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
      1934For
      the quarterly period ended September 30,
2008


or





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





Commission
File Number 000-51266





RIDGEWOOD
ENERGY K FUND, LLC


(Exact
name of registrant as specified in its charter)








Delaware
                  (State
      or other jurisdiction of
                  incorporation
      or organization)
                
                68-0580588
                  (I.R.S.
      Employer
                  Identification
      No.)





1314
King Street, Wilmington, Delaware 19801


(Address
of principal executive offices) (Zip code)





(302)
888-7444


(Registrant’s
telephone number, including area code)





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 whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.


Yes  xNo  o





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





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





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





There is
no market for the shares. As of October 30, 2008 there are 480.7046 shares
outstanding.
















Table of
      ContentsPart
      I - FINANCIAL INFORMATION
                                                        PageItem 1.
                                                        Financial Statements:Unaudited Condensed Balance Sheets as of September 30, 2008 and
      December 31, 2007
                                                        3Unaudited
      Condensed Statements of Operations for the three and nine months ended
      September
      30, 2008 and 2007
                                                        4Unaudited
      Condensed Statements of Cash Flows for the nine months endedSeptember
      30, 2008 and 2007
                                                        5Notes to Unaudited Condensed Financial
      Statements
                                                        6Item 2.
                                                        Management's Discussion and Analysis of Financial Condition
      and Results of Operations
                                                        12Item 3.
                                                        Quantitative and Qualitative Disclosures about Market
      Risk
                                                        18Item 4.
                                                        Controls and Procedures
                                                        18Part
      II - OTHER INFORMATIONItem 1.
                                                        Legal Proceedings
                                                        18Item 1A.
                                                        Risk Factors
                                                        18Item 2.
                                                        Unregistered  Sales of Equity Securities and Use of
      Proceeds
                                                        18Item 3.
                                                        Defaults Upon Senior Securities
                                                        18Item 4.
                                                        Submissions of Matters to a Vote of Security
      Holders
                                                        18Item 5.
                                                        Other Information
                                                        18Item 6.
                                                        Exhibits
                                                        19SIGNATURES
                                                        20








Table of Contents


Part
I - Financial Information


Item 1.  Financial
Statements


RIDGEWOOD ENERGY K
      FUND, LLCUNAUDITED
      CONDENSED BALANCE SHEETS(in
      thousands, except share data)September
      30, 2008
                            
                            
                            December
      31, 2007ASSETSCurrent
      assets:Cash
      and cash equivalents
                            
                            $
                            3,383
                            
                            
                            $
                            5,624Production
      receivable
                            
                            
                            263
                            
                            
                            
                            595Other
      current assets
                            
                            
                            252
                            
                            
                            
                            50Total
      current assets
                            
                            
                            3,898
                            
                            
                            
                            6,269Salvage
      fund
                            
                            
                            1,155
                            
                            
                            
                            1,133Oil
      and gas properties:Unproved
      properties
                            
                            
                            1,583
                            
                            
                            
                            1,869Proved
      properties
                            
                            
                            20,912
                            
                            
                            
                            19,247Less:  accumulated
      depletion and amortization
                            
                            
                            (11,655
                            )
                            
                            
                            (9,978
                            )Total
      oil and gas properties, net
                            
                            
                            10,840
                            
                            
                            
                            11,138Total
      assets
                            
                            $
                            15,893
                            
                            
                            $
                            18,540LIABILITIES
      AND MEMBERS' CAPITALCurrent
      liabilities:Due
      to operators
                            
                            $
                            129
                            
                            
                            $
                            1,291Accrued
      expenses payable
                            
                            
                            70
                            
                            
                            
                            69Total
      current liabilities
                            
                            
                            199
                            
                            
                            
                            1,360Asset
      retirement obligations
                            
                            
                            119
                            
                            
                            
                            81Total
      liabilities
                            
                            
                            318
                            
                            
                            
                            1,441Commitments
      and contingencies (Note 8)Members'
      capital:Manager:Distributions
                            
                            
                            (290
                            )
                            
                            
                            (290
                            )Retained
      earnings
                            
                            
                            903
                            
                            
                            
                            404Manager's
      total
                            
                            
                            613
                            
                            
                            
                            114Shareholders:Capital
      contributions (534 shares authorized;
                              480.7046
      issued and outstanding)
                            
                            
                            70,860
                            
                            
                            
                            70,860Syndication
      costs
                            
                            
                            (7,775
                            )
                            
                            
                            (7,775
                            )Distributions
                            
                            
                            (9,477
                            )
                            
                            
                            (6,074
                            )Accumulated
      deficit
                            
                            
                            (38,646
                            )
                            
                            
                            (40,026
                            )Shareholders'
      total
                            
                            
                            14,962
                            
                            
                            
                            16,985Total
      members' capital
                            
                            
                            15,575
                            
                            
                            
                            17,099Total
      liabilities and members' capital
                            
                            $
                            15,893
                            
                            
                            $
                            18,540




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


3
 Table of Contents




RIDGEWOOD ENERGY K
      FUND, LLCUNAUDITED
      CONDENSED STATEMENTS OF OPERATIONS(in
      thousands, except share data)Three
      months ended September 30,
                          
                          
                          Nine
      months ended September 30,2008
                          
                          
                          2007
                          
                          
                          2008
                          
                          
                          2007RevenueOil
      and gas revenue
                          
                          $
                          1,040
                          
                          
                          $
                          540
                          
                          
                          $
                          4,044
                          
                          
                          $
                          1,597ExpensesDepletion
      and amortization
                          
                          
                          435
                          
                          
                          
                          463
                          
                          
                          
                          1,677
                          
                          
                          
                          1,281Dry-hole
      costs
                          
                          
                          (2
                          )
                          
                          
                          113
                          
                          
                          
                          (18
                          )
                          
                          
                          110Operating
      expenses
                          
                          
                          140
                          
                          
                          
                          69
                          
                          
                          
                          401
                          
                          
                          
                          239General
      and administrative expenses
                          
                          
                          69
                          
                          
                          
                          79
                          
                          
                          
                          219
                          
                          
                          
                          278Total
      expenses
                          
                          
                          642
                          
                          
                          
                          724
                          
                          
                          
                          2,279
                          
                          
                          
                          1,908Income
      (loss) from operations
                          
                          
                          398
                          
                          
                          
                          (184
                          )
                          
                          
                          1,765
                          
                          
                          
                          (311
                          )Other
      incomeInterest
      income
                          
                          
                          27
                          
                          
                          
                          102
                          
                          
                          
                          114
                          
                          
                          
                          318Net
      income (loss)
                          
                          $
                          425
                          
                          
                          $
                          (82
                          )
                          
                          $
                          1,879
                          
                          
                          $
                          7Manager
      interestNet
      income
                          
                          $
                          121
                          
                          
                          $
                          54
                          
                          
                          $
                          499
                          
                          
                          $
                          153Shareholder
      interestNet
      income (loss)
                          
                          $
                          304
                          
                          
                          $
                          (136
                          )
                          
                          $
                          1,380
                          
                          
                          $
                          (146
                          )Net
      income (loss) per share
                          
                          $
                          633
                          
                          
                          $
                          (283
                          )
                          
                          $
                          2,871
                          
                          
                          $
                          (304
                          )




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





4
 Table of Contents




RIDGEWOOD ENERGY K
      FUND, LLCUNAUDITED
      CONDENSED STATEMENTS OF CASH FLOWS(in
      thousands)Nine
      months ended September 30,2008
                    
                    
                    2007Cash
      flows from operating activitiesNet
      income
                    
                    $
                    1,879
                    
                    
                    $
                    7Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depletion
      and amortization
                    
                    
                    1,677
                    
                    
                    
                    1,281Dry-hole
      costs
                    
                    
                    (18
                    )
                    
                    
                    110Accretion
      expense
                    
                    
                    3
                    
                    
                    
                    2Changes
      in assets and liabilities:Decrease
      (increase) in production receivable
                    
                    
                    332
                    
                    
                    
                    (112
                    )Increase
      in other current assets
                    
                    
                    (202
                    )
                    
                    
                    (28
                    )Increase
      in due to affiliates
                    
                    
                    -
                    
                    
                    
                    15Increase
      in due to operators
                    
                    
                    42
                    
                    
                    
                    2Increase
      (decrease) in accrued expenses payable
                    
                    
                    1
                    
                    
                    
                    (96
                    )Net
      cash provided by operating activities
                    
                    
                    3,714
                    
                    
                    
                    1,181Cash
      flows from investing activitiesCapital
      expenditures for oil and gas properties
                    
                    
                    (2,530
                    )
                    
                    
                    (1,502
                    )Interest
      reinvested in salvage fund
                    
                    
                    (22
                    )
                    
                    
                    (39
                    )Net
      cash used in investing activities
                    
                    
                    (2,552
                    )
                    
                    
                    (1,541
                    )Cash
      flows from financing activitiesDistributions
                    
                    
                    (3,403
                    )
                    
                    
                    (1,337
                    )Net
      cash used in financing activities
                    
                    
                    (3,403
                    )
                    
                    
                    (1,337
                    )Net
      decrease in cash and cash equivalents
                    
                    
                    (2,241
                    )
                    
                    
                    (1,697
                    )Cash
      and cash equivalents, beginning of period
                    
                    
                    5,624
                    
                    
                    
                    8,469Cash
      and cash equivalents, end of period
                    
                    $
                    3,383
                    
                    
                    $
                    6,772




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




5
 Table of Contents




RIDGEWOOD ENERGY K FUND,
LLC
 NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS





1. Organization
and Purpose





The
Ridgewood Energy K Fund, LLC ( the “Fund”), a Delaware limited liability
company, was formed on March 1, 2004 and operates pursuant to a limited
liability company agreement (the “LLC Agreement”) dated as of April 5, 2004 by
and among Ridgewood Energy Corporation (the “Manager”) and the shareholders of
the Fund. The Fund was organized to acquire interests in oil and gas properties
located in the United States offshore waters of Texas, Louisiana, and Alabama in
the Gulf of Mexico.





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 unaffiliated custodians, depositories, accountants, attorneys,
broker-dealers, corporate fiduciaries, insurers, banks and others as required.
See Notes 2, 6 and 8.





2. Summary
of Significant Accounting Policies





Basis
of Presentation


These
unaudited interim condensed financial statements have been prepared by the
Fund’s management, in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) and in the opinion of management,
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the Fund’s financial position, results of operations
and cash flows for the periods presented.  Certain information and
note disclosures normally included in annual financial statements prepared in
accordance with GAAP have been omitted in these unaudited interim condensed
financial statements.  The results of operations, financial position,
and cash flows for the periods presented herein are not necessarily indicative
of future financial results. These unaudited interim condensed financial
statements should be read in conjunction with the annual financial statements
and the notes thereto for the year ended December 31, 2007 included in the
Fund’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission (“SEC”).  The year-end condensed balance sheet data was
derived from audited financial statements, but does not include all disclosures
required by GAAP.





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 revenue 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, impairments and asset retirement
obligations.  Actual results may differ from those
estimates.





Cash
and Cash Equivalents


All
highly liquid investments with maturities when purchased of three months or less
are considered cash and cash equivalents. At times, bank deposits may be in
excess of federally insured limits.  At September 30, 2008 and
December 31, 2007, bank balances exceeded federally insured limits, inclusive of
the salvage fund, by $3.2 million and $5.4 million, respectively. At September
30, 2008, $1.2 million of the Fund’s uninsured balances were invested in money
market accounts that invest solely in U.S. Treasury bills and
notes.  The Fund maintains bank deposits with accredited financial
institutions.





Effective
October 3, 2008 through December 31, 2009, federally insured limits have been
increased from $0.1 million to $0.25 million.





6
 Table of Contents





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.  At September 30, 2008, the Fund had held-to-maturity
investments within its salvage fund totaling $1.1
million.  Held-to-maturity securities are those investments that the
Fund has the ability and intent to hold until maturity, and are recorded at cost
plus accrued income, adjusted for the amortization of premiums and discounts,
which approximates fair value. The held-to-maturity investment held within the
salvage fund at September 30, 2008 matures in February 2012.





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





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 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 gas, are capitalized.  Expenditures for ongoing repairs
and maintenance of producing properties are expensed as incurred.





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





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





As of
September 30, 2008, amounts recorded in due to operators totaling $0.1 million
related to capital expenditures for oil and gas property, which were principally
paid during the fourth quarter of 2008.





Advances
to Operators for Working Interests and Expenditures


The
Fund’s acquisition of a working interest in a well or a project may require it
to make a payment to the seller for the Fund’s right, title and
interest.  The Fund may be required to advance its share of estimated
cash expenditures for the succeeding month’s operation. The Fund accounts for
such payments as advances to operators for working interests and
expenditures.  As drilling costs are incurred, the advances are
transferred to unproved properties.





Asset
Retirement Obligations


For oil
and gas properties, there are obligations to perform removal and remediation
activities when the properties are retired.  When a project reaches
drilling depth and is determined to be either proved or dry, an asset retirement
obligation is recorded.  Plug and abandonment costs associated with
unsuccessful projects are expensed as dry-hole costs.   The table
below presents changes in the asset retirement obligations for the nine months
ended September 30, 2008 and the year ended December 31, 2007.





7
 Table of Contents





September
      30, 2008
                      
                      
                      December
      31, 2007(in
      thousands)Balance
      - Beginning of period
                      
                      $
                      81
                      
                      
                      $
                      78Liabilities
      incurred
                      
                      
                      35
                      
                      
                      
                      -Liabilities
      settled
                      
                      
                      -
                      
                      
                      
                      -Accretion
      expense
                      
                      
                      3
                      
                      
                      
                      3Balance
      - End of period
                      
                      $
                      119
                      
                      
                      $
                      81





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





Syndication
Costs


Syndication
costs are direct costs 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 unaffiliated broker-dealers, which are
reflected on the Fund’s balance sheet as a reduction of shareholders’
capital.





Revenue
Recognition and Imbalances


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





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





Impairment
of Long-Lived Assets


In
accordance with the provisions of the Statement of Financial Accounting
Standards (“SFAS”) No. 144, “Accounting for the Impairment of Long-Lived
Assets”, long-lived assets, such as oil and gas properties, are evaluated
when events or changes in circumstances indicate the carrying value of such
assets may not be recoverable. The determination of whether impairment has
occurred is made by comparing the carrying values of long-lived assets to
the estimated future undiscounted cash flows attributable to the asset. The
impairment loss recognized is the excess of the carrying value over the future
discounted cash flows attributable to the asset or the estimated fair value of
the asset.  During the nine months ended September 30, 2008 and 2007, no
impairments were recorded.





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 is used as the base for depleting or amortizing leasehold acquisition
costs, the costs to acquire proved properties and platform and pipeline
costs.





Income
Taxes


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





Income
and Expense Allocation


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





8
 Table of Contents




3. Recent
Accounting Standards





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





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





4. Unproved
Properties - Capitalized Exploratory Well Costs





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





As of
September 30, 2008, the Fund had two properties, Vermilion 344 and South Marsh
Island 111, with capitalized expenditures in excess of one year.  Both
projects have been determined to be successful, and production facilities are
being completed, with production expected during the fourth quarter of
2008.  Capitalized exploratory well costs related to Vermillion 344 at
September 30, 2008 and December 31, 2007 were $0.9 million and $0.5 million,
respectively.  Capitalized exploratory well costs related to South
Marsh Island 111 at September 30, 2008 and December 31, 2007 were $0.7 million
and $0.4 million, respectively.  The following table reflects the net
changes in unproved properties for the nine months ended September 30, 2008 and
the year ended December 31, 2007.





September
      30, 2008
                      
                      
                      December
      31, 2007(in
      thousands)Balance
      - Beginning of the period
                      
                      $
                      1,869
                      
                      
                      $
                      74Additions
      to capitalized exploratory well costs
                        pending
      the determination of proved reserves
                      
                      
                      807
                      
                      
                      
                      1,795Reclassification
      to proved properties based on
                        the
      determination of proved reserves
                      
                      
                      (1,093
                      )
                      
                      
                      -Capitalized
      exploratory well costs charged to
                        dry-hole
      costs
                      
                      
                      -
                      
                      
                      
                      -Balance
      - End of the period
                      
                      $
                      1,583
                      
                      
                      $
                      1,869





9
 Table of Contents





Capitalized
exploratory well costs are expensed as dry-hole costs in the event that reserves
are not found or are not in sufficient quantities to complete the well and
develop the field.  During the three and nine months ended September
30, 2008 and the nine months ended September 30, 2007, certain wells received
credits from their respective operators upon review and audits of the wells
costs performed by working interest owners.  Dry-hole costs, inclusive
of credits, are detailed in the table below.





Three
      months ended September 30,
                      
                      
                      Nine
      months ended September 30,Lease
      Block
                      
                      2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007(in
      thousands)Mobile
      946
                      
                      $
                      -
                      
                      
                      $
                      1
                      
                      
                      $
                      (22
                      )
                      
                      $
                      (2
                      )Ship
      Shoal 81 #1
                      
                      
                      (2
                      )
                      
                      
                      112
                      
                      
                      
                      4
                      
                      
                      
                      112$
                      (2
                      )
                      
                      $
                      113
                      
                      
                      $
                      (18
                      )
                      
                      $
                      110





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.  Effective April 1, 2006,
the Manager elected to permanently waive its distribution of available cash from
operations for the remaining life of the Fund.





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.





Distributions
to the Fund’s shareholders during the nine months ended September 30, 2008 and
2007 were $3.4 million and $1.3 million, respectively.





The
Manager received no distributions for the nine months ended September 30, 2008
and 2007.





6. Related
Parties





The
Fund’s LLC Agreement provides that the Manager render management, administrative
and advisory services, for which the Manager is entitled to receive a management
fee.  Beginning on October 1, 2005 and continuing for the remaining
life of the Fund, the Manager elected to waive its management
fee.  Upon the waiver of the management fee, the Fund began recording
costs relating to services provided by the Manager for accounting and investor
relations.  Such costs totaled $20 thousand and $60 thousand for each
of the three and nine months ended September 30, 2008 and 2007,
respectively.  The costs were included in general and administrative
expenses for the three and nine months ended September 30, 2008 and
2007.





From time
to time, short-term payables and receivables, which do not bear interest, arise
from transactions with affiliates in the ordinary course of
business.  At September 30, 2008 there were no such amounts
outstanding.  At December 31, 2007, $7 thousand was due from the
Manager, which was included in other current assets.   The
December 31, 2007 balance was received from the Manager during the first quarter
of 2008.





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 gas projects with other entities that are likewise managed by the
Manager.





7. Fair
Value of Financial Instruments and Measurements





As of
September 30, 2008 and December 31, 2007, the carrying value of cash and cash
equivalents, salvage fund, production receivable and accrued expenses
approximate fair value.





10
 Table of Contents




8. Commitments
and Contingencies





Capital
Commitments


The Fund
has entered into multiple offshore operating agreements for the drilling and
development of its investment properties. The estimated capital expenditures
associated with these agreements vary depending on the stage of development on a
property-by-property basis. As of September 30, 2008, the Fund had committed to
spend an additional $0.5 million relating to its investment
properties.





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 Operators are
continually taking action they believe appropriate to satisfy applicable
federal, state and local environmental regulations and do not currently
anticipate that compliance with federal, state and local environmental
regulations will have a material adverse effect upon capital expenditures,
results of operations or the competitive position of the Fund in the oil and gas
industry.  However, due to the significant public and governmental
interest in environmental matters related to those activities, the Manager
cannot predict the effects of possible future legislation, rule changes, or
governmental or private claims.  At September 30, 2008 and December
31, 2007, 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 gas. Insurance coverage as is customary for entities engaged in similar
operations is maintained, but losses may occur from uninsurable risks or amounts
in excess of existing insurance coverage. The occurrence of an event which is
not insured or not fully insured could have an adverse impact upon earnings and
financial position.  Moreover, insurance is obtained as a package
covering all of the Manager’s investment programs.  Claims made by
other such programs can reduce or eliminate insurance for the Fund.




Suspension
of MMS Royalty Relief




Under
Mineral Management Services (“MMS”) rules, the Fund is eligible for annual
royalty relief provided that the average New York Mercantile Exchange
(“NYMEX”) sales price for shallow water, deep gas (“Average NYMEX Price”)
does not exceed price thresholds established by the MMS, which will be published
during the first quarter of 2009.  The Average NYMEX Price during the
nine months ended September 30, 2008 was $9.73.  Based upon current
estimations of the 2008 price threshold by the MMS, in the event the Average
NYMEX Price exceeds $12.15 for the fourth quarter of 2008, royalty relief would
be suspended and the Fund would be obligated to pay its previously relieved MMS
royalties.  In addition, the Fund’s future reserve estimates report
for gas would be reduced by 16.67%.  The reduction in revenues
resulting from an obligation to pay these royalties and subsequent reduction of
proved reserves could have a material adverse effect on the Fund’s results of
operations.  If the Average NYMEX Price is below the threshold
established by the MMS, the Fund would not have an obligation to pay royalties
for those properties which qualify for royalty relief and the reserve balances
would not be reduced.  With regard to the shallow water, deep gas
properties, there was no reduction in reserves for potential future royalties as
of December 31, 2007 as a result of the average 2007 NYMEX price for gas
being below the price threshold.





The
Fund’s gas revenues for the nine months ended September 30, 2008 would be
reduced by $0.1 million if the 2008 annual Average NYMEX Price ultimately
exceeds the price threshold established by the MMS.  At September 30,
2008, the Fund has not recorded a liability associated with this contingency,
based upon the Manager’s assessment of its probability; however, the Fund has
prepaid the MMS this amount, which is included in other current assets, to avoid
the incurrence of potential interest charges.





11
 Table of Contents





ITEM 2.  MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




Cautionary
Statement Regarding Forward-Looking Statements





Certain
statements in this quarterly report on Form 10-Q (“Quarterly Report”) and
the documents Ridgewood Energy K Fund, LLC (the “Fund”) has incorporated by
reference into this Quarterly Report, other than purely historical information,
including estimates, projections, statements relating to the Fund’s business
plans, strategies, objectives and expected operating results, and the
assumptions upon which those statements are based, are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”) and Section 21E of the Securities Exchange Act of 1934
(the “Exchange Act”). These forward-looking statements generally are identified
by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “plan,” “target,” “pursue,” “may,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. Forward-looking
statements are based on current expectations and assumptions that are subject to
risks and uncertainties which may cause actual results to differ materially from
the forward-looking statements.  Examples of such events that could
cause actual results to differ materially from historical results or those
anticipated include weather conditions, such as hurricanes, changes in market
conditions affecting the pricing of oil and gas, the cost and availability of
equipment, and changes in governmental regulations.  The Fund
undertakes no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise.





Critical
Accounting Policies and Estimates





The
following discussion and analysis of the Fund’s financial condition and
operating results is based on its financial statements.  The
preparation of this Quarterly Report requires the Fund to make estimates and
assumptions that affect the reported amount of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the Fund’s
financial statements, and the reported amount of revenue and expenses during the
reporting period. Actual results may differ from those estimates and
assumptions.  See “Notes to Unaudited Condensed Financial Statements”
in Part I of this Quarterly Report for a presentation of the Fund’s significant
accounting policies.   No changes have been made to the Fund’s
critical accounting policies and estimates disclosed in its 2007 Annual Report
on Form 10-K.





Overview
of the Fund’s Business





The Fund
is a Delaware limited liability company formed on March 1, 2004 to acquire
interests primarily in oil and gas projects located in the U.S. waters of the
Gulf of Mexico. Ridgewood Energy Corporation (“Ridgewood Energy” or the
“Manager”) a Delaware corporation, is the Manager. As the Manager, Ridgewood
Energy has direct and exclusive control over the management and control of Fund
operations. The Fund’s primary investment objective is to generate cash
flow for distribution to the Fund’s shareholders through participation in oil
and gas exploration and development projects in the Gulf of Mexico.





The
Manager performs certain duties on the Fund’s behalf including the evaluation of
potential projects for investment and ongoing management, administrative and
advisory services associated with these projects. The Fund does not currently,
nor is there any plan, to operate any project in which the Fund participates.
The Manager enters into operating agreements with third-party operators
(“Operators”) for the management of all exploration, development and producing
operations, as appropriate.





Business
Update





The Fund
owns working interests and has participated in the drilling of fifteen wells,
seven of which were determined to be dry-holes, and eight that have been
determined to be successful.





Recent
hurricane activity in the Gulf of Mexico has not caused material damage to any
of the Fund’s wells or facilities.  However, damage to certain
pipelines, coastal refineries and gas processing plants have caused certain
wells to be shut-down for several weeks or months.  Accordingly,
several of the Fund’s producing properties generated little or no revenue during
the month of September and certain of the Fund’s wells were offline for an
additional period during October.  The reserves associated with these
properties remain intact and the value of the properties is
recoverable.  The delay in production and revenue resulted in the
delay in the payment of distributions related to certain
properties.





12
 Table of Contents




Successful
Projects


LLOG
Projects


In
October 2006, the Fund acquired a 3.75% working interest in each of six
exploratory wells to be drilled by LLOG Exploration Company (“LLOG”) off the
coast of Louisiana.  Of the six wells, the Fund elected not to proceed
with one well and one well was determined to be a dry hole.





The
remaining four LLOG wells, as detailed below, have been determined to be
successful and completion efforts are ongoing for two wells.  The
total budget for these projects is approximately $3.3 million, of which $2.8
million has been spent through September 30, 2008.





South
      Marsh Island 111
                  Discovery
      July 2007; Production expected December 2008Vermilion
      344
                  Discovery
      January 2007; Production expected November 2008West
      Delta 68
                  Discovery
      March 2007; Production commenced July 2008; shut-in for approximately
      three weeks during September 2008 due to hurricane
  activityWest
      Delta 67
                  Discovery
      November 2007; Production commenced July 2008; shut-in for approximately
      three weeks during September 2008 due to hurricane
  activity





East
Cameron 299 / West Cameron 556


In 2005,
the Fund acquired from Millennium Offshore Group (“MOGI”) a 10% working interest
in the East Cameron 299 field (“EC299”), of which the C-10 well was already
proven, the C-11 well was drilling and the C-12 well was to be drilled, for $15
million.  At the same time the Fund also acquired from MOGI a 20%
working interest in West Cameron 556.  During 2005, MOGI sold its
interests in the EC299 and WC556 properties and the wells are now operated by
ATP Oil and Gas Corporation (“ATP”).   The EC299 C-11 well
is currently shut-in with plans for a workover.  The C-12 well was
drilled and was determined to be dry in May 2005.





Production
rates continue to decline on the EC299 C-10 and West Cameron 556
projects.    To date, the Fund has recorded impairments of
$12.7 million related to the East Cameron 299 C-10, East Cameron 299 C-11, and
West Cameron 556 wells.  The Fund recorded no impairments during the
nine months ended September 30, 2008.   The Fund currently plans
to workover the C-11 well at a cost of $0.2 million and is awaiting availability
of a rig.  The Fund will perform maintenance work on the C-10 well
once the C-11 work is complete.  The estimated costs associated with
the C-10 maintenance work have not been determined.  Both the EC 299
C-10 and the West Cameron 556 experienced a shut-down in production for several
weeks in late-August 2008 and September 2008 due to hurricane
activity.  Both wells resumed production during October
2008.





West
Cameron 76 A-1


On
October 15, 2007, the Fund acquired an 8.43% working interest in a workover on
the West Cameron 76 A-1 well, which began producing in October
2007.  The West Cameron 76 A-1 well has not produced for approximately
two months due to hurricane activity during late-August 2008 and September
2008.  Production resumed for West Cameron 76 A-1 in late-October 2008
after the completion of minor onshore gas processing plant repairs. The Fund has
spent $2.0 million related to this property.





As
indicated above in the business update, none of the Fund’s wells, including the
West Cameron 76 A-1 well, were materially damaged as a result of recent
hurricane activity in the Gulf of Mexico.  However, the pipeline
utilized to transport West Cameron 76 A-1’s oil and gas production had suffered
damage thereby shutting down its production.





13
 Table of Contents





As a
result, this well was shut-in until the pipeline repairs were completed by its
owner.  There is no cost to the Fund related to these repair
activities, however, West Cameron 76 A-1 did not produce oil and gas or earn
revenue during this period.  The West Cameron 76 A-1 well resumed
production during late-October 2008.





Results
of Operations





The
following review of operations for the three and nine months ended September 30,
2008 and 2007 should be read in conjunction with the Fund’s financial statements
and the notes thereto.




Three
      months ended September 30,
                                  
                                  
                                  Nine
      months ended September 30,2008
                                  
                                  
                                  2007
                                  
                                  
                                  2008
                                  
                                  
                                  2007(in
      thousands)RevenueOil
      and gas revenue
                                  
                                  $
                                  1,040
                                  
                                  
                                  $
                                  540
                                  
                                  
                                  $
                                  4,044
                                  
                                  
                                  $
                                  1,597ExpensesDepletion
      and amortization
                                  
                                  
                                  435
                                  
                                  
                                  
                                  463
                                  
                                  
                                  
                                  1,677
                                  
                                  
                                  
                                  1,281Dry-hole
      costs
                                  
                                  
                                  (2
                                  )
                                  
                                  
                                  113
                                  
                                  
                                  
                                  (18
                                  )
                                  
                                  
                                  110Operating
      expenses
                                  
                                  
                                  140
                                  
                                  
                                  
                                  69
                                  
                                  
                                  
                                  401
                                  
                                  
                                  
                                  239General
      and administrative expenses
                                  
                                  
                                  69
                                  
                                  
                                  
                                  79
                                  
                                  
                                  
                                  219
                                  
                                  
                                  
                                  278Total
      expenses
                                  
                                  
                                  642
                                  
                                  
                                  
                                  724
                                  
                                  
                                  
                                  2,279
                                  
                                  
                                  
                                  1,908Income
      (loss) from operations
                                  
                                  
                                  398
                                  
                                  
                                  
                                  (184
                                  )
                                  
                                  
                                  1,765
                                  
                                  
                                  
                                  (311
                                  )Other
      incomeInterest
      income
                                  
                                  
                                  27
                                  
                                  
                                  
                                  102
                                  
                                  
                                  
                                  114
                                  
                                  
                                  
                                  318Net
      income (loss)
                                  
                                  $
                                  425
                                  
                                  
                                  $
                                  (82
                                  )
                                  
                                  $
                                  1,879
                                  
                                  
                                  $
                                  7





As
previously discussed in the Business Update, hurricane activity in the third
quarter of 2008 did not cause material damage to any of the Fund’s wells or
facilities, however, damage to certain pipelines, coastal refineries and gas
processing plants have caused certain wells to be shut-down for several weeks or
months.  Accordingly, revenues and depletion and amortization were
affected in August 2008 and September 2008 and will continue to be affected
during these periods of shut-down.





Oil and Gas
Revenue.During the three months
ended September 30, 2008, the Fund had five producing wells, East Cameron 299,
West Cameron 556, West Cameron 76 A-1, West Delta 68 and West Delta 67 which
came onto production September 2004, September 2005, October 2007, July 2008 and
July 2008, respectively.





Oil and
gas revenue for the three months ended September 30, 2008 was $1.0 million,
a $0.5 million increase from the three months ended September 30,
2007.  The increase is attributable to an increase in production and sales
volumes totaling $0.1 million coupled with the impact of increased average
prices totaling $0.4 million.





The
Fund’s wells produced approximately 2 thousand barrels of oil during the three
months ended September 30, 2008 compared to approximately 1 thousand barrels of
oil during the three months ended September 30, 2007.  The Fund’s oil
prices averaged approximately $119 per barrel and approximately $78 per barrel
during the three months ended September 30, 2008 and 2007,
respectively.





Gas
production during the three months ended September 30, 2008 was approximately 85
thousand mcf compared to 65 thousand mcf during the three months ended September
30, 2007.    The Fund’s gas prices averaged $10.34 per mcf
and $6.65 per mcf during the three months ended September 30, 2008 and 2007,
respectively.





Oil and
gas revenue for the nine months ended September 30, 2008 was $4.0 million, a
$2.4 million increase from the nine months ended September 30,
2007.   The increase is attributable to an increase in production
and sales volumes totaling $1.2 million and the impact of increased average
prices totaling $1.2 million





14
 Table of Contents




The
Fund’s wells produced approximately 5 thousand barrels of oil during the nine
months ended September 30, 2008 compared to approximately 4 thousand barrels
during the nine months ended September 30, 2007.  The Fund’s oil
prices averaged approximately $113 per barrel and approximately $68 per barrel
during the nine months ended September 30, 2008 and 2007,
respectively.





Gas
production during the nine months ended September 30, 2008 was approximately 336
thousand mcf compared to 178 thousand mcf, during the nine months ended
September 30, 2007.  The Fund’s gas prices averaged $10.53 per mcf and
$7.46 per mcf during the nine months ended September 30, 2008 and 2007,
respectively.





The
increase in sales volumes for both the three and nine months ended September 30,
2008 was attributable to the onset of production of West Cameron 76 A-1 during
October 2007 and West Delta 68 and West Delta 67 during July 2008, partially
offset by a hurricane-related decrease in production at West Cameron 556 and by
the reduced production of East Cameron 299.  See “Business Update” for
additional discussion.





Depletion and
Amortization.  For the three months ended September 30, 2008
and 2007, depletion and amortization was $0.4 million and $0.5 million,
respectively.  The decrease is due to a reduction in oil and gas
production for the East Cameron/West Cameron 556 field, partially offset by the
onset of production of the West Cameron 76 A-1 well during the fourth quarter of
2007 and the West Delta 68 and 67 wells began production during the third
quarter of 2008.   For the nine months ended September 30, 2008
and 2007, depletion and amortization was $1.7 million and $1.3 million,
respectively.  The increase is due to the onset of production of the
West Cameron 76 A-1 well and the West Delta 68 and 67 wells coupled with an
increase in gas production for the East Cameron 299/West Cameron 556 field
partially offset by a decrease in oil production at the East Cameron 299/West
Cameron 556 field.





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 oil or gas
in sufficient quantities to justify completion of the well.  During
the three and nine months ended September 30, 2008 and the nine months ended
September 30, 2007, certain wells received credits from their respective
operators upon review and audits of the wells’ costs.  The following
table summarizes dry-hole costs, inclusive of credits.





Three
      months ended September 30,
                      
                      
                      Nine
      months ended September 30,Lease
      Block
                      
                      2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007(in
      thousands)Mobile
      946
                      
                      $
                      -
                      
                      
                      $
                      1
                      
                      
                      $
                      (22
                      )
                      
                      $
                      (2
                      )Ship
      Shoal 81 #1
                      
                      
                      (2
                      )
                      
                      
                      112
                      
                      
                      
                      4
                      
                      
                      
                      112$
                      (2
                      )
                      
                      $
                      113
                      
                      
                      $
                      (18
                      )
                      
                      $
                      110





Operating
Expenses.Operating
expenses represent the costs of operating and maintaining wells and related
facilities, geological costs and accretion expense related to asset retirement
obligations, as detailed in the schedule below.





Three
      months ended September 30,
                      
                      
                      Nine
      months ended September 30,2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007(in
      thousands)Lease
      operating expenses
                      
                      $
                      139
                      
                      
                      $
                      66
                      
                      
                      $
                      397
                      
                      
                      $
                      227Geological
      costs
                      
                      
                      -
                      
                      
                      
                      3
                      
                      
                      
                      1
                      
                      
                      
                      10Accretion
                      
                      
                      1
                      
                      
                      
                      -
                      
                      
                      
                      3
                      
                      
                      
                      2$
                      140
                      
                      
                      $
                      69
                      
                      
                      $
                      401
                      
                      
                      $
                      239





Lease
operating expenses for the three and nine months ended September 30, 2008 were
primarily related to expenditures for the East Cameron 299/West Cameron 556
field and the onset of production for the West Cameron 76 A-1 well in the fourth
quarter of 2007 and the onset of production for the West Delta 68 and West Delta
67 wells during the third quarter of 2008.  Lease operating expenses
for the three and nine months ended September 30, 2007 were related to the East
Cameron 299/West Cameron 556 field.  Geological costs for the nine
months ended September 30, 2008 related primarily to geological surveys for
Vermillion 344 and West Delta 68.  Geological costs for the three and
nine months ended September 30, 2007 related primarily to geological surveys for
South Marsh Island 111, Ship Shoal 81 and West Delta 67.





15
 Table of Contents




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





Three
      months ended September 30,
                    
                    
                    Nine
      months ended September 30,2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007(in
      thousands)Accounting
      fees
                    
                    $
                    32
                    
                    
                    $
                    39
                    
                    
                    $
                    120
                    
                    
                    $
                    133Insurance
                    
                    
                    16
                    
                    
                    
                    20
                    
                    
                    
                    36
                    
                    
                    
                    83Management
      reimbursement and other
                    
                    
                    21
                    
                    
                    
                    20
                    
                    
                    
                    63
                    
                    
                    
                    62$
                    69
                    
                    
                    $
                    79
                    
                    
                    $
                    219
                    
                    
                    $
                    278




Accounting
fees represent annual audit and tax preparation fees, quarterly reviews and
filing fees of the Fund.  Insurance expense represents premiums
related to producing well and well control insurance, which varies dependent
upon the number of wells producing  and/or drilling and directors and
officer’s liability policy, which is allocated by the Manager to the Fund based
on capital raised by the Fund to total capital raised by all oil and gas funds
managed by the Manager.  Management reimbursement and other expenses
principally relates to a reimbursement to the Manager by the Fund for various
administrative costs incurred by the Manager on the Funds behalf.





Interest
Income.  Interest income is comprised of interest earned on
cash and cash equivalents.   For the three months ended September
30, 2008 interest income was $27 thousand, a $75 thousand decrease from $102
thousand for the three months ended September 30, 2007.  Interest
income for the nine months ended September 30, 2008 was $0.1 million, a $0.2
million decrease from $0.3 million for the nine months ended September 30,
2007.  The decreases are attributable to a reduction in average
outstanding balances earning interest due to ongoing capital expenditures during
the period coupled with a reduction in interest rates.





Capital
Resources and Liquidity





Operating
Cash Flows


Cash
flows provided by operating activities for the nine months ended September 30,
2008 were $3.7 million primarily related to revenue receipts of $4.4 million
coupled with interest income received of $0.1 million.  These cash
receipts were partially offset by operating expenses of $0.4 million, general
and administrative expenses of $0.2 million and prepaid MMS amounts of $0.2
million.





Cash
flows provided by operating activities for the nine months ended September 30,
2007 were $1.2 million primarily related to revenue receipts of $1.5 million and
interest income received of $0.3 million, partially offset by operating expenses
of $0.2 million, general and administrative expenses of $0.3 million and
unfavorable working capital of $0.1 million.





Investing
Cash Flows


Cash
flows used in investing activities for the nine months ended September 30, 2008
were $2.6 million primarily related to capital expenditures for oil and gas
properties of $2.5 million.  Additionally, the Fund increased its
salvage fund investments by $22 thousand, which consisted of the interest earned
on this account.





Cash
flows used in investing activities for the nine months ended September 30, 2007
were $1.5 million primarily related to capital expenditures for oil and gas
properties.  Additionally, the Fund increased its salvage fund
investments by $39 thousand, which consisted of the interest earned on this
account.





16
 Table of Contents





Financing
Cash Flows


Cash
flows used in financing activities for the nine months ended September 30, 2008
were $3.4 million related to distributions to shareholders.





Cash
flows used in financing activities for the nine months ended September 30, 2007
were $1.3 million related to distributions to shareholders.





Estimated
Capital Expenditures





The Fund
has entered into multiple offshore operating agreements for the drilling and
development of its investment properties.  The estimated capital
expenditures associated with these agreements can vary depending on the stage of
development on a property-by-property basis.  As of September 30,
2008, the Fund had commitments related to participation agreements totaling $0.5
million for its investment properties.





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





Liquidity
Needs





The
Fund’s primary short-term liquidity needs are to fund its operations, including
capital expenditures, with existing cash on-hand and income earned
therefrom.





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





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




Suspension
of MMS Royalty Relief




Under
Mineral Management Services (“MMS”) rules, the Fund is eligible for annual
royalty relief provided that the average New York Mercantile Exchange
(“NYMEX”) sales price for shallow water, deep gas (“Average NYMEX Price”)
does not exceed price thresholds established by the MMS, which will be published
during the first quarter of 2009.  The Average NYMEX Price during the
nine months ended September 30, 2008 was $9.73.  Based upon current
estimations of the 2008 price threshold by the MMS, in the event the Average
NYMEX Price exceeds $12.15 for the fourth quarter of 2008, royalty relief would
be suspended and the Fund would be obligated to pay its previously relieved MMS
royalties.  In addition, the Fund’s future reserve estimates report
for gas would be reduced by 16.67%.  The reduction in revenues
resulting from an obligation to pay these royalties and subsequent reduction of
proved reserves could have a material adverse effect on the Fund’s results of
operations.  If the Average NYMEX Price is below the threshold
established by the MMS, the Fund would not have an obligation to pay royalties
for those properties which qualify for royalty relief and the reserve balances
would not be reduced.  With regard to the shallow water, deep gas
properties, there was no reduction in reserves for potential future royalties as
of December 31, 2007 as a result of the average 2007 NYMEX price for gas
being below the price threshold.





The
Fund’s gas revenues for the nine months ended September 30, 2008 would be
reduced by $0.1 million if the 2008 annual Average NYMEX Price ultimately
exceeds the price threshold established by the MMS.  At September 30,
2008, the Fund has not recorded a liability associated with this contingency,
based upon the Manager’s assessment of its probability; however, the Fund has
prepaid the MMS this amount to avoid the incurrence of potential interest
charges.





17
 Table of Contents




Off-Balance
Sheet Arrangements





The Fund
had no off-balance sheet arrangements as of September 30, 2008 and December 31,
2007 and does not anticipate the use of such arrangements in the
future.





Contractual
Obligations





The Fund
enters into operating agreements with operators.  On behalf of the Fund, an
operator enters into various contractual commitments pertaining to exploration,
development and production activities.  The Fund does not discuss or
negotiate any such contracts. No contractual obligations exist at September 30,
2008 and December 31, 2007 other than those discussed in “Estimated Capital
Expenditures” above.





ITEM 3.  QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
required.





ITEM 4.  CONTROLS AND
PROCEDURES





In
accordance with Exchange Act Rules 13a-15 and 15d-15, the Fund carried out
an evaluation, under the supervision and with the participation of management,
including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report.  Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that the Fund’s
disclosure controls and procedures were effective as of September 30,
2008.




There has
been no change in the Fund’s internal control over financial reporting that
occurred during the three months ended September 30, 2008 that has materially
affected, or is reasonably likely to materially affect, the Fund’s internal
control over financial reporting.





PART
II.  OTHER INFORMATION





ITEM 1. LEGAL
PROCEEDINGS





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





ITEM 1A. RISK
FACTORS





Not
required.





ITEM
2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





None.





ITEM 3.  DEFAULTS
UPON SENIOR SECURITIES





None.





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





None.





ITEM 5. OTHER
INFORMATION





None.





18
 Table of Contents




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



















19
 Table of Contents





SIGNATURES





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





Dated:
                October
      30, 2008
                
                
                
                RIDGEWOOD
      ENERGY K FUND, LLCBy:
                /s/
                
                ROBERT
      E. SWANSONName:
                
                Robert
      E. SwansonTitle:
                
                President
      and Chief Executive Officer(Principal
      Executive Officer)Dated:
                October
      30, 2008By:
                /s/
                
                KATHLEEN
      P. MCSHERRYName:
                
                Kathleen
      P. McSherryTitle:
                
                Executive
      Vice President and Chief Financial Officer(Principal
      Financial and Accounting Officer)











20