##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    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.
  Delaware
    
    20-0153267(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)820 Gessner Road, Suite 1285, Houston, Texas
    
    77024(Address of Principal Executive Offices)
    
    (Zip Code)
 (713) 467-8235
  þ o
  o o þ
  o þ




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##### 



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 TABLE OF CONTENTS
 ITEM
    
    
    PAGE NO.Part I1.
    
    Financial StatementsReport of Independent Registered Public Accounting Firm
    
    
    3Consolidated Balance Sheets as of December 31, 2006 and March 31, 2007 (unaudited)
    
    
    4-5Unaudited Consolidated Statements of Operations for the three months ended March 31, 2006 and 2007
    
    
    6Unaudited Consolidated Statement of Partners Capital for the three months ended March 31, 2007
    
    
    7Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2007
    
    
    8Notes to Consolidated Financial Statements (unaudited)
    
    
    9-242.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25-363.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    374T.
    
    Controls and Procedures
    
    
    37Part II1.
    
    Legal Proceedings
    
    
    381A.
    
    Risk Factors
    
    
    38-392.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    393.
    
    Defaults Upon Senior Securities
    
    
    394.
    
    Submission of Matters to a Vote of Security Holders
    
    
    395.
    
    Other Information
    
    
    396.
    
    Exhibits
    
    
    40-44Signatures
    
    
    45Exhibit 31.1Exhibit 31.2Exhibit 32
   2




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##### Table of Contents



Part I  FINANCIAL INFORMATION
 
 Item 1.
 
 Report of Independent Registered Public Accounting Firm
 
      
  3




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##### Table of Contents



Rio Vista Energy Partners L.P. and Subsidiaries
 
 CONSOLIDATED BALANCE SHEETS
 ASSETS
 December 31,
    
    
    March 31,2006
    
    
    2007(unaudited)Current AssetsCash
    
    $
    3,896,000
    
    
    $
    3,675,000Restricted cash
    
    
    25,000
    
    
    
    25,000Trade accounts receivable (less
allowance for doubtful accounts of $0 at

December 31, 2006 and March 31, 2007)
    
    
    523,000
    
    
    
    998,000Due from Penn Octane Corporation, net
    
    
    1,751,000
    
    
    
    722,000Prepaid expenses and other current assets
    
    
    246,000
    
    
    
    244,000Total current assets
    
    
    6,441,000
    
    
    
    5,664,000Property, plant and equipment  net
    
    
    10,704,000
    
    
    
    10,539,000Other non-current assets
    
    
    11,000
    
    
    
    13,000Total assets
    
    $
    17,156,000
    
    
    $
    16,216,000
   4




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##### Table of Contents



Rio Vista Energy Partners L.P. and Subsidiaries
 CONSOLIDATED BALANCE SHEETS
 LIABILITIES AND PARTNERS CAPITAL
 December 31,
    
    
    March 31,2006
    
    
    2007(Unaudited)Current LiabilitiesNote payable
    
    $
    1,000,000
    
    
    $
    1,000,000Due to Penn Octane Corporation, net
    
    
    
    
    
    
    Accounts payable
    
    
    397,000
    
    
    
    499,000Mexican taxes payable
    
    
    17,000
    
    
    
    29,000Accrued liabilities
    
    
    702,000
    
    
    
    565,000Total current liabilities
    
    
    2,116,000
    
    
    
    2,093,000Commitments and contingencies
    
    
    
    
    
    
    Partners CapitalCommon units
    
    
    14,739,000
    
    
    
    13,840,000General partners equity
    
    
    301,000
    
    
    
    283,000Total Partners Capital
    
    
    15,040,000
    
    
    
    14,123,000Total liabilities and Partners Capital
    
    $
    17,156,000
    
    
    $
    16,216,000
   5




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##### Table of Contents



Rio Vista Energy Partners L.P. and Subsidiaries
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2007Revenues
    
    $
    
    
    
    $
    679,000Cost of goods sold
    
    
    540,000
    
    
    
    394,000Gross profit
    
    
    (540,000
    )
    
    
    285,000Selling, general and administrative expensesLegal and professional fees
    
    
    187,000
    
    
    
    288,000Salaries and payroll related expenses
    
    
    195,000
    
    
    
    132,000Other
    
    
    360,000
    
    
    
    299,000742,000
    
    
    
    719,000Operating income (loss) from continuing operations
    
    
    (1,282,000
    )
    
    
    (434,000
    )Other income (expense)Interest expense
    
    
    (42,000
    )
    
    
    (25,000
    )Interest income
    
    
    
    
    
    
    Loss from continuing operations before taxes
    
    
    (1,324,000
    )
    
    
    (459,000
    )Provision for Mexican income taxes
    
    
    14,000
    
    
    
    11,000Net loss from continuing operations
    
    
    (1,338,000
    )
    
    
    (470,000
    )Discontinued operations:Net income from operations of the LPG Assets Sold
    
    
    1,087,000
    
    
    
    Net income (loss)
    
    $
    (251,000
    )
    
    $
    (470,000
    )Net income (loss) allocable to the partners
    
    $
    (251,000
    )
    
    $
    (470,000
    )Less general partners interest in net income (loss)
    
    
    5,000
    
    
    
    9,000Net income (loss) allocable to the common units
    
    $
    (246,000
    )
    
    $
    (461,000
    )Net loss from continuing operations per common unit
    
    $
    (0.69
    )
    
    $
    (0.24
    )Net income from discontinued operations per common unit
    
    
    0.56
    
    
    
    Net income (loss) per common unit
    
    $
    (0.13
    )
    
    $
    (0.24
    )Weighted average common units outstanding
    
    
    1,910,656
    
    
    
    1,910,656
   6




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##### Table of Contents



Rio Vista Energy Partners L.P. and Subsidiaries
 
 CONSOLIDATED STATEMENT OF PARTNERS CAPITAL
 (Unaudited)
 TotalCommon Units
    
    
    General
    
    
    PartnersUnits
    
    
    Amount
    
    
    Partner
    
    
    CapitalBalance as of December 31, 2006
    
    
    1,910,656
    
    
    $
    14,739,000
    
    
    $
    301,000
    
    
    $
    15,040,000Net income (loss)
    
    
    
    
    
    
    (461,000
    )
    
    
    (9,000
    )
    
    
    (470,000
    )Cash distribution to partners
    
    
    
    
    
    
    (477,000
    )
    
    
    (10,000
    )
    
    
    (487,000
    )Unit-based payment expense
    
    
    
    
    
    
    39,000
    
    
    
    1,000
    
    
    
    40,000Balance as of March 31, 2007
(unaudited)
    
    
    1,910,656
    
    
    $
    13,840,000
    
    
    $
    283,000
    
    
    $
    14,123,000
   7




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##### Table of Contents



Rio Vista Energy Partners L.P. and Subsidiaries
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    (251,000
    )
    
    $
    (470,000
    )Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:Depreciation
    
    
    200,000
    
    
    
    165,000Unit-based payment expense
    
    
    8,000
    
    
    
    40,000Amortization of loan discount related to
detachable warrants issued
    
    
    22,000
    
    
    
    Changes in current assets and liabilities:Trade accounts receivable
    
    
    6,115,000
    
    
    
    (476,000
    )Inventories
    
    
    26,000
    
    
    
    Prepaid and other current assets
    
    
    (241,000
    )
    
    
    4,000Trade accounts payable
    
    
    (347,000
    )
    
    
    102,000Due to Penn Octane Corporation, net
    
    
    (6,828,000
    )
    
    
    1,029,000Accrued liabilities
    
    
    241,000
    
    
    
    (137,000
    )Mexican taxes payable
    
    
    (8,000
    )
    
    
    11,000Net cash provided by (used in) operating activities
    
    
    (1,063,000
    )
    
    
    268,000Cash flows from investing activities:Capital expenditures
    
    
    (4,000
    )
    
    
    Proceeds from the sale of land and other assets
    
    
    
    
    
    
    Other non-current assets
    
    
    (1,000
    )
    
    
    (2,000
    )Net cash (used in) provided by investing activities
    
    
    (5,000
    )
    
    
    (2,000
    )Cash flows from financing activities:(Increase) decrease in restricted cash
    
    
    1,052,000
    
    
    
    Cash distributions to partners
    
    
    
    
    
    
    (487,000
    )Issuance of TransMontaigne Note
    
    
    
    
    
    
    Net cash provided by (used) in financing activities
    
    
    1,052,000
    
    
    
    (487,000
    )Net increase in cash
    
    
    (16,000
    )
    
    
    (221,000
    )Cash at beginning of period
    
    
    26,000
    
    
    
    3,896,000Cash at end of period
    
    $
    10,000
    
    
    $
    3,675,000Supplemental disclosures of cash flow information:Cash paid during the year for:Interest
    
    $
    20,000
    
    
    $
    60,000Mexican taxes
    
    $
    
    
    
    $
    Supplemental disclosures of noncash transactions:Units and warrants issued and other
    
    $
    30,000
    
    
    $
    40,000
  
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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE A  ORGANIZATION
      9




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE A  ORGANIZATION   Continued
 Basis of Presentation
     NOTE B  UNIT-BASED PAYMENT
   10




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE B  UNIT-BASED PAYMENT  Continued
 Unit-Based Payment  Continued
  NOTE C  INCOME LOSS) PER COMMON UNIT
  For the three months ended March 31, 2006Income (Loss)
    
    
    Shares
    
    
    Per-Unit(Numerator)
    
    
    (Denominator)
    
    
    AmountNet income (loss) from continuing operations
available to the common units
    
    $
    (1,311,000
    )Basic EPSNet income (loss) available to the common units
    
    
    (1,311,000
    )
    
    
    1,910,656
    
    
    $
    (0.69
    )Effect of Dilutive SecuritiesWarrants
    
    
    
    
    
    
    Diluted EPSNet income (loss) available to the common units
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 For the three months ended March 31, 2007Income (Loss)
    
    
    Shares
    
    
    Per-Unit(Numerator)
    
    
    (Denominator)
    
    
    AmountNet income (loss) from continuing operations
available to the common units
    
    $
    (461,000
    )Basic EPSNet income (loss) available to the common units
    
    
    (461,000
    )
    
    
    1,910,656
    
    
    $
    (0.24
    )Effect of Dilutive SecuritiesWarrants
    
    
    
    
    
    
    Diluted EPSNet income (loss) available to the common units
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  11




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE D  SALE OF LPG ASSETS / DISCONTINUED OPERATIONS
       12




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE D  SALE OF LPG ASSETS / DISCONTINUED OPERATIONS  Continued
   Leases Assigned
   2006 PMI Agreement
     13




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE D  SALE OF LPG ASSETS / DISCONTINUED OPERATIONS  Continued
 2006 PMI Agreement  Continued
  Actual VolumesMonth
    
    Sold/Transported(gallons)January 2006
    
    
    14,757,646February 2006
    
    
    11,940,257March 2006
    
    
    11,606,435April 2006
    
    
    6,035,733May 2006
    
    
    5,733,193June 2006
    
    
    7,130,666July 2006
    
    
    4,937,441August 2006
    
    
    5,408,563September 2006
    
    
    6,402,253October 2006
    
    
    8,908,931November 2006
    
    
    9,906,874December 2006
    
    
    10,448,614January 2007
    
    
    10,362,590February 2007
    
    
    8,590,460March 2007
    
    
    8,772,010April 2007
    
    
    6,492,361
   14




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##### Table of Contents



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE D  SALE OF LPG ASSETS / DISCONTINUED OPERATIONS  Continued
 LPG Supply Agreement with Penn Octane
    NOTE E  PROPERTY, PLANT AND EQUIPMENT
 December 31,
    
    
    March 31,2006
    
    
    2007US  Mexico Pipelines and Matamoros Terminal Facility: (a)U.S. Pipelines and Rights of Way
    
    $
    6,852,000
    
    
    $
    6,852,000Mexico Pipelines and Rights of Way
    
    
    1,046,000
    
    
    
    1,046,000Matamoros Terminal Facility
    
    
    5,564,000
    
    
    
    5,564,000Land
    
    
    705,000
    
    
    
    705,000Total
    
    
    14,167,000
    
    
    
    14,167,000Less: accumulated depreciation and amortization
    
    
    (3,463,000
    )
    
    
    (3,628,000
    )$
    10,704,000
    
    
    $
    10,539,000
 (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.
  15




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE E  PROPERTY, PLANT AND EQUIPMENT  Continued
   NOTE F  DEBT OBLIGATIONS
 TransMontaigne Note
  NOTE G  INCOME TAXES
    16




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##### Table of Contents



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE H  PARTNERS CAPITAL
 General Partner Interest
    Distributions of Available Cash
    17




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##### Table of Contents



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE H  PARTNERS CAPITAL  Continued
 Distributions of Available Cash
   NOTE I  UNIT WARRANTS
 Options and Warrants
  Equity Incentive Plan
    18




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##### Table of Contents



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE J  COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
   Lesly Camacho by Her Mother Dora Adame as Next Friend, et al. vs. Penn Octane
International LLC th
 Faustino Izaguirre Gonzalez, et al. vs. Penn Octane Corporation, et
al. th
   19




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##### Table of Contents



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE J  COMMITMENTS AND CONTINGENCIES  Continued
 Legal Proceedings  Continued
 Rio Vista
Operating Partnership L.P. vs. Guajardo, Jr. Farms, Inc.
  Credit Facility, Letters of Credit and Other
      20




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##### Table of Contents



RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE J  COMMITMENTS AND CONTINGENCIES  Continued
 Consulting Agreement
   Concentrations of Credit Risk
  Tax obligations of Penn Octane resulting from the Spin-Off
    21




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RIO VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE J  COMMITMENTS AND CONTINGENCIES  Continued
 Partnership Tax Treatment
        22




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RIO
VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE J  COMMITMENTS AND CONTINGENCIES  Continued
 Guarantees and Assets Pledged on Certain of Penn Octanes Obligations
  Fuel Products trade accounts payable
    
    $
    5,626,000Lines of credit
    
    $
    3,923,000Letters of credit in excess of Fuel Products
trade accounts payable
    
    $
    2,478,000
  Accounts receivable
    
    $
    9,897,000Restricted cash
    
    $
    2,180,000Inventory
    
    $
    1,507,000Property, plant and equipment, net
    
    $
    10,908,000
  Accounts receivable
    
    $
    998,000Property, plant and equipment, net
    
    $
    10,539,000
 NOTE K  RELATED PARTY TRANSACTIONS
    23




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##### Table of Contents



RIO
VISTA ENERGY PARTNERS L.P. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 NOTE K  RELATED PARTY TRANSACTIONS  Continued
 Omnibus Agreement
     NOTE L  ACCRUED LIABILITIES
  December 31,
    
    
    March 31,2006
    
    
    2007Mexican taxes payable
    
    $
    299,000
    
    
    $
    346,000Other accrued liabilities
    
    
    403,000
    
    
    
    219,000$
    702,000
    
    
    $
    565,000
  24




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##### Table of Contents



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 unaudited consolidated financial statements of Rio Vista and related notes
thereto appearing elsewhere herein. References to specific years preceded by fiscal (e.g. fiscal
2007) 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, Rio Vista has made or may make forward-looking statements,
orally or in writing. These forward-looking statements include statements regarding anticipated
future revenues, sales, LPG supply, LPG Transportation Business, operations, demand, potential
acquisitions, competition, capital expenditures, the deregulation of the LPG market in Mexico, the
operations of the US  Mexico Pipelines, the Brownsville and Matamoros Terminal Facilities, 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,
risk factors 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 under Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of Operations, as well as those
discussed elsewhere in this Report on Form 10-Q . These factors may not include all material risks
facing Rio Vista.
 Rio Vista Energy Partners L.P. and its consolidated subsidiaries are collectively hereinafter
referred to as Rio Vista.
 Overview
    25




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Liquidity and Capital
Resources  Distributions of Available Cash)
 LPG Transportation Agreement
   26




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Actual VolumesMonth
    
    Sold/Transported(gallons)January 2006
    
    
    14,757,646February 2006
    
    
    11,940,257March 2006
    
    
    11,606,435April 2006
    
    
    6,035,733May 2006
    
    
    5,733,193June 2006
    
    
    7,130,666July 2006
    
    
    4,937,441August 2006
    
    
    5,408,563September 2006
    
    
    6,402,253October 2006
    
    
    8,908,931November 2006
    
    
    9,906,874December 2006
    
    
    10,448,614January 2007
    
    
    10,362,590February 2007
    
    
    8,590,460March 2007
    
    
    8,772,010April 2007
    
    
    6,492,361
    27




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Potential Factors Affecting Future Demand For The Retained Assets:
 Trends.
    Dependence on TransMontaigne.
  28




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Results of Operations
 The following discussion of Rio Vistas results of operations from continuing operations for all
periods presented excludes the results of operations related to the Sold Assets, including
revenues, direct costs and associated interest expenses, which have been reclassified as
discontinued operations (see below). As a result, the results of operations from continuing
operations reflects only the results associated with the LPG Transportation Business, including all
costs associated with operation of the US-Mexico Pipelines and Matamoros Terminal Facility and all
indirect income and expenses of Rio Vista. Revenues from Rio Vistas LPG Transportation Business
commenced on August 22, 2006 although expenses associated with operation of the US-Mexico Pipelines
and Matamoros Terminal Facility were incurred during the entire period for each period presented.
 Continuing Operations:
 Three months ended March 31, 2007 Compared With Three months ended March 31, 2006
 Revenues.
 Cost of goods sold.
 Selling, general and administrative expenses.
 Discontinued Operations:
  Three months ended
    
    
    Three months endedMarch 31, 2006
    
    
    March 31, 2007 (a)Volume SoldLPG (millions of
gallons)  PMI
    
    
    38.3
    
    
    
    Average sales priceLPG (per gallon)  PMI
    
    $
    1.02
    
    
    $
    
 (a)
    
    Sales of LPG ceased on August 21, 2006, immediately prior to the LPG Asset Sale
 Rio Vistas results of operations from discontinued operations of its LPG sales business
applies only for the three months ended March 31, 2006 since these operations were sold on August
21, 2006. As a result, there is no comparison of such operations presented for the three months
ended March 31, 2007 and March 31, 2006.
  29




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Liquidity and Capital Resources
 General.
 As Reported
    
    
    
    
    
    
    AdjustedMarch 31, 2007
    
    
    Pro Forma
    
    
    March 31, 2007Current AssetsCash
    
    $
    3,675,000
    
    
    $
    (487,000
    )(a)
    
    $
    3,910,000$
    722,000
    (b)Restricted Cash
    
    
    25,000
    
    
    
    
    
    
    
    25,000Trade Accounts Receivable
    
    
    998,000
    
    
    
    
    
    
    
    998,000Inventories
    
    
    
    
    
    
    
    
    
    
    Due To Affiliates
    
    
    722,000
    
    
    
    (722,000
    )(b)
    
    
    Prepaid Expenses
    
    
    244,000
    
    
    
    
    
    
    
    244,000Total Current Assets
    
    
    5,664,000
    
    
    
    (487,000
    )
    
    
    5,177,000Current LiabilitiesCurrent Maturities Of
Long-Term Debt
    
    $
    1,000,000
    
    
    
    
    
    
    $
    1,000,000US and Foreign Taxes Payable
    
    
    29,000
    
    
    
    
    
    
    
    29,000Accounts Payable
    
    
    499,000
    
    
    
    
    
    
    
    499,000Accrued Liabilities
    
    
    565,000
    
    
    
    
    
    
    
    565,000Total Current Liabilities
    
    
    2,093,000
    
    
    
    
    
    
    
    2,093,000Working Capital
    
    $
    3,571,000
    
    
    
    (487,000
    )
    
    $
    3,084,000
 (a)
    
    distribution paid by Rio Vista during May 2007(b)
    
    payment of outstanding intercompany balances
     30




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##### Table of Contents



TransMontaigne Note.
 Guarantees and Assets Pledged on Certain of Penn Octanes Obligations.
   RZB Obligation
    31




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##### Table of Contents



Guarantees and Assets Pledged on Certain of Penn Octanes Obligations
  Fuel Products trade payables
    
    $
    5.6Lines of credit
    
    $
    3.9Letters of credit in excess of Fuel Products
trade payables
    
    $
    2.5
  Accounts receivable
    
    $
    9.9Restricted cash
    
    $
    2.2Inventory
    
    $
    1.5Property, plant and equipment, net
    
    $
    10.9
  Accounts receivable
    
    $
    1.0Property, plant and equipment, net
    
    $
    10.5
  Payments due by Period(Amounts in Millions)Less than
    
    
    1 - 3
    
    
    4 - 5
    
    
    AfterContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLong-Term Debt Obligations
    
    $
    1.0
    
    
    $
    1.0
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating Leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    LPG Purchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Contractual Cash Obligations
    
    $
    1.0
    
    
    $
    1.0
    
    
    $
    
    
    
    $
    
    
    
    $
    
  32




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##### Table of Contents



Amount of Commitment ExpirationPer Period(Amounts in Millions)Total Amounts
    
    
    Less than
    
    
    1 - 3
    
    
    4 - 5
    
    
    OverCommercial Commitments
    
    Committed
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLines of Credit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Standby Letters of Credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Guarantees
    
    
    12.0
    
    
    
    12.0
    
    
    
    
    
    
    
    
    
    
    
    Standby Repurchase Obligations
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AOther Commercial Commitments
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal Commercial Commitments
    
    $
    12.0
    
    
    $
    12.0
    
    
    $
    
    
    
    $
    
    
    
    $
    
 Income Taxes.
  Partnership Tax Treatment.
 Legal Proceedings.
 Consulting Agreement
 Distributions of Available Cash.
   33




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##### Table of Contents



Mexican Operations.
  Deregulation of the LPG Industry in Mexico. Ley Reglarmentaria del Artículo 27 Constitutional en el Ramo del Petróleo Ley Orgánica del Petróleos Mexicanos
y Organismos Subsidiarios
  Partners Capital.
  34




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##### Table of Contents



General Partner Interest
    Options and Warrants
    35




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##### Table of Contents



Intercompany Agreement
 Omnibus Agreement.
   Impact of Inflation
  Environmental Matters
  Recently Issued Financial Accounting Standards
  Statement by Management Concerning Review of Interim Information by An Independent Registered
Public Accounting Firm.
   36




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
   
 Item 4T. Controls and Procedures.
    37




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##### Table of Contents



Part II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 Business Factors.
 Acquisition Factors.
 Competitive Factors.
 International Factors.
 Political Factors.
 Industry and Economic Factors.
  38




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##### Table of Contents



Market Risk Factors.
 Internal Control Factors.
 Projections.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
   39




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##### Table of Contents



Item 6 Exhibits
 The following exhibits are incorporated by reference to previously filed reports, as
noted.
 Exhibit No.
 2.1
    
    Distribution Agreement dated September 16, 2004 by and among Penn
Octane Corporation, Rio Vista Energy Partners L.P. and Subsidiaries.
(Incorporated by reference to 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).2.2
    
    Purchase and Sale Agreement dated August 15, 2005 as amended and
restated on August 15, 2006 entered into by and between Rio Vista
Operating Partnership L.P. and TransMontaigne Product Services Inc.
(Incorporated by reference to Rio Vistas Quarterly Report on Form
10-Q for the quarter ended June 30, 2006 filed on November 20, 2006,
SEC File No. 000-50394).3.1
    
    First Amendment to Amended and Restated Limited Liability Company
Agreement of Rio Vista GP LLC dated October 2, 2006. (Incorporated by
reference to Rio Vistas Annual Report on Form 10-K for the year ended
December 31, 2005 filed on April 6, 2006, SEC File No. 000-50394).3.2
    
    Certificate of Limited Partnership of Rio Vista Energy Partners L.P.
filed July 10, 2003. (Incorporated by reference to 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).3.3
    
    First Amended and Restated Limited Partnership Agreement of Rio Vista
Energy Partners L.P. dated September 16, 2004. (Incorporated by
reference to 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).3.4
    
    Certificate of Limited Partnership of Rio Vista Operating Partnership
L.P. (Incorporated by reference to 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).3.5
    
    First Amended and Restated Limited Partnership Agreement of Rio Vista
Operating Partnership L.P. dated September 16, 2004. (Incorporated by
reference to 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).3.6
    
    Certificate of Formation of Rio Vista GP LLC. (Incorporated by
reference to 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).3.7
    
    Rio Vista GP LLC Amended and Restated Limited Liability Company
Agreement dated as of September 16, 2004. (Incorporated by reference
to 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).3.8
    
    Certificate of Formation of Rio Vista Operating GP LLC filed July 10,
2003. (Incorporated by reference to 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).3.9
    
    Limited Liability Company Agreement of Rio Vista Operating GP LLC
dated July 10, 2003. (Incorporated by reference to 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).
  40




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##### Table of Contents



Exhibit No.
 3.10
    
    Amendment of Certificate of Limited Partnership of Rio Vista Energy
Partners L.P. filed September 17, 2003. (Incorporated by reference
to Rio Vistas Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004 filed on November 22, 2004, SEC File No.
000-50394).3.11
    
    Amendment to Certificate of Limited Partnership of Rio Vista
Operating Partnership L.P. (Incorporated by reference to Rio
Vistas Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004 filed on November 22, 2004, SEC File No.
000-50394).3.12
    
    First Amendment to the First Amended and Restated Agreement of
Limited Partnership of Rio Vista Energy Partners L.P. dated as of
October 26, 2005. (Incorporated by reference to Rio Vistas
Quarterly Report on Form 10-Q for the quarter ended September 30,
2005 filed on November 21, 2005, SEC File No. 000-50394).3.13
    
    First Amendment to the First Amended and Restated Agreement of
Limited Partnership of Rio Vista Operating Partnership L.P. dated as
of October 26, 2005. (Incorporated by reference to Rio Vistas
Quarterly Report on Form 10-Q for the quarter ended September 30,
2005 filed on November 21, 2005, SEC File No. 000-50394).4.1
    
    Specimen Unit Certificate for Common Units (contained in Exhibit
3.2). (Incorporated by reference to 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).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. (Incorporated by reference
to 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).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.
(Incorporated by reference to 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).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. (Incorporated by reference to 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).10.4
    
    Form of Unit Purchase Option between Penn Octane Corporation and
Shore Capital LLC. (Incorporated by reference to 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).10.5
    
    Form of Unit Purchase Option between Penn Octane Corporation and
Jerome B. Richter. (Incorporated by reference to 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).10.6
    
    Rio Vista Energy Partners L.P. Unit option Agreement dated July 10,
2003 granted to Shore Capital LLC. (Incorporated by reference to
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).10.7
    
    Forms of Warrants to Purchase Common Units to be issued to Penn
Octane warrant holders. (Incorporated by reference to 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).
  41




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##### Table of Contents



Exhibit No.
 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.
(Incorporated by reference to 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).10.9
    
    Conveyance Agreement effective September 30, 2004 from Penn Octane
Corporation in favor of Rio Vista Operating Partnership L.P.
(Incorporated by reference to Rio Vistas Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 filed on November 22,
2004, SEC File No. 000-50394).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.
(Incorporated by reference to Rio Vistas Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 filed on November 22,
2004, SEC File No. 000-50394).10.11
    
    Guaranty & Agreement between Rio Vista Energy Partners L.P. and RZB
Finance LLC dated as of September 15, 2004. (Incorporated by
reference to Rio Vistas Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004 filed on November 22, 2004, SEC
File No. 000-50394).10.12
    
    Guaranty & Agreement between Rio Vista Operating Partnership L.P.
and RZB Finance LLC dated as of September 15, 2004. (Incorporated
by reference to Rio Vistas Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004 filed on November 22, 2004, SEC
File No. 000-50394).10.13
    
    General Security Agreement between Rio Vista Energy Partners L.P.
and RZB Finance LLC dated as of September 15, 2004. (Incorporated
by reference to Rio Vistas Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004 filed on November 22, 2004, SEC
File No. 000-50394).10.14
    
    General Security Agreement between Rio Vista Operating Partnership
L.P. and RZB Finance LLC dated as of September 15, 2004.
(Incorporated by reference to Rio Vistas Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 filed on November 22,
2004, SEC File No. 000-50394).10.15
    
    Rio Vista Energy Partners L.P. 2005 Equity Incentive Plan
(Incorporated by reference to Rio Vistas Annual Report on Form 10-K
for the year ended December 31, 2004 filed on April 12, 2005, SEC
File No. 000-50394).10.16
    
    Promissory note dated August 15, 2005 between Rio Vista Operating
Partnership L.P. and TransMontaigne Product Services Inc.
(Incorporated by reference to Rio Vistas Quarterly Report on Form
10-Q for the quarter ended June 30, 2005 filed on August 19, 2005,
SEC File No. 000-50394).10.17
    
    Security agreement dated August 15, 2005 between Rio Vista Operating
Partnership L.P. and TransMontaigne Product Services Inc.
(Incorporated by reference to Rio Vistas Quarterly Report on Form
10-Q for the quarter ended June 30, 2005 filed on August 19, 2005,
SEC File No. 000-50394).10.18
    
    Amended and Restated Consulting Agreement dated November 15, 2005
between Penn Octane Corporation, Rio Vista Energy Partners and
Jerome B. Richter. (Incorporated by reference to Rio Vistas
Quarterly Report on Form 10-Q for the quarter ended September 30,
2005 filed on November 21, 2005, SEC File No. 000-50394).
  42




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##### Table of Contents



Exhibit No.
 10.19
    
    Unit Purchase Option effective February 6, 2007 between Shore Trading LLC and Penn
Octane Corporation. (Incorporated by reference to Rio Vistas Annual Report on Form 10-K
for the year ended December 31, 2006 filed on April 17, 2007, SEC File No. 000-50394).10.20
    
    Consent to Transfer of Units, Acknowledgement of Representation, and Waiver of
Conflicts dated February 6, 2007 among Penn Octane Corporation, Rio Vista GP LLC and
Shore Trading LLC. (Incorporated by reference to Rio Vistas Annual Report on Form 10-K
for the year ended December 31, 2006 filed on April 17, 2007, SEC File No. 000-50394).10.21
    
    Consulting Agreement entered into on March 5, 2007, with an effective date of
November 15, 2006 by and between Penn Octane Corporation and Rio Vista Energy Partners
L.P. and JBR Capital Resources, Inc. (Incorporated by reference to Rio Vistas Annual
Report on Form 10-K for the year ended December 31, 2006 filed on April 17, 2007, SEC
File No. 000-50394).10.22
    
    Letter agreement dated March 5, 2007 by and between Penn Octane Corporation,
Rio Vista Energy Partners L.P. and JBR Capital Resources, Inc. (Incorporated by
reference to Rio Vistas Annual Report on Form 10-K for the year ended December 31, 2006
filed on April 17, 2007, SEC File No. 000-50394).10.23
    
    Form of Rio Vista GP LLC Chairman Services Agreement. (Incorporated by
reference to Rio Vistas Annual Report on Form 10-K for the year ended December 31, 2006
filed on April 17, 2007, SEC File No. 000-50394).10.24
    
    Form of Rio Vista GP LLC Managers Services Agreement. (Incorporated by reference
to Rio Vistas Annual Report on Form 10-K for the year ended December 31, 2006 filed on
April 17, 2007, SEC File No. 000-50394).10.25
    
    Form of Rio Vista GP LLC Manager and Officer Indemnification Agreement.
(Incorporated by reference to Rio Vistas Annual Report on Form 10-K for the year ended
December 31, 2006 filed on April 17, 2007, SEC File No. 000-50394).10.26
    
    Form of Nonqualified Unit Option Agreement under the 2005 Rio Vista Energy
Partners L.P. Equity Incentive Plan. (Incorporated by reference to Rio Vistas Annual
Report on Form 10-K for the year ended December 31, 2006 filed on April 17, 2007, SEC
File No. 000-50394).14.1
    
    Code of Business Conduct of Rio Vista (2007). (Incorporated by reference to Rio
Vistas Annual Report on Form 10-K for the year ended December 31, 2006 filed on April
17, 2007, SEC File No. 000-50394).
  43




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##### Table of Contents



The following Exhibits are filed as part of this report:
 Exhibit No.
 31.1
    
    Certification Pursuant to Rule 13a-14(a) / 15d  14(a) of the Exchange Act31.2
    
    Certification Pursuant to Rule 13a-14(a) / 15d  14(a) of the Exchange Act32
    
    Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
Section 906 of the Sarbanes  Oxley Act of 2002
 www.sec.gov
  44




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##### Table of Contents



SIGNATURES
  RIO VISTA ENERGY PARTNERS L.P.May 21, 2007
    
    By:
    
    /s/Ian T. BothwellIan T. BothwellActing Chief Executive Officer, Acting
President, Vice-President, Chief Financial
Officer, Treasurer and Assistant Secretary
(Principal Executive, Financial and
Accounting Officer) of Rio Vista GP LLC,
general partner of Rio Vista Energy Partners
L.P.
  45




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    Certification Pursuant to Rule 13a-14(a) / 15d  14(a) of the Exchange Act31.2
    
    Certification Pursuant to Rule 13a-14(a) / 15d  14(a) of the Exchange Act32
    
    Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to
Section 906 of the Sarbanes  Oxley Act of 2002