RIDGEWOOD ENERGY X FUND, LLC

RIDGEWOOD ENERGY X FUND, LLC: Annual Report Summary – Fiscal Year Ended December 31, 2025

This summary offers retail investors a clear, accessible overview of RIDGEWOOD ENERGY X FUND, LLC's performance and strategic direction. Drawing from the Fund's latest annual report for the fiscal year ended December 31, 2025, we highlight critical information for those considering this distinctive energy investment.

Business Overview

RIDGEWOOD ENERGY X FUND, LLC (the "Fund"), a Delaware limited liability company established in August 2007, invests in oil and natural gas properties. Its primary assets are located in the U.S. offshore waters of Texas, Louisiana, and Alabama in the Gulf of Mexico. In 2008, the Fund raised $94.7 million in initial capital through a private placement offering, allocating $79.3 million for investments after fees.

The Fund has fully invested its capital and no longer pursues new projects. This marks a strategic shift to a "harvesting" or "liquidation" phase. Its current strategy focuses on managing and developing existing oil and gas properties to generate cash flow for distribution to shareholders, prioritizing maximum returns from a finite asset base over growth.

Investment Structure and Liquidity

Investors hold "Shares of LLC Membership Interest." As of February 26, 2026, approximately 477.8874 shares were outstanding.

Crucially, no public market exists for these shares, nor is one expected to develop. This makes the investment highly illiquid, meaning shares are extremely difficult to buy or sell. Transfers are also subject to strict rules and limitations. This significant lack of liquidity is a key consideration for any potential investor.

Management and Fees

Ridgewood Energy Corporation, operating since 1982, manages the Fund. The Manager exercises full operational control, overseeing shareholder accounts, investment management, and administration. An Investment Committee of five employees provides expertise on oil and gas projects.

The Manager receives compensation through two primary mechanisms:

1. Annual Management Fee: The Fund pays a monthly fee equal to 2.5% of the total capital contributed by shareholders (adjusted for certain costs), regardless of the Fund's profitability. This fee totaled $0.7 million in both 2025 and 2024.
2. Share of Distributions: The Manager receives 15% of the cash distributions generated from the Fund's operations. In 2025, this share totaled $0.2 million, a decrease from $0.3 million in 2024, reflecting a reduction in distributable cash flow.

The Fund also covers all other operating costs, including insurance, legal, accounting, and tax expenses.

Operational Assets and Production

The Fund's oil and natural gas properties are all located in the offshore Gulf of Mexico. The Fund holds a "working interest," meaning it owns a fractional share of the rights to drill, produce, and receive revenue from these properties, while also bearing a proportionate share of costs.

As of December 31, 2025, the Fund's operational assets included:

• Productive Wells: A working interest in 5 gross productive wells, equivalent to 0.04 net wells. "Net wells" reflects the Fund's proportionate ownership across all wells. Third-party companies operate all wells, which produce both oil and natural gas.
• Acreage: Working interests in 17,280 gross acres (148 net acres) of developed properties and 5,760 gross acres (51 net acres) of undeveloped properties.

Production Volumes (Fund's Net Share):

Estimated Proved Reserves (Fund's Net Share, as of December 31, 2025):

• Oil: 150,000 barrels
• Natural Gas: 800,000 Mcf

Production volumes decreased from 2024 to 2025, resulting directly from operational challenges and the natural decline of mature wells.

Project Updates

Recent project developments underscore ongoing operational challenges, including well failures, declining production, and significant, unavoidable costs associated with decommissioning aging offshore infrastructure.

1. Diller Project (0.88% Working Interest):

   • Total budget: $4.373 million; $3.776 million spent to date.
   • The project includes two wells. Well #1 has operated since 2015.
   • Well #2, which began production in 2019, permanently shut down in 2023 due to mechanical issues and will not restart. The Fund plans to plug and abandon (decommission) it by December 2026, at an estimated cost of $0.6 million.

2. Marmalard Project (0.84% Working Interest):

   • Total budget: $8.927 million; $7.098 million spent to date.
   • The project includes five wells; four began production in 2015.
   • Well #2 shut down in early 2024 due to mechanical failure. Unsuccessful repair attempts in late 2025 led to its plugging and abandonment in the last quarter of 2025.
   • Well #5, which started producing in early 2024, also experienced mechanical failure and shut down. After repairs, it successfully returned to production in late August 2025.
   • The Fund anticipates additional development costs of $0.9 million and future asset retirement obligations (decommissioning costs) of $0.9 million for this project.

Sales and Marketing

The Manager facilitates the sale of the Fund's oil and natural gas production to other companies. DH Sales and Transport, LLC, a subsidiary of the Manager, handles the transportation and sale of oil and gas from the Diller and Marmalard projects. This arrangement constitutes a related-party transaction. The Fund currently relies on two major customers for its sales. While the Manager believes a robust market for oil and gas would mitigate the impact of losing one customer, this concentration of sales remains a consideration.

Competitive Position

As a fund in a "harvesting" or "liquidation" phase, the Fund's competitive position stems not from market share growth or new project acquisition, but from its ability to efficiently manage and monetize its existing, declining oil and gas assets. The Fund operates within the highly competitive U.S. offshore oil and natural gas industry. Even for its existing operations, it competes with larger, better-capitalized companies for services, equipment, and personnel.

For investors, the Fund's competitive standing is influenced by its fee structure (an annual management fee regardless of profitability) and the extreme illiquidity of its shares. These factors may make it less attractive compared to publicly traded energy companies or more liquid investment funds. While the Fund relies on a related-party entity (DH Sales and Transport, LLC) for sales and marketing, the broader market for oil and gas sales generally remains robust.

Financial Performance and Management Discussion (MD&A Highlights)

The Fund's financial performance for the fiscal year ended December 31, 2025, reflects its mature asset base and ongoing operational challenges. This section summarizes key financial results and management's explanation of the factors influencing them.

Declining revenue, a net loss in 2025 (compared to a slight profit in 2024), and reduced cash flow from operations highlight the financial impact of decreasing production and rising operational costs. Distributions to shareholders also fell from $1.7 million in 2024 to $1.1 million in 2025, further underscoring these trends. The NAV per share also declined, reflecting the reduced value of the underlying assets. These changes stem primarily from the natural decline of mature wells, mechanical failures in key projects (Diller and Marmalard), and the associated costs of repairs and eventual plugging and abandonment.

Financial Health

The Fund's balance sheet as of December 31, 2025, shows:

• Oil and Gas Properties (Net): $55.0 million
• Cash and Equivalents: $2.8 million
• Asset Retirement Obligations (ARO): $12.5 million (estimated future decommissioning costs)
• Total Debt: $0 million

The Fund maintains a strong balance sheet with no outstanding debt, providing financial flexibility. However, significant Asset Retirement Obligations (AROs) of $12.5 million pose a substantial future liability, impacting cash flow available for distribution as these costs become due. While $2.8 million in cash and equivalents provides immediate liquidity, overall liquidity for investors remains extremely low due to the absence of a public market for shares. Cash flow from operations, though positive, has declined year-over-year, indicating a tightening of internally generated funds.

Future Outlook

The Fund has entered a "harvesting" or "liquidation" phase, having fully invested its capital and no longer pursuing new projects. Its future performance depends solely on maximizing cash flow from its existing, finite asset base. Management plans to continue managing and developing these properties to generate distributions, but these will likely decline over time as reserves deplete and wells are abandoned.

Specific future activities include plugging and abandoning Diller Well #2 by December 2026, at an estimated cost of $0.6 million. The Marmalard project also anticipates additional development costs of $0.9 million and future asset retirement obligations of $0.9 million. The Fund expects distributions to shareholders to likely decrease as production declines and it incurs significant decommissioning costs, ultimately leading to the wind-down of operations as assets deplete and retire.

Key Risks for Investors

Investing in RIDGEWOOD ENERGY X FUND, LLC involves significant risks, especially given its current strategic phase:

• Illiquidity: As noted, no public market exists for the shares, making it extremely difficult to sell your investment.
• No Growth Strategy: The Fund no longer invests in new projects. Its value depends entirely on the declining production and finite reserves of its existing, aging assets. There is no potential for growth through new discoveries or acquisitions.
• Commodity Price Volatility: The Fund's revenues directly depend on the fluctuating market prices of oil and natural gas, influenced by global supply and demand, geopolitical events (such as the Russia-Ukraine conflict), and economic conditions.
• Operational Challenges & Decline: The Fund faces inherent risks from offshore oil and gas operations, including mechanical failures, natural production decline, and high costs for maintenance, repairs, and interventions. Recent well shut-downs highlight these risks.
• High Decommissioning Costs: Offshore properties incur substantial "asset retirement obligations" (AROs) for plugging wells, removing platforms, and restoring the seabed. These significant costs can impact cash flow available for distribution. As of December 31, 2025, the Fund's estimated AROs totaled $12.5 million.
• Regulatory and Environmental Risks: Changes in environmental regulations, safety standards, or increased scrutiny of offshore operations could lead to higher compliance costs or operational restrictions.
• Concentration Risk: The Fund's assets are concentrated in a few offshore Gulf of Mexico properties, and its sales rely on two major customers.
• Manager Fees Regardless of Profit: The Fund pays the annual management fee regardless of its financial performance, which can further strain cash flow during periods of low revenue or losses.

Analyst's Conclusion

RIDGEWOOD ENERGY X FUND, LLC has clearly entered a "harvesting" phase, focusing on extracting value from its existing, mature oil and gas properties. The Fund's strategy does not include growth through new investments; instead, its future performance ties solely to the longevity and profitability of its current assets.

The 2025 financial performance—marked by declining revenue, a net loss, reduced cash flow from operations, and lower distributions to shareholders—reflects the inherent challenges of managing a declining asset base. Operational issues, such as well failures and the significant costs associated with plugging and abandonment, directly impact profitability and distributable cash.

For retail investors, the extreme illiquidity of the shares and the Fund's non-growth strategy are the most critical considerations. This investment is not for capital appreciation through expansion but rather for generating cash flow from a finite and declining resource base. Potential investors must weigh the declining production, significant decommissioning liabilities, and operational risks against the potential for future distributions, which will likely decrease over time as reserves deplete and wells are abandoned.