----

| Delaware                                  |   | 75-2220418          |
|-------------------------------------------|--------|---------------------|
| (State or other jurisdiction              |   | (I.R.S. Employer    |
| of incorporation or organization)         |   | Identification No.) |
|                                      |   |                |
| 6 Desta Drive, Suite 6500, Midland, Texas |   | 79705               |
| (Address of principal executive office)   |   | (Zip Code)          |

| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.                                                                                                                                                                                                                                    | ¨ Yes | x No      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                       |       |      |
| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.                                                                                                                                                                                                                               | ¨ Yes | x No      |
|                                                                                                                                                                                                                                                                                                                                                       |       |      |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) 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.   | x Yes      | ¨ No |
|                                                                                                                                                                                                                                                                                                                                                       |       |      |
| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | ¨ Yes | ¨ No |

| 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 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Large accelerated filer ¨                                                                                                                                                                                                                            |   | Accelerated filer ¨ |   | Non-accelerated filer  x |   | Smaller reporting company¨ |   |

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

|   |
|--------|

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Page   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Part I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Business                                                                                                                                                    | 3      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 1A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Risk Factors                                                                                                                                                | 7      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 1B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Unresolved Staff Comments                                                                                                                                   | 10     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Properties                                                                                                                                                  | 10     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Legal Proceedings                                                                                                                                           | 11     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (Removed and Reserved)                                                                                                                                      | 11     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Part II                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Market for Registrant's Common Equity, Related                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Stockholder Matters and Issuer Purchases of Equity Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 12     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Selected Financial Data                                                                                                                                     | 13     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Management's Discussion and Analysis of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Financial Condition and Results of Operations                                                                                                                                   | 14     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 7A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                  | 16     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Financial Statements and Supplementary Data                                                                                                                 | 17     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Changes in and Disagreements with Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | on Accounting and Financial Disclosure                                                                                                                                          | 30     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 9A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Controls and Procedures                                                                                                                                     | 30     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 9B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Other Information                                                                                                                                           | 31     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Part III                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Directors, Executive Officers and Corporate Governance                                                                                                      | 32     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Executive Compensation                                                                                                                                      | 32     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Security Ownership of Certain Beneficial Owners and Management and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Related Stockholder Matters                                                                                                                                                     | 33     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 13.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Certain Relationships and Related Transactions, and Director Independence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 33     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 14.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Principal Accounting Fees and Services                                                                                                                      | 33     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Part IV                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Item 15.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Exhibits and Financial Statement Schedules                                                                                                                  | 34     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Glossary of Oil and Gas Terms                                                                                                                   | 35                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| Signatures                                                                                                                                      | 37                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| ·   | amends the definition of proved reserves to require the use of average commodity prices based upon the prior 12 month period rather than year-end prices; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | expands the type of technologies available to establish reserve estimates and categories; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | modifies certain definitions used in estimating proved reserves; |
|--------------------|------------------------------------------------------------------|

| ·   | permits disclosure of probable and possible reserves; and |
|--------------------|-----------------------------------------------------------|

| ·   | permits disclosure of reserves based on different price and cost criteria, such as futures prices or management forecasts. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

|                               |   | Proved Developed |    |   | Proved       |   |   | Total       |   |
|------------------------------------|--------|------------------|---------|--------|--------------|--------|--------|-------------|--------|
|                               |   | Producing        |    |   | Nonproducing |   |   | Undeveloped |   |   | Proved |   |
| Oil (Bbls)                         |   |             | 444,000 |   |         |   | -      |        |   |   | - |   |   |   | 444,000 |   |
| Gas (Mcf)                          |   |             | 249,000 |   |         |   | -      |        |   |   | - |   |   |   | 249,000 |   |
| Total (BOE)                        |   |             | 486,000 |   |         |   | -      |        |   |   | - |   |   |   | 486,000 |   |
|                               |   |             |    |   |         |   |   |        |   |   |   |   |   |   |   |   |
| Standardized measure of discounted |   |             |    |   |         |   |   |        |   |   |   |   |   |   |   |   |
| future net cash flows              |   |             |    |   |         |   |   |        |   |   |   |   |   | $ | 8,663,000 |   |

|   |
|--------|

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|    |   | Proved Reserves |    |   |   |   |
|---------|--------|-----------------|---------|--------|--------|--------|
|    |   |            |    |   |   |   |   | Total Oil |   |   | Percent of |   |
|    |   | Oil             |    |   | Gas    |   |   | Equivalent |   |   | Total Oil |   |
|    |   | (Bbls)          |    |   | (Mcf)  |   |   | (BOE) |   |   | Equivalent |   |
| Block D |   |            | 274,000 |   |   |   | - |   |   |   | 274,000 |   |   |   | 56.4 | % |
| Scott   |   |            | 53,000  |   |   |   | 123,000 |   |   |   | 74,000 |   |   |   | 15.2 | % |
| Collie  |   |            | 55,000  |   |   |   | 67,000 |   |   |   | 66,000 |   |   |   | 13.6 | % |
| Other   |   |            | 62,000  |   |   |   | 59,000 |   |   |   | 72,000 |   |   |   | 14.8 | % |
| Total   |   |            | 444,000 |   |   |   | 249,000 |   |   |   | 486,000 |   |   |   | 100.0 | % |

Proceedings

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| Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|---------|--------------------------------------------------------------------------------------------------------------|

|           |   | Total Number |   |   |          |   |
|----------------|--------|--------------|--------|--------|---------------|--------|
|           |   | of Units     |   |   | Average Price |   |
| Period         |   | Purchased    |   |   | Paid Per Unit |   |
| January 2010   |   |         | -      |   |          | $      | - |   |
| February 2010  |   |         | -      |   |          |   | - |   |
| March 2010     |   |         | -      |   |          |   | - |   |
| April 2010     |   |         | -      |   |          |   | - |   |
| May 2010       |   |         | -      |   |          |   | - |   |
| June 2010      |   |         | 156.0  |   |          |   | 408.82 |   |
| July 2010      |   |         | -      |   |          |   | - |   |
| August 2010    |   |         | -      |   |          |   | - |   |
| September 2010 |   |         | 18.0   |   |          |   | 385.54 |   |
| October 2010   |   |         | -      |   |          |   | - |   |
| November 2010  |   |         | -      |   |          |   | - |   |
| December 2010  |   |         | -      |   |          |   | - |   |
| TOTALS         |   |         | 174.0  |   |          | $      | 406.41 |   |

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|                           |   | Years ended December 31, |      |
|--------------------------------|--------|--------------------------|-----------|
|                           |   | 2010                     |      |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Revenues                       |   | $                        | 1,835,339 |   |   | $ | 965,372 |   |   | $ | 2,579,702 |   |   | $ | 1,718,192 |   |   | $ | 1,647,951 |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                     |   |                     | 1,695,743 |   |   |   | 820,757 |   |   |   | 2,443,992 |   |   |   | 1,573,448 |   |   |   | 1,521,435 |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partners' share of net income: |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General partner                |   |                     | 171,108   |   |   |   | 83,677 |   |   |   | 245,864 |   |   |   | 159,161 |   |   |   | 153,638 |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners               |   |                     | 1,524,635 |   |   |   | 737,080 |   |   |   | 2,198,128 |   |   |   | 1,414,287 |   |   |   | 1,367,797 |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners'              |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net income per unit            |   |                     | 150.25    |   |   |   | 72.64 |   |   |   | 216.63 |   |   |   | 139.38 |   |   |   | 134.80 |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Limited partners'              |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| cash distributions per unit    |   |                     | 128.68    |   |   |   | 66.18 |   |   |   | 246.20 |   |   |   | 130.87 |   |   |   | 146.40 |   |
|                           |   |                     |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                   |   | $                        | 879,049   |   |   | $ | 580,879 |   |   | $ | 452,956 |   |   | $ | 829,934 |   |   | $ | 702,098 |   |

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|                                      |   | Year Ended December 31, |      |
|-------------------------------------------|--------|-------------------------|-----------|
|                                      |   | 2010                    |      |   | 2009 |   |   | 2008 |   |
| Oil production in barrels                 |   |                    | 35,349    |   |   |   | 33,490 |   |   |   | 35,512 |   |
| Gas production in mcf                     |   |                    | 33,669    |   |   |   | 29,369 |   |   |   | 33,099 |   |
| Total (BOE)                               |   |                    | 40,961    |   |   |   | 38,385 |   |   |   | 41,029 |   |
| Average price per barrel of oil           |   | $                       | 75.47     |   |   | $ | 56.84 |   |   | $ | 98.59 |   |
| Average price per mcf of gas              |   | $                       | 6.37      |   |   | $ | 4.68 |   |   | $ | 9.80 |   |
| Partnership distributions                 |   | $                       | 1,450,818 |   |   | $ | 746,293 |   |   | $ | 2,775,820 |   |
| Limited partner distributions             |   | $                       | 1,305,678 |   |   | $ | 671,564 |   |   | $ | 2,498,169 |   |
| Per unit distribution to limited partners |   | $                       | 128.68    |   |   | $ | 66.18 |   |   | $ | 246.20 |   |
| Number of limited partner units           |   |                    | 10,147    |   |   |   | 10,147 |   |   |   | 10,147 |   |

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Page   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| Report of Independent Registered Public Accounting Firm                                                                                                    |   | 18     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
| Balance Sheets                                                                                                                                             |   | 19     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
| Statements of Operations                                                                                                                                   |   | 20     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
| Statements of Changes in Partners' Equity (Deficit)                                                                                                        |   | 21     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
| Statements of Cash Flows                                                                                                                                   |   | 22     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
| Notes to Financial Statements                                                                                                                              |   | 23     |

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Southwest 

|                                       |   | December 31, |      |
|--------------------------------------------|--------|--------------|-----------|
|                                       |   | 2010         |      |   | 2009 |   |
|                                       |   |         |      |   |   |   |
| Assets                                     |   |         |      |   |   |   |
|                                       |   |         |      |   |   |   |
| Current assets:                            |   |         |      |   |   |   |
| Cash and cash equivalents                  |   | $            | 94,632    |   |   | $ | 76,137 |   |
| Receivable from Managing General Partner   |   |         | 427,384   |   |   |   | 162,926 |   |
| New Mexico income tax deposits             |   |         | 4,853     |   |   |   | 2,770 |   |
| Total current assets                       |   |         | 526,869   |   |   |   | 241,833 |   |
|                                       |   |         |      |   |   |   |   |   |
| Oil and gas properties - using the full-   |   |         |      |   |   |   |   |   |
| cost method of accounting                  |   |         | 4,183,679 |   |   |   | 4,155,207 |   |
| Less accumulated depreciation,             |   |         |      |   |   |   |   |   |
| depletion and amortization                 |   |         | 3,831,499 |   |   |   | 3,816,161 |   |
|                                       |   |         |      |   |   |   |   |   |
| Net oil and gas properties                 |   |         | 352,180   |   |   |   | 339,046 |   |
|                                       |   | $            | 879,049   |   |   | $ | 580,879 |   |
|                                       |   |         |      |   |   |   |   |   |
| Liabilities and Partners' Equity (Deficit) |   |         |      |   |   |   |   |   |
|                                       |   |         |      |   |   |   |   |   |
| Asset retirement obligation                |   | $            | 414,148   |   |   | $ | 360,903 |   |
|                                       |   |         |      |   |   |   |   |   |
| Partners' equity (deficit):                |   |         |      |   |   |   |   |   |
| General partner                            |   |         | 17,706    |   |   |   | (8,262 | ) |
| Limited partners                           |   |         | 447,195   |   |   |   | 228,238 |   |
|                                       |   |         |      |   |   |   |   |   |
| Total partners' equity                     |   |         | 464,901   |   |   |   | 219,976 |   |
|                                       |   | $            | 879,049   |   |   | $ | 580,879 |   |

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Southwest 

|                                     |   | Years ended December 31, |      |
|------------------------------------------|--------|--------------------------|-----------|
|                                     |   | 2010                     |      |   | 2009 |   |   | 2008 |   |
| Revenues                                 |   |                     |      |   |   |   |   |   |   |
|                                     |   |                     |      |   |   |   |   |   |   |
| Income from net profits interests        |   | $                        | 1,832,349 |   |   | $ | 965,125 |   |   | $ | 2,577,464 |   |
| Interest income                          |   |                     | 505       |   |   |   | 247 |   |   |   | 2,238 |   |
| Other                                    |   |                     | 2,485     |   |   |   | - |   |   |   | - |   |
|                                     |   |                     | 1,835,339 |   |   |   | 965,372 |   |   |   | 2,579,702 |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Expenses                                 |   |                     |      |   |   |   |   |   |   |   |   |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Depreciation, depletion and amortization |   |                     | 15,338    |   |   |   | 16,012 |   |   |   | 14,650 |   |
| Accretion expense                        |   |                     | 24,773    |   |   |   | 29,425 |   |   |   | 23,030 |   |
| General and administrative               |   |                     | 99,485    |   |   |   | 99,178 |   |   |   | 98,030 |   |
|                                     |   |                     | 139,596   |   |   |   | 144,615 |   |   |   | 135,710 |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Net income                               |   | $                        | 1,695,743 |   |   | $ | 820,757 |   |   | $ | 2,443,992 |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Net income allocated to:                 |   |                     |      |   |   |   |   |   |   |   |   |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Managing General Partner                 |   | $                        | 171,108   |   |   | $ | 83,677 |   |   | $ | 245,864 |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Limited partners                         |   | $                        | 1,524,635 |   |   | $ | 737,080 |   |   | $ | 2,198,128 |   |
|                                     |   |                     |      |   |   |   |   |   |   |   |   |   |
| Per limited partner unit                 |   | $                        | 150.25    |   |   | $ | 72.64 |   |   | $ | 216.63 |   |

|   |
|--------|

----

Southwest 

|                         |   | General  |     |   | Limited  |   |       |   |   |
|------------------------------|--------|----------|----------|--------|----------|--------|------------|--------|--------|
|                         |   | Partners |     |   | Partners |   |       | Total  |   |
| Balance at December 31, 2007 |   | $        | 14,577   |   |     | $      | 462,763    |   |   | $ | 477,340 |   |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Net income                   |   |     | 245,864  |   |     |   | 2,198,128  |   |   |   | 2,443,992 |   |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Distributions                |   |     | (277,651 | )      |     |   | (2,498,169 | )      |   |   | (2,775,820 | ) |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Balance at December 31, 2008 |   |     | (17,210  | )      |     |   | 162,722    |   |   |   | 145,512 |   |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Net income                   |   |     | 83,677   |   |     |   | 737,080    |   |   |   | 820,757 |   |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Distributions                |   |     | (74,729  | )      |     |   | (671,564   | )      |   |   | (746,293 | ) |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Balance at December 31, 2009 |   |     | (8,262   | )      |     |   | 228,238    |   |   |   | 219,976 |   |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Net income                   |   |     | 171,108  |   |     |   | 1,524,635  |   |   |   | 1,695,743 |   |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Distributions                |   |     | (145,140 | )      |     |   | (1,305,678 | )      |   |   | (1,450,818 | ) |
|                         |   |     |     |   |     |   |       |   |   |   |   |   |
| Balance at December 31, 2010 |   | $        | 17,706   |   |     | $      | 447,195    |   |   | $ | 464,901 |   |

|   |
|--------|

----

Southwest 

|                                                  |   | Years ended December 31, |       |
|-------------------------------------------------------|--------|--------------------------|------------|
|                                                  |   | 2010                     |       |   | 2009 |   |   | 2008 |   |
| Cash flows from operating activities:                 |   |                     |       |   |   |   |   |   |   |
| Cash received from income from net profits interests  |   | $                        | 1,565,808  |   |   | $ | 862,640 |   |   | $ | 2,825,533 |   |
| Cash paid to suppliers                                |   |                     | (99,485    | ) |   |   | (99,178 | ) |   |   | (98,030 | ) |
| Interest received                                     |   |                     | 505        |   |   |   | 247 |   |   |   | 2,238 |   |
| Other                                                 |   |                     | 2,485      |   |   |   | - |   |   |   | - |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities             |   |                     | 1,469,313  |   |   |   | 763,709 |   |   |   | 2,729,741 |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Cash flows used in financing activities:              |   |                     |       |   |   |   |   |   |   |   |   |   |
| Distributions to partners                             |   |                     | (1,450,818 | ) |   |   | (746,293 | ) |   |   | (2,775,820 | ) |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents  |   |                     | 18,495     |   |   |   | 17,416 |   |   |   | (46,079 | ) |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Beginning of year                                     |   |                     | 76,137     |   |   |   | 58,721 |   |   |   | 104,800 |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| End of year                                           |   | $                        | 94,632     |   |   | $ | 76,137 |   |   | $ | 58,721 |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Reconciliation of net income to net                   |   |                     |       |   |   |   |   |   |   |   |   |   |
| cash provided by operating activities:                |   |                     |       |   |   |   |   |   |   |   |   |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Net income                                            |   | $                        | 1,695,743  |   |   | $ | 820,757 |   |   | $ | 2,443,992 |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Adjustments to reconcile net income to                |   |                     |       |   |   |   |   |   |   |   |   |   |
| net cash provided by operating activities:            |   |                     |       |   |   |   |   |   |   |   |   |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Depreciation, depletion and amortization              |   |                     | 15,338     |   |   |   | 16,012 |   |   |   | 14,650 |   |
| Accretion expense                                     |   |                     | 24,773     |   |   |   | 29,425 |   |   |   | 23,030 |   |
| Settlement of asset retirement obligations            |   |                     |       |   |   |   |   |   |   |   |   |   |
| for plugged and abandoned wells                       |   |                     | -          |   |   |   | - |   |   |   | (605 | ) |
| (Increase) decrease in receivables and deposits       |   |                     | (266,541   | ) |   |   | (102,485 | ) |   |   | 248,674 |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities             |   | $                        | 1,469,313  |   |   | $ | 763,709 |   |   | $ | 2,729,741 |   |
|                                                  |   |                     |       |   |   |   |   |   |   |   |   |   |
| Noncash investing and financing activities:           |   |                     |       |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in oil and gas properties – |   |                     |       |   |   |   |   |   |   |   |   |   |
| Asset retirement obligations                          |   | $                        | 28,472     |   |   | $ | 24,034 |   |   | $ | (67,575 | ) |

|   |
|--------|

----

Southwest 

| 1. | Organization |
|----|--------------|

|                                                               | Limited  |   | General  |
|--------------------------------------------------------------------|----------|--------|----------|
|                                                               | Partners |   | Partners |
| Interest income on capital contributions                           | 100%     |   | -        |
| Oil and gas sales from net profits interests                       | 90%      |   | 10%      |
| All other revenues                                                 | 90%      |   | 10%      |
| Organization and offering costs (1)                                | 100%     |   | -        |
| Amortization of organization costs                                 | 100%     |   | -        |
| Property acquisition costs                                         | 100%     |   | -        |
| Gain/loss on property dispositions                                 | 90%      |   | 10%      |
| Operating and administrative costs (2)                             | 90%      |   | 10%      |
| Depreciation, depletion and amortization of oil and gas properties | 100%     |   | -        |
| All other costs                                                    | 90%      |   | 10%      |

|   | (1) | All organization costs in excess of 3% of initial capital contributions will be paid by the Managing General Partner and will be treated as a capital contribution.  The Partnership paid the Managing General Partner an amount equal to 3% of initial capital contributions for such organization costs. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Administrative costs in any year, which exceed 2% of capital contributions shall be paid by the Managing Partner and will be treated as a capital contribution. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Summary of Significant Accounting Policies |
|----|--------------------------------------------|

|   |
|--------|

----

| 2. | Summary of Significant Accounting Policies - continued |
|----|--------------------------------------------------------|

|   |
|--------|

----

| 2. | Summary of Significant Accounting Policies - continued |
|----|--------------------------------------------------------|

|                                              |   | 2010   |    |   | 2009   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Beginning of year                                 |   | $      | 360,903 |   |   | $      | 307,444 |   |
| Additional abandonment obligations from new wells |   |   | 274     |   |   |   | 440 |   |
| Reduction of obligations due to farmout           |   |   | (2,458  | )      |   |   | - |   |
| Accretion expense                                 |   |   | 24,773  |   |   |   | 29,425 |   |
| Revisions of previous estimates                   |   |   | 30,656  |   |   |   | 23,594 |   |
| End of year                                       |   | $      | 414,148 |   |   | $      | 360,903 |   |

|   |
|--------|

----

| 4. | Commitments and Contingent Liabilities |
|----|----------------------------------------|

| 5. | Related Party Transactions |
|----|----------------------------|

|   |
|--------|

----

| 5. | Related Party Transactions - continued |
|----|----------------------------------------|

| 6. | Oil and Gas Reserves Information (unaudited) |
|----|----------------------------------------------|

| ·   | amends the definition of proved reserves to require the use of average commodity prices based upon the prior 12-month period rather than year-end prices; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | expands the type of technologies available to establish reserve estimates and categories; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | modifies certain definitions used in estimating proved reserves; |
|--------------------|------------------------------------------------------------------|

| ·   | permits disclosure of probable and possible reserves; and |
|--------------------|-----------------------------------------------------------|

| ·   | permits disclosure of reserves based on different price and cost criteria, such as futures prices or management forecasts. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

|                                  |   | Oil (bbls) |     |   | Gas (mcf) |   |
|---------------------------------------|--------|------------|----------|--------|-----------|--------|
| Total Proved -                        |   |       |     |   |      |   |
|                                  |   |       |     |   |      |   |
| January 1, 2008                       |   |       | 607,000  |   |      |   | 332,000 |   |
|                                  |   |       |     |   |      |   |   |   |
| New discoveries and extensions        |   |       | 2,000    |   |      |   | 4,000 |   |
| Revisions of previous estimates       |   |       | (151,000 | )      |      |   | (10,000 | ) |
| Production from continuing operations |   |       | (36,000  | )      |      |   | (33,000 | ) |
| December 31, 2008                     |   |       | 422,000  |   |      |   | 293,000 |   |
|                                  |   |       |     |   |      |   |   |   |
| Revisions of previous estimates       |   |       | 9,000    |   |      |   | (54,000 | ) |
| Production from continuing operations |   |       | (33,000  | )      |      |   | (29,000 | ) |
| December 31, 2009                     |   |       | 398,000  |   |      |   | 210,000 |   |
|                                  |   |       |     |   |      |   |   |   |
| New discoveries and extensions        |   |       | 1,000    |   |      |   | - |   |
| Revisions of previous estimates       |   |       | 80,000   |   |      |   | 73,000 |   |
| Production from continuing operations |   |       | (35,000  | )      |      |   | (34,000 | ) |
| December 31, 2010                     |   |       | 444,000  |   |      |   | 249,000 |   |
|                                  |   |       |     |   |      |   |   |   |
| Proved developed reserves -           |   |       |     |   |      |   |   |   |
|                                  |   |       |     |   |      |   |   |   |
| December 31, 2008                     |   |       | 421,000  |   |      |   | 292,000 |   |
| December 31, 2009                     |   |       | 397,000  |   |      |   | 209,000 |   |
| December 31, 2010                     |   |       | 444,000  |   |      |   | 249,000 |   |

|   |
|--------|

----

|   | Southwest Royalties Institutional Income Fund VIII-B, L.P. |
|--------|------------------------------------------------------------|

|                                          |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Future cash inflows                           |   | $      | 34,336,000 |   |   | $      | 22,852,000 |   |   | $ | 20,055,000 |   |
| Production, development and abandonment costs |   |   | 18,651,000 |   |   |   | 13,634,000 |   |   |   | 11,468,000 |   |
| Future net cash flows                         |   |   | 15,685,000 |   |   |   | 9,218,000  |   |   |   | 8,587,000 |   |
| 10% annual discount for                       |   |   |       |   |   |   |       |   |   |   |   |   |
| estimated timing of cash flows                |   |   | 7,022,000  |   |   |   | 4,005,000  |   |   |   | 3,945,000 |   |
| Standardized measure of                       |   |   |       |   |   |   |       |   |   |   |   |   |
| discounted future net cash flows              |   | $      | 8,663,000  |   |   | $      | 5,213,000  |   |   | $ | 4,642,000 |   |

|   |
|--------|

----

|   | Southwest Royalties Institutional Income Fund VIII-B, L.P. |
|--------|------------------------------------------------------------|

|   | Changes in the standardized measure of discounted future net cash flows relating to proved reserves for the years ended December 31, 2010, 2009 and 2008 are as follows: |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   | 2010   |       |   | 2009   |   |      | 2008   |   |
|--------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
| Sales of oil and gas produced, net of production costs |   | $      | (1,832,000 | )      |   | $      | (965,000  | )      |   | $ | (2,577,000 | ) |
| Extensions and discoveries and improved                |   |   |       |   |   |   |      |   |   |   |   |   |
| recovery net of future production and                  |   |   |       |   |   |   |      |   |   |   |   |   |
| development costs                                      |   |   | 50,000     |   |   |   | -         |   |   |   | 48,000 |   |
| Changes in prices and production costs                 |   |   | 2,857,000  |   |   |   | 903,000   |   |   |   | (12,144,000 | ) |
| Changes of production rates (timing) and others        |   |   | 212,000    |   |   |   | 169,000   |   |   |   | 2,543,000 |   |
| Revisions of previous quantities estimates             |   |   | 1,642,000  |   |   |   | -         |   |   |   | (1,501,000 | ) |
| Accretion of discount                                  |   |   | 521,000    |   |   |   | 464,000   |   |   |   | 1,661,000 |   |
| Discounted future net cash flows -                     |   |   |       |   |   |   |      |   |   |   |   |   |
| Beginning of year                                      |   |   | 5,213,000  |   |   |   | 4,642,000 |   |   |   | 16,612,000 |   |
| End of year                                            |   | $      | 8,663,000  |   |   | $      | 5,213,000 |   |   | $ | 4,642,000 |   |

| 7. | Selected Quarterly Financial Results – (unaudited) |
|----|----------------------------------------------------------|

|                                 |   | Quarter |    |
|--------------------------------------|--------|---------|---------|
|                                 |   | First   |    |   | Second |   |   | Third |   |   | Fourth |   |
| 2010:                                |   |    |    |   |   |   |   |   |   |   |   |   |
| Total revenues                       |   | $       | 445,181 |   |   | $ | 480,635 |   |   | $ | 310,046 |   |   | $ | 599,477 |   |
| Total expenses                       |   |    | 37,205  |   |   |   | 37,304 |   |   |   | 33,236 |   |   |   | 31,851 |   |
| Net income                           |   | $       | 407,976 |   |   | $ | 443,331 |   |   | $ | 276,810 |   |   | $ | 567,626 |   |
|                                 |   |    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per limited partners unit |   | $       | 36.17   |   |   | $ | 39.27 |   |   | $ | 24.52 |   |   | $ | 50.29 |   |

|                                 |   | Quarter |   |
|--------------------------------------|--------|---------|--------|
|                                 |   | First   |   |   | Second |   |   | Third |   |   | Fourth |   |
| 2009:                                |   |    |   |   |   |   |   |   |   |   |   |   |
| Total revenues                       |   | $       | 77,999 |   |   | $ | 278,330 |   |   | $ | 330,734 |   |   | $ | 278,309 |   |
| Total expenses                       |   |    | 40,822 |   |   |   | 35,677 |   |   |   | 37,350 |   |   |   | 30,766 |   |
| Net income                           |   | $       | 37,177 |   |   | $ | 242,653 |   |   | $ | 293,384 |   |   | $ | 247,543 |   |
|                                 |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per limited partners unit |   | $       | 3.26   |   |   | $ | 21.48 |   |   | $ | 25.99 |   |   | $ | 21.91 |   |

|   |
|--------|

----

Item 

Item 

| ·   | management of the Managing General Partner has evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | this evaluation was conducted under the supervision and with the participation of management of the Managing General Partner, including the chief executive and chief financial officers of the Managing General Partner; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | it is the conclusion of chief executive and chief financial officers of the Managing General Partner that these disclosure controls and procedures are effective in ensuring that information that is required to be disclosed by the Partnership in reports filed or submitted with the SEC is recorded, processed, summarized and reported within the time periods specified in the rules and forms established by the SEC. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our Board of Directors; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | provide reasonable assurance regarding prevention or timely detection of any unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 |
|---|

----

Item 

|   |
|--------|

----

Item 

Item 

|   |
|--------|

----

Item 

Item 

Item 

| For the Year Ended December 31, |   | 2010   |   |   | 2009   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|
| Audit Fees                      |   | $      | 19,034 |   |   | $      | 17,163 |   |
| Audit Related Fees              |   |   | -      |   |   |   | - |   |
| Tax Fees                        |   |   | -      |   |   |   | - |   |
| All Other Fees                  |   |   | -      |   |   |   | - |   |
|                            |   |   |   |   |   |   |   |   |
| TOTAL                           |   | $      | 19,034 |   |   | $      | 17,163 |   |

|   |
|--------|

----

Item 

| (a)    | (1)    | Financial Statements:                                                                                                                                                                                |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                 |
|   |   | Included in Part II of this report                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                 |
|   |   | Report of Independent Registered Public Accounting Firm                                                                                                                                              |
|   |   | Balance Sheets                                                                                                                                                                                       |
|   |   | Statements of Operations                                                                                                                                                                             |
|   |   | Statements of Changes in Partners' Equity (Deficit)                                                                                                                                                  |
|   |   | Statements of Cash Flows                                                                                                                                                                             |
|   |   | Notes to Financial Statements                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                 |
|   | (2)    | Schedules required by Article 12 of Regulation S-X are either omitted because they are not applicable or because the required information is shown in the financial statements or the notes thereto. |
|   |   |                                                                                                                                                                                                 |
|   | (3)    | Exhibits:                                                                                                                                                                                            |

| 4      | (a)    | Certificate of Limited Partnership of Southwest Royalties Institutional Income Fund VIII-B, L.P., dated November 30, 1987.  (Incorporated by reference from Partner­ship's S-1 Registration Statement, File Number 33-18852 effective March 31, 1988.) |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                  |
|   | (b)    | Agreement of Limited Partnership of South­west Royalties Institutional Income Fund VIII-B, L.P. dated July 11, 1988.  (Incor­porated by reference from Partnership's Form 10-K for the fiscal year ended December 31, 1988.)                      |
|   |   |                                                                                                                                                                                                                                                                  |
|   | 31.1   | Rule 13a-14(a)/15d-14(a) Certification                                                                                                                                                                                                                                |
|   | 31.2   | Rule 13a-14(a)/15d-14(a) Certification                                                                                                                                                                                                                                |
|   | 32.1   | 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                                                                                         |

|   |
|--------|

----

Glossary 

|   |
|--------|

----

|   |
|--------|

----

Signatures

|   | Southwest Royalties Institutional Income Fund |
|--------|-----------------------------------------------|
|   | VIII-B, L.P., a Delaware limited partnership  |
|   |                                          |
| By:    | Southwest Royalties, Inc., Managing           |
|   | General Partner                               |
|   |                                          |
|   |                                          |
| By:    | /s/ Mel G. Riggs                              |
|   | Mel G. Riggs                                  |
|   | President and Chief Executive Officer         |
|   |                                          |
| Date:  | March 29, 2011                                |

|                                                                                  |   |                                                                                  |
|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|
| /s/ Clayton W Williams                                                                |   | /s/ Mel G. Riggs                                                                      |
| Clayton W. Williams, Chairman of the Board                                            |   | Mel G. Riggs, President, Chief Executive                                              |
| and a Director                                                                        |   | Officer and a Director                                                                |
|                                                                                  |   |                                                                                  |
| Date:           March 29, 2011 |   | Date:           March 29, 2011 |
|                                                                                  |   |                                                                                  |
|                                                                                  |   |                                                                                  |
|                                                                                  |   |                                                                                  |
|                                                                                  |   |                                                                                  |
| /s/ Michael L. Pollard                                                                |   |                                                                                  |
| Michael L. Pollard, Senior Vice President                                             |   |                                                                                  |
| and Chief Financial Officer                                                           |   |                                                                                  |
|                                                                                  |   |                                                                                  |
| Date:           March 29, 2011 |   |                                                                                  |
|                                                                                  |   |                                                                                  |
|                                                                                  |   |                                                                                  |