Attached files
file | filename |
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EX-32 - Ridgewood Energy M Fund LLC | ex32.htm |
EX-31.2 - Ridgewood Energy M Fund LLC | ex31_2.htm |
EX-31.1 - Ridgewood Energy M Fund LLC | ex31_1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
ý
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended September 30, 2009
|
or
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from
_______________________to____________________________
|
Commission
File No. 000-51268
RIDGEWOOD
ENERGY M FUND, LLC
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
13-4285167
(I.R.S.
Employer
Identification
No.)
|
947
Linwood Avenue, Ridgewood, NJ 07450
(Address
of principal executive offices) (Zip code)
(800)
942-5550
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ý
No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes o
No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
|
o |
Accelerated
filer
|
o |
Non-accelerated
filer
(Do
not check if a smaller reporting company)
|
o |
Smaller
reporting company
|
x |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No
x
There is
no market for the shares. As of November 12, 2009 there are 535.6818
shares outstanding.
Table
of Contents
|
||||
PART
I - FINANCIAL INFORMATION
|
Page
|
|||
2 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
11 | ||||
16 | ||||
17 | ||||
PART
II - OTHER INFORMATION
|
||||
17 | ||||
17 | ||||
17 | ||||
17 | ||||
17 | ||||
17 | ||||
18 | ||||
19 |
PART
I - FINANCIAL INFORMATION
|
||||||||
ITEM
1. FINANCIAL STATEMENTS
|
||||||||
RIDGEWOOD
ENERGY M FUND, LLC
|
||||||||
UNAUDITED
CONDENSED BALANCE SHEETS
|
||||||||
(in
thousands, except share data)
|
||||||||
September
30, 2009
|
December
31, 2008
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 1,304 | $ | 3,687 | ||||
Production
receivable
|
115 | 110 | ||||||
Other
current assets
|
71 | 87 | ||||||
Total
current assets
|
1,490 | 3,884 | ||||||
Salvage
fund
|
1,818 | 1,139 | ||||||
Oil
and gas properties:
|
||||||||
Advances
to operators for working interests and expenditures
|
259 | - | ||||||
Unproved
properties
|
- | 1,882 | ||||||
Proved
properties
|
23,442 | 20,346 | ||||||
Less:
accumulated depletion and amortization
|
(10,540 | ) | (7,537 | ) | ||||
Total
oil and gas properties, net
|
13,161 | 14,691 | ||||||
Total
assets
|
$ | 16,469 | $ | 19,714 | ||||
LIABILITIES
AND MEMBERS' CAPITAL
|
||||||||
Current
liabilities:
|
||||||||
Due
to operators
|
$ | 376 | $ | 1,337 | ||||
Accrued
expenses
|
68 | 50 | ||||||
Total
current liabilities
|
444 | 1,387 | ||||||
Asset
retirement obligations
|
2,019 | 1,651 | ||||||
Total
liabilities
|
2,463 | 3,038 | ||||||
Commitments
and contingencies (Note 8)
|
||||||||
Members'
capital:
|
||||||||
Manager:
|
||||||||
Distributions
|
(1,551 | ) | (1,439 | ) | ||||
Retained
earnings (accumulated deficit)
|
115 | (28 | ) | |||||
Manager's
total
|
(1,436 | ) | (1,467 | ) | ||||
Shareholders:
|
||||||||
Capital
contributions (834 shares authorized;
535.6818
issued and outstanding)
|
78,887 | 78,887 | ||||||
Syndication
costs
|
(8,597 | ) | (8,597 | ) | ||||
Distributions
|
(8,789 | ) | (8,152 | ) | ||||
Accumulated
deficit
|
(46,059 | ) | (43,995 | ) | ||||
Shareholders'
total
|
15,442 | 18,143 | ||||||
Total
members' capital
|
14,006 | 16,676 | ||||||
Total
liabilities and members' capital
|
$ | 16,469 | $ | 19,714 |
The
accompanying notes are an integral part of these unaudited condensed financial
statements.
RIDGEWOOD
ENERGY M FUND, LLC
|
||||||||||||||||
UNAUDITED
CONDENSED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenue
|
||||||||||||||||
Oil
and gas revenue
|
$ | 422 | $ | 417 | $ | 1,753 | $ | 1,045 | ||||||||
Expenses
|
||||||||||||||||
Depletion
and amortization
|
649 | 148 | 2,478 | 466 | ||||||||||||
Dry-hole
costs
|
1 | (4 | ) | 1 | 1,699 | |||||||||||
Impairment
of proved properties
|
- | - | 611 | (471 | ) | |||||||||||
Workover
expenses
|
6 | 10 | 25 | 882 | ||||||||||||
Operating
expenses
|
123 | 136 | 341 | 221 | ||||||||||||
General
and administrative expenses
|
75 | 122 | 240 | 396 | ||||||||||||
Total
expenses
|
854 | 412 | 3,696 | 3,193 | ||||||||||||
(Loss)
income from operations
|
(432 | ) | 5 | (1,943 | ) | (2,148 | ) | |||||||||
Other
income
|
||||||||||||||||
Interest
income
|
7 | 31 | 22 | 167 | ||||||||||||
Net
(loss) income
|
$ | (425 | ) | $ | 36 | $ | (1,921 | ) | $ | (1,981 | ) | |||||
Manager
Interest
|
||||||||||||||||
Net
income (loss)
|
$ | 26 | $ | 33 | $ | 143 | $ | (69 | ) | |||||||
Shareholder
Interest
|
||||||||||||||||
Net
(loss) income
|
$ | (451 | ) | $ | 3 | $ | (2,064 | ) | $ | (1,912 | ) | |||||
Net
(loss) income per share
|
$ | (842 | ) | $ | 6 | $ | (3,853 | ) | $ | (3,569 | ) |
The
accompanying notes are an integral part of these unaudited condensed financial
statements.
RIDGEWOOD
ENERGY M FUND, LLC
|
||||||||
UNAUDITED
CONDENSED STATEMENTS OF CASH FLOWS
|
||||||||
(in
thousands)
|
||||||||
Nine
months ended September 30,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities
|
||||||||
Net
loss
|
$ | (1,921 | ) | $ | (1,981 | ) | ||
Adjustments
to reconcile net loss to net cash
provided
by (used in) operating activities:
|
||||||||
Depletion
and amortization
|
2,478 | 466 | ||||||
Dry-hole
costs
|
1 | 1,699 | ||||||
Impairment
of proved property
|
611 | (471 | ) | |||||
Settlement
of asset retirement obligation
|
(18 | ) | (38 | ) | ||||
Accretion
expense
|
15 | 11 | ||||||
Interest
earned on marketable securities
|
- | (36 | ) | |||||
Changes
in assets and liabilities:
|
||||||||
(Increase)
decrease in production receivable
|
(5 | ) | 88 | |||||
Decrease
(increase) in other current assets
|
16 | (61 | ) | |||||
Increase
in due to operators
|
8 | 24 | ||||||
Increase
(decrease) in accrued expenses
|
18 | (48 | ) | |||||
Net
cash provided by (used in) operating activities
|
1,203 | (347 | ) | |||||
Cash
flows from investing activities
|
||||||||
Payments
to operators for working interests and expenditures
|
(259 | ) | - | |||||
Capital
expenditures for oil and gas properties
|
(1,899 | ) | (6,439 | ) | ||||
Proceeds
from the maturity of marketable securities
|
- | 5,111 | ||||||
Investments
in salvage fund
|
(679 | ) | (21 | ) | ||||
Net
cash used in investing activities
|
(2,837 | ) | (1,349 | ) | ||||
Cash
flows from financing activities
|
||||||||
Distributions
|
(749 | ) | - | |||||
Net
cash used in financing activities
|
(749 | ) | - | |||||
Net
decrease in cash and cash equivalents
|
(2,383 | ) | (1,696 | ) | ||||
Cash
and cash equivalents, beginning of period
|
3,687 | 8,163 | ||||||
Cash
and cash equivalents, end of period
|
$ | 1,304 | $ | 6,467 | ||||
Supplemental
schedule of non-cash investing activities
|
||||||||
Advances
used for capital expenditures in oil and gas
properties
reclassified to proved properties
|
$ | - | $ | 66 |
The
accompanying notes are an integral part of these unaudited condensed financial
statements.
RIDGEWOOD
ENERGY M FUND, LLC
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1.
|
Organization
and Purpose
|
The
Ridgewood Energy M Fund, LLC (the “Fund”), a Delaware limited liability company,
was formed on August 2, 2004 and operates pursuant to a limited liability
company agreement (the “LLC Agreement”) dated as of September 7, 2004 by and
among Ridgewood Energy Corporation (the “Manager”) and the shareholders of the
Fund. The Fund was organized to acquire interests in oil and natural gas
properties located in the United States offshore waters of Texas, Louisiana, and
Alabama in the Gulf of Mexico.
The
Manager has direct and exclusive control over the management of the Fund’s
operations. With respect to project investments, the Manager locates
potential projects, conducts appropriate due diligence and negotiates and
completes the transactions in which the investments are made. The
Manager performs, or arranges for the performance of, the management, advisory
and administrative services required for Fund operations. Such
services include, without limitation, the administration of shareholder
accounts, shareholder relations and the preparation, review and dissemination of
tax and other financial information. In addition, the Manager
provides office space, equipment and facilities and other services necessary for
Fund operations. The Manager also engages and manages the contractual
relations with unaffiliated custodians, depositories, accountants, attorneys,
broker-dealers, corporate fiduciaries, insurers, banks and others as
required. See Notes 2, 6 and 8.
2.
|
Summary
of Significant Accounting Policies
|
Basis
of Presentation
These
unaudited interim condensed financial statements have been prepared by the
Fund’s management in accordance with accounting principles generally accepted in
the United States of America (“GAAP”) and in the opinion of management, contain
all adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the Fund’s financial position, results of operations and cash
flows for the periods presented. Certain information and note
disclosures normally included in annual financial statements prepared in
accordance with GAAP have been omitted in these unaudited interim condensed
financial statements. The results of operations, financial position,
and cash flows for the periods presented herein are not necessarily indicative
of future financial results. These unaudited interim condensed
financial statements should be read in conjunction with the Fund’s December 31,
2008 financial statements and notes thereto included in the Fund’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission
(“SEC”). The year-end condensed balance sheet data was derived from
audited financial statements, but does not include all disclosures required by
GAAP. In September 2009, the Fund reclassified its
presentation of a $0.5 million proved property impairment credit within the
statement of cash flows. During the nine months ended September 30, 2008,
this credit was originally presented within operating activities and has now
been adjusted to be reflected in investing activities. The Fund has
assessed the impact of subsequent events through November 12, 2009, the date of
the issuance of its financial statements, and has concluded that there were no
such events that require adjustment to, or disclosure in, the notes to the
financial statements.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenue and expense
during the reporting period. On an ongoing basis, the Manager reviews its
estimates, including those related to property balances, determination of proved
reserves, impairments and asset retirement obligations. Actual
results may differ from those estimates.
Cash
and Cash Equivalents
All
highly liquid investments with maturities when purchased of three months or less
are considered cash and cash equivalents. At times, bank deposits may be in
excess of federally insured limits. At September 30, 2009, bank
balances exceeded federally insured limits by $1.1 million, all of which was
invested in money market accounts that invest solely in U.S. Treasury bills and
notes. Effective October 2008 through December 31, 2013, federally
insured limits have been increased from $0.1 million to $0.25 million for
interest bearing deposits. Additionally, non-interest bearing
deposits are fully insured through December 31, 2009, after which they will be
included in the $0.25 million limits.
Salvage
Fund
The Fund
deposits in a separate interest-bearing account, or salvage fund, money to
provide for the dismantling and removal of production platforms and facilities
and plugging and abandoning its wells at the end of their useful lives, in
accordance with applicable federal and state laws and regulations. At
September 30, 2009, the Fund had investments in U.S. Treasury securities within
its salvage fund of $0.4 million, which matured in October 2009, and $1.1
million, which mature in February 2012, that are classified as held-to-maturity
investments. Held-to-maturity investments are those securities that
the Fund has the ability and intent to hold until maturity, and are recorded at
cost plus accrued income, adjusted for the amortization of premiums and
discounts, which approximates fair value.
Interest
earned on the account will become part of the salvage fund. There are
no legal restrictions on withdrawals from the salvage fund.
Oil
and Gas Properties
The Fund
invests in oil and gas properties, which are operated by unaffiliated entities
that are responsible for drilling, administering and producing activities
pursuant to the terms of the applicable operating agreements with working
interest owners. The Fund's portion of exploration, drilling,
operating and capital equipment expenditures is billed by
operators.
The
successful efforts method of accounting for oil and gas producing activities is
followed. Acquisition costs are capitalized when incurred. Other oil
and gas exploration costs, excluding the costs of drilling exploratory wells,
are charged to expense as incurred. The costs of drilling exploratory
wells are capitalized pending the determination of whether the wells have
discovered proved commercial reserves. If proved commercial reserves
have not been found, exploratory drilling costs are expensed to dry-hole
expense. Costs to develop proved reserves, including the costs of all
development wells and related facilities and equipment used in the production of
oil and gas, are capitalized. Expenditures for ongoing repairs and
maintenance of producing properties are expensed as incurred.
Upon the
sale or retirement of a proved property, the cost and related accumulated
depletion and amortization will be eliminated from the property accounts, and
the resultant gain or loss is recognized. Upon the sale or retirement
of an unproved property, gain or loss on the sale is recognized.
Capitalized
acquisition costs of producing oil and gas properties are depleted by the
units-of-production method.
As of
September 30, 2009 and December 31, 2008, amounts recorded in due to operators
totaling $0.3 million and $1.3 million, respectively, related to capital
expenditures for oil and gas properties.
Advances
to Operators for Working Interests and Expenditures
The
Fund’s acquisition of a working interest in a well or a project requires it to
make a payment to the seller for the Fund’s rights, title and
interest. The Fund may be required to advance its share of estimated
cash expenditures for the succeeding month’s operation. The Fund
accounts for such payments as advances to operators for working interests and
expenditures. As drilling costs are incurred, the advances are
reclassified to unproved properties.
Asset
Retirement Obligations
For oil
and gas properties, there are obligations to perform removal and remediation
activities when the properties are retired. When a project reaches
drilling depth and is determined to be either proved or dry, an asset retirement
obligation is incurred. Plug and abandonment costs associated with
unsuccessful projects are expensed as dry-hole costs. The following
table presents changes in asset retirement obligations for the nine months ended
September 30, 2009 and the year ended December 31, 2008.
September
30, 2009
|
December
31, 2008
|
|||||||
(in
thousands)
|
||||||||
Balance,
beginning of period
|
$ | 1,651 | $ | 476 | ||||
Liabilities
incurred
|
285 | 770 | ||||||
Liabilities
settled
|
(18 | ) | (35 | ) | ||||
Accretion
expense
|
15 | 16 | ||||||
Revision
to prior estimate
|
86 | 424 | ||||||
Balance,
end of period
|
$ | 2,019 | $ | 1,651 |
As
indicated above, the Fund maintains a salvage fund to provide for the funding of
future asset retirement obligations.
Syndication
Costs
Syndication
costs are direct costs incurred by the Fund in connection with the offering of
the Fund’s shares including professional fees, selling expenses and
administrative costs payable to the Manager, an affiliate of the Manager and
unaffiliated broker-dealers, which are reflected on the Fund’s balance sheet as
a reduction of shareholders’ capital.
Revenue
Recognition and Imbalances
Oil and
gas revenues are recognized when oil and gas is sold to a purchaser at a
fixed or determinable price, when delivery has occurred and title has
transferred, and if collectibility of the revenue is
probable.
The Fund
uses the sales method of accounting for gas production imbalances. The volumes
of gas sold may differ from the volumes to which the Fund is entitled based on
its interests in the properties. These differences create imbalances that are
recognized as a liability only when the properties’ estimated remaining reserves
net to the Fund will not be sufficient to enable the underproduced owner to
recoup its entitled share through production. The Fund’s recorded liability, if
any, would be reflected in other liabilities. No receivables are recorded for
those wells where the Fund has taken less than its share of
production.
Impairment
of Long-Lived Assets
The Fund
reviews the value of its oil and gas properties whenever management determines
that events and circumstances indicate that the recorded carrying value of
properties may not be recoverable. Impairments of producing
properties are determined by comparing future net undiscounted cash flows to the
net book value at the end of each period. If the net book value
exceeds the future net undiscounted cash flows, the carrying value of the
property is written down to fair value, which is determined using net discounted
future cash flows from the producing property. The Fund provides for impairments
on unproved properties when it determines that the property will not be
developed or a permanent impairment in value has occurred. The fair
value determinations require considerable judgment and are sensitive to
change. Different pricing assumptions, reserve estimates or discount
rates could result in a different calculated impairment. Given the
volatility of oil and gas prices, it is reasonably possible that the Fund’s
estimate of discounted future net cash flows from proved oil and gas reserves
could change in the near term. If oil and gas prices decline
significantly, even if only for a short period of time, it is possible that
write-downs of oil and gas properties could occur. During the nine
months ended September 30, 2009, the Fund recorded impairments totaling $0.6
million related to Eugene Island 337, Vermilion 344 and West Cameron
77. The impairments to Eugene Island 337 and Vermilion 344 were a
result of lower oil and gas commodity prices. The carrying values for
Eugene Island 337 and Vermilion 344 of $0.3 million and $1.9 million,
respectively, were written down to their fair values of $0.2 million and $1.4
million, respectively. The fair value of the impaired wells was determined based
on level 3 inputs, which include projected income from proved and probable
reserves utilizing forward price curves, net of anticipated costs, discounted.
The changes related to West Cameron 77 were the result of additional retirement
obligations. West Cameron 77 was fully depleted as of December 31,
2008. No impairments were recorded during the three months ended
September 30, 2009. During the nine months ended September 30, 2008,
the Fund recorded an adjustment of $0.5 million related to the impairment charge
to Eugene Island 364 that was recorded in the fourth quarter of
2007. The adjustment was related to a credit from the operator based
upon a review of well costs.
Depletion
and Amortization
Depletion
and amortization of the cost of proved oil and gas properties are calculated
using the units-of-production method. Proved developed reserves are
used as the base for depleting capitalized costs associated with successful
exploratory well costs. The sum of proved developed and proved
undeveloped reserves is used as the base for depleting or amortizing leasehold
acquisition costs, the costs to acquire proved properties and platform and
pipeline costs.
Income
Taxes
No
provision is made for income taxes in the financial statements. The
Fund is a limited liability company, and as such, the Fund’s income or loss is
passed through and included in the tax returns of the Fund’s
shareholders.
Income
and Expense Allocation
Profits
and losses are allocated 85% to shareholders in proportion to their relative
capital contributions and 15% to the Manager, except for interest income and
certain expenses such as dry-hole costs, trust fees, depletion and amortization,
which are allocated 99% to shareholders and 1% to the Manager.
3.
|
Recent
Accounting Standards
|
In
June 2009, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Codification as the source of GAAP to be applied to
nongovernmental agencies. This guidance explicitly recognizes rules and
interpretive releases of the SEC under authority of federal securities laws as
authoritative GAAP for SEC registrants. It is effective for interim or annual
periods ending after September 15, 2009. The guidance was adopted for the
third quarter of 2009 and did not have a material impact on the Fund’s financial
statements.
In
May 2009, the FASB issued guidance on subsequent events, which sets forth
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued or are
available to be issued. The guidance was adopted effective for the second
quarter of 2009 and did not have a material impact on the Fund’s financial
statements.
In
April 2009, the FASB issued guidance on interim disclosures about fair
value of financial instruments, which requires quarterly disclosure of
information about the fair value of financial instruments. The guidance
was adopted effective for the second quarter of 2009 and did not have a material
impact on the Fund’s financial statements.
In April
2009, the FASB issued guidance on the recognition and presentation of
other-than-temporary impairments, which amends the other-than-temporary
impairment guidance for debt securities to make the guidance more operational
and to improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements. This
guidance does not amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities. This guidance does not
require disclosures for earlier periods presented for comparative purposes at
initial adoption. In periods after initial adoption, this guidance requires
comparative disclosures only for periods ending after initial adoption. The
guidance was adopted effective for the second quarter of 2009 and did not have a
material impact on the Fund’s financial statements.
In
September 2006, the FASB issued guidance related to fair value measurements.
This guidance provides a common definition of fair value as the price that would
be received to sell an asset or paid to transfer a liability in a transaction
between market participants. The FASB also issued guidance on the methods used
to measure fair value and required expanded disclosures related to fair value
measurements. The Fund adopted this guidance for financial assets and financial
liabilities effective January 1, 2008 and for non-financial assets and
non-financial liabilities effective January 1, 2009. The adoption did not
have a material impact on the Fund’s financial statements.
In
December 2008, the SEC issued Release No. 33-8995, “Modernization of
Oil and Gas Reporting” (“Release No. 33-8995”), amending oil and gas reporting
requirements under Rule 4-10 of Regulation S-X and Industry Guide 2 in
Regulation S-K. The new requirements provide for consideration of new
technologies in evaluating reserves, allow companies to disclose their probable
and possible reserves to investors, report oil and gas reserves using an average
price based on the prior 12-month period rather than year-end prices, and revise
the disclosure requirements for oil and gas operations. The final rules
are effective for fiscal years ending on or after
December 31, 2009. The Fund does not expect the adoption of
Release No. 33-8995 to have a material impact on its financial statements and
disclosures.
4.
|
Unproved
Properties - Capitalized Exploratory Well
Costs
|
Leasehold
acquisition and exploratory drilling costs are capitalized pending determination
of whether the well has found proved reserves. Unproved properties
are assessed on a quarterly basis by evaluating and monitoring if sufficient
progress is made on assessing the reserves. At September 30, 2009,
the Fund had no unproved properties. The following table reflects the
net changes in unproved properties for the nine months ended September 30, 2009
and the year ended December 31, 2008.
September
30, 2009
|
December
31, 2008
|
|||||||
(in
thousands)
|
||||||||
Balance,
beginning of period
|
$ | 1,882 | $ | 7,357 | ||||
Additions
to capitalized exploratory well costs pending the
determination
of proved reserves
|
546 | 6,940 | ||||||
Reclassification
to proved properties based on the
determination
of proved reserves
|
(2,428 | ) | (12,415 | ) | ||||
Capitalized
exploratory well costs charged to dry-hole costs
|
- | - | ||||||
Balance,
end of period
|
$ | - | $ | 1,882 |
Capitalized
exploratory well costs are expensed as dry-hole costs in the event that reserves
are not found or are not in sufficient quantities to complete the well and
develop the field. Dry-hole costs were $1 thousand for each of the
three and nine months ended September 30, 2009. During the three and
nine months ended September 30, 2008, the Fund received credits for certain
wells from their respective operators upon review and audits of the wells’
costs, resulting in a net credit of $4 thousand for the three months ended
September 30, 2008. Dry-hole costs, inclusive of credits, for the
nine months ended September 30, 2008 were $1.7 million, related primarily to
South Marsh Island 213.
5.
|
Distributions
|
Distributions
to shareholders are allocated in proportion to the number of shares
held. The Manager determines whether available cash from operations,
as defined in the LLC Agreement, will be distributed. Such
distributions are allocated 85% to the shareholders and 15% to the Manager, as
required by the LLC Agreement.
Available
cash from dispositions, as defined in the LLC Agreement, will be paid 99% to
shareholders and 1% to the Manager until the shareholders have received total
distributions equal to their capital contributions. After shareholders have
received distributions equal to their capital contributions, 85% of available
cash from dispositions will be distributed to shareholders and 15% to the
Manager.
6.
|
Related
Parties
|
Effective
October 1, 2007 and continuing for the remaining life of the Fund, the Manager
elected to waive its management fee. Upon the waiver of the
management fee, the Fund began recording costs relating to services provided by
the Manager for accounting and investor relations. Such costs,
totaling $20 thousand and $60 thousand for each of the three and nine months
ended September 30, 2009 and 2008, respectively, were included in general and
administrative expenses.
At times,
short-term payables and receivables, which do not bear interest, arise from
transactions with affiliates in the ordinary course of
business.
None of
the compensation paid to the Manager has been derived as a result of arm’s
length negotiations.
The Fund
has working interest ownership in certain projects to acquire and develop oil
and natural gas projects with other entities that are likewise managed by the
Manager.
7.
|
Fair
Value of Financial Instruments
|
At
September 30, 2009 and December 31, 2008, cash and cash equivalents, production
receivable, salvage fund and accrued expenses approximate fair
value.
8.
|
Commitments
and Contingencies
|
Capital
Commitments
The Fund
has entered into multiple agreements for the drilling and development of its
investment properties. The estimated capital expenditures associated with these
agreements vary depending on the stage of development on a property-by-property
basis. The Fund has nearly completed its capital investment
program. At September 30, 2009, the Fund has capital commitments of
$1.6 million that exceed, by $0.6 million, its current available working capital
of $1.0 million, and an unfunded asset retirement obligation of $0.2
million. Based upon its current reserve estimates, the Fund expects
cash flow from operations to be sufficient to cover these
deficiencies. During the third quarter 2009, the Manager suspended
Fund distributions through December 2009.
Environmental
Considerations
The
exploration for and development of oil and natural gas involves the extraction,
production and transportation of materials which, under certain conditions, can
be hazardous or cause environmental pollution problems. The Manager
and operators of the Fund’s properties are continually taking action they
believe appropriate to satisfy applicable federal, state and local environmental
regulations and do not currently anticipate that compliance with federal, state
and local environmental regulations will have a material adverse effect upon
capital expenditures, results of operations or the competitive position of the
Fund in the oil and gas industry. However, due to the significant
public and governmental interest in environmental matters related to those
activities, the Manager cannot predict the effects of possible future
legislation, rule changes, or governmental or private claims. At
September 30, 2009 and December 31, 2008, there were no known environmental
contingencies that required the Fund to record a liability.
Insurance
Coverage
The Fund
is subject to all risks inherent in the exploration for and development of oil
and gas. Insurance coverage as is customary for entities engaged in similar
operations is maintained, but losses may occur from uninsurable risks or amounts
in excess of existing insurance coverage. The occurrence of an event that is not
insured or not fully insured could have an adverse impact upon earnings and
financial position. Moreover, insurance is obtained as a package
covering all of the funds managed by the Manager. Claims made by
other funds can reduce or eliminate insurance for the Fund.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Cautionary
Statement Regarding Forward-Looking Statements
Certain
statements in this Quarterly Report on Form 10-Q (“Quarterly Report”) and
the documents Ridgewood Energy M Fund, LLC (the “Fund”) has incorporated by
reference into this Quarterly Report, other than purely historical information,
including estimates, projections, statements relating to the Fund’s business
plans, strategies, objectives and expected operating results, and the
assumptions upon which those statements are based, are forward-looking
statements based on current expectations and assumptions that are subject to
risks and uncertainties that may cause actual results to differ materially from
the forward-looking statements. These forward-looking statements
generally are identified by the words “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “plan,” “target,” “pursue,”
“may,” “will likely result,” and similar expressions. Examples of such events
that could cause actual results to differ materially from historical results or
those anticipated include weather conditions, such as hurricanes, changes in
market conditions affecting the pricing of oil and natural gas, the cost and
availability of equipment, and changes in governmental
regulations. The Fund undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Critical
Accounting Policies and Estimates
The
following discussion and analysis of the Fund’s financial condition and
operating results is based on its financial statements. The
preparation of this Quarterly Report requires the Fund to make estimates and
assumptions that affect the reported amount of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the Fund’s
financial statements, and the reported amount of revenue and expense during the
reporting period. Actual results may differ from those estimates and
assumptions. See “Notes to Unaudited Condensed Financial Statements”
in Part I of this Quarterly Report for a presentation of the Fund’s significant
accounting policies. No changes have been made to the Fund’s critical
accounting policies and estimates disclosed in its 2008 Annual Report on Form
10-K.
Overview
of the Fund’s Business
The Fund
is a Delaware limited liability company formed on August 2, 2004 to acquire
interests in oil and natural gas properties located in the United States
offshore waters of Texas, Louisiana and Alabama in the Gulf of
Mexico. Ridgewood Energy Corporation (“Ridgewood Energy” or the
“Manager”) a Delaware corporation, is the Manager. As the Manager, Ridgewood
Energy has direct and exclusive control over the management of the Fund’s
operations. The Fund’s primary investment objective is to generate
cash for distribution to its shareholders through the acquisition of “working
interests” in the exploration, production and sale of oil and natural gas.
The
Manager performs certain duties on the Fund’s behalf including the evaluation of
potential projects for investment and ongoing management, administrative and
advisory services associated with these projects. The Fund does not
currently, nor is there any plan to operate any project in which the Fund
participates. The Manager enters into operating agreements with
third-party operators for the management of all exploration, development and
producing operations, as appropriate. The Manager also participates
in distributions.
Business
Update
The Fund
owns working interests and has participated in the drilling of fifteen wells;
six are currently producing, completion efforts are ongoing for one and eight
have been determined to be dry holes or have been fully depleted. The
Fund does not expect to participate in any additional wells.
Discoveries
Whistler
Project
In July
2008, the Fund acquired a 20.0% working interest in the Whistler Project, an
exploratory well. The Whistler Project was determined to be a
discovery in November 2008 and completion efforts are ongoing. The
well is expected to commence production during the first quarter of
2010. Through September 30, 2009, the Fund has spent $3.5 million on
this well, for which the total estimated budget is $5.1 million.
West
Cameron 57
In 2007,
the Fund acquired a 12.5% working interest in West Cameron 57, an exploratory
well. The well was determined to be a discovery in February 2008 and
production commenced in December 2008. The total cost of this well
was $4.8 million.
LLOG
Projects
In 2006,
the Fund acquired an 8.75% working interest in six exploratory wells which are
operated by LLOG Offshore Exploration Inc. (“LLOG”) off the coast of
Louisiana. Of the six wells, the Fund elected not to proceed with one
well and one well was determined to be a dry hole.
The
remaining four LLOG wells, as detailed below, have been determined to be
discoveries. Through September 30, 2009, the Fund spent $8.2 million
related to these wells. The Fund has recorded impairments related to
Vermilion 344 totaling $1.8 million, of which $0.5 million of impairment expense
was incurred during the nine months ended September 30, 2009.
South
Marsh Island 111
|
Discovery
July 2007; Production
commenced
February 2009
|
Vermilion
344
|
Discovery
January 2007; Production
commenced
December 2008
|
West
Delta 68
|
Discovery
March 2007; Production
commenced
July 2008
|
West
Delta 67
|
Discovery
November 2007; Production
commenced
July 2008
|
The West
Delta 67 and West Delta 68 wells experienced several weeks of production
interruption during September and October 2009 due to mechanical issues and
pipeline repairs. Production has resumed for both of these
wells.
Eugene
Island 337
In 2006,
the Fund acquired a 20.0% ownership in Eugene Island 337, an exploratory
well. The well was determined to be a discovery in July 2006 and
production commenced in November 2007. The total cost of this well
was $6.0 million. The Fund has recorded impairment costs totaling
$5.6 million, of which $64 thousand was incurred during the nine months ended
September 30, 2009.
The
pipeline utilized to transport Eugene Island 337 oil and natural gas production
suffered damage as a result of hurricane activity in the third quarter 2008,
thereby shutting down production for this well, which resumed in June
2009. As the Fund had no ownership in the pipeline, there was no cost
to the Fund related to these repair activities.
Results
of Operations
The
following table summarizes the Fund’s results of operations for the three and
nine months ended September 30, 2009 and 2008 and should be read in conjunction
with the Fund’s financial statements and notes thereto included within Item 1.
“Financial Statements” in Part I of this Quarterly Report.
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Revenue
|
||||||||||||||||
Oil
and gas revenue
|
$ | 422 | $ | 417 | $ | 1,753 | $ | 1,045 | ||||||||
Expenses
|
||||||||||||||||
Depletion
and amortization
|
649 | 148 | 2,478 | 466 | ||||||||||||
Dry-hole
costs
|
1 | (4 | ) | 1 | 1,699 | |||||||||||
Impairment
of proved properties
|
- | - | 611 | (471 | ) | |||||||||||
Workover
expenses
|
6 | 10 | 25 | 882 | ||||||||||||
Operating
expenses
|
123 | 136 | 341 | 221 | ||||||||||||
General
and administrative expenses
|
75 | 122 | 240 | 396 | ||||||||||||
Total
expenses
|
854 | 412 | 3,696 | 3,193 | ||||||||||||
(Loss)
income from operations
|
(432 | ) | 5 | (1,943 | ) | (2,148 | ) | |||||||||
Other
income
|
||||||||||||||||
Interest
income
|
7 | 31 | 22 | 167 | ||||||||||||
Net
(loss) income
|
$ | (425 | ) | $ | 36 | $ | (1,921 | ) | $ | (1,981 | ) |
Overview. During the three and
nine months ended September 30, 2009, the Fund had six producing
wells; Eugene Island 337 commenced production in 2007, West Delta 67
and West Delta 68 commenced production in July 2008, West Cameron 57 and
Vermilion 344 commenced production in December 2008 and South Marsh Island 111
commenced production in February 2009. During the three and nine
months ended September 30, 2008, the Fund had four producing wells, West Cameron
77, which was fully depleted as of December 31, 2008, Eugene Island 337,
West Delta 67 and West Delta 68.
As
previously discussed in the “Business Update”, the pipeline utilized to
transport Eugene Island 337’s oil and gas production suffered damage as a result
of hurricane activity in the third quarter 2008, thereby shutting down
production for Eugene Island 337, which resumed production in June
2009.
Oil and Gas
Revenue. Oil
and gas revenue for the each of the three months ended September 30, 2009 and
2008 was $0.4 million. An increase in sales volumes of $0.7
million was offset by the impact of lower average prices of $0.7
million.
Oil sales
volumes were 1 thousand barrels during the three months ended September 30, 2009
compared to 2 thousand barrels during the three months ended September 30,
2008. The Fund’s oil prices averaged $49 per barrel and $113 per
barrel during the three months ended September 30, 2009 and 2008,
respectively.
Gas sales
volumes were 106 thousand mcf during the three months ended September 30, 2009,
compared to 18 thousand mcf during the three months ended September 30,
2008. The Fund’s gas prices averaged $3.06 per mcf and $9.27 per mcf
during the three months ended September 30, 2009 and 2008,
respectively.
Oil and
gas revenue for the nine months ended September 30, 2009 was $1.8 million, a
$0.7 million increase from the nine months ended September 30,
2008. The increase is attributable to an increase in sales volumes of
$3.3 million, partially offset by the impact of lower average prices of $2.6
million.
Oil sales
volumes were 6 thousand barrels during the nine months ended September 30, 2009
compared to 2 thousand barrels during the nine months ended September 30,
2008. The Fund’s oil prices averaged $50 per barrel and $116 per
barrel during the nine months ended September 30, 2009 and 2008,
respectively.
Gas sales
volumes were 374 thousand mcf during the nine months ended September 30, 2009,
compared to 80 thousand mcf during the nine months ended September 30,
2008. The Fund’s gas prices averaged $3.77 per mcf and $9.71 per mcf
during the nine months ended September 30, 2009 and 2008,
respectively.
The
decrease in oil volumes for the three months ended September 30, 2009 compared
to the three months ended September 30, 2008 was primarily attributable to West
Delta 67 and West Delta 68 being offline due to mechanical problems for several
weeks during September 2009, partially offset by the onset of production of West
Cameron 57. The increase in gas volumes for the three months ended
September 30, 2009 compared to the three months ended September 30, 2008 was
primarily attributable to the timing of the onset of production of the Fund’s
wells, as discussed above in “Overview”.
The
increase in oil and gas volumes for the nine months ended September 30, 2009
compared to the nine months ended September 30, 2008, was primarily attributable
to the timing of the onset of production of the Fund’s wells, as discussed above
in “Overview”. This increase was partially offset by lower oil and
gas sales volumes for West Cameron 77, which was fully depleted at December 31,
2008, and Eugene Island 337, which suffered damage as a result of hurricane
activity in the third quarter of 2008, shutting down its production until June
2009.
Depletion and
Amortization. Depletion and amortization was $0.6 million and
$2.5 million for the three and nine months ended September 30, 2009,
respectively, compared to $0.1 million and $0.5 million for the three and nine
months ended September 30, 2008, respectively. The increases for the
three and nine month periods are due to an overall increase in production
volumes coupled with an increase in the average depletion rate.
Dry-hole
Costs. Dry-hole costs are those
costs incurred to drill and develop a well that is ultimately found to be
incapable of producing either oil or gas in sufficient quantities to justify
completion of the well. Dry-hole costs were $1 thousand for each of the three
and nine months ended September 30, 2009. During the three and nine
months ended September 30, 2008, the Fund received credits for certain wells
from their respective operators upon review and audits of the wells’ costs,
resulting in a net credit of $4 thousand for the three months ended September
30, 2008. Dry-hole costs, inclusive of credits, for the nine months
ended September 30, 2008 were $1.7 million, related primarily to South Marsh
Island 213.
Impairment of
Proved Properties, net. During
the nine months ended September 30, 2009, the Fund recorded impairments to
proved properties of $0.6 million, of which $0.5 million and $64 thousand
related to Vermilion 344 and Eugene Island 337, respectively. Such
impairments were principally attributable to lower oil and gas commodity
prices. Additionally, impairment expense of $86 thousand was incurred
related to the West Cameron 77 asset retirement cost estimates, which was fully
depleted at December 31, 2008. During the nine months ended September
30, 2008, the Fund recorded a credit to impairment of proved properties of $0.5
million upon review of well costs related to Eugene Island 364, which had been
fully impaired in 2007. There were no impairments recorded during the
three months ended September 30, 2009 or 2008.
Workover
Expenses. Workover expenses represent costs to restore or
stimulate production of existing reserves of a proved
property. Workover expenses of $6 thousand and $25 thousand for the
three and nine months ended September 30, 2009 were primarily attributable to
West Delta 67 and West Delta 68. Workover expenses of $10 thousand
and $0.9 million for the three and nine months ended September 30, 2008,
respectively, were attributable to recompletion efforts for the upper reservoir
zone of West Cameron 77, which ultimately proved unsuccessful.
Operating
Expenses. Operating expenses include the costs of operating
and maintaining wells and related facilities, geological costs and accretion
expense, as detailed in the following table.
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Lease
operating expense
|
$ | 118 | $ | 60 | $ | 326 | $ | 135 | ||||||||
Geological
costs
|
- | 71 | - | 75 | ||||||||||||
Accretion
expense
|
5 | 5 | 15 | 11 | ||||||||||||
$ | 123 | $ | 136 | $ | 341 | $ | 221 |
Lease
operating expense for the three and nine months ended September 30, 2009 and
2008 related to the Fund’s producing properties during each period as outlined
above in “Overview”. Geological costs for the three and nine months
ended September 30, 2008 related primarily to the Whistler
project. Accretion expense related to the asset retirement
obligations established for the Fund’s proved properties.
General
and Administrative Expenses. General and administrative expenses
represent costs specifically identifiable or allocable to the Fund as detailed
in the following table.
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Accounting
fees
|
$ | 38 | $ | 35 | $ | 112 | $ | 143 | ||||||||
Insurance
expense
|
17 | 63 | 66 | 179 | ||||||||||||
Management
reimbursement
|
20 | 20 | 60 | 60 | ||||||||||||
Trust
fees and other
|
- | 4 | 2 | 14 | ||||||||||||
$ | 75 | $ | 122 | $ | 240 | $ | 396 |
Accounting
fees represent audit and tax preparation fees, quarterly review and filing fees
incurred by the Fund. Insurance expense represents premiums related
to producing well and control of well insurance, which varies dependent upon the
number of wells producing or drilling, and director’s and officers’ liability
insurance. Management reimbursement relates to reimbursements for
various administrative costs incurred on the Fund’s behalf. Trust
fees represent bank fees associated with the management of the Fund’s cash
accounts.
Interest
Income. Interest
income is comprised of interest earned on money market accounts and investments
in U.S. Treasury securities within the Fund’s salvage fund. Interest
income for the three months ended September 30, 2009 was $7 thousand, a $24
thousand decrease from the three months ended September 30,
2008. Interest income for the nine months ended September 30, 2009
was $22 thousand, a $0.1 million decrease from the nine months ended September
30, 2008. The decreases were attributable to a reduction in the average
outstanding balances earning interest due to ongoing capital expenditures for
oil and gas properties, coupled with lower interest rates earned.
Capital
Resources and Liquidity
Operating Cash
Flows
Cash
flows provided by operating activities for the nine months ended September 30,
2009 were $1.2 million, primarily related to revenue receipts of $1.7 million,
partially offset by operating expenses of $0.3 million and general and
administrative expenses of $0.2 million.
Cash
flows used in operating activities for the nine months ended September 30, 2008
were $0.3 million, primarily related to workover expenses paid of $0.9 million,
general and administrative expenses of $0.4 million and operating expenses of
$0.2 million, partially offset by revenue received of $1.1 million and interest
received of $0.1 million.
Investing
Cash Flows
Cash
flows used in investing activities for the nine months ended September 30, 2009
were $2.8 million, related to capital expenditures for oil and gas properties of
$2.2 million, inclusive of advances, and investments in the salvage fund of $0.7
million, inclusive of interest earned on this account.
Cash
flows used in investing activities for the nine months ended September 30, 2008
were $1.3 million, related to capital expenditures for oil and gas properties of
$6.4 million, partially offset by the proceeds from the maturity of U.S.
Treasury securities of $5.1 million. Additionally, the Fund increased
its salvage fund investments by $21 thousand, which consisted of interest earned
on this account.
Financing
Cash Flows
Cash
flows used in financing activities for the nine months ended September 30, 2009
were $0.7 million, related to manager and shareholder
distributions.
There
were no cash flows from financing activities for the nine months ended September
30, 2008.
Estimated
Capital Expenditures
The Fund
has entered into multiple agreements for the drilling and development of its
investment properties. The estimated capital expenditures associated
with these agreements can vary depending on the stage of development on a
property-by-property basis. As of September 30, 2009, the Fund had
committed to spend an additional $1.6 million related to its investment
properties. The Fund does not expect to participate in any
additional investment properties.
When the
Manager makes a decision to participate in a particular project, it assumes that
the well will be successful and allocates enough capital to budget for the
completion of that well and the additional development wells and infrastructure
anticipated. If an exploratory well is deemed a dry hole or if it is
un-economical, the capital allocated to the completion of that well and to the
development of additional wells is then reallocated to a new project or used to
make additional investments.
Capital
expenditures for investment properties are funded with the capital raised by the
Fund in its private placement offering, which is more than likely, all the
capital it will obtain. The number of projects in which the Fund can
invest will naturally be limited and each unsuccessful project the Fund
experiences will reduce its ability to generate revenue and exhaust its
capital. Typically, the Manager seeks an investment portfolio that
combines high and low risk exploratory projects.
Liquidity
Needs
The
Fund’s primary short-term liquidity needs are to fund its operations, including
capital expenditures for its investment properties. The Fund has
nearly completed its capital investment program. At September 30,
2009, the Fund has capital commitments of $1.6 million that exceed, by $0.6
million, its current available working capital of $1.0 million, and an unfunded
asset retirement obligation of $0.2 million. Based upon its current
reserve estimates, the Fund expects cash flow from operations to be sufficient
to cover these deficiencies, as well as ongoing operations. During
the third quarter 2009, the Manager suspended Fund distributions through
December 2009.
Distributions
are funded from available cash from operations, as defined in the Fund’s limited
liability company agreement, and the frequency and amount are within the
Manager’s discretion subject to available cash from operations, reserve
requirements and the Fund’s operations.
Operations
are funded utilizing operating income, existing cash on-hand and income earned
therefrom.
Off-Balance
Sheet Arrangements
The Fund
had no off-balance sheet arrangements at September 30, 2009 and December 31,
2008 and does not anticipate the use of such arrangements in the
future.
Contractual
Obligations
The Fund
enters into operating agreements with operators. On behalf of the Fund, an
operator enters into various contractual commitments pertaining to exploration,
development and production activities. The Fund does not negotiate any
such contracts. No contractual obligations exist at September 30, 2009 and
December 31, 2008 other than those discussed in “Estimated Capital Expenditures”
above.
Recent
Accounting Pronouncement
See Note
3 of Notes to Unaudited Condensed Financial Statements – “Recent Accounting
Standards” contained in this Quarterly Report for a discussion of recent
accounting pronouncements.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not
required.
ITEM
4. CONTROLS AND PROCEDURES
In
accordance with Exchange Act Rules 13a-15 and 15d-15, the Fund carried out
an evaluation, under the supervision and with the participation of management,
including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Fund’s disclosure controls and procedures as of the end of
the period covered by this report. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Fund’s
disclosure controls and procedures were effective as of September 30,
2009.
There has
been no change in the Fund’s internal control over financial reporting that
occurred during the three months ended September 30, 2009 that has materially
affected, or is reasonably likely to materially affect, the Fund’s internal
control over financial reporting.
PART
II -OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
On August
16, 2006, the Manager of the Fund filed a lawsuit against the former independent
registered public accounting firm for the Fund, Perelson Weiner, LLP
(“Perelson”), in New Jersey Superior Court, captioned Ridgewood Energy
Corporation v. Perelson Weiner, LLP, Docket No. L-6092-06. The suit
alleged professional malpractice and breach of contract in connection with audit
and accounting services performed for the Fund by
Perelson. Thereafter, Perelson filed a counterclaim against the
Manager on October 20, 2006, alleging breach of contract due to unpaid invoices
in the amount of $326,554. Discovery is ongoing and a trial date has
been set for February 1, 2010.
Legal
costs related to this claim are borne by the Manager.
ITEM
1A. RISK FACTORS
Not
required.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None.
ITEM
5. OTHER INFORMATION
On June
22, 2009, Kenneth W. Lang was named President and Chief Operating Officer of the
Fund. Prior to joining the Fund, Mr. Lang was with BP for twenty-four
years, ultimately serving as Senior Vice President for BP’s Gulf of Mexico
business and a member of the Board of Directors for BP America,
Inc. Robert E. Swanson, formerly President and Chief Executive
Officer of the Fund, will remain Chief Executive Officer of the
Fund.
Adrien
Doherty, Executive Vice President of the Fund resigned effective October 30,
2009.
ITEM
6. EXHIBITS
Exhibit
|
||||
Number
|
Title of Exhibit
|
Method
of Filing
|
||
31.1
|
Certification
of Robert E. Swanson, Chief Executive Officer of the Fund, pursuant to
Securities Exchange Act Rule 13a-14(a)
|
Filed
herewith
|
||
31.2
|
Certification
of Kathleen P. McSherry, Chief Financial Officer of the Fund, pursuant to
Securities Exchange Act Rule 13a-14(a)
|
Filed
herewith
|
||
32
|
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
The Sarbanes-Oxley Act of 2002, signed by Robert E. Swanson, Chief
Executive Officer of the Fund and Kathleen P. McSherry, Chief Financial
Officer of the Fund
|
Filed
herewith
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RIDGEWOOD
ENERGY M FUND, LLC
|
||||||
Dated:
|
November
12, 2009
|
By:
|
/s/
|
ROBERT
E. SWANSON
|
||
Name:
|
Robert
E. Swanson
|
|||||
Title:
|
Chief
Executive Officer
|
|||||
(Principal
Executive Officer)
|
||||||
Dated:
|
November
12, 2009
|
By:
|
/s/
|
KATHLEEN
P. MCSHERRY
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Name:
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Kathleen
P. McSherry
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Title:
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Executive
Vice President and Chief Financial Officer
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(Principal
Financial Officer)
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