UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q


[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934

     For  the  quarterly  period  ended  September  30,  2004

                                       OR

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

     For  the  transition  period  from __________ to ___________

                       Commission file number:  000-50394

                         RIO VISTA ENERGY PARTNERS L.P.
             (Exact Name of Registrant as Specified in Its Charter)

                   DELAWARE                            20-0153267
       (State or Other Jurisdiction of              (I.R.S. Employer
        Incorporation or Organization)            Identification  No.)


820 GESSNER ROAD, SUITE 1285,  HOUSTON, TEXAS             77024
   (Address of Principal Executive Offices)             (Zip Code)

Registrant's  Telephone  Number,  Including  Area  Code:    (713)  467-8235

     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.
Yes      No  X
    ---     ---

     Indicate  by  check mark whether the registrant is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).
Yes      No  X
    ---     ---

The  number  of  common  units  outstanding  on  November 5, 2004 was 1,910,656.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                       RIO VISTA ENERGY PARTNERS L.P.  AND SUBSIDIARIES
                                       TABLE OF CONTENTS

         ITEM                                                                         PAGE NO.
         ----                                                                         --------
<S>      <C>   <C>                                                                    <C>
Part I     1.  Financial Statements

               Independent Certified Public Accountants' Review Report                       3

               Consolidated Balance Sheets as of December 31, 2003 and
               September 30, 2004 (unaudited)                                              4-5

               Unaudited Consolidated Statements of Operations for the three months
               and nine months ended September 30, 2003 and 2004                             6

               Unaudited Consolidated Statements of Cash Flows for the nine months
               ended September 30, 2003 and 2004                                             7

               Notes to Consolidated Financial Statements (Unaudited)                     8-21

           2.  Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                                 22-35

           3.  Quantitative and Qualitative Disclosures About Market Risk                   36

           4.  Controls and Procedures                                                      36

Part II    1.  Legal Proceedings                                                            37

           2.  Unregistered Sales of Equity Securities and Use of Proceeds                  37

           3.  Defaults Upon Senior Securities                                              37

           4.  Submission of Matters to a Vote of Security Holders                          37

           5.  Other Information                                                            37

           6.  Exhibits and Reports on Form 8-K                                          37-39

           Signatures                                                                       40
</TABLE>


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<PAGE>
PART  I
ITEM  1.

             Independent Certified Public Accountants' Review Report
             -------------------------------------------------------


To  the  Board  of  Managers  of  Rio  Vista  GP  LLC,
  General  Partner  of  Rio  Vista  Energy  Partners  L.P.

We  have  reviewed  the  consolidated balance sheet of Rio Vista Energy Partners
L.P.  and  subsidiaries  (Rio  Vista)  as of September 30, 2004, and the related
consolidated statements of operations for the three months and nine months ended
September  2003  and  2004 and the consolidated statements of cash flows for the
nine  months  ended  September  30, 2003 and 2004.  These consolidated financial
statements  are  the  responsibility  of  Rio  Vista's  management.

We  conducted  our review in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  A  review  of interim financial
information  consists  principally  of applying analytical procedures and making
inquiries  of  persons  responsible for financial and accounting matters.  It is
substantially  less  in  scope  than  an  audit conducted in accordance with the
standards  of  the  Public  Company Accounting Oversight Board, the objective of
which  is  the expression of an opinion regarding the financial statements taken
as  a  whole.  Accordingly,  we  do  not  express  such  an  opinion.

Based  on our review, we are not aware of any material modifications that should
be  made to the consolidated financial statements referred to above for it to be
in  conformity  with  United  States  generally  accepted accounting principles.

We  have  previously  audited,  in  accordance  with the standards of the Public
Company  Accounting  Oversight  Board  (United States), the consolidated balance
sheet  of  Rio  Vista  Energy  Partners L.P. and subsidiaries as of December 31,
2003;  and  in  our  report  dated February 6, 2004, we expressed an unqualified
opinion  on the consolidated balance sheet.  In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December 31, 2003, is
fairly  stated.

The  accompanying  consolidated financial statements have been prepared assuming
that  Rio Vista will continue as a going concern.  As discussed in note K to the
consolidated  financial  statements,  conditions  exist  which raise substantial
doubt  about Rio Vista's ability to continue as a going concern including 1) Rio
Vista's  dependence  on  Penn  Octane  to  continue  as  a going concern and  2)
continued  sales  to PMI at acceptable volumes and margins to provide sufficient
cash  flow  to  pay  Rio  Vista's  expenses  and  guarantees  of  Penn  Octane's
obligations  assuming  Penn  Octane's  inability  to  pay  such  obligations.
Management's plans in regard to these matters are also described in note K.  The
consolidated  financial statements do not include any adjustments related to the
recoverability  and  classification  of  recorded  asset  amounts or amounts and
classification of liabilities that might be necessary should Rio Vista be unable
to  continue  in  existence.


                                   /s/ BURTON McCUMBER & CORTEZ, L.L.P.

Brownsville, Texas
November 12, 2004


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<TABLE>
<CAPTION>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                     September 30,
                                     December 31,        2004
                                         2003         (Unaudited)
                                     -------------  ---------------
<S>                                  <C>            <C>
Current Assets
  Cash                               $       2,000  $        10,000
  Trade accounts receivable                      -           32,000
  Due from affiliates                            -           89,000
  Inventories                                    -          195,000
                                     -------------  ---------------
    Total current assets                     2,000          326,000
Property, plant and equipment - net              -       14,406,000
Other non-current assets                         -           12,000
                                     -------------  ---------------
      Total assets                   $       2,000  $    14,744,000
                                     =============  ===============
<FN>
   The accompanying notes and accountants' report are an integral part of these
                                   statements.
</TABLE>


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<PAGE>
<TABLE>
<CAPTION>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


                        LIABILITIES AND PARTNERS' CAPITAL


                                                                   September 30,
                                                   December 31,        2004
                                                       2003         (Unaudited)
                                                   -------------  ---------------
<S>                                                <C>            <C>
Current Liabilities
    Due to affiliates                              $       1,000  $         2,000
    Accounts payable                                           -           21,000
    Accrued liabilities                                        -           89,000
                                                   -------------  ---------------
      Total current liabilities                            1,000          112,000
Commitments and contingencies                                  -                -
Partners' capital                                          1,000       14,632,000
                                                   -------------  ---------------
          Total liabilities and partners' capital  $       2,000  $    14,744,000
                                                   =============  ===============
<FN>
    The accompanying notes and accountants' report are an integral part of these
                                   statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                               RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES

                                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                                 (UNAUDITED)


                                                     Three Months Ended               Nine Months Ended
                                               ------------------------------  ------------------------------
                                               September 30,   September 30,   September 30,   September 30,
                                                    2003            2004            2003            2004
                                               --------------  --------------  --------------  --------------
<S>                                            <C>             <C>             <C>             <C>
Revenues                                       $            -  $            -  $            -  $            -
Cost of goods sold                                          -               -               -               -
                                               --------------  --------------  --------------  --------------
    Gross profit                                            -               -               -               -
Selling, general and administrative expenses                -               -               -               -
                                               --------------  --------------  --------------  --------------

      Operating income                                      -               -               -               -

Other income (expense)                                      -               -               -               -
                                               --------------  --------------  --------------  --------------

        Net income                             $            -  $            -  $            -  $            -
                                               ==============  ==============  ==============  ==============

Allocation of net income:
  General partners' interest in net income                  -               -               -               -
  Limited partners' interest in net income                  -               -               -               -
Net income per common unit                     $            -  $            -  $            -  $            -
                                               ==============  ==============  ==============  ==============
Weighted average common units outstanding                   -       1,910,656               -       1,910,656
                                               ==============  ==============  ==============  ==============
<FN>


           The accompanying notes and accountants' report are an integral part of these statements.
</TABLE>




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<PAGE>
<TABLE>
<CAPTION>

                          RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES

                               CONSOLIDATED STATEMENTS OF CASH FLOWS

                                            (UNAUDITED)


                                                                          Nine Months Ended
                                                                    ------------------------------
                                                                    September 30,   September 30,
                                                                         2003            2004
                                                                    --------------  --------------
<S>                                                                 <C>             <C>
Cash flows from operating activities:
Net income                                                          $            -  $            -
Adjustments to reconcile net income to net cash (used in) provided
  by operating activities:                                                       -               -

Changes in current assets and liabilities:
    Due to affiliates                                                        1,000               -
                                                                    --------------  --------------
      Net cash provided by operating activities                              1,000               -
                                                                    --------------  --------------
Cash flows from investing activities                                             -               -
                                                                    --------------  --------------

Cash flows from financing activities:
    Partners' capital                                                        1,000               -
                                                                    --------------  --------------
      Net cash  provided by financing activities                             1,000               -
                                                                    --------------  --------------
          Net increase in cash                                               2,000               -
Cash at beginning of period                                                      -           2,000
Cash received from Spin-Off                                                      -           8,000
                                                                    --------------  --------------
Cash at end of period                                               $        2,000  $       10,000
                                                                    ==============  ==============

Supplemental disclosures of noncash transactions:
    Assets transferred in connection with the Spin-Off              $            -  $   14,624,000
                                                                    ==============  ==============
<FN>
     The accompanying notes and accountants' report are an integral part of these statements.
</TABLE>


                                        7
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE A - ORGANIZATION

Rio  Vista Energy Partners L.P. (Rio Vista), a Delaware limited partnership, was
formed  by  Penn  Octane  Corporation  (Penn  Octane) on July 10, 2003 and was a
wholly  owned  subsidiary of Penn Octane until September 30, 2004, the date that
Penn  Octane  completed  a  series of transactions involving (i) the transfer of
substantially  all  of  its  owned  pipeline and terminal assets in Brownsville,
Texas  and  Matamoros, Mexico and certain immaterial liabilities (Assets) to Rio
Vista  Operating  Partnership L.P.(RVOP) (ii) the transfer of its 99.9% interest
in  RVOP  to  Rio  Vista  and  (iii)  the  distribution  of  all  of its limited
partnership  interests  in  Rio  Vista  to  its  common stockholders (Spin-Off),
resulting  in  Rio  Vista  becoming a separate public company.  The Common Units
represented  98%  of  Rio Vista's outstanding units.  The remaining 2%, which is
the  general  partner  interest,  is  owned  and  controlled by Rio Vista GP LLC
(General  Partner),  a  wholly  owned  subsidiary  of  Penn Octane.  The General
Partner  is  responsible  for  the  management  of  Rio  Vista.

As  a  result  of  the  Spin-Off,  Rio  Vista  is  engaged  in  the  purchase,
transportation  and  sale  of liquefied petroleum gas (LPG).  Rio Vista owns and
operates  LPG  terminal  facilities  in Brownsville, Texas (Brownsville Terminal
Facility) and in Matamoros, Tamaulipas, Mexico (Matamoros Terminal Facility) and
approximately  23  miles  of pipelines (US - Mexico Pipelines) which connect the
Brownsville  Terminal  Facility to the Matamoros Terminal Facility.  The primary
market  for Rio Vista's LPG is the northeastern region of Mexico, which includes
the states of Coahuila, Nuevo Leon and Tamaulipas.  Rio Vista's primary customer
for  LPG  is  P.M.I.  Trading  Limited  (PMI).  PMI is a subsidiary of Petroleos
Mexicanos,  the  state-owned Mexican oil company, which is commonly known by its
trade  name "PEMEX."  PMI is the exclusive importer of LPG into Mexico.  The LPG
purchased  by  PMI  from  Rio  Vista  is sold to PEMEX which distributes the LPG
purchased  from  PMI  into  the  northeastern  region  of  Mexico.

All  of  Rio  Vista's  operations  will  be  conducted  through, and Rio Vista's
operating  assets  will  be  owned by, RVOP.  The General Partner is entitled to
receive  distributions  on  its  general partner interest as provided for in Rio
Vista's  partnership  agreement  (Agreement).  The  General  Partner  has  sole
responsibility  for conducting Rio Vista's business and for managing Rio Vista's
operations  in  accordance  with  the  Agreement.   The General Partner will not
receive  any  management  fee  or  other  compensation  in  connection  with its
management  of  Rio  Vista's business, but will be entitled to be reimbursed for
all  direct  and  indirect  expenses  incurred  on  Rio  Vista's  behalf.

Rio  Vista will purchase LPG from Penn Octane under a long-term supply agreement
(LPG  Supply Agreement).  The purchase price of the LPG from Penn Octane will be
determined  based  on  the cost of LPG under Penn Octane's LPG supply agreements
with  its  suppliers, other direct costs related to PMI sales and a formula that
takes  into  consideration  operating  costs  of  Penn  Octane  and  Rio  Vista.

Historically,  Penn  Octane  has  sold  LPG primarily to PMI.  Penn Octane has a
long-term  lease  agreement  for  approximately  132  miles  of pipeline (Leased
Pipeline)  which  connects ExxonMobil Corporation's (Exxon) King Ranch Gas Plant
in  Kleberg  County,  Texas  and  Duke Energy's La Gloria Gas Plant in Jim Wells
County,  Texas, to Rio Vista's Brownsville Terminal Facility.  In addition, Penn
Octane  has  access to a twelve-inch pipeline which connects Exxon's Viola valve
station in Nueces County, Texas to the inlet of the King Ranch Gas Plant (ECCPL)
as  well  as  existing and other potential propane pipeline suppliers which have
the  ability  to  access  the  ECCPL.  In  connection  with  Penn Octane's lease
agreement  for  the  Leased  Pipeline,  Penn  Octane may access up to 21,000,000
gallons of storage located in Markham, Texas (Markham Storage), as well as other
potential  propane  pipeline  suppliers, via approximately 155 miles of pipeline
located  between  Markham,  Texas  and  the  Exxon  King  Ranch Gas Plant.  Penn
Octane's  current long term supply agreements in effect as of July 31, 2004 with
its  suppliers  in  southeast  Texas  require  Penn  Octane  to purchase minimum
quantities  of  LPG  totaling  up  to  22,100,000  gallons  of  LPG  per  month.

BASIS  OF  PRESENTATION
-----------------------

The  accompanying  consolidated  financial  statements include Rio Vista and its
United  States  subsidiaries including RVOP, Rio Vista Operating GP LLC and Penn
Octane  International,  L.L.C.,  and  its  Mexican  subsidiaries, Penn Octane de
Mexico,  S.  de  R.L.  de  C.V.  (PennMex)  and  Termatsal,  S.  de R.L. de C.V.
(Termatsal) and its consolidated affiliate, Tergas, S.A. de C.V. (Tergas).   All
significant  intercompany  accounts  and  transactions  are  eliminated.


                                        8
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE A - ORGANIZATION  - CONTINUED

BASIS  OF  PRESENTATION  -  CONTINUED
-----------------------

The  unaudited  consolidated  balance  sheet  as  of  September 30, 2004 and the
unaudited  consolidated  statements  of operations for the three months and nine
months  ended  September 30, 2003 and 2004 and unaudited consolidated statements
of  cash  flows  for the nine months ended September 30, 2003 and 2004 have been
prepared  by  Rio  Vista  without  audit.  In  the  opinion  of  management, the
unaudited  consolidated  financial  statements  include  all  adjustments (which
include  only  normal  recurring  adjustments)  necessary  to present fairly the
unaudited consolidated financial position of Rio Vista as of September 30, 2004,
the  unaudited  consolidated results of operations for the three months and nine
months  ended  September  30,  2003 and 2004 and the unaudited consolidated cash
flows  for  the  nine  months  ended September 30, 2003 and 2004.  Rio Vista was
inactive  until  September 30, 2004, the date of the Spin-Off and operations did
not  commence  until  October  1,  2004.  Accordingly,  there  are no results of
operations  during the three months and nine months ended September 30, 2004 and
2003.

Certain  information  and footnote disclosures normally included in consolidated
financial statements prepared in accordance with accounting principles generally
accepted  in  the  United  States of America have been omitted.  These unaudited
consolidated  financial  statements  should  be  read  in  conjunction  with the
December  31, 2003 and June 30, 2004 consolidated financial statements and notes
thereto  included in Rio Vista's Report on Form 10 filed with the Securities and
Exchange  Commission  on  September  16,  2004.

NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     A summary of the significant accounting policies applied in the preparation
     of  the  accompanying  consolidated  financial statements and which will be
     applied  in the preparation of future consolidated financial statements are
     as  follows.

     1.   INVENTORIES

     Inventories  are stated at the lower of cost or market.  Cost is determined
     on  the  first-in,  first-out  method.

     2.   PROPERTY,  PLANT  AND  EQUIPMENT

     Property, plant and equipment are recorded at historical cost.  After being
     placed  into  service,  assets  are  depreciated  and  amortized  using the
     straight-line  method  over  their  estimated  useful  lives  as  follows:

     LPG  terminals,  building  and leasehold improvements (a)     8 to 19 years
     Automobiles                                                   3-5  years
     Furniture,  fixtures  and  equipment                          3-5  years
     Pipelines                                                     30  years

     (a)  Brownsville  Terminal  related  assets  are  depreciated  over  their
          estimated  useful lives, not to exceed the term of the Pipeline Lease.

     Maintenance  and  repair  costs  are  charged  to  expense  as  incurred.

     In  August  2001  Statement  of  Financial  Accounting   Standards   (SFAS)
     No.  144   (SFAS  144)  "Accounting  for  the  Impairment  or  Disposal  of
     Long-Lived  Assets"   was  issued.   SFAS  144  supersedes   the provisions
     of  Statement  of  Financial  Accounting  Standards  No.  121   (SFAS  121)
     "Accounting  for  the  Impairment  of  Long-lived Assets and for Long-lived
     Assets  to  be  Disposed Of".   SFAS  144  requires  Rio  Vista  to  review
     long-lived  assets  and  certain  identifiable  intangibles  for impairment
     whenever  events  or   changes   in   circumstances   indicate   that   the


                                        9
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

     2.   PROPERTY,  PLANT  AND  EQUIPMENT  -  CONTINUED

     carrying  amount  of  an asset may not be recoverable.  If it is determined
     that an impairment has occurred, the amount of the impairment is charged to
     operations.

     3.   INCOME TAXES

     Rio  Vista is a public limited partnership and is not subject to Federal or
     state  income  taxes.

     The  foreign subsidiaries are taxed on their income directly by the Mexican
     Government. The income/loss of such foreign subsidiaries is included in the
     U.S.  partnership income tax return of Rio Vista. The holders of the common
     units  and  General  Partner  Units will be entitled to their proportionate
     share  of  any  tax  credits  resulting  from  any income taxes paid to the
     Mexican  Government.

     4.   INCOME  (LOSS)  PER  COMMON  UNIT

     Income (loss) per common unit is computed on the weighted average number of
     common units outstanding in accordance with SFAS 128, "Earnings Per Share".
     During  periods  in  which Rio Vista incurs losses, giving effect to common
     unit  equivalents  is  not  presented  as  it  would  be  antidilutive.

     5.   CASH  EQUIVALENTS

     For  purposes of the cash flow statement, Rio Vista considers cash in banks
     and securities purchased with a maturity of three months or less to be cash
     equivalents.

     6.   USE  OF  ESTIMATES

     The  preparation  of  financial  statements  in  conformity  with generally
     accepted  accounting  principles  requires  Rio Vista to make estimates and
     assumptions that affect the reported amounts of assets and liabilities, the
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and  the  reported  amounts of revenues and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     7.   FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

     SFAS 107, "Disclosures about Fair Value of Financial Instruments", requires
     the  disclosure  of  fair  value  information  about financial instruments,
     whether or not recognized on the balance sheet, for which it is practicable
     to estimate the value. SFAS 107 excludes certain financial instruments from
     its  disclosure requirements. Accordingly, the aggregate fair value amounts
     are  not  intended  to  represent  the  underlying  value of Rio Vista. The
     carrying  amounts  of  cash  and  cash equivalents, current receivables and
     payables  approximate  fair value because of the short-term nature of these
     instruments.

     8.   UNIT-BASED  COMPENSATION

     SFAS  123  and  SFAS  148,  "Accounting  for  Stock-Based Compensation" and
     "Accounting  for  Stock-Based  Compensation-Transition  and  Disclosure",
     establishes  financial  accounting  and reporting standards for stock-based
     employee  compensation plans and for transactions in which an entity issues
     its  equity  instruments  to acquire goods and services from non-employees.

     Under  the guidance provided by SFAS 123, Rio Vista has elected to continue
     to  account  for employee unit-based compensation using the intrinsic value
     method  prescribed in Accounting Principles Board (APB) 25, "Accounting for
     Stock  Issued  to  Employees",  and  related  Interpretations.


                                       10
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

     9.   REVENUE  RECOGNITION  ON  SALES  OF  LPG

     Revenues  are  recorded  based  on  the  following  criteria:

     (1)  Persuasive  evidence  of  an  arrangement  exists  and  the  price  is
          determined
     (2)  Delivery  has  occurred
     (3)  Collectibility  is  reasonably  assured

     Any  amounts  collected  from  customers  for  which  the  delivery has not
     occurred  are  recorded as an obligation to deliver LPG in the consolidated
     balance  sheet.  Losses,  if  any, resulting from inventory imbalances from
     such  sales  are recognized currently, and gains, if any, are recognized at
     final  delivery.

     10.  FOREIGN  CURRENCY  TRANSLATION

     Rio  Vista  follows  FASB  No.  52  "Foreign  Currency  Translation"  in
     consolidation  of  the  Rio  Vista's Mexican subsidiaries, whose functional
     currency  is  the  US  dollar. Non monetary balance sheet items and related
     revenue and expense are remeasured using historical rates. Monetary balance
     sheet  items  and related revenue and expense are remeasured using exchange
     rates  in  effect  at  the  balance  sheet  dates.

     11.  FINANCIAL  INSTRUMENTS

     Rio  Vista has adopted SFAS 133, "Accounting for Derivative Instruments and
     Hedging  Activities",  which  requires  that  all  derivative  financial
     instruments  be recognized in the financial statements and measured at fair
     value  regardless of the purpose or intent for holding them. Changes in the
     fair  value  of  derivative  financial  instruments  are  either recognized
     periodically  in  income  or  partner's  capital  (as  a  component  of
     comprehensive income), depending on whether the derivative is being used to
     hedge  changes  in fair value or cash flows. In April 2003, the FASB issued
     SFAS  No.  149,  "Amendment  of Statement 133 on Derivative Instruments and
     Hedging Activities". SFAS No. 149 amends and clarifies financial accounting
     and  reporting  for derivative instruments and hedging activities. SFAS No.
     149 is effective for contracts entered into or modified after June 30, 2003
     and is effective for hedging relationships designed after June 30, 2003. At
     December  31,  2003  and  September  30,  2004  Rio Vista had no derivative
     financial  instruments.

     12.  NON-EMPLOYEE  UNIT-BASED  COMPENSATION

     Rio  Vista may issue warrants to purchase common units to non-employees for
     goods  and  services  and  to acquire or extend debt. Rio Vista applies the
     provisions  of  SFAS  123 and APB 14 to account for such transactions. SFAS
     123  requires that such transactions be accounted for at fair value. If the
     fair  value  of the goods and services or debt related transactions are not
     readily  measurable,  the fair value of the warrants is used to account for
     such  transactions.

     13.  TRADE  ACCOUNTS  RECEIVABLE  AND  ALLOWANCE  FOR  DOUBTFUL  ACCOUNTS

     Trade  accounts receivable are accounted for at fair value.  Trade accounts
     receivable  do not bear interest and are short-term in nature. An allowance
     for doubtful accounts for trade accounts receivable is established when the
     fair  value  is less than the carrying value. Trade accounts receivable are
     charged  to  the allowance when it is determined that collection is remote.


                                       11
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  B  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  -  CONTINUED

     14.  CONSOLIDATION  OF  VARIABLE  INTEREST  ENTITIES

     During  2004,  Rio  Vista  adopted  Financial  Accounting  Standards  Board
     Interpretation No. 46, "Consolidation of Variable Entities" (FIN 46), which
     was amended by FIN 46R. This interpretation of Accounting Research Bulletin
     No.  51,  "Consolidated  Financial  Statements", addresses consolidation by
     business  enterprises  of variable interest entities (VIE) that do not have
     sufficient  equity  investment  at risk to permit the entity to finance its
     activities  without  additional  subordinated  financial  support.  FIN 46R
     requires  the  beneficiary  of  a  VIE  to  consolidate  in  its  financial
     statements  the  assets,  liabilities and results of operations of the VIE.
     Tergas,  an  affiliate  of  Rio  Vista, is a VIE and therefore, its assets,
     liabilities  and  results  of  operations  have  been  included  in  the
     accompanying  consolidated  financial  statements  of  Rio  Vista.

     15.  GUARANTEES

     In November 2002, the Financial Accounting Standards board issued Financial
     Accounting  Standards  Board  Interpretation No. 45 "Guarantor's Accounting
     and  Disclosure  Requirements for Guarantees, including Indirect Guarantees
     of  Indebtedness  of  Others"  (FIN  45).  This  interpretation  requires
     guarantors to disclose certain information about guarantees of indebtedness
     of  others.  In addition, under certain circumstances, those guarantees may
     result  in  such  debts  being  recorded  in  the  guarantor's  financial
     statements.


NOTE  C  -  SPIN-OFF

     During September 2003, Penn Octane's Board of Directors and the Independent
     Committee  of  its  Board  of  Directors formally approved the terms of the
     Spin-Off  and  Rio  Vista  filed  a Form 10 registration statement with the
     Securities  and  Exchange  Commission.  On  September  30, 2004 all of Penn
     Octane's  limited partnership interest in Rio Vista was distributed to Penn
     Octane's  stockholders.  Each  stockholder  of Penn Octane on September 30,
     2004,  received  one common unit of the limited partnership interest of Rio
     Vista  for  every  eight  shares  of  Penn  Octane's  common  stock  owned.

     As  a  result  of  the  Spin-Off,  Rio  Vista  owns  and  operates the LPG,
     distribution, transportation and marketing business previously conducted by
     Penn  Octane. All of the Assets transferred to Rio Vista in connection with
     the  Spin-Off  have  been  transferred  at  historical  costs  and  related
     accumulated  depreciation  of  Penn Octane at the date of the Spin-Off. Rio
     Vista began selling LPG directly to PMI upon the completion of the Spin-Off
     and  at  that time also began purchasing LPG from Penn Octane under the LPG
     Supply  Agreement.

     Penn Octane has control of Rio Vista by virtue of its ownership, management
     and  related voting control through the ownership and voting control of the
     General  Partner.  Therefore, Rio Vista is accounted for as a subsidiary of
     Penn  Octane  for  financial  accounting  purposes  and will continue to be
     consolidated  by  Penn  Octane  after  the  Spin-Off.


                                       12
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  D  -  PROPERTY,  PLANT  AND  EQUIPMENT

     Property,  plant  and  equipment  consists  of  the  following:

<TABLE>
<CAPTION>
                                                        December 31,    September 30,
                                                            2003            2004
                                                        -------------  ---------------
<S>                                                     <C>            <C>
     Brownsville Terminal Facility
       Building                                         $           -  $      173,000
       Terminal facilities                                          -       3,631,000
       Tank Farm                                                    -         374,000
       Leasehold improvements                                       -         303,000
       Equipment                                                    -         226,000
       Truck                                                        -          26,000
                                                        -------------  ---------------
                                                                    -       4,733,000
                                                        -------------  ---------------
     US - Mexico Pipelines and Matamoros Terminal
     Facility:  (a)

     U.S. Pipelines and Rights of Way                               -       6,775,000
     Mexico Pipelines and Rights of Way                             -         993,000
     Matamoros Terminal Facility                                    -       5,876,000
     Land                                                           -         856,000
                                                        -------------  ---------------
                                                                    -      14,500,000
                                                        -------------  ---------------
         Total                                                      -      19,233,000
                                                        -------------  ---------------


     Less:  accumulated depreciation and amortization               -  (    4,827,000)
                                                        -------------  ---------------

                                                        $           -  $   14,406,000
                                                        =============  ===============
</TABLE>

     (a)  Rio  Vista owns, leases, or is in the process of obtaining the land or
          rights  of  way  used  related  to  the  US-Mexico  Pipelines.

Property,  plant  and  equipment,  net  of  accumulated  depreciation,  includes
$5,820,000  of  costs  located  in  Mexico  at  September  30,  2004.


NOTE  E  -  INVENTORIES

     Inventories  consist  of  the  following:

<TABLE>
<CAPTION>
                                           December 31, 2003    September 30, 2004
                                          -------------------  --------------------
                                          Gallons     Cost      Gallons     Cost
                                          --------  ---------  ---------  ---------
<S>                                       <C>       <C>        <C>        <C>
     LPG:
       Brownsville Terminal Facility and
         Matamoros Terminal Facility             -  $       -    239,000  $ 195,000
                                          ========  =========  =========  =========
</TABLE>


                                       13
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  F  -  PARTNERS'  CAPITAL

     COMMON  UNITS
     -------------

     In connection with the Spin-Off, Rio Vista issued 1,910,656 common units to
     the  holders  of  Penn  Octane  common  stock  as  of  September  30, 2004.

     The  common  units  represent  limited  partner interests in Rio Vista. The
     holders  of  common  units  are  entitled  to  participate  in  Rio Vista's
     distributions  and  exercise  the rights or privileges available to limited
     partners under the Agreement. The holders of common units have only limited
     voting  rights on matters affecting Rio Vista. Holders of common units have
     no right to elect the General Partner or its managers on an annual or other
     continuing  basis.  Penn Octane elects the managers of the General Partner.
     Although  the General Partner has a fiduciary duty to manage Rio Vista in a
     manner  beneficial  to  Rio  Vista and its unitholders, the managers of the
     General Partner also have a fiduciary duty to manage the General Partner in
     a  manner  beneficial  to  Penn  Octane  and  its stockholders. The General
     Partner generally may not be removed except upon the vote of the holders of
     at  least 80% of the outstanding common units; provided, however, if at any
     time  any  person  or  group,  other  than  the  General  Partner  and  its
     affiliates,  or a direct or subsequently approved transferee of the General
     Partner or its affiliates, acquires, in the aggregate, beneficial ownership
     of 20% or more of any class of units then outstanding, that person or group
     will  lose voting rights on all of its units and the units may not be voted
     on  any  matter  and  will not be considered to be outstanding when sending
     notices  of  a  meeting  of  unitholders,  calculating  required  votes,
     determining  the  presence  of  a  quorum  or  for  other similar purposes.

     In  addition,  the  Agreement  contains  provisions limiting the ability of
     holders  of  common  units to call meetings or to acquire information about
     Rio Vista's operations, as well as other provisions limiting the holders of
     common  units  ability  to influence the manner or direction of management.

     GENERAL  PARTNER  UNITS
     -----------------------

     The  General Partner of Rio Vista owns a 2% general partner interest in Rio
     Vista.  The  General  Partner  is  currently  100%  owned  by  Penn Octane.

     The  General  Partner generally has unlimited liability for the obligations
     of  Rio  Vista, such as its debts and environmental liabilities, except for
     those  contractual obligations of Rio Vista that are expressly made without
     recourse  to  the  General  Partner.

     OPTIONS  AND  WARRANTS
     ----------------------

     Rio  Vista has no U.S. employees and is managed by its General Partner. Rio
     Vista  applies APB 25 for warrants granted to employees and managers of the
     General  Partner  and  SFAS  123  for  warrants issued to acquire goods and
     services  from  non-employees.

     GENERAL  PARTNER  OPTIONS

     Penn  Octane's  100% general partnership interest in the General Partner is
     expected  to  be  decreased  to  50%  as  a result of the exercise by Shore
     Capital  LLC  (Shore Capital) an affiliate of Richard Shore, Jr., President
     of  Penn  Octane  and  Jerome  B.  Richter, Chief Executive Officer of Penn
     Octane,  of  options  to  each  acquire 25% of the General Partner (General
     Partner  Options).  Mr. Shore and Mr. Richter are each members of the board
     of  directors  of  Penn  Octane  and  the  board of managers of the General
     Partner. It is anticipated that Mr. Richter and Shore Capital will exercise
     their  General  Partner  Options in the near future. The exercise price for
     each  option  is  approximately  $82,000.  Penn  Octane  will retain voting
     control  of  the  General  Partner  pursuant  to  a  voting  agreement.


                                       14
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  F  -  PARTNERS'  CAPITAL  -  CONTINUED

     COMMON  UNIT  WARRANTS

     Holders  of  unexercised  warrants  of  Penn  Octane  as of the date of the
     Spin-Off  received  new  warrants  to purchase common units of Rio Vista to
     reflect  the  transfer of assets from Penn Octane into Rio Vista. As of the
     date of the Spin-Off, Penn Octane had 2,542,500 warrants to purchase common
     stock outstanding. The number of Rio Vista warrants given to the holders of
     Penn Octane warrants as of the date of the Spin-Off was 317,813, determined
     by  dividing  the  existing number of warrants of Penn Octane by eight. The
     exercise  price of the Rio Vista warrants was determined by multiplying the
     original  exercise  price of the existing Penn Octane warrants by 5.05. The
     expiration  date of the Rio Vista warrants is the same as the existing Penn
     Octane  warrants.

     In connection with Mr. Shore's employment agreement with Penn Octane, Shore
     Capital  received  warrants  to acquire 97,415 common units of Rio Vista at
     $8.47  per  unit.  On  October  1,  2004  Rio  Vista recorded approximately
     $350,000  of  compensation cost related to these warrants. The warrants are
     exercisable  beginning  on  October  1,  2004  and expire on July 10, 2006.

     During  January  2004, in connection with $1,805,000 of debt obligations of
     Penn  Octane,  Penn  Octane agreed to issue 55,125 warrants to purchase Rio
     Vista  common  units and an additional 3,054 warrants in Rio Vista for each
     $100,000  of  debt  obligations outstanding at December 15, 2004 (Rio Vista
     Warrants).  The Rio Vista Warrants will expire three years from the date of
     the  Spin-Off  and the exercise price will be determined based on a formula
     whereby  the  annualization  of  the  first  quarterly  distribution  will
     represent  a  20%  yield  to  the  exercise  price.

     DISTRIBUTIONS  OF  AVAILABLE  CASH
     ----------------------------------

     All  unitholders,  including the General Partner, have the right to receive
     distributions  of  "available  cash"  as  defined in the Agreement from Rio
     Vista  in  an amount equal to the minimum distribution of $0.25 per quarter
     per  unit,  plus  any  arrearages  in  the payment of the minimum quarterly
     distribution  on the units from prior quarters. The distributions are to be
     paid  45 days after the end of each calendar quarter. However, Rio Vista is
     prohibited  from  making any distributions to unitholders if it would cause
     an  event  of  default,  or  an  event  of  default  is existing, under any
     obligation  of  Penn  Octane  which  Rio Vista has guaranteed (see note G).

     Cash  distributions  from  Rio  Vista  will be shared by the holders of the
     common  units  and  the General Partner Units as described in the Agreement
     based  on  a  formula  whereby  the  General  Partner  will  receive
     disproportionately  more  distributions  per  unit  than the holders of the
     common  units  as  annual  cash  distributions  exceed  certain milestones.


                                       15
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  G  -  COMMITMENTS  AND  CONTINGENCIES

     CREDIT  FACILITY,  LETTERS  OF  CREDIT  AND  OTHER

     Rio  Vista's LPG purchases are financed entirely by Penn Octane through its
     credit  facility  with  RZB  Finance,  LLC  (RZB).

     As  of  September  30,  2004, Penn Octane had a $15,000,000 credit facility
     (see  below)  with  RZB for demand loans and standby letters of credit (RZB
     Credit Facility) to finance Penn Octane's purchases of LPG and gasoline and
     diesel  fuel  (Fuel  Products)  in connection with Penn Octane's fuel sales
     business.  The  RZB  Credit facility is an uncommitted facility under which
     the  letters  of credit have an expiration date of no more than 90 days and
     the facility is reviewed annually at March 31. As a result of the financing
     provided  to  Rio  Vista  by Penn Octane, Rio Vista has agreed to guarantee
     Penn  Octane's  obligations  with  respect  to  the RZB Credit Facility. In
     connection  with  Rio  Vista's  guaranty,  Rio Vista granted RZB a security
     interest  and assignment in any and all of Rio Vista's accounts, inventory,
     real  property,  buildings,  pipelines,  fixtures  and interests therein or
     relating  thereto,  including,  without  limitation,  the  lease  with  the
     Brownsville  Navigation  District of Cameron County (District) for the land
     on  which  Rio  Vista's  Brownsville  Terminal Facility is located, and has
     entered  into  leasehold  deeds  of  trust,  security agreements, financing
     statements  and  assignments  of  rent.  Under the RZB Credit Facility, Rio
     Vista  may  not  permit  to  exist  any subsequent lien, security interest,
     mortgage,  charge  or  other  encumbrance  of  any  nature  on  any  of its
     properties  or  assets, except in favor of RZB, without the consent of RZB.
     In connection with the LPG Supply Agreement, Penn Octane and Rio Vista have
     agreed  to  share  the financing costs related to Penn Octane's purchase of
     LPG  under  the  RZB  Credit  Facility.

     Under  the  RZB  Credit Facility, Penn Octane is required to pay a fee with
     respect  to  each  letter  of  credit  thereunder in an amount equal to the
     greater of (i) $500, (ii) 2.5% of the maximum face amount of such letter of
     credit, or (iii) such higher amount as may be agreed to between Penn Octane
     and  RZB.  Any loan amounts outstanding under the RZB Credit Facility shall
     accrue interest at a rate equal to the rate announced by the JPMorgan Chase
     Bank  as its prime rate (4.5% at September 30, 2004) plus 2.5%. Pursuant to
     the  RZB  Credit Facility, RZB has sole and absolute discretion to limit or
     terminate  its participation in the RZB Credit Facility and to refrain from
     making  any loans or issuing any letters of credit thereunder. RZB also has
     the  right  to  demand payment of any and all amounts outstanding under the
     RZB  Credit  Facility  at  any  time.  The  General  Partner's Chairman has
     personally  guaranteed  all  of  Penn  Octane's  and  Rio  Vista's  payment
     obligations  with  respect  to  the  RZB  Credit  Facility.

     Effective  November  12,  2004  the  RZB  Credit  Facility was increased to
     $20,000,000.

     Under the terms of the RZB Credit Facility, either Penn Octane or Rio Vista
     is  required  to maintain net worth of a minimum of $9,000,000 ($10,000,000
     effective  November  12,  2004).

     Under  the  terms of the RZB Credit Facility, all cash from Rio Vista's LPG
     sales  are  deposited  directly  into  a  restricted cash account under the
     direction  of  RZB to pay down all obligations of Penn Octane arising under
     the  RZB Credit Facility. Accordingly, Rio Vista only receives net proceeds
     from the restricted cash account when the amounts of collateral provided by
     Penn  Octane and Rio Vista exceed all liabilities under outstanding letters
     of  credit  issued on behalf of Penn Octane, at the sole discretion of RZB.
     Historically  RZB has not unduly withheld net proceeds from Penn Octane and
     Rio  Vista  does not expect that RZB will unduly withhold net proceeds from
     Rio  Vista.  Upon  the release of Rio Vista's net proceeds from Rio Vista's
     restricted  cash  account,  Rio  Vista  will  then  be  required to pay any
     remaining  amounts due Penn Octane, if any, for the supply of LPG and other
     allocated  or  direct  expenses.


                                       16
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  G  -  COMMITMENTS  AND  CONTINGENCIES  -  CONTINUED

     TAX  OBLIGATIONS  OF  PENN  OCTANE  RESULTING  FROM  THE  SPIN-OFF

     Rio  Vista  has agreed to indemnify Penn Octane for a period of three years
     from  the  fiscal  year  end that includes the date of the Spin-Off for any
     federal  income  tax  liabilities  resulting from the Spin-Off in excess of
     $2,500,000.  Penn  Octane does not believe that it has a federal income tax
     in  connection  with  the  Spin-Off  in  excess of $2,500,000. However, the
     Internal  Revenue Service (IRS) may review Penn Octane's federal income tax
     returns  and  challenge  positions  that  it  may  take with respect to the
     Spin-Off.

     PARTNERSHIP  TAX  TREATMENT

     Rio  Vista is not a taxable entity (see below) and incurs no federal income
     tax  liability.  Instead,  each unitholder of Rio Vista is required to take
     into  account  that  unitholder's  share of items of income, gain, loss and
     deduction  of  Rio  Vista in computing that unitholder's federal income tax
     liability,  even if no cash distributions are made to the unitholder by Rio
     Vista. Distributions by Rio Vista to a unitholder are generally not taxable
     unless  the  amount  of  cash  distributed is in excess of the unitholder's
     adjusted  basis  in  Rio  Vista.

     Section  7704  of  the  Internal Revenue Code (Code) provides that publicly
     traded  partnerships  shall,  as  a  general rule, be taxed as corporations
     despite the fact that they are not classified as corporations under Section
     7701  of  the  Code. Section 7704 of the Code provides an exception to this
     general  rule for a publicly traded partnership if 90% or more of its gross
     income  for  every taxable year consists of "qualifying income" (Qualifying
     Income  Exception).  For  purposes  of  this exception, "qualifying income"
     includes income and gains derived from the exploration, development, mining
     or  production,  processing, refining, transportation (including pipelines)
     or marketing of any mineral or natural resource. Other types of "qualifying
     income"  include interest (other than from a financial business or interest
     based  on  profits  of the borrower), dividends, real property rents, gains
     from  the  sale  of  real  property,  including  real  property held by one
     considered  to  be  a "dealer" in such property, and gains from the sale or
     other  disposition of capital assets held for the production of income that
     otherwise  constitutes  "qualifying  income".

     No  ruling  has been or will be sought from the IRS and the IRS has made no
     determination as to Rio Vista's classification as a partnership for federal
     income tax purposes or whether Rio Vista's operations generate a minimum of
     90%  of  "qualifying  income"  under  Section  7704  of  the  Code.

     If  Rio  Vista were classified as a corporation in any taxable year, either
     as  a  result  of  a  failure  to  meet  the Qualifying Income Exception or
     otherwise,  Rio  Vista's items of income, gain, loss and deduction would be
     reflected  only  on Rio Vista's tax return rather than being passed through
     to  Rio  Vista's  unitholders, and Rio Vista's net income would be taxed at
     corporate  rates.


                                       17
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  G  -  COMMITMENTS  AND  CONTINGENCIES  -  CONTINUED

     PARTNERSHIP  TAX  TREATMENT  -  CONTINUED

     If Rio Vista were treated as a corporation for federal income tax purposes,
     Rio  Vista would pay tax on income at corporate rates, which is currently a
     maximum of 35%. Distributions to unitholders would generally be taxed again
     as  corporate  distributions,  and  no income, gains, losses, or deductions
     would  flow through to the unitholders. Because a tax would be imposed upon
     Rio  Vista  as  a  corporation,  the  cash  available  for  distribution to
     unitholders  would be substantially reduced and Rio Vista's ability to make
     minimum  quarterly distributions would be impaired. Consequently, treatment
     of  Rio  Vista as a corporation would result in a material reduction in the
     anticipated  cash  flow  and  after-tax return to unitholders and therefore
     would  likely result in a substantial reduction in the value of Rio Vista's
     common  units.

     Current  law  may  change  so  as  to  cause  Rio  Vista to be taxable as a
     corporation  for federal income tax purposes or otherwise subject Rio Vista
     to  entity-level taxation. The Agreement provides that, if a law is enacted
     or  existing  law  is  modified or interpreted in a manner that subject Rio
     Vista  to  taxation  as  a  corporation  or otherwise subjects Rio Vista to
     entity-level taxation for federal, state or local income tax purposes, then
     the  minimum  quarterly  distribution  amount  and  the target distribution
     amount  will  be  adjusted  to reflect the impact of that law on Rio Vista.

     OTHER

     Rio  Vista  is  a  newly-created entity and is not currently a party to any
     litigation.  Pursuant  to  the Omnibus Agreement, Penn Octane has agreed to
     indemnify Rio Vista for claims related to the Assets arising from events or
     conditions  occurring  or  existing  before  completion  of  the  Spin-Off.

     LONG-TERM  DEBT

     Long-term  debt of Penn Octane guaranteed by Rio Vista and on which certain
     of its assets are pledged totaled $1,805,000 at July 31, 2004. This debt is
     due  on December 15, 2005. Interest is payable quarterly at a rate of 16.5%
     per  annum.

     GUARANTEES  AND  ASSETS  PLEDGED  ON  CERTAIN  OF PENN OCTANE'S OBLIGATIONS

     The  dollar  amounts  of  Penn  Octane's  obligations  for  which Rio Vista
     guarantees and/or for which Rio Vista's asset are pledged total $11,927,000
     at  July  31, 2004 based on Penn Octane's most recently filed Form 10-K and
     were  as  follows:

          LPG  and  fuel  products  trade  payables                 $  7,433,000
          Long-term  debt                                           $  1,805,000
          Lines  of  credit                                         $  2,689,000

     Current  assets  of  Penn  Octane  pledged in favor of Penn Octane's credit
facility  total  $13,700,000  at  July  31,  2004  and  were  as  follows:

          Accounts  receivable                                      $  6,207,000
          Restricted  cash                                          $  5,860,000
          Inventory ($195,000 relates to the transferred Assets)    $  1,633,000

     Rio  Vista's  property,  plant and equipment and inventory, with a net book
value  at  September  30,  2004 of approximately $14,600,000 are pledged to Penn
Octane's  creditors.


                                       18
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  G  -  COMMITMENTS  AND  CONTINGENCIES  -  CONTINUED

     CONCENTRATIONS  OF  CREDIT  RISK

     Financial  instruments  that  potentially subject Rio Vista  to credit risk
     include  cash  balances  at banks which at times exceed the federal deposit
     insurance.


NOTE  H  -  CONTRACTS

     LPG  SALES  TO  PMI

     For the months of October 2004 and November 2004, Rio Vista and PMI entered
     into  a  monthly  agreements  for the minimum sale of 11,050,000 gallons of
     LPG.  Prior  to  the  Spin-Off,  during  the  period  April 1, 2004 through
     September  30,  2004,  Penn  Octane entered into monthly agreements for the
     minimum  sale  of  11,050,000  gallons  -  13,000,000  gallons  of  LPG.

     PMI  has  primarily  used  the  Matamoros  Terminal  Facility  to  load LPG
     purchased  from  Penn  Octane  prior  to  the  Spin-Off and from Rio Vista,
     subsequent  thereto,  for  distribution  by truck in Mexico. Rio Vista will
     continue  to  use  the Brownsville Terminal Facility in connection with LPG
     delivered  by  railcar  to  other  customers, storage and as an alternative
     terminal  in  the  event  the  Matamoros  Terminal Facility cannot be used.

     LPG  SUPPLY  AGREEMENT

     Under  the LPG Supply Agreement, Penn Octane will supply all of Rio Vista's
     LPG  requirements  in connection with its LPG sales obligations to PMI. The
     purchases will be at fluctuating prices. The purchase price of the LPG from
     Penn Octane will be determined based on the cost of LPG under Penn Octane's
     LPG supply agreements with its suppliers, other direct costs related to PMI
     sales  and  a formula that takes into consideration operating costs of Penn
     Octane  and  Rio Vista. Rio Vista expects the aggregate costs per gallon to
     purchase  LPG  (less  any applicable adjustments) to be below the aggregate
     sales prices per gallon of LPG sold to PMI. Based on Penn Octane's existing
     LPG  supply  agreements, Penn Octane can sell to Rio Vista up to 22,100,000
     gallons of LPG per month. The Leased Pipeline's capacity is estimated to be
     between  25,000,000  and  30,000,000  gallons  per  month.

NOTE I - RELATED PARTY TRANSACTIONS

     The  General  Partner  has  a  legal  duty  to manage Rio Vista in a manner
     beneficial  to  Rio  Vista's  unitholders.  This  legal  duty originates in
     statutes  and  judicial  decisions  and  is  commonly  referred  to  as  a
     "fiduciary"  duty.  Because  the  General  Partner is owned by Penn Octane,
     subject  to the options of Shore Capital and Mr. Richter to each acquire up
     to  25%  of the limited liability company interests of the General Partner,
     Penn  Octane's  officers  and  managers  of  the  General Partner also have
     fiduciary  duties to manage the business of the General Partner in a manner
     beneficial  to  Penn  Octane  and  its  stockholders.

     The  Agreement limits the liability and reduces the fiduciary duties of the
     General  Partner  to  the  unitholders.  The  Agreement  also restricts the
     remedies  available  to  unitholders  for  actions  that  might  otherwise
     constitute  breaches  of  the  General  Partner's  fiduciary  duty.


                                       19
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE I - RELATED PARTY TRANSACTIONS - CONTINUED

     INTERCOMPANY  PURCHASE  AGREEMENT  FOR  LPG

     Penn  Octane  entered into the LPG Supply Agreement with Rio Vista pursuant
     to  which  Rio Vista has agreed to purchase all of its LPG requirements for
     sales  which  utilize the assets transferred to Rio Vista by Penn Octane to
     the  extent  Penn  Octane  is able to supply such LPG requirements. The LPG
     Supply  Agreement  further  provides  that  Rio  Vista has no obligation to
     purchase LPG from Penn Octane to the extent the distribution of such LPG to
     Rio  Vista's  customers would not require the use of any of the assets Penn
     Octane  contributed to Rio Vista or Penn Octane ceases to have the right to
     access  the  Seadrift  pipeline.

     OMNIBUS  AGREEMENT

     In  connection  with  the  Spin-Off,  Penn  Octane  entered into an Omnibus
     Agreement  with  Rio  Vista  and its subsidiaries that governs, among other
     things,  indemnification  obligations  among  the parties to the agreement,
     related  party  transactions,  the  provision of general administration and
     support  services  by  Penn  Octane.

     The  Omnibus  Agreement prohibits Rio Vista from entering into any material
     agreement  with  Penn  Octane  without  the prior approval of the conflicts
     committee  of the board of managers of the General Partner. For purposes of
     the  Omnibus  Agreement,  the  term material agreements means any agreement
     between  Rio  Vista and Penn Octane that requires aggregate annual payments
     in  excess  of  $100,000.

     The  Omnibus  Agreement may be amended by written agreement of the parties;
     provided,  however  that  it may not be amended without the approval of the
     conflicts  committee  of  the  General  Partner  if  such  amendment  would
     adversely affect the unitholders of Rio Vista. The Omnibus Agreement has an
     initial  term  of  five  years  that  automatically  renews  for successive
     five-year  terms  and,  other  than  the  indemnification  provisions, will
     terminate  if  Rio  Vista  is  no  longer  an  affiliate  of  Penn  Octane.


NOTE  J  -  MEXICAN  OPERATIONS

     Under  current  Mexican law, foreign ownership of Mexican entities involved
     in  the  distribution of LPG or the operation of LPG terminal facilities is
     prohibited.  Foreign  ownership  is  permitted  in  the  transportation and
     storage  of  LPG.  Mexican  law  also  provides that a single entity is not
     permitted  to  participate  in  more than one of the defined LPG activities
     (transportation,  storage  or  distribution).  PennMex has a transportation
     permit  and  Termatsal  owns, leases, or is in the process of obtaining the
     land  or  rights  of way used in the construction of the Mexican portion of
     the  US-Mexico  Pipelines,  and  owns  the  Mexican  portion  of the assets
     comprising the US-Mexico Pipelines and the Matamoros Terminal Facility. Rio
     Vista's  consolidated Mexican affiliate, Tergas, S.A. de C.V. (Tergas), has
     been  granted the permit to operate the Matamoros Terminal Facility and Rio
     Vista  relies  on  Tergas'  permit  to  continue its delivery of LPG at the
     Matamoros  Terminal  Facility.  Rio  Vista  pays Tergas its actual cost for
     distribution  services  at  the  Matamoros  Terminal  Facility plus a small
     profit.

     Through  Rio Vista's operations in Mexico and the operations of the Mexican
     subsidiaries  and Tergas, a consolidated affiliate, Rio Vista is subject to
     the  tax  laws  of Mexico which, among other things, require that Rio Vista
     comply  with  transfer  pricing  rules, the payment of income, asset and ad
     valorem  taxes,  and possibly taxes on distributions in excess of earnings.
     In  addition,  distributions  to  foreign entities, including dividends and
     interest  payments  may  be  subject  to  Mexican  withholding  taxes.


                                       20
<PAGE>
                 RIO VISTA ENERGY PARTNERS L.P. AND SUBIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  J  -  MEXICAN  OPERATIONS  -  CONTINUED

     During  July 2003, Penn Octane acquired an option to purchase Tergas, which
     is  95%  owned  by  Vicente  Soriano,  an  employee of Penn Octane, and the
     remaining  balance owned by Abelardo Mier, a consultant of Penn Octane, for
     a  nominal  price  of  approximately  $5,000.

NOTE  K  -  REALIZATION  OF  ASSETS

     The accompanying consolidated balance sheet has been prepared in conformity
     with  accounting  principles  generally  accepted  in  the United States of
     America,  which  contemplate  continuation of Rio Vista as a going concern.
     Rio  Vista  is  dependent  on  Penn  Octane's  ability  to deliver adequate
     quantities  of  LPG  at  an  acceptable  price for ultimate sale to PMI, to
     provide credit to Rio Vista for such purchases and to provide management of
     its operations. Currently, Rio Vista's only source of revenue is from sales
     of  LPG  to  PMI and it operates under month to month sales agreements with
     PMI. Since April 1, 2004, through the date of the Spin-Off, Penn Octane had
     also  been  operating  under  month to month sales agreements with PMI. The
     monthly  volumes  of LPG sold by Penn Octane to PMI since April 1, 2004 has
     been  materially  less  than  historical  levels.

     Rio  Vista  has  guaranteed  certain  of  Penn  Octane's  obligations.
     Substantially  all  of  Rio Vista's and Penn Octane's assets are pledged or
     committed  to  be  pledged  as  collateral  on  $1,805,000 of Penn Octane's
     existing  debt  and  the RZB Credit Facility, and therefore, both Rio Vista
     and  Penn Octane maybe unable to obtain additional financing collateralized
     by  those  assets.  Penn  Octane's  Report  of Independent Certified Public
     Accountants on the consolidated financial statements of Penn Octane at July
     31,  2004  contains an explanatory paragraph which describes an uncertainty
     about  Penn  Octane's  ability to continue as a going concern. In addition,
     Penn  Octane's ability to obtain cash from operations or additional debt or
     equity  financing may be limited which could subject the Rio Vista's assets
     to  foreclosure  by  Penn  Octane's  creditors.

     In  view  of  the  matters  described  in  the  preceding  paragraphs,
     recoverability  of  the  recorded  asset  amounts shown in the accompanying
     consolidated  balance sheet is dependent upon the ability of Penn Octane to
     continue as a going concern and continued sales of LPG to PMI at acceptable
     volumes  and  margins  to  provide  sufficient cash flow to pay Rio Vista's
     expenses and guarantees of Penn Octane's obligations assuming Penn Octane's
     inability  to pay such obligations. The consolidated balance sheet does not
     include any adjustments related to the recoverability and classification of
     recorded  asset  amounts  or amounts and classification of liabilities that
     might  be  necessary  should  Rio Vista be unable to continue in existence.

     To  provide Rio Vista with the ability it believes necessary to continue in
     existence,  management  is  negotiating  with  PMI to increase LPG sales at
     acceptable  monthly  volumes and margins. In addition, management is taking
     steps  to diversify Rio Vista's operations to reduce dependency on sales of
     LPG.


                                       21
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

     The  following  discussion  of  Rio Vista's liquidity and capital resources
should  be read in conjunction with the consolidated financial statements of Rio
Vista  and  related  notes  thereto  appearing  elsewhere herein.  References to
specific  years  preceded  by  "fiscal"  (e.g. fiscal 2004) refer to Rio Vista's
fiscal  year  ending  December  31.

FORWARD-LOOKING  STATEMENTS

     The  statements  contained in this Quarterly Report that are not historical
facts  are  forward-looking  statements within the meaning of Section 27A of the
Securities  Act  of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements may be identified by the use of forward-looking
terms such as "believes," "expects," "may," "will", "should" or "anticipates" or
by discussions of strategy that inherently involve risks and uncertainties. From
time  to time, we have made or may make forward-looking statements, orally or in
writing.  These  forward-looking  statements  include  statements  regarding
anticipated future revenues, sales, LPG supply, operations, demand, competition,
capital  expenditures,  the  deregulation  of  the  LPG  market  in  Mexico, the
operations  of the US - Mexico Pipelines, the Matamoros Terminal Facility, other
upgrades  to  Rio  Vista's  facilities,  foreign  ownership  of  LPG operations,
short-term  obligations and credit arrangements, guarantees, cash distributions,
Qualified  Income,  Penn  Octane,  the  Spin-Off  and other statements regarding
matters  that  are not historical facts, and involve predictions which are based
upon  a  number of future conditions that ultimately may prove to be inaccurate.
Actual  results,  performance  or  achievements could differ materially from the
results  expressed  in, or implied by, these forward-looking statements. Factors
that  may cause or contribute to such differences include those discussed in Rio
Vista's  Form  10  filed with the Securities and Exchange Commission, as well as
those  discussed  elsewhere  in  this  Quarterly  Report.  These factors may not
include  all  material  risks  facing  Rio  Vista.

OVERVIEW

     Rio  Vista  Energy  Partners  L.P.  ("Rio  Vista"),  a  Delaware  limited
partnership,  was  formed by Penn Octane Corporation ("Penn Octane") on July 10,
2003  and was a wholly owned subsidiary of Penn Octane until September 30, 2004,
the  date  that Penn Octane completed a series of transactions involving (i) the
transfer  of  substantially  all  of  its  owned pipeline and terminal assets in
Brownsville, Texas and Matamoros, Mexico and certain immaterial liabilities (the
"Assets")  to Rio Vista Operating Partnership L.P. ("RVOP") (ii) the transfer of
its 99.9% interest in RVOP to Rio Vista and (iii) the distribution of all of its
limited  partnership  interests  in  Rio  Vista  to its common stockholders (the
"Spin-Off"),  resulting  in  Rio  Vista becoming a separate public company.  The
Common  Units  represented  98% of Rio Vista's outstanding units.  The remaining
2%,  which is the general partner interest, is owned and controlled by Rio Vista
GP  LLC  (the "General Partner"), a wholly owned subsidiary of Penn Octane.  The
General  Partner  is  responsible  for  the  management  of  Rio  Vista.

     As  a  result  of  the  Spin-Off,  Rio  Vista  is  engaged in the purchase,
transportation  and  sale  of liquefied petroleum gas ("LPG").    Rio Vista owns
and  operates  terminal  facilities  in  Brownsville,  Texas  (the  "Brownsville
Terminal  Facility")  and  in  Matamoros,  Tamaulipas,  Mexico  (the  "Matamoros
Terminal  Facility")  and  approximately 23 miles of pipelines (the "US - Mexico
Pipelines")  which  connect  the  Brownsville Terminal Facility to the Matamoros
Terminal  Facility.  The  primary market for Rio Vista's LPG is the northeastern
region  of  Mexico,  which  includes  the  states  of  Coahuila,  Nuevo Leon and
Tamaulipas.

     Rio  Vista believes it has a competitive advantage in the supply of LPG for
the  northeastern  region of Mexico because of Rio Vista's pipeline and terminal
facilities  and  its long term LPG supply agreement with Penn Octane which allow
Rio  Vista to bring supplies of LPG close to consumers of LPG in major cities in
that  region.  Rio  Vista's  primary  customer for LPG is P.M.I. Trading Limited
("PMI").  PMI  is  a  subsidiary of Petroleos Mexicanos, the state-owned Mexican
oil  company,  which  is  commonly  known by its trade name "PEMEX."  PMI is the
exclusive  importer of LPG into Mexico.  The LPG purchased by PMI from Rio Vista
is  sold  to  PEMEX  which  distributes  the  LPG  purchased  from  PMI into the
northeastern  region  of  Mexico.


                                       22
<PAGE>
     All  of  Rio  Vista's operations will be conducted through, and Rio Vista's
operating  assets  will  be  owned  by, RVOP. The General Partner is entitled to
receive  distributions  on  its  general partner interest as provided for in Rio
Vista's  partnership  agreement  (the "Agreement"). The General Partner has sole
responsibility  for conducting Rio Vista's business and for managing Rio Vista's
operations  in  accordance  with  the  Agreement.  The  General Partner will not
receive  any  management  fee  or  other  compensation  in  connection  with its
management  of  Rio  Vista's business, but will be entitled to be reimbursed for
all  direct  and  indirect  expenses  incurred  on  Rio  Vista's  behalf.

     Rio  Vista  will  purchase  LPG  from  Penn Octane under a long-term supply
agreement (the "LPG Supply Agreement").  The purchase price of the LPG from Penn
Octane  will  be  determined  based  on  the cost of LPG under Penn Octane's LPG
supply  agreements  with  its suppliers, other direct costs related to PMI sales
and  a  formula that takes into consideration operating costs of Penn Octane and
Rio  Vista.

     Rio  Vista  provides  products  and  services  through  a  combination  of
fixed-margin  and  fixed-price contracts.  Costs included in cost of goods sold,
other  than  the  purchase  price  of LPG, may affect actual profits from sales,
including  costs  relating  to  transportation, storage, leases and maintenance.

     Historically, Penn Octane has sold LPG primarily to PMI.  Penn Octane has a
long-term  lease  agreement for approximately 132 miles of pipeline (the "Leased
Pipeline")  which  connects  ExxonMobil  Corporation's  ("Exxon") King Ranch Gas
Plant  in  Kleberg  County,  Texas  and Duke Energy's La Gloria Gas Plant in Jim
Wells County, Texas, to Rio Vista's Brownsville Terminal Facility.  In addition,
Penn  Octane  has  access to a twelve-inch pipeline which connects Exxon's Viola
valve  station  in Nueces County, Texas to the inlet of the King Ranch Gas Plant
(the  "ECCPL"),  as  well  as  existing  and  other  potential  propane pipeline
suppliers  which  have the ability to access the ECCPL.  In connection with Penn
Octane's  lease  agreement for the Leased Pipeline, Penn Octane may access up to
21.0  million  gallons  of  storage  located  in  Markham,  Texas  (the "Markham
Storage"),  as  well  as  other  potential  propane  pipeline  suppliers,  via
approximately 155 miles of pipeline located between Markham, Texas and the Exxon
King  Ranch  Gas  Plant.  Penn  Octane's  current long term supply agreements in
effect  as  of  July 31, 2004 with its suppliers in southeast Texas require Penn
Octane  to  purchase  minimum  quantities  of  LPG  totaling up to 22.1  million
gallons  of  LPG  per  month.


LPG  SALES

     As  of  September  30,  2004,  Rio  Vista  had  not  commenced  operations.
Beginning  October  1,  2004, Rio Vista began selling LPG to PMI under a monthly
sales  agreement.  The monthly sales agreements provides for minimum LPG volumes
of  approximately  11.1  million  gallons  in  October  and  November 2004.  The
following  table  shows  Penn Octane's historical volumes sold to PMI in gallons
and  average  sales  price  for  its  fiscal years ended July 31, 2003 and 2004.

<TABLE>
<CAPTION>
                                           2003    2004
                                          ------  ------
<S>                                       <C>     <C>
Volume Sold

    LPG (millions of gallons) - PMI        211.1   197.9

Average sales price

    LPG (per gallon) - PMI                $ 0.63  $ 0.72
</TABLE>


                                       23
<PAGE>
     RECENT  TRENDS.  Since  April 2004, PMI had contracted with Penn Octane and
Rio  Vista  for volumes which were significantly lower than amounts purchased by
PMI  from  Penn  Octane in similar periods during previous years.  See Liquidity
and  Capital  Resources  -  Sales  to  PMI  below.  Rio  Vista believes that the
reduction  of  volume commitments is based on additional LPG production by PEMEX
being  generated  from the Burgos Basin field in Reynosa, Mexico, an area within
the proximity of Rio Vista's Mexican terminal facilities.  Although Rio Vista is
not  aware  of the total amount of LPG actually being produced by PEMEX from the
Burgos  Basin,  it  is aware that PEMEX has constructed and is operating two new
cryogenic  facilities  at the Burgos Basin which it believes may have a capacity
of producing up to 12 million gallons of LPG per month.  Rio Vista also believes
that  PEMEX  is  intending  to install two additional cryogenic facilities, with
similar  capacity,  to  be operational in early 2006.  Rio Vista is not aware of
the  capacity  at  which  the  current  cryogenic facilities are being operated.
Furthermore,  Rio  Vista  is  not aware of the actual gas reserves of the Burgos
Basin  or  the  gas  quality,  each  of  which  could  significantly  impact LPG
production  amounts.  Rio  Vista  still  believes  that  its  LPG  supplies  are
competitive  with  the  necessary  US  imports  of LPG by PEMEX and that the LPG
volumes  which  are  actually produced from the Burgos Basin would not eliminate
the  need  for  US  LPG  imports by PEMEX and that LPG volumes produced from the
Burgos  Basin  would  be  more  economically  suited  for distribution to points
further  south  in  Mexico  rather  than  Rio  Vista's  strategic  zone.

     During  June 2004, Valero L.P., a U.S. limited partnership ("Valero") began
operation  of  a newly constructed LPG terminal facility in Nuevo Laredo, Mexico
and  a  newly  constructed  pipeline  connecting  the terminal facility in Nuevo
Laredo,  Mexico  to  existing  pipelines which connect directly to Valero Energy
Corporation's  Corpus Christi, Texas and Three Rivers, Texas refineries.  Valero
has contracted with PMI under a five year agreement to deliver approximately 6.3
million gallons (of which 3.2 million gallons were previously delivered by truck
from  Three  Rivers, Texas) of LPG per month.  Valero has also indicated that it
intends  to  increase  capacity  of  its  Nuevo  Laredo terminal to 10.1 million
gallons  per  month.  Rio  Vista  believes  that  if  Valero intends to maximize
capacity of these facilities, then it would be required to obtain additional LPG
supplies  from major LPG hubs located in Corpus Christi and Mont Belvieu, Texas.
Accordingly,  Rio  Vista  believes  that  any  additional  supplies over amounts
currently  available to the Mexican market through Valero's system could be more
expensive  than  Rio  Vista's currently available supplies and delivery systems.

     During  2004, a pipeline operated by El Paso Energy between Corpus Christi,
Texas  and  Hidalgo County, Texas was closed.  Historically these facilities had
supplied  approximately  5.0  million  gallons  of  LPG per month to Rio Vista's
strategic  zone.  Rio  Vista  is  not  aware  of  any  future  plans  for  these
facilities.

     During  2003,  PMI  constructed  and began operations of a refined products
cross  border  pipeline  connecting  a  pipeline  running from PEMEX's Cadereyta
Refinery  in  Monterey, Mexico to terminal facilities operated by Transmontagne,
Inc.,  in  Brownsville,  Texas.   Transmontagne  is  a  U.S.  corporation.  The
pipeline  crosses  the  US-Mexico  border  near  the  proximity  of  Rio Vista's
pipelines.  In  connection  with  the  construction  of  the  pipeline,  PMI was
required  to  obtain  an  easement  from Rio Vista for an approximate 21.67 acre
portion  of  the  pipeline.  Under  the terms of the easement, PMI has warranted
that  it  will  not  transport  LPG  through  October  15,  2017.

RESULTS  OF  OPERATIONS

     Rio Vista did not commence operations until October 1, 2004 and accordingly
did  not  have  any  results  of  operations  prior  to  that  period.


                                       24
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     General.  Rio  Vista  commenced  operations on October 1, 2004 and only had
nominal  cash  funds  at  the  time  of the Spin-Off.  Rio Vista pays all of its
direct costs and expenses, and Rio Vista will reimburse Penn Octane for cost and
expenses  paid  by  Penn Octane on behalf of Rio Vista.  As discussed below, Rio
Vista's  sells  LPG  to PMI and purchases the LPG from Penn Octane.  Rio Vista's
LPG  Supply Agreement with Penn Octane provides that it will pay Penn Octane for
LPG purchased upon receipt of the proceeds from sales to PMI.  Rio Vista intends
to  distribute  any  "available  cash"  as  defined  in  the  Agreement  to  its
unitholders  on  a  quarterly  basis.

     Dependency on Penn Octane.  Rio Vista is dependent on Penn Octane's ability
to  deliver  adequate quantities of LPG at an acceptable price for ultimate sale
to  PMI,  to  provide  credit  to  Rio  Vista  for such purchases and to provide
management of its operations.  In addition, substantially all of Rio Vista's and
Penn  Octane's  assets  are  pledged or committed to be pledged as collateral on
$1.8  million  of  Penn  Octane's  existing debt and the RZB Credit Facility and
therefore,  both  Rio  Vista  and  Penn Octane maybe unable to obtain additional
financing  collateralized  by  those  assets.

     Guarantees and Assets Pledged on Certain of Penn Octane's Obligations.  Rio
Vista  has agreed to guarantee certain of Penn Octane's obligations to creditors
and all of Rio Vista's assets are pledged as collateral for those obligations of
Penn  Octane  to such creditors.  In addition, Rio Vista has agreed to indemnify
Penn  Octane  for a period of three years from the fiscal year end that includes
the  date  of the Spin-Off for any federal income tax liabilities resulting from
the  Spin-Off  in excess of $2.5 million.  Consequently, Rio Vista may be unable
to  obtain  financing  using  these pledged assets as collateral and Rio Vista's
inability  to borrow on these assets may adversely affect Rio Vista's results of
operations  and ability to make distributions to its unitholders.  Rio Vista may
also  be  prohibited  from  making any distributions to unit holders if it would
cause  an  event  of  default, or if an event of default is existing, under Penn
Octane's  revolving  credit  facilities,  or  any other covenant which may exist
under  any other credit arrangement or other regulatory requirement at the time.

     The  following  is  a  discussion  of  the  guaranteed  obligations:

     RZB  OBLIGATION

     Rio  Vista's LPG purchases are financed entirely by Penn Octane through its
credit  facility  with RZB Finance, LLC ("RZB").  As of September 30, 2004, Penn
Octane had a $15.0 million credit facility (see below) with RZB for demand loans
and  standby  letters  of  credit  (the  "RZB  Credit Facility") to finance Penn
Octane's  purchases  of  LPG  and  gasoline and diesel fuel ("Fuel Products") in
connection  with  Penn Octane's fuel sales business.  The RZB Credit facility is
an  uncommitted  facility  under  which the letters of credit have an expiration
date  of no more than 90 days and the facility is reviewed annually at March 31.
As a result of the financing provided to Rio Vista by Penn Octane, Rio Vista has
agreed  to  guarantee  Penn  Octane's obligations with respect to the RZB Credit
Facility.  In  connection  with  Rio  Vista's  guaranty, Rio Vista granted RZB a
security  interest  and  assignment  in  any  and  all  of Rio Vista's accounts,
inventory,  real  property, buildings, pipelines, fixtures and interests therein
or  relating  thereto,  including,  without  limitation,  the  lease  with  the
Brownsville  Navigation District of Cameron County (the "District") for the land
on  which  Rio Vista's Brownsville Terminal Facility is located, and has entered
into  leasehold  deeds  of  trust, security agreements, financing statements and
assignments of rent.  Under the RZB Credit Facility, Rio Vista may not permit to
exist  any  subsequent  lien,  security  interest,  mortgage,  charge  or  other
encumbrance of any nature on any of its properties or assets, except in favor of
RZB,  without  the consent of RZB.  In connection with the LPG Supply Agreement,
Penn  Octane  and  Rio Vista have agreed to share the financing costs related to
Penn  Octane's  purchase  of  LPG  under  the  RZB  Credit  Facility.


                                       25
<PAGE>
     Under  the  RZB  Credit Facility, Penn Octane is required to pay a fee with
respect to each letter of credit thereunder in an amount equal to the greater of
(i)  $500,  (ii)  2.5%  of  the maximum face amount of such letter of credit, or
(iii)  such  higher amount as may be agreed to between Penn Octane and RZB.  Any
loan  amounts outstanding under the RZB Credit Facility shall accrue interest at
a  rate equal to the rate announced by the JPMorgan Chase Bank as its prime rate
(4.5%  at  September  30, 2004) plus 2.5%.  Pursuant to the RZB Credit Facility,
RZB  has sole and absolute discretion to limit or terminate its participation in
the  RZB  Credit  Facility  and  to refrain from making any loans or issuing any
letters  of  credit thereunder.  RZB also has the right to demand payment of any
and  all  amounts  outstanding  under  the RZB Credit Facility at any time.  The
General  Partner's  Chairman  has personally guaranteed all of Penn Octane's and
Rio  Vista's  payment  obligations  with  respect  to  the  RZB Credit Facility.

     Effective  November 12, 2004 the RZB Credit Facility was increased to $20.0
million.

     Under the terms of the RZB Credit Facility, either Penn Octane or Rio Vista
is  required  to  maintain net worth of a minimum of $9.0 million ($10.0 million
effective  November  12,  2004).

     Under  the  terms of the RZB Credit Facility, all cash from Rio Vista's LPG
sales  are deposited directly into a restricted cash account under the direction
of  RZB  to pay down all obligations of Penn Octane arising under the RZB Credit
Facility.  Accordingly, Rio Vista only receives net proceeds from the restricted
cash  account  when  the  amounts  of collateral provided by Penn Octane and Rio
Vista  exceed  all  liabilities  under  outstanding  letters of credit issued on
behalf  of Penn Octane, at the sole discretion of RZB.  Historically RZB has not
unduly withheld net proceeds from Penn Octane and Rio Vista does not expect that
RZB  will  unduly withhold net proceeds from Rio Vista.  Upon the release of Rio
Vista's  net  proceeds  from Rio Vista's restricted cash account, Rio Vista will
then  be  required to pay any remaining amounts due Penn Octane, if any, for the
supply  of  LPG  and  other  allocated  or  direct  expenses.

     Penn  Octane  may  need  to  increase  its credit facility for increases in
quantities  of  LPG  and  fuel products purchased and/or to finance future price
increases  of  LPG and fuel products.  Rio Vista relies on Penn Octane's ability
to  allocate  credit limits under the RZB Credit Facility to purchase quantities
of  LPG.  However there can be no assurance that Penn Octane will have available
and/or  continue  to  provide  sufficient credit limits for Rio Vista's required
purchases  of  LPG.

     LONG-TERM  DEBT

     Long-term  debt of Penn Octane guaranteed by Rio Vista and on which certain
of  its  assets are pledged totaled $1.8 million at July 31, 2004.  This debt is
due  on December 15, 2005.  Interest is payable quarterly at a rate of 16.5% per
annum.

     OBLIGATIONS  AND  ASSETS  PLEDGED

     The  dollar  amounts  of  Penn  Octane  obligations,  which  Rio  Vista  is
guaranteeing and/or for which Rio Vista's assets are pledged total $11.9 million
at July 31, 2004, based on Penn Octane's most recently filed Form 10-K, and were
as  follows  (in  millions):
               LPG and fuel products trade payables                     $  7.4
               Long-term Debt                                           $  1.8
               Lines of credit                                          $  2.7

     Current  assets  of  Penn  Octane  pledged in favor of Penn Octane's credit
facility total $13.7 million at July 31, 2004 and were as follows (in millions):
               Accounts receivable                                      $  6.2
               Restricted cash                                          $  5.9
               Inventory ($195,000 relates to the transferred Assets)   $  1.6

     Rio  Vista's property, plant, equipment and inventory with a net book value
at  September  30,  2004  of  approximately  $14.6  million  are pledged to Penn
Octane's  creditors.


                                       26
<PAGE>
     The  following  is  a  summary of Rio Vista's estimated minimum contractual
obligations  as  of  September  30,  2004.

<TABLE>
<CAPTION>
                                                    PAYMENTS DUE BY PERIOD
                                                    (AMOUNTS IN MILLIONS)
                                        ----------------------------------------------
                                                Less than    1 - 3    4 - 5    After
    Contractual Obligations             Total     1 Year     Years    Years   5 Years
    -----------------------             ------  ----------  -------  -------  --------
<S>                                     <C>     <C>         <C>      <C>      <C>

Long-Term Debt Obligations              $    -  $        -  $     -  $     -  $      -
Operating Leases                            .2          .1       .1        -         -
LPG Purchase Obligations                     -           -        -        -         -
Other Long-Term Obligations                  -           -        -        -         -
                                        ------  ----------  -------  -------  --------
    Total Contractual Cash Obligations  $   .2  $       .1  $    .1  $     -  $      -
                                        ======  ==========  =======  =======  ========
</TABLE>

The  following  is  a  summary  of  Rio  Vista's  estimated  minimum  commercial
obligations as of September 30, 2004, based on Penn Octane's most recently filed
Form  10-K  as  of  July  31,  2004.

<TABLE>
<CAPTION>
                                             AMOUNT OF COMMITMENT EXPIRATION
                                                        PER PERIOD
                                                  (AMOUNTS IN MILLIONS)
                                  ------------------------------------------------------
    Commercial                    Total Amounts   Less than    1 - 3   4 - 5     Over
      Commitments                   Committed       1 Year     Years   Years    5 Years
      -----------                 --------------  ----------  -------  ------  ---------
<S>                               <C>             <C>         <C>      <C>     <C>
Lines of Credit                   $            -  $        -  $     -  $    -  $       -
Standby Letters of Credit                      -           -        -       -          -
Guarantees                                  17.9        16.1      1.8       -          -
Standby Repurchase Obligations               N/A         N/A      N/A     N/A        N/A
Other Commercial Commitments                 N/A         N/A      N/A     N/A        N/A
                                  --------------  ----------  -------  ------  ---------
    Total Commercial Commitments  $         17.9  $     16.1  $   1.8  $    -  $       -
                                  ==============  ==========  =======  ======  =========
</TABLE>

     If  Penn Octane's cash flow from operations is not adequate to satisfy such
payment  of  liabilities and obligations and/or tax liabilities when due and Rio
Vista  is  unable  to  satisfy its guarantees and /or tax agreement, Penn Octane
and/or  Rio  Vista  may  be  required  to  pursue  additional debt and/or equity
financing.  In  such  event,  Penn  Octane's  and  Rio Vista's management do not
believe that Penn Octane and/or Rio Vista would be able to obtain such financing
from  traditional  commercial  lenders.  In  addition, there can be no assurance
that  such  additional  financing  will be available on terms attractive to Penn
Octane and/or Rio Vista or at all.  If additional financing is available through
the  sale  of  Penn  Octane's  and/or Rio Vista's equity and/or other securities
convertible  into  equity  securities  through  public  or  private  financings,
substantial  and  immediate  dilution may occur.  There is no assurance that Rio
Vista  would  be  able to raise any additional capital if needed.  If additional
financing  cannot be accomplished and Rio Vista is unable to pay its liabilities
and  obligations when due or to restructure certain of Penn Octane's liabilities
and  obligations,  Rio  Vista  may  suffer  material adverse consequences to its
business,  financial  condition  and  results  of  operations.

     Income  Taxes.   Rio Vista has agreed to indemnify Penn Octane for a period
of  three years from this fiscal year end that includes the date of the Spin-Off
for  any federal income tax liabilities resulting from the Spin-Off in excess of
$2.5 million.   Penn Octane does not believe that it has a federal income tax in
connection  with  the Spin-Off in excess of $2.5 million.  However, the Internal
Revenue  Service (the "IRS") may review Penn Octane's federal income tax returns
and  challenge  positions  that  it  may  take  with  respect  to  the Spin-Off.


                                       27
<PAGE>
     Partnership  Tax  Treatment.  Rio Vista is not a taxable entity (see below)
and  incurs  no  federal  income tax liability.  Instead, each unitholder of Rio
Vista  is  required  to  take  into  account that unitholder's share of items of
income,  gain,  loss  and  deduction of Rio Vista in computing that unitholder's
federal  income  tax  liability,  even  if no cash distributions are made to the
unitholder  by  Rio  Vista.   Distributions  by  Rio  Vista  to a unitholder are
generally  not taxable unless the amount of cash distributed is in excess of the
unitholder's  adjusted  basis  in  Rio  Vista.

     Section  7704  of  the  Internal Revenue Code (Code) provides that publicly
traded  partnerships  shall, as a general rule, be taxed as corporations despite
the  fact that they are not classified as corporations under Section 7701 of the
Code.  Section 7704 of the Code provides an exception to this general rule for a
publicly traded partnership if 90% or more of its gross income for every taxable
year  consists  of "qualifying income" (the "Qualifying Income Exception").  For
purposes  of  this  exception,  "qualifying  income"  includes  income and gains
derived  from  the  exploration,  development, mining or production, processing,
refining,  transportation  (including  pipelines) or marketing of any mineral or
natural  resource.  Other  types  of "qualifying income" include interest (other
than  from  a  financial business or interest based on profits of the borrower),
dividends,  real property rents, gains from the sale of real property, including
real  property  held  by  one  considered to be a "dealer" in such property, and
gains  from  the  sale  or  other  disposition  of  capital  assets held for the
production  of  income  that  otherwise  constitutes  "qualifying  income".

     No  ruling  has been or will be sought from the IRS and the IRS has made no
determination  as  to  Rio  Vista's  classification as a partnership for federal
income  tax purposes or whether Rio Vista's operations generate a minimum of 90%
of  "qualifying  income"  under  Section  7704  of  the  Code.

     If  Rio  Vista were classified as a corporation in any taxable year, either
as  a  result of a failure to meet the Qualifying Income Exception or otherwise,
Rio Vista's items of income, gain, loss and deduction would be reflected only on
Rio  Vista's  tax  return  rather  than  being  passed  through  to  Rio Vista's
unitholders,  and  Rio  Vista's  net  income  would be taxed at corporate rates.

     If Rio Vista were treated as a corporation for federal income tax purposes,
Rio  Vista  would  pay  tax  on  income at corporate rates, which is currently a
maximum  of 35%.  Distributions to unitholders would generally be taxed again as
corporate  distributions, and no income, gains, losses, or deductions would flow
through  to the unitholders.  Because a tax would be imposed upon Rio Vista as a
corporation,  the  cash  available  for  distribution  to  unitholders  would be
substantially  reduced  and  Rio  Vista's  ability  to  make  minimum  quarterly
distributions  would  be  impaired.  Consequently,  treatment  of Rio Vista as a
corporation  would  result  in a material reduction in the anticipated cash flow
and  after-tax  return  to  unitholders  and  therefore would likely result in a
substantial  reduction  in  the  value  of  Rio  Vista's  common  units.

     Current  law  may  change  so  as  to  cause  Rio  Vista to be taxable as a
corporation  for  federal  income tax purposes or otherwise subject Rio Vista to
entity-level  taxation.  The  Agreement  provides  that,  if a law is enacted or
existing  law  is modified or interpreted in a manner that subjects Rio Vista to
taxation  as  a  corporation  or  otherwise  subjects  Rio Vista to entity-level
taxation  for  federal,  state  or  local  income tax purposes, then the minimum
quarterly  distribution  amount  and  the  target  distribution  amount  will be
adjusted  to  reflect  the  impact  of  that  law  on  Rio  Vista.

     Distributions  of  Available  Cash.  All unitholders, including the General
Partner, have the right to receive distributions of "available cash"  as defined
in  the  Agreement from Rio Vista in an amount equal to the minimum distribution
of $0.25 per quarter per unit, plus any arrearages in the payment of the minimum
quarterly  distribution on the units from prior quarters.  The distributions are
to  be  paid 45 days after the end of each calendar quarter.  However, Rio Vista
is  prohibited from making any distributions to unitholders if it would cause an
event  of  default,  or an event of default is existing, under any obligation of
Penn  Octane  which  Rio  Vista  has  guaranteed  (see  note  G to the unaudited
consolidated  financial  statements).

     Cash  distributions  from  Rio  Vista  will be shared by the holders of the
common  units  and the General Partner Units as described in the Agreement based
on  a  formula  whereby the General Partner will receive disproportionately more
distributions  per  unit  than  the  holders  of the common units as annual cash
distributions  exceed  certain  milestones.


                                       28
<PAGE>
     Rio  Vista's  ability to make distributions may be impacted by sales to PMI
at  acceptable  volumes  and  margins,  payments  from its guarantees, costs and
expenses and the inability to obtain additional financing on its pledged assets.
Although  Penn  Octane  is not required to do so, to the extent that Penn Octane
has  sufficient  cash  to do so, it intends to lend amounts to Rio Vista to meet
the  minimum  distributions.  If  Rio  Vista's  revenues  and  other  sources of
liquidity  after  its  quarterly  distributions are not adequate to satisfy such
payment  obligations  of  Penn  Octane  and/or  Penn  Octane  does  not have the
necessary  cash  to  loan  to  Rio Vista, Rio Vista may be required to reduce or
eliminate  the  quarterly distributions to unitholders and/or Penn Octane and/or
Rio  Vista  may  be  required  to  raise  additional funds to avoid foreclosure.
However,  there  can  be  no  assurance  that  such  additional  funding will be
available on terms attractive to either Penn Octane or Rio Vista or available at
all.

     Increased  expenses.  As a result of the Spin-Off, Rio Vista estimates that
operating expenses will increase by approximately $450,000 on an annual basis as
a  result  of additional public company and income tax preparation costs related
to  Rio  Vista.

     Sales  to  PMI.  On  March 31, 2004, Penn Octane's sales agreement with PMI
(the  "Contract")  expired.  During  the  months of April 2004 through September
2004,  Penn  Octane  and PMI entered into monthly agreements for the sale of LPG
("Monthly  2004  Contracts").  During  the  months  of October 2004 and November
2004, Rio Vista and PMI entered into Monthly 2004 Contracts.  Under the terms of
the Monthly 2004 Contracts for April, May and June, the minimum amount of LPG to
be  purchased per month by PMI was 13.0 million gallons.  Under the terms of the
Monthly 2004 Contracts for July, August and September, the minimum amount of LPG
to  be  purchased per month by PMI was 11.7 million gallons.  Under the terms of
the  Monthly  2004 Contracts for October and November, the minimum amount of LPG
to  be purchased per month by PMI is 11.1 million gallons.  During the months of
April  2004,  May  2004,  June  2004, July 2004, August 2004, September 2004 and
October  2004,  the actual amount of LPG purchased by PMI was approximately 13.1
million  gallons,  13.4  million  gallons,  13.8  million  gallons, 12.3 million
gallons,  12.4  million  gallons, 11.8 million gallons and 10.9 million gallons,
respectively.

     Rio  Vista  continues  to negotiate for the extension and/or renewal of the
LPG  contract  with  PMI.  There  is no assurance that the LPG contract with PMI
will  be extended and/or renewed, and if so, that the terms will be more or less
favorable than those of the most recent Monthly 2004 Contracts.  Until the terms
of  a  new  long-term  contract  are  reached,  Rio  Vista expects to enter into
additional  monthly  agreements  similar  to  the  Monthly  2004  Contracts.

     Rio  Vista  believes  that  PMI's reduction of volume commitments for April
2004  through November 2004 is based on additional LPG production by PEMEX being
generated  from  the  Burgos  Basin field in Reynosa, Mexico, an area within the
proximity  of  Rio Vista's Mexican terminal facilities.  In the event the volume
of  LPG  sold  to  PMI by Rio Vista under the month-to-month agreements declines
below  the current level of approximately 11.0 million gallons, assuming margins
remain  unchanged,  Rio  Vista would suffer material adverse consequences to its
business,  financial condition and results of operations to the extent that Penn
Octane  is unable to obtain additional favorable price and/or volume concessions
from  LPG  suppliers.   Penn  Octane  is  attempting  to obtain additional price
and/or volume concessions from its LPG suppliers to lower costs.  If Penn Octane
is  unsuccessful in lowering its costs to offset a decline in volumes below 11.0
million  gallons per month and/or Rio Vista is forced to accept similar or lower
prices for sales to PMI, the results of operations of Rio Vista may be adversely
affected.   Rio  Vista  may not have sufficient cash flow or available credit to
absorb  such  reductions  in  gross  profit.

     PMI  has  primarily  used  the  Matamoros  Terminal  Facility  to  load LPG
purchased  from Penn Octane prior to the Spin-Off and from Rio Vista, subsequent
thereto,  for  distribution  by truck in Mexico.  Rio Vista will continue to use
the Brownsville Terminal Facility in connection with LPG delivered by railcar to
other  customers,  storage  and  as  an  alternative  terminal  in the event the
Matamoros  Terminal  Facility  cannot  be  used.

     Seasonality.  Rio Vista's gross profit will be dependent on sales volume of
LPG  to  PMI, which fluctuates in part based on the seasons.  The demand for LPG
is  strongest  during  the  winter  season.


                                       29
<PAGE>
     LPG  Supply  Agreements.  Under  the LPG Supply Agreement, Penn Octane will
supply  all  of  Rio  Vista's  LPG requirements in connection with its LPG sales
obligations  to PMI.  The purchases will be at fluctuating prices.  The purchase
price  of  the  LPG from Penn Octane will be determined based on the cost of LPG
under Penn Octane's LPG supply agreements with its suppliers, other direct costs
related to PMI sales and a formula that takes into consideration operating costs
of  Penn  Octane and Rio Vista. Rio Vista expects the aggregate costs per gallon
to  purchase  LPG  (less  any  applicable adjustments) to be below the aggregate
sales  prices  per  gallon  of LPG sold to PMI.  Rio Vista believes that its LPG
Supply Agreement with Penn Octane provides it with an advantage over competitors
in  the  supply  of LPG to PMI based on Penn Octane's adequate volumes and price
provided  for in its agreements with its LPG suppliers, and Penn Octane's Leased
Pipeline  which  brings  the  LPG  directly  to Rio Vista's Brownsville Terminal
Facility  from  those  suppliers.   Based  on  Penn Octane's existing LPG supply
agreements,  Penn Octane can sell to Rio Vista up to 22.1 million gallons of LPG
per month.  The Leased Pipeline's capacity is estimated to be between 25 million
and  30  million  gallons  per  month.

     Mexican  Operations.  Under  current  Mexican  law,  foreign  ownership  of
Mexican  entities  involved  in  the distribution of LPG or the operation of LPG
terminal  facilities  is  prohibited.  Foreign  ownership  is  permitted  in the
transportation  and  storage  of  LPG.  Mexican  law also provides that a single
entity  is  not  permitted  to  participate  in more than one of the defined LPG
activities  (transportation,  storage  or  distribution).  PennMex  has  a
transportation  permit  and  Termatsal  owns,  leases,  or  is in the process of
obtaining  the  land  or  rights  of way used in the construction of the Mexican
portion  of  the US-Mexico Pipelines, and owns the Mexican portion of the assets
comprising  the  US-Mexico  Pipelines  and the Matamoros Terminal Facility.  Rio
Vista's  consolidated  Mexican  affiliate,  Tergas, S.A. de C.V. ("Tergas"), has
been granted the permit to operate the Matamoros Terminal Facility and Rio Vista
relies  on  Tergas'  permit  to  continue  its  delivery of LPG at the Matamoros
Terminal  Facility.  Rio  Vista  pays  Tergas  its  actual cost for distribution
services  at  the  Matamoros  Terminal  Facility  plus  a  small  profit.

     Through  Rio Vista's operations in Mexico and the operations of the Mexican
subsidiaries  and  Tergas, a consolidated affiliate, Rio Vista is subject to the
tax laws of Mexico which, among other things, require that Rio Vista comply with
transfer  pricing  rules, the payment of income, asset and ad valorem taxes, and
possibly  taxes  on  distributions  in  excess  of  earnings.  In  addition,
distributions to foreign entities, including dividends and interest payments may
be  subject  to  Mexican  withholding  taxes.

     During  July 2003, Penn Octane acquired an option to purchase Tergas, which
is  95%  owned by Vicente Soriano, an employee of Penn Octane, and the remaining
balance  owned  by  Abelardo  Mier,  a consultant of  Penn Octane, for a nominal
price  of  approximately  $5,000.

     Deregulation  of the LPG Industry in Mexico. The Mexican petroleum industry
is  governed by the Ley Reglarmentaria del Articulo 27 Constitutional en el Ramo
del  Petroleo  (the  Regulatory  Law to Article 27 of the Constitution of Mexico
concerning  Petroleum  Affairs  (the  "Regulatory  Law")),  and Ley Organica del
Petroleos  Mexicanos  y  Organismos  Subsidiarios  (the Organic Law of Petroleos
Mexicanos  and  Subsidiary  Entities (the "Organic Law")). Under Mexican law and
related  regulations,  PEMEX  is  entrusted  with  the  central planning and the
strategic  management  of  Mexico's  petroleum  industry, including importation,
sales  and  transportation  of  LPG.  In  carrying out this role, PEMEX controls
pricing  and  distribution  of  various  petrochemical  products, including LPG.

     Beginning  in  1995,  as  part  of  a  national  privatization program, the
Regulatory  Law  was  amended to permit private entities to transport, store and
distribute  natural gas with the approval of the Ministry of Energy.  As part of
this  national  privatization  program,  the  Mexican  Government is expected to
deregulate  the  LPG  market ("Deregulation").  In June 1999, the Regulatory Law
for LPG was changed to permit foreign entities to participate without limitation
in  the  defined LPG activities related to transportation and storage.  However,
foreign entities are prohibited from participating in the distribution of LPG in
Mexico.  Upon  Deregulation,  Mexican  entities  will be able to import LPG into
Mexico.  Under  Mexican  law, a single entity is not permitted to participate in
more  than  one  of  the  defined  LPG  activities  (transportation, storage and
distribution).  Rio  Vista  expects  to sell LPG directly to independent Mexican
distributors  as  well as PMI upon Deregulation.  Rio Vista anticipates that the
independent  Mexican  distributors will be required to obtain authorization from
the  Mexican  government  for  the importation of LPG upon Deregulation prior to
entering  into  contracts  with  Rio  Vista.


                                       30
<PAGE>
     During  July  2001, the Mexican government announced that it would begin to
accept  applications  from  Mexican  companies  for  permits  to  allow  for the
importation  of  LPG  pursuant to provisions already provided for under existing
Mexican  law.

     In  connection  with  the above, in August 2001, Tergas received a one year
permit  from  the  Mexican government to import LPG.  During September 2001, the
Mexican government decided to delay the implementation of Deregulation and asked
Tergas  to defer use of the permit and as a result, Penn Octane did not sell LPG
to  distributors  other  than  PMI.  In March 2002, the Mexican government again
announced its intention to issue permits for free importation of LPG into Mexico
by  distributors  and others beginning August 2002, which was again delayed.  To
date  the  Mexican  government  has  continued  to  delay  implementation  of
Deregulation.  Tergas'  permit to import LPG expired during August 2002.  Tergas
intends  to  obtain  a  new  permit  when the Mexican government again begins to
accept  applications.  As a result of the foregoing, it is uncertain as to when,
if  ever,  Deregulation will actually occur and the effect, if any, it will have
on  Rio  Vista.  However, should Deregulation occur, it is Rio Vista's intention
to  sell  LPG  directly  to  distributors  in  Mexico  as  well  as  to  PMI.

     The  point  of sale for LPG which flows through the US-Mexico Pipelines for
delivery  to the Matamoros Terminal Facility is the United States-Mexico border.
For  LPG  delivered  into  Mexico,  PMI  is  the  importer  of  record.

     Partners'  Capital.  Rio  Vista's beginning capital was contributed by Penn
Octane  to  Rio  Vista's  operating partnership in the form of assets consisting
primarily  of  terminal  assets  located  in  Brownsville, Texas, and Matamoros,
Mexico,  as  well  as  the  pipelines connecting these terminal facilities.  The
contribution  to Rio Vista was recorded at Penn Octane's historical cost of such
assets  on  the  date  of  the  Spin-Off  ($14.6  million).

     COMMON  UNITS

     In connection with the Spin-Off, Rio Vista issued 1,910,656 common units to
the  holders  of  Penn  Octane  common  stock  as  of  September  30,  2004.

     The  common  units  represent  limited partner interests in Rio Vista.  The
holders of common units are entitled to participate in Rio Vista's distributions
and  exercise  the  rights or privileges available to limited partners under the
Agreement.  The  holders  of  common  units  have  only limited voting rights on
matters affecting Rio Vista.  Holders of common units have no right to elect the
General  Partner  or  its managers on an annual or other continuing basis.  Penn
Octane elects the managers of the General Partner.  Although the General Partner
has a fiduciary duty to manage Rio Vista in a manner beneficial to Rio Vista and
its  unitholders, the managers of the General Partner also have a fiduciary duty
to  manage  the  General  Partner  in a manner beneficial to Penn Octane and its
stockholders.  The  General Partner generally may not be removed except upon the
vote  of  the holders of at least 80% of the outstanding common units; provided,
however,  if at any time any person or group, other than the General Partner and
its  affiliates,  or a direct or subsequently approved transferee of the General
Partner  or  its affiliates, acquires, in the aggregate, beneficial ownership of
20%  or  more  of any class of units then outstanding, that person or group will
lose  voting  rights  on  all of its units and the units may not be voted on any
matter  and  will  not be considered to be outstanding when sending notices of a
meeting  of unitholders, calculating required votes, determining the presence of
a  quorum  or  for  other  similar  purposes.

     In  addition,  the  Agreement  contains  provisions limiting the ability of
holders  of  common  units  to call meetings or to acquire information about Rio
Vista's  operations,  as well as other provisions limiting the holders of common
units  ability  to  influence  the  manner  or  direction  of  management.

     GENERAL  PARTNER  UNITS

     The  General Partner of Rio Vista owns a 2% general partner interest in Rio
Vista.  The  General  Partner  is  currently  100%  owned  by  Penn  Octane.

     The  General  Partner generally has unlimited liability for the obligations
of  Rio Vista, such as its debts and environmental liabilities, except for those
contractual obligations of Rio Vista that are expressly made without recourse to
the  General  Partner.


                                       31
<PAGE>
     OPTIONS  AND  WARRANTS

     Rio Vista has no U.S. employees and is managed by its General Partner.  Rio
Vista  applies  APB  25  for  warrants  granted to employees and managers of the
General  Partner  and SFAS 123 for warrants issued to acquire goods and services
from  non-employees.

     GENERAL  PARTNER  OPTIONS.  Penn Octane's 100% general partnership interest
in  the  General  Partner  is expected to be decreased to 50% as a result of the
exercise  by  Shore  Capital  LLC (Shore Capital) an affiliate of Richard Shore,
Jr., President of Penn Octane, and Jerome B. Richter, Chief Executive Officer of
Penn  Octane,  of  options  to  each acquire 25% of the General Partner (General
Partner  Options).  Mr.  Shore  and Mr. Richter are each members of the board of
directors  of  Penn Octane and the board of managers of the General Partner.  It
is  anticipated  that  Mr. Richter and Shore Capital will exercise their General
Partner  Options  in  the  near  future.  The  exercise price for each option is
approximately  $82,000.  Penn  Octane  will retain voting control of the General
Partner  pursuant  to  a  voting  agreement.

     COMMON UNIT WARRANTS.  Holders of unexercised warrants of Penn Octane as of
the  date  of the Spin-Off received new warrants to purchase common units of Rio
Vista  to reflect the transfer of assets from Penn Octane into Rio Vista.  As of
the  date of the Spin-Off, Penn Octane had 2,542,500 warrants to purchase common
stock  outstanding.  The  number  of  Rio Vista warrants given to the holders of
Penn  Octane  warrants as of the date of the Spin-Off was 317,813, determined by
dividing  the existing number of warrants of Penn Octane by eight.  The exercise
price  of  the  Rio  Vista  warrants  was determined by multiplying the original
exercise  price  of  the  existing Penn Octane warrants by 5.05.  The expiration
date of the Rio Vista warrants is the same as the existing Penn Octane warrants.

     In connection with Mr. Shore's employment agreement with Penn Octane, Shore
Capital  received  warrants to acquire 97,415 common units of Rio Vista at $8.47
per  unit.  On  October  1,  2004  Rio  Vista recorded approximately $350,000 of
compensation  cost  related  to  these  warrants.  The  warrants are exercisable
beginning  on  October  1,  2004  and  expire  on  July  10,  2006.

     During January 2004, in connection with $1.8 million of debt obligations of
Penn  Octane,  Penn Octane agreed to issue 55,125 warrants to purchase Rio Vista
common  units and an additional 3,054 warrants in Rio Vista for each $100,000 of
debt obligations outstanding at December 15, 2004 (Rio Vista Warrants).  The Rio
Vista  Warrants  will  expire  three years from the date of the Spin-Off and the
exercise  price  will be determined based on a formula whereby the annualization
of  the  first quarterly distribution will represent a 20% yield to the exercise
price.

     The  Spin-Off.  During September 2003, Penn Octane's Board of Directors and
the  Independent Committee of its Board of Directors formally approved the terms
of  the  Spin-Off  and Rio Vista filed a Form 10 registration statement with the
Securities  and Exchange Commission.  On September 30, 2004 all of Penn Octane's
limited  partnership  interest  in  Rio  Vista  was distributed to Penn Octane's
stockholders.  Each  stockholder  of Penn Octane on September 30, 2004, received
one common unit of the limited partnership interest of Rio Vista for every eight
shares  of  Penn  Octane's  common  stock  owned.

     As  a  result  of  the  Spin-Off,  Rio  Vista  owns  and  operates the LPG,
distribution, transportation and marketing business previously conducted by Penn
Octane.  All  of  the  Assets  transferred  to  Rio Vista in connection with the
Spin-Off  have  been  transferred  at  historical  costs and related accumulated
depreciation  of  Penn  Octane  at  the  date  of the Spin-Off.  Rio Vista began
selling LPG directly to PMI upon the completion of the Spin-Off and at that time
also  began  purchasing  LPG  from  Penn  Octane under the LPG Supply Agreement.

     Penn  Octane  has  control  of  Rio  Vista  by  virtue  of  its  ownership,
management,  and related voting control through the ownership and voting control
of  the  General Partner.  Therefore, Rio Vista is accounted for as a subsidiary
of  Penn  Octane  for  financial  accounting  purposes  and  will continue to be
consolidated  by  Penn  Octane  after  the  Spin-Off.


                                       32
<PAGE>
     INTERCOMPANY  PURCHASE  AGREEMENT  FOR  LPG

     Penn  Octane  entered into the LPG Supply Agreement with Rio Vista pursuant
to  which Rio Vista has agreed to purchase all of its LPG requirements for sales
which  utilize  the assets transferred to Rio Vista by Penn Octane to the extent
Penn  Octane  is able to supply such LPG requirements.  The LPG Supply Agreement
further  provides  that  Rio  Vista  has no obligation to purchase LPG from Penn
Octane to the extent the distribution of such LPG to Rio Vista's customers would
not require the use of any of the assets Penn Octane contributed to Rio Vista or
Penn  Octane  ceases  to  have  the  right  to  access  the  Seadrift  pipeline.

     OMNIBUS  AGREEMENT

     In  connection  with  the  Spin-Off,  Penn  Octane  entered into an Omnibus
Agreement  with Rio Vista and its subsidiaries that governs, among other things,
indemnification  obligations  among  the parties to the agreement, related party
transactions,  the  provision  of general administration and support services by
Penn  Octane.

     The  Omnibus  Agreement prohibits Rio Vista from entering into any material
agreement with Penn Octane without the prior approval of the conflicts committee
of  the  board  of managers of the General Partner.  For purposes of the Omnibus
Agreement,  the  term  material agreements means any agreement between Rio Vista
and  Penn  Octane that requires aggregate annual payments in excess of $100,000.

     The  Omnibus  Agreement may be amended by written agreement of the parties;
provided,  however  that  it  may  not  be  amended  without the approval of the
conflicts  committee  of  the  General Partner if such amendment would adversely
affect  the unitholders of Rio Vista.  The Omnibus Agreement has an initial term
of  five  years  that  automatically  renews for successive five-year terms and,
other  than  the  indemnification  provisions, will terminate if Rio Vista is no
longer  an  affiliate  of  Penn  Octane.

     TRANSFERRED ASSETS

     The  following  assets  of  Penn  Octane  were transferred to the operating
     subsidiary  of  Rio  Vista  on  September  30,  2004:

     Brownsville Terminal Facilities
     US Mexico Pipelines, including various rights of way and land obtained in
          connection with operation of US Pipelines between Brownsville Terminal
          Facility  and  the  US  Border
     Inventory located in storage tanks and pipelines located in Brownsville
          (and  extending to storage and pipelines located in assets held by the
          Mexican  subsidiaries)
     Contracts and Leases (assumed and/or assigned):
          Lease Agreements:
               Port of Brownsville:
                    LPG Terminal Facility
                    Tank  Farm  Lease
          US  State  Department  Permit
          Other  licenses and permits in connection with ownership and operation
               of  the  US  pipelines  between  Brownsville  and  US  border
     Investment  in  Subsidiaries:
          Penn  Octane  de Mexico, S. de R.L. de C.V., consisting primarily of a
               permit  to transport LPG from the Mexican Border to the Matamoros
               Terminal  Facility
          Termatsal,  S.  de  R.L.  de  C.V.,  consisting primarily of land, LPG
               terminal  facilities,  Mexican  pipelines  and rights of way, and
               equipment  used  in  the  transportation  of LPG from the Mexican
               border  to  the  Matamoros  terminal  facility  and  various  LPG
               terminal  equipment
          Penn  Octane  International  LLC
     Option to acquire Tergas, S.A. de C.V.


                                       33
<PAGE>
Realization  of  Assets.   The  accompanying consolidated balance sheet has been
prepared  in  conformity  with  accounting  principles generally accepted in the
United States of America, which contemplate continuation of Rio Vista as a going
concern.  Rio  Vista  is  dependent on Penn Octane's ability to deliver adequate
quantities  of  LPG  at an acceptable price for ultimate sale to PMI, to provide
credit  to  Rio  Vista  for  such  purchases  and  to  provide management of its
operations.  Currently,  Rio Vista's only source of revenue is from sales of LPG
to  PMI  and  it operates under month to month sales agreements with PMI.  Since
April  1,  2004,  through  the  date  of the Spin-Off, Penn Octane had also been
operating  under  month to month sales agreements with PMI.  The monthly volumes
of  LPG  sold by Penn Octane to PMI since April 1, 2004 has been materially less
than  historical  levels.

Rio  Vista  has  guaranteed certain of Penn Octane's obligations.  Substantially
all  of  Rio  Vista's  and  Penn  Octane's assets are pledged or committed to be
pledged as collateral on $1.8 million of Penn Octane's existing debt and the RZB
Credit  Facility,  and therefore, both Rio Vista and Penn Octane maybe unable to
obtain  additional  financing  collateralized  by  those assets.   Penn Octane's
Report of Independent Certified Public Accountants on the consolidated financial
statements  of  Penn  Octane  at July 31, 2004 contains an explanatory paragraph
which  describes  an  uncertainty  about  Penn Octane's ability to continue as a
going  concern.  In  addition,  Penn  Octane's  ability  to  obtain  cash  from
operations  or  additional  debt  or equity financing may be limited which could
subject  the  Rio  Vista's  assets  to  foreclosure  by Penn Octane's creditors.

In  view of the matters described in the preceding paragraphs, recoverability of
the  recorded asset amounts shown in the accompanying consolidated balance sheet
is  dependent upon the ability of Penn Octane to continue as a going concern and
continued  sales  of  LPG  to  PMI  at acceptable volumes and margins to provide
sufficient cash flow to pay Rio Vista's expenses and guarantees of Penn Octane's
obligations  assuming  Penn  Octane's  inability  to  pay such obligations.  The
consolidated  balance  sheet  does  not  include  any adjustments related to the
recoverability  and  classification  of  recorded  asset  amounts or amounts and
classification of liabilities that might be necessary should Rio Vista be unable
to  continue  in  existence.

To  provide  Rio  Vista  with  the  ability it believes necessary to continue in
existence,  management  is  negotiating  with  PMI  to  increase  LPG  sales  at
acceptable monthly volumes and margins.  In addition, management is taking steps
to  diversify  Rio  Vista's  operations  to  reduce  dependency on sales of LPG.

IMPACT OF INFLATION

Inflation  in  the United States has been relatively low in recent years and did
not  have  a  material  impact  on  the consolidated financial statements of Rio
Vista.  However,  inflation  remains  a  factor in the United States economy and
could  increase  Rio  Vista's  cost  to  acquire  or replace property, plant and
equipment  as  well  as  our  labor  and  supply  costs.

ENVIRONMENTAL MATTERS

Rio Vista's operations are subject to environmental laws and regulations adopted
by  various  governmental  authorities  in  the  jurisdictions  in  which  these
operations  are  conducted.  Under  the  omnibus  agreement,  Penn  Octane  will
indemnify  Rio Vista for five years after the completion of the Spin-Off against
certain  potential  environmental  liabilities  associated  with  the  assets it
contributed  to  Rio  Vista relating to events or conditions that existed before
the  completion  of  the  Spin-Off.

RECENTLY  ISSUED  FINANCIAL  ACCOUNTING  STANDARDS

During  2004,  Rio  Vista  adopted  Financial  Accounting  Standards  Board
Interpretation  No.  46,  "Consolidation of Variable Entities" ("FIN 46"), which
was amended by FIN 46R.  This interpretation of Accounting Research Bulletin No.
51,  "Consolidated  Financial  Statements",  addresses consolidation by business
enterprises  of  variable  interest entities ("VIE") that do not have sufficient
equity investment at risk to permit the entity to finance its activities without
additional  subordinated financial support.  FIN 46R requires the beneficiary of
a  VIE  to  consolidate  in its financial statements the assets, liabilities and
results  of  operations of the VIE.  Tergas, an affiliate of Rio Vista, is a VIE
and  therefore,  its  assets,  liabilities  and  results of operations have been
included  in  the  accompanying  consolidated financial statements of Rio Vista.


                                       34
<PAGE>
CRITICAL  ACCOUNTING  POLICIES

The  consolidated  financial  statements  of Rio Vista reflect the selection and
application  of accounting policies which require management to make significant
estimates and judgments.  See note B to those consolidated financial statements,
"Summary  of  Significant  Accounting  Policies".  Rio  Vista  believes that the
following  reflect  the  more  critical  accounting  policies  that  affect  the
financial  position  and  results  of  operations.

     Revenues  recognition - Rio Vista expects in the future to enter into sales
     agreements to sell LPG for future delivery. Rio Vista will not record sales
     until  the  LPG  is  delivered  to  the  customer.

     Impairment  of  long-lived assets - The determination of whether impairment
     has  occurred  is  based  on  an  estimate  of  undiscounted  cash  flows
     attributable  to  assets in future periods. If impairment has occurred, the
     amount  of  the impairment loss recognized will be determined by estimating
     the fair value of the assets and recording a loss if the fair value is less
     than  the  carrying  value.  Assessments  of  impairment  are  subject  to
     management's  judgments  and based on estimates that management is required
     to  make.

     Depreciation  and amortization expenses - Property, plant and equipment are
     carried  at  cost  less  accumulated  depreciation  and  amortization.
     Depreciation  and  amortization rates are based on management's estimate of
     the  future  utilization  and  useful  lives  of  the  assets.

     Stock-based compensation -  Rio Vista accounts for stock-based compensation
     using the provisions of ABP 25 (intrinsic value method), which is permitted
     by  SFAS  123.  The difference in net income, if any, between the intrinsic
     value method and the method provided for by SFAS 123 (fair value method) is
     required  to  be  disclosed  in  the  financial statements on an annual and
     interim  basis  as  a  result  of  the  issuance  of  SFAS  148.

     Allowance  for  doubtful  accounts  -  The carrying value of trade accounts
     receivable  is  based  on  estimated  fair value. The determination of fair
     value  is  subject to management's judgments and is based on estimates that
     management  is  required  to  make.


STATEMENT  BY MANAGEMENT CONCERNING REVIEW OF INTERIM INFORMATION BY INDEPENDENT
CERTIFIED  PUBLIC  ACCOUNTANTS.

     The  unaudited consolidated financial statements included in this filing on
Form  10-Q  have  been reviewed by Burton McCumber & Cortez, L.L.P., independent
certified  public  accountants,  in  accordance  with  established  professional
standards  and  procedures  for  such  review.  The  report of Burton McCumber &
Cortez,  L.L.P.  commenting  on  their  review,  accompanies  the  unaudited
consolidated  financial  statements  included  in  Item  1  of  Part  I.


                                       35
<PAGE>
ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.

     To  the  extent  that  Rio  Vista  maintains quantities of LPG inventory in
excess  of  commitments for quantities of undelivered LPG and/or has commitments
for  undelivered  LPG  in  excess of inventory balances, Rio Vista is exposed to
market  risk  related  to  the  volatility  of  LPG  prices.  In  the event that
inventory  balances  exceed  commitments  for undelivered LPG, during periods of
falling  LPG  prices, Rio Vista may sell excess inventory to customers to reduce
the  risk  of  these  price  fluctuations.  In  the  event  that commitments for
undelivered  LPG  exceed  inventory  balances,  Rio Vista may purchase contracts
which  protect  it  against  future  price  increases  of  LPG.

     Rio  Vista  does  not  maintain  quantities  of  LPG inventory in excess of
quantities  actually  ordered  by  PMI.  Therefore,  Rio Vista has not currently
entered into and does not currently expect to enter into any arrangements in the
future  to  mitigate  the  impact  of  commodity  price  risk.

     Rio  Vista  does not have any debt.  Trade accounts receivable from PMI and
Rio  Vista's  trade  and  other  accounts  payable  do  not bear interest.  Penn
Octane's credit facility with RZB for which Rio Vista is responsible for some of
the  costs  does  not bear interest since generally no cash advances are made to
Rio  Vista  or  Penn  Octane by RZB.  Fees paid to RZB for letters of credit are
based  on  a  fixed  schedule  as  provided in Penn Octane's agreement with RZB.
Therefore,  Rio  Vista  currently  has  limited,  if  any,  interest  rate risk.

     Rio  Vista  routinely  converts  U.S.  dollars  into  Mexican  pesos to pay
terminal  operating  costs and income taxes.  Such costs are expected to be less
than  $1  million  per year and Rio Vista expects such costs will remain at less
than  $1  million  in  any  year.  Rio Vista does not maintain Mexican peso bank
accounts with other than nominal balances.  Therefore, Rio Vista has limited, if
any,  risk  related  to  foreign  currency  exchange  rates.

ITEM  4.  CONTROLS  AND  PROCEDURES.

     The General Partner's management, including the principal executive officer
and  principal  financial  officer,  conducted  an  evaluation  of  Rio  Vista's
disclosure controls and procedures, as such term is defined under Rule 13a-14(c)
promulgated under the Securities Exchange Act of 1934, as amended, as of the end
of  the  period.  Based  on  their evaluation, Penn Octane's principal executive
officer  and  principal accounting officer concluded that Rio Vista's disclosure
controls  and  procedures  are  effective.

     There  have  been no significant changes (including corrective actions with
regard  to  significant  deficiencies  or  material  weaknesses)  in Rio Vista's
internal  controls  or  in  other  factors that could significantly affect these
controls subsequent to the date of the evaluation referenced in paragraph above.


                                       36
<PAGE>
PART  II

ITEM 1.   LEGAL PROCEEDINGS

          None.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

          See  note  F  to  the  accompanying  unaudited  consolidated financial
          statements,  for  information  concerning certain sales of securities.

          The  above  transactions  were  exempt  from  registration  under  the
          Securities  Act  of  1933 pursuant to Section 4(2) thereof because the
          issuance  did  not  involve  any  public  offering  of  securities.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          None.

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

          None.

ITEM 5.   OTHER INFORMATION

          The  following  persons  were  elected to the following offices of the
          general  partner  effective  September  30,  2004:

<TABLE>
<CAPTION>
                 Name                                     Office
          ------------------  ----------------------------------------------------------------
<S>                           <C>
          Jerome B. Richter   Chairman of the Board
          Richard Shore, Jr.  Chief Executive Officer and President
          Charles Handly      Chief Operating Officer and Executive Vice President
          Ian T. Bothwell     Vice President, Chief Financial Officer, Treasurer and Assistant
                                Secretary
          Jerry L. Lockett    Vice President and Secretary
</TABLE>

ITEM 6.   EXHIBITS  AND  REPORTS  ON  FORM  8-K

          a.   Exhibits.

          THE  FOLLOWING  EXHIBITS  ARE  FILED  AS  PART  OF  THIS  REPORT:

<TABLE>
<CAPTION>
Exhibit No.
-----------
<S>          <C>

       2.1*  Distribution Agreement dated September 16, 2004 by and among Penn Octane
             Corporation, Rio Vista Energy Partners L.P. and Subsidiaries.

       3.1*  Certificate of Limited Partnership of Rio Vista Energy Partners L.P. filed July 10, 2003

       3.2*  First Amended and Restated Limited Partnership Agreement of Rio Vista Energy Partners
             L.P. dated September 16, 2004

       3.3*  Certificate of Limited Partnership of Rio Vista Operating Partnership L.P.

       3.4*  First Amended and Restated Limited Partnership Agreement of Rio Vista Operating
             Partnership L.P. dated September 16, 2004

       3.5*  Certificate of Formation of Rio Vista GP LLC


                                       37
<PAGE>
       3.6*  Rio Vista GP LLC Amended and Restated Limited Liability Company Agreement dated
             as of September 16, 2004

       3.7*  Certificate of Formation of Rio Vista Operating GP LLC filed July 10, 2003

       3.8*  Limited Liability Company Agreement of Rio Vista Operating GP LLC dated July 10,
             2003

        3.9  Amendment of Certificate of Limited Partnership of Rio Vista Energy Partners L.P. filed
             September 17, 2003

       3.10  Amendment to Certificate of Limited Partnership of Rio Vista Operating Partnership
             L.P.

       4.1*  Specimen Unit Certificate for Common Units (contained in Exhibit 3.2)

      10.1*  Contribution, Conveyance and Assumption Agreement entered into as of September 16,
             2004 by and among Penn Octane Corporation, Rio Vista GP LLC, Rio Vista Energy
             Partners L.P., Rio Vista Operating GP LLC and Rio Vista Operating Partnership L.P.

      10.2*  Omnibus Agreement entered into as of September 16, 2004 by and among Penn Octane
             Corporation, Rio Vista GP LLC , Rio Vista Energy Partners, L.P. and Rio Vista Operating
             Partnership L.P.

      10.3*  Purchase Contract made and entered into effective as of October 1, 2004 by and between
             Penn Octane Corporation and Rio Vista Operating Partnership L.P.

      10.4*  Form of Unit Purchase Option between Penn Octane Corporation and Shore Capital LLC

      10.5*  Form of Unit Purchase Option between Penn Octane Corporation and Jerome B. Richter

      10.6*  Rio Vista Energy Partners L.P. Unit option Agreement dated July 10, 2003 granted to
             Shore Capital LLC.

      10.7*  Forms of Warrants to Purchase Common Units to be issued to Penn Octane warrant
             holders.

      10.8*  Form of RVGP Voting Agreement by and among Rio Vista GP LLC, Penn Octane
             Corporation and the members of Rio Vista GP LLC.

       10.9  Conveyance Agreement effective September 30, 2004 from Penn Octane Corporation in
             favor of Rio Vista Operating Partnership L.P.

      10.10  Amendment No. 1 to Omnibus Agreement entered into as of September 16, 2004 by and
             among Penn Octane Corporation, Rio Vista GP LLC, Rio Vista Energy Partners L.P. and
             Rio Vista Operating Partnership L.P.

      10.11  Lease dated October 20, 1993 between Brownsville Navigation District of Cameron
             County, Texas and Registrant with respect to Penn Octane's land lease rights, including
             related amendment to the Lease dated as of February 11, 1994 and Purchase Agreement.

      10.12  Lease Amendment dated May 7, 1997 between Registrant and Brownsville Navigation
             District of Cameron County, Texas.

      10.13  Assignment of Easements from Penn Octane to Rio Vista Operating Partnership L.P. dated
             September 15, 2004.

      10.14  Assignment of lease No. "2823" dated September 15, 2004 between Penn Octane
             Corporation and Rio Vista Operating Partnership L.P.

      10.15  Assignment of lease No. "3165" dated September 15, 2004 between Penn Octane
             Corporation and Rio Vista Operating Partnership L.P.


                                       38
<PAGE>
      10.16  Assignment of lease No. "3154" dated September 15, 2004 between Penn Octane
             Corporation and Rio Vista Operating Partnership L.P.

      10.17  Guaranty & Agreement between Rio Vista Energy Partners L.P. and RZB Finance LLC
             dated as of September 15, 2004.

      10.18  Guaranty & Agreement between Rio Vista Operating Partnership L.P. and RZB Finance
             LLC dated as of September 15, 2004.

      10.19  General Security Agreement between Rio Vista Energy Partners L.P. and RZB Finance
             LLC dated as of September 15, 2004.

      10.20  General Security Agreement between Rio Vista Operating Partnership L.P. and RZB
             Finance LLC dated as of September 15, 2004.

      10.21  Form of Amendment to Promissory Note (the "Note") of Penn Octane Corporation (the
             "Company") due December 15, 2003, and related agreements and instruments dated
             January 13, 2004, between the Company and the holders of the Notes.

       31.1  Certification Pursuant to Rule 13a-14(a) / 15d - 14(a) of the Exchange Act

       31.2  Certification Pursuant to Rule 13a-14(a) / 15d - 14(a) of the Exchange Act

         32  Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the
             Sarbanes - Oxley Act of 2002
</TABLE>


     *    Incorporated by reference to the corresponding exhibit filed with Rio
          Vista's  registration  statement  on Form 10 filed August 26, 2004 and
          amended  Form  10 filed on September 16, 2004 (SEC File No. 000-50394)


                                       39
<PAGE>
                                   SIGNATURES

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


                                     RIO  VISTA  ENERGY  PARTNERS  L.P.


November  22,  2004                  By:  /s/ Ian  T.  Bothwell
                                          --------------------------------------
                                          Ian  T.  Bothwell
                                          Treasurer  (principal  accounting  and
                                          financial officer)  of  Rio  Vista  GP
                                          LLC,  General  Partner  of  Rio  Vista
                                          Energy  Partners  L.P.


                                       40
<PAGE>