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 March 31,
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 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 x
 
 There is
no market for the shares. As of April 29, 2009 there are 480.7046 shares
outstanding.
  
 
  Table of ContentsPART
      I - FINANCIAL INFORMATION
                                          
                                          PageItem 1.
                                          Financial Statements
                                          
                                          2Unaudited Condensed Balance Sheets as of March 31, 2009
      and December 31, 2008
                                          
                                          2Unaudited Condensed Statements of Operations for the three
      months ended
                                            March 31, 2009 and 2008
                                          
                                          3Unaudited Condensed Statements of Cash Flows for the three
      months ended
                                            March 31, 2009 and 2008
                                          
                                          4Notes to Unaudited Condensed Financial
      Statements
                                          
                                          5Item 2.
                                          Management's Discussion and Analysis of Financial Condition and
      Results of Operations
                                          
                                          10Item 3.
                                          Quantitative and Qualitative Disclosures about Market
      Risk
                                          
                                          15Item 4.
                                          Controls and Procedures
                                          
                                          15PART
      II - OTHER INFORMATIONItem 1.
                                          Legal Proceedings
                                          
                                          15Item 1A.
                                          Risk Factors
                                          
                                          15Item 2.
                                          Unregistered Sales of Equity Securities and Use of
      Proceeds
                                          
                                          15Item 3.
                                          Defaults Upon Senior Securities
                                          
                                          15Item 4.
                                          Submission of Matters to a Vote of Security
      Holders
                                          
                                          15Item 5.
                                          Other Information
                                          
                                          15Item 6.
                                          Exhibits
                                          
                                          16SIGNATURES
                                          
                                          17
  1
 Table of Contents
  PART I - FINANCIAL
      INFORMATIONITEM
      1.  FINANCIAL STATEMENTSRIDGEWOOD ENERGY K
      FUND, LLCUNAUDITED
      CONDENSED BALANCE SHEETS(in
      thousands, except share data)March
      31, 2009
                                      
                                      
                                      December
      31, 2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                                      
                                      $
                                      3,318
                                      
                                      
                                      $
                                      3,295Production
      receivable
                                      
                                      
                                      278
                                      
                                      
                                      
                                      422Other
      current assets
                                      
                                      
                                      25
                                      
                                      
                                      
                                      185Total
      current assets
                                      
                                      
                                      3,621
                                      
                                      
                                      
                                      3,902Salvage
      fund
                                      
                                      
                                      1,169
                                      
                                      
                                      
                                      1,162Oil
      and gas properties:Unproved
      properties
                                      
                                      
                                      -
                                      
                                      
                                      
                                      807Proved
      properties
                                      
                                      
                                      23,335
                                      
                                      
                                      
                                      22,216Less:  accumulated
      depletion and amortization
                                      
                                      
                                      (14,091
                                      )
                                      
                                      
                                      (12,904
                                      )Total
      oil and gas properties, net
                                      
                                      
                                      9,244
                                      
                                      
                                      
                                      10,119Total
      assets
                                      
                                      $
                                      14,034
                                      
                                      
                                      $
                                      15,183LIABILITIES
      AND MEMBERS' CAPITALCurrent
      liabilities:Due
      to operators
                                      
                                      $
                                      208
                                      
                                      
                                      $
                                      245Accrued
      expenses
                                      
                                      
                                      49
                                      
                                      
                                      
                                      46Total
      current liabilities
                                      
                                      
                                      257
                                      
                                      
                                      
                                      291Asset
      retirement obligations
                                      
                                      
                                      472
                                      
                                      
                                      
                                      348Total
      liabilities
                                      
                                      
                                      729
                                      
                                      
                                      
                                      639Commitments
      and contingencies (Note 8)Members'
      capital:Manager:Distributions
                                      
                                      
                                      (290
                                      )
                                      
                                      
                                      (290
                                      )Retained
      earnings
                                      
                                      
                                      1,066
                                      
                                      
                                      
                                      982Manager's
      total
                                      
                                      
                                      776
                                      
                                      
                                      
                                      692Shareholders:Capital
      contributions (534 shares authorized;
                                        480.7046
      issued and outstanding)
                                      
                                      
                                      70,860
                                      
                                      
                                      
                                      70,860Syndication
      costs
                                      
                                      
                                      (7,775
                                      )
                                      
                                      
                                      (7,775
                                      )Distributions
                                      
                                      
                                      (10,593
                                      )
                                      
                                      
                                      (9,887
                                      )Accumulated
      deficit
                                      
                                      
                                      (39,963
                                      )
                                      
                                      
                                      (39,346
                                      )Shareholders'
      total
                                      
                                      
                                      12,529
                                      
                                      
                                      
                                      13,852Total
      members' capital
                                      
                                      
                                      13,305
                                      
                                      
                                      
                                      14,544Total
      liabilities and members' capital
                                      
                                      $
                                      14,034
                                      
                                      
                                      $
                                      15,183
  The
accompanying notes are an integral part of these unaudited condensed financial
statements.
 2
 Table of Contents
  RIDGEWOOD ENERGY K
      FUND, LLCUNAUDITED
      CONDENSED STATEMENTS OF OPERATIONS(in
      thousands, except per share data)Three
      months ended March 31,2009
                            
                            
                            2008RevenueOil
      and gas revenue
                            
                            $
                            868
                            
                            
                            $
                            1,527ExpensesDepletion
      and amortization
                            
                            
                            989
                            
                            
                            
                            684Impairment
      of proved properties
                            
                            
                            198
                            
                            
                            
                            -Operating
      expenses
                            
                            
                            155
                            
                            
                            
                            157General
      and administrative expenses
                            
                            
                            75
                            
                            
                            
                            80Total
      expenses
                            
                            
                            1,417
                            
                            
                            
                            921(Loss)
      income from operations
                            
                            
                            (549
                            )
                            
                            
                            606Other
      incomeInterest
      income
                            
                            
                            16
                            
                            
                            
                            52Net
      (loss) income
                            
                            $
                            (533
                            )
                            
                            $
                            658Manager
      interestNet
      income
                            
                            $
                            84
                            
                            
                            $
                            188Shareholder
      interestNet
      (loss) income
                            
                            $
                            (617
                            )
                            
                            $
                            470Net
      (loss) income per share
                            
                            $
                            (1,286
                            )
                            
                            $
                            978
 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)Three
      months ended March 31,2009
                            
                            
                            2008Cash
      flows from operating activitiesNet
      (loss) income
                            
                            $
                            (533
                            )
                            
                            $
                            658Adjustments
      to reconcile net (loss) income to net cashprovided
      by operating activities:Depletion
      and amortization
                            
                            
                            989
                            
                            
                            
                            684Dry-hole
      costs
                            
                            
                            -
                            
                            
                            
                            6Impairment
      of proved properties
                            
                            
                            198
                            
                            
                            
                            -Accretion
      expense
                            
                            
                            2
                            
                            
                            
                            1Changes
      in assets and liabilities:Decrease
      (increase) in production receivable
                            
                            
                            144
                            
                            
                            
                            (123
                            )Decrease
      in other current assets
                            
                            
                            160
                            
                            
                            
                            9Increase
      in due to operators
                            
                            
                            7
                            
                            
                            
                            38Increase
      (decrease) in accrued expenses payable
                            
                            
                            3
                            
                            
                            
                            (17
                            )Net
      cash provided by operating activities
                            
                            
                            970
                            
                            
                            
                            1,256Cash
      flows from investing activitiesCapital
      expenditures for oil and gas properties
                            
                            
                            (234
                            )
                            
                            
                            (1,650
                            )Interest
      reinvested in salvage fund
                            
                            
                            (7
                            )
                            
                            
                            (9
                            )Net
      cash used in investing activities
                            
                            
                            (241
                            )
                            
                            
                            (1,659
                            )Cash
      flows from financing activitiesDistributions
                            
                            
                            (706
                            )
                            
                            
                            (1,072
                            )Net
      cash used in financing activities
                            
                            
                            (706
                            )
                            
                            
                            (1,072
                            )Net
      increase (decrease) in cash and cash equivalents
                            
                            
                            23
                            
                            
                            
                            (1,475
                            )Cash
      and cash equivalents, beginning of period
                            
                            
                            3,295
                            
                            
                            
                            5,624Cash
      and cash equivalents, end of period
                            
                            $
                            3,318
                            
                            
                            $
                            4,149
 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.
 
 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 March 31, 2009 bank balances
exceeded federally insured limits by $2.6 million, of which $1.1 million was
invested in money market accounts that invest solely in U.S. Treasury bills and
notes.  Effective October 2008 through December 31, 2009, 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 during this period.
 
 Salvage
Fund
 The Fund
deposits in a separate interest-bearing account, or a 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
March 31, 2009, the Fund had a held-to-maturity investment within its salvage
fund totaling $1.1 million, which matures 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.
  5
 Table of Contents
 
 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.  The
Manager does not currently intend to sell any of the Fund’s property
interests.
 
 Capitalized
acquisition costs of producing oil and gas properties are depleted by the
units-of-production method.
 
 As of
March 31, 2009 and December 31, 2008, amounts recorded in due to operators
totaling $0.2 million 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 three
months ended March 31, 2009 and the year ended December 31, 2008.
  March
      31, 2009
                        
                        
                        December
      31, 2008(in
      thousands)Balance
      - Beginning of period
                        
                        $
                        348
                        
                        
                        $
                        81Liabilities
      incurred
                        
                        
                        122
                        
                        
                        
                        183Liabilities
      settled
                        
                        
                        -
                        
                        
                        
                        -Accretion
      expense
                        
                        
                        2
                        
                        
                        
                        5Revision
      to prior estimate
                        
                        
                        -
                        
                        
                        
                        79Balance
      - End of period
                        
                        $
                        472
                        
                        
                        $
                        348
 As
indicated above, the Fund maintains a salvage fund to provide for the funding of
future asset retirement obligations.
 
 Syndication
Costs
 Syndication
costs are direct costs 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.
  6
 Table of Contents
 
 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.  As of March 31, 2009 and December 31, 2008, there were no
material oil or gas balancing arrangements between the Fund and other working
interest owners.
 
 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.  Different
pricing assumptions, reserve estimates or discount rates could result in a
different calculated impairment.  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.  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. As of March 31, 2009, the Fund recorded an
impairment of $0.2 million relating to Vermilion 344, which was
attributable to lower oil and gas commodity prices.
 
 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.
  7
 Table of Contents
 
 3.
              Recent
      Accounting Standards
 
 In
December 2008, the SEC issued Release No. 33-8995, “Modernization of
Oil and Gas Reporting,” 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.
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard No. 157, “Fair Value Measurements,”
(“SFAS No.157”), which applies under most other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 provides a common
definition of fair value as the price that would be received to sell an asset or
paid to transfer a liability in a transaction between market participants. The
new standard also provides guidance on the methods used to measure fair value
and requires expanded disclosures related to fair value
measurements.  SFAS No. 157 had originally been effective for
financial statements issued for fiscal years beginning after November 15, 2007,
however the FASB has agreed on a one year deferral for all non-financial assets
and liabilities. On January 1, 2008, the Fund adopted SFAS No. 157 for financial
assets and liabilities.
 
 4.
              Unproved
      Properties - Capitalized Exploratory Well
Costs
 
 Leasehold
acquisition and exploratory drilling costs are capitalized pending determination
of whether the well has found proved reserves.  Unproved properties
are assessed on a quarterly basis by evaluating and monitoring if sufficient
progress is made on assessing the reserves.  At March 31, 2009, the
Fund had no capitalized exploratory well costs.  The following table
reflects the net changes in unproved properties for the three months ended March
31, 2009 and the year ended December 31, 2008.
 
 March
      31, 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. There
were no dry-hole costs during the three months ended March 31, 2009. Dry-hole
costs of $6 thousand for the three months ended March 31, 2008 are included in
operating expenses.
 
 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.
  8
 Table of Contents
 
 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 for each of the three months ended March 31, 2009 and
2008, 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.  At
March 31, 2009 and December 31, 2008 there were no such amounts
outstanding.
 
 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
 
 As of
March 31, 2009 and December 31, 2008, cash and cash equivalents, production
receivable, salvage fund and accrued expenses are
recorded at cost, which approximatesfair value due to their short-term
nature.
 
 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. As of March 31, 2009, the Fund had no commitments related to its
investment properties.
 
 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
March 31, 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.
  9
 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 fourteen wells,
seven have been determined to be successful and seven have been determined to be
dry-holes.
  10
 Table of Contents
 
 Successful
Projects
 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.
 
 The
remaining four LLOG wells, as detailed below, have been determined to be
successful.  Through March 31, 2009, 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 three months ended March 31, 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.  These wells 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.
 
 Production
rates, while significantly reduced from levels in prior years, have stabilized
for the East Cameron 299 and West Cameron 556 wells.  To date, the
Fund has recorded impairments of $12.7 million related to these
properties.  No impairments were recorded during the three months
ended March 31, 2009   The Fund currently plans to workover the
C-11 well at a cost of $0.2 million and is awaiting availability of a
rig.  The Fund will perform maintenance work on the C-10 well once the
work on the C-11 well is complete.  The estimated costs associated
with the C-10 maintenance work have not been determined.
 
 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 West Cameron 76 A-1
well is operated by BHP Billiton Petroleum (Americas) Inc.  The Fund
has spent $1.8 million related to this property.
 
 Results
of Operations
 
 The
following table summarizes the Fund’s results of operations for the three months
ended March 31, 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.
  11
 Table of Contents
  Three
      months ended March 31,2009
                                    
                                    
                                    2008(in
      thousands)RevenueOil
      and gas revenue
                                    
                                    $
                                    868
                                    
                                    
                                    $
                                    1,527ExpensesDepletion
      and amortization
                                    
                                    
                                    989
                                    
                                    
                                    
                                    684Impairment
      of proved properties
                                    
                                    
                                    198
                                    
                                    
                                    
                                    -Operating
      expenses
                                    
                                    
                                    155
                                    
                                    
                                    
                                    157General
      and administrative expenses
                                    
                                    
                                    75
                                    
                                    
                                    
                                    80Total
      expenses
                                    
                                    
                                    1,417
                                    
                                    
                                    
                                    921(Loss)
      income from operations
                                    
                                    
                                    (549
                                    )
                                    
                                    
                                    606Other
      incomeInterest
      income
                                    
                                    
                                    16
                                    
                                    
                                    
                                    52Net
      (loss) income
                                    
                                    $
                                    (533
                                    )
                                    
                                    $
                                    658
 Three
months ended March 31, 2009 compared to the Three months ended
March 31, 2008
 
 Overview.  During
the three months ended March 31, 2009 the Fund had seven producing wells, East
Cameron 299, which came onto production in September 2004, West Cameron 556,
which came onto production in September 2005, West Cameron 76 A-1, which came
onto production in October 2007, West Delta 67/68, which came onto production in
July 2008, Vermilion 344, which came onto production in December 2008 and South
Marsh Island 111, which came onto production in February 2009. During the three
months ended March 31, 2008, the Fund had three producing wells.
 
 Oil and Gas
Revenue.Oil
and gas revenue for the three months ended March 31, 2009 was $0.9 million,
a $0.7 million decrease from the three months ended March 31, 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 $0.2
million.
 
 The Fund
sold 2 thousand barrels of oil during each of the three months ended March 31,
2009 and 2008.  The Fund’s oil prices averaged $42 per barrel and $99
per barrel during the three months ended March 31, 2009 and 2008,
respectively.
 
 The Fund
sold 165 thousand mcf of gas during the three months ended March 31,
2009 compared to 144 thousand mcf during the three months ended March 31,
2008.    The Fund’s gas prices averaged $4.81 per mcf and
$9.44 per mcf during the three months ended March 31, 2009 and 2008,
respectively.
 
 The
increase in gas volume during the three months ended March 31, 2009 compared to
the three months ended March 31, 2008, is primarily attributable to the timing
of the onset of production of the Fund’s wells, as discussed above in
“Overview”.
 
 Depletion and
Amortization.  Depletion and amortization for the three months
ended March 31, 2009 and 2008, was $1.0 million and $0.7 million,
respectively.  The increase resulted from the timing of the onset of
production of the Fund’s wells.
 
 Impairment of
Proved Properties.  During the three months ended March 31,
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.
 
 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.
  12
 Table of Contents
  Three
      months ended March 31,2009
                          
                          
                          2008(in
      thousands)Lease
      operating expenses
                          
                          $
                          153
                          
                          
                          $
                          150Accretion
      expense
                          
                          
                          2
                          
                          
                          
                          1Dry-hole
      costs
                          
                          
                          -
                          
                          
                          
                          6$
                          155
                          
                          
                          $
                          157
 Lease
operating expenses for the three months ended March 31, 2009 were related to the
East Cameron 299/West Cameron 556 field, West Cameron 76 A-1, West Delta 68/67,
Vermilion 344 and South Marsh Island 111.  Lease operating expenses
for the three months ended March 31, 2008 were related to the East Cameron
299/West Cameron 556 field and West Cameron 76 A-1.  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.
 
 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 March 31,2009
                          
                          
                          2008(in
      thousands)Accounting
      fees
                          
                          $
                          35
                          
                          
                          $
                          48Management
      reimbursement and other
                          
                          
                          22
                          
                          
                          
                          20Insurance
      expense
                          
                          
                          18
                          
                          
                          
                          12$
                          75
                          
                          
                          $
                          80
 Accounting
fees represent annual audit and tax preparation fees, quarterly reviews and
filing fees incurred by the Fund.  Management reimbursement and other
expenses relate primarily to reimbursements to the Manager 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 March
31, 2009, was $16 thousand, a $36 thousand decrease from the three months ended
March 31, 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.
 
 Capital
Resources and Liquidity
 
 Operating
Cash Flows
 Cash
flows provided by operating activities for the three months ended March 31, 2009
were $1.0 million, primarily related to revenue receipts of $1.0 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 and
general and administrative expenses totaling $0.2 million.
 
 Cash
flows provided by operating activities for the three months ended March 31, 2008
were $1.3 million, primarily related to revenue receipts of $1.4 million,
interest income received of $0.1 million and favorable working capital of $0.1
million, partially offset by operating and general and administrative expenses
totaling $0.2 million.
 
 Investing
Cash Flows
 Cash
flows used in investing activities for the three months ended March 31, 2009
were $0.2 million, primarily related to capital expenditures for oil and gas
properties.  Additionally, the Fund increased its salvage fund
investments by $7 thousand, which consisted of the interest earned on this
account.
  13
 Table of Contents
  Cash
flows used in investing activities for the three months ended March 31, 2008
were $1.7 million, primarily related to capital expenditures for oil and gas
properties.  Additionally, the Fund increased its salvage fund
investments by $9 thousand, which consisted of the interest earned on this
account.
 
 Financing
Cash Flows
 Cash
flows used in financing activities for the three months ended March 31, 2009
were $0.7 million related to distributions to shareholders.
 
 Cash
flows used in financing activities for the three months ended March 31, 2008
were $1.1 million related to distributions to shareholders.
 
 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 March 31, 2009, the Fund has no
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, including
capital expenditures for its investment properties.  Operations are
funded utilizing operating income, existing cash on-hand and income earned
therefrom.
 
 Distributions
are funded from cash flow from operations, and the frequency and amount are
within the Manager’s discretion subject to available cash from operations,
reserve requirements and the Fund’s operations.
 
 Off-Balance
Sheet Arrangements
 
 The Fund
had no off-balance sheet arrangements as of March 31, 2009 and December 31, 2008
and does not anticipate the use of such arrangements in the future.
 
 14
 Table of Contents
 
 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 March 31, 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 our 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 March 31,
2009.
  There has
been no change in the Fund’s internal control over financial reporting that
occurred during the three months ended March 31, 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
 
 There
have been no changes to the legal proceedings disclosed in the Fund’s most
recent Annual Report on Form 10-K.
 
 ITEM 1A. RISK
FACTORS
 
 Not
required.
 
 ITEM
2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 
 None.
 
 ITEM 3.  DEFAULTS
UPON SENIOR SECURITIES
 
 None.
 
 ITEM 4. SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS
 
 None.
 
 ITEM 5. OTHER
INFORMATION
 
 None.
  15
 Table of Contents
  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
 
      16
 Table of Contents
  SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 Dated:
                      April
      29, 2009
                      
                      
                      
                      RIDGEWOOD
      ENERGY K FUND, LLCBy:
                      /s/
                      
                      ROBERT
      E. SWANSONName:
                      
                      Robert
      E. SwansonTitle:
                      
                      President
      and Chief Executive Officer(Principal
      Executive Officer)Dated:
                      April
      29, 2009By:
                      /s/
                      
                      KATHLEEN
      P. MCSHERRYName:
                      
                      Kathleen
      P. McSherryTitle:
                      
                      Executive
      Vice President and Chief Financial Officer(Principal
      Financial Officer)
        17