0001214659-13-005874.txt : 20131024 0001214659-13-005874.hdr.sgml : 20131024 20131024160550 ACCESSION NUMBER: 0001214659-13-005874 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20130930 FILED AS OF DATE: 20131024 DATE AS OF CHANGE: 20131024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIDGEWOOD ENERGY A-1 FUND LLC CENTRAL INDEX KEY: 0001457919 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53895 FILM NUMBER: 131168227 BUSINESS ADDRESS: STREET 1: 947 LINWOOD AVENUE CITY: RIDGEWOOD STATE: NJ ZIP: 07450 BUSINESS PHONE: 201-447-9000 MAIL ADDRESS: STREET 1: 947 LINWOOD AVENUE CITY: RIDGEWOOD STATE: NJ ZIP: 07450 10-Q 1 g102113010q.htm FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013 g102113010q.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, 2013
           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. 000-53895

Ridgewood Energy A-1 Fund, LLC
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
 
01-0921132
(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

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
(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 of October 24, 2013 the Fund had 207.7026 shares of LLC Membership Interest outstanding.
 


 
 

 
 
Table of Contents


 
PAGE
PART I - FINANCIAL INFORMATION
 
  1
                                    1
      2
      3
      4
10
16
16
     
PART II - OTHER INFORMATION
 
16
16
16
16
16
16
17
     
  18

 
PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

RIDGEWOOD ENERGY A-1 FUND, LLC
UNAUDITED CONDENSED BALANCE SHEETS
(in thousands, except share data)

   
September 30, 2013
   
December 31, 2012
 
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 5,553     $ 5,045  
Production receivable
    775       1,728  
Other current assets
    107       53  
 Total current assets
    6,435       6,826  
Salvage fund
    1,305       1,305  
Other  assets
    519       610  
Oil and gas properties:
               
Advances to operators for working interests and expenditures
    95       -  
Proved properties
    27,604       26,808  
Less:  accumulated depletion and amortization
    (20,950 )     (18,456 )
Total oil and gas properties, net
    6,749       8,352  
Total assets
  $ 15,008     $ 17,093  
Liabilities and Members' Capital
               
Current liabilities:
               
Due to operators
  $ 645     $ 613  
Accrued expenses
    34       37  
Total current liabilities
    679       650  
Asset retirement obligations
    1,131       1,131  
Total liabilities
    1,810       1,781  
Commitments and contingencies (Note 5)
               
Members' capital:
               
Manager:
               
Distributions
    (4,244 )     (3,246 )
Retained earnings
    4,602       3,570  
Manager's total
    358       324  
Shareholders:
               
Capital contributions (250 shares authorized;
               
    207.7026 issued and outstanding)
    41,143       41,143  
Syndication costs
    (4,804 )     (4,804 )
Distributions
    (24,051 )     (18,398 )
Retained earnings (accumulated deficit)
    548       (2,968 )
Shareholders' total
    12,836       14,973  
Accumulated other comprehensive income
    4       15  
Total members' capital
    13,198       15,312  
Total liabilities and members' capital
  $ 15,008     $ 17,093  
 
The accompanying notes are an integral part of these unaudited condensed financial statements.

 
RIDGEWOOD ENERGY A-1 FUND, LLC
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(in thousands, except per share data)
 

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
Revenue
                       
Oil and gas revenue
  $ 2,591     $ 4,028     $ 9,682     $ 12,037  
                                 
Expenses
                               
Depletion and amortization
    726       1,793       2,494       6,136  
Impairment of oil and gas properties
    -       -       -       3,114  
Management fees to affiliate (Note 3)
    232       232       697       697  
Operating expenses
    569       471       1,756       1,439  
General and administrative expenses
    60       65       199       143  
Total expenses
    1,587       2,561       5,146       11,529  
Income from operations
    1,004       1,467       4,536       508  
Other income (loss)
    3       10       12       (1 )
Net income
    1,007       1,477       4,548       507  
Other comprehensive income (loss)
                               
Unrealized income (loss) on marketable securities
    6       (4 )     (11 )     (7 )
Total comprehensive income
  $ 1,013     $ 1,473     $ 4,537     $ 500  
                                 
Manager Interest
                               
Net income
  $ 253     $ 473     $ 1,032     $ 1,383  
                                 
Shareholder Interest
                               
Net income (loss)
  $ 754     $ 1,004     $ 3,516     $ (876 )
Net income (loss) per share
  $ 3,629     $ 4,837     $ 16,929     $ (4,217 )
 
The accompanying notes are an integral part of these unaudited condensed financial statements.

 
RIDGEWOOD ENERGY A-1 FUND, LLC
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)

   
Nine months ended September 30,
 
 
 
2013
   
2012
 
             
Cash flows from operating activities
           
 Net income
  $ 4,548     $ 507  
 Adjustments to reconcile net income to net cash
               
    provided by operating activities:
               
 Depletion and amortization
    2,494       6,136  
 Impairment of oil and gas properties
    -       3,114  
 Derivative instrument loss
    -       29  
 Derivative instrument settlements
    -       2  
 Changes in assets and liabilities:
               
Decrease in production receivable
    953       291  
Increase in other current assets
    (56 )     (40 )
Increase in due to operators
    139       92  
(Decrease) increase in accrued expenses
    (3 )     65  
Net cash provided by operating activities
    8,075       10,196  
                 
Cash flows from investing activities
               
Payments to operators for working interests and expenditures
    (95 )     -  
Capital expenditures for oil and gas properties
    (810 )     (2,581 )
Interest reinvested in salvage fund
    (11 )     (28 )
Net cash used in investing activities
    (916 )     (2,609 )
                 
Cash flows from financing activities
               
Distributions
    (6,651 )     (9,741 )
Net cash used in financing activities
    (6,651 )     (9,741 )
Net increase (decrease) in cash and cash equivalents
    508       (2,154 )
Cash and cash equivalents, beginning of period
    5,045       6,817  
Cash and cash equivalents, end of period
  $ 5,553     $ 4,663  

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

 
RIDGEWOOD ENERGY A-1 FUND, LLC
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1.           Organization and Summary of Significant Accounting Policies

Organization
The Ridgewood Energy A-1 Fund, LLC (the "Fund"), a Delaware limited liability company, was formed on February 3, 2009 and operates pursuant to a limited liability company agreement (the “LLC Agreement") dated as of March 2, 2009 by and among Ridgewood Energy Corporation (the "Manager") and the shareholders of the Fund, which addresses matters such as the authority and voting rights of the Manager and shareholders, capitalization, transferability of membership interests, participation in costs and revenues, distribution of assets and dissolution and winding up.  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, 4 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, 2012 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.

Fair Value Measurements
The fair value measurement guidance provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value.  The fair value hierarchy gives the highest priority to Level 1 inputs, which consists of unadjusted quoted prices for identical instruments in active markets.  Level 2 inputs consist of quoted prices for similar instruments.  Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.  Cash and cash equivalents approximate fair value based on Level 1 inputs.   Mortgage-backed securities are recorded based on Level 2 inputs, as such instruments trade in over-the-counter markets.

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 are $250 thousand per insured financial institution.  At September 30, 2013, the Fund’s bank balances exceeded federally insured limits by $6.5 million, of which $1.0 million 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 September 30, 2013 and December 31, 2012, the Fund had investments in federal agency mortgage-backed securities as detailed in the following table, which are classified as available-for-sale.  Available-for-sale securities are carried in the financial statements at fair value.

         
Gross
       
   
Amortized
   
Unrealized
   
Fair
 
Available-for-Sale
 
Cost
   
Gains (Losses)
   
Value
 
   
(in thousands)
 
Government National Mortgage Association securities (GNMA July 2041)
 
   September 30, 2013
  $ 96     $ 3     $ 99  
   December 31, 2012
  $ 116     $ 8     $ 124  
                         
Federal National Mortgage Association security (FNMA January 2042)
 
   September 30, 2013
  $ 215     $ 1     $ 216  
   December 31, 2012
  $ 538     $ 7     $ 545  

During the three months ended September 30, 2013, unrealized gains on the Fund's investments in federal agency mortgage-backed securities were $6 thousand.  During the nine months ended September 30, 2013, unrealized losses on the Fund's investments in federal agency mortgage-backed securities were $11 thousand.  During the three and nine months ended September 30, 2012, unrealized losses on the Fund's investments in federal agency mortgage-backed securities were $4 thousand and $7 thousand, respectively.  The unrealized gains and losses were the result of fluctuations in market interest rates.  The contractual cash flows of those investments are guaranteed by an agency of the U.S. government.  It is expected that the securities would not be settled at a price less than the amortized cost basis of the Fund’s investments. Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income until realized.

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.

Debt Discounts and Deferred Financing Costs
Debt discounts and deferred financing costs include lender fees and other costs of the credit agreement such as the conveyance of override royalty interests related to the Beta Project.  These costs are deferred and amortized over the term of the debt period or until the redemption of the debt and are included on the balance sheet within “Other assets”.  At September 30, 2013 and December 31, 2012, $0.5 million and $0.6 million, respectively, of debt discounts and deferred financing costs were unamortized.  Amortization expense was $31 thousand and $0.1 million during the three and nine months ended September 30, 2013, respectively. There was no amortization expense during the three and nine months ended September 30, 2012.  During the period of asset construction, amortization expense, as a component of interest, is capitalized and included on the balance sheet within “Oil and gas properties”.

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.  All costs related to production activity and workover efforts are expensed as incurred.
 
 
Upon the sale, retirement or abandonment of a property, the cost and related accumulated depletion and amortization, if any, is eliminated from the property accounts, and the resultant gain or loss is recognized.

At September 30, 2013 and December 31, 2012, amounts recorded in due to operators totaling $0.3 million and $0.4 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 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.  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 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.

Derivative Instruments
The Fund may periodically utilize derivative instruments to manage the price risk attributable to its oil and gas production.  Derivative instruments are carried on the balance sheet at fair value and recorded as either an asset or liability.  Changes in the fair value of the derivatives are recorded currently in earnings unless specific hedge accounting criteria are met.  At this time, the Fund has elected not to use hedge accounting for its derivatives and, accordingly, the derivatives are marked-to-market each quarter with fair value gains and losses recognized currently as other income on the statement of operations.  The estimated fair value of such contracts is based upon various factors, including reported prices on the New York Mercantile Exchange (“NYMEX”) and the Intercontinental Exchange (“ICE”), volatility, and the time value of options.  The Fund recognizes all unrealized and realized gains and losses related to these contracts on a mark-to-market basis on the statement of operations within other income or loss. The related cash flow impact of the derivative activities are reflected as cash flows from operating activities on the statement of cash flows.  The Fund actively monitors the creditworthiness of each counterparty and assesses the impact, if any, on its derivative positions.  See Note 2.  “Derivative Instruments”.

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 proved 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 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.
 
 
During the nine months ended September 30, 2012, the Fund recorded an impairment of $3.1 million, relating to the Alpha Project, which was attributable to revisions to reserve estimates. The fair value at the date of impairment was $2.6 million.  Such amount was determined based on level 3 inputs, which included projected income from reserves utilizing forward price curves, net of anticipated costs, discounted. There were no impairments to oil and gas properties for the three and nine months ended September 30, 2013 and for the three months ended September 30, 2012.

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 to shareholders and the Manager in accordance with the LLC agreement.

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.
 
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.           Derivative Instruments

The Fund periodically enters into derivative contracts relating to its oil or gas production. The use of such derivative instruments limits the downside risk of adverse price movements.  The estimated fair value of such contracts is based upon various factors, including reported prices on NYMEX and ICE, volatility, and the time value of options.  The Fund has exposure to credit risk to the extent the derivative instrument counterparty is unable to satisfy its settlement commitment.

The Fund had no derivative contracts during the three and nine months ended September 30, 2013 and during the three months ended September 30, 2012.  For the nine months ended September 30, 2012, the Fund’s derivative instrument income consisted of realized losses of $29 thousand.

3.           Related Parties

The LLC Agreement provides that the Manager render management, administrative and advisory services to the Fund. For such services, the Manager is paid an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund.  Management fees for each of the three months ended September 30, 2013 and 2012 were $0.2 million. Management fees for each of the nine months ended September 30, 2013 and 2012 were $0.7 million.
 
 
The Manager is entitled to receive a 15% interest in cash distributions from operations made by the Fund.  Distributions paid to the Manager for the three and nine months ended September 30, 2013 were $0.2 million and $1.0 million, respectively.  Distributions paid to the Manager for the three and nine months ended September 30, 2012 were $0.5 million and $1.5 million, respectively.

At times, short-term payables and receivables, which do not bear interest, arise from transactions with affiliates in the ordinary course of business.

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.

In November 2012, the Fund entered into a credit agreement along with other entities managed by the Manager.

4.           Credit Agreement – Beta Project Financing

In November 2012, the Fund entered into a credit agreement (the “Credit Agreement”) with Rahr Energy Investments LLC, as Administrative Agent and Lender (and any other banks or financial institutions that may in the future become a party thereto, collectively “Lenders”) that provides for an aggregate loan commitment to the Fund of approximately $8.3 million (“Loan”), to provide capital toward the funding of the Fund’s share of development costs on the Beta Project.

As of September 30, 2013, the Fund had no borrowings under the Credit Agreement.  The Fund anticipates it will borrow approximately $8.3 million over the development period of the Beta Project, which will bear interest at 8% compounded annually and accrue only on Loan proceeds as they are drawn.  Principal and interest will not be payable until such time that initial production has commenced for the Beta Project, which is currently expected to occur in 2016. At that time, if certain revenue production levels are met, principal and interest will be repaid at a monthly rate of 1.25% of the Fund’s total principal outstanding at the date the Beta Project commences production for the first seven months of production, and a monthly rate of 4.5% of the Fund’s total principal outstanding at the date the Beta Project commences production thereafter until the Loan is repaid in full, in no event later than December 31, 2020.  The Loan may be prepaid by the Fund without premium or penalty.

As additional consideration to the Lenders, the Fund has agreed to convey an overriding royalty interest (“ORRI”) in its working interests in the Beta Project to the Lenders. The Fund recorded the additional consideration as debt discounts and deferred financing costs at a fair value of $0.6 million, which will be amortized to interest expense over the expected payoff period of the Loan.  The fair value of the ORRI was determined using net discounted cash flows from the Beta Project related to the ORRI based on level 3 inputs, which include projected net income from reserves and forward pricing curves.  At September 30, 2013 and December 31, 2012, the outstanding debt discounts and deferred financing costs recorded on the balance sheet within “Other assets” were $0.5 million and $0.6 million, respectively.
 
The Credit Agreement contains customary covenants, for which the Fund believes it is in compliance at September 30, 2013.

5.           Commitments and Contingencies

Capital Commitments
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 vary depending on the stage of development on a property-by-property basis.  Currently, the Fund has one non-producing property, the Beta Project, for which additional development costs must be incurred in order to commence production. The Fund currently anticipates such development will include a four-well development with related platform and pipeline infrastructure.  It is also possible that full development of the Beta Project will entail the drilling of additional wells beyond the four projected wells, the cost of which is not included in the below estimates.
 
 
As of September 30, 2013, the Fund expects to spend an additional $14.6 million related to its investments in oil and gas properties, inclusive of $14.5 million to develop the Beta Project, of which $3.3 million is expected to be spent during the next twelve months.  Total capital commitments exceed available working capital by $8.8 million at September 30, 2013, which includes projected interest costs and asset retirement obligations for the Beta Project.  In November 2012, the Fund entered into a credit agreement that provides for an aggregate loan commitment of up to $8.3 million to provide capital toward the funding of the Fund’s share of development costs on the Beta Project.  See Note 4. “Credit Agreement – Beta Project Financing,” for additional information.  The Fund expects that cash flows from operations will be sufficient to fund its remaining commitments.

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, 2013 and December 31, 2012, there were no known environmental contingencies that required the Fund to record a liability.

Effective October 22, 2012, the United States Department of Interior, acting through the Bureau of Safety and Environmental Enforcement, implemented the Final Drilling Safety Rule (the “Final Rule”) which refined certain interim rules imposed in the immediate wake of the 2010 Deepwater Horizon oil spill.  The Final Rule was promulgated for the prevention of waste and for the conservation of natural resources of the Outer Continental Shelf under the rulemaking authority of the Outer Continental Shelf Lands Act.  The United States Congress continues to consider a number of legislative proposals relating to the upstream oil and gas industry both onshore and offshore, in addition to the Final Rule.  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 the Fund’s 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 a material 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.
 
 
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 A-1 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 and production 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 projects, investments, insurance, capital expenditures and liquidity.  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 2012 Annual Report on Form 10-K.

Overview of the Fund’s Business

The Fund is a Delaware limited liability company formed on February 3, 2009 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 projects, including ongoing management, administrative and advisory services.  For these services, the Manager receives an annual management fee equal to 2.5% of capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund, payable monthly.  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.

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.
 
 
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
   
Project
 
Interest
 
September 30, 2013
   
Budget
 
Status
     
(in thousands)
   
Non-producing Properties
             
Beta Project
  2.0%   $ 3,461     $ 17,998  
Well deemed to be a discovery in February 2012.  Expected to commence production in 2016.
Producing Properties
                     
Alpha Project
  3.75%   $ 6,602     $ 6,602  
Production commenced April 2012.  Well experienced shut-ins during first and third quarters of 2013 for repairs and maintenance and compression work to increase production rates.
Carrera Project
  2.0%   $ 3,194     $ 3,238  
Production commenced in 2011.  Well was shut-in for several weeks periodically throughout 2013 due to repairs, pipeline work, and storm activity.  During second quarter 2013, the well's umbilical was flooded and electrical communication was lost.   Costs to install a new umbilical are estimated to be $221 thousand, of which $177 thousand was incurred during the third quarter 2013.  Compressor was installed in second quarter 2013 at a cost of $23 thousand.
Liberty Project
  2.0%   $ 3,008     $ 3,028  
Production commenced in 2010. Well was shut-in for several weeks during the first and third quarters of 2013 due to repairs and maintenance and storm activity.  Recompletion is planned for 2014 at an estimated cost of  $20 thousand.
Raven Project well #1
  25.0%   $ 6,508     $ 6,508  
Production commenced in 2010.  Well is currently not producing, awaiting redirection to new production facility, which is expected in December 2013.
Raven Project well #2
  25.0%   $ 4,364     $ 4,364  
Production commenced in 2011.

Results of Operations

The following table summarizes the Fund’s results of operations for the three and nine months ended September 30, 2013 and 2012, 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 September 30,
   
Nine months ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
   
(in thousands)
 
Revenue
                       
Oil and gas revenue
  $ 2,591     $ 4,028     $ 9,682     $ 12,037  
                                 
Expenses
                               
Depletion and amortization
    726       1,793       2,494       6,136  
Impairment of oil and gas properties
    -       -       -       3,114  
Management fees to affiliate
    232       232       697       697  
Operating expenses
    569       471       1,756       1,439  
General and administrative expenses
    60       65       199       143  
Total expenses
    1,587       2,561       5,146       11,529  
Income from operations
    1,004       1,467       4,536       508  
Other income (loss)
    3       10       12       (1 )
Net income
    1,007       1,477       4,548       507  
Other comprehensive income (loss)
                               
Unrealized income (loss) on marketable securities
    6       (4 )     (11 )     (7 )
Total comprehensive income
  $ 1,013     $ 1,473     $ 4,537     $ 500  
 
Overview. The following table provides information related to the Fund’s oil and gas production and oil and gas revenue during the three and nine months ended September 30, 2013 and 2012.

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
Number of wells producing
    4       5       5       5  
Total number of production days
    331       411       1,069       1,192  
Oil sales (in thousands of barrels)
    9       18       34       54  
Average oil price per barrel
  $ 109     $ 103     $ 109     $ 107  
Gas sales (in thousands of mcfs)
    458       641       1,550       2,047  
Average gas price per mcf
  $ 3.64     $ 2.99     $ 3.94     $ 2.57  

The decreases in number of production days and sales volumes for the three months ended September 30, 2013 were primarily attributable to the Raven well #1 and Alpha projects, which were shut-in during the third quarter 2013.  The decreases in number of production days and sales volumes for the nine months ended September 30, 2013 were primarily attributable to the Raven well #1, Liberty and Carrera projects, which were periodically shut-in during 2013. See additional discussion in “Business Update” section above.

Oil and Gas Revenue.   Oil and gas revenue for the three months ended September 30, 2013 was $2.6 million, a $1.4 million decrease from the three months ended September 30, 2012.  The decrease is attributable to decreased sales volumes totaling $1.7 million, partially offset by the impact of increased average prices totaling $0.3 million.  Oil and gas revenue for the nine months ended September 30, 2013 was $9.7 million, a $2.4 million decrease from the nine months ended September 30, 2012.  The decrease is attributable to decreased sales volumes totaling $4.3 million, partially offset by the impact of increased average prices totaling $1.9 million.  See “Overview” above for additional information.

Depletion and Amortization.  Depletion and amortization for the three months ended September 30, 2013 was $0.7 million, a decrease of $1.1 million from the three months ended September 30, 2012.  The decrease resulted from a decrease in production volumes totaling $0.7 million coupled with a decrease in average depletion rates totaling $0.4 million.  Depletion and amortization for the nine months ended September 30, 2013 was $2.5 million, a decrease of $3.6 million from the nine months ended September 30, 2012.  The decrease resulted from a decrease in production volumes totaling $1.9 million coupled with a decrease in average depletion rates totaling $1.7 million.  The decreases in average depletion rates were primarily attributable to the Alpha Project, which was impaired during second quarter 2012 coupled with an increase in year-end reserve estimates as assigned by the Fund’s independent petroleum engineer. See “Overview” above for additional information.
 
 
Impairment of Oil and Gas Properties.  There were no impairments to oil and gas properties during the three and nine months ended September 30, 2013 and during the three months ended September 30, 2012.  During the nine months ended September 30, 2012, the Fund recorded an impairment to oil and gas properties of $3.1 million, relating to the Alpha Project, which was attributable to revisions to reserve estimates.

Management Fees to Affiliate. Management fees for each of the three months ended September 30, 2013 and 2012 were $0.2 million.  Management fees for each of the nine months ended September 30, 2013 and 2012 were $0.7 million.  An annual management fee, totaling 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund, is paid monthly to the Manager.

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

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
   
(in thousands)
 
Lease operating expense
  $ 508     $ 435     $ 1,623     $ 1,237  
Workover expense
    55       25       116       90  
Geological costs and other
    6       14       17       51  
Dry-hole costs
    -       (3 )     -       61  
    $ 569     $ 471     $ 1,756     $ 1,439  
 
Lease operating expense relates to the Fund’s producing properties during each period as outlined above in “Overview”.  The average production cost was $5.97 per barrel of oil equivalent (“BOE”) and $5.55 per BOE during the three and nine months ended September 30, 2013, respectively, compared to $3.25 per BOE and $2.92 per BOE during the three and nine months ended September 30, 2012, respectively.  Workover expense represents costs to restore or stimulate production of existing reserves of a proved property.  During the three and nine months ended September 30, 2013, workover expense related to the Carrera, Alpha and Liberty projects.  During the three and nine months ended September 30, 2012, workover expense related to the Raven Project.  Geological costs, which were related to the Beta Project, represent costs incurred to obtain seismic data, surveys, and lease rentals. Dry-hole costs are those costs incurred to drill and develop a well that is ultimately found to be incapable of producing either oil or natural gas in sufficient quantities to justify completion of the well. At times, the Fund receives adjustments to certain wells from their respective operators upon review and audit of the wells’ costs.

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,
 
   
2013
   
2012
   
2013
   
2012
 
   
(in thousands)
 
Accounting and professional fees
  $ 28     $ 35     $ 113     $ 108  
Insurance expense
    31       29       82       33  
Other
    1       1       4       2  
    $ 60     $ 65     $ 199     $ 143  
 
Accounting and professional fees represent expenses for audits, quarterly reviews, tax preparation, reserve data engineering and reporting, and administration of filings. 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.
 
 
Other Income (Loss).  Other income (loss) for the three and nine months ended September 30, 2013 and 2012 is detailed in the following table.

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
   
(in thousands)
 
Interest income
  $ 3     $ 10     $ 12     $ 28  
Realized losses on derivative instruments
    -       -       -       (29 )
    $ 3     $ 10     $ 12     $ (1 )
                                 

Unrealized Income (Loss) on Marketable Securities.  At September 30, 2013, the Fund had available-for-sale investments within its salvage fund in federal agency mortgage-backed securities totaling $0.3 million, which mature between 2041 and 2042.  Available-for-sale securities are carried in the financial statements at fair value and unrealized gains and losses related to the securities’ changes in fair value are recorded in other comprehensive income until realized.  The Fund recognized unrealized gains of $6 thousand and unrealized losses of $11 thousand during the three and nine months ended September 30, 2013, respectively.  The Fund recognized unrealized losses of $4 thousand and $7 thousand during the three and nine months ended September 30, 2012, respectively.

Capital Resources and Liquidity

Operating Cash Flows
Cash flows provided by operating activities for the nine months ended September 30, 2013 were $8.1 million, primarily related to revenue received of $10.6 million, partially offset by operating expenses paid of $1.6 million, management fees of $0.7 million, and general and administrative expenses paid of $0.3 million.

Cash flows provided by operating activities for the nine months ended September 30, 2012 were $10.2 million, primarily related to revenue received of $12.3 million, partially offset by operating expenses paid of $1.3 million, management fees of $0.7 million and general and administrative expenses paid of $0.2 million.

Investing Cash Flows
Cash flows used in investing activities for the nine months ended September 30, 2013 were $0.9 million, primarily related to capital expenditures for oil and gas properties, inclusive of advances.

Cash flows used in investing activities for the nine months ended September 30, 2012 were $2.6 million, primarily related to capital expenditures for oil and gas properties.

Financing Cash Flows
Cash flows used in financing activities for the nine months ended September 30, 2013 were $6.7 million, related to manager and shareholder distributions.

Cash flows used in financing activities for the nine months ended September 30, 2012 were $9.7 million, related to manager and shareholder distributions.

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 vary depending on the stage of development on a property-by-property basis. As of September 30, 2013, the Fund has one non-producing property, the Beta Project, for which additional development costs must be incurred in order to commence production. The Fund currently expects to spend an additional $14.5 million related to the development of this project, which the Fund anticipates will include a four-well development with related platform and pipeline infrastructure. It is also possible that full development of the Beta Project will entail the drilling of additional wells beyond the four projected wells, the cost of which is not included in the above estimates. See “Liquidity Needs” below for additional information.
 
Capital expenditures for investment properties have been funded with the capital raised by the Fund in its private placement offering, and in certain circumstances, through debt financing. The number of projects in which the Fund can invest was limited, and each unsuccessful project the Fund experienced exhausted its capital and reduced its ability to generate revenue.

 
Liquidity Needs

The Fund’s primary short-term liquidity needs are to fund its operations and capital expenditures for its investment properties. Operations are funded utilizing operating income, existing cash on-hand and income earned therefrom.

As of September 30, 2013, the Fund expects to spend an additional $14.6 million related to its investments in oil and gas properties, inclusive of $14.5 million to develop the Beta Project, of which $3.3 million is expected to be spent during the next twelve months.  Total capital commitments exceed available working capital by $8.8 million at September 30, 2013, which includes projected interest costs and asset retirement obligations for the Beta Project.  In November 2012, the Fund entered into a credit agreement that provides for an aggregate loan commitment of up to $8.3 million to provide capital toward the funding of the Fund’s share of development costs on the Beta Project.  Principal and interest amounts are contracted to be repaid upon the onset of production of the Beta Project, which is expected in 2016, over a period not to extend beyond December 31, 2020.  See “Credit Agreement” below for additional information.  The Fund expects that cash flows from operations will be sufficient to fund its remaining commitments.

The Manager is entitled to receive an annual management fee from the Fund regardless of the Fund’s profitability in that year. Generally, all or a portion of the management fee is paid from operating income.

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. Due to the significant capital required to develop the Beta Project, distributions have been impacted by amounts reserved to provide for its ongoing development costs, debt service costs, and funding its estimated asset retirement obligations.

Credit Agreement
In November 2012, the Fund entered into a credit agreement (the “Credit Agreement”) with Rahr Energy Investments LLC, as administrative agent and lender (and any other banks or financial institutions that may in the future become a party thereto) that provides for an aggregate loan commitment to the Fund of approximately $8.3 million (“Loan”), to provide capital toward the funding of the Fund’s share of development costs on the Beta Project.  As of September 30, 2013, the Fund had no borrowings under this credit agreement.  See Note 4 of “Notes to Unaudited Condensed Financial Statements” – “Credit Agreement – Beta Project Financing” in Part I of this Quarterly Report for more information regarding this credit agreement.

The Credit Agreement contains customary negative covenants including covenants that limit the Fund’s ability to, among other things, grant liens, change the nature of its business, or merge into or consolidate with other persons. The events that constitute events of default are also customary for credit facilities of this nature and include payment defaults, breaches of representations, warrants and covenants, insolvency and change of control. Upon the occurrence of a default, in some cases following a notice and cure period, the Lenders under the Credit Agreement may accelerate the maturity of the loans and require full and immediate repayment of all borrowings under the Credit Agreement. Finally, the Lenders obligation to make the Loan is subject to customary conditions precedent including the delivery to Lenders of effective corporate organizational documents, pro forma financial statements, evidence of defensible title to the Beta Project and the payment of fees.  The Fund believes it is in compliance with all covenants under the Credit Agreement at September 30, 2013.

Off-Balance Sheet Arrangements

The Fund had no off-balance sheet arrangements at September 30, 2013 and December 31, 2012 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 September 30, 2013 and December 31, 2012, other than those discussed in “Estimated Capital Expenditures” and “Liquidity Needs” – Credit Agreement 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.

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 September 30, 2013.

There has been no change in the Fund’s internal control over financial reporting that occurred during the three months ended September 30, 2013 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

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 Extension 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.
 
 
SIGNATURES

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


           
RIDGEWOOD ENERGY A-1 FUND, LLC
 
Dated:
October 24, 2013
By:
/s/
   
ROBERT E. SWANSON
     
Name:
   
Robert E. Swanson
     
Title:
   
Chief Executive Officer
           
(Principal Executive Officer)
             
             
Dated:
October 24, 2013
By:
/s/
   
KATHLEEN P. MCSHERRY
     
Name:
   
Kathleen P. McSherry
     
Title:
   
Executive Vice President and Chief Financial Officer
           
(Principal Financial and Accounting Officer)
             
             
 
 
 
18

EX-31.1 2 ex31_1.htm EX-31.1 ex31_1.htm
EXHIBIT 31.1
CERTIFICATION

I, Robert E. Swanson, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of Ridgewood Energy A-1 Fund, LLC;

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated:
   
October 24, 2013
 
         
/s/
   
ROBERT E. SWANSON
 
Name:
   
Robert E. Swanson
 
         
Title:
   
Chief Executive Officer
 
     
(Principal Executive Officer)
 
 
 
 

EX-31.2 3 ex31_2.htm EX-31.2 ex31_2.htm
EXHIBIT 31.2
CERTIFICATION

I, Kathleen P. McSherry, certify that:

1.           I have reviewed this Quarterly Report on Form 10-Q of Ridgewood Energy A-1 Fund, LLC;

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated:
   
October 24, 2013
 
         
/s/
   
KATHLEEN P. MCSHERRY
 
Name:
   
Kathleen P. McSherry
 
         
Title:
   
Executive Vice President and Chief Financial Officer
 
     
(Principal Financial and Accounting Officer)
 
 
 
 

EX-32 4 ex32.htm EX-32 ex32.htm
EXHIBIT 32



CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with this Quarterly Report on Form 10-Q of the Ridgewood Energy A-1 Fund, LLC (the “Fund”) for the period ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof, (the “Report”), each of the undersigned officers of the Fund hereby certifies, pursuant to 18 U.S.C. (section) 1350, as adopted pursuant to (section) 906 of the Sarbanes-Oxley Act of 2002, that to the best of their knowledge:

 
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund.
 
 
Dated:
October 24, 2013
         
         
/s/
ROBERT E. SWANSON
         
Name:
Robert E. Swanson
         
Title:
Chief Executive Officer
           
(Principal Executive Officer)
             
Dated:
October 24, 2013
         
         
/s/
KATHLEEN P. MCSHERRY
         
Name:
Kathleen P. McSherry
         
Title:
Executive Vice President and Chief Financial Officer
           
(Principal Financial and Accounting Officer)
             
             

A signed original of this written statement or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of this report or as a separate disclosure document.
 
 
 

 
EX-101.INS 5 cik1457919-20130930.xml EXHIBIT 101.INS <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Advances to Operators for Working Interests and Expenditures</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund&#39;s acquisition of a working interest in a well or a project requires it to make a payment to the seller for the Fund&#39;s rights, title and interest.&nbsp;&nbsp;The Fund may be required to advance its share of estimated cash expenditures for the succeeding month&#39;s operation. The Fund accounts for such payments as advances to operators for working interests and expenditures.&nbsp;&nbsp;As drilling costs are incurred, the advances are reclassified to unproved or proved properties.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 0.025 0.0125 0.045 2000 200000 500000 1000000 1500000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Distributions</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Distributions to shareholders are allocated in proportion to the number of shares held.&nbsp;&nbsp;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.</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> &nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;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.</div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Income and Expense Allocation</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Profits and losses are allocated to shareholders and the Manager in accordance with the LLC agreement.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 250 250 207.7026 207.7026 207.7026 207.7026 3300000 14500000 8800000 232000 232000 697000 697000 4244000 3246000 4602000 3570000 358000 324000 250000 253000 473000 1032000 1383000 3629 4837 16929 -4217 754000 1004000 3516000 -876000 2600000 95000 0.01 0.15 0.99 0.85 0.15 0.85 0.15 11000 28000 -29000 1305000 1305000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Salvage Fund</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;At September 30, 2013 and December 31, 2012, the Fund had investments in federal agency mortgage-backed securities as detailed in the following table, which are classified as available-for-sale.&nbsp;&nbsp;Available-for-sale securities are carried in the financial statements at fair value.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="text-align: center"> <table style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman" cellspacing="0" cellpadding="0" width="90%"> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Gross</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Amortized</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Unrealized</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Fair</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Available-for-Sale</div> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Cost</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Gains (Losses)</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="34%" colspan="10" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> (in thousands)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="99%" colspan="12" nowrap="nowrap" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Government National Mortgage Association securities (GNMA July 2041)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; FONT-STYLE: italic; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;September 30, 2013</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">96</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">3</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">99</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;December 31, 2012</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">116</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">8</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">124</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="99%" colspan="12" nowrap="nowrap" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Federal National Mortgage Association security (FNMA January 2042)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; FONT-STYLE: italic; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;September 30, 2013</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">215</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">216</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;December 31, 2012</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">538</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">7</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">545</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> </table> </div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; TEXT-INDENT: 0pt"> During the three months ended September 30, 2013, unrealized gains on the Fund&#39;s investments in federal agency mortgage-backed securities were $6 thousand.&nbsp;&nbsp;During the nine months ended September 30, 2013, unrealized losses on the Fund&#39;s investments in federal agency mortgage-backed securities were $11 thousand.&nbsp;&nbsp;During the three and nine months ended September 30, 2012, unrealized losses on the Fund&#39;s investments in federal agency mortgage-backed securities were $4 thousand and $7 thousand, respectively.&nbsp;&nbsp;The unrealized gains and losses were the result of fluctuations in market interest rates.&nbsp;&nbsp;The contractual cash flows of those investments are guaranteed by an agency of the U.S. government.&nbsp;&nbsp;It is expected that the securities would not be settled at a price less than the amortized cost basis of the Fund&#39;s investments. <font style="DISPLAY: inline">Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income until realized.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> For all investments, interest income is accrued as earned and amortization of premium or discount, if any, is included in interest income.&nbsp;&nbsp;<font style="DISPLAY: inline">Interest earned on the account will become part of the salvage fund.&nbsp;&nbsp;There are no restrictions on withdrawals from the salvage fund.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 12836000 14973000 41143000 41143000 24051000 18398000 548000 -2968000 4804000 4804000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Syndication Costs</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Syndication costs are direct costs incurred by the Fund in connection with the offering of the Fund&#39;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&#39;s balance sheet as a reduction of shareholders&#39; capital.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 300000 400000 false --12-31 Q3 2013 2013-09-30 10-Q 0001457919 207.7026 Smaller Reporting Company RIDGEWOOD ENERGY A-1 FUND LLC 645000 613000 775000 1728000 34000 37000 4000 15000 31000 100000 1131000 1131000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Asset Retirement Obligations</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired.&nbsp;&nbsp; When a project reaches drilling depth and is determined to be either proved or dry, an asset retirement obligation is incurred.&nbsp;&nbsp;Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.&nbsp;&nbsp;As indicated above, the Fund maintains a salvage fund to provide for the funding of future asset retirement obligations.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 15008000 17093000 6435000 6826000 99000 124000 216000 545000 96000 116000 215000 538000 3000 8000 1000 7000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Basis of Presentation</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> These unaudited interim condensed financial statements have been prepared by the Fund&#39;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&#39;s financial position, results of operations and cash flows for the periods presented.&nbsp;&nbsp;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.&nbsp;&nbsp;The results of operations, financial position, and cash flows for the periods presented herein are not necessarily indicative of future financial results.&nbsp;&nbsp;These unaudited interim condensed financial statements should be read in conjunction with the Fund&#39;s December 31, 2012 financial statements and notes thereto included in the Fund&#39;s Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC").&nbsp;&nbsp;The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.</div> <!--EndFragment--></div> </div> 5553000 5045000 4663000 6817000 508000 -2154000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Cash and Cash Equivalents</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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 are $250 thousand per insured financial institution.&nbsp;&nbsp;At September 30, 2013, the Fund&#39;s bank balances exceeded federally insured limits by $6.5 million, of which $1.0 million was invested in money market accounts that invest solely in U.S. Treasury bills and notes.</div> <!--EndFragment--></div> </div> 1000000 6500000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Capital Commitments</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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 vary depending on the stage of development on a property-by-property basis.&nbsp;&nbsp;Currently, the Fund has one non-producing property, the Beta Project, for which additional development costs must be incurred in order to commence production. The Fund currently anticipates such development will include a four-well development with related platform and pipeline infrastructure.&nbsp;&nbsp;It is also possible that full development of the Beta Project will entail the drilling of additional wells beyond the four projected wells, the cost of which is not included in the below estimates.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> As of September 30, 2013, the Fund expects to spend an additional $14.6 million related to its investments in oil and gas properties, inclusive of $14.5 million to develop the Beta Project, of which $3.3 million is expected to be spent during the next twelve months.&nbsp;&nbsp;Total capital commitments exceed available working capital by $8.8 million at September 30, 2013, which includes projected interest costs and asset retirement obligations for the Beta Project.&nbsp;&nbsp;In November 2012, the Fund entered into a credit agreement that provides for an aggregate loan commitment of up to $8.3 million to provide capital toward the funding of the Fund&#39;s share of development costs on the Beta Project.&nbsp;&nbsp;See Note 4. "Credit Agreement - Beta Project Financing," for additional information.&nbsp;&nbsp;The Fund expects that cash flows from operations will be sufficient to fund its remaining commitments.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Environmental Considerations</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;The Manager and operators of the Fund&#39;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.&nbsp;&nbsp;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.&nbsp;&nbsp;At September 30, 2013 and December 31, 2012, there were no known environmental contingencies that required the Fund to record a liability.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Effective October 22, 2012, the United States Department of Interior, acting through the Bureau of Safety and Environmental Enforcement, implemented the Final Drilling Safety Rule (the "Final Rule") which refined certain interim rules imposed in the immediate wake of the 2010 Deepwater Horizon oil spill.&nbsp;&nbsp;The Final Rule was promulgated for the prevention of waste and for the conservation of natural resources of the Outer Continental Shelf under the rulemaking authority of the Outer Continental Shelf Lands Act.&nbsp;&nbsp;The United States Congress continues to consider a number of legislative proposals relating to the upstream oil and gas industry both onshore and offshore, in addition to the Final Rule.&nbsp;&nbsp;Such proposals could result in significant additional laws or regulations governing the Fund&#39;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 the Fund&#39;s 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&#39;s operating results and cash flows.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Insurance Coverage</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;The occurrence of an event that is not insured or not fully insured could have a material adverse impact upon earnings and financial position.&nbsp;&nbsp;Moreover, insurance is obtained as a package covering all of the funds managed by the Manager.&nbsp;&nbsp;Claims made by other funds managed by the Manager can reduce or eliminate insurance for the Fund.</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> &nbsp;</div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit Agreement - Beta Project Financing</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> In November 2012, the Fund entered into a credit agreement (the "Credit Agreement") with Rahr Energy Investments LLC, as Administrative Agent and Lender (and any other banks or financial institutions that may in the future become a party thereto, collectively "Lenders") that provides for an aggregate loan commitment to the Fund of approximately $8.3 million ("Loan"), to provide capital toward the funding of the Fund&#39;s share of development costs on the Beta Project.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> As of September 30, 2013, the Fund had no borrowings under the Credit Agreement.&nbsp;&nbsp;The Fund anticipates it will borrow approximately $8.3 million over the development period of the Beta Project, which will bear interest at 8% compounded annually and accrue only on Loan proceeds as they are drawn.&nbsp;&nbsp;Principal and interest will not be payable until such time that initial production has commenced for the Beta Project, which is currently expected to occur in 2016. At that time, if certain revenue production levels are met, principal and interest will be repaid at a monthly rate of 1.25% of the Fund&#39;s total principal outstanding at the date the Beta Project commences production for the first seven months of production, and a monthly rate of 4.5% of the Fund&#39;s total principal outstanding at the date the Beta Project commences production thereafter until the Loan is repaid in full, in no event later than December 31, 2020.&nbsp;&nbsp;The Loan may be prepaid by the Fund without premium or penalty.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> As additional consideration to the Lenders, the Fund has agreed to convey an overriding royalty interest ("ORRI") in its working interests in the Beta Project to the Lenders. The Fund recorded the additional consideration as debt discounts and deferred financing costs at a fair value of $0.6 million, which will be amortized to interest expense over the expected payoff period of the Loan.&nbsp;&nbsp;The fair value of the ORRI was determined using net discounted cash flows from the Beta Project related to the ORRI based on level 3 inputs, which include projected net income from reserves and forward pricing curves.&nbsp; At September 30, 2013 and December 31, 2012, the outstanding debt discounts and deferred financing costs recorded on the balance sheet within "Other assets" were $0.5 million and $0.6 million, respectively.</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> &nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Credit Agreement contains customary covenants, for which the Fund believes it is in compliance at September 30, 2013.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 0.08 2020-12-31 500000 600000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Debt Discounts and Deferred Financing Costs</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Debt discounts and deferred financing costs include lender fees and other costs of the credit agreement such as the conveyance of override royalty interests related to the Beta Project.&nbsp;&nbsp;These costs are deferred and amortized over the term of the debt period or until the redemption of the debt and are included on the balance sheet within "Other assets".&nbsp;&nbsp;At September 30, 2013 and December 31, 2012, $0.5 million and $0.6 million, respectively, of debt discounts and deferred financing costs were unamortized.&nbsp;&nbsp;Amortization expense was $31 thousand and $0.1 million during the three and nine months ended September 30, 2013, respectively. There was no amortization expense during the three and nine months ended September 30, 2012.&nbsp;&nbsp;During the period of asset construction, amortization expense, as a component of interest, is capitalized and included on the balance sheet within "Oil and gas properties".</div> <!--EndFragment--></div> </div> 500000 600000 -29000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative Instruments</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund periodically enters into derivative contracts relating to its oil or gas production. The use of such derivative instruments limits the downside risk of adverse price movements.&nbsp;&nbsp;The estimated fair value of such contracts is based upon various factors, including reported prices on NYMEX and ICE, volatility, and the time value of options.&nbsp;&nbsp;The Fund has exposure to credit risk to the extent the derivative instrument counterparty is unable to satisfy its settlement commitment.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund had no derivative contracts during the three and nine months ended September 30, 2013 and during the three months ended September 30, 2012.&nbsp;&nbsp;For the nine months ended September 30, 2012, the Fund&#39;s derivative instrument income consisted of realized losses of $29 thousand.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Derivative Instruments</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund may periodically utilize derivative instruments to manage the price risk attributable to its oil and gas production.&nbsp;&nbsp;Derivative instruments are carried on the balance sheet at fair value and recorded as either an asset or liability.&nbsp;&nbsp;Changes in the fair value of the derivatives are recorded currently in earnings unless specific hedge accounting criteria are met.&nbsp; At this time, the Fund has elected not to use hedge accounting for its derivatives and, accordingly, the derivatives are marked-to-market each quarter with fair value gains and losses recognized currently as other income on the statement of operations.&nbsp;&nbsp;The estimated fair value of such contracts is based upon various factors, including reported prices on the New York Mercantile Exchange ("NYMEX") and the Intercontinental Exchange ("ICE"), volatility, and the time value of options.&nbsp;&nbsp;The Fund recognizes all unrealized and realized gains and losses related to these contracts on a mark-to-market basis on the statement of operations within other income or loss. The related cash flow impact of the derivative activities are reflected as cash flows from operating activities on the statement of cash flows.&nbsp;&nbsp;The Fund actively monitors the creditworthiness of each counterparty and assesses the impact, if any, on its derivative positions.&nbsp;&nbsp;See Note&nbsp;2.&nbsp;&nbsp;"Derivative Instruments".</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Fair Value Measurements</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The fair value measurement guidance provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value.&nbsp;&nbsp;The fair value hierarchy gives the highest priority to Level 1 inputs, which consists of unadjusted quoted prices for identical instruments in active markets.&nbsp;&nbsp;Level 2 inputs consist of quoted prices for similar instruments.&nbsp;&nbsp;Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.&nbsp;&nbsp;Cash and cash equivalents approximate fair value based on Level 1 inputs.&nbsp;&nbsp;&nbsp;Mortgage-backed securities are recorded based on Level 2 inputs, as such instruments trade in over-the-counter markets.</div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Oil and Gas Properties</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;The Fund&#39;s portion of exploration, drilling, operating and capital equipment expenditures is billed by operators.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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&#39; 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.&nbsp;&nbsp;All costs related to production activity and workover efforts are expensed as incurred.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Upon the sale, retirement or abandonment of a property, the cost and related accumulated depletion and amortization, if any, is eliminated from the property accounts, and the resultant gain or loss is recognized.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> At September 30, 2013 and December 31, 2012, amounts recorded in due to operators totaling $0.3 million and $0.4 million, respectively, related to capital expenditures for oil and gas properties.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 60000 65000 199000 143000 3114000 3114000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Impairment of Long-Lived Assets</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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 proved 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 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&#39;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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> During the nine months ended September 30, 2012, the Fund recorded an impairment of $3.1 million, relating to the Alpha Project, which was attributable to revisions to reserve estimates. The fair value at the date of impairment was $2.6 million.&nbsp;&nbsp;Such amount was determined based on level 3 inputs, which included projected income from reserves utilizing forward price curves, net of anticipated costs, discounted. There were no impairments to oil and gas properties for the three and nine months ended September 30, 2013 and for the three months ended September 30, 2012.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Income Taxes</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> No provision is made for income taxes in the financial statements. The Fund is a limited liability company, and as such, the Fund&#39;s income or loss is passed through and included in the tax returns of the Fund&#39;s shareholders.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 139000 92000 -953000 -291000 -3000 65000 56000 40000 1810000 1781000 15008000 17093000 679000 650000 8300000 14600000 -6651000 -9741000 -916000 -2609000 8075000 10196000 1007000 1477000 4548000 507000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Recent Accounting Pronouncements</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund has considered recent accounting pronouncements and believes that these recent pronouncements will not have a material effect on the Fund&#39;s financial statements.</div> <!--EndFragment--></div> </div> 3000 10000 12000 -1000 20950000 18456000 6749000 8352000 2591000 4028000 9682000 12037000 569000 471000 1756000 1439000 1587000 2561000 5146000 11529000 1004000 1467000 4536000 508000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Organization and Summary of Significant Accounting Policies</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Organization</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Ridgewood Energy A-1 Fund, LLC (the "Fund"), a Delaware limited liability company, was formed on February 3, 2009 and operates pursuant to a limited liability company agreement (the "LLC Agreement") dated as of March 2, 2009 by and among Ridgewood Energy Corporation (the "Manager") and the shareholders of the Fund, which addresses matters such as the authority and voting rights of the Manager and shareholders, capitalization, transferability of membership interests, participation in costs and revenues, distribution of assets and dissolution and winding up.&nbsp;&nbsp;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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Manager has direct and exclusive control over the management of the Fund&#39;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.&nbsp;&nbsp;In addition, the Manager provides office space, equipment and facilities and other services necessary for Fund operations.&nbsp;&nbsp;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.&nbsp;&nbsp;See Notes 3, 4 and 5.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Basis of Presentation</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> These unaudited interim condensed financial statements have been prepared by the Fund&#39;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&#39;s financial position, results of operations and cash flows for the periods presented.&nbsp;&nbsp;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.&nbsp;&nbsp;The results of operations, financial position, and cash flows for the periods presented herein are not necessarily indicative of future financial results.&nbsp;&nbsp;These unaudited interim condensed financial statements should be read in conjunction with the Fund&#39;s December 31, 2012 financial statements and notes thereto included in the Fund&#39;s Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC").&nbsp;&nbsp;The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Use of Estimates</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Fair Value Measurements</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The fair value measurement guidance provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value.&nbsp;&nbsp;The fair value hierarchy gives the highest priority to Level 1 inputs, which consists of unadjusted quoted prices for identical instruments in active markets.&nbsp;&nbsp;Level 2 inputs consist of quoted prices for similar instruments.&nbsp;&nbsp;Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.&nbsp;&nbsp;Cash and cash equivalents approximate fair value based on Level 1 inputs.&nbsp;&nbsp;&nbsp;Mortgage-backed securities are recorded based on Level 2 inputs, as such instruments trade in over-the-counter markets.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Cash and Cash Equivalents</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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 are $250 thousand per insured financial institution.&nbsp;&nbsp;At September 30, 2013, the Fund&#39;s bank balances exceeded federally insured limits by $6.5 million, of which $1.0 million was invested in money market accounts that invest solely in U.S. Treasury bills and notes.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Salvage Fund</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;At September 30, 2013 and December 31, 2012, the Fund had investments in federal agency mortgage-backed securities as detailed in the following table, which are classified as available-for-sale.&nbsp;&nbsp;Available-for-sale securities are carried in the financial statements at fair value.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="text-align: center"> <table style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman" cellspacing="0" cellpadding="0" width="90%"> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Gross</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Amortized</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Unrealized</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Fair</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Available-for-Sale</div> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Cost</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Gains (Losses)</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="34%" colspan="10" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> (in thousands)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="99%" colspan="12" nowrap="nowrap" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Government National Mortgage Association securities (GNMA July 2041)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; FONT-STYLE: italic; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;September 30, 2013</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">96</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">3</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">99</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;December 31, 2012</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">116</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">8</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">124</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="99%" colspan="12" nowrap="nowrap" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Federal National Mortgage Association security (FNMA January 2042)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; FONT-STYLE: italic; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;September 30, 2013</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">215</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">216</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;December 31, 2012</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">538</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">7</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">545</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> </table> </div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; TEXT-INDENT: 0pt"> During the three months ended September 30, 2013, unrealized gains on the Fund&#39;s investments in federal agency mortgage-backed securities were $6 thousand.&nbsp;&nbsp;During the nine months ended September 30, 2013, unrealized losses on the Fund&#39;s investments in federal agency mortgage-backed securities were $11 thousand.&nbsp;&nbsp;During the three and nine months ended September 30, 2012, unrealized losses on the Fund&#39;s investments in federal agency mortgage-backed securities were $4 thousand and $7 thousand, respectively.&nbsp;&nbsp;The unrealized gains and losses were the result of fluctuations in market interest rates.&nbsp;&nbsp;The contractual cash flows of those investments are guaranteed by an agency of the U.S. government.&nbsp;&nbsp;It is expected that the securities would not be settled at a price less than the amortized cost basis of the Fund&#39;s investments. <font style="DISPLAY: inline">Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income until realized.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> For all investments, interest income is accrued as earned and amortization of premium or discount, if any, is included in interest income.&nbsp;&nbsp;<font style="DISPLAY: inline">Interest earned on the account will become part of the salvage fund.&nbsp;&nbsp;There are no restrictions on withdrawals from the salvage fund.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Debt Discounts and Deferred Financing Costs</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Debt discounts and deferred financing costs include lender fees and other costs of the credit agreement such as the conveyance of override royalty interests related to the Beta Project.&nbsp;&nbsp;These costs are deferred and amortized over the term of the debt period or until the redemption of the debt and are included on the balance sheet within "Other assets".&nbsp;&nbsp;At September 30, 2013 and December 31, 2012, $0.5 million and $0.6 million, respectively, of debt discounts and deferred financing costs were unamortized.&nbsp;&nbsp;Amortization expense was $31 thousand and $0.1 million during the three and nine months ended September 30, 2013, respectively. There was no amortization expense during the three and nine months ended September 30, 2012.&nbsp;&nbsp;During the period of asset construction, amortization expense, as a component of interest, is capitalized and included on the balance sheet within "Oil and gas properties".</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Oil and Gas Properties</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;The Fund&#39;s portion of exploration, drilling, operating and capital equipment expenditures is billed by operators.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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&#39; 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.&nbsp;&nbsp;All costs related to production activity and workover efforts are expensed as incurred.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Upon the sale, retirement or abandonment of a property, the cost and related accumulated depletion and amortization, if any, is eliminated from the property accounts, and the resultant gain or loss is recognized.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> At September 30, 2013 and December 31, 2012, amounts recorded in due to operators totaling $0.3 million and $0.4 million, respectively, related to capital expenditures for oil and gas properties.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Advances to Operators for Working Interests and Expenditures</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund&#39;s acquisition of a working interest in a well or a project requires it to make a payment to the seller for the Fund&#39;s rights, title and interest.&nbsp;&nbsp;The Fund may be required to advance its share of estimated cash expenditures for the succeeding month&#39;s operation. The Fund accounts for such payments as advances to operators for working interests and expenditures.&nbsp;&nbsp;As drilling costs are incurred, the advances are reclassified to unproved or proved properties.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Asset Retirement Obligations</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired.&nbsp;&nbsp; When a project reaches drilling depth and is determined to be either proved or dry, an asset retirement obligation is incurred.&nbsp;&nbsp;Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.&nbsp;&nbsp;As indicated above, the Fund maintains a salvage fund to provide for the funding of future asset retirement obligations.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Syndication Costs</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Syndication costs are direct costs incurred by the Fund in connection with the offering of the Fund&#39;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&#39;s balance sheet as a reduction of shareholders&#39; capital.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Revenue Recognition and Imbalances</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.<font style="FONT-WEIGHT: bold; DISPLAY: inline">&nbsp;</font> The Fund uses the sales method of accounting for gas production imbalances.&nbsp;&nbsp;The volumes of gas sold may differ from the volumes to which the Fund is entitled based on its interests in the properties.&nbsp;&nbsp;These differences create imbalances that are recognized as a liability only when the properties&#39; estimated remaining reserves net to the Fund will not be sufficient to enable the underproduced owner to recoup its entitled share through production.&nbsp;&nbsp;The Fund&#39;s recorded liability, if any, would be reflected in other liabilities.&nbsp;&nbsp;No receivables are recorded for those wells where the Fund has taken less than its share of production.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Derivative Instruments</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund may periodically utilize derivative instruments to manage the price risk attributable to its oil and gas production.&nbsp;&nbsp;Derivative instruments are carried on the balance sheet at fair value and recorded as either an asset or liability.&nbsp;&nbsp;Changes in the fair value of the derivatives are recorded currently in earnings unless specific hedge accounting criteria are met.&nbsp; At this time, the Fund has elected not to use hedge accounting for its derivatives and, accordingly, the derivatives are marked-to-market each quarter with fair value gains and losses recognized currently as other income on the statement of operations.&nbsp;&nbsp;The estimated fair value of such contracts is based upon various factors, including reported prices on the New York Mercantile Exchange ("NYMEX") and the Intercontinental Exchange ("ICE"), volatility, and the time value of options.&nbsp;&nbsp;The Fund recognizes all unrealized and realized gains and losses related to these contracts on a mark-to-market basis on the statement of operations within other income or loss. The related cash flow impact of the derivative activities are reflected as cash flows from operating activities on the statement of cash flows.&nbsp;&nbsp;The Fund actively monitors the creditworthiness of each counterparty and assesses the impact, if any, on its derivative positions.&nbsp;&nbsp;See Note&nbsp;2.&nbsp;&nbsp;"Derivative Instruments".</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Impairment of Long-Lived Assets</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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 proved 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 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&#39;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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> During the nine months ended September 30, 2012, the Fund recorded an impairment of $3.1 million, relating to the Alpha Project, which was attributable to revisions to reserve estimates. The fair value at the date of impairment was $2.6 million.&nbsp;&nbsp;Such amount was determined based on level 3 inputs, which included projected income from reserves utilizing forward price curves, net of anticipated costs, discounted. There were no impairments to oil and gas properties for the three and nine months ended September 30, 2013 and for the three months ended September 30, 2012.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Depletion and Amortization</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Depletion and amortization of the cost of proved oil and gas properties are calculated using the units-of-production method.&nbsp;&nbsp;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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Income Taxes</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> No provision is made for income taxes in the financial statements. The Fund is a limited liability company, and as such, the Fund&#39;s income or loss is passed through and included in the tax returns of the Fund&#39;s shareholders.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Income and Expense Allocation</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Profits and losses are allocated to shareholders and the Manager in accordance with the LLC agreement.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Distributions</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Distributions to shareholders are allocated in proportion to the number of shares held.&nbsp;&nbsp;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.</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> &nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.&nbsp;&nbsp;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.</div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> &nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Recent Accounting Pronouncements</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Fund has considered recent accounting pronouncements and believes that these recent pronouncements will not have a material effect on the Fund&#39;s financial statements.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 107000 53000 519000 610000 1013000 1473000 4537000 500000 6000 -4000 -11000 -7000 95000 6651000 9741000 810000 2581000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Depletion and Amortization</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Depletion and amortization of the cost of proved oil and gas properties are calculated using the units-of-production method.&nbsp;&nbsp;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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 27604000 26808000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Parties</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The LLC Agreement provides that the Manager render management, administrative and advisory services to the Fund. For such services, the Manager is paid an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund.&nbsp;&nbsp;Management fees for each of the three months ended September 30, 2013 and 2012 were $0.2 million. Management fees for each of the nine months ended September 30, 2013 and 2012 were $0.7 million.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt">&nbsp;</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> The Manager is entitled to receive a 15% interest in cash distributions from operations made by the Fund.&nbsp;&nbsp;Distributions paid to the Manager for the three and nine months ended September 30, 2013 were $0.2 million and $1.0 million, respectively.&nbsp;&nbsp;Distributions paid to the Manager for the three and nine months ended September 30, 2012 were $0.5 million and $1.5 million, respectively.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> At times, short-term payables and receivables, which do not bear interest, arise from transactions with affiliates in the ordinary course of business.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> None of the amounts paid to the Manager have been derived as a result of arm&#39;s length negotiations.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> In November 2012, the Fund entered into a credit agreement along with other entities managed by the Manager.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 726000 1793000 2494000 6136000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Revenue Recognition and Imbalances</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.<font style="FONT-WEIGHT: bold; DISPLAY: inline">&nbsp;</font> The Fund uses the sales method of accounting for gas production imbalances.&nbsp;&nbsp;The volumes of gas sold may differ from the volumes to which the Fund is entitled based on its interests in the properties.&nbsp;&nbsp;These differences create imbalances that are recognized as a liability only when the properties&#39; estimated remaining reserves net to the Fund will not be sufficient to enable the underproduced owner to recoup its entitled share through production.&nbsp;&nbsp;The Fund&#39;s recorded liability, if any, would be reflected in other liabilities.&nbsp;&nbsp;No receivables are recorded for those wells where the Fund has taken less than its share of production.</div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <div style="text-align: center"> <table style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman" cellspacing="0" cellpadding="0" width="90%"> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Gross</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Amortized</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Unrealized</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Fair</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Available-for-Sale</div> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Cost</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Gains (Losses)</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="PADDING-BOTTOM: 2px" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td style="BORDER-BOTTOM: black 2px solid" valign="bottom" width="10%" colspan="2" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> Value</div> </td> <td style="PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="34%" colspan="10" nowrap="nowrap"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: center; TEXT-INDENT: 0pt"> (in thousands)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#ffffff"> <td valign="bottom" width="99%" colspan="12" nowrap="nowrap" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Government National Mortgage Association securities (GNMA July 2041)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; FONT-STYLE: italic; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;September 30, 2013</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">96</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">3</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">99</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;December 31, 2012</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">116</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">8</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">124</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: right" valign="bottom" width="9%"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="99%" colspan="12" nowrap="nowrap" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> Federal National Mortgage Association security (FNMA January 2042)</div> </td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; FONT-WEIGHT: bold; FONT-STYLE: italic; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="#cceeff"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;September 30, 2013</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">215</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">1</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">216</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> <tr bgcolor="white"> <td valign="bottom" width="64%" align="left"> <div style="DISPLAY: block; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: left; TEXT-INDENT: 0pt"> &nbsp;&nbsp;&nbsp;December 31, 2012</div> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">538</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">7</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td valign="bottom" width="1%" align="left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: left" valign="bottom" width="1%">$</td> <td style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-ALIGN: right" valign="bottom" width="9%">545</td> <td style="TEXT-ALIGN: left" valign="bottom" width="1%" nowrap="nowrap"><font style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; DISPLAY: inline"> &nbsp;</font> </td> </tr> </table> </div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /> </div> <!--EndFragment--></div> </div> 13198000 15312000 <!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> <!--StartFragment--> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-WEIGHT: bold; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> Use of Estimates</div> <div style="DISPLAY: block; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt; text-align: justify; TEXT-INDENT: 0pt"> 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.</div> <!--EndFragment--></div> </div> xbrli:pure iso4217:USD xbrli:shares iso4217:USD xbrli:shares 0001457919 cik1457919:FundManagerMember 2013-07-01 2013-09-30 0001457919 2013-07-01 2013-09-30 0001457919 cik1457919:GovernmentNationalMortgageAssociationSecuritiesMaturingJulyTwoThousandFortyOneMember 2013-01-01 2013-09-30 0001457919 cik1457919:FundManagerMember 2013-01-01 2013-09-30 0001457919 cik1457919:FederalNationalMortgageAssociationSecuritiesMaturingJanuaryTwoThousandFortyTwoMember 2013-01-01 2013-09-30 0001457919 2013-01-01 2013-09-30 0001457919 cik1457919:FundManagerMember 2012-07-01 2012-09-30 0001457919 2012-07-01 2012-09-30 0001457919 cik1457919:GovernmentNationalMortgageAssociationSecuritiesMaturingJulyTwoThousandFortyOneMember 2012-01-01 2012-12-31 0001457919 cik1457919:FederalNationalMortgageAssociationSecuritiesMaturingJanuaryTwoThousandFortyTwoMember 2012-01-01 2012-12-31 0001457919 cik1457919:FundManagerMember 2012-01-01 2012-09-30 0001457919 cik1457919:AlphaProjectMember 2012-01-01 2012-09-30 0001457919 2012-01-01 2012-09-30 0001457919 2013-10-24 0001457919 us-gaap:MoneyMarketFundsMember 2013-09-30 0001457919 cik1457919:GovernmentNationalMortgageAssociationSecuritiesMaturingJulyTwoThousandFortyOneMember 2013-09-30 0001457919 cik1457919:FederalNationalMortgageAssociationSecuritiesMaturingJanuaryTwoThousandFortyTwoMember 2013-09-30 0001457919 2013-09-30 0001457919 cik1457919:GovernmentNationalMortgageAssociationSecuritiesMaturingJulyTwoThousandFortyOneMember 2012-12-31 0001457919 cik1457919:FederalNationalMortgageAssociationSecuritiesMaturingJanuaryTwoThousandFortyTwoMember 2012-12-31 0001457919 2012-12-31 0001457919 cik1457919:AlphaProjectMember 2012-09-30 0001457919 2012-09-30 0001457919 2011-12-31 EX-101.SCH 6 cik1457919-20130930.xsd EXHIBIT 101.SCH 104 - Disclosure - Credit Agreement - Beta Project Financing link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 40401 - Disclosure - Credit Agreement - Beta Project Financing (Details) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 105 - Disclosure - Commitments and Contingencies link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 40501 - Disclosure - Commitments and Contingencies (Details) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 001 - Document - Document and Entity Information link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 102 - Disclosure - Derivative Instruments link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 40201 - Disclosure - Derivative Instruments (Details) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 101 - Disclosure - Organization and Summary of Significant Accounting Policies link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 40101 - Disclosure - Organization and Summary of Significant Accounting Policies (Narrative) (Details) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 201 - Disclosure - Organization and Summary of Significant Accounting Policies (Policy) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 40102 - Disclosure - Organization and Summary of Significant Accounting Policies (Schedule of Available-For-Sale Securities) (Details) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 301 - Disclosure - Organization and Summary of Significant Accounting Policies (Tables) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 103 - Disclosure - Related Parties link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 40301 - Disclosure - Related Parties (Details) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 002 - Statement - UNAUDITED CONDENSED BALANCE SHEETS link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 003 - Statement - UNAUDITED CONDENSED BALANCE SHEETS (Parenthetical) link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 005 - Statement - UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink 004 - Statement - UNAUDITED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME link:calculationLink link:definitionLink link:presentationLink link:labelLink link:referenceLink EX-101.CAL 7 cik1457919-20130930_cal.xml EXHIBIT 101.CAL EX-101.DEF 8 cik1457919-20130930_def.xml EXHIBIT 101.DEF EX-101.LAB 9 cik1457919-20130930_lab.xml EXHIBIT 101.LAB Advances To Operators For Working Interests And Expenditures [Policy Text Block] Advances To Operators For Working Interests And Expenditures [Policy Text Block] Advances to Operators for Working Interests and Expenditures Asset Retirement Obligations, Policy [Policy Text Block] Asset Retirement Obligations Basis of Accounting, Policy [Policy Text Block] Basis of Presentation Cash and Cash Equivalents Cash and Cash Equivalents, Policy [Policy Text Block] Debt, Policy [Policy Text Block] Debt Discounts and Deferred Financing Costs Derivative Instruments Derivatives, Policy [Policy Text Block] Distributions [Policy Text Block] Distributions [Policy Text Block] Distributions Fair Value Measurements Fair Value Measurement, Policy [Policy Text Block] Oil and Gas Properties Full Cost or Successful Efforts, Policy [Policy Text Block] Impairment of Long-Lived Assets Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] Income And Expense Allocation [Policy Text Block] Income And Expense Allocation [Policy Text Block] Income and Expense Allocation Income Taxes Income Tax, Policy [Policy Text Block] New Accounting Pronouncements, Policy [Policy Text Block] Recent Accounting Pronouncements Property, Plant and Equipment, Policy [Policy Text Block] Depletion and Amortization Revenue Recognition, Policy [Policy Text Block] Revenue Recognition and Imbalances Salvage Fund [Policy Text Block] Salvage Fund [Policy Text Block] Salvage Fund Syndication Costs [Policy Text Block] Syndication Costs [Policy Text Block] Syndication Costs Use of Estimates Use of Estimates, Policy [Policy Text Block] Credit Agreement - Beta Project Financing [Abstract] Debt Disclosure [Text Block] Credit Agreement - Beta Project Financing Debt Instrument, Interest Rate, Stated Percentage Credit agreement, interest rate Debt Instrument, Maturity Date Credit agreement, maturity date Debt Instrument Repayment Rate Revenue Contingency First Seven Months Of Production Monthly repayment rate of total principal outstanding for the first seven months of production for a specified project if certain revenue production levels are not met. Credit agreement, contingency repayment rate, first seven months of production Debt Instrument Repayment Rate Revenue Contingency Thereafter Monthly repayment rate of total principal outstanding after the first seven months of production for a specified project if certain revenue production levels are not met. Credit agreement, contingency repayment rate, after first seven months of production Debt Issuance Cost Debt issuance expenses Deferred Finance Costs, Noncurrent, Net Deferred financing cost Line Of Credit Facility Collective Maximum Borrowing Capacity The maximum borrowing capacity for all funds within the entity prior to the satisfaction or waiver of certain administrative conditions precedent. Collective maximum borrowing capacity Line of Credit Facility, Maximum Borrowing Capacity Credit agreement, maximum borrowing capacity Line Of Credit Facility Overriding Royalty Interest The royalty amount that shall be paid to the lenders expressed as a percentage of total production of a specified project. Overriding royalty interest Line Of Credit Facility Overriding Royalty Interest Maximum Production Volume The maximum barrels of oil correlating to the corresponding overriding royalty interest rate that shall be paid to the lender. Maximum barrels of oil Milestone One [Member] Milestone One [Member] Milestone Thereafter [Member] Milestone Thereafter [Member] Milestone Two [Member] Milestone Two [Member] Oil And Gas Properties Milestone [Axis] Oil And Gas Properties Milestone [Axis] Oil And Gas Properties Milestone [Domain] Oil And Gas Properties Milestone [Domain] Oil And Gas Properties Milestone [Line Items] Oil And Gas Properties Milestone [Line Items] Oil And Gas Properties Milestone [Table] Oil And Gas Properties Milestone [Table] Commitments and Contingencies [Abstract] Commitments and Contingencies Commitments and Contingencies Disclosure [Text Block] Long-term Purchase Commitment, Amount Long Term Purchase Commitment Amount Expected To Be Incurred In Next Twelve Months Long-Term Purchase Commitment Amount Expected To Be Incurred In Next Twelve Months. Commitments for the drilling and development of investment properties expected to be incurred in the next 12 months Long Term Purchase Commitment Amount For Additional Development Of Non Producing Properties The commitment amount for the additional development of non-producing properties. Commitments for the additional development of non-producing properties Long Term Purchase Commitment Amount In Excess Of Working Capital The minimum amount the entity agreed to spend under the long-term purchase commitment that is in excess of available working capital. Commitments for the drilling and development of investment properties in excess of working capital Commitments for the drilling and development of investment properties Llc Membership Interest Shares Authorized Llc Membership Interest Shares Issued Llc Membership Interest Shares Outstanding LLC Membership Interest, Shares Authorized Shares authorized Llc Membership Interest, Shares Issued Shares issued Llc Membership Interest, Shares Outstanding Shares outstanding Advances used for capital expenditures in oil and gas properties reclassified to proved properties Adjustments to reconcile net income to net cash provided by operating activities: Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] Advances used for capital expenditures in oil and gas properties reclassified to proved, unproved or dry-hole properties. Advances Used For Capital Expenditures In Oil And Gas Properties Reclassified To Proved Properties Unproved Properties Or Dry Hole Costs Asset Retirement Obligation, Accretion Expense Accretion expense Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Net increase (decrease) in cash and cash equivalents Cash and Cash Equivalents, Period Increase (Decrease) Contributions From Shareholders Contributions From Shareholders Contributions from shareholders Derivative Cash Received The cash received from the settlement of derivative instruments. Derivative instrument settlements Derivative, Gain (Loss) on Derivative, Net Derivative instrument loss Increase (Decrease) in Accounts Payable Increase in due to operators Decrease in production receivable Increase (Decrease) in Accounts Receivable Increase (Decrease) in Accrued Liabilities (Decrease) increase in accrued expenses Changes in assets and liabilities: Increase (Decrease) in Operating Capital [Abstract] Increase in other current assets Increase (Decrease) in Other Current Assets Increase (Decrease) in Prepaid Royalties Decrease in prepaid royalties Insured Event, Gain (Loss) Casualty loss Interest Earned On Marketable Securities The interest earned on marketable securities. Interest earned on marketable securities The cash outflow for deposits into the salvage fund. Investments in salvage fund (Not Used This Quarter) Net Cash Provided by (Used in) Financing Activities Net cash used in financing activities Net Cash Provided by (Used in) Financing Activities [Abstract] Cash flows from financing activities Net Cash Provided by (Used in) Investing Activities Net cash used in investing activities Net Cash Provided by (Used in) Investing Activities [Abstract] Cash flows from investing activities Net Cash Provided by (Used in) Operating Activities Net cash provided by operating activities Net Cash Provided by (Used in) Operating Activities [Abstract] Cash flows from operating activities Net Income (Loss) Attributable to Parent Net income Payments For Investments In Salvage Fund Payments of Capital Distribution Distributions Payments to Acquire Marketable Securities Investments in marketable securities Payments to Acquire Oil and Gas Property Capital expenditures for oil and gas properties Payments to operators for working interests and expenditures related to oil and gas properties. Payments To Operators For Working Interests And Expenditures Payments to operators for working interests and expenditures Proceeds From Investments In Salvage Fund Net Proceeds from Sale and Maturity of Marketable Securities Proceeds from the maturity of investments Proceeds from Sale of Oil and Gas Property and Equipment Proceeds from sale of oil and gas properties Results of Operations, Depreciation, Depletion and Amortization, and Valuation Provisions Depletion and amortization Results of Operations, Dry Hole Costs Dry-hole costs UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS [Abstract] Supplemental schedule of non-cash investing activities Supplemental Cash Flow Information [Abstract] Syndication Costs Syndication Costs Syndication costs (Not Used This Quarter) The cash inflow or outflow relating to salvage fund. Interest reinvested in salvage fund Amendment Flag Current Fiscal Year End Date Document And Entity Information Abstract Document Fiscal Period Focus Document Fiscal Year Focus Document Period End Date Document Type Entity Central Index Key Entity Common Stock, Shares Outstanding Entity Filer Category Entity Registrant Name Derivative Instruments [Abstract] Derivative Instruments and Hedging Activities Disclosure [Text Block] Derivative Instruments Realized Gain Loss On Derivatives The realized gain (loss) on derivatives included in earnings for the period as a result of settlement of derivative instruments. Realized losses on derivative instruments Unrealized (losses) gains on derivative instruments Unrealized Gain (Loss) on Derivatives Organization and Summary of Significant Accounting Policies [Abstract] Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] Organization and Summary of Significant Accounting Policies Schedule of Available-for-sale Securities Reconciliation [Table Text Block] Summary of Available-For-Sale Securities Total cash balance not insured by the FDIC Advance Cash Flow Distributions For Shareholders Without Early Investment Incentives Price Per Share Advance Cash Flow Distributions For Shareholders Without Early Investment Incentives Price Per Share Advance cash flow distributions for shareholders without early investment incentives, price per share Alpha Project [Member] Alpha Project [Member] Amortization of financing costs Amortization of Financing Costs Cash and Cash Equivalents [Axis] Cash and Cash Equivalents [Line Items] Cash, Uninsured Amount Debt Instrument, Unamortized Discount Unamortized debt discounts and deferred financing costs Early Investment Incentive Rights Price Per Share Early Investment Incentive Rights Price Per Share Early investment incentive rights, price per share Impaired Long-Lived Assets Held and Used, Asset Name [Domain] Impaired Long-Lived Assets Held and Used by Type [Axis] Impaired Long-Lived Assets Held and Used [Line Items] Impairment of oil and gas properties Impairment of Oil and Gas Properties Maximum Cash Balance Federally Insured Per Financial Institution The maximum cash balance that is insured by the FDIC, per financial institution. Maximum cash balance federally insured per financial institution Money Market Funds [Member] Oil And Gas Properties Carrying Value The carrying value at the balance sheet date of oil and gas properties, prior to write-down. Oil and gas properties, carrying value Oil And Gas Properties Fair Value The fair value of oil and gas properties. Oil and gas properties, fair value Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax Unrealized income (loss) on marketable securities Percentage Of Available Cash From Dispositions Allocated To Fund Manager The percentage of available cash from dispositions allocated to the Fund manager until the shareholders have received total distributions equal to their capital contributions. Percentage of available cash from dispositions allocated to fund manager Percentage Of Available Cash From Dispositions Allocated To Fund Manager After Distributions Have Equaled Capital Contributions The percentage of available cash from dispositions allocated to the Fund manager after shareholders have received distributions equal to their capital contributions. Percentage of available cash from dispositions allocated to fund manager after distributions have equaled capital contributions Percentage Of Available Cash From Dispositions Allocated To Shareholders The percentage of available cash from dispositions allocated to shareholders until the shareholders have received total distributions equal to their capital contributions. Percentage of available cash from dispositions allocated to shareholders Percentage Of Available Cash From Dispositions Allocated To Shareholders After Distributions Have Equaled Capital Contributions The percentage of available cash from dispositions allocated to shareholders after shareholders have received distributions equal to their capital contributions. Percentage of available cash from dispositions allocated to shareholders after distributions have equaled capital contributions Percentage Of Cash From Operations Allocated To Fund Manager The percentage of cash from operations allocated to the Fund manager. Percentage of cash from operations allocated to fund manager Percentage Of Cash From Operations Allocated To Shareholders The percentage of cash from operations allocated to shareholders. Percentage of cash from operations allocated to shareholders Percentage Of Profit And Loss Allocated To Fund Manager Percentage of profit and losses that are allocated to the Fund manager excluding interest income and certain expenses such as such as dry-hole costs, trust fees and depletion and amortization expenses. Percentage of profit and loss allocated to fund manager Percentage Of Profit And Loss Allocated To Fund Manager For Interest Income And Certain Expenses Percentage of profit and losses that are allocated to the Fund manager for interest income and certain expenses such as such as dry-hole costs, trust fees and depletion and amortization expenses. Percentage of profit and loss allocated to fund manager for interest income and certain expenses Percentage Of Profit And Loss Allocated To Shareholders The percentage of profit and losses that are allocated to shareholders, excluding interest income and certain expenses such as such as dry-hole costs, trust fees and depletion and amortization expenses. Percentage of profit and loss allocated to shareholders Percentage Of Profit And Loss Allocated To Shareholders For Interest Income And Certain Expenses Percentage of profit and losses that are allocated to the sharesholders for interest income and certain expenses such as such as dry-hole costs, trust fees and depletion and amortization expenses. Percentage of profit and loss allocated to shareholders for interest income and certain expenses Cash and Cash Equivalents [Domain] Schedule of Cash and Cash Equivalents [Table] Schedule of Impaired Long-Lived Assets Held and Used [Table] Value Of Capital Expenditures For Oil And Gas Properties Owed To Operators Value of capitalized expenditures for oil and gas properties owed to operators. Value of capital expenditures for oil and gas properties owed to operators Related Parties [Abstract] Related Party Transactions Disclosure [Text Block] Related Parties Annual Management Fee Percentage Rate The annual rate for distributions paid to the Fund Manager as a percentage of capital contributions, net of cumulative dry-hole costs incurred. Annual management fee percentage rate Distributions Paid During Period Distributions Paid During Period. Distributions Fund Manager [Member] Fund Manager [Member] The fees paid to the Manager of the Fund for the management of the Fund. Annual management fees paid to Fund Manager Management Fees To Affiliate Percentage Of Total Distributions Allocated To Fund Manager Percentage of total distributions allocated to Fund Manager. Percentage of total distributions allocated to Fund Manager Related Party [Domain] Related Party Transaction [Line Items] Related Party [Axis] Schedule of Related Party Transactions, by Related Party [Table] Available-for-sale Securities Fair Value Available-for-sale Securities, Amortized Cost Basis Amortized Cost Available-for-sale Securities, Gross Unrealized Gain Gross Unrealized Gains Federal National Mortgage Association Securities Maturing January Two Thousand Forty Two [Member] Federal National Mortgage Association Securities Maturing January Two Thousand Forty Two [Member] FNMA January 2042 [Member] Government National Mortgage Association Securities Maturing April Two Thousand Forty [Member] Government National Mortgage Association Securities Maturing April Two Thousand Forty [Member] GNMA April 2040 [Member] Government National Mortgage Association Securities Maturing July Two Thousand Forty One [Member] Government National Mortgage Association Securities Maturing July Two Thousand Forty One [Member] GNMA July 2041 [Member] Government National Mortgage Association Securities Maturing June Two Thousand Thirty Nine [Member] Government National Mortgage Association Securities Maturing June Two Thousand Thirty Nine [Member] GNMA June 2039 [Member] Major Types of Debt and Equity Securities [Axis] Major Types of Debt and Equity Securities [Domain] Schedule of Available-for-sale Securities [Line Items] Schedule of Available-for-sale Securities [Table] Accounts Payable, Current Due to operators Accounts Receivable, Net, Current Production receivable Accrued Liabilities, Current Accrued expenses Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other comprehensive income Asset Retirement Obligations, Noncurrent Asset retirement obligations Assets Total assets Assets [Abstract] Assets Assets, Current Total current assets Assets, Current [Abstract] Current assets: Cash and cash equivalents Cash and Cash Equivalents, at Carrying Value Commitments and Contingencies Commitments and contingencies (Note 5) Liabilities Total liabilities Liabilities and Equity Total liabilities and members' capital Liabilities and Equity [Abstract] Liabilities and Members' Capital Liabilities, Current Total current liabilities Liabilities, Current [Abstract] Current liabilities: Distributions to the Manager of the Fund. Manager Distributions Distributions The cumulative earnings (or deficit) for the Manager of the Fund. Manager Retained Earnings Accumulated Deficit Retained earnings The total amount of equity attributable to the Manager of the Fund. Managers Capital Manager's total Oil and Gas Property, Successful Effort Method, Accumulated Depreciation, Depletion and Amortization Less: accumulated depletion and amortization Oil and Gas Property, Successful Effort Method, Net Total oil and gas properties, net Other Assets, Current Other current assets Other Assets, Noncurrent Other assets Other Oil and Gas Property, Successful Effort Method Advances to operators for working interests and expenditures Partners' Capital [Abstract] Members' capital: Property, Plant and Equipment, Net [Abstract] Oil and gas properties: Proved Oil and Gas Property, Successful Effort Method Proved properties Salvage Fund Noncurrent Salvage Fund, Noncurrent. Salvage fund The total amount of equity attributable to the shareholders of the Fund. Shareholders Capital Shareholders' total The amount of capital raised from selling shares. Shareholders Capital Contributions Capital contributions (250 shares authorized; 207.7026 issued and outstanding) Distributions to shareholders. Shareholders Distributions Distributions The cumulative earnings (or deficit) for the shareholders of the Fund. Shareholders Retained Earnings Accumulated Deficit Retained earnings (accumulated deficit) 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. Shareholders Syndication Costs Syndication costs UNAUDITED CONDENSED BALANCE SHEETS [Abstract] Total members' capital Stockholders' Equity Attributable to Parent Unproved properties Unproved Oil and Gas Property, Successful Effort Method General and Administrative Expense General and administrative expenses UNAUDITED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME [Abstract] Management fees to affiliate (Note 3) Manager Interest In Net Income Loss Abstract Manager Interest Net income Manager's interest in net income (loss). Net Income Loss Manager Interest Net income The net income (loss) per share attributable to the shareholders. Net Income Loss Per Share Shareholder Interest Net income (loss) per share Shareholders' interest in net income (loss). Net Income Loss Shareholder Interest Net income (loss) Nonoperating Income (Expense) Other income (loss) Oil and Gas Revenue Oil and gas revenue Operating Costs and Expenses Operating expenses Operating Expenses Total expenses Operating Expenses [Abstract] Expenses Operating Income (Loss) Income from operations Other Comprehensive Income (Loss), Net of Tax Total comprehensive income Other Comprehensive Income (Loss), Net of Tax [Abstract] Other comprehensive income (loss) Revenues [Abstract] Revenue Shareholders Interest In Net Income Loss Abstract Shareholder Interest EX-101.PRE 10 cik1457919-20130930_pre.xml EXHIBIT 101.PRE ZIP 11 0001214659-13-005874-xbrl.zip IDEA: XBRL DOCUMENT begin 644 0001214659-13-005874-xbrl.zip M4$L#!!0````(`,"`6$,L;H@:HUD``/`[`P`7`!P`8VEK,30U-SDQ.2TR,#$S M,#DS,"YX;6Q55`D``Z=]:5*G?6E2=7@+``$$)0X```0Y`0``[%UM<^HXEOZ^ M5?L?-/1TU^VJD&!>0DCZ]BPW"6EVDY!)N-O=^V5*V`+4U]BL9"=A?_V>(QFP ML2&&V(3D,M/536Q)?IYSCMZ.I*-?_O$\LLDC$Y*[SN>"<5@J$.:8KL6=P>?" 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Credit Agreement - Beta Project Financing (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Credit Agreement - Beta Project Financing [Abstract]    
Credit agreement, maximum borrowing capacity $ 8.3  
Credit agreement, interest rate 8.00%  
Credit agreement, contingency repayment rate, first seven months of production 1.25%  
Credit agreement, contingency repayment rate, after first seven months of production 4.50%  
Credit agreement, maturity date Dec. 31, 2020  
Deferred financing cost $ 0.5 $ 0.6
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UNAUDITED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Revenue        
Oil and gas revenue $ 2,591 $ 4,028 $ 9,682 $ 12,037
Expenses        
Depletion and amortization 726 1,793 2,494 6,136
Impairment of oil and gas properties          3,114
Management fees to affiliate (Note 3) 232 232 697 697
Operating expenses 569 471 1,756 1,439
General and administrative expenses 60 65 199 143
Total expenses 1,587 2,561 5,146 11,529
Income from operations 1,004 1,467 4,536 508
Other income (loss) 3 10 12 (1)
Net income 1,007 1,477 4,548 507
Other comprehensive income (loss)        
Unrealized income (loss) on marketable securities 6 (4) (11) (7)
Total comprehensive income 1,013 1,473 4,537 500
Manager Interest        
Net income 253 473 1,032 1,383
Shareholder Interest        
Net income (loss) $ 754 $ 1,004 $ 3,516 $ (876)
Net income (loss) per share $ 3,629 $ 4,837 $ 16,929 $ (4,217)
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Commitments and Contingencies
9 Months Ended
Sep. 30, 2013
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
5.           Commitments and Contingencies

Capital Commitments
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 vary depending on the stage of development on a property-by-property basis.  Currently, the Fund has one non-producing property, the Beta Project, for which additional development costs must be incurred in order to commence production. The Fund currently anticipates such development will include a four-well development with related platform and pipeline infrastructure.  It is also possible that full development of the Beta Project will entail the drilling of additional wells beyond the four projected wells, the cost of which is not included in the below estimates.
 
As of September 30, 2013, the Fund expects to spend an additional $14.6 million related to its investments in oil and gas properties, inclusive of $14.5 million to develop the Beta Project, of which $3.3 million is expected to be spent during the next twelve months.  Total capital commitments exceed available working capital by $8.8 million at September 30, 2013, which includes projected interest costs and asset retirement obligations for the Beta Project.  In November 2012, the Fund entered into a credit agreement that provides for an aggregate loan commitment of up to $8.3 million to provide capital toward the funding of the Fund's share of development costs on the Beta Project.  See Note 4. "Credit Agreement - Beta Project Financing," for additional information.  The Fund expects that cash flows from operations will be sufficient to fund its remaining commitments.

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, 2013 and December 31, 2012, there were no known environmental contingencies that required the Fund to record a liability.

Effective October 22, 2012, the United States Department of Interior, acting through the Bureau of Safety and Environmental Enforcement, implemented the Final Drilling Safety Rule (the "Final Rule") which refined certain interim rules imposed in the immediate wake of the 2010 Deepwater Horizon oil spill.  The Final Rule was promulgated for the prevention of waste and for the conservation of natural resources of the Outer Continental Shelf under the rulemaking authority of the Outer Continental Shelf Lands Act.  The United States Congress continues to consider a number of legislative proposals relating to the upstream oil and gas industry both onshore and offshore, in addition to the Final Rule.  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 the Fund's 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 a material 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.
 
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Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Commitments and Contingencies [Abstract]  
Commitments for the additional development of non-producing properties $ 14.5
Commitments for the drilling and development of investment properties 14.6
Commitments for the drilling and development of investment properties expected to be incurred in the next 12 months 3.3
Commitments for the drilling and development of investment properties in excess of working capital 8.8
Credit agreement, maximum borrowing capacity $ 8.3
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Organization and Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2013
Organization and Summary of Significant Accounting Policies [Abstract]  
Organization and Summary of Significant Accounting Policies
1.           Organization and Summary of Significant Accounting Policies

Organization
The Ridgewood Energy A-1 Fund, LLC (the "Fund"), a Delaware limited liability company, was formed on February 3, 2009 and operates pursuant to a limited liability company agreement (the "LLC Agreement") dated as of March 2, 2009 by and among Ridgewood Energy Corporation (the "Manager") and the shareholders of the Fund, which addresses matters such as the authority and voting rights of the Manager and shareholders, capitalization, transferability of membership interests, participation in costs and revenues, distribution of assets and dissolution and winding up.  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, 4 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, 2012 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.

Fair Value Measurements
The fair value measurement guidance provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value.  The fair value hierarchy gives the highest priority to Level 1 inputs, which consists of unadjusted quoted prices for identical instruments in active markets.  Level 2 inputs consist of quoted prices for similar instruments.  Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.  Cash and cash equivalents approximate fair value based on Level 1 inputs.   Mortgage-backed securities are recorded based on Level 2 inputs, as such instruments trade in over-the-counter markets.

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 are $250 thousand per insured financial institution.  At September 30, 2013, the Fund's bank balances exceeded federally insured limits by $6.5 million, of which $1.0 million 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 September 30, 2013 and December 31, 2012, the Fund had investments in federal agency mortgage-backed securities as detailed in the following table, which are classified as available-for-sale.  Available-for-sale securities are carried in the financial statements at fair value.

         
Gross
       
   
Amortized
   
Unrealized
   
Fair
 
Available-for-Sale
 
Cost
   
Gains (Losses)
   
Value
 
   
(in thousands)
 
Government National Mortgage Association securities (GNMA July 2041)
 
   September 30, 2013
  $ 96     $ 3     $ 99  
   December 31, 2012
  $ 116     $ 8     $ 124  
                         
Federal National Mortgage Association security (FNMA January 2042)
 
   September 30, 2013
  $ 215     $ 1     $ 216  
   December 31, 2012
  $ 538     $ 7     $ 545  

During the three months ended September 30, 2013, unrealized gains on the Fund's investments in federal agency mortgage-backed securities were $6 thousand.  During the nine months ended September 30, 2013, unrealized losses on the Fund's investments in federal agency mortgage-backed securities were $11 thousand.  During the three and nine months ended September 30, 2012, unrealized losses on the Fund's investments in federal agency mortgage-backed securities were $4 thousand and $7 thousand, respectively.  The unrealized gains and losses were the result of fluctuations in market interest rates.  The contractual cash flows of those investments are guaranteed by an agency of the U.S. government.  It is expected that the securities would not be settled at a price less than the amortized cost basis of the Fund's investments. Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income until realized.

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.

Debt Discounts and Deferred Financing Costs
Debt discounts and deferred financing costs include lender fees and other costs of the credit agreement such as the conveyance of override royalty interests related to the Beta Project.  These costs are deferred and amortized over the term of the debt period or until the redemption of the debt and are included on the balance sheet within "Other assets".  At September 30, 2013 and December 31, 2012, $0.5 million and $0.6 million, respectively, of debt discounts and deferred financing costs were unamortized.  Amortization expense was $31 thousand and $0.1 million during the three and nine months ended September 30, 2013, respectively. There was no amortization expense during the three and nine months ended September 30, 2012.  During the period of asset construction, amortization expense, as a component of interest, is capitalized and included on the balance sheet within "Oil and gas properties".

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.  All costs related to production activity and workover efforts are expensed as incurred.
 
Upon the sale, retirement or abandonment of a property, the cost and related accumulated depletion and amortization, if any, is eliminated from the property accounts, and the resultant gain or loss is recognized.

At September 30, 2013 and December 31, 2012, amounts recorded in due to operators totaling $0.3 million and $0.4 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 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.  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 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.

Derivative Instruments
The Fund may periodically utilize derivative instruments to manage the price risk attributable to its oil and gas production.  Derivative instruments are carried on the balance sheet at fair value and recorded as either an asset or liability.  Changes in the fair value of the derivatives are recorded currently in earnings unless specific hedge accounting criteria are met.  At this time, the Fund has elected not to use hedge accounting for its derivatives and, accordingly, the derivatives are marked-to-market each quarter with fair value gains and losses recognized currently as other income on the statement of operations.  The estimated fair value of such contracts is based upon various factors, including reported prices on the New York Mercantile Exchange ("NYMEX") and the Intercontinental Exchange ("ICE"), volatility, and the time value of options.  The Fund recognizes all unrealized and realized gains and losses related to these contracts on a mark-to-market basis on the statement of operations within other income or loss. The related cash flow impact of the derivative activities are reflected as cash flows from operating activities on the statement of cash flows.  The Fund actively monitors the creditworthiness of each counterparty and assesses the impact, if any, on its derivative positions.  See Note 2.  "Derivative Instruments".

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 proved 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 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.
 
During the nine months ended September 30, 2012, the Fund recorded an impairment of $3.1 million, relating to the Alpha Project, which was attributable to revisions to reserve estimates. The fair value at the date of impairment was $2.6 million.  Such amount was determined based on level 3 inputs, which included projected income from reserves utilizing forward price curves, net of anticipated costs, discounted. There were no impairments to oil and gas properties for the three and nine months ended September 30, 2013 and for the three months ended September 30, 2012.

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 to shareholders and the Manager in accordance with the LLC agreement.

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.
 
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.

XML 19 R8.htm IDEA: XBRL DOCUMENT v2.4.0.8
Related Parties
9 Months Ended
Sep. 30, 2013
Related Parties [Abstract]  
Related Parties
3.           Related Parties

The LLC Agreement provides that the Manager render management, administrative and advisory services to the Fund. For such services, the Manager is paid an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole and related well costs incurred by the Fund.  Management fees for each of the three months ended September 30, 2013 and 2012 were $0.2 million. Management fees for each of the nine months ended September 30, 2013 and 2012 were $0.7 million.
 
The Manager is entitled to receive a 15% interest in cash distributions from operations made by the Fund.  Distributions paid to the Manager for the three and nine months ended September 30, 2013 were $0.2 million and $1.0 million, respectively.  Distributions paid to the Manager for the three and nine months ended September 30, 2012 were $0.5 million and $1.5 million, respectively.

At times, short-term payables and receivables, which do not bear interest, arise from transactions with affiliates in the ordinary course of business.

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.

In November 2012, the Fund entered into a credit agreement along with other entities managed by the Manager.

XML 20 R11.htm IDEA: XBRL DOCUMENT v2.4.0.8
Organization and Summary of Significant Accounting Policies (Policy)
9 Months Ended
Sep. 30, 2013
Organization and Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation
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, 2012 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
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.
Fair Value Measurements
Fair Value Measurements
The fair value measurement guidance provides a hierarchy that prioritizes and defines the types of inputs used to measure fair value.  The fair value hierarchy gives the highest priority to Level 1 inputs, which consists of unadjusted quoted prices for identical instruments in active markets.  Level 2 inputs consist of quoted prices for similar instruments.  Level 3 valuations are derived from inputs that are significant and unobservable; hence, these valuations have the lowest priority.  Cash and cash equivalents approximate fair value based on Level 1 inputs.   Mortgage-backed securities are recorded based on Level 2 inputs, as such instruments trade in over-the-counter markets.
Cash and Cash Equivalents
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 are $250 thousand per insured financial institution.  At September 30, 2013, the Fund's bank balances exceeded federally insured limits by $6.5 million, of which $1.0 million was invested in money market accounts that invest solely in U.S. Treasury bills and notes.
Salvage Fund
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, 2013 and December 31, 2012, the Fund had investments in federal agency mortgage-backed securities as detailed in the following table, which are classified as available-for-sale.  Available-for-sale securities are carried in the financial statements at fair value.

         
Gross
       
   
Amortized
   
Unrealized
   
Fair
 
Available-for-Sale
 
Cost
   
Gains (Losses)
   
Value
 
   
(in thousands)
 
Government National Mortgage Association securities (GNMA July 2041)
 
   September 30, 2013
  $ 96     $ 3     $ 99  
   December 31, 2012
  $ 116     $ 8     $ 124  
                         
Federal National Mortgage Association security (FNMA January 2042)
 
   September 30, 2013
  $ 215     $ 1     $ 216  
   December 31, 2012
  $ 538     $ 7     $ 545  

During the three months ended September 30, 2013, unrealized gains on the Fund's investments in federal agency mortgage-backed securities were $6 thousand.  During the nine months ended September 30, 2013, unrealized losses on the Fund's investments in federal agency mortgage-backed securities were $11 thousand.  During the three and nine months ended September 30, 2012, unrealized losses on the Fund's investments in federal agency mortgage-backed securities were $4 thousand and $7 thousand, respectively.  The unrealized gains and losses were the result of fluctuations in market interest rates.  The contractual cash flows of those investments are guaranteed by an agency of the U.S. government.  It is expected that the securities would not be settled at a price less than the amortized cost basis of the Fund's investments. Unrealized gains or losses on available-for-sale securities are reported in other comprehensive income until realized.

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.

Debt Discounts and Deferred Financing Costs
Debt Discounts and Deferred Financing Costs
Debt discounts and deferred financing costs include lender fees and other costs of the credit agreement such as the conveyance of override royalty interests related to the Beta Project.  These costs are deferred and amortized over the term of the debt period or until the redemption of the debt and are included on the balance sheet within "Other assets".  At September 30, 2013 and December 31, 2012, $0.5 million and $0.6 million, respectively, of debt discounts and deferred financing costs were unamortized.  Amortization expense was $31 thousand and $0.1 million during the three and nine months ended September 30, 2013, respectively. There was no amortization expense during the three and nine months ended September 30, 2012.  During the period of asset construction, amortization expense, as a component of interest, is capitalized and included on the balance sheet within "Oil and gas properties".
Oil and Gas Properties
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.  All costs related to production activity and workover efforts are expensed as incurred.
 
Upon the sale, retirement or abandonment of a property, the cost and related accumulated depletion and amortization, if any, is eliminated from the property accounts, and the resultant gain or loss is recognized.

At September 30, 2013 and December 31, 2012, amounts recorded in due to operators totaling $0.3 million and $0.4 million, respectively, related to capital expenditures for oil and gas properties.

Advances to Operators for Working Interests and Expenditures
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
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.  As indicated above, the Fund maintains a salvage fund to provide for the funding of future asset retirement obligations.

Syndication Costs
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
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.

Derivative Instruments
Derivative Instruments
The Fund may periodically utilize derivative instruments to manage the price risk attributable to its oil and gas production.  Derivative instruments are carried on the balance sheet at fair value and recorded as either an asset or liability.  Changes in the fair value of the derivatives are recorded currently in earnings unless specific hedge accounting criteria are met.  At this time, the Fund has elected not to use hedge accounting for its derivatives and, accordingly, the derivatives are marked-to-market each quarter with fair value gains and losses recognized currently as other income on the statement of operations.  The estimated fair value of such contracts is based upon various factors, including reported prices on the New York Mercantile Exchange ("NYMEX") and the Intercontinental Exchange ("ICE"), volatility, and the time value of options.  The Fund recognizes all unrealized and realized gains and losses related to these contracts on a mark-to-market basis on the statement of operations within other income or loss. The related cash flow impact of the derivative activities are reflected as cash flows from operating activities on the statement of cash flows.  The Fund actively monitors the creditworthiness of each counterparty and assesses the impact, if any, on its derivative positions.  See Note 2.  "Derivative Instruments".

Impairment of Long-Lived Assets
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 proved 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 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.
 
During the nine months ended September 30, 2012, the Fund recorded an impairment of $3.1 million, relating to the Alpha Project, which was attributable to revisions to reserve estimates. The fair value at the date of impairment was $2.6 million.  Such amount was determined based on level 3 inputs, which included projected income from reserves utilizing forward price curves, net of anticipated costs, discounted. There were no impairments to oil and gas properties for the three and nine months ended September 30, 2013 and for the three months ended September 30, 2012.

Depletion and Amortization
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
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
Income and Expense Allocation
Profits and losses are allocated to shareholders and the Manager in accordance with the LLC agreement.

Distributions
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.
Recent Accounting Pronouncements
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.
XML 21 R9.htm IDEA: XBRL DOCUMENT v2.4.0.8
Credit Agreement - Beta Project Financing
9 Months Ended
Sep. 30, 2013
Credit Agreement - Beta Project Financing [Abstract]  
Credit Agreement - Beta Project Financing
4.           Credit Agreement - Beta Project Financing

In November 2012, the Fund entered into a credit agreement (the "Credit Agreement") with Rahr Energy Investments LLC, as Administrative Agent and Lender (and any other banks or financial institutions that may in the future become a party thereto, collectively "Lenders") that provides for an aggregate loan commitment to the Fund of approximately $8.3 million ("Loan"), to provide capital toward the funding of the Fund's share of development costs on the Beta Project.

As of September 30, 2013, the Fund had no borrowings under the Credit Agreement.  The Fund anticipates it will borrow approximately $8.3 million over the development period of the Beta Project, which will bear interest at 8% compounded annually and accrue only on Loan proceeds as they are drawn.  Principal and interest will not be payable until such time that initial production has commenced for the Beta Project, which is currently expected to occur in 2016. At that time, if certain revenue production levels are met, principal and interest will be repaid at a monthly rate of 1.25% of the Fund's total principal outstanding at the date the Beta Project commences production for the first seven months of production, and a monthly rate of 4.5% of the Fund's total principal outstanding at the date the Beta Project commences production thereafter until the Loan is repaid in full, in no event later than December 31, 2020.  The Loan may be prepaid by the Fund without premium or penalty.

As additional consideration to the Lenders, the Fund has agreed to convey an overriding royalty interest ("ORRI") in its working interests in the Beta Project to the Lenders. The Fund recorded the additional consideration as debt discounts and deferred financing costs at a fair value of $0.6 million, which will be amortized to interest expense over the expected payoff period of the Loan.  The fair value of the ORRI was determined using net discounted cash flows from the Beta Project related to the ORRI based on level 3 inputs, which include projected net income from reserves and forward pricing curves.  At September 30, 2013 and December 31, 2012, the outstanding debt discounts and deferred financing costs recorded on the balance sheet within "Other assets" were $0.5 million and $0.6 million, respectively.
 
The Credit Agreement contains customary covenants, for which the Fund believes it is in compliance at September 30, 2013.

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UNAUDITED CONDENSED BALANCE SHEETS (Parenthetical)
Sep. 30, 2013
Dec. 31, 2012
UNAUDITED CONDENSED BALANCE SHEETS [Abstract]    
Shares authorized 250 250
Shares issued 207.7026 207.7026
Shares outstanding 207.7026 207.7026
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Organization and Summary of Significant Accounting Policies (Schedule of Available-For-Sale Securities) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
GNMA July 2041 [Member]
   
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 96 $ 116
Gross Unrealized Gains 3 8
Fair Value 99 124
FNMA January 2042 [Member]
   
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 215 538
Gross Unrealized Gains 1 7
Fair Value $ 216 $ 545
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UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Cash flows from operating activities    
Net income $ 4,548 $ 507
Adjustments to reconcile net income to net cash provided by operating activities:    
Depletion and amortization 2,494 6,136
Impairment of oil and gas properties    3,114
Derivative instrument loss    29
Derivative instrument settlements    2
Changes in assets and liabilities:    
Decrease in production receivable 953 291
Increase in other current assets (56) (40)
Increase in due to operators 139 92
(Decrease) increase in accrued expenses (3) 65
Net cash provided by operating activities 8,075 10,196
Cash flows from investing activities    
Payments to operators for working interests and expenditures (95)   
Capital expenditures for oil and gas properties (810) (2,581)
Interest reinvested in salvage fund (11) (28)
Net cash used in investing activities (916) (2,609)
Cash flows from financing activities    
Distributions (6,651) (9,741)
Net cash used in financing activities (6,651) (9,741)
Net increase (decrease) in cash and cash equivalents 508 (2,154)
Cash and cash equivalents, beginning of period 5,045 6,817
Cash and cash equivalents, end of period $ 5,553 $ 4,663
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UNAUDITED CONDENSED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Current assets:    
Cash and cash equivalents $ 5,553 $ 5,045
Production receivable 775 1,728
Other current assets 107 53
Total current assets 6,435 6,826
Salvage fund 1,305 1,305
Other assets 519 610
Oil and gas properties:    
Advances to operators for working interests and expenditures 95   
Proved properties 27,604 26,808
Less: accumulated depletion and amortization (20,950) (18,456)
Total oil and gas properties, net 6,749 8,352
Total assets 15,008 17,093
Current liabilities:    
Due to operators 645 613
Accrued expenses 34 37
Total current liabilities 679 650
Asset retirement obligations 1,131 1,131
Total liabilities 1,810 1,781
Commitments and contingencies (Note 5)      
Members' capital:    
Distributions (4,244) (3,246)
Retained earnings 4,602 3,570
Manager's total 358 324
Capital contributions (250 shares authorized; 207.7026 issued and outstanding) 41,143 41,143
Syndication costs (4,804) (4,804)
Distributions (24,051) (18,398)
Retained earnings (accumulated deficit) 548 (2,968)
Shareholders' total 12,836 14,973
Accumulated other comprehensive income 4 15
Total members' capital 13,198 15,312
Total liabilities and members' capital $ 15,008 $ 17,093
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Organization and Summary of Significant Accounting Policies (Narrative) (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Organization and Summary of Significant Accounting Policies [Abstract]          
Maximum cash balance federally insured per financial institution $ 250,000   $ 250,000    
Cash and Cash Equivalents [Line Items]          
Total cash balance not insured by the FDIC 6,500,000   6,500,000    
Unrealized income (loss) on marketable securities 6,000 (4,000) (11,000) (7,000)  
Unamortized debt discounts and deferred financing costs 500,000   500,000   600,000
Amortization of financing costs 31,000    100,000     
Value of capital expenditures for oil and gas properties owed to operators 300,000   300,000   400,000
Impaired Long-Lived Assets Held and Used [Line Items]          
Impairment of oil and gas properties          3,114,000  
Percentage of cash from operations allocated to shareholders 85.00%   85.00%    
Percentage of cash from operations allocated to fund manager 15.00%   15.00%    
Percentage of available cash from dispositions allocated to shareholders 99.00%   99.00%    
Percentage of available cash from dispositions allocated to fund manager 1.00%   1.00%    
Percentage of available cash from dispositions allocated to shareholders after distributions have equaled capital contributions 85.00%   85.00%    
Percentage of available cash from dispositions allocated to fund manager after distributions have equaled capital contributions 15.00%   15.00%    
Alpha Project [Member]
         
Impaired Long-Lived Assets Held and Used [Line Items]          
Impairment of oil and gas properties       3,114,000  
Oil and gas properties, fair value   2,600,000   2,600,000  
Money Market Funds [Member]
         
Cash and Cash Equivalents [Line Items]          
Total cash balance not insured by the FDIC $ 1,000,000   $ 1,000,000    
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Related Parties (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Related Party Transaction [Line Items]        
Annual management fee percentage rate 2.50%   2.50%  
Annual management fees paid to Fund Manager $ 232,000 $ 232,000 $ 697,000 $ 697,000
Percentage of total distributions allocated to Fund Manager 15.00%   15.00%  
Fund Manager [Member]
       
Related Party Transaction [Line Items]        
Distributions $ (200,000) $ (500,000) $ (1,000,000) $ (1,500,000)
XML 30 R12.htm IDEA: XBRL DOCUMENT v2.4.0.8
Organization and Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2013
Organization and Summary of Significant Accounting Policies [Abstract]  
Summary of Available-For-Sale Securities

         
Gross
       
   
Amortized
   
Unrealized
   
Fair
 
Available-for-Sale
 
Cost
   
Gains (Losses)
   
Value
 
   
(in thousands)
 
Government National Mortgage Association securities (GNMA July 2041)
 
   September 30, 2013
  $ 96     $ 3     $ 99  
   December 31, 2012
  $ 116     $ 8     $ 124  
                         
Federal National Mortgage Association security (FNMA January 2042)
 
   September 30, 2013
  $ 215     $ 1     $ 216  
   December 31, 2012
  $ 538     $ 7     $ 545  

XML 31 R7.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivative Instruments
9 Months Ended
Sep. 30, 2013
Derivative Instruments [Abstract]  
Derivative Instruments
2.           Derivative Instruments

The Fund periodically enters into derivative contracts relating to its oil or gas production. The use of such derivative instruments limits the downside risk of adverse price movements.  The estimated fair value of such contracts is based upon various factors, including reported prices on NYMEX and ICE, volatility, and the time value of options.  The Fund has exposure to credit risk to the extent the derivative instrument counterparty is unable to satisfy its settlement commitment.

The Fund had no derivative contracts during the three and nine months ended September 30, 2013 and during the three months ended September 30, 2012.  For the nine months ended September 30, 2012, the Fund's derivative instrument income consisted of realized losses of $29 thousand.

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Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Derivative Instruments [Abstract]        
Realized losses on derivative instruments          $ (29)
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Document and Entity Information
9 Months Ended
Sep. 30, 2013
Oct. 24, 2013
Document And Entity Information Abstract    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2013  
Entity Registrant Name RIDGEWOOD ENERGY A-1 FUND LLC  
Entity Central Index Key 0001457919  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2013  
Document Fiscal Period Focus Q3  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   207.7026