UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


 |X|     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended September 30, 2006

                                       or

 |_|     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from _________________to____________________


                        Commission File Number 000-51268


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


                     Delaware                                  13-4285167
         (State or other jurisdiction of                    (I.R.S. Employer
          incorporation or organization)                   Identification No.)


                  1314 King Street, Wilmington, Delaware  19801
               (Address of principal executive offices) (Zip code)

                                 (302) 888-7444
              (Registrant's telephone number, including area code)


    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  |_| No  |X|

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

    Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |X|

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

As of April 5, 2007 there were 535.6818 shares of membership interest of the
registrant outstanding.


<PAGE>

                                     Table of Contents

<TABLE>
Part I - FINANCIAL INFORMATION                                                                              Page
<S>                                                                                                          <C>
   Item 1.  Financial Statements (Unaudited):
      Condensed Balance Sheets as of September 30, 2006 and December 31, 2005 .................................3
      Condensed Statements of Operations for the three and nine months ended September 30, 2006
         and 2005 and for the period August 2, 2004 (Inception) through September 30, 2006 ....................4
      Condensed Statements of Cash Flows for the nine months ended September 30, 2006 and 2005
         and for the period August 2, 2004 (Inception) through September 30, 2006 .............................5
      Notes to Unaudited Condensed Financial Statements .......................................................6
   Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations ............15
   Item 3.  Quantitative and Qualitative Disclosures About Market Risk .......................................22
   Item 4.  Controls and Procedures ..........................................................................22

Part II - OTHER INFORMATION ..................................................................................25

   Item 6.  Exhibits .........................................................................................25

   SIGNATURES ................................................................................................26
</TABLE>








                                        2
<PAGE>

                          Ridgewood Energy M Fund
                     (An exploratory stage enterprise)
                         Condensed Balance Sheets
                                (Unaudited)

<TABLE>
<CAPTION>
                                                                                          September 30, 2006       December 31, 2005
                                                                                          ------------------       -----------------
<S>                                                                                      <C>                      <C>
Assets
    Current Assets:
        Cash and cash equivalents                                                                $ 10,534,998          $ 43,453,700
        Short-term investment in marketable securities                                             15,456,197                     -
        Production receivable                                                                       1,838,366                     -
        Insurance receivable                                                                                -             1,235,351
        Prepaid expenses                                                                               31,390                24,730
                                                                                                 ------------          ------------
    Total current assets                                                                           27,860,951            44,713,781
                                                                                                 ------------          ------------
      Salvage fund                                                                                  1,047,067             1,013,612
                                                                                                 ------------          ------------
      Oil and gas properties
        Advances to operators for working interests and expenditures                                        -             4,365,943
        Proved properties                                                                          22,003,742             7,052,187
        Unproved properties                                                                         5,066,349               464,748
        Less: accumulated depletion and amortization-proved properties                             (3,498,863)                    -
                                                                                                 ------------          ------------
      Total oil and gas properties, net                                                            23,571,228            11,882,878
                                                                                                 ------------          ------------
Total assets                                                                                     $ 52,479,246          $ 57,610,271
                                                                                                 ============          ============
Liabilities and Members' Capital
    Current Liabilities:
        Due to operators                                                                         $  1,935,453          $    477,117
        Accrued expenses payable                                                                       82,082                44,671
                                                                                                 ------------          ------------
      Total current liabilities                                                                     2,017,535               521,788
                                                                                                 ------------          ------------
    Non-current liabilities
        Asset retirement obligations                                                                  222,319                23,145
                                                                                                 ------------          ------------
      Total non-current liabilities                                                                   222,319                23,145
                                                                                                 ------------          ------------
Total liabilities                                                                                $  2,239,854          $    544,933
                                                                                                 ------------          ------------
    Commitments and contingencies
    Members' capital:
    Manager:
    Distributions                                                                                    (353,171)                    -
    Accumulated deficit                                                                                41,110              (478,483)
                                                                                                 ------------          ------------
    Manager's total                                                                                  (312,061)             (478,483)
                                                                                                 ------------          ------------
    Shareholders:
    Capital contributions, and syndication costs (834 shares authorized;                           78,886,679            78,886,679
       535.6818 issued and outstanding, respectively)
    Distributions                                                                                  (2,001,316)                    -
    Syndication costs                                                                              (8,596,612)           (8,596,612)
    Accumulated deficit                                                                           (17,737,298)          (12,746,246)
                                                                                                 ------------          ------------
    Shareholders' total                                                                            50,551,453            57,543,821
                                                                                                 ------------          ------------
    Total members' capital                                                                       $ 50,239,392          $ 57,065,338
                                                                                                 ------------          ------------
    Total liabilities and members' capital                                                       $ 52,479,246          $ 57,610,271
                                                                                                 ============          ============

 The accompanying notes are an integral part of these unaudited condensed financial statements.
</TABLE>


                                       3
<PAGE>


                          Ridgewood Energy M Fund, LLC
                        (An exploratory stage enterprise)
                       Condensed Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                          For the period
                                                                                                          August 2, 2004
                                                                                                            (Inception)
                                             For the three months ended     For the nine months ended         through
                                                   September 30,                  September 30,            September 30,
                                                2006          2005            2006             2005            2006
                                                ----          ----            ----             ----            ----
<S>                                        <C>             <C>            <C>              <C>            <C>
   Revenues
  Oil and gas revenue                      $  3,803,200   $          -    $  6,114,075    $          -    $  6,114,075
                                           ------------   ------------    ------------    ------------    ------------
Expenses
   Investment fees to affiliate (Note 6)              -              -               -               -       3,583,985
   Dry-hole costs                                25,081      2,028,648       6,305,929       4,055,385      14,251,334
   Depletion and amortization                 2,222,110              -       3,498,863               -       3,498,863
   Accretion expense                              2,767              -           4,941               -           5,027
   Geological costs                                   -              -               -               -         221,586
   Lease operating expenses                     217,068              -         309,001               -         309,001
   Management fees to affiliate (Note 6)        463,615        491,639       1,449,703       1,478,606       3,903,223
   Casualty loss                                      -              -               -          72,700         109,900
   Other general and administrative
   expenses                                     127,277         86,800         345,591         177,266         618,798
                                           ------------   ------------    ------------    ------------    ------------
  Total expenses                              3,057,919      2,607,087      11,914,029       5,783,957      26,501,717
                                           ------------   ------------    ------------    ------------    ------------
Income (loss) from operations                   745,282     (2,607,087)     (5,799,954)     (5,783,957)    (20,387,642)
Other income
   Interest income                              863,705        368,048       1,328,495         899,867       2,691,455
                                           ------------   ------------    ------------    ------------    ------------
  Total other income                            863,705        368,048       1,328,495         899,867       2,691,455
                                           ------------   ------------    ------------    ------------    ------------

Net income (loss)                          $  1,608,986   $ (2,239,039)   $ (4,471,459)   $ (4,884,090)   $(17,696,188)
                                           ============   ============    ============    ============    ============
Manager - Net income (loss)                $    294,613   $   (103,372)   $    519,593    $   (245,157)   $     41,110
Shareholders - Net income (loss)           $  1,314,373   $ (2,135,667)   $ (4,991,052)   $ (4,638,933)   $(17,737,298)
Net income (loss) per share                $      2,454   $     (3,987)   $     (9,317)   $     (8,660)   $    (33,112)




 The accompanying notes are an integral part of these unaudited condensed financial statements.
</TABLE>




                                        4
<PAGE>

                          Ridgewood Energy M Fund, LLC
                        (An exploratory stage enterprise)
                        Condensed Statement of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                    For the period
                                                                                                                    August 2, 2004
                                                                                 For the nine     For the nine        (Inception)
                                                                                 months ended     months ended          through
                                                                                September, 2006  September, 2005  September 30, 2006
                                                                                ---------------  ---------------  -----------------
<S>                                                                              <C>                <C>                <C>
Cash flows from operating activities
     Net loss                                                                    $ (4,471,459)      $ (4,884,090)      $(17,696,188)
     Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities
     Dry-hole costs                                                                 6,305,929          4,055,385         14,251,334
     Depletion and amortization                                                     3,498,863                  -          3,498,863
     Accretion expense                                                                  4,941                  -              5,027
     Interest earned on marketable securities                                        (456,534)                 -           (456,534)
Changes in assets and liabilities
     Increase in production receivable                                             (1,838,366)                 -         (1,838,366)
     Decrease in due to operators                                                     155,688                  -            155,688
     Increase in prepaid expenses                                                      (6,660)              (315)           (31,390)
     Increase in accrued expenses payable                                              37,411             59,709             82,082
     Decrease in due to affiliate                                                           -           (194,281)                 -
                                                                                 ------------       ------------       ------------
         Net cash provided by (used in) operating activities                        3,229,813           (963,592)        (2,029,484)
Cash flows from investing activities
     Payments to operators for working interests and expenditures                           -            (99,000)                 -
     Capital expenditures for oil and gas properties                              (19,996,261)        (7,813,127)       (40,559,719)
     Proceeds from the insurance receivable                                         1,235,351                             1,235,351
     Proceeds from the maturity of investment                                      15,346,000                  -         15,346,000
     Funding of salvage fund                                                                -         (1,000,000)        (1,000,000)
     Interest income reinvested - salvage fund                                        (33,455)            (5,866)           (47,067)
     Investment in marketable securities                                          (30,345,663)                 -        (30,345,663)
                                                                                 ------------       ------------       ------------
         Net cash used in investing activities                                    (33,794,028)        (8,917,993)       (55,371,098)
Cash flows from financing activities
     Contributions from shareholders                                                        -                  -         78,886,679
     Return of shareholder's capital contribution                                           -           (127,000)
     Collection of subscription receivable                                                  -            680,000
     Syndication costs paid                                                                 -           (560,218)        (8,596,612)
     Distributions paid                                                            (2,354,487)                 -         (2,354,487)
     Syndication costs recovered                                                            -             58,190
                                                                                 ------------       ------------       ------------
         Net cash (used in) provided by financing activities                       (2,354,487)            50,972         67,935,580
                                                                                 ------------       ------------       ------------
         Net (decrease) increase in cash and cash equivalents                     (32,918,702)        (9,830,613)        10,534,998
         Cash and cash equivalents, beginning of period                            43,453,700         62,461,036                  -
                                                                                 ------------       ------------       ------------
         Cash and cash equivalents, end of period                                $ 10,534,998       $ 52,630,423       $ 10,534,998
                                                                                 ============       ============       ============

Supplemental Schedule of noncash investing activities
         Advances used for capital expenditures in oil and gas
         properties reclassified to dry hole costs                               $  4,365,943       $          -       $         -
                                                                                 ============       ============       ============

 The accompanying notes are an integral part of these unaudited condensed financial statements.
</TABLE>




                                        5
<PAGE>

                          RIDGEWOOD ENERGY M FUND, LLC
                        (An exploratory stage enterprise)
                NOTES TO UNAUDITED CONDENSED 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 ("LLC Agreement") dated as of September 7, 2004 by and among
Ridgewood Energy Corporation ("Manager") and the shareholders of the Fund.
Although the date of formation is August 2, 2004, the Fund did not begin
operations until September 7, 2004 when it began its private offering of shares.

The Fund was organized to acquire, drill, construct and develop oil and natural
gas properties located in the United States offshore waters of Texas, Louisiana,
and Alabama in the Gulf of Mexico. The Fund has devoted most of its efforts to
raising capital and oil and natural gas exploration activities. The Fund began
earning revenue in May 2006 from these operations.

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

2.   Summary of Significant Accounting Policies

     Basis of presentation

These unaudited interim condensed financial statements have been prepared by the
Fund's management, in accordance with accounting principles generally accepted
in the United States of America ("GAAP") and in the opinion of management,
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the Fund's financial position, results of operations
and cash flows for the periods presented. Certain information and note
disclosures normally included in annual financial statements prepared in
accordance with GAAP have been omitted in these unaudited interim condensed
financial statements. The results of operations, financial position, and cash
flows for the periods presented herein are not necessarily indicative of future
financial results. These unaudited interim condensed financial statements should
be read in conjunction with the annual financial statements and the notes
thereto for the period ended December 31, 2005 included in the Fund's 2005
Annual Report on form 10-K/A filed with the Securities and Exchange Commission
("SEC").


                                       6
<PAGE>

     Exploratory Stage Enterprise

Management uses various criteria to evaluate whether the Fund is an exploratory
stage enterprise, including but not limited to, the success of drilling, the
timing, significance, quality and flow of production and the results of reserve
reports obtained from experts. On a case by case basis, once a project begins
production, management performs diligent analysis at regular intervals utilizing
the various criteria noted above to determine the appropriate classification of
the Fund as an exploratory stage entity. Based on such an analysis, management
has determined the Fund continues to be an exploratory stage enterprise.

     Use of Estimates

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

     Advances to Operators for Working Interests and Expenditures

Each participation agreement the Fund executes for an exploratory project
requires the Fund to make a payment to the working interest owner for the Fund's
ownership rights and working interest in the project. The Fund will account for
such payments as advances to operators for working interests and expenditures.
As drilling costs are incurred the advances are transferred to unproved
properties.

     Oil and natural gas properties

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

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


                                       7
<PAGE>

Upon the sale or retirement of a proved property (i.e. a producing well), the
cost and related accumulated depletion and amortization will be eliminated from
the property accounts, and the resultant gain or loss is recognized. On the sale
or retirement of an unproved property, gain or loss on the sale is recognized.
Currently, it is not the Manager's intention to sell any of the Fund's property
interests.

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

As of September 30, 2006 and December 31, 2005, amounts recorded in due to
operators totaling approximately $1.9 million and $0.5 million, respectively,
related to the acquisition of oil and gas property. In 2006, the December 31,
2005 due to operators balance was paid.

     Revenue Recognition and Production Receivable

Oil and natural gas sales are recognized when delivery is made by the Operator
to the purchaser and title is transferred (i.e. production has been delivered to
a pipeline or transport vehicle). At the time of transfer a production
receivable is recorded. The Fund earned revenue approximating $3.8 million and
$6.1 million for the three and nine months ended September 30, 2006,
respectively. No revenue was earned in 2005.

The volume of oil and natural gas sold on the Fund's behalf may differ from the
volume of oil and natural gas to which the Fund is entitled. The Fund will
account for such oil and natural gas production imbalances by the entitlements
method. Under the entitlements method, the Fund will recognize a receivable from
other working interest owners for volumes oversold by other working interest
owners. For volumes oversold by the Fund, a payable to other working interest
owners will be recorded. As of September 30, 2006 and December 31, 2005, there
were no oil or natural gas balancing arrangements between the Fund and other
working interest owners.

     Interest Income

Interest income is recognized when earned.

     Syndication Costs

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

     Asset Retirement Obligations

For oil and natural gas properties, there are obligations to perform removal and
remediation activities when the properties are retired. The Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No.


                                      8
<PAGE>

143"), 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 natural gas properties on the balance sheet. When a project
reaches drilling depth and is determined to be either proved or dry, an asset
retirement obligation is recorded. Plug and abandonment costs associated with
unsuccessful projects are expensed as dry-hole costs.

                                           September 30, 2006
                                           ------------------

Balance - Beginning of period                  $  23,145

Liabilities incurred                             501,509
Liabilities settled                             (307,276)
Accretion expense                                  4,941
                                               ---------
Balance - End of period                        $ 222,319
                                               =========

In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47, "Accounting
for Conditional Asset Retirement Obligations" ("FIN 47"). This interpretation
clarifies that the term "conditional asset retirement obligation" as used in
FASB 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 was
effective for calendar year-end entities no later than December 31, 2005. The
adoption of FIN 47 did not have an impact on the Fund's 2005 financial position
or results of operations.

     Impairment of Long-Lived Assets

In accordance with the provisions of SFAS No. 144, "Accounting for the
Impairment of Long-Lived Assets", long-lived assets, such as oil and natural gas
properties, are evaluated when events or changes in circumstances indicate the
carrying value of such assets may not be recoverable. The determination of
whether impairment has occurred is made by comparing the carrying values of
long-lived assets to the estimated future undiscounted cash flows attributable
to the asset. The impairment loss recognized is the excess of the carrying value
over the future discounted cash flows attributable to the asset or the estimated
fair value of the asset. For the three and nine months ended September 30, 2006
and 2005 and for the period August 2, 2004 (Inception) through September 30,
2006, the Fund had no impairments of long-lived assets.


                                       9
<PAGE>

     Depletion and Amortization

Depletion and amortization of the cost of proved oil and natural gas properties
are calculated using the units of production method. Proved developed reserves
are used as the base for depleting the cost of successful exploratory drilling
and development costs. The sum of proved developed and proved undeveloped
reserves is used as the base for depleting (or amortizing) leasehold acquisition
costs, the costs to acquire proved properties and platform and pipeline costs.
As of September 30, 2006 and December 31, 2005 accumulated depletion and
amortization were approximately $3.5 million and nil, respectively.

     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

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 September 30, 2006 and December 31,
2005, bank balances exceeded federally insured limits by approximately $10.3
million and $43.3 million, respectively inclusive of the salvage fund. The Fund
maintains bank deposits with accredited financial institutions to mitigate such
risk.

     Salvage Fund

The Fund deposits in a separate interest-bearing account, or a salvage fund,
money to provide for dismantling production platforms and facilities, plugging
and abandoning the wells and removing the platforms, facilities and wells after
their useful lives, in accordance with applicable federal and state laws and
regulations. Interest earned on the account will become part of the salvage
fund.

     Short-term Investments in Marketable Securities

At times the Fund may purchase short-term investments comprised of US Treasury
Notes with maturities greater than three months and as such are considered
held-to-maturity investments. Held-to-maturity securities are those investments
that the Fund has the ability and intent to hold until maturity.
Held-to-maturity investments are recorded at cost plus accrued income, adjusted
for the amortization of premiums and discounts which approximate market value.
Interest income is accrued as earned. As of September 30, 2006 held to maturity
investments of approximately $16.5 million, inclusive of the salvage fund, will
mature in February 2007.

     Income and Expense Allocation

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


                                       10
<PAGE>

3.   Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
("SFAS No. 157") which applies under most other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 provides a common
definition of fair value as the price that would be received to sell an asset or
paid to transfer a liability in a transaction between market participants. The
new standard also provides guidance on the methods used to measure fair value
and requires expanded disclosures related to fair value measurements. SFAS No.
157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007. The Fund does not expect this guidance to have a
material impact on the financial statements.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3"
("SFAS No. 154"). SFAS No. 154 requires, unless impracticable, retrospective
application to prior periods' financial statements of changes in accounting
principle where transition is not specified by a new accounting pronouncement.
SFAS No. 154 also requires that retrospective application of a change in
accounting principle be limited to the direct effects of the change. Indirect
effects of a change in accounting principle should be recognized in the period
of the accounting change. SFAS No. 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
The adoption of SFAS No. 154 had no impact on the financial statements.

FASB Staff Position ("FSP") 115-1 and 124-1, the Meaning of Other Than Temporary
Impairment and its Application to Certain Investments ("FSP 115-1 and 124-1").
This FSP addresses the determination as to when an investment is considered
impaired, whether that impairment is other than temporary and the measurement of
the impairment loss. It also requires certain disclosures about unrealized
losses that have not been recognized as other than temporary impairments. This
guidance applies to equity securities that have a readily determinable fair
value and all debt securities. It does not apply to investments accounted for
under the equity method. An investment is impaired if its fair value is less
than its cost, as assessed at the individual security level. When an investment
is impaired, the investor is required to evaluate whether the impairment is
other than temporary. If other than temporary, the unrealized loss must be
recognized. For all investments in an unrealized loss position for which other
than temporary impairments have not been recognized, the investor should
disclose by category of investment the amount of unrealized losses and the fair
value of investments with unrealized losses and related narrative disclosures.
The adoption of FSP 115-1 and 124-1 had no impact on the financial statements.

4.   Unproved Properties - Capitalized Exploratory Well Costs

In April 2005, FASB issued ("FSP") 19-1, "Accounting for Suspended Well Costs"
("FSP 19-1"). This FSP was issued to address whether there were circumstances
that would permit the continued capitalization of exploratory well costs beyond
one year, other than when further exploratory drilling is planned and major
capital expenditures would be required to develop the project. FSP 19-1 requires
the continued capitalization of suspended well costs if the well has found a
sufficient quantity of reserves to justify its completion as a producing well


                                       11
<PAGE>

and the entity is making sufficient progress assessing these reserves and the
economic and operating viability of the project. All relevant facts and
circumstances should be evaluated in determining whether an entity is making
sufficient progress assessing the reserves and FSP 19-1 provides several
indicators in this evaluation. FSP 19-1 prohibits continued capitalization of
suspended well costs on the chance that market conditions will change or
technology will be developed to make the project economic.

The Fund adopted FSP 19-1 during the second quarter of 2005. Leasehold
acquisition and exploratory drilling costs are capitalized pending determination
of whether the well has found proved reserves. Unproved properties are assessed
on a quarterly basis by evaluating and monitoring if sufficient progress is made
on assessing the reserves. Capitalization costs are expensed as dry-hole costs
in the event that reserves are not found or are not in sufficient quantities to
complete the well and develop the field. Dry-hole costs were approximately $25
thousand and $6.3 million for the three and nine months ended September 30,
2006, respectively. For the period August 2, 2004 (Inception) through September
30, 2006, dry-hole costs were approximately $14.3 million. As of September 30,
2006 and December 31, 2005, the Fund had no capitalized exploratory well costs
greater than one year.

The following table summarizes unproved properties and related activity for the
nine months ended September 30, 2006.

                                                             September 30, 2006
                                                             ------------------

        Balance - Beginning of period                        $          464,748

        Additions to capitalized exploratory well costs
         pending the determination of proved reserves                17,747,862
        Reclassifications to proved properties based on
         the determination of proved reserves                       (12,874,690)
        Capitalized exploratory well costs charged to
         dry-hole costs                                                (271,571)
                                                                    -----------
        Balance - End of period                              $        5,066,349
                                                                    ===========

5.   Distributions

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

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

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

The shareholders received distributions of approximately $2.0 million, nil and
$2.0 million for the nine months ended September 30, 2006, nine months ended
September 30, 2005, and for the period August 2, 2004 (Inception) through
September 30, 2006, respectively.


                                       12
<PAGE>

The Manager received distributions of approximately $0.4 million, nil and $0.4
million for the nine months ended September 30, 2006, nine months ended
September 30, 2005, and for the period August 2, 2004 (Inception) through
September 30, 2006, respectively.

6.   Related Parties

The Manager was 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. There were no investment
fees in 2006 and 2005. For the period August 2, 2004 (Inception) through
September 30, 2006, investment fees were approximately $3.6 million.

The Fund's LLC Agreement provides that the Manager render management,
administrative and advisory services. For such services, the Manager receives an
annual management fee, payable monthly, of 2.5% of total capital contributions.
Effective September 2006, the Manager has changed its policy regarding the
annual management fee. Commencing on September 1, 2006, the management fee,
payable monthly, will be equal to 2.5% of the total shareholder capital
contributions, net of dry-hole expenses incurred by the Fund. Management fees of
approximately $0.5 million and $1.4 million were incurred and paid for the three
and nine months ended September 30, 2006, respectively. Management fees of
approximately $0.5 million and $1.5 million were incurred and paid for the three
and nine months ended September 30, 2005, respectively. Management fees of
approximately $3.9 million were incurred and paid for the period August 2, 2004
(Inception) through September 30, 2006.

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. No amount was outstanding as of September 30, 2006 and December 31,
2005.

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

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

7.   Fair Value of Financial Instruments

As of September 30, 2006 and December 31, 2005, the carrying value of cash and
cash equivalents, short term investments in marketable securities and salvage
fund approximate fair value.

8.   Commitment and Contingencies

     Environmental Considerations

The exploration for and development of oil and natural gas involves the
extraction, production and transportation of materials which, under certain
conditions, can be hazardous or cause environmental pollution problems. The
Manager and the Operators are continually taking action they believe appropriate
to satisfy applicable federal, state and local environmental regulations and do
not currently anticipate that compliance with federal, state and local
environmental regulations will have a material adverse effect upon capital
expenditures, results of operations or the competitive position of the Fund in


                                       13
<PAGE>

the oil and natural gas industry. However, due to the significant public and
governmental interest in environmental matters related to those activities, the
Manager cannot predict the effects of possible future legislation, rule changes,
or governmental or private claims. As of September 30, 2006 and December 31,
2005, there were no known environmental contingencies that required the Fund to
record a liability.

     Insurance Coverage

The Fund is subject to all risks inherent in the exploration for and development
of oil and natural gas. Insurance coverage as is customary for entities engaged
in similar operations is maintained, but losses may occur from uninsurable risks
or amounts in excess of existing insurance coverage. The occurrence of an event
which is not insured or not fully insured could have an adverse impact upon
earnings and financial position.

During March 2005, the Fund reported a claim to its insurance carrier for cost
recovery related to the West Cameron 77 # 2 project and recorded a $110 thousand
casualty loss related to costs not recoverable through insurance. Estimated
losses not expected to be recovered by insurance are recorded as casualty losses
when the loss is incurred. An insurance recovery receivable of approximately
$1.2 million was recorded as of December 31, 2005 and was collected in the first
quarter of 2006.

9.   Subsequent Events

In October 2006, the Fund has acquired a working interest in the following
wells:

<TABLE>
<CAPTION>
                                                                                  Working             Drilling
 Project                        Operator             Acquisition     Offshore    Interest %             Date
-----------------------------------------------------------------------------------------------------------------------
<S>                        <C>                       <C>                <C>        <C>                 <C>
Galveston 248              LLOG Exploration          October 2006       TX         8.75%               Q2 2007
                               Company
Ship Shoal 81              LLOG Exploration          October 2006       LA         8.75%               Q3 2007
                               Company
South Marsh Island 111     LLOG Exploration          October 2006       LA         8.75%               Q2 2007
                               Company
Vermilion 344              LLOG Exploration          October 2006       LA         8.75%             Successful-
                               Company                                                            completion in progress
West Delta 67              LLOG Exploration          October 2006       LA         8.75%               Q2 2007
                               Company
West Delta 68              LLOG Exploration          October 2006       LA         8.75%              Successful -
                               Company                                                           completion in progress
</TABLE>


                                       14
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q including all documents incorporated by reference, includes
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and the Private
Securities Litigation Reform Act of 1995, and the "safe harbor" provisions
thereof. These forward-looking statements are usually accompanied by the words
"anticipates," "believes," "plan," "seek," "expects," "intends," "estimates,"
"projects," "will," "would," "will likely result," "will continue," "future" and
similar terms and expressions or variations thereof. The forward-looking
statements in this Form 10-Q reflect the current views of management of the Fund
with respect to future events and financial performance. These forward-looking
statements are subject to certain risks and uncertainties, including, among
other things, the high-risk nature of oil and natural gas exploratory
operations, the fact that our drilling activities are managed by third parties,
the volatility of natural gas prices and extraction, and those other risks and
uncertainties discussed in the Fund's originally filed 2005 Form 10-K and Form
10 filed with the Securities and Exchange Commission that could cause actual
results to differ materially from historical results or those anticipated. You
are urged to carefully consider all such factors.

In light of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Form 10-Q will in fact occur or
prove to be accurate. Readers should not place undue reliance on the
forward-looking statements contained herein, which speak only as of today's
date. We undertake no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that may arise after today. 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.

Critical Accounting Policies and Estimates

The following discussion and analysis of our financial condition and operating
results is based on our financial statements. The preparation of this Quarterly
Report on Form 10-Q requires us to make estimates and assumptions that affect
the reported amount of assets and liabilities, disclosure of contingent assets
and liabilities at the date of our financial statements, and the reported amount
of revenue and expenses during the reporting period. Actual results may differ
from those estimates and assumptions. No changes have been made to our critical
accounting policies and estimates since the filing of the Form 10-K/A.

Overview of our Business

The Fund is an independent oil and natural gas producer. The Fund's primary
investment objective is to generate cash flow for distribution to our
shareholders through participation in oil and natural gas exploration and
development projects in the Gulf of Mexico. The Fund began its operations by
offering shares in a private offering on September 7, 2004. As a result of such


                                       15
<PAGE>

offering, it raised capital of approximately $78.9 million through the sale of
535.6818 shares of LLC membership interests. After the payment of approximately
$12.2 million in offering fees, commissions and investment fees to the Fund's
Manager, affiliates, and broker-dealers, the Fund retained approximately $66.7
million available for investment. Investment fees represent a one time fee of
4.5% of initial capital contributions. The fee is payable to the Manager for the
service of investigating and evaluating investment opportunities and affecting
transactions.

The Manager performs certain duties on the Fund's behalf including the
evaluation of potential projects for investment and ongoing administrative and
advisory services associated with these projects. The Fund does not currently,
nor is there any plan, to operate any project in which the Fund participates.
The Manager enters into operating agreements with third-party operators for the
management of all exploration, development and producing operations, as
appropriate. As compensation for the above duties, the Manager is paid a one
time investment fee (4.5% of capital contributions) for the evaluation of
projects on the Fund's behalf and an annual management fee (2.5% of capital
contributions), payable monthly, for ongoing administrative and advisory duties
as well as reimbursement of expenses. The Manager also participates in
distributions.

Business Update


In 2004, the Fund acquired from BHP Billiton ("BHP") a 14.54% working interest
in the West Cameron 77 #2 project of which one well has been drilled and is
producing. We anticipate drilling a second well in the future.

<TABLE>
<CAPTION>
                                                                 Costs incurred
                                                   Working      through 12/31/06
    Well Name           Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
West Cameron 77#2    BHP Billiton       LA          14.54%          $  9,127               Currently producing

In 2006, the Fund acquired Eugene Island 364 from El Paso Corporation ("El
Paso"). The well was deemed a success and began production in June 2006. After
two months, the well encountered mechanical problems and has been shut in since
for review by the partners

<CAPTION>
                                                                 Costs incurred
                                                   Working      through 12/31/06
    Well Name           Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Eugene Island 364        El Paso        LA             50%          $ 13,035             Temporarily shut in for
                                                                                            mechanical problems

In 2005, the Fund acquired Eugene Island 357 from Newfield Exploration
Corporation ("Newfield"). The well was deemed a dry-hole and was plugged and
abandoned in March 2006.

<CAPTION>
                                                                 Costs incurred
                                                  Working       through 12/31/06
   Well Name            Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Eugene Island 357       Newfield        LA              7%          $  1,707                 DRY:March 2006


                                       16
<PAGE>

In 2005, the Fund acquired East Breaks 157 from ENI Petroleum (now Woodside).
The well was deemed a dry-hole and was plugged and abandoned in March 2006.

<CAPTION>
                                                                 Costs incurred
                                                   Working      through 12/31/06
    Well Name           Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Eugene Breaks 157       Woodside        TX             18%          $   4,632                DRY:March 2006

In 2005, the Fund acquired a 20% working interest in Eugene Island 337 from
Devon Energy ("Devon") which was drilled in two zones, one at 12,500 feet which
was dry and one at 7,500 feet which will be completed once a platform-based rig
becomes available to Devon.

<CAPTION>
                                                                 Costs incurred
                                                   Working      through 12/31/06
    Well Name           Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Eugene Island 337         Devon         LA             20%          $  5,184           Discovery July 2006: Waiting
                                                                                               on Production

In 2005, the Fund acquired a 30% working interest in Main Pass 155 from Samson
Energy ("Samson") which was drilled and deemed a dry-hole in July 2005.

<CAPTION>
                                                                 Costs incurred
                                                   Working      through 12/31/06
    Well Name           Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Main Pass 155            Samson         AL             30%          $  3,953                  DRY:July 2005

In 2004, the Fund acquired a 26% working interest in Vermilion 7/8 from Apache
Corporation ("Apache") in 2004. The well was drilled and deemed to be
non-commercial and in April 2005, the blocks were released back to Apache.

<CAPTION>
                                                                 Costs incurred
                                                   Working      through 12/31/06
    Well Name           Operator      Offshore    Interest %      (in thousands)                  Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Vermilion 7/8            Apache         LA           26.0%          $  4,069                DRY:January 2005

In October 2006, the Fund acquired a working interest in the following wells
operated by LLOG Exploration Company ("LLOG").

<CAPTION>
                                                   Working         Budgeted
    Well Name           Operator      Offshore    Interest %    (in thousands)                    Status
<S>                  <C>              <C>          <C>            <C>                      <C>
Galveston 248             LLOG          TX           8.75%          $  2,118          2nd quarter 2007 drilling date
Ship Shoal 81             LLOG          LA           8.75%          $  1,663          3rd quarter 2007 drilling date
South Marsh Island 111    LLOG          LA           8.75%          $  1,645          2nd quarter 2007 drilling date
Vermilion 344             LLOG          LA           8.75%          $  1,890            Successful-completion in
                                                                                                progress
West Delta 67             LLOG          LA           8.75%          $  1,505          2nd quarter 2007 drilling date
                                                                                        Successful-completion in
West Delta 68             LLOG          LA           8.75%          $  1,610              progress
</TABLE>

Results of Operations

Net income (loss). For the three and nine months ended September 30, 2006, net
income (loss) was approximately $1.6 million and $(4.5) million, respectively,
primarily related to revenue of approximately $3.8 million and $6.1 million,
respectively, and interest income of approximately $0.9 million and $1.3
million, respectively, partially offset by dry-hole costs, depletion and
amortization and management fees. For the three and nine months ended September
30, 2005, net loss was approximately $2.2 million and $4.9 million,
respectively, primarily related to dry-hole costs and management fees partially
offset by interest income. For the period August 2, 2004 (Inception) through


                                       17
<PAGE>

September 30, 2006, the net loss was approximately $17.7 million, primarily
related to dry-hole costs, depletion and amortization, investment fees and
management fees of approximately $14.3 million, $3.5 million, $3.6 million and
$3.9 million, respectively, partially offset by revenue of approximately $6.1
million and interest income of approximately $2.7 million.

Oil and gas revenues. Oil and natural gas revenues for the three and nine months
ended September 30, 2006, and for the period August 2, 2004 (Inception) through
September 30, 2006, were approximately $3.8 million, $6.1 million and $6.1
million, respectively. There was no production prior to the second quarter of
2006. Production volume for oil for the three and nine months ended September
30, 2006 was approximately 15 thousand and 26 thousand barrels, respectively.
Average sales price for oil for the three and nine months ended September 30,
2006 was approximately $70.73 and $69.82 per barrel, respectively. Production
volume for natural gas for the three and nine months ended September 30, 2006
was approximately 404 thousand MCFs and 651 MCFs, respectively. Average sales
price for natural gas for the three months and nine months ended September 2006
was approximately $6.69 per MCF and $6.55 per MCF, respectively.

Investment fees. The manager is paid a one time investment fee of 4.5% of
initial capital contributions, the fee is payable for the service of
investigating and evaluating investment opportunities and affecting transactions
when the capital contributions are made. There were no investment fees incurred
or paid in 2006 or 2005. For the period August 2, 2004 (Inception) through
September 30, 2006, investment fees incurred and paid were approximately $3.6
million.

Depletion and amortization. Depletion and amortization for the three and nine
months ended September 30, 2006, and for the period August 2, 2004 (Inception)
through September 30, 2006, was approximately $2.2 million, $3.5 million and
$3.5 million, respectively. This increase is the result of production reserves
volumes in 2006 compared to no production in 2005 and 2004.

Dry-hole costs. Dry-hole costs are those costs incurred to drill and develop a
well that is ultimately found to be incapable of producing either oil or natural
gas in sufficient quantities to justify completion of the well. Dry-hole costs
are recognized in the period in which the costs are incurred. Dry-hole costs for
the three months and nine months ended September 30, 2006 were approximately $25
thousand and $6.3 million, respectively, related to the determination that
Eugene Island 357 and East Breaks 157 were dry. Dry-hole costs for the three
months and nine months ended September 30, 2005 were approximately $2.0 million
and $4.1 million, respectively, related to the determination that Main Pass 155
was dry. For the period August 2, 2004 (Inception) through September 30, 2006,
were approximately $14.3 million relating to the aforementioned dry-holes in
2005 and 2006 as well as dry-hole costs incurred in 2004 for Vermilion 7/8.

Geological costs. Geological costs represent seismic data costs relating to the
West Cameron 77 Mustang well. Geological costs for the period August 2, 2004
(Inception) through September 30, 2006 were approximately $0.2 million. There
were no geological costs incurred in 2005 or 2006.


                                       18
<PAGE>

Lease operating expenses. Lease operating expenses for the three and nine months
ended September 30, 2006 and for the period August 2, 2004 (Inception) through
September 30, 2006, were approximately $0.2 million, $0.3 million and $0.3
million, respectively. Lease operating expenses are related to production
activity for the West Cameron 77 #2 project and the Eugene Island 364 project.
There were no lease operating expenses incurred in 2005.

Management fees. The manager receives annual management fee, payable monthly, of
2.5% of total capital contributions. Effective September 2006, the Manager has
changed its policy regarding the annual management fee. Commencing on September
1, 2006, the management fee, payable monthly, will be equal to 2.5% of the total
shareholder capital contributions, net of dry-hole expenses incurred by the
Fund. Management fees are charged to cover expenses associated with overhead
incurred by the Manager for its ongoing management, administrative and advisory
services. Such overhead expenses include but are not limited to rent, payroll
and benefits for employees of the Manager, and other administrative costs.
Management fees incurred and paid for the three and nine months ended September
30, 2006 were approximately $0.5 million and $1.4 million respectively.
Management fees incurred and paid for the three and nine months ended September
30, 2005 and for the period August 2, 2004 (Inception) through September 30,
2006, were approximately $0.5 million, $1.5 million and $3.9 million,
respectively.

Other general and administrative expenses. Other general and administrative
expenses represent accounting, legal, fiduciary fees and insurance expenses
specifically identifiable or allocable to the Fund. Accounting and legal fees
represent annual audit and tax preparation fees, quarterly reviews and filing
fees of the Fund. Insurance expense represents well control insurance and
premiums related to directors and officers liability and are allocated to the
Fund based on capital raised by all oil and natural gas funds managed by the
Manager. Other general and administrative expenses were approximately $0.1
million and $0.3 million, respectively, for the three and nine months ended
September 30, 2006. For the three and nine months ended September 30, 2005,
other general and administrative expenses were approximately $0.1 million and
$0.2 million, respectively. For the period August 2, 2004 (Inception) through
September 30, 2006, other general and administrative expenses were approximately
$0.6 million.

Casualty loss. Casualty loss for the period August 2, 2004 (Inception) through
September 30, 2006 was approximately $0.1 million, related to costs not
recoverable through insurance for the West Cameron 77 #2 project. There was no
casualty loss for the three months ended September 30, 2006 and 2005. For the
nine months ended September 30, 2006 and 2005, casualty losses were nil and $0.1
million, respectively.

Other income. Other income is comprised solely of interest income and represents
interest earned on money market accounts and US Treasury Notes. Interest income
for the three and nine months ended September 30, 2006 was approximately $0.9
million and $1.3 million, respectively. Interest income for the three and nine
months ended September 30, 2005 and for the period August 2, 2004 (Inception)
through September 30, 2006, was approximately $0.4 million, $0.9 million, and
$2.7 million, respectively.

Capital Resources and Liquidity

Cash flows provided by operating activities for the nine months ended September
30, 2006 were approximately $3.2 million, primarily related cash receipts from
production revenue and interest income, partially offset by cash expenditures
for operating expenses.


                                       19
<PAGE>

Cash flows used in operating activities for the nine months ended September 30,
2005 were approximately $1.0 million, primarily related to management fees and
general and administrative fees partially offset by interest income.

Cash flows used in operating activities for the period August 2, 2004
(Inception) through September 30, 2006 were approximately $2.0 million,
primarily related to cash receipts from production revenue offset by cash
expenditures for operating expenses.

Cash flows used in investing activities for the nine months ended September 30,
2006 were approximately $33.8 million, primarily related to capital expenditures
for oil and gas properties and investments in marketable securities offset by
proceeds from maturity of investment and an insurance receivable.

Cash flows used in investing activities for the nine months ended September 30,
2005 were approximately $8.9 million, primarily related to payments to operators
for working interests and expenditures, funding of the salvage fund and capital
expenditures for oil and gas properties. Investing activities relate to the
actual purchase of wells, infrastructure and other capital items unrelated to
operating activities occurring after a well has begun producing.

Cash flows used in investing activities for the period August 2, 2004
(Inception) through September 30, 2006 were approximately $55.4 million,
primarily related payments to operators for working interests and expenditures,
capital expenditures for oil and gas properties, funding of the salvage fund and
investments in marketable securities offset by proceeds from maturity of
investment.

Cash flows used in by financing activities for the nine months ended September
30, 2006 were approximately $2.4 million, related to distributions to
shareholders and the Manager.

Cash flows provided by financing activities for the nine months ended September
30, 2005 were approximately $51 thousand, primarily related to the collection of
subscription receivable, partially offset by syndication costs.

Cash flows provided by financing activities for the period August 2, 2004
(Inception) through September 30, 2006 represents approximately $67.9 million,
primarily related to net proceeds from the sale of shares of the Fund, which was
comprised primarily of approximately $78.9 million shareholders contributions
offset by syndication costs of approximately $8.6 million and distributions to
shareholders and the Manager of approximately $2.4 million.

The Manager may distribute available cash from operations which includes cash
received by the Fund from producing wells (not including cash flow from
dispositions and investor capital contributions), less operating expenses and
other cash expenditures and less reserves for operating expenses, plugging and
abandonment costs and certain other actual and contingent liabilities.


                                       20
<PAGE>

We expect to meet our cash commitments for the next twelve months from our cash
and investments on hand.

Estimated Capital Expenditures

The Fund has entered into multiple operating agreements for the drilling and
development of its investment properties. The estimated capital expenditures
associated with these agreements can vary depending on the stage of development
on a property-by-property basis. For projects committed as of September 30,
2006, such estimated capital expenditures to be spent total approximately $6.3
million, all of which is expected to be paid out of the unspent capital
contribution within the following 12 months.

The table below presents exploration and development capital expenditures from
inception as well as estimated budgeted amounts for future periods:

<TABLE>
<CAPTION>
Estimated Capital Expenditures
As of  September 30, 2006
(In thousands)                          Total Project          Spent Through           To be Spent
                                            Costs           September 30, 2006        Next 12 Months
                                            -----           ------------------        --------------
<S>                                     <C>                 <C>                     <C>
Projects
        West Cameron 77 #2 (i)                $  13.1                 $   9.1                  $  4.0
        Eugene Island 364 (ii)                   13.3                    12.9                     0.4
        Eugene Island 337 (iii)                   7.0                     5.1                     1.9
                                              -------                 -------                  ------
                                              $  33.4                 $  27.1                  $  6.3
                                              =======                 =======                  ======
</TABLE>

     (i)   Total project costs assumes the drilling of two wells, costs spent
           through September 30, 2006 represent drilling and completion costs
           associated with the first well only.
     (ii)  Eugene Island 364 began production in June 2006 and is currently
           shut-in due to mechanical problems.
     (iii) Eugene Island 337 was determined to be successful in July 2006,
           production is expected in April 2007.







                                       21
<PAGE>

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The principal market risks to which the Fund is exposed that may adversely
impact the Fund's results of operations and financial position are changes in
oil and natural gas prices. The Fund has no market risk sensitive instruments
held for trading purposes. Information about market risks for the nine months
ended September 30, 2006, does not differ materially from that discussed in the
Fund's 10-K/A.

Item 4. Controls and Procedures

(a) Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Fund maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the reports that the Fund
files or submits as defined in Rules 13a-15(e) of the Securities and Exchange
Act of 1934, as amended ("Exchange Act") is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission ("SEC") rules and forms, and that such information is accumulated and
communicated to the Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO") to allow timely decisions regarding required disclosures.

The Fund, under the supervision and with the participation of management,
including the CEO and CFO, evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934) as of September 30, 2006
("Evaluation Date"). Based on our initial evaluation, our CEO and CFO concluded
that our disclosure controls and procedures were effective as of the Evaluation
Date.

However, subsequent to the Evaluation Date, as reported under Item 4.02 of the
Form 8-K filed by the Fund on December 21, 2006, on December 19, 2006, the
Manager of the Fund, Ridgewood Energy Corporation, concluded that the Fund's
financial statements for the year ended December 31, 2005 as included in the
Fund's Annual Report on Form 10-K should no longer be relied upon and should be
restated for errors detected by management. The Fund is filing amendments to its
Form 10-K, as well as amendments to its Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 2005, September 30, 2005 and March 31, 2006,
and Form 10-Q/A for the quarterly period ended June 30, 2005, as a result of
these restatements.

Accordingly, subsequent to the Evaluation Date, management of the Fund concluded
that we had material weaknesses in our internal control over financial reporting
as of the Evaluation Date. Because of the existence of these material
weaknesses, our CEO and CFO have concluded that our disclosure controls and
procedures were not effective as of such date. As of December 22, 2006, we
believe we have addressed the material weaknesses through the institution of the
material weakness remediation plans described below.


                                       22
<PAGE>

(b)  Changes in Internal Control over Financial Reporting

In the course of our initial evaluation of disclosure controls and procedures,
management considered certain internal control areas in which we have made and
are continuing to make changes to improve and enhance controls. Based upon that
evaluation, the CEO and CFO concluded that there were no changes in our internal
control over financial reporting identified in connection with the evaluation
required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred
during the Fund's quarter ended September 30, 2006 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

(c)  Material Weaknesses

After examining certain transactions and reviewing reconciliations from 2004 and
2005, various accounting errors were identified. Based upon management's review,
it has been determined these errors were inadvertent and unintentional. As a
result of these initial findings, on December 19, 2006, management announced the
Fund would restate its previously filed financial statements. Management
expanded the scope of the review to include accounting principles generally
accepted in the United States ("GAAP") and financial reporting procedures
surrounding GAAP pre and post-closing procedures.

Management concluded the reason for these errors primarily related to the lack
of technical accounting expertise relating to certain GAAP processing,
recording, summarizing and reporting processes.

The Fund had the following weaknesses.

      o  Insufficient training programs, and formalized policies and procedures
         on documenting financial controls, to ensure the ongoing application
         and execution of controls;
      o  Staff lacking sufficient technical accounting expertise in GAAP and SEC
         requirements; and
      o  Lack of resources necessary to perform consistent, routine analytical
         reviews of the GAAP financial results, including key balance sheet and
         income statement account analyses.

(d)   Material Weaknesses Remediated

Management has been and is committed to remediation of weaknesses, as well as to
continual improvement of the Fund's overall system of internal control over GAAP
financial reporting. Management has developed and implemented remediation
procedures for each of the weaknesses, and has undergone efforts to
significantly strengthen the existing finance organization and systems across
the Fund. These efforts included the addition of finance resources which
provided technical support and oversight of financial processes. In addition,
various employees attended training programs. The Fund also utilized additional
resources to assist in the program management aspect of each weakness in its
remediation design.


                                       23
<PAGE>

The remediation plans were initially instituted in 2006, and have been evaluated
by management. Based on these evaluations, management has determined the
corrective actions have been implemented to address the weaknesses.

With respect to the weaknesses, the following remediation actions have been
implemented throughout the year:

      o  Created detailed training programs and policies and procedures
         surrounding the accounting for oil and natural gas projects and GAAP
         and SEC financial reporting controls;
      o  Expansion of accounting and SEC reporting staff and various resources,
         by hiring five personnel with GAAP and/or SEC accounting and reporting
         expertise; and
      o  Enhanced tools and added appropriate resources to perform consistent,
         routine analytical reviews of the GAAP financial results, including key
         balance sheet and income statement account analyses.

On December 22, 2006, management, as a result of its ongoing evaluation of the
effectiveness of the Fund's "disclosure controls and procedures" (as defined in
the Securities Exchange Act of 1934 as amended (the "34 Act") Rules 13a-15(e)
and 15d-15(e)) and "internal control over financial reporting" (as defined in
the 34 Act Rules 13a-15(f) and 15d-15(f)), concluded the material weaknesses
disclosed in this Item 4 had been addressed and remediated.





                                       24
<PAGE>

Part II.   Other Information

Item 6.    Exhibits

   31.1    Certification of Robert E. Swanson, Chief Executive Officer, pursuant
           to Securities Exchange Act Rule 13a-14(a).
   31.2    Certification of Kathleen P. McSherry, Chief Financial Officer,
           pursuant to Securities Exchange Act Rule 13a-14(a).
     32    Certifications pursuant to 18 U.S.C. Section 1350, as adopted
           pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by
           Robert E. Swanson, Chief Executive Officer of the Company and
           Kathleen P. McSherry, Chief Financial Officer of the Company.





                                       25
<PAGE>

                                   SIGNATURES

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

Dated: April 5, 2007                      RIDGEWOOD ENERGY M FUND, LLC

                             By:     /s/  ROBERT E. SWANSON
                                   Name:  Robert E. Swanson
                                  Title:  President and Chief Executive Officer
                                          (Principal Executive Officer)

Dated: April 5, 2007
                             By:     /s/  KATHLEEN P. MCSHERRY
                                   Name:  Kathleen P. McSherry
                                  Title:  Senior Vice President and Chief
                                          Financial Officer
                                          (Principal Financial and Accounting
                                          Officer)






                                       26
<PAGE>

           Exhibit Index

   31.1    Certification of Robert E. Swanson, Chief Executive Officer, pursuant
           to Securities Exchange Act Rule 13a-14(a).
   31.2    Certification of Kathleen P. McSherry, Chief Financial Officer,
           pursuant to Securities Exchange Act Rule 13a-14(a).
     32    Certifications pursuant to 18 U.S.C. Section 1350, as adopted
           pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by
           Robert E. Swanson, Chief Executive Officer of the Company and
           Kathleen P. McSherry, Chief Financial Officer of the Company.





                                       27