Ridgewood Energy Y Fund's Net Income Plummets 65% Amid Revenue Decline

TL;DR

**SELL: Ridgewood Energy Y Fund's plummeting revenue and net income, coupled with rising operating costs, paint a bleak picture for future returns.**

AI Summary

Ridgewood Energy Y Fund, LLC reported a significant decline in net income for the nine months ended September 30, 2025, falling to $740 thousand from $2.152 million in the prior year, a decrease of 65.6%. This was primarily driven by a substantial drop in oil and gas revenue, which decreased by 30.1% to $3.304 million from $4.723 million in the same period of 2024. The company also experienced a net loss of $8 thousand for the three months ended September 30, 2025, a sharp contrast to the net income of $658 thousand reported in the comparable 2024 quarter. Operating expenses increased by 19.9% to $1.033 million for the nine months ended September 30, 2025, compared to $860 thousand in 2024. Cash and cash equivalents decreased to $1.310 million as of September 30, 2025, from $1.994 million at December 31, 2024. The Fund received $0.5 million in insurance proceeds related to a sidetrack operation on the Marmalard well #5, which was completed in August 2025 to resume production after a mechanical failure.

Why It Matters

This significant decline in net income and revenue for Ridgewood Energy Y Fund, LLC signals potential headwinds for investors, particularly given the fund's focus on oil and gas properties. The substantial drop in oil and gas revenue, coupled with increased operating expenses, could impact future distributions to shareholders. For employees and customers, the operational challenges, such as the Marmalard well #5 sidetrack, highlight the inherent risks in deepwater oil and gas exploration and production. In a competitive energy market, sustained revenue declines could affect the fund's ability to invest in new projects or maintain existing infrastructure, potentially impacting its long-term viability and market position.

Risk Assessment

Risk Level: high — The fund's net income decreased by 65.6% to $740 thousand for the nine months ended September 30, 2025, from $2.152 million in the prior year, indicating significant financial deterioration. Oil and gas revenue also saw a substantial 30.1% decline to $3.304 million from $4.723 million, directly impacting profitability. Furthermore, the company reported a net loss of $8 thousand for the three months ended September 30, 2025, demonstrating a negative trend in recent performance.

Analyst Insight

Investors should consider divesting from Ridgewood Energy Y Fund, LLC given the sharp decline in net income and oil and gas revenue. The increasing operating expenses and the recent net loss for the quarter suggest a deteriorating financial outlook, making it a high-risk investment.

Financial Highlights

debt To Equity

0.58

revenue

$3,489,000

operating Margin

16.6%

total Assets

$10,391,000

total Debt

$3,806,000

net Income

$740,000

eps

$988

gross Margin

N/A

cash Position

$1,310,000

revenue Growth

-28.3%

Revenue Breakdown

Key Numbers

• $740K — Net income for nine months ended Sept 30, 2025 (Decreased by 65.6% from $2.152 million in 2024)
• $3.304M — Oil and gas revenue for nine months ended Sept 30, 2025 (Decreased by 30.1% from $4.723 million in 2024)
• $8K — Net loss for three months ended Sept 30, 2025 (Compared to $658 thousand net income in 2024)
• $1.033M — Operating expenses for nine months ended Sept 30, 2025 (Increased by 19.9% from $860 thousand in 2024)
• $1.310M — Cash and cash equivalents as of Sept 30, 2025 (Decreased from $1.994 million at Dec 31, 2024)
• $0.5M — Insurance proceeds received (Related to Marmalard well #5 sidetrack operation)
• 492.3709 — LLC Membership Interest shares outstanding (As of November 4, 2025)
• 2.5% — Annual management fee rate (Of total capital contributions, net of certain costs)
• 15% — Manager's share of cash distributions (From operations made by the Fund)

Key Players & Entities

• RIDGEWOOD ENERGY Y FUND LLC (company) — registrant
• Ridgewood Energy Corporation (company) — Manager of the Fund
• Murphy Exploration & Production Company - USA (company) — operator of Delta House floating production system
• Delta House Oil and Gas Lateral, LLC (company) — entity in which the Fund has investments
• Delta House FPS, LLC (company) — entity in which the Fund has investments
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• Marmalard well #5 (other) — oil well that required sidetrack operation

FAQ

Risk Factors

• Production Decline and Mechanical Failures [high — operational]: The Fund experienced a substantial drop in oil and gas revenue by 30.1% for the nine months ended September 30, 2025. This decline was exacerbated by mechanical failures, such as on the Marmalard well #5, which required a sidetrack operation to resume production.
• Decreasing Net Income and Cash Position [high — financial]: Net income for the nine months ended September 30, 2025, fell by 65.6% to $740 thousand from $2.152 million in 2024. Cash and cash equivalents decreased by $684 thousand to $1.310 million as of September 30, 2025, from $1.994 million at December 31, 2024.
• Increased Operating Expenses [medium — financial]: Operating expenses rose by 19.9% to $1.033 million for the nine months ended September 30, 2025, compared to $860 thousand in the same period of 2024, further pressuring profitability.
• Commodity Price Volatility [high — market]: As an oil and gas fund, Ridgewood Energy Y Fund LLC is inherently exposed to fluctuations in oil and gas prices. A sustained downturn in commodity prices could significantly impact revenue and profitability.
• Environmental and Asset Retirement Obligations [medium — regulatory]: The company has significant asset retirement obligations totaling $3.365 million as of September 30, 2025. Changes in environmental regulations or unforeseen costs associated with these obligations could impact financial performance.

Industry Context

The oil and gas exploration and production sector is characterized by high capital intensity, significant price volatility, and evolving regulatory landscapes. Companies like Ridgewood Energy Y Fund LLC are subject to global commodity price fluctuations, geopolitical events, and the ongoing transition towards cleaner energy sources. Operational efficiency and effective reserve management are critical for success in this competitive environment.

Regulatory Implications

The Fund faces regulatory scrutiny related to environmental protection and asset retirement obligations, which require significant financial provisions. Changes in environmental laws or stricter enforcement could lead to increased compliance costs or liabilities. Furthermore, reporting requirements for oil and gas operations are subject to specific accounting and disclosure standards.

What Investors Should Do

1. Monitor oil and gas price trends closely.
2. Analyze the impact of operating expense increases.
3. Evaluate the long-term viability of oil and gas properties.
4. Assess the adequacy of cash reserves.

Key Dates

• 2025-08-01: Sidetrack operation on Marmalard well #5 completed — Resumed production after a mechanical failure, and the Fund received $0.5 million in insurance proceeds.
• 2025-09-30: End of the third quarter and nine-month period — Reporting period for the condensed financial statements, showing a significant decline in net income and revenue.
• 2025-11-04: LLC Membership Interest shares outstanding reported — 492.3709 shares outstanding as of this date.
• 2024-09-30: Prior year comparable period end — Used for year-over-year comparison, highlighting a substantial decrease in revenue and net income for 2025.
• 2024-12-31: End of the fiscal year 2024 — Balance sheet comparison point, showing a decrease in cash and cash equivalents by September 30, 2025.

Glossary

Depletion and amortization

The accounting process of allocating the cost of natural resources (like oil and gas) or intangible assets over their useful lives. (Represents a significant expense for an oil and gas company, reflecting the extraction of resources.)

Asset retirement obligations

The costs associated with the retirement of tangible long-lived assets, such as plugging and abandoning oil wells. (Represents a future liability for the Fund, impacting its financial position and potentially future cash flows.)

Sidetrack operation

A drilling operation where a new wellbore is intentionally deviated from an existing wellbore. (Indicates a technical intervention to overcome production issues, as seen with the Marmalard well #5.)

Syndication costs

Costs incurred by a fund to raise capital from investors, such as underwriting fees or legal expenses. (A reduction to capital contributions, impacting the reported equity of the shareholders.)

Salvage fund

A fund set aside for the purpose of salvaging or recovering assets, potentially related to decommissioning or environmental remediation. (Represents restricted cash or assets earmarked for specific future costs.)

Year-Over-Year Comparison

Ridgewood Energy Y Fund LLC has experienced a significant downturn compared to the prior year. Revenue for the nine months ended September 30, 2025, decreased by 30.1% to $3.304 million, leading to a 65.6% drop in net income to $740 thousand. Operating expenses, however, increased by 19.9% to $1.033 million. The Fund also shifted from net income to a net loss in the most recent quarter, indicating deteriorating operational performance.

Filing Documents

• y101425110q.htm (10-Q) — 434KB
• ex31_1.htm (EX-31.1) — 10KB
• ex31_2.htm (EX-31.2) — 9KB
• ex32.htm (EX-32) — 7KB
• 0001214659-25-015887.txt ( ) — 2085KB
• ridg-20250930.xsd (EX-101.SCH) — 22KB
• ridg-20250930_cal.xml (EX-101.CAL) — 34KB
• ridg-20250930_def.xml (EX-101.DEF) — 24KB
• ridg-20250930_lab.xml (EX-101.LAB) — 160KB
• ridg-20250930_pre.xml (EX-101.PRE) — 106KB
• y101425110q_htm.xml (XML) — 245KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 1 Unaudited Condensed Balance Sheets as of September 30, 2025 and December 31, 2024 1 Unaudited Condensed Statements of Operations for the three and nine months ended September 30, 2025 and 2024 2 Unaudited Condensed Statements of Changes in Members' Capital for the nine months ended September 30, 2025 and 2024 3 Unaudited Condensed Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 4 Notes to Unaudited Condensed Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 18 Item 4.

Controls and Procedures

Controls and Procedures 18

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 19 Item 1A.

Risk Factors

Risk Factors 19 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Mine Safety Disclosures 19 Item 5. Other Information 19 Item 6. Exhibits 20

SIGNATURES

SIGNATURES 21 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS RIDGEWOOD ENERGY Y FUND, LLC UNAUDITED CONDENSED BALANCE SHEETS (in thousands, except share data) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,310 $ 1,994 Salvage fund 263 103 Production receivable 391 430 Due from affiliate (Note 2) 14 19 Other current assets 665 54 Total current assets 2,643 2,600 Salvage fund 3,741 3,642 Investment in Delta House 119 119 Oil and gas properties: Advances to operators for capital expenditures 3 - Proved properties 32,121 31,728 Less: accumulated depletion and amortization ( 28,236 ) ( 27,232 ) Total oil and gas properties, net 3,888 4,496 Total assets $ 10,391 $ 10,857 Liabilities and Members' Capital Current liabilities: Due to operators $ 120 $ 60 Accrued expenses 58 59 Asset retirement obligations 263 103 Total current liabilities 441 222 Asset retirement obligations 3,365 3,539 Total liabilities 3,806 3,761 Commitments and contingencies (Note 3) Members' capital: Manager: Distributions ( 9,850 ) ( 9,662 ) Retained earnings 10,757 10,504 Manager's total 907 842 Shareholders: Capital contributions ( 500 shares authorized; 492.3709 issued and outstanding) 97,818 97,818 Syndication costs ( 11,668 ) ( 11,668 ) Distributions ( 57,454 ) ( 56,391 ) Accumulated deficit ( 23,018 ) ( 23,505 ) Shareholders' total 5,678 6,254 Total members' capital 6,585 7,096 Total liabilities and members' capital $ 10,391 $ 10,857 The accompanying notes are an integral part of these unaudited condensed financial statements. 1 Table of Contents RIDGEWOOD ENERGY Y FUND, LLC UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue Oil and gas revenue $ 972 $ 1,448 $ 3,304 $ 4,723 Other revenue 54 6

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View this 10-Q filing on SEC EDGAR