SECURITIESTable ANDof EXCHANGE COMMISSION Contents

~~Washington,~~SECURITIES D.AND C.EXCHANGE ~~20549~~ COMMISSION

~~Form~~Washington, ~~10-K~~D. C. 20549

~~ANNUAL~~Form ~~REPORT~~10-K ~~PURSUANT TO SECTION 13 OR 15(d) OF~~

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

For the fiscal year ended December 31, ~~2004~~ 2008

~~Commission~~OR ~~File Number 2-71865~~

~~TEXLAND~~¨ ~~DRILLING~~TRANSITION ~~PROGRAM-1981,~~REPORT ~~LTD.~~PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(Name~~Commission ofFile ~~Registrant)~~Number 2-71865

TEXAS		75-1791491
(State of Organization)		I. R. S. Employer Identification No.

TEXLAND DRILLING PROGRAM-1981, LTD.

777 Main Street, Suite 3200 Fort Worth, Texas		76102
(Address of Executive Offices)		Zip Code

(Exact Name of Registrant as Specified in its Partnership Agreement)

Registrant’s Telephone Number (817) 336-2751

Texas

75-1791491

(State or Other Jurisdiction of

Incorporation or Organization)

(I. R. S. Employer

Identification No.)

Securities registered pursuant to Section 12(b) of the Act:


777 Main Street, Suite 3200, Fort Worth, Texas		76102
(Address of Principal Executive Offices)		(Zip Code)

2425 Units of Limited Partnership Interest		None
(Title of Class)		(Voting Units)

(817) 336-2751

~~Indicate by check mark whether the Registrant~~ (1)Issuer’s ~~has~~Telephone ~~filed~~Number, ~~all~~Including ~~reports~~Area ~~required to be filed by Section 13 of 15(d~~Code) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 ¨ NO x

~~PART~~Securities Iregistered pursuant to Section 12(b) of the Act:

Item 1. Business


Title of each class		Name of each exchange on which registered
2425 Units of Limited Partnership Interest		None

~~Texland~~Securities ~~Drilling~~registered ~~Program-1981,~~pursuant ~~Ltd.~~to Section 12(~~a Limited Partnership~~g) ~~was formed on July 20, 1981 with $12,125,000 in aggregate Limited Partnership subscriptions for the purpose~~ of ~~engaging in~~ the ~~exploration~~Exchange ~~for~~Act: ~~oil and gas~~None. ~~Such~~ exploration has taken place principally in the geological area known as the Texas Permian Basin. The Partnership’s drilling and exploration phase is complete. Development of the Partnership’s properties is also complete; except for possible occasional developmental drilling which may be undertaken to the extent necessary to insure the maximum commercial recovery of reserves. In 2004, the Partnership drilled 3 such developmental wells.

~~The~~Indicate ~~Partnership~~by ~~has~~check nomark ~~plans~~if ~~to borrow funds or reinvest significant amounts of oil and gas revenues. To~~ the ~~extent~~registrant ~~that~~is ina well-~~fill~~known ~~development~~seasoned ~~is deemed advisable~~issuer, ~~however;~~as ~~such~~defined ~~operations~~in ~~will~~Rule be405 ~~funded~~of ~~from~~the ~~available~~Securities ~~cash flow~~Act. Yes ¨ No x

~~Sales~~Indicate toby ~~such~~check ~~purchasers~~mark ~~are~~if ~~on a competitive basis on short-term contracts customarily used in~~ the ~~industry.~~registrant ~~Should~~is ~~sales~~not required to ~~these~~file ~~purchasers~~reports ~~become~~pursuant ~~interrupted, management~~to ~~believes~~Section 13 ~~alternative~~or ~~purchasers~~15(d) ~~would~~of bethe ~~immediately available on similar terms~~Act. Yes ¨ No x

~~Purchasers,~~Indicate ~~which~~by ~~accounted~~check ~~for~~mark ~~10%~~whether orthe ~~more~~Registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the ~~Partnership’s~~Securities ~~sales~~Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), ~~were~~and as(2) has ~~follows:~~been subject to such filing requirements for the past 90 days. Yes x No ¨

	2004		2003		2002
Conoco Phillips	61	%	55	%	56	%
Sun Partners Marketing and Terminals, L.P.	20	%	22	%	10	%
Occidental Premium, Ltd.	19	%	22	%
BP American Production Co.					20	%
Calpine Producer Services, L.P.					10	%
	100	%	99	%	96	%

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. x

~~Texland~~Indicate ~~Petroleum,~~by ~~L.P.~~check ~~receives substantially~~mark ~~all~~whether ~~revenues~~the ~~directly~~registrant ~~from~~is ~~the~~a ~~purchasers~~large accelerated ~~and~~filer, ~~subsequently~~an ~~disburses~~accelerated ~~these~~filer, ~~revenues~~or toa ~~interest~~non-accelerated ~~owners.~~filer, ~~Substantially~~or ~~all~~a ~~trade~~smaller ~~accounts~~reporting ~~receivable~~company. ~~were~~See ~~due~~definitions ~~from~~of ~~Texland~~“large ~~Petroleum~~accelerated filer, ~~L.P.~~“accelerated atfiler,” ~~December~~and ~~31,~~“smaller ~~2004~~reporting ~~and~~company” ~~2003~~in Rule 12b-2 of the Exchange Act. (Check one):

~~The~~Large ~~price~~accelerated offiler ~~oil~~¨ ~~and~~Accelerated ~~gas~~filer is¨ ~~affected~~Non-accelerated byfiler ~~world~~¨ ~~wide~~(Do ~~supply~~not ~~and~~check ~~demand~~if ~~beyond~~a ~~the Partnership’s~~smaller ~~control.~~reporting ~~The monthly average price during the past five years for West Texas Sour (adjusted for gravity and marketing costs~~company), ~~the~~Smaller ~~primary~~reporting ~~type~~company ~~of Partnership oil, and for the widely available NYMEX benchmark West Texas Intermediate are as follows:~~ x

Year	WTS	NYMEX
2000	$28.34	$	30.25
2001	$22.29	$	25.99
2002	$23.88	$	26.09
2003	$28.33	$	31.08
2004	$37.23	$	41.38

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

FromTable January 1, 2005 to May 31, 2005, average daily oil prices of WTS oil ranged from $41.53 to $48.06 and NYMEX ranged from $46.82 to $54.72. Contents

-PART 2I -

Item 1. 2Business ~~- Properties~~

~~The~~Texland Drilling Program-1981, Ltd. (a Limited Partnership) ~~currently~~was ~~has~~formed anon ~~interest~~July 20, 1981 with $12,125,000 in aggregate ~~264~~Limited ~~active~~Partnership ~~gross~~subscriptions for the purpose of engaging in the exploration for oil and gas. ~~wells,~~Such ~~representing~~exploration ~~17.15~~has ~~net~~taken ~~wells.~~place ~~Two~~principally ofin the ~~gross~~geological ~~wells~~area known as the Texas Permian Basin. The Partnership’s drilling and exploration 0phase is complete.64 Development of the ~~net~~Partnership’s ~~wells~~properties ~~are~~is ~~gas~~also complete; except for possible occasional developmental drilling which may be undertaken to the extent necessary to insure the maximum commercial recovery of ~~wells~~reserves. ~~and~~In 2008, the ~~remainder~~Partnership ~~are~~re-completed ~~oil~~three developmental wells.

The Partnership ~~currently~~ has ~~257~~no ~~oil wells~~plans ~~included~~to inborrow 8funds ~~different~~or ~~enhanced~~reinvest ~~recovery~~significant ~~projects~~amounts ~~operated~~of oil byand ~~Texland~~gas ~~Petroleum, L~~revenues. P.To ~~Such~~the ~~enhanced~~extent ~~recovery~~that ~~projects~~in-fill ~~are~~development ~~designed~~is todeemed ~~pressurize~~advisable, ~~the~~however; ~~oil~~such ~~bearing~~operations ~~reservoirs~~will ~~and~~be ~~increase~~funded ~~the~~from ~~producing~~available ~~rates,~~cash ~~property life and overall ultimate recovery of oil~~flow.

~~Item~~Sales to 3such purchasers are on a competitive basis on short-term ~~Legal~~contracts ~~Proceedings~~customarily used in the industry. Should sales to these purchasers become interrupted, management believes alternative purchasers would be immediately available on similar terms.

~~None~~Purchasers, which accounted for 10% or more of the Partnership’s sales, were as follows:

Item 4 - Submission of Matters to a Vote of Security Holders


	2008		2007		2006
BP America					42	%
Conoco Phillips	68	%	65	%	26	%
Sun Partners Marketing and Terminals, L.P.	15	%	17	%	18	%
Occidental Premium, Ltd.					13	%
Other	17	%	18	%	1	%

	100	%	100	%	100	%

~~None~~Texland Petroleum, L.P. as the operator receives substantially all revenues directly from the purchasers and subsequently disburses these revenues to interest owners. Substantially all trade accounts receivable were due from Texland Petroleum, L.P. at December 31, 2008 and 2007.

-The 3price -of oil and gas is affected by world wide supply and demand beyond the Partnership’s control. The monthly average price during the past five years for West Texas Sour (adjusted for gravity and marketing costs), the primary type of Partnership oil, and for the widely available NYMEX benchmark West Texas Intermediate are as follows:

PART II


Year	WTS		NYMEX
2004	$	37.23	$	41.38
2005	$	50.33	$	56.56
2006	$	58.68	$	66.22
2007	$	64.77	$	72.39
2008	$	93.63	$	99.75

~~Item~~From 5January 1, -2009 ~~Market~~to ~~for~~March 4, ~~Registrant’s~~2009, ~~Common~~monthly ~~Equity~~average oil prices of WTS oil ranged from $30.38 to $33.21 and ~~Related~~NYMEX ~~Stockholder~~ranged ~~Matters~~from $39.40 to $42.99.

~~Omitted.~~- ~~Not~~2 ~~applicable.~~-

ItemTable 6of - Selected Financial Data Contents

~~The following table presents selected financial data for each of the past five years ended December 31, 2004~~Item 1A. ~~The~~Risk ~~data~~Factors ~~has been derived from the audited financial statements:~~

~~TEXLAND~~The ~~DRILLING~~primary ~~PROGRAM~~factor –affecting ~~1981,~~Partnership ~~LTD~~net income and cash distributions is the price of oil and gas. Partnership oil and gas is sold on short-term contracts whose prices fluctuate widely from month to month in response to a world wide supply and demand and geopolitical factors over which the Partnership has no control.

~~SELECTED~~Texland ~~FINANCIAL~~Drilling ~~INFORMATION~~Program-1981 LTD will not incur any debt and will not request funds from the Limited Partners. Therefore, the existing reserves will be produced and depleted until exhausted; or until the Partnerships properties are sold. Unless prices rise to offset this depletion, the Partners can anticipate declining future net income and cash distributions.

~~FOR~~Our ~~THE~~reserve ~~YEAR~~estimates ~~ENDED~~depend ~~DECEMBER~~on 31many assumptions that may be inaccurate, which could materially adversely affect the quantities and value of our reserves. Future oil and gas prices, operating costs, developmental capital expenditures, state production taxes and abandonment costs, are such factors over which we have limited control and will likely vary from estimates; and these variations could materially affect the estimates of economically available quantities of oil and gas.

	2004		2003			2002		2001		2000
STATEMENT OF INCOME:
Revenues	$	1,742,842	$	1,479,631		$	1,260,462	$	1,327,968	$	1,534,376
Income before cumulative effect of change in accounting principle		868,821		666,707			388,170		439,820		788,357
Cumulative effect of change in accounting principle				214,257			—		—		—
Net Income	$	868,821	$	880,964		$	388,170	$	439,820	$	788,357
Allocation of Net Income:
Limited Partners	$	410,104	$	227,971		$	166,128	$	184,865	$	380,922
General Partners		458,717		652,993			222,042		254,955		407,435
	$	868,821	$	880,964		$	388,170	$	439,820	$	788,357
Net Income per $5,000
Limited Partner Units (2,425 Units Outstanding)	$	169	$	127		$	69	$	76	$	157
Cumulative effect of change in accounting principle				(33	)		—		—		—
	$	169	$	94		$	69	$	76	$	157
BALANCE SHEET DATA:
Total Assets	$	1,852,199	$	1,820,165		$	1,510,473	$	1,457,338	$	1,570,122
Total Liabilities	$	243,963	$	214,415		$	56,733	$	55,102	$	48,398
Partners’ Equity	$	1,608,236	$	1,605,750		$	1,453,740	$	1,402,236	$	1,521,724
PARTNERSHIP CASH DISTRIBUTIONS
Limited Partner (per $5,000 unit)	$	170	$	142		$	55	$	108	$	175
General Partner	$	480,100	$	410,950		$	254,400	$	348,100	$	490,791

Increased governmental regulation and taxes imposed at the wellhead may increase in the future and could materially affect the cash distributions to the Partners.

-Limited 4Partners -have limited voting rights and therefore have limited ability to affect Partnership operations.

~~Item~~The 7Partnership -can ~~Management’s~~be terminated ~~Discussion~~under ~~and~~certain ~~Analysis~~circumstances. The General Partner may sell all of ~~Financial~~the ~~Condition~~assets of the Partnership and ~~Results~~terminate the Partnership. The expiration of ~~Operations~~the Partnership term could cause the Partnership to be reformed as a nominee entity without limited liability protection.

~~Risk~~Item 1B. ~~Factors~~Unresolved ~~and~~Staff ~~Cautionary~~Comments ~~Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995~~

~~Certain information included in Items 1 and Items 7 of this report contain certain statements that may constitute forward-looking statements within the meaning of Securities and Exchange regulations~~None. ~~Such forward-looking statements are based upon the current expectations of Texland Drilling Program-1981, Ltd. and speak only as of the date made.~~

~~Where~~Item 2 ~~any forward~~-~~looking~~ ~~statement~~Properties includes a statement of the assumptions or bases underlying such forward-looking statement, we caution that while we believe these assumptions or bases to be reasonable and to be made in good faith, assumed facts or bases almost always vary from actual results and the difference between assumed facts or bases and the actual results could be material, depending on the circumstances.

~~Factors~~The ~~that~~Partnership ~~could~~currently ~~cause~~has ~~our~~an ~~results~~interest ~~to differ materially from the results discussed~~ in ~~such~~286 ~~forward-looking~~active ~~statements~~gross ~~include, but are not limited to, the following: production variance from expectations, volatility of~~ oil and gas ~~prices~~wells, ~~the~~representing ~~need~~22.04 tonet ~~further~~wells. ~~develop~~Two ~~reserves,~~of the ~~substantial~~gross ~~capital~~wells ~~expenditures required to fund operations, development risks, environmental risks, uncertainties about estimates of reserves, litigation, government regulation, political risks, costs~~ and ~~results~~0.45 of ~~developmental~~the ~~drilling,~~net ~~and~~wells ~~mechanical~~are ~~and other inherent risks associated with oil and~~ gas ~~production.~~wells ~~All such forward-looking statements in this document are expressly qualified in their entirety by the cautionary statements in this paragraph,~~ and the ~~Partnership~~remainder ~~undertakes~~are nooil ~~obligation to publicly update or revise any forward-looking statements~~wells.

~~Critical~~The ~~Accounting~~Partnership ~~Policies~~currently has 278 oil wells included in 8 different enhanced recovery projects operated by Texland Petroleum, L. P. Such enhanced recovery projects are designed to pressurize the oil bearing reservoirs and ~~Estimates~~increase the producing rates, property life and overall ultimate recovery of oil.

The Partnership~~’s discussion and analysis of its financial condition and results of~~ ~~operations~~has ~~are~~interests ~~based upon financial statements which have been prepared~~ in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires the Partnership to make estimates and judgments that affect the amounts reported in the financial statements and related footnote disclosures. Application of certain of the Partnership’s accounting policies21,087 ~~including~~gross ~~those related to oil~~ and ~~gas revenues~~1,756 ~~oil~~net ~~and gas properties~~acres, ~~asset retirement~~all ~~obligations,~~of ~~and~~which ~~litigation require significant estimates. The Partnership bases its estimates on historical experience and various assumptions that~~ are ~~believed~~fully ~~reasonable under the circumstances~~developed. ~~Actual results may differ from these estimates.~~ The Partnership ~~believes~~has ~~the~~no ~~following~~plans ~~critical~~to ~~accounting~~acquire ~~policies~~any ~~reflect~~additional ~~its more significant judgments and estimates used in the preparation of its financial statements~~acreage.

~~Property,~~Item 3 ~~Plant~~- ~~and~~Legal ~~Equipment~~Proceedings

~~Proved reserves are defined by the U~~None.S. Securities and Exchange Commission (“SEC”) as those volumes of crude oil, condensate, natural gas liquids and natural gas that geological and engineering data demonstrate with reasonable certainty are recoverable from known reservoirs under existing economic and operating conditions. Proved developed reserves are volumes expected to be recovered through existing wells with existing equipment and operating methods. Although the Managing General Partner’s engineers are knowledgeable of and follow the guidelines for reserves established by the SEC, the estimation of reserves requires a significant number of assumptions based on professional judgment. Reserve estimates are updated at least annually and consider recent production levels and other technical information. Estimated reserves are often subject to future revision, which could be substantial, based on the availability of additional information. Changes in oil and gas prices can lead to substantial revisions to reserve quantities.

~~Reserve~~Item 4 ~~revisions in turn may cause adjustments in the units~~-~~of-production~~ ~~depreciation~~Submission ~~and depletion rates, the estimates~~ of ~~potential impairment~~Matters ofto ~~carrying~~a ~~value,~~Vote ~~and the supplemental disclosure~~ of ~~standardized~~Security ~~measure~~Holders ~~of discounted future net cash flows relating to oil and gas producing activities. The Partnership cannot predict what reserve revisions may be required in future periods.~~

-None. ~~5 -~~

~~Asset~~- ~~Retirement~~3 ~~Obligations~~-

TheTable Partnership has material obligations to remove tangible equipment and restore land at the end of oil and gas production operations. The Partnership’s removal and restoration obligations are primarily associated with plugging and abandoning onshore wells. Estimating the future asset removal costs is difficult and requires management to make estimates and judgments because most of the removal obligations are many years in the future and contracts and regulations often have vague descriptions of what constitutes removal. Asset removal costs are constantly changing, as well as related regulatory, political, environmental, and safety considerations. Contents

~~Asset~~PART ~~retirement~~II obligations are not unique to the Partnership or to the oil and gas industry; accordingly, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations,” (“SFAS 143”). The Partnership adopted this statement effective January 1, 2003. SFAS 143 significantly changed the method of accruing for costs an entity is legally obligated to incur related to the retirement of fixed assets (“asset retirement obligations” or “ARO”). Primarily, the new statement requires the Partnership to record a separate liability for the discounted present value of the Partnership’s asset retirement obligations, with an offsetting increase to the related oil and gas properties on the Partnership’s Balance Sheet.

~~Inherent~~Item 5 in- ~~the~~Market ~~present~~for ~~value~~Registrant’s ~~calculation~~Common ~~are~~Equity ~~numerous assumptions~~ and ~~judgments~~Related ~~including~~Stockholder ~~the~~Matters ultimate retirement costs, inflation factors, credit adjusted discount rates, timing of retirement, and changes in the legal and regulatory, environments. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. In addition, increases in the discounted ARO liability resulting from the passage of time will be reflected as accretion expense in the Statement of Income.

~~SFAS 143 required a cumulative adjustment to reflect the impact of implementing the statement had the rule been in effect since inception~~Omitted. ~~The~~Not ~~Partnership, therefore, calculated the cumulative accretion expense on the ARO liability and the cumulative depletion expense on the corresponding property balance~~applicable. ~~The sum of this cumulative expense was compared to the depletion expense originally recorded.~~

Item 6 - Selected Financial ~~Results~~Data

~~Oil sales increased by 24% and gas sales decreased by 2.5% in 2004 as compared to 2003.~~ The ~~average~~following ~~price~~table ~~of Partnerhsip oil increased by~~presents ~~approximately~~selected ~~30%~~financial indata ~~2004.~~for ~~The~~each ~~price~~ of ~~gas sold by~~ the ~~Partnership~~past infive ~~2004,~~years ~~which~~ended ~~represents approximately 19% of total sales~~December 31, ~~increased by approximately 15% in 2004~~2008. ~~Gas~~The ~~volume~~data ~~sales~~has ~~declined~~been inderived ~~2004~~from ~~due to normal declines in~~ the ~~Partnership’s~~ ~~two~~audited ~~major~~financial ~~gas~~statements: ~~wells.~~

~~Oil~~TEXLAND ~~and~~DRILLING ~~gas~~PROGRAM ~~sales~~– ~~increased by 19% in 2003 as compared to 2002. The average price of Partnership oil increased by approximately 19% in 2003. The price of gas sold by the Partnership~~1981, ~~which represents approximately 23% of total sales, increased by approximately 85%~~LTD.

InSELECTED ~~addition,~~FINANCIAL ~~normal~~INFORMATION and expected declines were experienced in the production of existing oil and gas wells in 2004, 2003 and 2002. These declines were somewhat offset by increased production from in-fill developmental oil wells drilled during 2004, 2003 and 2002.

~~Fees~~FOR toTHE ~~the~~YEAR ~~managing~~ENDED ~~general~~DECEMBER ~~partner increased by~~ 31~~% in 2004~~, and decreased by 2% in 2003 due to discretionary changes in fees charged by the General Partner. Such changes are within the allowable fees specified by the provisions of the Partnership Agreement. Fees to the managing general partner increased 6% due to increased administrative costs for 2002.

~~Depreciation,~~STATEMENT ~~depletion and amortization are calculated on the units-of-production method.~~OF ~~Therefore,~~INCOME: changes in these amounts are affected by upward or downward revisions in future oil and gas reserve estimates. In addition, such revisions are also caused by changes in current prices of oil and gas, which correspondingly affect the number of future years that oil and gas properties will remain economically viable.

- 6 -


	2008		2007		2006		2005		2004
Revenues	$	3,417,208	$	2,548,394	$	2,346,334	$	2,228,832	$	1,742,842

Net Income	$	1,979,358	$	1,312,050	$	1,284,051	$	1,248,156	$	868,821

Allocation of Net Income:
Limited Partners	$	984,323	$	635,346	$	627,418	$	599,288	$	410,104
General Partners		995,035		676,704		656,633		648,868		458,717

	$	1,979,358	$	1,312,050	$	1,284,051	$	1,248,156	$	868,821

Net Income per $5,000
Limited Partner Units (2,425 Units Outstanding)	$	406	$	262	$	259	$	247	$	169


BALANCE SHEET DATA:
Total Assets	$	2,230,268	$	2,386,426	$	2,211,240	$	2,091,047	$	1,852,199

Total Liabilities	$	686,790	$	498,727	$	416,659	$	415,921	$	243,963

Partners’ Equity	$	1,543,478	$	1,887,699	$	1,794,581	$	1,675,126	$	1,608,236

PARTNERSHIP CASH DISTRIBUTIONS
Limited Partner (per $5,000 unit)	$	495	$	221	$	240	$	234	$	170
General Partner	$	1,178,600	$	728,000	$	778,600	$	665,700	$	480,100

~~Depreciation,~~- ~~depletion~~4 ~~and~~- amortization for 2004, 2003, and 2002 were $110,332, $120,305 and $144,513. Changes in depreciation, depletion and amortization for the period 2004 through 2002, were due primarily to the effect that changes in oil and gas prices have on the calculation of estimated future economically recoverable oil and gas reserves; and due to normal expected declines in the recoverable reserves due to production.

On JanuaryTable 1, 2003, the Partnership adopted Statements of Financial Accounting Standard 143, “Accounting for Asset Retirement Obligations”. As a result of such implementation, a gain of $214,257 as cumulative effect adjustment of a change in accounting principle has been reflected in the Statement of Income for 2003. In addition, accretion expense of $13,779 and $12,758, respectively, reflect the increase in the amount of the Asset Retirement Liability for 2004, and 2003. Contents

~~Production~~Item 7 ~~expenses~~- ~~remained~~Management’s ~~relatively~~Discussion ~~stable~~and inAnalysis ~~2004~~of asFinancial ~~compared~~Condition toand ~~2003.~~Results ~~Production expenses~~of ~~decreased by 12% in 2003 as compared to 2002 due a decrease in workover activity~~Operations. ~~Production expenses increased by 8% in 2002 as compared to 2001 due to an increase in workovers.~~

~~Changes~~Risk inFactors ~~oil~~and ~~prices~~Cautionary ~~substantially~~Statement ~~impact~~for ~~the~~Purposes ~~net income and cash flow~~ of the ~~Partnership.~~Safe ~~All~~Harbor ~~oil~~Provisions ~~produced~~of by the ~~Partnership~~Private isSecurities ~~sold under~~Litigation ~~short~~Reform ~~term~~Act ~~contracts~~of that are immediately affected by changes in oil prices. Since 1981, world oil supply and demand conditions have caused prices to rise and decline in an essentially unpredictable manner. It is not possible to predict1995 ~~whether the recent dramatic increase in oil prices will continue for the near or long term. No change in this price volatility is foreseeable.~~

~~Texland~~Certain ~~Drilling~~information ~~Program-1981,~~included ~~Ltd.~~in ~~has~~Items ~~substantially~~1 ~~completed~~and ~~all~~Items ~~the~~7 ~~exploration~~of ~~and~~this ~~development~~report oncontains ~~the~~certain ~~oil~~statements ~~and~~that ~~gas~~may ~~properties~~constitute inforward-looking ~~which~~statements itwithin the ~~has~~meaning anof ~~interest~~Securities and Exchange regulations. ~~No long~~Such forward-~~term~~looking ~~debt~~statements ~~will~~are bebased ~~incurred~~upon ~~and~~the nocurrent ~~new~~expectations ~~properties~~of ~~will~~Texland beDrilling ~~acquired. Therefore~~Program-1981, noLtd. ~~future~~and ~~liquidity~~speak ~~problems~~only ~~are~~as ~~anticipated~~of by the ~~Partnership~~date made.

~~Off~~Where any forward-~~Balance~~looking ~~Sheet~~statement ~~Arrangements~~includes a statement of the assumptions or bases underlying such forward-looking statement, we caution that while we believe these assumptions or bases to be reasonable and to be made in good faith, assumed facts or bases almost always vary from actual results and the difference between assumed facts or bases and the actual results could be material, depending on the circumstances.

~~The~~Factors ~~Partnership~~that ~~does~~could cause our results to differ materially from the results discussed in such forward-looking statements include, but are not ~~have~~limited ~~any~~to, ~~off~~the following: production variance from expectations, volatility of oil and gas prices, the need to further develop reserves, the substantial capital expenditures required to fund operations, development risks, environmental risks, uncertainties about estimates of reserves, litigation, government regulation, political risks, costs and results of developmental drilling, and mechanical and other inherent risks associated with oil and gas production. All such forward-~~balance~~looking statements ~~sheet~~in ~~arrangements~~this document are expressly qualified in their entirety by the cautionary statements in this paragraph, and the Partnership undertakes no obligation to publicly update or revise any forward-looking statements.

~~Item~~Critical 8Accounting -Policies ~~Financial Statements~~ and ~~Supplementary~~Estimates ~~Data:~~

~~See~~The ~~Index~~Partnership’s discussion and analysis of its financial condition and results of operations are based upon financial statements which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires the Partnership to ~~Financial~~make ~~Statements~~estimates onand ~~Page~~judgments 14that affect the amounts reported in the financial statements and related footnote disclosures. Application of ~~this~~certain ~~report~~of the Partnership’s accounting policies, including those related to oil and gas revenues, oil and gas properties, asset retirement obligations, and litigation require significant estimates. The Partnership bases its estimates on historical experience and various assumptions that are believed reasonable under the circumstances. Actual results may differ from these estimates. The Partnership believes the following critical accounting policies reflect its more significant judgments and estimates used in the preparation of its financial statements.

~~Item~~Property, 9Plant ~~- Changes in~~ and ~~Disagreements~~Equipment ~~with Accountants on Accounting and Financial Disclosures.~~

OnProved ~~May~~reserves 4,are defined ~~2005,~~by the ~~accounting~~U.S. ~~firm~~Securities and Exchange Commission (“SEC”) as those volumes of ~~Weaver~~crude oil, condensate, natural gas liquids and ~~Tidwell~~natural ~~L.L.P.,~~gas ~~was~~that ~~engaged~~geological asand ~~independent~~engineering ~~auditors~~data ~~for~~demonstrate ~~the~~with ~~fiscal~~reasonable ~~year~~certainty ~~ending~~are ~~December~~recoverable ~~31,~~from ~~2004.~~known ~~During~~reservoirs ~~the~~under ~~most~~existing ~~recent~~economic ~~year~~ and ~~subsequent~~operating ~~interim~~conditions. ~~periods,~~Proved ~~there~~developed ~~were~~reserves noare ~~disagreements~~volumes onexpected ~~matters~~to ofbe ~~accounting~~recovered ~~principles~~through ~~and~~existing ~~practices,~~wells ~~financial~~with ~~disclosure,~~existing orequipment ~~auditing~~and ~~scope~~operating ormethods. ~~procedures~~Although ~~between~~ the ~~Registrant~~Managing ~~and~~General ~~its~~Partner’ ~~previous~~s ~~independent~~engineers ~~auditors.~~are Atknowledgeable noof ~~time~~and ~~preceding~~follow ~~May~~the 4,guidelines ~~2005~~for ~~has~~reserves established by the ~~Registrant~~SEC, ~~(or~~the ~~anyone~~estimation onof ~~behalf~~reserves requires a significant number of ~~the~~assumptions ~~Registrant)~~based ~~consulted~~on ~~with~~professional ~~Weaver~~judgment. Reserve estimates are updated at least annually and consider ~~Tidwell~~recent ~~L.L.P.~~production onlevels ~~matters~~and ~~regarding~~other ~~either~~technical ~~the~~information. ~~application~~Estimated ofreserves ~~accounting~~are ~~principles~~often subject to afuture ~~specified transaction~~revision, ~~either~~which ~~completed~~could orbe ~~proposed~~substantial, orbased on the ~~type~~availability of ~~audit~~additional ~~opinion~~information. ~~that~~Changes ~~might~~in beoil ~~rendered~~and ongas ~~the~~prices ~~Partnership’s~~can ~~financial~~lead ~~statements~~to substantial revisions to reserve quantities.

OnReserve ~~May~~revisions 4,in ~~2005,~~turn ~~Weinstein~~may ~~Spira~~cause &adjustments ~~Company~~in ~~P.C.~~the ~~resigned~~units-of-production asdepreciation ~~its~~and ~~independent~~depletion ~~auditor.~~rates, the ~~There~~estimates ~~were~~of nopotential ~~disagreements~~impairment ~~on matters~~ of ~~accounting~~carrying ~~principles~~value, and ~~practices, financial~~the supplemental disclosure, orof ~~auditing~~standardized ~~scope~~measure orof ~~procedures~~discounted ~~between~~future ~~the~~net ~~Registrant~~cash flows relating to oil and ~~Weinstein~~gas ~~Spira~~producing &activities. ~~Company~~The PPartnership cannot predict what reserve revisions may be required in future periods.C.

On- ~~January~~5 ~~14,~~- 2004, the Registrant engaged Weinstein Spira & Company P.C. as its independent auditors for the fiscal year ending December 31, 2003. At no time preceding January 14, 2004 has the Registrant (or anyone on behalf of the Registrant) consulted with Weinstein Spira & Company PC on matters regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Partnership’s financial statements.

-Table 7of - Contents

OnAsset ~~January~~Retirement ~~14,~~Obligations 2004, the accounting firm of Sproles Woodard L.L.P., previously the certifying accountant for Texland Drilling Program 1981, Ltd., was engaged to assist the Partnership in the performance of certain internal audit functions. As a result, Sproles Woodard L.L.P. will no longer serve as the Partnership’s certifying accountant. There were no disagreements on matters of accounting principles and practices, financial disclosure, or auditing scope or procedures between the Registrant and Sproles Woodard L.L.P.

~~Item~~The 9APartnership -has ~~Controls~~material obligations to remove tangible equipment and ~~Procedures~~ restore land at the end of oil and gas production operations. The Partnership’s removal and restoration obligations are primarily associated with plugging and abandoning onshore wells. Estimating the future asset removal costs is difficult and requires management to make estimates and judgments because most of the removal obligations are many years in the future and contracts and regulations often have vague descriptions of what constitutes removal. Asset removal costs are constantly changing, as well as related regulatory, political, environmental, and safety considerations.

WeAsset ~~use~~retirement ~~certain~~obligations ~~internal~~are ~~controls~~not ~~and~~unique ~~procedures~~ to ~~help~~the ~~ensure~~Partnership ~~that~~or ~~information~~to wethe ~~are~~oil ~~required~~and togas ~~disclose~~industry; inaccordingly, ~~reports~~the ~~that~~Financial weAccounting ~~file~~Standards ~~with~~Board ~~the~~issued ~~SEC~~Statement isof ~~accurately accumulated,~~Financial ~~reported~~Accounting ~~and~~Standards ~~communicated~~No. 143, “Accounting tofor ~~our~~Asset ~~management.~~Retirement AsObligations,” of(“SFAS ~~the~~143”). ~~end~~The ofPartnership ~~the~~adopted ~~period~~this ~~covered~~statement byeffective ~~this~~January 1, ~~Annual~~2003. ~~Report~~SFAS on143 ~~Form~~significantly ~~10-K,~~changed the ~~effectiveness~~method of ~~our~~accruing ~~disclosure~~for ~~controls~~costs ~~and~~an ~~procedures~~entity ~~(as~~is legally ~~defined~~obligated into ~~Rules~~incur ~~13a-15(e)~~related ~~and~~to ~~15d-15(e)~~the ~~promulgated under~~retirement ~~the~~of ~~Securities~~fixed ~~Exchange~~assets ~~Act~~(“asset ofretirement ~~1934~~obligations” or “ARO”). ~~were~~Primarily, ~~evaluated~~the bynew ~~management~~statement ~~and~~requires ~~based~~the ~~upon~~Partnership ~~such~~to ~~evaluation~~record ~~have~~a ~~concluded~~separate ~~that~~liability ~~our~~for ~~disclosure~~the ~~controls~~discounted present ~~and~~value ~~procedures~~of ~~are~~the ~~effective~~Partnership’s asset retirement obligations, aswith ofan ~~the~~offsetting ~~end~~increase ofto the ~~period~~related ~~covered~~oil byand ~~this~~gas ~~Annual~~properties ~~Report~~ on ~~Form~~the ~~10-K, for~~Partnership’s ~~their~~Balance ~~intended purposes~~Sheet.

-Inherent 8in -the present value calculation are numerous assumptions and judgments including the ultimate retirement costs, inflation factors, credit adjusted discount rates, timing of retirement, and changes in the legal and regulatory environments. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. In addition, increases in the discounted ARO liability resulting from the passage of time will be reflected as accretion expense in the Statement of Income.

~~PART~~SFAS ~~III~~143 required a cumulative adjustment to reflect the impact of implementing the statement had the rule been in effect since inception. The Partnership, therefore, calculated the cumulative accretion expense on the ARO liability and the cumulative depletion expense on the corresponding property balance to determine the impact of adopting this standard.

~~Item~~Financial 10Results ~~- Directors and Executive Officers of the Registrant~~

Oil sales increased by 36% and gas sales increased by 13% in 2008 as compared to 2007. The average price of Partnership ~~has~~oil noincreased ~~officers,~~by ~~employees~~approximately or37% ~~directors~~in 2008. The price ~~background~~ of gas sold by the ~~General~~Partnership ~~Partners~~in is2008, which represents approximately 7% of total sales, increased by approximately 6% in 2008. Gas volumes decreased by 13% in 2008 as ~~follows:~~compared to 2007.

R.Oil J.sales ~~Schumacher~~increased -by ~~Age~~15% ~~76, Vice President~~ and ~~Co-Owner~~gas ofsales ~~Texland~~decreased ~~Petroleum,~~by ~~L.P. since~~29% ~~May, 1967, has been an independent oil operator involved~~ in ~~drilling~~2007 ~~and~~as ~~producing~~compared ~~operations~~to ~~and~~2006. ~~the~~The ~~financing~~average price of Partnership oil ~~and~~increased ~~gas~~by ~~prospects,~~approximately ~~principally~~5% in ~~West Texas, Oklahoma and Arkansas~~2007. HeThe price ~~has~~of ~~served~~gas assold anby ~~executive~~the ~~officer~~Partnership ~~with~~in ~~Texland since~~2007, ~~its~~which ~~incorporation.~~represents ~~For~~approximately ~~more~~9% ~~than~~of ~~ten~~total ~~years~~sales, ~~prior~~decreased toby ~~becoming~~approximately an2% ~~independent~~in ~~oil operator, Mr~~2007. ~~Schumacher~~Gas ~~was~~volumes ~~the~~decreased ~~chief~~by ~~financial~~28% ~~officer,~~in ~~contract~~2007 ~~drilling~~as ~~manager~~compared ~~and~~to ~~land~~2006 ~~supervisor~~primarily ~~for~~due anto ~~independent~~a ~~oil~~decrease ~~and~~in ~~gas~~the ~~drilling contractor and~~Partnership’s ~~operator.~~interest ~~He received a Bachelor of Science~~ in ~~Commerce~~the ~~degree~~Partnership’s ~~from~~two ~~Texas~~major ~~Christian~~gas ~~University~~wells inas ~~1950 and~~ a ~~Master~~result ~~in Professional Accounting degree from the University~~ of ~~Texas~~contractual ~~in 1951~~provisions.

J.Oil N.sales ~~Namy~~increased -by ~~Age~~13% ~~66, President~~ and ~~Chief~~gas ~~Executive~~sales ~~Officer~~decreased ~~of Texland Petroleum, L.P., was employed~~ by ~~Texland~~27% in 2006 as acompared ~~geologist~~to ~~in June 1978~~2005. ~~From~~The ~~1967~~average toprice ~~1970~~of hePartnership ~~was~~oil ~~employed~~increased by ~~Pan~~approximately ~~American~~16% ~~Petroleum Corp.~~ in ~~the Fort Worth Division~~2006. ~~From~~The ~~1970~~price toof ~~1978~~gas hesold ~~taught~~by ~~at Baylor University achieving~~ the ~~rank~~Partnership ofin ~~Associate Professor. During this time~~2006, hewhich ~~served~~represents asapproximately a14% ~~consultant for several independent petroleum companies working on exploration and development projects in the Eastern Shelf and the Permian Basin~~ of ~~West~~total ~~Texas and New Mexico~~sales, asdecreased ~~well~~by asapproximately ~~the~~18% ~~southern~~in ~~Rockies of New Mexico and Colorado~~2006. ~~He received his Bachelor and Master~~Gas ~~degrees~~volume ~~from~~sales ~~Western~~decreased ~~Reserve~~by ~~University~~11% in ~~Cleveland,~~2006 ~~Ohio~~as ~~and~~compared ~~his~~to ~~Ph.~~2005 D.primarily ~~degree~~due ~~from~~to ~~the~~a ~~University~~decrease ofin ~~Texas~~the atPartnership’s ~~Austin~~interest in ~~1969. Mr. Namy is a member of~~ the ~~American~~Partnership’s ~~Association~~two ofmajor ~~Petroleum~~gas ~~Geologists,~~wells ~~Geological~~as ~~Society~~a ofresult ~~America and the Society~~ of ~~Economic~~contractual ~~Paleontologists and Mineralogists~~provisions.

J.In H.addition, ~~Wilkes~~normal ~~- Age 49 President~~ and ~~Chief~~expected ~~Operating~~declines ~~Officer~~were ofexperienced ~~Texland Petroleum, L.P., was employed by Texland as a reservoir engineer~~ in ~~August~~the ~~1984.~~production ~~From~~of ~~1978~~existing tooil ~~1984, he was employed by Sun Exploration~~ and ~~Production~~gas ~~Company~~wells in ~~Midland and Abilene~~2008, ~~Texas.~~2007 ~~The first three years he served as a production engineer~~ and ~~for the remaining three years he served as a reservoir engineer~~2006. HeThese ~~received~~declines awere ~~Bachelor~~somewhat ofoffset ~~Science~~by increased ~~degree~~production ~~in Petroleum Engineering~~ from ~~Texas A&M University~~ in-fill ~~1978.~~developmental Heoil iswells adrilled ~~member~~during ~~of the Society of Petroleum Engineers~~2008, ~~A.I.M.E.~~2007 and ~~is a registered professional engineer in Texas~~2006.

~~The~~Fees ~~Partnership~~to ~~has~~the ~~not~~managing ~~adopted~~general apartner ~~formal~~remained ~~code~~constant in 2008 as compared to 2007. They decreased by 13% in 2006, due to discretionary changes in fees charged by the General Partner. Such changes are within the allowable fees specified by the provisions of ~~ethics~~the Partnership Agreement.

~~Item~~- 116 - ~~Executive Compensation~~

See ItemTable 13 of this report for information with respect to payments to the Managing General Partner. Contents

~~Item~~Depreciation, 12depletion and amortization are calculated on the units-of-production ~~Security~~method. ~~Ownership~~Therefore, changes in these amounts are affected by upward or downward revisions in future oil and gas reserve estimates. In addition, such revisions are also caused by changes in current prices of ~~Certain~~oil ~~Beneficial~~and ~~Owners~~gas, which correspondingly affect the number of future years that oil and ~~Management~~gas properties will remain economically viable.

~~Omitted~~Depreciation, depletion and amortization for 2008, 2007, and 2006 were $193,998, $148,415 and $142,225. ~~Not~~Changes ~~applicable~~in depreciation, depletion and amortization for the period 2006 through 2008, were due primarily to ~~Registrant~~the effect that changes in oil and gas prices have on the calculation of estimated future economically recoverable oil and gas reserves; and due to normal expected declines in the recoverable reserves due to production.

~~Due~~On toJanuary 1, ~~the death of W. E. Rector~~2003, the W.Partnership E.adopted ~~Rector~~Statements of ~~interest~~Financial ~~was~~Accounting ~~transferred~~Standard to143, ~~Rector~~“Accounting ~~Family~~for ~~interests~~Asset ~~during~~Retirement ~~2000~~Obligations”. ~~Pending~~Accretion ~~final~~expense ~~organization~~ of ~~the~~$37,966, ~~Rector Estate~~$29,721 ~~the interest~~and ~~was~~$28,102, ~~held by the Rector Living Trust. In 2002~~respectively, ~~this interest~~ was ~~transferred~~recorded tofor ~~Rector~~2008, ~~Oil~~2007, ~~Ltd~~and 2006.

~~Effective~~Production ~~January~~expenses 1,increased ~~2003,~~by ~~Texland~~approximately ~~Petroleum,~~13% ~~Inc.,~~in ~~the~~2008 ~~managing~~as ~~General~~compared ~~Partner~~to of2007 ~~Texland~~due ~~Properties-1981,~~to ~~was~~a ~~converted~~significant ~~into~~increase ain ~~Texas~~ad ~~Limited~~valorem ~~Partnership,~~taxes ~~named~~and ~~Texland~~an ~~Petroleum,~~increase ~~L.P.~~in ~~The~~the ~~interests~~cost ~~and obligations~~ of ~~Texland~~oil ~~Petroleum, Inc~~field services. asProduction ~~Managing~~expenses ~~General~~increased ~~Partner,~~by ~~were~~approximately ~~assumed~~24% in ~~their~~2007 ~~entirety~~as bycompared ~~Texland~~to ~~Petroleum,~~2006 Ldue to a significant increase in workover activity.P.

AsChanges ofin oil ~~December~~prices ~~31,~~substantially ~~2002,~~impact the ~~ownership~~net income and cash flow of the ~~outstanding~~Partnership. ~~closely~~All ~~held~~oil ~~common~~produced ~~shares~~by ofthe ~~Texland~~Partnership ~~Petroleum,~~is ~~Inc.~~sold ~~were~~under R.short J.term ~~Schumacher~~contracts ~~(66 2/3%),~~that J.are N.immediately ~~Namy~~affected ~~(16 2/3%),~~by ~~and~~changes J.in H.oil ~~Wilkes (16 2/3%)~~prices. OnSince ~~January 1~~1981, ~~2003,~~world ~~all~~oil ~~the~~supply and demand ~~shareholders~~conditions ~~exchanged~~and ~~their~~other ~~outstanding~~factors ~~common~~have ~~shares~~caused ofprices ~~Texland~~to ~~Petroleum,~~rise ~~Inc.~~and ~~for~~decline in an ~~effective~~essentially ~~equivalent~~unpredictable ~~percentage~~manner. ~~ownership~~It ofis ~~Texland~~not ~~Petroleum,~~possible ~~L.P.~~to ~~There~~predict ~~was,~~whether ~~therefore,~~the ~~effectively~~recent nodramatic ~~change~~volatility in ~~management~~oil prices will continue for the near or ~~ownership~~long term.

Texland Drilling Program-1981, 9Ltd. has substantially completed all the exploration and development on the oil and gas properties in which it has an interest. No long-term debt will be incurred and no new properties will be acquired. Therefore, no future liquidity problems are anticipated by the Partnership.

~~Item 13~~ Off-Balance ~~Certain~~Sheet ~~Relationships~~Arrangements ~~and Related Transactions~~

~~Contributions~~The byPartnership ~~General~~does ~~Partners~~not have any off-balance sheet arrangements.

~~Under~~Item 7A ~~terms of the Partnership agreement, Texland Properties~~ - ~~1981~~Quantitative ~~is charged for certain costs related to drilling~~ and ~~production~~Qualitative ~~operations,~~Disclosure ~~which~~about ~~are~~Market ~~required to be capitalized for federal income tax purposes~~Risk. These costs are treated as capital contributions. In addition, Texland Properties - 1981 and Texland Petroleum, L.P. currently hold 38.75 units and 6 units, respectively. These investments as a limited partner are reported with other limited partners’ capital in the accompanying financial statements.

~~Payments~~The toPartnership ~~Managing~~has ~~General~~no ~~Partner~~derivative instruments.

~~The~~Item 8 ~~Partnership~~- ~~was~~Financial ~~charged~~Statements ~~$191,272, $160,482~~ and ~~$170,090~~Supplementary inData: 2004, 2003 and 2002, respectively, for technical and accounting services performed by employees of the managing general partner. These charges are included in intangible development costs, production expenses and fees to managing general partner.

~~Item~~See 14Index -to ~~Principal~~Financial ~~Accountant~~Statements ~~Fees~~on ~~and~~Page ~~Services~~ 13 of this report.

Sproles Woodard L.L.P. audited the Partnership’s financial statements for the three years ended December 31, 2002. Sproles Woodard L.L.P. performed audit and tax services for the Partnership during the period of their engagement. As described under Item 9 ~~of this Annual Report on Form 10~~ -K, ~~Sproles~~Changes ~~Woodard L.L.P. resigned~~ in ~~January 2004,~~ and atDisagreements ~~that~~with ~~time,~~Accountants ~~the~~on ~~Partnership~~Accounting ~~engaged Weinstein Spira & Company PC as our independent auditors. On May 4, 2005; Weinsten Spira & Company P.C. resigned~~ and ~~Weaver~~Financial ~~and Tidwell L~~Disclosures.~~L.P.~~ ~~were engaged as our independent auditors.~~

~~Weaver and Tidwell L~~None.~~L.P.~~ ~~and Weinstein Spira & Company P.C. were engaged to perform audit services only.~~

~~The~~Item ~~following~~9A ~~table sets forth the aggregate fees for professional services rendered to Texland Drilling Program~~-~~1981,~~ ~~Ltd.~~Controls ~~for the years 2004~~ and ~~2003~~Procedures ~~by the accounting firm of Weinsten Spira & Company, and Sproles Woodard L.L.P.~~

Type of Fee	2004	2003	2002
Audit	15,336	18,075	18,631
Audit Related	8,800
Tax	3,800	5,045	4,860
Other

Evaluation of Disclosure Controls and Procedures

~~The~~We ~~General~~use ~~Partners~~certain ofinternal ~~Texland~~controls and procedures to help ensure that information we are required to disclose in reports that we file with ~~Drilling~~the ~~Program-1981~~SEC is accurately accumulated, ~~Ltd~~reported and communicated to our management. ~~fulfill~~As of the ~~responsibilities~~end of anthe ~~audit~~period ~~committee~~covered ~~and~~by ~~have~~this ~~established~~Annual ~~policies~~Report ~~and~~on ~~procedures~~Form ~~for~~10-K, the ~~approval~~effectiveness of ~~audit~~our ~~services~~disclosure controls and ~~permitted~~procedures ~~non-audit~~(as ~~services.~~defined ~~The~~in ~~General~~Rules ~~Partners~~13a-15(e) ~~approved~~and 15d-15(e) promulgated under the ~~engagement~~Securities Exchange Act of ~~Weaver~~ 1934) were evaluated by management and ~~Tidwell~~based ~~L.L.P.,~~upon ~~Weinstein~~such ~~Spira~~evaluation &have ~~Company~~concluded PCthat our disclosure controls and ~~Sproles~~procedures ~~Woodard~~are ~~L.L.P.~~effective, ~~for~~as of the ~~performance~~end of ~~audit~~the ~~and~~period ~~tax~~covered ~~services~~by ~~for~~this ~~the~~Annual Report ~~years~~on ~~2004,~~Form ~~2003~~10-K, ~~and~~for ~~2002~~their intended purposes.

~~Item 15~~ - ~~Exhibits,~~7 ~~Financial Statement Schedules and Reports on Form 8~~-K

(a)1Table andof (a)2 Financial Statement and Financial Statement Schedules Contents

~~See~~Changes ~~Index~~in toInternal ~~Financial~~Control ~~Statements~~Over onFinancial ~~Page~~Reporting ~~14 of this report.~~

~~(a)3~~As ~~Item~~of ~~601~~the ~~(Reg~~end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our internal control over financial reporting to determine whether any changes occurred during the fourth quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ~~S-K)~~Based ~~Exhibits:~~on that evaluation, there were no changes in our internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~None~~Management’s Report on Internal Control Over Financial Reporting

-Our management, 10under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with existing policies or procedures may deteriorate.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an assessment of our internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (a“COSO”). ~~Exhibits:~~Based on this assessment, our management has concluded that, as of December 31, 2008, our internal control over financial reporting was effective.

(31)		Certification by CEO & CFO Pursuant to Rule 13a-14(a)/15d-14(a).
(32)		Certification by CEO & CFO Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

PART III

~~(b)~~Item 10 ~~Reports~~- onDirectors, ~~Form~~Executive ~~8-K:~~Officers and Corporate Governance of the Registrant

Item 9:		Change in Registrant’s Certifying Accountant
		On January 13, 2004, the Registrant engaged Weinstein Spira & Company P.C. as it’s independent auditors for the fiscal year ending December 31, 2003.
Item 9:		Change in Registrant’s Certifying Account
		On May 4, 2005, the Registrant engaged Weaver & Tidwell as it’s independent auditors for the fiscal year ending December 31, 2004.

The Partnership has no officers, employees or directors. The background of the General Partners is as follows:

~~(c)~~R. ~~Item~~J. ~~601~~Schumacher ~~(Reg.~~- SAge 79, Vice President and Co-K)Owner ~~Exhibits:~~of Texland Petroleum, L.P. since May, 1967, has been an independent oil operator involved in drilling and producing operations and the financing of oil and gas prospects, principally in West Texas, Oklahoma and Arkansas. He has served as an executive officer with Texland since its incorporation. For more than ten years prior to becoming an independent oil operator, Mr. Schumacher was the chief financial officer, contract drilling manager and land supervisor for an independent oil and gas drilling contractor and operator. He received a Bachelor of Science in Commerce degree from Texas Christian University in 1950 and a Master in Professional Accounting degree from the University of Texas in 1951.

~~None~~J. N. Namy - Age 70, President and Chief Executive Officer of Texland Petroleum, L.P., was employed by Texland as a geologist in June 1978. From 1967 to 1970 he was employed by Pan American Petroleum Corp. in the Fort Worth Division. From 1970 to 1978 he taught at Baylor University achieving the rank of Associate Professor. During this time, he served as a consultant for several independent petroleum companies working on exploration and development projects in the Eastern Shelf and the Permian Basin of West Texas and New Mexico, as well as the southern Rockies of New Mexico and Colorado. He received his Bachelor and Master degrees from Western Reserve University in Cleveland, Ohio and his Ph. D. degree from the University of Texas at Austin in 1969. Mr. Namy is a member of the American Association of Petroleum Geologists, Geological Society of America and the Society of Economic Paleontologists and Mineralogists.

~~(d)~~J. ~~Other~~H. ~~Financial~~Wilkes ~~Statements~~- Age 53 President and ~~Financial~~Chief ~~Statement~~Operating ~~Schedules:~~Officer of Texland Petroleum, L.P., was employed by Texland as a reservoir engineer in August 1984. From 1978 to 1984, he was employed by Sun Exploration and Production Company in Midland and Abilene, Texas. The first three years he served as a production engineer and for the remaining three years he served as a reservoir engineer. He received a Bachelor of Science degree in Petroleum Engineering from Texas A&M University in 1978. He is a member of the Society of Petroleum Engineers, A.I.M.E. and is a registered professional engineer in Texas.

~~Not~~The Partnership ~~applicable~~has not adopted a formal code of ethics.

- 118 -

SIGNATURETable of Contents

~~Pursuant~~Item 11 to- ~~the~~Executive ~~requirements~~Compensation ~~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.~~

~~TEXLAND~~See ~~DRILLING~~Item 13 ~~PROGRAM-1981,~~of ~~LTD~~this report for information with respect to payments to the Managing General Partner.

~~Registrant~~Item 12 - Security Ownership of Certain Beneficial Owners and Management

By	/s/ M. E. Chapman
	M. E. Chapman, Vice President - Finance
	Texland Petroleum, L.P.	Date June 20, 2005

Omitted. Not applicable to Registrant.

~~Pursuant~~Item 13 to- ~~the~~Certain ~~requirements~~Relationships ~~of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant~~ and inRelated ~~the~~Transactions ~~capacities and on the dates indicated.~~

By	/s/ R. J. Schumacher
	R. J. Schumacher, Vice President
	Texland Petroleum, L.P.	Date June 20, 2005

Contributions by General Partners

By	/s/ J. N. Namy
	J. N. Namy, President & C.E.O.
	Texland Petroleum, L.P.	Date June 20, 2005

Under terms of the Partnership agreement, Texland Properties - 1981 is charged for certain costs related to drilling and production operations, which are required to be capitalized for federal income tax purposes. These costs are treated as capital contributions. In addition, Texland Properties - 1981 and Texland Petroleum, L.P. currently hold 41.27 units and 12 units, respectively. These investments as a limited partner are reported with other limited partners’ capital in the accompanying financial statements.

By	/s/ J. H. Wilkes
	J. H. Wilkes, President & C.O.O.
	Texland Petroleum, L.P.	Date June 20, 2005

Payments to Managing General Partner

-The 12Partnership -was charged $229,025 $186,118 and $180,585 in 2008, 2007 and 2006, respectively, for technical and accounting services performed by employees of the managing general partner. These charges are included in intangible development costs, production expenses and fees to managing general partner.

~~TEXLAND~~Item 14 ~~DRILLING~~- ~~PROGRAM~~Principal -Accountant ~~1981,~~Fees ~~LTD.~~and Services

~~Fort~~Weaver ~~Worth,~~and Tidwell ~~Texas~~L.L.P. was engaged to perform audit services only.

~~ANNUAL~~The ~~FINANCIAL~~following ~~REPORT~~table sets forth the aggregate fees for professional services rendered to Texland Drilling Program-1981, Ltd. for the years 2008, 2007 and 2006 by the accounting firm Weaver and Tidwell, LLP

December 31, 2004


Type of Fee	2008	2007	2006
Audit	26,500	23,700	20,700

The General Partners of Texland Drilling Program-1981, 13Ltd. fulfill the responsibilities of an audit committee and have established policies and procedures for the approval of audit services and permitted non-audit services. The General Partners approved the engagement of Weaver and Tidwell L.L.P. for the performance of audit services for the years 2008, 2007, and 2006.

~~TABLE~~- OF9 ~~CONTENTS~~-

		Page Number
Independent Auditors’ Reports		15 - 17
Balance Sheets		18
Statements of Income		19
Statements of Partners’ Capital		20
Statements of Cash Flows		21
Notes to Financial Statements		22

Item 15 - 14Exhibits, Financial Statement Schedules and Reports on Form 8-K

~~REPORT~~(a)1 OFand ~~INDEPENDENT~~(a)2 ~~REGISTERED~~Financial ~~PUBLIC~~Statement and Financial Statement Schedules

~~ACCOUNTING~~See ~~FIRM~~Index to Financial Statements on Page 13 of this report.

To(a)3 ~~the~~Item 601 ~~Partners~~(Reg. S-K) Exhibits:

~~Texland Drilling Program-1981, Ltd~~None.

~~Fort~~(a) ~~Worth,~~Exhibits: ~~Texas~~

We have audited the accompanying balance sheet of Texland Drilling Program-1981, Ltd. (the Partnership) as of December 31, 2004, and the related statements of income, partners’ capital and cash flows for the year then ended. 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.


(31)		Certification by CEO & CFO Pursuant to Rule 13a-14(a)/15d-14(a).

(32)		Certification by CEO & CFO Pursuant to 18 U. S. C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

~~We conducted our audit in accordance with the Standards of Public Company Accounting Oversight Board~~ (~~United States~~b). ~~Those~~Reports ~~standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,~~ on aForm ~~test~~8-K: basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the 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.

~~In our opinion, the 2004 financial statements referred to above present fairly, in all material respects, the financial position of Texland Drilling Program-1981, Ltd~~None. ~~as of December 31, 2004 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.~~

~~WEAVER~~(c) ~~AND~~Item 601 ~~TIDWELL, L~~(Reg.~~L.P.~~ S-K) Exhibits:

~~Fort~~None. ~~Worth, Texas~~

~~May~~(d) ~~31,~~Other ~~2005~~Financial Statements and Financial Statement Schedules:

-Not 15applicable. -

~~Independent~~- ~~Auditors’~~10 ~~Report~~-

ToTable theof Partners Contents

~~Texland~~SIGNATURE ~~Drilling Program - 1981, Ltd.~~

~~Fort~~Pursuant ~~Worth~~to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ~~Texas~~the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

We have audited the accompanying Balance Sheet of Texland Drilling Program-1981, Ltd. (the Partnership) as of December 31, 2003, and the related Statements of Income, Partners’ Capital and Cash Flows for the year then ended. 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. The 2002 and 2001 financial statements of Texland Drilling Program-1981, Ltd. were audited by other auditors, whose reported Dated March 17, 2003, expressed an unqualified opinion on those statements.


TEXLAND DRILLING PROGRAM-1981, LTD.
Registrant

By	/s/ M. E. Chapman	.
	M. E. Chapman, Vice President - Finance
	Texland Petroleum, L.P.		Date March 30, 2009

WePursuant ~~conducted~~to ~~our audit in accordance with auditing standards generally accepted in~~ the ~~United Stated~~requirements of ~~America.~~the ~~Those~~Securities ~~standards~~Exchange ~~require~~Act ~~that~~of we1934, ~~plan~~this ~~and~~report ~~perform~~has ~~the~~been ~~audit~~signed tobelow ~~obtain~~by ~~reasonable assurance about whether~~ the following ~~financial~~person ~~statements~~on ~~are~~behalf ~~free~~ of ~~material misstatement. An audit includes examining, on a test basis, evidence supporting~~ the ~~amounts~~registrant and ~~disclosures~~ in the ~~financial~~capacities ~~statements. An audit also includes assessing the accounting principles used~~ and ~~significant~~on ~~estimates made by management, as well as evaluating~~ the ~~overall~~dates ~~balance sheet presentation~~indicated. ~~We believe that our audit provides a reasonable basis for our opinion.~~

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Texland Drilling Program-1981, Ltd. as of December 31, 2003, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.


By	/s/ R. J. Schumacher	.
	R. J. Schumacher, Vice President
	Texland Petroleum, L.P.		Date March 30, 2009

By	/s/ J. N. Namy	.
	J. N. Namy, President & C.E.O.
	Texland Petroleum, L.P.		Date March 30, 2009

By	/s/ J. H. Wilkes	.
	J. H. Wilkes, President & C.O.O.
	Texland Petroleum, L.P.		Date March 30, 2009

~~WEINSTEIN~~- ~~SPIRA~~11 &- ~~COMPANY, P.C.~~

Houston, TexasTable of Contents

~~March~~Texland 19Drilling Program-1981, ~~2004~~LTD.

-Fort 16Worth, -Texas

~~Independent~~Annual ~~Auditors’~~Financial Report

ToDecember 31, ~~the~~2008 ~~Partners~~

TexlandTable Drillingof Program - 1981, Ltd. Contents

~~Fort~~Texland ~~Worth,~~Drilling ~~Texas~~Program-1981 (A Limited Partnership)

WeTable ~~have audited the accompanying statements~~ of ~~income,~~Contents partners’ capital and cash flows of Texland Drilling Program-1981, Ltd. (the Partnership) for the year ended December 31, 2002. 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 our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


Report of Independent Registered Public Accounting Firm		15

Balance Sheets		16

Statements of Income		17

Statements of Partners’ Capital		18

Statements of Cash Flows		19

Notes to Financial Statements		20

InTable our opinion, the 2002 financial statements referred to above present fairly, in all material respects, the results of operations, changes in partners’ capital and cash flows of Texland Drilling Program-1981, Ltd. for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Contents

~~Sproles~~REPORT ~~Woodard~~OF ~~L.L.P.~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~Fort~~To ~~Worth,~~the ~~Texas~~Partners

~~March~~Texland 17Drilling Program-1981, ~~2003~~Ltd.

-Fort 17Worth, -Texas

~~TEXLAND~~We ~~DRILLING~~have ~~PROGRAM~~audited -the accompanying balance sheets of Texland Drilling Program-1981, ~~LTD~~Ltd. (the Partnership) as of December 31, 2008 and 2007, and the related statements of income, partners’ capital and cash flows for each of the three years ended December 31, 2008, 2007, and 2006. The Partnership’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

~~BALANCE~~We ~~SHEETS~~conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

	December 31,
	2004		2003
ASSETS
Current Assets
Cash and cash equivalents	$	91,885	$	52,124
Accounts receivable:
Trade		178,470		136,491
Managing general partner		6,540		1,257
Total Current Assets		276,895		189,872
Property and Equipment, Proved (Successful Efforts Method)
Intangible development costs		7,382,739		7,346,495
Lease and well equipment		4,320,278		4,301,178
Producing leaseholds		161,495		161,495
		11,864,512		11,809,168
Less: Accumulated depreciation, depletion and amortization		10,289,208		10,178,875
		1,575,304		1,630,293
Total Assets	$	1,852,199	$	1,820,165
LIABILITIES
Current Liabilities
Accounts payable - Managing General Partner	$	57,949	$	42,180
Total Current Liabilities		57,948		42,180
Asset Retirement Liability		186,014		172,235
Total Liabilities		243,963		214,415
PARTNERS’ CAPITAL
Limited Partners - 2,425 units outstanding		1,158,090		1,160,236
General Partners		450,146		445,514
		1,608,236		1,605,750
Total Liabilities and Partners’ Capital	$	1,852,199	$	1,820,165

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Texland Drilling Program-1981, Ltd. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the three years ended December 31, 2008, 2007, and 2006 in conformity with accounting principles generally accepted in the United States of America.

~~See~~WEAVER ~~notes~~AND toTIDWELL, ~~financial statements~~L.L.P. Fort Worth, Texas March 30, 2009

-15 ~~18 -~~

TEXLANDTable DRILLINGof PROGRAM - 1981, LTD. Contents

~~STATEMENTS~~Texland OFDrilling ~~INCOME~~Program-1981, Ltd. (A Limited Partnership)

	For the Year Ended December 31,
	2004		2003			2002
Revenue
Oil and gas sales	$	1,742,227	$	1,477,840		$	1,245,208
Interest income		615		534			293
Gain on sale of assets				1,257			14,961
		1,742,842		1,479,631			1,260,462
Operating Expenses
Production expense		505,250		478,731			543,400
Depreciation, depletion and amortization		110,332		120,305			144,513
Fees to Managing General Partner		120,000		91,500			93,000
Severance tax		89,796		77,883			62,967
Other		34,864		31,747			28,412
Accretion expense		13,779		12,758
		874,021		812,924			872,292
Income before Change in Accounting Principle		868,821		666,707			388,170
Cumulative Effect of Change in Accounting Principle				214,257
Net Income	$	868,821	$	880,964		$	388,170
Allocation of Net Income
Limited partners	$	410,104	$	227,971		$	166,128
General partners		458,717		652,993			222,042
	$	868,821	$	880,964		$	388,170
Net Income Per $5,000 Limited Partner Unit (2,425 Units Outstanding)
Net income per limited partner unit before change in accounting principle	$	169	$	127		$	69
Cumulative effect of change in accounting principle				(33	)
Net income per limited partner unit	$	169	$	94		$	69

Balance Sheets

~~See~~December 31, ~~notes~~2008 toand ~~financial statements.~~2007

- 19 -


	2008		2007
ASSETS
Current Assets
Cash and cash equivalents	$	20,345	$	141,479
Accounts receivable:
Trade		122,577		255,303

Total Current Assets		142,922		396,782


Property and Equipment (Successful Efforts Method)
Intangible development costs		7,828,324		7,727,462
Lease and well equipment		4,977,953		4,787,115
Producing leaseholds		161,495		161,495

		12,967,772		12,676,072
Less: Accumulated depreciation and depletion		10,880,426		10,686,428

		2,087,346		1,989,644

Total Assets	$	2,230,268	$	2,386,426


LIABILITIES

Current Liabilities
Accounts payable - Managing General Partner	$	82,932	$	68,762

Total Current Liabilities		82,932		68,762
Asset Retirement Liability		603,858		429,965

Total Liabilities		686,790		498,727

PARTNERS’ CAPITAL
Limited Partners - 2,425 units outstanding		1,120,413		1,335,980
General Partners		423,065		551,719

		1,543,478		1,887,699

Total Liabilities and Partners’ Capital	$	2,230,268	$	2,386,426

~~TEXLAND~~See ~~DRILLING~~accompanying ~~PROGRAM~~notes -to ~~1981,~~financial ~~LTD~~statements.

~~STATEMENTS~~16 ~~OF PARTNERS’ CAPITAL~~

ForTable theof Years Ended December 31, 2004, 2003 and 2002 Contents

	Limited Partners			General Partners			Total
Balance - December 31, 2001	$	1,241,922			160,314			1,402,236
Partners’ Distributions		(132,162	)		(254,400	)		(386,562	)
Partners’ Contributions					49,896			49,896
Net Income		166,128			222,042			388,170
Balance - December 31, 2002		1,275,888			177,852			1,453,740
Partners’ Distributions		(343,623	)		(410,950	)		(754,573	)
Partners’ Contributions					25,619			25,619
Net Income		227,971			652,993			880,964
Balance - December 31, 2003		1,160,236			445,514			1,605,750
Partners’ Distributions		(412,250	)		(480,100	)		(892,350	)
Partners’ Contributions					26,015			26,015
Net Income		410,104			458,717			868,821
Balance - December 31, 2004	$	1,158,090		$	450,146		$	1,608,236

Texland Drilling Program-1981, Ltd. (A Limited Partnership)

~~See~~Statements ~~notes~~of toIncome ~~financial statements.~~

-For 20the -Years Ended December 31, 2008, 2007, and 2006

TEXLAND DRILLING PROGRAM - 1981, LTD.


	2008		2007		2006
Revenue
Oil and gas sales	$	3,416,348	$	2,547,053	$	2,344,576
Interest income		860		1,341		1,758

		3,417,208		2,548,394		2,346,334


Operating Expenses
Production expense		882,940		783,499		628,192
Depreciation, depletion and amortization		193,998		148,415		142,225
Fees to Managing General Partner		104,700		104,700		104,700
Severance tax		164,476		123,673		117,047
Other		53,770		46,336		42,017
Accretion expense		37,966		29,721		28,102

		1,437,850		1,236,344		1,062,283

Net Income	$	1,979,358	$	1,312,050	$	1,284,051


Allocation of Net Income
Limited partners		984,323		635,346		627,418
General partners		995,035		676,704		656,633

	$	1,979,358	$	1,312,050	$	1,284,051

Net Income Per $5,000 Limited Partner Unit (2,425 Units Outstanding)

Net income per limited partner unit	$	406	$	262	$	259

~~STATEMENTS~~See OFaccompanying ~~CASH~~notes ~~FLOWS~~to financial statements.

	For the Year Ended December 31,
	2004			2003			2002
Cash Flows From Operating Activities
Net income	$	868,821		$	880,964		$	388,170
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of change in accounting principle					(214,257	)
Accretion expense		13,779			12,758
Depreciation, depletion and amortization		110,332			120,305			144,513
Gain on sale of assets					(1,257	)		(14,961	)
(Increase) Decrease in accounts receivable		(47,262	)		18,156			(45,083	)
Increase (Decrease) in accounts payable		15,769			(14,553	)		1,630
Net Cash Provided by Operating Activities		961,439			802,116			474,269
Cash Flows From Investing Activities
Acquisition of property and equipment		(55,343	)		(58,494	)		(118,964	)
Proceeds from sales of assets					1,257			14,961
Net Cash Used in Investing Activities		(55,343	)		(57,237	)		(104,003	)
Cash Flows From Financing Activities
Partners’ contributions		26,015			25,619			49,896
Partners’ distributions		(892,350	)		(754,573	)		(386,562	)
Net Cash Used in Financing Activities		(866,335	)		(728,954	)		(336,666	)
Net Increase in Cash and Cash Equivalents		39,761			15,925			33,600
Cash and Cash Equivalents - Beginning of Year		52,124			36,199			2,599
Cash and Cash Equivalents - End of Year	$	91,885		$	52,124		$	36,199

SeeTable notesof to financial statements. Contents

-Texland 21Drilling Program-1981, Ltd. (A Limited Partnership)

~~TEXLAND~~Statements ~~DRILLING~~of ~~PROGRAM~~Partners’ -Capital ~~1981, LTD.~~

For the Years Ended ~~NOTES~~December 31, TO2008, ~~FINANCIAL~~2007 ~~STATEMENTS~~and 2006

For the Years Ended December 31, 2004 and 2003


	Limited Partner			General Partner			Total
Balance at December 31, 2005		1,191,140			483,986			1,675,126

Partners’ Distributions		(582,000	)		(778,600	)		(1,360,600	)
Partners’ Contributions					196,004			196,004
Net income		627,419			656,632			1,284,051


Balance at December 31, 2006		1,236,559			558,022			1,794,581

Partners’ Distributions		(535,925	)		(728,000	)		(1,263,925	)
Partners’ Contributions					44,993			44,993
Net income		635,346			676,704			1,312,050


Balance at December 31, 2007		1,335,980			551,719			1,887,699

Partners’ Distributions		(1,199,890	)		(1,178,600	)		(2,378,490	)
Partners’ Contributions					54,911			54,911
Net income		984,323			995,035			1,979,358

Balance at December 31, 2008	$	1,120,413		$	423,065		$	1,543,478

~~Note~~See 1accompanying -notes ~~Organization~~to ~~and~~financial ~~Summary~~statements. ~~of Significant Accounting Policies~~

~~Texland~~18 Drilling Program - 1981, Ltd. (the “Partnership”) was organized as a limited partnership on July 20, 1981, for the purpose of engaging in oil and gas exploration and production. Texland Properties - 1981, a general partnership, and Texland Petroleum, L.P. are the general partners. The managing general partner is Texland Petroleum, L.P. Partnership operations are conducted predominately in West Texas.

TheTable Partnership shall continue in existence, unless terminated sooner through the occurrence of a final terminating event as defined by the Partnership agreement, until December 31, 2006, as extended through approval by the limited partners owning a majority of aggregate Partnership subscriptions. Contents

~~The~~Texland ~~Partnership’s~~Drilling ~~accounting~~Program-1981, ~~policies~~Ltd. ~~are~~(A ~~summarized~~Limited ~~below:~~Partnership)

~~Basis~~Statements of ~~Accounting~~Cash Flows

~~The~~For ~~Partnership maintains its financial records on~~ the ~~income~~Years ~~tax~~Ended ~~basis. The financial statements are presented in accordance with accounting principles~~December 31, ~~generally~~2008, ~~accepted~~2007, inand ~~the~~2006 ~~United States of America. The primary differences in accounting methods are identified in Note 8.~~

Revenue Recognition


	2008			2007			2006
Cash Flows From Operating Activities
Net income	$	1,979,358		$	1,312,050		$	1,284,051
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion expense		37,966			29,721			28,102
Depreciation, depletion and amortization		193,998			148,415			142,225
(Increase) Decrease in accounts receivable		132,726			(68,159	)		64,367
Increase (Decrease) in accounts payable		14,170			17,673			(13,550	)


Net Cash Provided by Operating Activities		2,358,218			1,439,700			1,505,195


Cash Flows From Investing Activities
Acquisition of property and equipment		(155,773	)		(130,031	)		(436,513	)


Net Cash Used in Investing Activities		(155,773	)		(130,031	)		(436,513	)


Cash Flows From Financing Activities
Partners’ contributions		54,911			44,993			196,004
Partners’ distributions		(2,378,490	)		(1,263,925	)		(1,360,600	)


Net Cash Used in Financing Activities		(2,323,579	)		(1,218,932	)		(1,164,596	)


Net Change in Cash and Cash Equivalents		(121,134	)		90,737			(95,914	)

Cash and Cash Equivalents - Beginning of Year		141,479			50,742			146,656


Cash and Cash Equivalents - End of Year	$	20,345		$	141,479		$	50,742


Non Cash Disclosure
ARO Revision	$	135,927		$	33,357		$	(20,582	)

~~Revenues~~See ~~associated~~accompanying ~~with~~notes ~~the~~to ~~production~~financial ~~of oil and gas properties, in which we have an interest, are based on volumes produced during the period~~statements.

~~Property~~19 ~~and Equipment~~

TheTable Partnership uses the successful efforts method of accounting for oil and gas producing activities. Costs incurred for the acquisition of producing and non-producing leaseholds are capitalized. Costs of intangible development and lease and well equipment incurred to drill and equip successful exploratory and development wells are capitalized. Costs to drill and equip unsuccessful exploratory wells are charged to operations while costs of unsuccessful development wells remain capitalized. Costs to carry unproved properties and geophysical costs are expensed. Costs associated with uncompleted wells are capitalized as wells-in-progress. Contents

OnTexland ~~the~~Drilling ~~sale or retirement of a complete unit of a proved property~~Program-1981, ~~the cost and the related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized~~Ltd. On(A ~~the~~Limited ~~retirement~~Partnership) ~~or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in income.~~

-Notes 22to -Financial Statements

~~TEXLAND~~1. ~~DRILLING~~Organization ~~PROGRAM~~and -Summary ~~1981,~~of ~~LTD.~~Significant Accounting Policies

~~NOTES~~Texland TODrilling ~~FINANCIAL~~Program ~~STATEMENTS~~- 1981, Ltd. (the “Partnership”) was organized as a limited partnership on July 20, 1981, for the purpose of engaging in oil and gas exploration and production. Texland Properties - 1981, a general partnership, and Texland Petroleum, L.P. are the general partners. The managing general partner is Texland Petroleum, L.P. Partnership operations are conducted predominately in West Texas.

~~For~~The Partnership shall continue in existence, unless terminated sooner through the ~~Years~~occurrence ~~Ended~~of ~~December~~a final terminating event as defined by the Partnership agreement, until December 31, ~~2004~~2009, ~~and~~as ~~2003~~extended through approval by the limited partners owning a majority of aggregate Partnership subscriptions.

~~Non-producing~~Use ~~Leaseholds~~of Estimates

~~Costs~~The preparation of ~~non-producing~~financial ~~properties~~statements ~~are~~in ~~charged~~accordance with accounting principles generally accepted in the United States of America requires management to ~~expense~~make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at ~~such~~the ~~time~~date asof ~~they~~the ~~are~~financial ~~deemed~~statements toand bereported ~~impaired,~~revenues ~~based~~and ~~upon~~expenses ~~periodic~~during the ~~assessments~~reporting period. Actual results could differ from those estimates. The estimation of ~~such~~oil ~~costs~~and gas reserves is inherently imprecise and may change materially in the near term.

~~Amortization~~Basis ~~and~~of ~~Depletion~~ Accounting

~~Leasehold~~The ~~costs~~Partnership ofmaintains ~~producing~~its ~~properties~~financial ~~are~~records ~~amortized~~ on the ~~unit-of-production~~income ~~method~~tax ~~based~~basis. onThe ~~proved~~financial statements ~~oil~~are ~~and~~presented ~~gas~~in ~~reserves~~accordance aswith ~~estimated~~accounting byprinciples ~~the~~generally ~~Partnership.~~accepted ~~Intangible~~in ~~development~~the ~~costs~~United States of ~~producing~~America. ~~properties~~The ~~are~~primary ~~amortized~~differences onin ~~the~~accounting ~~unit-of-production~~methods ~~method~~are ~~based~~identified onin ~~estimated~~Note ~~proved developed oil and gas reserves~~8.

~~Depreciation~~Revenue Recognition

~~Depreciation~~Revenues associated with the production of ~~equipment~~oil isand ~~provided~~gas byproperties, ~~the~~in ~~unit-of-production~~which ~~method based~~we onhave ~~estimated~~an ~~proved~~interest, ~~developed~~are ~~oil~~based ~~and~~on ~~gas~~volumes ~~reserves~~produced during the period.

~~Income~~Property ~~Taxes~~and Equipment

~~Income taxes~~The ~~have~~Partnership ~~not~~uses ~~been~~the ~~provided~~successful efforts method of accounting for byoil ~~the~~and ~~Partnership,~~gas ~~because~~producing activities. Costs incurred for the ~~partners~~acquisition of producing and non-producing leaseholds are ~~liable~~capitalized. ~~for~~Costs ~~taxes~~of onintangible ~~their~~development ~~respective~~and ~~shares~~lease and well equipment incurred to drill and equip successful exploratory and development wells are capitalized. Costs to drill and equip unsuccessful exploratory wells are charged to operations while costs of ~~the~~unsuccessful ~~Partnership’s~~development ~~taxable~~wells ~~income~~remain capitalized. Costs to carry unproved properties and geophysical costs are expensed. Costs associated with uncompleted wells are capitalized as wells-in-progress.

~~Statement~~On the sale or retirement of ~~Cash~~a ~~Flows~~complete unit of a proved property, the cost and the related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in income.

~~For~~20 ~~purposes of these statements, the Partnership considers cash on deposits and highly liquid money market funds as cash and cash equivalents.~~

AllocationTable of Net Income Contents

~~Revenues~~Texland ~~and~~Drilling ~~costs~~Program-1981, ofLtd. ~~the~~(A ~~Partnership are~~Limited ~~allocated between the general and limited partners in accordance with the~~ Partnership) ~~agreement.~~

~~Fair~~Notes ~~Values~~to of Financial ~~Instruments~~Statements

~~The~~Impairment ~~Partnership’s financial instruments consist~~ of ~~cash,~~Oil ~~accounts receivable~~ and ~~accounts~~Gas ~~payable. The carrying amount of each of these financial instruments reported in the accompanying statements of financial position approximates the instruments fair value.~~ Properties

~~Use~~The Partnership reviews its proved oil and gas properties for impairment on an annual basis or whenever events and circumstances indicate a potential decline in the recoverability of ~~Estimates~~their carrying value. The Partnership compares expected undiscounted future net cash flows on a cost center basis to the unamortized capitalized cost of the asset. If the future undiscounted net cash flows, based on the Partnership‘s estimate of future oil and natural gas prices and operating costs and anticipated production from proved reserves, are lower than the unamortized capitalized cost, then the capitalized cost is reduced to fair market value.

The ~~preparation~~factors ofused ~~financial~~to ~~statements~~determine infair ~~accordance~~value ~~with~~include, ~~accounting~~but ~~principles~~are ~~generally~~not ~~accepted~~limited ~~in the United States of America requires management~~ to ~~make~~, estimates ~~and assumptions that affect the reported amounts~~ of ~~assets~~reserves, ~~and~~future ~~liabilities~~commodity ~~and~~pricing, ~~disclosure~~future ofproduction ~~contingent~~estimates, ~~assets and liabilities at the date of the financial statements and reported revenues and expenses during the reporting period.~~anticipated ~~Actual~~capital ~~results could differ from those estimates~~expenditures. The ~~estimation~~Partnership ofhas ~~oil~~no ~~and~~unproven ~~gas reserves is inherently imprecise and may change materially in the near term~~properties.

-Given 23the -complexities associated with oil and gas reserve estimates and the history of price volatility in the oil and gas markets, events may arise that will require the Partnership to record an impairment of its oil and gas properties and there can be no assurance that such impairments will not be required in the future nor that they will not be material.

~~TEXLAND~~No ~~DRILLING~~impairment ~~PROGRAM~~has -been ~~1981,~~recorded ~~LTD~~as a result of these reviews.

~~NOTES~~Non-producing TOLeaseholds ~~FINANCIAL STATEMENTS~~

~~For~~Costs ~~the~~of ~~Years~~non-producing ~~Ended~~properties are ~~December~~charged 31to expense at such time as they are deemed to be impaired, ~~2004~~based ~~and~~upon ~~2003~~periodic assessments of such costs.

~~Note~~Amortization ~~2 - Costs Incurred in Oil~~ and ~~Gas Producing Activities~~ Depletion

~~The~~Leasehold ~~following~~costs ~~summarizes~~of producing properties are amortized on the ~~Partnership’s~~unit-of-production ~~costs~~method ~~incurred~~based inon ~~its~~proved oil and gas ~~activities,~~reserves ~~all~~as estimated by the Partnership. Intangible development costs of ~~which~~producing ~~were~~properties ~~conducted~~are ~~within~~amortized on the ~~United~~unit-of-production ~~States,~~method ~~for~~based ~~the~~on ~~years~~estimated ~~ended December~~proved ~~31:~~developed oil and gas reserves.

	Lease Acquisition Costs		Development Costs
	Expensed	Capitalized	Expensed		Capitalized
2004			$	286	$	55,343
2003				233		58,492
2002				233		118,964

Depreciation

~~Note~~Depreciation 3of -equipment ~~Acquisition~~is provided by the unit-of ~~Non~~-~~producing~~production ~~Properties~~method based on estimated proved developed oil and gas reserves.

~~The~~Income ~~Partnership~~Taxes acquired working interests in certain oil and gas properties through assignments from other Texland Drilling Program partnerships. These acquisitions involved no cost to the Partnership and are subject to retained nonworking interests by the assignor. Upon payout of these properties, the assignor has an option to convert the retained nonworking interest to a working interest.

~~Note~~Income 4taxes -have ~~Contributions~~not been provided for by ~~General~~the ~~Partners~~Partnership, because the partners are liable for taxes on their respective shares of the Partnership’s taxable income. Beginning January 1, 2007, the Partnership is subject to the Texas Margin Tax. However, no margin tax was due for 2007 or 2008.

~~Under~~In ~~terms~~July, of2006, the ~~Partnership~~FASB ~~agreement,~~issued ~~Texland~~Interpretation ~~Properties - 1981 is charged for certain costs related to drilling and production operations~~No. 48, ~~which~~“Accounting ~~are required to be~~for ~~capitalized~~Uncertainty ~~for~~in ~~federal~~Income ~~income~~Taxes-an ~~tax~~interpretation ~~purposes.~~of ~~These~~SFAS ~~costs~~109” ~~are~~(“FIN ~~treated as capital contributions~~48”). InThis ~~addition,~~interpretation ~~Texland~~clarifies ~~Properties~~the -application ~~1981~~of ~~and~~SFAS ~~Texland~~109 ~~Petroleum,~~by ~~L.P.~~defining ~~currently~~the ~~hold~~criterion ~~38.75~~that ~~units~~an ~~and~~individual 6tax ~~units,~~position ~~respectively.~~must ~~These~~meet ~~investments~~for asany apart ~~limited partner~~of ~~are reported with other limited partners’ capital in~~ the ~~accompanying~~benefit ~~financial~~of ~~statements.~~ that

~~Note~~21 ~~5 - Payments to Managing General Partner~~

TheTable Partnership was charged $191,272, $160,482 and $170,090 in 2004, 2003 and 2002, respectively, for technical and accounting services performed by employees of the managing general partner. These charges are included in intangible development costs, production expenses and fees to managing general partner. Contents

~~Supervisory~~Texland ~~fees~~Drilling ~~charged to the Partnership by the managing general partner for drilling and operating the partnership wells were $172~~Program-1981,~~424,~~ ~~$151,004~~Ltd. ~~and~~(A ~~$152,559~~Limited inPartnership) ~~2004, 2003 and 2002, respectively, and are included in intangible development costs and production expenses.~~

~~These~~Notes ~~charges~~to ~~are allocated~~Financial ~~between~~Statements ~~the general and limited partners based upon applicable revenue and expense sharing rates.~~

- position 24to -be recognized in an entity’s financial statements and also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, and disclosure. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006. The Partnership adopted the provisions of FIN 48 on January 1, 2007. The adoption of this standard did not have a material impact on the Partnership’s financial statements. No liabilities or assets have been recognized as a result of the implementation of Interpretation 48.

~~TEXLAND~~The ~~DRILLING~~Partnership’s ~~PROGRAM~~income -is ~~1981,~~passed ~~LTD~~through and paid at the partner level on a federal basis. The tax years 2005 to 2008 remain open to examination by the major taxing jurisdictions in which the partners are subject to tax.

~~NOTES~~Statement TOof ~~FINANCIAL~~Cash ~~STATEMENTS~~Flows

For purposes of these statements, the ~~Years~~Partnership ~~Ended~~considers ~~December~~cash ~~31,~~on ~~2004~~deposits and ~~2003~~highly liquid money market funds as cash and cash equivalents.

~~Note~~Net 6Income -Allocation ~~Major Purchasers~~

~~Purchasers,~~Revenues ~~which~~and ~~accounted~~costs ~~for~~of ~~10%~~the orPartnership are ~~more~~allocated ofbetween the ~~Partnership’s~~general ~~sales,~~and ~~were~~limited aspartners ~~follows:~~in accordance with the Partnership agreement.

	2004		2003		2002
Conoco Phillips	61	%	55	%	56	%
Sun Partners Marketing and Terminals, L.P.	20	%	22	%	10	%
Occidental Premium, Ltd.	19	%	22	%
BP American Production Co.					20	%
Calpine Producer Services, L.P.					10	%
	100	%	99	%	96	%

Fair Values of Financial Instruments

~~Texland~~The ~~Petroleum,~~Partnership’s ~~L.P.~~financial ~~receives substantially~~instruments ~~all~~consist ~~revenues~~of ~~directly~~cash, ~~from~~accounts ~~the~~receivable ~~purchasers~~ and ~~subsequently~~accounts ~~disburses these revenues to interest owners~~payable. ~~Substantially~~The ~~all~~carrying ~~trade~~amount ~~accounts~~of ~~receivable~~each ~~were~~of ~~due~~these ~~from~~financial instruments ~~Texland~~reported ~~Petroleum,~~in ~~L.P.~~the ataccompanying ~~December~~statements ~~31,~~of ~~2004~~financial ~~and~~position ~~2003~~approximates ~~for oil and gas sales to~~ the ~~above~~instruments ~~purchasers~~fair value.

~~Note~~2. 7Costs –Incurred ~~Asset~~in ~~Retirement Obligations~~Oil and Gas Producing Activities

OnThe ~~January~~following summarizes ~~1, 2003,~~ the Partnership’s ~~adopted Statements~~costs ofincurred ~~Financial~~in ~~Accounting~~its ~~Standards~~oil ~~(SFAS)~~and ~~No.~~gas ~~143~~activities, ~~“Accounting~~all ~~for~~of ~~Asset Retirement Obligations,”~~ which ~~addresses~~were ~~the~~conducted ~~financial~~within ~~accounting and reporting obligations and retirement costs related to~~ the ~~retirement~~United ~~of tangible long-lived assets. Among other things~~States, ~~SFAS~~for ~~No. 143 requires oil and gas companies to reflect asset retirement obligation liabilities on~~ the ~~face~~years ofended ~~the~~December 31: ~~balance sheet at fair value on a discounted basis.~~

Consistent with industry practice, historically the Company had assumed the costs of plugging abandonment on its properties would be offset by salvage value received. SFAS 143 requires the Company to consider estimated salvage value in the calculation of depreciation, depletion and amortization. The adoption of SFAS No. 143 resulted in a cumulative effect adjustment as of January 1, 2003 to record (i) a $39,781 increase in the carrying values of proved properties, (ii) a $333,953 decrease in accumulated depreciation, depletion and amortization of property and equipment, and (iii) a $159,477 increase in asset retirement obligation liabilities. The net impact of items (i) through (iii) was to record a gain of $214,257 as a cumulative effect adjustment of a change in accounting principle in the Partnership’s statements of operations upon adoption on January 1, 2003. The general partner has received the benefit of the change in asset salvage value while the asset retirement obligation was allocated based on income allocation. The Partnership has no material assets that are legally restricted for purposes of settling its asset retirement obligation liabilities.


	Lease Acquisition Costs		Development Costs
	Expensed	Capitalized	Expensed		Capitalized
2008			$	—	$	155,773
2007				—		130,031
2006				424		430,543

	Limited Partners			General Partners		Total
Income Before Change in Accounting Principle	$	307,283		$	359,424	$	666,707
Cumulative Effect of Change in Accounting Principle		(79,312	)		293,569		214,257
Net Income	$	227,971		$	652,993	$	880,964

3. Acquisition of Non-producing Properties

-The 25Partnership -acquired working interests in certain oil and gas properties through assignments from other Texland Drilling Program partnerships. These acquisitions involved no cost to the Partnership and are subject to retained nonworking interests by the assignor. Upon payout of these properties, the assignor has an option to convert the retained nonworking interest to a working interest.

~~TEXLAND~~22 ~~DRILLING PROGRAM - 1981, LTD.~~

NOTESTable TOof FINANCIAL STATEMENTS Contents

~~For~~Texland ~~the~~Drilling ~~Years Ended December 31~~Program-1981, ~~2004~~Ltd. ~~and~~(A ~~2003~~Limited Partnership)

~~The~~Notes ~~pro~~to ~~forma~~Financial ~~effects~~Statements ~~of the application of SFAS No. 143 as if the statement had been adopted on January 1, 2002 are presented below:~~

	Years Ended December 31,
	2003			2002
Net income as reported	$	880,964		$	388,170
Change in depreciation, depletion and amortization					(16,718	)
Cumulative effect of accounting change		(214,257	)
Pro forma net income		666,707			371,452
Less: General partner pro forma income		359,424			211,112
Pro forma net income applicable to limited partners	$	307,283		$	160,340
Pro forma net income per $5,000 limited partner unit	$	127		$	66
Net income per $5,000 limited partner unit as reported	$	94		$	69

4.	Contributions by General Partners

~~The~~Under ~~following~~terms ~~table~~of ~~describes~~ the Partnership ~~changes~~agreement, inTexland ~~the~~Properties ~~Partnership’s~~- ~~asset~~1981 ~~retirement~~is ~~obligations~~charged for ~~the~~certain ~~years~~costs ~~ended~~related ~~2003~~to drilling and ~~2004:~~production operations, which are required to be capitalized for federal income tax purposes. These costs are treated as capital contributions. In addition, Texland Properties - 1981 and Texland Petroleum, L.P. currently hold 41.27 units and 12 units, respectively. These investments as a limited partner are reported with other limited partners’ capital in the accompanying financial statements.

	2004		2003
Asset retirement obligation, beginning of year	$	172,235	$	159,477
Liability incurred during the period
Liabilities settled during the period
Revision in estimated cash flows
Accretion expense		13,779		12,758
Asset retirement obligation, end of year	$	186,014	$	172,235

5.	Payments to Managing General Partner

~~Note~~The 8Partnership -was ~~Reconciliation~~charged $199,018, $186,118 and $180,585 in 2008, 2007 and 2006, respectively, for technical and accounting services performed by employees of ~~Book-Tax~~the ~~Reporting~~managing ~~Differences~~general partner. These charges are included in intangible development costs, production expenses and fees to managing general partner.

~~Although~~Supervisory fees charged to the Partnership’s ~~financial~~by ~~statements~~the ~~are~~managing ~~prepared~~general inpartner ~~accordance~~for ~~with~~drilling ~~accounting~~and ~~principles~~operating ~~generally~~the ~~accepted~~partnership wells were $229,025, $211,324 and $194,876 in ~~the~~2008, ~~United~~2007 ~~States~~and of2006, ~~America~~respectively, ~~its~~and ~~books~~are included in intangible development costs and ~~records~~production expenses. These charges are ~~maintained~~allocated onbetween the ~~basis~~general ofand ~~accounting~~limited ~~used~~partners ~~for~~based ~~federal~~upon ~~income~~applicable revenue ~~tax~~and ~~purposes~~expense sharing rates.

-6. 26Major - Purchasers

~~TEXLAND~~Purchasers, ~~DRILLING~~which ~~PROGRAM~~accounted -for ~~1981~~10% or more of the Partnership’s sales, ~~LTD.~~were as follows:

NOTES TO FINANCIAL STATEMENTS


	2008		2007		2006
BP America	—		—		42	%
Conoco Phillips	68	%	65	%	26	%
Sun Partners Marketing and Terminals, L.P.	15	%	17	%	18	%
Occidental Premium, Ltd.	—		—		13	%
Other	17	%	18	%	1	%

	100	%	100	%	100	%

~~For~~Texland Petroleum, L.P. receives substantially all revenues directly from the ~~Years~~purchasers ~~Ended~~and ~~December~~subsequently disburses these revenues to interest owners. Substantially all trade accounts receivable were due from Texland Petroleum, L.P. at December 31, ~~2004~~2008, 2007 and ~~2003~~2006 for oil and gas sales to the above purchasers. Based on past experience, it is believed that all receivables are collectible.

	Limited Partners			General Partners			Total
Net Income Differences for 2004:
Net income for financial reporting purposes	$	410,104		$	458,717		$	868,821
Expenses for federal income tax purposes, capitalized for financial reporting purposes		(36,243	)					(36,243	)
(Excess) Deficiency of depreciation, depletion and amortization expense for financial reporting purposes over amounts for federal income tax purposes		83,036			(10,423	)		72,613
Additional income (loss) for federal income tax purposes		46,793			(10,423	)		36,370
Net income for federal income tax purposes	$	456,897		$	448,294		$	905,191
Partners’ Capital Differences:
Partners’ capital at December 31, 2004, for financial reporting purposes	$	1,158,090		$	450,146		$	1,608,236
Additional income (loss) for federal income tax purposes:
2004		46,793			(10,423	)		36,370
2003		131,934			(303,210	)		(171,276	)
2002		22,693			(7,866	)		14,827
2001		(1,649	)		37,048			35,399
2000		71,096			19,652			90,748
1999		96,076			20,149			116,225
1998		773,151			510,714			1,283,865
1997 and prior		(1,057,518	)		(454,310	)		(1,511,828	)
Investment tax credit basis reduction not recognized for financial reporting purposes					(38,802	)		(38,802	)
Partners’ capital December 31, 2004, for federal income tax purposes	$	1,240,666		$	223,098		$	1,463,764

7.	Asset Retirement Obligations

-On 27January 1, 2003, the Partnership adopted Statement of Financial Accounting Standards (SFAS) No. 143, “Accounting for Asset Retirement Obligations,” which addresses the financial accounting and reporting obligations and retirement costs related to the retirement of tangible long-lived assets. Among other things, SFAS No. 143 requires oil and gas companies to reflect asset retirement obligation liabilities on the face of the balance sheet at fair value on a discounted basis.

~~TEXLAND~~23 ~~DRILLING PROGRAM - 1981, LTD.~~

NOTESTable TOof FINANCIAL STATEMENTS Contents

~~For~~Texland ~~the~~Drilling ~~Years Ended December 31~~Program-1981, ~~2004~~Ltd. ~~and~~(A ~~2003~~Limited Partnership)

~~Note~~Notes 9to -Financial ~~Supplemental~~Statements ~~Oil and Gas Information (Unaudited)~~

~~Proved~~Consistent ~~Oil~~with industry practice, historically the Partnership had assumed the costs of plugging abandonment on its properties would be offset by salvage value received. SFAS 143 requires the Partnership to consider estimated salvage value in the calculation of depreciation, depletion and ~~Gas~~amortization. ~~Reserves~~The general partner has received the benefit of the change in asset salvage value while the asset retirement obligation was allocated based on income allocation. The Partnership has no material assets that are legally restricted for purposes of settling its asset retirement obligation liabilities.

The following table ~~summarizes~~describes the ~~Partnership’s~~changes ~~net ownership interests~~ in ~~estimated~~the ~~quantities~~Partnership’s ofasset ~~proved~~retirement ~~oil~~obligations ~~and~~for ~~gas~~the ~~reserves~~years ~~and~~ended ~~changes in net proved reserves~~2008, ~~all~~2007 ofand ~~which~~2006: ~~are located in the continental United States.~~

	For the Years Ended December 31,
	2008		2007				2006
	2004					2003					2002
Asset retirement obligation, beginning of year	$	429,965	$	365,570			$	351,282
	Oil (Mbbls)		Gas (Mmcf)			Oil (Mbbls)			Gas (Mmcf)		Oil (Mbbls)		Gas(Mmcf)
Liability incurred during the period		—		2,758				6,768
Net proved reserves at beginning of year	364		1,191			359			1,257		285		926
Liabilities settled during the period		—		(1,441	)			—
Production	(37	)	(89	)		(39	)		(105	)	(43	)	(143	)
Revision in estimated cash flows		135,927		33,357				(20,582	)
Extensions and discoveries
Accretion expense		37,966		29,721				28,102
Revisions	31		(29	)		44			39		117		474
Asset retirement obligation, end of year	$	603,858	$	429,965			$	365,570
Net proved reserves at end of year	358		1,073			364			1,191		359		1,257

~~There~~The ~~are~~estimate ~~numerous uncertainties in estimating quantities~~ of ~~proved reserves believed to have been discovered and in projecting future rates of production and~~ the ~~timing~~asset ofretirement ~~development~~obligations ~~expenditures, including many factors beyond the control of the Partnership. The reserve data set forth in this document are only estimates. Reserve estimates are inherently imprecise and~~ may ~~be expected to~~ change asmaterially ~~additional information becomes available. Furthermore, estimates of oil and natural gas reserves, of necessity, are projections based on engineering data, and there are uncertainties inherent~~ in the ~~interpretation~~near ~~of such data as well as the projection of future rates of production and the timing of development expenditures~~term. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured exactly, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Accordingly, estimates of the economically recoverable quantities of oil and natural gas attributable to any particular group of properties, classifications of such reserves based on risk of recovery and estimates of the future net cash flows expected therefrom prepared by different engineers or by the same engineers at different times may vary substantially. There also can be no assurance that the reserves set forth herein will ultimately be produced. It is possible that variances from the estimates will be material.

~~Standardized~~24 ~~Measure of Discounted Future Net Cash Flows~~

TheTable standardized measure of discounted future net cash flows is computed by applying year-end prices of oil and gas (with consideration of price changes only to the extent provided by contractual arrangements) to the estimated future production of proved oil and gas reserves less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, discounted Contents

-Texland 28Drilling Program-1981, Ltd. (A Limited Partnership)

~~TEXLAND~~Notes ~~DRILLING~~to ~~PROGRAM~~Financial -Statements ~~1981, LTD.~~

~~NOTES~~8. TOReconciliation ~~FINANCIAL~~of ~~STATEMENTS~~Book-Tax Reporting Differences

~~For~~Although the Partnership’s ~~Years~~financial ~~Ended~~statements ~~December~~are 31prepared in accordance with accounting principles generally accepted in the United States of America, ~~2004~~its books and ~~2003~~records are maintained on the basis of accounting used for federal income tax purposes. The following information is presented to assist the limited partners in reconciling the tax information provided to the information provided in these financial statements.

using a rate of 10% per year to reflect the estimated timing of the future cash flows. A federal income tax provision has not been calculated as the income of the Partnership is included in the individual federal income tax returns of the respective partners.


	Limited Partners			General Partners			Total
Net Income Differences for 2008:
Net income for financial reporting purposes	$	984,323		$	995,035		$	1,979,358


Expenses for federal income tax purposes, capitalized for financial reporting purposes		(100,861	)					(100,861	)

Excess (Deficiency) of depreciation, depletion and amortization expense for financial reporting purposes over amounts for federal income tax purposes		117,525			4,827			122,352

Additional income (loss) for federal income tax purposes


Net income for federal income tax purposes	$	1,000,987		$	999,862		$	2,000,849


Partners’ Capital Differences:
Partners’ capital at December 31, 2008, for financial reporting purposes	$	1,120,413		$	423,065		$	1,543,478

Additional income (loss) for federal income tax purposes:
2008		16,664			4,827			21,491
2007		17,544			(22,948	)		(5,404	)
2006		(142,878	)		(1,100	)		(143,978	)
2005		54,177			(4,144	)		50,033
2004		46,793			(10,423	)		36,370
2003		131,934			(303,210	)		(171,276	)
2002		22,693			(7,866	)		14,827
2001		(1,649	)		37,048			35,399
2000		71,096			19,652			90,748
1999		96,076			20,149			116,225
1998 and prior		(284,369	)		56,404			(227,965	)
Investment tax credit basis reduction not recognized for financial reporting purposes					(38,802	)		(38,802	)


Partners’ capital December 31, 2008, for federal income tax purposes	$	1,148,494		$	172,652		$	1,321,146

~~Discounted~~25 future cash flow estimates like those shown below are not intended to represent estimates of the fair value of oil and gas properties. Estimates of fair value should also consider anticipated future oil and gas prices, interest rates, changes in development and production costs and risks associated with future production. Because of these and other considerations, any estimate of fair value is necessarily subjective and imprecise.

-Table 29of - Contents

~~TEXLAND~~Texland ~~DRILLING~~Drilling ~~PROGRAM~~ Program- 1981, ~~LTD~~Ltd. (A Limited Partnership)

~~NOTES~~Notes TOto ~~FINANCIAL~~Financial ~~STATEMENTS~~Statements

~~For~~9. ~~the~~Supplemental ~~Years~~Oil ~~Ended December 31, 2004~~ and ~~2003~~Gas Information (Unaudited)

~~The~~Proved ~~following table summarizes the Partnership’s standardized measure of discounted future net cash flows of its ownership interests in proved oil~~ Oil and ~~gas~~Gas ~~reserves~~Reserves ~~and changes in the standardized measure of discounted future net cash flows:~~

	As of December 31,
	2004			2003			2002
	(in thousands)
Future cash inflows	$	16,734		$	13,924		$	13,257
Future production costs		(6,187	)		(5,718	)		(5,244	)
Future development cost		(30	)					(33	)
		10,517			8,206			7,980
10% annual discount factor		(4,983	)		(3,599	)		(3,479	)
Standardized measure of discounted future net cash flows	$	5,534		$	4,607		$	4,501

The following table summarizes the Partnership’s net ownership interests in estimated quantities of proved oil and gas reserves and changes in net proved reserves, all of which are located in the continental United States. All proved reserves are classified as proved developed.

The following table summarizes the changes in the Partnership’s standardized measure of discounted future net cash flows:


	For the Years Ended December 31,
	2008				2007				2006
	Oil (Mbbls)		Gas (Mmcf)		Oil (Mbbls)		Gas (Mmcf)		Oil (Mbbls)		Gas (Mmcf)
Net proved reserves at beginning of year	329		854		304		1,252		357		1,014
Production	(34	)	(52	)	(35	)	(60	)	(33	)	(88	)
Extensions and discoveries	—		—		—		—		—		—
Revisions	(20	)	(6	)	60		(338	)	(20	)	326

Net proved reserves at end of year	275		796		329		854		304		1,252

	For the Years Ended December 31,
	2004			2003			2002
	(in thousands)
Oil and gas sales, net of production costs	$	(1,147	)	$	(922	)	$	(639	)
Net change in prices and production costs		1,189			158			2,024
Extensions and discoveries
Revisions of previous quantity estimates		517			734			2,758
Changes in production rates, timing and other		(77	)		(314	)		(1,236	)
Change in development costs		(16	)
Accretion of discount		461			450			145
Change in present value of future net revenues		927			106			3,052
Balance, beginning of year		4,607			4,501			1,449
Balance, end of year	$	5,534		$	4,607		$	4,501

There are numerous uncertainties in estimating quantities of proved reserves believed to have been discovered and in projecting future rates of production and the timing of development expenditures, including many factors beyond the control of the Partnership. The reserve data set forth in this document are only estimates. Reserve estimates are inherently imprecise and may be expected to change as additional information becomes available. Furthermore, estimates of oil and natural gas reserves, of necessity, are projections based on engineering data, and there are uncertainties inherent in the interpretation of such data as well as the projection of future rates of production and the timing of development expenditures. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured exactly, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Accordingly, estimates of the economically recoverable quantities of oil and natural gas attributable to any particular group of properties, classifications of such reserves based on risk of recovery and estimates of the future net cash flows expected therefrom prepared by different engineers or by the same engineers at different times may vary substantially. There also can be no assurance that the reserves set forth herein will ultimately be produced. It is possible that variances from the estimates will be material.

-Standardized 30Measure -of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows is computed by applying year-end prices of oil and gas (with consideration of price changes only to the extent provided by contractual arrangements) to the estimated future production of proved oil and gas reserves less estimated future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, discounted using a rate of 10% per year to reflect the estimated timing of the future cash flows. A federal income tax provision has not been calculated as the income of the Partnership is included in the individual federal income tax returns of the respective partners.

Texland Drilling Program-1981, Ltd. (A Limited Partnership)

Notes to Financial Statements

Discounted future cash flow estimates like those shown below are not intended to represent estimates of the fair value of oil and gas properties. Estimates of fair value should also consider anticipated future oil and gas prices, interest rates, changes in development and production costs and risks associated with future production. Because of these and other considerations, any estimate of fair value is necessarily subjective and imprecise.

The following table summarizes the Partnership’s standardized measure of discounted future net cash flows of its ownership interests in proved oil and gas reserves and changes in the standardized measure of discounted future net cash flows:


	2008			2007			2006
	(in thousands)
Future cash inflows	$	12,359		$	30,910		$	20,117
Future production cost		(6,730	)		(9,138	)		(7,070	)
Future development cost		—			—			—

		5,629			21,772			13,047
10% annual discount factor		(2,458	)		(10,300	)		(6,194	)


Standardized measure of discounted future net cash flows	$	3,171		$	11,472		$	6,853

The following table summarizes the changes in the Partnership’s standardized measure of discounted future net cash flows:


	2008			2007			2006
	(in thousands)
Oil and gas sales, net of production costs	$	(2,369	)	$	(1,639	)	$	(1,600	)
Net change in prices and production costs		(7,812	)		5,629			(2,229	)
Extensions and discoveries		0			0			0
Revisions of previous quantity estimates		(287	)		228			879
Changes in production rates, timing and other		1,020			(284	)		(736	)
Change in development costs		0			0			341
Accretion of discount		1,147			685			927

Change in present value of future net revenues		(8,301	)		4,619			(2,418	)
Balance, beginning of year		11,472			6,853			9,271

Balance, end of year	$	3,171		$	11,472		$	6,853

Texland Drilling Program-1981, Ltd. (A Limited Partnership)

Notes to Financial Statements

10.

Supplemental Oil and Gas Information (Unaudited)

The following is a summary of the quarterly results of operations for the years ended December 31, 2008 and 2007:


	First Quarter 2008		Second Quarter 2008		Third Quarter 2008		Fourth Quarter 2008
Fiscal 2008 Quarters
Revenues	$	833,466	$	1,032,609	$	1,048,616	$	502,517
Expenses		298,023		362,584		358,163		419,080

Net Income		535,443		670,025		690,453		83,437

Limited Partners		267,997		329,736		321,049		65,541
General Partner		267,446		340,289		369,404		17,896

		535,443		670,025		690,453		83,437

Net Income per Limited Partner unit	$	110.51	$	135.97	$	132.39	$	27.03


	First Quarter 2007		Second Quarter 2007		Third Quarter 2007		Fourth Quarter 2007
Fiscal 2007 Quarters
Revenues	$	508,636	$	562,306	$	739,536	$	737,916
Expenses		256,366		315,271		359,161		305,546

Net Income		252,270		247,035		380,375		432,370

Limited Partners		114,607		117,424		187,274		216,041
General Partner		137,663		129,611		193,101		216,329

		252,270		247,035		380,375		432,370

Net Income per Limited Partner unit	$	47.26	$	48.42	$	77.23	$	89.09

Filing Compare · TEXLAND DRILLING PROGRAM 1981