UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

FORM 10-Q

xý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended ~~March~~June 3130, 2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ~~_______________ to __________________~~_______________________to____________________________

Commission File ~~Number:~~No. 000-51266

RIDGEWOOD ENERGY K FUND, LLC

(Exact name of registrant as specified in its charter)

Delaware	68-0580588
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Delaware

(State or other jurisdiction of

incorporation or organization)

68-0580588

(I.R.S. Employer

Identification No.)

14 Philips Parkway, Montvale, NJ 07645

(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 x No o~~

Yes x 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 x 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 ~~o Smaller reporting company x~~ (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~~.

As Yes o No ~~of May 7, 2012 the Fund had 480.7046 shares of LLC Membership Interest outstanding.~~x

As of August 2, 2012 the Fund had 480.7046 shares of LLC Membership Interest outstanding.

Table of Contents

			PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		1
		Unaudited Condensed Balance Sheets as of June 30, 2012 and December 31, 2011	1
		Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2012 and 2011	2
		Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2012 and 2011	3
		Notes to Unaudited Condensed Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		13
Item 4.	Controls and Procedures		13

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		14
Item 1A.	Risk Factors		14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		14
Item 3.	Defaults Upon Senior Securities		14
Item 4.	Mine Safety Disclosures		14
Item 5.	Other Information		14
Item 6.	Exhibits		14
	SIGNATURES		15

Table of Contents

PART I – FINANCIAL INFORMATION			PAGE
Item 1.	Financial Statements		1
		Unaudited Condensed Balance Sheets as of March 31, 2012 and December 31, 2011	1
		Unaudited Condensed Statements of Operations for the three months ended
		March 31, 2012 and 2011	2
		Unaudited Condensed Statements of Cash Flows for the three months ended
		March 31, 2012 and 2011	3
		Notes to Unaudited Condensed Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		13
Item 4.	Controls and Procedures		13
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		13
Item 1A.	Risk Factors		13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		13
Item 3.	Defaults upon Senior Securities		13
Item 4.	Mine Safety Disclosures		13
Item 5.	Other Information		13
Item 6.	Exhibits		13
	SIGNATURES		14

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RIDGEWOOD ENERGY K FUND, LLC

UNAUDITED CONDENSED BALANCE SHEETS

(in thousands, except share data)

	March 31, 2012			December 31, 2011
	June 30, 2012			December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	21,~~058~~240		$	2,014
Salvage fund		~~305~~421			305
Production receivable		6178			35
Other current assets		132			41
Total current assets		21,~~437~~741			2,395
Salvage fund		~~798~~687			793
Oil and gas properties:
Unproved properties		-			2
Proved properties		4,~~632~~633			4,634
Less: accumulated depletion and amortization		(2,~~527~~597	)		(2,438	)
Total oil and gas properties, net		2,~~105~~036			2,198
Total assets	$	54,~~340~~464		$	5,386
Liabilities and Members' Capital
Current liabilities:
Accrued expenses	$	~~112~~330		$	154
Asset retirement obligations		~~305~~421			305
Total current liabilities		~~417~~751			459
Asset retirement obligations		~~231~~230			231
Total liabilities		~~648~~981			690
Commitments and contingencies (Note 5)
Members' capital:
Manager:
Distributions		(290	)		(290	)
Retained earnings		1,~~151~~140			1,145
Manager's total		~~861~~850			855
Shareholders:
Capital contributions (534 shares authorized;
480.7046 issued and outstanding)		70,860			70,860
Syndication costs		(7,775	)		(7,775	)
Distributions		(12,442	)		(12,442	)
Accumulated deficit		(4648,~~812~~010	)		(46,802	)
Shareholders' total		32,~~831~~633			3,841
Total members' capital		43,~~692~~483			4,696
Total liabilities and members' capital	$	54,~~340~~464		$	5,386

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

Table of Contents

RIDGEWOOD ENERGY K FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three months ended March 31,
	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Revenue
Oil and gas revenue	$	~~122~~121		$	9566		$	243		$	161
Expenses
Depletion and amortization		8970			4539			159			84
Dry-hole costs		~~(34~~1,153	)		-111			1,119			111
Operating expenses		3132			2383			63			106
General and administrative expenses		4580			4960			125			109
Total expenses		~~131~~1,335			~~117~~293			1,466			410
Loss from operations		(91,214	)		(22227	)		(1,223	)		(249	)
Interest income		5			78			10			15
Net loss	$	(41,209	)	$	(15219	)	$	(1,213	)	$	(234	)
Manager Interest
Net income	$	6		$	3
Net loss	$	(11	)	$	(13	)	$	(5	)	$	(10	)
Shareholder Interest
Net loss	$	(101,198	)	$	(18206	)	$	(1,208	)	$	(224	)
Net loss per share	$	(222,493	)	$	(37429	)	$	(2,515	)	$	(466	)

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

Table of Contents

RIDGEWOOD ENERGY K FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	Three months ended March 31,
	Six months ended June 30,
	2012			2011
Cash flows from operating activities
Net loss	$	(41,213	)	$	(15234	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
used in operating activities:
Depletion and amortization		89159			4584
Dry-hole costs		~~(34~~1,119	)		-111
Changes in assets and liabilities:
Increase in production receivable		(26	)		(11	)
(Increase) decrease in production receivable		(43	)		14
Decrease in other current assets		2839			1224
Decrease in accrued expenses		(877	)		(93100	)
Net cash provided by (used in) operating activities		45			(62	)
Net cash used in operating activities		(16	)		(101	)
Cash flows from investing activities
Credits (expenditures) for capital investment properties		4			(2	)
Capital expenditures for oil and gas properties		(748	)		(162	)
Interest reinvested in salvage fund		(510	)		(714	)
Net cash used in investing activities		(1758	)		(9176	)
Net increase (decrease) in cash and cash equivalents		44			(71	)
Net decrease in cash and cash equivalents		(774	)		(277	)
Cash and cash equivalents, beginning of period		2,014			2,311
Cash and cash equivalents, end of period	$	21,~~058~~240		$	2,~~240~~034
Supplemental schedule of non-cash investing activities
Advances used for capital expenditures in oil and gas properties reclassified to proved properties	$	-		$	67

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

Table of Contents

RIDGEWOOD ENERGY K FUND, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. Organization and Summary of Significant Accounting Policies

Organization

The Ridgewood Energy K Fund, LLC (the “Fund”), a Delaware limited liability company, was formed on March 1, 2004 and operates pursuant to a limited liability company agreement (the “LLC Agreement”) dated as of April 1, 2004 by and among Ridgewood Energy Corporation (the “Manager”) and the shareholders of the Fund. The Fund was organized to primarily acquire interests in oil and 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 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 3 and 5.

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, 2011 financial statements and notes thereto included in the Fund’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

Use of Estimates

The preparation of financial statements in accordance 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 the fair value of financial instruments, 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, deposits may be in excess of federally insured limits, which, for interest bearing deposits, are $250 thousand per insured financial institution. Additionally, non-interest bearing deposits are fully insured through December 31, 2012, after which they will be included within the $250 thousand limit. At ~~March~~June 3130, 2012, the Fund’s bank balances exceeded federally insured limits by $10.48 million, all of which was invested in money market accounts that invest solely in U.S. Treasury bills and notes.

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 ~~March~~June 3130, 2012, the Fund had investments in U.S. Treasury securities within its salvage fund that are classified as held-to-maturity of $0.3 million, which ~~mature~~matured in July 2012. Held-to-maturity investments are those securities that the Fund has the ability and intent to hold until maturity, and are recorded at cost plus accrued income, adjusted for the amortization of premiums and discounts, which approximates fair value. Additionally, at ~~March~~June 3130, 2012, the Fund had investments in federal agency mortgage-backed securities within its salvage fund that are classified as available-for-sale of $0.7 million, which mature in January 2042. Available-for-sale securities are carried in the financial statements at fair value. At ~~March~~June 3130, 2012, there was no unrealized gain or loss related to the Fund’s available-for-sale investments. The Fund had no investments in available-for-sale securities at December 31, 2011.

Table of Contents

For all investments, interest income is accrued as earned and amortization of premium or discount, if any, is included in interest income. Interest earned on the account will become part of the salvage fund. There are no 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.

Exploration, development and acquisition costs are accounted for using the successful efforts method. Costs of acquiring unproved and proved oil and natural gas leasehold acreage, including lease bonuses, brokers’ fees and other related costs are capitalized. Costs of drilling and equipping productive wells and related production facilities are capitalized. Exploratory costs are capitalized pending determination of whether proved reserves have been found. If proved commercial reserves are not found, exploratory drilling costs are expensed as dry-hole costs. Annual lease rentals and exploration expenses 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.

At June 30, 2012, amounts recorded in accrued expenses totaling $0.3 million related to capital expenditures for oil and gas properties. There were no such amounts recorded at December 31, 2011.

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 or proved 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. AsThe ~~indicated~~following ~~above,~~table ~~the~~presents ~~Fund~~changes ~~maintains~~in aasset ~~salvage~~retirement ~~fund~~obligations ~~to provide~~ for the ~~funding~~six ofmonths ~~future~~ended ~~asset~~June ~~retirement~~30, ~~obligations~~2012 and the year ended December 31, 2011.

	2012		2011
	(in thousands)
Balance, beginning of period	$	536	$	588
Liabilities incurred		-		-
Liabilities settled		-		(125	)
Accretion expense		-		4
Revisions in estimated cash flows		115		69
Balance, end of period	$	651	$	536

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

Table of Contents

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 collectability 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.

Table of Contents

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 time of the review. 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 natural gas prices, it is reasonably possible that the Fund’s estimate of discounted future net cash flows from proved oil and natural gas reserves could change in the near term. If oil and natural 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.

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, development costs and related facilities. The sum of proved developed and proved undeveloped reserves is used as the base for depleting or amortizing leasehold acquisition 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.

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. During 2006, the Manager elected to waive its right to distributions of available cash from operations for the remaining life of the Fund.

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

Table of Contents

Recent Accounting Pronouncements

The Fund has considered recent accounting pronouncements and believes that these recent pronouncements will not have a material effect on the Fund’s financial statements.

2. Oil and Gas Properties

Leasehold acquisition and exploratory drilling costs are capitalized pending determination of whether the well has found proved reserves. Unproved properties are assessed on a quarterly basis by evaluating and monitoring if sufficient progress is made on assessing the reserves. At ~~March~~June 3130, 2012, the Fund had no unproved properties ~~with capitalized exploratory well costs in excess of one year~~.

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. At times, the Fund receives credits on certain wells from their respective operators upon review and audit of the wells’ costs. ~~The Fund recorded credits to dry~~Dry-hole costs, inclusive of ~~$34~~such ~~thousand during the three months ended March 31~~credits, ~~2012. The~~are ~~Fund~~detailed ~~had~~in ~~no dry-hole costs during~~ the ~~three~~following ~~months ended March 31, 2011~~table.

	Three months ended June 30,				Six months ended June 30,
Project	2012		2011		2012		2011
	(in thousands)
Falcon Project	$	1,056	$	-	$	1,056	$	-
Other wells		97		111		63		111
	$	1,153	$	111	$	1,119	$	111

3. Related Parties

The LLC Agreement provides that the Manager render management, administrative and advisory services for which the Manager is entitled to an annual management fee equal to 2.5% of the total shareholder capital. During 2005, the Manager waived its management fee for the remaining life of the Fund. 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, which are included in general and administrative expenses, totaled $10 thousand and $20 thousand for each of the three and six months ended ~~March~~June 3130, 2012 and 2011, respectively.

Table of Contents

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 amounts paid to the Manager have 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.

4. Fair Value Measurements

At ~~March~~June 3130, 2012 and December 31, 2011, cash and cash equivalents, salvage fund, production receivable, and accrued expenses approximate fair value. At ~~March~~June 3130, 2012, the fair value of the Fund’s mortgage-backed securities were recorded based on Level 2 inputs, as such instruments trade in over-the-counter markets.

5. 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 reached the end of its investment cycle. As of ~~March~~June 3130, 2012, the Fund had committed to spend an additional $10.65 million related to its investment properties, principally all of which is expected to be spent during the next twelve months. Based upon its current ~~cash position and its current~~ reserve estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments, as well as ongoing operations. Reserve estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision. In the event of a temporary production stoppage, causing the Fund’s wells to not produce cash flow from operations, the Fund may borrow from the Manager until such time that production is resumed. At such time the Manager determines that the Fund is no longer capable of continuing to fund its operations, the Manager would elect to dissolve the Fund.

Table of Contents

Environmental Considerations

The exploration for and development of oil and natural gas involves the extraction, production and transportation of materials which, under certain conditions, can be hazardous or cause environmental pollution problems. The Manager and operators of the Fund’s properties are continually taking action they believe appropriate to satisfy applicable federal, state and local environmental regulations and do not currently anticipate that compliance with federal, state and local environmental regulations will have a material adverse effect upon capital expenditures, results of operations or the competitive position of the Fund in the oil and gas industry. However, due to the significant public and governmental interest in environmental matters related to those activities, the Manager cannot predict the effects of possible future legislation, rule changes, or governmental or private claims. At ~~March~~June 3130, 2012 and December 31, 2011, there were no known environmental contingencies that required the Fund to record a liability.

In response to the April 2010 oil spill in the Gulf of Mexico, the United States Congress is considering a number of legislative proposals relating to the upstream oil and gas industry both onshore and offshore. Such proposals could result in significant additional laws or regulations governing the Fund’s operations in the United States, including a proposal to raise or eliminate the cap on liability for oil spill cleanups under the Oil Pollution Act of 1990. Although it is not possible at this time to predict whether proposed legislation or regulations will be adopted as initially written, if at all, or how legislation or new regulation that may be adopted would impact our business, any such future laws and regulations could result in increased compliance costs or additional operating restrictions, which could have a material adverse effect on the Fund’s operating results and cash flows.

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 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 managed by the Manager can reduce or eliminate insurance for the Fund.

Table of Contents

6. Subsequent Events

~~The~~Falcon Fund has assessed the impact of subsequent events through the date of 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.Project

In July 2011, the Fund acquired a 4.5% working interest in the exploratory well Falcon Project. This project began drilling in April 2012 and was determined to be an unsuccessful well, or dry hole, in July 2012. For the three and six months ended June 30, 2012, dry-hole costs related to this well were $1.1 million. Additional dry-hole costs of $0.1 million, inclusive of plug and abandonment expenses, were incurred during the third quarter 2012.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q (“Quarterly Report”) and the documents Ridgewood Energy K Fund, LLC (the “Fund”) has incorporated by reference into this Quarterly Report, other than purely historical information, including estimates, projections, statements relating to the Fund’s business plans, strategies, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 that are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. You are therefore cautioned against relying on any such forward-looking statements. Forward-looking statements can generally be identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “target,” “pursue,” “may,” “will,” “will likely result,” and similar expressions and references to future periods. Examples of 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. Examples of forward-looking statements made herein include statements regarding future projects, investments and insurance. Forward-looking statements made in this document speak only as of the date on which they are made. 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 2011 Annual Report on Form 10-K.

Overview of the Fund’s Business

The Fund is a Delaware limited liability company formed on March 1, 2004 to primarily acquire interests in oil and natural gas properties located in the United States offshore waters of Texas, Louisiana and Alabama in the Gulf of Mexico. The Fund’s primary investment objective is to generate cash flow for distribution to its shareholders by generating returns across a portfolio of exploratory or development oil and natural gas projects. However, the Fund is not required to make distributions to shareholders except as provided in the Fund’s limited liability company agreement (the “LLC Agreement”).

Ridgewood Energy Corporation (the “Manager” or “Ridgewood Energy”) is the Manager, and as such, has direct and exclusive control over the management of the Fund’s operations. The Manager performs certain duties on the Fund’s behalf including the evaluation of potential projects for investment and ongoing management, administrative and advisory services associated with these projects. The Fund does not currently, nor is there any plan to, operate any project in which the Fund participates. The Manager enters into operating agreements with third-party operators for the management of all exploration, development and producing operations, as appropriate.

Revenues are subject to market pricing for oil and natural gas, which has been volatile, and is 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 oil and natural gas with any certainty. Low commodity prices could have an adverse effect on the Fund’s future profitability.

9Subsequent Event

~~Table~~Falcon ~~of Contents~~Project

Business Update

Information regarding the Fund’s current projects, all of which are located in the offshore waters of the Gulf of Mexico, is provided in the following table.

		Total Spent	Total
	Working	through	Fund
Lease Block	Interest	March 31, 2012	Budget	Status
		(in thousands)
Non-producing Properties
Falcon Project	4.50%	$ -	$ 1,258	Acquired interest in July 2011. Drilling commenced in April 2012. Results expected in May 2012.
Producing Properties
South Marsh Island 111	3.75%	$ 1,182	$ 1,186	Production commenced in 2009. Minor recompletion is planned for 2013 at an estimated cost of $4 thousand.
West Cameron 76 A-1	11.24%	$ 1,781	$ 2,129	Production commenced in 2007. Recompletion efforts to access behind the pipe reserves are planned for 2012 at an estimated cost of $0.3 million.
West Delta 68	3.75%	$ 888	$ 892	Production commenced in 2008. Recompletion planned for 2014 at an estimated cost of $4 thousand.

Table of Contents

		Total Spent		Total
	Working	through		Fund
Project	Interest	June 30, 2012		Budget		Status
		(in thousands)
Producing Properties
South Marsh Island 111	3.75%	$	1,184	$	1,184	Production commenced in 2009. Well underwent a recompletion during second quarter 2012 at a cost of $2 thousand.
West Cameron 76 A-1	11.24%	$	1,781	$	2,129	Production commenced in 2007. Recompletion efforts to access behind the pipe reserves are planned for 2012 at an estimated cost of $0.3 million.

West Delta 68	3.75%	$	888	$	892	Production commenced in 2008. Recompletion planned for 2014 at an estimated cost of $4 thousand.
Dry Hole
Falcon Project	4.50%	$	1,056	$	1,202	Acquired interest in July 2011. Drilling commenced in April 2012. Well determined to be a dry hole in July 2012.

Results of Operations

The following table summarizes the Fund’s results of operations for the three and six months ended ~~March~~June 3130, 2012 and 2011, and should be read in conjunction with the Fund’s financial statements and notes thereto included within Item 1. “Financial Statements” in Part I in this Quarterly Report.

	Three months ended March 31,
	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
	(in thousands)
Revenue
Oil and gas revenue	$	~~122~~121		$	9566		$	243		$	161
Expenses
Depletion and amortization		8970			4539			159			84
Dry-hole costs		~~(34~~1,153	)		-111			1,119			111
Operating expenses		3132			2383			63			106
General and administrative expenses		4580			4960			125			109
Total expenses		~~131~~1,335			~~117~~293			1,466			410
Loss from operations		(91,214	)		(22227	)		(1,223	)		(249	)
Interest income		5			78			10			15
Net loss	$	(41,209	)	$	(15219	)	$	(1,213	)	$	(234	)

Overview. The following table provides information related to the Fund’s oil and gas production and oil and gas revenue during the three and six months ended ~~March~~June 3130, 2012 and 2011.

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Number of wells producing		3		3		3		4
Total number of production days		234		227		476		410
Average mcfe per production day		89		44		89		57
Oil sales (in barrels)		315		191		790		656
Average oil price per barrel	$	110	$	112	$	111	$	101
Gas sales (in thousands of mcfs)		16		8		32		17
Average gas price per mcf	$	2.26	$	4.57	$	2.28	$	4.46

Table of Contents

	Three months ended March 31,
	2012		2011
Number of wells producing		3		4
Total number of production days		241		183
Average mcfe per production day		93		66
Oil sales (in barrels)		510		500
Average oil price per barrel	$	113	$	97
Gas sales (in thousands of mcfs)		16		9
Average gas price per mcf	$	2.45	$	5.30

The increases in production days, average production rates and oil and gas sales volumes were principally attributable to a decrease in the number of non-productive days related to maintenance activities. See additional discussion in “Business Update” section above.

~~The~~Oil ~~increases~~and inGas ~~production~~Revenue. Oil ~~days,~~and ~~average~~gas ~~production~~revenue ~~rate~~for ~~and~~the ~~oil~~three ~~and~~months ~~gas~~ended ~~sales~~June ~~volumes~~30, ~~were~~2012 ~~principally~~was ~~attributable~~$121 tothousand, a ~~decrease~~$55 inthousand increase from the ~~number~~three ofmonths ~~non-productive~~ended ~~days~~June ~~related~~30, 2011. The increase is attributable to ~~maintenance~~increased ~~activities~~sales volume partially offset by the decrease in average prices.

Oil and ~~Gas Revenue. Oil and~~ gas revenue for the ~~three~~six months ended ~~March~~June 3130, 2012 was $~~122~~243 thousand, aan $2782 thousand increase from the ~~three~~six months ended ~~March~~June 3130, 2011. The increase is ~~principally~~ attributable to increased sales volume, partially offset by the impact of ~~decreased~~the ~~gas~~change ~~prices. See~~in ~~“Overview”~~average ~~above for additional information~~prices.

~~Depletion~~See ~~and~~“Overview” ~~Amortization. Depletion~~above ~~and amortization~~ for ~~the~~additional ~~three months ended March 31, 2012 was $89 thousand, an increase of $44 thousand from the three months ended March 31, 2011~~information. ~~The increase resulted primarily from an increase in production volumes.~~

~~Dry-hole~~Depletion ~~Costs~~and Amortization. ~~Dry-hole~~Depletion ~~costs~~and ~~are~~amortization ~~those~~for ~~costs~~the ~~incurred~~three ~~to drill~~ and ~~develop~~six amonths ~~well~~ended ~~that~~June is30, ~~ultimately~~2012 ~~found~~was to$70 bethousand ~~incapable~~and of$159 ~~producing~~thousand, ~~either~~respectively, ~~oil~~an orincrease ~~natural gas in sufficient quantities to justify completion~~ of ~~the~~$31 ~~well. At~~thousand ~~times, the Fund receives credits on certain wells from their respective operators upon review~~ and ~~audit of the wells’ costs. The Fund recorded credits to dry-hole costs of~~ $3475 thousand ~~during~~from the three and six months ended ~~March~~June 3130, ~~2012~~2011, respectively. The ~~Fund~~increases ~~had~~resulted noprimarily ~~dry-hole~~from ~~costs~~increased ~~during~~production ~~the three months ended March 31, 2011~~volumes.

~~Operating~~Dry-hole ~~Expenses~~Costs. ~~Operating~~Dry-hole ~~expenses represent~~ costs ~~specifically~~are ~~identifiable~~those orcosts ~~allocable~~incurred to ~~the~~drill ~~Fund’s~~and ~~wells.~~develop ~~During~~a ~~the~~well ~~three~~that ~~months~~is ~~ended~~ultimately ~~March~~found ~~31,~~to ~~2012~~be ~~and~~incapable ~~2011,~~of ~~operating~~producing ~~expenses~~either ofoil ~~$31~~or ~~thousand~~natural ~~and~~gas ~~$23~~in ~~thousand,~~sufficient ~~respectively,~~quantities ~~related~~ to ~~lease~~justify ~~operating~~completion ~~expenses~~of ~~for~~ the ~~Fund’s~~well. At ~~producing~~times, ~~properties~~the ~~during~~Fund ~~each~~receives ~~period~~credits ason ~~outlined~~certain ~~above~~wells infrom ~~“Overview”. The~~their ~~average~~respective ~~production~~operators ~~cost~~upon ~~was~~review ~~$1.37~~and ~~per~~audit ~~mcfe~~of ~~during~~ the ~~three~~wells’ ~~months~~costs. Dry-hole ~~ended March 31~~costs, ~~2012~~inclusive ~~compared~~of tosuch ~~$1.93~~credits, ~~per~~are ~~mcfe~~detailed ~~during~~in the ~~three~~following ~~months ended March 31, 2011~~table.

	Three months ended June 30,				Six months ended June 30,
Project	2012		2011		2012		2011
	(in thousands)
Falcon Project	$	1,056	$	-	$	1,056	$	-
Other wells		97		111		63		111
	$	1,153	$	111	$	1,119	$	111

Operating Expenses. Operating expenses represent costs specifically identifiable or allocable to the Fund’s wells, as detailed in the following table.

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Lease operating expense	$	27	$	83	$	58	$	106
Workover expense		5		-		5		-
	$	32	$	83	$	63	$	106

Lease operating expense relates to the Fund’s producing properties during each period as outlined above in “Overview”. The average production cost was $1.31 per mcfe and $1.36 per mcfe during the three and six months ended June 30, 2012, respectively, compared to $8.40 per mcfe and $4.56 per mcfe during the three and six months ended June 30, 2011, respectively. Workover expense, which was related to West Delta 68, represents costs to restore or stimulate production of existing reserves.

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

	Three months ended March 31,
	2012		2011
	(in thousands)
Accounting fees	$	26	$	26
Management reimbursement		10		10
Insurance expense		9		13
	$	45	$	49

Accounting fees represent audit and tax preparation fees, quarterly reviews and filing fees incurred by the Fund. Management reimbursement relates to reimbursements for various administrative costs incurred on the Fund’s behalf. Insurance expense represents premiums related to producing well and control of well insurance, which varies depending upon the number of wells producing or drilling, and directors’ and officers’ liability insurance.

Interest Income. Interest income is comprised of interest earned on money market accounts and investments in U.S. Treasury securities. Interest income for the three months ended March 31, 2012 was $5 thousand, a $2 thousand decrease from the three months ended March 31, 2011.

Table of Contents

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Accounting fees	$	40	$	29	$	66	$	55
Insurance expense		30		19		39		32
Management reimbursement and other		10		12		20		22
	$	80	$	60	$	125	$	109

Accounting fees represent audit and tax preparation fees, quarterly reviews and filing fees incurred by the Fund. Insurance expense represents premiums related to producing well and control of well insurance, which varies depending upon the number of wells producing or drilling, and directors’ and officers’ liability insurance. Management reimbursement relates to reimbursements for various administrative costs incurred on the Fund’s behalf.

Interest Income. Interest income is comprised of interest earned on money market accounts and investments in U.S. Treasury securities. Interest income was $5 thousand and $10 thousand for the three and six months ended June 30, 2012, respectively, a decrease of $3 thousand and $5 thousand from the three and six months ended June 30, 2011, respectively.

Capital Resources and Liquidity

Operating Cash Flows

Cash flows ~~provided~~used byin operating activities for the ~~three~~six months ended ~~March~~June 3130, 2012 were $4516 thousand, primarily related to ~~revenue~~general ~~received~~and administrative expenses paid of $0.1 million, ~~partially~~and ~~offset by~~ operating expenses ~~and~~paid ~~general~~of ~~and~~$0.1 ~~administrative~~million, ~~expenses~~partially ~~paid~~offset ~~totaling~~by revenue received of $0.12 million.

Cash flows used in operating activities for the ~~three~~six months ended ~~March~~June 3130, 2011 were $0.1 million, primarily related to operating ~~and~~expenses paid of $0.2 million coupled with general and administrative expenses ~~paid~~of ~~totaling~~ $0.21 million, partially offset by revenue received of $0.12 million.

Investing Cash Flows

Cash flows used in investing activities for the ~~three~~six months ended ~~March~~June 3130, 2012 were $10.8 ~~thousand~~million, primarily related to capital expenditures for oil and gas properties.

Cash flows used in investing activities for the ~~three~~six months ended ~~March~~June 3130, 2011 were $90.2 ~~thousand~~million, primarily related to capital expenditures for oil and gas properties.

Financing Cash Flows

There were no cash flows from financing activities for the ~~three~~six months ended ~~March~~June 3130, 2012 or 2011.

Estimated Capital Expenditures

The Fund has entered into multiple agreements for the acquisition, drilling and development of its investment properties. The estimated capital expenditures associated with these agreements can vary depending on the stage of development on a property-by-property basis. As of ~~March~~June 3130, 2012, the Fund had committed to spend an additional $10.65 million related to its investment properties, principally all of which is expected to be spent during the next twelve months.

~~When~~Capital ~~the~~expenditures ~~Manager~~for ~~makes~~investment aproperties ~~decision~~were tofunded ~~participate~~with ~~in an exploratory project, it assumes that~~ the ~~well will be successful and allocates enough~~ capital toraised ~~budget~~by ~~for~~ the ~~completion~~Fund ofin ~~that~~its ~~well~~private ~~and~~placement ~~the~~offering, ~~additional~~which ~~development wells and infrastructure anticipated. If an exploratory well~~ is ~~deemed~~all athe ~~dry~~capital ~~hole or if~~ it iswill ~~determined~~obtain. byThe ~~the~~number ~~Manager~~of toprojects bein ~~un-economical,~~which the ~~capital~~Fund ~~allocated~~can toinvest ~~the~~was ~~completion~~limited, ofand ~~that~~each ~~well~~unsuccessful ~~and~~project to the ~~development~~Fund ofexperienced ~~additional~~reduced ~~wells~~its isability ~~then reallocated~~ to agenerate ~~new~~revenue ~~project~~and orexhausted ~~used~~its ~~to make additional investments~~capital.

Capital expenditures for investment properties are funded with the capital raised by the Fund in its private placement offering, which is all the capital it will obtain. The number of projects in which the Fund can invest is limited, and each unsuccessful project the Fund experiences exhausts its capital and reduces its ability to generate revenue.12

Table of Contents

Liquidity Needs

The Fund’s primary short-term liquidity needs are to fund its operations, inclusive of capital expenditures for its investment properties. Operations are funded utilizing operating income, existing cash on-hand and income earned therefrom. The Fund has reached the end of its investment cycle. Based upon its current reserve estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments, as well as ongoing operations. Reserve estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision. In the event of a temporary production stoppage, causing the Fund’s wells to not produce cash flow from operations, the Fund may borrow from the Manager until such time that production is resumed. At such time the Manager determines that the Fund is no longer capable of continuing to fund its operations, the Manager would elect to dissolve the Fund.

Distributions, if any, are funded from available cash from operations, as defined in the LLC Agreement, and the frequency and amount are within the Manager’s discretion.

Off-Balance Sheet Arrangements

The Fund had no off-balance sheet arrangements at ~~March~~June 3130, 2012 and December 31, 2011 and does not anticipate the use of such arrangements in the future.

Contractual Obligations

The Fund enters into participation and joint 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 such contracts. No contractual obligations exist at ~~March~~June 3130, 2012 and December 31, 2011 other than those discussed in “Estimated Capital Expenditures” above.

Recent Accounting Pronouncements

The Fund has considered recent accounting pronouncements and believes that these recent pronouncements will not have a material effect on the Fund’s financial statements.

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES

In accordance with Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Fund’s management, including its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Fund’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Fund’s disclosure controls and procedures were effective as of ~~March~~June 3130, 2012.

There has been no change in the Fund’s internal control over financial reporting that occurred during the three months ended ~~March~~June 3130, 2012 that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Table of Contents

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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 Exchange Act Rule 13a-14(a)	Filed herewith
31.2	Certification of Kathleen P. McSherry, Executive Vice President and Chief Financial Officer of the Fund, pursuant to 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, Executive Vice President and Chief Financial Officer of the Fund	Filed herewith
101.INS	XBRL Instance Document	*
101.SCH	XBRL Taxonomy Extension Schema	*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	*
101.DEF	XBRL Taxonomy Extention Definition Linkbase Document	*
101.LAB	XBRL Taxonomy Extension Label Linkbase	*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	*

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.

1314

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

				~~RIDGEWOOD ENERGY K FUND, LLC~~	RIDGEWOOD ENERGY K FUND, LLC
Dated: May 7, 2012	By:	/s/		ROBERT E. SWANSON
Dated:	August 2, 2012	By:	/s/		ROBERT E. SWANSON
		~~Name:~~	Name:	~~Robert E. Swanson~~	Robert E. Swanson
		~~Title:~~	Title:	~~Chief Executive Officer (Principal Executive Officer)~~	Chief Executive Officer
					(Principal Executive Officer)
Dated:	August 2, 2012	By:	/s/		KATHLEEN P. MCSHERRY
			Name:		Kathleen P. McSherry
			Title:		Executive Vice President and Chief Financial Officer
					(Principal Financial and Accounting Officer)

Dated: May 7, 2012	By:	/s/	KATHLEEN P. MCSHERRY
		Name:	Kathleen P. McSherry
		Title:	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Filing Compare · RIDGEWOOD ENERGY K FUND LLC