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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, 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, 2007    

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
 incorporation or organization) |  | (I.R.S.
 Employer
 Identification No.)

1314 King Street, Wilmington, Delaware 19801(Address of principal
executive offices) (Zip code)

(302) 888-7444(Registrants
telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Shares of LLC Membership Interest

Indicate by check mark 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. As of March 14, 2008 there are 839.5395 Shares outstanding.

---



RIDGEWOOD ENERGY S FUND, LLC 
2007 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

|         |         |                                                                                                                     |  |     
|-------- | ------- | ------------------------------------------------------------------------------------------------------------------- |  | ----
|         |         |                                                                                                                     |  | PAGE
|         |         |                                                                                                                     |  |     
|PART I   |         |                                                                                                                     |  |     
|         | ITEM 1  | BUSINESS                                                                                                            |  | 4   
|         | ITEM 1A | RISK
 FACTORS                                                                                                       |  | 10  
|         | ITEM 1B | UNRESOLVED
 STAFF COMMENTS                                                                                          |  | 10  
|         | 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 SECURITY HOLDER MATTERS, AND ISSUER
 PURCHASES OF EQUITY SECURITIES |  | 11  
|         | 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                                                                                                  |  | 18  
|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 SECURITY
 HOLDER MATTERS                |  | 20  
|         | ITEM 13 | CERTAIN
 RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                           |  | 21  
|         | ITEM 14 | PRINCIPAL
 ACCOUNTANT FEES AND SERVICES                                                                             |  | 21  
|PART IV  |         |                                                                                                                     |  |     
|         | ITEM 15 | EXHIBITS
 AND FINANCIAL STATEMENT SCHEDULES                                                                         |  | 21  

2

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FORWARD-LOOKING STATEMENTS

Certain statements in this
Annual Report on Form 10-K (Annual Report) of the Ridgewood
Energy S Fund, LLC (the Fund) and
the documents that are
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 within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, as amended (the
Securities Act) and Section 21E of the Securities Exchange Act of 1934
(the Exchange Act). These forward-looking statements generally are identified
by the words believe, project, expect, anticipate, estimate,
intend, strategy, plan, target, pursue, may,
will, would, will
be, will continue, will likely result, and similar expressions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking
statements. Examples of such events that could cause actual results to differ materially from historical
results or those anticipated include weather conditions, such as hurricanes,
changes in market conditions affecting the pricing of oil and 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.

AVAILABLE INFORMATION

The Funds shares of LLC
membership interest (the Shares) are registered under Section 12(g) of the
Exchange Act. The Fund must therefore comply with, among other things, the
periodic reporting requirements of Section 13(a) of the Exchange Act. As a
result, the Fund prepares and files annual reports with the United States
Securities and Exchange Commission (the SEC) on Form 10-K, quarterly reports
on Form 10-Q and, from time to time, current reports on Form 8-K. Moreover,
Ridgewood Energy Corporation (the Manager) maintains a website at
http://www.ridgewoodenergy.com that contains important information about the
Manager, including biographies of key management personnel, as well as
information about the oil and natural gas investments made by the Fund and the
other investment programs managed by the Manager. Such information includes,
without limitation, a map of the Gulf of Mexico that provides the location of
every well and project managed by the Manager along with information as to
whether the project is exploratory, drilling or producing. This information is
publicly available (i.e., not password protected) and is updated regularly.

REPORTS TO SHAREHOLDERS

The Fund does not anticipate
providing annual reports to shareholders but will make available, upon request,
copies of the Funds periodic reports filed with the SEC on Form 10-K and on
Form 10-Q.

WHERE YOU CAN GET MORE INFORMATION

The Fund files annual,
quarterly and current reports and certain other information with the SEC.
Persons may read and copy any documents the Fund files at the SECs public
reference room at 100 F Street, NE, Washington D.C. 20549. Information may be
obtained 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. A copy of any such filings will be provided free of charge
to any shareholder upon written request to the Fund at its business address 947
Linwood Avenue, Ridgewood, New Jersey 07450, ATTN: General Counsel.

3

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PART I

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

Overview

Ridgewood Energy S Fund, LLC
(the Fund) is a Delaware limited liability company and was formed on December
19, 2005 to acquire interests primarily in oil and natural gas projects located
in the U.S. waters of the Gulf of Mexico. Ridgewood Energy Corporation
(Ridgewood Energy or the Manager), a Delaware corporation, is the Manager.
As the Manager, Ridgewood Energy has direct and exclusive control over the
management and control of Fund operations.

The Fund initiated its
private placement offering on February 1, 2006, selling whole and fractional
shares of membership interests (the Shares) primarily at $150 thousand per
share. There is no public market for these shares and one is not likely to
develop. In addition, the shares are subject to severe 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 offering was terminated on June 12,
2006. The Fund raised $124.4 million, and after payments totaling $19.9 million
in offering fees, commissions and investment fees, the Fund had $104.5 million
for investments and operating expenses. As of March 14, 2008, the Fund had
approximately 1,300 shareholders.

Manager

Ridgewood Energy was founded
in 1982 by Robert E. Swanson. As the Manager, Ridgewood Energy has direct and
exclusive control over the management of the Funds operations. With respect to
project investment, Ridgewood Energy locates potential projects, conducts
appropriate due diligence and negotiates and completes the transactions in
which the investments are made. This includes not only review of existing title
documents, reserve information, and other technical specifications regarding a
project, but also the review and preparation of participation agreements and
other agreements relating to an investment.

In addition, Ridgewood
Energy performs (or arranges for the performance of) the management and
administrative services required for Fund operations. Among other services,
Ridgewood Energy administers the accounts and handles relations with the
shareholders, including tax and other financial information. In addition,
Ridgewood Energy provides the Fund with office space, equipment and facilities
and other services necessary for its operation. Finally, Ridgewood Energy
manages and conducts the Funds relations with custodians, depositories,
accountants, attorneys, broker-dealers, corporate fiduciaries, insurers, banks
and others, as required.

The Fund is required to pay
all other expenses it incurs, including expenses of preparing and printing
periodic reports for shareholders and the United States Securities and Exchange
Commission (the SEC), commission fees, taxes, outside legal, accounting and
consulting fees, litigation expenses and other expenses, if any, properly
payable by the Fund. The Fund is required to reimburse the Manager for all such
Fund expenses paid by them.

As compensation for their
management services, the Manager is entitled to an annual management fee, which
is equal to 2.5% of the total shareholder capital contributions, net of
cumulative dry-hole expenses incurred by the Fund, payable monthly. The Manager
received from the Fund for its management services a total of $2.4 million for
the years ended December 31, 2007 and 2006, respectively. In addition, the
Manager is also entitled to a 15% interest in the cash distributions. For the year ended December 31,
2007, the Manager was paid $0.1 million of cash distributions. There were no
distributions paid to the Manager for the year ended December 31, 2006.

Business Strategy

The Funds primary
investment objective is to generate cash flow from the acquisition,
exploration, production and sale of crude oil and natural gas from oil and
natural gas projects. The Fund has invested and participates in exploration and
production projects located in the waters of the Gulf of Mexico offshore Texas,
Louisiana and Alabama on the Outer Continental Shelf (the OCS). These
activities are governed by the Outer Continental Shelf Lands Act (the OCSLA)
enacted in 1953 and administered by the Mineral Management Services (the
MMS). The Fund generally looks to invest in projects 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 a project. These investments
may require the Fund to pay a disproportionate part of the drilling costs on
the exploratory well of a project than its ownership interest would otherwise
require. This is called a promote and 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 relatively common in this industry.
Notwithstanding any such promote or overriding interest, the Fund has tried to
invest 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.

4

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The Fund tries to focus on
projects that have significant reserve potential and which 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. Moreover, when performing due diligence with respect to a project,
the Fund must rely on the independent reservoir engineers who are hired and
paid, in most cases, by the operator. The Fund does engage certain consultants
to examine and review such reserve estimates and seismic information on its
behalf.

Managers Investment Committee and Investment Criteria

The New Jersey office has
five executives on the investment committee, three of whom have been working
together at Ridgewood Energy for over twenty years. The Houston office, which
opened in 2003, has four executives on the investment committee who provide
operational, scientific and technical oil and gas expertise. In considering
projects, the Manager and investment committee investigates each such project
against a list of factors that it believes will result in the selection of
projects that have the highest probability of success. These factors, in no
particular order, include, but are not limited to, the following (i) targeting
projects that have or are expected to have operators with significant resources
and experience in oil and gas exploration; (ii) targeting projects that have or
are expected to have partners that also have significant resources and
experience in oil and 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 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, as more fully
described in this filing; (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 nine wells, three that were
determined to be dry holes, four that are currently being completed, and two
that have begun production.

|                       |  |                   |  |                        |  |                                         |  |                       |  |                                        |                |        |        |  |  |                                                       
|---------------------- |  | ----------------- |  | ---------------------- |  | --------------------------------------- |  | --------------------- |  | -------------------------------------- | -------------- | ------ | ------ |  |  | ------------------------------------------------------
|Lease Block            |  | Working
 Interest |  | Operator               |  | Off-shore
 Location in
 Gulf of
 Mexico |  | Target
 Depth
 (Feet) |  | Total Spent Through
 December 31, 2007 |                | Status
|                       |  |                   |  |                        |  |                                         |  |                       |  |                                        |                |       
|                       |  |                   |  |                        |  |                                         |  |                       |  |                                        | (in thousands) |        |       
|Sucessful
 projects    |  |                   |  |                        |  |                                         |  |                       |  |                                        |                |        |        |  |  |                                                       
|Vermilion 344 #2       |  | 22.5%             |  | LLOG Exploration       |  | Louisiana                               |  | 8,900                 |  |                                        |                | $      | 2,731  |  |  | Successful
 1Q 2007- production 
 expected 2Q 2008    
|Main Pass 275          |  | 30.0%             |  | McMoRan Exploration    |  | Louisiana                               |  | 11,200                |  |                                        |                | $      | 5,799  |  |  | Successful
 1Q 2007- production 
 began April 2007    
|South Marsh Island 111 |  | 22.5%             |  | LLOG Exploration       |  | Louisiana                               |  | 18,000                |  |                                        |                | $      | 2,644  |  |  | Successful
 3Q 2007 - production 
 expected 2Q 2008   
|West Cameron 75        |  | 20.0%             |  | El Paso Inc.           |  | Louisiana                               |  | 23,800                |  |                                        |                | $      | 20,793 |  |  | Successful
 3Q 2007 - production 
 began December 2007
|West Delta 68          |  | 22.5%             |  | LLOG Exploration       |  | Louisiana                               |  | 14,000                |  |                                        |                | $      | 4,118  |  |  | Successful
 1Q 2007- production 
 expected 2Q 2008    
|West Delta 67          |  | 22.5%             |  | LLOG Exploration       |  | Louisiana                               |  | 14,000                |  |                                        |                | $      | 1,720  |  |  | Successful
 4Q 2007- production 
 expected 2Q 2008    
|Dry holes
 (a)         |  |                   |  |                        |  |                                         |  |                       |  |                                        |                |        |        |  |  |                                                       
|Viosca Knoll 207       |  | 40.0%             |  | Chevron U.S.A. Inc.    |  | Alabama                                 |  | N/A                   |  |                                        |                | $      | 7,154  |  |  | Dry
 - December 2006                                  
|Garden Banks 346/390   |  | 27.0%             |  | Walter Oil & Gas, Inc. |  | Texas                                   |  | N/A                   |  |                                        |                | $      | 20,499 |  |  | Dry
 - March 2007                                     
|Ship Shoal 81          |  | 22.5%             |  | LLOG Exploration       |  | Louisiana                               |  | N/A                   |  |                                        |                | $      | 1,581  |  |  | Dry
 - October 2007                                   

|    |                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Dry-hole
 costs represent wells that have been drilled but do not have commercially
 productive oil and/or natural gas reservoirs and have been plugged and
 abandoned.

Successful Projects

LLOG Projects

In October 2006, the Fund
acquired a working interest in six exploratory wells to be drilled by LLOG
Exploration Company (LLOG) off the coast of Louisiana. During the first
quarter of 2007, the Fund decided not to participate in the Galveston 248
project with LLOG which was no longer economical. On October 15,
2007, the Fund was informed by LLOG that the exploratory
well being drilled by LLOG in the Ship Shoal 81 lease block did not have
commercially productive quantities of either oil or natural gas and has
therefore been deemed an unsuccessful well or dry hole. The Fund owns a 22.5%
working interest in Ship Shoal 81, and has spent $1.6 million on this well
through December 31, 2007.

5

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The remaining four LLOG
wells have been determined successes, are undergoing completion, and production
is expected during the second quarter of 2008. The total budget for these
projects is approximately $21.6 million, of which $11.2 million has been spent
at December 31, 2007.

Main Pass 275

In late 2006 the Fund
acquired a 30% interest in the Main Pass 275 project being drilled by Newfield,
Inc. (Newfield) from an existing production platform. 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 completed in March 2007. The well began production in late
April 2007.

West Cameron 75

In March 2007, the Fund
acquired a 20% working interest in the exploratory project West Cameron 75 from
El Paso E&P Company, LLP (El Paso), the operator. In June 2007, El Paso
notified the Fund that the property was deemed to be a commercial discovery.
The well began production in December 2007.

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.

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.

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. 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 to
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 gas lease under the OCSLA pay a 16.67% royalty to the MMS.
Therefore, the net revenue interest of the holders of 100% of the working
interest in the projects in which the Fund will invest is approximately 83.33%
of the total revenue of the project, and, 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.

Minerals Management Services Deep Natural 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 approximately $10.19 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, the MMS defines
deepwater as depths in excess of 656 feet (200 meters). In order for a lease to
be eligible for royalty relief, 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
short-term 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 such
oil and natural gas. The Manager believes that it is likely that oil and
natural gas from other projects will also have access to pipeline
transportation and can also 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). The Operators are responsible
for drilling, administration and production activities for leases jointly owned
by working interest owners and acts on behalf of all working interest owners
under the terms of the applicable offshore operating agreements. 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 projects are operated by
LLOG, El Paso, and McMoRan.

Because the Fund does not
operate any of the projects in which it has acquired an interest, shareholders
must 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 the 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. These projects are owned by affiliates of the
Fund. 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 become
exhausted and be insufficient to cover a claim made by the Fund in that year.

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, money to
help provide for the Funds proportionate share of the cost of dismantling
production platforms and facilities, plugging and abandoning the projects, and
removing the platforms, facilities and projects in respect of each of such
projects after their useful life, 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 the Fund estimates to be
sufficient to meet its potential requirements. If management later determines
the deposit and earned interest is not enough to cover the Funds proportionate
share of expense, the Fund will deposit payments from operating income to make
up any differences.

7

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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 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.

However, the Funds
drilling, production and transportation operations are subject to seasonal
risks, such as hurricanes, that may affect the Funds ability to bring such oil
or natural gas to the market and, consequently, affect the price for such oil
and natural gas. The National Hurricane Center defines hurricane season in the
Atlantic Region, Caribbean, and Gulf of Mexico to be from June 1 through
November 30. During hurricane season, the number and intensity of and resulting
damage from hurricanes in the Gulf of Mexico region could affect the gathering
and processing infrastructure, drilling platforms or the availability or price
of repair or replacement equipment. As a result, these factors may affect the
supply and, consequently, the price of oil and natural gas resulting in an
increase in price if supplies are reduced. However, even if commodity prices
increase because of weather related shortages, the Fund may not be in a
position to take immediate advantage of any such price increase if, as a result
of such weather related incident, damage occurred to its projects, the
gathering infrastructure or in the transportation network.

The Manager
has had past experiences that indicate the typical interruption in operations
resulting from a hurricane that does not result in significant damage may be
approximately three to seven days. The Manager has experienced the range
of possible interruptions in operations due to hurricanes from as little as no
damage and insignificant or no interruptions to significant damage and extended
interruptions. However, it is impossible to predict whether and to what extent
hurricanes and damage may occur and to what projects.

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 third
parties. Therefore, the Fund had no customers or any one customer upon which
the Fund depends for more than ten percent (10%) of its revenues.

Energy Prices

Historically, the markets for 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. Also, 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 the lease acquisition 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.

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, but 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.

8

---



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 US 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.

Sales and Transportation of Natural Gas/Oil

The Fund sells the Funds
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 the Fund 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 us, 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.

9

---



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 which 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
Operators are responsible for compliance with the Clean Water Act although the
Fund may be liable for any failure of the Operators 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.

Other Environmental Laws

In addition to the above,
the Funds operations may be subject to the Resource Conservation and Recovery Act,
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 (federal,
state and local) will have a material adverse impact on the financial condition
and/or operations of the Fund.

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

Not
required.

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

Not applicable.

10

---



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

The information regarding
the Funds properties that is contained under heading Properties in Item 1.
Business 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.

PART II.

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

Market Price of Common Units, Distributions and Related
Shareholder Matters

There is currently no
established public trading market for the Shares. As of the date of this
filing, there were approximately 1,300 holders of Fund shares. The Fund began
payment of cash dividends to the Fund shareholders and the Manager in September
2007. The Fund may distribute dividends from available cash from operations as
defined in the LLC Agreement. For the year ended December 31, 2007, $0.7
million and $0.1 million have been paid to the Fund shareholders and the
Manager, respectively.

Participation in Costs and Revenues

The Funds investment
objective is primarily to generate current cash flow for distribution to
shareholders from the operation of the Fund projects to the extent that such
distributions are consistent with the reserve requirements and operational
needs of those projects. If the Fund does make distributions, this section
describes how the Fund will:

| |   |                                                                               
| | - | ------------------------------------------------------------------------------
| |  | determine what cash flow
 will be available for distributions to shareholders,
| |   |                                                                               
| |  | distribute available cash
 flow,                                              
| |   |                                                                               
| |  | give the Manager a share
 of cash flow, if available,                         
| |   |                                                                               
| |  | handle returns of capital
 contributions,                                     
| |   |                                                                               
| |  | allocate income and
 deductions for tax purposes, and                         
| |   |                                                                               
| |  | maintain capital accounts
 for shareholders.                                  

Available cash determines
what amounts in cash the Fund will be able to distribute in cash to
shareholders. There are three types of available cash as follows:

Available
Cash from Capital Transactions is total cash received by the Fund from the
proceeds of the sale or other disposition of the Funds property (including
items such as insurance proceeds and other amounts received out of the ordinary
course of business), but excluding dispositions of temporary investments of the
Fund.

Available
Cash from Temporary Investments is cash from short-term investments (i.e. U.S.
Treasury Bills, certificates of deposits) and other interest bearing cash
accounts.

Available Cash from Operations is all other available cash.

There is no fixed
requirement to distribute available cash; instead, it will be distributed to
shareholders to the extent and at such times as the Manager believes is
advisable. Once the amount and timing of a distribution is determined, it shall
be made to shareholders as described below.

Distributions from Operations

At various times during a
calendar year, the Fund will determine whether there is enough available cash
from operations for a distribution to shareholders. The amount of available
cash from operations determined to be available, if any, will be distributed to
the shareholders. At all times, the Manager will be entitled to 15% and
shareholders will be entitled to 85% of the available cash from operations
distributed.

11

---



Distributions of Available Cash from Capital Transactions

Available cash from capital
transactions that the Fund decides to distribute will be paid as follows:

| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Before shareholders have
 received total distributions equal to their capital contributions, 99% of
 available cash from capital transactions will be distributed to shareholders
 and 1% to the Manager.
| |   |                                                                                                                                                                                                          
| |  | After shareholders have
 received total distributions equal to their capital contributions, 85% of
 available cash from capital transactions will be distributed to shareholders
 and 15% to the Manager.

General Distribution Provisions

Distributions to
shareholders under the foregoing provisions will be apportioned among them in
proportion to their ownership of their shares. The Manager has the sole
discretion to determine the amount and frequency of any distributions;
provided, however, that a distribution may not be made selectively to one
shareholder or group of shareholders but must be made ratably to all shareholders
entitled to that type of distribution at that time. The Manager in its
discretion nevertheless may credit select persons with a portion of its
compensation from the Fund or distributions otherwise payable to the Manager.

Because distributions, if any,
will be dependent upon the earnings and financial condition of the Fund, its
anticipated obligations, the Managers discretion and other factors, there can
be no assurance as to the frequency or amounts of any distributions that the
Fund may make.

Return of Capital Contributions

If the Fund for any reason
at any time does not find it necessary or appropriate to retain or expend all
capital contributions, in its sole discretion it may return any or all of such
excess capital contributions ratably to shareholders. A return of capital
contributions is not treated as a distribution. The Fund and the Manager will
not be required to return any fees deducted from the original capital
contribution or any costs and expenses incurred and paid by the Fund. Any such
return of capital will decrease the shareholders capital contributions.

Capital Accounts and Allocations

The tax consequences of an
investment in the Fund to a shareholder in the event of dissolution depend on
the shareholders capital account and on the allocations of profits and losses
to that account. The Funds taxable profits or losses are allocated among the
shareholders as described below and profits or losses are added to or
subtracted from the shareholders capital accounts. The amounts allocated to
each shareholder will generally not be equal to the distributions the
shareholder receives until final liquidating distributions are made to
shareholders.

The Fund does not currently
anticipate that any contributions or distributions of property will be made.
Certain additional adjustments to capital accounts will be made if necessary to
account for the effects of non-recourse debt incurred by the Fund, if any, or
contributions of property, if any, to the Fund.

During the period from
February 1, 2006 until June 12, 2006, the Fund issued an aggregate 839.5395
shares for gross proceeds of $124.4 million. All sales of unregistered
securities relied on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder. All of the sales were made without the use
of an underwriter. All purchasers of Shares represented and warranted to the
Fund that they were accredited investors as defined in Rule 501(a) under the
Securities Act and that the shares were being purchased for investment and not
for resale.

From the amount raised,
$14.2 million was disbursed for commissions and legal syndication fees.
Additionally, $5.6 million was paid as an investment fee to Ridgewood Energy
Corporation, the Manager, for the investigation and evaluation of investment
property prospects. Remaining funds are expected to be used for exploration and
development activities of oil and gas properties as well as the operation of
the Fund.

|        |                         
|------- | ------------------------
|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 Business

The Fund is an independent
oil and natural gas producer. The Funds primary investment objective is to
generate cash flow for distribution to its shareholders through participation
in oil and natural gas exploration and development projects in the Gulf of
Mexico. The Fund began its operations by offering its Shares in a private
offering on February 1, 2006. As a result of such offering, which was
terminated on June 12, 2007, the Fund raised approximately $124.4 million
through the sale of 839.5395 shares of LLC membership interest. After the
payment of approximately $19.9 million in offering fees, commissions and
investment fees to the Manager, affiliates and broker-dealers, the Fund
retained approximately $104.5 million available for investment. Investment fees
represent a one-time fee of 4.5% of initial capital contributions. The fee was
payable for the service of investigating and evaluating investment opportunities
and expensed as incurred. Since inception in December 2005, the Fund has
acquired an interest in nine wells. The Fund was notified by project operators that three of
the projects resulted in dry holes. See also Item 1. Business.

12

---



The Manager performs certain
duties on the Funds behalf including the evaluation of potential projects for
investment and ongoing administrative and advisory services associated with
these projects. The Fund does not currently, nor is there any plan to operate
any project in which the Fund participates. The Manager enters into operating
agreements with third-party operators for the management of all exploration,
development and producing operations, as appropriate. As compensation for the
above duties, the Manager was paid a one-time investment fee (4.5% of capital
raised) for the evaluation of projects on the Funds behalf and an annual
management fee (2.5% of capital contributions, net of cumulative dry-hole costs
incurred), payable monthly, for ongoing administrative and advisory duties as
well as reimbursement of expenses. See also Item 1. Business.

Revenues are
subject to the markets for 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 Estimates

The discussion and analysis
of the Funds financial condition and results of operations are based upon its
financial statements, which have been prepared in conformity with U.S.
generally accepted accounting principles, or 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 the Funds 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 such differences may have a
material impact on the results of operations, financial position, or cash
flows. See Note 2  Summary of Significant Accounting Policies of 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
Costs

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

The costs of exploratory
wells that find oil and gas reserves are capitalized pending determination of
whether proved reserves have been found. Exploratory 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.
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.

Proved Reserves

Annually, the
Fund engages an independent petroleum engineer, Ryder Scott Company, L.P., to perform
a comprehensive study of the Funds proved, or 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 natural gas and oil which 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 revenue 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.

13

---



Unproved Properties

Unproved properties is
comprised of capital costs incurred for undeveloped acreage, wells and
production facilities in progress, wells pending determination and related
capitalized interest. 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. Substantially all
of the costs included in its unproved property balances are evaluated within
two years.

Asset Retirement Obligations

For oil and natural gas
properties, there are obligations to perform removal and remediation activities
when the properties are retired. When a project reaches drilling depth and is
determined to be either proved or dry, a liability is recognized for the fair
value of legally required asset retirement obligations once it can be
reasonably estimated. The Fund capitalizes the associated asset retirement
costs as part of the carrying amount of the long-lived assets. Plug and
abandonment costs associated with unsuccessful projects are expensed as
dry-hole costs.

Impairment of Long-Lived Assets

The Fund reviews long-lived
assets, including oil and natural gas fields, for impairment whenever events or
changes in circumstances indicate that the carrying amounts may not be
recovered. Long-lived assets are tested based on identifiable cash flows (the
field level for oil and natural gas assets) and are largely independent of the
cash flows of other assets and liabilities. If the carrying amounts of the
long-lived assets are not expected to be recovered by undiscounted future net
cash flow estimates, the assets are impaired and an impairment loss is
recorded. The amount of impairment is based on the estimated fair value of the
assets determined by discounting anticipated future net cash flows.

In the case of oil and
natural gas fields, the present value of future net cash flows is based on
managements best estimate of future prices, which is determined with reference
to recent historical prices and published forward prices, applied to projected
production volumes of individual fields and discounted at a rate commensurate
with the risks involved. The projected production volumes represent reserves,
including probable reserves, expected to be produced based on a stipulated
amount of capital expenditures. The production volumes, prices and timing of
production are consistent with internal projections and other externally
reported information. Oil and natural gas prices used for determining asset
impairments will generally differ from those used in the standardized measure
of discounted future net cash flows, since the standardized measure requires
the use of actual prices on the last day of the year.

Results of Operations

The following
table summarizes the Funds results of operations, 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 contained in this
Annual Report. As the Funds inception was December 2005, and as a result of
the private placement offering that commenced shortly thereafter, there were
certain one-time costs incurred in 2006 causing the periods to be
non-comparable regarding these costs.

14

---



|                                    |  |                         |        |      |   |         |  
|----------------------------------- |  | ----------------------- | ------ | ---- | - | ------- | -
|                                    |  | Year Ended December 31, |       
|                                    |  | 2007                    |        | 2006 |  
|                                    |  |                         |        |      |  
|                                    |  | (in thousands)          |       
|Revenue                             |  |                         |        |      |   |         |  
|Oil and gas revenue                 |  | $                       | 3,085  |      | $ |        |  
|                                    |  |                         |        |      |   |         |  
|Expenses                            |  |                         |        |      |   |         |  
|Dry-hole costs                      |  |                         | 2,450  |      |   | 26,783  |  
|Depletion and amortization          |  |                         | 1,898  |      |   |        |  
|Investment fees to affiliate        |  |                         |       |      |   | 5,642   |  
|Management fees to affiliate        |  |                         | 2,424  |      |   | 2,377   |  
|Lease operating expenses            |  |                         | 104    |      |   |        |  
|Other operating expense             |  |                         | 311    |      |   | 11      |  
|General and administrative expenses |  |                         | 1,209  |      |   | 619     |  
|                                    |  |                         |        |      |   |         |  
|Total expenses                      |  |                         | 8,396  |      |   | 35,432  |  
|                                    |  |                         |        |      |   |         |  
|Loss from operations                |  |                         | (5,311 | )    |   | (35,432 | )
|Other income                        |  |                         |        |      |   |         |  
|Interest income                     |  |                         | 3,099  |      |   | 3,085   |  
|                                    |  |                         |        |      |   |         |  
|Net loss                            |  | $                       | (2,212 | )    | $ | (32,347 | )
|                                    |  |                         |        |      |   |         |  

Year Ended December 31, 2007 compared to
Year Ended December 31, 2006

Oil and Gas Revenue. During 2006 and the first three months of
2007, the Fund did not record any operating revenue and was considered an
exploratory stage enterprise. As a result of the onset production for Main Pass
275 and West Cameron 75, which began in April 2007 and December 2007,
respectively, the Fund has recorded revenue of $3.1 million.

Natural gas production
volumes sold were 286 million cubic feet and the average price for the periods
of production was $8.17 per thousand cubic feet. Oil production for the year
ended December 31, 2007 was approximately 9,500 barrels and the average price
was $77 per barrel.

Dry-hole costs. Dry-hole costs are those
costs incurred to drill and develop a well, which is ultimately found to be
incapable of producing either oil or natural gas in sufficient quantities to
justify completion of the well. The following table summarizes dry-hole costs
inclusive of plug and abandonment.

|                     |  |                         |       |      |   |        | 
|-------------------- |  | ----------------------- | ----- | ---- | - | ------ | 
|                     |  | Year ended December 31, |      
|                     |  | 2007                    |       | 2006 |  
|                     |  |                         |       |      |  
|                     |  | (in thousands)          |      
|Lease block          |  |                         |       |      |   |        | 
|                     |  |                         |       |      |   |        | 
|Viosca Knoll 207     |  | $                       | 308   |      | $ | 6,846  | 
|Garden Banks 346/390 |  |                         | 561   |      |   | 19,937 | 
|Ship Shoal 81        |  |                         | 1,581 |      |   |       | 
|                     |  |                         |       |      |   |        | 
|                     |  | $                       | 2,450 |      | $ | 26,783 | 
|                     |  |                         |       |      |   |        | 

Depletion and Amortization. Depletion and amortization was $1.9 million
for the year ended December 31, 2007. There was no depletion and amortization
for the year ended December 31, 2006, as production began for Main Pass 275 in
April 2007 and West Cameron 75 in December 2007.

Investment Fees.The Manager was paid a one time investment
fee of 4.5% of initial capital contributions. The fee was payable for the
service of investigating and evaluating investment opportunities and affecting
transactions and were expensed as incurred. Investments fees were $5.6 million,
for the year ended December 31, 2006. There were no investment fees incurred
for the year ended December 31, 2007.

Management Fees.Management fees for the years ended December
31, 2007 and 2006 were $2.4 million. The Manager receive s an annual management
fee of 2.5% of total capital contributions, payable monthly, to cover expenses
associated with overhead incurred by the Manager for its on-going management,
administrative and advisory services. Such overhead expenses include but are
not limited to rent, payroll and benefits for employees of the Manager, and other
administrative costs. Commencing on January 1, 2007, the management fee, was
reduced by 2.5% of the cumulative dry-hole expenses incurred by the Fund.
During the year ended December 31, 2007, the aforementioned reduction in the
management fees was principally offset by an increase in average outstanding
capital contributions.

15

---



Lease Operating Expenses. Lease operating expenses represent the
day-to-day cost of operating and maintaining wells and related facilities. For
the year ended December 31, 2007, lease operating expenses were $0.1 million.
There were no lease operating expenses for 2006 as production had not yet
commenced.

Other Operating Expenses. Other operating expenses represent
geological and geophysical expenses and accretion of the asset retirement
obligation. For the years ended December 31, 2007 and 2006 other operating
expenses were $0.3 million and $11 thousand, respectively. The increase
represents geological costs related to the acquisition of seismic data for West
Cameron 75.

General and Administrative Expenses.Accounting, legal, fiduciary fees and
insurance expenses represent costs specifically identifiable or allocable to
the Fund. The following table summarizes general and administrative expenses.

|                          |  |                                 |       |      |   |     | 
|------------------------- |  | ------------------------------- | ----- | ---- | - | --- | 
|                          |  | For the year ended December 31, |      
|                          |  | 2007                            |       | 2006 |  
|                          |  |                                 |       |      |  
|                          |  | (in thousands)                  |      
|Insurance                 |  | $                               | 923   |      | $ | 443 | 
|Accounting and legal fees |  |                                 | 177   |      |   | 88  | 
|Trust fees                |  |                                 | 109   |      |   | 80  | 
|Other                     |  |                                 |      |      |   | 8   | 
|                          |  |                                 |       |      |   |     | 
|                          |  | $                               | 1,209 |      | $ | 619 | 
|                          |  |                                 |       |      |   |     | 

Accounting and legal fees
represent annual audit and tax preparation fees, quarterly reviews and filing
fees of the Fund and have increased since 2006 due to additional SEC filing
requirements once the Fund became effective in 2007. Trust fees represent bank
fees associated with the management of the Funds short-term investment
portfolio in US Treasury securities which were opened in 2006. Insurance
expense represents premiums related to well control insurance and directors and
officers liability policy and are allocated by the Manager to the Fund based on
capital raised by the Fund to total capital raised by all oil and natural gas
funds managed by the Manager. The increase in the insurance expenses relates to
the timing of the drilling of the Funds wells.

Other Income.Interest income represents interest earned on
money market accounts and US Treasury securities. Interest income for both
years ended December 31, 2007 and 2006 was $3.1 million. There was a slight
increase as a result of increasing rates, which was offset by a reduction in
the investment balance.

Capital Resources and Liquidity

Operating Cash Flows

Cash flows used in operating
activities for the year ended December 31, 2007 were $0.4 million, primarily
related to payments for management fees, general and administrative expenses
and operating expenses of $2.4 million, $1.2 million and $0.4 million,
respectively, offset by revenue received of $2.2 million, interest income
received of $1.4 million and favorable working capital of $0.1 million.

Cash flows used in operating
activities for the year ended December 31, 2006 were $6.9 million, primarily
related to payments for investment fees, management fees and general and
administrative expenses of $5.6 million, $2.4 million and $0.6 million,
respectively, offset by interest income received of $1.7 million.

Investing Cash Flows

Cash flows used in investing
activities for the year ended December 31, 2007 were $41.6 million. The Fund
made investments in held-to-maturity securities of $50.9 million and
available-for-sale securities of $20.0 million, and received proceeds of $68.7
million from held-to-maturity securities that matured during 2007.
Additionally, the Fund made capital expenditures of $39.4 million for unproved
oil and natural gas properties during 2007, of which $8.2 million were determined
to be unsuccessful, or dry holes.

Cash flows used in investing
activities for the year ended December 31, 2006 were $53.2 million. The Fund
made investments in marketable securities of $84.1 million, inclusive of
salvage fund, and received proceeds of $51.3 million from marketable securities
that matured during 2006. Additionally, the Fund made capital expenditures of
$20.4 million for unproved oil and natural gas properties during 2006, of which
$20.3 million were determined to be unsuccessful, or dry holes.

16

---



Financing Cash Flows

Cash flows used in financing
activities for the year ended December 31, 2007 were $0.8 million, primarily
related to distributions paid of $0.8 million, offset by the collection of the
$60 thousand of capital contributions, net of syndication costs of $11
thousand.

Cash flows provided by
financing activities for the year ended December 31, 2006 were $110.1 million,
primarily related to cash receipts of $124.3 million obtained from the Funds
private offering, offset by $14.2 million of payments for syndication costs. At
December 31, 2006, there was one outstanding subscription receivable of $60
thousand and $12 thousand of syndication costs payable.

Estimated Capital Expenditures

The Fund has entered into
multiple offshore operating agreements for the drilling and development of its
investment properties. The estimated capital expenditures associated with these
agreements can vary depending on the stage of development on a
property-by-property basis. As of December 31, 2007, the Fund had commitments
related to authorizations for expenditures totaling $3.4 million for
properties. If the properties were to be successful, the Fund would make
additional expenditures totaling $9.1 million related to the completion of
these properties.

Liquidity Needs

The Funds primary
short-term liquidity needs are to fund its 2008 operations, including
management fees and capital expenditures, with existing cash on-hand and income
earned from its short-term investments and cash and cash equivalents. The
Manager is entitled to receive an annual management fee from the Fund
regardless of whether the Fund is profitable in that year. The annual fee,
payable monthly, is equal to 2.5% of total capital contributed by shareholders,
net of cumulative dry-hole costs.

With respect to the payment
of management fees, until one of the Funds projects begins producing, all or a
portion of the management fee is paid generally from the interest or dividend
income generated by the Funds development capital that has not been spent,
although the management fee can be paid out of capital contributions. Such
interest and/or dividend income is more than enough to cover Fund expenses,
including the management fee. Generally, it can take anywhere from 18 to 24 months
to bring a project to production. Once a well is on production, the management
fee and fund expenses are paid from operating income. Over time, as a well
produces, the Fund may recover some or the entire management fee that may have
been paid out of capital contributions.

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

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

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

Off-Balance Sheet Arrangements

The Fund had no off-balance
sheet arrangements as of December 31, 2007 and 2006 and does not anticipate the
use of such arrangements in the future.

Contractual Obligations

The Fund enters into
operating agreements with operators. On behalf of the Fund, an operator enters
into various contractual commitments pertaining to exploration, development and
production activities. The Fund does not discuss or negotiate any such
contracts. No contractual obligations exist at December 31, 2007 and 2006.

17

---



|         |                                                            
|-------- | -----------------------------------------------------------
|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 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 Procedures

Under 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, 2007. 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 Reporting

Management 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, 2007. 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,
2007, 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
Reporting

The 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, 2007 that have materially affected, or are
reasonably likely to materially affect, the Funds internal control over
financial reporting.

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

None.

18

---



PART III

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

The Fund has engaged
Ridgewood Energy Corporation as 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, 2007 are as
follows:

|                                          |  |               
|----------------------------------------- |  | --------------
|Name, Age
 and Position with Registrant   |  | Officer
 Since
|                                          |  |               
|Robert E. Swanson, 60                     |  |               
|President and Chief Executive Officer     |  | 1982          
|                                          |  |               
|W. Greg Tabor, 47                         |  |               
|Executive Vice President and              |  |               
|Director of Business Development          |  | 2004          
|                                          |  |               
|Robert L. Gold, 49                        |  |               
|Executive Vice President                  |  | 1987          
|                                          |  |               
|Kathleen P. McSherry, 42                  |  |               
|Executive Vice President and              |  |               
|Chief Financial Officer                   |  | 2000          
|                                          |  |               
|Daniel V. Gulino, 47                      |  |               
|Senior Vice President and General Counsel |  | 2003          
|                                          |  |               
|Adrien Doherty, 55                        |  |               
|Executive Vice President                  |  | 2006          

Set forth below is the name 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 (Ridgewood
Power) and Ridgewood Capital Corporation (Ridgewood Capital), 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.

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 is also Executive Vice President of Ridgewood Power. 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.

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.

19

---



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.

Code of Ethics

The 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 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.

Board of Directors and Board Committees

The 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.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 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, 2007, 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 SECURITY
 HOLDERS MATTERS

The following table sets
forth information with respect to beneficial ownership of the shares as of
March 14, 2008 (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 December 31, 2007. Other than the
below, no officer and director owns any of the Funds shares.

|                                                              |  |                   |  |         |  
|------------------------------------------------------------- |  | ----------------- |  | ------- | -
|Name of
 beneficial owner                                     |  | Number
 of shares |  | Percent |  
|                                                              |  |                   |  |         |  
|Robert E. Swanson (1),
 President and Chief Executive Officer |  | 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.

20

---



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

In 2006, Ridgewood Energy
Corporation, the Manager, was paid a one-time investment fee of 4.5% of capital
contributions. These fees were payable for services provided by the Manager of
locating, investigating and evaluating investment opportunities and expensed as
incurred. These fees were $5.6 million, of which $12 thousand was included in
due to affiliates at December 31, 2006. There were no amounts payable at
December 31, 2007.

The Funds LLC Agreement
provides that the Manager render management, administrative and advisory
services. For such services, the Manager receives an annual management fee,
payable monthly, of 2.5% of total capital contributions net of cumulative
dry-hole costs. In 2007, the Manager changed its policy regarding the management
fee calculation, and netted cumulative dry-hole costs against the total capital
contributions, thus reducing its annual fee on a go-forward basis. Management
fees of $2.4 million were incurred and paid for the years ended December 31,
2007 and 2006, respectively.

In 2006 the Manager was paid
an offering fee of $4.4 million, which approximated 3.5% of capital
contributions directly related of offer and sale of shares of the Fund. Such
offering fee was included in syndication costs of $14.2 million. Of
this amount, $9 thousand was included in due to affiliates at December 31,
2006. There were no amounts payable at December 31, 2007.

From time to time,
short-term payables and receivables, which do not bear interest, arise from
transactions with affiliates in the ordinary course of business. At December
31, 2007 the Manager owed the Fund $18 thousand relating to these transactions,
which is classified as due from affiliates at December 31, 2007.

In 2006, Ridgewood
Securities Corporation, a registered broker-dealer affiliated with the Manager,
was paid selling commissions and placement fees of $0.2 million and $1.2
million, respectively, for shares of the Fund sold, which are reflected in
syndication costs of $14.2 million. At December 31, 2006, $2 thousand
was included in due to affiliates. There were no amounts payable at December
31, 2007.

None of the compensation to
be received by the Manager has been derived as a result of arms length
negotiations.

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

|         |                                        
|-------- | ---------------------------------------
|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, 2007 and 2006.

|               |  |                |     |      |   |    | 
|-------------- |  | -------------- | --- | ---- | - | -- | 
|               |  | 2007           |     | 2006 |  
|               |  |                |     |      |  
|               |  | (in thousands) |    
|Audit Fees (1) |  | $              | 125 |      | $ | 40 | 
|Tax fees (2)   |  |                |    |      |   | 15 | 
|               |  |                |     |      |   |    | 
|Total          |  | $              | 125 |      | $ | 55 | 
|               |  |                |     |      |   |    | 

|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Fees for audit of annual
 financial statements, reviews of the related quarterly financial statements,
 and reviews of documents filed with the SEC.
|    |                                                                                                                                                     
|(2) | Fees related to
 professional services for tax compliance, tax advice and tax planning.                                                             

PART IV.

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

|        |                      
|------- | ---------------------
|(a) (1) | Financial
 Statements

See Index to Financial Statements
set forth on page F-1.

21

---



|        |                               
|------- | ------------------------------
|(a) (2) | Financial
 Statement Schedules

None.

|             |   |                                                                                                                                                                                                                                                                  
|------------ | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
 No. |   | Description                                                                                                                                                                                                                                                      
|             |   |                                                                                                                                                                                                                                                                  
|             |   |                                                                                                                                                                                                                                                                  
|23.1         |   | Consent of Ryder Scott
 Company, L.P.                                                                                                                                                                                                                            
|             |   |                                                                                                                                                                                                                                                                  
|31.1         | * | Certification of Robert E.
 Swanson, Chief Executive Officer, pursuant to Securities Exchange Act Rule 13a-14(a).                                                                                                                                                
|             |   |                                                                                                                                                                                                                                                                  
|31.2         | * | Certification of Kathleen
 P. McSherry, Chief Financial Officer, pursuant to Securities Exchange Act Rule
 13a-14(a).                                                                                                                                            
|             |   |                                                                                                                                                                                                                                                                  
|32           | * | Certifications pursuant to
 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley
 Act of 2002, signed by Robert E. Swanson, Chief Executive Officer of the Company
 and Kathleen P. McSherry, Chief Financial Officer of the Company.

22

---



|                                                                                                             |  |     
|------------------------------------------------------------------------------------------------------------ |  | ----
|INDEX TO
 FINANCIAL STATEMENTS                                                                               |  | PAGE
|                                                                                                             |  |     
|Report of
 Independent Registered Public Accounting Firm                                                     |  | F-2 
|Balance
 Sheets as of December 31, 2007 and 2006                                                             |  | F-3 
|Statements
 of Operations for the years ended December 31, 2007 and 2006                                     |  | F-4 
|Statements
 of Changes in Members Capital for the years ended December 31, 2007 and 2006                    |  | F-5 
|Statements
 of Cash Flows for the years ended December 31, 2007 and 2006                                     |  | F-6 
|Notes to
 Financial Statements                                                                               |  | F-7 
|Supplementary Financial Information - Information
 about Oil and Natural 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, 2007 and 2006, the related statements of operations, changes in
members capital and cash flows for the years ended December 31, 2007 and
2006. 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 audit 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, 2007 and 2006, and the
results of operations and cash flows for the years ended December 31, 2007 and
2006, in conformity with accounting principles generally accepted in the United
States of America.

/s/ Deloitte & Touche
LLP

March 14, 2008
Parsippany, New Jersey

F-2

---



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

|                                                                                   |  |              |         |      |   |         |  
|---------------------------------------------------------------------------------- |  | ------------ | ------- | ---- | - | ------- | -
|                                                                                   |  | December 31, |        
|                                                                                   |  | 2007         |         | 2006 |  
|                                                                                   |  |              |         |      |  
|ASSETS                                                                             |  |              |         |      |   |         |  
|Current assets:                                                                    |  |              |         |      |   |         |  
|Cash and cash equivalents                                                          |  | $            | 7,296   |      | $ | 50,050  |  
|Short-term investment in marketable
securities                                     |  |              | 17,000  |      |   | 33,138  |  
|Production receivable                                                              |  |              | 893     |      |   |        |  
|Due from affiliates (Note 6)                                                       |  |              | 18      |      |   |        |  
|Other current assets                                                               |  |              | 191     |      |   | 89      |  
|                                                                                   |  |              |         |      |   |         |  
|Total current assets                                                               |  |              | 25,398  |      |   | 83,277  |  
|                                                                                  
|Salvage fund                                                                       |  |              | 1,081   |      |   | 1,030   |  
|                                                                                   |  |              |         |      |   |         |  
|                                                                                  
|Long-term investment                                                               |  |              | 19,963  |      |   |        |  
|                                                                                   |  |              |         |      |   |         |  
|                                                                                   |  |              |         |      |   |         |  
|Oil and gas properties:                                                            |  |              |         |      |   |         |  
|Unproved properties                                                                |  |              | 11,215  |      |   | 641     |  
|Proved properties                                                                  |  |              | 26,720  |      |   |        |  
|Less: accumulated depletion and amortization-proved
properties                     |  |              | (1,898  | )    |   |        |  
|                                                                                   |  |              |         |      |   |         |  
|Total oil and gas properties                                                       |  |              | 36,037  |      |   | 641     |  
|                                                                                   |  |              |         |      |   |         |  
|                                                                                  
|Total assets                                                                       |  | $            | 82,479  |      | $ | 84,948  |  
|                                                                                   |  |              |         |      |   |         |  
|LIABILITIES
  AND MEMBERS CAPITAL                                                 |  |              |         |      |   |         |  
|Current liabilities:                                                               |  |              |         |      |   |         |  
|Due to operators                                                                   |  | $            | 7,350   |      | $ | 7,064   |  
|Accrued expenses payable                                                           |  |              | 191     |      |   | 104     |  
|Due to affiliates (Note 6)                                                         |  |              |        |      |   | 23      |  
|                                                                                   |  |              |         |      |   |         |  
|Total current liabilities                                                          |  |              | 7,541   |      |   | 7,191   |  
|                                                                                  
|Asset retirement obligations                                                       |  |              | 131     |      |   |        |  
|                                                                                   |  |              |         |      |   |         |  
|Total liabilities                                                                  |  |              | 7,672   |      |   | 7,191   |  
|                                                                                   |  |              |         |      |   |         |  
|Commitments and contingencies (Note 8)                                             |  |              |         |      |   |         |  
|Members
  capital:                                                                |  |              |         |      |   |         |  
|Manager:                                                                           |  |              |         |      |   |         |  
|Distributions                                                                      |  |              | (120    | )    |   |        |  
|Accumulated deficit                                                                |  |              | (773    | )    |   | (675    | )
|                                                                                   |  |              |         |      |   |         |  
|Managers total                                                                    |  |              | (893    | )    |   | (675    | )
|                                                                                   |  |              |         |      |   |         |  
|Shareholders:                                                                      |  |              |         |      |   |         |  
|Capital contributions (1,000 shares authorized;
839.5395 issued and
  outstanding) |  |              | 124,401 |      |   | 124,401 |  
|Syndication costs                                                                  |  |              | (14,236 | )    |   | (14,237 | )
|Distributions                                                                      |  |              | (679    | )    |   |        |  
|Subscription receivable                                                            |  |              |        |      |   | (60     | )
|Accumulated deficit                                                                |  |              | (33,786 | )    |   | (31,672 | )
|                                                                                   |  |              |         |      |   |         |  
|                                                                                   |  |              | 75,700  |      |   | 78,432  |  
|                                                                                   |  |              |         |      |   |         |  
|                                                                                  
|Total members capital                                                             |  |              | 74,807  |      |   | 77,757  |  
|                                                                                   |  |              |         |      |   |         |  
|                                                                                  
|Total liabilities and members
capital                                             |  | $            | 82,479  |      | $ | 84,948  |  
|                                                                                   |  |              |         |      |   |         |  

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

F-3

---



RIDGEWOOD ENERGY S FUND, LLCSTATEMENTS OF OPERATIONS
(in thousands, except share amounts)

|                                      |  |                         |        |      |   |         |  
|------------------------------------- |  | ----------------------- | ------ | ---- | - | ------- | -
|                                      |  | Year Ended December 31, |       
|                                      |  | 2007                    |        | 2006 |  
|                                      |  |                         |        |      |  
|Revenue                               |  |                         |        |      |   |         |  
|Oil and gas revenue                   |  | $                       | 3,085  |      | $ |        |  
|                                      |  |                         |        |      |   |         |  
|Expenses                              |  |                         |        |      |   |         |  
|Dry-hole costs                        |  |                         | 2,450  |      |   | 26,783  |  
|Depletion and amortization            |  |                         | 1,898  |      |   |        |  
|Investment fees to affiliate (Note 6) |  |                         |       |      |   | 5,642   |  
|Management fees to affiliate (Note 6) |  |                         | 2,424  |      |   | 2,377   |  
|Lease operating expenses              |  |                         | 104    |      |   |        |  
|Other operating expenses              |  |                         | 311    |      |   | 11      |  
|General and administrative expenses   |  |                         | 1,209  |      |   | 619     |  
|                                      |  |                         |        |      |   |         |  
|Total expenses                        |  |                         | 8,396  |      |   | 35,432  |  
|                                      |  |                         |        |      |   |         |  
|Loss from operations                  |  |                         | (5,311 | )    |   | (35,432 | )
|Other
  income                        |  |                         |        |      |   |         |  
|Interest income                       |  |                         | 3,099  |      |   | 3,085   |  
|                                      |  |                         |        |      |   |         |  
|Net loss                              |  | $                       | (2,212 | )    | $ | (32,347 | )
|                                      |  |                         |        |      |   |         |  
|                                      |  |                         |        |      |   |         |  
|Manager Interest                      |  |                         |        |      |   |         |  
|Net loss                              |  | $                       | (98    | )    | $ | (675    | )
|                                      |  |                         |        |      |   |         |  
|Shareholder Interest                  |  |                         |        |      |   |         |  
|Net loss                              |  | $                       | (2,114 | )    | $ | (31,672 | )
|Net loss per share                    |  | $                       | (2,518 | )    | $ | (37,725 | )

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

F-4

---



RIDGEWOOD ENERGY S FUND, LLC STATEMENTS OF CHANGES IN MEMBERS CAPITAL 
(in thousands, except share amounts)

|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | -------- | ------- | - | ------------ | - | ----- | ------- | - | - | ------- | -
|                                                                                                                                                                                                    |  | # of Shares |          | Manager |   | Shareholders |   | Total |        
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |        
|Balances,
  January 1, 2006                                                                                                                                                                         |  |             |         |         | $ |             |   | $     |        |   | $ |        |  
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|Shareholders capital contributions                                                                                                                                                                 |  |             | 839.5395 |         |   |             |   |       | 124,401 |   |   | 124,401 |  
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|Syndication costs (included offering fee of $4,388
paid to the Manager
  and selling commissions and placement fees of $166 and $1,188 respectively,
  paid to Ridgewood Securities Corp. - Note 6) |  |             |         |         |   |             |   |       | (14,237 | ) |   | (14,237 | )
|Subscription receivable                                                                                                                                                                             |  |             |         |         |   |             |   |       | (60     | ) |   | (60     | )
|Net loss                                                                                                                                                                                            |  |             |         |         |   | (675         | ) |       | (31,672 | ) |   | (32,347 | )
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|Balances, December 31, 2006                                                                                                                                                                         |  |             | 839.5395 |         |   | (675         | ) |       | 78,432  |   |   | 77,757  |  
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|Syndication costs                                                                                                                                                                                   |  |             |         |         |   |             |   |       | 1       |   |   | 1       |  
|Distributions                                                                                                                                                                                       |  |             |         |         |   | (120         | ) |       | (679    | ) |   | (799    | )
|Subscription receivable collected                                                                                                                                                                   |  |             |         |         |   |             |   |       | 60      |   |   | 60      |  
|Net loss                                                                                                                                                                                            |  |             |         |         |   | (98          | ) |       | (2,114  | ) |   | (2,212  | )
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  
|Balances, December 31, 2007                                                                                                                                                                         |  |             | 839.5395 |         | $ | (893         | ) | $     | 75,700  |   | $ | 74,807  |  
|                                                                                                                                                                                                    |  |             |          |         |   |              |   |       |         |   |   |         |  

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, |        
|                                                                              |  | 2007                    |         | 2006 |  
|                                                                              |  |                         |         |      |  
|                                                                              |  |                         |         |      |   |         |  
|Cash flows
  from operating activities                                        |  |                         |         |      |   |         |  
|Net loss                                                                      |  | $                       | (2,212  | )    | $ | (32,347 | )
|Adjustments to reconcile net loss to net cash used
in operating
  activities: |  |                         |         |      |   |         |  
|Dry-hole costs                                                                |  |                         | 2,450   |      |   | 26,783  |  
|Interest earned on marketable securities                                      |  |                         | (1,629  | )    |   | (1,366  | )
|Accretion expense                                                             |  |                         | 3       |      |   |        |  
|Depletion and amortization                                                    |  |                         | 1,898   |      |   |        |  
|Changes in assets and liabilities:                                            |  |                         |         |      |   |         |  
|Increase in production receivable                                             |  |                         | (893    | )    |   |        |  
|Increase in other current assets                                              |  |                         | (102    | )    |   | (89     | )
|Increase in due to operator                                                   |  |                         | 54      |      |   |        |  
|Increase in accrued expenses payable                                          |  |                         | 87      |      |   | 104     |  
|(Decrease) increase in due to affiliates                                      |  |                         | (29     | )    |   | 12      |  
|                                                                              |  |                         |         |      |   |         |  
|Net cash used in operating activities                                         |  |                         | (373    | )    |   | (6,903  | )
|                                                                              |  |                         |         |      |   |         |  
|                                                                              |  |                         |         |      |   |         |  
|Cash flows
  from investing activities                                        |  |                         |         |      |   |         |  
|Capital expenditures for properties                                           |  |                         | (39,384 | )    |   | (20,360 | )
|Salvage fund investments                                                      |  |                         | (51     | )    |   | (1,030  | )
|Proceeds from the sale of held-to-maturity
securities                         |  |                         | 68,698  |      |   | 51,317  |  
|Investment in held-to-maturity securities                                     |  |                         | (50,931 | )    |   | (83,090 | )
|Investment in available-for-sale
securities                                   |  |                         | (19,963 | )    |   |        |  
|                                                                              |  |                         |         |      |   |         |  
|Net cash used in investing activities                                         |  |                         | (41,631 | )    |   | (53,163 | )
|                                                                              |  |                         |         |      |   |         |  
|                                                                              |  |                         |         |      |   |         |  
|Cash flows
  from financing activities                                        |  |                         |         |      |   |         |  
|Contributions from shareholders                                               |  |                         | 60      |      |   | 124,341 |  
|Distributions                                                                 |  |                         | (799    | )    |   |        |  
|Syndication costs paid                                                        |  |                         | (11     | )    |   | (14,225 | )
|                                                                              |  |                         |         |      |   |         |  
|Net cash (used in) provided by financing
activities                           |  |                         | (750    | )    |   | 110,116 |  
|                                                                              |  |                         |         |      |   |         |  
|Net (decrease) increase in cash and cash
equivalents                          |  |                         | (42,754 | )    |   | 50,050  |  
|                                                                              |  |                         |         |      |   |         |  
|Cash and cash equivalents, beginning of
period                                |  |                         | 50,050  |      |   |        |  
|                                                                              |  |                         |         |      |   |         |  
|Cash and cash equivalents, end of period                                      |  | $                       | 7,296   |      | $ | 50,050  |  
|                                                                              |  |                         |         |      |   |         |  
|                                                                              |  |                         |         |      |   |         |  
|Supplemental
  schedule of non-cash financing activities                      |  |                         |         |      |   |         |  
|Subscriptions receivable                                                      |  | $                       |        |      | $ | 60      |  
|Accrual for syndication costs                                                 |  | $                       |        |      | $ | 12      |  

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

F-6

---



RIDGEWOOD ENERGY S FUND, LLC NOTES 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. Although the date of
formation is December 19, 2005, the Fund did not begin business activities
until February 1, 2006 when it began its private offering of shares of LLC
member interest (the Shares).

The Fund was
organized to acquire, drill, construct and develop oil and natural gas
properties located in the United States offshore waters of Texas, Louisiana,
and Alabama in the Gulf of Mexico. The Fund has devoted most of its efforts to
raising capital and oil and natural gas exploration activities. As of April
2007 the Fund began earning revenue from its operations and has ceased to be in
the exploratory stage. Prior to April 2007, the Fund had been classified as an
exploratory stage enterprise.

The Manager
performs (or arranges for the performance of) the management, administrative
and advisory services required for Fund operations. Such services include,
without limitation, the administration of shareholder accounts, shareholder
relations and the preparation, review and dissemination of tax and other
financial information. In addition, the Manager provides office space,
equipment and facilities and other services necessary for Fund operations. The
Manager also engages and manages the contractual relations with outside
custodians, depositories, accountants, attorneys, broker-dealers, corporate
fiduciaries, insurers, banks and others as required (Notes 2, 6 and 8).

2. Summary of Significant Accounting Policies

Use of EstimatesThe preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. On an
ongoing basis, the Manager reviews its estimates, including those related to
amounts advanced to and billed by operators, determination of proved reserves,
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 as cash and cash equivalents.
At times, bank deposits may be in excess of federal insured limits. At December
31, 2007 and 2006, bank balances inclusive of the salvage fund exceeded
federally insured limits by $7.1 million and $24.9 million, respectively. Cash
and cash equivalents of nil and $25.0 million are investments in three month US
Treasury Bills at December 31, 2007 and 2006, respectively.

Investments in
Marketable SecuritiesAt times the Fund may invest in United States
Treasury Bills and Notes. These investments are considered short-term when
their maturities are greater than three months and less than one year and
long-term when their maturities are in excess of twelve months. The Fund
currently has short-term investments that are classified as held-to-maturity.
Held-to-maturity securities are those investments that the Fund has the ability
and intent to hold until maturity, and are recorded at cost plus accrued
income, adjusted for the amortization of premiums and discounts, which
approximate fair value. At December 31, 2007, the Fund had short-term
held-to-maturity investments, inclusive of the salvage fund, totaling $18.1
million, maturing in the first and second quarters of 2008.

The Fund
currently has long-term investments, totaling $20 million, which mature in
December 2009, that are classified as available-for-sale. Available-for-sale
securities are carried in the financial statements at fair value, and as the
investments were purchased on December 31, 2007 there were no unrealized gains or
losses.

There were no
available-for-sale investments, short or long-term, at December 31, 2006.

F-7

---



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
for available-for-sale securities are reported in other comprehensive income
until realized.

Salvage FundPursuant to the Funds LLC Agreement, the Fund
deposits in a separate interest-bearing account, or a salvage fund, money to
provide for dismantling production platforms and facilities, plugging and
abandoning the wells and removing the platforms, facilities and wells after
their useful lives, in accordance with applicable federal and state laws and
regulations.

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

Oil and Natural Gas
Properties

Investments in
oil and natural gas properties are operated by unaffiliated entities (the
Operators) who are responsible for drilling, administering and producing
activities pursuant to the terms of the applicable Operating Agreements with
working interest owners. The Funds portion of exploration, drilling, operating
and capital equipment expenditures relating to the wells are advanced and
billed by Operators through authorization for expenditures.

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

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

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

As of December
31, 2007 and 2006 amounts recorded in due to operators totaling $7.3 million
and $7.1 million, respectively, related to the acquisition of oil and gas
property. The December 31, 2007 balance was paid during the first quarter of
2008.

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
rights, title and interest. The Fund is required to advance its share of
estimated cash outlay for the succeeding months operation. The Fund accounts
for such payments as advances to Operators for working interests and
expenditures. As drilling costs are incurred, the advances are transferred to
unproved properties.

Asset Retirement
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, an asset retirement obligation is recorded. Plug and
abandonment costs associated with unsuccessful projects are expensed as
dry-hole costs. The following table presents changes to the asset retirement
obligations.

F-8

---



|                        |  |                |      |      |   |      |  
|----------------------- |  | -------------- | ---- | ---- | - | ---- | -
|                        |  | 2007           |      | 2006 |  
|                        |  |                |      |      |  
|                        |  | (in thousands) |     
|Balance at January 1,   |  | $              |     |      | $ |     |  
|                       
|Liabilities incurred    |  |                | 306  |      |   | 634  |  
|Liabilities settled     |  |                | (178 | )    |   | (634 | )
|Accretion expense       |  |                | 3    |      |   |     |  
|                        |  |                |      |      |   |      |  
|Balance at December 31, |  | $              | 131  |      | $ |     |  
|                        |  |                |      |      |   |      |  

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

Syndication CostsDirect costs associated with offering the Funds
Shares including professional fees, selling expenses and administrative costs
payable to the Manager, an affiliate of the Manager and outside brokers are
reflected as a reduction of shareholders capital.

Revenue RecognitionOil and natural gas sales are recognized when
delivery is made by the Operator to the purchaser and title is transferred
(i.e., production has been delivered to a pipeline or transport vehicle). The
Fund began earning revenue in April 2007.

The volume of
oil and natural gas sold on the Funds behalf may differ from the volume of oil
and natural gas to which the Fund is entitled. The Fund will account for such
oil and natural gas production imbalances by the entitlements method. Under the
entitlements method, the Fund will recognize a receivable from other working
interest owners for volumes oversold by other working interest owners, and a
payable to other working interest owners for volumes oversold by the Fund. As
of December 31, 2007 and 2006, there were no material oil or natural gas
balancing arrangements between the Fund and other working interest owners.

Impairment of
Long-Lived AssetsIn accordance with the provisions of Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment of
Long-Lived Assets, long-lived assets, such as oil and natural gas properties,
are evaluated when events or changes in circumstances indicate the carrying value
of such assets may not be recoverable. The determination of whether impairment
has occurred is made by comparing the carrying values of long-lived assets to
the estimated future undiscounted cash flows attributable to the asset. The
impairment loss recognized is the excess of the carrying value over the future
discounted cash flows attributable to the asset or the estimated fair value of
the asset. No impairments of proved properties have been recorded in the Fund.

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

Income TaxesNo provision is made for income taxes in the
financial statements. The Fund is a limited liability company, and as such the
Funds income or loss is passed through and included in the tax returns of the
Funds shareholders.

Income and Expense
AllocationProfits and losses are allocated 85% to shareholders in proportion to their
relative capital contributions and 15% to the Manager, except for items of
expense, loss, deduction and credit that are attributable to the expenditure of
shareholders capital contributions, which are allocated 99% to shareholders
and 1% to the Manager.

F-9

---



3. Recent Accounting Standards

In February
2007, the Financial Accounting Standards Board (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 is applied instrument by instrument, with a few
exceptions; the decision is irrevocable; and it 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 is effective for financial statements issued for fiscal years
beginning after November 15, 2007. The adoption of SFAS No. 159 will not have a
material impact on its financials. 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 nonfinancial assets and liabilities. The Fund believes this
guidance will not have a material impact on the financial statements.

4. Unproved Properties - Capitalized
Exploratory Well Costs

Leasehold
acquisition and exploratory drilling costs are capitalized pending
determination of whether the well has found proved reserves. Unproved
properties are assessed on a quarterly basis by evaluating and monitoring if
sufficient progress is made on accessing the reserves. Capitalized 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. At
December 31, 2007 and 2006, the Fund had no capitalized exploratory well costs
greater than one year. The following table reflects the net changes in unproved
properties.

|                                                                                               |  |                |         |      |   |     | 
|---------------------------------------------------------------------------------------------- |  | -------------- | ------- | ---- | - | --- | 
|                                                                                               |  | 2007           |         | 2006 |  
|                                                                                               |  |                |         |      |  
|                                                                                               |  | (in thousands) |        
|Balance at January 1,                                                                          |  | $              | 641     |      | $ |    | 
|Additions to capitalized exploratory well costs pending the
  determination of proved reserves |  |                | 37,165  |      |   | 641 | 
|Reclassifications to proved properties based on the determination of
  proved reserves         |  |                | (26,591 | )    |   |    | 
|Capitalized exploratory well costs charged to dry hole
costs                                   |  |                |        |      |   |    | 
|                                                                                               |  |                |         |      |   |     | 
|Balance at December 31,                                                                        |  | $              | 11,215  |      | $ | 641 | 
|                                                                                               |  |                |         |      |   |     | 

Dry-hole costs
are detailed in the table below.

|                     |  |                                 |       |      |   |        | 
|-------------------- |  | ------------------------------- | ----- | ---- | - | ------ | 
|                     |  | For the year ended December 31, |      
|Lease Block          |  | 2007                            |       | 2006 |  
|                     |  |                                 |       |      |  
|                     |  | (in thousands)                  |      
|Viosca Knoll 207     |  | $                               | 308   |      | $ | 6,846  | 
|Garden Banks 346/390 |  |                                 | 561   |      |   | 19,937 | 
|Ship Shoal 81        |  |                                 | 1,581 |      |   |       | 
|                     |  |                                 |       |      |   |        | 
|                     |  | $                               | 2,450 |      | $ | 26,783 | 
|                     |  |                                 |       |      |   |        | 

5. Distributions

Distributions
to shareholders are allocated in proportion to the number of Shares held.

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

F-10

---



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

The
shareholders and Manager was paid distributions of $0.7 million and $0.1
million, respectively, for the year ended December 31, 2007. There were no
distributions paid in 2006.

6. Related Parties

In 2006,
Ridgewood Energy Corporation, the Manager, was paid a one-time investment fee
of 4.5% of capital contributions. These fees were payable for services provided
by the Manager of locating, investigating and evaluating investment
opportunities and expensed as incurred. These fees were $5.6 million, of which
$12 thousand was included in due to affiliates at December 31, 2006. There were
no amounts payable at December 31, 2007.

The Funds LLC
Agreement provides that the Manager render management, administrative and
advisory services. For such services, the Manager receives an annual management
fee, payable monthly, of 2.5% of total capital contributions net of cumulative dry-hole costs.
In 2007, the Manager changed its policy regarding the management fee calculation, and netted the cumulative dry-hole costs against
the total capital contributions, thus reducing its annual fee on a go-forward
basis. Management fees of $2.4 million were incurred and paid for the years
ended December 31, 2007 and 2006.

In 2006 the
Manager was paid an offering fee of $4.4 million, which approximated 3.5% of
capital contributions directly related of offer and sale of shares of the Fund.
Such offering fee was included in syndication costs (Note 2) of $14.2 million.
Of this amount, $9 thousand was included in due to affiliates at December 31,
2006. There were no amounts payable at December 31, 2007.

From time to
time, short-term payables and receivables, which do not bear interest, arise
from transactions with affiliates in the ordinary course of business. At
December 31, 2007 the Manager owed the Fund $18 thousand relating to these
transactions, which is classified as due from affiliates at December 31, 2007.

In 2006,
Ridgewood Securities Corporation, a registered broker-dealer affiliated with
the Manager, was paid selling commissions and placement fees of $0.2 million
and $1.2 million, respectively, for shares of the Fund sold, which are
reflected in syndication costs (Note 2) of $14.2 million. At December 31, 2006,
$2 thousand was included in due to affiliates. There were no amounts payable at
December 31, 2007.

None of the
compensation to be received by the Manager has been derived as a result of arms length negotiations.

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

7. Fair Value of Financial Instruments

At December
31, 2007 and 2006, the carrying values of cash and cash equivalents, short-term
and long-term investments in marketable securities, salvage fund, production
receivable and accrued expenses approximate fair value.

8. Commitments and Contingencies

Capital Commitments

The Fund has
entered into multiple offshore operating agreements for the drilling and
development of its investment properties. The estimated capital expenditures
associated with these agreements vary depending on the stage of development on
a property-by-property basis. As of December 31, 2007, the Fund had committed
to spend an additional $3.4 million relating to the completion of a number of
its wells. No other firm commitments have been entered, however it is expected
that the Fund will invest all of its unspent capital on either current or
future projects.

F-11

---



Environmental
Considerations

The
exploration for and development of oil and natural gas involves the extraction,
production and transportation of materials which, under certain conditions, can
be hazardous or cause environmental pollution problems. The Manager and the
Operators are continually taking action they believe appropriate to satisfy
applicable federal, state and local environmental regulations and do not currently
anticipate that compliance with federal, state and local environmental
regulations will have a material adverse effect upon capital expenditures,
results of operations or the competitive position of the Fund in the oil
and natural gas industry. However, due to the significant public and
governmental interest in environmental matters related to those activities, the
Manager cannot predict the effects of possible future legislation, rule
changes, or governmental or private claims. At December 31, 2007 and 2006,
there were no known environmental issues that required the Fund to record a
liability.

Insurance Coverage

The Fund is
subject to all risks inherent in the exploration for and development of oil and
natural gas. Insurance coverage as is customary for entities engaged in similar
operations is maintained, but losses may occur from uninsurable risks or
amounts in excess of existing insurance coverage. The occurrence of an event
which is not insured or not fully insured could have an adverse impact upon
earnings and financial position. Moreover, insurance is obtained as a package
covering all of the Managers investment programs and is allocated to the Fund.
Claims made by other such programs can reduce or eliminate insurance for the
Fund.

F-12

---



Ridgewood Energy S Fund, LLC 
Supplementary Financial Information Information about Oil and Natural 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 natural gas exploration and producing activities of the Fund. Tables
I and II provide historical cost information pertaining to capitalized costs,
costs incurred in exploration, and property acquisitions and development.

The Fund is
engaged solely in oil and natural gas activities, all of which are located in
the United States offshore waters of Texas, Louisiana, and Alabama in the Gulf
of Mexico.

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

|                                                            |  |                |        |      |   |     | 
|----------------------------------------------------------- |  | -------------- | ------ | ---- | - | --- | 
|                                                            |  | December 31,   |       
|                                                            |  | 2007           |        | 2006 |  
|                                                            |  |                |        |      |  
|                                                            |  | (in thousands) |       
|                                                           
|Proved oil
 and gas properties                              |  | $              | 26,720 |      | $ |    | 
|Unproved oil
 and gas properties                            |  |                | 11,215 |      |   | 641 | 
|                                                            |  |                |        |      |   |     | 
|Total oil and gas properties                                |  |                | 37,935 |      |   | 641 | 
|Accumulated
 depletion and amortization - proved properties |  |                | (1,898 | )    |   |    | 
|                                                            |  |                |        |      |   |     | 
|Oil and gas
 properties, net                                |  | $              | 36,037 |      | $ | 641 | 
|                                                            |  |                |        |      |   |     | 

Table
II - Costs Incurred in Exploration, Property Acquisitions and Development

|                                          |  |                                 |        |      |   |        | 
|----------------------------------------- |  | ------------------------------- | ------ | ---- | - | ------ | 
|                                          |  | For the year ended December 31, |       
|                                          |  | 2007                            |        | 2006 |  
|                                          |  |                                 |        |      |  
|                                          |  | (in thousands)                  |       
|                                         
|Exploratory
 drilling costs - capitalized |  | $                               | 37,166 |      | $ | 641    | 
|Exploratory
 drilling costs - expensed    |  |                                 | 2,450  |      |   | 26,783 | 
|                                          |  |                                 |        |      |   |        | 
|                                          |  | $                               | 39,616 |      | $ | 27,424 | 
|                                          |  |                                 |        |      |   |        | 

F-13

---



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 year ended December 31, 2007. The reserve estimates for
December 31, 2007 were based on estimated future reserves as of December 31, 2007
provided by Ryder Scott Company, L.P. These reserve disclosures have been prepared
in compliance with the Securities and Exchange Commission rules.

Proved reserves are
classified as either developed or undeveloped. Proved developed reserves are
the quantities expected to be recovered through existing wells with existing
equipment and operating methods. The Fund had no proved undeveloped reserves at
December 31, 2007.

|                                |  |                                  |        |           |  |            |  
|------------------------------- |  | -------------------------------- | ------ | --------- |  | ---------- | -
|                                |  | December 31, 2007
 United States |       
|                                |  | Oil (BBLS)                       |        | Gas (MCF) | 
|                                |  |                                  |        |           | 
|                                |  |                                  |        |           |  |            |  
|Proved
 developed reserves:     |  |                                  |        |           |  |            |  
|Beginning of year               |  |                                  |       |           |  |           |  
|Discoveries                     |  |                                  | 52,354 |           |  | 15,275,126 |  
|Revisions of previous estimates |  |                                  |       |           |  |           |  
|Production                      |  |                                  | (9,488 | )         |  | (286,426   | )
|                                |  |                                  |        |           |  |            |  
|End of year                     |  |                                  | 42,866 |           |  | 14,988,700 |  
|                                |  |                                  |        |           |  |            |  

Due to the inherent
uncertainties and the limited nature of recovery data, estimates of reserve
information are subject to change as additional information becomes available.

Table IV - Standardized Measure of Discounted Future Net Cash
Flows Related to Proved Oil and Gas Reserves

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, development, site restoration and abandonment
costs are derived based on current costs assuming continuation of existing
economic conditions.

|                                                                    |  |                    |         |  
|------------------------------------------------------------------- |  | ------------------ | ------- | -
|                                                                    |  | December 31,
 2007 |        
|                                                                    |  |                    |        
|                                                                    |  | (in thousands)     |        
|Future estimated revenues                                           |  | $                  | 101,115 |  
|Future estimated
 production costs                                  |  |                    | (3,370  | )
|Future estimated
 development costs                                 |  |                    | (1,294  | )
|                                                                    |  |                    |         |  
|Future net cash flows                                               |  |                    | 96,451  |  
|10% annual discount for
 estimated timing of cash flows             |  |                    | (32,989 | )
|                                                                    |  |                    |         |  
|Standardized measure of
 discounted future estimated net cash flows |  | $                  | 63,462  |  
|                                                                    |  |                    |         |  

F-14

---



Table V - Changes in the Standardized Measure of Discounted
Future Net Cash Flows Related to Proved Oil and Gas Reserves

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, 2007 |       
|                                                                                   |  |                               |       
|                                                                                   |  | (in thousands)                |       
|Standardized measure
 beginning of the year                                        |  | $                             |       |  
|Sales of oil and gas
 production, net of production costs                          |  |                               | (2,981 | )
|Net changes in prices and
 production costs                                        |  |                               |       |  
|Extensions, discoveries,
 and improved recovery and techniques, less related costs |  |                               | 65,612 |  
|Development costs incurred
 during the period                                      |  |                               |       |  
|Revisions of previous
 reserve quantities estimate                                 |  |                               |       |  
|Accretion of discount                                                              |  |                               | 831    |  
|                                                                                   |  |                               |        |  
|Standardized measure end
 of the year                                              |  | $                             | 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 large 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-15

---



SIGNATURES

Pursuant to the
requirements 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
 14, 2008 | By:                          | /s/ ROBERT
 E. SWANSON        
|                      |                              |                               
|                      |                              | Robert E.
 Swanson            
|                      |                              | 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    |  | Chief
 Executive Officer (Principal Executive Officer)                               |  | Date: March 14, 2008
|                          |  |                                                                                      | 
|Robert E.
 Swanson        |  |                                                                                      |  |                     
|                          |  |                                                                                      |  |                     
|                          |  |                                                                                      |  |                     
|/s/ KATHLEEN
 P. MCSHERRY |  | Executive
 Vice President and Chief Financial Officer (Principal Accounting Officer) |  | Date: March 14, 2008
|                          |  |                                                                                      | 
|Kathleen P.
 McSherry     |  |                                                                                      | 
|                          |  |                                                                                      |  |                     
|                          |  |                                                                                      |  |                     
|/s/ ROBERT
 E. SWANSON    |  | Chief
 Executive Officer of Manager                                                  |  | Date: March 14, 2008
|                          |  |                                                                                      |  |                     
|Robert E. Swanson         |  |                                                                                      |  |                     

---