Sheridan Production Partners Manager III LLC

ITEM 5.    FEES AND COMPENSATION
Management Fees
In return for its advisory services, Sheridan receives a management fee (the
“Management Fee”) from Fund III-A and Fund III-B. The Management Fee is payable
quarterly in advance. Pre-paid Management Fees are generally not subject to refund.
However, as required by the Investment Advisers Act of 1940, if Sheridan is removed as
the manager of a Fund prior to the end of the applicable period, management fees will
be charged on a pro rata basis through to the date of removal, and any fees paid in
advance but not earned will be refunded. Fund III-M does not pay management fees.

The Management Fees payable by the Funds are calculated in accordance with their
Governing Documents. The Management Fee for each Fund is calculated by assessing
a specified rate against the lesser of the value (calculated in accordance with the
Governing Documents) of the limited partners’ interest in such Fund or the aggregate
limited partner capital commitments.
Management Fees are subject to reduction by 100% of the amount of certain additional
fees received by Sheridan in connection with the Funds’ investments, as described
below under “Other Fees.” Management Fees may be funded from cash flows received
in respect of a Fund’s operations or through capital contributions by its limited partners.
Other Fees
None of Sheridan or its affiliates charges the Funds any fees other than the
Management Fee. Pursuant to the Governing Documents, any transaction fees or other
fees received by Sheridan or its affiliates from third parties related to the Funds’
investments are applied entirely to reduce the Management Fee (excluding any third-
party fees received as operator of properties under standard joint operating agreements,
which would reduce Fund Expenses (as defined below) on a dollar-for-dollar basis).
Fund Expenses
Each Fund bears all amounts associated with its investment program and operations
(“Fund Expenses”), including, without limitation, all liabilities, obligations, fees, costs and
expenses related to (i) proposed and actual purchases and sales of properties, (ii) the
management and operation of the Fund and development of its properties (including,
without limitation, capital expenses, operating expenses, overhead, rent, information
technology, travel costs and other general and administrative expenses, expenses of
custodians, consultants, legal counsel and auditors, and any insurance, indemnity or
litigation expenses), (iii) Funds’ administration (including, but not limited to, preparation
of financial statements and reports to limited partners, interest, fees and other amounts
payable in connection with obtaining, maintaining or terminating any leveraging or
hedging arrangements or transactions, and costs of holding any meetings of limited
partners), (iv) any taxes, fees or other governmental charges levied against such Funds
and (v) any transactions that are not consummated (including, amounts due to any
potential counterparty or other third party, any legal, financial, accounting, consulting or
other advisors, or any lenders, investment banks and other financing sources in
connection.
One or more of the Firm’s wholly-owned subsidiaries (collectively, “SPC III”), manage
the day-to-day operation and administration of the Funds’ oil and gas properties and
employs engineers, geoscientists, accountants, attorneys, land professionals and other
office staff and field level personnel to carry out these activities. SPC III does not charge
the Funds a fee for these services; however, all Fund Expenses (including, but not
limited to, compensation and employee benefit expenses for such personnel) incurred by
the Firm or its affiliates are reimbursed by the Funds at cost unless included in Manager
Expenses, as described below. In the ordinary course of business, SPC III receives
revenues and pays expenses associated with the properties owned by the Funds.
Sheridan accounts for all such revenues and expenses as among the Funds, and cash
held by SPC III is allocated to the Funds on the quarterly financial statements delivered
to limited partners.
Fund Expenses that are common to more than one Fund are allocated among the Funds
as reasonably determined in good faith by Sheridan. As is customary in the oil and gas

business, field-level operating expenses are charged against the applicable property and
allocated to the Funds in proportion to their working interest ownership therein, with any
expenses recouped from third-party interest owners being credited back against such
costs in the same percentages as borne by the Funds. The Firm allocates general and
administrative expenses based on estimates of effort expended, benefit received, assets
under management, and other methods that are reasonable under the circumstances,
which methods may vary for the different categories of Fund Expenses and are reviewed
from time to time.
Manager Expenses
The Firm is responsible for paying, without reimbursement from the Funds, an allocated
portion of the compensation and employee benefit expenses, and rent and other
occupancy costs, of Sheridan’s senior management team and, if applicable, certain
additional management and/or investment professionals. The scope of these costs that
are borne by the Firm is set forth in the Governing Documents.

ITEM 7.    TYPES OF CLIENTS
Sheridan's only clients are the Funds, all of which are pooled investment vehicles
subject to the direction and control of Sheridan. Each of the Funds is exempt from
registration as an investment company under Section 3(c)(9) of the Investment
Company Act of 1940, and none of the Funds are private funds (as defined in the
instructions to Form ADV).        The Firm does not provide management or advisory
services to the individual limited partner investors in the Funds and references to
“clients” in this Brochure should be construed accordingly.
Investors in the Funds include, but are not limited to, pension plans, endowments,
foundations, pooled investment vehicles, trusts, estates, high net worth individuals,
charitable organizations and corporate or business entities. Investors in the Funds were
required to meet certain suitability criteria (including commitment minimums) as set forth
in their respective Governing Documents and subscription materials, which were
furnished to the investors in connection with the formation of the Funds.