UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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

                      For the Year Ended December 31, 2005
                          Commission File No. 000-51268

                          RIDGEWOOD ENERGY M FUND, LLC
                  1314 King Street, Wilmington, Delaware 19801
                                 (302) 888-7444

  Incorporated in the State of Delaware            Employer ID No. 13-4285167

        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 [_] 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 [_] 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 [_]

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]

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

Large accelerated filer [_]   Accelerated filer [_]    Non-accelerated filer [X]

Indicated by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [_] No [X]

There is no market for the Shares. The aggregate capital contributions made for
the Registrant's voting Shares held by non-affiliates of the Registrant at
February 28, 2006 was $78,886,679 and as of that date there are 535.6818 Shares
outstanding.


<PAGE>


                                Table of Contents

Forward-Looking Statements
--------------------------

PART I
------

Item 1   Business                                                          1
Item 1A  Risks                                                             9
Item 1B  Unresolved Staff Comments                                         14
Item 2   Properties                                                        14
Item 3   Legal Proceedings                                                 16
Item 4   Submission of Matters to a Vote of Security Holders               16

PART II
-------

Item 5   Market for Registrant's Common Equity and Related
            Shareholder Matters                                            16
Item 6   Selected Financial Data                                           16
Item 7   Management's Discussion and Analysis of Financial
         Condition and Results of Operations                               17
Item 7A  Quantitative and Qualitative Disclosures About
            Market Risk                                                    23
Item 8   Financial Statements and Supplementary Data                       24
Item 9   Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosures                           24
Item 9A  Controls and Procedures                                           24
Item 9B  Other Information                                                 24

PART III
--------

Item 10  Directors and Executive Officers of the Registrant                24
Item 11  Executive Compensation                                            27
Item 12  Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters                     27
Item 13  Certain Relationships and Related Transactions                    28
Item 14  Principal Accountant Fees and Services                            28

PART IV
-------

Item 15  Exhibits, Financial Statement Schedules                           29

Signatures                                                                 32


<PAGE>


FORWARD LOOKING STATEMENTS

         This Annual Report on Form 10-K, including all documents incorporated
by reference, includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Private Securities Litigation Reform Act of 1995, and the "safe
harbor" provisions thereof. These forward-looking statements are usually
accompanied by the words "anticipates," "believes," "plan," "seeks," "expects,"
"intends," "estimates," "projects," "will likely result," "will continue,"
"future" and similar terms and expressions. All statements other than statements
of historical facts, including among others, statements regarding our future
financial position, business strategy, budgets, reserve information, and
projected plans and objectives of management for future operations, are
forward-looking statements. Forward-looking statements are not guarantees of
performance. Although, we believe the expectations reflected in forward-looking
statements are based on reasonable assumptions, no assurance can be given that
these expectations will be achieved. The forward-looking statements contained
herein reflect our current views with respect to future events and financial
performance. Important factors that could cause actual results to differ
materially from the expectations reflected include, among others: the timing and
extent of changes in commodity prices for oil and natural gas; the extent of our
success in discovering, developing and acquiring oil and gas properties; the
accuracy of reserve estimates, which by their nature involve the exercise of
professional judgment and may, therefore, be imprecise; the availability and
cost of drilling rigs; and those other risks and uncertainties discussed in Item
1A under "Risk Factors" and elsewhere in this Annual Report on Form 10-K that
could cause actual results to differ materially from historical results or those
anticipated. In light of these risks and uncertainties, there can be no
assurance that the forward-looking information contained in this Annual Report
on Form 10-K will in fact occur or prove to be accurate. Readers should not
place undue reliance on the forward-looking statements contained herein, which
speak only as of the date of filing. We undertake no obligation to publicly
revise these forward-looking statements to reflect events or circumstances that
may arise after the date of filing. All subsequent written or oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by this section.

PART I

Item 1.  Business
-----------------

General

         We were formed on August 2, 2004 as a Delaware limited liability
company and we operate pursuant to a limited liability company agreement ("LLC
Agreement"), dated as of September 7, 2004, that we executed with Ridgewood
Energy Corporation, our manager ("Manager") and our shareholders. We are engaged
in the acquisition, development and production of oil and natural gas properties
in the Gulf of Mexico. We have focused primarily on acquiring natural gas and
oil projects in the shallow waters of the Gulf of Mexico in locations with
access to existing gathering and processing infrastructure or where such
infrastructure can be constructed economically and efficiently.

         In many instances, we compete for projects with large independent oil
and natural gas producers who generally have significantly greater access to
capital resources, have larger staffs, and more experience in natural gas and
oil exploration and production than we have. As a result, these larger companies
are in a position that they could outbid us for a project. However, because
these companies are so large and have such significant resources, they tend to


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focus more on projects that are larger, have greater reserve potential, but cost
significantly more to explore and develop. These larger projects increasingly
tend to be projects in the deepwater areas of the Gulf of Mexico, the North Sea
off the coast of Great Britain or in other areas of the world. 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
we compete. 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. We,
therefore, have opportunities to acquire interests in these smaller, yet
economically attractive projects.

         We offered our securities to investors in a private placement beginning
on September 7, 2004 and sold whole and fractional shares of LLC membership
interests at $150,000 per share. There is no public market for these shares and
one is not likely to develop. In addition, the shares are subject to
restrictions on transfer and resale and cannot be transferred or resold except
in accordance with the LLC Agreement and applicable federal and state securities
laws. The offering was terminated on November 30, 2004. We raised approximately
$78.9 million and, after payment of $12.2 million in offering fees, commissions
and investment fees, we retained approximately $66.7 million for investments and
operating expenses. As of December 31, 2005, approximately $18.6 million has
been spent acquiring, drilling and completing our various oil and gas
properties, with approximately $48.1 million remaining for further investment
and fund expenses of which approximately $39.3 million is committed to specific
projects. See, Item 7, Management's Discussion and Analysis.

         We operate in only one segment: oil and natural gas exploration and
production. Through December 31, 2005, we have not produced oil or natural gas
and as a result, are considered an Exploratory Stage company. The financial
results from this segment are contained in the financial statements attached to
this Annual report on Form 10-K and in Item 7, Management's Discussion and
Analysis.

Manager

         We do not have a Board of Directors. Ridgewood Energy Corporation is
our Manager and pursuant to the LLC Agreement has direct and exclusive control
over our management and operations. As part of our project investment activities
and on our behalf, the Manager locates potential projects, conducts appropriate
due diligence and negotiates and completes the transactions in which the
investments are made. This includes, but is not limited to, review of existing
title documents, reserve information and other technical specifications related
to a project as well as the review and preparation of agreements related to the
investment. In addition, once the investment is made and the project begun, the
Manager is responsible for overseeing and managing the activities of the project
and the operator and is empowered to act on our behalf with the other working
interest owners.

         The Manager also performs, or arranges for the performance of, certain
management and administrative services we require including the administration
of shareholder accounts, shareholder relations, and the preparation, review and
dissemination of tax and other financial information. In addition, the Manager
provides us with office space, equipment and facilities, and other services
necessary for our operations. Finally, the Manager manages and conducts our
relationships with custodians, depositories, accountants, attorneys,
broker/dealers, corporate fiduciaries, insurers, banks and others as required.
See also, Item 1A, Risk Factors.


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<PAGE>


         As compensation for its management services, the Manager is entitled to
(i) an annual "Management Fee" equal to 2.5% of the total Capital Contributions
made by our shareholders and (ii) a 15% interest in the cash distributions made
to our shareholders. As set forth in Item 7, Management's Discussion and
Analysis, the Manager received from us for the year 2005 a total of $1,969,426
for its management services. There were no distributions.

Business Strategy

         Our primary investment objective is to generate cash flow from the
acquisition, exploration, production and sale of crude oil and natural gas from
oil and gas properties. We have invested and participate in exploration and
production projects located in the waters of the Gulf of Mexico offshore
Louisiana and Texas on the Outer Continental Shelf ("OCS"). These activities are
governed by the Outer Continental Shelf Lands Act (OSCLA) enacted in 1953 and
administered by the Minerals Management Service ("MMS"). We generally look to
invest in projects that have been proposed by larger independent oil and gas
companies seeking to minimize their risks by selling a portion of their interest
in a project. These investments may require us to pay a larger interest of the
costs than our ownership interest would otherwise require. This is called a
"promote" and is relatively typical in the oil and natural gas exploration
industry. In addition, notwithstanding the sale of an interest to us, the seller
may retain a right for some period of time to payments from sale of the
production from a well or project. This is called an "overriding interest" which
is also relatively common in this industry. Notwithstanding any such promote or
overriding interest, we have tried to invest in projects that we believe contain
sufficient commercial quantities of natural gas or oil and which are near (i)
existing natural gas or oil gathering and processing infrastructure and (ii)
developed markets where we can sell our natural gas or oil.

         We try to focus on projects that have significant reserve potential and
which are projected to have the shortest time period from our investment to
first production. However, we do not operate these projects, and the manner in
which and schedule pursuant to which our projects are developed and completed is
determined exclusively by the operator and is beyond our ability to
significantly influence. Moreover, when performing due diligence with respect to
a project, we must rely on the independent reservoir engineers who are hired and
paid, in most cases by the operator, although we do engage certain consultants
for ourselves to examine and review such reserve estimates and seismic
information on our behalf.

Acquisition Criteria

         The Manager has control over the selection of projects, the percentage
investment and ownership interest acquired. In evaluating various potential
investments, the Manager conducts due diligence of each such project against a
list of factors that we believe will result in the selection of those projects
that have the highest probability of success. These factors include, but are not
limited to, the following:

     o    The oil or gas reserve potential of the project.

     o    Economic factors, such as potential revenues from the project, the
          rate of return, and estimated time to first production.


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<PAGE>

     o    The technical quality of the project, including its geology, seismic
          profile, locational trends, and whether the project has potential for
          multiple prospects.

     o    Whether the project will have operators and/or partners with
          significant resources, experience, and prior success in oil and gas
          exploration.

     o    Whether and the extent to which the operator participates as a working
          interest owner in the project.

     o    The existence and availability of drilling rigs, platforms and other
          infrastructure, at or nearby the project.

     o    Proposed drilling schedule.

     o    The terms of the proposed transaction, including contractual
          restrictions and obligations and lease term.

     o    Overall cost of the project

     Although these factors are those generally used by our Manager, we can not
say whether the Manager reviews every potential investment against all of these
factors or, if so, whether and for what reason one factor was given greater
weight in the analysis than another.

Operators

         The projects in which we have invested are operated and controlled by
unaffiliated third-party entities acting as operators. The operator is
responsible for drilling, administration and production activities for leases
jointly owned by working interest owners and acts for the account of all working
interest owners under the terms of the applicable offshore operating agreements.
In certain circumstances, operators will enter into agreements with independent
third-party subcontractors and suppliers to provide the various services
required for operating leases.

         Because we do not operate any of the projects in which we have acquired
an interest, our shareholders must not only bear the risk that the Manager will
be able to select suitable projects, but also that, once acquired, such projects
will be managed prudently, efficiently and fairly by their operators.

         As of December 31, 2005, our exploration and development activities in
West Cameron 77 #2 are operated by BHP Billiton.

         We also invested in one well each with Apache Corporation, and Samson
Offshore Group, both of which were considered dry-holes.

         We also have two projects currently drilling, East Breaks 157, operated
by ENI Petroleum and Eugene Island 357, operated by Newfield Exploration. We
have one other project, Eugene Island 337 to be drilled and operated by Devon
Energy in the spring of 2006. See Item 2, Properties.

Seasonality

         Our business operations are not subject to seasonal fluctuations that
would materially affect the amount of or manner in which our natural gas or oil
is sold and marketed. Once a well is drilled and reserves of oil and gas are
determined to exist, the operator of the well extracts such reserves throughout
the year. Oil and gas, once extracted, can be sold at any time during the year.


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<PAGE>


         However, our business operations and sales are subject to seasonal
"risks" that may affect, if anything, the price for such oil and gas or our
ability to bring such gas or oil to the market. For example, 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 or price of repair or replacement
equipment. As a result, these factors may affect the supply and, consequently,
the price of oil and gas resulting in an increase in price if supplies are
reduced. However, even if commodity prices increase because of weather related
shortages, we 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 our projects, the gathering infrastructure or in the transportation network.

Regulation

         Oil and 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,
our operators to obtain permits to drill wells and to meet bonding, insurance
and environmental requirements in order to drill, own or operate wells. In
addition, the location of wells, the method of drilling and casing wells, the
restoration of properties upon which wells are drilled and the plugging and
abandoning of wells are also subject to regulations.

         Outer Continental Shelf Lands Act

         Our projects are located in the offshore waters of the Gulf of Mexico
on the Outer Continental Shelf, or the OCS. Our operations and activities,
therefore, are governed by, among other things, the Outer Continental Shelf
Lands Act, or the OCSLA, which was enacted in 1953.

         Under OCSLA, as amended, 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
Minerals Management Services, or 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 our
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.


                                       5
<PAGE>


         Sales and transportation of Natural Gas/Oil

         We expect to sell our natural gas and oil to the market and to receive
market prices from such sales. These sales are not currently subject to
regulation by any federal or state agency. However, in order for us to make such
sales we are dependent upon pipelines 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 to us, although regulated, are beyond our control.
Nevertheless, such rates would apply uniformly to all transporters on that
pipeline and, as a result, we believe that the impact of any changes in such
rates, terms or conditions would not impact our operations differently in any
material way than the impact upon other natural gas or oil producers and
marketers.

Environmental Regulation

         Our 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 we share the
liability along with our other working interest owners for any environmental
damage, most of the activities to which these environmental laws and regulations
apply are conducted by our operator on our behalf. Nevertheless, environmental
laws and regulations to which our operations are subject may require us, or our
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 wells and, finally, impose in some instances severe
penalties, fines and liabilities for the environmental damage that is caused by
our operations.

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

         The Oil Pollution Act. The Oil Pollution Act ("OPA") amends Section 311
of the Federal Water Pollution Act (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 which 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 the 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


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earlier, we have not been required to make any such showing to the MMS as the
operator is responsible for such compliance. However, notwithstanding the
operator's responsibility for compliance, in the event of an oil spill, we,
along with the operator and other working interest owners, could be liable under
the OPA for the resulting environmental damage.

         Federal Water Pollution Act/Clean Water Act. Generally, the Clean Water
Act imposes liability for the unauthorized discharge of 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. Again, our operators are responsible
for compliance with the Clean Water Act although we may be liable for any
failure of the operator to do so.

         Federal Clean Air Act. The Federal 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, our operations may be required to incur additional
costs to comply with the Clean Air Act.

          Other Environmental Laws. In addition to the above, our operations may
be subject to the Resource Conservation and Recovery Act, which regulates the
generation, transportation, treatment, storage, disposal and cleanup of certain
"hazardous wastes", as well as the Comprehensive Environmental Response,
Compensation and Liability Act which imposes join 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 our operations. We believe that our operators are in
compliance with each of these environmental laws and the regulations promulgated
thereunder.

Competition and Markets

         Strong competition exists for the acquisition and participation in
offshore drilling projects. Such activity has only increased recently given the
recent surge in the commodity prices for oil and natural gas. Many companies
with whom we compete for the acquisition of projects have more financial and
other resources than may be available to us. Some of these companies, but
certainly not all, include Chevron, BP, Apache Corporation, and Houston
Exploration, all of whom are substantially larger than we are. As a result, our
competitive position against these companies is relatively weak. However, as
indicated earlier, most of our capital has been either spent or committed to
projects such that we will likely not be competing with these large companies in
the future for projects. However, if one or more of our existing projects were
to be deemed a dry-hole, the funds we are holding for completion would be free
for further investing. In such a case, we would again be competing with these
larger companies for projects.

         The availability of a market for any oil and gas produced from our
operations will depend on a number of factors beyond our control, most of which
cannot be accurately predicted. These factors include the extent of domestic
production and importation of oil and natural gas, the proximity of our wells to
and the capacity of natural gas pipelines, the availability of other competitive
fuels, fluctuations in seasonal supply and demand, government regulation of
supply and demand caused by its pricing and allocation restrictions, and general
national and worldwide economic conditions. Additionally, increased drilling
activity could cause a shortage of drilling rigs and other services necessary
for the drilling, production and marketing of oil and natural gas. Any such
shortage of equipment and services could adversely affect our activities.


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<PAGE>


Customers

         Through December 31, 2005, we have not sold any of our production from
West Cameron 77 #2. We are still in the process of building a production
facility and anticipate sales in the second quarter of 2006. As a result, we do
not contract to sell any of our oil or gas to third parties; and therefore,
during this period, we had no customers or any one customer upon which we
depended for more than 10% of our 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
which we can not control. Therefore, it is impossible to predict the future
price of crude oil and natural gas with any certainty. Low commodity prices
could adversely affect our future profitability. Also, we have not engaged in
any price risk management programs or hedges to date and do not anticipate
engaging in those types of transactions in the future.

Insurance

         Through our Manager we obtain hazard, property, general liability and
other insurance in commercially reasonable amounts to cover our projects, as
well as general liability and similar coverage for our business operations.
However, there is no assurance that such insurance will be adequate to protect
us from material losses related to our projects or operations. In addition, the
Manager's practice is to obtain insurance as a package that is intended to cover
most, if not all, of the natural gas and oil projects under its management,
including many projects not owned by us. As a result, given insurance limits, if
significant damages occur in a given year to projects owned by other energy
programs managed by our Manager, the insurance available for potential damages
to our projects in that year could be significantly reduced. Nevertheless, and
despite this risk, we believe that the Manager has obtained adequate insurance
in accordance with customary industry practices although the possibility does
exist that depending on the occurrence, there may not be enough insurance to
entirely cover any losses we sustain.

Salvage Fund

         As to projects in which we own a working interest, we deposit in a
separate interest-bearing account, or a salvage fund, which is in the nature of
a sinking fund, enough money to provide for our proportionate share of the
anticipated gross cost net of anticipated salvage value of dismantling
production platforms and facilities, plugging and abandoning the wells, and
removing the platforms, facilities and wells in respect of each of such projects
after their useful life, in accordance with applicable federal and state laws
and regulations. There is no assurance that the salvage fund will have
sufficient assets to meet these requirements and any unfunded expenses, and we
may be liable for such expenses. We have deposited $1 million from capital
contributions into a salvage fund which we estimate to be sufficient to meet our
potential requirements. If management later determines the deposit and earned
interest is not enough to cover our proportionate share of expense, we will
deposit payments from operating income to make up any differences. Any portion
of a salvage fund that remains after we pay our share of the actual salvage cost
will be distributed to the shareholders. There are no legal restrictions on the
withdrawal of the salvage fund.


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<PAGE>


Employees

         We have no employees. The Manager operates and manages all of our
activities.

Item 1A. Risks
--------------

Risks Related to Oil and Gas Activities

         All of our oil and natural gas activities are subject to risks normally
incident to the exploration for and development and production of natural gas
and crude oil, including:

         Our investment activities have resulted in unsuccessful projects and
our other projects may not be successful. Notwithstanding the best efforts of
the Manager in selecting projects, there is always significant risk that despite
contrary indications, a project will not have commercially productive oil or
natural gas reservoirs. The successful acquisition of producing properties
requires assessment of reserves, seismic and other engineering information,
future commodity prices, operating costs and potential environmental
liabilities. Our assessment of these factors may not be successful. Indeed,
during 2004 and 2005, we invested in two projects that resulted in "dry-holes",
meaning that there were either no or commercially insufficient quantities of oil
and natural gas. Those dry-holes, as well as any future unsuccessful projects,
will have an adverse effect on our future operations, financial condition and
cash distribution to shareholders. We have two pending wells, one, East Breaks
157 is currently being drilled by ENI and the other, Eugene Island 337, will be
drilled by Devon Energy beginning sometime in the spring of 2006.

         Our exploration and production activities are subject to risks that we
cannot control and we may have insufficient insurance to cover these risks. To
the extent we are not covered by insurance, we could incur losses and
liabilities which could reduce revenues, increase costs or eliminate dollars
available for future exploration and development programs. Costs of drilling,
completing and operating wells are often uncertain and drilling operations may
be curtailed, delayed or canceled as a result of a variety of factors including:

     o    Fires, explosions, blowouts and cratering
     o    Equipment failures, casing collapse, pipe and cement failures
     o    Marine risks such as capsizing or collisions
     o    Adverse weather conditions, including hurricanes
     o    Shortages or delays in the delivery of equipment
     o    Acts of terrorism
     o    Environmental hazards
     o    Pipeline ruptures and discharge of toxic gases

         Many of the above-mentioned risks could result in damage to life and/or
property or cause sustained interruption of production. In accordance with
customary industry practice, we maintain insurance against some, but not all, of
these risks. Insurance to cover certain of these risks may be prohibitively
expensive or unavailable, particularly with respect to acts of terrorism.
Additionally, insurance coverage may not be sufficient to cover certain
catastrophic events.

         In addition, it is significantly less costly for our insurance to be
acquired and maintained by the Manager as a package that covers all of the
natural gas and oil projects under its management. The majority of these
projects are owned by other entities under its management. As a result, given
insurance limits, if significant damage occurs to those other projects in any
given year, the amount of insurance available to cover any damage to our
projects could be significantly reduced.


                                       9
<PAGE>


         Our reserve estimates are inherently uncertain and may be inaccurate
and if so, may adversely affect our revenue and profitability. There are many
uncertainties inherent in estimating quantities of proved reserves and in
projecting future rates of production and timing of development expenditures,
including many factors beyond our control. Estimates of reserves by necessity
are projections based on engineering and geological data, including but not
limited to volumetrics, reservoir size, reservoir characteristics, the
projection of future rates of production and the timing of future expenditures.
The accuracy of any reserve estimate is a function of the amount and quality of
available data and of engineering and geological interpretation and judgment. As
a result, estimates of different engineers normally vary and may not be
accurate. Development of our reserves may not occur as scheduled and the actual
results may not be as estimated.

         In addition, results of drilling, testing and production subsequent to
the date of an estimate may justify revision of such reserve and cost estimate
upward or downward. Accordingly, reserve estimates are often different from the
quantities ultimately recovered. The Manager reviews the reserve estimates
provided by the operators of properties in which we participate and may retain
independent reserve engineers to review such reserve estimates and/or conduct an
independent review, as appropriate. Future performance that deviates
significantly from reserve estimates could have a material effect (positive or
negative) on our operations, business and prospects, as well as on the amounts
of such reserves.

         Moreover, our estimated or proved oil and natural gas reserves and the
estimated future net revenues from such reserves are based upon various
assumptions, including those required by the SEC relating to oil and natural gas
prices, drilling and operating expenses. As a result, we are required to make
assumptions and judgments, all of which can be wrong or inaccurate. Thus, our
estimates are inherently imprecise and the quality and reliability of this
information can vary, perhaps significantly, from actual results.

         Our revenue, profitability and cash flow are highly dependent on the
prices of oil and gas. 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.
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 our
future profitability and, in such an event, we may be required by accounting
rules to write down the carrying value of our Projects.

         We have not engaged in any price risk management programs or hedges to
date and we do not anticipate engaging in those types of transactions in the
future.

         The availability and cost of needed equipment may adversely affect our
profitability and operations. As a result of the increase in natural gas and oil
prices, drilling activity in the Gulf of Mexico has increased significantly.
Drilling rigs and other equipment could become harder to obtain and more costly
to acquire, especially if weather occurrences, such as hurricanes, occur with
frequency in the Gulf of Mexico. These circumstances could have a negative
impact on our operations.

         We have invested most of our capital. As a result, we have limited
ability to invest in additional projects. The capital we raised in our private
placement is all the capital we will be able to obtain for investments in
Projects. Given our structure, obtaining traditional financing from public
markets is unlikely and it is not practical to assume we can raise additional
funds through a supplemental offering or through debt financing. As a result, we
have little, if any, ability to grow our business and each of the unsuccessful
projects we have experienced to date not only reduces our ability to generate
revenue, but also exhausts our limited supply of capital.


                                       10
<PAGE>


         We may incur costs to comply with the many environmental and other
governmental regulations that apply to our operations. The oil and gas industry,
in general, and offshore activities, in particular, are subject to numerous
governmental laws and regulations which may affect our ongoing and future
operational decisions and financial results. United States legislation affecting
the oil and gas industry is under constant review for amendment and expansion.
Also, numerous departments and agencies, both federal and state, are authorized
by statute to issue and have issued rules and regulations which, among other
things, require permits for the drilling of wells, impose construction,
abandonment and remediation requirements, prevent the waste of natural gas and
liquid hydrocarbons through restrictions on flaring, require drilling bonds and
regulate environmental and safety matters. Additionally, governmental
regulations may also impact the demand for oil and gas, which could adversely
affect the price at which oil and gas is sold. The regulatory burden on the oil
and gas industry increases its cost of doing business and, subsequently, affects
its profitability. Finally, as additional legislation or amendments may be
enacted in the future, we are unable to predict the ultimate cost of compliance.

         We rely on third parties to operate, manage and maintain our projects
over which we have limited control. Neither we nor our Manager currently own or
have any plans to acquire drilling or production equipment nor do we maintain a
staff of technical employees required for on-site operations. Therefore, we rely
on unrelated third party operators to oversee and/or perform all drilling,
completion and ongoing maintenance and production activities for the projects in
which we participate. As such, we have little or no control over the day-to-day
operations of these projects. However, we have acquired and will continue to
seek projects in which the operators have significant resources, are experienced
in offshore operations and have a long term presence in the Gulf of Mexico.

         We own projects jointly with other companies over whom we have no
control and who may influence the manner in which the project is operated. We
participate in projects as a working interest owner along with other unrelated
third party entities, including the operator. While our Manager may monitor and
participate in decisions affecting exploration and development of the leases or
wells in which we participate, other decisions with respect to lease exploration
and development activities may be controlled by the other participants and could
be unfavorable to us. Finally, we could be held liable for the joint activity
obligations or tortuous actions of the operator or other working interest
owners. If our co-participants fail to pay their portion of the lease
acquisition, drilling and completion or ongoing maintenance costs for any well,
the project may lack sufficient funds to perform such work.

         We face competition. As a small natural gas and oil producer, we face
competition in all aspects or our business. Many of our competitors are large,
well-established companies that have significantly larger staffs and have
greater capital resources than we do. These companies may be able to pay more
for a project or sustain losses for a longer period of time than we can.

         We maintain a salvage fund. As indicated above, we have created a
salvage fund to cover certain anticipated salvage costs associated with our
projects. There is no assurance that the salvage fund will have sufficient
assets to meet these requirements, and we may be liable for our percentage share
of unfunded expenses.


                                       11
<PAGE>


Risks related to the nature of our shares.
------------------------------------------

         Our shares have severe restrictions on transferability and liquidity.
Our shares are illiquid investments. There is currently no market for these
shares. Because there will be a limited number of persons who purchase shares
and because there are significant restrictions on the transferability of such
shares under the LLC Agreement and under applicable federal and state securities
laws, it is expected that no public market will develop. Moreover, neither we
nor our Manager will provide any market for the shares. Shareholders are
generally prohibited from selling or transferring their shares except in the
circumstances permitted under the LLC Agreement, and all such sales or transfers
require our consent, which we may withhold in our sole discretion. Accordingly,
shareholders have no assurance that an investment can be transferred and must be
prepared to bear the economic risk of the investment indefinitely.

         Our shareholders can not participate in our management or operations.
Shareholders have no right, power or authority to participate in our management
or decision making or in the management of our projects. The Manager has the
exclusive right to manage, control and operate our affairs and business and to
make all decisions relating to our operation.

         Our assets will be illiquid. Our interest in projects will be illiquid.
We do not anticipate selling our interests in the projects, or any part thereof.
Even if we elected to sell, it is likely that there will be little or no market
for these assets. However, if we were to attempt to sell any such interest, a
successful sale would depend upon, among other things, the operating history and
prospects for the well or interest being sold, proven oil and gas reserves, the
number of potential purchasers and the economics of any bids made by them and
the current economics of the oil and gas market. In addition, any such sale may
result in adverse tax consequences to the shareholders. The Manager has full
discretion to determine whether any project, or any partial interest, should be
sold. Shareholders have no ability to override the decision of the Manager.
Consequently, shareholders will depend on the Manager for the decision to sell
all or a portion of a project, or retain it, for the benefit of the
shareholders.

         We indemnify our officers and the Manager and its employees for certain
actions taken on our behalf. The LLC Agreement provides that our officers and
agents, the Manager, the affiliates of the Manager and their respective
directors, officers and agents when acting on behalf of the Manager or its
affiliates on our behalf, will be indemnified and held harmless by the
shareholders from any and all claims rising out of our management, except for
claims arising out of the bad faith, gross negligence or willful misconduct or a
breach of the underlying LLC operating agreement. Therefore, we may have
difficulty sustaining an action against the Manager, or its affiliates and their
officers based on breach of fiduciary responsibility or other obligations to the
shareholders.

         The Manager will receive a management fee regardless of our
profitability. The Manager is entitled to receive an annual management fee from
us regardless of whether our activities are profitable. The annual fee is equal
to 2.5% of total capital contributed by shareholders. Inherent in the fee and
compensation arrangements are the possibility of conflicts between our interests
and the best interests of the Manager. The Manager may have incentive to act in
its best interests rather than in our best interest.

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

         Our Manager will receive cash distributions in addition to its
management fee. The Manager as compensation for its management services will
receive, in addition to its annual management fee, 15% of our cash distributions


                                       12
<PAGE>


to shareholders although it has not contributed any cash to us. Accordingly, our
shareholders contribute all of the cash utilized for our investments and
activities. If we are unsuccessful, the shareholders lose 100% of their
investment.

         Shareholders have limited access to information. Delaware law permits
Delaware limited liability companies to restrict access to certain information
provided that such restricted access is set forth in the LLC Agreement. Our LLC
Agreement contains provisions that limit shareholder access to certain sensitive
or confidential information such as trade secrets, agreements or confidential or
proprietary information. Moreover, shareholder access to information regarding
other shareholders is likewise limited and we may refuse to give shareholder
information, such as name and address, of other shareholders, which could make
it difficult for a shareholder to contact other shareholders. Nevertheless,
shareholders do have access to our tax, other financial information or any other
reasonable information regarding our operations.

         Cash distributions are not guaranteed and may be less than anticipated
or estimated. Distributions depend primarily on our available cash from oil and
gas operations. At times, distributions may be delayed to repay the principal
and interest on our borrowings, if any, or to fund our costs, although we do not
anticipate such borrowings. Our taxable income will be taxable to the
shareholders in the year earned, even if cash is not distributed.

          Our Manager has conflicts of interest in its management of our
operations. Our shareholders will not be involved in the management of our
operations. Accordingly, they must rely on the Manager's judgment in such
matters. Inherent with the exercise of its judgment, the Manager will be faced
with conflicts of interest. While neither we nor the Manager have specific
procedures in place in the event of any such conflicting responsibilities, the
Manager recognizes that it has fiduciary duties to us in connection with its
position and responsibilities as Manager and the Manager intends to abide by
such fiduciary responsibilities in performing its duties. Therefore, the Manager
and its affiliates will attempt, in good faith, to resolve all conflicts of
interest in a fair and equitable manner with respect to all persons affected by
those conflicts of interest. The Manager is not liable to us for how conflicts
of interest are resolved unless it has acted in bad faith, or engaged in gross
negligence or willful misconduct.

Tax risks associated with an investment in our Shares.
------------------------------------------------------

         Although we have received an opinion from our counsel that we would be
classified as a partnership and our shareholders would be treated as limited
partners for federal income tax purposes, we will not obtain a ruling from the
Internal Revenue Service (the "IRS") as to any aspect of our tax status. The tax
consequences of investing in our shares could be altered at any time by
legislative, judicial, or administrative action.

         The IRS may audit our tax returns. Any audit issues will be resolved by
our Manager. If adjustments are made by the IRS, corresponding adjustments will
be required to be made to the federal income tax returns of our shareholders,
which may require payment of additional taxes, interest, and penalties. An audit
of our tax return may result in the examination and audit of a shareholder's
return that otherwise might not have occurred, and such audit may result in
adjustments to items in the shareholder's return that are unrelated to our
operations. Each shareholder bears the expenses associated with an audit of that
shareholder's return.

         In the event that an audit of us by the IRS results in adjustments to
the tax liability of a shareholder, such shareholder will be subject to interest
on the under payment and may be subject to substantial penalties. In addition, a
number of substantial penalties could potentially be asserted by the IRS on any
such deficiencies.


                                       13
<PAGE>


         There can be no assurance that any deductions, credits or other tax
consequences will be available. In addition, no assurance can be given that
legislative or administrative changes or court decisions may not be forthcoming
which would significantly change our tax risks or the tax risks to our
shareholders. In some instances, these changes could have substantial effect on
our taxes and those of our shareholders. Any future legislative changes may or
may not be retroactive with respect to transactions prior to the effective date
of such changes. Bills have been introduced in Congress in the past and may be
introduced in the future which, if enacted, would adversely affect us.

Item 1B.  Unresolved Staff Comments
-----------------------------------

         None.

Item 2.  Properties
-------------------

Oil and Gas exploration and Production Properties and Reserves.
---------------------------------------------------------------

         Projects

         As of December 31, 2005, we owned working interests in six offshore
blocks as noted below. Since inception (August 2, 2004), we have participated in
three projects, drilling three wells, of which one has found commercial
quantities of oil and gas reserves but has not yet come on production. We have
two wells currently drilling and one to start drilling during the spring of
2006.

West Cameron 77 #2 (Mustang)

          The West Cameron 77 #2 Project is located approximately 11 miles off
the coast of Louisiana and is operated by BHP Billiton. We participated in an
exploratory well in early 2005 with a 14.54% working interest. The well was
completed and tested and is currently shut in awaiting the construction of a
production platform and pipeline. Initial flow tests produced 19.2 MMCFE per
day. It is anticipated that production will begin in the second quarter of 2006.
In March 2005, while drilling the West Cameron 77 #2 well, the operator
encountered mechanical problems but was able to shut-in the well and
subsequently complete sidetrack operations such that the well was preserved. In
accordance with our control of well insurance, we filed a claim for the recovery
and costs related to the incident. Our share of the cost of drilling totaled
$1,383,349 of which $1,235,351 was recovered through insurance proceeds
resulting in a net casualty loss of $147,998. Total costs through December 31,
2005 were approximately $5.9 million.

Main Pass 155

          The Main Pass 155 Project consisted of ten (10) lease blocks, Main
Pass 154-157, Viosca 338-339 and Chandeleur 43, all of which are located
approximately 46 miles offshore Alabama. In 2005, we participated in an
exploratory well paying 40% of the drilling costs to earn a 30% working interest
in these blocks from Samson Offshore Group, the operator. The well was drilled
in June 2005, and targeted the Lower Cretaceous James Lime at approximately
15,505 feet. The well was drilled and logged. A thick section of porous but wet
James Lime was encountered between 15,100' and 15,500'. Interpretation of the 3D
data post drilling indicated that the up-dip porosity punchout we were looking
for was not sufficient to seal the trap and any hydrocarbons that migrated
through the section leaked out. On July 29, 2005 we plugged and abandoned the
well which had a dry-hole cost of approximately $3.8 million.


                                       14
<PAGE>


         An affiliate, the Ridgewood Energy L Fund, LLC, also participated in
the well to earn a 7.5% working interest in the Main Pass 155 Project.

Vermilion Blocks 7/8

         Vermilion Blocks 7/8 was operated by Apache Corporation and is located
in federal waters approximately 11 miles offshore Louisiana.

         In 2004, we participated with a 26% working interest in the drilling of
an exploratory well. In early 2005, the well was determined to be
non-commercial. In April 2005, the blocks were released to Apache. Our total
expenditures for Vermillion Blocks 7/8 were approximately $4.1 million.

East Breaks 157

         In 2005, we agreed to participate in a 12,000 foot exploratory well
paying 27% of the drilling costs for the first well to earn an 18% working
interest in East Breaks 157. The lease block is operated by ENI Petroleum and
started drilling in January 2006. This well is located in 940 feet of water and
is off the coast of Texas. Total drilling cost is approximately $3.4 million. If
successful, we have budgeted for a total of four wells and the total budget for
the lease block to date is $20.1 million.

         An affiliate, Ridgewood Energy L Fund, LLC is also participating in
this lease block to earn a 7% working interest in East Breaks 157.

Eugene Island 337

         Eugene Island 337 is a two well prospect located offshore Louisiana. In
September 2005 we agreed to participate in the project which was supposed to
start drilling by December 31, 2005. There was damage on the Eugene Island 330
platform during Hurricane Katrina. This platform was to process our production
is successful. Because of this platform delay, Devon Energy as the operator
postponed the drilling of the well for six to eight months. The initial test
well was to be drilled to 12,860 feet and we agreed to pay 26.4% of the drilling
costs for the first well to earn a 20% working interest in the lease block. To
date we have paid a prospect generation fee of $148,500 toward the overall
budget of $7.9 million for Eugene Island 337.

         An affiliate, Ridgewood Energy L Fund, LLC, is also participating in
this lease block to earn a 13.33% working interest in this project.

Eugene Island 357

         In 2005, we agreed to participate in a 16,500 foot well paying 22.66%
of the drilling costs for the first well to earn a 17% working interest in
Eugene Island 357. The lease block is operated by Newfield Exploration and
started drilling in January 2006. This well is located approximately 120 miles
off the coast of Louisiana. Total drilling costs for the first well are
approximately $1.2 million. If successful, we have budgeted for up to six wells.
The total budget for this project is $8.6 million.

         An affiliate, Ridgewood Energy O Fund, LLC is also participating in
this lease block to earn an 8% working interest in these wells.

         Drilling Activities. During the year ended December 31, 2005, we
expended approximately $10.7 million for exploratory and developmental
activities inclusive of the casualty loss related to West Cameron 77 #2
(Mustang) project. We had no such expenditures for 2004. We have budgeted $39.3
million for the three remaining projects.


                                       15
<PAGE>


         Production Volumes and Prices. We have no production for the periods
ending December 31, 2005 or 2004. We have one well (West Cameron 77 #2) which is
shut in pending the completion of a production platform and pipeline.

Item 3. Legal Proceedings
-------------------------

         We are not a party to any material existing or pending legal action
that would have a material effect on our business, financial condition, results
of operations or liquidity.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         There were no matters submitted to a vote of security holders in 2005.

PART II

Item 5. Market for Registrant's Common Equity Related Shareholder Matters and
-----------------------------------------------------------------------------
Issuer Purchasers of Equity Securities
--------------------------------------

         There is currently no established trading market for our shares. The
aggregate capital contributions made were $78,886,679 and as of the date of this
filing, there are 535.6818 shares outstanding. We are not currently offering or
proposing to offer any shares for sale to the public. There are no outstanding
options or warrants to purchase, or securities convertible into shares and we do
not have any equity-based compensation plans. The shares are severely restricted
as to resale.

         There have been no cash distributions made to date.

Item 6.  Selected Financial Data
--------------------------------

         The following table summarizes certain of our selected financial data
for the year ending December 31, 2005, the period from August 2, 2004
(Inception) through December 31, 2004, and the period from August 2, 2004
(Inception) through December 31, 2005. The information summarized below should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and our audited Financial Statements and
related Notes.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                         August 2, 2004          August 2, 2004
                                                   Year ended          (Inception) through    (Inception) through
                                                December 31, 2005       December 31, 2004       December 31, 2005
-----------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                    <C>                       <C>
Statement of Operations Data:
-----------------------------------------------------------------------------------------------------------------
Revenues (1)                                        $         -            $         -               $         -
-----------------------------------------------------------------------------------------------------------------
Loss from operations                                 (6,734,422)            (8,035,844)              (14,770,266)
-----------------------------------------------------------------------------------------------------------------
Net loss                                             (5,441,637)            (7,965,669)              (13,407,306)
-----------------------------------------------------------------------------------------------------------------
Net loss per share                                       (9,435)               (14,567)                  (24,015)
-----------------------------------------------------------------------------------------------------------------
Number of shares outstanding                           535.6818               536.1818                  535.6818
-----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
Balance Sheet Data:
-----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents                           $43,453,700            $62,461,036               $43,453,700
-----------------------------------------------------------------------------------------------------------------
Unproved Properties                                  10,513,639                      -                10,513,639
-----------------------------------------------------------------------------------------------------------------
Total assets                                         56,927,432             62,515,643                56,927,432
-----------------------------------------------------------------------------------------------------------------
Total current liabilities                                44,671                802,435                    44,671
-----------------------------------------------------------------------------------------------------------------
Total members' capital                               56,882,761             61,713,208                56,882,761
-----------------------------------------------------------------------------------------------------------------
Total liabilities and members' capital              $56,927,432            $62,515,643               $56,927,432
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      See Item 7, Operating Revenues


                                       16
<PAGE>


Item 7. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operations
-------------

Overview of Our Business

         We are a small independent natural gas and oil producer. Our primary
investment objective is to generate cash flow for distribution to our
shareholders through participation in oil and natural gas exploration and
development projects in the Gulf of Mexico. We began our operations by offering
our shares in a private offering on August 2, 2004. As a result of such
offering, we raised capital of $78.9 million through the sale of 535.6818 shares
of LLC membership interests. After the payment of $12.2 million in offering
fees, commissions and investment fees to Ridgewood Energy Corporation and
broker-dealers, we retained approximately $66.7 million available for
investment. Since our inception in August of 2004, we have acquired an interest
in six offshore blocks and have participated in the drilling of three wells. As
of December 31, 2005 we have one successful well located in the West Cameron 77
block, located offshore Louisiana. Production at this well should begin in the
second quarter of 2006 once platform facilities are completed. During 2004 and
2005, we invested in two projects that resulted in dry-holes. In total, $7.9
million of investors' capital has been expended on dry-holes. We have two wells
East Breaks 157 and Eugene Island 357 currently drilling and one well, Eugene
Island 337 to start drilling during the spring of 2006. Approximately $39.3
million is estimated for the future development of these projects.

         The Manager performs certain duties on our behalf including the
evaluation of potential projects for investment and ongoing administrative and
advisory services associated with these projects. We do not currently, nor is
there any plan to, operate any project in which we participate. The Manager
enters into operating agreements with third-party outside operators for the
management of all exploration, development and producing operations, as
appropriate. As compensation for the performance of these duties, the Manager is
paid a one-time investment fee for the evaluation of projects on our behalf and
an annual management fee for ongoing administrative and advisory duties as well
as reimbursement of expenses. The Manager also participates in distributions as
additional compensation for its duties. (See also Item 1, Business).

         The following review of operations for each of the two periods ended
December 31 should be read in conjunction with our financial statements and the
notes thereto beginning on page F-1. The financial statements for 2004 reflect
results from August 2, 2004 (Inception) through December 31, 2004.

Results of Operations

         During 2005, our first full year of operations, we had a loss from
operations of $6,734,422 compared to a loss from operations in 2004 of
$8,035,844.

         Operating Revenues

         During the first two years of operations we have not recorded any
operating revenues and are considered an exploratory stage enterprise. We
anticipate our revenues to begin in the second quarter of 2006 when platform
facilities are scheduled to be complete on the West Cameron 77 project and
production can begin. Initial flow tests produced 19.2 MMCFE per day. At the
Fund's ownership percentage of 14.54% and utilizing the December 2005 average
gas price of $13.14 that equates to approximately $1.1 million of estimated
revenue per month. Additionally, we have two active exploratory projects, Eugene
Island 357 and East Breaks 157, and one project delayed to the spring, Eugene
Island 337. See Item 2, Properties for a detailed description of each project.


                                       17
<PAGE>


         Operating and Other Expenses

         Dry-hole costs. Dry-hole costs are those costs incurred to drill and
develop a well that is ultimately found to be incapable of producing either
natural gas or oil in sufficient quantities to justify completion of the well.
In 2005, dry-holes costs were $4,010,588, an increase of $120,568 from the
$3,890,020 of dry-hole costs recorded in 2004.

Dry-hole costs for the periods ended December 31 were as follows:

         --------------------------------------------------------------
                                              2005             2004
         --------------------------------------------------------------
         Main Pass 155                     $3,831,354       $        -
         --------------------------------------------------------------
         Vermillion 7/8                       179,234        3,890,020
         --------------------------------------------------------------

         --------------------------------------------------------------
                  Dry-hole Costs           $4,010,588       $3,890,020
         --------------------------------------------------------------


         Lease Operating Expenses.

         Lease operating expenses are the day-to-day costs incurred related to
the ongoing operations and maintenance of wells and related facilities. These
costs include lease operating expenses, transportation expense, work over
expenses, if any, as well as well control insurance and certain other items, as
applicable. All properties in which we participate are operated by third
parties, with whom we have contractual agreements. Lease operating expenses
totaled $248,400 for 2005 and related primarily to the West Cameron 77 lease
block. Included in the total is $189,362 of monthly well operating expenses and
$59,038 of well control insurance. Even though the West Cameron 77 well is not
producing due to delays in the construction of the production platform, the
operator is still entitled to its overhead charge related to the operations of
the well site.

         Geological costs

            Geological costs as of December 31, 2005 of $200,000 represents
one-time costs related to 3-D seismic data gathered by a third party geophysical
company on the West Cameron 77 lease block.

         Casualty loss

         In March 2005 while drilling the West Cameron 77#2 well, the operator
encountered mechanical problems. The operator was able to successfully shut-in
the well and subsequently completed sidetrack operations such that the well was
preserved. In accordance with our well control insurance, we filed a claim for
the recovery and costs related to the incident. Our share of the cost of
drilling totaled $1,383,349 of which $1,235,351 was recovered through insurance
proceeds resulting in a net casualty loss of $147,998. The $1,235,351 of
insurance proceeds was recorded as a receivable as of December 31, 2005 and was
subsequently collected in January 2006.

         General and Administrative Expenses.

General and administrative expenses for the periods ended December 31 were as
follows:

         ---------------------------------------------------------------
                                                 2005            2004
         ---------------------------------------------------------------
         Investment fees                     $        -      $3,583,985
         ---------------------------------------------------------------
         Management fees                      1,969,426         481,869
         ---------------------------------------------------------------
         Accounting and legal fees              105,341          33,385
         ---------------------------------------------------------------
         Insurance                               52,669          24,999
         ---------------------------------------------------------------
                                             $2,127,436      $4,124,238
         ---------------------------------------------------------------


                                       18
<PAGE>


         The Manager is paid a one time investment fee of 4.5% of initial
capital contributions. Fees are payable for services of investigating and
evaluating investment opportunities and effecting transactions when the capital
contribution is made. Investment fees of $3,583,985 were paid in 2004.

         Management fees are charged to cover those expenses associated with
overhead, including payroll and benefits for employees, rent and other
administrative costs incurred by the Manager for its on-going management,
administrative and advisory services. For such services, the Manager receives an
annual management fee, payable monthly, of 2.5% of total capital contributions.
Management fees were $1,969,426 in 2005 compared to $481,869 for 2004. The
increase is a result of twelve months of fees paid in 2005 as compared to only
three months in 2004.

         Accounting and legal fees and insurance expenses represent those costs
specifically identifiable or allocable to us. The increase in accounting and
legal fees is due to the additional review and audit procedures required for SEC
reporting requirements as compared to 2004. Insurance expense represents
premiums related to the directors and officers liability policy and is allocated
by the Manager to the fund based on total capital raised.

Other Income

          Other income, comprised solely of interest income, increased from
$70,175 in 2004 to $1,292,785 in 2005 representative of higher interest rates on
larger average cash balances in 2005.

Capital Resources and Liquidity

         The primary sources of our cash during the periods from inception
through December 31, 2005 included the initial net cash contribution of $66.7
million obtained from our private offering and $1.4 million generated from
interest income. Primary cash outflow included funds used for operation,
exploration and development expenditures. We had a cash balance of $43.5 million
at December 31, 2005 and $62.5 million at December 31, 2004.

The following table reflects inception-to-date actual sources and uses of our
cash:

         -------------------------------------------------------------
         Sources and Uses of Cash (In Millions)
         -------------------------------------------------------------
         Initial private placement                              $78.9
         -------------------------------------------------------------
         Fees (1)                                               (12.2)
         -------------------------------------------------------------
         Net                                                     66.7
         -------------------------------------------------------------
         Revenues                                                   -
         -------------------------------------------------------------
         Interest income                                          1.4
         -------------------------------------------------------------
         Total Available Cash                                    68.1
         -------------------------------------------------------------

         -------------------------------------------------------------
         Exploration and development expenditures               (18.6)
         -------------------------------------------------------------
         Management fee                                          (2.5)
         -------------------------------------------------------------
         Expenses (LOE, G&A, etc.)                               (0.7)
         -------------------------------------------------------------
         Net Receivable                                          (1.8)
         -------------------------------------------------------------
         Salvage Fund                                            (1.0)
         -------------------------------------------------------------
           Cash and cash equivalents                             43.5
         -------------------------------------------------------------
         Funds for future project development                   (39.3)
         -------------------------------------------------------------
         Available uninvested capital at December 31, 2005        4.2
         -------------------------------------------------------------


                                       19
<PAGE>


     (1)  Includes syndication costs of $8.6 million and one-time investment fee
          paid to the Manager of $3.6 million.

         In 2005, we expended $3.4 million from operating activities compared to
a net operating cash outflow of $3.9 million in 2004. The major component of the
cash outflow in 2004 was the one-time investment fee paid of $3.6 million plus
various other general and administrative expenses. Operating cash flows for 2005
represents management fees, lease operating expenses and other general and
administrative expenses. Also impacting the 2005 operating cash flows is the
timing of the collection of insurance proceeds related to the casualty loss on
the West Cameron 77 #2 (Mustang) project. The approximate $1.2 million
receivable outstanding at December 31, 2005 was subsequently collected in
January 2006.

         Net investing cash outflows of $15.7 million in 2005 increased $11.8
million as compared to 2004 due to a significant increase in the amount of
capital expended related to exploratory drilling. In 2005 we invested $5.9
million in the West Cameron 77 lease block, expended $4.0 million related to
dry-hole properties and invested an additional $3.4 million and $1.2 million in
exploratory drilling costs related to the East Breaks 157 projects and Eugene
Island 357. We also paid $148,500 as a prospect generation fee for Eugene Island
337. Additionally, we have deposited $1 million from capital contributions into
a salvage fund which we estimate to be sufficient to meet our share of the
anticipated costs in the dismantling of production facilities, the plugging, and
abandonment of wells and the removing of any equipment in accordance with
applicable federal and state laws and regulations.

         Cash provided by financing activities in 2005 totaled $0.1 million
compared to $70.2 million of cash generated from financing activities of the
previous year. In 2004, we generated cash contributions from shareholders of
$78.3 million net of syndication costs paid of $8.1 million. In 2005, we
collected $0.7 million of subscriptions receivable, returned $0.1 million of
shareholders' capital contributions and paid accrued syndication costs of $0.5
million.

         Exploration and Development Expenditures

         The chart below is a summary of our investments detailing the drilling
risk and the actual dollars in millions spent on each well. The total spent on
producing properties demonstrates the completion and facilities costs in
addition to the drilling risk money. The total spent on dry-holes represents the
total amount spent on each well and written off.

<TABLE>
---------------------------------------------------------------------------------------------------------------------
          Lease Block             Working    Operator      Offshore        Target         Drilling       Total Spent
                                  Interest               Location in        Depth          Risk(b)       12/31/05 (c)
                                                        Gulf of Mexico                 ($ in millions) ($ in millions)
---------------------------------------------------------------------------------------------------------------------
<S>                                <C>       <C>             <C>            <C>              <C>             <C>
---------------------------------------------------------------------------------------------------------------------
Drilling
---------------------------------------------------------------------------------------------------------------------
West Cameron 77                     14.54%    BHP Billiton    LA             16,400'          $2.6            $5.9
---------------------------------------------------------------------------------------------------------------------
East Breaks 157                     18%       ENI             TX             12,000'          $3.4            $3.4
---------------------------------------------------------------------------------------------------------------------
Eugene Island 357                   17%       Newfield        LA             16,500'          $1.2            $1.2
---------------------------------------------------------------------------------------------------------------------
Dry-holes(a)
---------------------------------------------------------------------------------------------------------------------
Main Pass 155                       30%       Samson          AL             15,500'          $3.8            $3.8
---------------------------------------------------------------------------------------------------------------------
Vermillion 7/8                      26%       Apache    Inland Waters, LA    17,585'          $4.1            $4.1
---------------------------------------------------------------------------------------------------------------------
To Be Drilled
---------------------------------------------------------------------------------------------------------------------
Eugene Island 337                   20%       Devon           LA             12,860'          $3.6            $0.2
---------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       20
<PAGE>


     (a) Dry-hole costs represent wells that have been drilled but do not have
         commercially productive oil and/or gas reservoirs. See Item 2,
         Properties.

     (b) Drilling risk represents the potential dry-hole costs, leasehold costs
         or sunk costs including promote for project participation per AFE's.

     (c) Total Spent includes development money, i.e. completion and facilities
         costs on wells that are deemed commercially productive.

         An affiliate, Ridgewood Energy L Fund, LLC has a 7% working interest in
         East Breaks 157 which is now drilling.

         An affiliate, Ridgewood Energy O Fund, LLC has an 8% working interest
         in Eugene Island 357 which is now drilling.

         An affiliate, Ridgewood Energy L Fund, LLC had a 7.5% working interest
         in Main Pass 155 which has been deemed a dry-hole.

         An affiliate, Ridgewood Energy L Fund, LLC has a 13.33% working
         interest in Eugene Island 337 which will be drilled in the spring of
         2006.

         The table below sets out exploration and development capital
expenditures for the periods ending December 31, 2005 and 2004 along with
estimated budgeted amounts for future periods:

<TABLE>
         ----------------------------------------------------------------------------------------------------
         Expenditure Category                                            Actual                   Budget (1)
         ----------------------------------------------------------------------------------------------------
                                                                2004(2)           2005               2006
         ----------------------------------------------------------------------------------------------------
         <S>                                                 <C>               <C>                <C>
         Capital
         ----------------------------------------------------------------------------------------------------
         Exploration
         ----------------------------------------------------------------------------------------------------
                  Property Acquisition Costs                 $        -        $1,722,450        $         -
         ----------------------------------------------------------------------------------------------------
                  Exploratory Drilling Costs (3)                      -         8,939,186         39,265,000
         ----------------------------------------------------------------------------------------------------
         Total Exploration                                                     10,661,636         39,265,000
         ----------------------------------------------------------------------------------------------------
         ----------------------------------------------------------------------------------------------------
         Development
         ----------------------------------------------------------------------------------------------------
                  Developmental Drilling Costs                        -                 -
         ----------------------------------------------------------------------------------------------------
         Total Development                                            -                 -
         ----------------------------------------------------------------------------------------------------
         ----------------------------------------------------------------------------------------------------
         Total Capital Expenditures                                   -        10,661,636         39,265,000
         ----------------------------------------------------------------------------------------------------
         ----------------------------------------------------------------------------------------------------
         Dry-hole Costs                                       3,890,020        4,010,588
         ----------------------------------------------------------------------------------------------------
         ----------------------------------------------------------------------------------------------------
         Capital Expenditures for oil and gas properties     $3,890,020       $14,672,224        $39,265,000
         ====================================================================================================
</TABLE>

(1) Budget amounts assume that the wells are commercially successful. If any of
the budgeted exploratory projects are unsuccessful, budgeted development capital
will be reallocated to one or more new unspecified projects.
(2) From Inception - August 2, 2004.
(3) Inclusive of casualty loss related to West Cameron 77 #2 (Mustang).

 Off-Balance Sheet Arrangements

         We have no off-balance sheet arrangements as of December 31, 2005 and
do not anticipate the use of such arrangements in the future.

Contractual Obligations

         We have no known contractual obligations at December 31, 2005.


                                       21
<PAGE>


Summary of Critical Accounting Policies

         We prepare our financial statements and the accompanying notes in
accordance with accounting principles generally accepted in the United States of
America, which require management to make estimates and assumptions about future
events that affect the reported amounts of assets and liabilities and the
reported amounts of revenue and expenses during the reporting period. We
identify certain accounting policies as critical, based on, among other things,
their impact on the portrayal of our financial condition, results of operations
or liquidity, and the degree of difficulty, subjectivity and complexity in their
deployment. Critical accounting policies cover accounting matters that are
inherently uncertain because future resolution of such matters is unknown.
Management routinely discusses the development, selection and disclosure of each
of the critical accounting policies. Following is a discussion of our most
critical accounting policies:

         Proved Oil and Gas Reserves

         Proved reserves represent estimated quantities of natural gas, crude
oil and condensate that geological and engineering data demonstrate, with
reasonable certainty, to be recoverable in future years from known reservoirs
under economic and operating conditions existing at the time the estimates are
made. The changes in present value between years, which can be significant,
reflect changes in estimated proved reserve quantities and prices and
assumptions used in forecasting production volumes and costs. The process of
estimating quantities of natural gas, crude oil and condensate reserves is very
complex, requiring significant decisions in the evaluation of all available
geological, geophysical, engineering and economic data. The data for any given
reservoir also may change over time as a result of numerous factors including,
but not limited to, additional development activity, evolving production history
and continual reassessment of the viability of production under varying economic
conditions. Consequently, material revisions (upward or downward) to existing
reserve estimates may occur from time to time. Our reserve quantities will be
prepared annually by an independent engineering firm.

         Oil and Gas Properties

         We use the successful efforts method of accounting for its oil and gas
producing activities. 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 determination of whether the wells have discovered proved
commercial reserves. If proved commercial reserves have not been found, such
drilling costs are expensed. If commercial quantities of reserves are found,
costs remain capitalized. Costs to develop proved reserves, including the costs
of all development wells and related facilities and equipment used in the
production of natural gas and crude oil, are capitalized. Expenditures for
ongoing repairs and maintenance of producing properties are expensed. Upon the
sale or retirement of a proved property (i.e. a producing well), the cost and
related accumulated depletion and amortization are eliminated from the property
accounts, and the resultant gain or loss is recognized. On the sale or
retirement of an unproved property, gain or loss on the sale is recognized,
taking into consideration the amount of any recorded impairment if the property
had been assessed for impairment. It is not the Manager's intention to sell any
of the Fund's property interests.

         Depletion and Amortization for Oil and Gas Properties

         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 the cost of successful exploratory drilling
projects and development costs. The base used to calculate depletion and


                                       22
<PAGE>


amortization is the sum of proved developed reserves and proved undeveloped
reserves for leasehold acquisition costs, the costs to acquire proved properties
and platform and pipeline costs. Estimated future dismantlement, restoration and
abandonment costs, net of salvage values, are taken into account and will be
adjusted each year as additional information becomes available. Depletion and
amortization rates are updated quarterly to reflect the addition of capitalized
costs, property acquisitions or dispositions, and impairments; reserve additions
and revisions are updated annually. The quantities of estimated proved oil and
gas reserves are a significant component of our calculation of depletion and
amortization and revisions in such estimates may alter our future expense.
Holding all other factors constant, if reserves are revised upward or downward,
earnings will increase or decrease, respectively.

         Impairments

         An impairment analysis is performed when events or changes in
circumstances occur which indicate that an oil and gas asset's carrying value
may not be recoverable. The determination of whether impairment has occurred is
made by comparing the carrying value of the asset 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 undiscounted cash
flows attributable to the asset or the estimated fair value of the asset.

         Gas Imbalances

         Oil and gas sales are recognized when delivery is made by the operator
to the purchaser and title is transferred. The actual volume of gas sold may
differ from the volume of gas to which we are entitled. We will account for such
gas production imbalances by the entitlements method. Under the entitlements
method, we will record as revenues our entitled share of the total gas sold
during the period. We will record a receivable from or payable to other working
interest owners for the value of any under or overproduction, respectively. We
have had no production and therefore no sales.

         Asset Retirement Obligations

         For proved oil and gas properties there are obligations to perform
certain removal and remediation when the asset is retired. SFAS 143 requires
that we estimate the future cost of this obligation, discount it to its present
value, and record a corresponding asset and liability on our balance sheet. The
values ultimately derived are based on many significant estimates, including the
expected future costs of this obligation, the future date of the required cash
payment, and interest and inflation rates. Any revisions to these estimates will
result in an adjustment to the carrying value of the capitalized asset and
corresponding liability on a prospective basis. As of December 31, 2005, the
Fund did not have proved oil and gas properties.

         Authorization for Expenditures

         Authorization for Expenditures (AFE's) represents the operator's
estimated budget for the cost of drilling or completing a well. AFE's are
supplied to the working interest owners by the operator for review and
acceptance before work has begun on a project. At times, operators may require a
cash advance for our proportionate share of the AFE before beginning work. As
the actual costs are incurred, they are offset against the prepaid AFE.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
--------------------------------------------------------------------

         We do not currently have, or use, any derivative instruments nor does
it have any plans to enter into such derivatives. We will generally invest cash
equivalents in high-quality credit instruments consisting primarily of money
market funds, Bankers acceptance notes and government agency securities with


                                       23
<PAGE>


maturities of 180 days or less. We do not expect any material loss from cash
equivalents and therefore believes that potential interest rate exposure is not
material. We have no plan to conduct any international activities and therefore
believe we are not subject to foreign currency risk.

         The principal market risk to which we are exposed that may adversely
impact our results of operations and financial position is changes in oil and
gas prices.

         Our revenue is sensitive to changes in the price received for oil and
gas production. Prevailing market prices fluctuate in response to many factors
that are outside of our control such as the supply and demand for oil and gas.
Availability of alternative fuels as well as seasonal risks such as hurricanes
can also impact the supply and demand.

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

Item 8.  Financial Statements and Supplementary Data
----------------------------------------------------

     See Item 15.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------------
Financial Disclosure
--------------------

         None.

Item 9A.  Controls and Procedures
---------------------------------

         Disclosure Controls and Procedures. Our Chief Executive Officer and
Chief Financial Officer have evaluated the effectiveness of our disclosure
controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities and Exchange Act of 1934, as amended ("Exchange Act") as of the end
of the period covered by this report ("Evaluation Date"). Based on this
evaluation, our Chief Executive Officer and the Chief Financial Officer have
concluded that our disclosure controls and procedures were effective as of the
Evaluation Date to ensure that information that is required to be disclosed by
us in the reports we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms.

         Changes to Internal Controls. There have been no changes in our
internal control over financial reporting that occurred during the fiscal
quarter ended December 31, 2005 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

Item 9B.  Other Information
---------------------------

         None

PART III

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------

         Ridgewood Energy Corporation, our Manager, is controlled by Robert E.
Swanson, who is the manager, chairman, and, together with his family trusts,
owns all of the membership interests of the Manager. The officers of the


                                       24
<PAGE>


Manager are also our officers. Our Manager takes all actions necessary to manage
our business affairs. We do not have a board of directors nor an audit committee
or nominating committee as contemplated by the Sarbanes-Oxley Act of 2002.
Instead, the Manager effectively performs the functions that the board of
directors or the audit or nominating committee would otherwise perform.

         The Manager has direct and exclusive discretion in management and
control of our affairs. The Manager may resign as Manager only (i) with cause
(which cause does not include the fact or determination that continued service
would be unprofitable to the Manager), or (ii) without cause with the consent of
a majority in interest of the Investors. The Manager may be removed as manager
as provided in our LLC Agreement.

         Ridgewood Energy Corporation was incorporated in October 1982 as a
Delaware corporation for the primary purpose of acting as a manager of the
business of funds and as a managing general partner of limited partnerships. All
of the equity in the Manager is owned by Mr. Swanson or by family trusts. Mr.
Swanson has the power on behalf of those trusts to vote or dispose of the
membership equity interests owned by them.

         The Manager has also organized affiliated funds as Delaware limited
partnerships or Delaware limited liability companies. Ridgewood Energy also
manages those affiliated natural gas and oil funds. The business objectives of
these other funds are similar to our objectives.

         The Manager is an affiliate of Ridgewood Renewable Power, LLC
("Ridgewood Power"), which organizes and operates Delaware business trusts and
limited liability companies that have invested in independent renewable electric
power project and other related activities. Other affiliates of the Manager
include Ridgewood Securities LLC ("Ridgewood Securities"), an NASD member which
has been the placement agent for the private placement offerings of the funds
sponsored by the Manager and the funds sponsored by Ridgewood Power; Ridgewood
Capital Management LLC ("Ridgewood Capital"), which assists in offerings made by
the Manager and which is the sponsor of four privately offered venture capital
funds; and Ridgewood Power Management, LLC, which operates the power projects
owned by the trusts and funds managed by Ridgewood Power. Each of these
companies is controlled by Robert E. Swanson, who is their sole director or
manager.

         Our executive officers as well as those of REC, and their ages at
December 31, 2005 are as follows:

Name, Age and Position with Registrant                      Officer Since*
--------------------------------------                      --------------

Robert E. Swanson, 58
President and Chief Executive Officer                       1982*

W. Greg Tabor, 45
Executive Vice President and Director of Business           January 2004
Development

Robert L. Gold, 46
Executive Vice President                                    1987

Kathleen P. McSherry, 40
Senior Vice President and Chief Financial Officer           2000

Daniel V. Gulino, 44
Senior Vice President and General Counsel                   2003

Mary Lou Olin, 51
Vice President and Secretary                                1982*

*Each officer has served as an executive officer since its inception.


                                       25
<PAGE>


         Set forth below is the name of, and certain biographical information
regarding the executive officers of REC and the Fund.

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

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

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

Kathleen P. McSherry has served as the Senior 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 CFO in 2000. Ms. McSherry also serves as
Vice President of Systems and Administration of Ridgewood Power. Ms. McSherry
holds a Bachelor of Science degree in Accounting.

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

Mary Lou Olin has served as the Vice President and Secretary of Ridgewood Energy
since its inception. Ms. Olin has been a Vice President RPM, and Ridgewood
Capital Management, LLC since their inception. Ms. Olin has a Bachelor of Arts
degree from Queens College.

         Pursuant to the LLC Agreement, the Manager has appointed our officers
to act on our behalf and sign documents on our behalf as authorized by the
Manager. Mr. Swanson serves as our Chairman and our other executive officers are
identical to those of the Manager, as indicated in the table immediately above.

         The officers have the duties and powers usually applicable to similar
officers of a Delaware business corporation in carrying out our business.
Officers act under the supervision and control of the Manager, which is entitled
to remove any officer at any time. The Manager expects that most actions taken
in our name will be taken by Mr. Swanson and the other principal officers in
their capacities as our officers under the direction of the Manager rather than
as officers of the Manager.


                                       26
<PAGE>


Section 16(a) Beneficial Ownership Reporting Compliance

         The individuals who are subject to the requirements of Section 16(a)
have complied with those reporting requirements during 2005.

         Code of Ethics. In March 2004, a Code of Ethics was adopted for the
Manager, Ridgewood Power, Ridgewood Capital and for the funds organized and
managed by the Manager and its affiliated entities. The Code of Ethics is
applicable to the principal executive officer, principal financial officer,
principal accounting officer or controller (or any persons performing similar
functions), of each such entity. A copy of the Code of Ethics is being filed as
an exhibit to this report. A copy of the Code of Ethics will be provided to any
person without charge, upon written request made to Ridgewood Energy M Fund,
LLC, 947 Linwood Avenue, Ridgewood, New Jersey 07450 Attn: Daniel V. Gulino.

Audit Committee Financial Expert.

         We have neither a board of directors nor an audit committee as
contemplated by the Sarbanes-Oxley Act of 2002 and instead, the Manager
effectively performs the functions that the board of directors or the audit
committee would otherwise perform. However, the Manager has determined that
Kathleen P. McSherry, who serves as our Senior Vice President and Chief
Financial Officer and the Chief Financial Officer of the Manager qualifies as an
audit committee financial expert as defined in Item 401(h)(2) of Regulation S-K.

Item 11.  Executive Compensation
--------------------------------

         Other than the management fee, we do not compensate our officers or
those of REC. The Manager, or its affiliates, compensates its officers without
any additional payments by us.

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 December 31, 2005 and 2004 (no person owns more
than 5% of the shares) for:

         - Each executive officer (there are no directors)

         - All of the executive officers as a group

         Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission 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 have sole
voting and investment power with respect to all shares shown as beneficially
owned by them. Percentage of beneficial ownership is based on 535.6818 shares
outstanding at December 31, 2005 and December 31, 2004. Other than those set
forth below, no officer or director owns any of our shares.

<TABLE>
<CAPTION>
                                                               Number of
Name of beneficial owner                                       shares       Percent
------------------------                                       ------       -------
<S>                                                              <C>         <C>
Robert E. Swanson (1), President and Chief Executive Officer      3           *
Executive officers as a group (1)                                 3           *
</TABLE>

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


                                       27
<PAGE>


Item 13. Certain Relationships and Related Transactions
-------------------------------------------------------

         In connection with the sale of shares in 2004, Ridgewood Securities
Corporation, an affiliate of Ridgewood Energy, the Manager, earned $1,033,423 as
a placement agent fee and for commissions. The Manager earned $3,583,985 in 2004
as an investment fee for the services of investigating and evaluating projects
for future investment. The Manager was paid $2,791,857 in 2004 to cover legal
and syndication fees for the organization, distribution and offering expenses.

         The Manager receives an annual management fee equal to 2.5% of total
capital contributions, payable monthly, for general and administrative services
supplied to us. For the periods ending December 31, 2005 and 2004, the Fund paid
management fees totaling $1,969,426 and $481,869, respectively. Additionally,
when distributions are made, the Manager is entitled to a portion of funds
distributed to shareholders. The Fund made no distributions in 2004 or 2005.

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

         Available cash from dispositions, as defined in our LLC Agreement, will
be paid 99% to shareholders and 1% to the Manager until the shareholders have
received 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.

         Allocation of profits and losses from the normal course of operations
of our wells shall be allocated 85% to shareholders and 15% to the Manager. The
primary exception to this treatment is that all items of expense, loss,
deduction and credit attributable to the expenditure of shareholders' capital
contributions are allocated 99% to shareholders and 1% to the Manager.

         From time to time, short-term payables and receivables, which do not
bear interest, arise from transactions with affiliates in the ordinary course of
business. As of December 31, 2004 no amounts were outstanding.

         We have co-invested with similar affiliated natural gas and oil funds,
which are also managed by our Manager to acquire and develop oil and gas
projects. See Item 2, Properties.

Item 14.  Principal Accountant Fees and Services
------------------------------------------------

         For the year ended December 31, 2005, Perelson Weiner LLP billed us
$99,341 for professional services, of which $19,341 related to preparation of
our tax returns and $80,000 related to the audit of our financial statements in
our Annual Report on Form 10-K and for related services relating to our
Registration Statement on Form 10 and our Quarterly Reports on Form 10-Q. From
inception through December 31, 2004, Perelson Weiner LLP billed us $39,341 for
professional services, of which $19,341 related to the preparation of our tax
returns and $20,000 related to the audit of our financial statements as filed
with our Registration Statement on Form 10.


                                       28
<PAGE>


         Because we do not have an audit committee in the traditional sense, all
services provided to us by Perelson Weiner LLP were approved by the appropriate
senior management of the Manager, including, but not limited to the Manager's
Chief Executive Office and Chief Financial Officer.

PART IV

Item 15.  Exhibits and Financial Statement Schedules
----------------------------------------------------

<TABLE>
<CAPTION>
1.       Financial Statements
<S>                                                                                         <C>
Report of Independent Registered Public Accounting Firm                                    F1
Balance sheets at December 31, 2005 and 2004                                               F2
Statements  of  Operations  for the year ended  December  31,  2005,
       the period  from  August 2, 2004 (Inception) through December 31, 2004
       and the period from August 2, 2004 (Inception) through December 31, 2005            F3
Statements of Changes in Members' Capital for the year ended December 31, 2005,
       the period from August 2, 2004 (Inception) through December 31, 2004 and
       the period from August 2, 2004 (Inception) through December 31, 2005                F4
Statements of Cash Flows for the year ended December 31, 2005, the period from
       August 2, 2004 (Inception) through December 31, 2004 and the period from
       August 2, 2004 (Inception) through December 31, 2005                                F5
Notes to Financial Statements                                                           F6-10
Supplemental Information About Oil and Gas Producing Activities (Unaudited)               F11
Quarterly Financial Information (Unaudited)                                                30
</TABLE>








                                       29
<PAGE>


             Report of Independent Registered Public Accounting Firm


The Shareholders and Manager
Ridgewood Energy M Fund, LLC


We have audited the accompanying balance sheets of Ridgewood Energy M Fund, LLC
("Fund"), an exploratory stage enterprise, as of December 31, 2005 and 2004, and
the related statements of operations, changes in members' capital and cash flows
for the year ended December 31, 2005, the period August 2, 2004 (inception)
through December 31, 2004 and the period August 2, 2004 (inception) through
December 31, 2005. These financial statements are the responsibility of the
manager of the Fund. 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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the manager, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Fund as of December 31,
2005 and 2004 and the results of its operations and its cash flows for the year
ended December 31, 2005, the period August 2, 2004 (inception) through December
31, 2004 and the period August 2, 2004 (inception) through December 31, 2005 in
conformity with accounting principles generally accepted in the United States of
America.



/s/ Perelson Weiner, LLP
New York, New York
March 3, 2006


                                       F1
<PAGE>

                          RIDGEWOOD ENERGY M FUND, LLC
                        (An exploratory stage enterprise)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                         December 31, 2005     December 31, 2004
                                                                         -----------------     -----------------
<S>                                                                        <C>                   <C>
                                   ASSETS
Current assets:
         Cash and cash equivalents                                         $ 43,453,700          $ 62,461,036
         Receivable - insurance proceeds (Note 9)                             1,235,351                    --
         Due from operators                                                     686,400                    --
         Due from affiliates (Note 6)                                                --                19,595
         Prepaid expenses                                                        24,730                35,012
                                                                           ------------          ------------
                Total current assets                                         45,400,181            62,515,643
                                                                           ------------          ------------
Salvage fund                                                                  1,013,612                    --
                                                                           ------------          ------------
Oil and gas properties
         Unproved properties                                                 10,513,639                    --
                                                                           ------------          ------------
                Total assets                                               $ 56,927,432          $ 62,515,643
                                                                           ============          ============
                      LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
         Accrued expenses payable                                          $     44,671          $    365,663
          Due to affiliates (Note 6)                                                 --               436,772
                                                                           ------------          ------------
                Total current liabilities                                        44,671               802,435
                                                                           ------------          ------------

Commitment and contingencies (Note 8)

Members' capital:
         Manager:
                Deficit accumulated during the exploratory stage               (542,637)             (155,292)
                                                                           ------------          ------------

         Shareholders:
                Capital contributions (834 shares authorized, 535.6818
                   and 536.1818 issued and outstanding at December 31,
                   2005 and 2004, respectively)                              78,886,679            79,013,679
                Subscriptions receivable                                             --              (680,000)
                Syndication costs                                            (8,596,612)           (8,654,802)
                Deficit accumulated during the exploratory stage             12,864,669)           (7,810,377)
                                                                           ------------          ------------

                            Shareholders' total                              57,425,398            61,868,500
                                                                           ------------          ------------

                Total members' capital                                       56,882,761            61,713,208
                                                                           ------------          ------------

                Total liabilities and members' capital                     $ 56,927,432          $ 62,515,643
                                                                           ============          ============
</TABLE>

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


                                       F2
<PAGE>


                          RIDGEWOOD ENERGY M FUND, LLC
                        (An exploratory stage enterprise)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                          For the period         For the period
                                                                          August 2, 2004         August 2, 2004
                                                  For the year             (Inception)             (Inception)
                                                     ended                   through                 through
                                               December 31, 2005        December 31, 2004       December 31, 2005
                                               -----------------        -----------------      ------------------
<S>                                              <C>                      <C>                     <C>
Expenses
      Dry-hole costs                             $  4,010,588             $  3,890,020            $  7,900,608
      Investment fees (Note 6)                             --                3,583,985               3,583,985
      Management fees (Note 6)                      1,969,426                  481,869               2,451,295
      Lease operating expenses                        248,400                       --                 248,400
      Geological costs                                200,000                   21,586                 221,586
      Casualty loss                                   147,998                       --                 147,998
      Accounting and legal fees                       105,341                   33,385                 138,726
      Insurance                                        52,669                   24,999                  77,668
                                                 ------------             ------------            ------------

        Total expenses                              6,734,422                8,035,844              14,770,266
                                                 ------------             ------------            ------------

        Loss from operations                       (6,734,422)              (8,035,844)            (14,770,266)
                                                 ------------             ------------            ------------

Other income
      Interest income                               1,292,785                   70,175               1,362,960
                                                 ------------             ------------            ------------

        Net loss                                 $ (5,441,637)            $ (7,965,669)           $(13,407,306)
                                                 ============             ============            ============

        Manager - Net loss                       $   (387,345)            $   (155,292)           $   (542,637)

        Shareholders - Net loss                  $ (5,054,292)            $ (7,810,377)           $(12,864,669)
        Net loss per share                       $     (9,435)            $    (14,567)           $    (24,015)
</TABLE>


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


                                       F3
<PAGE>


                          RIDGEWOOD ENERGY M FUND, LLC
                        (An exploratory stage enterprise)
                    STATEMENTS OF CHANGES IN MEMBERS' CAPITAL

<TABLE>
<CAPTION>
                                                         Year ended                       For the period August 2, 2004 (Inception)
                                                     December 31, 2005                           through December 31, 2004
                                            -----------------------------------------   ------------------------------------------
                                              Manager     Shareholders      Total        Manager      Shareholders       Total
                                            ----------    ------------  -------------   ---------     -------------   ------------

<S>                                        <C>           <C>             <C>            <C>          <C>             <C>
Balances, January 1                         $(155,292)   $ 61,868,500    $ 61,713,208   $      --     $         --    $         --
Shareholders' capital contributions -
     536.1818 shares                                                                           --       79,013,679      79,013,679
Subscription receivable                            --              --              --                     (680,000)       (680,000)
Syndication costs                                  --              --              --          --       (8,654,802)     (8,654,802)
Return of shareholders' capital
    contribution - 0.500 share                     --        (127,000)       (127,000)         --               --              --
Collection of subscription receivable              --         680,000         680,000          --               --              --
Syndication costs recovered                        --          58,190          58,190          --               --              --
Deficit accumulated during the
    exploratory stage                        (387,345)     (5,054,292)     (5,441,637)   (155,292)      (7,810,377)     (7,965,669)
                                            ---------     -----------    ------------   ---------     ------------    ------------
Balances, December 31                       $(542,637)    $ 57,425,398   $ 56,882,761   $(155,292)    $ 61,868,500    $ 61,713,208
                                            =========     ============   ============   =========     ============    ============

</TABLE>

<TABLE>
<CAPTION>
                                                      For the period August 2, 2004 (Inception)
                                                              through December 31, 2005
                                                      ------------------------------------------
                                                       Manager      Shareholders        Total
                                                      ---------     -------------   ------------
<S>                                                    <C>             <C>             <C>
Balances, August 2, 2004 (Inception)                 $      --     $         --   $         --

Shareholders' capital contribution -
     536.1818 shares                                        --       79,013,679     79,013,679
Return of shareholders' capital
     contribution - 0.500 share                             --         (127,000)      (127,000)
Syndication costs (included offering fee
   of $2,791,857 paid to the Manager and
   selling commissions and placement fees
   of $236,000 and $797,423, respectively,
   paid to Ridgewood Securities Corp.)                      --       (8,596,612)    (8,596,612)
Deficit accumulated during the
   exploratory stage                                  (542,637)     (12,864,669)   (13,407,306)
                                                     ---------     ------------   ------------

Balances, December 31, 2005                          $(542,637)    $ 57,425,398   $ 56,882,761
                                                     =========     ============   ============
</TABLE>


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


                                       F4
<PAGE>


                          RIDGEWOOD ENERGY M FUND, LLC
                        (An exploratory stage enterprise)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                          For the period       For the period
                                                                                          August 2, 2004       August 2, 2004
                                                                     For the year           (Inception)          (Inception)
                                                                        ended                 through              through
                                                                  December 31, 2005      December 31, 2004    December 31, 2005
                                                                 ------------------      -----------------    -----------------
<S>                                                                 <C>                     <C>                  <C>
Cash flows from operating activities
   Net loss                                                         $  (5,441,637)          $ (7,965,669)        $(13,407,306)
   Adjustments to reconcile net loss to net cash
      used in operating activities
          Dry-hole costs                                                4,010,588              3,890,020            7,900,608
          Casualty loss on oil and gas properties                         147,998                     --              147,998
          Interest collected on salvage fund                              (13,612)                    --              (13,612)
          Changes in assets and liabilities
              Increase in receivable - insurance proceeds              (1,235,351)                    --           (1,235,351)
              Increase in due from operators                             (686,400)                    --             (686,400)
              Decrease (increase) in due from affiliate                    19,595                (19,595)                  --
              Decrease (increase) in prepaid expenses                      10,282                (35,012)             (24,730)
              Increase in accrued expenses payable                         22,949                 23,341               46,290
              (Decrease) increase in due to affiliate                    (220,496)               218,876               (1,620)
                                                                    -------------           ------------         ------------

              Net cash used in operating activities                    (3,386,084)            (3,888,039)          (7,274,123)
                                                                    -------------           ------------         ------------

Cash flows from investing activities
   Capital expenditures for oil and gas properties                    (14,672,224)            (3,890,020)         (18,562,244)
   Funding of salvage fund                                             (1,000,000)                    --           (1,000,000)
                                                                    -------------           ------------         ------------

     Net cash used in investing activities                            (15,672,224)            (3,890,020)         (19,562,244)
                                                                    -------------           ------------         ------------

Cash flows from financing activities
   Contributions from shareholders, net of subscription
       receivable                                                              --             78,333,679           78,333,679
   Syndication costs                                                     (560,218)            (8,094,584)          (8,654,802)
   Return of shareholder's capital contribution                          (127,000)                    --             (127,000)
   Collection of subscription receivable                                  680,000                     --              680,000
   Syndication costs recovered                                             58,190                     --               58,190
                                                                    -------------           ------------         ------------

     Net cash provided by financing activities                             50,972             70,239,095           70,290,067
                                                                    -------------           ------------         ------------

             Net (decrease) increase in cash and cash equivalents     (19,007,336)            62,461,036           43,453,700

             Cash and cash equivalents, beginning of period            62,461,036                     --                   --
                                                                    -------------           ------------         ------------

             Cash and cash equivalents, end of period               $  43,453,700           $ 62,461,036         $ 43,453,700
                                                                    -------------           ------------         ------------

</TABLE>

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


                                       F5
<PAGE>


                          RIDGEWOOD ENERGY M FUND, LLC
                        (An exploratory stage enterprise)
                      NOTES TO AUDITED FINANCIAL STATEMENTS

1. Organization and Purpose

The Ridgewood Energy M Fund, LLC ("Fund"), a Delaware limited liability company,
was formed on August 2, 2004 and operates pursuant to a limited liability
company agreement ("Agreement") dated as of September 7, 2004 by and among
Ridgewood Energy Corporation ("Manager"), and the shareholders of the Fund.

The Fund was organized to acquire, drill, construct and develop natural gas and
oil properties located in the United States offshore waters of Texas and
Louisiana in the Gulf of Mexico. To date, the Fund has not earned revenue from
these operations and is considered in the exploratory stage.

The Manager performs (or arranges for the performance of) the management and
administrative services required for Fund operations. Such services include,
without limitation, the administration of shareholder accounts, shareholder
relations and the preparation, review and dissemination of tax and other
financial information. In addition, the Manager provides office space, equipment
and facilities and other services necessary for Fund operations. The Manager
also engages and manages the contractual relations with outside custodians,
depositories, accountants, attorneys, broker dealers, corporate fiduciaries,
insurers, banks and others as required. (Notes 2, 5 and 6)

2. Summary of Significant Accounting Policies

     Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. On an ongoing basis, the Manager reviews its
estimates, including those related to amounts advanced to and billed by
operators, determination of proved reserves, impairment allowances, and
environmental liabilities. Actual results may differ from those estimates.

     Oil and gas properties

Investments in oil and gas properties are operated by unaffiliated entities
("Operators") who are responsible for drilling, administering and producing
activities pursuant to the terms of the applicable Operating Agreements with
working interest owners. The Fund's portion of exploration, drilling, operating
and capital equipment expenditures relating to the wells are advanced and billed
by Operators through authorization for expenditures.

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. Costs to develop proved reserves,
including the costs of all development wells and related facilities and
equipment used in the production of natural gas and crude oil, are capitalized.
Expenditures for ongoing repairs and maintenance of producing properties are
expensed as incurred.

Upon the sale or retirement of a proved property (i.e. a producing well), the
cost and related accumulated depletion and amortization are eliminated from the
property accounts, and the resultant gain or loss is recognized. On the sale or
retirement of an unproved property, gain or loss on the sale is recognized,
taking into consideration the amount of any recorded impairment if the property
had been assessed for impairment. It is not the Manager's intention to sell any
of the Fund's property interests.

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

     Revenue Recognition

Oil and gas sales will be recognized when delivery is made by the Operator to
the purchaser and title is transferred, i.e., production has been delivered to a
pipeline or transport vehicle. The Fund has not earned revenue for the periods
ended December 31, 2005 and 2004.


                                       F6
<PAGE>


The volume of gas sold by the operator on the Fund's behalf may differ from the
volume of gas the Fund is entitled to. The Fund will account for such gas
imbalances by the entitlements method. Under the entitlements method, the Fund
will recognize a receivable from other working interest owners for volumes
oversold by other working interest owners, and a payable to other working
interest owners for volumes oversold by the Fund. For the periods ended December
31, 2005 and December 31, 2004, there were no gas-balancing arrangements between
the Fund and other working interest owners.

     Interest Income

Interest income is recognized when earned.

     Syndication Costs

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

     Asset Retirement Obligations

For proved oil and gas properties, there are obligations to perform removal and
remediation activities when the properties are retired. The Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 143 "Accounting for Asset Retirement Obligations" effective for years
beginning after December 15, 2002. SFAS No. 143 requires the Fund to record a
separate liability for the discounted present value of the Fund's asset
retirement obligations, with an offsetting increase to the related oil and gas
properties on the balance sheet. As of December 31, 2005 and 2004, the Fund did
not have proved oil and gas properties.

     Impairment of Long-Lived Assets

In accordance with the provisions of SFAS No. 144, "Accounting for the
Impairment of Long-Lived Assets", long-lived assets, such as oil and gas
properties, are evaluated when events or changes in circumstances occur which
indicate that an oil and gas asset's carrying value may not be recoverable. The
determination of whether impairment has occurred is made by comparing the
carrying value of the asset to the estimated future undiscounted cash flows
attributable to the asset. The impairment loss recognized is the excess of the
carrying value over the future discounted cash flows attributable to the asset
or the estimated fair value of the asset. No impairment was recorded during 2005
or 2004.

     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 the cost of successful exploratory drilling and
development costs. The sum of proved developed and proved undeveloped reserves
are used as the base for depleting (or amortizing) leasehold acquisition costs,
the costs to acquire proved properties and platform and pipeline costs. As of
December 31, 2005 and 2004 the Fund did not have proved oil and gas reserves.

     Income Taxes

No provision is made for income taxes in the financial statements as the income
or losses are passed through and included in the tax returns of the individual
shareholders.

     Cash and cash equivalents / Salvage fund

All highly liquid investments with maturities when purchased of three months or
less are considered as cash and cash equivalents. At times, bank deposits may be
in excess of federal insured limits. As of December 31, 2005, bank balances
inclusive of the salvage fund exceeded federally insured limits by approximately
$43.3 million. The Fund maintains bank deposits with high quality financial
institutions to mitigate such risk.

     Income and Expense Allocation

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


                                       F7
<PAGE>


Reclassifications

Certain amounts in the prior-year financial statements have been reclassified
for comparative purposes to conform with the presentation in the current-year
financial statements. The reclassification had no impact on the loss from
operations, net loss, Manager - net loss or shareholders - net loss for the year
ended December 31, 2005 and the period August 2, 2004 (inception) through
December 31, 2004.

3.  Recent Accounting Pronouncements

In March 2005, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations"
(FIN 47). This interpretation clarifies that the term "conditional asset
retirement obligation" as used in SFAS No. 143 refers to a legal obligation to
perform an asset retirement activity in which the timing and/or method of
settlement are conditional on a future event that may or may not be within the
control of the entity incurring the obligation. The obligation to perform the
asset retirement activity is unconditional even though uncertainty exists about
the timing and/or method of settlement. Thus, the timing and/or method of
settlement may be conditional on a future event. Accordingly, an entity is
required to recognize a liability for the fair value of a conditional asset
retirement obligation if the fair value of the liability can be reasonably
estimated. Uncertainty about the timing and/or method of settlement of a
conditional asset retirement obligation should be factored into the measurement
of the liability, rather than the timing of recognition of the liability, when
sufficient information exists. FIN 47 is effective for calendar year-end
entities no later than December 31, 2005. The application of FIN 47 did not have
an impact on the Fund's financial position or results of operations.

In April 2005, the FASB issued FASB Staff Position FAS 19-1, "Accounting for
Suspended Well Costs." The Fund adopted FAS 19-1 during the third quarter of
2005 (Note 4). 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 for impairment of value by
evaluating and monitoring if sufficient progress is made on assessing the
reserves. Capitalized costs are expensed as dry-hole costs in the event that
reserves are determined to be not proved. Dry-hole costs were $4,010,588 and
$3,890,020 for the year ended December 31, 2005 and the period from August 2,
2004 (inception) to December 31, 2004, respectively.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities", ("FIN 46") which changes the criteria by which one
company includes another entity in its consolidated financial statements. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after December 31, 2003, and apply in the
first fiscal period ending after March 15, 2004, for variable interest entities
created prior to January 1, 2004. The Fund adopted the disclosure provisions of
FIN 46 effective August 2, 2004, with no impact to the financial statements. In
December 2003, the FASB issued a revision of FIN 46 ("FIN 46R") to clarify some
of the provisions and to exempt certain entities from its requirements. The Fund
implemented the full provisions of FIN 46R effective August 2, 2004, with no
impact on the financial statements.

4.    Unproved Properties - Capitalized Exploratory Well Costs

The following table reflects the net changes in capitalized exploratory well
costs for the year ended December 31, 2005. As of December 31, 2004, the Fund
has no capitalized exploratory well costs.

<TABLE>
<CAPTION>
                                                      Eugene        East       WC 77 #2      Eugene
                                                    Island 357   Breaks 157  Mustang (a)   Island 337       Total
                                                    ----------   ----------  -----------   ----------       -----
<S>                                                 <C>          <C>         <C>             <C>        <C>
Balance - January 1, 2005                           $       --   $       --  $       --      $     --   $        --

Additions to capitalized exploratory well costs
  pending the determination of proved reserves       1,231,104    3,396,560   5,737,475       148,500    10,513,639
                                                   ------------------------------------------------------------------

Balance - December 31, 2005                         $1,231,104   $3,396,560  $5,737,475      $148,500   $10,513,639
                                                   ------------------------------------------------------------------
</TABLE>

(a) Capitalized exploratory well costs net of casualty loss (Note 9).

As of December 31, 2005, the Fund has no capitalized exploratory well costs
greater than a year.


                                       F8
<PAGE>


5.   Distributions

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

The Manager will determine whether Available Cash from Operations, as defined in
the Fund's Operating Agreement, is to be distributed. Such distribution will be
allocated 85% to the shareholders and 15% to the Manager.

Available Cash from Dispositions, as defined in the Fund's Operating 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.

There have been no distributions made by the Fund.

6. Transactions with Manager

The Manager is paid an investment fee of 4.5% of initial capital contributions.
Fees are payable for services of investigating and evaluating investment
opportunities and effecting transactions when the capital contribution is made.
For 2004, investment fees were $3,583,985 of which $218,876 was included in due
to affiliates as of December 31, 2004.

A management agreement provides that the Manager render management,
administrative and advisory services. For such services, the Manager receives an
annual management fee, payable monthly, of 2.5% of total capital contributions.
For the periods ended December 31, 2005 and 2004, a management fee of $1,969,426
and $481,869, respectively, was incurred and paid.

The Manager is paid an offering fee which approximates 3.5% of capital
contributions to cover expenses incurred in the offer and sale of shares of the
Fund. Such offering fee was included in syndication costs (Note 2). For 2004,
the Manager was paid an offering fee of $2,791,857, of which $169,086 was
included in due to affiliates and paid in 2005.

From time to time, short-term payables and receivables, which do not bear
interest, arise from transactions with affiliates in the ordinary course of
business. As of December 31, 2004, $19,595 was due from the Manager.

In 2004, Ridgewood Securities Corp., a registered broker dealer affiliated with
the Manager, was paid selling commissions and placement fees of $236,000 and
$797,423, respectively, for shares of the Fund sold which are reflected in
syndication costs (Note 2). As of December 31, 2004, $48,810 was included in due
to affiliates and paid in 2005.

The Fund co-invests with affiliated funds managed by the Manager to acquire and
develop oil and gas projects.

7.  Fair Value of Financial Instruments

As of December 31, 2005 and 2004, the carrying value of cash and cash
equivalents, receivable-insurance proceeds, due to/from operators, due to/from
affiliates, salvage fund and accrued expenses payable approximate fair value.
Cash and cash equivalents principally consist of money market funds.

8. Commitments and Contingencies

     Environmental Considerations

The exploration for and development of oil and gas involves the extraction,
production and transportation of materials which, under certain conditions, can
be hazardous or cause environmental pollution problems. The Manager and the
Operators are continually taking action they believe appropriate to satisfy
applicable federal, state and local environmental regulations and do not
currently anticipate that compliance with federal, state and local environmental
regulations will have a material adverse effect upon capital expenditures,
earnings or the competitive position of the Fund in the oil and gas industry.
However, due to the significant public and governmental interest in
environmental matters related to those activities, the Manager cannot predict
the effects of possible future legislation, rule changes, or governmental or
private claims. As of December 31, 2005 and 2004, there were no known
environmental issues that required the Fund to record a liability.


                                       F9
<PAGE>


     Salvage Fund

Pursuant to the Fund's Operating Agreement, the Fund deposits in a separate
interest-bearing account, or a salvage fund, money to provide for dismantling
production platforms and facilities, plugging and abandoning the wells and
removing the platforms, facilities and wells after their useful lives, in
accordance with applicable federal and state laws and regulations. Interest
earned on the account will become part of the salvage fund; there are no legal
restrictions on the withdrawal from the salvage fund.

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
which is not insured or not fully insured could have an adverse impact upon
earnings and financial position.

9.  Casualty Loss

         During March 2005 while drilling the West Cameron Block 77 No 2 well,
the operator encountered mechanical problems. The operator was able to
successfully shut-in the well and subsequently completed sidetrack operations
such that the well was preserved. In accordance with the Fund's control of well
insurance, the Fund filed a claim for the recovery of costs related to the
incident. The Fund's share of the cost of drilling totaled $1,383,349 of which
$1,235,351 was recovered through insurance proceeds, resulting in a net casualty
loss of $147,998. The $1,235,351 of insurance proceeds was recorded as a
receivable as of December 31, 2005 and was subsequently collected in January
2006.





                                      F10
<PAGE>


Supplemental 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. Tables I thru III provide historical cost information pertaining to
capitalized costs and costs incurred in exploration, property acquisitions and
development. As of December 31, 2005 and 2004, the Fund does not have any proved
reserves to warrant additional disclosure.

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


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

                                         December 31, 2005     December 31, 2004
                                         -----------------     -----------------

Leasehold acquisition costs                  $ 1,722,450          $         --
Exploratory drilling costs                     8,791,189                    --
                                             -----------          ------------

Unproved oil and gas properties              $10,513,639          $         --
                                             ===========          ============

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

                                                               For the period
                                                               August 2, 2004
                                         Year ended          (Inception) through
                                      December 31, 2005       December 31, 2004
                                      -----------------      ------------------

Leasehold acquisition costs             $ 1,722,450             $        --
Exploratory drilling costs                8,791,189                      --
Dry hole costs                            4,010,588               3,890,020
Lease operating expenses                    248,400                      --
Geological costs                            200,000                  21,586
                                        -----------             -----------

                                        $14,972,627             $ 3,911,606
                                        ===========             ===========

Table III - Results of Operations for Oil and Gas Producing
Activities

<TABLE>
<CAPTION>
                                                                                          For the period
                                                                                          August 2, 2004
                                                                    Year ended          (Inception) through
                                                                 December 31, 2005       December 31, 2004
                                                                 -----------------      -------------------
<S>                                                               <C>                       <C>
Dry hole costs                                                    $ 4,010,588               $ 3,890,020
Lease operating expenses                                              248,400                        --
Geological costs                                                      200,000                    21,586
                                                                  -----------               -----------
   Total expenses                                                   4,458,988                 3,911,606
                                                                  -----------               -----------
Results of Operations for Oil and Gas Producing Activities        $(4,458,988)              $(3,911,606)
                                                                  ===========               ===========
</TABLE>





                                      F11
<PAGE>



         Selected Quarterly Financial Data for the year ended December 31, 2005
and the period from August 2, 2004 (inception) through December 31, 2004
(unaudited).

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                             2005
---------------------------------------------------------------------------------------------------
                              First Quarter     Second Quarter      Third Quarter    Fourth Quarter
---------------------------------------------------------------------------------------------------
<S>                                <C>                <C>                <C>             <C>
Revenues                                 --                 --                 --                --
---------------------------------------------------------------------------------------------------
Loss from operations               (548,196)        (4,570,505)           (680,038)        (935,683)
---------------------------------------------------------------------------------------------------
Net loss                           (379,162)        (4,207,720)           (311,990)        (542,765)
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
                                                             2004
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
Revenues                                 --                 --                 --                --
---------------------------------------------------------------------------------------------------
Loss from operations                     --                 --           (925,137)       (7,110,707)
---------------------------------------------------------------------------------------------------
Net loss                                 --                 --           (924,572)       (7,041,097)
---------------------------------------------------------------------------------------------------
</TABLE>

         The significant losses in Q4 2004 were related to dry-hole costs for
         wells drilled in 2004.
         The losses in Q2 2005 were related to dry-hole costs for wells drilled
         in 2005.





                                       30
<PAGE>


                                    Exhibits

         Exhibit No.       Description
         -----------       -----------

         3(i)(A)           Articles of Formation of Registrant (incorporated by
                           reference to Exhibit 3.1 of Registrant's Registration
                           Statement on Form 10-12 G/A filed with the Commission
                           on September 2, 2005.)

         3(i)(B)           Limited Liability Company Agreement of Registrant
                           (incorporated by reference to Exhibit 10.1 of
                           Registrant's Registration Statement on Form 10-12G/A
                           filed with the Commission on September 2, 2005.)

         10.1              Registrant's Confidential Private Offering Memorandum
                           (incorporated by reference to Exhibit 10.1A of
                           Registrant's Registration Statement on form 10-12G/A
                           filed with the Commission on September 2, 2005.)

         10.2              Offshore Operating Agreement between Apache
                           Corporation and Ridgewood Energy Corporation as
                           Manager of the Registrant for the Vermilion 7 project
                           (incorporated by reference to Exhibit 10.2 of
                           Registrant's Registration Statement on Form 10-12G/A
                           filed with the Commission on September 2, 2005.)

         10.3              Offshore Operating Agreement between BHP Billiton and
                           Ridgewood Energy Corporation as Manager of the
                           Registrant for the West Cameron 77 Mustang project
                           (incorporated by reference to Exhibit 10.3of
                           Registrant's Registration Statement on Form 10-12G/A
                           filed with the Commission on September 2, 2005.)

         10.4              Offshore Operating Agreement between Samson Offshore
                           Company and Ridgewood Energy Corporation as Manager
                           of the Registrant for the James Lime project
                           (incorporated by reference to Exhibit 10.4 of
                           Registrant's Registration Statement on Form 10-12G/A
                           filed with the Commission on September 2, 2005.)

         14*               Code of Ethics adopted by the Manager in March 2004.

         31.1*             Certification of Robert E. Swanson, Chief Executive
                           Officer of the Registrant pursuant to Securities
                           Exchange Act Rule 13a-14(a).

         31.2*             Certification of Kathleen P. McSherry, Chief
                           Financial Officer of the Registrant, pursuant to
                           Securities Exchange Act Rule 13a-14(a).


                                       31
<PAGE>


         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 Registrant and Kathleen P.
                           McSherry, Chief Financial Officer of the Registrant.


-----------------
* Filed herewith


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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, on the 15th day of
March, 2006.




                           RIDGEWOOD ENERGY M FUND, LLC


                           By: /s/ Robert E. Swanson
                              -----------------------------
                                   Robert E. Swanson
                                   Chief Executive Officer

                           By: /s/ Kathleen P. McSherry
                              -----------------------------
                                   Kathleen P. McSherry
                                   Senior Vice President and
                                   Chief Financial Officer

























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