---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
D.C. 20549

FORM 10-K

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008
or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 000-52576

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

|                                                                 |  |                    
|---------------------------------------------------------------- |  | -------------------
|Delaware                                                         |  | 20-4077773         
|(State or other jurisdiction of                                  |  | (I.R.S. Employer   
|incorporation or organization)                                   |  | 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)            
|                                                                
|Securities registered pursuant to Section 12(b) of the Act: None
|Securities registered pursuant to Section 12(g) of the Act:     
|                                                                
|Shares of LLC Membership Interest                               

Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
  Yes o No x

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Act.  
Yes o No x

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 x No o

Indicate by check mark if the disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained herein, to the best of the registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. x

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

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

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

There is no market for the shares of LLC Membership Interest in the
Fund. As of March 26, 2009 there are 839.5395 shares outstanding.

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RIDGEWOOD ENERGY S FUND, LLC
2008 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

|         |         |  |                                                                                                                |     
|-------- | ------- |  | -------------------------------------------------------------------------------------------------------------- | ----
|         |         |  |                                                                                                                | PAGE
|         |         |  |                                                                                                                |     
|PART I   |        
|         | ITEM 1  |  | BUSINESS                                                                                                       | 3   
|         | ITEM 1A |  | RISK
 FACTORS                                                                                                  | 11  
|         | ITEM 1B |  | UNRESOLVED
 STAFF COMMENTS                                                                                     | 11  
|         | ITEM 2  |  | PROPERTIES                                                                                                     | 11  
|         | ITEM 3  |  | LEGAL
 PROCEEDINGS                                                                                             | 11  
|         | ITEM 4  |  | SUBMISSION
 OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                           | 11  
|PART II  |        
|         | ITEM 5  |  | MARKET FOR
 REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
 OF EQUITY SECURITIES | 12  
|         | ITEM 6  |  | SELECTED
 FINANCIAL DATA                                                                                       | 12  
|         | ITEM 7  |  | MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                         | 12  
|         | ITEM 7A |  | QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                    | 18  
|         | ITEM 8  |  | FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA                                                                   | 18  
|         | ITEM 9  |  | CHANGES IN
 AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                          | 18  
|         | ITEM 9A |  | CONTROLS
 AND PROCEDURES                                                                                       | 18  
|         | ITEM 9B |  | OTHER INFORMATION                                                                                              | 19  
|PART III |        
|         | ITEM 10 |  | DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                        | 19  
|         | ITEM 11 |  | EXECUTIVE
 COMPENSATION                                                                                        | 20  
|         | ITEM 12 |  | SECURITY
 OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
 MATTERS               | 20  
|         | ITEM 13 |  | CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                     | 21  
|         | ITEM 14 |  | PRINCIPAL
 ACCOUNTING FEES AND SERVICES                                                                        | 21  
|PART IV  |        
|         | ITEM 15 |  | EXHIBITS,
 FINANCIAL STATEMENT SCHEDULES                                                                       | 22  

1

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FORWARD-LOOKING STATEMENTS

Certain
statements in this Annual Report on Form 10-K (Annual Report) and the
documents Ridgewood Energy S Fund, LLC (the Fund) has incorporated by
reference into this Annual 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.

WHERE YOU CAN GET MORE INFORMATION

The
Fund files annual, quarterly and current reports and certain other information
with the Securities and Exchange Commission (SEC). Persons may read and copy
any materials the Fund files with the SEC at the SECs public reference room at
100 F Street, NE, Washington D.C. 20549, on official business days during the
hours of 10 a.m. to 3 p.m. Eastern Time.
Information may be obtained from the public reference room by calling
the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC at http://www.sec.gov.

2

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PART I

|        |         
|------- | --------
|ITEM 1. | BUSINESS

Overview

The
Fund is a Delaware limited liability company (LLC) formed on December 19,
2005 to acquire interests primarily in oil and natural gas properties located
in the United States offshore waters of Texas, Louisiana and Alabama in the
Gulf of Mexico.

The
Fund initiated its private placement offering on February 1, 2006, selling
whole and fractional shares of LLC membership interests (Shares), primarily
at $150 thousand per whole Share. There is no public market for the Shares and
one is not likely to develop. In addition, the Shares are subject to material
restrictions on transfer and resale and cannot be transferred or resold except
in accordance with the Funds limited liability company agreement (the LLC
Agreement) and applicable federal and state securities laws. The private placement offering was
terminated on June 12, 2006. The Fund raised $124.4 million, and after payment
of $19.9 million in offering fees, commissions and investment fees, the Fund
had $104.5 million for investments and operating expenses. See Item 13. Certain Relationships and
Related Transactions, and Director Independence for additional discussion.

Manager

Ridgewood
Energy Corporation (the Manager) or (Ridgewood Energy) was founded in 1982
by Robert E. Swanson. The Manager has direct and exclusive control over the
management of the Funds operations. With respect to project investment, the
Manager locates potential projects, conducts appropriate due diligence and
negotiates and completes the transactions in which the investments are made.
This includes review of existing title documents, reserve information, and
other technical specifications regarding a project, and review and preparation
of participation agreements and other agreements relating to an investment.

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.

The
Fund is required to pay all other expenses it may incur, including insurance
premiums, expenses of preparing and printing periodic reports for shareholders
and the SEC, commission fees, taxes, outside legal, accounting and consulting
fees, litigation expenses and other expenses. The Fund is required to reimburse
the Manager for all such expenses paid on its behalf.

As
compensation for their services, the Manager is entitled to an annual
management fee, payable monthly, equal to 2.5% of the total capital
contributions made by the Funds shareholders, net of cumulative dry-hole and
related well costs incurred by the Fund.
For each of the years ended December 31, 2008 and 2007, management fees
were $2.4 million. Additionally, the
Manager is entitled to receive a 15% interest in cash distributions made by the
Fund. Distributions paid to the Manager
for the years ended December 31, 2008 and 2007, were $2.3 million and $0.1
million, respectively.

Business Strategy

The
Funds primary investment objective is to generate cash for distribution to the
Funds shareholders through the acquisition of working interests in the
exploration, production and sale of oil and natural gas. Distributions are funded from cash flow from
operations, and the frequency and amount are within the Managers discretion,
subject to available cash from operations, reserve requirements and Fund
operations. A working interest is a
percentage of ownership in an oil and natural gas lease granting its owner the
right to explore, drill and produce oil and natural gas from projects on that
lease block. The Fund tries to focus on projects that have significant reserve
potential and are projected to have the shortest time period from investment to
first production. The Fund does not operate these projects, and although it has
a vote, it is not in control of the schedule pursuant to which its projects are
developed and completed. Working interest owners are obligated to pay a
corresponding percentage of the cost of leasing, drilling, producing and
operating a well. After royalties are paid, the working interest also entitles
its owner to share in production revenues with other working interest owners,
based on the percentage of working interest owned.

3

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By
virtue of its acquisition of working interests in various leases, the Fund
invests and participates in exploration and production of oil and natural gas
projects in leases located in the waters of the Gulf of Mexico on the Outer
Continental Shelf (OCS). These activities are governed by the Outer
Continental Shelf Lands Act (OCSLA) enacted in 1953 and administered by the
Mineral Management Services (MMS). The Fund generally looks to invest in
working interests that have been proposed by larger independent oil and natural
gas companies seeking to minimize their risks by selling a portion of their
interest in the working interest. These investments may require the Fund to pay
a disproportionate part of the drilling costs on the exploratory well of a
project than its working interest would otherwise require. This is called a
promote, which is common in the oil and natural gas exploration industry. In
addition, notwithstanding the sale of an interest to the Fund, the seller may
retain a right for some period of time to payments from sales of oil and
natural gas production from a well or project. This is called an overriding
interest, which is also common in this industry. Notwithstanding any such
promote or overriding interest, the Fund invests in projects that it believes
contain sufficient commercial quantities of oil or natural gas and which are
near (i) existing oil or natural gas gathering and processing infrastructure
and (ii) developed markets where the Fund can sell its oil or natural gas.

For
potential project investments, the Manager reviews reserve analyses provided by
the operators. The Manager employs
individuals in its Houston, Texas office that can perform significant analysis
of the operators information. However, if necessary, the Fund may retain
independent engineers to review the operators reserve analysis and/or conduct
an independent review. For producing
properties, the Manager engages independent petroleum engineers to examine and
provide reserve estimates on the Funds behalf.

Once
the Manager determines that a particular project (i.e., working interest in a
lease block) is an appropriate investment for the Fund, the Manager enters into
a participation agreement and a joint operating agreement with the other
working interest owners in a lease.
Pursuant to the participation agreements and operating agreements,
proposals and decisions are made based on percentage ownership approvals.

The
Manager, on behalf of the Fund, and other working interest owners retain the
right to make proposals involving certain operational matters associated with a
project. This limits the operators
inclination to act on its own or against the interests of the other working
interest owners of the project. In
accordance with the Managers working interest, the Manager reviews, discusses
and consents to the details of the drilling plan, monitors progress under such
plan, contributes ideas to the design of and budget for production facilities
and then monitors the construction of those facilities. In addition, the Manager retains the right
to review and audit the operators financial records related to the project to
ensure the project is executed according to budget. Once a well is in production, the Manager continually monitors,
evaluates and discusses the well production rate with the operator.

Managers Investment Committee and Investment Criteria

The
Manager maintains an investment committee, consisting of six members, which
provides operational, scientific and technical oil and gas expertise to the
Fund. Five members of the investment
committee are based out of the Managers Ridgewood, New Jersey office and one
member of the investment committee is based out of the Managers Houston, Texas
office. In considering projects, the investment committee and other members of
the investment team evaluate each project against a list of factors that it
believes will result in the selection of those projects that have the highest
probability of success. These factors, in no particular order, include, but are
not limited to (i) targeting projects that have or are expected to have
operators with significant resources and experience in oil and natural gas
exploration; (ii) targeting projects that have or are expected to have partners
that also have significant resources and experience in oil and natural gas
exploration; (iii) technical quality of the project including its geology,
seismic profile, locational trends, and whether the project has potential for
multiple prospects; (iv) oil or natural gas reserve potential; (v) whether and
the extent to which the operator participates as a working interest owner in
the project; (vi) economic factors, such as potential revenues from the
project, the rate of return, and estimated time to first production; (vii) risk
factors associated with exploration; (viii) existence of drilling rigs,
platforms and other infrastructure, at or nearby the project; (ix) proposed
drilling schedule; (x) terms of the proposed transaction, including contractual
restrictions and obligations and lease term; and (xi) overall cost of the
project.

Properties

The
Fund owns working interests and has participated in the drilling of eleven wells;
one is currently drilling, six have been determined to be successful and
four have been determined to be dry holes.

4

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|                                    |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |       |  |   |        | 
|----------------------------------- |  | ---------------- | - | -------- | ---------------------- | ------------------------------------ | --------- | ------------ | ------ | ----------------- |  | ------------------------------------- | ----- |  | - | ------ | 
|Lease Block                         |  | Working
Interest |   | Operator |                        | Off-shore
Location in
Gulf of
Mexico |           | Target
Depth |        | Drilling
Risk
(b) |  | Total Spent through
December 31, 2008 |      
|                                    |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |      
|                                    |  |                  |   |          |                        |                                      |           | (feet)       |        | (in thousands)    | 
|Currently
Drilling                  |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |       |  |   |        | 
|Aspen Project                       |  | 2.25             | % |          | Newfield               |                                      | Louisiana |              | 22,000 |                   |  | $                                     | 4,152 |  | $ |       | 
|                                    |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |       |  |   |        | 
|Sucessful Projects                  |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |       |  |   |        | 
|South Marsh Island 111              |  | 22.5             | % |          | LLOG                   |                                      | Louisiana |              | 18,000 |                   |  |                                       | N/A   |  | $ | 4,840  | 
|Vermilion 344                       |  | 22.5             | % |          | LLOG                   |                                      | Louisiana |              | 8,900  |                   |  |                                       | N/A   |  | $ | 7,194  | 
|West Delta 68                       |  | 22.5             | % |          | LLOG                   |                                      | Louisiana |              | 14,000 |                   |  |                                       | N/A   |  | $ | 4,579  | 
|West Delta 67                       |  | 22.5             | % |          | LLOG                   |                                      | Louisiana |              | 14,000 |                   |  |                                       | N/A   |  | $ | 2,972  | 
|West Cameron 75                     |  | 20.0             | % |          | El
Paso                |                                      | Louisiana |              | 23,800 |                   |  |                                       | N/A   |  | $ | 23,415 | 
|Main Pass 275                       |  | 30.0             | % |          | McMoRan                |                                      | Louisiana |              | 11,200 |                   |  |                                       | N/A   |  | $ | 5,636  | 
|                                    |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |       |  |   |        | 
|Dry holes (Date determined dry) (a) |  |                  |   |          |                        |                                      |           |              |        |                   |  |                                       |       |  |   |        | 
|Ruby Project (August 2008)          |  | 18.0             | % |          | PetroQuest             |                                      | Louisiana |              | 16,000 |                   |  |                                       | N/A   |  | $ | 3,464  | 
|Ship Shoal 81 (October 2007)        |  | 22.5             | % |          | LLOG                   |                                      | Louisiana |              | 10,000 |                   |  |                                       | N/A   |  | $ | 1,605  | 
|Garden Banks 346/390 (March 2007)   |  | 27.0             | % |          | Walter
Oil & Gas, Inc. |                                      | Texas     |              | 21,000 |                   |  |                                       | N/A   |  | $ | 20,497 | 
|Viosca Knoll 207 (December 2006)    |  | 40.0             | % |          | Chevron
U.S.A. Inc.    |                                      | Alabama   |              | 15,000 |                   |  |                                       | N/A   |  | $ | 6,862  | 

|    |                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Dry-hole
 costs represent costs incurred for wells that have been drilled but do not
 have commercially productive quantities of oil and/or natural gas reservoirs and have been plugged and abandoned.
|    |                                                                                                                                                                                                        
|(b) | Drilling
 risk represents the prospective estimated dry-hole, leasehold and sunk costs,
 as applicable.                                                                                                

Currently DrillingAspen ProjectIn July 2008, the Fund
acquired a 2.25% working interest in the Aspen Project, an exploratory well,
from Newfield Exploration Company (Newfield), the operator. The Aspen Project began drilling in February
2009 and results are expected during the second quarter of 2009. The total estimated budget for this well is
$20.2 million, which includes two additional wells. At December 31, 2008, the Fund had not incurred costs related to
this well.

Successful Projects LLOG Projects:In October 2006, the Fund
acquired a 22.5% working interest in each of six exploratory wells from LLOG
Exploration Offshore, Inc. (LLOG), the operator, 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. The total budget for these
wells is $21.2 million, of which $19.6 million has been spent at December 31,
2008. Additionally, impairment costs of
$3.4 million, relating to Vermilion 344, were recorded during the year ended
December 31, 2008.

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

West Cameron 75
In March 2007, the Fund
acquired a 20.0% working interest in the exploratory well West Cameron 75 from
El Paso E&P Company, L.P. (El Paso), the operator. In June 2007, El Paso notified the Fund that
the property was determined to be to be a commercial discovery. The well was completed and production
commenced in December 2007. As a result
of hurricane activity late in the third quarter of 2008, West Cameron 75
production was suspended for three months while pipeline repairs were
completed. Production resumed in
November 2008. There was no cost to the
Fund related to the pipeline repairs.
The Fund has spent $23.4 million related to this property.

5

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Main Pass 275In 2006, the Fund
acquired a 30% working interest in the Main Pass 275 well from Newfield. In August 2007, Newfield sold its interest
in this property to McMoRan Exploration Co. (McMoRan). At that time, McMoRan assumed Newfields
responsibilities as the operator of this property. The well was declared a commercial success in February 2007 and
production began in April 2007. Due to
hurricane activity, this well did not produce for approximately three weeks
during late-August 2008 and early-September 2008. Production resumed for Main Pass 275 in mid-September 2008. The Fund has spent $5.6
million related to
this property.

Dry Hole Ruby ProjectIn May 2008, the Fund
acquired an 18.0% working interest in the Ruby Project, an exploratory well
from PetroQuest Energy, L.L.C. (PetroQuest), the operator. The well is located in the Eugene Island
region of the Gulf of Mexico. The well
began drilling in June 2008 and was determined to be an unsuccessful well, or
dry hole, in August 2008. For the year
ended December 31, 2008, dry-hole costs related to this well, including plug
and abandonment expenses, were $3.5 million.

Working Interest in Oil and Natural Gas Leases

Existing
projects, and future projects, if any, are expected to be located in the waters
of the Gulf of Mexico offshore from Texas, Louisiana and Alabama on the OCS.
The OCSLA, which was enacted in 1953, governs certain activities with respect
to working interests and the exploration of oil and natural gas in the
OCS. See further discussion under the
heading Regulation in this Item 1. Business.

As
part of the leasing activity and as required by the OCSLA, the leases auctioned
include specified lease terms such as the length of the lease, the amount of
royalty to be paid, lease cancellation and suspension, and, to a degree, the
planned activities of exploration and production to be conducted by the lessee.

The
winning bidder(s) at the lease sale, or the lessee(s), are given a lease by the
MMS that grants such lessee(s) the exclusive right to conduct oil and natural
gas exploration and production activities within a specific lease block, or
working interest. Leases in the OCS are generally issued for a primary lease
term of 5, 8 or 10 years depending on the water depth of the lease block. The
5-year lease term is for blocks in water depths generally less than 400 meters,
8 years for depths between 400 meters and 800 meters and 10 years for depths in
excess of 800 meters. During this primary lease term, except in limited
circumstances, lessees are not subject to any particular requirements to
conduct exploratory or development activities. However, once a lessee drills a
well and begins production, the lease term is extended for the duration of
commercial production.

The
lessee of a particular block, for the term of the lease, has the right to drill
and develop exploratory wells and conduct other activities throughout the
block. If the initial well on the block is successful, a lessee, or third-party
operator for a project, may conduct additional geological studies and may
determine to drill additional or development wells. If a development well is to
be drilled in the block, each lessee owning working interests in the block must
be offered the opportunity to participate in, and cover the costs of, the
development well up to that particular lessees working interest ownership
percentage.

Generally,
working interests in an offshore natural gas lease under the OCSLA pay a 16.67%
or 18.75% royalty to the MMS for shallow-water projects, dependent upon lease
date, and a 12.5% royalty to the MMS for deepwater projects. Therefore, the net
revenue interest of the holders of 100% of the working interest in the projects
in which the Fund will invest is between 81.25% and 83.33% of the total revenue
for shallow-water projects and 87.5% of the total revenue for deepwater
projects, and, such net revenue amount is further reduced by any other royalty
burdens that apply to a lease block. However, as described below, the MMS has
adopted royalty relief for existing OCS leases for those who drill deep oil and
natural gas projects.

Mineral Management Services Deep Gas Royalty Incentive

On
January 26, 2004, the MMS promulgated a rule providing incentives for companies
to increase deep oil and natural gas production in the Gulf of Mexico (the
Royalty Relief Rule). Under the Royalty Relief Rule, lessees will be eligible
for royalty relief on their existing leases if they drill and perforate wells
for new and deeper reserves at depths greater than 15,000 feet subsea. In
addition, an even larger royalty relief would be available for wells drilled
and perforated deeper than 18,000 feet subsea. It should be noted that the
Royalty Relief Rule does not extend to deep waters of the Gulf of Mexico off
the continental shelf nor does it apply if the price of natural gas exceeds
$10.37 Million British Thermal Units (mmbtu) adjusted annually for inflation.
The Royalty Relief Rule is limited to leases in a water depth less than 656
feet, or 200 meters.

6

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In
addition to the Royalty Relief Rule promulgated by the MMS, the Deep Water
Royalty Relief Act of 1995 (the Deepwater Relief Act) was enacted to promote
exploration and production of natural gas and oil in the deepwater of the Gulf
of Mexico and relieves eligible leases from paying royalties to the U.S.
Government on certain defined amounts of deepwater production. The Deepwater Relief Act expired in the year
2000 but was extended by the MMS to promote continued interest in deepwater.
For purposes of royalty relief, under the Deepwater Relief Act, the MMS defines
deepwater as depths in excess of 656 feet (200 meters). In order for a lease to be eligible for
royalty relief, under the Deepwater Relief Act, it must be located in the Gulf
of Mexico and west of 87 degrees and 30 minutes West longitude (essentially the
Florida-Alabama boundary).

Currently,
for leases entered into after November 2000, the MMS assigns a lease a specific
volume of royalty suspension based on how the suspension amount would affect
the economics of the leases development.
Any such royalty suspension applicable to a particular lease is
generally set forth in the lease auction materials prepared by the MMS. The amount of the suspension, if any, is not
determined by water depth levels (as it had in the past) but rather based upon
the MMS view of the characteristics and economics of the project. For example, projects deemed relatively
secure and safe such as those near existing transportation infrastructure may
receive no royalty relief while a similar project far away from any such
infrastructure or in an area deemed more risky may receive significant royalty relief. As a result, unlike the royalty relief
associated with deep drilling in shallow waters, there is no formulaic or
predictable means of determining in advance whether and to what extent royalty
relief would be available for a potential deepwater project.

Oil and Natural Gas Agreements

The
Fund has entered into a month-to-month agreement with a third-party marketer,
who is currently marketing and selling the Funds proportionate share of oil
and natural gas to the public market.
The Fund is receiving market prices for the oil and natural gas it
sells. All of the Funds current projects are near existing transportation
infrastructure and pipelines. The
Manager believes that it is likely that oil and natural gas from the Funds
future projects will have access to pipeline transportation and can be marketed
in a similar fashion.

Operator

The
projects in which the Fund has invested are operated and controlled by
unaffiliated third-party entities acting as operators. The operators are
responsible for drilling, administration and production activities for leases
jointly owned by working interest owners and act on behalf of all working
interest owners under the terms of the applicable operating agreement. In
certain circumstances, operators will enter into agreements with independent
third-party subcontractors and suppliers to provide the various services
required for operating leases. Currently, the Funds ongoing projects are
operated by El Paso, LLOG, McMoRan, and Newfield.

Because
the Fund does not operate any of the projects in which it has acquired an
interest, shareholders not only bear the risk that the Manager will be able to
select suitable projects, but also that once selected, such projects will be
managed prudently, efficiently and fairly by the operators.

Insurance

The
Manager has obtained hazard, property, general liability and other insurance in
commercially reasonable amounts to cover its projects, as well as general
liability and similar coverage for its business operations. However, there is
no assurance that such insurance will be adequate to protect the Fund from
material losses related to the projects. In addition, the Managers past
practice has been to obtain insurance as a package that is intended to cover
most, if not all, of the funds under its management. While the Manager believes
it has obtained adequate insurance in accordance with customary industry
practices, the possibility exists, depending on the extent of the incident,
that insurance coverage may not be sufficient to cover all losses. In addition,
depending on the extent, nature and payment of any claims to the Funds
affiliates, yearly insurance limits may be exhausted and become insufficient to
cover a claim made by the Fund in a given year.

7

---



Salvage Fund

As
to projects in which the Fund owns a working interest, the Fund deposits in a
separate interest-bearing account, or a salvage fund, which is in the nature of
a sinking fund, cash to help provide for the Funds proportionate share of the
cost of dismantling and removing production platforms and facilities and
plugging and abandoning the projects, in accordance with applicable federal and
state laws and regulations. There is no assurance that the salvage fund will have sufficient assets to meet these
requirements and any unfunded expenses, and the Fund may be liable for such
expenses. The Fund deposited $1.0
million from capital contributions into a salvage fund, which, along with
interest earned on this account, the Fund estimates to be sufficient to meet the
Funds potential requirements. If the Manager determines the salvage fund will
not be sufficient to cover the Funds proportionate share of expense, the Fund
may transfer amounts from operating income to fund the deficit. Any portion of
a salvage fund that remains after the Fund pays its share of the actual salvage
cost will be distributed to the shareholders. There are no legal restrictions
on the withdrawal or use of the salvage fund.

Seasonality

Generally,
the Funds business operations are not subject to seasonal fluctuations in the
demand for oil and natural gas that would result in more of the Funds oil and
natural gas being sold, or likely to be sold, during one or more particular
months or seasons. Once a project is drilled and reserves of oil and natural
gas are determined to exist, the operator of the project extracts such reserves
throughout the year. Oil and natural gas, once extracted, can be sold at any
time during the year.

The
Funds properties are located in the Gulf of Mexico; therefore its operations
and cash flows may be significantly impacted by hurricanes and other inclement
weather. Such events may also have a
detrimental impact on third-party pipelines and processing facilities, upon which
the Fund relies upon to transport and process the crude oil and natural gas it
produces. The National Hurricane Center defines hurricane season in the Gulf of
Mexico as June 1st through November 30th. During the third quarter of 2008, two
hurricanes struck in the Gulf of Mexico, which significantly impacted the
Funds operations. These two storms, Hurricanes Gustav and Ike, came ashore in
Louisiana and Texas, respectively, and caused production curtailments due to
damage to third-party pipelines and disrupted the operations of crews that could
assess and repair the damage. While the Funds platforms avoided major damage,
the Funds production was curtailed from the time personnel were evacuated for
safety purposes, until assessment and repair to the Funds platforms were
completed and until repairs to third-party pipelines and facilities, for which
the Fund was not responsible, were completed.
In all, Main Pass 275 was shut-in for approximately several weeks, with
production resuming in September 2008, West Delta 67/68 was shut-in for
approximately one month, with production resuming in October 2008 and West
Cameron 75 was shut-in for approximately three months, with production resuming
in November 2008.

Customers

All
of the oil and natural gas production from the Funds producing properties is
sold by a third party on the Funds behalf.
As a result, the Fund did not contract to sell oil and natural gas to
customers. Therefore, the Fund had no
customers or any one customer upon which the Fund depends for more than ten
percent (10%) of its revenue.

Energy Prices

Historically,
the markets for and prices of crude oil and natural gas have been extremely
volatile, and they are likely to continue to be volatile in the future. This volatility is caused by numerous
factors and market conditions that the Fund cannot control or influence. Therefore, it is impossible to predict the
future price of crude oil and natural gas with any certainty. Low commodity prices could have an adverse
affect on the Funds future profitability.
The Fund has not engaged in any price risk management programs or hedges
to date.

Competition

Strong
competition exists in the acquisition of oil and natural gas leases and in all
sectors of the oil and natural gas exploration and production industry.
Although the Fund does not compete for lease acquisitions from the MMS, it does
compete with other companies for the acquisition of percentage ownership
interests in oil and natural gas working interests in the secondary market.

8

---



In
many instances, the Fund competes for projects with large independent oil and
natural gas producers who generally have significantly greater access to
capital resources, have a larger staff, and more experience in oil and natural
gas exploration and production than the Fund. As a result, these larger
companies are in a position that they could outbid the Fund for a project.
However, because these companies are so large and have such significant
resources, they tend to focus more on projects that are larger, have greater
reserve potential, and cost significantly more to explore and develop. These
larger projects increasingly tend to be projects in the deepwater areas of the
Gulf of Mexico and the North Sea off the coast of Great Britain. However, the
focus of these companies on larger projects does not necessarily mean that they
will not investigate and/or acquire smaller projects in shallow waters for
which the Fund typically competes.
Many of these larger companies have participated in the auctions for lease
blocks directly from the U.S. Government. In such cases, these companies obtain
from the U.S. Government 100% of the leasehold of a particular lease block in
the Gulf of Mexico. In order to obtain even more resources to invest in other
larger and more expensive projects, they diversify current holdings, including
projects they own in the shallow waters of the Gulf of Mexico, by selling off
percentage interests in these lease blocks. As a result, very good projects in
the shallow waters of the Gulf of Mexico become available. The Fund, therefore,
has opportunities to acquire interests in these smaller, yet economically
attractive projects.

Employees

The
Fund has no employees as the Manager operates and manages the Fund.

Offices

The
Managers principal executive offices are located at 947 Linwood Avenue,
Ridgewood, NJ 07450, and its phone number is 800-942-5550. The Manager also leases additional office
space at 11700 Old Katy Road, Houston, TX 77079. In addition, the Manager also
maintains leases for other offices that are used for administrative purposes.

Regulation

Oil
and natural gas exploration, development and production activities are subject
to extensive federal and state laws and regulations. Regulations governing
exploration and development activities require, among other things, the Funds
operators to obtain permits to drill projects and to meet bonding, insurance
and environmental requirements in order to drill, own or operate projects. In
addition, the location of projects, the method of drilling and casing projects,
the restoration of properties upon which projects are drilled and the plugging
and abandoning of projects are also subject to regulations.

Outer Continental Shelf Lands Act

The
Funds projects are located in the offshore waters of the Gulf of Mexico on the
OCS. The Funds operations and activities, therefore, are governed by, among
other things, the OCSLA.

Under
OCSLA, the United States federal government has jurisdiction over oil and
natural gas development on the OCS. As a result, the United States Secretary of
the Interior is empowered to sell exploration, development and production
leases of a defined submerged area of the OCS, or a block, through a
competitive bidding process. Such activity is conducted by the MMS, an agency
of the United States Department of Interior. The MMS administers federal
offshore leases pursuant to regulations promulgated under the OCSLA. Lessees
must obtain MMS approval for exploration, development and production plans
prior to the commencement of offshore operations. In addition, approvals and
permits are required from other agencies such as the U.S. Coast Guard, the Army
Corps of Engineers and the Environmental Protection Agency. Offshore operations
are subject to numerous regulatory requirements, including stringent engineering
and construction specifications related to offshore production facilities and
pipelines and safety-related regulations concerning the design and operating
procedures of these facilities and pipelines. MMS regulations also restrict the
flaring or venting of production and proposed regulations would prohibit the
flaring of liquid hydrocarbons and oil without prior authorization.

The
MMS has also imposed regulations governing the plugging and abandonment of
wells located offshore and the installation and removal of all production
facilities. Under certain circumstances, the MMS may require operations on
federal leases to be suspended or terminated. Any such suspension or
termination could adversely affect the Funds operations and interests.

The
MMS conducts auctions for lease blocks of submerged areas offshore. As part of
the leasing activity and as required by the OCSLA, the leases auctioned include
specified lease terms such as the length of the lease, the amount of royalty to
be paid, lease cancellation and suspension, and, to a degree, the planned
activities of exploration and production to be conducted by the lessee. In
addition, the OCSLA grants the Secretary of the Interior continuing oversight
and approval authority over exploration plans throughout the term of the lease.

9

---



Sales and Transportation of Oil and
Natural Gas

The
Fund sells its proportionate share of oil and natural gas to the market and
receives market prices from such sales. These sales are not currently subject
to regulation by any federal or state agency. However, in order for it to make
such sales the Fund is dependent upon unaffiliated pipeline companies whose
rates, terms and conditions of transport are subject to regulation by the
Federal Energy Regulatory Commission (FERC). The rates, terms and conditions
are regulated by FERC pursuant to a variety of statutes including the OSCLA,
the Natural Gas Policy Act and the Energy Policy Act of 1992. Generally,
depending on certain factors, pipelines can charge rates that are either
market-based or cost-of-service. In some circumstances, rates can be agreed
upon pursuant to settlement. Thus, the rates that pipelines charge the Fund,
although regulated, are beyond the Funds control. Nevertheless, such rates
would apply uniformly to all transporters on that pipeline and, as a result,
management does not anticipate that the impact to the Fund of any changes in
such rates, terms or conditions would be materially different than the impact
upon other oil or natural gas producers and marketers.

Environmental Matters and Regulation

The
Funds operations are subject to pervasive environmental laws and regulations
governing the discharge of materials into the air and water and the protection
of aquatic species and habitats. However, although it shares the liability
along with its other working interest owners for any environmental damage, most
of the activities to which these environmental laws and regulations apply are
conducted by the operator on the Funds behalf. Nevertheless, environmental
laws and regulations to which its operations are subject may require the Fund,
or the operator, to acquire permits to commence drilling operations, restrict
or prohibit the release of certain materials or substances into the environment,
impose the installation of certain environmental control devices, require
certain remedial measures to prevent pollution and other discharges such as the
plugging of abandoned projects and, finally, impose in some instances severe
penalties, fines and liabilities for the environmental damage that is caused by
the Funds projects.

Some
of the environmental laws that apply to oil and natural gas exploration and
production are:

The Oil Pollution Act.
The Oil Pollution Act of 1990, as amended (the OPA), amends Section 311 of
the Federal Water Pollution Control Act of 1972 (the Clean Water Act) and was
enacted in response to the numerous tanker spills, including the Exxon Valdez
that occurred in the 1980s. Among other things, the OPA clarifies the federal
response authority to, and increases penalties for, spills. The OPA establishes
a new liability regime for oil pollution incidents in the aquatic environment.
Essentially, the OPA provides that a responsible party for a vessel or facility
from which oil is discharged or that poses a substantial threat of a discharge
could be liable for certain specified damages resulting from a discharge of
oil, including clean-up and remediation, loss of subsistence use of natural
resources, real or personal property damages, as well as certain public and
private damages. A responsible party includes a lessee of an offshore facility.

The
OPA also requires a responsible party to submit proof of its financial
responsibility to cover environmental cleanup and restoration costs that could
be incurred in connection with an oil spill. Under the OPA, parties responsible
for offshore facilities must provide financial assurance of at least $35
million to address oil spills and associated damages. In certain limited
circumstances, that amount may be increased to $150 million. As indicated
earlier, the Fund has not been required to make any such showing to the MMS as
the operators are responsible for such compliance. However, notwithstanding the
operators responsibility for compliance, in the event of an oil spill, the
Fund, along with the operators and other working interest owners, could be
liable under the OPA for the resulting environmental damage.

Clean Water Act.
Generally, the Clean Water Act imposes liability for the unauthorized discharge
of pollutants, including petroleum products, into the surface and coastal U.S.
waters except in strict conformance with discharge permits issued by the
federal, or state if applicable, agency. Regulations governing water discharges
also impose other requirements, such as the obligation to prepare spill
response plans. The Funds operators are responsible for compliance with the
Clean Water Act although the Fund may be liable for any failure of the operator
to do so.

Federal Clean Air Act.
The Federal Clean Air Act of 1970, as amended (the Clean Air Act) restricts
the emission of certain air pollutants. Prior to constructing new facilities,
permits may be required before work can commence and existing facilities may be
required to incur additional capital costs to add equipment to ensure and
maintain compliance. As a result, the Funds operations may be required to
incur additional costs to comply with the Clean Air Act.

10

---



Other Environmental Laws.
In addition to the above, the Funds operations may be subject to the Resource Conservation and Recovery Act of 1976, as
amended, which regulates the generation, transportation, treatment,
storage, disposal and cleanup of
certain hazardous wastes, as well as the Comprehensive
Environmental Response, Compensation and Liability Act, which
imposes joint and several liability without regard to fault or legality of
conduct on classes of persons who are considered responsible for the release of
a hazardous substance into the environment.

The
above represents a brief outline of the major environmental laws that may apply
to the Funds operations. The Fund believes that its operators are in
compliance with each of these environmental laws and the regulations
promulgated thereunder. The Fund does
not believe that the costs of complying with environmental laws, including
federal, state and local laws, will have a material adverse impact on its
financial condition and/or operations.

|         |              
|-------- | -------------
|ITEM 1A. | RISK
 FACTORS

Not required.

|         |                           
|-------- | --------------------------
|ITEM 1B. | UNRESOLVED
 STAFF COMMENTS

Not applicable.

|        |           
|------- | ----------
|ITEM 2. | PROPERTIES

The
information regarding the Funds properties that is contained in Item 1.
Business under the heading Properties of this Annual Report is incorporated
herein by reference.

|        |                   
|------- | ------------------
|ITEM 3. | LEGAL
 PROCEEDINGS

None.

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

None.

11

---



PART II

|        |                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------
|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
 MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There
is currently no established public trading market for the Shares. As of the date of this filing, there
were 1,307 shareholders of record of
the Fund.

Distributions
are made in accordance with the provisions of the LLC Agreement. At various times throughout the year, the
Manager determines whether there is sufficient available cash, as defined in
the LLC Agreement, for distribution to shareholders. There is, however, no requirement to distribute available cash
and as such, available cash is distributed to the extent and at such times as
the Manager believes is advisable.
During the years ended December 31, 2008 and 2007, the Fund paid
distributions totaling $15.6 million and $0.8 million, respectively.

|        |                         
|------- | ------------------------
|ITEM 6. | SELECTED
 FINANCIAL DATA

Not required.

|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS

Overview of the Funds BusinessThe 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 Funds primary investment objective is to generate cash flow for
distribution to its shareholders through participation in oil and natural gas
exploration and development projects in the Gulf of Mexico. 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.

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. See also Item 1.
Business for additional information regarding the projects of the Fund.

Revenues
are subject to the markets for and prices of crude oil and natural gas, which
have been extremely volatile, and are likely to continue to be volatile in the
future. This volatility is caused by numerous factors and market conditions
that the Fund cannot control or influence. Therefore, it is impossible to
predict the future price of crude oil and natural gas with any certainty. Low
commodity prices could have an adverse affect on the Funds future
profitability.

Critical Accounting EstimatesThe discussion and
analysis of the Funds financial condition and results of operations are based
upon the Funds financial statements, which have been prepared in conformity
with accounting principles generally accepted in the United States of America
(GAAP). In preparing these financial
statements, the Fund is required to make certain estimates, judgments and
assumptions. These estimates, judgments and assumptions affect the reported
amounts of the Funds assets and liabilities, including the disclosure of
contingent assets and liabilities, at the date of the financial statements and
the reported amounts of its revenues and expenses during the periods
presented. The Fund evaluates these
estimates and assumptions on an ongoing basis. The Fund bases its estimates and
assumptions on historical experience and on various other factors that the Fund
believes to be reasonable at the time the estimates and assumptions are made.
However, future events and actual results may differ from these estimates and
assumptions and such differences may have a material impact on the results of
operations, financial position or cash flows.
See Note 2 of Notes to the Financial Statements  Summary of
Significant Accounting Policies in Item 8. Financial Statements and
Supplementary Data contained in this Annual Report for a discussion of the
Funds significant accounting policies.

Accounting for Exploration and
Development CostsExploration and
production activities are accounted for using the successful efforts method.
Costs of acquiring unproved and proved oil and natural gas leasehold acreage,
including lease bonuses, brokers fees and other related costs are capitalized.
Annual lease rentals, exploration expenses and dry-hole costs are expensed as
incurred. Costs of drilling and equipping productive wells and related
production facilities are capitalized.

12

---



The
costs of exploratory and developmental wells are capitalized pending
determination of whether proved reserves have been found. Drilling costs remain capitalized after
drilling is completed if (1) the well has found a sufficient quantity of
reserves to justify completion as a producing well and (2) sufficient progress
is being made in assessing the reserves and the economic and operating
viability of the project. If either of those criteria is not met, or if there
is substantial doubt about the economic or operational viability of the
project, the capitalized well costs are charged to expense as dry-hole costs.
Indicators of sufficient progress in assessing reserves and the economic and
operating viability of a project include: commitment of project personnel;
active negotiations for sales contracts with customers; negotiations with
governments, operators and contractors; and firm plans for additional drilling
and other factors.

Unproved PropertyUnproved property
is comprised of capital costs incurred for undeveloped acreage, wells and
production facilities in progress and wells pending determination. These costs
are initially excluded from the depletion base until the outcome of the project
has been determined, or generally until it is known whether proved reserves
will or will not be assigned to the property.
The Fund assesses all items in its unproved property balance on an
ongoing basis for possible impairment or reduction in value.

Proved ReservesAnnually, the Fund engages
an independent petroleum engineer, Ryder Scott Company, L.P., to perform a
comprehensive study of the Funds producing properties and dependent upon
timing of discoveries, certain successful properties, to determine the
quantities of reserves and the period over which such reserves will be
recoverable. The Funds estimates of proved reserves are based on the
quantities of oil and natural gas that geological and engineering data
demonstrate, with reasonable certainty, to be recoverable in future years from
known reservoirs under existing economic and operating conditions. However,
there are numerous uncertainties inherent in estimating quantities of proved
reserves and in projecting future revenues, rates of production and timing of
development expenditures, including many factors beyond the Funds control. The
estimation process is very complex and relies on assumptions and subjective
interpretations of available geologic, geophysical, engineering and production
data and the accuracy of reserve estimates is a function of the quality and
quantity of available data, engineering and geological interpretation, and
judgment. In addition, as a result of volatility and changing market conditions,
commodity prices and future development costs will change from period to
period, causing estimates of proved reserves and future net revenues to change.
Estimates of proved reserves are key components of the Funds most significant
financial estimates involving its rate for recording depreciation, depletion
and amortization.

Asset Retirement ObligationsFor 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, a liability is recognized for the
present value of asset retirement obligations once reasonably estimable. The Fund capitalizes the associated asset
retirement costs as part of the carrying amount of its proved properties. Plug
and abandonment costs associated with unsuccessful projects are expensed as
dry-hole costs.

Impairment of Long-Lived AssetsThe 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.

13

---



Results of Operations

The
following table summarizes the Funds results of operations for the years ended
December 31, 2008 and 2007 and should be read in conjunction with the Funds
financial statements and the notes thereto included within Item 8. Financial
Statements and Supplementary Data in this Annual Report.

|                                               |  |                         |        |      |   |        |  
|---------------------------------------------- |  | ----------------------- | ------ | ---- | - | ------ | -
|                                               |  | Year ended December 31, |       
|                                               |  | 2008                    |        | 2007 |  
|                                               |  |                         |        |      |  
|                                               |  | (in thousands)          |       
|Revenue                                        |  |                         |        |      |   |        |  
|Oil and gas revenue                            |  | $                       | 19,032 |      | $ | 3,085  |  
|                                               |  |                         |        |      |   |        |  
|Expenses                                       |  |                         |        |      |   |        |  
|Depletion and amortization                     |  |                         | 4,937  |      |   | 1,898  |  
|Impairment of proved properties                |  |                         | 3,407  |      |   |       |  
|Dry-hole costs                                 |  |                         | 3,193  |      |   | 2,450  |  
|Management fees to affiliate                   |  |                         | 2,356  |      |   | 2,424  |  
|Operating expenses                             |  |                         | 664    |      |   | 415    |  
|General and administrative expenses            |  |                         | 553    |      |   | 1,209  |  
|                                               |  |                         |        |      |   |        |  
|Total expenses                                 |  |                         | 15,110 |      |   | 8,396  |  
|                                               |  |                         |        |      |   |        |  
|                                               |  |                         |        |      |   |        |  
|Income (loss) from operations                  |  |                         | 3,922  |      |   | (5,311 | )
|                                               |  |                         |        |      |   |        |  
|Other income                                   |  |                         |        |      |   |        |  
|Interest income                                |  |                         | 926    |      |   | 3,099  |  
|Realized gain on sale of marketable
securities |  |                         | 325    |      |   |       |  
|                                               |  |                         |        |      |   |        |  
|Total other income                             |  |                         | 1,251  |      |   | 3,099  |  
|                                               |  |                         |        |      |   |        |  
|                                               |  |                         |        |      |   |        |  
|Net income (loss)                              |  |                         | 5,173  |      |   | (2,212 | )
|                                               |  |                         |        |      |   |        |  
|Other comprehensive income                     |  |                         |        |      |   |        |  
|Unrealized gain on marketable securities       |  |                         | 487    |      |   |       |  
|                                               |  |                         |        |      |   |        |  
|                                               |  |                         |        |      |   |        |  
|Total comprehensive income (loss)              |  | $                       | 5,660  |      | $ | (2,212 | )
|                                               |  |                         |        |      |   |        |  

Year ended December 31, 2008 compared to
Year ended December 31, 2007

Overview.Since inception, the Fund has had five wells come onto production: Main
Pass 275 in April 2007; West Cameron 75 in December 2007; West Delta 67/68 in
July 2008 and Vermilion 344 in December 2008, thereby impacting the Funds
revenue, depletion and amortization and lease operating expense upon
production. Prior to April 2007, the
Fund had no operating revenue and was considered an exploratory stage
enterprise.

As
previously discussed in Item 1. Business, hurricane activity in the third
quarter of 2008 did not cause material damage to any of the Funds wells or
facilities, however, damage to certain pipelines, coastal refineries and gas
processing plants caused certain wells to be temporarily shut-in. In all, Main Pass 275 was shut-in for
approximately several weeks, with production resuming in September 2008, West
Delta 67/68 was shut-in for approximately one month, with production resuming
in October 2008 and West Cameron 75 was shut-in for approximately three months,
with production resuming in November 2008.
Accordingly, revenue, depletion and amortization and lease operating
expense were affected during these periods.

Oil and Gas Revenue.Oil and gas
revenue for the year ended December 31, 2008 was $19.0 million, a $15.9 million
increase from the year ended December 31, 2007. The increase is attributable to an increase in sales volumes
totaling $11.3 million, the impact of increased average prices totaling $4.4
million, and increased processing revenue of $0.2 million.

During
the years ended December 31, 2008 and 2007, the Funds wells produced and sold
25 thousand barrels and 10 thousand barrels of oil, respectively and 1,717
thousand mcf and 286 thousand mcf of gas, respectively.

14

---



During
the years ended December 31, 2008 and 2007, the Funds oil prices averaged $95
per barrel and $77 per barrel, respectively and the Funds gas prices averaged
$9.36 per mcf and $8.17 per mcf, respectively.

The
increase in volume is primarily attributable to the timing of the onset of
production of the Funds wells, as discussed above in Overview.

Depletion and Amortization.Depletion and amortization for the years ended December 31,
2008
and 2007 was $4.9 million and $1.9 million, respectively. The increase resulted from the timing of the
onset of production of the Funds wells.

Impairment of Proved Properties.During the year ended December 31, 2008, the
Fund recorded
impairments to proved properties of $3.4 million, relating to Vermilion 344,
due to increased project costs, lower oil and gas commodity prices and a reduction
in the Funds estimates of proved oil and gas reserves. See additional
discussion in Item 1. Business.

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. During the years ended December 31, 2008 and
2007, certain wells received credits from their respective operators upon
review and audit of the wells costs.
The following table summarizes dry-hole costs, inclusive of credits and
plug and abandonment costs, for the years ended December 31, 2008 and
2007.

|                      |  |                         |       |      |   |       | 
|--------------------- |  | ----------------------- | ----- | ---- | - | ----- | 
|                      |  | Year ended December 31, |      
|Lease Block           |  | 2008                    |       | 2007 |  
|                      |  |                         |       |      |  
|                      |  | (in thousands)          |      
|Ruby Project          |  | $                       | 3,464 |      | $ |      | 
|Ship Shoal
 81        |  |                         | 23    |      |   | 1,581 | 
|Viosca Knoll
 207     |  |                         | (293  | )    |   | 308   | 
|Garden Banks
 346/390 |  |                         | (1    | )    |   | 561   | 
|                      |  |                         |       |      |   |       | 
|                      |  | $                       | 3,193 |      | $ | 2,450 | 
|                      |  |                         |       |      |   |       | 

Management Fees to Affiliate.Management fees
for each of the years ended December 31, 2008 and 2007 were $2.4 million,
representing 2.5% of total contributions, net of cumulative dry-hole and
related well costs incurred by the Fund.
See additional discussion in Item 1. Business.

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

|                         |  |                         |     |      |   |     | 
|------------------------ |  | ----------------------- | --- | ---- | - | --- | 
|                         |  | Year ended December 31, |    
|                         |  | 2008                    |     | 2007 |  
|                         |  |                         |     |      |  
|                         |  | (in thousands)          |    
|                        
|Lease
 operating expense |  | $                       | 615 |      | $ | 104 | 
|Geological
 costs        |  |                         | 37  |      |   | 308 | 
|Accretion
 expense       |  |                         | 12  |      |   | 3   | 
|                         |  |                         |     |      |   |     | 
|                         |  | $                       | 664 |      | $ | 415 | 
|                         |  |                         |     |      |   |     | 

Lease
operating expense for the year ended December 31, 2008 was primarily related to
Main Pass 275 and West Cameron 75 and the onset of production of the West Delta
67/68 wells. Lease operating expense
for the year ended December 31, 2007 was primarily related to Main Pass
275. Geological costs for the year
ended December 31, 2008 related primarily to geological surveys for the Ruby
Project. Geological costs for the year
ended December 31, 2007 were primarily related to geological surveys for
West Cameron 75.
Accretion expense is related to the asset
retirement obligations established for the Funds proved properties.

15

---



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

|                     |  |                         |     |      |   |       | 
|-------------------- |  | ----------------------- | --- | ---- | - | ----- | 
|                     |  | Year ended December 31, |    
|                     |  | 2008                    |     | 2007 |  
|                     |  |                         |     |      |  
|                     |  | (in thousands)          |    
|                    
|Accounting fees      |  | $                       | 242 |      | $ | 177   | 
|Insurance expense    |  |                         | 246 |      |   | 923   | 
|Trust fees and other |  |                         | 65  |      |   | 109   | 
|                     |  |                         |     |      |   |       | 
|                     |  | $                       | 553 |      | $ | 1,209 | 
|                     |  |                         |     |      |   |       | 

Accounting
fees represent annual audit and tax preparation fees, quarterly reviews and
filing fees incurred by the Fund.
Insurance expense represents premiums related to producing well and
control of well insurance, which varies dependent upon the number of wells
producing and/or drilling and directors and officers liability insurance. Trust fees represent bank fees associated
with the management of the Funds cash accounts.

Interest Income.
Interest income is comprised of interest earned on money market accounts
and investments in U.S. Treasury securities.
Interest income for the year ended December 31, 2008 was $0.9 million, a
$2.2 million decrease from the year ended December 31, 2007. The decrease was attributable to a reduction
in average outstanding balances earning interest, due to ongoing capital
expenditures, coupled with lower interest rates earned.

Realized Gain on Sale of Marketable
Securities.During the first quarter of 2008, the Fund
sold $10.0 million of its available-for-sale marketable securities, which
resulted in a realized gain of $0.3 million.

Unrealized Gain on Marketable
Securities.During 2007, the Fund purchased long-term
available-for-sale U.S. Treasury securities, which mature in December
2010. Unrealized gains and losses
related to the securities change in fair value are recorded in other
comprehensive income until realized.
The Fund recorded unrealized gains of $0.5 million during year ended
December 31, 2008. There was no
unrealized gain or loss on marketable securities for the year ended December
31, 2007.

Capital Resources and Liquidity

Operating Cash FlowsCash flows
provided by operating activities for the year ended December 31, 2008 were
$15.9 million. Revenue received of
$18.9 million and interest received of $0.6 million was partially offset by
payments for management fees, operating expenses and general and administrative
expenses of $2.4 million, $0.7 million and $0.6 million, respectively.

Cash
flows used in operating activities for the year ended December 31, 2007 were
$0.4 million. Payments for management
fees, general and administrative expenses and operating expenses of $2.4
million, $1.2 million and $0.4 million, respectively, were offset by revenue
received of $2.2 million and interest income received of $1.4 million.

Investing Cash FlowsCash flows
provided by investing activities for the year ended December 31, 2008 of $8.5
million related to proceeds from the sales and maturity of U.S. Treasury securities of
$37.4 million partially offset by capital expenditures for oil and gas properties of $18.8
million and investments in U.S. Treasury securities of $10.0 million. Additionally, the Fund
increased its salvage fund investments by $32 thousand, which consisted of the
interest earned on this account.

Cash
flows used in investing activities for the year ended December 31, 2007 of
$41.6 million related to investments in U.S. Treasury securities of $70.9 and
capital expenditures for oil and gas properties of $39.4 million, partially
offset by proceeds from the maturity of U.S. Treasury securities of $68.7
million. Additionally, the Fund
increased its salvage fund investments by $51 thousand, which consisted of the
interest earned on this fund.

16

---



Financing Cash FlowsCash flows used
in financing activities for year ended December 31, 2008 of $15.6 million
related to the payment of Manager and shareholder distributions.

Cash
flows used in financing activities for the year ended December 31, 2007 of $0.8
million related to the payment of Manger and shareholder distributions of $0.8
million, offset by contributions from shareholders, net of syndication costs,
of $49 thousand.

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 December 31, 2008, the Fund had
committed to spend an additional $21.8 million 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, inclusive
of management fees, and capital expenditures for its investment
properties. Operations are funded
utilizing operating income, existing cash on-hand, short-term investments and
income earned therefrom.

The
Manager is entitled to receive an annual management fee from the Fund
regardless of the Funds profitability in that year. Generally, all or a
portion of the management fee is paid from operating income and interest
income, although the management fee can be paid out of capital contributions;
however, this is not the Funds intent.

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 the Funds operations.

Suspension of MMS Royalty Relief

Under
MMS rules, the Fund is eligible for annual royalty relief provided that the
average New York Mercantile Exchange (NYMEX) sales price for shallow water,
deep gas does not exceed price thresholds established by the MMS, which were
published during the first quarter of 2009. Rising prices early in 2008 created
uncertainty as to whether West Cameron 75 would be eligible for the royalty
relief and accordingly, the Fund previously disclosed this contingency.
Ultimately, however, the NYMEX sales price did not exceed the price thresholds
established by the MMS and the Fund had no obligation to pay royalties for
those properties which qualify for royalty relief.

Off-Balance Sheet Arrangements

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

Contractual Obligations

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

17

---



Recent Accounting Pronouncements

See
Note 3 of Notes to Financial Statements  Recent Accounting Standards in Item
8. Financial Statements and Supplementary Data contained in this Annual
Report for a discussion of recent accounting pronouncements.

|         |                                                           
|-------- | ----------------------------------------------------------
|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

|        |                                             
|------- | --------------------------------------------
|ITEM 8. | FINANCIAL
 STATEMENTS AND SUPPLEMENTARY DATA

All
financial statements meeting the requirements of Regulation S-X and the
supplementary financial information required by Item 302 of Regulation S-K are
included in the financial statements listed in Item 15. Exhibits, Financial
Statement Schedules and filed as part of this report.

|        |                                                                                  
|------- | ---------------------------------------------------------------------------------
|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
 FINANCIAL DISCLOSURE

None.

|         |                         
|-------- | ------------------------
|ITEM 9A. | CONTROLS
 AND PROCEDURES

Disclosure Controls and ProceduresUnder the
supervision and with the participation of the Chief Executive Officer and Chief
Financial Officer of the Fund, management of the Fund and the Manager carried
out an evaluation of the effectiveness of the design and operation of the
Funds disclosure controls and procedures pursuant to the Exchange Act Rule
13a-15(e) as of December 31, 2008.
Based upon the evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Funds disclosure controls and procedures
are effective as of the end of the period covered by this report.

Managements Report on Internal
Control over Financial ReportingManagement of the
Fund is responsible for establishing and maintaining adequate internal control
over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Funds internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.

Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

Management
of the Fund, including its Chief Executive Officer and Chief Financial Officer,
assessed the effectiveness of the Funds internal control over financial
reporting as of December 31, 2008. In
making this assessment, management of the Fund used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (the
COSO) in Internal Control  Integrated
Framework. Based on their assessment using those criteria,
management of the Fund concluded that, as of December 31, 2008, the Funds
internal control over financial reporting is effective.

This
Annual Report does not include an attestation report of the Funds registered
public accounting firm regarding internal control over financial reporting. The
Funds report was not subject to attestation by the Funds registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Fund to provide only managements report in this
Annual Report.

Changes in Internal Control over
Financial ReportingThe Chief
Executive Officer and Chief Financial Officer of the Fund have concluded that
there have not been any changes in the Funds internal control over financial
reporting during the quarter ended December 31, 2008 that have materially
affected, or are reasonably likely to materially affect, the Funds internal
control over financial reporting.

18

---



|         |                   
|-------- | ------------------
|ITEM 9B. | OTHER
 INFORMATION

None.

PART III

|         |                                                        
|-------- | -------------------------------------------------------
|ITEM 10. | DIRECTORS,
 EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The
Fund has engaged Ridgewood Energy as the Manager. The Manager has very broad authority, including the authority to
appoint the executive officers of the Fund.
Executive officers of Ridgewood Energy and the Fund and their ages at
December 31, 2008 are as follows:

|                                                             |  |                                                
|------------------------------------------------------------ |  | -----------------------------------------------
|Name, Age
 and Position with Registrant                      |  | Officer of
 Ridgewood Energy
 Corporation Since
|                                                             |  |                                                
|                                                             |  |                                                
|Robert E. Swanson, 61                                        |  |                                                
|President and Chief Executive Officer                        |  | 1982                                           
|                                                             |  |                                                
|W. Greg Tabor, 48                                            |  |                                                
|Executive Vice President andDirector of Business
Development |  | 2004                                           
|                                                             |  |                                                
|Robert L. Gold, 50                                           |  |                                                
|Executive Vice President                                     |  | 1987                                           
|                                                             |  |                                                
|Kathleen P. McSherry, 43                                     |  |                                                
|Executive Vice President and Chief Financial
Officer         |  | 2000                                           
|                                                             |  |                                                
|Daniel V. Gulino, 48                                         |  |                                                
|Senior Vice President and General Counsel                    |  | 2003                                           
|                                                             |  |                                                
|Adrien Doherty, 56                                           |  |                                                
|Executive Vice President                                     |  | 2006                                           

The
officers in the above table have also been officers of the Fund since December
19, 2005, the date of inception of the Fund, with the exception of Mr. Doherty,
who became an officer of the Fund in 2006. The officers are employed by and
paid exclusively by the Manager. Set forth below are the names of, and certain
biographical information regarding the executive officers of Ridgewood Energy
and the Fund:

Robert E. Swanson has served as the President, Chief Executive Officer, sole director,
and sole stockholder of Ridgewood Energy since its inception. Mr. Swanson is
also the controlling member of Ridgewood Renewable Power, LLC and Ridgewood
Capital Corporation, affiliates of Ridgewood Energy. Mr. Swanson has been
President and registered principal of Ridgewood Securities Management, LLC and
has served as the Chairman of the Board of Ridgewood Capital since its
organization in 1998. Mr. Swanson is a member of the New York State and New
Jersey State Bars, the Association of the Bar of the City of New York and the
New York State Bar Association. He is a graduate of Amherst College and Fordham
University Law School.

W. Greg Tabor has served as the Executive Vice President and Director of Business
Development for Ridgewood Energy since January 2004. Mr. Tabor was senior
business development manager for El Paso Production Company from December 2001
to December 2003. From April 2000 to December 2001, Mr. Tabor was Vice
President, Business Development for Madison Energy Advisors. Mr. Tabor is a
graduate of the University of Houston.

Robert L. Gold has served as the Executive Vice President of Ridgewood Energy since
1987. Mr. Gold has also served as the President and Chief Executive Officer of
Ridgewood Capital since its inception in 1998. Mr. Gold is a member of the New
York State Bar. He is a graduate of Colgate University and New York University
School of Law.

19

---



Kathleen P. McSherry has served as the Executive Vice President and Chief Financial Officer
of Ridgewood Energy since 2000. Ms. McSherry has been employed by Ridgewood
Energy since 1987, first as the Assistant Controller and then as the Controller
before being promoted to Chief Financial Officer in 2000. Ms. McSherry also
serves as Vice President of Systems and Administration of Ridgewood Power. Ms.
McSherry holds a Bachelor of Science degree in Accounting.

Daniel V. Gulino has served as Senior Vice President and General Counsel of Ridgewood
Energy since August 2003. Mr. Gulino also serves as Senior Vice President and
General Counsel of Ridgewood Power Management, Ridgewood Power, and Ridgewood
Capital and has done so since 2000. Mr. Gulino is a member of the New Jersey
State and Pennsylvania State Bars. He is a graduate of Fairleigh Dickinson
University and Rutgers School of Law.

Adrien Doherty has served as Executive Vice President of Ridgewood Energy since
2006. Mr. Doherty joined Ridgewood
Energy after a thirty year career in investment banking, most recently as Head
of Barclays Capitals oil and gas banking effort. Mr. Doherty is a graduate of Amherst College and the Wharton
Graduate Division of the University of Pennsylvania.

Board of Directors and Board CommitteesThe Fund does not
have its own board of directors or any board committees. The Fund relies upon
the Manager to provide recommendations regarding dispositions and financial
disclosure. Officers of the Fund are
not compensated by the Fund, and all compensation matters are addressed by the
Manager, as described in Item 11. Executive Compensation of this Annual
Report. Because the Fund does not
maintain a board of directors and because officers of the Fund are compensated
by the Manager, the Manager believes that it is appropriate for the Fund to not
have a nominating or compensation committee.

Code of EthicsThe Manager of the
Fund has adopted a code of ethics for all employees, including the Managers
principal executive officer and principal financial and accounting officer. If
any amendments are made to the code of ethics or the Manager of the Fund grants
any waiver, including any implicit waiver, from a provision of the code to any
of the Managers executive officers, the Fund will disclose the nature of such
amendment or waiver on our website or in a current report on Form 8-K. Copies of the code of ethics are available,
without charge, on the Managers website at www.ridgewoodenergy.com and in
print upon written request to the business address of the Manager at 947
Linwood Avenue, Ridgewood, New Jersey 07450, ATTN: General Counsel.

Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the
Exchange Act, as amended, requires the Funds executive officers and directors,
and persons who own more than 10% of a registered class of the Funds equity
securities, to file reports of ownership and changes in ownership with the SEC.
Based on a review of the copies of reports furnished or otherwise available to
the Fund, the Fund believes that during the year ended December 31, 2008, all
filing requirements applicable to its officers, directors and 10% beneficial
owners were met.

|         |                        
|-------- | -----------------------
|ITEM 11. | EXECUTIVE
 COMPENSATION

The
executive officers of the Fund do not receive compensation from the Fund. The
Manager, or its affiliates, compensates the officers without additional
payments by the Fund. See Item 13. Certain Relationships and Related
Transactions, and Director Independence for more information regarding Manager
compensation and payments to affiliated entities.

|         |                                                                                                
|-------- | -----------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 AND RELATED STOCKHOLDER MATTERS

The
following table sets forth information with respect to beneficial ownership of
the shares as of March 26, 2009 (no person owns more than 5% of the shares) by:

| |   |                                                      
| | - | -----------------------------------------------------
| |  | each executive officer
 (there are no directors); and
| |  | all of the executive
 officers as a group.           

Beneficial
ownership is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to the securities. Except as indicated
by footnote, and subject to applicable community property laws, the persons
named in the table below have sole voting and investment power with respect to
all shares shown as beneficially owned by them. Percentage of beneficial
ownership is based on 839.5395 shares outstanding at March 26, 2009. Other than
as indicated below, no officer of the Manager or the Fund owns any of the
Funds shares.

20

---



|                                                             |  |                  |        |         |  |   | 
|------------------------------------------------------------ |  | ---------------- | ------ | ------- |  | - | 
|Name of beneficial owner                                     |  | Number
of shares |        | Percent | 
|                                                             |  |                  |        |         | 
|Robert E. Swanson, President and Chief Executive Officer (1) |  |                  | 3.6667 |         |  | * | 
|Executive officers as a
 group (1)                           |  |                  | 3.6667 |         |  | * | 

*
Represents less than one percent. 
(1) Includes shares owned by Mr. Swansons family members and trusts, which he
controls.

|         |                                                                           
|-------- | --------------------------------------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
 INDEPENDENCE

The
LLC Agreement provides that the Manager render management, administrative and
advisory services. For such services, the Manager is paid an annual management
fee, payable monthly, of 2.5% of total capital contributions, net of cumulative
dry-hole and related well costs incurred by the Fund. Management fees were $2.4 million for each of the years ended
December 31, 2008 and 2007.

The
Manager is entitled to receive a 15% interest in cash distributions made by the
Fund. Distributions paid to the
Manager for the years ended December 31, 2008 and 2007, were $2.3 million and
$0.1 million, respectively.

At
times, short-term payables and receivables, which do not bear interest, arise
from transactions with affiliates in the ordinary course of business. There were no such amounts outstanding at
December 31, 2008. At December 31,
2007, the Manager owed the Fund $18 thousand, which was classified as other
current assets.

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.

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.

|         |                                        
|-------- | ---------------------------------------
|ITEM 14. | PRINCIPAL
 ACCOUNTANT FEES AND SERVICES

The
following table presents fees for services rendered by Deloitte & Touche
LLP for the years ended December 31, 2008 and 2007.

|               |  |                         |     |      |   |     | 
|-------------- |  | ----------------------- | --- | ---- | - | --- | 
|               |  | Year ended December 31, |    
|               |  | 2008                    |     | 2007 |  
|               |  |                         |     |      |  
|               |  | (in thousands)          |    
|               |  |                         |     |      |   |     | 
|Audit fees (1) |  | $                       | 130 |      | $ | 125 | 

|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Fees
 for audit of annual financial statements, reviews of the related quarterly
 financial statements, and reviews of documents filed with the SEC.

21

---



PART IV

|         |                                         
|-------- | ----------------------------------------
|ITEM 15. | EXHIBITS,
 FINANCIAL STATEMENT SCHEDULES

|                                                           |                               
|---------------------------------------------------------- | ------------------------------
|(a) (1)                                                    | Financial
 Statements         
|                                                           |                               
|See Index to Financial Statements set forth on page F-1.
|                                                           |                               
|(a) (2)                                                    | Financial
 Statement Schedules

None.

|        | 
|------- | 
|(a) (3) | 

|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|--------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------
|EXHIBIT
 NUMBER |  | TITLE OF EXHIBIT                                                                                                                                                                                                                                                                                       |  | METHOD OF FILING                                                           
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|3.1             |  | Articles of Formation of Ridgewood Energy S Fund, LLC filed with the
 Secretary of State of the State of Delaware on December 19, 2005.                                                                                                                                                                |  | Incorporated by reference to the Funds Form 10 filed on April 24,
 2007.  
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|3.2             |  | Limited Liability Company Agreement between Ridgewood Energy
 Corporation and Investors of Ridgewood Energy S Fund, LLC dated February 1,
 2006.                                                                                                                                                       |  | Incorporated by reference to the Funds Form 10 filed on April 24,
 2007.  
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|10.1            |  | Participation Agreement between PetroQuest Energy L.L.C. and Ridgewood
 Energy Corporation as Manager for the Ruby Project.                                                                                                                                                                            |  | Incorporated by reference to the Funds Form 10-Q filed on August 1,
 2008.
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|10.2            |  | Participation Agreement between Newfield Exploration Company and
 Ridgewood Energy Corporation as Manager for the Aspen Project.                                                                                                                                                                       |  | Filed
 herewith.                                                           
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|23.1            |  | Consent of Ryder Scott Company, L.P.                                                                                                                                                                                                                                                                   |  | Filed
 herewith.                                                           
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|31.1            |  | Certification of Robert E. Swanson, President and Chief Executive
 Officer, pursuant to Securities Exchange Act Rule 13a-14(a).                                                                                                                                                                        |  | Filed herewith.                                                            
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|31.2            |  | Certification of Kathleen P. McSherry, Executive Vice President and
 Chief Financial Officer, pursuant to Securities Exchange Act Rule 13a-14(a).                                                                                                                                                      |  | Filed
 herewith.                                                           
|                |  |                                                                                                                                                                                                                                                                                                        |  |                                                                            
|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, President and Chief Executive Officer of the Fund and Kathleen P.
 McSherry, Executive Vice President and Chief Financial Officer of the Fund. |  | Filed
 herewith.                                                           

22

---



INDEX TO
FINANCIAL STATEMENTS

|                                                                                                          |  |     
|--------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                          |  | PAGE
|                                                                                                          |  |     
|Report of
 Independent Registered Public Accounting Firm                                                  |  | F-2 
|Balance
 Sheets as of December 31, 2008 and 2007                                                          |  | F-3 
|Statements
 of Operations and Comprehensive Income (Loss) for the years ended December
 31, 2008 and 2007 |  | F-4 
|Statements
 of Changes in Members Capital for the years ended December 31, 2008 and 2007                 |  | F-5 
|Statements
 of Cash Flows for the years ended December 31, 2008 and 2007                                  |  | F-6 
|Notes to
 Financial Statements                                                                            |  | F-7 
|Supplementary
 Financial Information - Information about Oil and Gas Producing Activities
 -Unaudited     |  | F-13

F-1

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Shareholders and Manager of Ridgewood Energy S Fund, LLC:

We
have audited the accompanying balance sheets of Ridgewood Energy S Fund, LLC
(the Fund) as of December 31, 2008 and 2007, and the related statements of
operations and comprehensive income (loss), changes in members capital, and
cash flows for the years ended December 31, 2008 and 2007. These financial statements are the
responsibility of the Funds management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. The Fund is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our
audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Funds internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our
audits provide a reasonable basis for our opinion.

In
our opinion, such financial statements present fairly, in all material
respects, the financial position of Ridgewood Energy S Fund, LLC as of December
31, 2008 and 2007, and the results of its operations and its cash flows for the
years ended December 31, 2008 and 2007, in conformity with accounting
principles generally accepted in the United States of America.

|                           | 
|-------------------------- | 
|/s/ Deloitte & Touche
 LLP | 
|                           | 
|                           | 
|Parsippany, New Jersey     | 
|March 26, 2009             | 

F-2

---



RIDGEWOOD ENERGY S FUND, LLCBALANCE SHEETS
(in thousands, except share data)

|                                                                                  |  |              |         |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------- | -
|                                                                                  |  | December 31, |        
|                                                                                  |  | 2008         |         | 2007 |  
|                                                                                  |  |              |         |      |  
|ASSETS                                                                            |  |              |         |      |   |         |  
|Current assets:                                                                   |  |              |         |      |   |         |  
|Cash and cash equivalents                                                         |  | $            | 16,046  |      | $ | 7,296   |  
|Short-term investment in held-to-maturity securities                              |  |              |        |      |   | 17,000  |  
|Production receivable                                                             |  |              | 985     |      |   | 893     |  
|Other current assets                                                              |  |              | 335     |      |   | 209     |  
|                                                                                  |  |              |         |      |   |         |  
|Total current assets                                                              |  |              | 17,366  |      |   | 25,398  |  
|                                                                                 
|Long-term investment in available-for-sale securities                             |  |              | 10,743  |      |   | 19,963  |  
|Salvage fund                                                                      |  |              | 1,113   |      |   | 1,081   |  
|                                                                                 
|Oil and gas properties:                                                           |  |              |         |      |   |         |  
|Unproved properties                                                               |  |              | 4,840   |      |   | 11,215  |  
|Proved properties                                                                 |  |              | 45,173  |      |   | 26,720  |  
|Less: accumulated depletion and amortization                                      |  |              | (10,242 | )    |   | (1,898  | )
|                                                                                  |  |              |         |      |   |         |  
|Total oil and gas properties, net                                                 |  |              | 39,771  |      |   | 36,037  |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                 
|Total assets                                                                      |  | $            | 68,993  |      | $ | 82,479  |  
|                                                                                  |  |              |         |      |   |         |  
|LIABILITIES
 AND MEMBERS CAPITAL                                                 |  |              |         |      |   |         |  
|Current
 liabilities:                                                             |  |              |         |      |   |         |  
|Due to operators                                                                  |  | $            | 2,663   |      | $ | 7,350   |  
|Accrued expenses                                                                  |  |              | 81      |      |   | 191     |  
|                                                                                  |  |              |         |      |   |         |  
|Total current liabilities                                                         |  |              | 2,744   |      |   | 7,541   |  
|Asset retirement obligations                                                      |  |              | 1,391   |      |   | 131     |  
|                                                                                  |  |              |         |      |   |         |  
|Total liabilities                                                                 |  |              | 4,135   |      |   | 7,672   |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                  |  |              |         |      |   |         |  
|Commitments and contingencies (Note 8)                                            |  |              |         |      |   |         |  
|Members capital:                                                                 |  |              |         |      |   |         |  
|Manager:                                                                          |  |              |         |      |   |         |  
|Distributions                                                                     |  |              | (2,461  | )    |   | (120    | )
|Retained earnings (accumulated deficit)                                           |  |              | 1,459   |      |   | (773    | )
|                                                                                  |  |              |         |      |   |         |  
|Managers total                                                                   |  |              | (1,002  | )    |   | (893    | )
|                                                                                  |  |              |         |      |   |         |  
|                                                                                  |  |              |         |      |   |         |  
|Shareholders:                                                                     |  |              |         |      |   |         |  
|Capital contributions (1,000 shares authorized; 839.5395 issued and
 outstanding) |  |              | 124,401 |      |   | 124,401 |  
|Syndication costs                                                                 |  |              | (14,236 | )    |   | (14,236 | )
|Distributions                                                                     |  |              | (13,947 | )    |   | (679    | )
|Accumulated deficit                                                               |  |              | (30,845 | )    |   | (33,786 | )
|                                                                                  |  |              |         |      |   |         |  
|Shareholders total                                                               |  |              | 65,373  |      |   | 75,700  |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                  |  |              |         |      |   |         |  
|Accumulated other comprehensive income                                            |  |              | 487     |      |   |        |  
|                                                                                  |  |              |         |      |   |         |  
|Total members capital                                                            |  |              | 64,858  |      |   | 74,807  |  
|                                                                                  |  |              |         |      |   |         |  
|                                                                                  |  |              |         |      |   |         |  
|Total liabilities and members capital                                            |  | $            | 68,993  |      | $ | 82,479  |  
|                                                                                  |  |              |         |      |   |         |  

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

F-3

---



RIDGEWOOD ENERGY S FUND, LLCSTATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)

|                                                |  |                         |        |      |   |        |  
|----------------------------------------------- |  | ----------------------- | ------ | ---- | - | ------ | -
|                                                |  | Year ended December 31, |       
|                                                |  | 2008                    |        | 2007 |  
|                                                |  |                         |        |      |  
|Revenue                                         |  |                         |        |      |   |        |  
|Oil and gas revenue                             |  | $                       | 19,032 |      | $ | 3,085  |  
|                                               
|Expenses                                        |  |                         |        |      |   |        |  
|Depletion and amortization                      |  |                         | 4,937  |      |   | 1,898  |  
|Impairment of proved properties                 |  |                         | 3,407  |      |   |       |  
|Dry-hole costs                                  |  |                         | 3,193  |      |   | 2,450  |  
|Management fees to affiliate (Note 6)           |  |                         | 2,356  |      |   | 2,424  |  
|Operating expenses                              |  |                         | 664    |      |   | 415    |  
|General and administrative expenses             |  |                         | 553    |      |   | 1,209  |  
|                                                |  |                         |        |      |   |        |  
|Total expenses                                  |  |                         | 15,110 |      |   | 8,396  |  
|                                                |  |                         |        |      |   |        |  
|                                               
|Income (loss) from operations                   |  |                         | 3,922  |      |   | (5,311 | )
|                                                |  |                         |        |      |   |        |  
|Other income                                    |  |                         |        |      |   |        |  
|Interest income                                 |  |                         | 926    |      |   | 3,099  |  
|Realized gain on sale of marketable
 securities |  |                         | 325    |      |   |       |  
|                                                |  |                         |        |      |   |        |  
|Total other income                              |  |                         | 1,251  |      |   | 3,099  |  
|                                                |  |                         |        |      |   |        |  
|                                               
|Net income (loss)                               |  |                         | 5,173  |      |   | (2,212 | )
|                                                |  |                         |        |      |   |        |  
|Other comprehensive income                      |  |                         |        |      |   |        |  
|Unrealized gain on marketable securities        |  |                         | 487    |      |   |       |  
|                                                |  |                         |        |      |   |        |  
|                                                |  |                         |        |      |   |        |  
|Total comprehensive income (loss)               |  | $                       | 5,660  |      | $ | (2,212 | )
|                                                |  |                         |        |      |   |        |  
|                                                |  |                         |        |      |   |        |  
|Manager Interest                                |  |                         |        |      |   |        |  
|Net income (loss)                               |  | $                       | 2,232  |      | $ | (98    | )
|                                                |  |                         |        |      |   |        |  
|Shareholder
 Interest                           |  |                         |        |      |   |        |  
|Net income (loss)                               |  | $                       | 2,941  |      | $ | (2,114 | )
|Net income (loss) per share                     |  | $                       | 3,503  |      | $ | (2,518 | )

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

F-4

---



RIDGEWOOD ENERGY S FUND, LLCSTATEMENTS OF CHANGES IN MEMBERS CAPITAL
(in thousands, except share data)

|                                       |  |             |          |         |   |              |   |                              |         |       |   |     |  |   |         |  
|-------------------------------------- |  | ----------- | -------- | ------- | - | ------------ | - | ---------------------------- | ------- | ----- | - | --- |  | - | ------- | -
|                                       |  | # of Shares |          | Manager |   | Shareholders |   | Other
 Comprehensive
 Income |         | Total |  
|                                       |  |             |          |         |   |              |   |                              |         |       |  
|                                      
|Balances, December 31, 2006            |  |             | 839.5395 |         | $ | (675         | ) | $                            | 78,432  |       | $ |    |  | $ | 77,757  |  
|                                      
|Syndication costs                      |  |             |         |         |   |             |   |                              | 1       |       |   |    |  |   | 1       |  
|Distributions                          |  |             |         |         |   | (120         | ) |                              | (679    | )     |   |    |  |   | (799    | )
|Collection of subscriptions receivable |  |             |         |         |   |             |   |                              | 60      |       |   |    |  |   | 60      |  
|Net loss                               |  |             |         |         |   | (98          | ) |                              | (2,114  | )     |   |    |  |   | (2,212  | )
|                                       |  |             |          |         |   |              |   |                              |         |       |   |     |  |   |         |  
|Balances, December 31, 2007            |  |             | 839.5395 |         |   | (893         | ) |                              | 75,700  |       |   |    |  |   | 74,807  |  
|                                      
|Distributions                          |  |             |         |         |   | (2,341       | ) |                              | (13,268 | )     |   |    |  |   | (15,609 | )
|Net income                             |  |             |         |         |   | 2,232        |   |                              | 2,941   |       |   |    |  |   | 5,173   |  
|Other comprehensive income             |  |             |         |         |   |             |   |                              |        |       |   | 487 |  |   | 487     |  
|                                       |  |             |          |         |   |              |   |                              |         |       |   |     |  |   |         |  
|Balances, December 31, 2008            |  |             | 839.5395 |         | $ | (1,002       | ) | $                            | 65,373  |       | $ | 487 |  | $ | 64,858  |  
|                                       |  |             |          |         |   |              |   |                              |         |       |   |     |  |   |         |  

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

F-5

---



RIDGEWOOD ENERGY S FUND, LLCSTATEMENTS OF CASH FLOWS
(in thousands)

|                                                                                                    |  |                         |         |      |   |         |  
|--------------------------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- | -
|                                                                                                    |  | Year ended December 31, |        
|                                                                                                    |  | 2008                    |         | 2007 |  
|                                                                                                    |  |                         |         |      |  
|                                                                                                    |  |                         |         |      |   |         |  
|Cash flows from operating activities:                                                               |  |                         |         |      |   |         |  
|Net income (loss)                                                                                   |  | $                       | 5,173   |      | $ | (2,212  | )
|Adjustments to reconcile net income (loss) to net cash provided by
 (used in) operating activities: |  |                         |         |      |   |         |  
|Depletion and amortization                                                                          |  |                         | 4,937   |      |   | 1,898   |  
|Impairment of proved properties                                                                     |  |                         | 3,407   |      |   |        |  
|Dry-hole costs                                                                                      |  |                         | 3,193   |      |   | 2,450   |  
|Accretion expense                                                                                   |  |                         | 12      |      |   | 3       |  
|Realized gain on marketable securities                                                              |  |                         | (325    | )    |   |        |  
|Interest earned on marketable securities                                                            |  |                         | (500    | )    |   | (1,629  | )
|Amortization of premium on investment                                                               |  |                         | 146     |      |   |        |  
|Changes in assets and liabilities:                                                                  |  |                         |         |      |   |         |  
|Increase in production receivable                                                                   |  |                         | (92     | )    |   | (893    | )
|Increase in other current assets                                                                    |  |                         | (50     | )    |   | (102    | )
|Increase in due to operator                                                                         |  |                         | 62      |      |   | 54      |  
|(Decrease) increase in accrued expenses                                                             |  |                         | (110    | )    |   | 58      |  
|                                                                                                    |  |                         |         |      |   |         |  
|Net
 cash provided by (used in) operating activities                                                |  |                         | 15,853  |      |   | (373    | )
|                                                                                                    |  |                         |         |      |   |         |  
|                                                                                                    |  |                         |         |      |   |         |  
|Cash flows from investing activities:                                                               |  |                         |         |      |   |         |  
|Capital expenditures for oil and gas properties                                                     |  |                         | (18,848 | )    |   | (39,384 | )
|Proceeds from the maturity of held-to-maturity investments                                          |  |                         | 27,386  |      |   | 68,698  |  
|Proceeds from sale of available-for-sale investments                                                |  |                         | 10,001  |      |   |        |  
|Investment in held-to-maturity securities                                                           |  |                         | (10,001 | )    |   | (50,931 | )
|Investment in available-for-sale securities                                                         |  |                         |        |      |   | (19,963 | )
|Interest reinvested in salvage fund                                                                 |  |                         | (32     | )    |   | (51     | )
|                                                                                                    |  |                         |         |      |   |         |  
|Net
 cash provided by (used in) investing activities                                                |  |                         | 8,506   |      |   | (41,631 | )
|                                                                                                    |  |                         |         |      |   |         |  
|                                                                                                    |  |                         |         |      |   |         |  
|Cash flows from financing activities:                                                               |  |                         |         |      |   |         |  
|Distributions                                                                                       |  |                         | (15,609 | )    |   | (799    | )
|Contributions from shareholders                                                                     |  |                         |        |      |   | 60      |  
|Syndication costs paid                                                                              |  |                         |        |      |   | (11     | )
|                                                                                                    |  |                         |         |      |   |         |  
|Net
 cash used in financing activities                                                              |  |                         | (15,609 | )    |   | (750    | )
|                                                                                                    |  |                         |         |      |   |         |  
|                                                                                                    |  |                         |         |      |   |         |  
|Net
 increase (decrease) in cash and cash equivalents                                               |  |                         | 8,750   |      |   | (42,754 | )
|                                                                                                    |  |                         |         |      |   |         |  
|Cash
 and cash equivalents, beginning of year                                                       |  |                         | 7,296   |      |   | 50,050  |  
|                                                                                                    |  |                         |         |      |   |         |  
|Cash
 and cash equivalents, end of year                                                             |  | $                       | 16,046  |      | $ | 7,296   |  
|                                                                                                    |  |                         |         |      |   |         |  

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

F-6

---



RIDGEWOOD ENERGY S FUND, LLCNOTES TO FINANCIAL STATEMENTS

1. Organization and
Purpose

The
Ridgewood Energy S Fund, LLC (the Fund), a Delaware limited liability
company, was formed on December 19, 2005 and operates pursuant to a limited
liability company agreement (the LLC Agreement) dated as of February 1, 2006
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.
During 2007, the Fund began earning revenue and as a result was
determined by the Manager to no longer be an exploratory stage enterprise.

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 outside 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

Use of Estimates The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (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 property balances, determination of
proved reserves, impairments and asset retirement obligations. Actual results may differ from those
estimates.

Cash and Cash EquivalentsAll
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 December 31, 2008 bank
balances exceeded federally insured limits by $15.6 million, all of which was
invested in money market accounts that invest solely in U.S. Treasury bills and
notes. Effective October 2008 through
December 31, 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.

Investments in Marketable
SecuritiesAt
times the Fund may invest in U.S. Treasury bills and notes. These investments
are considered short-term when their maturities are greater than three months
and one year or less, and long-term when their maturities are greater than one
year. 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. At December 31, 2008 the Fund had no short-term,
held-to-maturity investments. At
December 31, 2007, the Fund had short-term, held-to-maturity investments
totaling $17.0 million.

F-7

---



The
Fund currently has long-term investments, which mature in December 2010, that
are classified as available-for-sale.
Available-for-sale securities are carried in the financial statements at
fair value. In March 2008, the Fund
sold a portion of its available-for-sale investment in U.S. Treasury notes,
which were purchased in December 2007.
Gross proceeds from the sale totaled $10.0 million, which included
interest income of $0.1 million and a gross realized gain on investment of $0.3
million. The following table is a
summary of long-term, available-for-sale investments at December 31, 2008 and
2007:

|                    |  |                |        |                        |   |            |  |   |        | 
|------------------- |  | -------------- | ------ | ---------------------- | - | ---------- |  | - | ------ | 
|                    |  | Amortized Cost |        | Gross Unrealized Gains |   | Fair Value | 
|                    |  |                |        |                        |   |            | 
|                    |  | (in thousands) |       
|Available-for-Sale  |  |                |        |                        |   |            |  |   |        | 
|U.S. Treasury notes |  |                |        |                        |   |            |  |   |        | 
|December 31, 2008   |  | $              | 10,256 |                        | $ | 487        |  | $ | 10,743 | 
|                    |  |                |        |                        |   |            |  |   |        | 
|                    |  |                |        |                        |   |            |  |   |        | 
|December 31, 2007   |  | $              | 19,963 |                        | $ |           |  | $ | 19,963 | 
|                    |  |                |        |                        |   |            |  |   |        | 

For
all investments, interest income is accrued as earned and amortization of premium
or discount, if any, is included in interest income. Unrealized gains or losses on available-for-sale securities are
reported in other comprehensive income until realized.

Salvage FundThe
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
December 31, 2008, the Fund had a held-to-maturity investment within its
salvage fund totaling $1.1 million, which matures in December 2012.

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 PropertiesThe
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
unit-of-production method.

As
of December 31, 2008 and 2007, amounts recorded in due to operators totaling
$2.5 million and $7.3 million respectively, related to capital expenditures for
oil and gas properties.

Advances to Operators for Working Interests
and ExpendituresThe
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 may be required to advance its
share of estimated cash expenditures for the succeeding months operation. The Fund accounts for such payments as
advances to operators for working interests and expenditures. As drilling costs are incurred, the advances
are reclassified to unproved properties.

Asset Retirement ObligationsFor
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 years
ended December 31, 2008 and 2007.

F-8

---



|                                 |  |                |       |      |   |     | 
|-------------------------------- |  | -------------- | ----- | ---- | - | --- | 
|                                 |  | December 31,   |      
|                                 |  | 2008           |       | 2007 |  
|                                 |  |                |       |      |  
|                                 |  | (in thousands) |      
|Balance, beginning of
 period    |  | $              | 131   |      | $ |    | 
|Liabilities incurred             |  |                | 1,183 |      |   | 128 | 
|Liabilities settled              |  |                |      |      |   |    | 
|Accretion expense                |  |                | 12    |      |   | 3   | 
|Revisions to previous
 estimates |  |                | 65    |      |   |    | 
|                                 |  |                |       |      |  
|Balance, end of period           |  | $              | 1,391 |      | $ | 131 | 
|                                 |  |                |       |      |  

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.

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
underproduced 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. At December 31, 2008 and 2007, 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 December 31, 2008, the Fund recorded
impairments to proved properties of $3.4 million, relating to Vermilion 344,
due to increased project costs, lower oil and gas commodity prices and a
reduction in the Funds estimates of proved oil and gas reserves. See additional
discussion in Item 1. Business.

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
wells. 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.

F-9

---



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

3. Recent Accounting
Standards In
December 2008, the Securities and Exchange Commission (SEC) announced final
approval of new requirements for reporting oil and gas reserves. 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 new rule is expected to
be effective for fiscal years ending on or after December 31, 2009. The Fund has not yet evaluated the effects
of these new requirements on its financial statements and disclosures.

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

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities (SFAS No. 159), which permits
entities to measure many financial instruments and certain other items at fair
value that are not currently required to be measured at fair value. An entity
would report unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting date. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex
hedge accounting provisions. The decision about whether to elect the fair value
option (i) is applied instrument by instrument, with a few exceptions; (ii) is
irrevocable; and (iii) is applied only to entire instruments and not to
portions of instruments. The statement requires disclosures that facilitate
comparisons (a) between entities that choose different measurement attributes
for similar assets and liabilities and (b) between assets and liabilities in
the financial statements of an entity that selects different measurement
attributes for similar assets and liabilities. SFAS No. 159 was effective for
financial statements issued for fiscal years beginning after November 15,
2007. The Fund did not elect to measure
existing assets and liabilities at fair value on the date of adoption.

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

4. Unproved
Properties - Capitalized Exploratory Well Costs

Leasehold
acquisition and exploratory drilling costs are capitalized pending
determination of whether the well has found proved reserves. Unproved properties are assessed on a
quarterly basis by evaluating and monitoring if sufficient progress is made on
assessing reserves. As of December 31,
2008 the Fund had one property, South Marsh Island 111, with capitalized costs
greater than one year. South Marsh
Island 111 was determined to be successful, and production facilities were
completed during the fourth quarter of 2008, with production commencing during
the first quarter of 2009.

F-10

---



The
following table reflects the net changes in unproved properties for years ended
December 31, 2008 and 2007.

|                                                                                              |  |                |         |      |   |         |  
|--------------------------------------------------------------------------------------------- |  | -------------- | ------- | ---- | - | ------- | -
|                                                                                              |  | 2008           |         | 2007 |  
|                                                                                              |  |                |         |      |  
|                                                                                              |  | (in thousands) |        
|Balance, January 1,                                                                           |  | $              | 11,215  |      | $ | 641     |  
|Additions to capitalized exploratory well costs pending the
 determination of proved reserves |  |                | 7,380   |      |   | 37,165  |  
|Reclassifications to proved properties based on the determination of
 proved reserves         |  |                | (13,755 | )    |   | (26,591 | )
|Capitalized exploratory well costs charged to dry-hole costs                                  |  |                |        |      |   |        |  
|                                                                                              |  |                |         |      |   |         |  
|Balance, December 31,                                                                         |  | $              | 4,840   |      | $ | 11,215  |  
|                                                                                              |  |                |         |      |   |         |  

Capitalized
exploratory well costs are expensed as dry-hole costs in the event that
reserves are not found or are not in sufficient quantities to complete the well
and develop the field. During the years
ended December 31, 2008 and 2007, the Fund received credits on certain wells
from their respective operators upon review and audit of the wells costs. Dry-hole costs, inclusive of credits and
plug and abandonment expenses, are detailed in the table below.

|                     |  |                         |       |      |   |       | 
|-------------------- |  | ----------------------- | ----- | ---- | - | ----- | 
|                     |  | Year ended December 31, |      
|Lease
 Block         |  | 2008                    |       | 2007 |  
|                     |  |                         |       |      |  
|                     |  | (in thousands)          |      
|Ruby Project         |  | $                       | 3,464 |      | $ |      | 
|Ship Shoal 81        |  |                         | 23    |      |   | 1,581 | 
|Viosca Knoll 207     |  |                         | (293  | )    |   | 308   | 
|Garden Banks 346/390 |  |                         | (1    | )    |   | 561   | 
|                     |  |                         |       |      |  
|                     |  | $                       | 3,193 |      | $ | 2,450 | 
|                     |  |                         |       |      |  

5. Distributions

Distributions
to shareholders are allocated in proportion to the number of shares held. Certain shares have early investment
incentive and advance distribution rights, as defined in the Funds LLC Agreement,
which range from approximately $8 thousand to $12 thousand per share.

The
Manager determines whether available cash from operations, as defined in the
Funds LLC Agreement, is to be distributed.
Such distributions are allocated 85% to the shareholders and 15% to the
Manager, as required by the LLC Agreement.

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

The
Fund began making distributions to eligible early investors in September 2007
and to all investors in May 2008.
During the year ended December 31, 2008, Manager and shareholders
distributions totaled $2.3 million and $13.3 million, respectively. During the
year ended December 31, 2007, Manager and shareholders distributions totaled
$0.1 million and $0.7 million, respectively.

6. Related Parties

The
LLC Agreement provides that the Manager render management, administrative and
advisory services. For such services,
the Manager is paid an annual management fee, payable monthly, of 2.5% of total
capital contributions, net of cumulative dry-hole and related well costs
incurred by the Fund. Management fees
for each of the years ended December 31, 2008 and 2007 were $2.4 million.

At
times, short-term payables and receivables, which do not bear interest, arise
from transactions with affiliates in the ordinary course of business. At December 31, 2008 there were no such
amounts outstanding. At December 31,
2007 the Manager owed the Fund $18 thousand, which was classified as other
current assets.

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.

F-11

---



7. Fair Value of
Financial Instruments

At
December 31, 2008 and 2007, cash and cash equivalents, short-term investments
in marketable securities, production receivable, salvage fund and accrued
expenses approximate fair value due to their short-term nature. At December 31, 2008 and 2007,
available-for-sale investments are recorded at fair value based on Level 1
inputs  quoted prices in active markets.

8. Commitments and
Contingencies

Capital CommitmentsThe
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 December 31, 2008, the Fund had committed to
spend an additional $21.8 million 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 the
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 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 December 31, 2008
and 2007, there were no known environmental contingencies that required the
Fund to record a liability.

Insurance Coverage The
Fund is subject to all risks inherent in the exploration for and development of
oil and gas. Insurance coverage as is customary for entities engaged in similar
operations is maintained, but losses may occur from uninsurable risks or
amounts in excess of existing insurance coverage. The occurrence of an event
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.

Suspension of MMS Royalty Relief Under
MMS rules, the Fund is eligible for annual royalty relief provided that the
average New York Mercantile Exchange (NYMEX) sales price for shallow water, deep
gas does not exceed price thresholds established by the MMS, which were
published during the first quarter of 2009. Rising prices early in 2008 created
uncertainty as to whether West Cameron 75 would be eligible for the royalty
relief and accordingly, the Fund previously disclosed this contingency.
Ultimately, however, the NYMEX sales price did not exceed the price thresholds
established by the MMS and the Fund had no obligation to pay royalties for
those properties which qualify for royalty relief.

F-12

---



Ridgewood Energy S Fund, LLCSupplementary Financial Information 
Information about Oil and Gas Producing Activities -Unaudited

In
accordance with Statement of Financial Accounting Standards No. 69,
Disclosures about Oil and Gas Producing Activities, this section provides
supplemental information on oil and gas exploration and producing activities of
the Fund. The Fund is engaged solely in
oil and gas activities, all of which are currently located in the United States
offshore waters of Louisiana in the Gulf of Mexico.

Table I - Capitalized Costs Relating to Oil and Gas Producing
Activities

|                                        |  |                |         |      |   |        |  
|--------------------------------------- |  | -------------- | ------- | ---- | - | ------ | -
|                                        |  | December 31,   |        
|                                        |  | 2008           |         | 2007 |  
|                                        |  |                |         |      |  
|                                        |  | (in thousands) |        
|Unproved properties                     |  | $              | 4,840   |      | $ | 11,215 |  
|Proved properties                       |  |                | 45,173  |      |   | 26,720 |  
|                                        |  |                |         |      |  
|Total oil and gas properties            |  |                | 50,013  |      |   | 37,935 |  
|Accumulated depletion and
 amortization |  |                | (10,242 | )    |   | (1,898 | )
|                                        |  |                |         |      |  
|Oil and gas properties, net             |  | $              | 39,771  |      | $ | 36,037 |  
|                                        |  |                |         |      |  

Table II - Costs Incurred in Oil and Gas Property
Acquisition, Exploration, and Development Activities

|                                          |  |                         |                |      |   |        | 
|----------------------------------------- |  | ----------------------- | -------------- | ---- | - | ------ | 
|                                          |  | Year ended December 31, |               
|                                          |  | 2008                    |                | 2007 |  
|                                          |  |                         |                |      |  
|                                          |  |                         | (in thousands) |     
|Exploratory drilling costs
 - capitalized |  | $                       | 6,289          |      | $ | 37,166 | 
|Development drilling
 costs-capitalized   |  |                         | 5,789          |      |   |       | 
|Exploratory drilling costs
 - expensed    |  |                         | 3,193          |      |   | 2,450  | 
|Geological costs                          |  |                         | 37             |      |   | 308    | 
|                                          |  |                         |                |      |   |        | 
|                                          |  | $                       | 15,308         |      | $ | 39,924 | 
|                                          |  |                         |                |      |   |        | 

Table III - Reserve Quantity Information

Oil
and gas reserves of the Fund have been estimated by an independent petroleum
engineer, Ryder Scott Company, L.P. for the years ended December 31, 2008 and
2007. These reserve disclosures have been prepared in compliance with the
Securities and Exchange Commission rules. Due to inherent uncertainties and the
limited nature of recovery data, estimates of reserve information are subject
to change as additional information becomes available.

|                                |  |                   |         |                   |  |            |   |           |        |   |  |            |  
|------------------------------- |  | ----------------- | ------- | ----------------- |  | ---------- | - | --------- | ------ | - |  | ---------- | -
|                                |  | December 31, 2008 |         | December 31, 2007 | 
|                                |  |                   |         |                   | 
|                                |  | United States     |        
|                                |  | Oil (BBLS)        |         | Gas (MCF)         |  | Oil (BBLS) |   | Gas (MCF) |       
|                                |  |                   |         |                   |  |            |   |           |       
|                                |  |                   |         |                   |  |            |   |           |        |   |  |            |  
|Proved
 developed reserves:     |  |                   |         |                   |  |            |   |           |        |   |  |            |  
|Beginning of year               |  |                   | 42,866  |                   |  | 14,988,700 |   |           |       |   |  |           |  
|Discoveries                     |  |                   | 140,244 |                   |  | 1,332,561  |   |           | 52,354 |   |  | 15,275,126 |  
|Revisions of previous estimates |  |                   | 12,017  |                   |  | (2,299,630 | ) |           |       |   |  |           |  
|Production                      |  |                   | (25,173 | )                 |  | (1,716,654 | ) |           | (9,488 | ) |  | (286,426   | )
|                                |  |                   |         |                   |  |            |   |           |        |   |  |            |  
|End of year                     |  |                   | 169,954 |                   |  | 12,304,977 |   |           | 42,866 |   |  | 14,988,700 |  
|                                |  |                   |         |                   |  |            |   |           |        |   |  |            |  

F-13

---



Table IV - Standardized Measure of Discounted Future Net Cash
Flows Relating to Proved Oil and Gas Reserve Quantities

Summarized
in the following table is information for the Fund with respect to the
standardized measure of discounted future net cash flows relating to proved oil
and gas reserves. Future cash inflows
are computed by applying year-end prices of oil and gas relating to the Funds proved
reserves to the year-end quantities of those reserves. Future production and development costs are
derived based on current costs assuming continuation of existing economic
conditions.

|                                                                    |  |              |                |      |   |         |  
|------------------------------------------------------------------- |  | ------------ | -------------- | ---- | - | ------- | -
|                                                                    |  | December 31, |               
|                                                                    |  | 2008         |                | 2007 |  
|                                                                    |  |              |                |      |  
|                                                                    |  |              | (in thousands) |     
|Future estimated revenues                                           |  | $            | 78,334         |      | $ | 101,115 |  
|Future estimated production
 costs                                  |  |              | (4,606         | )    |   | (3,370  | )
|Future estimated
 development costs                                 |  |              | (2,325         | )    |   | (1,294  | )
|                                                                    |  |              |                |      |   |         |  
|Future net cash flows                                               |  |              | 71,403         |      |   | 96,451  |  
|10% annual discount for
 estimated timing of cash flows             |  |              | (17,889        | )    |   | (32,989 | )
|                                                                    |  |              |                |      |   |         |  
|Standardized measure of
 discounted future estimated net cash flows |  | $            | 53,514         |      | $ | 63,462  |  
|                                                                    |  |              |                |      |   |         |  

Table V - Changes in the Standardized Measure of Discounted
Future Net Cash Flows Relating to Proved Oil and Gas Reserve Quantities

The
changes in present values between years, which can be significant, reflect
changes in estimated proved reserve quantities and prices and assumptions used
in forecasting production volumes and costs.

|                                                                                   |  |                         |         |      |   |        |  
|---------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------ | -
|                                                                                   |  | Year ended December 31, |        
|                                                                                   |  | 2008                    |         | 2007 |  
|                                                                                   |  |                         |         |      |  
|                                                                                   |  | (in thousands)          |        
|Standardized measure beginning of the year                                         |  | $                       | 63,462  |      | $ |       |  
|Sales of oil and gas production, net of production costs                           |  |                         | (18,422 | )    |   | (2,981 | )
|Net changes in prices and production costs                                         |  |                         | (411    | )    |   |       |  
|Extensions, discoveries, and improved recovery and techniques, less
 related costs |  |                         | 10,126  |      |   | 65,612 |  
|Development costs incurred during the period                                       |  |                         |        |      |   |       |  
|Revisions of previous reserve quantities estimate                                  |  |                         | (8,795  | )    |   |       |  
|Accretion of discount                                                              |  |                         | 6,346   |      |   | 831    |  
|Timing and other                                                                   |  |                         | 1,208   |      |   |       |  
|                                                                                   |  |                         |         |      |   |        |  
|Standardized measure end of the year                                               |  | $                       | 53,514  |      | $ | 63,462 |  
|                                                                                   |  |                         |         |      |   |        |  

It
is necessary to emphasize that the data presented should not be viewed as
representing the expected cash flow from, or current value of, existing proved
reserves as the computations are based on a number of estimates. Reserve quantities cannot be measured with
precision and their estimation requires many judgmental determinations and
frequent revisions. The required
projection of production and related expenditures over time requires further
estimates with respect to pipeline availability, rates and governmental
control. Actual future prices and costs
are likely to be substantially different from the current price and cost estimates
utilized in the computation of reported amounts. Any analysis or evaluation of the reported amounts should give
specific recognition to the computational methods utilized and the limitation
inherent therein.

F-14

---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

|                     |                               |                                       
|-------------------- | ----------------------------- | --------------------------------------
|                     | RIDGEWOOD
 ENERGY S FUND, LLC
|                     |                               |                                       
|                     |                               |                                       
|Date: March 26, 2009 | By:                           | /s/ ROBERT E. SWANSON                 
|                     |                               |                                       
|                     |                               | Robert E. Swanson                     
|                     |                               | President and Chief
 Executive Officer
|                     |                               | (Principal Executive
 Officer)        

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|                              |  |                                                                                      |  |                      
|----------------------------- |  | ------------------------------------------------------------------------------------ |  | ---------------------
|Signature                     |  | Capacity                                                                             |  | Date                 
|                              |  |                                                                                      |  |                      
|                              |  |                                                                                      |  |                      
|/s/ ROBERT E. SWANSON         |  | President and Chief
 Executive Officer
 (Principal Executive Officer)                |  | Date:
 March 26, 2009
|                              |  |                                                                                      | 
|Robert E. Swanson             |  |                                                                                      | 
|                              |  |                                                                                      |  |                      
|/s/ KATHLEEN P. McSHERRY      |  | Executive Vice President
 and Chief Financial Officer (Principal Accounting Officer) |  | Date:
 March 26, 2009
|                              |  |                                                                                     
|Kathleen P. McSherry          |  |                                                                                      |  |                      
|                              |  |                                                                                      |  |                      
|RIDGEWOOD
 ENERGY CORPORATION |  |                                                                                     
|                              |  |                                                                                      |  |                      
|/s/ ROBERT E. SWANSON         |  | Chief Executive Officer of
 Manager                                                  |  | Date:
 March 26, 2009
|                              |  |                                                                                      |  |                      
|Robert E. Swanson             |  |                                                                                      |  |                      

---