# **UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

# **Washington, D.C. 20549**

 

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## **FORM 10-Q**

 

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# **QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934**

 

# **For thequarterly period ended September 30, 2003**

 

# **CommissionFile Number: 333-93399-01**

 

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**REEF GLOBALENERGY I, L.P.**

(Exact name of registrant as specified in itscharter)

 

| **Nevada**                                                         |   | **41-2064521**                                             |
|--------------------------------------------------------------------|--------|------------------------------------------------------------|
| (State or other jurisdiction of  incorporation or organization)    |   | (I.R.S. employer  identification no.)                      |
|                                                               |   |                                                       |
|                                                               |   |                                                       |
| **1901 N. Central Expressway, Suite 300  Richardson, Texas 75080** |   | **(972) 437-6792**                                         |
| (Address of principal executive offices,  including zip code)      |   | (Registrant’s telephone number,  including area code) |

 

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Indicateby ý whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days.  Yes ý     No o

 

Indicate by ýwhether the registrant is an accelerated filer (as defined in Rule 12b-2 of theExchange Act).

Yes o  No ý

 

** **

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** **

**Reef Global Energy I, L.P.**

**Index**

 
| **PART I — FINANCIAL INFORMATION** |                                                                                                    |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------|
|                                    |                                                                                                    |   |
|                                    | **ITEM 1. FINANCIAL STATEMENTS**                                                                        |   |
|                                    | *Condensed Balance Sheets*                                                                              |   |
|                                    | *Condensed Statements of Operations*                                                                    |   |
|                                    | *Condensed Statements of Cash Flows*                                                                    |   |
|                                    | *Notes to Condensed Financial Statements*                                                               |   |
|                                    | **ITEM 2. MANAGEMENT’S DISCUSSION AND  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 3. QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK**                                 |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 4. CONTROLS AND PROCEDURES**                                                                     |   |
|                                    |                                                                                                    |   |
| **PART II — OTHER INFORMATION**    |                                                                                                    |
|                                    |                                                                                                    |   |
|                                    | **ITEM 1. LEGAL PROCEEDINGS**                                                                           |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 2. CHANGES IN SECURITIES AND THE USE  OF PROCEEDS**                                              |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 3. DEFAULTS UPON SENIOR SECURITIES**                                                             |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF  SECURITY HOLDERS**                                        |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 5. OTHER INFORMATION**                                                                           |   |
|                                    |                                                                                                    |   |
|                                    | **ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K**                                                            |   |
|                                    |                                                                                                    |   |
|                                    | **SIGNATURES**                                                                                          |   |

 

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# **PART I** FINANCIAL INFORMATION

 

## **Item 1**. Financial Statements

 

**ReefGlobal Energy I, L.P.**

### **Condensed Balance Sheets**

**(Unaudited)**

 
|                                                    |   | **September  30,  2003** |          | **December  31,  2002** |       |
|---------------------------------------------------------|--------|--------------------------|---------------|-------------------------|------------|
| **Assets**                                              |   |                     |          |                    |       |
| **Current assets:**                                     |   |                     |          |                    |       |
| Cash and cash equivalents                               |   | $                        | 248,077       |                    | $          | 1,703,041 |   |
| Accounts receivable                                     |   | 61,253                   |          | —                  |       |
| Accounts receivable from affiliates                     |   | 2,991                    |          | 83,986                  |       |
| Accrued interest receivable                             |   | —                   |          | 94                      |       |
| Prepaid drilling costs                                  |   | 60,469                   |          | —                  |       |
| **Total current assets**                                |   | **372,790**              | ** **    | **1,787,121**           | ** ** |
|                                                    |   |                     |          |                    |       |
| **Property and equipment:**                             |   |                     |          |                    |       |
| Oil and gas properties, full cost method of  accounting |   | 1,395,019                |          | —                  |       |
| Accumulated depreciation and depletion                  |   | (26,847                  | )             | —                  |       |
| **Net property and equipment**                          |   | **1,368,172**            | ** **    | **—**              | ** ** |
|                                                    |   |                     | ** **    |                    | ** ** |
| **Total assets**                                        |   | **$**                    | **1,740,962** | ** **              | **$**      | **1,787,121** | ** ** |
|                                                    |   |                     |          |                    |       |
| **Liabilities and partners’ equity**               |   |                     |          |                    |       |
| **Current liabilities:**                                |   |                     |          |                    |       |
| Accounts payable                                        |   | $                        | 67,980        |                    | $          | — |   |
| Accounts payable to affiliates                          |   | 4,559                    |          | 105,075                 |       |
| **Total current liabilities**                           |   | **72,539**               | ** **    | **105,075**             | ** ** |
|                                                    |   |                     |          |                    |       |
| **Noncurrent liabilities:**                             |   |                     |          |                    |       |
| Asset retirement obligation                             |   | 32,483                   |          | —                  |       |
| **Total noncurrent liabilities**                        |   | **32,483**               |          | —                  |       |
|                                                    |   |                     |          |                    |       |
| **Partners’ equity:**                              |   |                     |          |                    |       |
| General partners                                        |   | 930,736                  |          | 952,657                 |       |
| Limited partners                                        |   | 705,204                  |          | 729,389                 |       |
| **Total partners’ equity**                         |   | **1,635,940**            | ** **    | **1,682,046**           | ** ** |
|                                                    |   |                     | ** **    |                    | ** ** |
| **Total liabilities and partners’ equity**         |   | **$**                    | **1,740,962** | ** **              | **$**      | **1,787,121** | ** ** |

 

*See accompanying notes*

 

1

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**ReefGlobal Energy I, L.P.**

### **Condensed Statements of Operations**

### **(Unaudited)**

 
|                                                   |   | **Three months ended  September 30, 2003** |       | **Nine months ended  September 30, 2003** |       |
|--------------------------------------------------------|--------|--------------------------------------------|------------|-------------------------------------------|------------|
| **Revenues:**                                          |   |                                       |       |                                      |       |
| Oil and gas sales                                      |   | $                                          | 59,526     |                                      | $          | 64,001 |   |
| Interest income                                        |   | —                                     |       | 22                                        |       |
| **Total****revenues**                                  |   | **59,526**                                 | ** ** | **64,023**                                | ** ** |
|                                                   |   |                                       |       |                                      |       |
| **Costs and expenses:**                                |   |                                       |       |                                      |       |
| Lease operating expenses                               |   | 2,492                                      |       | 3,634                                     |       |
| Production taxes                                       |   | 2,426                                      |       | 2,748                                     |       |
| Depreciation and depletion                             |   | 25,809                                     |       | 26,847                                    |       |
| Accretion of asset retirement obligation               |   | 330                                        |       | 330                                       |       |
| General and administrative                             |   | 12,617                                     |       | 90,199                                    |       |
| **Total costs and expenses**                           |   | **43,674**                                 | ** ** | **123,758**                               | ** ** |
|                                                   |   |                                       |       |                                      |       |
| **Partnership net income (loss)**                      |   | **$**                                      | **15,852** | ** **                                | **$**      | **(59,735** | **)** |
|                                                   |   |                                       |       |                                      |       |
| Net income (loss) per managing general  partner unit   |   | $                                          | 993        |                                      | $          | (1,372 | ) |
| Net income (loss) per additional general  partner unit |   | $                                          | 117        |                                      | $          | (564 | ) |
| Net income (loss) per limited partner unit             |   | $                                          | 117        |                                      | $          | (564 | ) |

 

*See accompanyingnotes*

 

2

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**ReefGlobal Energy I, L.P.**

### **Condensed Statement of Cash Flows**

**(Unaudited)**

 
|                                                                        |   | **Nine  months ended  September 30, 2003** |        |
|-----------------------------------------------------------------------------|--------|--------------------------------------------|-------------|
| **Operating Activities**                                                    |   |                                       |        |
| **Net loss**                                                                |   | **$**                                      | **(59,735** | **)** |
| Adjustments for non-cash transactions                                       |   |                                       |        |
| Depreciation and depletion                                                  |   | 26,847                                     |        |
| Accretion of asset retirement obligation                                    |   | 330                                        |        |
| Adjustments to reconcile net loss to net  cash used in operating activities |   |                                       |        |
| **Changes in operating assets and liabilities**                             |   |                                       |        |
| Accounts receivable from affiliates                                         |   | 80,995                                     |        |
| Accounts receivable                                                         |   | (61,159                                    | )           |
| Prepaid drilling costs                                                      |   | (60,469                                    | )           |
| Accounts payable                                                            |   | 3,087                                      |        |
| Accounts payable to affiliates                                              |   | (103,470                                   | )           |
| **Net cash used in operating activities**                                   |   | **(173,574**                               | **)**       |
|                                                                        |   |                                       | ** **  |
| **Investing Activities**                                                    |   |                                       |        |
| Property acquisition and development                                        |   | (1,295,019                                 | )           |
| **Net cash used in investing activities**                                   |   | **(1,295,019**                             | **)**       |
|                                                                        |   |                                       |        |
| **Financing Activities**                                                    |   |                                       |        |
| Partner capital contributions, net of  syndication costs                    |   | 13,629                                     |        |
| **Net cash provided by financing activities**                               |   | **13,629**                                 | ** **  |
|                                                                        |   |                                       | ** **  |
| **Net decrease in cash and cash equivalents**                               |   | **(1,454,964**                             | **)**       |
| Cash and cash equivalents at beginning of  period                           |   | 1,703,041                                  |        |
| **Cash and cash equivalents at end of period**                              |   | **$**                                      | **248,077** | ** ** |

 

*See accompanyingnotes*

 

3

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**Note 1.  Organization and Basis of Presentation**

 

Reef Global Energy I, L.P. (the “Partnership”) is the first in a seriesof up to ten Nevada limited partnerships to be formed comprising a programcalled Reef Global Energy Ventures (the “Program”), pursuant to an S-1Registration Statement declared effective May 31, 2001. Reef Global Energy I,L.P. was formed on October 23, 2003 under the Nevada Revised LimitedPartnership Act. Reef Partners LLC (“Reef Partners”) serves as managing generalpartner. The Partnership interests are held by the managing general partner andinvestor partners who are general and limited partners (“investor partners”).The Partnership was formed to acquire offshore and onshore interests in oil andgas properties in the United States in which major or independent oil companiesalso have interests. The Partnership has generally purchased less than amajority interest in the properties acquired and been a non-operator workinginterest owner. The Partnership has purchased interests in both exploratory anddevelopmental drilling projects.  ThePartnership did not engage in any oil and gas activity until after the offeringperiod closed on December 31, 2002.

 

The financial statements have been prepared in accordance with theinstructions to Form 10-Q and do not include all disclosures required bygenerally accepted accounting principles. However, we have recorded alltransactions and adjustments necessary to fairly present the financialstatements included in this Form 10-Q. The adjustments are normal andrecurring. The following notes describe only the material changes in accountingpolicies, account details, or financial statement notes during the first ninemonths of 2003. Therefore, please read these financial statements and notes tothe financial statements together with the audited financial statements andnotes to financial statements in the Partnership’s 2002 Form 10-K. ThePartnership began oil and gas activities in January 2003. Because the futureresults of the Partnership are dependent upon drilling operations whichcommenced in January 2003 and are expected to continue during most of thecalendar year, the results for the first nine months of 2003 cannot necessarilybe used to project results for the full year.

 

**Note 2.  New Accounting Policies**

 

The Partnership has adopted Statement of FinancialAccounting Standards No. 143 “*Accounting for Asset Retirement**Obligations*”effective January 1, 2003. The statement requires the Partnership to estimatethe fair value of asset retirement obligations (dismantlement and abandonmentof oil and gas wells and offshore platforms) in the period in which the assetis first placed in service. The Partnership then adjusts the current estimatedobligation for estimated inflation and market risk contingencies to theprojected settlement date of the obligations. The result is then discounted toa present value from the projected settlement date to the date the asset wasfirst placed in service. The Partnership will record the present value of theasset retirement obligation as additional property cost and as an assetretirement liability. A combination of the amortization of the additionalproperty cost (using the unit of production method) and the accretion of thediscounted liability will be recorded as expense in the income statement.

 

There is no cumulative effect of this change on thePartnership’s previously reported statements, since the Partnership had no oiland gas assets placed in service at December 31, 2002.  The Partnership has recorded $32,153 asadditional property cost and as an asset retirement liability in conjunctionwith the three Partnership wells placed into service as of September 30, 2003.The Partnership has one additional well which is expected to be placed in serviceduring the fourth quarter. Using the units of production method, thePartnership has recorded $1,000 as amortization of the additional propertycost. The increase in the net present value of the asset retirement liabilityof $330 has been charged to income as accretion expense.

 

4

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**Note 3.  Prepaid Drilling Costs**

 

The Partnership generally prepays drilling andcompletion costs to the various operators of the drilling projects. As ofSeptember 30, 2003, the Partnership had prepaid $60,469 for productionfacilities installation costs on the Main Pass #57 well.  This well is expected to begin productionduring the fourth quarter of 2003.

 

**Note 4.  Commitmentsand Contingencies**

 

The Partnership is not currently involved in anylegal proceedings.

 

Since its inception, Reef Partners has been owned in equal one-halfshares by two individuals (each, a “member”), one of whom died in 1999.  Pursuant to the settlement of litigation inthe Probate Court of Dallas County, Texas, the interest in Reef Partners ownedby the estate of the deceased member has been acquired by the surviving memberin exchange for cash payments made by the surviving member.  The settlement was partially implementedprior to December 31, 2002 and was consummated in June 2003.  A portion of the cash payments to the estateof the deceased member were funded by distributions from Reef Partners to thesurviving member in 2002 and 2003.  ThePartnership does not expect the settlement to have an adverse impact on itsfinancial position or operations.

 

Reef Partners, the managing general partner of thePartnership, has entered into an agreement with Challenger Minerals, Inc.,(“CMI”) a subsidiary of GlobalSantaFe Corporation and a screener of oil and gasprospects in the Gulf of Mexico region. Under this agreement, during the periodbetween January 31, 2002 and January 31, 2005, CMI will screen and present toReef Partners a minimum of 50 prospects per year in the Gulf of Mexico region.Reef Partners will have the right to purchase up to 12.5% of the interest madeavailable to CMI in any of these projects. Reef Partners is under no obligationto acquire any interest in any project reviewed by CMI and presented to ReefPartners as a viable project. Reef Partners will pay a fee of $1,125,000($375,000 per year) (the “Fee”) for the geological and geophysical servicesprovided by CMI under the agreement. Projects approved for acquisition by ReefPartners will be assigned to Reef Global Energy I, L.P. as well as otherpartnerships formed as part of the Program. Based upon initial estimatesprepared by Reef Partners, each of the partnerships formed under the Programwill reimburse Reef Partners an amount equal to 5% of the gross capitalcontributions made to each partnership. The amount of the Fee to be reimbursedto Reef Partners by Reef Global Energy I, L.P. is $98,066.  The Fee has been capitalized as geologicaland geophysical costs in accordance with the full cost method of accounting foroil and gas properties, and as a payable to Reef Partners. The Partnershipreimbursed Reef Partners for its portion of the Fee on August 1, 2003.

 

**Note 5.  Drilling Activity**

 

The Partnership began oil and gas activities effective January 1, 2003.The Partnership has committed funds to six projects. The Partnership expects tocommit funds to one additional project during the fourth quarter of 2003. Asummary of these projects as of September 30, 2003 is set forth below. Theestimated costs shown are estimated third party costs based upon the AFE(authority for expenditure) amounts and do not include an allocation of theChallenger Fee nor any direct costs of Reef Exploration, Inc. personnel.

 

5

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| **Well Name**                 |   | **Location**       |       | **Working  Interest** |   | **Revenue  Interest** |   | **Estimated  Cost** |        | **Status** |                                                                                                        |
|-------------------------------|--------|--------------------|------------|-----------------------|--------|-----------------------|--------|---------------------|-------------|------------|-------------------------------------------------------------------------------------------------------------|
| **Main Pass 57**              |   | **Gulf of Mexico** | ** ** | **4.69**              | **%**  | **3.69**              | **%**  | **$**               | **251,000** | ** ** | **Productive. Facilities installation and pipeline completed.  Awaiting compressor repairs to begin sales** | ** ** |
| **Grand Isle 27**             |   | **Gulf of Mexico** | ** ** | **1.50**              | **%**  | **1.23**              | **%**  | **$**               | **115,000** | ** ** | **Dry hole, well plugged and abandoned**                                                                    | ** ** |
| **Eugene Island 268**         |   | **Gulf of Mexico** | ** ** | **5.00**              | **%**  | **3.75**              | **%**  | **$**               | **399,000** | ** ** | **First sales were September 11, 2003**                                                                     | ** ** |
| **Eugene Island 190**         |   | **Gulf of Mexico** | ** ** | **3.75**              | **%**  | **2.67**              | **%**  | **$**               | **179,000** | ** ** | **Mechanical failure, pipe stuck prior to reaching target  zone. Well abandoned**                           | ** ** |
| **Scherer B#3**               |   | **Oklahoma**       | ** ** | **13.36**             | **%**  | **8.98**              | **%**  | **$**               | **142,000** | ** ** | **First sales were June 13, 2003**                                                                          | ** ** |
| **Matthew J Guidry et al #1** |   | **Louisiana**      | ** ** | **4.00**              | **%**  | **3.12**              | **%**  | **$**               | **201,000** | ** ** | **First sales were July 16, 2003.**                                                                         | ** ** |

 

**Note6.  Partnership Equity**

 

During the offering period ended December 31, 2002, the Partnershipsold 98.807348 units. Information regarding the number of unitsoutstanding,  the net income per type ofPartnership unit for the quarter ending September 30, 2003 and the net loss pertype of Partnership unit for the nine months ending September 30, 2003 isdetailed below.

 
|                             |   |                 |   | **Three  months ended  September 30, 2003** |   | **Nine  months ended  September 30, 2003** |   |
|----------------------------------|--------|----------------------|--------|---------------------------------------------|--------|--------------------------------------------|--------|
| **Type of Unit**                 |   | **Number of  Units** |   | **Net income**                              |   | **Net income  per unit**                   |   | **Net loss** |   | **Net loss  per  unit** |   |
| Managing general partner units   |   | 4.940367             |   | $                                           | 4,904  |                                       | $      | 993 |   | $ | (6,777 | ) | $ | (1,372 | ) |
| Additional general partner units |   | 51.000000            |   | 5,949                                       |   | 117                                        |   | (28,773 | ) | (564 | ) |
| Limited partner units            |   | 42.866981            |   | 4,999                                       |   | 117                                        |   | (24,185 | ) | (564 | ) |
| Total                            |   | 98.807348            |   | $                                           | 15,852 |                                       |   |   | $ | (59,735 | ) |   |   |
|                                  |        |                      |        |                                             |        |                                            |        |  |  |  |  |  |  |  |  |

 

6

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**Item 2****.****   ****Management’s Discussion and Analysis of Financial Conditionand Results of Operations.**

 

The following discussion will assist youin understanding the Partnership’s financial position and results ofoperations. The information below should be read in conjunction with thefinancial statements, the related notes to financial statements, and thePartnership’s Form 10-K for the year ended December 31, 2002 (the “2002 10-K”).

 

This discussion contains both historicaland forward-looking information. We assess risks and uncertainties about ourbusiness, strategy, and financial condition before we make any forward-lookingstatements, but we cannot guarantee that our assessment is accurate or that ourgoals and projections can or will be met. Statements concerning our strategyfor acquiring prospects, estimating the number, type, and percentage interestin prospects we may acquire, estimated drilling and completion costs for prospectsacquired, future uses of Partnership funds, and the state of the oil and gasindustry are all forward-looking statements.

 

This discussion is primarily an update tothe Management’s Discussion and Analysis of Financial Condition and Results ofOperations included in our 2002 10-K. We recommend that you read thisdiscussion in conjunction with the 2002 10-K.

 

**Liquidity and CapitalResources**

 

The Partnership was funded with initial contributions totaling$1,961,326. Reef Partners contributed $83,986, the additional general partnerscontributed $1,020,000, and the limited partners contributed $857,340.Syndication costs of $231,601 and organization costs of $50,000 were incurredleaving available cash of $1,679,725 for Partnership activities. The Partnershipoffering was closed on December 31, 2002. The Partnership did not engage in anyoil and gas activity until after December 31, 2002.

 

During the first nine months of 2003, the Partnership identified andcommitted funds to six drilling projects. Five of these projects are classifiedas developmental, and one is an exploration project. All six projects arelocated in the United States. The projected third party costs for these sixprojects, based upon authority for expenditure (AFE) estimates, are $1,250,000(see Note 5 to condensed financial statements). Based upon cost overrunsincurred on the Eugene Island #268 well, and cost underruns on the MJ Guidry #1and the Scherer B#3 well, the Partnership’s September 30, 2003 projection ofthird party costs on these six projects totals approximately $1,287,000. ThePartnership also paid $98,066 to Reef Partners as reimbursement of its portionof the Challenger Fee (see Note 4 to condensed financial statements). ThroughSeptember 30, 2003, the Partnership has expended $84,945 for general andadministrative costs and $62,285 as payment for direct and administrative costsprovided by Reef Exploration. These committed and expended funds totalapproximately $1,532,000. The partnership agreement prohibits bank borrowingsduring the Partnership’s drilling phase of operations. The Partnership expectsto commit funds to one additional project during the fourth quarter. Thirdparty general and administrative costs, direct and administrative costs paid toReef Exploration, and lease operating costs are expected to be covered byrevenues generated from the Partnership’s four successful projects during thefourth quarter, with net revenues in excess of costs being distributed topartners. The Partnership made an initial distribution to shareholders duringOctober 2003 of approximately $66 per unit, which was based upon initialrevenues from the MJ Guidry #1 well. Reef Partners expects that Partnershipdistributions will increase as funds from additional wells are received. Revenuesfor the Scherer B#3 well, which began production in June, have still not beenpaid to the working interest owners by the operator pending completion of adivision order title opinion.  Theinitial revenue payment to the Partnership for its interest in the Scherer B#3well****is not expected to bereceived until December 2003.

 

7

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As of November 4, 2003, drilling operations on the six Partnershipcommitted projects had been completed. The Partnership plugged and abandonedwells on the Grand Isle 27 and Eugene Island 190 projects. The Scherer B#3 wellwas placed on production in June 2003, the Matthew J Guidry #1 well was placedon production during July 2003, and the Eugene Island 268 well was placed onproduction during September 2003. The Main Pass #57 well production facilitiesand pipeline were completed in late October, and sales are expected to beginshortly pending compressor repairs at the production handling facility.

 

**Results of Operations**

 

The Partnership was formed on October 23, 2002 and began operations inJanuary 2003; therefore there is no comparable information for the three monthperiod ending September 30, 2002 and the nine month period ending September 30,2002.

 

The Partnership had net income of $15,852 during the third quarter,resulting in a cumulative net loss of $59,735 as of September 30, 2003. As ofSeptember 30, 2003, three of the four successful wells drilled by thePartnership were producing oil and gas; however, the Partnership had onlyreceived approximately $8,000 of the revenues from purchasers. Only one of thethree productive wells produced during the three month period ending September30, 2003. Operating costs totaled approximately $5,000 and depreciation,depletion, and amortization totaled approximately $26,000. Primary componentsof the approximately $13,000 in general and administrative costs incurredduring the third quarter are legal and accounting fees totaling approximately$10,500, which were incurred in connection with the Partnership’s filing andauditing requirements, and charges for accounting services and administrativeexpenses from Reef Exploration totaling approximately $1,600.  Legal and accounting fees incurred duringthe fourth quarter of 2003 are expected to be comparable to those incurredduring the third quarter. General and administrative charges incurred by thePartnership from Reef Exploration, Inc. (“Reef Exploration”) are expected toincrease as Partnership activity levels increase and successful wells areplaced in service.  Reef Exploration, anaffiliate of Reef Partners, employs a staff including geologists, petroleumengineers, landmen, and accounting personnel who administer all of thePartnership operations.

 

**Item 3****.****    Quantitativeand Qualitative Disclosures about Market Risk.**

 

*Interest Rate Risk*

 

The Partnership agreement prohibits bank borrowings during thePartnership’s drilling phase of operations. However, to the extent that changesin interest rates affect general economic conditions, the Partnership will beaffected by such changes.

 

*Commodity Price Risk*

 

The Partnership will not engage in commodity futures trading or hedgingactivities and will not enter into derivative financial instrument transactionsfor trading or other speculative purposes. The Partnership expects to sell a vast majority of its production fromsuccessful oil and gas wells on a month-to-month basis at current spot marketprices. Accordingly, the Partnership will be at risk for the volatility incommodity prices inherent in the oil and gas industry, and the level ofcommodity prices will have a significant impact on the Partnership’s results ofoperations.

 

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**Item 4****.  Controls and Procedures**

 

Based upon their evaluation as of the end of the period covered by thisQuarterly Report on Form 10-Q, the principal executive officer, principalfinancial officer and principal accounting officer of the managing generalpartner of the Partnership have concluded that the Partnership’s disclosurecontrols and procedures (as defined in Rule 13a-15(e) under the SecuritiesExchange Act of 1934) are effective. During our fiscal quarter ended September 30, 2003, no change occurredin our internal control over financial reporting that has materially affected,or is reasonably likely to materially affect, our internal control overfinancial reporting.

 

**PART II****– OTHERINFORMATION**

 

**Item1.  Legal Proceedings**

 

None

 

**Item2.  Changes in Securitiesand the use of Proceeds**

 

None

 

**Item3.  Defaults Upon SeniorSecurities**

 

None

 

**Item4.  Submission ofMatters to a Vote of Security Holders**

 

None

 

**Item5.  Other Information**

 

None

 

**Item6.  Exhibits andReports on Form 8-K**

 

(a)  Exhibits

 
| 31.1   |   | Certification of Chief Executive Officer                                                                                                                                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                            |
| 31.2   |   | Certification of Chief Financial Officer                                                                                                                                        |
|   |   |                                                                                                                                                                            |
| 32     |   | Certification of Chief Executive Officer and Chief Financial Officer  pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |

 

(b)  Reports on Form 8-K

 

The Partnership filed a Form 8-K on August 12, 2003 pursuant to Item 5(Other Events) with respect to a participation arrangement between it and otherparties regarding a certain oil and gas property described as Block 268, EugeneIsland Area, South Addition, Offshore Louisiana.

 

9

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**SIGNATURES**

 

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

 
|   |              | REEF GLOBAL ENERGY I, L.P. |
|--------|-------------------|----------------------------|
|   |              |                       |   |
|   |              | By:                        | Reef Partners LLC, |
|   |              |                       | Managing General Partner |
|   |              |                       |   |
| Dated: | November 14, 2003 | By:                        | /s/ Michael J. Mauceli |   |
|   |              |                       | **Michael J. Mauceli** |
|   |              |                       | Manager and Member |
|   |              |                       | (*Principal  Executive Officer)* |
|   |              |                       |   |
| Dated: | November 14, 2003 | By:                        | /s/ Daniel C. Sibley |   |
|   |              |                       | **Daniel C. Sibley** |
|   |              |                       | General Counsel and Chief Financial Officer |
|   |              |                       | (*Principal  Financial and Accounting Officer)* |

 

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