UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION





Washington,
D.C. 20549





FORM
10-Q








ý
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30,
2009


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 No. 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.)





947
Linwood Avenue, Ridgewood, NJ 07450


(Address
of principal executive offices) (Zip code)





(800)
942-5550


(Registrant’s
telephone number, including area code)








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


Yes  ýNo  o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web sit, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or such shorter period that the
registrant was required to submit and post such
files).  Yes  oNo  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
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





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 Exchange Act). Yes o No ý





There is
no market for the shares. As of November 2, 2009 there are 480.7046 shares
outstanding.













Table of ContentsPART
      I - FINANCIAL INFORMATION
                
                PageItem 1.
                Financial Statements:
                
                2Unaudited Condensed Balance Sheets as of September 30, 2009 and
      December 31, 2008
                
                2Unaudited
      Condensed Statements of Operations for the three and nine months endedSeptember
      30, 2009 and 2008
                
                3Unaudited
      Condensed Statements of Cash Flows for the nine months endedSeptember
      30, 2009 and 2008
                
                4Notes to Unaudited Condensed Financial
      Statements
                
                5Item 2.
                Management's Discussion and Analysis of Financial Condition
      and Results of Operations
                
                11Item 3.
                Quantitative and Qualitative Disclosures about Market
      Risk
                
                16Item 4.
                Controls and Procedures
                
                16PART
      II - OTHER INFORMATIONItem 1.
                Legal Proceedings
                
                16Item 1A.
                Risk Factors
                
                16Item 2.
                Unregistered Sales of Equity Securities and Use of
      Proceeds
                
                16Item 3.
                Defaults Upon Senior Securities
                
                17Item 4.
                Submission of Matters to a Vote of Security
      Holders
                
                17Item 5.
                Other Information
                
                17Item 6.
                Exhibits
                
                17SIGNATURES
                
                18





1
 Table of Contents





PART I - FINANCIAL INFORMATIONITEM 1.  FINANCIAL STATEMENTSRIDGEWOOD ENERGY K FUND, LLCUNAUDITED
      CONDENSED BALANCE SHEETS(in
      thousands, except share data)September
      30, 2009
              
              
              December
      31, 2008ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              2,799
              
              
              $
              3,295Production
      receivable
              
              
              207
              
              
              
              422Other
      current assets
              
              
              37
              
              
              
              185Total
      current assets
              
              
              3,043
              
              
              
              3,902Salvage
      fund
              
              
              1,182
              
              
              
              1,162Oil
      and gas properties:Unproved
      properties
              
              
              -
              
              
              
              807Proved
      properties
              
              
              23,363
              
              
              
              22,216Less:  accumulated
      depletion and amortization
              
              
              (15,528
              )
              
              
              (12,904
              )Total
      oil and gas properties, net
              
              
              7,835
              
              
              
              10,119Total
      assets
              
              $
              12,060
              
              
              $
              15,183LIABILITIES
      AND MEMBERS' CAPITALCurrent
      liabilities:Due
      to operators
              
              $
              175
              
              
              $
              245Accrued
      expenses
              
              
              68
              
              
              
              46Total
      current liabilities
              
              
              243
              
              
              
              291Asset
      retirement obligations
              
              
              476
              
              
              
              348Total
      liabilities
              
              
              719
              
              
              
              639Commitments
      and contingencies (Note 8)Members'
      capital:Manager:Distributions
              
              
              (290
              )
              
              
              (290
              )Retained
      earnings
              
              
              1,140
              
              
              
              982Manager's
      total
              
              
              850
              
              
              
              692Shareholders:Capital
      contributions (534 shares authorized;
                480.7046
      issued and outstanding)
              
              
              70,860
              
              
              
              70,860Syndication
      costs
              
              
              (7,775
              )
              
              
              (7,775
              )Distributions
              
              
              (11,720
              )
              
              
              (9,887
              )Accumulated
      deficit
              
              
              (40,874
              )
              
              
              (39,346
              )Shareholders'
      total
              
              
              10,491
              
              
              
              13,852Total
      members' capital
              
              
              11,341
              
              
              
              14,544Total
      liabilities and members' capital
              
              $
              12,060
              
              
              $
              15,183
 
 The
accompanying notes are an integral part of these unaudited condensed financial
statements.


2
 Table of Contents




RIDGEWOOD ENERGY K FUND, LLC


UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS
 (in
thousands, except per share data)


Three
      months ended September 30,
                
                
                Nine
      months ended September 30,2009
                
                
                2008
                
                
                2009
                
                
                2008RevenueOil
      and gas revenue
                
                $
                470
                
                
                $
                1,040
                
                
                $
                1,909
                
                
                $
                4,044ExpensesDepletion
      and amortization
                
                
                664
                
                
                
                435
                
                
                
                2,426
                
                
                
                1,677Impairment
      of proved properties
                
                
                -
                
                
                
                -
                
                
                
                198
                
                
                
                -Operating
      expenses
                
                
                161
                
                
                
                138
                
                
                
                475
                
                
                
                383General
      and administrative expenses
                
                
                70
                
                
                
                69
                
                
                
                217
                
                
                
                219Total
      expenses
                
                
                895
                
                
                
                642
                
                
                
                3,316
                
                
                
                2,279(Loss)
      income from operations
                
                
                (425
                )
                
                
                398
                
                
                
                (1,407
                )
                
                
                1,765Other
      incomeInterest
      income
                
                
                9
                
                
                
                27
                
                
                
                37
                
                
                
                114Net
      (loss) income
                
                $
                (416
                )
                
                $
                425
                
                
                $
                (1,370
                )
                
                $
                1,879Manager
      InterestNet
      income
                
                $
                30
                
                
                $
                121
                
                
                $
                158
                
                
                $
                499Shareholder
      InterestNet
      (loss) income
                
                $
                (446
                )
                
                $
                304
                
                
                $
                (1,528
                )
                
                $
                1,380Net
      (loss) income per share
                
                $
                (928
                )
                
                $
                633
                
                
                $
                (3,179
                )
                
                $
                2,871
 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 CASH FLOWS(in
      thousands)Nine
      months ended September 30,2009
              
              
              2008Cash
      flows from operating activitiesNet
      (loss) income
              
              $
              (1,370
              )
              
              $
              1,879Adjustments
      to reconcile net (loss) income to net cashprovided
      by operating activities:Depletion
      and amortization
              
              
              2,426
              
              
              
              1,677Dry-hole
      costs
              
              
              -
              
              
              
              (18
              )Impairment
      of proved properties
              
              
              198
              
              
              
              -Accretion
      expense
              
              
              6
              
              
              
              3Changes
      in assets and liabilities:Decrease
      in production receivable
              
              
              215
              
              
              
              332Decrease
      (increase) in other current assets
              
              
              148
              
              
              
              (202
              )Increase
      in due to operators
              
              
              8
              
              
              
              42Increase
      in accrued expenses
              
              
              22
              
              
              
              1Net
      cash provided by operating activities
              
              
              1,653
              
              
              
              3,714Cash
      flows from investing activitiesCapital
      expenditures for oil and gas properties
              
              
              (296
              )
              
              
              (2,530
              )Interest
      reinvested in salvage fund
              
              
              (20
              )
              
              
              (22
              )Net
      cash used in investing activities
              
              
              (316
              )
              
              
              (2,552
              )Cash
      flows from financing activitiesDistributions
              
              
              (1,833
              )
              
              
              (3,403
              )Net
      cash used in financing activities
              
              
              (1,833
              )
              
              
              (3,403
              )Net
      decrease in cash and cash equivalents
              
              
              (496
              )
              
              
              (2,241
              )Cash
      and cash equivalents, beginning of period
              
              
              3,295
              
              
              
              5,624Cash
      and cash equivalents, end of period
              
              $
              2,799
              
              
              $
              3,383
 The
accompanying notes are an integral part of these unaudited condensed financial
statements.




4
 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 1, 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 natural gas
properties located in the United States offshore waters of Texas, Louisiana and
Alabama in the Gulf of Mexico.





The
Manager has direct and exclusive control over the management of the Fund’s
operations.  With respect to project investments, the Manager locates
potential projects, conducts appropriate due diligence and negotiates and
completes the transactions in which the investments are made.  The
Manager performs, or arranges for the performance of, the management, advisory
and administrative services required for Fund operations. Such services include,
without limitation, the administration of shareholder accounts, shareholder
relations and the preparation, review and dissemination of tax and other
financial information.  In addition, the Manager provides office
space, equipment and facilities and other services necessary for Fund
operations.  The Manager also engages and manages the contractual
relations with 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 Fund’s December 31, 2008
financial statements and notes thereto 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. The Fund has assessed the impact of subsequent events through November 2,
2009, the date of the issuance of its financial statements, and has concluded
that there were no such events that require adjustment to, or disclosure in, the
notes to the financial statements.





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 expense
during the reporting period. On an ongoing basis, the Manager reviews its
estimates, including those related to property balances, determination of proved
reserves, impairments and asset retirement obligations.  Actual
results may differ from those estimates.





Cash
and Cash Equivalents


All
highly liquid investments with maturities, when purchased, of three months or
less are considered cash and cash equivalents. At times, bank deposits may be in
excess of federally insured limits.  At September 30, 2009, bank
balances exceeded federally insured limits by $2.6 million, all of which was
invested in money market accounts that invest solely in U.S. Treasury bills and
notes.  Effective October 2008 through December 31, 2013, federally
insured limits have been increased from $0.1 million to $0.25 million for
interest bearing deposits.  Additionally, non-interest bearing
deposits are fully insured through December 31, 2009, after which they will be
included in the $0.25 million limits.




5
 Table of Contents




Salvage
Fund


The Fund
deposits in a separate interest-bearing account, or salvage fund, money to
provide for the dismantling and removal of production platforms and facilities
and plugging and abandoning its wells at the end of their useful lives, in
accordance with applicable federal and state laws and regulations.  At
September 30, 2009, the Fund had investments in U.S. Treasury securities within
its salvage fund that are classified as held-to-maturity, totaling $1.1 million,
which mature in February 2012.  Held-to-maturity investments are those
securities that the Fund has the ability and intent to hold until maturity, and
are recorded at cost plus accrued income, adjusted for the amortization of
premiums and discounts, which approximates fair value.





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





Oil
and Gas Properties


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





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





Upon the
sale or retirement of a proved property, the cost and related accumulated
depletion and amortization will be eliminated from the property accounts, and
the resultant gain or loss is recognized.  Upon the sale or retirement
of an unproved property, gain or loss on the sale is recognized.





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





As of
September 30, 2009 and December 31, 2008, amounts recorded in due to operators
totaling $0.1 million and $0.2 million, respectively, related to capital
expenditures for oil and gas properties.





Asset
Retirement Obligations


For oil
and gas properties, there are obligations to perform removal and remediation
activities when the properties are retired.  When a project reaches
drilling depth and is determined to be either proved or dry, an asset retirement
obligation is incurred.  Plug and abandonment costs associated with
unsuccessful projects are expensed as dry-hole costs.   The
following table presents changes in asset retirement obligations for the nine
months ended September 30, 2009 and the year ended December 31,
2008.




September
      30, 2009
              
              
              December
      31, 2008(in
      thousands)Balance,
      beginning of period
              
              $
              348
              
              
              $
              81Liabilities
      incurred
              
              
              122
              
              
              
              183Liabilities
      settled
              
              
              -
              
              
              
              -Accretion
      expense
              
              
              6
              
              
              
              5Revision
      to prior estimate
              
              
              -
              
              
              
              79Balance,
      end of period
              
              $
              476
              
              
              $
              348


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





6
 Table of Contents




Syndication
Costs


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





Revenue
Recognition and Imbalances


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





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





Impairment
of Long-Lived Assets


The Fund
reviews the value of its oil and gas properties whenever management determines
that events and circumstances indicate that the recorded carrying value of
properties may not be recoverable.  Impairments of producing
properties are determined by comparing future net undiscounted cash flows to the
net book value at the end of each period.  If the net book value
exceeds the future net undiscounted cash flows, the carrying value of the
property is written down to fair value, which is determined using net discounted
future cash flows from the producing property.  The Fund provides for
impairments on unproved properties when it determines that the property will not
be developed or a permanent impairment in value has occurred.  The
fair value determinations require considerable judgment and are sensitive to
change.  Different pricing assumptions, reserve estimates or discount
rates could result in a different calculated impairment.  Given the
volatility of oil and gas prices, it is reasonably possible that the Fund’s
estimate of discounted future net cash flows from proved oil and gas reserves
could change in the near term.  If oil and gas prices decline
significantly, even if only for a short period of time, it is possible that
write-downs of oil and gas properties could occur. During the nine months ended
September 30, 2009, the Fund recorded an impairment of $0.2 million related to
Vermilion 344, which was attributable to lower oil and gas commodity
prices.  The carrying value for Vermilion 344 of $0.8 million was
written down to its fair value of $0.6 million. The fair value of the impaired
well was determined based on level 3 inputs, which include projected income from
proved and probable reserves utilizing forward price curves, net of anticipated
costs, discounted.  No impairments were recorded during the three
months ended September 30, 2009.





Depletion
and Amortization


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





Income
Taxes


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





Income
and Expense Allocation


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





3. Recent
Accounting Standards





In
June 2009, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Codification, as the source of GAAP to be applied to
nongovernmental agencies. This guidance explicitly recognizes rules and
interpretive releases of the SEC under authority of federal securities laws as
authoritative GAAP for SEC registrants. It is effective for interim or annual
periods ending after September 15, 2009.  The guidance was adopted for the
third quarter of 2009 and did not have a material impact on the Fund’s financial
statements.




7
 Table of Contents





In
May 2009, the FASB issued guidance on subsequent events, which sets forth
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued or are
available to be issued. The guidance was adopted effective for the second
quarter of 2009 and did not have a material impact on the Fund’s financial
statements.





In
April 2009, the FASB issued guidance on interim disclosures about fair
value of financial instruments, which requires quarterly disclosure of
information about the fair value of financial instruments.  The guidance
was adopted effective for the second quarter of 2009 and did not have a material
impact on the Fund’s financial statements.





In April
2009, the FASB issued guidance on the recognition and presentation of
other-than-temporary impairments, which amends the other-than-temporary
impairment guidance for debt securities to make the guidance more operational
and to improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements. This
guidance does not amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities. This guidance does not
require disclosures for earlier periods presented for comparative purposes at
initial adoption. In periods after initial adoption, this guidance requires
comparative disclosures only for periods ending after initial adoption. The
guidance was adopted effective for the second quarter of 2009 and did not have a
material impact on the Fund’s financial statements.





In
September 2006, the FASB issued guidance related to fair value measurements.
This guidance 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 FASB also issued guidance on the methods used
to measure fair value and required expanded disclosures related to fair value
measurements. The Fund adopted this guidance for financial assets and financial
liabilities effective January 1, 2008 and for non-financial assets and
non-financial liabilities effective January 1, 2009.  The adoption did not
have a material impact on the Fund’s financial statements.





In
December 2008, the SEC issued Release No. 33-8995, “Modernization of
Oil and Gas Reporting” (“Release No. 33-8995”), amending oil and gas reporting
requirements under Rule 4-10 of Regulation S-X and Industry Guide 2 in
Regulation S-K.  The new requirements provide for consideration of new
technologies in evaluating reserves, allow companies to disclose their probable
and possible reserves to investors, report oil and gas reserves using an average
price based on the prior 12-month period rather than year-end prices, and revise
the disclosure requirements for oil and gas operations.  The final rules
are effective for fiscal years ending on or after
December 31, 2009.  The Fund does not expect the adoption of
Release No. 33-8995 to have a material impact on its financial statements and
disclosures.





4. Unproved
Properties - Capitalized Exploratory Well Costs





Leasehold
acquisition and exploratory drilling costs are capitalized pending determination
of whether the well has found proved reserves.  Unproved properties
are assessed on a quarterly basis by evaluating and monitoring if sufficient
progress is made on assessing the reserves.  At September 30, 2009,
the Fund had no unproved properties.  The following table reflects the
net changes in unproved properties for the nine months ended September 30, 2009
and the year ended December 31, 2008.




8
 Table of Contents





September
      30, 2009
              
              
              December
      31, 2008(in
      thousands)Balance,
      beginning of period
              
              $
              807
              
              
              $
              1,869Additions
      to capitalized exploratory well costs
                pending
      the determination of proved reserves
              
              
              234
              
              
              
              1,230Reclassification
      to proved properties based on
                the
      determination of proved reserves
              
              
              (1,041
              )
              
              
              (2,292
              )Capitalized
      exploratory well costs charged to
                dry-hole
      costs
              
              
              -
              
              
              
              -Balance,
      end of period
              
              $
              -
              
              
              $
              807


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.





5. Distributions





Distributions
to shareholders are allocated in proportion to the number of shares
held.  The Manager determines whether available cash from operations,
as defined in the LLC Agreement, is to be distributed.  Effective
April 1, 2006, the Manager elected to permanently waive its right to
distributions of available cash from operations for the remaining life of the
Fund.





Available
cash from dispositions, as defined in the 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.





6. Related
Parties





Effective
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,
totaling $20 thousand and $60 thousand for each of the three and nine months
ended September 30, 2009 and 2008, respectively, were included in general and
administrative expenses.





At times,
short-term payables and receivables, which do not bear interest, arise from
transactions with affiliates in the ordinary course of business.





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





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





7. Fair
Value of Financial Instruments





At
September 30, 2009 and December 31, 2008, cash and cash equivalents, production
receivable, salvage fund and accrued expenses approximate fair
value.





8. Commitments
and Contingencies





Capital
Commitments


The Fund
has entered into multiple agreements for the drilling and development of its
investment properties. The estimated capital expenditures associated with these
agreements vary depending on the stage of development on a property-by-property
basis. At September 30, 2009, the Fund had no capital commitments related to its
investment properties.




9
 Table of Contents





Environmental
Considerations


The
exploration for and development of oil and natural gas involves the extraction,
production and transportation of materials which, under certain conditions, can
be hazardous or cause environmental pollution problems. The Manager and
operators of the Fund’s properties are continually taking action they believe
appropriate to satisfy applicable federal, state and local environmental
regulations and do not currently anticipate that compliance with federal, state
and local environmental regulations will have a material adverse effect upon
capital expenditures, results of operations or the competitive position of the
Fund in the oil and 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, 2009 and December 31, 2008, 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
that is not insured or not fully insured could have an adverse impact upon
earnings and financial position.  Moreover, insurance is obtained as a
package covering all of the funds managed by the Manager.  Claims made
by other funds can reduce or eliminate insurance for the Fund.










10
 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 based on current expectations and assumptions that are subject to
risks and uncertainties that may cause actual results to differ materially from
the forward-looking statements. These forward-looking statements generally are
identified by the words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “plan,” “target,” “pursue,” “may,” “will
likely result,” and similar expressions.  Examples of such events that
could cause actual results to differ materially from historical results or those
anticipated include weather conditions, such as hurricanes, changes in market
conditions affecting the pricing of oil and natural gas, the cost and
availability of equipment, and changes in governmental
regulations.  The Fund undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.





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 expense 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 2008 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 in oil and natural gas properties located in the United States
offshore waters of Texas, Louisiana and Alabama in 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 of the Fund’s operations.  The
Fund’s primary investment objective is to generate cash for distribution to its
shareholders through the acquisition of “working interests” in the exploration,
production and sale of oil and natural gas.





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





Business
Update





The Fund
owns working interests and has participated in the drilling of fifteen wells;
seven are currently producing, one is currently shut-in and seven have been
determined to be dry holes.





Discoveries


LLOG
Projects


The Fund
acquired a 3.75% working interest in each of six exploratory wells, which are
operated by LLOG Exploration Offshore, Inc. (“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.




11
 Table of Contents





The
remaining four LLOG wells, as detailed below, have been determined to be
discoveries.  The Fund has spent $3.5 million related to these
wells.  The Fund has recorded impairments related to Vermilion 344
totaling $0.8 million, of which $0.2 million of impairment expense was incurred
during the nine months ended September 30, 2009.





South
      Marsh Island 111
            Discovery
      July 2007; Production
              commenced
      February 2009Vermilion
      344
            Discovery
      January 2007; Production
              commenced
      December 2008West
      Delta 68
            Discovery
      March 2007; Production
              commenced
      July 2008West
      Delta 67
            Discovery
      November 2007; Production
              commenced
      July 2008





East
Cameron 299 / West Cameron 556


The Fund
acquired from Millennium Offshore Group (“MOGI”) a 10.0% working interest in the
East Cameron 299 field and a 20.0% working interest in West Cameron 556 at a
total cost of $30.3 million.  During 2005, MOGI sold its interests in
the East Cameron 299 and West Cameron 556 wells, which are currently operated by
ATP Oil and Gas Corporation.   Within the East Cameron
299/West Cameron 556 field, there are currently two producing wells and one well
is shut in pending a workover.





During
August 2009, a valve repair was required on the pipeline through which the East
Cameron 299/West Cameron 556 production flows.  Accordingly, these
wells did not produce for several weeks during the third quarter
2009.  Production rates continue to decrease for the East Cameron 299
well, as its initial zone is nearly depleted.  A recompletion of the
well will be needed in order to access the reserves in the well’s lower
zone.  The Fund and its joint interest partners are evaluating the
recompletion options and currently estimate the Fund will incur $0.3 million
relative to such efforts.  Additionally, the Fund continues to
evaluate the costs associated with bringing the second East Cameron well on
production.  To date, the Fund has recorded impairments of $12.7
million related to East Cameron 299 and West Cameron 556.  No
impairments have been recorded during the nine months ended September 30,
2009.





West
Cameron 76 A-1


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 Fund has spent $1.8
million related to this well.





Results
of Operations





The
following table summarizes the Fund’s results of operations for the three and
nine months ended September 30, 2009 and 2008 and should be read in conjunction
with the Fund’s financial statements and notes thereto included within Item 1.
“Financial Statements in Part I of this Quarterly Report.




12
 Table of Contents




Three
      months ended September 30,
              
              
              Nine
      months ended September 30,2009
              
              
              2008
              
              
              2009
              
              
              2008(in
      thousands)RevenueOil
      and gas revenue
              
              $
              470
              
              
              $
              1,040
              
              
              $
              1,909
              
              
              $
              4,044ExpensesDepletion
      and amortization
              
              
              664
              
              
              
              435
              
              
              
              2,426
              
              
              
              1,677Impairment
      of proved properties
              
              
              -
              
              
              
              -
              
              
              
              198
              
              
              
              -Operating
      expenses
              
              
              161
              
              
              
              138
              
              
              
              475
              
              
              
              383General
      and administrative expenses
              
              
              70
              
              
              
              69
              
              
              
              217
              
              
              
              219Total
      expenses
              
              
              895
              
              
              
              642
              
              
              
              3,316
              
              
              
              2,279(Loss)
      income from operations
              
              
              (425
              )
              
              
              398
              
              
              
              (1,407
              )
              
              
              1,765Other
      incomeInterest
      income
              
              
              9
              
              
              
              27
              
              
              
              37
              
              
              
              114Net
      (loss) income
              
              $
              (416
              )
              
              $
              425
              
              
              $
              (1,370
              )
              
              $
              1,879


Overview.  Since
inception, the Fund has had seven wells come onto production: East Cameron 299
in 2004, West Cameron 556 in 2005, West Cameron 76 A-1 in 2007, West Delta 67/68
in July 2008, Vermilion 344 in December 2008 and South Marsh Island 111 in
February 2009.





Oil and Gas
Revenue.Oil
and gas revenue for the three months ended September 30, 2009 was $0.5 million,
a $0.6 million decrease from the three months ended September 30,
2008.  The decrease is attributable to the impact of decreased average
prices totaling $0.9 million, partially offset by an increase in sales volumes
totaling $0.3 million.





Oil sales
volumes were 2 thousand barrels during each of the three months ended September
30, 2009 and 2008.   The Fund’s oil prices averaged $49 per
barrel and $119 per barrel during the three months ended September 30, 2009 and
2008, respectively.





Gas sales
volumes were 109 thousand mcf during the three months ended September 30, 2009
compared to 82 thousand mcf during the three months ended September 30,
2008.  The Fund’s gas prices averaged $3.32 per mcf and $10.49 per mcf
during the three months ended September 30, 2009 and 2008,
respectively.





Oil and
gas revenue for the nine months ended September 30, 2009 was $1.9 million, a
$2.1 million decrease from the nine months ended September 30,
2008.  The decrease is attributable to the impact of decreased average
prices totaling $2.9 million, partially offset by an increase in sales volumes
totaling $0.7 million.





Oil sales
volumes were 5 thousand barrels during the nine months ended September 30, 2009
compared to 4 thousand barrels during the nine months ended September 30,
2008.  The Fund’s oil prices averaged $48 per barrel and $113 per
barrel during the nine months ended September 30, 2009 and 2008,
respectively.





Gas sales
volumes were 402 thousand mcf during the nine months ended September 30, 2009
compared to 336 thousand mcf during the nine months ended September 30,
2008.  The Fund’s gas prices averaged $4.11 per mcf and $10.53 per mcf
during the nine months ended September 30, 2009 and 2008,
respectively.





The
increase in oil and gas volume during the three months ended September 30, 2009
compared to the three months ended September 30, 2008 was due primarily to the
onset of production of Vermilion 344 and South Marsh Island 111, as discussed
above in “Overview”.  The increase in oil and gas volume during the
nine months ended September 30, 2009 compared to the nine months ended September
30, 2008 was due primarily to the onset of production of Vermilion 344 and South
Marsh Island 111, partially offset by decreases in sales volumes by the Fund’s
West Cameron 556 and West Cameron 76 A-1 wells, due to the natural decline in
production rates.




13
 Table of Contents





Depletion and
Amortization.  Depletion and amortization for the three months
ended September 30, 2009 and 2008 was $0.7 million and $0.4 million,
respectively.  Depletion and amortization for the nine months ended
September 30, 2009 and 2008 was $2.4 million and $1.7 million,
respectively.  The increase resulted from increased production volumes
due to the timing of the onset of production of the Fund’s wells, partially
offset by decreases in production by the Fund’s West Cameron 556 and West
Cameron 76 A-1 wells.





Impairment of
Proved Properties.  During the nine months ended September 30,
2009, the Fund recorded an impairment to proved properties of $0.2 million,
relating to Vermilion 344, which was attributable to lower oil and gas commodity
prices.  There were no impairments recorded during the three months
ended September 30, 2009 or during the three and nine months ended September 30,
2008.





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




Three
      months ended September 30,
              
              
              Nine
      months ended September 30,2009
              
              
              2008
              
              
              2009
              
              
              2008(in
      thousands)Lease
      operating expense
              
              $
              159
              
              
              $
              139
              
              
              $
              469
              
              
              $
              398Accretion
      expense
              
              
              2
              
              
              
              1
              
              
              
              6
              
              
              
              3Dry-hole
      costs
              
              
              -
              
              
              
              (2
              )
              
              
              -
              
              
              
              (18
              )$
              161
              
              
              $
              138
              
              
              $
              475
              
              
              $
              383


Lease
operating expense for the three and nine months ended September 30, 2009 and
2008 was related to the Fund’s producing properties during each period as
outlined above in “Overview”.  Accretion expense is related to the
asset retirement obligations established for the Fund’s proved
properties.  Dry-hole costs are those costs incurred to drill and
develop a well that is ultimately found to be incapable of producing either oil
or natural gas in sufficient quantities to justify completion of the
well.  During the three and nine months ended September 30, 2009 and
2008, the Fund received credits on certain wells from their respective operators
upon review and audit of the well’s costs.





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





Three
      months ended September 30,
              
              
              Nine
      months ended September 30,2009
              
              
              2008
              
              
              2009
              
              
              2008(in
      thousands)Accounting
      fees
              
              $
              36
              
              
              $
              32
              
              
              $
              106
              
              
              $
              120Management
      reimbursement and other
              
              
              20
              
              
              
              21
              
              
              
              61
              
              
              
              63Insurance
      expense
              
              
              14
              
              
              
              16
              
              
              
              50
              
              
              
              36$
              70
              
              
              $
              69
              
              
              $
              217
              
              
              $
              219
 Accounting
fees represent audit and tax preparation fees, quarterly reviews and filing fees
incurred by the Fund.  Management reimbursement and other expenses
relate primarily to reimbursements for various administrative costs incurred on
the Fund’s behalf.  Insurance expense represents premiums related to
producing well and control of well insurance, which varies dependent upon the
number of wells producing or drilling, and director’s and officers’ liability
insurance.





Interest
Income.  Interest income is comprised of interest earned on
money market accounts and investments in U.S. Treasury securities within the
Fund’s salvage fund.  Interest income for the three months ended
September 30 2009 was $9 thousand, an $18 thousand decrease from the three
months ended September 30, 2008.  Interest income for the nine months
ended September 30, 2009, was $37 thousand, a $77 thousand decrease from the
nine months ended September 30, 2008.  The decrease was attributable
to a reduction in average outstanding balances earning interest, due to ongoing
capital expenditures for oil and gas properties, coupled with lower interest
rates earned.




14
 Table of Contents




Capital
Resources and Liquidity





Operating
Cash Flows


Cash
flows provided by operating activities for the nine months ended September 30,
2009 were $1.7 million, primarily related to revenue receipts of $2.1 million,
$0.1 million received as a refund of estimated royalty payments made in 2008 and
favorable working capital of $0.1 million, partially offset by operating
expenses of $0.5 million and general and administrative expenses totaling $0.1
million.





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
and interest income received of $0.1 million, partially offset by operating
expenses of $0.4 million and general and administrative expenses of $0.2 million
and MMS deposits of $0.2 million.





Investing
Cash Flows


Cash
flows used in investing activities for the nine months ended September 30, 2009
were $0.3 million, primarily related to capital expenditures for oil and gas
properties.  Additionally, the Fund increased its salvage fund
investments by $20 thousand, which consisted of the interest earned on this
account.





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.  Additionally, the Fund increased its salvage fund
investments by $22 thousand, which consisted of the interest earned on this
account.





Financing
Cash Flows


Cash
flows used in financing activities for the nine months ended September 30, 2009
were $1.8 million, related to shareholder distributions.





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





Estimated
Capital Expenditures





The Fund
has entered into multiple agreements for the drilling and development of its
investment properties.  The estimated capital expenditures associated
with these agreements can vary depending on the stage of development on a
property-by-property basis.  As of September 30, 2009, the Fund had no
capital commitments related to its investment properties.





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





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





Liquidity
Needs





The
Fund’s primary short-term liquidity needs are to fund its
operations.  Operations are funded utilizing operating income,
existing cash on-hand and income earned therefrom.





Distributions
are funded from available cash from operations, as defined in the Fund’s limited
liability company agreement, and the frequency and amount are within the
Manager’s discretion subject to available cash from operations, reserve
requirements and the Fund’s operations.




15
 Table of Contents





Off-Balance
Sheet Arrangements





The Fund
had no off-balance sheet arrangements at September 30, 2009 and December 31,
2008 and does not anticipate the use of such arrangements in the
future.





Contractual
Obligations





The Fund
enters into operating agreements with operators.  On behalf of the Fund, an
operator enters into various contractual commitments pertaining to exploration,
development and production activities.  The Fund does not negotiate any
such contracts. No contractual obligations exist at September 30, 2009 and
December 31, 2008 other than those discussed in “Estimated Capital Expenditures”
above.





Recent
Accounting Pronouncements





See Note
3 of Notes to Unaudited Condensed Financial Statements – “Recent Accounting
Standards” contained in this Quarterly Report for a discussion of recent
accounting pronouncements.





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 the Fund’s disclosure controls and procedures as of the end of
the period covered by this report.  Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Fund’s
disclosure controls and procedures were effective as of September 30,
2009.





There has
been no change in the Fund’s internal control over financial reporting that
occurred during the three months ended September 30, 2009 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





On August
16, 2006, the Manager of the Fund filed a lawsuit against the former independent
registered public accounting firm for the Fund, Perelson Weiner, LLP
(“Perelson”), in New Jersey Superior Court, captioned Ridgewood Energy
Corporation v. Perelson Weiner LLP, Docket No. L-6092-06.  The suit
alleged professional malpractice and breach of contract in connection with audit
and accounting services performed for the Fund by
Perelson.  Thereafter, Perelson filed a counterclaim against the
Manager on October 20, 2006, alleging breach of contract due to unpaid invoices
in the amount of $326,554.  Discovery is ongoing and a trial date has
been set for February 1, 2010.





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





ITEM 1A. RISK FACTORS





Not
required.





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





None.




16
 Table of Contents




ITEM 3.  DEFAULTS UPON SENIOR SECURITIES





None.





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





None.





ITEM 5. OTHER INFORMATION





On June
22, 2009, Kenneth W. Lang was named President and Chief Operating Officer of the
Fund.  Prior to joining the Fund, Mr. Lang was with BP for twenty-four
years, ultimately serving as Senior Vice President for BP’s Gulf of Mexico
business and a member of the Board of Directors for BP America,
Inc.  Robert E. Swanson, formerly President and Chief Executive
Officer of the Fund, will remain Chief Executive Officer of the
Fund.





Adrien
Doherty, Executive Vice President of the Fund, resigned effective October 30,
2009.





ITEM 6. EXHIBITS





ExhibitNumber
              
              Title
      of Exhibit
              
              Method
      of Filing31.1
              
              Certification
      of Robert E. Swanson, Chief Executive Officer of the Fund, pursuant to
      Securities Exchange Act Rule 13a-14(a)
              
              Filed
      herewith31.2
              
              Certification
      of Kathleen P. McSherry, Chief Financial Officer of the Fund, pursuant to
      Securities Exchange Act Rule 13a-14(a)
              
              Filed
      herewith32
              
              Certifications
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      The Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief
      Executive Officer of the Fund and Kathleen P. McSherry, Chief Financial
      Officer of the Fund
              
              Filed
      herewith





17
 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.





RIDGEWOOD
      ENERGY K FUND, LLCDated:
            November
      2, 2009
            By:
            /s/
            
            ROBERT
      E. SWANSONName:
            
            Robert
      E. SwansonTitle:
            
            Chief
      Executive Officer(Principal
      Executive Officer)Dated:
            November
      2, 2009
            By:
            /s/
            
            KATHLEEN
      P. MCSHERRYName:
            
            Kathleen
      P. McSherryTitle:
            
            Executive
      Vice President and Chief Financial Officer(Principal
      Financial Officer)