UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For The Fiscal Year Ended December 31, 2005
		OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

x		ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For The Fiscal Year Ended December 31, 2008

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from to

CommissionCOMMISSION fileFILE numberNUMBER 333-93399-04

REEF GLOBAL ENERGY IV, L.P.

(Exact name of registrant as specified in its charter)

Nevada		20-1654113
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1901 N. Central Expressway
Suite 300
Richardson, Texas		75080-3610
(Address of principal executive offices)		(Zip Code)

~~Registrant’s telephone~~1901 ~~number~~N. Central Expressway, Suite 300, Richardson, TX 75080-3610 (Address of principal executive offices including ~~area~~zip code:) (972) -437-6792 (Registrant’s telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the ~~Exchange~~ Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of of the Securities Act. Yes o No ý x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý x

~~Note~~Indicate –by ~~checking~~check mark whether the ~~box~~registrant ~~above~~(1) has ~~will~~filed ~~not~~all ~~relieve~~reports ~~any registrant~~ required to ~~file~~be ~~reports~~filed ~~pursuant to~~by Section 13 or 15(d) of the Securities Exchange Act ~~from~~of ~~their~~1934 ~~obligations~~during the preceding 12 months ~~under~~(or ~~those~~for ~~sections~~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 ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and posted on its corporate Web site, if any, every Interactive Data File required to be ~~filed~~ bysubmitted ~~Section 13~~and orposted ~~15(d)~~pursuant to Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§ ~~Act~~232.405 of this ~~1934~~chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit ~~such reports),~~ and ~~(2) has~~post ~~been subject to~~ such ~~filing requirements for the past 90 days~~files). Yes ~~ý No~~ o No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý x

Indicate by check ~~mark~~ mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the ~~definition~~definitions of “large accelerated filer,” ~~and large~~ “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer ýo Smaller reporting company x

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

No market currently exists for the limited and general partnership interests of the registrant.

As of March 31, ~~2006~~2009, the registrant had 25.028 units held by the managing general partner, ~~125.00 units of additional general partner interest~~ and ~~349~~ 474.972 units of limited partner interest outstanding.

Documents incorporated by reference: None

~~TABLE~~Table ~~OF CONTENTS~~of Contents

Part I
Item 1.	BUSINESS
Item 1A.	RISK FACTORS
Item 1B.	UNRESOLVED STAFF COMMENTS
Item 2.	PROPERTIES
Item 3.	LEGAL PROCEEDINGS
Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Item 6.	SELECTED FINANCIAL DATA
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Item 9A.	CONTROLS AND PROCEDURES
Item 9B.	OTHER INFORMATION
PART III
Item 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Item 11.	EXECUTIVE COMPENSATION
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

REEF GLOBAL ENERGY IV, L.P.

~~PART I~~ANNUAL REPORT ON FORM10-K FOR THE YEAR ENDED DECEMBER 31, 2008

TABLE OF CONTENTS

Part I
Item 1.	Business
Item 1A.	Risk Factors
Item 1B.	Unresolved Staff Comments
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6.	Selected Financial Data
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk
Item 8.	Financial Statements and Supplementary Data
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A.	Controls and Procedures
Item 9B.	Other Information

PART III
Item 10.	Directors, Executive Officers and Corporate Governance
Item 11.	Executive Compensation
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.	Certain Relationships and Related Transactions, and Director Independence
Item 14.	Principal Accountant Fees and Services

PART IV
Item 15.	Exhibits and Financial Statement Schedules
	Signatures

Table of Contents

PART I

ITEM 1. BUSINESS.

Introduction

Reef Global Energy IV, L.P. (the Partnership) is the fourth in a series of five Nevada limited partnerships comprising a program called Reef Global Energy Ventures (the Program). The Partnership was formed in the state of Nevada on November 10, 2004. The Partnership purchased working interests in oil and gas prospects and participated in the drilling of wells on those prospects. The primary ~~purposes~~objectives of the Partnership are to generate revenue from the production of crude oil and natural gas, distribute cash to the partners, and provide tax benefits. Reef Oil & Gas Partners, L.P. (~~formerly known as~~ Reef ~~Oil & Gas Partners LLC~~) ~~(Reef)~~ is the managing general partner of the Partnership.

~~The Partnership was formed to drill, complete and own working interests in oil and natural gas wells.~~ During 2004 and 2005, the Partnership acquired working interests in ~~thirteen~~eight developmental ~~oil~~ and ~~natural~~five ~~gas~~exploratory prospects located in ~~which major~~Texas, orLouisiana, ~~independent~~and in ~~oil~~U.S ~~and~~coastal ~~gas~~waters ~~companies~~in ~~also~~the ~~have~~Gulf ~~interests.~~of ~~The~~Mexico. The Partnership drilled ~~thirteen~~13 wells on these prospects induring ~~Louisiana,~~2004 ~~Texas, and~~thru ~~in U~~2007.S. ~~coastal waters in the Gulf of Mexico.~~ The Partnership purchased a minority non-operated working interest in these prospects. Reef purchased ~~additional~~ additional interests in certain Partnership prospects ~~that~~for ~~have~~some ~~been~~of ~~assigned~~the to other ~~partnerships~~ ~~in the Program as well as to private drilling~~ partnerships ~~managed~~it ~~by Reef~~manages. The additional interest purchased by Reef on nine of the Partnership prospects was large enough to allow OREI, Inc. (~~formerly~~OREI), ~~known~~an affiliate of Reef, to serve as prospect operator. During 2006 well operator status was transferred by OREI to Reef Exploration~~, Inc~~ L.) P. (~~OREI~~RELP), an affiliate of Reef, toformed ~~serve~~in ~~as prospect operator~~2005.

During 2006, Reef agreed to pay 100% of the costs for a working interest in a developmental well in Louisiana. This well was not successful. However, in October 2007 the well was re-entered and successfully side-tracked. The well began production operations in May 2008 and remains productive as of the date of this report. Reef expended approximately $184,000 in costs related to the drilling and completion of the original well and the successful sidetrack. The Partnership expended no funds in connection with the drilling and completion of the original well and the successful sidetrack.

In this Annual Report on Form 10-K (Annual Report), we use the term “successful” to refer to wells that are drilled, tested, and either capable of or actually producing in commercial quantities. We use the term “unsuccessful” to refer to wells that do not meet one or more of these criteria.

Acquisition and Drilling of Undeveloped Prospects

The Partnership purchased an ~~interest~~working interests in eight developmental ~~prospects~~ and five exploratory prospects. A “prospect” is generally defined as a contiguous oil and gas leasehold estate, or lesser interest in a leasehold estate, upon which drilling operations may be conducted. A prospect is characterized as “exploratory” or “developmental” based upon the type of well to be drilled on the prospect. A development well is a well drilled within a proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive. Generally an exploratory well is any well that is not a development well, including wells drilled to find and produce oil or gas in an unproven area, wells drilled to find a new ~~reservoir~~ reservoir in a field previously found to be productive of oil or gas, or wells drilled to extend a known reservoir. Thirteen wells were drilled on the prospects acquired by the Partnership.

The Partnership prospects were acquired pursuant to an arrangement in which the Partnership purchased part of the working interest. A working interest bears a specified portion of the costs of development, operation and maintenance. A working interest is subject to landowners’ royalty interests and may be subject to other royalty interests payable to unaffiliated third parties. Where the Partnership acquired less than 100% of the working interest, costs were reduced proportionately. The Partnership’s limited partnership agreement (the Partnership Agreement) prohibits Reef or any of its affiliates from retaining any overriding royalty interest, that is, any royalty interest that would be paid out of the Partnership’s working interest, in any working interest purchased by the Partnership. The Partnership is a non-operator working interest owner in all prospects purchased by the Partnership.

Consulting Agreements for Prospect Acquisitions

Reef ~~has~~ entered into ~~two~~three agreements (the CMI Agreements) with Challenger Minerals Inc. (CMI), a subsidiary of GlobalSantaFe Corporation and a ~~premier~~ screener of oil and gas prospects in the Gulf of Mexico and North Sea regions. ~~The~~Under ~~first of~~ the ~~agreements~~terms ~~(the New Gulf Agreement) amended certain provisions~~ of ~~Reef’s October 2001~~ ~~agreement~~these ~~with CMI (the Original Agreement). The Original Agreement provided~~agreements, ~~among~~ ~~other things, that CMI would present a minimum of 50 prospects per year in the Gulf of Mexico region to~~ Reef, ~~and~~had ~~that Reef would have~~ the option to ~~purchase~~ upacquire toworking ~~12.5%~~interests ~~of the interest made available to CMI~~ in ~~any Gulf of Mexico exploration project or developmental project made available to Reef for purchase. Under the New Gulf Agreement, CMI continued to present Reef with a minimum of 50 Gulf of Mexico~~ prospects ~~per year, which Reef was under no~~ ~~obligation~~screened ~~to purchase. Reef paid CMI $300,000 per year (the CMI Gulf Fee) for the geological and geophysical services provided~~ by CMI under the New Gulf Agreement, which was a $75,000 reduction in the CMI fee charged under the Original Agreement. The New Gulf Agreement amended the Original Agreement for the period between January 31, 2004 and January 31, 2006, by reducing Reef’s participation interest in Gulf of Mexico exploration projects from 12.5% to 7.5%. Reef has allowed this agreement to expire effective January 31, 2006.

~~In consideration of the reduction from a 12.5% to a 7.5% interest in CMI generated Gulf of Mexico~~3

~~exploration projects,~~Table ~~Reef and CMI agreed to enter into a new screening program for prospects in the North Sea region pursuant to a second agreement (the North Sea Agreement). Pursuant to the terms~~ of the North Sea Agreement, for the period between December 1, 2003 and November 30, 2006, Reef may acquire up to 5% of the interest made available to CMI in all offshore prospects located in the North Sea region that are identified and initially reviewed by CMI during the term of the North Sea Agreement. Reef will pay CMI a fee of $75,000 per year, or a total of $225,000 over the three-year term (the CMI North Sea Fee and together with the CMI Gulf Fee, the Challenger Fees) under the North Sea Agreement. CMI is not obligated to present Reef with a specific number of prospects under the North Sea Agreement, and under certain circumstances further described in the North Sea Agreement, Reef may be excluded from participation in certain prospects.Contents

~~Projects approved for acquisition by Reef under these agreements are assigned to this Partnership as well as other limited partnerships formed as part of the Program~~CMI. ~~The five partnerships formed as a part of this Program have each~~ ~~reimbursed to~~ Reef ~~a portion of the actual fees~~ paid byCMI ~~Reef~~an ~~under~~annual ~~these~~fee ~~agreements during~~for the ~~term~~geological ofand ~~the~~geophysical ~~Program. The payments made were proportionate to the~~services ~~capital~~provided ~~raised~~ by ~~each partnership~~CMI. ~~This~~The ~~Partnership~~last ~~reimbursed Reef $314,380, or 3.17%~~ of ~~its gross capital contributions of $9,924,916. There are no further amounts to be reimbursed by this Partnership under~~ these agreements. ~~The partnerships~~expired ~~formed~~effective asNovember ~~a part of this Program did not reimburse Reef any amount~~30, ~~in excess of the actual fees paid by Reef~~2006.

Prospects approved for acquisition by Reef under these agreements were assigned to this Partnership as well as other limited partnerships formed as part of the Program. The five partnerships formed as a part of this Program have each reimbursed to Reef a portion of the actual fees paid by Reef under these agreements during the term of the Program. The payments made were proportionate to the capital raised by each partnership. This Partnership reimbursed Reef $314,380, or 3.17% of its gross capital contributions of $9,924,916. This amount has been capitalized as geological and geophysical costs in accordance with the full cost method of accounting for oil and gas properties. There are no further amounts to be reimbursed by this Partnership under these agreements. The partnerships formed as a part of this Program did not reimburse Reef any amount in excess of the actual fees paid by Reef.

Drilling and Completion Phase of Operations

On all prospects operated by OREI and later transferred to RELP, drilling operations were contracted to independent third party drillers, and the costs of the wells to the Partnership were determined by actual third party costs, plus OREI’s or RELP’s monthly operator fees at the competitive rate for the geographical area where the ~~well~~wells isare located.

The Partnership generally pays drilling and completion costs as incurred. ~~The Partnership made advance payments in December 2004 to secure the tax benefits of prepaid intangible drilling costs where there was a valid business reason.~~ Wells drilled that failed to result in the discovery of commercial quantities of crude oil or natural gas were plugged and abandoned in accordance with applicable regulations. ~~Three~~Two of the ~~exploratory~~developmental wells and ~~two~~ four of the exploratory ~~developmental~~ wells drilled by the Partnership were ~~dry holes~~unsuccessful.

Production Phase of Operations

~~Production operations~~Wells ~~commence~~capable ~~when~~of aproducing ~~Partnership~~quantities ~~well~~of ~~has~~crude ~~been~~oil and/or natural gas in commercial quantities were completed by installing all surface equipment necessary to control the flow of production or to shut down the well, ~~including~~ ~~any required gathering~~ and ~~sales~~by ~~lines,~~installing ~~production operations commence.~~any ~~The~~storage ~~Partnership~~facilities, ~~completed~~gathering, ~~four~~or ~~producing~~sales ~~wells~~lines ~~during~~required ~~2005,~~to ~~three~~produce ofand ~~which~~sell ~~are~~the ~~still~~crude ~~producing~~ oil and/or natural gas, isproduction ~~currently~~from ~~completing~~the ~~three~~well. ~~other~~The Partnership drilled seven successful wells, of which ~~are~~six ~~expected~~were todevelopmental bewells ~~productive,~~ and isone ~~awaiting~~was ~~final testing on one~~an exploratory well. ~~Five~~Two ~~additional~~developmental wells ~~were~~and ~~dry~~four ~~holes~~exploratory wells were unsuccessful and have been plugged and abandoned. Of the seven successful wells drilled by the Partnership, three are productive at December 31, 2008.

The Partnership has entered into agreements with third party marketers to sell the crude oil and/or natural gas produced from successful wells on a competitive basis at the best available terms and prices. Generally, ~~the~~ purchase contracts for the sale of ~~oil~~ ~~and~~crude ~~gas~~oil are cancelable on 30 days’ notice, but purchase contracts for the sale of natural gas may have a longer term. In certain instances the Partnership, as a minority non-operated working interest owner, has elected to permit the operator of the well to enter into sales and marketing agreements with third party purchasers.

Historically, the oil and gas market has experienced significant price fluctuations. Prices are ~~significantly~~ impacted by local weather, supply in the area, availability and price of competitive fuels, seasonal variations in local demand, limited ~~transportation~~ transportation capacity to other regions, and the worldwide supply and demand balance for crude oil.

The Partnership has not and does not expect to engage in commodity futures trading or hedging activities, or to enter into derivative financial instrument transactions for trading or other speculative purposes. Accordingly, the Partnership is at risk for the volatility in commodity prices inherent in the oil and gas industry, and the level of commodity prices has a significant ~~impact~~ impact on the Partnership’s results of operations. See “Item 7A. — Quantitative and Qualitative ~~Disclosures~~Disclosure About Market Risk.”

The Partnership’s share of revenue from productive wells is burdened by and/or subject to royalties and overriding royalties, monthly operating charges, and other operating costs. These items of expenditure involve amounts payable solely out of, or expenses incurred solely by reason of, production operations. The Partnership deducts operating expenses from the production revenue for the corresponding period.

Table of Contents

Major Customers

The Partnership sells crude oil and natural gas on credit terms to refiners, pipelines, marketers, and other users of petroleum commodities. Revenues are received directly from these parties or, in certain circumstances, paid to the operator of the property who disburses to the Partnership its percentage share of the revenues. During the year ended December 31, 2008, three marketers and one operator accounted for 34.2%, 17.9%, 11.0%, and 29.7% of the Partnership’s crude oil and natural gas revenues, respectively. During the year ended December 31, 2007, four marketers and one operator accounted for 41.0%, 17.2%, 16.8%, 13.4%, and 10.7% of the Partnership’s crude oil and natural gas revenues, respectively. During the year ended December 31, 2006, three marketers and one operator accounted for 32.9%, 21.8%, 13.4%, and 23.0% of the Partnership’s crude oil and natural gas revenues, respectively. Due to the competitive nature of the market for purchase of crude oil and natural gas, the Partnership does not believe that the loss of any particular purchaser would have a material adverse impact on the Partnership.

Insurance

The Partnership is a named insured under blowout, pollution, public liability and workmen’s compensation insurance policies obtained by ~~OREI~~RELP. Such insurance, however, may not be sufficient to cover all liabilities. Each unit held by ~~the additional~~ general partners represents an open-ended security for unforeseen events such as blowouts, lost circulation, stuck drill pipe, etc. that may result in unanticipated additional liability materially in excess of ana ~~additional~~ general partner’s initial investment in the Partnership.

The Partnership is a named insured under various insurance policies and intends to maintain such policies subject to its analysis of their premium costs, coverage and other factors. In the exercise of Reef ‘s fiduciary duty as managing general partner, Reef has obtained insurance on behalf of the Partnership to provide the Partnership with such coverage as Reef believes is sufficient to protect the investor partners against the foreseeable risks of drilling and production. Reef reviewed the Partnership insurance coverage prior to commencing drilling operations and periodically evaluates the sufficiency of insurance. In no event will the Partnership maintain public liability insurance of less than two times the Partnership’s capitalization. Subject to the foregoing, Reef may, in its sole discretion, increase or decrease the policy limits and types of insurance from time to time as Reef deems appropriate under the circumstances, which may vary materially.

~~Reef will notify all~~In ~~additional~~accordance ~~general~~with ~~partners of~~ the Partnership atAgreement ~~least 30 days prior to any material change in the amount~~ of the Partnership~~’s insurance coverage. Within this 30-day period and otherwise after the expiration of one year following the closing of the offering of this Partnership~~, ~~additional~~all general ~~partners have~~ ~~the~~partner ~~right to convert their~~ units ~~into~~held ~~units of limited partnership interest~~ by ~~giving~~ ~~Reef~~investors ~~written~~were ~~notice~~converted ofinto ~~their intent to convert. Additional general partners will have~~ limited ~~liability as a limited~~ partner ~~for any Partnership~~units ~~operations~~during ~~conducted after their conversion date, effective upon~~ the ~~filing~~third ~~of an~~quarter ~~amendment to the Certificate~~ of ~~Limited Partnership of the Partnership~~2008. At ~~any~~ ~~time~~that ~~during this 30-day period~~time, ~~upon~~Reef ~~receipt~~amended of the ~~required~~Certificate ~~written notice from the additional general partner~~ of ~~his intent to convert, Reef will amend~~ ~~the~~Limited Partnership ~~Agreement and will file the amendment with the State of Nevada prior~~ to ~~the effective date of the change in insurance coverage. This amendment to the Partnership Agreement will~~ effectuate the conversion of the interest of the former investor ~~additional~~ general ~~partner~~partners to that of a limited partner. ~~Effecting~~Investor general ~~conversion~~partners iswill ~~subject~~have tolimited ~~the~~liability ~~express~~as ~~requirement~~a ~~that~~limited ~~the~~partner ~~conversion~~for ~~will~~any ~~not~~Partnership ~~cause~~operations aconducted ~~termination~~after oftheir ~~the~~conversion ~~Partnership for federal income tax purposes~~date. However, ~~even~~ ~~after~~investor angeneral partners ~~election~~that ofconverted ~~conversion,~~to anlimited ~~additional~~partners ~~general partner will~~ continue to have unlimited liability regarding partnership activities ~~while~~that ~~he was~~occurred anprior ~~additional~~to ~~general~~their conversion ~~partner~~date.

Markets

The marketing of ~~any~~crude oil and natural gas produced by the Partnership is affected by a number of factors that are beyond the Partnership’s control and whose exact effect cannot be accurately predicted. These factors include:

• · the amount of crude oil and natural gas imports;

• · the availability, proximity and cost of adequate pipeline and other transportation facilities;

• · the success of efforts to market competitive fuels, such as coal and nuclear energy , and the growth and/or success of alternative energy sources such as wind power;

• · the effect of United States and state regulation of production, refining, transportation and sales;

~~• the~~· other matters ~~laws~~affecting ofthe ~~foreign~~availability ~~jurisdictions~~of ~~and~~a ~~the~~ready ~~laws~~market, ~~and~~such ~~regulations~~as ~~affecting~~fluctuating ~~foreign~~supply and ~~markets~~demand; and

~~• other~~· general ~~matters~~economic ~~affecting~~conditions in the ~~availability~~United ofStates ~~a ready market, such as fluctuating supply~~ and ~~demand;~~around ~~and~~the world.

~~• general~~The ~~economic~~supply ~~conditions~~and indemand ~~the~~balance ~~United~~of ~~States~~crude oil and ~~around~~natural ~~the~~gas in world markets has caused significant variations in the prices of these products over recent years. The North American Free Trade Agreement eliminated trade and

The supply and demand balance of crude oil and natural gas in world markets has caused significant variations in the prices of these products over recent years. The North American Free Trade Agreement eliminated trade and investment barriers in the United States, Canada, and Mexico, resulting in increased foreign competition for domestic5

3Table of Contents

investment barriers between the United States, Canada, and Mexico, resulting in increased foreign competition for domestic natural gas production. New pipeline projects recently approved by, or presently pending before, FERC, as well as nondiscriminatory access requirements, could further substantially increase the availability of gas imports to certain U.S. markets. Such ~~imports~~ imports could have an adverse effect on both the price and volume of natural gas sales from Partnership wells.

Members of the Organization of Petroleum Exporting Countries (OPEC) establish prices ~~and~~ and production quotas for petroleum products from time to time with the intent of ~~reducing~~of affecting the global supply of crude oil and ~~maintaining~~reducing, or increasing ~~certain~~or maintaining certain price levels. Reef is unable to predict what effect, if any, such actions will have on the amount of or the prices received for oil produced and sold from the Partnership’s wells.

In several initiatives, FERC has required pipelines to develop electronic communication and to provide standardized access via the Internet to information concerning capacity and prices on a nationwide basis, so as to create a national market. Parallel developments toward an electronic marketplace for electric power, mandated by FERC, are serving to create multi-national markets for energy products generally. These systems will allow rapid consummation of natural gas transactions. Although this system may initially lower prices due to increased competition, it is anticipated to expand natural gas markets and to improve their reliability.

Regulation

The Partnership’s operations are affected from time to time in varying degrees by domestic and foreign political developments, and by federal and state laws and regulations.

Production. In most areas of operations within the United States the production of crude oil and natural gas is regulated by state agencies that set allowable rates of production and otherwise control the conduct of oil and ~~natural~~ gas operations. Among the ways that states control production is through regulations that establish the spacing of wells or limit the number of days in a given month during which a well can produce.

Environmental. The Partnership’s drilling and production operations are ~~also~~ subject to environmental protection regulations established by federal, state, and local agencies that ~~in turn~~ may necessitate significant capital outlays that, in turn, would materially affect the financial position and business operations of the Partnership. These regulations, enacted to protect against waste, conserve natural resources and prevent pollution, could necessitate spending funds on environmental protection measures, rather than on drilling operations. If any penalties or prohibitions were imposed on the Partnership for violating such regulations, the Partnership’s operations could be adversely affected.

Natural Gas Transportation and Pricing. FERC regulates the rates for interstate transportation of natural gas as well as the terms for access to natural gas pipeline capacity. Pursuant to the Wellhead Decontrol Act of 1989, however, FERC may not regulate the price of gas. Such deregulated gas production may be sold at market prices determined by supply and demand, Btu content, pressure, location of wells, and other factors. Reef anticipates that all of the gas produced by the Partnership’s wells will be considered price-decontrolled gas and that the Partnership’s gas will be sold at fair market value.

Proposed Regulation. Various legislative proposals are being considered in Congress and in the legislatures of various states, which, if enacted, may significantly and adversely affect the petroleum and natural gas industries. Such proposals involve, among other things, the imposition of price controls on all categories of natural gas production, the imposition of land use controls, such as prohibiting drilling activities on certain federal and state lands in protected areas, as well as other measures. At the present time, it is impossible to predict what proposals, if any, will actually be enacted by Congress or the various state legislatures and what effect, if any, such proposals will have on the Partnership’s operations.

Employees

The Partnership has no employees, and is managed by its managing general partner, Reef. Through ~~December 31~~January 1, ~~2005~~ 2006, OREI employed a staff including geologists, petroleum engineers, landmen , and accounting personnel who ~~administer~~administered all of the Partnership’s operations. On January 2, 2006, the employees of OREI were transferred to ~~Reef Exploration, L.P. (RELP), where they will continue to administer all of the Partnership’s~~

~~operations.~~Table ~~RELP~~of ~~is a new affiliate formed on December 20, 2005. The Partnership reimburses OREI and RELP for direct and administrative services at cost. See “Item 11 – Executive Compensation.”~~Contents

RELP, where they continue to administer all of the Partnership’s operations. The Partnership reimburses OREI and RELP for technical and administrative services at cost. See “Item 11 — Executive Compensation.”

FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements that involve risks and uncertainties. You should exercise extreme caution with respect to all forward-looking statements made in this Annual Report. Specifically, the following statements are forward-looking:

· statements regarding the Partnership’s overall strategy for acquiring prospects, including its intent to diversify the Partnership’s investments;

· statements estimating any number or specific type or size of prospects the Partnership may acquire or size of the interest the Partnership may acquire in such prospects;

· statements regarding the state of the oil and gas industry and the opportunity to profit within the oil and gas industry, competition, pricing, level of production, or the regulations that may affect the Partnership;

· statements regarding the plans and objectives of Reef for future operations, including, without limitation, the uses of Partnership funds and the size and nature of the costs the Partnership expects to incur and people and services the Partnership may employ;

· any statements using the words “anticipate,” “believe,” “estimate,” “expect” and similar such phrases or words; and

· any statements of other than historical fact.

Reef believes that it is important to communicate its future expectations to the partners. Forward-looking statements reflect the current view of management with respect to future events and are subject to numerous risks, uncertainties and assumptions, including, without limitation, the factors listed in ITEM 1A of this Annual Report captioned “RISK FACTORS.” Although Reef believes that the expectations reflected in such forward-looking statements are reasonable, Reef can give no assurance that such expectations will prove to have been correct. Should any one or more of these or other risks or uncertainties materialize or should any underlying assumptions prove incorrect, actual results are likely to vary materially from those described herein. There can be no assurance that the projected results will occur, that these judgments or assumptions will prove correct or that unforeseen developments will not occur.

Reef does not intend to update its forward-looking statements. All subsequent written and oral forward-looking statements attributable to Reef or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements.

ITEM 1A. RISK FACTORS

~~Oil~~Our business activities are subject to certain risks and ~~gas~~hazards, ~~drilling~~including isthe risks adiscussed ~~speculative~~below. ~~activity~~If any of these events should occur, it could materially ~~involving~~and ~~numerous~~adversely affect our business, financial condition, cash flow, or results of operations. The risks ~~and~~below ~~substantial~~are not the only risks we face. We may experience additional risks and ~~uncertain~~uncertainties ~~costs~~not ~~which~~currently ~~could~~known to us or, as a result of developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect ~~the~~our ~~Partnership~~business, financial condition, cash flow, and results of operations.

~~Drilling~~The for oil and natural gas involves numerous risks, including the risk that no commercially productive oil and/or natural gas reserves will be discovered. There can be no assurance that wells drilled by the Partnership will be productive or recover all or any portion of the investment in such wells. Drilling and completion costs are substantial and uncertain, and drilling operations may be curtailed, delayed, or cancelled due to a variety of factors beyond our control, including shortages or delays in the availability of drilling rigs and crews, unexpected drilling conditions, title problems, pressure or irregularities in formations, equipment failures or accidents, adverse weather conditions, and compliance with environmental and other governmental regulations. Our drilling activities may not be successful and, if unsuccessful, will have an adverse effect on the Partnership’s ~~results~~ability ~~of operations and cash flow available for distribution~~ to ~~the~~continue ~~partners.~~as ~~Unexpected costs~~a ~~incurred~~going in the drilling of certain wells may limit the total number of wells the Partnership is able to drill with the capital raised by the Partnership, thus increasing the overall risk of the Partnership’s drilling programconcern.

~~Oil~~Our independent registered public accounting firm’s opinion on our 2008 and 2007 financial statements included an explanatory paragraph indicating substantial doubt about our ability to continue as a going concern. Since its inception, the Partnership has expended its operating capital on drilling for crude oil and natural gas. ~~prices~~The ~~are~~Partnership ~~volatile~~has completed drilling operations with the original capital raised by the Partnership. In addition, drilling operations have been completed on the wells for which Reef has contributed 100% of the cost. The drilling operations of the Partnership have not resulted in the discovery or exploitation of sufficient crude oil and/or natural gas reserves to recover all of the Partnership’s investment in Partnership wells. The December 31, 2008 estimate of the Partnership’s crude oil and natural gas reserves and future cash flows raises doubts about the future ability of the Partnership to generate crude oil and natural gas revenues in excess of current operating costs at current crude oil and natural gas prices.

The financial condition, results of operations, and the carrying value of our oil and natural gas properties depend primarily upon the prices received for our oil and natural gas production. Oil and natural gas prices historically have been volatile and likely will continue to be volatile given current world geopolitical conditions. Cash flow from operations is highly dependent upon the sales prices received from oil and natural gas production. The prices for oil and natural gas are subject to a variety of factors beyond our control. These factors include:7

~~• the~~Table ~~level~~ of ~~consumer~~ ~~demand for oil and natural gas;~~Contents

• The managing general partner is considering several options related to the ~~domestic~~Partnership, incuding the ~~and~~possible ~~foreign~~sale ~~supply~~of marketable assets, as a result of ~~oil~~the recurring losses, erosion of partnership equity, and ~~natural~~lack ~~gas;~~of significant cash flows from operations.

~~• the ability~~Crude ofoil ~~the~~and ~~members~~natural ~~of OPEC~~gas toprices ~~agree~~are tovolatile, and ~~maintain~~ ~~oil~~fluctuate ~~price~~due ~~and~~to ~~production~~a ~~controls;~~number of factors outside of our control.

• The financial condition, results of operations, and the ~~price~~carrying value of our oil and gas properties ~~foreign~~depend primarily upon the prices received for our crude oil and natural gas; production. Crude oil and natural gas prices historically have been volatile and likely will continue to be volatile given current geopolitical conditions. Cash flow from operations is highly dependent upon the sales prices received from crude oil and natural gas production. The prices for crude oil and natural gas are subject to a variety of factors beyond our control. These factors include:

• · the domestic ~~government~~and ~~regulations~~foreign supply of oil and ~~taxes~~natural gas; consumer demand for oil and gas, and market expectations regarding supply and demand;

• · the ~~price~~ability ~~and~~of ~~availability~~the members of ~~alternative~~OPEC ~~fuel~~to ~~sources~~agree to and maintain oil price and production controls;

~~• weather~~· domestic ~~conditions,~~government ~~including~~regulations ~~hurricanes~~ and ~~tropical storms in and around the Gulf of Mexico~~taxes;

~~• market~~· the price ~~uncertainty~~and availability of foreign exports and alternative fuel sources;

~~• political~~· weather conditions, inincluding ~~oil~~hurricanes and ~~natural~~tropical ~~gas~~storms ~~producing~~in ~~regions,~~and ~~including~~around the ~~Middle~~Gulf ~~East;~~of ~~and~~Mexico;

~~• worldwide~~· political ~~economic~~ conditions. in oil and natural gas producing regions, including the Middle East, Nigeria, and Venezuela; and

~~These factors~~· domestic and ~~the volatility of the energy markets make it extremely difficult to~~ ~~predict~~worldwide ~~price~~economic ~~movements~~conditions. Also, oil and natural gas prices do not necessarily move in tandem. Declines in oil and natural gas prices would not only reduce revenues and cash flow available for distributions to partners, but could reduce the amount of oil and natural gas that can be economically produced from successful wells drilled by the Partnership, and, therefore, have an adverse effect upon financial condition, results of operations, oil and gas reserves, and the carrying value of the Partnership’s oil and natural gas properties.

~~The~~These factors and the ~~Partnership~~volatility of the energy markets make it extremely difficult to predict price movements. Also, ~~while~~crude oil and natural gas prices do not ~~prohibited~~necessarily ~~from~~move ~~engaging~~in tandem. Declines in ~~commodity~~crude ~~trading~~oil orand ~~hedging~~natural gas prices would not only reduce ~~activities~~revenues inand ancash ~~effort~~flow available for distributions to partners, but could reduce ~~exposure~~the toamount ~~short-term~~of ~~fluctuations~~crude inoil and natural gas that can be economically produced from successful wells drilled by the Partnership, and, therefore, have ~~price~~an adverse effect upon financial condition, results of operations, oil and gas reserves, and the carrying value of the Partnership’s oil and gas properties. Approximately 70.6% of the Partnership’s estimated proved reserves at December 31, 2008 were natural gas, and, ~~currently~~as ~~does~~a ~~not~~result, our financial results are more sensitive to fluctuations in natural gas prices.

5The Partnership, while not prohibited from engaging in commodity trading or hedging activities in an effort to reduce exposure to short-term fluctuations in the price of crude oil and natural gas, has not engaged in such activities. Accordingly, the Partnership is at risk for the volatility in crude oil and natural gas prices, and the level of commodity prices has a significant impact upon the Partnership’s results of operations.

engage in such activities. Accordingly, the Partnership is at risk for the volatility in oil and natural gas prices, and the level of commodity prices has a significant impact upon the partnership’s results of operations.

We are subject to substantial operating risks that may adversely affect the results of operations.

There are numerous hazards involved in the drilling and operation of oil and ~~natural~~ gas wells, including blowouts involving possible damages to property and third parties, bodily injuries, mechanical failures, explosions, uncontrollable flows of oil, natural gas or well fluids, fires, formations with abnormal pressure, pollution, releases of toxic gas and other environmental hazards and risks. The Partnership could suffer substantial losses as a result of any of these risks. The Partnership is not fully insured against all risks ~~incident~~inherent to the oil and gas business. Uninsured liabilities would reduce the funds available to the Partnership, may result in the loss of Partnership properties and may create liability for the ~~additional~~ general partners. Although the Partnership ~~maintains~~ maintains insurance coverage in amounts Reef deems appropriate, it is possible ~~that~~ that insurance coverage may be insufficient. In that case Partnership assets ~~may~~ may have to be sold to pay personal injury and property claims and the cost of controlling blowouts or replacing damaged equipment rather than for drilling activities.

We cannot control activities on non-operated properties.

The Partnership has limited ability to exercise influence over and control the risks associated with operations on properties not operated by ~~OREI or another affiliate of Reef~~RELP. The failure of an operator of our wells to adequately perform operations, an operator’s breach of the applicable agreements, or an operator’s failure to act in ways that are in our best interest could reduce our production and revenues. The success and timing of drilling and development activities on properties operated by others depends upon a number of factors outside of our control, including the operator’s

~~• timing and amount of capital expenditures;~~8

~~• expertise and~~Table ~~financial~~of ~~resources;~~Contents

~~• inclusion~~could ofreduce our ~~other~~production ~~participants~~and inrevenues. ~~drilling~~The ~~wells;~~success and timing of drilling and development activities on properties operated by others depends upon a number of factors outside of our control, including the operator’s

~~• use~~· timing ofand ~~technology~~amount of capital expenditures;

· expertise and financial resources;

· inclusion of other participants in drilling wells; and

· use of technology.

In addition, the Partnership could be held liable for the joint interest obligations of other working interest owners, such as nonpayment of costs and liabilities arising from the actions of the other working interest owners. Full development of prospects may be jeopardized in the event other working interest owners cannot pay their share of drilling and completion costs.

~~High~~Crude oil ~~demand~~and ~~for~~natural ~~drilling~~gas ~~contractors,~~reserve ~~field services~~data ~~and~~are ~~equipment,~~estimates ~~and~~based ~~the~~upon ~~ability~~assumptions ofthat ~~suppliers~~may be toinaccurate ~~meet~~and ~~demand~~existing ~~may~~economic ~~limit our~~and ~~ability~~operating toconditions ~~drill~~that ~~and~~may ~~produce~~differ from ~~our~~future ~~oil~~economic and ~~natural~~operating ~~gas properties~~conditions.

~~Due~~Securities and Exchange toCommission ~~current~~(SEC) ~~industry~~rules ~~demands,~~require ~~drilling~~the ~~contractors,~~Partnership ~~well~~to ~~service~~present ~~providers~~annual ~~and~~estimates of ~~related~~reserves. ~~equipment~~Reservoir ~~and~~engineering ~~personnel~~is ~~are~~a insubjective ~~short~~and ~~supply.~~inexact ~~This~~process isof estimating ~~causing~~underground ~~escalating prices,~~accumulations ~~delays~~of incrude ~~drilling~~oil and ~~other~~natural ~~exploration~~gas ~~activities,~~that ~~and the~~cannot ~~possibility~~be ofmeasured ~~poor~~in ~~services~~an ~~coupled~~exact ~~with~~manner, ~~potential~~and ~~damage~~is tobased ~~downhole reservoirs~~upon ~~and~~assumptions ~~personnel~~that ~~injuries.~~may ~~Such~~vary considerably ~~pressures~~from ~~will~~actual ~~likely~~results. ~~increase~~Accordingly, ~~the actual~~reserve ~~cost~~estimates ofmay ~~services,~~be ~~extend~~subject to ~~the~~upward ~~time~~or todownward ~~secure~~adjustments. ~~such~~Actual ~~services~~production, revenues and ~~add costs~~expenditures ~~for~~with ~~damages~~respect ~~due~~ to ~~any~~reserves ~~accidents~~will ~~sustained~~likely vary from ~~overuse~~estimates, ofand ~~equipment~~such ~~and~~variances ~~inexperienced~~could ~~personnel~~be material.

WeYou ~~face~~should ~~strong~~not ~~competition~~assume that any present value of future net cash flows from ~~larger~~our producing reserves shown in this Annual Report is the market value for our estimated crude oil and natural gas ~~companies~~reserves. The estimated discounted future net cash flows from our proved reserves are based upon prices and costs in effect at the end of the period held constant and discounted at 10%. Actual future prices and costs may be materially higher or lower. Further, actual future net cash flows will be affected by factors such as the amount and timing of actual development expenditures, the rate and timing of production, and changes in governmental regulations and tax rates.

The oil and gas industry is highly competitive. Competition is encountered in all aspects of Partnership operations, including the acquisition of prospects for drilling and requisition of drilling and service contractors. Many of our competitors are larger, well-established companies with substantially larger operating staffs and greater capital resources than those of the Partnership, Reef and its affiliates. We may not be able to conduct our operations successfully, evaluate and select suitable prospects, obtain drilling and

service contractors, consummate transactions, and obtain technical, managerial and other professional personnel in this highly competitive environment. Specifically, larger competitors may be able to pay more for prospects and competent personnel than the Partnership, Reef and its affiliates. In addition, such competitors may be able to expend greater resources on the existing and changing technologies that will be increasingly important to success. Such competitors may also be in a better position to secure drilling and oilfield services, as well as equipment, on a timely basis or on more favorable terms.

Oil and natural gas reserve data are estimates based upon assumptions that may be inaccurate and existing economic and operating conditions that may differ from future economic and operating conditions.

Securities and Exchange Commission (SEC) rules require the Partnership to present annual estimates of reserves. Reservoir engineering is a subjective and inexact process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner, and is based upon assumptions that may vary considerably from actual results. Accordingly, reserve estimates may be subject to upward or downward adjustments. Actual production, revenues and expenditures with respect to reserves will likely vary from estimates, and such variances could be material.

Reef and its affiliates have sponsored ventures in the past that have produced dry holes and abandoned wells.

Reef Global Energy Ventures is the first public drilling program sponsored by Reef as the managing general partner, and Reef Global Energy IV, L.P. is the fourth limited partnership offered under that Program. Reef and its affiliate, OREI, have sponsored 58 ventures from 1996 to the present. Among these ventures, (i) eight were dedicated almost exclusively to the purchase of interests in already producing reserves, (ii) one was dedicated primarily to the purchase of interests in already producing reserves but has the ability to use up to 20% of capital raised for development purposes, and (iii) two others were dedicated to both the purchase of interests in producing wells and the use of up to 50% of capital raised for development of proven reserves. We refer to the programs described in clauses (i) and (ii) of the preceding sentence as “income fund” ventures and to the programs described in (iii) as “income and development fund” ventures. We have also sponsored 47 drilling ventures since 1996. Together, these ventures have drilled 86 wells (73 by drilling ventures and 13 by income fund and income and development fund ventures). Of the wells drilled by Reef and its affiliates’ ventures, 36 were exploratory wells and 50 were developmental. Thirty-two of these wells were dry holes, and three wells were completed but were non-commercial. Of the 51 wells that were commercial, 31 are still owned by Reef or its affiliates’ ventures and producing, four are awaiting connection to the pipeline, seven have been plugged and abandoned, and five have been sold. Four wells are currently shut-in for evaluation. Using this data, approximately 59.3% of the wells drilled by these ventures were completed as commercially producing and 40.7% were dry holes (including the three wells that were completed but failed to become commercial producers). Approximately 8.1% of the wells drilled by our ventures were subsequently abandoned.

The Partnership Agreement limits Reef’s liability to each partner and the Partnership and requires the Partnership to indemnify Reef against certain losses.

Reef will have no liability to the Partnership or to any partner for any loss suffered by the Partnership, and will be indemnified by the Partnership against loss sustained by it in connection with the Partnership if:

• · Reef ~~determines~~ determines in good faith that its action was in the best interest of the Partnership;

• · Reef was acting on behalf of or performing services for the Partnership; and

• · Reef’s ~~actions~~ actions did not constitute negligence or misconduct.

Drilling exploratory wells is riskier than drilling developmental wells.

Many of the wells drilled by Reef and its affiliates since 1996 have been exploratory wells. Drilling exploratory wells involves greater risks of dry holes and loss of the partners’ investment than the drilling of developmental wells. Drilling developmental wells generally involves less risk of dry holes, although sometimes developmental acreage is more expensive and subject to greater royalties and other burdens on production. The Partnership purchased five exploratory

prospects with available capital, three of which were unsuccessful, one of which is being completed and is expected to be productive, and one awaiting final testing.

The production and producing life of Partnership wells is uncertain.

Production will decline. It is not possible to predict the life and production of any well. The actual ~~lives~~ life could differ from ~~those~~that which is anticipated. Sufficient crude oil or natural gas may not be produced for a partner to receive a profit or even to recover his initial investment. In addition, production from the Partnership’s oil and ~~natural~~ gas wells, if any, will decline over time, and does not indicate any consistent level of future production. This production decline may be rapid and irregular when compared to a well’s initial production.

Extreme weather conditions may adversely affect well operations and partner distributions.

The Partnership conducts significant operations in the ~~Gulf~~coastal ofregions ~~Mexico region~~ of Louisiana and Texas. This ~~region~~area is susceptible to extreme weather conditions, especially ~~those~~ those associated with hurricanes. In the event of a hurricane and related storm activity, such as windstorms, storm surges, floods and tornados, Partnership ~~operations~~ operations in the region may be adversely affected. The occurrence of a hurricane or other extreme weather may harm or delay the Partnership’s operations or distribution of revenues, if any.

~~FORWARD-LOOKING STATEMENTS~~9

~~This~~Table ~~Report on Form 10-K~~of contains forward-looking statements that involve risks and uncertainties. You should exercise extreme caution with respect to all forward-looking statements made in this Report. Specifically, the following statements are forward-looking:Contents

~~• statements~~Our ~~regarding~~dependence ~~the~~on ~~Partnership’s~~third ~~overall~~parties ~~strategy~~ for ~~acquiring~~the ~~prospects,~~processing ~~including its~~and ~~intent~~transportation toof ~~co-invest~~crude ~~with major independent~~ oil and ~~companies~~natural ~~and~~gas ~~its~~may ~~intent~~adversely ~~to diversify~~affect the Partnership’s ~~investments;~~revenues and, consequently, the distribution of net cash flows to investor partners.

~~• statements estimating~~We ~~any~~rely ~~number~~on orthird ~~specific~~parties ~~type~~to orprocess ~~size~~and oftransport ~~prospects~~the crude oil and natural gas produced by the Partnership’s ~~may~~successful wells. In the event a ~~acquire~~third party upon whom we rely is unable to provide transportation or ~~size~~processing services, ofand ~~the~~another ~~interest~~third ~~the~~party is unavailable to provide such services, the Partnership may ~~acquire~~have to temporarily shut-in ~~such~~successful ~~prospects;~~wells, and revenues to the Partnership and distributions to investor partners related to those wells may be delayed.

• statements regarding the state of the oil and gas industry and the opportunity to profit within the oil and gas industry, competition, pricing, level of production, or the regulations that may affect the Partnership;

• statements regarding the plans and objectives of Reef for future operations, including, without limitation, the uses of Partnership funds and the size and nature of the costs the Partnership expects to incur and people and services the Partnership may employ;

• any statements using the words “anticipate,” “believe,” “estimate,” “expect” and similar such phrases or words; and

• any statements of other than historical fact.

Reef believes that it is important to communicate its future expectations to the partners. Forward-looking statements reflect the current view of management with respect to future events and are subject to numerous risks, uncertainties and assumptions, including, without limitation, the factors listed above in the section captioned “RISK FACTORS.” Although Reef believes that the expectations reflected in such forward-looking statements are reasonable, Reef can give no assurance that such expectations will prove to have been correct. Should any one or more of these or other risks or uncertainties materialize or should any underlying assumptions prove incorrect, actual results are likely to vary materially from those described herein. There can be no assurance that the projected results will occur, that these judgments or assumptions will prove correct or that unforeseen developments will not occur.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. PROPERTIES.

Drilling Activities and Productive Wells

The Partnership focused its drilling operations in Texas, Louisiana, and in U.S. coastal waters of the Gulf of Mexico. With the available Partnership capital, the Partnership purchased interests in ~~thirteen~~13 prospects. Seven prospects were in Louisiana, five were in Texas, and one was located in the Gulf of Mexico off of the Texas coast. The Partnership also purchased a royalty interest in a field in Louisiana with three productive wells, ~~two~~one of which ~~remain~~remains productive as of the date of this report. The Partnership drilled three wells in this field, ~~two~~ of ~~which~~ which two were unsuccessful and one ~~which~~was issuccessful ~~currently~~but ~~being~~has ~~completed.~~ceased production. The Partnership ~~will~~ ~~have~~drilled a13 ~~royalty~~wells ~~interest~~on ~~in addition to~~ its ~~working~~13 ~~interest~~prospects. inTwo ~~this~~developmental ~~well.~~and ~~The~~four ~~Partnership~~exploratory ~~drilled thirteen~~ wells onwere ~~these~~unsuccessful. ~~thirteen~~These ~~prospects. Unsuccessful~~six wells were ~~drilled~~located onin Galveston ~~three~~County, ofTexas, ~~the~~in ~~exploratory~~Jefferson, St. Charles, Plaquemines, and ~~two~~Acadia Parish, ofLouisiana, and in the ~~developmental~~ ~~prospects~~Gulf of Mexico. The Partnership completed six successful developmental wells on ~~four~~six ~~of the~~ developmental prospects, ~~three~~ of which ~~are~~two are currently productive. ~~Completion operations~~Four ~~were completed in March 2006 on one~~ of the ~~exploration~~developmental wells~~, and~~ ~~are~~have inceased ~~progress~~production and onhave ~~two~~or ofwill ~~the~~be ~~developmental~~plugged ~~prospects~~and abandoned. ~~Testing~~The ~~was suspended~~two oncurrent ~~one~~productive ofwells ~~the~~are located ~~exploratory prospects~~ in ~~September 2005~~Nueces asand ~~a result~~Live ofOak ~~Hurricane~~County, ~~Rita~~Texas. The ~~well~~four ~~remains~~wells ~~shut-~~that have ceased production are located in ~~because~~Jefferson, aAcadis, ~~third~~and ~~party operated~~Cameron ~~gas~~Parish, ~~plant~~Louisiana isand Live ~~still~~Oak ~~undergoing~~County, ~~repairs~~Texas. ~~Final~~The ~~testing~~Partnership ofalso ~~the~~completed ~~well~~one issuccessful exploratory ~~expected~~well ~~when~~in ~~the~~Galveston ~~plant~~County, ~~resumes~~Texas ~~operations~~that inremains ~~April 2006~~productive. ~~The~~Drilling ~~well~~operations were ~~has~~completed ~~no reserves~~during ~~classified~~2006 aswith ~~proved~~the atcapital ~~December 31,~~raised ~~2005~~by the Partnership.

~~The~~In ~~Partnership offering period extended from September~~August 212006, ~~2004 through December 2, 2004,~~the ~~during~~managing ~~which~~general ~~time~~partner ~~the~~agreed ~~Partnership sold 474.972 units~~ to ~~outside~~pay ~~investors.~~100% ~~Reef purchased~~of ~~25.028~~the ~~units.~~costs ~~Gross~~for ~~capital~~a ~~contributions~~working ~~totaled $9,924,916, and net~~interest ~~capital~~in ~~contributions~~a ~~available~~developmental ~~for~~well ~~Partnership~~in ~~drilling~~Terrebonne ~~and operations totaled $8~~Parish,~~500,000,~~ ~~after~~Louisiana. ~~payment~~Though ofthe ainitial well ~~15%~~was ~~management~~unsuccessful, ~~fee~~the towell ~~Reef~~was onre-entered ~~all~~and ~~units~~successfully ~~sold to~~side-tracked ~~investor~~beginning ~~partners~~in October 2007. The ~~Partnership~~well began ~~purchasing~~production ~~prospects~~operations ~~and~~in ~~commenced~~May 2008 ~~drilling~~and ~~activities~~is ~~during~~currently ~~the~~productive. ~~fourth~~The ~~quarter~~costs of ~~2004. Drilling activities continued throughout 2005 on~~ the ~~prospects~~original ~~purchased~~well byand the ~~Partnership. The~~successful ~~initial~~side-track, ~~productive~~totaling ~~well~~approximately ~~began~~$184,000, ~~operations in April 2005. Drilling operations~~ were ~~completed~~paid by ~~December 31,~~the ~~2005~~Partnership onand then ~~twelve~~reimbursed ofto the ~~prospects, and~~Partnership ~~these~~through ~~are~~additional ~~included~~capital incontributions to the ~~reserve~~Partnership ~~information~~made ~~presented~~by ~~below~~Reef. ~~The~~ No Partnership’s ~~final~~funds ~~well~~were ~~completed~~expended ~~drilling~~in ~~during~~connection with the ~~first~~original ~~quarter~~drilling ofand ~~2006. Completion~~successful ~~operations were finished in mid~~side-~~March,~~tracking ~~and~~of ~~first~~this well ~~production is expected in April 2006~~.

~~Five of the twelve wells~~The ~~drilled by the~~ Partnership ~~were~~has ~~impacted~~no byplans hurricanes which struck the Gulf Coast of the U.S. during August and September 2005. One of the Partnership’s productive wells incurred uninsured damages for which the Partnership’s share of repair costs totaled approximately $19,000. The well was shut-in for over four months due to ~~damages~~conduct toadditional ~~the~~drilling ~~well as well as damage to third party infrastructure necessary for the delivery and processing of production, and it did not resume production~~ operations ~~until January 2006. Testing and completion operations were delayed~~ on ~~four other drilled wells due~~any toPartnership ~~flooding~~prospect and, ~~subsequently,~~has ~~the~~no ~~availability~~plans of completion crews. One of these three wells was abandoned as unsuccessful, and completion operations are now in progress on two of the wells. First production from these two wells is expected during the second quarter of 2006. Testing operations were suspended on a fourth well, and remain suspended as a result of damages to aacquire ~~gas~~additional ~~plant in the area that remains inoperative~~prospects. ~~The plant is expected to reopen in April and testing will resume at that time. At December 31, 2005 the Partnership showed no proved reserves from this well.~~

Proved Crude Oil and Natural Gas Reserves

~~Net~~The Partnership used an independent petroleum engineer, Gleason Engineering, of Arlington, Texas, to prepare its December 31, 2008 and 2007 estimates of net proved crude oil and natural gas reserves. Net proved reserves atas of December 31, ~~2005,~~2006 aswere ~~prepared~~estimated by a petroleum engineer employed by RELP. The estimated net proved crude oil and natural gas reserves as of December 31, ~~are~~2008, 2007, and 2006 are summarized below. The quantities of proved crude oil and natural gas ~~reserves~~ reserves discussed in this section include only the amounts which wethe Partnership reasonably ~~expect~~expects to recover in the future from known oil and gas reservoirs under the current economic and operating conditions. Proved reserves include only quantities that wethe ~~expect~~Partnership expects to recover commercially using current prices, costs, existing regulatory practices, and technology. Therefore, any changes in future prices, costs, regulations, technology or other unforeseen factors could materially increase or decrease the proved reserve estimates.

estimates. The Partnership had no proved reserves at December 31, 2004. Reserve estimates are included for the twelve prospects for which drilling operations had been completed at December 31, 2005.

December 31, 2005		Oil (BBL)		Gas (MCF)
Net proved reserves		4,537		401,480

The standardized measure of discounted future net cash flows is computed by applying the December 31, 2005 oil (NYMEX) price of $61.04 per barrel and natural gas (Henry Hub) price of $10.08 per MMBtu, adjusted by property for energy content, quality and transportation costs, current costs and a discount factor of 10 percent to proved reserves. The standardized measure of discounted future net cash flows does not purport to present the fair value of our oil and natural gas reserves. The Partnership had no proved reserves at December 31, 2004, and therefore had no standardized measure of discounted future net cash flows at that date.

December 31, 2005
Standardized measure of discounted future net cash flows		$	2,524,655

At December 31, 2005, the net capitalized costs of oil and gas properties exceeded the standardized measure of discounted future net cash flows. The Partnership recorded property impairment expense of $1.24 million during the fourth quarter, and $5.17 million during the year ended December 31, 2005, in order to write off these excess capitalized costs.

ITEM 3. LEGAL PROCEEDINGS.

The Partnership is not, and has not been, a party to any legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

At December 31, 2005, the Partnership had one managing general partner, 127 limited partners, and 247 additional general partners. Reef holds a total of 25.028 limited partner units and the general and limited investor partners hold 125.00 general partner units and 349.972 limited partner units. No established trading market exists for the units.

Limited and additional general partnership interests are transferable, subject to certain restrictions contained in the Partnership Agreement; however, no assignee of a unit in the Partnership can become a substituted partner without the written consent of both the transferor and Reef.

The Partnership did not repurchase any units in 2005 and 2004 and has not adopted a unit repurchase program.

Use of Proceeds

In connection with the Registration Statement filed on form S-1 (No. 333-93399) and declared effective May 31, 2001, Reef filed a post-effective amendment to the Registration Statement on behalf of the Program on September 14, 2001. On January 10, 2002 Reef filed a final prospectus and commenced the offering of units in the

~~Program.~~Table ~~All sales~~ of Partnership units were made through the Program’s dealer-manager, Reef Securities, Inc., and a number of soliciting dealers. The Program filed a prospectus supplement describing Reef Global Energy IV, L.P. on September 21, 2004 and commenced offering units. Under the terms of the offering, a minimum of 50 Partnership units at a price of $20,000 per unit were required to be sold in order to form the Partnership. The Partnership offering consisted of 375 units of limited partner interest and 125 units of general partner interest. The offering period ended on December 2, 2004, at which time all 500 allowable units had been sold. Investor partners purchased 349.972 limited partner units and 125 general partner units. Reef purchased 25.028 limited partner units, equaling 5.01% of the total Partnership units sold. Total offering proceeds were $9,924,916.Contents

All units except those purchased by Reef paid a 15% management fee to Reef to pay for the Partnership organization and offering costs, including sales commissions. These costs totaled $1,424,916, leaving capital contributions of $8,500,000 available for Partnership oil & gas operations. As of December 31, 2005 the Partnership had expended $7.88 million on oil and gas operations. The Partnership will utilize the remaining $0.62 million during the first half of 2006.

	Oil (BBL)	Gas (MCF)
Net proved reserves as of December 31, 2006	1,185	65,178
Net proved reserves as of December 31, 2007	3,175	74,811
Net proved reserves as of December 31, 2008	5,781	83,173

The standardized measure of discounted future net cash flows as of December 31, 2008, 2007 and 2006 is computed by applying year-end prices, costs, and legislated tax rates and a discount factor of 10% to net proved reserves. The standardized measure of discounted future net cash flows does not purport to present the fair value of our crude oil and natural gas reserves.

Standardized measure of discounted future net cash flows as of December 31, 2006	$	139,220
Standardized measure of discounted future net cash flows as of December 31, 2007	$	356,210
Standardized measure of discounted future net cash flows as of December 31, 2008	$	339,744

During the years ended December 31, 2008, 2007 and 2006, the Partnership recorded property impairment costs totaling $0, $56,256, and $2,805,385 as a result of the net capitalized costs of oil and gas properties exceeding the standardized measure of discounted future net cash flows.

ITEM 3. LEGAL PROCEEDINGS.

The Partnership is not, and has not been, a party to any legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

As of December 31, 2008, the Partnership had one managing general partner, and 377 investor limited partners. Pursuant to the Partnership Agreement of the Partnership, all general partner units held by investor partners were converted into limited partner units during the 3rd quarter of 2008. Reef holds a total of 25.028 limited partner units and the investor partners hold 474.972 limited partner units. No established trading market exists for the units.

Cash which, in the sole judgment of the managing general partner, is not required to meet the Partnership’s obligations is distributed to the partners quarterly in accordance with the Partnership Agreement. Effective November 1, 2006, cash distributions are distributed 5.96% to the managing general partner (based upon the 1% interest not represented by units and the 4.96% interest represented by Partnership units) and 94.04% to investor partners

Investor limited partnership interests are transferable, subject to certain restrictions contained in the Partnership Agreement; however, no assignee of a unit in the Partnership can become a substituted partner without the written consent of both the transferor and Reef.

The Partnership did not repurchase any units in 2008, 2007 and 2006 and has not adopted a unit repurchase program.

Use of Proceeds

In connection with the Registration Statement filed on Form S-1 (No. 333-93399) and declared effective May 31, 2001, Reef filed a post-effective amendment to the Registration Statement on behalf of the Program on September

Table of Contents

14, 2001. On January 10, 2002 Reef filed a final prospectus and commenced the offering of units in the Program. All sales of Partnership units were made through the Program’s dealer-manager, Reef Securities, Inc., and a number of soliciting dealers. The Program filed a prospectus supplement describing the Partnership on September 21, 2004 and commenced offering units. Under the terms of the offering, a minimum of 50 Partnership units at a price of $20,000 per unit were required to be sold in order to form the Partnership. Upon meeting this requirement, the Partnership was formed on November 10, 2004. The Partnership offering consisted of 375 units of limited partner interest and 125 units of general partner interest. The offering period ended on December 2, 2004, at which time all 500 allowable units had been sold. Investor partners purchased 349.972 limited partner units and 125 general partner units. Reef purchased 25.028 limited partner units, equaling 5.01% of the total Partnership units sold. Total offering proceeds were $9,924,916. Reef also contributed 1% of all leasehold, drilling, and completion costs as incurred, and reimbursed the Partnership 100% of the costs of drilling an unsuccessful development well and 100% of the costs of drilling and completing a successful sidetrack to the unsuccessful developmental well in Louisiana. Reef paid the Partnership $264,691 in connection with these obligations. Reef also retained interest income earned by the Partnership totaling $68,585 to be used during the drilling phase of operations.

All units except those purchased by Reef paid a 15% management fee to Reef to pay for Partnership organization and offering costs, including sales commissions. These costs totaled $1,424,916, leaving capital contributions of $8,833,276 available for Partnership oil and gas operations. As of December 31, 2008, the Partnership had expended $8,640,947 on property acquisitions and $112,843 on general and administrative expenses. The remainder of $79,486 has been retained for plugging and abandonment costs of productive wells. Drilling operations have been completed on the 13 prospects owned by the Partnership, and the Partnership has no plans to conduct further development operations on any Partnership prospect.

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth selected financial data. The selected financial data presented below has been derived from the audited financial statements of ~~the~~ the Partnership.

	Year ended December 31, 2005			Period from Inception (November 10, 2004) to December 31 2004
	December 31,			December 31,			December 31,			December 31,			Period from Inception (November 10, 2004) to December 31,
Oil and gas sales income	$	113,465		—
	2008			2007			2006			2005			2004
Interest income	54,820			13,765
Financial Data
Costs and expenses	(5,554,339		)	54,891
Oil and gas sales revenue	$	315,781		$	231,283		$	311,888		$	113,465		$	—
Partnership net loss	(5,386,054		)	(41,126	)
Interest income	762			1,155			7,175			54,820			13,765
Allocation of net loss:
Costs and expenses	(250,388		)	(307,424		)	(3,260,326		)	(5,554,339		)	(54,891		)
Managing general partner units	(325,236		)	(756	)
Partnership net income (loss)	66,155			(74,986		)	(2,941,263		)	(5,386,054		)	(41,126		)
General partner units	(1,331,873		)	(10,624	)
Allocation of net income (loss):
Limited partner units	(3,728,945		)	(29,746	)
Managing general partner	(45,797		)	(28,494		)	(161,672		)	(325,236		)	(756		)
Net loss per managing partner unit	(12,994.92		)	(30.21	)
General partner units	15,302			(12,235		)	(731,514		)	(1,331,873		)	(10,624		)
Net loss per general partner unit	(10,654.98		)	(85.00	)
Limited partner units	96,650			(34,256		)	(2,048,077		)	(3,728,945		)	(29,746		)
Net loss per limited partner unit	(10,654.98		)	(85.00	)
Net loss per managing general partner unit	(1,829.83		)	(1,138.48		)	(6,459.63		)	(12,994.92		)	(30.21		)
Total assets	3,482,185			9,163,596
Net income (loss) per general partner unit	122.41			(97.88		)	(5,852.12		)	(10,654.98		)	(85.00		)
Distributions to managing general partner	11,066			—
Net income (loss) per limited partner unit	235.70			(97.88		)	(5,852.12		)	(10,654.98		)	(85.00		)
Distributions to investor partners	60,534			—
Distributions per unit	$	127.45

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion will assist you in understanding the Partnership’s financial position, liquidity, and results of operations. This information should be read in conjunction with the audited financial statements and notes to financial statements contained herein. The discussion contains historical and forward-looking information.

For a discussion of risk factors that could impact the Partnership’s financial results, please see Item IA of this Report on Form 10-K.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and use assumptions that can affect the reporting of assets, liabilities, equity, revenues, and expenses. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We are also required to select among alternative acceptable accounting policies. See Note 2 to the financial statements for a complete list of significant accounting policies.

Oil and Gas Properties

The Partnership follows the full cost method of accounting for crude oil and natural gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized crude oil and natural gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method using proved reserves. Proved gas reserves are converted to equivalent barrels at a rate of 6 Mcf to 1 Bbl. Net capitalized costs of crude oil and natural gas properties, as adjusted for asset retirement obligations, are limited to the lower of unamortized cost or the cost ceiling, defined as the sum of the present value of estimated future net revenues from proved reserves based on un-escalated prices discounted at 10 percent, plus the cost of properties not being amortized, if any, plus the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any. Excess costs are charged to property impairment expense. No gain or loss is recognized upon sale or disposition of crude oil and natural gas properties, except in unusual circumstances. During the year ended December 31, 2005, the Partnership recognized property impairment expense of $5,173,969. The Partnership had no property impairment expense for the period from inception (November 10, 2004) to December 31, 2004.

The estimate of proved oil and gas reserves used to determine property impairment expense, and also utilized in the Partnership’s disclosures of supplemental information regarding oil and gas producing activities, including the standardized measure of discounted cash flows, is prepared by a petroleum engineer employed by RELP utilizing the period end prices and costs as promulgated by the Securities and Exchange Commission (SEC). Reserve engineering is a subjective and inexact process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Accordingly, reserve estimates may be subject to upward or downward adjustments. Actual production, revenues and expenditures with respect to reserves will likely vary from estimates, and such variances could be material.

The determination of depreciation, depletion and amortization expense recognized in the financial statements is also dependent upon the estimates of proved oil and gas reserves. The Partnership utilizes a petroleum engineer employed by RELP to prepare an estimate of proved reserves, utilizing the period end prices and costs as promulgated by the SEC, which is used to determine depreciation, depletion and amortization for financial statement purposes. Reserve engineering is a subjective and inexact process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Accordingly, reserve estimates are often different from the quantities of oil and gas ultimately recovered. Depreciation, depletion and amortization expense is computed using the units-of-production method based upon this estimate of proved reserves. During the year ended December 31, 2005, the Partnership had depreciation, depletion and amortization expense totaling $230,123. During the period from inception (November 10, 2004) to December 31, 2004, the Partnership had no production of proved reserves and therefore had no depreciation, depletion, and amortization expense.

The Partnership follows Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations,” for all productive oil and gas wells drilled by the Partnership. This statement requires the

~~Partnership~~Table ~~to estimate the fair value~~ of asset retirement obligations (dismantlement and abandonment of oil and gas wells and site restoration) in the period in which the asset is placed in service. The liability recognized is offset by a corresponding increase in the carrying value of the asset. Each period the liability is accreted to its net present value with a corresponding charge to accretion expense, and the additional asset cost is amortized using the units-of-production method. Upon settlement of the obligation a gain or loss is recognized to the extent actual charges are less than or exceed the liability recorded. During the year ended December 31, 2005, the Partnership recognized $85,037 of asset retirement obligation and additional capitalized cost in connection with successful wells drilled by the Partnership. At December 31, 2004 the Partnership had no successful wells and therefore recognized no asset retirement obligation for the period from inception (November 10, 2004) to December 31, 2004.Contents

Recognition of Revenue

	December 31,		December 31,		December 31,		December 31,		Period from Inception (November 10, 2004) to December 31,
	2008		2007		2006		2005		2004
Financial Data
Total assets	352,067		228,326		304,718		3,482,185		9,163,596
Distributions to managing general partner	7,206		2,170		12,952		11,066		—
Distributions to investor partners	113,794		34,280		89,298		60,534		—
Distributions per general partner unit	81.18		72.17		188.01		127.45		—
Distributions per limited partner unit	239.58		72.17		188.01		127.45		—
Distributions per managing general partner unit	287.92		86.70		517.50		442.14		—

Operating Data
Annual production:
Gas (MCF)	19,016		22,447		32,636		11,019		—
Oil (BBL)	1,305		795		1,014		212		—

Average sales price:
Gas (per MCF)	$	9.88	$	7.77	$	7.55	$	9.20	$	—
Oil (per BBL)	$	97.98	$	71.45	$	64.58	$	57.28	$	—

~~The~~ITEM ~~Partnership has entered into sales contracts for disposition of its share of oil and gas production from productive wells~~7. ~~Revenue~~MANAGEMENT’S isDISCUSSION ~~recognized~~AND ~~based~~ANALYSIS ~~upon~~OF ~~the~~FINANCIAL ~~metered volumes~~CONDITION ~~delivered~~AND toRESULTS ~~those~~OF ~~purchasers each month~~OPERATIONS.

~~Gas imbalances sometimes~~The ~~occur~~following ~~when~~discussion ~~certain~~will ~~working~~assist ~~interest~~you ~~parties~~in dounderstanding ~~not~~the ~~take~~Partnership’s financial ~~their~~position, ~~entitled~~liquidity, ~~share~~and results of ~~gas~~ ~~production~~operations. The ~~Partnership will utilize the sales method of accounting for~~information ~~recording~~should ~~gas~~be ~~imbalances.~~read ~~Under~~in ~~this~~conjunction ~~method,~~with the ~~Partnership~~audited ~~will~~financial ~~record~~statements ~~as revenue~~and ~~all gas delivered for its account. Any significant over or under~~notes ~~balanced~~to ~~gas positions will be disclosed in the~~ financial statements. Ascontained ofherein. ~~December 31, 2005,~~The ~~the~~discussion ~~Partnership~~contains ~~had~~historical and noforward-looking ~~gas imbalance positions~~information.

~~Liquidity~~For a ~~and~~discussion ~~Capital~~of ~~Resources~~risk factors that could impact the Partnership’s financial results, please see Item 1A of this Annual Report.

~~The Partnership was~~Critical ~~initially~~Accounting funded with gross capital contributions of $9,924,416. Reef contributed a total of $425,475, and investor partners purchased 125 general partner units for $2,500,000 and 349.972 limited partner units for $6,999,441. Syndication and organization costs of $1,424,916 were incurred leaving available cash of $8,500,000 for Partnership activities. The Partnership was formed on November 10, 2004 and the last partner was admitted to the Partnership on December 2, 2004, which was the date the offering of the Partnership units ended. As of December 31, 2005, the Partnership has also received $63,893 in additional capital contributions from Reef representing its obligation to pay for 1% of all leasehold, drilling, and completion costs, and has received $68,585 in interest income from the investment of partner capital contributions, resulting in total funds available of approximately $8.63 million. These funds are the sole funds available to the Partnership for prospect acquisition, drilling and completion of wells, and operational expenses during the drilling phase of operations.Policies

The ~~Partnership~~preparation ~~purchased interests~~of financial statements in conformity ~~thirteen~~with ~~prospects~~accounting ~~upon~~principles ~~which~~generally ~~thirteen~~accepted ~~wells~~in ~~have~~the ~~been~~United ~~drilled.~~States ~~The~~of ~~Partnership~~America ~~expects~~requires us to ~~fully~~make ~~expend~~estimates ~~its~~and ~~available~~assumptions ~~funds~~that oncan ~~these~~affect ~~thirteen~~the ~~prospects~~reporting ~~prior~~of toassets, ~~June 30~~liabilities, ~~2006. As of December 31~~equity, ~~2005 the Partnership has expended approximately $7.87 million of these funds~~revenues, and ~~has an additional $0~~expenses.27 ~~million~~We ofbase ~~property cost in accounts payable. The Partnership~~our ~~had~~estimates ~~expended~~on ~~approximately~~historical ~~$3.08~~experience ~~million~~and invarious ~~connection~~other ~~with~~assumptions ~~the~~that ~~five~~are ~~unsuccessful~~believed ~~wells~~to ~~drilled,~~be ~~approximately~~reasonable ~~$2.11~~under ~~million on~~ the ~~four wells completed as productive wells in 2005, $0~~circumstances.52 ~~million~~Actual onresults ~~the~~may ~~purchase of a~~differ ~~royalty~~from ~~interest~~these inestimates aunder ~~field~~different inassumptions ~~Louisiana,~~or ~~approximately $1~~conditions.15 ~~million~~We onare ~~the~~also ~~three~~required ~~wells~~ to beselect ~~completed~~among ~~during~~alternative ~~2006,~~acceptable ~~approximately~~accounting $0policies.90 ~~million~~See onNote ~~the~~2 ~~well~~to ~~where testing is currently suspended, and $0.11 million in general and administrative expenses. Drilling on~~ the ~~final~~financial ~~prospect~~statements ~~purchased~~for bya ~~the Partnership~~complete ~~was~~list ~~completed during the first quarter~~ of ~~2006,~~significant ~~and~~accounting ~~completions operations on this well and two other wells are expected to be completed before June 30, 2006~~policies.

~~The~~Oil ~~Partnership had working capital of $499,884 at December 31, 2005, from which to pay additional drilling~~ and ~~operations~~Gas ~~costs.~~Properties

The Partnership ~~Agreement allows~~follows ~~for~~ the ~~assessment~~full cost method of upaccounting tofor ~~$20~~oil and gas properties. Under this method,~~000~~ ~~per~~all ~~unit~~direct ~~for~~costs ~~subsequent~~and ~~operations~~certain ~~deemed~~indirect costs ~~necessary~~associated towith ~~fully~~acquisition ~~develop~~of ~~any~~properties ofand ~~the~~successful ~~initial~~as ~~Partnership~~well ~~prospects~~as unsuccessful exploration and development activities are capitalized. ~~The~~Depreciation, ~~Partnership~~depletion, ~~currently~~and ~~has~~amortization noof ~~plans~~capitalized ~~for~~oil ~~subsequent~~and ~~operations~~gas orproperties ~~additional~~and estimated ~~partner~~future ~~assessments~~development costs, excluding unproved properties, are based on the unit-of-production method using estimated proved reserves. For these purposes, proved natural gas reserves are converted

~~Results of Operations~~13

~~The initial Partnership~~Table ~~well~~of ~~began production operations in April 2005. During the year ended December 31,~~Contents

13to equivalent barrels of crude oil at a rate of 6 Mcf to 1 Bbl. Net capitalized costs of oil and gas properties, as adjusted for asset retirement obligations, are limited to the lower of unamortized cost or the cost ceiling, defined as the sum of the present value of estimated future net revenues from proved reserves based on prices in effect at the end of the period held constant and discounted at 10 percent, plus the lower of cost or estimated fair value of unproved properties, if any. Pursuant to full cost accounting rules, the Partnership performs a ceiling test quarterly as of the balance sheet date on its proved oil and gas properties. Excess capitalized costs are charged to property impairment expense. No gain or loss is recognized upon sale or disposition of oil and gas properties, unless such a sale would significantly alter the rate of depletion and amortization. During the years ended December 31, 2008, 2007 and 2006, the Partnership recognized property impairment expense of proved properties totaling $0, $56,256, and $2,805,385, respectively.

~~2005~~The estimate of proved crude oil and natural gas reserves used to determine property impairment expense, and also utilized in the Partnership’s ~~recorded~~disclosures aof ~~net~~supplemental ~~loss~~information ofregarding ~~$5,386,054,~~oil ~~compared~~and togas aproducing activities, ~~net~~including ~~loss~~the standardized measure of ~~$41,126~~discounted ~~for~~cash ~~the~~flows, was ~~period~~prepared ~~from~~by ~~inception~~an ~~(November~~independent petroleum engineer at December 1031, ~~2004)~~2008 toand 2007, and by a petroleum engineer employed by RELP at December 31, ~~2004.~~2006, ~~The Partnership~~utilizing ~~had~~the noperiod ~~substantive~~end ~~oil~~prices and costs ~~gas~~as ~~operations~~promulgated ~~during~~by the ~~period~~SEC. ~~from~~Reserve engineering is a subjective and ~~inception~~inexact ~~(November 10,~~process ~~2004)~~of toestimating ~~December 31,~~underground ~~2004~~accumulations ~~that~~of ~~would~~crude ~~provide~~oil and natural ~~any~~gas ~~meaningful~~that ~~comparisons~~cannot ~~between~~be ~~2005~~measured in an exact manner, and ~~2004~~is ~~operations.~~based ~~The~~upon ~~$41~~assumptions that may vary considerably from actual results. Accordingly,~~126~~ ~~loss~~reserve estimates inmay ~~2004~~be ~~was~~subject ~~incurred~~to ~~primarily~~upward asor adownward ~~result~~adjustments. ofActual ~~$50~~production,~~000~~ inrevenues ~~organizational~~and ~~costs~~expenditures with ~~incurred~~respect into ~~connection~~reserves ~~with~~will ~~the~~likely ~~formation~~vary offrom ~~the~~estimates, ~~Partnership~~and ~~which~~such ~~were~~variances ~~expensed~~could be material.

The ~~loss~~determination ~~incurred~~of ~~for 2005~~depreciation, ~~was~~depletion ~~primarily~~and ~~due~~amortization expense torecognized in the ~~fact~~financial ~~that~~statements ~~five~~is ofalso ~~the~~dependent ~~wells~~upon ~~drilled by~~ the ~~Partnership,~~estimates ~~at a cost~~ of ~~$3.08 million,~~ proved tocrude beoil ~~unsuccessful~~ and ~~were abandoned.~~natural Ingas ~~addition,~~reserves ~~funds spent to drill all other wells,~~ and tois ~~purchase~~computed using ~~reserves~~the ~~exceeded~~units-of-production ~~the~~method ~~year~~based ~~end~~upon ~~standardized~~this ~~measure~~estimate of ~~discounted~~proved ~~future~~reserves. ~~net~~During the ~~cash~~years ~~flows~~ended ~~from~~December 31, ~~those~~2008, ~~discovered~~2007 and ~~purchased~~2006, ~~reserves~~the byPartnership ~~an additional $2.09~~had ~~million~~depreciation, ~~resulting~~depletion, inand ~~total~~amortization ~~property~~expense ~~impairment~~totaling of$59,234, $~~5.17~~62,949, and ~~million~~$247,338, respectively.

The Partnership ~~operations during~~accounts ~~2005~~for ~~were~~its ~~significantly~~asset ~~impacted~~retirement byobligations ~~hurricanes~~in ~~which~~accordance ~~struck~~with Statement ~~the~~of ~~Gulf Coast~~Financial ~~during~~Accounting ~~August~~Standards (“SFAS”) No. ~~and~~143, ~~September~~“Accounting for Asset Retirement Obligations” (“SFAS No. ~~2005~~143”). ~~Two~~Asset ~~Partnership~~retirement ~~wells had~~costs ~~completion~~and ~~operations~~liabilities ~~suspended~~associated ~~for~~with ~~several~~future ~~months~~site restoration and ~~will~~abandonment ~~not~~of long-lived beassets ~~productive until~~are ~~sometime~~initially ~~during~~measured ~~the~~at ~~2nd~~fair ~~quarter~~value ofwhich ~~2006.~~approximates ~~Another~~the cost ~~partnership~~a ~~well~~third ~~which~~party ~~began operations~~would incur in ~~August was~~performing ~~subsequently~~the ~~shut-in~~tasks ~~and~~necessary ~~damaged~~to byretire ~~Hurricane~~such ~~Rita~~assets. inThe ~~September,~~fair ~~and~~value ~~did~~is ~~not~~recognized ~~produce~~in ~~during~~ the ~~fourth~~financial ~~quarter~~statements ofas ~~2005.~~the ~~The~~present ~~final~~value ~~Partnership~~of ~~well~~expected ~~which~~future ~~completed~~cash ~~drilling~~expenditures ~~operations~~for ~~during~~site ~~the~~restoration ~~first~~and ~~quarter~~abandonment. ofSubsequent ~~2006~~to isthe ~~still~~initial ~~unable~~measurement, tothe ~~produce~~effect ~~because~~of athe ~~gas~~passage of ~~plant~~time inon the ~~area~~liability ~~has still~~for ~~not~~the ~~reopened~~net asasset aretirement ~~result~~obligation (accretion expense) and the amortization of ~~hurricane~~the ~~related~~asset ~~damages.~~retirement ~~The~~cost ~~Partnership~~are recognized in ~~believes~~the itresults ~~will~~of beoperations. ~~May or~~During ~~June~~the years ended December 31, 2008, 2007, and 2006, ~~before~~the ~~all~~Partnership ~~productive~~recognized ~~wells~~$410, ~~are~~$0, ~~selling~~and ~~oil~~$1,173 of asset retirement obligations and ~~gas~~additional ~~simultaneously~~capitalized cost in connection with successful wells drilled by the Partnership.

~~Off-Balance~~Recognition of ~~Sheet Arrangements~~Revenue

The Partnership ~~does~~has ~~not~~entered ~~participate~~into insales contracts ~~transactions~~for ~~that~~disposition ~~generate~~of ~~relationships with~~its ~~unconsolidated~~share ~~entities~~of orcrude ~~financial~~oil ~~partnerships,~~and ~~such~~natural asgas ~~entities often~~production ~~referred~~from toproductive aswells. ~~structure~~Revenue ~~finance~~is orrecognized ~~special~~based ~~purpose~~upon ~~entities~~the ~~(SPEs),~~metered ~~which~~volumes ~~would~~delivered ~~have~~to ~~been~~those ~~established~~purchasers ~~for~~each ~~the~~month. ~~purpose~~Any ofsignificant ~~facilitating~~over ~~off-balance~~or ~~sheet~~under ~~arrangements~~balanced orgas ~~other~~positions ~~contractually~~are ~~narrow~~disclosed orin ~~limited~~the ~~purposes~~financial statements. As of December 31, ~~2005~~2008, ~~the~~2007 ~~Partnership~~and ~~was~~2006, ~~not~~the ~~involved~~Partnership inhad ~~any~~no ~~unconsolidated~~material ~~SPE~~gas ~~transactions~~imbalance positions.

~~Contractual Obligations~~New ~~Table~~Accounting Pronouncements

~~The Partnership~~Modernization ~~has~~of noOil ~~obligations~~and ~~under non-cancelable agreements at December 31,~~Gas ~~2005.~~Reporting

~~For~~In aJanuary 2009, ~~discussion~~the SEC ofissued ~~risk~~revisions ~~factors~~to the oil and gas reporting disclosures, “Modernization ~~that~~of ~~could~~Oil ~~impact~~and Gas Reporting; Final Rule” (“the ~~Partnership’s~~Final ~~financial~~Rule”). ~~results~~In addition to changing the definition and disclosure requirements for oil and gas reserves, the ~~please~~Final ~~see~~Rule changes ~~Item~~the IArequirements for determining quantities of oil ~~this~~and ~~Report~~gas onreserves. ~~Form~~The Final Rule ~~10-K~~also changes certain accounting requirements under the full cost method of accounting for oil and gas activities. The amendments are designed to modernize the requirements for the determination of oil and gas reserves, aligning them with current practices and updating them for changes in technology. The Final Rule is

~~ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~14

~~Interest Rate~~Table ~~Risk~~of Contents

~~The Partnership~~effective ~~currently~~for ~~has~~annual ~~no borrowings. The partnership agreement prohibits~~reports ~~bank~~on ~~borrowings~~Form 10-K ~~during~~for ~~the~~fiscal ~~Partnership’s~~years ~~drilling~~ending ~~phase~~on ~~of operations. The Partnership is permitted to borrow monies~~ or ~~assess~~after ~~partners~~December 31, ~~for developmental~~2009. ~~activities~~The onPartnership ~~the prospects it~~ has ~~drilled,~~not ~~however,~~yet atdetermined ~~this time~~ the ~~Partnership~~ ~~has~~impact, noif ~~plans~~any, ~~to conduct additional activities~~ on ~~any~~the ~~of these~~financial ~~prospects~~statements. ~~The Partnership is subject to interest rate risk solely to the extent that changes in interest rates affect general economic conditions.~~

~~Commodity~~The Hierarchy of Generally ~~Price~~Accepted ~~Risk~~Accounting Principles

~~The~~In ~~Partnership~~May 2008, ~~has~~the ~~not~~FASB ~~and~~issued ~~does~~SFAS ~~not~~No. 162, ~~expect~~“The toHierarchy ~~engage~~of inGenerally ~~commodity~~Accepted ~~futures trading or hedging~~Accounting ~~activities~~Principles” or(“SFAS ~~enter~~162”). ~~into~~SFAS ~~derivative~~162 ~~financial~~identifies ~~instrument~~the ~~transactions~~sources for ~~trading~~ ~~or other speculative purposes. The Partnership sells a vast majority of~~accounting ~~its~~principles ~~production~~and ~~from~~the ~~successful~~framework ~~oil~~for ~~and~~selecting ~~gas~~the ~~wells~~principles ~~on a month-~~to~~-month~~ ~~basis~~be atused in ~~current~~preparing ~~spot~~financial ~~market~~statements ~~prices.~~of ~~Accordingly,~~nongovernmental ~~the~~entities ~~Partnership~~that isare ~~at risk for the~~presented ~~volatility~~ in ~~commodity~~conformity ~~prices~~with ~~inherent~~generally inaccepted ~~the~~accounting ~~oil~~principles ~~and~~in ~~gas industry, and~~ the United ~~level~~States. ofThis ~~commodity~~Statement ~~prices~~became ~~has~~effective ain ~~significant impact on the Partnership’s results of operations~~November 2008.

14Disclosures About Derivative Instruments and Hedging Activities

~~ITEM~~In 8March 2008, the FASB issued SFAS No. 161, ~~FINANCIAL~~“Disclosures ~~STATEMENTS~~about ~~AND~~Derivative ~~SUPPLEMENTARY~~Instruments ~~DATA~~and Hedging Activities” (“SFAS 161”). SFAS 161 requires entities that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit-risk-related contingent features contained within derivatives. The Partnership does not utilize derivative instruments; therefore, the Partnership does not expect this pronouncement to have any impact on the Partnership’s results of operations, cash flows or financial position.

~~The~~Non-controlling ~~Partnership’s financial~~Interests ~~statements and supplementary data are set forth~~ in ~~a separate section to~~ ~~this~~Consolidated ~~Report,~~Financial ~~beginning on page F-1.~~Statements

~~ITEM~~In 9December 2007, the FASB issued SFAS No. 160, ~~CHANGES~~“Noncontrolling INInterests ~~AND~~in ~~DISAGREEMENTS~~Consolidated Financial ~~WITH~~Statements, ~~ACCOUNTANTS~~an ONamendment ~~ACCOUNTING~~of ~~AND~~Accounting ~~FINANCIAL~~Research ~~DISCLOSURE~~Bulletin No. 51” (“SFAS 160”), which improves the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The Partnership does not own any subsidiaries, and does not expect this pronouncement to have any impact on the Partnership’s results of operations, cash flows or financial position.

~~None~~Business Combinations

~~ITEM~~In 9ADecember 2007, the FASB issued SFAS No. 141 ~~CONTROLS~~(revised ~~AND~~2007), ~~PROCEDURES~~“Business Combinations” (“SFAS 141R”), which replaces SFAS No. 141, “Business Combinations” (“SFAS 141”). SFAS 141R retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations. The Partnership has no business combinations in progress or, at this time, in future plans. The Partnership does not expect this pronouncement to have any impact on the Partnership’s results of operations, cash flows or financial position.

~~Evaluation~~Accounting Standard Fair Value offor ~~Disclosure~~Financial ~~Controls~~Assets and ~~Procedures~~Financial Liabilities

AsIn ~~the Managing General Partner of the Partnership~~February 2007, ~~Reef maintains a system of controls and procedures designed to provide reasonable assurance as to~~ the ~~reliability of the financial statements~~ ~~and~~FASB ~~other~~issued ~~disclosures~~SFAS ~~included in this report, as well as to safeguard assets from unauthorized use or disposition~~No. ~~At December~~ 31159, ~~2005,~~“The ~~Reef’s~~Fair ~~Chief Executive~~Value ~~Officer~~Option ~~and~~for ~~Chief~~ Financial ~~Officer~~Assets ~~have evaluated the effectiveness of the design~~ and ~~operation of the Partnership’s disclosure controls and~~ ~~procedures~~Financial ~~with~~Liabilities” ~~the~~(“SFAS ~~assistance and participation of other members of management~~159”). ~~Based~~SFAS ~~upon~~159 ~~that~~allows ~~evaluation,~~entities ~~Reef’s~~the ~~Chief~~option ~~Executive Officer and~~to ~~Chief~~measure ~~Financial~~eligible ~~Officer~~financial ~~concluded~~instruments ~~that~~at ~~our~~fair ~~disclosure~~value ~~controls~~as ~~and~~of ~~procedures~~specified ~~were effective~~dates. ~~for gathering, analyzing and disclosing the information the~~The Partnership isdid ~~required~~not toelect ~~disclose~~fair invalue ~~the~~as ~~reports~~an italternative ~~files~~as provided under ~~the~~SFAS 159 ~~Securities~~for ~~Exchange~~any ~~Act~~ of ~~1934~~its ~~within~~financial ~~the~~assets ~~time~~and ~~periods~~liabilities ~~specified~~that inare ~~the~~not ~~SEC’s~~currently ~~rules and~~measured ~~forms~~at fair value.

~~Changes in~~Liquidity ~~Internal~~and ~~Controls~~Capital Resources

~~There~~The Partnership ~~have~~was ~~been~~funded nowith ~~significant~~initial capital contributions totaling $9,924,916. ~~changes~~Investor inpartners purchased 125 general partner units and 349.972 limited partner units for $9,499,441. Reef’s ~~internal~~purchased ~~controls~~25.028 ~~over~~units, ~~financial~~or ~~reporting~~5.01% ~~that~~of ~~occurred~~the ~~during~~total ~~our~~units ~~last~~sold, ~~fiscal~~for ~~quarter~~$425,475. ~~that~~As ~~have~~of ~~materially~~December 31, ~~affected~~2008, orReef ~~are~~has ~~reasonably~~also ~~likely~~contributed $264,691 in connection with its obligation to ~~materially~~pay ~~affect~~1% ~~our~~of ~~internal~~all ~~control~~leasehold, drilling, ~~over~~and ~~financial~~completion ~~reporting~~costs, and to reimburse the Partnership for 100% of the drilling costs of an unsuccessful developmental well in Louisiana, and 100% of the drilling and completion costs for a successful sidetrack of this developmental well.. The Partnership also retained $68,585 of interest income

~~ITEM 9B. OTHER INFORMATION.~~15

~~None.~~Table of Contents

~~PART III~~earned for use during the drilling phase of operations. Organization and offering costs totaled $1,424,916, leaving capital contributions of $8,833,276 available for Partnership activities.

~~ITEM~~The Partnership 10Agreement does not allow the Partnership to borrow funds or issue partner assessments during the drilling phase of its operations. ~~DIRECTORS~~Therefore, ~~AND~~the $8,833,276 ~~EXECUTIVE~~was ~~OFFICERS~~the OFtotal ~~THE~~amount ~~REGISTRANT~~available to the Partnership for drilling and administrative costs during the drilling phase of its operations. As of December 31, 2008, drilling operations had been completed on the 13 wells drilled by the Partnership, and also on the developmental well and sidetrack to the developmental well for which Reef is reimbursing 100% of drilling and completion costs to the Partnership. The Partnership expended $8,640,947 on prospect and property acquisitions, drilling and completion costs and $112,843 on general and administrative expenses during the drilling phase of operations. The Partnership retained $79,486 for plugging and abandonment costs of productive wells.

Please see Item 1A of this Annual Report for a list of risk factors that could impact the Partnership. The Partnership ~~has~~distributes noto investors on a quarterly basis ~~directors~~the ornet ~~executive~~cash ~~officers;~~flow itfrom isinterest ~~managed~~income byand ~~Reef~~crude ~~Oil &~~oil ~~Gas~~and natural gas sales ~~Partners~~revenues from successful wells, Lless operating, general and administrative, and other costs.P These funds are not available for drilling activities.

~~Reef~~The Partnership ~~Oil &~~Agreement ~~Gas~~allows ~~Partners~~the Partnership to borrow funds or issue assessments of up to $20,000 per unit to the investor partners for subsequent Loperations deemed necessary to fully develop any of the initial Partnership prospects.P. ~~and~~The ~~Reef~~Partnership ~~Exploration,~~has Lno plans for subsequent operations on any of its prospects.P.

The Partnership ~~Manager~~has working capital of $89,217 ~~officers~~at ~~and~~December 31, 2008. ~~key~~Subsequent ~~personnel~~to ofexpending the ~~managing~~initial ~~general~~available ~~partner,~~Partnership ~~their~~capital ~~ages,~~contributions on ~~current~~prospect ~~positions with~~and ~~the~~property ~~managing~~acquisitions ~~general~~and ~~partner~~drilling and~~/or~~ ~~RELP~~completion costs of Partnership wells, ~~and~~the ~~certain~~Partnership ~~additional~~has minimal working capital, consisting ~~information~~primarily ~~are~~of ~~set~~cash ~~forth~~flow ~~below:~~from productive properties utilized to pay cash distributions to investors.

Name	Age	Positions and Offices Held
Michael J. Mauceli	48	Manager of Reef Oil & Gas Partners, GP, LLC; Chief Executive Officer of RELP
Kellam Colquitt	58	Chief Operating Officer of RELP
H. Walt Dunagin	48	Executive Vice President—Land Manager of RELP
Laura S. Klein	46	Drilling Engineering Manager of RELP
John M. Dees	52	Vice President—Operations and Engineering of RELP
Daniel C. Sibley	54	Chief Financial Officer of Reef and RELP
David M. Tierney	53	Controller—Reef Global Energy Ventures

During 2006, the managing general partner contributed a working interest in a well to the Partnership and agreed to pay all costs associated with the drilling and equipping of the well. The well is located in Terrebonne Parish, Louisiana. The initial drilling operations were completed in May 2007 and the well was unsuccessful, however, after reviewing the well logs and other geologic data, the wellbore was re-entered during the fourth quarter of 2007 and successfully sidetracked. Sidetrack drilling operations were completed during February 2008 and the well began production operations in May 2008. A workover of an existing Partnership well that was a significant producing well during 2006 but was shut-in for most of 2007 as a result of high water volumes was performed in February 2008 in an attempt to open a new productive zone. The workover was unsuccessful, and the well was plugged and abandoned. A third partnership well was successfully re-completed in a new productive zone in June 2007, and production volumes from the well were increased. The success of the two projects above, combined with significant increases in the average prices received for crude oil and natural gas during 2008, enabled the Partnership to operate with positive cash flow levels. During the latter half of 2008, prices began moving downward to a level which reached a low point during the first quarter of 2009. While management does not expect to see a return to the average pricing levels received during 2008, there has already been positive movement of prices from the low point reached during the first quarter of 2009. Management believes that 2009 sales volumes will be equal to or exceed 2008 volumes as a result of the successful developmental well which began production during May 2008. The ability of the Partnership to generate positive cash flows during 2009 will primarily depend upon crude oil and natural gas pricing. The Partnership is not expected to generate positive cash flows during the first quarter of 2009. The managing general partner is considering several options related to the Partnership, including the possible sale of marketable assets and dissolution of the Partnership, as a result of the recurring losses incurred over the past several years, the erosion of partnership equity, and the lack of significant cash flows from operations.

15Results of Operations

~~Michael J. Mauceli is the Manager and a member~~Comparison of ~~Reef Oil & Gas Partners, GP, LLC, which is~~ the ~~general~~Year ~~partner~~Ended ~~of Reef, as well as the Chief Executive Officer of RELP. Mr.~~December ~~Mauceli has been the principal executive officer of Reef since its formation in February 1999. He has served as the Chief Executive Officer of RELP since January 2~~31, ~~2006 and~~2008 ~~has~~to ~~served in~~ the ~~same position~~Year ~~with~~Ended ~~its predecessor entity, OREI, since 1987. Mr.~~December Mauceli attended the University of Mississippi where he majored in business management and marketing as well as the University of Houston where he received his Commercial Real Estate License. He entered the oil and gas business in 1976 when he joined Tenneco Oil & Gas Company. Mr. Mauceli moved to Dallas in 197931, ~~where he was independently employed by several exploration and~~ ~~development firms in planning exploration and marketing feasibility of privately sponsored drilling programs.~~2007

~~Kellam Colquitt joined RELP as Chief~~The ~~Operating~~Partnership ~~officer~~had onnet ~~February 14,~~income ~~2006. Mr. Colquitt has over thirty-five years~~ of ~~experience~~$66,155 infor the ~~oil~~year ~~and~~ended ~~gas~~December 31, 2008, ~~industry.~~compared Heto is a ~~1971~~net ~~graduate~~loss of ~~Texas A&M University with a degree in geology. Prior to joining RELP~~$74,986 ~~Mr. Colquitt served~~for asthe ~~Vice~~year ~~President-Exploration~~ended ~~of Vintage Petroleum,~~December ~~Inc. in Tulsa~~31, ~~Oklahoma from 2001-2006~~2007. HeThe ~~also~~improvement ~~served~~in asoperating ~~the~~results ~~General~~was ~~Manager-Exploration~~primarily ~~of Vintage~~due ~~Petroleum, Inc. from 2000-2001. Prior~~ to ~~that,~~prices ~~Mr. Colquitt~~received ~~was~~for ~~employed~~the ~~from~~Partnership’s ~~1995-2000,~~crude ~~first~~oil ~~as Vice President-International Exploration Western Hemisphere~~ and ~~later~~natural asgas ~~Vice President-U~~production.S. ~~Operations~~The ~~for~~average ~~Ranger Oil~~prices ~~Limited.~~received Hefor iscrude aoil ~~member~~sales ofjumped ~~the~~from ~~American~~$71.45 ~~Association~~per ofbarrel ~~Petroleum~~in ~~Geologists,~~2007 to $97.98 ~~the~~per ~~Houston~~barrel ~~Petroleum~~in ~~Club~~2008, ~~the~~an ~~Tulsa~~increase ~~Geological~~of ~~Society,~~37.1%. ~~and~~The ~~the~~average ~~Houston Geological Society.~~price

H. Walt Dunagin is Executive Vice President—Land Manager of RELP. He has held this position with RELP since January 2, 2006 and has served in the same position with its predecessor entity, OREI, since 1990. He is a 1979 graduate of the University of Mississippi. Mr. Dunagin began his career doing independent land work for Exxon Co. U.S.A. Since that time he has performed land work in Alabama, Mississippi, Louisiana, North Dakota, Montana, Oklahoma and Texas. For six years prior to joining OREI, he was directly involved in the sale of producing properties for Mobil, Texaco, Oryx Energy and American Exploration Company. He has been a Certified Professional Landman since 1986 and is a member of the American Association of Petroleum Landmen, Dallas Association of Petroleum Landmen and the International Association of Petroleum Negotiators.16

~~Laura~~Table ~~S. Klein is Drilling Engineering Manager~~ of ~~RELP. She has held this position with RELP since January 2,~~ 2006 and has served in the same position with its predecessor entity, OREI, since 2000. She is a 1981 graduate of the Colorado School of Mines with a Bachelor’s degree in Petroleum Engineering. Since receiving her degree, Ms. Klein has accumulated 25 years of experience as a drilling/completion engineer and as a worldwide rig operations supervisor. From 1996 until joining OREI, she held the position of Senior Staff Drilling Engineer with Mobil’s International Drilling Services Unit and oversaw projects in Russia, China, Italy and the North Sea. Ms. Klein also managed recruiting and training for Mobil’s worldwide drilling organization. Ms. Klein’s professional affiliations include the Society of Petroleum Engineers, the American Association of Drilling Engineers and the American Society of Training and Development.Contents

~~John~~received for M.natural ~~Dees,~~gas PEincreased isfrom ~~Vice President-Operations~~$7.77 ~~and~~per ~~Engineering~~MCF ofin ~~RELP.~~2007 ~~From 1994~~ to ~~2004, Mr~~$9. ~~Dees served~~88 asper aMCF ~~petroleum~~received during ~~engineering~~2008, ~~consultant~~an ~~with~~increase ~~Dees~~of ~~Well Completions~~27. Mr2%. ~~Dees has~~ ~~over~~These 30increases ~~years~~in ofpricing ~~industry~~led ~~experience.~~to Mran overall 36. ~~Dees~~5% ~~has~~increase ~~conducted~~in ~~well completion~~sales ~~engineering~~revenues ~~and~~from ~~production~~$231,283 ~~operations~~in ~~for~~2007 ~~RELP~~to ~~since January 2~~$315,781 in 2008. ~~2006,~~Crude ~~and~~oil ~~has~~sales ~~been~~volume ~~with~~increased ~~RELP’s~~from ~~predecessor~~795 ~~entity,~~barrels ~~OREI,~~sold ~~since~~in ~~2003~~2007 to 1,305 ~~when~~barrels hesold ~~joined it~~ in a ~~consulting capacity~~2008. HeThe ~~holds~~volume aincrease ~~Bachelor~~was ofthe ~~Science~~result ~~degree~~of inthe ~~Chemistry~~Partnership’s ~~from~~final ~~Southwestern~~well ~~Oklahoma~~beginning ~~State~~production ~~University~~operations ~~and~~in aMay 2008. ~~Masters~~Crude inoil ~~Petroleum~~sales ~~Engineering~~volume from ~~the~~this ~~University~~well oftotaled ~~Oklahoma.~~553 ~~Prior~~barrels toduring ~~consulting~~2008. ~~for~~Natural ~~Reef,~~gas ~~Mr. Dees~~volumes dropped ~~worked~~from ~~for~~22,447 ~~Halliburton~~MCF ~~Services~~sold in ~~fracturing~~2007 ~~fluids~~to 19,016 ~~fracturing~~MCF ~~research~~sold in 2008. While the Partnership ~~engineering,~~had ~~and~~gas ~~field~~sales ~~operations~~of ~~engineering~~4,221 asMCF ~~well~~from asthe ~~for~~well ~~numerous~~that ~~oil~~began ~~and gas~~production ~~companies~~operations, ~~including~~the Partnership ~~Getty~~lost ~~Oil~~approximately 4,500 ~~Sun~~MCF ~~E&P,~~from ~~and~~two ~~Oryx~~wells ~~Energy.~~which ~~Mr. Dees~~ceased production ~~has~~during ~~published~~2008, ~~several~~and ~~peer-reviewed~~experienced ~~technical~~natural ~~papers~~production ~~and~~declines ~~was~~from ~~the~~other ~~inventor of~~productive ~~several U~~wells.S. ~~and~~The ~~international~~Partnership ~~patents~~had onone ~~extreme~~developmental ~~overbalancing~~well ~~perforating stimulation~~cease production in January 2008, and ~~resin~~had ~~formation~~no ~~sand~~production ~~control.~~during ~~Mr. Dees~~2008 isfrom a ~~member~~second ofwell ~~the American~~which ~~Chemical~~underwent ~~Society~~an unsuccessful ~~and~~workover ~~the~~attempt ~~Society~~in ~~of Petroleum Engineers~~February 2008.

~~Daniel~~General and C.administrative ~~Sibley~~costs ~~became~~increased ~~Chief~~during ~~Financial Officer~~2008 as a result of ~~Reef~~a change in method ~~December 1999.~~for Heallocating ~~has~~overhead ~~served~~to inPartnerships. ~~the~~Reef ~~same~~implemented ~~position~~a ~~for~~new method ~~RELP~~for ~~since~~allocating ~~January 2, 2006~~overhead ~~and~~that ~~has~~takes ~~served~~actual inoverhead ~~this~~and ~~position~~allocates ~~with~~it ~~RELP’s~~based ~~predecessor~~upon the ~~entity,~~summation ~~OREI~~of revenues, ~~since 1998.~~expenses Mrand capital costs incurred. ~~Sibley~~ ~~was~~Under ~~employed~~the asprior method aof ~~CPA~~allocating ~~tax~~overhead, ~~accountant~~not ~~with~~all ~~Grant~~allocable ~~Thornton~~general and administrative ~~from~~expenses ~~1977~~were charged to ~~1980~~the Partnership during 2007. ~~From~~The ~~1980~~administrative overhead charge to ~~1998,~~the hePartnership ~~was~~for ~~involved~~the inyear ~~the~~ended ~~private~~December 31, ~~practice~~2008 ofwas ~~law.~~$44,370, Hecompared ~~received~~to a$16,802 ~~B.B.A.~~for inthe ~~accounting~~year ~~from~~ended December 31, 2007.

16The rapid decline in crude oil and natural gas prices that occurred during the fourth quarter of 2008 caused the Partnership to incur a net loss during the fourth quarter of 2008 totaling $12,066. Pricing continued to decline into the first quarter of 2009, and the Partnership also expects to incur a net loss during the first quarter of 2009.

~~the University~~ Comparison of ~~North~~the ~~Texas~~Year inEnded ~~1973~~December 31, a2007 ~~law~~to ~~degree (J.D.) from~~ the ~~University~~Year ofEnded ~~Texas in 1977~~December 31, ~~and a Master of Laws-Taxation degree~~ ~~(L.L.M.) from Southern Methodist University in 1984.~~2006

~~David~~During the M.year ~~Tierney~~ended ~~has~~December 31, ~~been~~2007, ~~employed~~the byPartnership ~~RELP~~incurred a net loss of ~~since~~$76,986 ~~January~~ compared to a net loss of $2,941,263 for 2006. Net cash from oil and gas ~~has~~sales ~~been~~revenues, ~~with~~less ~~its~~operating ~~predecessor~~costs, ~~entity~~production taxes, ~~OREI~~and general and administrative costs fell from $110,103 ~~since~~to ~~March 2001~~$86,103. Natural gas sales volumes Mrdeclined 31. ~~Tierney~~2% isduring ~~the~~2007, ~~Controller~~going from a sales volume of ~~the~~32,636MCF ~~Reef~~in ~~Global~~2006 ~~Energy~~to ~~Ventures~~a ~~partnerships~~sales volume of 22,447 MCF during 2007. MrNatural gas sales account for 75-80% of total Partnership crude oil and natural gas revenues, and total crude oil and natural gas revenues declined by 25. ~~Tierney~~8% ~~received~~in aconjunction ~~Bachelor~~with the decline in natural gas sales volumes. During 2006, five productive wells accounted for 98.5% of the Partnership’s ~~degree~~natural ~~from~~gas ~~Davidson~~sales. One of these five wells ceased ~~College~~production induring ~~1974~~September 2006, and a ~~Masters~~second ofwell ~~Business~~was ~~Administration~~shut-in ~~(MBA)~~after three ~~from~~unsuccessful ~~Tulane~~attempts to decrease high water volumes. This well produced ~~University~~for inapproximately ~~1976~~thirty days during 2007 after a fourth attempt temporarily reduced water levels, but will be plugged and isabandoned during 2008 after a final ~~Texas~~attempt ~~Certified~~to ~~Public~~open ~~Accountant.~~a ~~Mr.~~new productive zone in February ~~Tierney~~2008 was ~~has~~unsuccessful. ~~worked~~Sales infrom ~~public~~these ~~accounting~~two wells fell from 10,100 ~~and~~MCF ~~has~~during ~~worked~~2006 to 2,081 MCF during 2007. Sales volumes on two other productive wells declined significantly during 2007. After a successful re-completion in a new productive zone, the ~~oil~~fifth ~~and~~well ~~gas~~increased ~~industry~~sales volumes from 5,990 MCF during 2006 to ~~since~~12,187 ~~1979~~MCF during 2007. ~~From~~While ~~1992~~the ~~through~~Partnership ~~2000~~has hea ~~served~~new asdiscovery ~~controller/treasurer~~expected to provide significant gas sales beginning in May 2008, only one of anthe five ~~independent~~wells ~~oil~~producing ~~and~~during ~~gas~~2006 ~~exploration~~remains ~~company~~a significant producer as of December 31, 2007.

~~Audit~~As ~~Committee~~a result of the significant impairment charges taken by the Partnership in both 2005 and ~~Nominating~~2006, ~~Committee~~the Partnership incurred property impairment expense of only $56,256 during 2007, compared to $2,805,385 during 2006. The 2007 impairment expense was the result of the decrease in estimated proved reserves from properties placed in production during 2005 and 2006 as a result of production declining at a greater rate than previously estimated.

~~Because~~As of December 31, 2007, the Partnership has noone ~~directors,~~producing itroyalty ~~does~~interest well ~~not~~and ~~have~~four anproducing ~~audit~~working ~~committee~~interest wells, anand ~~audit committee~~has ~~financial~~one ~~expert~~additional orwell expected ato ~~nominating~~begin ~~committee~~production during May 2008.

~~Code~~Off-Balance ~~of Ethics~~Sheet Arrangements

~~Because~~The ~~the~~ Partnership ~~has no employees, it~~ does not ~~have~~ aparticipate ~~code~~in oftransactions that ~~ethics.~~generate ~~Employees~~relationships ofwith ~~the~~unconsolidated ~~Partnership’s~~entities ~~managing~~or ~~general partner,~~financial ~~Reef~~partnerships, ~~must~~such ~~comply~~as ~~with~~entities ~~Reef’s~~often ~~Code~~referred ofto ~~Ethics,~~as astructure ~~copy~~finance ofor special ~~which~~purpose ~~will~~entities be(SPEs), ~~provided to~~which ~~investor~~would ~~partners,~~have ~~without~~been ~~charge,~~established ~~upon~~for ~~request~~the purpose ~~made~~of tofacilitating ~~Reef~~off-balance ~~Oil~~sheet ~~and~~arrangements ~~Gas~~or other contractually ~~Partners,~~narrow ~~L.P.,~~or ~~1901~~limited Npurposes. ~~Central~~As ~~Expressway,~~of ~~Suite~~December ~~300~~31, ~~Richardson~~2008, ~~Texas 75080~~2007, ~~Attention:~~and ~~Daniel~~2006, C.the Partnership ~~Sibley~~was not involved in any unconsolidated SPE transactions.

Table of Contents

Contractual Obligations

The Partnership has no obligations under non-cancelable agreements as of December 31, 2008.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Interest Rate Risk

The Partnership has not borrowed any funds to date. The partnership agreement prohibited bank borrowings during the Partnership’s drilling phase of operations. The Partnership is permitted to borrow monies or assess partners for developmental activities on the prospects it has drilled, however, at this time the Partnership has no plans to conduct additional activities on any of its existing prospects. Consequently, the Partnership is subject to interest rate risk solely to the extent that changes in interest rates affect general economic conditions.

Commodity Price Risk

The Partnership has not and does not expect to engage in commodity futures trading or hedging activities or enter into derivative financial instrument transactions for trading or other speculative purposes. The Partnership sells a vast majority of its production from successful oil and gas wells on a month-to-month basis at current spot market prices. Accordingly, the Partnership is at risk for the volatility in commodity prices inherent in the oil and gas industry, and the level of commodity prices has a significant impact on the Partnership’s results of operations.

Assuming the production levels we attained during the year ended December 31, 2008, a 10% change in the price received for our crude oil would have had an approximate $12,800 impact on our oil revenues, and a 10% change in the price received for our natural gas would have resulted in an approximate $18,800 impact on our natural gas revenues.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The reports of our independent registered public accounting firm, and the Partnership’s financial statements, related notes, and supplementary data are set forth in a separate section to this Annual Report, beginning on page F-1.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None

ITEM 9A.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As the Managing General Partner of the Partnership, Reef maintains a system of controls and procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. The Partnership, under the supervision and with participation of its management, including the principal executive officer and principal financial officer of the Partnership’s general partner, Reef Oil & Gas Partners, L.P., evaluated the effectiveness of its “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report. Based on that evaluation, the principal executive officer and principal financial officer of our general partner have concluded that the Partnership’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Partnership in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the principal executive officer and principal financial officer of our general partner, as appropriate to allow timely decisions regarding financial disclosure.

Table of Contents

Management Report on Internal Control Over Financial Reporting

Management of the Partnership is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation under the framework in Internal Control — Integrated Framework, management of the Partnership concluded that the Partnership’s internal control over financial reporting was effective as of December 31, 2008.

This annual report does not include an attestation report of the Partnership’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Partnership’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Partnership to provide only management’s report in this annual report.

Changes in Internal Controls

There have not been any changes in the Partnership’s internal controls over financial reporting during the fiscal quarter ended December 31, 2008 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION.

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The Partnership has no directors or executive officers. Its managing general partner is Reef Oil & Gas Partners, L.P.

Reef Oil & Gas Partners, L.P. and Reef Exploration, L.P.

The Manager, officers and key personnel of the managing general partner, their ages, current positions with the managing general partner and/or RELP, and certain additional information are set forth below:

Name	Age	Positions and Offices Held
Michael J. Mauceli	52	Manager of Reef Oil & Gas Partners GP, LLC; Chief Executive Officer of RELP
H. Walt Dunagin	51	Vice President — Land Manager of RELP
Lawrence J. Harrison, Jr.	58	Vice President — Business Development of RELP
Byron H. Dean	59	Manager of Acquisitions and Divestitures of RELP
Daniel C. Sibley	57	General Counsel of RELP
L. Mark Price	46	Chief Financial Officer of Reef and of RELP
David M. Tierney	56	Chief Accounting Officer — Public Partnerships

Michael J. Mauceli is the Manager and a member of Reef Oil & Gas Partners, GP, LLC, which is the general partner of Reef, as well as the Chief Executive Officer of RELP. Mr. Mauceli has been the principal executive officer of Reef since its formation in February 1999. He has served in this position with RELP since January 2006 and has served in this position with its predecessor entity, OREI, since 1987. Mr. Mauceli attended the University of Mississippi where he majored in business management and marketing as well as the University of Houston where he received his Commercial Real Estate License. He entered the oil and natural gas business in 1976 when he joined Tenneco Oil & Gas Company. Mr. Mauceli moved to Dallas in 1979, where he was independently employed by

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several exploration and development firms in planning exploration and marketing feasibility of privately sponsored drilling programs.

H. Walt Dunagin is Vice President—Land Manager of RELP. He has held this position since January 2006 and has served in this position with its predecessor entity, OREI, since 1990. He is responsible for all contracts with other industry partners and all land activities required for exploration, development and production, including lease acquisition, title opinions, curative, permitting, unitization, rights-of-way and environmental issues. A graduate of the University of Mississippi in 1969 with a B.B.A. degree, Walt’s career has also involved land work for ExxonMobil, ChevronTexaco, UNOCAL, Santa Fe Energy and Oryx Energy (now Kerr-McGee). Walt is a member of the Dallas Association of Petroleum Landmen and the Association of International Petroleum Negotiators.

Lawrence J. Harrison, Jr. is Vice President – Business Development of RELP. He joined RELP in October 2006 following fourteen years with The Oil & Gas Asset Clearinghouse, a leading acquisition and divestiture advisory firm. Mr. Harrison has served as an independent Landman verifying title ownership and acquiring leases and other agreements in support of clients drilling programs. He worked for Mobil Oil Corporation and several other companies before joining The Clearinghouse. Mr. Harrison is a 1972 graduate of the University of Southern Mississippi with a Bachelor of Science degree in Communications. Mr. Harrison is a past president of the Houston Association of Professional Landmen and a past member of the American Association of Professional Landmen Executive Committee. He is currently a Director of the Louisiana Oil & Gas Association (LOGA) and a member of the ADAM Energy Forum and the Independent Petroleum Association of America.

Byron H. (Howard) Dean is Manager – Acquisitions and Divestitures of RELP and is responsible for solicitation and technical evaluation of acquisition and development opportunities for Reef. A registered petroleum engineer, Mr. Dean has over 30 years of industry experience with oil and natural gas operations and reservoir engineering, both domestic onshore and offshore. Prior to joining RELP, Mr. Dean was Senior Petroleum Engineer and Acquisition and Divestiture Specialist for PLS, Inc. and Noble Royalties, Inc. He is a 1974 graduate of the University of Texas at Arlington with a Bachelor of Science degree in Civil Engineering. Mr. Dean is an active member of the Society of Petroleum Engineers, the Society of Petroleum Evaluation Engineers, ADAM Energy Forum, and Texas Independent Producer and Royalty Owners Association.

Daniel C. Sibley is General Counsel of RELP. Mr. Sibley was appointed General Counsel of RELP on January 14, 2009. Previously, Mr. Sibley served as Chief Financial Officer of Reef and RELP. Mr. Sibley was employed as a Certified Public Accountant with Grant Thornton from 1977 to 1980. From 1980 to 1994, he was involved in the private practice of law. He received a B.B.A. in accounting from the University of North Texas in 1973, a law degree (J.D.) from the University of Texas in 1977, and a Master of Laws-Taxation degree (L.L.M.) from Southern Methodist University in 1984.

L. Mark Price is Chief Financial Officer of Reef and RELP. Mr. Price was appointed to this position January 9, 2009. Mr. Price has over twenty-two years of experience working in the oil and gas and manufacturing industries. He previously served as the Chief Financial Officer for The Terramar Group, Inc., an international oil and gas and manufacturing company, since 2007. From 2004 to 2007, he served as the Chief Accounting Officer for Lancer Corporation, an international manufacturing company. Additionally, Mr. Price served as the Chief Financial Officer of Nunn Manufacturing, and for PCLC Asset Management after its acquisition of Nunn Manufacturing in 1998, from 1996 until 2004. Mr. Price received his BBA in accounting and finance from Texas Tech University and is a Texas Certified Public Accountant.

David M. Tierney is Chief Accounting Officer – Public Partnerships. Mr. Tierney was appointed to this position in July 2008. Mr. Tierney has been employed by RELP since January 2006 and was previously with its predecessor entity, OREI, since March 2001. Mr. Tierney was previously the Controller of the Reef Global Energy Ventures and Reef Global Energy Ventures II partnerships. Mr. Tierney received a Bachelor’s degree from Davidson College in 1974, a Masters of Business Administration from Tulane University in 1976, and is a Texas Certified Public Accountant. Mr. Tierney has worked in public accounting, and has worked in the oil and gas industry since 1979. From 1992 through 2000 he served as controller/treasurer of an independent oil and gas exploration company.

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Audit Committee and Nominating Committee

Because the Partnership has no directors, it does not have an audit committee, an audit committee financial expert or a nominating committee.

Code of Ethics

Because the Partnership has no employees, it does not have a code of ethics. Employees of the Partnership’s managing general partner, Reef, must comply with Reef’s Code of Ethics, a copy of which will be provided to investor partners, without charge, upon request made to Reef Oil and Gas Partners, L.P., 1901 N. Central Expressway, Suite 300, Richardson, Texas 75080, Attention: Daniel C. Sibley.

ITEM 11. EXECUTIVE COMPENSATION.

The following table summarizes the items of compensation to be received by Reef as the managing general partner ~~from~~of the Partnership.

Recipient	Form of Compensation	Amount
Managing General Partner	Partnership interest (excluding any partnership interest resulting from the purchase of units)	10% interest
Managing General Partner	Management fee	15% of subscriptions
Managing General Partner and its Affiliates	Direct and administrative costs	Reimbursement at cost
Affiliate of the Managing General Partner	Operator’s per-well charges	Competitive prices
Managing General Partner and its Affiliates	Payment for equipment, supplies, marketing, and other services	Cost or competitive prices

Reef’s “partnership interest,” as described in the table above, refers only to its interest as managing general partner and does not include the interest Reef has as the result of its purchase of units in the Partnership, nor the 1% interest Reef has as the result of its payment of 1% of all lease costs, intangible drilling and development costs, and well completion costs. Reef ~~has~~ purchased 5.01% of the outstanding Partnership’s units. Reef received a 10% interest as managing general partner of the Partnership and a 1% interest as a result of Reef’s payment of 1% of all lease costs, intangible drilling and development costs, and well completion costs for a total of an 11% interest. This 11% interest iswas not represented by partnership units. During 2006, Reef voluntarily gave up its 10% interest received for forming the Partnership, and now has only a ~~total~~1% interest in the Partnership that is not represented by partnership units. As a result, Reef has a total interest in the Partnership of 155.4596%.

Reef received a management fee of $1,424,916, which is 15% of the Partnership subscriptions exclusive of the units purchased by Reef. From this amount Reef paid all of the Partnership’s organization and offering costs, including sales commissions. The Partnership recorded $1,374,916 of this payment as ~~syndication~~offering costs, and $50,000 as organization costs in the December 31, 2004 financial statements.

Reef ~~will~~is be reimbursed for direct costs and all documented out-of-pocket expenses incurred on behalf of the Partnership, including administrative costs. During ~~Reimbursable~~the ~~costs~~years ~~incurred~~ended December 31, 2008, 2007, and 2006, the Partnership byreimbursed Reef 4,721, ($1,558) and $26,468, respectively, for ~~the~~technical services ~~year~~costs ~~ended~~which ~~December~~have 31been capitalized as project costs, and $44,370, $16,802 and $13,666, respectively, for administrative costs included as general and administrative expenses.

17Operator fees are payable to OREI and RELP on the nine prospects where OREI and RELP serve as operator. OREI and RELP receive fees at the competitive rate in the geographical area of the prospects during the drilling and production phase of operations. These fees are charged as a monthly fee per well as agreed to in an operating agreement signed by the Partnership as well as outside third party working interest owners in the wells. During the years ended December 31, 2008, 2007, and 2006, the Partnership paid operator fees totaling $4,361, $5,236 and $4,507 to RELP and OREI. RELP (previously OREI) serves as operator for nine Partnership prospects upon which

~~2005 and the period from inception (November 10, 2004) to December 31, 2004 were $18,143 and $18,549, respectively, primarily for technical and administrative personnel.~~21

~~Operators fees are~~Table ~~payable to OREI on the nine prospects where OREI serves as operator. OREI receives fees at the competitive rate in the area during the drilling and production phase~~ of operations. Often these are charged as a monthly fee per well. During the year ended December 31, 2005 and the period from inception (November 10, 2004) to December 31, 2004, the Partnership paid OREI $26,182 and $752 in operator fees on drilling wells and $1,772 and $0 in operator fees on producing wells operated by OREI. Three of the five unsuccessful wells and six of the additional wells are operated by OREI.Contents

~~ITEM~~five 12successful and four unsuccessful wells were drilled. ~~SECURITY~~Of ~~OWNERSHIP~~the OFfive ~~CERTAIN~~successful wells ~~BENEFICIAL~~drilled, ~~OWNERS~~three ~~AND~~are ~~MANAGEMENT~~currently producing and two have ceased production.

~~The following~~ITEM ~~table sets forth information as of March 31, 2006 concerning all persons known by Reef to own beneficially more than 5% of the Partnership’s units~~12. ~~Unless~~SECURITY ~~expressly~~OWNERSHIP ~~indicated~~OF ~~otherwise,~~CERTAIN ~~each~~BENEFICIAL ~~partner~~OWNERS ~~exercises~~AND ~~sole~~MANAGEMENT ~~voting and~~AND ~~investment~~RELATED ~~power~~STOCKHOLDER ~~with respect to the shares beneficially owned.~~MATTERS

~~Reef~~The ~~has~~following ~~calculated~~table ~~the~~sets ~~percentages~~forth information as of ~~units~~December 31, 2008 concerning all persons known by Reef to own beneficially ~~owned~~more ~~based~~than ~~upon~~5% ~~500~~of ~~Partnership~~the interests in ~~units~~the ~~outstanding~~Partnership. atUnless ~~March 31~~expressly indicated otherwise, ~~2006~~each partner exercises sole voting and investment power with respect to the units beneficially owned.

	Units beneficially owned
Person or Group	Number of Units Beneficially Owned	Percent of Total Partnership Units Outstanding		Percentage of Total Partnership Interests Beneficially Owned
Person or group	Number	Percent
Reef Oil & Gas Partners, L.P. (1)	25.028	5.01	%	4.96	%
Reef Oil & Gas Partners, L.P. (1)	~~25.028~~—	~~5.01~~—	%	1.00	%

(1) Reef Oil & Gas Partners, L.P.’s address is 1901 N. Central Expressway, Suite 300, Richardson, Texas 75080.

~~ITEM~~The managing 13general partner holds a 1% interest in the Partnership as a result of paying 1% of all leasehold, drilling and completion costs. ~~CERTAIN~~In ~~RELATIONSHIPS~~addition ~~AND~~to ~~RELATED~~this 1% ~~TRANSACTIONS~~interest not represented by Partnership units, Reef purchased 5.01% of the 500 Partnership units and, therefore, holds 5.01% of the 99% interest in the Partnership (4.96%) held by the unit holders.

InReef ~~addition,~~is the ~~Partnership~~managing general ~~paid~~partner ~~$314,380~~of tothe ~~Reef as~~Partnership. ~~reimbursement~~Along ~~for~~with its ~~pro-rata~~affiliates, ~~share~~Reef ofhas ~~actual~~entered ~~consulting~~into ~~fees~~agreements ~~paid~~with, byand received ~~Reef~~compensation from, ~~and~~ ~~purchased~~the ~~two~~Partnership ~~properties~~for ~~from~~services ~~Reef~~it performs for ~~approximately~~the Partnership. ~~$2,000~~See Item 11. — Executive Compensation.

ITEM 14. PRINCIPAL ~~ACCOUNTING~~ACCOUNTANT FEES AND SERVICES.

The Partnership ~~reached minimum subscription levels on October 28, 2004 and was formed November 10, 2004. The Partnership~~ incurred professional audit and tax fees from its principal auditor BDO Seidman, LLP, as disclosed in the table below:

	2005		2004
	2008		2007
Audit fees	$	5535,~~254~~075	$	3534,~~000~~066
Tax compliance fees	$	2,000	$	1,700
Audit related fees	$	—	$	—
Tax fees	$	1,397	$	1,000
Tax related fees	$	—	$	—

18Fees for tax services are for review of the Partnership’s tax return.

~~PART IV~~22

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)	1. Financial Statements
	Report of Independent Registered Public Accounting Firm	F-1
	Balance Sheet
	Balance Sheets	F-2
	Statement of Operations
	Statements of Operations	F-3
	Statement of Partnership Equity
	Statements of Partnership Equity	F-4
	Statement of Cash Flows
	Statements of Cash Flows	F-5
	Notes to Financial Statements	F-6
	2. Financial Statement Schedules	None
	3. Exhibits

2. Financial Statement Schedules

None

3. Exhibits.

A list of the exhibits filed or furnished with this report on Form 10-K (or incorporated by reference to exhibits previously filed or furnished by us) is provided in the Exhibit Index in this report. Those exhibits incorporated by reference herein are indicated as such by the information supplied in the parenthetical thereafter. Otherwise, the exhibits are filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date:	April 17, 2006	REEF GLOBAL ENERGY IV, L.P.
Date: April 15, 2009			REEF GLOBAL ENERGY IV, L.P.
		~~Reef Oil & Gas Partners, L.P.~~	Reef Oil & Gas Partners, L.P.
		~~Managing General Partner~~	Managing General Partner
		By:	~~Reef Oil & Gas Partners, GP, LLC~~	Reef Oil & Gas Partners, GP, LLC
		By:	/s/ Michael J. Mauceli
				General Partner
			Michael J. Mauceli
		By:		/s/ Michael J. Mauceli
			Manager (principal executive officer)
				Michael J. Mauceli
				Manager (principal executive officer)

Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	~~Title~~	Date	~~Date~~
/s/ MICHAEL J. MAUCELI		Manager and Member of the general partner of Reef		April 17, 2006
/s/ Michael J. Mauceli	Manager and Member of the general partner of Reef Oil & Gas Partners, L.P. (Principal Executive Officer)		April 15, 2009
Michael J. Mauceli		~~Oil & Gas Partners, L.P. (Principal Executive Officer)~~
/s/ DANIEL C. SIBLEY		Chief Financial Officer (Principal Financial Officer		April 17, 2006
/s/ David M. Tierney	Chief Accounting Officer-Public Partnerships Reef Exploration, L.P. (Principal Financial and Accounting Officer)		April 15, 2009
Daniel C. Sibley		and Principal Accounting Officer)
David M. Tierney

2024

~~Financial~~Table of ~~Statements~~Contents

Reef Global Energy IV, L.P.

~~For the~~Financial ~~Year Ended December 31, 2005 and the Period from Inception~~Statements

~~(November~~Years ~~10,~~Ended ~~2004) to~~ December 31, ~~2004~~2008, 2007 and 2006

Contents

Report of Independent Registered Public Accounting Firm Audited Financial Statements Balance Sheets Statements of Operations Statements of Partnership Equity Statements of Cash Flows Notes to Financial Statements

Report of Independent Registered Public Accounting Firm	F-1

Audited Financial Statements

Balance sheets	F-2
Statements of operations	F-3
Statements of partnership equity	F-4
Statements of cash flows	F-5
Notes to financial statements	F-6

~~Report~~Table of ~~Independent Registered Public Accounting Firm~~Contents

~~The~~Report ~~Partners~~of Independent Registered Public Accounting Firm

~~Reef~~The ~~Global Energy IV, L.P.~~Partners

~~We have audited the accompanying balance sheets of~~ Reef Global Energy IV, L.P. as of December 31, 2005 and 2004, and the related statements of operations, partnership equity, and cash flows for the year ended December 31, 2005 and for the period from inception (November 10, 2004) to December 31, 2004. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We ~~conducted~~have ~~our~~audited ~~audit~~the inaccompanying ~~accordance~~balance ~~with~~sheets ~~the standards~~ of ~~the~~Reef ~~Public~~Global Energy ~~Company~~IV, ~~Accounting~~L.P. ~~Oversight Board~~ (~~United~~the ~~States~~“Partnership”). ~~Those~~as ~~standards~~of ~~require that~~December 31, we2008 ~~plan~~ and ~~perform~~2007, ~~the~~and ~~audit to obtain reasonable assurance about whether~~ the related ~~financial~~ statements ~~are free~~ of ~~material misstatement. The Partnership is not required to have~~operations, ~~nor~~partnership ~~were we engaged to perform~~equity, anand ~~audit~~cash offlows ~~its~~for ~~internal~~the ~~control~~years ~~over~~ended ~~financial~~December 31, ~~reporting.~~2008, An2007, ~~audit~~and ~~includes~~2006. These ~~consideration of internal control over~~ financial ~~reporting~~statements ~~as a basis for designing audit procedures that~~ are ~~appropriate in~~ the ~~circumstances, but not for the purpose of expressing an~~ ~~opinion~~responsibility ~~on the effectiveness~~ of the Partnership’s ~~internal control over financial reporting~~management. ~~Accordingly,~~Our weresponsibility is to express noan ~~such~~ opinion. ~~An audit also includes examining,~~ on athese ~~test basis, evidence supporting the amounts and disclosures in the~~ financial statements, ~~assessing~~based ~~the~~on ~~accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that~~ our ~~audit provides a reasonable basis for our opinion~~audits.

InWe conducted our ~~opinion,~~audits ~~the~~in ~~financial~~accordance ~~statements~~with ~~referred~~the tostandards ~~above~~of ~~present~~the Public Company ~~fairly,~~Accounting inOversight ~~all~~Board ~~material~~(United ~~respects,~~States). Those standards require that we plan and perform the ~~financial~~audit ~~position~~to ofobtain ~~Reef~~reasonable ~~Global~~assurance ~~Energy~~about whether the ~~IV,~~financial Lstatements are free of material misstatement.P. atThe ~~December~~Partnership ~~31,~~is ~~2005~~not required ~~and~~to ~~2004~~have, ~~and~~nor ~~the~~were ~~results~~we engaged to perform, an audit of its ~~operations~~internal control ~~and~~over financial reporting. An audit includes consideration of internal ~~its~~control ~~cash~~over ~~flows~~financial reporting as a basis for ~~the~~designing ~~year~~audit ~~ended~~procedures ~~December~~that are 31appropriate in the circumstances, ~~2005~~but ~~and~~not for the ~~period~~purpose ~~from~~of expressing an ~~inception~~opinion ~~(November~~on 10the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, ~~2004)~~we toexpress ~~December~~no 31such opinion. An audit also includes examining, ~~2004~~on a test basis, inevidence ~~conformity~~supporting ~~with~~the amounts and disclosures in the financial statements, assessing the accounting principles used ~~generally~~and ~~accepted~~significant inestimates made by management, as well as evaluating the overall ~~United~~financial ~~States~~statement ofpresentation. ~~America~~We believe that our audits provide a reasonable basis for our opinion.

~~BDO~~In ~~Seidman~~our opinion, ~~LLP~~the financial statements referred to above present fairly, in all material respects, the financial position of Reef Global Energy IV, L.P. at December 31, 2008, and 2007, and the results of its operations and its cash flows for the years ended December 31, 2008, 2007, and 2006, in conformity with accounting principles generally accepted in the United States of America.

~~Dallas~~The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. As discussed in Note 1 to the financial statements, ~~Texas~~the Partnership has suffered significant impairment losses, erosion of partnership equity, and projected declines in cash flow from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~March~~BDO 10Seidman, ~~2006~~LLP

1Dallas, Texas

~~Reef Global Energy IV~~April 13, ~~L.P.~~2009

~~Balance Sheets~~F-1

December 31,	2005			2004
Assets
Current assets:
Cash and cash equivalents	$	757,983		$	5,002,892
Accounts receivable from affiliates	10,446			425,475
Accrued interest receivable	356			305
Total current assets	768,785			5,428,672
Property and Equipment:
Oil and gas properties, full cost method of accounting	7,928,747			—
Drilling in progress	188,745			815,519
Prepaid drilling costs	—			2,919,405
Accumulated depreciation and depletion	(5,404,092		)	—
Net property and equipment	2,713,400			3,734,924
Total assets	$	3,482,185		$	9,163,596
Liabilities and Partners’ Equity
Current liabilities:
Accounts payable	$	32,908		$	1,106
Accounts payable to affiliates	235,993			653,616
Total current liabilities	268,901			654,722
Non-current liabilities:
Asset retirement obligation	87,725			—
Partners’ Equity
General partners	779,731			2,127,535
Limited partners	2,183,072			5,956,620
Managing general partner	162,756			424,719
Partners’ equity	3,125,559			8,508,874
Total liabilities and partners’ equity	$	3,482,185		$	9,163,596

Table of Contents

~~See~~Reef ~~accompanying~~Global ~~notes~~Energy toIV, ~~financial statements~~L.P.

2Balance Sheets

Reef Global Energy IV, L.P.

December 31,	2008		2007

Assets

Current assets:
Cash and cash equivalents	$	106,454	$	75,764
Total current assets	106,454		75,764

Oil and natural gas properties, full cost method of accounting:
Proved properties, net of accumulated depletion of $8,470,972 and $8,393,271	245,613		152,562
Net oil and natural gas properties	245,613		152,562

Total assets	$	352,067	$	228,326

Liabilities and partnership equity

Current liabilities:
Accounts payable	$	436	$	82
Accounts payable to affiliates	16,801		6,240
Total current liabilities	17,237		6,322

Long-term liabilities:
Asset retirement obligation	122,213		137,757
Total long-term liabilities	122,213		137,757

Commitments and contingencies (Note 5)

Partnership equity
General partners	—		3,459
Limited partners	11,300		9,683
Managing general partner	201,317		71,105
Partnership equity	212,617		84,247

Total liabilities and partnership equity	$	352,067	$	228,326

~~Statements~~See ofaccompanying ~~Operations~~notes to financial statements and independent registered public accounting firm’s report.

	2005			Period from Inception (November 10, 2004) to December 31, 2004
Revenues:
Oil and gas sales	$	113,465		$	—
Interest income	54,820			13,765
Total revenues	168,285			13,765
Costs and expenses:
Lease operating expenses	36,583			—
Production taxes	3,024			—
General and administrative expenses	107,952			4,891
Organization expenses	—			50,000
Accretion of asset retirement obligation	2,688			—
Depreciation and depletion	5,404,092			—
Total costs and expenses	5,554,339			54,891
Net loss	$	(5,386,054	)	$	(41,126	)
Net loss per general partner unit	$	(10,654.98	)	$	(85.00	)
Net loss per limited partner unit	$	(10,654.98	)	$	(85.00	)
Net loss per managing general partner unit	$	(12,994.92	)	$	(30.21	)

F-2

~~See~~Table ~~accompanying~~of ~~notes to financial statements.~~Contents

3Reef Global Energy IV, L.P.

~~Reef~~Statements ~~Global~~of ~~Energy IV, L.P.~~Operations

Statements of Partnership Equity

	Year ended December 31			Year ended December 31			Year ended December 31,
	2008			2007			2006

Revenues	$	315,781		$	231,283		$	311,888

Costs and expenses:
Lease operating expenses	51,904			59,971			110,103
Production taxes	19,858			14,256			17,465
Depreciation, depletion and amortization	59,324			62,949			247,338
Property impairment	—			56,256			2,805,385
Accretion of asset retirement obligation	3,519			43,039			5,820
General and administrative expenses	115,783			70,953			74,215
Total costs and expenses	250,388			307,424			3,260,326

Income (loss) from operations	65,393			(76,141		)	(2,948,438		)

Other income:
Interest income	762			1,155			7,175

Net income (loss)	$	66,155		$	(74,986	)	$	(2,941,263	)

Net income (loss) per general partner unit	$	122.41		$	(97.88	)	$	(5,852.12	)
Net income (loss) per limited partner unit	$	235.70		$	(97.88	)	$	(5,852.12	)
Net loss per managing general partner unit	$	(1,829.83	)	$	(1,138.48	)	$	(6,459.63	)

~~For~~See ~~the~~accompanying ~~Year~~notes ~~Ended December 31,~~to ~~2005~~financial statements and ~~the~~independent ~~Period~~registered ~~from~~public accounting firm’s report.

~~Inception (November 10, 2004) to December 31, 2004~~F-3

	General partners				Limited partners				Managing general partner				Total
	Units	Amount			Units	Amount			Units	Amount			Units	Amount
Partner contributions, net of syndication costs	125.000	$	2,138,159		349.972	$	5,986,366		25.028	$	425,475		500.000	$	8,550,000
Net loss	—	(10,624		)	—	(29,746		)		(756		)	—	(41,126		)
Balance at December 31, 2004	125.000	2,127,535			349.972	5,956,620			25.028	424,719			500.000	8,508,874
Partner contributions, net of syndication costs	—	—			—	—			—	74,339			—	74,339
Partner distributions	—	(15,931		)	—	(44,603		)	—	(11,066		)	—	(71,600		)
Net loss	—	(1,331,873		)	—	(3,728,945		)	—	(325,236		)	—	(5,386,054		)
Balance at December 31, 2005	125.000	$	779,731		349.972	$	2,183,072		25.028	$	162,756		500.000	$	3,125,559

Table of Contents

~~See~~Reef ~~accompanying~~Global ~~notes~~Energy toIV, ~~financial statements~~L.P.

4Statements of Partnership Equity

Reef Global Energy IV, L.P.

	General partners					Limited partners				Managing general partner				Total
	Units		Amount			Units	Amount			Units	Amount			Units	Amount
Balance at December 31, 2005	125.000		$	779,731		349.972	$	2,183,072		25.028	$	162,756		500.000	$	3,125,559
Partner contributions	—		—			—	—			—	37,392			—	37,392
Partner distributions	—		(23,501		)	—	(65,797		)	—	(12,952		)	—	(102,250		)
Net loss	—		(731,514		)	—	(2,048,077		)	—	(161,672		)	—	(2,941,263		)
Balance at December 31, 2006	125.000		24,716			349.972	69,198			25.028	25,524			500.000	119,438

Distribution amount per partnership unit			$	188.01			$	188.01			$	517.50

Balance at December 31, 2006	125.000		24,716			349.972	69,198			25.028	25,524			500.000	119,438
Partner contributions	—		—			—	—			—	76,245			—	76,245
Partner distributions	—		(9,022		)	—	(25,258		)	—	(2,170		)	—	(36,450		)
Net loss	—		(12,235		)	—	(34,257		)	—	(28,494		)	—	(74,986		)
Balance at December 31, 2007	125.000		3,459			349.972	9,683			25.028	71,105			500.000	84,247

Distribution amount per partnership unit			$	72.17			$	72.17			$	86.70

Balance at December 31, 2007	125.000		3,459			349.972	9,683			25.028	71,105			500.000	84,247
Partner contributions	—		—			—	—			—	183,215			—	183,215
Partner distributions	—		(10,148		)	—	(103,646		)	—	(7,206		)	—	(121,000		)
Net income (loss)	—		15,302			—	96,650			—	(45,797		)	—	66,155
Conversion of general partner units into limited partner units (Note 1)	(125.000	)	(8,613		)	125.000	8,613			—	—			—	—
Balance at December 31, 2008	—		$			474.972	$	11,300		25.028	$	201,317		500.000	$	212,617

Distribution amount per partnership unit			$	81.18			$	239.58			$	287.92

~~Statements~~See ofaccompanying ~~Cash~~notes ~~Flows~~to financial statements and independent registered public accounting firm’s report.

	2005			Period from Inception (November 10, 2004) to December 31, 2004
Operating Activities
Net loss	$	(5,386,054	)	$	(41,126	)
Adjustments for non-cash transactions:
Depreciation and depletion	230,123			—
Property impairment	5,173,969			—
Accretion of asset retirement obligation	2,688			—
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Changes in operating assets and liabilities:
Accounts receivable	(51		)	(305		)
Accounts payable	14,790			1,106
Accounts payable to affiliates	5,862			4,712
Net cash provided by (used in) operating activities	41,327			(35,613		)
Investing Activities
Property acquisition and development	(4,704,004		)	(3,086,020		)
Net cash used in investing activities	(4,704,004		)	(3,086,020		)
Financing Activities
Partner capital contributions	489,368			9,499,441
Syndication costs	—			(1,374,916		)
Partner distributions	(71,600		)	—
Net cash provided by financing activities	417,768			8,124,525
Net increase (decrease) in cash and cash equivalents	(4,244,909		)	5,002,892
Cash and cash equivalents at beginning of period	5,002,892			—
Cash and cash equivalents at end of period	$	757,983		$	5,002,892
Supplemental disclosure of non-cash investing transactions:
Additions to property included in accounts payable	$	17,012		$	—
Additions to property included in accounts payable to affiliates	$	225,419		$	648,904
Additions to property and asset retirement obligation	$	85,037		$	—
Supplemental disclosure of non-cash financing transactions:
Partner capital contributions included in receivables from affiliates	$	10,446		$	425,475

F-4

~~See~~Table of ~~accompanying notes to financial statements.~~Contents

5Reef Global Energy IV, L.P.

1.Statements ~~Organization~~of ~~and~~Cash ~~Basis of Presentation~~Flows

Reef Global Energy IV, L.P. (the Partnership) is the fourth in a series of five Nevada limited partnerships comprising a program called Reef Global Energy Ventures (the Program), pursuant to an S-1 Registration Statement declared effective by the Securities and Exchange Commission (the SEC) on May 31, 2001. In order to be formed, each partnership is required to sell a minimum of 50 partnership units at $20,000 per unit, including units purchased by the managing general partner. A maximum of 500 units will be sold in each partnership, consisting of a maximum of 375 limited partner units and a maximum of 125 general partner units. Investor funds are held in escrow and are subject to reimbursement with interest if the minimum number of units is not sold. The Program filed a prospectus supplement with the SEC on September 21, 2004 describing the Partnership, and commenced offering units in the Partnership. Upon reaching the minimum subscription level, the Partnership was formed on November 10, 2004. The Partnership offering closed December 2, 2004, with sales to outside investors totaling 125 general partner units and 349.972 limited partner units.

	For the Years Ended December 31,
	2008			2007			2006

Operating Activities
Net income (loss)	$	66,155		$	(74,986	)	$	(2,941,263	)
Adjustments for non-cash transactions:
Depreciation, depletion and amortization	59,324			62,949			247,338
Property impairment	—			56,256			2,805,385
Accretion of asset retirement obligation	3,519			43,039			5,820
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Changes in operating assets and liabilities:
Accounts receivable	—			—			356
Accounts payable	354			(144		)	(15,670		)
Accounts payable to affiliates	11,313			(58,380		)	53,294
Net cash provided by operating activities	140,665			28,734			155,260

Investing Activities
Property acquisition and development	(170,342		)	(104,498		)	(747,850		)
Plugging and abandonment costs paid from ARO	(1,096		)	—			—
Net cash used in investing activities	(171,438		)	(104,498		)	(747,850		)

Financing Activities
Partner capital contributions	182,463			104,917			19,918
Partner distributions	(121,000		)	(36,450		)	(102,250		)
Net cash provided by (used in) financing activities	61,463			68,467			(82,332		)

Net increase (decrease) in cash and cash equivalents	30,690			(7,297		)	(674,922		)
Cash and cash equivalents at beginning of period	75,764			83,061			757,983
Cash and cash equivalents at end of period	$	106,454		$	75,764		$	83,061

Non-cash investing transactions:
Property additions included in accounts payable to affiliates	$	—		$	—		$	26,468
Property additions and asset retirement obligation	$	410		$	—		$	1,173
Adjustment to asset retirement obligation	$	18,377		$	—		$	—
Non-cash financing transactions:
Managing partner contributions included in accounts receivable from or accounts payable to affiliates	$	—		$	752		$	27,920

~~The~~See ~~Partnership~~accompanying isnotes ~~a Nevada limited partnership formed under the Nevada~~to ~~Revised~~financial ~~Limited~~statements ~~Partnership~~and ~~Act.~~independent ~~Reef~~registered ~~Oil~~public &accounting ~~Gas Partners, L.P. (Reef) serves as the Partnership~~firm’s ~~managing general partner. Partnership interests are~~ ~~held by the managing general partner and investor partners who are general and limited partners (investor partners)~~report. The Partnership has acquired leases and drilled oil and gas wells in Texas, Louisiana, and in U.S. coastal waters in the Gulf of Mexico. The Partnership purchased a non-operating working interest in eight developmental and five exploratory prospects. The Partnership also purchased a royalty interest in three producing wells in Louisiana, two of which are currently productive. The Partnership has drilled four successful wells, three of which are still productive, five dry holes, and has four wells in various stages of completion and testing.

During the year following completion of the drilling phase of the Partnership, all additional general partner units purchased by investors will be converted into limited partner units. Limited partners do not have any rights to convert their units to general partner units.F-5

~~Under~~Table ~~the terms~~ of ~~the partnership agreement, participation in distributions, profits, losses, costs and revenues is as follows:~~Contents

Item:	Managing General Partner		Investor Partners
Revenues	15.45	%	84.55	%
Operating costs	15.45	%	84.55	%
Direct and administrative costs	15.45	%	84.55	%
Organization costs	0	%	100.00	%
Leasehold, drilling, and completion costs	5.95	%	94.05	%
Cash distributions	15.45	%	84.55	%

Reef Global Energy IV, L.P.

6Notes to Financial Statements

~~The managing general partner was not allocated any portion of the interest income during the period from inception (November 10, 2004) to~~ December 31, ~~2004, as its capital contribution was not received as of December~~ ~~31, 2004.~~2008

21. Organization ~~Summary~~and Basis of ~~Accounting Policies~~Presentation

~~Use~~Reef Global Energy IV, L.P. (the “Partnership”) is the fourth in a series of ~~Estimates~~five Nevada limited partnerships comprising a program called Reef Global Energy Ventures (the “Program”), pursuant to an S-1 Registration Statement declared effective by the Securities and Exchange Commission (the “SEC”) on May 31, 2001. In order to be formed, each partnership was required to sell a minimum of 50 partnership units at $20,000 per unit, including units purchased by the managing general partner. Each partnership formed as a part of the Program offered a maximum of 500 units for sale, consisting of a maximum of 375 limited partner units and a maximum of 125 general partner units. Reef Global Energy IV, L.P. offered 500 units for sale ($10,000,000), consisting of up to 375 limited partner units and up to 125 general partner units. Investor funds were held in escrow and were subject to reimbursement with interest if the minimum number of units were not sold. The Program filed a prospectus supplement with the SEC on September 21, 2004 describing the Partnership, and commenced offering units in the Partnership. Upon reaching the minimum subscription level, the Partnership was formed on November 10, 2004. The Partnership offering closed December 2, 2004, with sales to outside investors totaling 125 general partner units and 349.972 limited partner units, and sales to the managing general partner totaling 25.028 limited partner units.

The Partnership ~~preparation~~is ofa ~~financial~~Nevada ~~statements~~limited partnership formed under the Nevada Uniform Limited Partnership Act. Reef Oil & Gas Partners, L.P. (“Reef”) serves as the Partnership’s managing general partner. Partnership interests are held by the managing general partner and investor partners who are general and limited partners (“investor partners”). The managing general partner received a 10% interest in ~~conformity~~the ~~with~~Partnership ~~accounting~~as compensation for forming the Partnership, ~~principles~~and ~~generally~~also ~~accepted~~holds a 1% interest in the ~~United~~Partnership ~~States~~as ~~requires~~a ~~management~~result of paying 1% of all leasehold, drilling and completion costs. This 11% interest was not represented by Partnership units. In addition, Reef purchased 5.01% of the Partnership units and, therefore, held 5.01% of the 89% interest in the Partnership (4.46%) held by the unit holders. Effective August 1, 2006, Reef reduced the interest it received as compensation for forming the Partnership from 10% to 5%, ~~make~~and effective November 1, 2006 it reduced this interest from 5% to 0%. ~~estimates~~Therefore, effective November 1, 2006, Reef holds a 1% interest in the partnership as a result of paying 1% of all leasehold, drilling and ~~assumptions~~completion costs. ~~that~~This ~~affect~~1% interest is not represented by Partnership units. Effective November 1, 2006 Reef holds 5.01% of the ~~amounts~~99% ~~reported~~interest in the ~~financial~~Partnership (4.96%) held by ~~statements~~the unit holders. The Partnership primarily purchased working interests in exploratory and ~~accompanying~~developmental ~~notes~~drilling prospects and drilled oil and gas wells located onshore in the continental United States and in U.S. ~~Actual~~coastal ~~results~~waters ~~could~~in the ~~differ~~Gulf ~~from~~of Mexico. Other partnerships formed as a part of this Program, as well as other private drilling partnerships managed by Reef also own interests in some of these wells. In instances where Reef affiliated entities own a ~~estimates~~majority working interest in a well, the well may be operated by OREI, Inc. (“OREI”) or Reef Exploration, L.P. (“RELP”), affiliates of the managing general partner.

~~Cash~~Pursuant ~~and~~to ~~Cash~~the Partnership ~~Equivalents~~Agreement of the Partnership, all general partner units held by investors other than the managing general partner were converted into limited partner units. This

~~Risks~~Table ~~and~~of ~~Uncertainties~~Contents

~~Historically,~~Reef ~~the~~Global ~~oil~~Energy ~~and gas market has experienced significant price fluctuations. Prices are significantly impacted by local weather~~IV, supply in the area, availability and price of competitive fuels, seasonal variations in local demand, limited transportation capacity to other regions, and the worldwide supply and demand balance for crude oilL.P.

~~The~~Notes ~~Partnership~~to ~~has~~Financial ~~not~~Statements engaged in commodity futures trading or hedging activities and has not entered into derivative financial instrument transactions for trading or other speculative purposes. Accordingly, the Partnership is at risk for the volatility in commodity prices inherent in the oil and gas industry, and the level of commodity prices has a significant impact on the Partnership’s results of operations.(continued)

~~Organization~~conversion of general partner units into limited partner units occurred during the 3rd quarter of 2008. The additional general partner equity at June 30, 2008 was transferred to limited partner equity, and ~~Syndication~~all ~~Costs~~income and expense items during the third quarter have been allocated between the managing general partner and the limited partners.

~~Organization~~Under the ~~and~~terms ~~syndication~~of ~~costs~~the ~~total~~partnership ~~15%~~agreement, ~~of investor~~certain ~~capital~~income ~~contributions,~~and ~~except~~expense ~~for~~items ~~units~~are allocated ~~purchased~~differently bybetween the managing general partner, ~~which~~and ~~are~~the ~~purchased~~investor partners. ~~net~~Allocations of income and expense to the ~~15%~~managing ~~cost.~~general ~~Partnership~~partner and ~~organization~~investor ~~costs~~partners ~~totaling~~are ~~$50,000~~made ~~were~~quarterly ~~expensed~~based inupon the ~~2004~~number ~~financial~~and ~~statements~~type of partnership units held at the end of the quarter.

7Quarterly cash distributions to partners are based upon the number and type of partnership units held at the close of the quarter. Prior to August 1, 2006, cash distributions to partners of the net cash flow from interest income and crude oil and natural gas sales revenues, less operating, general and administrative, and other costs were distributed 15.46% to the managing general partner (based upon the 11% interest not represented by units and the 4.46% interest represented by Partnership units) and 84.54% to investor partners. Effective November 1, 2006, cash distributions are distributed 5.96% to the managing general partner (based upon the 1% interest not represented by units and the 4.96% interest represented by Partnership units) and 94.04% to investor partners.

~~Syndication costs~~Going ~~represent costs incurred in conjunction with the offering of partnership units. These costs, totaling $1,374,916 in 2004, were recorded as a reduction of the proceeds of the offering.~~Concern

The accompanying financial statements have been prepared assuming the Partnership is a going concern, which assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Partnership has suffered losses from operations that have utilized a major portion of partnership equity. While the Partnership appears to have adequate liquidity at December 31, 2008, there can be no assurance that such liquidity will remain sufficient.

These factors raise substantial doubt about the Partnership’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount of liabilities that might be necessary should the Partnership be unable to continue in existence.

The managing general partner is considering several options related to the Partnership, including the possible sale of marketable assets, as a result of the recurring losses incurred over the past several years, the erosion of partnership equity, and the lack of significant cash flows from operations.

F-7

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

2. Summary of Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with maturity dates of no more than three months from the purchase date to be cash equivalents. Cash and cash equivalents consist of demand deposits and money market investments invested with a major national bank, which at times may exceed federally insured limits. The Partnership has not experienced any losses in such accounts, and does not expect any loss from this exposure. The carrying value of the Partnership’s cash equivalents approximates fair value.

Risks and Uncertainties

Historically, the oil and gas market has experienced significant price fluctuations. Prices are impacted by local weather, supply in the area, availability and price of competitive fuels, seasonal variations in local demand, limited transportation capacity to other regions, and the worldwide supply and demand balance for crude oil.

The Partnership has not engaged in commodity futures trading or hedging activities and has not entered into derivative financial instrument transactions for trading or other speculative purposes. Accordingly, the Partnership is at risk for the volatility in commodity prices inherent in the oil and gas industry, and the level of commodity prices has a significant impact on the Partnership’s results of operations.

Oil and Gas Properties

The Partnership follows the full cost method of accounting for ~~crude~~ oil and ~~natural~~ gas properties. Under this method, ~~all~~ all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized ~~crude~~ oil and ~~natural~~ gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method using estimated proved reserves. For ~~Proved~~these purposes, proved natural gas reserves are converted to equivalent barrels of crude oil at a rate of 6 Mcf to 1 Bbl. Net capitalized costs of ~~crude~~ oil and ~~natural~~ gas properties, as adjusted for asset retirement obligations, are limited to the lower of unamortized cost or the cost ceiling, defined as the sum of the present value of estimated future net revenues from proved reserves based on ~~un-escalated~~ prices ~~discounted~~in effect at 10the ~~percent,~~end ~~plus~~of the ~~cost~~ ofperiod ~~properties~~held ~~not~~constant ~~being~~and ~~amortized,~~discounted ifat ~~any~~10 percent, plus the lower of cost or estimated fair value of unproved properties included in the costs being amortized, if any. Excess costs are charged to property impairment expense. No gain or loss is recognized upon sale or disposition of crude oil and natural gas properties, except in unusual circumstances. During the year ended December 31, 2005, the Partnership recognized property impairment expense of $5,173,969. The Partnership held no productive oil and gas assets at December 31, 2004 and recognized no property impairment for the period from inception (November 10, 2004) to December 31, 2004.

F-8

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

properties, if any. Pursuant to full cost accounting rules, the Partnership performs a ceiling test quarterly as of the balance sheet date on its proved oil and gas properties. Excess capitalized costs are charged to property impairment expense. No gain or loss is recognized upon sale or disposition of oil and gas properties, unless such a sale would significantly alter the rate of depletion and amortization. During the years ended December 31, 2008, 2007, and 2006, the Partnership recognized property impairment expense of proved properties totaling $0, $56,256, and $2,805,385, respectively.

Restoration, Removal, and Environmental Liabilities

The Partnership is subject to extensive Federal, state and local environmental laws and regulations. These laws regulate the discharge of materials into the environment and may require the Partnership to remove or mitigate the environmental effects of the disposal or release of petroleum substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed.

Liabilities for expenditures of a non-capital nature are recorded when environmental assessments and/or remediation is probable, and the costs can be reasonably estimated. Such liabilities are generally undiscounted values unless the timing of cash payments for the liability or component is fixed or reliably determinable.

The Partnership accounts for its asset retirement obligations in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting ~~for~~ for Asset Retirement Obligations” (“SFAS No. 143”). ~~addresses~~Asset ~~accounting~~retirement costs and ~~reporting~~liabilities associated with future site restoration and abandonment of long-lived assets are initially measured at fair value which approximates the cost a third party would incur in performing the tasks necessary to retire such assets. The fair value is recognized in the financial statements as the present value of expected future cash expenditures for site restoration and ~~obligations~~abandonment. ~~associated~~Subsequent to the initial measurement, the effect of the passage of time on the liability for the net asset retirement obligation (accretion expense) and the amortization of the asset retirement cost are recognized in the results of operations.

8The following table summarizes the Partnership’s asset retirement obligation for the years ended December 31, 2008 and 2007.

with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS 143 requires that the fair value of a liability for an asset’s retirement obligation be recorded in the period in which it is incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life of the related asset. SFAS 143 is effective for the Partnership as of its inception date.

	2008			2007
Beginning asset retirement obligation	$	137,757		$	94,718
Additions related to new properties	410			—
Accretion expense	3,519			43,039
Retirement related to property abandonment and restoration	(19,473		)	—
Ending asset retirement obligation	$	122,213		$	137,757

~~The following table summarizes the Partnership’s asset retirement obligation for the year ended December 31, 2005 and the period from inception (November 10, 2004) to December 31, 2004.~~F-9

	2005		2004
Beginning asset retirement obligation	$	—	$	—
Additions related to new properties	85,037		—
Accretion expense	2,688		—
Ending asset retirement obligation	$	87,725	$	—

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

Recognition of Revenue

The Partnership enters into sales contracts for disposition of its share of crude oil and ~~gas~~natural gas production from productive wells. Revenues are recognized based upon the Partnership’s share of metered volumes delivered to its purchasers each month. The Partnership had no material gas imbalances at December 31, 2008, 2007, and 2006.

Gas imbalances sometimes occur when certain working interest parties do not take their entitled share of gas production. The Partnership utilizes the sales method of accounting for recording imbalances. Under this method, the Partnership records as revenue all gas delivered for its account. Any significant over or under balanced gas positions are recorded in the financial statements. As of December 31, 2005 and 2004, the Partnership had no gas imbalance positions.

Income Taxes

The Partnership’s net income or loss flows directly through to its partners, who are responsible for the payment of Federal taxes on their respective share of any income or loss. Therefore, there is no provision for federal income taxes in the accompanying financial statements.

AtAs of December 31, ~~2005~~2008, the tax basis of the Partnership’s assets exceeds the ~~book~~financial reporting basis of the assets by approximately $01.484 million ~~at December 31~~, ~~2005,~~ primarily due to the difference between property impairment costs deducted for financial ~~book~~reporting purposes and intangible drilling costs deducted for income tax purposes.

9Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Effective January 1, 2008, the Partnership adopted SFAS No. 157, which applies to other accounting pronouncements that require or permit fair value measurements; however, it does not require any new fair value measurements.

SFAS No. 157 establishes a hierarchy for disclosure of the inputs to valuation used to measure fair value. The hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. All of the Partnership’s cash equivalents fall into Level 1 and consist of short-term, highly liquid investments, which have maturities of 90 days or less, including money market funds. The Partnership does not have any assets or liabilities falling under Level 2 or 3.

New Accounting Pronouncements

Modernization of Oil and Gas Reporting

In January 2009, the SEC issued revisions to the oil and gas reporting disclosures, “Modernization of Oil and Gas Reporting; Final Rule” (“the Final Rule”). In addition to changing the definition and disclosure requirements for oil and gas reserves, the Final Rule changes the requirements for determining quantities of oil and gas reserves. The Final Rule also changes certain accounting requirements under the full cost method of accounting for oil and gas activities. The amendments are designed to modernize the requirements for the determination of

F-10

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

oil and gas reserves, aligning them with current practices and updating them for changes in technology. The Final Rule is effective for annual reports on Form 10-K for fiscal years ending on or after December 31, 2009. The Partnership has not yet determined the impact, if any, on the financial statements.

The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies the sources for accounting principles and the framework for selecting the principles to be used in preparing financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. This Statement became effective in November 2008.

Disclosures About Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 requires entities that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit-risk-related contingent features contained within derivatives. The Partnership does not utilize derivative instruments; therefore, the Partnership does not expect this pronouncement to have any impact on the Partnership’s results of operations, cash flows or financial position.

Non-controlling Interests in Consolidated Financial Statements

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), which improves the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The Partnership does not own any subsidiaries, and does not expect this pronouncement to have any impact on the Partnership’s results of operations, cash flows or financial position.

Business Combinations

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”), which replaces SFAS No. 141, “Business Combinations” (“SFAS 141”). SFAS 141R retains the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations. The Partnership has no business combinations in progress or, at this time, in future plans. The Partnership does not expect this pronouncement to have any impact on the Partnership’s results of operations, cash flows or financial position.

F-11

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

Accounting Standard Fair Value for Financial Assets and Financial Liabilities

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. The Partnership did not elect fair value as an alternative as provided under SFAS 159 for any of its financial assets and liabilities that are not currently measured at fair value.

3. Transactions with Affiliates

The Partnership has no employees. ~~OREI~~RELP, ~~Inc. (formerly known as Reef Exploration, Inc.), (OREI),~~ an affiliate of Reef formed in 2005, employs a staff including geologists, petroleum engineers, landmen and accounting personnel who administer all of the Partnership’s operations. ~~The~~Prior ~~Partnership~~to ~~reimburses~~January 2, 2006, OREI ~~for~~, ~~direct~~another ~~and~~Reef ~~administrative~~affiliate, ~~services~~employed atthis ~~cost.~~staff ~~During~~of ~~the~~employees. ~~year~~On ~~ended December~~January 2, 312006, ~~2005,~~ the ~~Partnership~~employees ~~incurred~~of ~~technical~~OREI ~~services~~were ~~and~~transferred ~~administrative~~to ~~costs totaling $18,143~~RELP. OfIn ~~this amount~~addition, ~~$7,295~~during ~~represented~~2006 RELP ~~technical~~assumed ~~services capitalized~~from asOREI ~~project~~well ~~costs,~~operator ~~and~~status ~~$10,848~~for ~~represented~~all ~~administrative~~wells ~~costs~~previously operated ~~included~~by asOREI. ~~general~~The ~~and~~Partnership ~~administrative~~reimburses ~~expenses.~~RELP ~~During~~and ~~the~~OREI ~~period~~for ~~from~~technical and ~~inception~~administrative ~~(November~~services ~~10,~~at ~~2004)~~cost. ~~through~~During ~~December~~the years ended December 31, ~~2004~~2008, 2007, and 2006, the Partnership incurred technical services and administrative costs totaling $1849,~~549~~091, $15,244, and $40,134, respectively. Of ~~this~~these amounts, ~~amount~~$4,721, ($151,~~740~~558), ~~represented~~and $26,468 represent technical services costs capitalized as project costs, and $244,~~809~~370, ~~represented~~$16,802, and $13,666 represent administrative costs included as general and administrative expenses.

~~The~~Reef ~~Partnership~~contributes ~~has~~1% ~~receivables~~of all ~~from~~leasehold, ~~Reef totaling $10~~drilling,~~446~~ and ~~$425,475~~completion costs when incurred. During the year atended December 31, ~~2005~~2008, ~~and~~this ~~2004,~~1% ~~respectively.~~obligation ~~The~~totaled $~~10,446~~11. ~~balance~~Reef ~~due at~~also ~~December~~purchased ~~31,~~5.01% ~~2005 consists~~ of the 1Partnership units and pays 5.01% of ~~leasehold,~~the ~~drilling~~99% ~~and~~of ~~completion~~these costs ~~which~~paid ~~Reef~~by isthe ~~required~~unit toholders ~~pay~~(4.96%). inIn addition, Reef agreed to reimburse the ~~4.95~~Partnership 100% of ~~these~~the costs ~~it pays~~for ~~related~~the toworkover ~~its ownership~~ of ~~units.~~a ~~The~~Partnership ~~$425,475~~well ~~due~~which occurred atduring ~~December~~the ~~31,~~first ~~2004 represents~~quarter ~~the~~of ~~purchase~~2008, ~~price~~and to100% ~~Reef~~of ~~for~~ the ~~purchase~~costs of ~~25.027956 Partnership~~drilling ~~units.~~and ~~Reef~~completing ~~paid~~a ~~these~~well ~~balances~~ in ~~full~~Terrebonne ~~during~~Parish, ~~the~~Louisiana. ~~first~~During ~~quarter~~the ofyear ~~the~~ended December 31, ~~subsequent~~2008, ~~year~~this obligation totaled $183,204.

~~Accounts~~RELP processes ~~payable~~joint tointerest ~~affiliates~~billings ~~totaled $235,993~~ and ~~$653,616~~revenue ~~at December~~payments ~~31,~~on ~~2005~~behalf ~~and~~of ~~2004, respectively~~the Partnership. ~~The~~At December 31, ~~2005~~2008 ~~balance includes~~and ~~$230~~2007,~~347~~ ~~due~~the ~~OREI~~Partnership ~~for~~owed ~~technical and administrative services provided~~RELP by$16,801 ~~OREI~~ and $5,488 for joint interest ~~billings~~and ontechnical ~~properties~~and ~~operated~~administrative ~~by OREI. The~~charges ~~balance~~processed ~~also~~in ~~includes~~excess ~~$5,166 due Reef for reimbursement~~ of ~~third party invoices paid by Reef~~revenues. The December 31, ~~2004~~2007 balance also includes $~~314,380~~752 due Reef for ~~the Challenger~~reimbursement ~~Fee~~of ~~described~~an ~~below~~overpayment ~~and~~made ~~$40,553~~by ~~due~~ Reef ~~for the unpaid portion of~~in ~~the~~connection ~~15%~~with ~~management~~its ~~fee~~obligation ~~due~~to atpay ~~December~~1% ~~31,~~of ~~2004~~all ~~for organization and syndication costs~~leasehold, ~~including sales commissions (see note 7)~~drilling, ~~as well as~~and ~~reimbursement~~completion ~~for property acquisition~~ costs ~~paid~~incurred by ~~Reef~~the Partnership. The ~~balance~~Partnership ~~also~~settles its ~~includes~~balances ~~$298,683~~with ~~due~~Reef ~~OREI for technical~~ and ~~administrative~~RELP ~~services provided by OREI and for joint interest billings~~ on ~~properties~~a ~~operated~~quarterly ~~by OREI~~basis. ~~All payables to affiliates at December 31, 2005 and 2004 were paid in full during the first quarter of the subsequent year.~~

If an affiliate of Reef serves as operator of a Partnership prospect, ~~then~~ then operator fees will be payable to the affiliate. Under such circumstances, ~~such~~ such affiliate will receive fees at the competitive rate in the geographical area where the prospect is located during the drilling and production phase of operations. ~~Often~~These ~~these~~fees are charged as a monthly fee per well as agreed to in an operating agreement signed by the Partnership as well as outside third party working ~~interests~~interest owners in the well. During the year ended December 31, 2006 the Partnership paid drilling

~~The Partnership acquired two properties from Reef in 2004, at cost, for approximately $2,000. Properties transferred to the Partnership from Reef are transferred at Reef’s cost,~~F-12

10Table of Contents

~~unless~~ Reef ~~has~~Global ~~reason to~~Energy ~~believe that cost is materially higher than the current fair market value~~IV, ~~in which case the properties are transferred to the Partnership at their fair market value~~L.P.

~~Reef~~Notes ~~has~~to ~~entered into two agreements (the CMI Agreements) with~~Financial ~~Challenger~~Statements ~~Minerals, Inc.~~ (~~CMI~~continued), a subsidiary of Global Santa Fe Corporation and a screener of oil and gas prospects in the Gulf of Mexico and North Sea regions. The CMI Agreements allow Reef the opportunity to review and selectively participate in exploratory and developmental prospects either originated or previewed by CMI. Reef pays CMI for the geological and geophysical services provided by CMI under the CMI Agreements.

~~Prospects~~overhead fees ~~approved~~totaling ~~for~~$199 ~~acquisition by Reef under the CMI Agreements are assigned~~ to ~~this~~RELP ~~Partnership~~and ~~as well as other limited partnerships formed as part of the Program~~OREI. ~~Each~~During ~~partnership formed as a part of~~ the ~~Program~~years ~~pays~~ended ~~Reef~~December 31, a2008, ~~single payment as reimbursement~~2007, onand ~~a pro rata basis~~2006, of the ~~fees~~Partnership paid ~~by Reef~~operator tofees ~~CMI under the CMI agreements. This payment is based upon total Partnership capital contributions. The amount~~ of ~~the fees reimbursed to Reef by this Partnership~~$4, ~~based upon total capital contributions~~361, is $~~314~~5,~~380~~236, and ~~was~~ ~~paid~~$4,308 ~~in January 2005. There are no additional amounts~~ to beRELP ~~reimbursed by this Partnership under these agreements. This amount has been capitalized as geological and geophysical costs as of December 31, 2004~~ in ~~accordance~~connection with ~~the full~~this ~~cost method of accounting for oil and gas properties, and is included in accounts payable to affiliates as of December 31, 2004~~obligation.

4. Major ~~Prepaid Drilling Costs~~Customers

AtThe ~~December~~Partnership sells crude oil and natural gas on credit terms to refiners, pipelines, marketers, and other users of petroleum commodities. Revenues are received directly from these parties or, in certain circumstances, paid to the operator of the property who disburses to the Partnership its percentage share of the revenues. During the year ended December 31, 2008, ~~2004~~three marketers and one operator accounted for 34.2%, 17.9%, 11.0%, and 29.7% of the Partnership’s ~~had~~crude ~~prepaid~~oil $and natural gas revenues, respectively. During the year ended December 31, 2007, four marketers and one operator accounted for 41.0%, 17.2%,~~919~~ 16.8%,~~405~~ in13.4%, and 10.7% of the Partnership’s crude ~~connection~~oil ~~with~~and ~~intangible~~natural ~~drilling~~gas ~~costs~~revenues, torespectively. beDuring ~~incurred~~the onyear ~~wells~~ended ~~which~~December 31, 2006, ~~began~~three marketers and one operator accounted for 32.9%, 21.8%, 13.4%, and ~~drilling~~23.0% ~~operations~~of ~~during~~the Partnership’s crude oil and natural gas revenues, respectively. Due to the ~~first~~competitive nature ~~quarter~~of the market for purchase of ~~2005~~crude inoil ~~which~~and natural gas, the Partnership ~~had~~does not believe that the loss of any particular purchaser would have a material ~~working~~adverse ~~interest~~impact on the Partnership.

5. ~~Major~~Commitments ~~Customers~~and Contingencies

The Partnership sells crude oil and natural gas on credit terms to refiners, pipelines, marketers, and other users of petroleum commodities. Revenues are received directly from these parties or, in certain circumstances, paid to the operator of the property who disburses to the Partnership its percentage share of the revenues. During 2005, one marketer and one operator purchased all of the Partnership’s products and accounted for 75.6% and 24.4% of the Partnership’s oil and gas revenues, respectively. As of December 31, 2004, the Partnership had no oil and gas production and, therefore, had no customers. Due to the competitive nature of the market for purchase of crude oil and natural gas, the Partnership does not believe that the loss of any particular purchaser would have a material adverse impact on the Partnership.

6. Commitments and Contingencies

The Partnership is not currently involved in any legal proceedings.

76. Partnership Equity

Sales of Partnership units began on September 21, 2004. Proceeds received were placed into an interest bearing escrow account until the Partnership reached the minimum subscription level of 50 units. The Partnership was formed on November 10, 2004, and the sale of Partnership units was closed on December 2, 2004 when all 500 Partnership units were sold. The Partnership raised $9,499,441 from the sale of 474.~~972044~~972 Partnership units to investor partners. Reef purchased ~~the~~ the remaining 25.~~027956~~028 units (5.01%) for $425,475. ~~The units purchased by~~ Reef ~~were~~ ~~paid for in January 2005. Reef~~ also contributes 1% of all leasehold, drilling, and completion costs when incurred, in addition to paying its pro rata share (4.9596%) of the leasehold, drilling, and completion costs paid by the Partnership. In addition, Reef has agreed to reimburse the Partnership for 100% of the costs of drilling a developmental well and a work-over for another well in Louisiana. In connection with ~~this~~these ~~obligation~~obligations, Reef ~~paid~~has contributed $63371,~~893~~191 ~~during~~to the ~~year~~ ~~ended~~Partnership ~~December~~at December 31, ~~2005~~2008.

~~All units except those~~The ~~purchased~~Partnership byalso ~~Reef~~retained ~~paid~~the ainterest ~~15%~~income ~~management~~earned ~~fee~~during to2004 ~~Reef to pay for Partnership organization~~ and ~~syndication costs~~2005, ~~including sales commissions. These costs~~ ~~totaled~~totaling $168,~~424~~585,~~916,~~ ~~leaving net capital contributions of $8,500,000 available~~ for ~~Partnership~~use ~~oil~~during ~~and~~the ~~gas~~drilling ~~activities.~~phase Ofof the ~~$1,424,916, syndication costs were $1,374,916 and organization costs were $50,000~~Partnership.

All units, except those purchased by Reef, paid a 15% management fee to Reef to pay for Partnership organization and offering costs, including sales commissions. These costs totaled $1,424,916, leaving net capital contributions of $8,939,776 available for Partnership oil and gas

F-13

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

activities. Of the $1,424,916, offering costs were $1,374,916 and organization costs were $50,000.

Reef exclusively manages and controls all aspects of the business of the Partnership. The Partnership agreement prohibits participation by investor partners in the Partnership’s day-to-day business decisions.

~~Information regarding the~~7. ~~number of units outstanding and the net loss per type of~~ Partnership ~~unit for the year ended December 31, 2005 and the period from inception (November 10, 2004) to December 31, 2004 is detailed below:~~Projects

		Year ended December						Period from inception (November 10, 2004) to December 31, 2004
Type of Unit	Number of Units	31, 2005						Net (loss)			Net (loss) per unit
					Net loss
		Net loss			per unit
Managing general partner units	25.028	$	(325,236	)	$	(12,994.92	)	$	(756	)	$	(30.21	)
General partner units	125.000	(1,331,873		)	(10,654.98		)	(10,624		)	(85.00		)
Limited partner units	349.972	(3,728,945		)	(10,654.98		)	(29,746		)	(85.00		)
Total	500.000	$	(5,386,054	)				$	(41,126	)

During 2004-2006, the Partnership utilized the $8,939,776 of net capital contributions to drill thirteen wells and to purchase royalty interests in a field in Louisiana with three producing oil and gas properties. The Partnership drilled six successful developmental wells and one successful exploratory well, three of which are still productive, and drilled two developmental dry holes and four exploratory dry holes. One of the royalty interest properties purchased by the Partnership is still productive.

12In August 2006, the managing general partner agreed to pay 100% of the costs for a working interest in a developmental well in Louisiana. The well completed drilling operations in May 2007 and was unsuccessful, however, after reviewing the well logs and other geologic data, the wellbore was re-entered during the fourth quarter of 2007 and successfully sidetracked. Sidetrack drilling operations were completed during February 2008 and the well began production in May 2008. Reef agreed to pay 100% of the cost of the successful sidetrack operations and completion costs. As of December 31, 2008 the Partnership had incurred and been reimbursed $183,847 of costs related to this well. The amounts reimbursed are classified as additional capital contributions on the accompanying balance sheet.

8.RELP serves as operator of nine of the wells drilled by the Partnership. ~~Projects~~Four of these wells were unsuccessful and five were successful wells, of which three are still productive at December 31, 2008.

~~At December 31, 2005, the Partnership has five exploratory and eight developmental projects~~8. InSupplemental ~~addition,~~Information ~~the~~on ~~Partnership purchased~~Oil & aNatural ~~royalty~~Gas ~~interest in three productive wells, two of which are~~Exploration ~~producing at December 31, 2005. Twelve of the thirteen projects completed drilling during 2005,~~ and ~~the~~Production ~~final~~Activities project completed drilling during the first quarter of 2006. The Partnership has drilled four productive wells, three of which are still producing at December 31, 2005, five dry holes, and four wells which are in various stages of completion and testing.(Unaudited)

OREI has been named operator of nine of the thirteen wells in which the Partnership has participated. Two of the wells operated by OREI were successful, three were dry holes, and four are in various stages of completion and testing. Other partnerships in the Program also own working interests in all of the wells. In certain instances, private drilling partnerships managed by Reef also own interests in these wells.

One of the Partnership’s successful wells and three of the wells which are in various stages of testing and completion had operations which were disrupted by hurricanes which struck the Gulf Coast of the United States in August and September 2005. The Partnership incurred uninsured repair costs of approximately $19,000 during 2005 in connection with the successful well. The well was shut-in for the period from September 22, 2005 thru January 27, 2006 due to location flooding and the time required for Reef and pipeline operators in the area to repair damages sustained as a result of the hurricanes. Completion operations were suspended on two of the drilled wells as a result of location flooding and, subsequently, the availability of suitable completion rigs. Operations have resumed on these two locations during the first quarter of 2006. Testing of one additional well has been suspended because a gas plant in the area has been shut-down since late September 2005. Testing will resume when the plant reopens in April 2006.

9. Subsequent Events

On December 20, 2005, an affiliate of Reef, Reef Exploration, L.P. (RELP), was formed to engage in the business of developing, exploiting, and producing oil and gas properties, and, in some cases, to serve as operator for the wells drilled by partnerships formed under the Program. It is expected that during 2006 RELP will assume operations of the wells currently operated by OREI.

10. Supplemental Information on Oil & Gas Exploration and Production Activities (Unaudited)

Capitalized Costs

The following table presents the Partnership’s aggregate capitalized costs ofrelating to oil and gas ~~properties~~activities ~~are~~at ~~as follows~~the end of each of the years indicated:

December 31,	~~2005~~2008			~~2004~~2007			2006
Oil and gas properties:
Oil and natural gas properties:
Leasehold costs	$	1,354,736		$	44,983
Unproved properties	$	—		$	—		$	27,920
Producing oil & gas assets	6,574,483			—
Proved properties	8,716,585			8,545,833			8,596,035
Drilling in progress	188,273			3,689,941
	8,716,585			8,545,833			8,623,955
Total oil and gas properties	$	8,117,492		$	3,734,924
Less:
Accumulated depreciation and depletion	(5,404,092		)	—
Accumulated depreciation, depletion and amortization	(435,362		)	(357,661		)	(477,461		)
Net oil and gas property	2,713,400			3,734,924
Property impairment	(8,035,610		)	(8,035,610		)	(7,979,354		)
Total	$	245,613		$	152,562		$	2,713,400

F-14

Table of Contents

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

Costs Incurred

~~Costs~~The following table sets forth costs incurred in ~~property~~oil and natural gas acquisition, exploration, ~~development,~~ and ~~production~~development activities ~~consisted~~during of the ~~following~~years ended December 31, 2008, 2007, and 2006:

	2005		Period from inception (November 10, 2004) to December 31, 2004
	2008		2007			2006
Oil and gas properties:
Oil and natural gas properties:
Property acquisition of proved reserves	$	523,554	$	—
Exploration	$	1,474	$	(24	)	$	33,439
Exploration costs	1,998,052		1,062,526
Development	169,278		104,650			473,024
Development costs	1,775,925		2,672,398
Total	$	170,752	$	104,626		$	506,463
Asset retirement obligation	85,037		—
Production costs	39,607		—
Total costs incurred	$	4,422,175	$	3,734,924

Results of Operations

The following table ~~summarizes~~sets ~~for the~~forth ~~periods~~results ~~indicated total revenues and costs, net sales volumes~~ of ~~oil~~operations ~~(including~~from ~~condensate)~~oil and ~~natural~~ gas, ~~the~~producing ~~average~~activities ~~price~~for ~~received~~the ~~per~~years ~~barrel~~ended ~~(BBL)~~December 31, of2008, ~~oil sold~~2007, ~~the average price received per thousand cubic feet (MCF) of natural gas sold~~ and ~~the production costs per barrel of oil equivalent (BOE), using a conversion rate of 6 MCF per barrel of oil.~~2006:

	2005			Period from inception (November 10, 2004) to December 31, 2004
	2008			2007			2006
Oil and gas properties:
Oil and gas producing activities:
Oil sales	$	12127,~~144~~875		$	—56,780		$	65,467
Gas sales	101,321
Natural gas sales	187,906			174,503			246,421
Production costs	(39,607		)	—
Production expenses	(71,762		)	(74,227		)	(127,568		)
Depreciation and depletion	(5,550,273		)	—
Accretion of asset retirement obligation	(3,519		)	(43,039		)	(5,820		)
Accretion of asset retirement obligation	(2,688		)	—
Depreciation , depletion and amortization	(59,324		)	(62,949		)	(247,338		)
Results of producing activities	$	(5,479,103	)	$	—
Property impairment expense	—			(56,256		)	(2,805,385		)
Oil BBL sold	212			—
Results of producing activities	$	181,176		$	(5,188	)	$	(2,874,223	)
Gas MCF sold	11,019			—
Depletion rate per BOE	$	13.26		$	13.88		$	38.33
Average sales price per BBL sold	$	57.28		$	—
Average sales price per MCF sold	$	9.20		$	—
Production cost per BOE	$	19.34		$	—

BOE = Barrels of Oil Equivalent ~~and~~(6 ~~Gas~~MCF ~~Reserves~~equals 1 BOE)

~~The~~Crude ~~following~~Oil ~~information describes changes during the years~~ and ~~balances~~ ofNatural ~~proved~~Gas oil and gas reserves at December 31, 2005. The Partnership had no crude oil and natural gas reserves at December 31, 2004. The definitions used are in accordance with applicable Securities and Exchange Commission regulations.Reserves

~~Proved~~The ~~oil~~following ~~and~~information describes ~~gas~~changes ~~reserves~~during ~~are~~ the ~~estimated~~year ~~quantities~~and balances of estimated proved crude oil, ~~natural gas~~ and natural gas ~~liquids~~reserves which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided by contractual arrangements, but not escalations based upon future conditions. The estimate for 2005 utilizes the December 31, ~~oil (NYMEX) price of $61.04 per barrel and natural gas (Henry Hub) price of $10.08 per MMBtu~~2008, ~~adjusted by property for energy content~~2007, ~~quality~~ and ~~transportation~~ ~~costs~~2006. ~~Additional~~The definitions ~~development~~used ~~costs~~are ~~required~~in toaccordance ~~recover~~with ~~these proved~~applicable ~~reserves~~SEC ~~are~~regulations.

15Proved crude oil and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable

~~estimated at approximately $146,000 as of December 31, 2005. All of the Partnership’s reserves are located in the United States.~~F-15

~~The reserves in the following table are reserves owned~~Table byof ~~the Partnership. The reserves stated below include royalty interests and exclude quantities due others.~~Contents

	Oil (BBL) (1)		Gas (mcf)		BOE (2)
Net proved developed reserves for properties owned by the Partnership:
Reserves at December 31, 2004	—		—		—
Purchases of reserves in place	19		3,801		653
New discoveries	4,730		408,698		72,846
Production	(212	)	(11,019	)	(2,049	)
Reserves at December 31, 2005	4,537		401,480		71,450

Reef Global Energy IV, L.P.

Notes to Financial Statements (continued)

certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, that is, prices and costs as of the date the estimate is made.

Prices include consideration of changes in existing prices provided by contractual arrangements, but not escalations based upon future conditions. Additional development costs required to recover these proved reserves are estimated at approximately $0, $8,857, and $13,923 as of December 31, 2008, 2007, and 2006, respectively. All of the Partnership’s reserves are located in the United States.

	Oil (BBL) (1)		Gas (mcf)		BOE (2)
Net proved developed reserves for properties owned by the Partnership:
Reserves at December 31, 2005	4,537		401,480		71,450
Revisions of previous estimates	(2,395	)	(304,084	)	(53,076	)
New discoveries	57		418		127
Production	(1,014	)	(32,636	)	(6,453	)
Reserves at December 31, 2006	1,185		65,178		12,048

Revisions of previous estimates	(252	)	(40,471	)	(6,997	)
New discoveries	3,037		72,551		15,129
Production	(795	)	(22,447	)	(4,536	)
Reserves at December 31, 2007	3,175		74,811		15,644

Revisions of previous estimates	3,911		27,378		8,474
Production	(1,305	)	(19,016	)	(4,475	)
Reserves at December 31, 2008	5,781		83,173		19,643

(1) Oil includes both oil and natural gas liquids

(2) BOE (barrels of oil equivalent) is calculated by converting 6 MCF of natural gas to 1 BBL of oil. A BBL (barrel) of oil is one stock tank barrel, or 42 U.S. gallons liquid volume, of crude oil or other liquid hydrocarbons.

Standardized Measure of Discounted Future Net Cash Flows

As required by the FASB, the standardized measure of discounted future net cash flows is computed by applying year-end prices, costs and legislated tax rates and a discount factor of 10 percent to net proved reserves.

December 31,	2005			2004
Oil and gas properties owned by the Partnership:
Future cash inflows from sales of oil and gas	$	4,561,530		$	—
Future production costs	(931,286		)	—
Asset retirement obligations	(150,422		)	—
Future development costs	(146,180		)	—
Future net cash flows	3,333,642			—
Effect of discounting net cash flows at 10%	(808,987		)	—
Discounted future net cash flows	$	2,524,655		$	—

Changes in the demand for crude oil and natural gas, inflation, and other factors make such estimates inherently imprecise and subject to substantial revision. This table should not be construed to be an estimate of the current market value of the Partnership’s proved reserves.

~~Changes in Standardized Measure of Discounted Future Net Cash flows Relating to Proved Oil and Gas Reserves~~F-16

16Table of Contents

December 31,	~~2005~~2008			~~2004~~2007			2006
Oil and gas properties owned by the Partnership:
Oil and natural gas properties owned by the Partnership:
Standardized measure at beginning of year	$	—		$	—
Future cash inflows	$	769,676		$	789,360		$	548,350
Purchase of minerals in place	29,798			—
Future production costs	(338,637		)	(310,806		)	(392,739		)
Extensions and discoveries	2,566,027			—
Future development costs	—			(8,857		)	(13,923		)
Sales net of production costs	(71,170		)	—
Future net cash flows	431,039			469,697			141,688
Net increase (decrease)	2,524,655			—
Effect of discounting net cash flows at 10%	(91,295		)	(113,487		)	(2,468		)
Standardized measure at end of year	$	2,524,655		$	—
Discounted future net cash flows	$	339,744		$	356,210		$	139,220

17Changes in the Standardized Measure of Discounted Future Net Cash flows Relating to Proved Crude Oil and Natural Gas Reserves

December 31,	2008			2007			2006
Oil and natural gas properties owned by the Partnership:
Standardized measure at beginning of period	$	356,210		$	139,220		$	2,524,655
Extensions and discoveries	—			517,409			2,726
Purchase of minerals in place	—			—			—
Net change in sales price, net of production costs	(106,619		)	161,491			(2,149,101		)
Revisions of quantity estimates	204,318			(90,401		)	(673,318		)
Net changes in estimated future development costs	(25,096		)	10,559			—
Changes in production timing rates	115,810			(281,973		)	360,292
Accretion of discount	35,621			13,922			252,466
Sales net of production costs	(240,500		)	(114,017		)	(178,500		)
Net increase (decrease)	(16,466		)	216,990			(2,385,435		)
Standardized measure at end of year	$	339,744		$	356,210		$	139,220

F-17

Table of Contents

EXHIBIT INDEX

3.1 Form of Limited Partnership Agreement (incorporated by reference to Exhibit 3.1 to Form S-1, SEC File No. 333-93399, as filed with the SEC on September 14, 2001).

3.1(a)(i)*	Certificate of Limited Partnership of Reef Global Energy IV, L.P., dated November 10, 2004.

3.1(a)(ii)	Certificate of Amendment to the Certificate of Limited Partnership of Reef Global Energy IV, L.P., dated August 27, 2008 (incorporated by reference to Exhibit 3.1(i)(a) to Form 8-K, SEC File No. 333-93399-04, as filed with the SEC on September 3, 2008).

3.1(a)(iii)	Certificate of Amendment to the Certificate of Limited Partnership of Reef Global Energy IV, L.P., dated August 28, 2008 (incorporated by reference to Exhibit 3.1(i)(b) to Form 8-K, SEC File No. 333-93399-04, as filed with the SEC on September 3, 2008).

3.2	Form of Limited Partnership Agreement (incorporated by reference to Appendix A to the prospectus filed as part of Post-Effective Amendment No. 1 to Registration Statement on Form S-1, SEC File No.333-93399, as filed with the SEC on September 14, 2001).

10.1	Letter Agreement, dated November 7, 2001, by and between Reef Partners LLC and Challenger Minerals Inc. (incorporated by reference to Exhibit 10.2 of the Annual Report on Form 10-K of Reef Global Energy Ventures as filed with the SEC on March 5, 2002).

23.2*	Consent of Gleason Engineering

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2*	Certification of Chief Financial Officer pursuant to Rule 13-14(a) under the Securities Exchange Act of 1934.

32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350.

32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350.

~~10.1 Letter~~* ~~Agreement,~~Attached dated November 7, 2001, by and between Reef Partners LLC and Challenger Minerals Inc. (incorporated by reference to Exhibit 10.2 of the Report on Form 10-K of Reef Global Energy Ventures as filed with the SEC on March 5, 2002).herewith

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. §1350.

32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. §1350.

Filing Compare · Reef Global Energy IV, L.P.