Partnership Equity

6 Months Ended

Jun. 30, 2014

4. Partnership Equity

The offering period for units of Partnership interest began on September 16, 2013 and terminates on June 30, 2015, unless the Partnership is fully subscribed or Reef terminates the offering prior to that date. Proceeds received were placed into an interest bearing escrow account until the Partnership reached the minimum subscription level of 10 units required for the escrow agent to fund the Partnership on December 10, 2013. Subsequent to that date, additional proceeds are placed into the same interest bearing escrow account and funded on a weekly basis to the Partnership. Reef is obligated to purchase at least 5% of the total outstanding Partnership units and to contribute an amount equal to 1% of the net capital of the Partnership after payment of all organization and offering costs.

All units except those purchased by Reef or Reef affiliates pay a 15% management fee to Reef to pay for Partnership organization and offering costs, including sales commissions. From the inception of the offering through June 30, 2014, the Partnership had raised $9,306,100 from the sale of 62.2010 units of general partner interest and 30.8600 units of limited partner interest to investor partners. Reef contributed $416,325 in connection with its obligation to purchase 4.8979 units of general partner interest (5%) and contributed $84,107 in connection with its obligation to contribute 1% of total net capital contributions to the Partnership after payment of all organization and offering costs. Offering costs totaling $1,345,915 were netted from capital contributions, leaving net capital contributions of $8,460,617. Organization costs of $50,000 were expensed, leaving $8,410,617 available for Partnership activities.

Under the terms of the offering, all units of general partner interest, except those owned by Reef, will be converted to units of limited partner interest on a one-to-one basis as soon as practicable after the end of the year in which the Partnership has substantially completed all drilling activity.

Information regarding the number of units outstanding and the net income per type of Partnership unit for the three and six month periods ended June 30, 2014 is detailed below.

For the three months ended June 30, 2014

Type of Unit	Number of Units	Net Income		Net income per unit
Managing general partner units	4.8979	$	10,508	$	2,145.41
General partner units	62.2010	19,324		310.67
Limited partner units	30.8600	10,361		335.74
Total	97.9589	$	40,193

For the six months ended June 30, 2014

Type of Unit	Number of Units	Net Income		Net income per unit
Managing general partner units	4.8979	$	9,616	$	1,963.29
General partner units	62.2010	13,091		210.46
Limited partner units	30.8600	6,800		220.35
Total	97.9589	$	29,507

- Definition

The entire disclosure for the formation, structure, control and ownership of the partnership. Disclosures related to accounts comprising partners' capital. Includes balances of general partners' capital account, limited partners' capital account, preferred partners' capital account and total partners' capital account and units outstanding; accumulated other comprehensive income; amount and nature of changes to amount of partner's capital and units outstanding by class, rights and privileges for each class of units; distribution policies and distributions paid by unit class; impact of and correction of an error in previously issued financial statements; limitations of partners' liability; redemption, conversion and distribution policies; and deferred compensation related to the issuance of units.

+ References+ Details

Reef Oil & Gas Drilling & Income Fund, L.P. 10-Q