

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

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

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

|                                                              |  |                |        |      |   |        |  
|------------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                                              |  | December 31,   |       
|                                                              |  | 2008           |        | 2007 |  
|                                                              |  |                |        |      |  
|                                                              |  | (in thousands) |       
|Advances to operators for
 working interests and expenditures |  | $              | 128    |      | $ | 1,866  |  
|Unproved properties                                           |  |                | 984    |      |   | 5,961  |  
|Proved properties                                             |  |                | 12,525 |      |   | 5,603  |  
|                                                              |  |                |        |      |   |        |  
|Total oil and gas properties                                  |  |                | 13,637 |      |   | 13,430 |  
|Accumulated depletion and
 amortization                       |  |                | (4,238 | )    |   | (701   | )
|                                                              |  |                |        |      |   |        |  
|Oil and gas properties, net                                   |  | $              | 9,399  |      | $ | 12,729 |  
|                                                              |  |                |        |      |   |        |  

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

|                                          |  |                         |        |      |   |        | 
|----------------------------------------- |  | ----------------------- | ------ | ---- | - | ------ | 
|                                          |  | Year ended December 31, |       
|                                          |  | 2008                    |        | 2007 |  
|                                          |  |                         |        |      |  
|                                          |  | (in thousands)          |       
|Exploratory drilling costs
 - capitalized |  | $                       | 5,709  |      | $ | 13,947 | 
|Developmental drilling
 costs-capitalized |  |                         | 133    |      |   |       | 
|Exploratory drilling costs
 - expensed    |  |                         | 13,244 |      |   | 3,808  | 
|Geological costs                          |  |                         | 107    |      |   | 44     | 
|                                          |  |                         |        |      |   |        | 
|                                          |  | $                       | 19,193 |      | $ | 17,799 | 
|                                          |  |                         |        |      |   |        | 

F-13

---



Table III - Reserve Quantity Information

As of December 31, 2008 and
2007, oil and gas reserve data for the producing properties of the Fund was
estimated by an independent petroleum engineer, Ryder Scott Company. As of
December 31, 2008, the Fund had one non-producing property for which reserve
data is based upon internal estimates. These reserve disclosures have been
prepared in compliance with the Securities and Exchange Commission rules. Due
to inherent uncertainties and the limited nature of recovery data, estimates of
reserve information are subject to change as additional information becomes
available.

|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|------------------------------------------- |  | ----------------- | ------- | ----------------- | ------------- | ---------- | - | --------- | ------- | - |  | ---------- | -
|                                            |  | December 31, 2008 |         | December 31, 2007 |              
|                                            |  |                   |         |                   |               |            |  
|                                            |  |                   |         |                   | United States |            |   |          
|                                            |  | Oil (BBLS)        |         | Gas (MCF)         |               | Oil (BBLS) |   | Gas (MCF) |        
|                                            |  |                   |         |                   |               |            |   |           |        
|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|Proved
 developed and undeveloped reserves: |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|Beginning of year                           |  |                   | 32,443  |                   |               | 931,000    |   |           | 139,320 |   |  | 2,786,403  |  
|Discoveries                                 |  |                   | 43,989  |                   |               | 687,543    |   |           |        |   |  |           |  
|Revisions of previous estimates             |  |                   | 27,035  |                   |               | 795,858    |   |           | (99,026 | ) |  | (1,718,072 | )
|Production                                  |  |                   | (32,425 | )                 |               | (690,613   | ) |           | (7,851  | ) |  | (137,331   | )
|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|End of year                                 |  |                   | 71,042  |                   |               | 1,723,788  |   |           | 32,443  |   |  | 931,000    |  
|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|Proved
 developed reserves:                 |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|Beginning of year                           |  |                   | 32,443  |                   |               | 931,000    |   |           | 139,320 |   |  | 2,786,403  |  
|Discoveries                                 |  |                   | 22,537  |                   |               | 352,743    |   |           |        |   |  |           |  
|Revisions of previous estimates             |  |                   | 27,035  |                   |               | 795,858    |   |           | (99,026 | ) |  | (1,718,072 | )
|Production                                  |  |                   | (32,425 | )                 |               | (690,613   | ) |           | (7,851  | ) |  | (137,331   | )
|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  
|End of year                                 |  |                   | 49,590  |                   |               | 1,388,988  |   |           | 32,443  |   |  | 931,000    |  
|                                            |  |                   |         |                   |               |            |   |           |         |   |  |            |  

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

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

|                                                                    |  |                |        |      |   |        |  
|------------------------------------------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                                                    |  | December 31,   |       
|                                                                    |  | 2008           |        | 2007 |  
|                                                                    |  |                |        |      |  
|                                                                    |  | (in thousands) |       
|Future estimated revenues                                           |  | $              | 13,670 |      | $ | 11,096 |  
|Future estimated production
 costs                                  |  |                | (935   | )    |   | (684   | )
|Future estimated
 development costs                                 |  |                | (1,745 | )    |   |       |  
|                                                                    |  |                |        |      |   |        |  
|Future net cash flows                                               |  |                | 10,990 |      |   | 10,412 |  
|10% annual discount for
 estimated timing of cash flows             |  |                | (1,646 | )    |   | (1,350 | )
|                                                                    |  |                |        |      |   |        |  
|Standardized measure of
 discounted future estimated net cash flows |  | $              | 9,344  |      | $ | 9,062  |  
|                                                                    |  |                |        |      |   |        |  

F-14

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

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

|                                                                                   |  |                         |         |      |   |         |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- | -
|                                                                                   |  | Year ended December 31, |        
|                                                                                   |  | 2008                    |         | 2007 |  
|                                                                                   |  |                         |         |      |  
|                                                                                   |  | (in thousands)          |        
|Standardized measure
 beginning of the year                                        |  | $                       | 9,062   |      | $ | 16,248  |  
|Sales of oil and gas
 production, net of production costs                          |  |                         | (10,921 | )    |   | (1,822  | )
|Net changes in prices and
 production costs                                        |  |                         | (2,559  | )    |   | 4,823   |  
|Extensions, discoveries,
 and improved recovery and techniques, less related costs |  |                         | 3,638   |      |   |        |  
|Development costs incurred
 during the period                                      |  |                         |        |      |   | 1,581   |  
|Revisions of previous
 reserve quantities estimate                                 |  |                         | 8,683   |      |   | (15,737 | )
|Accretion of discount                                                              |  |                         | 906     |      |   | 798     |  
|Timing and other                                                                   |  |                         | 535     |      |   | 3,171   |  
|                                                                                   |  |                         |         |      |   |         |  
|Standardized measure end of
 the year                                              |  | $                       | 9,344   |      | $ | 9,062   |  
|                                                                                   |  |                         |         |      |   |         |  

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

F-15

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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 O FUND, LLC |                               
|                     |                              |                                | 
|Date: March 12, 2009 | By:                          | /s/ ROBERT
 E. SWANSON         | 
|                     |                              |                                | 
|                     |                              | Robert E.
 Swanson             | 
|                     |                              | Chief
 Executive Officer       | 
|                     |                              | (Principal
 Executive Officer) | 

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

|                             |  |                                                                                      |  |                
|---------------------------- |  | ------------------------------------------------------------------------------------ |  | ---------------
|Signature                    |  | Capacity                                                                             |  | Date           
|                             |  |                                                                                      |  |                
|/s/ ROBERT
 E. SWANSON       |  | Chief
 Executive Officer (Principal Executive Officer)                               |  | March 12,
 2009
|>                            |  |                                                                                     
|Robert E.
 Swanson           |  |                                                                                      | 
|                             |  |                                                                                      |  |                
|/s/ KATHLEEN
 P. McSHERRY    |  | Executive
 Vice President and Chief Financial Officer (Principal Accounting Officer) |  | March 12,
 2009
|>                            |  |                                                                                     
|Kathleen P.
 McSherry        |  |                                                                                      | 
|                             |  |                                                                                      |  |                
|RIDGEWOOD ENERGY CORPORATION |  |                                                                                      |  |                
|                             |  |                                                                                      |  |                
|/s/ ROBERT
 E. SWANSON       |  | Chief
 Executive Officer of Manager                                                  |  | March 12,
 2009
|>                            |  |                                                                                      |  |                
|Robert E.
 Swanson           |  |                                                                                      |  |                



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