10-Q

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, 2017

or

☐	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 ☒    No ☐

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 ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer (Do not check if a smaller reporting company)	☐	Smaller reporting company Emerging growth company	☒ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  Yes ☐    No ☒

As of November 7, 2017 there were 207.7026 shares of LLC Membership Interest outstanding.

Table of Contents

			PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements		1
		Unaudited Condensed Balance Sheets as of September 30, 2017 and December 31, 2016	1
		Unaudited Condensed Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2017 and 2016	2
		Unaudited Condensed Statements of Cash Flows for the nine months ended September 30, 2017 and 2016	3
		Notes to Unaudited Condensed Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		15
Item 4.	Controls and Procedures		15
			15
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		15
Item 1A.	Risk Factors		15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		15
Item 3.	Defaults Upon Senior Securities		16
Item 4.	Mine Safety Disclosures		16
Item 5.	Other Information		16
Item 6.	Exhibits		16
	SIGNATURES		17

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, 2017			December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	2,777		$	3,458
Salvage fund		942			266
Production receivable		210			324
Other current assets		74			119
Total current assets		4,003			4,167
Salvage fund		558			1,286
Oil and gas properties:
Proved properties		19,962			18,056
Less:  accumulated depletion and amortization		(6,493	)		(3,804	)
Total oil and gas properties, net		13,469			14,252
Total assets	$	18,030		$	19,705
Liabilities and Members' Capital
Current liabilities:
Due to operators	$	552		$	462
Accrued expenses		240			566
Current portion of long-term borrowings		1,393			690
Asset retirement obligations		942			266
Total current liabilities		3,127			1,984
Long-term borrowings		5,841			6,453
Asset retirement obligations		553			1,409
Other liabilities		40			40
Total liabilities		9,561			9,886
Commitments and contingencies (Note 4)
Members' capital:
Manager:
Distributions		(5,058	)		(5,058	)
Retained earnings		5,356			5,117
Manager's total		298			59
Shareholders:
Capital contributions (250 shares authorized;
207.7026 issued and outstanding)		41,143			41,143
Syndication costs		(4,804	)		(4,804	)
Distributions		(35,427	)		(35,427	)
Retained earnings		7,257			8,845
Shareholders' total		8,169			9,757
Accumulated other comprehensive income		2			3
Total members' capital		8,469			9,819
Total liabilities and members' capital	$	18,030		$	19,705

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

1

RIDGEWOOD ENERGY A-1 FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

 (in thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Revenue
Oil and gas revenue	$	777		$	220		$	2,692		$	376
Expenses
Depletion and amortization		395			167			2,563			198
Management fees to affiliate (Note 2)		93			64			280			254
Operating expenses		164			91			515			134
General and administrative expenses		38			41			126			114
Total expenses		690			363			3,484			700
Income (loss) from operations		87			(143	)		(792	)		(324	)
Interest expense, net		(187	)		(103	)		(557	)		(100	)
Net loss		(100	)		(246	)		(1,349	)		(424	)
Other comprehensive (loss) income
Unrealized (loss) gain on marketable securities		-			-			(1	)		1
Total comprehensive loss	$	(100	)	$	(246	)	$	(1,350	)	$	(423	)
Manager Interest
Net income (loss)	$	68		$	2		$	239		$	(20	)
Shareholder Interest
Net loss	$	(168	)	$	(248	)	$	(1,588	)	$	(404	)
Net loss per share	$	(813	)	$	(1,194	)	$	(7,649	)	$	(1,944	)

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

2

RIDGEWOOD ENERGY A-1 FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine months ended September 30,
	2017			2016
Cash flows from operating activities
Net loss	$	(1,349	)	$	(424	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depletion and amortization		2,563			198
Accretion expense		22			-
Amortization of debt discounts and deferred financing costs		91			31
Changes in assets and liabilities:
Decrease (increase) in production receivable		114			(137	)
Decrease (increase) in other current assets		45			(70	)
Increase (decrease) in due to operators		38			(6	)
(Decrease) increase in accrued expenses		(14	)		107
Settlement of asset retirement obligation		(82	)		-
Net cash provided by (used in) operating activities		1,428			(301	)
Cash flows from investing activities
Capital expenditures for oil and gas properties		(2,160	)		(1,517	)
Decrease (increase) in salvage fund		51			(3	)
Net cash used in investing activities		(2,109	)		(1,520	)
Cash flows from financing activities
Long-term borrowings		-			1,120
Net cash provided by financing activities		-			1,120
Net decrease in cash and cash equivalents		(681	)		(701	)
Cash and cash equivalents, beginning of period		3,458			1,444
Cash and cash equivalents, end of period	$	2,777		$	743
Supplemental disclosure of cash flow information
Cash paid for interest, net of amounts capitalized	$	485		$	-
Supplemental disclosure of non-cash investing activities
Due to operators for accrued capital expenditures for oil and gas properties	$	467		$	254

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

3

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.  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, the preparation, review and dissemination of tax and other financial information and the management of the Fund’s investments in projects.  In addition, the Manager provides office space, equipment and facilities and other services necessary for Fund operations.  The Manager also engages and manages contractual relations with unaffiliated custodians, depositories, accountants, attorneys, corporate fiduciaries, insurers, banks and others as required. See Notes 2, 3 and 4.

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, 2016 financial statements and notes thereto included in the Fund’s Annual Report on Form 10-K (“2016 Annual Report”) filed with the Securities and Exchange Commission (“SEC”).  The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2016, but does not include all annual 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, depletion and amortization, determination of proved reserves, impairment of long-lived assets and asset retirement obligations. Actual results may differ from those estimates.

Summary of Significant Accounting Policies

The Fund has provided discussion of significant accounting policies in Note 1 of “Notes to Financial Statements” – “Organization and Summary of Significant Accounting Policies” contained in Item 8. “Financial Statements and Supplementary Data” within its 2016 Annual Report. There have been no significant changes to the Fund’s significant accounting policies during the three and nine months ended September 30, 2017.

Salvage Fund

The Fund deposits in a separate interest-bearing account, or salvage fund, cash to provide for the funding of asset retirement obligations. As of September 30, 2017 and December 31, 2016, 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. Mortgage-backed securities within the salvage fund are recorded based on Level 2 inputs, as suchinstruments trade in over-the-counter markets.

4

			Gross
	Amortized		Unrealized		Fair
	Cost		Gains		Value
	(in thousands)
Government National Mortgage Association security (GNMA July 2041)
September 30, 2017	$	46	$	2	$	48
December 31, 2016	$	64	$	3	$	67

The unrealized gains on the Fund's investments in federal agency mortgage-backed securities 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.  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.

Asset Retirement Obligations

For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired. Upon the determination that a property is either proved or dry, a retirement obligation is incurred. The Fund recognizes the fair value of a liability for an asset retirement obligation in the period incurred.  Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.  At least bi-annually, or more frequently if an event occurs that would dictate a change in assumptions or estimates underlying the obligations, the Fund reassesses its asset retirement obligations to determine whether any revisions to the obligations are necessary.  The following table presents changes in asset retirement obligations during the nine months ended September 30, 2017 and 2016.

	2017			2016
	(in thousands)
Balance, beginning of period	$	1,675		$	2,119
Liabilities incurred		2			-
Liabilities settled		(82	)		-
Accretion expense		22			-
Revision of estimates		(122	)		-
Balance, end of period	$	1,495		$	2,119

During the nine months ended September 30, 2017, the Fund recorded credits to depletion expense totaling $0.1 million related to an adjustment to the asset retirement obligation for a fully depleted property. The Fund maintains a salvage fund to provide for the funding of asset retirement obligations.

Impairment of Long-Lived Assets

The Fund reviews the carrying value of its oil and gas properties annually and when management determines that events and circumstances indicate that the recorded carrying value of properties may not be recoverable.  Impairments are determined by comparing estimated future net undiscounted cash flows to the carrying value at the time of the review.  If the carrying value exceeds the estimated future net undiscounted cash flows, the carrying value of the asset is written down to fair value, which is determined using estimated future net discounted cash flows from the asset.  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 future net discounted cash flows from proved oil and natural gas reserves could change in the near term.

Fluctuations in oil and natural gas prices may impact the fair value of the Fund’s oil and gas properties. If oil and natural gas prices decline, even if only for a short period of time, it is possible that impairments of oil and gas properties will occur.

5

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. In July 2015, the FASB issued a deferral of the effective date of the guidance to 2018, with early adoption permitted in 2017. In March 2016, the FASB issued accounting guidance, which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued guidance on identifying performance obligations and licensing and in May 2016, the FASB issued final amendments which provided narrow scope improvements and practical expedients related to the implementation of the guidance.  The accounting guidance may be applied either retrospectively or through the use of a modified-retrospective method. The Fund has substantially completed the evaluation of the accounting guidance and currently expects the adoption of the accounting guidance will not have a material impact on the Fund’s financial statements. Under the new accounting guidance, the revenue associated with the Fund’s existing contracts will be recognized in the period that control of the related commodity is transferred to the customer, which is generally consistent with its current revenue recognition model.  The Fund will adopt the new accounting guidance using the modified retrospective method at the date of adoption, which is January 1, 2018.  Although the Fund has not identified changes to its revenue recognition that would result in a material cumulative effect adjustment to retained earnings on January 1, 2018, the Fund expects the adoption of the accounting guidance will result in enhanced disclosures related to revenue recognition policies, the Fund’s performance obligations and significant judgments used in applying the new revenue recognition accounting guidance.

2. Related Parties

Pursuant to the terms of the LLC Agreement, the Manager is entitled to 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. In addition, pursuant to the terms of the LLC Agreement, the Manager is also permitted to waive the management fee at its own discretion. Such fee may be temporarily waived to accommodate the Fund’s short-term capital commitments. Management fees during each of the three and nine months ended September 30, 2017 and 2016 were $0.1 million and $0.3 million, respectively.

The Manager is also entitled to receive a 15% interest in cash distributions from operations made by the Fund.  The Fund did not pay distributions during the three and nine months ended September 30, 2017 and 2016.

In 2016, the Fund entered into a master agreement with Beta Sales and Transport, LLC, a wholly owned subsidiary of the Manager, to facilitate the transportation and sale of oil and natural gas produced from the Beta Project. The Fund has provided discussion of this agreement in Note 2 of “Notes to Financial Statements” – “Related Parties” contained in Item 8. “Financial Statements and Supplementary Data” within its 2016 Annual Report.

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

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

3. Credit Agreement – Beta Project Financing

As of September 30, 2017 and December 31, 2016, the Fund had borrowings of $7.3 million under the credit agreement. The loan bears interest at 8% compounded annually.  Principal and interest are repaid at the lesser of the Monthly Fixed Amount or the Debt Service Cap amount, as defined in the credit agreement, 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 of December 31, 2016, in accordance with the terms of the credit agreement, there are no additional borrowings available to the Fund. On September 15, 2017, the Fund and other participating funds managed by the Manager, entered into the second amendment to the credit agreement (“Second Amendment”). The Second Amendment principally amended the definition of net revenues, which is the basis for the calculation of the Debt Service Cap amount.

Unamortized debt discounts and deferred financing costs of $31 thousand as of September 30, 2017 and $0.1 million as of December 31, 2016 are presented as a reduction of “Long-term borrowings” on the balance sheets.  Amortization expense during the three and nine months ended September 30, 2017 of $31 thousand and $0.1 million, respectively, and amortization expense during the three months ended September 30, 2016 of $31 thousand were expensed and included on the statements of operations within “Interest expense, net”. Amortization expense during the nine months ended September 30, 2016 of $0.1 million was capitalized and included on the balance sheet within “Oil and gas properties”.

6

As of September 30, 2017 and December 31, 2016, accrued interest costs of $0.2 million and $0.5 million, respectively, were included on the balance sheets within “Accrued expenses”. Interest costs incurred during the three and nine months ended September 30, 2017 of $0.2 million and $0.5 million, respectively, and interest costs incurred during the three months ended September 30, 2016 of $0.1 million were expensed and included on the statements of operations within “Interest expense, net”. Interest costs incurred during the nine months ended September 30, 2016 of $0.1 million were capitalized and included on the balance sheet within “Oil and gas properties”. During the nine months ended September 30, 2017, the Fund made payments on the loan of $0.3 million, which related to capitalized interest costs.

As additional consideration to the lenders, the Fund has agreed to convey an overriding royalty interest (“ORRI”) in its working interest in the Beta Project to the lenders. Such ORRI will not accrue or become payable to the lenders until after the loan is repaid in full. The credit agreement contains customary covenants, with which the Fund was in compliance as of September 30, 2017 and December 31, 2016.

4. Commitments and Contingencies

Capital Commitments

As of September 30, 2017, the Fund’s estimated capital commitments related to its oil and gas properties were $3.7 million (which include asset retirement obligations for the Fund’s projects of $2.3 million), of which $2.1 million is expected to be spent during the next twelve months primarily related to the additional development costs for the Beta Project. As a result of continued development of the Beta Project, the Fund has experienced negative cash flows for the nine months ended September 30, 2017.  Future results of operations and cash flows are dependent on the continued successful development and the related production of oil and gas revenues from the Beta Project.

Based upon its current cash position and its current reserve estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments, borrowing repayments and ongoing operations. Reserve estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision.  However, if cash flow from operations is not sufficient to meet the Fund’s commitments, the Manager will temporarily waive all or a portion of the management fee as well as provide short-term financing to accommodate the Fund’s short-term commitments if needed.

Environmental and Governmental Regulations

Many aspects of the oil and gas industry are subject to federal, state and local environmental laws and regulations. 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. 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. As of September 30, 2017 and December 31, 2016, there were no known environmental contingencies that required adjustment to, or disclosure in, the Fund’s financial statements.

Oil and gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. 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. It is not possible at this time to predict whether such legislation or regulation, if proposed, 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.

BOEM Notice to Lessees on Supplemental Bonding

On July 14, 2016, the Bureau of Ocean Energy Management (“BOEM”) issued a Notice to Lessees (“NTL”) that discontinued and materially replaced existing policies and procedures regarding financial security (i.e. supplemental bonding) for decommissioning obligations of lessees of federal oil and gas leases and owners of pipeline rights-of-way, rights-of use and easements on the Outer Continental Shelf (“Lessees”).  Generally, the new NTL (i) ended the practice of excusing Lessees from providing such additional security where co-lessees had sufficient financial strength to meet such decommissioning obligations, (ii) established new criteria for determining financial strength and additional security requirements of such Lessees,  (iii) provided acceptable forms of such additional security and (iv) replaced the waiver system with one of self-insurance.  The new rule became effective as of September 12, 2016; however on January 6, 2017, the BOEM announced that it was suspending the implementation timeline for six months in certain circumstances.  On June 22, 2017, the BOEM announced that the implementation timeline extension will remain in effect pending the completion of its review of the new NTL.The Fund, as well as other industry participants, are working with the BOEM, its operators and working interest partners to determine and agree upon the correct level of decommissioning obligations to which they may be liable and the manner in which such obligations will be secured.  The impact of the NTL, if enforced without change or amendment, may require the Fund to fully secure all of its potential abandonment liabilities to the BOEM’s satisfaction using one or more of the enumerated methods for doing so.  Potentially this could increase costs to the Fund if the Fund is required to obtain additional supplemental bonding, fund escrow accounts or obtain letters of credit.

7

Insurance Coverage

The Fund is subject to all risks inherent in the oil and natural gas business. 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.  Depending on the extent, nature and payment of claims made by the Fund or other funds managed by the Manager, yearly insurance coverage may be exhausted and become insufficient to cover a claim by the Fund in a given year.

8

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 U.S. 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 and other conditions affecting the pricing, production and demand of oil and natural gas, the cost and availability of equipment, and changes in domestic and foreign 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

There were no changes to the Fund’s critical accounting policies and estimates from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016.

Overview of the Fund’s Business

The Fund was organized primarily to acquire interests in oil and natural gas properties located in the United States offshore waters of Texas, Louisiana and Alabama in the Gulf of Mexico.  The Fund’s primary investment objective is to generate cash flow for distribution to its shareholders by generating returns across a portfolio of oil and natural gas projects. Distributions to shareholders are made in accordance with the Fund’s limited liability company agreement (the “LLC Agreement”).

Ridgewood Energy Corporation (the “Manager”) is the Manager, and as such, has direct and exclusive control over the management of the Fund’s operations.  The Manager performs or arranges for the performance of, the management, advisory and administrative services required for the Fund’s operations.  As compensation for its services, the Manager is entitled to an annual management fee, payable monthly, equal to 2.5% of the total capital contributions made by the Fund’s shareholders, net of cumulative dry-hole and related well costs incurred by the Fund.  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.

Commodity Price Changes

Changes in commodity prices may significantly affect liquidity and expected operating results.  Declines in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable.  Significant declines in prices could result in non-cash charges to earnings due to impairment.

Oil and natural gas commodity prices have been subject to significant fluctuations during the past several years. The Fund anticipates price cyclicality in its planning and believes it is well positioned to withstand price volatility. Despite operating in a sustained lower commodity price environment, the Fund continued to advance the development of the Beta Project, which commenced production during the second half of 2016. The Fund has suspended distributions and continues to conserve cash to provide for the continued development of the Beta Project. See “Results of Operations” under this Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report for more information on the average oil and natural gas prices received by the Fund during the three and nine months ended September 30, 2017 and 2016 and the effect of such average prices on the Fund’s results of operations.  If oil and natural gas commodity prices decline, even if only for a short period of time, the Fund’s results of operations and liquidity will be adversely impacted.

9

Market pricing for oil and natural gas is 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.  Factors affecting market pricing for oil and natural gas include:

· weather conditions;

· economic conditions, including demand for petroleum-based products;

· actions by OPEC, the Organization of Petroleum Exporting Countries;

· political instability in the Middle East and other major oil and gas producing regions;

· governmental regulations, both domestic and foreign;

· domestic and foreign tax policy;

· the pace adopted by foreign governments for the exploration, development, and production of their national reserves;

· the supply and price of foreign oil and gas;

· the cost of exploring for, producing and delivering oil and gas;

· the discovery rate of new oil and gas reserves;

· the rate of decline of existing and new oil and gas reserves;

· available pipeline and other oil and gas transportation capacity;

· the ability of oil and gas companies to raise capital;

· the overall supply and demand for oil and gas; and

· the price and availability of alternate fuel sources.

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.  See “Liquidity Needs” under this Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report for information regarding the funding of the Fund’s capital commitments.

10

			Total Spent		Total
	Working		through		Fund
Project	Interest		September 30, 2017		Budget		Status
			(in thousands)
Producing Properties
Beta Project		2.0%	$	16,689	$	19,069	The Beta Project is expected to include the development of five wells.  Wells #1 and #2 commenced production during third quarter 2016 and fourth quarter 2016, respectively.  Wells #3  and #4 commenced production during second  quarter 2017 and  third quarter 2017, respectively. Well #5 began drilling in third quarter 2017 and is expected to commence production in first quarter 2018. The Fund expects to spend $1.5 million for additional development costs and $0.9 million for asset retirement obligations.
Liberty Project		2.0%	$	3,004	$	3,445	The Liberty Project, a single-well project, commenced production in 2010.  After various shut-ins in late-2015 and early-2016, due to third-party facilities' repair and maintenance activities, the well resumed production in early-May 2016.  The well was shut-in again in late-June 2017 due to gas dehydration unit work, resuming production in late-September 2017. The operator is currently flowing the well's current zone together with the behind-pipe zone at no cost to the Fund.  The Fund expects to spend $0.4 million for asset retirement obligations.

Results of Operations

The following table summarizes the Fund’s results of operations during the three and nine months ended September 30, 2017 and 2016, and should be read in conjunction with the Fund’s financial statements and notes thereto included within Item 1.  “Financial Statements” in Part I of this Quarterly Report.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
	(in thousands)
Revenue
Oil and gas revenue	$	777		$	220		$	2,692		$	376
Expenses
Depletion and amortization		395			167			2,563			198
Management fees to affiliate		93			64			280			254
Operating expenses		164			91			515			134
General and administrative expenses		38			41			126			114
Total expenses		690			363			3,484			700
Income (loss) from operations		87			(143	)		(792	)		(324	)
Interest expense, net		(187	)		(103	)		(557	)		(100	)
Net loss		(100	)		(246	)		(1,349	)		(424	)
Other comprehensive (loss) income
Unrealized (loss) gain on marketable securities		-			-			(1	)		1
Total comprehensive loss	$	(100	)	$	(246	)	$	(1,350	)	$	(423	)

11

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, 2017 and 2016.  Natural gas liquid (“NGL”) sales are included within gas sales.

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Number of wells producing		5		2		5		2
Total number of production days		280		117		859		190
Oil sales (in thousands of barrels)		17		5		56		7
Average oil price per barrel	$	43	$	40	$	44	$	39
Gas sales (in thousands of mcfs)		21		8		73		14
Average gas price per mcf	$	3.61	$	2.36	$	3.35	$	1.97

The increases in the above table were primarily related to the commencement of production of four wells in the Beta Project, two wells during the second half of 2016 and two wells during 2017, partially offset by the Liberty Project, which was shut-in during the majority of third quarter 2017.  See additional discussion in “Business Update” section above.

Oil and Gas Revenue.   Generally, the Fund sells oil, gas and NGLs under two types of agreements, which are common in the oil and gas industry. In a netback agreement, the Fund receives a price, net of transportation expense incurred by the purchaser, and the Fund records revenue at the net price received. In the second type of agreement, the Fund pays transportation expense directly, and transportation expense is included within operating expenses in the statements of operations.

Oil and gas revenue during the three months ended September 30, 2017 was $0.8 million, an increase of $0.6 million from the three months ended September 30, 2016. The increase was attributable to increased sales volume totaling $0.5 million coupled with increased oil and gas prices totaling $0.1 million.

Oil and gas revenue during the nine months ended September 30, 2017 was $2.7 million, an increase of $2.3 million from the nine months ended September 30, 2016. The increase was attributable to increased sales volume totaling $2.0 million coupled with increased oil and gas prices totaling $0.4 million.

See “Overview” above for factors that impact the oil and gas revenue volume and rate variances.

Depletion and Amortization.  Depletion and amortization during the three months ended September 30, 2017 was $0.4 million, an increase of $0.2 million from the three months ended September 30, 2016.  The increase was attributable to an increase in production volumes totaling $0.4 million, partially offset by a decrease in the average depletion rate totaling $0.1 million.  The decrease in the average depletion rate was primarily attributable the Liberty Project, which was shut-in during the majority of third quarter 2017.

Depletion and amortization during the nine months ended September 30, 2017 was $2.6 million, an increase of $2.4 million from the nine months ended September 30, 2016.  The increase was attributable to an increase in the average depletion rate totaling $1.3 million coupled with an increase in production volumes totaling $1.2 million, partially offset by an adjustment to the asset retirement obligation related to a fully depleted property totaling $0.1 million. The increase in the average depletion rate was primarily attributable to the onset of production of the Beta Project.

See “Overview” above for certain factors that impact the depletion and amortization volume and rate variances.  Depletion and amortization rates may also be impacted by changes in reserve estimates provided annually by the Fund’s independent petroleum engineers.

Management Fees to Affiliate.  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. Such fee may be temporarily waived by the Manager to accommodate the Fund’s short-term capital commitments.

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

12

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
	(in thousands)
Lease operating expense	$	98	$	31	$	333	$	56
Insurance expense		42		50		103		65
Transportation and processing expense		12		-		28		-
Accretion expense		7		-		22		-
Workover expense and other		5		10		29		13
	$	164	$	91	$	515	$	134

Lease operating expense and transportation and processing expense, relates to the Fund’s producing properties. Insurance expense represents premiums related to the Fund’s properties, which vary depending upon the number of wells producing or drilling. Accretion expense relates to the asset retirement obligations established for the Fund’s proved properties. Workover expense represents costs to restore or stimulate production of existing reserves.

The average production cost, which includes lease operating expense, transportation and processing expense and insurance expense, was $7.32 per barrel of oil equivalent (“BOE”) and $6.79 per BOE during the three and nine months ended September 30, 2017, respectively, compared to $12.69 per BOE and $12.75 per BOE during the three and nine months ended September 30, 2016, respectively. The decreases were primarily attributable to the Beta Project, which commenced production in third quarter 2016, and has lower cost per BOE as compared to the Liberty Project due to the processing of production through its standalone facility. The production costs per BOE may decline over time as throughput increases from the project or other projects expected to tie-in to the facility.

General and Administrative Expenses.  General and administrative expenses represent costs specifically identifiable or allocable to the Fund, such as accounting and professional fees and insurance expenses.

Interest Expense, Net.  Interest expense, net is comprised of interest expense and amortization of debt discounts and deferred financing costs related to the Fund’s long-term borrowings (see “Liquidity Needs” below for additional information), and interest income earned on cash and cash equivalents and salvage fund.

Unrealized (Loss) Gain on Marketable Securities.  The Fund has available-for-sale investments within its salvage fund in federal agency mortgage-backed securities.  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.

Capital Resources and Liquidity

Operating Cash Flows

Cash flows provided by operating activities during the nine months ended September 30, 2017 were $1.4 million, related to revenue received of $2.8 million, partially offset by operating expenses of $0.9 million, management fees of $0.3 million, general and administrative expenses of $0.1 million, and the settlement of an asset retirement obligation of $0.1 million.

Cash flows used in operating activities during the nine months ended September 30, 2016 were $0.3 million, related to management fees of $0.3 million, operating expenses of $0.2 million and general and administrative expenses of $0.1 million, partially offset by revenue received of $0.2 million.

Investing Cash Flows

Cash flows used in investing activities during the nine months ended September 30, 2017 were $2.1 million, primarily related to capital expenditures for oil and gas properties.

Cash flows used in investing activities during the nine months ended September 30, 2016 were $1.5 million, primarily related to capital expenditures for oil and gas properties.

Financing Cash Flows

There were no cash flows from financing activities during the nine months ended September 30, 2017.

Cash flows provided by financing activities during the nine months ended September 30, 2016 were $1.1 million, related to proceeds from long-term borrowings.

13

Estimated Capital Expenditures

Capital Commitments

The Fund has entered into multiple agreements for the acquisition, drilling and development of its oil and gas properties. The estimated capital expenditures associated with these agreements vary depending on the stage of development on a property-by-property basis.  See “Business Update” under this Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report for information regarding the Fund’s current projects. See “Liquidity Needs” below for additional information.

Capital expenditures for oil and gas properties have been funded with the capital raised by the Fund in its private placement offering, and in certain circumstances, through debt financing.  The Fund’s remaining capital has been fully allocated to complete its projects. As a result, the Fund will not invest in any new projects and will limit its investment activities, if any, to those projects in which it currently has a working interest.

Liquidity Needs

The Fund’s primary short-term liquidity needs are to fund its operations, capital expenditures for its oil and gas properties and borrowing repayments.  Such needs are funded utilizing operating income and existing cash on-hand.

As of September 30, 2017, the Fund’s estimated capital commitments related to its oil and gas properties were $3.7 million (which include asset retirement obligations for the Fund’s projects of $2.3 million), of which $2.1 million is expected to be spent during the next twelve months primarily related to the additional development costs for the Beta Project. As a result of continued development of the Beta Project, the Fund has experienced negative cash flowsfor the nine months ended September 30, 2017.  Future results of operations and cash flows are dependent on the continued successful development and the related production of oil and gas revenues from the Beta Project. Based upon its current cash position and its current reserve estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments, borrowing repayments, as well as ongoing operations. Reserve estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision.  However, if cash flow from operations is not sufficient to meet the Fund’s commitments, the Manager will temporarily waive all or a portion of the management fee as well as provide short-term financing to accommodate the Fund’s short-term commitments if needed.

The Manager is entitled to an annual management fee from the Fund regardless of the Fund’s profitability in that year. However, pursuant to the terms of the LLC Agreement, the Manager is also permitted to waive the management fee at its own discretion.

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, and may be impacted in the future, 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 (as amended on September 30, 2016 and September 15, 2017, the “Credit Agreement”) to provide capital toward the funding of the Fund’s share of development costs on the Beta Project.  As of September 30, 2017 and December 31, 2016, the Fund had borrowed $7.3 million under the Credit Agreement. As of December 31, 2016, in accordance with the terms of the Credit Agreement, there are no additional borrowings available to the Fund.

The loan bears interest at 8% compounded annually. Monthly principal and interest payments are the lesser of the Monthly Fixed Amount or the Debt Service Cap amount, as defined in the Credit Agreement, until the loan is repaid in full, in no event later than December 31, 2020. The Fund expects operating income from the Beta Project to be sufficient to cover the principal and interest payments required under the Credit Agreement. 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 interest in the Beta Project to the lenders.  The Fund’s share of the lender’s aggregate ORRI is directly proportionate to its level of borrowing as a percentage of total borrowings of all the other participating funds managed by the Manager. Such ORRI will not accrue or become payable to the lenders until after the loan is repaid in full.

14

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 which 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 loan and require full and immediate repayment of all borrowings under the Credit Agreement. The Fund believes it is in compliance with all covenants under the Credit Agreement as of September 30, 2017 and December 31, 2016.

Off-Balance Sheet Arrangements

The Fund had no off-balance sheet arrangements as of September 30, 2017 and December 31, 2016 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 as of September 30, 2017 and December 31, 2016, other than those discussed in “Estimated Capital Expenditures” and “Liquidity Needs – Credit Agreement” above.

Recent Accounting Pronouncements

See Note 1 of “Notes to Unaudited Condensed Financial Statements” - “Organization and Summary of Significant Accounting Policies” contained in Item 1. “Financial Statements” within Part I of this Quarterly Report for a discussion of recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES

In accordance with 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, 2017.

There has been no change in the Fund’s internal control over financial reporting that occurred during the three months ended September 30, 2017 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.

15

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
10.3	Second Amendment to Credit Agreement and Reaffirmation of Waiver dated September 15, 2017 by and among Ridgewood Energy O Fund, LLC, Ridgewood Energy Q Fund, LLC, Ridgewood Energy S Fund, LLC, Ridgewood Energy T Fund, LLC, Ridgewood Energy V Fund, LLC, Ridgewood Energy W Fund, LLC, Ridgewood Energy A-1 Fund, LLC, Ridgewood Energy B-1 Fund, LLC, Rahr Energy Investments LLC, as Administrative Agent, and certain Lenders party thereto	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith

16

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:	November 7, 2017	By:	/s/	ROBERT E. SWANSON
			Name:	Robert E. Swanson
			Title:	Chief Executive Officer
				(Principal Executive Officer)
Dated:	November 7, 2017	By:	/s/	KATHLEEN P. MCSHERRY
			Name:	Kathleen P. McSherry
			Title:	Executive Vice President and Chief Financial Officer
				(Principal Financial and Accounting Officer)

17

EX-10.3

Exhibit 10.3

SECOND AMENDMENT TO CREDIT AGREEMENT AND REAFFIRMATION OF WAIVER

This Second Amendment to Credit Agreement and Reaffirmation of Waiver (this “Amendment and Reaffirmation”) is dated as of September 15, 2017 (the “Second Amendment Effective Date”), by and among the following entities, as borrowers (each, a “Borrower” and, collectively, the “Borrowers”):

Ridgewood Energy O Fund, LLC a Delaware limited liability company

Ridgewood Energy Q Fund, LLC a Delaware limited liability company

Ridgewood Energy S Fund, LLC a Delaware limited liability company

Ridgewood Energy T Fund, LLC a Delaware limited liability company

Ridgewood Energy V Fund, LLC a Delaware limited liability company

Ridgewood Energy W Fund, LLC a Delaware limited liability company

Ridgewood Energy A-1 Fund, LLC a Delaware limited liability company

Ridgewood Energy B-1 Fund, LLC a Delaware limited liability company

and Rahr Energy Investments, LLC a Delaware limited liability company, as Administrative Agent (“Administrative Agent”), and each of the Lenders party hereto.

RECITALS

A. The Borrowers, the Administrative Agent, and the Lenders have entered into that certain Credit Agreement, dated as of November 27, 2012, as amended by that certain First Amendment to Credit Agreement, dated as of September 30, 2016 (as may be further amended, supplemented, or otherwise modified prior to the Second Amendment Effective Date, the “Credit Agreement”).

B. Pursuant to the Credit Agreement, the Lenders have made loans to the Borrowers.

C. The Administrative Agent and Borrowers previously agreed to a waiver via email (the “Previous Waiver”) regarding the monthly payment due for the Monthly Payment Date occurring on August 31, 2017 (the “Waived Event”).

D. The Borrowers have requested that the Lenders enter into this Amendment and Reaffirmation to (a) formalize and document the Previous Waiver and (b) make certain amendments to the Credit Agreement.

E. Subject to the terms and conditions set forth herein, the parties hereto have agreed to enter into this Amendment and Reaffirmation.

F. NOW THEREFORE, for and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrowers, Administrative Agent, and the Lenders party hereto hereby agree as follows:

SECTION 1.    Definitions

1.1          Unless otherwise defined herein, all capitalized terms used herein will have the meaning given such terms in the Credit Agreement.

SECTION 2.    Reaffirmation of the Previous Waiver; Confirmation of Debt Service Cap Increase. 

2.1          In reliance on the representations, warranties, covenants and agreements contained in this Amendment and Reaffirmation, and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Administrative Agent and the Lenders hereby acknowledge and reaffirm the Previous Waiver.

2.2          The limited waiver reaffirmed in Section 2.1 hereof is limited solely to the Waived Event and nothing contained herein will be deemed a consent to, or waiver of, any other action or inaction of any Borrower or any Related Party of any Borrower which constitutes (or would constitute) a violation of any provision of the Credit Agreement or any other Loan Document.  Neither the Lenders nor Administrative Agent will be obligated to grant any future waivers, consents, or amendments with respect to any other provision of the Credit Agreement or any other Loan Document.

2.3          Each Borrower acknowledges that such Borrower’s Net Revenue Interest share of crude oil produced from the Project Properties was less than the minimum set forth for such Borrower in the Minimum Targeted Production Schedule for three-month period beginning on June 1, 2017 and ending on August 31, 2017. Each Borrower acknowledges and agrees that beginning with the Monthly Payment Date scheduled to occur on October 31, 2017, such Borrower’s Debt Service Cap will be 100% of such Borrower’s Net Revenues until such time as such Borrower is current in payment of all of its Monthly Payment Amounts and all of its Prior Shortfall Amounts.

SECTION 3.      Amendments to Credit Agreement.  In reliance on the representations, warranties, covenants and agreements contained in this Amendment and Reaffirmation, and subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the parties hereto hereby agree that, notwithstanding anything to the contrary contained in the Credit Agreement, the Credit Agreement will be amended as of the Second Amendment Effective Date as follows:

3.1          Amendment to “Net Revenues” Definition.  Section 1.02 of the Credit Agreement is amended to amend and restate the definition of “Net Revenues” to read as follows:

“Net Revenues” means, for any Borrower and any Monthly Payment Date, all proceeds payable to such Borrower arising from the sale of Hydrocarbons produced during the second calendar month preceding the calendar month in which such Monthly Payment Date occurs, less Borrower’s share of:

(i) Existing Production Burdens payable with respect to such production,

(ii) Operating Costs incurred by such Borrower with respect to such production (and which have not been funded out of prior production proceeds from the Project Properties), and

(iii) Permitted Net Revenues Diversion Costs.

Notwithstanding anything to the contrary herein, the parties hereto acknowledge that the amounts set forth on any AFE are estimates, and that the total costs actually incurred and invoiced may differ from the initial estimates in the AFE. Accordingly, upon completion of the activity set forth on any AFE, then, for each Borrower based on such Borrower’s Pro-Rata Share, as soon as reasonably possible after the invoicing for such activity has occurred, (A) to the extent the actual costs were less than the amount set forth in the AFE, the difference shall be added to such Borrower’s Net Revenues for the then-current month or (B) to the extent the actual costs were greater than the amount set forth in the AFE, the difference shall be subtracted from such Borrower’s Net Revenues for the then-current month.

3.2          Addition of “Permitted Net Revenues Diversion Costs” Definition. Section 1.02 of the Credit Agreement is hereby amended to add the following term:

“Permitted Net Revenues Diversion Costs” means (a) Development Costs incurred under Walter’s AFE D1604-Slot G supplement dated August 18, 2017 and under Walter’s AFE E1706-Slot C dated August 18, 2017, which costs shall be deemed to have been incurred for each Borrower at the times and in the amounts (and at no other time and in no other amount) set forth on Schedule 1.01(h) hereto, (b) drill pipe, drilling, and completion costs for Well A-7, which costs shall be deemed to have been incurred for each Borrower at the times and in the amounts set forth on Schedule 1.01(h) hereto, and (c) drill pipe, drilling, and completion costs for the sixth (development) well (referred to, as of the Second Amendment Effective Date, as Well A-9), which costs shall be deemed to have been incurred for each Borrower pro rata -- beginning on the day on which an AFE for such costs is received by Borrowers – over the period of activity for such costs set forth in the AFE or, if no period of activity is specified, 90 days, all in the manner illustrated on Schedule 1.01(h); provided that the aggregate amount of any Borrower’s Permitted Net Revenues Diversion Costs during the term of this Agreement may not exceed such Borrower’s Pro-Rata Share of $19,058,000 (as outlined below):

Borrower	Borrower’s Pro -Rata Share	Maximum PermittedNet Revenues Diversion Costs
O	25.4%	4,840,732
Q	5.7%	1,086,306
S	13.5%	2,572,830
T	9.3%	1,772,394
V	14.3%	2,725,294
W	9.9%	1,886,742
A-1	8.7%	1,658,046
B-1	13.2%	2,515,656
Total	1.00	19,058,000

3.3          Addition of “Second Amendment Effective Date” Definition. Section 1.02 of the Credit Agreement is hereby amended to add the following term:

“Second Amendment Effective Date” means September 15, 2017.

3.4          Addition of Section 9.12. The following will be added as a new Section 9.12 of the Credit Agreement:

Section 9.12       Operating Accounts. From and after the Second Amendment Effective Date and until such time as all Development Costs and completion costs for Wells A-7 and A-9 have been fully paid:

(a) no Borrower may use any funds from any Operating Account for any purpose other than (i) to pay Walter under AFEs as otherwise permitted by this Agreement, (ii) to make payments to the Administrative Agent and the Lenders, or (iii) to reimburse or pay management fees to Ridgewood Energy Corporation as required under such Borrower’s formation documents, as in effect on the Effective Date; and

(b) all amounts in any Operating Account are to be held in trust by each Borrower for the benefit of the Administrative Agent and the Lenders.

3.5          Addition of Schedule 1.01(h). The attached Schedule 1.01(h) is hereby added to the Credit Agreement as Schedule 1.01(h) thereto.

SECTION 4.    Conditions Precedent.  The effectiveness of this Amendment and Reaffirmation is subject to the satisfaction of each of the following conditions precedent:

4.1          Payment of August Monthly Payment Amount. The Administrative Agent must have received the August Monthly Payment Amount due for the August 2017 Monthly Payment Date from each Borrower.

4.2          Payment of Legal Fees & Expenses. The Administrative Agent must have received an amount equal to $30,000 for expenses of counsel to the Administrative Agent.

4.3          Signature Pages.  The Administrative Agent must have received counterparts of this Amendment and Reaffirmation executed on behalf of each Borrower, the Administrative Agent and each of the Lenders.

4.4          Other Documents.  The Administrative Agent must have been provided with any other documents, instruments, and agreements, and each Borrower must have taken such actions, in each case, as the Administrative Agent may reasonably require in connection with this Amendment and Reaffirmation and the transactions contemplated hereby.

SECTION 5.    Representations and Warranties of Borrower.  To induce the Lenders and the Administrative Agent to enter into this Amendment and Reaffirmation, each Borrower hereby represents and warrants to the Lenders and Administrative Agent as follows:

5.1          Reaffirm Existing Representations and Warranties.  Each representation and warranty of such Borrower contained in the Credit Agreement, and the other Loan Documents is true and correct on the date hereof and will be true and correct after giving effect to this Amendment and Reaffirmation, except to the extent any such representation and warranty is expressly limited to an earlier date, in which case, such representation and warranty is true and correct as of such specified earlier date.

5.2          Due Authorization; No Conflict.  The execution, delivery and performance by such Borrower of this Amendment and Reaffirmation are within such Borrower’s corporate powers, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not violate or constitute a default under any provision of applicable law or any material agreement binding upon such Borrower or result in the creation or imposition of any Lien upon any of the assets of such Borrower.

5.3          Validity and Enforceability.  This Amendment and Reaffirmation constitutes the valid and binding obligation of such Borrower enforceable in accordance with its terms, except as (a) the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditor’s rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general application.

5.4          No Material Adverse Effect. Since September 30, 2016, there has been no event or circumstance, either individually or in the aggregate, that has had, or could be reasonably expected to have, a Material Adverse Effect.

5.5          No Default or Event of Default.  After giving effect to this Amendment and Reaffirmation, no Default or Event of Default has occurred which is continuing.

SECTION 6.    Miscellaneous.

6.1          Reaffirmation of Loan Documents; Extension of Liens.  Any and all of the terms and provisions of the Credit Agreement and the Loan Documents will, except as modified hereby, remain in full force and effect.  The waiver contemplated hereby will not limit or impair any Liens securing the Obligations, each of which are hereby ratified, affirmed, and extended to secure the Obligations after giving effect to this Amendment and Reaffirmation.

6.2          Parties in Interest.  All of the terms and provisions of this Amendment and Reaffirmation will bind and inure to the benefit of the parties hereto and their respective successors and assigns.

6.3          Counterparts.  This Amendment and Reaffirmation may be executed in counterparts and all parties need not execute the same counterpart. No party will be bound by this Amendment and Reaffirmation until each Borrower, the Administrative Agent, and each of the Lenders have executed a counterpart.  Facsimiles or other electronic transmission (e.g. .pdf) will be effective as originals.

6.4          Complete Agreement.  This Amendment and Reaffirmation, the Credit Agreement and the other Loan Documents represent the final agreement among the parties and may not be contradicted by evidence of prior, contemporaneous or oral agreements of the parties.  There are no unwritten oral agreements between or among the parties.

6.5          Headings.  The headings, captions, and arrangements used in this Amendment and Reaffirmation are, unless otherwise specified, for convenience only and will not be deemed to limit, amplify or modify the terms of this Amendment and Reaffirmation, nor affect the meaning thereof.

6.6          Effectiveness.  This Amendment and Reaffirmation will be effective automatically and without necessity of any further action by Borrower, Administrative Agent, or the Lenders when counterparts hereof have been executed by Borrower, Administrative Agent, and each of the Lenders and all conditions to the effectiveness hereof set forth herein have been satisfied.

6.7          Governing Law.  This Amendment and Reaffirmation will be governed by, and construed in accordance with, the laws of the State of New York.

6.8          RELEASE.  As part of the consideration for each Lender’s and the Administrative Agent’s execution of this Amendment and Reaffirmation, each Borrower, on behalf of itself and its successors, assigns, parents, subsidiaries, affiliates, officers, directors, employees, agents and attorneys hereby forever, fully, unconditionally and irrevocably waives and releases the Lenders, the Administrative Agent and each of their successors, assigns, parents, subsidiaries, limited partners, shareholder(s), affiliates, officers, directors, employees, attorneys and agents (collectively, the “Releasees”) from any and all claims, liabilities, obligations, debts, causes of action (whether at law or in equity or otherwise), defenses, counterclaims, setoffs, of any kind, whether known or unknown, whether liquidated or unliquidated, matured or unmatured, fixed or contingent, directly or indirectly arising out of, connected with, resulting from or related to any act or omission by any Lender or the Administrative Agent or any other Releasee prior to the date hereof (collectively, the “Claims”). Each Borrower further agrees that it may not commence, institute, or prosecute any lawsuit, action or other proceeding, whether judicial, administrative or otherwise, to collect or enforce any Claim.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Reaffirmation to be duly executed on the date and year first above written.

BORROWERS:	RIDGEWOOD ENERGY O FUND, LLC
	By:	/S/ DANIEL V. GULINO
		Daniel V. Gulino
		Senior Vice President – Legal

RIDGEWOOD ENERGY Q FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

RIDGEWOOD ENERGY S FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

RIDGEWOOD ENERGY T FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

RIDGEWOOD ENERGY V FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

RIDGEWOOD ENERGY W FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

RIDGEWOOD ENERGY A-1 FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

RIDGEWOOD ENERGY B-1 FUND, LLC
By:	/S/ DANIEL V. GULINO
	Daniel V. Gulino
	Senior Vice President – Legal

ADMINISTRATIVE AGENT:	RAHR ENERGY INVESTMENTS, LLC, as Administrative Agent
	By:	/S/ LAWRENCE J. FOSSI
		Lawrence J. Fossi
		Manager

LENDER:	RAHR ENERGY INVESTMENTS, LLC, as a Lender
	By:	/S/ LAWRENCE J. FOSSI
		Lawrence J. Fossi
		Manager

Schedule 1.01(h)
Permitted Net Revenues Diversion Costs for Beta A-7, AFE D1604-Slot G, and AFE E1706-Slot C
Working		8/8ths		Ridgewoods Interest			Notes	O Fund			Q Fund			S Fund			T Fund			V Fund			W Fund			A-1 Fund			B-1 Fund
Interest				32.50%				5%			2.25%			2.50%			2%			3%			3%			2%			3%
Beta A-7 Project (5th well)
Lease Costs			1,272,679.00		413,620.68		purchase of Javelin Lease		63,633.95			28,635.28			31,816.98			25,453.58			38,180.37			38,180.37			25,453.58			38,180.37
Paid	Jun-16				(413,620.67	)			(63,633.95	)		(28,635.28	)		(31,816.97	)		(25,453.58	)		(38,180.37	)		(38,180.37	)		(25,453.58	)		(38,180.37	)
Paid in Full					0.01				0.00			0.00			0.00			0.00			0.00			0.00			0.00			0.00
Drill Pipe A-7			1,879,120.00		610,714.00		Drive Pipe/ Suspension Sys		93,956.00			42,280.20			46,978.00			37,582.40			56,373.60			56,373.60			37,582.40			56,373.60
Paid thru	Jul-17				(524,869.00	)			(80,749.08	)		(36,337.08	)		(40,374.54	)		(32,299.63	)		(48,449.45	)		(48,449.45	)		(32,299.63	)		(48,449.45	)
Accrued	Aug-17				(28,972.69	)	27 of the 80 days		(4,457.34	)		(2,005.80	)		(2,228.67	)		(1,782.93	)		(2,674.40	)		(2,674.40	)		(1,782.93	)		(2,674.40	)
Accrued	Sep-17				(32,191.88	)	30 of the 80 days		(4,952.60	)		(2,228.67	)		(2,476.30	)		(1,981.04	)		(2,971.56	)		(2,971.56	)		(1,981.04	)		(2,971.56	)
Accrued	Oct-17				(24,680.44	)	23 of the 80 days		(3,796.99	)		(1,708.65	)		(1,898.50	)		(1,518.80	)		(2,278.19	)		(2,278.19	)		(1,518.80	)		(2,278.19	)
Outstanding Balance					-				-			0.00			-			0.00			0.00			0.00			0.00			0.00
Drilling Well A-7			32,320,600.00		10,504,195.00		80 day operation per AFE		1,616,030.00			727,213.50			808,015.00			646,412.00			969,618.00			969,618.00			646,412.00			969,618.00
Paid thru	Jul-17				-				-			-			-			-			-			-			-			-
Accrued	Aug-17				(3,545,165.81	)	27 of the 80 days		(545,410.13	)		(245,434.56	)		(272,705.06	)		(218,164.05	)		(327,246.08	)		(327,246.08	)		(218,164.05	)		(327,246.08	)
Accrued	Sep-17				(3,939,073.13	)	30 of the 80 days		(606,011.25	)		(272,705.06	)		(303,005.63	)		(242,404.50	)		(363,606.75	)		(363,606.75	)		(242,404.50	)		(363,606.75	)
Accrued	Oct-17				(3,019,956.06	)	23 of the 80 days		(464,608.63	)		(209,073.88	)		(232,304.31	)		(185,843.45	)		(278,765.18	)		(278,765.18	)		(185,843.45	)		(278,765.18	)
Outstanding Balance					-				-			-			-			-			-			-			-			-
Completion  A-7			23,500,000.00		7,637,500.00		55 day operation (est)		1,175,000.00			528,750.00			587,500.00			470,000.00			705,000.00			705,000.00			470,000.00			705,000.00
Accrued	Nov-17				(1,110,909.09	)	8 of the 55 days		(170,909.09	)		(76,909.09	)		(85,454.55	)		(68,363.64	)		(102,545.45	)		(102,545.45	)		(68,363.64	)		(102,545.45	)
Accrued	Dec-17				(4,304,772.73	)	31 of the 55 days		(662,272.73	)		(298,022.73	)		(331,136.36	)		(264,909.09	)		(397,363.64	)		(397,363.64	)		(264,909.09	)		(397,363.64	)
Accrued	Jan-17				(2,221,818.18	)	16 of the 55 days		(341,818.18	)		(153,818.18	)		(170,909.09	)		(136,727.27	)		(205,090.91	)		(205,090.91	)		(136,727.27	)		(205,090.91	)
Outstanding Balance					-				-			-			-			-			-			-			-			-
Other Developmental AFE's received per Walter's APOD (not associated with the A-7 well)
AFE D1604-Slot G (potential A-5 well location)-supplement dated 8/18/17
Pipe			1,100,000.00		357,500.00				55,000.00			24,750.00			27,500.00			22,000.00			33,000.00			33,000.00			22,000.00			33,000.00
Drive Pipe into Slot			559,450.00		181,821.25				27,972.50			12,587.63			13,986.25			11,189.00			16,783.50			16,783.50			11,189.00			16,783.50
					539,321.25				82,972.50			37,337.63			41,486.25			33,189.00			49,783.50			49,783.50			33,189.00			49,783.50
Paid in 2016					(834.74	)			(128.42	)		(57.79	)		(64.21	)		(51.37	)		(77.05	)		(77.05	)		(51.37	)		(77.05	)
Paid July 2017					(686.73	)			(105.65	)		(47.54	)		(52.83	)		(42.26	)		(63.39	)		(63.39	)		(42.26	)		(63.39	)
Accrued	Aug-17				(77,682.08	)	13 of the 90 days		(11,951.09	)		(5,377.99	)		(5,975.54	)		(4,780.44	)		(7,170.65	)		(7,170.65	)		(4,780.44	)		(7,170.65	)
Accrued	Sep-17				(179,266.33	)	30 of the 90 days		(27,579.44	)		(12,410.75	)		(13,789.72	)		(11,031.77	)		(16,547.66	)		(16,547.66	)		(11,031.77	)		(16,547.66	)
Accrued	Oct-17				(185,241.88	)	31 of the 90 days		(28,498.75	)		(12,824.44	)		(14,249.38	)		(11,399.50	)		(17,099.25	)		(17,099.25	)		(11,399.50	)		(17,099.25	)
Accrued	Nov-17				(95,609.49	)	16 of the 90 days		(14,709.15	)		(6,619.12	)		(7,354.58	)		(5,883.66	)		(8,825.49	)		(8,825.49	)		(5,883.66	)		(8,825.49	)
Outstanding Balance					-				-			-			-			-			-			-			-			-
AFE E1706-Slot C (well location TBD)-dated 8/18/17
Pipe			1,100,000.00		357,500.00				55,000.00			24,750.00			27,500.00			22,000.00			33,000.00			33,000.00			22,000.00			33,000.00
Drive Pipe into Slot			559,450.00		181,821.25				27,972.50			12,587.63			13,986.25			11,189.00			16,783.50			16,783.50			11,189.00			16,783.50
					539,321.25				82,972.50			37,337.63			41,486.25			33,189.00			49,783.50			49,783.50			33,189.00			49,783.50
Accrued	Aug-17				(77,901.96	)	13 of the 90 days		(11,984.92	)		(5,393.21	)		(5,992.46	)		(4,793.97	)		(7,190.95	)		(7,190.95	)		(4,793.97	)		(7,190.95	)
Accrued	Sep-17				(179,773.75	)	30 of the 90 days		(27,657.50	)		(12,445.88	)		(13,828.75	)		(11,063.00	)		(16,594.50	)		(16,594.50	)		(11,063.00	)		(16,594.50	)
Accrued	Oct-17				(185,766.21	)	31 of the 90 days		(28,579.42	)		(12,860.74	)		(14,289.71	)		(11,431.77	)		(17,147.65	)		(17,147.65	)		(11,431.77	)		(17,147.65	)
Accrued	Nov-17				(95,879.33	)	16 of the 90 days		(14,750.67	)		(6,637.80	)		(7,375.33	)		(5,900.27	)		(8,850.40	)		(8,850.40	)		(5,900.27	)		(8,850.40	)
Outstanding Balance					-				-			-			-			-			-			-			-			-

EX-31.1

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:	November 7, 2017
/s/	ROBERT E. SWANSON
Name:	Robert E. Swanson
Title:	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

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:	November 7, 2017
/s/	KATHLEEN P. MCSHERRY
Name:	Kathleen P. McSherry
Title:	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32

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, 2017, 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:	November 7, 2017
		/s/	ROBERT E. SWANSON
		Name:	Robert E. Swanson
		Title:	Chief Executive Officer
			(Principal Executive Officer)
Dated:	November 7, 2017
		/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.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 07, 2017
Document And Entity Information Abstract
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
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	2017
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		207.7026

XML

UNAUDITED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 2,777	$ 3,458
Salvage fund	942	266
Production receivable	210	324
Other current assets	74	119
Total current assets	4,003	4,167
Salvage fund	558	1,286
Oil and gas properties:
Proved properties	19,962	18,056
Less: accumulated depletion and amortization	(6,493)	(3,804)
Total oil and gas properties, net	13,469	14,252
Total assets	18,030	19,705
Current liabilities:
Due to operators	552	462
Accrued expenses	240	566
Current portion of long-term borrowings	1,393	690
Asset retirement obligations	942	266
Total current liabilities	3,127	1,984
Long-term borrowings	5,841	6,453
Asset retirement obligations	553	1,409
Other liabilities	40	40
Total liabilities	9,561	9,886
Commitments and contingencies (Note 4)
Members' capital:
Distributions	(5,058)	(5,058)
Retained earnings	5,356	5,117
Manager's total	298	59
Capital contributions (250 shares authorized; 207.7026 issued and outstanding)	41,143	41,143
Syndication costs	(4,804)	(4,804)
Distributions	(35,427)	(35,427)
Retained earnings	7,257	8,845
Shareholders' total	8,169	9,757
Accumulated other comprehensive income	2	3
Total members' capital	8,469	9,819
Total liabilities and members' capital	$ 18,030	$ 19,705

XML

UNAUDITED CONDENSED BALANCE SHEETS (Parenthetical) - shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Shares authorized	250	250
Shares issued	207.7026	207.7026
Shares outstanding	207.7026	207.7026

XML

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue
Oil and gas revenue	$ 777	$ 220	$ 2,692	$ 376
Expenses
Depletion and amortization	395	167	2,563	198
Management fees to affiliate (Note 2)	93	64	280	254
Operating expenses	164	91	515	134
General and administrative expenses	38	41	126	114
Total expenses	690	363	3,484	700
Income (loss) from operations	87	(143)	(792)	(324)
Interest expense, net	(187)	(103)	(557)	(100)
Net loss	(100)	(246)	(1,349)	(424)
Other comprehensive (loss) income
Unrealized (loss) gain on marketable securities			(1)	1
Total comprehensive loss	(100)	(246)	(1,350)	(423)
Manager Interest
Net income (loss)	68	2	239	(20)
Shareholder Interest
Net loss	$ (168)	$ (248)	$ (1,588)	$ (404)
Net loss per share	$ (813)	$ (1,194)	$ (7,649)	$ (1,944)

XML

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities
Net loss	$ (1,349)	$ (424)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depletion and amortization	2,563	198
Accretion expense	22
Amortization of debt discounts and deferred financing costs	91	31
Changes in assets and liabilities:
Decrease (increase) in production receivable	114	(137)
Decrease (increase) in other current assets	45	(70)
Increase (decrease) in due to operators	38	(6)
(Decrease) increase in accrued expenses	(14)	107
Settlement of asset retirement obligation	(82)
Net cash provided by (used in) operating activities	1,428	(301)
Cash flows from investing activities
Capital expenditures for oil and gas properties	(2,160)	(1,517)
Decrease (increase) in salvage fund	51	(3)
Net cash used in investing activities	(2,109)	(1,520)
Cash flows from financing activities
Long-term borrowings		1,120
Net cash provided by financing activities		1,120
Net decrease in cash and cash equivalents	(681)	(701)
Cash and cash equivalents, beginning of period	3,458	1,444
Cash and cash equivalents, end of period	2,777	743
Supplemental disclosure of cash flow information
Cash paid for interest, net of amounts capitalized	485
Supplemental disclosure of non-cash investing activities
Due to operators for accrued capital expenditures for oil and gas properties	$ 467	$ 254

XML

Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [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.  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, the preparation, review and dissemination of tax and other financial information and the management of the Fund’s investments in projects.  In addition, the Manager provides office space, equipment and facilities and other services necessary for Fund operations.  The Manager also engages and manages contractual relations with unaffiliated custodians, depositories, accountants, attorneys, corporate fiduciaries, insurers, banks and others as required. See Notes 2, 3 and 4.

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, 2016 financial statements and notes thereto included in the Fund’s Annual Report on Form 10-K (“2016 Annual Report”) filed with the Securities and Exchange Commission (“SEC”).  The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2016, but does not include all annual 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, depletion and amortization, determination of proved reserves, impairment of long-lived assets and asset retirement obligations. Actual results may differ from those estimates.

Summary of Significant Accounting Policies

The Fund has provided discussion of significant accounting policies in Note 1 of “Notes to Financial Statements” – “Organization and Summary of Significant Accounting Policies” contained in Item 8. “Financial Statements and Supplementary Data” within its 2016 Annual Report. There have been no significant changes to the Fund’s significant accounting policies during the three and nine months ended September 30, 2017.

Salvage Fund

The Fund deposits in a separate interest-bearing account, or salvage fund, cash to provide for the funding of asset retirement obligations. As of September 30, 2017 and December 31, 2016, 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. Mortgage-backed securities within the salvage fund are recorded based on Level 2 inputs, as suchinstruments trade in over-the-counter markets.

			Gross
	Amortized		Unrealized		Fair
	Cost		Gains		Value
	(in thousands)
Government National Mortgage Association security (GNMA July 2041)
September 30, 2017	$	46	$	2	$	48
December 31, 2016	$	64	$	3	$	67

The unrealized gains on the Fund's investments in federal agency mortgage-backed securities 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.  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.

Asset Retirement Obligations

For oil and gas properties, there are obligations to perform removal and remediation activities when the properties are retired. Upon the determination that a property is either proved or dry, a retirement obligation is incurred. The Fund recognizes the fair value of a liability for an asset retirement obligation in the period incurred.  Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.  At least bi-annually, or more frequently if an event occurs that would dictate a change in assumptions or estimates underlying the obligations, the Fund reassesses its asset retirement obligations to determine whether any revisions to the obligations are necessary.  The following table presents changes in asset retirement obligations during the nine months ended September 30, 2017 and 2016.

	2017			2016
	(in thousands)
Balance, beginning of period	$	1,675		$	2,119
Liabilities incurred		2			-
Liabilities settled		(82	)		-
Accretion expense		22			-
Revision of estimates		(122	)		-
Balance, end of period	$	1,495		$	2,119

During the nine months ended September 30, 2017, the Fund recorded credits to depletion expense totaling $0.1 million related to an adjustment to the asset retirement obligation for a fully depleted property. The Fund maintains a salvage fund to provide for the funding of asset retirement obligations.

Impairment of Long-Lived Assets

The Fund reviews the carrying value of its oil and gas properties annually and when management determines that events and circumstances indicate that the recorded carrying value of properties may not be recoverable.  Impairments are determined by comparing estimated future net undiscounted cash flows to the carrying value at the time of the review.  If the carrying value exceeds the estimated future net undiscounted cash flows, the carrying value of the asset is written down to fair value, which is determined using estimated future net discounted cash flows from the asset.  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 future net discounted cash flows from proved oil and natural gas reserves could change in the near term.

Fluctuations in oil and natural gas prices may impact the fair value of the Fund’s oil and gas properties. If oil and natural gas prices decline, even if only for a short period of time, it is possible that impairments of oil and gas properties will occur.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. In July 2015, the FASB issued a deferral of the effective date of the guidance to 2018, with early adoption permitted in 2017. In March 2016, the FASB issued accounting guidance, which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued guidance on identifying performance obligations and licensing and in May 2016, the FASB issued final amendments which provided narrow scope improvements and practical expedients related to the implementation of the guidance.  The accounting guidance may be applied either retrospectively or through the use of a modified-retrospective method. The Fund has substantially completed the evaluation of the accounting guidance and currently expects the adoption of the accounting guidance will not have a material impact on the Fund’s financial statements. Under the new accounting guidance, the revenue associated with the Fund’s existing contracts will be recognized in the period that control of the related commodity is transferred to the customer, which is generally consistent with its current revenue recognition model.  The Fund will adopt the new accounting guidance using the modified retrospective method at the date of adoption, which is January 1, 2018.  Although the Fund has not identified changes to its revenue recognition that would result in a material cumulative effect adjustment to retained earnings on January 1, 2018, the Fund expects the adoption of the accounting guidance will result in enhanced disclosures related to revenue recognition policies, the Fund’s performance obligations and significant judgments used in applying the new revenue recognition accounting guidance.

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Related Parties

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Parties

2. Related Parties

Pursuant to the terms of the LLC Agreement, the Manager is entitled to 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. In addition, pursuant to the terms of the LLC Agreement, the Manager is also permitted to waive the management fee at its own discretion. Such fee may be temporarily waived to accommodate the Fund’s short-term capital commitments. Management fees during each of the three and nine months ended September 30, 2017 and 2016 were $0.1 million and $0.3 million, respectively.

The Manager is also entitled to receive a 15% interest in cash distributions from operations made by the Fund.  The Fund did not pay distributions during the three and nine months ended September 30, 2017 and 2016.

In 2016, the Fund entered into a master agreement with Beta Sales and Transport, LLC, a wholly owned subsidiary of the Manager, to facilitate the transportation and sale of oil and natural gas produced from the Beta Project. The Fund has provided discussion of this agreement in Note 2 of “Notes to Financial Statements” – “Related Parties” contained in Item 8. “Financial Statements and Supplementary Data” within its 2016 Annual Report.

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

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

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Credit Agreement - Beta Project Financing

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Credit Agreement - Beta Project Financing

3. Credit Agreement – Beta Project Financing

As of September 30, 2017 and December 31, 2016, the Fund had borrowings of $7.3 million under the credit agreement. The loan bears interest at 8% compounded annually.  Principal and interest are repaid at the lesser of the Monthly Fixed Amount or the Debt Service Cap amount, as defined in the credit agreement, 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 of December 31, 2016, in accordance with the terms of the credit agreement, there are no additional borrowings available to the Fund. On September 15, 2017, the Fund and other participating funds managed by the Manager, entered into the second amendment to the credit agreement (“Second Amendment”). The Second Amendment principally amended the definition of net revenues, which is the basis for the calculation of the Debt Service Cap amount.

Unamortized debt discounts and deferred financing costs of $31 thousand as of September 30, 2017 and $0.1 million as of December 31, 2016 are presented as a reduction of “Long-term borrowings” on the balance sheets.  Amortization expense during the three and nine months ended September 30, 2017 of $31 thousand and $0.1 million, respectively, and amortization expense during the three months ended September 30, 2016 of $31 thousand were expensed and included on the statements of operations within “Interest expense, net”. Amortization expense during the nine months ended September 30, 2016 of $0.1 million was capitalized and included on the balance sheet within “Oil and gas properties”.

As of September 30, 2017 and December 31, 2016, accrued interest costs of $0.2 million and $0.5 million, respectively, were included on the balance sheets within “Accrued expenses”. Interest costs incurred during the three and nine months ended September 30, 2017 of $0.2 million and $0.5 million, respectively, and interest costs incurred during the three months ended September 30, 2016 of $0.1 million were expensed and included on the statements of operations within “Interest expense, net”. Interest costs incurred during the nine months ended September 30, 2016 of $0.1 million were capitalized and included on the balance sheet within “Oil and gas properties”. During the nine months ended September 30, 2017, the Fund made payments on the loan of $0.3 million, which related to capitalized interest costs.

As additional consideration to the lenders, the Fund has agreed to convey an overriding royalty interest (“ORRI”) in its working interest in the Beta Project to the lenders. Such ORRI will not accrue or become payable to the lenders until after the loan is repaid in full. The credit agreement contains customary covenants, with which the Fund was in compliance as of September 30, 2017 and December 31, 2016.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

Capital Commitments

As of September 30, 2017, the Fund’s estimated capital commitments related to its oil and gas properties were $3.7 million (which include asset retirement obligations for the Fund’s projects of $2.3 million), of which $2.1 million is expected to be spent during the next twelve months primarily related to the additional development costs for the Beta Project. As a result of continued development of the Beta Project, the Fund has experienced negative cash flows for the nine months ended September 30, 2017.  Future results of operations and cash flows are dependent on the continued successful development and the related production of oil and gas revenues from the Beta Project.

Based upon its current cash position and its current reserve estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments, borrowing repayments and ongoing operations. Reserve estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision.  However, if cash flow from operations is not sufficient to meet the Fund’s commitments, the Manager will temporarily waive all or a portion of the management fee as well as provide short-term financing to accommodate the Fund’s short-term commitments if needed.

Environmental and Governmental Regulations

Many aspects of the oil and gas industry are subject to federal, state and local environmental laws and regulations. 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. 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. As of September 30, 2017 and December 31, 2016, there were no known environmental contingencies that required adjustment to, or disclosure in, the Fund’s financial statements.

Oil and gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. 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. It is not possible at this time to predict whether such legislation or regulation, if proposed, 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.

BOEM Notice to Lessees on Supplemental Bonding

On July 14, 2016, the Bureau of Ocean Energy Management (“BOEM”) issued a Notice to Lessees (“NTL”) that discontinued and materially replaced existing policies and procedures regarding financial security (i.e. supplemental bonding) for decommissioning obligations of lessees of federal oil and gas leases and owners of pipeline rights-of-way, rights-of use and easements on the Outer Continental Shelf (“Lessees”).  Generally, the new NTL (i) ended the practice of excusing Lessees from providing such additional security where co-lessees had sufficient financial strength to meet such decommissioning obligations, (ii) established new criteria for determining financial strength and additional security requirements of such Lessees,  (iii) provided acceptable forms of such additional security and (iv) replaced the waiver system with one of self-insurance.  The new rule became effective as of September 12, 2016; however on January 6, 2017, the BOEM announced that it was suspending the implementation timeline for six months in certain circumstances.  On June 22, 2017, the BOEM announced that the implementation timeline extension will remain in effect pending the completion of its review of the new NTL.The Fund, as well as other industry participants, are working with the BOEM, its operators and working interest partners to determine and agree upon the correct level of decommissioning obligations to which they may be liable and the manner in which such obligations will be secured.  The impact of the NTL, if enforced without change or amendment, may require the Fund to fully secure all of its potential abandonment liabilities to the BOEM’s satisfaction using one or more of the enumerated methods for doing so.  Potentially this could increase costs to the Fund if the Fund is required to obtain additional supplemental bonding, fund escrow accounts or obtain letters of credit.

Insurance Coverage

The Fund is subject to all risks inherent in the oil and natural gas business. 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.  Depending on the extent, nature and payment of claims made by the Fund or other funds managed by the Manager, yearly insurance coverage may be exhausted and become insufficient to cover a claim by the Fund in a given year.

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Organization and Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [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, 2016 financial statements and notes thereto included in the Fund’s Annual Report on Form 10-K (“2016 Annual Report”) filed with the Securities and Exchange Commission (“SEC”).  The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2016, but does not include all annual 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, depletion and amortization, determination of proved reserves, impairment of long-lived assets and asset retirement obligations. Actual results may differ from those estimates.

Salvage Fund

Salvage Fund

The Fund deposits in a separate interest-bearing account, or salvage fund, cash to provide for the funding of asset retirement obligations. As of September 30, 2017 and December 31, 2016, 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. Mortgage-backed securities within the salvage fund are recorded based on Level 2 inputs, as suchinstruments trade in over-the-counter markets.

			Gross
	Amortized		Unrealized		Fair
	Cost		Gains		Value
	(in thousands)
Government National Mortgage Association security (GNMA July 2041)
September 30, 2017	$	46	$	2	$	48
December 31, 2016	$	64	$	3	$	67

The unrealized gains on the Fund's investments in federal agency mortgage-backed securities 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.  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.

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. Upon the determination that a property is either proved or dry, a retirement obligation is incurred. The Fund recognizes the fair value of a liability for an asset retirement obligation in the period incurred.  Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs.  At least bi-annually, or more frequently if an event occurs that would dictate a change in assumptions or estimates underlying the obligations, the Fund reassesses its asset retirement obligations to determine whether any revisions to the obligations are necessary.  The following table presents changes in asset retirement obligations during the nine months ended September 30, 2017 and 2016.

	2017			2016
	(in thousands)
Balance, beginning of period	$	1,675		$	2,119
Liabilities incurred		2			-
Liabilities settled		(82	)		-
Accretion expense		22			-
Revision of estimates		(122	)		-
Balance, end of period	$	1,495		$	2,119

During the nine months ended September 30, 2017, the Fund recorded credits to depletion expense totaling $0.1 million related to an adjustment to the asset retirement obligation for a fully depleted property. The Fund maintains a salvage fund to provide for the funding of asset retirement obligations.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Fund reviews the carrying value of its oil and gas properties annually and when management determines that events and circumstances indicate that the recorded carrying value of properties may not be recoverable.  Impairments are determined by comparing estimated future net undiscounted cash flows to the carrying value at the time of the review.  If the carrying value exceeds the estimated future net undiscounted cash flows, the carrying value of the asset is written down to fair value, which is determined using estimated future net discounted cash flows from the asset.  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 future net discounted cash flows from proved oil and natural gas reserves could change in the near term.

Fluctuations in oil and natural gas prices may impact the fair value of the Fund’s oil and gas properties. If oil and natural gas prices decline, even if only for a short period of time, it is possible that impairments of oil and gas properties will occur.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. In July 2015, the FASB issued a deferral of the effective date of the guidance to 2018, with early adoption permitted in 2017. In March 2016, the FASB issued accounting guidance, which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued guidance on identifying performance obligations and licensing and in May 2016, the FASB issued final amendments which provided narrow scope improvements and practical expedients related to the implementation of the guidance.  The accounting guidance may be applied either retrospectively or through the use of a modified-retrospective method. The Fund has substantially completed the evaluation of the accounting guidance and currently expects the adoption of the accounting guidance will not have a material impact on the Fund’s financial statements. Under the new accounting guidance, the revenue associated with the Fund’s existing contracts will be recognized in the period that control of the related commodity is transferred to the customer, which is generally consistent with its current revenue recognition model.  The Fund will adopt the new accounting guidance using the modified retrospective method at the date of adoption, which is January 1, 2018.  Although the Fund has not identified changes to its revenue recognition that would result in a material cumulative effect adjustment to retained earnings on January 1, 2018, the Fund expects the adoption of the accounting guidance will result in enhanced disclosures related to revenue recognition policies, the Fund’s performance obligations and significant judgments used in applying the new revenue recognition accounting guidance.

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Organization and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2017

Organization And Summary Of Significant Accounting Policies Tables

Schedule of Available-For-Sale Securities

			Gross
	Amortized		Unrealized		Fair
	Cost		Gains		Value
	(in thousands)
Government National Mortgage Association security (GNMA July 2041)
September 30, 2017	$	46	$	2	$	48
December 31, 2016	$	64	$	3	$	67

Schedule of Changes in Asset Retirement Obligations

	2017			2016
	(in thousands)
Balance, beginning of period	$	1,675		$	2,119
Liabilities incurred		2			-
Liabilities settled		(82	)		-
Accretion expense		22			-
Revision of estimates		(122	)		-
Balance, end of period	$	1,495		$	2,119

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Organization and Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Organization And Summary Of Significant Accounting Policies Narrative Details
Credits to depletion	$ (100)

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Organization and Summary of Significant Accounting Policies (Schedule of Available-For-Sale Securities) (Details) - GNMA July 2041 [Member] - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Amortized Cost	$ 46	$ 64
Gross Unrealized Gains	2	3
Fair Value	$ 48	$ 67

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Organization and Summary of Significant Accounting Policies (Schedule of Changes in Asset Retirement Obligations) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Organization And Summary Of Significant Accounting Policies Schedule Of Changes In Asset Retirement Obligations Details
Balance, beginning of period	$ 1,675	$ 2,119
Liabilities incurred	2
Liabilities settled	(82)
Accretion expense	22
Revision of estimates	(122)
Balance, end of period	$ 1,495	$ 2,119

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Related Parties (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Related Party Transactions [Abstract]
Annual management fee percentage rate	2.50%		2.50%
Annual management fees paid to Fund Manager	$ 93	$ 64	$ 280	$ 254
Percentage of total distributions allocated to Fund Manager	15.00%		15.00%

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Credit Agreement - Beta Project Financing (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Debt Disclosure [Abstract]
Long-term borrowings	$ 7,300		$ 7,300		$ 7,300
Credit agreement, interest rate	8.00%		8.00%
Credit agreement, maturity date			Dec. 31, 2020
Unamortized debt discounts and deferred financing costs	$ 31		$ 31		100
Amortization of financing costs	31	$ 31	100
Amortization capitalized				$ 100
Accrued interest	200		200		$ 500
Interest expense	$ 200	$ 100	500
Capitalized interest				$ 100
Interest paid			$ 300

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Commitments and Contingencies (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Commitments for the drilling and development of investment properties	$ 3,700
Commitments for asset retirement obligations included in estimated capital commitments	2,300
Commitments for the drilling and development of investment properties expected to be incurred in the next 12 months	$ 2,100