| Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Organization The Ridgewood Energy Q Fund, LLC (the Fund),
a Delaware limited liability company, was formed on August 16, 2005 and operates pursuant to a limited liability company agreement
(the LLC Agreement) dated as of September 6, 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 Funds operations. The Manager performs, or arranges for the performance of, the management, advisory
and administrative services required for the Funds 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 Funds investments in projects. In addition, the Manager provides office space, equipment and facilities
and other services necessary for the Funds 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 3, 4
and 5. Basis of Presentation These unaudited interim condensed financial
statements have been prepared by the Funds 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 Funds 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 Funds December 31, 2019 financial statements and notes thereto included in the Funds Annual Report on Form 10-K
(2019 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, 2019, 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 2019 Annual
Report. There have been no significant changes to the Funds significant accounting policies during the three and nine months
ended September 30, 2020. 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 Funds financial
assets and liabilities consist of cash and cash equivalents, salvage fund, production receivable, due from affiliate, other current
assets, due to operators, accrued expenses, long-term debt and other current liabilities. Except for long-term debt, the carrying
amounts of these financial assets and liabilities approximate fair value due to their short-term nature. The Funds long-term debt is valued
using an income approach and classified as Level 3 in the fair value hierarchy. The fair value of long-term debt is estimated by
discounting future cash payments of principal and interest to a present value amount using a market yield for debt instruments
with similar terms, maturities and credit ratings. 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. 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 Funds
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. Revenue Recognition Oil and gas revenues are recognized at
the point when control of oil and natural gas is transferred to the customers. Natural gas liquid sales are included within gas
sales. The Funds 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 Funds
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 Funds oil and
natural gas contracts do not give rise to contract assets or liabilities. The receivables related to the Funds oil and gas
revenue are included within Production receivable on the Funds balance sheets. Other revenue is generated from the Funds
production handling, gathering and operating services agreement with an affiliated entity 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 Funds
project operator performs joint interest billing once the performance obligations have been satisfied, at which point the payment
is unconditional. Accordingly, the Funds production handling, gathering and operating services agreement with an affiliated
entity and other third parties does not give rise to contract assets or liabilities. The receivables related to the Funds
proportionate share of revenue from an affiliate are included within Due from affiliate on the Funds balance
sheets. The receivables related to the Funds proportionate share of revenue from third parties are presented as a reduction
from Due to operator on the Funds 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. 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 nine months ended September 30, 2020 and 2019, revenue recognized from performance obligations satisfied
in previous periods was not significant. 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 the oil
and gas properties may not be recoverable. Impairments are determined 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 written down to fair value, which 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, reserve estimates or discount rates could
result in a different calculated impairment. During first half of 2020, there had been
a significant fluctuation in oil and natural gas commodity prices primarily due to the Coronavirus (COVID-19) pandemic.
Fluctuations in oil and natural gas commodity prices may impact the fair value of the Funds 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. The Fund is unable to predict the amount of future reserve revisions at this
time, however, if oil and natural gas commodity prices are further impacted by the COVID-19 pandemic, it is possible that impairments
of oil and gas properties will occur. During third quarter 2020, the Beta Project
experienced negative oil and natural gas reserves revisions primarily due to well performance and a steeper than anticipated production
decline curve. As a result, the Fund determined that it had a triggering event requiring the Fund to evaluate recoverability of
the Beta Project. The Fund performed an asset recoverability assessment for the Beta Project as of September 30, 2020 and based
on this assessment, the Fund determined the Beta Project was not impaired during the three and nine months ended September 30,
2020. There were no impairments during the three and nine months ended September 30, 2019. Recent Accounting Pronouncements In August 2018, the Financial
Accounting Standards Board (FASB) issued accounting guidance on fair value measurement, which adds, among other things,
disclosure requirements for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value
measurements. This accounting guidance is effective for the Fund in the first quarter 2020 with early adoption permitted. The Fund
adopted this accounting guidance on January 1, 2020 and the adoption did not have a material impact on the Funds financial
statements. In June 2016, the FASB issued accounting
guidance on measurement of credit losses, which introduces, among other things, a new expected loss impairment model that applies
to most financial assets measured at amortized cost and certain other instruments including trade and other receivables and other
financial assets. Under the new accounting guidance, entities are required to estimate expected credit loss over the life of financial
assets and record an allowance against the assets amortized cost basis to present the financial asset at the amount expected
to be collected. The estimate of expected credit losses will require entities to incorporate considerations of historical information,
current information and reasonable and supportable forecasts. The accounting guidance and the most recent update issued in February
2020 are effective for the Fund in the first quarter of 2023 with early adoption permitted. The Fund early adopted this accounting
guidance and related updates prospectively on January 1, 2020 and the adoption did not result in a cumulative adjustment to retained
earnings on January 1, 2020. The Fund is exposed to credit losses through
the sales 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. The Fund considered the current and expected future
economic and market conditions surrounding the COVID-19 pandemic and determined based on the composition of its customer base,
there was no related credit loss impact. |
