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Form 10-Q Ridgewood Energy O Fund For: Jun 30

August 8, 2022 11:32 AM EDT

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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 June 30, 2022

or

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

 

Commission File No. 000-51924

 

Ridgewood Energy O Fund, LLC

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

 

76-0774429

(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)

 

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).   Yes x     No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 Exchange Act.

 

Large accelerated filer o Accelerated filer o

Non-accelerated filer

 

x

 

Smaller reporting company

Emerging growth company

x

o

 

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 Exchange Act. o

 

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

 

As of August 8, 2022, there were 870.6486 shares of LLC Membership Interest outstanding.

 

 

 

  

 

Table of Contents

 

   PAGE
PART I - FINANCIAL INFORMATION  
Item 1. Financial Statements 1
      Unaudited Condensed Balance Sheets as of June 30, 2022 and December 31, 2021 1
     

Unaudited Condensed Statements of Operations for the three and six months ended
June 30, 2022 and 2021

2
    Unaudited Condensed Statements of Changes in Members’ Capital for the six months ended June 30, 2022 and 2021 3
   

Unaudited Condensed Statements of Cash Flows for the six months ended
June 30, 2022 and 2021

4
      Notes to Unaudited Condensed Financial Statements 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Item 4. Controls and Procedures 16
    
PART II - OTHER INFORMATION  
Item 1. Legal Proceedings 17
Item 1A. Risk Factors 17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Mine Safety Disclosures 17
Item 5. Other Information 17
Item 6. Exhibits 17
    17
   SIGNATURES 18

 

  

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

RIDGEWOOD ENERGY O FUND, LLC

UNAUDITED CONDENSED BALANCE SHEETS

(in thousands, except share data)

 

   June 30, 2022   December 31, 2021 
Assets          
Current assets:          
Cash and cash equivalents  $2,791   $2,409 
Salvage fund   458    117 
Production receivable   1,885    878 
Due from affiliate (Note 2)   38    34 
Other current assets   14    83 
Total current assets   5,186    3,521 
Salvage fund   3,022    3,217 
Investment in Delta House   119    119 
Oil and gas properties:          
Proved properties   41,151    40,461 
Less:  accumulated depletion and amortization   (30,736)   (28,777)
Total oil and gas properties, net   10,415    11,684 
Total assets  $18,742   $18,541 
           
Liabilities and Members' Capital          
Current liabilities:          
Due to operators  $517   $162 
Accrued expenses   53    67 
Asset retirement obligations   458    117 
Total current liabilities   1,028    346 
Asset retirement obligations   1,328    1,472 
Total liabilities   2,356    1,818 
Commitments and contingencies (Note 3)          
Members' capital:          
Manager:          
Distributions   (8,334)   (7,644)
Retained earnings   11,210    10,266 
Manager's total   2,876    2,622 
Shareholders:          
Capital contributions (935 shares authorized;
   870.6486 issued and outstanding)
 
 
 
 
 
128,990
 
 
 
 
 
 
 
128,990
 
 
Syndication costs   (14,742)   (14,742)
Distributions   (49,399)   (45,489)
Accumulated deficit   (51,339)   (54,658)
Shareholders' total   13,510    14,101 
Total members' capital   16,386    16,723 
Total liabilities and members' capital  $18,742   $18,541 

 

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

 

1

 

RIDGEWOOD ENERGY O FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

                             
   Three months ended June 30,   Six months ended June 30, 
   2022   2021   2022   2021 
Revenue                
Oil and gas revenue  $4,310   $2,531   $7,414   $4,868 
Other revenue   145    186    296    377 
Total revenue   4,455    2,717    7,710    5,245 
Expenses                    
Depletion and amortization   1,236    1,352    2,128    2,459 
Operating expenses   363    401    761    773 
Management fees to affiliate (Note 2)   244    243    486    490 
General and administrative expenses   43    38    85    80 
Total expenses   1,886    2,034    3,460    3,802 
Income from operations   2,569    683    4,250    1,443 
Other income (loss)                    
Dividend income   6    9    13    19 
Interest expense   -    (32)   -    (74)
Total other income (loss)   6    (23)   13    (55)
Net income  $2,575   $660   $4,263   $1,388 
                     
Manager Interest                    
Net income  $564   $295   $944   $567 
                     
Shareholder Interest                    
Net income  $2,011   $365   $3,319   $821 
Net income per share  $2,311   $420   $3,812   $943 

 

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

 

2

 

RIDGEWOOD ENERGY O FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF CHANGES

IN MEMBERS’ CAPITAL

(in thousands, except share data)

 

                               
   Six months ended June 30, 2022 
   # of Shares   Manager   Shareholders   Total 
Balances, December 31, 2021   870.6486   $2,622   $14,101    16,723 
 Distributions  --    (290)   (1,645)   (1,935)
 Net income  --    380    1,308    1,688 
Balances, March 31, 2022   870.6486   $2,712   $13,764   $16,476 
 Distributions  --    (400)   (2,265)   (2,665)
 Net income  --    564    2,011    2,575 
Balances, June 30, 2022   870.6486   $2,876   $13,510   $16,386 

 

                               
   Six months ended June 30, 2021 
   # of Shares   Manager   Shareholders   Total 
Balances, December 31, 2020   870.6486   $2,216   $15,877   $18,093 
 Distributions  --    (137)   (780)   (917)
 Net income  --    272    456    728 
Balances, March 31, 2021   870.6486   $2,351   $15,553   $17,904 
 Distributions  --    (197)   (1,117)   (1,314)
 Net income  --    295    365    660 
Balances, June 30, 2021   870.6486   $2,449   $14,801   $17,250 

 

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

 

3

 

RIDGEWOOD ENERGY O FUND, LLC

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

 

               
   Six months ended June 30, 
   2022   2021 
Cash flows from operating activities          
Net income  $4,263   $1,388 
Adjustments to reconcile net income to net cash
provided by operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depletion and amortization   2,128    2,459 
Accretion expense   29    31 
Amortization of debt discounts   -    3 
Changes in assets and liabilities:          
Increase in production receivable   (1,007)   (112)
(Increase) decrease in due from affiliate   (4)   128 
Decrease in other current assets   69    97 
Increase (decrease) in due to operators   16    (7)
(Decrease) increase in accrued expenses   (14)   2 
Settlement of asset retirement obligations   (1)   (629)
Net cash provided by operating activities   5,479    3,360 
           
Cash flows from investing activities          
Payments to operators for working interests and expenditures   -    (41)
Capital expenditures for oil and gas properties   (351)   (462)
Proceeds from salvage fund   1    629 
Increase in salvage fund   (147)   (197)
Net used in investing activities   (497)   (71)
           
Cash flows from financing activities          
Repayments of long-term borrowings   -    (897)
Distributions   (4,600)   (2,231)
Net cash used in financing activities   (4,600)   (3,128)
           
Net increase in cash and cash equivalents   382    161 
Cash and cash equivalents, beginning of period   2,409    2,764 
Cash and cash equivalents, end of period  $2,791   $2,925 
           
Supplemental disclosure of cash flow information          
Cash paid for interest  $-   $71 
           
Supplemental disclosure of non-cash investing activities          
Due to operators for accrued capital expenditures for
oil and gas properties
  $350   $- 

 

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

 

4

 

RIDGEWOOD ENERGY O FUND, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

 

1.Organization and Summary of Significant Accounting Policies

 

Organization

The Ridgewood Energy O Fund, LLC (the “Fund”), a Delaware limited liability company, was formed on December 21, 2004 and operates pursuant to a limited liability company agreement (the “LLC Agreement”) dated as of February 16, 2005 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 the Fund’s 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 the Fund’s 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 and 3.

 

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, changes in members’ capital 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 financial position, results of operations, changes in members’ capital 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, 2021 financial statements and notes thereto included in the Fund’s Annual Report on Form 10-K (“2021 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, 2021, 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, management 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 2021 Annual Report. There have been no significant changes to the Fund’s significant accounting policies during the three and six months ended June 30, 2022.

 

Fair Value Measurements

The Fund follows the accounting guidance for fair value measurement for measuring fair value of assets and liabilities in its financial statements. The Fund’s financial assets and liabilities consist of cash and cash equivalents, salvage fund, production receivable, due from affiliate, other current assets, investment in Delta House, due to operators and accrued expenses. Except for investment in Delta House, the carrying amounts of these financial assets and liabilities approximate fair value due to their short-term nature.

 

The Fund’s investment in Delta House is valued using the measurement alternative for investment in other entities (see Investment in Delta House below for additional information). The Fund also applies the provisions of the fair value measurement accounting guidance to its non-financial assets and liabilities, such as oil and gas properties and asset retirement obligations, on a non-recurring basis.

 

5

 

Investment in Delta House

The Fund has investments in Delta House Oil and Gas Lateral, LLC and Delta House FPS, LLC (collectively “Delta House”), legal entities that own interests in a deepwater floating production system operated by Murphy Exploration & Production Company - USA. The investment in Delta House is valued using the measurement alternative to record the investment at cost, less impairment and plus or minus subsequent adjustments for observable price changes with change in basis reported in current earnings. At each reporting period, the Fund reviews its investment in Delta House to evaluate whether the investment is impaired. During each of the three and six months ended June 30, 2022 and 2021, there were no impairments of the Fund’s investment in Delta House.

 

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 based on expected future cash outflows required to satisfy the obligation discounted at the Fund’s credit-adjusted risk-free rate. Plug and abandonment costs associated with unsuccessful projects are expensed as dry-hole costs. 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 Fund maintains a salvage fund to provide for the funding of future asset retirement obligations. The following table presents changes in asset retirement obligations for the following periods:

 

               
   Six months ended June 30, 
   2022   2021 
         
   (in thousands) 
Balance, beginning of period  $1,589   $2,559 
Liabilities settled   (1)   (629)
Accretion expense   29    31 
Revision of estimates   169    (91)
Balance, end of period  $1,786   $1,870 

 

During the six months ended June 30, 2022, the Fund recorded depletion expense totaling $0.2 million, which primarily related to an adjustment to the asset retirement obligation for a fully depleted property. During the six months ended June 30, 2021, the Fund recorded credits to depletion expense totaling $0.1 million, which related to an adjustment to the asset retirement obligation for a fully depleted property.

 

Revenue Recognition

Oil and gas revenues from contracts with customers are recognized at the point when control of oil and natural gas is transferred to the customers in accordance with Accounting Standard Codification Topic 606, Revenue from Contracts with Customers. Revenues from the sale of natural gas liquid are included within gas revenues. The Fund’s oil and natural gas generally are sold to its customers at prevailing market prices based on an index in which the prices are published, adjusted for pricing differentials, quality of oil and pipeline allowances. Under the Fund’s oil and natural gas contracts, each unit of oil and natural gas represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and the transaction price related to the remaining performance obligations is the variable index-based price attributable to each unit of oil and natural gas that is transferred to the customer. The Fund invoices customers once its performance obligations have been satisfied, at which point the payment is unconditional. Accordingly, the Fund’s oil and natural gas contracts do not give rise to contract assets or liabilities. The receivables related to the Fund’s oil and gas revenue are included within “Production receivable” on the Fund’s balance sheets.

 

Other revenue is generated from the Fund’s production handling, gathering and operating services agreement with affiliated entities and other third parties. The Fund earns a fee for its services and recognizes these fees as revenue at the time its performance obligations are satisfied as the control of oil and natural gas is never transferred to the Fund, thus there are no unsatisfied performance obligations. The Fund’s project operator performs joint interest billing once the performance obligations have been satisfied, at which point the payment is unconditional. Accordingly, the Fund’s production handling, gathering and operating services agreement with affiliated entities and other third parties does not give rise to contract assets or liabilities. The receivables related to the Fund’s proportionate share of revenue from affiliates are included within “Due from affiliate” on the Fund’s balance sheets. The receivables related to the Fund’s proportionate share of revenue from third parties are presented as a reduction from “Due to operator” on the Fund’s balance sheets. The receivables are settled by issuance of a non-cash credit from the Beta Project operator to the Fund when the operator performs the joint interest billing of the lease operating expenses due from the Fund. However, if applying the joint interest billing credit results in a net credit balance due to the Fund, the Beta Project operator remits such balance in cash to the Fund.

 

The Fund also has an estimation process for revenue and related accruals, and any identified difference between its revenue estimates and actual revenue has not been significant. During each of the three and six months ended June 30, 2022 and 2021, revenue recognized from performance obligations satisfied in previous periods was not significant.

 

6

 

Allowance for Credit Losses

The Fund is exposed to credit losses through the sale of oil and natural gas to customers. However, the Fund only sells to a small number of major oil and gas companies that have investment-grade credit ratings. Based on historical collection experience, current and future economic and market conditions and a review of the current status of customers' production receivables, the Fund has not recorded an expected loss allowance as there are no past due receivable balances or projected credit losses.

 

Impairment of Long-Lived Assets

The Fund reviews the carrying value of its oil and gas properties for impairment whenever events and circumstances indicate that the recorded carrying value of its oil and gas properties may not be recoverable. Recoverability is evaluated by comparing estimated future net undiscounted cash flows to the carrying value of the oil and gas properties at the time of the review. If the carrying value exceeds the estimated future net undiscounted cash flows, the carrying value of the oil and gas properties is impaired, and written down to fair value. Fair value is determined using valuation techniques that include both market and income approaches and use Level 3 inputs. The fair value determinations require considerable judgment and are sensitive to change. Different pricing assumptions, estimates of oil and natural gas reserves and future development costs or discount rates could result in a significant impact on the amount of impairment. 

 

There were no impairments of oil and gas properties during each of the three and six months ended June 30, 2022 and 2021. Fluctuations in oil and natural gas commodity prices may impact the fair value of the Fund’s oil and gas properties. In addition, significant declines in oil and natural gas commodity prices could reduce the quantities of reserves that are commercially recoverable, which could result in impairment. 

 

Recent Accounting Pronouncements

The Fund has considered recent accounting pronouncements issued during the six months ended June 30, 2022 and through the filing of this report, and the Fund has not identified new standards that it believes will have an impact on the Fund’s financial statements.

 

 

 

2.Related Parties

 

Pursuant to the terms of the LLC Agreement, the Manager is entitled to receive an annual management fee, payable monthly, of 2.5% of total capital contributions, net of cumulative dry-hole well costs incurred by the Fund and fully depleted project investments, however, the Manager is permitted to waive all or a portion of the management fee at its own discretion. Therefore, all or a portion of the management fee may be temporarily waived to accommodate the Fund’s short-term commitments. Management fees during each of the three and six months ended June 30, 2022 and 2021 were $0.2 million and $0.5 million, respectively.

 

The Manager is also entitled to receive 15% of the cash distributions from operations made by the Fund. Distributions paid to the Manager during the three and six months ended June 30, 2022 were $0.4 million and $0.7 million, respectively. Distributions paid to the Manager during the three and six months ended June 30, 2021 were $0.2 million and $0.3 million, respectively.

 

The Fund utilizes Beta Sales and Transport, LLC and DH Sales and Transport, LLC, wholly-owned subsidiaries of the Manager, to facilitate the transportation and sale of oil and natural gas produced from the Beta, Diller and Marmalard projects.

 

The Fund is a party to a production handling, gathering and operating services agreement (“PHA”) with affiliated entities and other third-party working interest owners in the Claiborne Project. On May 12, 2022, a third-party working interest owner executed an assignment and bill of sale agreement to assign the rights to the services under the PHA to Ridgewood Institutional IV Prospective Leases, LLC, a wholly-owned entity of Ridgewood Energy Oil & Gas Fund IV, L.P. (“Institutional Fund IV”). As a result of the assignment, Ridgewood Institutional IV Prospective Leases, LLC, as a working interest owner in the Claiborne Project, became party to the Claiborne Project’s PHA with entities that own the Beta Project production facility. Institutional Fund IV is an entity that is managed by the Fund’s Manager. Under the terms of the PHA, the Claiborne Project producers have agreed to pay the Beta Project owners a fixed production handling fee for each barrel of oil and mcf of natural gas processed through the Beta Project production facility. During each of the three and six months ended June 30, 2022 and 2021, the Fund earned $0.1 million, respectively, representing its proportionate share of the production handling fees earned from affiliates, which are included within “Other revenue” on the Fund’s statements of operations. As of June 30, 2022 and December 31, 2021, the Fund’s receivable of $38 thousand and $34 thousand, respectively, related to the Fund’s proportionate share of revenue from affiliates are included within “Due from affiliate” on the Fund’s balance sheets. The receivables are settled by issuance of a non-cash credit from the Beta Project operator to the Fund on behalf of the Claiborne Project working interest owners when the operator performs the joint interest billing of the lease operating expenses due from the Fund. However, if applying the joint interest billing credit results in a net credit balance due to the Fund, the Beta Project operator remits such balance in cash to the Fund.

 

7

 

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 oil and natural gas projects, which are also owned by other entities that are likewise managed by the Manager.

 

 

3.Commitments and Contingencies

 

Capital Commitments

As of June 30, 2022, the Fund’s estimated capital commitments related to its oil and gas properties were $5.7 million (which include asset retirement obligations for the Fund’s projects of $3.0 million), of which $0.5 million is expected to be spent during the next twelve months. Future results of operations and cash flows are dependent on the ongoing development of and revenues from production and sale of oil and gas from the Fund’s producing projects.

 

Based upon its current cash position, salvage fund and its current reserves estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments and ongoing operations. Reserves estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision.

 

Impact from current market conditions

The oil and gas market is subject to sources of uncertainty relating to: (i) Russia’s invasion of Ukraine in early 2022 and the impact of world sanctions against Russia, which created global economic uncertainty that resulted in significant volatility in oil and natural gas commodity prices and supply side uncertainty; (ii) the risk of a near-term U.S. or global economic downturn, particularly as a result of tighter monetary policy efforts by the U.S. Federal Reserve and other global central banks to curb inflation; and (iii) the impact of the Russia and Ukraine war on the European economy, which is impacting its access to energy and other vital supply for its manufacturing capacity. The impact of these matters on global financial and commodity markets and their corresponding effect on the Fund remains uncertain.

 

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 June 30, 2022 and December 31, 2021, 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 Supplemental Financial Assurance Requirements

On July 14, 2016, the Bureau of Ocean Energy Management (“BOEM”) issued a Notice to Lessees (“NTL 2016-N01”) 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, NTL 2016-N01 (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 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 May 1, 2017, the Secretary of the U.S. Department of the Interior (“Interior”) directed the BOEM to complete a review of NTL 2016-N01, to provide a report to certain Interior personnel describing the results of the review and options for revising or rescinding NTL 2016-N01, and to keep the implementation timeline extension in effect pending the completion of the review of NTL 2016-N01 by the identified Interior personnel. 

 

On October 16, 2020, BOEM and the Bureau of Safety and Environmental Enforcement published a proposed new rule at 85 FR 65904 on Risk, Management, Financial Assurance and Loss Prevention, addressing the streamlining of evaluation criteria when determining whether oil, gas and sulfur leases, right-of-use and easement grant holders, and pipeline right-of-way grant holders may be required to provide bonds or other security above the prescribed amounts for base bonds to ensure compliance with the Lessees’ obligations, primarily decommissioning obligations. The proposed rule was significantly less stringent with respect to financial assurance than NTL 2016-N01. To date, the BOEM is not currently implementing NTL 2016-N01 and its status is uncertain, but has indicated that it is reviewing the proposed rule.

 

8

 

Notwithstanding the uncertain status of NTL 2016-N01, BOEM had continued under existing law to review supplemental financial assurance requirements relative to sole liability properties (i.e., properties in which only one company is liable for decommissioning).  However, on August 18, 2021, the BOEM issued a Note to Stakeholders in which the BOEM stated that it was expanding its financial assurance efforts beyond sole liability projects to include “supplemental financial assurance of certain high-risk, non-sole liability properties” (those properties with more than one company potentially liable for decommissioning costs). The BOEM identified (i) inactive properties, (ii) those with less than five years of production left, and (iii) those with damaged infrastructure, as being high-risk, non-sole liability properties and for which supplemental financial assurance may be required.   The BOEM may require the Fund to fully secure all of its potential abandonment liabilities, which potentially could increase costs to the Fund. The Fund is not able to evaluate the impact of the proposed new rule on its operations or financial condition until a final rule is issued or some other definitive action is taken by the Interior or BOEM. As of June 30, 2022, the Fund has fully funded in a separate interest-bearing account, or salvage fund, its proportionate share of the estimated decommissioning liabilities for its projects. The Fund will continue to reassess its estimated decommissioning liabilities and reserve for additional funding as necessary.  

 

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 entities managed by the Manager. Depending on the extent, nature and payment of claims made by the Fund or other entities managed by the Manager, yearly insurance coverage may be exhausted and become insufficient to cover a claim by the Fund in a given year.

 

9

 

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 O 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. Such forward-looking statements 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 the impact on the Fund’s business and operations of any future widespread health emergencies or public health crises such as pandemics and epidemics, 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, 2021.

 

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 receive 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 well costs incurred by the Fund and fully depleted project investments. 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.

 

Market Conditions

 

The oil and gas market is subject to sources of uncertainty relating to: (i) Russia’s invasion of Ukraine in early 2022 and the impact of world sanctions against Russia, which created global economic uncertainty that resulted in significant volatility in oil and natural gas commodity prices and supply side uncertainty; (ii) the risk of a near-term U.S. or global economic downturn, particularly as a result of tighter monetary policy efforts by the U.S. Federal Reserve and other global central banks to curb inflation; and (iii) the impact of the Russia and Ukraine war on the European economy, which is impacting its access to energy and other vital supply for its manufacturing capacity. While the current outlook for oil and gas commodity prices is favorable, different outcomes of these issues would have different impacts on global economic growth and the performance of financial markets during the rest of 2022 and the Fund, its operators and other working interest partners’ financial performance results may be materially adversely affected, which could affect the Fund’s liquidity, development of oil and gas properties and expected operating results. However, because the Fund owns its oil and gas properties with no debt and these projects are long-lived assets that are expected to produce over many years with relatively low operating costs, the Fund believes that it is positioned to weather this period of uncertainty and volatility in the global oil and gas market.

 

10

 

Commodity Price Changes

 

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

 

Oil and natural gas commodity prices have been subject to significant volatility most recently due to the issues impacting market conditions described above. Although volatile, the overall trend for the crude oil market has been favorable during the first half of 2022, which positively impacted cash flow generated by the Fund’s projects. The Fund anticipates price cyclicality in its planning and believes it is well positioned to withstand price volatility. The Fund will continue to closely manage and coordinate its capital spending estimates within its expected cash flows to provide for future development costs of its producing projects, as budgeted. 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 six months ended June 30, 2022 and 2021 and the effect of such average prices on the Fund’s results of operations.

 

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:

 

·worldwide economic, political and social conditions impacting the global supply and demand for oil and natural gas, which may be driven by various risks, including war (such as the invasion of Ukraine by Russia), terrorism, political unrest, or health epidemics;
·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 (inclusive of impacts of climate change), 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.

 

11

 

Business Update

 

Information regarding the Fund’s current projects, all of which are located in the United States offshore waters in 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.

 

      Total Spent   Total    
   Working  through   Fund    
Project  Interest  June 30, 2022   Budget   Status
      (in thousands)    
Beta Project  2.93%  $29,602   $32,003   The Beta Project includes the development of seven wells.  Wells #1 and #2 commenced production in 2016.  Wells #3  and #4 commenced production in 2017. Wells #5 and #6 commenced production in 2018. Well #7 commenced production in 2019. Production from one of the Beta Project's wells, which was shut-in since late-March 2022 for recompletion work, resumed in early-June 2022. During the third quarter of 2021, the project experienced storm shut-ins as a result of Hurricane Ida, which passed directly through the corridor where the project is located. In addition, production from one of the Beta Project's wells, which was shut-in since May 2021 for recompletion work, resumed in late-September 2021. The Fund expects to spend $1.1 million for additional development costs and $1.3 million for asset retirement obligations.
Diller Project  0.88%  $3,761   $4,005   The Diller Project includes the development of two wells.  Well #1 commenced production in 2015.  Well #2 commenced production in 2019. During the third quarter of 2021, the project experienced storm shut-ins as a result of Hurricane Ida, which passed directly through the corridor where the project is located. The Fund expects to spend $18 thousand for additional development costs and $0.2 million for asset retirement obligations.
Marmalard Project  0.84%  $5,624   $7,647   The Marmalard Project is expected to include the development of five wells.  Four wells commenced production in 2015. An additional well is expected to commence production in 2023.  During the third quarter of 2021, the project experienced storm shut-ins as a result of Hurricane Ida, which passed directly through the corridor where the project is located. Production from one of the Marmalard Project's wells was shut-in due to a mechanical issue observed on restart after storm shut-in. The well resumed production in early-March 2022. The Fund expects to spend $1.6 million for additional development costs and $0.4 million for asset retirement obligations.

 

12

 

Results of Operations

 

The following table summarizes the Fund’s results of operations during the three and six months ended June 30, 2022 and 2021, 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 June 30,   Six months ended June 30, 
   2022   2021   2022   2021 
                 
   (in thousands) 
Revenue                
Oil and gas revenue  $4,310   $2,531   $7,414   $4,868 
Other revenue   145    186    296    377 
Total revenue   4,455    2,717    7,710    5,245 
Expenses                    
Depletion and amortization   1,236    1,352    2,128    2,459 
Operating expenses   363    401    761    773 
Management fees to affiliate   244    243    486    490 
General and administrative expenses   43    38    85    80 
Total expenses   1,886    2,034    3,460    3,802 
Income from operations   2,569    683    4,250    1,443 
Other income (loss)                    
Dividend income   6    9    13    19 
Interest expense   -    (32)   -    (74)
Total other income (loss)   6    (23)   13    (55)
Net income  $2,575   $660   $4,263   $1,388 

 

Overview. The following table provides information related to the Fund’s oil and natural gas production and oil and gas revenue during the three and six months ended June 30, 2022 and 2021. Natural gas liquid sales are included within gas sales.

 

   Three months ended June 30,   Six months ended June 30, 
   2022   2021   2022   2021 
Number of wells producing   13    13    13    13 
Total number of production days   1,119    1,090    2,156    2,252 
Oil sales (in thousands of barrels)   36    36    67    72 
Average oil price per barrel  $108   $65   $101   $61 
Gas sales (in thousands of mcfs)   56    57    96    120 
Average gas price per mcf  $7.92   $3.53   $7.04   $3.69 

 

The production related decreases noted in the table above were primarily related to one well in the Marmalard Project, which was shut-in for the majority of first quarter 2022 due to a mechanical issue. The well returned to production in early-March 2022. In addition, the decreases in oil and gas sales volumes were also attributable to lower production rates from the Diller and Marmalard projects due to natural declines in production. The decrease in oil sales volume was partially offset by increased production rate from one of the Beta Project’s well, which was recompleted during 2021 and has been producing from new reservoir sands. The increase in the number of production days during the three months ended June 30, 2022 was attributable to one well in the Beta Project, which was shut-in during second quarter 2021 due to recompletion work. See additional discussion in “Business Update” section above.

 

Oil and Gas Revenue. Oil and gas revenue during the three months ended June 30, 2022 was $4.3 million, an increase of $1.8 million from the three months ended June 30, 2021. The increase was primarily attributable to increased oil and gas prices.

 

Oil and gas revenue during the six months ended June 30, 2022 was $7.4 million, an increase of $2.5 million from the six months ended June 30, 2021. The increase was attributable to increased oil and gas prices totaling $3.0 million, partially offset by decreased sales volume totaling $0.4 million.

 

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

 

Other Revenue. Other revenue is generated from the Fund’s production handling, gathering and operating services agreement with affiliated entities and other third parties.

 

13

 

Depletion and Amortization. Depletion and amortization during the three months ended June 30, 2022 was $1.2 million, a decrease of $0.1 million from the three months ended June 30, 2021. The decrease was primarily attributable to a decrease in the average depletion rate totaling $0.2 million, partially offset by adjustments to the asset retirement obligations related to fully depleted properties totaling $0.2 million during the three months ended June 30, 2022.

 

Depletion and amortization during the six months ended June 30, 2022 was $2.1 million, a decrease of $0.3 million from the six months ended June 30, 2021. The decrease was attributable to a decrease in the average depletion rate totaling $0.3 million and a decrease in production volumes totaling $0.3 million, partially offset by adjustments to the asset retirement obligations related to fully depleted properties totaling $0.2 million and $0.1 million during the six months ended June 30, 2022 and 2021, respectively.

 

The decreases in the average depletion rates were primarily attributable to the changes in reserves estimates provided annually by the Fund’s independent petroleum engineers.

 

See “Overview” above for certain factors that impact the depletion and amortization volume and rate variances.

 

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

 

   Three months ended June 30,   Six months ended June 30, 
   2022   2021   2022   2021 
                 
   (in thousands) 
Lease operating expense  $177   $178   $397   $350 
Transportation and processing expense   123    125    236    255 
Insurance expense   34    42    71    85 
Accretion expense   14    16    29    31 
Workover expense and other   15    40    28    52 
   $363   $401   $761   $773 

 

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

 

Production costs, which include lease operating expense, transportation and processing expense and insurance expense, were $0.3 million ($7.41 per barrel of oil equivalent or “BOE”) and $0.7 million ($8.52 per BOE) during the three and six months ended June 30, 2022, respectively, compared to $0.3 million ($7.62 per BOE) and $0.7 million ($7.46 per BOE) during the three and six months ended June 30, 2021, respectively.

 

Production costs were relatively consistent during the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021.

 

Production costs per BOE were relatively consistent during the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in production costs per BOE during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily attributable to the impact of the ongoing costs for the Marmalard Project, which experienced decreased oil and natural gas production as a result of shut-ins and natural declines in production. The increase in production cost per BOE was also attributable to the Beta Project, which had lower production costs per BOE during the six months ended June 30, 2021 due to a credit to the lease operating expense received from the operator during the first quarter of 2021.

 

See “Overview” above for factors that impact oil and natural gas production.

 

Management Fees to Affiliate. An annual management fee, totaling 2.5% of total capital contributions, net of cumulative dry-hole well costs incurred by the Fund and fully depleted project investments, is paid monthly to the Manager. All or a portion of such fee may be temporarily waived by the Manager to accommodate the Fund’s short-term commitments.

 

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.

 

Dividend Income. Dividend income is related to the Fund’s investment in Delta House.

 

14

 

Interest Expense. During the three and six months ended June 30, 2021, interest expense was comprised of interest expense and amortization of debt discounts related to the Fund’s long-term borrowings.  The Fund fully repaid its loan related to the Beta Project as of December 31, 2021.

 

Capital Resources and Liquidity

 

Operating Cash Flows

Cash flows provided by operating activities during the six months ended June 30, 2022 were $5.5 million, primarily related to revenue received of $6.7 million, partially offset by operating expenses of $0.7 million, management fees of $0.5 million and general and administrative expenses of $0.1 million.

 

Cash flows provided by operating activities during the six months ended June 30, 2021 were $3.4 million, primarily related to revenue received of $5.2 million, partially offset by operating expenses of $0.7 million, the settlement of asset retirement obligations of $0.6 million, management fees of $0.5 million and interest payments of $0.1 million.

 

Investing Cash Flows

Cash flows used in investing activities during the six months ended June 30, 2022 were $0.5 million, primarily related to capital expenditures for oil and gas properties of $0.4 million and investments in salvage fund of $0.1 million.

 

Cash flows used in investing activities during the six months ended June 30, 2021 were $0.1 million, related to capital expenditures for oil and gas properties of $0.5 million, inclusive of advances, and investments in salvage fund of $0.2 million, partially offset by proceeds from the salvage fund of $0.6 million.

 

Financing Cash Flows

Cash flows used in financing activities during the six months ended June 30, 2022 were $4.6 million, related to manager and shareholder distributions.

 

Cash flows used in financing activities during the six months ended June 30, 2021 were $3.1 million, related to manager and shareholder distributions of $2.2 million and the repayments of long-term borrowings of $0.9 million.

 

Capital Expenditures

 

Capital expenditures for oil and gas properties have been funded with the capital raised by the Fund in its private placement offering and through debt financing. The Fund’s capital has been fully allocated to 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. Such investment activities, which include estimated capital spending on planned well recompletions and ongoing development of the Fund’s producing projects, are expected to be funded from cash flows from operations and existing cash-on-hand and not from equity, debt or off-balance sheet financing arrangements.

 

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.

 

Liquidity Needs

 

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

 

As of June 30, 2022, the Fund’s estimated capital commitments related to its oil and gas properties were $5.7 million (which include asset retirement obligations for the Fund’s projects of $3.0 million), of which $0.5 million is expected to be spent during the next twelve months. Future results of operations and cash flows are dependent on the ongoing development of and revenues from production and sale of oil and gas from the Fund’s producing projects. In addition, cash flow from operations may be impacted by fluctuations in oil and natural gas commodity prices.

 

Based upon its current cash position, salvage fund and its current reserves estimates, the Fund expects cash flow from operations to be sufficient to cover its commitments and ongoing operations. Reserves estimates are projections based on engineering data that cannot be measured with precision, require substantial judgment, and are subject to frequent revision.

 

15

 

The Manager is entitled to receive 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 all or a portion of 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. However, distributions may be impacted by amounts of future capital required for the ongoing development of the Fund’s producing projects, as budgeted, as well as the funding of estimated asset retirement obligations. Distributions may also be impacted by fluctuations in oil and natural gas commodity prices.

 

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 June 30, 2022 and December 31, 2021, other than those discussed in “Capital Expenditures” 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 June 30, 2022.

 

There has been no change in the Fund’s internal control over financial reporting that occurred during the three months ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

 

16

 

PART II – OTHER INFORMATION

 

ITEM 1.LEGAL PROCEEDINGS

 

None.

 

ITEM 1A.RISK FACTORS

 

Not required.

 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.MINE SAFETY DISCLOSURES

 

None.

 

ITEM 5.OTHER INFORMATION

 

None.

 

ITEM 6.EXHIBITS

 

EXHIBIT

NUMBER

  TITLE OF EXHIBIT   METHOD OF FILING
         
31.1   Certification of Robert E. Swanson, Chief Executive Officer of
the Fund, pursuant to Exchange Act Rule 13a-14(a)
  Filed herewith
         
31.2   Certification of Kathleen P. McSherry, Executive Vice President,
Chief Financial Officer and Assistant Secretary 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, Chief
Financial Officer and Assistant Secretary of the Fund
  Filed herewith
         
101.INS   Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document   Filed herewith
         
101.SCH   Inline XBRL Taxonomy Extension Schema   Filed herewith
         
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase   Filed herewith
         
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document   Filed herewith
         
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase   Filed herewith
         
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase   Filed herewith
         
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   Filed herewith

 

17

 

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 O FUND, LLC
             
Dated: August 8, 2022 By: /s/     ROBERT E. SWANSON
      Name:     Robert E. Swanson
      Title:     Chief Executive Officer
            (Principal Executive Officer)
             
             
Dated: August 8, 2022 By: /s/     KATHLEEN P. MCSHERRY
      Name:     Kathleen P. McSherry
      Title:    

Executive Vice President, Chief Financial Officer and

Assistant Secretary

            (Principal Financial and Accounting Officer)

 

 

18

 

 

 

 

EXHIBIT 31.1

CERTIFICATION

 

I, Robert E. Swanson, certify that:

 

 

1.       I have reviewed this Quarterly Report on Form 10-Q of Ridgewood Energy O 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:     August 8, 2022  
         
/s/     ROBERT E. SWANSON  
Name:     Robert E. Swanson  
         
Title:     Chief Executive Officer  
      (Principal Executive Officer)  

 

 

 

 

 

 

 

EXHIBIT 31.2

CERTIFICATION

 

I, Kathleen P. McSherry, certify that:

 

 

1.       I have reviewed this Quarterly Report on Form 10-Q of Ridgewood Energy O 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:     August 8, 2022  
         
/s/     KATHLEEN P. MCSHERRY  
Name:     Kathleen P. McSherry  
         
Title:    

Executive Vice President, Chief Financial Officer and

Assistant Secretary

 
      (Principal Financial and Accounting Officer)  

 

 

 

 

 

 

  

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 O Fund, LLC (the “Fund”) for the period ended June 30, 2022, 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: August 8, 2022        
        /s/ ROBERT E. SWANSON
        Name: Robert E. Swanson
        Title: Chief Executive Officer
          (Principal Executive Officer)
           
Dated: August 8, 2022        
        /s/ KATHLEEN P. MCSHERRY
        Name: Kathleen P. McSherry
        Title:

Executive Vice President, Chief Financial Officer and

Assistant Secretary

          (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.

 

 

 

 

 

 



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