**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
                  1934**For
                  the quarterly period ended June 30, 2007
 or
 
 o
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**For
                  the transition period from
                  _______________________to____________________________
 
 **Commission
      File Number 000-51266**
  **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)
 
 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  ý     No  o
 
 Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or non-accelerated filer.  See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
      Exchange Act.  (Check one) :
  Large
      accelerated filer  oAccelerated
      filer  oNon-accelerated
      filer  ý
 
 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
 
 As
      of
      July 27, 2007 there were 480.7046 shares of membership interest of the
      registrant outstanding.
 
 
 
 
 
  **Table
                  of Contents****Part
                  I - FINANCIAL INFORMATION**
              
              **Page**Item
                  1.  Financial Statements:Unaudited
                  Condensed Balance Sheets as of June 30, 2007 and December 31,
                  2006
              
              3Unaudited
                  Condensed Statements of Operations for the three and six months
                  ended
                June
                  30, 2007 and 2006
              4Unaudited
                  Condensed Statements of Cash Flows for the six months ended June
                  30, 2007
                  and 2006
              
              5Notes
                  to Unaudited Condensed Financial Statements
              
              6Item
                  2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations
              
              11Item
                  3.  Quantitative and Qualitative Disclosures About Market
                  Risk
              
              17Item
                  4.  Controls and Procedures
              
              17**Part
                  II - OTHER INFORMATION**Item
                  1. Legal Proceedings
              
              19Item
                  1A. Risk Factors
              
              19Item
                  2.  Unregistered  Sales of Equity Securities and Use
                  of Proceeds
              
              19Item
                  3. Defaults Upon Senior Securities
              
              19Item
                  4.  Submissions of Matters to a Vote of Security
                  Holders
              
              19Item
                  5. Other Information
              
              19Item
                  6.  Exhibits
              
              19SIGNATURES
              
              20
  2
  **Part
                  I - Financial Information****Item
                  1.  Financial Statements****RIDGEWOOD
                  ENERGY K FUND, LLC****UNAUDITED
                  CONDENSED BALANCE SHEETS****(in
                  thousands, except number of shares)****June
                  30, 2007**
              
              
              **December
                  31, 2006****ASSETS**Current
                  assets:Cash
                  and cash equivalents
              
              $
              7,185
              
              
              $
              8,469Production
                  receivable
              
              
              219
              
              
              
              188Other
                  current assets
              
              
              13
              
              
              
              -Total
                  current assets
              
              
              7,417
              
              
              
              8,657Salvage
                  fund
              
              
              1,098
              
              
              
              1,081Oil
                  and gas properties:Proved
                  properties
              
              
              17,662
              
              
              
              17,662Unproved
                  properties
              
              
              940
              
              
              
              74Less:  accumulated
                  depletion and amortization -proved
                  properties
              
              
              (8,836
              )
              
              
              (8,018
              )Total
                  oil and gas properties, net
              
              
              9,766
              
              
              
              9,718Total
                  assets
              
              $
              18,281
              
              
              $
              19,456**LIABILITIES
                  AND MEMBERS' CAPITAL**Current
                  liabilities:Due
                  to affiliate (Note 5)
              
              $
              -
              
              
              $
              228Due
                  to operators
              
              
              41
              
              
              
              93Accrued
                  expenses payable
              
              
              89
              
              
              
              149Total
                  current liabilities
              
              
              130
              
              
              
              470Non-current
                  liabilities:Asset
                  retirement obligations
              
              
              80
              
              
              
              78Total
                  non-current liabilities
              
              
              80
              
              
              
              78Total
                  liabilities
              
              
              210
              
              
              
              548Commitment
                  and contingencies (Note 7)Members'
                  capital:Manager:Distributions
              
              
              (290
              )
              
              
              (290
              )Retained
                  earnings
              
              
              217
              
              
              
              118Manager's
                  total
              
              
              (73
              )
              
              
              (172
              )Shareholders:Capital
                  contributions (534 shares authorized;
                480.7046
                  issued and outstanding)
              
              
              70,860
              
              
              
              70,860Syndication
                  costs
              
              
              (7,775
              )
              
              
              (7,775
              )Distributions
              
              
              (4,982
              )
              
              
              (4,056
              )Accumulated
                  deficit
              
              
              (39,959
              )
              
              
              (39,949
              )Shareholders'
                  total
              
              
              18,144
              
              
              
              19,080Total
                  members' capital
              
              
              18,071
              
              
              
              18,908Total
                  liabilities and members' capital
              
              $
              18,281
              
              
              $
              19,456The
                  accompanying notes are an integral part of these unaudited condensed
                  financial statements.
 
 3
  **RIDGEWOOD
                  ENERGY K FUND, LLC****UNAUDITED
                  CONDENSED STATEMENTS OF OPERATIONS****(in
                  thousands, except per share amounts)****For
                  the three months ended June 30,**
              
              
              **For
                  the six months ended**
                **June
                  30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Revenue**Oil
                  and gas revenue
              
              $
              492
              
              
              $
              931
              
              
              $
              1,057
              
              
              $
              2,036**Expenses**Dry-hole
                  costs
              
              
              (5
              )
              
              
              718
              
              
              
              (3
              )
              
              
              760Depletion
                  and amortization
              
              
              375
              
              
              
              1,121
              
              
              
              818
              
              
              
              2,343Impairment
                  of proved properties
              
              
              -
              
              
              
              2,154
              
              
              
              -
              
              
              
              2,154Lease
                  operating expenses
              
              
              62
              
              
              
              117
              
              
              
              161
              
              
              
              201Other
                  operating expenses
              
              
              7
              
              
              
              1
              
              
              
              9
              
              
              
              2General
                  and administrative expenses
              
              
              97
              
              
              
              59
              
              
              
              199
              
              
              
              104Total
                  expenses
              
              
              536
              
              
              
              4,170
              
              
              
              1,184
              
              
              
              5,564Loss
                  from operations
              
              
              (44
              )
              
              
              (3,239
              )
              
              
              (127
              )
              
              
              (3,528
              )**Other
                  income**Interest
                  income
              
              
              109
              
              
              
              106
              
              
              
              216
              
              
              
              186Net
                  income (loss)
              
              $
              65
              
              
              $
              (3,133
              )
              
              $
              89
              
              
              $
              (3,342
              )**Manager
                  Interest**Net
                  income
              
              $
              48
              
              
              $
              74
              
              
              $
              99
              
              
              $
              209**Shareholder
                  Interest**Net
                  income (loss)
              
              $
              17
              
              
              $
              (3,207
              )
              
              $
              (10
              )
              
              $
              (3,551
              )Net
                  income (loss) per share
              
              $
              35
              
              
              $
              (6,671
              )
              
              $
              (21
              )
              
              $
              (7,387
              )The
                  accompanying notes are an integral part of these unaudited condensed
                  financial statements.
  4
  **RIDGEWOOD
                  ENERGY K FUND, LLC****UNAUDITED
                  CONDENSED STATEMENTS OF CASH FLOWS****(in
                  thousands)****Six
                  months ended June 30,****2007**
              
              
              **2006****Cash
                  flows from operating activities**Net
                  income (loss)
              
              $
              89
              
              
              $
              (3,342
              )Adjustments
                  to reconcile net income (loss) to net cashprovided
                  by operating activities:Impairment
                  of proved properties
              
              
              -
              
              
              
              2,154Depletion
                  and amortization
              
              
              818
              
              
              
              2,343Dry-hole
                  costs
              
              
              (3
              )
              
              
              760Accretion
                  expense
              
              
              2
              
              
              
              2Changes
                  in assets and liabilities:(Increase)
                  decrease in production receivable
              
              
              (31
              )
              
              
              844(Increase)
                  decrease in other current assets
              
              
              (13
              )
              
              
              19Increase
                  in due to affiliate
              
              
              -
              
              
              
              8Increase
                  in due to operators
              
              
              -
              
              
              
              94(Decrease)
                  increase in accrued expenses payable
              
              
              (60
              )
              
              
              10Net
                  cash provided by operating activities
              
              
              802
              
              
              
              2,892**Cash
                  flows from investing activities**Capital
                  expenditures for oil and gas properties
              
              
              (1,143
              )
              
              
              (210
              )Interest
                  income reinvested - salvage fund
              
              
              (17
              )
              
              
              (22
              )Net
                  cash used in investing activities
              
              
              (1,160
              )
              
              
              (232
              )**Cash
                  flows from financing activities**Distributions
              
              
              (926
              )
              
              
              (1,429
              )Net
                  cash used in financing activities
              
              
              (926
              )
              
              
              (1,429
              )Net
                  (decrease) increase in cash and cash equivalents
              
              
              (1,284
              )
              
              
              1,231Cash
                  and cash equivalents, beginning of period
              
              
              8,469
              
              
              
              7,846Cash
                  and cash equivalents, end of period
              
              $
              7,185
              
              
              $
              9,077**Supplemental
                  schedule of non-cash operating activities**Reclassification
                  of due to operators to due to affiliate
              
              $
              -
              
              
              $
              217The
                  accompanying notes are an integral part of these unaudited condensed
                  financial statements.
 
 5
  **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 (“Agreement”) dated as of April 5, 2004 by and among
      Ridgewood Energy Corporation (the “Manager”) and the shareholders of the
      Fund.  Although the date of formation is March 1, 2004, the Fund did
      not begin operations until April 22, 2004 when it began its private offering
      of
      shares.
 
 The
      Fund
      was organized to acquire, drill, construct and develop oil and natural gas
      properties located in the United States offshore waters of Texas, Louisiana,
      and
      Alabama in the Gulf of Mexico.  The Fund has devoted most of its
      efforts to raising capital and oil and natural gas exploration
      activities.
 
 The
      Manager performs (or arranges for the performance of) the management,
      administrative and advisory services required for Fund operations. Such services
      include, without limitation, the administration of shareholder accounts,
      shareholder relations and the preparation, review and dissemination of tax
      and
      other financial information.  In addition, the Manager provides office
      space, equipment and facilities and other services necessary for Fund
      operations.  The Manager also engages and manages the contractual
      relations with outside custodians, depositories, accountants, attorneys,
      broker-dealers, corporate fiduciaries, insurers, banks and others as required
      (Notes 2, 5 and 7).
 
 **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, 2006 included in the
      Fund’s Annual Report on Form 10-K filed with the Securities and Exchange
      Commission (“SEC”).
 
 ***Use
      of Estimates***
 The
      preparation of financial statements in conformity with GAAP requires management
      to make estimates and assumptions that affect the reported amounts of assets
      and
      liabilities and disclosure of contingent assets and liabilities as of the date
      of the financial statements and the reported amounts of revenues and expenses
      during the reporting period. On an ongoing basis, the Manager reviews its
      estimates, including those related to amounts advanced to and billed by
      operators, determination of proved reserves, impairment allowances and
      environmental liabilities.  Actual results may differ from those
      estimates.
 
 ***Advances
      to Operators for Working Interests and Expenditures***
 The
      Fund’s acquisition of a working interest in a well or a project requires it to
      make a payment to the seller for the Fund’s right, title and
      interest.  The Fund is 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.
 
  6
  ***Oil
      and natural gas properties***
 Investments
      in oil and natural gas properties are operated by unaffiliated entities
      ("Operators") who are responsible for drilling, administering and producing
      activities pursuant to the terms of the applicable operating agreements with
      working interest owners. The Fund's portion of exploration, drilling, operating
      and capital equipment expenditures relating to the wells are advanced and billed
      by Operators through authorization for expenditures.
 
 The
      successful efforts method of accounting for oil and natural gas producing
      activities is followed. Acquisition costs are capitalized when
      incurred.  Other oil and natural gas exploration costs, excluding the
      costs of drilling exploratory wells, are charged to expense as
      incurred.  The costs of drilling exploratory wells are capitalized
      pending the determination of whether the wells have discovered proved commercial
      reserves.  If proved commercial reserves have not been found,
      exploratory drilling costs are expensed to dry-hole expense.  Costs to
      develop proved reserves, including the costs of all development wells and
      related facilities and equipment used in the production of crude oil and natural
      gas, are capitalized.  Expenditures for ongoing repairs and
      maintenance of producing properties are expensed as incurred.
 
 Upon
      the
      sale or retirement of a proved property (i.e. a producing well), the cost and
      related accumulated depletion and amortization will be eliminated from the
      property accounts, and the resultant gain or loss is recognized.  On
      the sale or retirement of an unproved property, gain or loss on the sale is
      recognized.  Currently it is not the Manager’s intention to sell any
      of the Fund’s property interests.
 
 Capitalized
      acquisition costs of producing oil and natural gas properties after recognizing
      estimated salvage values are depleted by the unit-of-production
      method.
 
 As
      of
      June 30, 2007, approximately $20 thousand in due to operators related to the
      acquisition of oil and gas property and/or drilling costs.  The
      balance in due to operators related to the acquisition of oil and gas properties
      at December 31, 2006 was paid during the first quarter of 2007.
 
 ***Revenue
      Recognition and Production Receivable***
 Oil
      and
      natural gas sales are recognized when delivery is made by the Operator to the
      purchaser and title is transferred (i.e. production has been delivered to a
      pipeline or transport vehicle).  At the time of transfer a production
      receivable is recorded.
 
 The
      volume of oil and natural gas sold on the Fund’s behalf may differ from the
      volume of oil and natural gas to which the Fund is entitled.  The Fund
      will account for such oil and natural gas production imbalances by the
      entitlements method.  Under the entitlements method, the Fund will
      recognize a receivable from other working interest owners for volumes oversold
      by other working interest owners.  For volumes oversold by the Fund, a
      payable to other working interest owners will be recorded.  As of June
      30, 2007 and December 31, 2006, there were no material oil or natural gas
      balancing arrangements between the Fund and other working interest
      owners.
 
 ***Syndication
      Costs***
 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 outside brokers are reflected as a reduction of shareholders’
capital.
 
  7
  ***Asset
      Retirement Obligations***
 For
      oil
      and natural gas properties, there are obligations to perform removal and
      remediation activities when the properties are retired.  When a
      project reaches drilling depth and is determined to be either proved or dry,
      an
      asset retirement obligation is recorded. Plug and abandonment costs associated
      with unsuccessful projects are expensed as dry-hole costs.
  **For
                  the six**
              
              
              **For
                  the year****months
                  ended**
              
              
              **ended****June
                  30, 2007**
              
              
              **December
                  31, 2006****(in
                  thousands)****Balance
                  - Beginning of period**
              
              $
              78
              
              
              $
              74Liabilities
                  incurred
              
              
              -
              
              
              
              20Liabilities
                  settled
              
              
              -
              
              
              
              (19
              )Accretion
                  expense
              
              
              2
              
              
              
              3**Balance
                  - End of period**
              
              $
              80
              
              
              $
              78
 ***Impairment
      of Long-Lived Assets***
 In
      accordance with the provisions of Statement of Financial Accounting Standards
      (“SFAS”) No. 144, “Accounting for the Impairment of Long-Lived
      Assets”, long-lived assets, such as oil and natural gas properties, are
      evaluated when events or changes in circumstances indicate the carrying value
      of
      such assets may not be recoverable. The determination of whether impairment
      has
      occurred is made by comparing the carrying values of long-lived assets to
      the estimated future undiscounted cash flows attributable to the asset. The
      impairment loss recognized is the excess of the carrying value over the future
      discounted cash flows attributable to the asset or the estimated fair value
      of
      the asset.  For the three and six months June 30, 2007, no impairments were
      recorded.  For the three and six months ended June 30, 2006, the Fund
      recorded an impairment of proved properties of approximately $2.2
      million.  The impairment recorded in 2006 related to the Fund’s
      investments in East Cameron 299 field inclusive of East Cameron 299 C-10, C-11
      and West Cameron 556.
 
 ***Depletion
      and Amortization***
 Depletion
      and amortization of the cost of proved oil and natural gas properties are
      calculated using the units of production method.  Proved developed
      reserves are used as the base for depleting the cost of successful exploratory
      drilling and development costs.  The sum of proved developed and
      proved undeveloped reserves is used as the base for depleting (or amortizing)
      leasehold acquisition costs, the costs to acquire proved properties and platform
      and pipeline costs.
 
 ***Income
      Taxes***
 No
      provision is made for income taxes in the financial
      statements.  Because the Fund is a limited liability company (“LLC”),
      the income or losses are passed through and included in the tax returns of
      the
      individual shareholders.
 
 ***Cash
      and cash equivalents***
 All
      highly liquid investments with maturities when purchased of three months or
      less
      are considered as cash and cash equivalents. At times, bank deposits may be
      in
      excess of federally insured limits.  At June 30, 2007 and December 31,
      2006, bank balances exceeded federally insured limits by approximately $7.0
      million and $8.3 million, respectively. The Fund maintains bank deposits with
      accredited financial institutions to mitigate such risk.
 
 ***Salvage
      Fund***
 The
      Fund
      deposits in a separate interest-bearing account, or a salvage fund, money to
      provide for dismantling production platforms and facilities, plugging and
      abandoning the wells and removing the platforms, facilities and wells after
      their useful lives, in accordance with applicable federal and state laws and
      regulations.
 
 Interest
      earned on the account will become part of the salvage fund, there are no legal
      restrictions on the withdrawal from the salvage fund.
  8
  ***Short-term
      Investments in Marketable Securities***
 At
      times
      the Fund may purchase short-term investments comprised of US Treasury Notes
      with
      maturities greater than three months and as such are considered held-to-maturity
      investments.  Held-to-maturity securities are those investments that
      the Fund has the ability and intent to hold until
      maturity.  Held-to-maturity investments are recorded at cost plus
      accrued income, adjusted for the amortization of premiums and discounts, which
      approximate market value.  Interest income is accrued as
      earned.  There were no held-to-maturity investments at June 30,
      2007.
 
 ***Income
      and Expense Allocation***
 Profits
      and losses are to be allocated 85% to shareholders in proportion to their
      relative capital contributions and 15% to the Manager, except for items of
      expense, loss, deduction and credit that are attributable to the expenditure
      of
      shareholders’ capital contributions, which are allocated 99% to shareholders and
      1% to the Manager.
 
 **3.**
            **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.  Capitalization costs are
      expensed as dry-hole costs in the event that reserves are not found or are
      not
      in sufficient quantities to complete the well and develop the field. The
      following table reflects the net changes in unproved properties at June 30,
      2007
      and December 31, 2006.  At June 30, 2007, the Fund had no capitalized
      exploratory well costs greater than one year.
 
 **For
                  the six months ended June 30,**
              
              
              **For
                  the year ended December 31,****2007**
              
              
              **2006****(in
                  thousands)**Balance
                  - Beginning of the period
              
              $
              74
              
              
              $
              -Additions
                  to capitalized exploratory well costs
                pending
                  the determination of proved reserves
              
              
              866
              
              
              
              74Balance
                  - End of the period
              
              $
              940
              
              
              $
              74
  Dry-hole
      costs are detailed in the table below for the three and six months ended June
      30, 2007 and 2006.
 
 **For
                  the three months endedJune 30,**
              
              
              **For
                  the six months ended****June
                  30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****(in
                  thousands)**Mobile
                  946
              
              $
              (5
              )
              
              $
              718
              
              
              $
              (3
              )
              
              $
              718High
                  Island 53
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              34West
                  Cameron 103
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              7Galveston
                  246
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1**Total
                  Dry-hole Costs**
              
              $
              (5
              )
              
              $
              718
              
              
              $
              (3
              )
              
              $
              760
  **4.  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 Agreement, is to be distributed. Prior to March 1, 2006, such
      distribution would be allocated 85% to the shareholders and 15% to the Manager,
      as defined in the Fund's Agreement. Effective March 1, 2006 the Manager elected
      to reduce its distribution of Available Cash from Operations to 1%.
      Subsequently, effective April 1, 2006, the Manager elected to permanently waive
      its distribution of Available Cash from Operations for the remaining life of
      the
      Fund.
  9
 
 Available
      Cash from Dispositions, as defined in the Fund's Agreement, will be paid 99%
      to
      shareholders and 1% to the Manager until the shareholders have received total
      distributions equal to their capital contributions. After shareholders have
      received distributions equal to their capital contributions, 85% of Available
      Cash from Dispositions will be distributed to shareholders and 15% to the
      Manager.
 
 The
      shareholders received distributions of approximately $0.9 million and $1.4
      million for the six months ended June 30, 2007 and 2006,
      respectively.
 
 The
      Manager received no distributions for the six months ended June 30,
      2007.  Distributions to the Manager approximated $76 thousand for the
      six months ended June 30, 2006.
 
 **5.**
            **Related
                Parties**
 
 A
      management agreement provides that the Manager render management, administrative
      and advisory services.  For such services, prior to October 1, 2005,
      the Manager received an annual management fee, payable monthly, of 2.5% of
      total
      capital contributions.  Beginning on October 1, 2005 and continuing
      for the remaining life of the Fund, the Manager elected to waive its management
      fee.
 
 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 June 30, 2007, there were no amounts due to
      affiliates. The Fund recorded costs relating to services provided by the
      Manager for accounting and investor relations. Such costs are included within
      general and administrative expenses, and were approximately $20 thousand and
      $40
      thousand for the three and six months ended June 30, 2007, respectively. At
      December 31, 2006 approximately $0.2 million was due to the Manager relating
      to
      capital expenditures paid by the Manager on behalf of the Fund which was paid
      by
      the Fund during the first quarter of 2007.
 
 None
      of
      the compensation to be received by the Manager has been derived as a result of
      arm’s length negotiations.
 
 The
      Fund
      has working interest ownership in certain projects to acquire and develop oil
      and natural gas projects with other entities that are likewise managed by the
      Manager.
 
 **6.  Fair
      Value of Financial Instruments**
 
 At
      June
      30, 2007 and December 31, 2006, the carrying value of cash and cash equivalents
      and salvage fund approximate fair value.
 
 **7.**
            **Commitments
                and Contingencies**
 
 ***Environmental
      Considerations***
 The
      exploration for and development of oil and natural gas involves the extraction,
      production and transportation of materials which, under certain conditions,
      can
      be hazardous or cause environmental pollution problems. The Manager and the
      Operators are continually taking action they believe appropriate to satisfy
      applicable federal, state and local environmental regulations and do not
      currently anticipate that compliance with federal, state and local environmental
      regulations will have a material adverse effect upon capital expenditures,
      results of operations or the competitive position of the Fund in the oil and
      natural gas industry.  However, due to the significant public and
      governmental interest in environmental matters related to those activities,
      the
      Manager cannot predict the effects of possible future legislation, rule changes,
      or governmental or private claims.  At June 30, 2007 and December 31,
      2006, there were no known environmental contingencies that required the Fund
      to
      record a liability.
 
 ***Insurance
      Coverage***
 The
      Fund
      is subject to all risks inherent in the exploration for and development of
      oil
      and natural gas. Insurance coverage as is customary for entities engaged in
      similar operations is maintained, but losses may occur from uninsurable risks
      or
      amounts in excess of existing insurance coverage. The occurrence of an event
      which is not insured or not fully insured could have an adverse impact upon
      earnings and financial position.
 
  10
  I**tem
      2.  Management’s Discussion and Analysis of Financial Condition and Results
      of Operations**
 
 **Cautionary
      Statement Regarding Forward-Looking Statements**
 
 This
      Quarterly Report on Form 10-Q, including all documents incorporated by
      reference, includes "forward-looking" statements within the meaning of Section
      27A of the Securities Act of 1933, as amended (the "Securities Act") and Section
      21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and
      the Private Securities Litigation Reform Act of 1995, and the "safe harbor"
      provisions thereof. These forward-looking statements are usually accompanied
      by
      the words "anticipates," "believes," "plan," "seek," "expects," "intends,"
      "estimates," "projects," "will likely result," "future" and similar terms and
      expressions or variations thereof.  The forward-looking statements in
      this Quarterly Report on Form 10-Q reflect the Fund’s current views with respect
      to future events and financial performance.  These forward-looking
      statements are subject to certain risks and uncertainties, including, among
      other things, the high-risk nature of oil and natural gas exploratory
      operations, the fact that the Fund’s drilling activities are managed by third
      parties, the volatility of natural gas prices and extraction, and those other
      risks and uncertainties discussed in the Fund’s 2006 Annual Report on Form 10-K
      filed with the Securities and Exchange Commission that could cause actual
      results to differ materially from historical results or those
      anticipated.  You are urged to carefully consider all such
      factors.
 
 In
      light
      of these risks and uncertainties, there can be no assurance that the
      forward-looking information contained in this Quarterly Report on Form 10-Q
      will
      in fact occur or prove to be accurate.  Readers should not place undue
      reliance on the forward-looking statements contained herein, which speak only
      as
      of today's date.  The Fund undertakes no obligation to publicly revise
      these forward-looking statements to reflect events or circumstances that may
      arise after the date of this filing.  All subsequent written or oral
      forward-looking statements attributable to the Fund or persons acting on its
      behalf are expressly qualified in their entirety by this section.
 
 **Critical
      Accounting Policies and Estimates**
 
 The
      following discussion and analysis of the Fund’s financial condition and
      operating results is based on our financial statements.  The
      preparation of this Quarterly Report on Form 10-Q 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
      our
      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 on Form 10-Q for a presentation of the Fund’s
      significant accounting principles.  No changes have been made to
      the Fund’s’ critical accounting policies and estimates disclosed in its 2006
      Annual Report on Form 10-K.
 
 **Overview
      of the Fund’s Business**
 
 The
      Fund
      is an independent oil and natural gas producer. The Fund’s primary investment
      objective is to generate cash flow for distribution to the Fund’s shareholders
      through participation in oil and natural 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 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**
 
 As
      of
      June 30, 2007 the Fund has participated in the drilling of twelve wells, of
      which two wells are currently producing and three wells were determined to
      have
      natural gas and oil reserves in commercial quantities such that these properties
      are in the process of being completed to facilitate production.  Six
      of the Fund’s wells were deemed dry-holes and plugged and abandoned in prior
      years.  The Fund has working interests in two new projects expected to
      be drilled over the next three months and is planning for a workover of a
      currently shut-in well.
 
  11
  **Recent
      Developments**
 
 In
      October 2006, the Fund acquired a working interest in six exploratory wells
      to
      be drilled by LLOG Exploration Offshore Inc. (“LLOG”) off the coast of
      Louisiana.  During the first quarter of 2007, the Fund decided not to
      participate in the Galveston 248 project with LLOG due to
      economics.  Each of the remaining projects is viewed as lower risk
      projects as they are being drilled in relatively shallow depths ranging from
      10,000 to 13,000 feet and the projects reveal three dimensional seismic data
      indicative of producing fields in close proximity to the drilling
      sites.   Since the projects are not very deep, they can be
      drilled and completed quickly.  Construction of minimal facilities in
      order to tie the well to nearby production platforms also facilitates turning
      the project to production quickly.    During the first half
      of 2007, three of the projects operated by LLOG were determined to have
      successful discoveries.  The Fund plans to participate in the
      remaining two LLOG projects with drilling expected within the next three
      months.  Below is a summary of the wells operated by
      LLOG:
 
 **Well
                Name**
            **Operator**
            **Offshore**
            
            **Working
                Interest %**
            
            
            **Drilling
                Risk**
              **(in
                thousands)**
            
            **Status**South
                Marsh Island 111
            LLOG
            LA
            
            
            3.75%
            
            
            
            n/a
            
            Successful
                - production expected 2nd quarter 2008Vermilion
                344
            LLOG
            LA
            
            
            3.75%
            
            
            
            n/a
            
            Successful
                - production expected 1st quarter 2008West
                Delta 68
            LLOG
            LA
            
            
            3.75%
            
            
            
            n/a
            
            Successful
                - production
              expected
                1st quarter 2008Ship
                Shoal 81
            LLOG
            LA
            
            
            3.75%
            
            
            $
            240
            
            3rd
                quarter 2007 drilling dateWest
                Delta 67
            LLOG
            LA
            
            
            3.75%
            
            
            $
            310
            
            3rd
                quarter 2007 drilling date
  **Producing
      Properties**
 
 In
      2005,
      the Fund acquired from Millenium Offshore Group (“MOGI”) a 10% working interest
      in the East Cameron 299 field, 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.   The EC299 C-11 well is currently shut-in with plans for a
      workover within the next twelve months.  The workover has been delayed
      due the high cost and constrained supply of drilling rigs post-Hurricane
      Katrina.  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.  In June 2007, the C-10 and WC556 wells produced average
      gross production per day of 6.2 million cubic feet equivalent
      (“MMCFE”)  and 0.2 MMCFE, respectively.  The West Cameron
      556 deeper reservoir is almost fully depleted and the well will be recompleted
      into the shallower reservoir later this year.   To date, the Fund
      has recorded impairments of approximately $12.6 million related to the East
      Cameron 299 C-10, East Cameron 299 C-11, and West Cameron 556
      wells.  The Fund recorded no additional impairments during the three
      and six months ended June 30, 2007.
 
 **Results
      of Operations**
 
 The
      following review of operations for the three and six months ended June 30,
      2007
      and 2006 should be read in conjunction with the Fund’s financial statements and
      the notes thereto.  The following table summarizes the Fund’s results
      of operations (in thousands):
  12
  **For
                  the three months ended June 30,**
              
              
              **For
                  the six months ended June 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Revenue**Oil
                  and gas revenue
              
              $
              492
              
              
              $
              931
              
              
              $
              1,057
              
              
              $
              2,036**Expenses**Dry-hole
                  costs
              
              
              (5
              )
              
              
              718
              
              
              
              (3
              )
              
              
              760Depletion
                  and amortization
              
              
              375
              
              
              
              1,121
              
              
              
              818
              
              
              
              2,343Impairment
                  of proved properties
              
              
              -
              
              
              
              2,154
              
              
              
              -
              
              
              
              2,154Lease
                  operating expenses
              
              
              62
              
              
              
              117
              
              
              
              161
              
              
              
              201Other
                  operating expenses
              
              
              7
              
              
              
              1
              
              
              
              9
              
              
              
              2General
                  and administrative expenses
              
              
              97
              
              
              
              59
              
              
              
              199
              
              
              
              104Total
                  expenses
              
              
              536
              
              
              
              4,170
              
              
              
              1,184
              
              
              
              5,564Loss
                  from operations
              
              
              (44
              )
              
              
              (3,239
              )
              
              
              (127
              )
              
              
              (3,528
              )**Other
                  income**Interest
                  income
              
              
              109
              
              
              
              106
              
              
              
              216
              
              
              
              186Net
                  income (loss)
              
              $
              65
              
              
              $
              (3,133
              )
              
              $
              89
              
              
              $
              (3,342
              )
  ***Operating
      Revenues.*******Oil and gas revenues for the three
      and six months ended June 30, 2007 were approximately $0.5 million and $1.1
      million, respectively.  Oil and gas revenues for the three and six
      months ended June 30, 2006 were approximately $0.9 million and $2.0 million,
      respectively. The decrease in revenues is a result of decreased production
      volumes for both producing properties partially offset by increased natural
      gas
      prices.
 
 Natural
      gas production volumes decreased from approximately 108 thousand million cubic
      feet (“MMCF”) for the three months ended June 30, 2006 to approximately 51
      thousand MMCF for the three months ended June 30, 2007.  Year-to-date
      volumes also declined from approximately 229 thousand MMCF in 2006 to 113
      thousand MMCF in 2007.  The decrease is primarily caused by the WC556
      production which decreased significantly during the first half of 2007 as the
      deeper reservoir was almost fully depleted.  Once the deeper reservoir
      has been fully depleted the well will be re-completed into the shallower
      reservoir.  Natural gas prices increased during the second quarter of
      2007 as compared to the first quarter of 2006, from approximately $6.99 to
      $8.17.  Natural gas prices also increased for the year-to-date period
      from $7.63 in 2006 to $7.90 in 2007.
 
 Oil
      production for the quarter decreased from approximately 2,600 barrels in 2006
      to
      1,500 barrels in 2007.  Year-to-date volumes also declined from
      approximately 4,500 barrels in 2006 to approximately 2,600 barrels in
      2007.  Oil prices during the second quarter of 2007 averaged
      approximately $66 per barrel as compared to $68 per barrel for the first quarter
      of 2006.  On a year-to-date basis, average oil prices declined from
      approximately $65 per barrel in 2006 to approximately $63 per barrel in
      2007.
 
 **Operating
      and Other Expenses**
 
 ***Dry-hole
      costs.*******Dry-hole costs are those costs
      incurred to drill and develop a well that is ultimately found to be incapable
      of
      producing either oil or natural gas in sufficient quantities to justify
      completion of the well. The following table summarizes dry-hole costs inclusive
      of plug and abandonment costs for the three and six months ended June 30, 2007
      and 2006.
  13
  **For
                  the three months ended June 30,**
              
              
              **For
                  the six months ended June 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****(in
                  thousands)**Mobile
                  946
              
              $
              (5
              )
              
              $
              718
              
              
              $
              (3
              )
              
              $
              718High
                  Island 53
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              34West
                  Cameron 103
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              7Galveston
                  246
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1**Total
                  Dry-hole Costs**
              
              $
              (5
              )
              
              $
              718
              
              
              $
              (3
              )
              
              $
              760
  ***Depletion
      and amortization.***  Depletion and amortization for the
      three and six months ended June 30, 2007 were approximately $0.4 million and
      $0.8 million, respectively.  Depletion and amortization for the three
      and six months ended June 30, 2006 were approximately $1.1 million and $2.3
      million, respectively.  This decrease in 2007 is the result of
      decreased production volumes in 2007 compared to 2006 and a lower depreciable
      base in 2007 due to impairments of proved properties recorded during
      2006.
 
 ***Impairment
      of proved properties.***There were no impairments of
      proved properties for the three and six months ended June 30,
      2007.  Impairment of proved properties for the three and six
      months ended June 30, 2006 was approximately $2.2 million.  The
      impairment related to the Fund’s C10, C11, and WC 556 wells.  Natural
      gas and oil reserve quantities used to calculated impairment represent estimates
      only and are estimated by a third party petroleum engineer
      specialist.  Under successful efforts accounting, the Fund uses
      reserve estimates to calculate cash flows as well as its depletion rate.
      The Fund estimates its proved reserves and future net cash flows using sales
      prices estimated to be in effect as of the date the reserve
      estimated.  Oil and gas prices, which have fluctuated widely in recent
      years, affect the future revenues. The estimates provided by the
      specialist have been reviewed by the Fund's manager and internal
      engineering department.  The reserve estimates used to calculate
      the 2006 impairment were based on historical data and production as of December
      31, 2005.
 
 ***Lease
      operating expenses.***  Lease operating expenses represent
      the day to day cost of operating and maintaining wells and related
      facilities.  For the three and six months ended June 30, 2007 lease
      operating expenses were approximately $0.1million and $0.2 million,
      respectively.  For the three and six months ended June 30, 2006 lease
      operating expenses were approximately $0.1 million and $0.2 million,
      respectively.
 
 ***General
      and Administrative Expenses.***Accounting, legal,
      fiduciary fees and insurance expenses represent costs specifically identifiable
      or allocable to the Fund. Accounting and legal fees represent annual audit
      and
      tax preparation fees, quarterly reviews and filing fees of the
      Fund.   Insurance expense represents premiums related to well
      control insurance and production insurance.
 
 The
      following table summarizes general and administrative expenses for the three
      and
      six months ended June 30, 2007 and 2006.
 
 **For
                  the three months ended June 30,**
              
              
              **For
                  the six months ended June 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****(in
                  thousands)**Accounting
                  and legal fees
              
              $
              43
              
              
              $
              49
              
              
              $
              94
              
              
              $
              84Insurance
              
              
              33
              
              
              
              9
              
              
              
              63
              
              
              
              19Other
                  general and administrative expenses
              
              
              21
              
              
              
              1
              
              
              
              42
              
              
              
              1**General
                  and administrative expenses**
              
              $
              97
              
              
              $
              59
              
              
              $
              199
              
              
              $
              104
 
  14
  ***Interest
      Income.***  Interest income for the three and six months
      ended June 30, 2007 was approximately $109 thousand and $216 thousand,
      respectively.  Interest income for the three and six months ended June
      30, 2006 was approximately $106 thousand and $186 thousand,
      respectively.  The increase in 2007 is predominately the result of
      higher interest rates in 2007 compared to 2006.
 
 **Capital
      Resources and Liquidity**
 
 ***Operating
      Cash Flows***
 Cash
      flows provided by operating activities for the six months ended June 30, 2007
      and 2006 were approximately $0.8 million and $2.9 million, respectively,
      primarily related to production revenue and interest income, offset by lease
      operating expenses and general and administrative expenses.  The
      significant decrease in 2007 operating cash flows is primarily a result of
      lower
      production volumes and thus a decrease in revenue receipts.
 
 ***Investing
      Cash Flows***
 Cash
      flows used in investing activities for the six months ended June 30, 2007 and
      2006 were approximately $1.2 million and $0.2 million, respectively, related
      to
      capital expenditures for oil and gas properties and interest income reinvested
      for the salvage fund.  The significant increase in investing
      activities in 2007 primarily relates to the exploratory LLOG projects drilling
      during the period.
 
 ***Financing
      Cash Flows***
 Cash
      flows used in financing activities for the six months ended June 30, 2007 and
      2006 were approximately $0.9 million and $1.4 million, respectively, 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 June 30, 2007,
      such estimated capital expenditures approximate $3.3 million, all of which
      is
      expected to be paid out of unspent cash within the following 12
      months.
 
 The
      table
      below presents exploration and development capital expenditures incurred to
      date
      for projects currently drilling or expected to be drilled in the near future
      as
      well as their estimated budgeted amounts for the next twelve
      months.  Remaining unspent cash will be reallocated to one or more new
      unspecified projects.
 
 **($
                  in thousands)****Estimated
                  Capital Expenditures:****At
                  June 30, 2007**
                **Projects**
              
              **Spent
                  through June 30, 2007**
              
              
              **To
                  be Spent Next 12 Months**South
                  Marsh Island 111 (ii)
              
              $
              216
              
              
              $
              613Vermilion
                  344 (i)
              
              
              319
              
              
              
              502West
                  Delta 68 (i)
              
              
              383
              
              
              
              185Ship
                  Shoal 81(iii) *
              
              
              22
              
              
              
              682West
                  Delta 67 (iii) *
              
              
              -
              
              
              
              549East
                  Cameron 299 Workover
              
              
              -
              
              
              
              750$
              940
              
              
              $
              3,281
 (i)
            
            Project
                successful, production expected in 1st quarter 2008.(ii)
            
            Project
                successful, production expected in 2nd quarter 2008.(iii)
            
            Drilling
                expected 3rd quarter 2007.*
            
            Total
                estimated capital expenditures assume that the wells are commercially
                successful.  If one or more of the budgeted exploratory projects
                are unsuccessful, budgeted development capital will be reallocated
                to one
                or more new unspecified
                projects.
  15
  **Liquidity
      Needs**
 
 The
      Fund’s primary short-term liquidity needs are to fund its 2007 operations,
      including operating expenses and capital expenditures, with existing cash
      on-hand and income earned from its short-term investments and cash and cash
      equivalents. Beginning October 2005 and continuing for the remaining life of
      the
      Fund, the Manager elected to waive its annual management fee.
  Distributions,
        if any, 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. Effective March 1, 2006, the Manager
        elected to reduce its distribution of available cash from operations to 1%,
        and
        effective April 1, 2006, the Manager elected to permanently waive its
        distribution of available cash from operations for the remaining life of
        the
        Fund.
 
 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 for a fund, the Manager seeks an investment
      portfolio that combines high and low risk exploratory projects.
 
 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 that are
      anticipated to be drilled.  If the 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.
  **Off-Balance
      Sheet Arrangements**
 
 The
      Fund
      had no off-balance sheet arrangements as of June 30, 2007 and December 31,
      2006
      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 June 30, 2007 and December 31, 2006.
 
  16
  **Item
      3.  Quantitative and Qualitative Disclosures about Market
      Risk**
 
 Projects
      drilled may not have commercially productive oil and natural gas reservoirs.
      In
      such an event, the Fund's revenue, future results of operations and financial
      condition would be adversely impacted.
 
 The
      Fund
      does not have or use, any derivative instruments nor does it have any plans
      to
      enter into such derivative arrangements. The Fund will generally invest cash
      in
      high-quality credit instruments consisting primarily of money market funds,
      bankers’ acceptance notes and government agency securities with maturities of
      six months or less. The Fund does not expect any material loss from cash
      equivalents and therefore believes its potential interest rate exposure is
      not
      material. The Fund has no plan to conduct any international activities and
      therefore believes it is not subject to foreign currency risk.
 
 The
      principal market risks to which the Fund is exposed that may adversely impact
      the Fund's results of operations and financial position are changes in oil
      and
      natural gas prices.
 
 Low
      commodity prices could have an adverse affect on the Fund’s future profitability
      and, in such an event the Fund may be required by accounting rules to write
      down
      the carrying value of the Fund’s projects.  Revenue to the Fund will
      be sensitive to changes in price to be received for oil and natural gas
      production. Prevailing market prices fluctuate in response to many factors
      that
      are outside of the Fund's control such as the supply and demand for oil and
      natural gas. Availability of alternative fuels as well as seasonal risks such
      as
      hurricanes can also impact the supply and demand.
 
 High
      oil
      and natural gas prices have resulted in a strong demand for and a tight supply
      of drilling rigs necessary to drill new projects. The increased cost in daily
      rig rates could have a negative impact on the return to shareholders in the
      Fund. The shortage of drilling rigs could delay the application of capital
      to
      such projects and thus delay revenue from operations.
 
 **Item
      4.  Controls and Procedures**
 
 ***Evaluation
      of Disclosure Controls and Procedures***
 The
      Fund
      maintains "disclosure controls and procedures", as such term is defined under
      Securities and Exchange Act of 1934 (“Exchange Act”) Rule 13a-15(e), that
      are designed to ensure that information required to be disclosed in the Fund’s
      Exchange Act reports is recorded, processed, summarized and reported within
      the
      same time periods specified in the SEC's rules and forms, and that such
      information is accumulated and communicated to its management, including its
      Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
      timely decisions regarding required disclosures. In designing and evaluating
      the
      disclosure controls and procedures, the Fund’s management recognized that any
      controls and procedures, no matter how well designed and operated, can provide
      only reasonable assurance of achieving the desired control objectives and its
      management necessarily was required to apply its judgment in evaluating the
      cost-benefit relationship of possible controls and procedures. The Fund has
      carried out an evaluation, as of June 30, 2007, under the supervision and with
      the participation of its management, including its Chief Executive Officer
      and
      Chief Financial Officer, of the effectiveness of the design and operation of
      the
      Fund’s disclosure controls and procedures.  Based upon their
      evaluation and subject to the foregoing, such procedures were
      effective.
 
 Because
      the Fund is not an “Accelerated Filer” as defined in Rule 12b-2 of the Exchange
      Act, the Fund is not presently required to file Management’s annual report on
      internal control over financial reporting and the Attestation report of the
      registered public accounting firm required by Item 308(a) and (b) of Regulation
      S-K promulgated under the Securities Act.  Under current rules,
      because the Fund is neither a “large accelerated filer” nor an “accelerated
      filer”, the Fund is not required to provide management’s report on internal
      control over financial reporting until the Fund files its annual report for
      2007
      and compliance with the auditor’s attestation report requirement is not required
      until the Fund files its annual report for 2008.  The Fund currently
      expects to comply with these requirements at such time as the Fund is required
      to do so.
 
  17
  ***Changes
      in Internal Controls over Financial Reporting***
 The
      Fund
      continually reviews its disclosure controls and procedures and makes changes
      as
      necessary, to ensure the quality of its financial reporting.  There
      were no changes in the Fund’s internal control over financial reporting
      identified in connection with the evaluation required by paragraph (d) of
      Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended
      June
      30, 2007 that have materially affected, or are reasonably likely to materially
      affect, our internal control over financial reporting.
 
 
 
 
 
 
  18
  **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**
 
 For
      information regarding factors that could affect the Fund’s results of
      operations, financial condition and liquidity, see risk factors discussed under
      “Management’s Discussion and Analysis of Financial Condition and Results of
      Operations”  in Item 7 of the Fund’s 2006 Annual Report on Form
      10-K.  There have been no material changes from the risk factors
      previously disclosed in the Fund’s most recent Annual Report on Form
      10-K.
 
 **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.
 
 **Item
      6. EXHIBITS**
 
 31.1
              
              Certification
                  of Robert E. Swanson, Chief Executive Officer, pursuant to Securities
                  Exchange Act Rule 13a-14(a).31.2
              
              Certification
                  of Kathleen P. McSherry, Chief Financial Officer, pursuant to Securities
                  Exchange Act Rule 13a-14(a).32
              
              Certifications
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  The Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief
                  Executive Officer of the Company and Kathleen P. McSherry, Chief
                  Financial
                  Officer of the Company.
   19
  **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:
            July
                27, 2007
            
            
            RIDGEWOOD
                ENERGY K FUND, LLCBy:
            /s/
            ROBERT
                E. SWANSONName:
            Robert
                E. SwansonTitle:
            President
                and Chief Executive Officer(Principal
                Executive Officer)Dated:
            July
                 27, 2007By:
            /s/
            KATHLEEN
                P. MCSHERRYName:
            Kathleen
                P. McSherryTitle:
            Senior
                Vice President and Chief Financial Officer(Principal
                Financial and Accounting Officer)
   20