# **UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

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

 

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## **FORM 10-Q**

 

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# **QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934**

** **

**For the quarterly period ended September30, 2005**

** **

**Commission File Number: 333-122935-01**

** **

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**REEF GLOBALENERGY VI, L.P.**

(Exact name of registrant asspecified in its charter)

 

| **Nevada**                                                          |       | **20-3170768**                                             |
|---------------------------------------------------------------------|------------|------------------------------------------------------------|
| (State or other jurisdiction of  incorporation or organization)     |       | (I.R.S. employer  identification no.)                      |
|                                                                |       |                                                       |
| **1901 N.  Central Expressway, Suite 300  Richardson, Texas 75080** | ** ** | **(972) 437-6792**                                         |
| (Address of principal executive  offices,  including zip code)      |       | (Registrant’s telephone number,  including area code) |

 

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Indicate by ýwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes o  No ý

 

Indicateby ý whether theregistrant is an accelerated filer (as defined in Rule 12b-2 of the ExchangeAct). Yes o    No ý

 

Indicateby ý whether theregistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

 

**As of September30, 2005, the registrant had 52.819155units held by the managing general partner, 827.073043 units of additional general partner interest and 176.490909units of limited partner interest outstanding.**

** **

 

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**ReefGlobal Energy VI, L.P.**

**Index**

 
| **PART I –  FINANCIAL INFORMATION**                                                                 |   |
|----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                     |   |
| **ITEM 1. FINANCIAL STATEMENTS (Unaudited)**                                                             |   |
| *Condensed Balance Sheet*                                                                                |   |
| *Condensed Statement of Operations*                                                                      |   |
| *Condensed Statement of Cash Flows*                                                                      |   |
| *Notes  to Condensed Financial Statements*                                                               |   |
|                                                                                                     |   |
| **ITEM  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF  OPERATIONS** |   |
|                                                                                                     |   |
| **ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**                                  |   |
|                                                                                                     |   |
| **ITEM 4. CONTROLS AND PROCEDURES**                                                                      |   |
|                                                                                                     |   |
| **PART II – OTHER  INFORMATION**                                                                    |   |
|                                                                                                     |   |
| **ITEM 1. LEGAL PROCEEDINGS**                                                                            |   |
|                                                                                                     |   |
| **ITEM  2. 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**                                                                            |   |
|                                                                                                     |   |
| **ITEM 6. EXHIBITS**                                                                                     |   |
|                                                                                                     |   |
| **SIGNATURES**                                                                                           |   |

 

i

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# **PART I FINANCIAL INFORMATION**

 

## **Item 1. FinancialStatements**

 

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

**Condensed Balance Sheet**

 
| ** **                                              | ** ** | **September 30,  2005** | ** **     |
|---------------------------------------------------------|------------|-------------------------|----------------|
| ** **                                              | ** ** | **(Unaudited)**         | ** **     |
| **Assets**                                              |       |                    |           |
| **Current  assets:**                                    |       |                    |           |
| Cash and cash  equivalents                              |       | $                       | 21,407,300     |   |
| Accounts  receivable                                    |       | 4,158                   |           |
| Accounts  receivable from affiliates                    |       | 1,122,407               |           |
| **Total  current assets**                               | ** ** | **22,533,865**          | ** **     |
|                                                    |       |                    |           |
| **Property  and equipment:**                            |       |                    |           |
| Oil and gas  properties, full cost method of accounting |       | 1,013,711               |           |
| Prepaid drilling  costs                                 |       | 1,122,731               |           |
| **Net property  and equipment**                         | ** ** | **2,136,442**           | ** **     |
| ** **                                              | ** ** | ** **              | ** **     |
| **Total  assets**                                       | ** ** | **$**                   | **24,670,307** | ** ** |
|                                                    |       |                    |           |
| **Liabilities  and partners’ equity**              |       |                    |           |
| **Current  liabilities:**                               |       |                    |           |
| Accounts payable                                        |       | $                       | 189            |   |
| Accounts payable  to affiliates                         |       | 2,185,816               |           |
| **Total  current liabilities**                          | ** ** | **2,186,005**           | ** **     |
|                                                    |       |                    |           |
| **Partners’  equity:**                             |       |                    |           |
| General partners                                        |       | 17,607,044              |           |
| Limited partners                                        |       | 3,756,863               |           |
| Managing general  partner                               |       | 1,120,395               |           |
| **Total  partners’ equity**                        | ** ** | **22,484,302**          | ** **     |
| ** **                                              | ** ** | ** **              | ** **     |
| **Total  liabilities and partners’ equity**        | ** ** | **$**                   | **24,670,307** | ** ** |

 

*See accompanying notes to condensed financialstatements.*

 

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

**Condensed Statement of Operations**

*** ***
| ** **                                  | ** ** | **Period from  inception (July  18, 2005) to  September 30,  2005** | ** **  |
|---------------------------------------------|------------|---------------------------------------------------------------------|-------------|
| ** **                                  | ** ** | **(Unaudited)**                                                     | ** **  |
| **Revenues:**                               | ** ** | ** **                                                          | ** **  |
| Interest income                             | ** ** | $                                                                   | 49,189      | ** ** |
|                                        |       |                                                                |        |
| **Costs  and expenses:**                    |       |                                                                |        |
| General and  administrative                 |       | 13,028                                                              |        |
| Organization  costs                         |       | 50,000                                                              |        |
| **Total  costs and expenses**               | ** ** | **63,028**                                                          | ** **  |
|                                        |       |                                                                |        |
| **Net  loss**                               | ** ** | **$**                                                               | **(13,839** | **)** |
|                                        |       |                                                                |        |
| Net loss per  general partner unit          |       | $                                                                   | (11.44      | ) |
| Net loss per  limited partner unit          |       | $                                                                   | (13.38      | ) |
| Net loss per  managing general partner unit |       | $                                                                   | (38.09      | ) |

 

*Seeaccompanying notes to condensed financial statements.*

 

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

**Condensed Statement of Cash Flows**

 
| ** **                                                                       | ** ** | **Period from  inception (July  18, 2005) to  September 30,  2005** | ** **     |
|----------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|----------------|
| ** **                                                                       | ** ** | **(Unaudited)**                                                     | ** **     |
| **Operating  Activities**                                                        |       |                                                                |           |
| **Net  loss**                                                                    | ** ** | **$**                                                               | **(13,839**    | **)** |
| Adjustments to  reconcile net loss to net cash provided by operating activities: |       |                                                                |           |
| **Changes  in operating assets and liabilities:**                                |       |                                                                |           |
| Accounts  receivable                                                             |       | (4,158                                                              | )              |
| Accounts payable                                                                 |       | 189                                                                 |           |
| Accounts payable  to affiliates                                                  |       | 872,320                                                             |           |
| **Net  cash provided by operating activities**                                   | ** ** | **854,512**                                                         | ** **     |
| ** **                                                                       | ** ** | ** **                                                          | ** **     |
| **Investing  Activities**                                                        |       |                                                                |           |
| Property  acquisition and development                                            |       | (822,946                                                            | )              |
| **Net  cash used in investing activities**                                       | ** ** | **(822,946**                                                        | **)**          |
|                                                                             |       |                                                                |           |
| **Financing  Activities**                                                        |       |                                                                |           |
| Partner capital  contributions                                                   |       | 25,089,099                                                          |           |
| Syndication  costs                                                               |       | (3,713,365                                                          | )              |
| **Net  cash provided by financing activities**                                   | ** ** | **21,375,734**                                                      | ** **     |
| ** **                                                                       | ** ** | ** **                                                          | ** **     |
| **Net  increase in cash and cash equivalents**                                   | ** ** | **21,407,300**                                                      | ** **     |
| Cash and cash  equivalents at July 18, 2005                                      |       | —                                                              |           |
| **Cash  and cash equivalents at September 30, 2005**                             | ** ** | **$**                                                               | **21,407,300** | ** ** |
| ** **                                                                       | ** ** | ** **                                                          | ** **     |
| **Non-cash  investing transactions:**                                            | ** ** | ** **                                                          | ** **     |
| Increase in  property additions included in accounts payable to affiliates       | ** ** | **1,313,496**                                                       | ** **     |
| **Non-cash  financing transactions:**                                            | ** ** | ** **                                                          | ** **     |
| Managing partner  contributions included in accounts receivable from affiliates  | ** ** | **$**                                                               | **1,122,407**  | ** ** |

 

*Seeaccompanying notes to condensed financial statements.*

 

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**ReefGlobal Energy VI, L.P.**

**Notes to Condensed FinancialStatements (unaudited)**

**September 30, 2005**

 

**1. Organization and Basis ofPresentation**

 

Reef Global Energy VI,L.P. (the Partnership) is the first in a series of Nevada limited partnershipscomprising a program called Reef Global Energy Ventures II (the Program),pursuant to an S-1 Registration Statement declared effective by the Securitiesand Exchange Commission (the SEC) on July 7, 2005. In order to be formed, eachpartnership is required to a sell a minimum of 40 partnership units at $25,000per unit, including units purchased by the managing general partner. Eachpartnership to be formed as a part of the program will offer a minimum of 1,000and a maximum of 2,000 units for sale. The Program is authorized to sell up to1,600 limited partner units and 6,400 general partner units during the periodbeginning July 8, 2005 thru July 7, 2007. Reef Global Energy VI, L.P. isoffering up to 2,000 units for sale ($50,000,000), consisting of up to 400limited partner units and up to 1,600 general partner units. Investor funds areheld in escrow and are subject to reimbursement with interest if the minimumnumber of units is not sold. The Program filed a prospectus supplement with theSEC on July 8, 2005 describing the Partnership, and commenced offering units inthe Partnership. Upon reaching the minimum subscription level, the Partnershipwas formed on July 18, 2005.

 

The Partnership is aNevada limited partnership formed under the Nevada Revised Limited PartnershipAct. Reef Oil & Gas Partners LLC (Reef) serves as the Partnership’smanaging general partner. Partnership interests are held by the managinggeneral partner and investor partners who are general and limited partners(investor partners). The Partnership acquires leases and drills oil and gaswells located primarily onshore in the continental United States and in U.S.coastal waters in the Gulf of Mexico. The Partnership primarily purchasesworking interests in exploratory and developmental drilling prospects in which majoror independent oil companies also have interests. The Partnership generallypurchases less than a majority interest in the properties acquired. ThePartnership began drilling activities during July 2005.

 

During the year followingcompletion of the drilling phase of the Partnership, all additional generalpartner units purchased by investors will be converted into limited partnerunits. Limited partners do not have any rights to convert their units togeneral partner units.

 

Under the terms of thepartnership agreement, participation in distributions, profits, losses, costsand revenues is as follows:

 

| **Item:**                                 | ** ** | **Managing   General Partner** | ** ** | **Investor Partners** | ** ** |
|-------------------------------------------|------------|--------------------------------|------------|-----------------------|------------|
| Revenues                                  |       | 15.45                          | %          | 84.55                 | %          |
| Operating costs                           |       | 15.45                          | %          | 84.55                 | %          |
| Direct and administrative costs           |       | 15.45                          | %          | 84.55                 | %          |
| Organization costs                        |       | 0                              | %          | 100.00                | %          |
| Leasehold, drilling, and completion costs |       | 5.95                           | %          | 94.05                 | %          |
| Cash distributions                        |       | 15.45                          | %          | 84.55                 | %          |

 

The managing generalpartner was not allocated any portion of the interest income during the periodfrom inception (July 18, 2005) to September 30, 2005, as its capitalcontribution was not received as of September 30, 2005.

 

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**2. Summary of Accounting Policies**

 

**Use of Estimates**

 

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States requires management to make estimates andassumptions that affect the amounts reported in the financial statements andaccompanying notes. Actual results could differ from these estimates.

 

**Cash and Cash Equivalents**

 

The Partnership considersall highly liquid investments with maturity dates of no more than three monthsfrom the purchase date to be cash equivalents. Cash and cash equivalentsconsist of demand deposits and money market investments invested with a majornational bank. The carrying value of the Partnership’s cash equivalentsapproximates fair value.

 

**Risks and Uncertainties**

 

Historically, the oil andgas market has experienced significant price fluctuations. Prices are significantlyimpacted by local weather, supply in the area, availability and price ofcompetitive fuels, seasonal variations in local demand, limited transportationcapacity to other regions, and the worldwide supply and demand balance forcrude oil.

 

The Partnership has notengaged in commodity futures trading or hedging activities and has not enteredinto derivative financial instrument transactions for trading or otherspeculative purposes. Accordingly, the Partnership is at risk for the volatilityin commodity prices inherent in the oil and gas industry, and the level ofcommodity prices will have a significant impact on the Partnership’s results ofoperations.

 

**Organization and SyndicationCosts**

 

Organization andsyndication costs total 15% of investor capital contributions, except for unitspurchased by the managing general partner, which are purchased net of the 15%cost. Partnership organization costs totaling $50,000 have been expensed in thefinancial statements. Syndication costs represent costs incurred in conjunctionwith the offering of partnership units. These costs, totaling $3,713,365 as ofSeptember 30, 2005, are recorded as a reduction of the proceeds of theoffering.

# ** **

# **Oiland Gas Properties**

 

The Partnership willfollow the full cost method of accounting for crude oil and natural gasproperties. Under this method, all direct costs and certain indirect costsassociated with acquisition of properties and successful as well asunsuccessful exploration and development activities are capitalized.Depreciation, depletion, and amortization of capitalized crude oil and naturalgas properties and estimated future development costs, excluding unprovedproperties, are based on the unit-of-production method using proved reserves.  Proved gas reserves are converted toequivalent barrels at a rate of 6 Mcf to 1 Bbl. Net capitalized costs of crudeoil and natural gas properties, as adjusted for asset retirement obligations,are limited to the lower of unamortized cost or the cost ceiling, defined as thesum of the present value of estimated future net revenues from proved reservesbased on un-escalated prices discounted at 10 percent, plus the cost ofproperties not being amortized, if any, plus the lower of cost or estimatedfair value of unproved properties included in the costs being amortized, ifany. Excess costs are charged to property impairment expense. No gain or lossis recognized upon sale or disposition of crude oil and natural gas properties,except in unusual circumstances. The Partnership held no productive oil and gasassets at September 30, 2005 and recognized no property impairment.

# ** **

# **Restoration, Removal, and Environmental Liabilities**

 

The Partnership issubject to extensive Federal, state and local environmental laws andregulations. These laws regulate the discharge of materials into theenvironment and may require the Partnership to remove or mitigate theenvironmental effects of the disposal or release of petroleum substances atvarious sites. Environmental expenditures are expensed or capitalized dependingon their future economic benefit. Expenditures that relate to an existingcondition caused by past operations and that have no future economic benefitare expensed.

 

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Liabilities forexpenditures of a non-capital nature are recorded when environmentalassessments and/or remediation is probable, and the costs can be reasonablyestimated. Such liabilities are generally undiscounted values unless the timingof cash payments for the liability or component is fixed or reliablydeterminable.

 

In June 2001, theFinancial Accounting Standards Board (FASB) issued Statement of FinancialAccounting Standards No. 143, “Accounting for Retirement Obligations” (SFAS143). SFAS 143 addresses accounting and reporting for obligations associatedwith the retirement of tangible long-lived assets and the associated assetretirement costs. SFAS 143 requires that the fair value of a liability for anasset’s retirement obligation be recorded in the period in which it is incurredand the corresponding cost capitalized by increasing the carrying amount of therelated long-lived asset. The liability is accreted to its then present valueeach period, and the capitalized cost is depreciated over the useful life of therelated asset. SFAS 143 is effective for the Partnership as of its inceptiondate. As of September 30, 2005 the Partnership had no productive long-livedassets and therefore had no asset retirement obligations.

 

**Recognition of Revenue**

 

The Partnership expectsto enter into sales contracts for disposition of its share of oil and gasproduction from productive wells. Revenues are recognized based upon thePartnership’s share of metered volumes delivered to its purchasers each month.

 

Gas imbalances sometimesoccur when certain working interest parties do not take their entitled share ofgas production. The Partnership utilizes the sales method of accounting forrecording imbalances. Under this method, the Partnership records as revenue allgas delivered for its account. Any significant over or under balanced gaspositions will be recorded in the financial statements. As of September 30, 2005,the Partnership had no oil and gas production, and, therefore, had no gasimbalances.

 

**Income Taxes**

 

The Partnership’s netincome or loss flows directly through to its partners, who are responsible for thepayment of Federal taxes on their respective share of any income or loss.Therefore, there is no provision for federal income taxes in the accompanyingfinancial statements.

 

**New Accounting Pronouncements**

 

In September 2004, theSecurities and Exchange Commission issued “Staff Accounting Bulletin No. 106”(SAB No. 106). SAB No. 106 applies to entities using the full cost method ofaccounting for crude oil and natural gas properties. SAB No. 106 affects theway in which entities calculate their full cost ceiling limitation (includingasset retirement cost related to proved developed properties in the calculationof the ceiling) and the way entities calculate depletion on oil and gasproperties (only asset retirement cost for new re-completions and new wellswill be included in future development costs in calculating depletion rates). ThePartnership had no productive oil & gas properties at September 30, 2005for purposes of calculating the full cost ceiling limitation and depletion.

 

**3. Transactions with Affiliates**

 

The Partnership has noemployees.  Reef Exploration, Inc. (REI),an affiliate of Reef, employs a staff including geologists, petroleumengineers, landmen, and accounting personnel who administer all of thePartnership’s operations. The Partnership reimburses REI for direct andadministrative services at cost. During the period from inception (July 18, 2005)to September 30, 2005, the partnership incurred technical services andadministrative costs totaling $136,642. Of this amount, $124,819 representstechnical services capitalized as project costs, and $11,823 representsadministrative costs included as general and administrative expenses.

 

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The Partnership has areceivable from Reef at September 30, 2005 related to its capital contribution.The balance due consists of $1,122,407 for the purchase of 52.819155Partnership units. Reef paid the $1,122,407 during October 2005.

 

Accounts payable toaffiliates totaled $2,185,816 at September 30, 2005. The balance includes $869,192due Reef for the unpaid portion of the 15% management fee paid for organizationand syndication costs, including sales commissions (see note 7), as well $172,026due as reimbursement for property acquisition costs paid by Reef. The balancealso includes $108,291 due REI for technical and administrative servicesprovided by REI, $111,763 for joint interest billings on properties currentlydrilling and operated by REI, and $913,636 for joint interest billings onproperties operated by third parties and paid by REI. The balance also includesexpense reimbursements due REI personnel of $10,908. All payables to affiliatesat September 30, 2005 were paid in full during the fourth quarter of 2005.

 

If an affiliate of Reefserves as operator of a Partnership prospect, then operator fees will bepayable to the affiliate. Under such circumstances, such affiliate will receivefees at the competitive rate in the area during the drilling and productionphase of operations. Often these are charged as a monthly fee per well asagreed to in an operating agreement signed by the Partnership as well asoutside third party working interests in the well. At September 30, 2005, thereare no Partnership wells being drilled which are operated by REI. REI isexpected to drill and operate five of the twenty-one projects included in thecurrent Partnership budget.

 

As the managing generalpartner, Reef or one of its affiliates may provide oil field or other services,equipment or supplies to the Partnership. If Reef or one of its affiliatesprovides such services, equipment or supplies as part of its ordinary business,the compensation, price or rental for such services, equipment and suppliesprovided to the Partnership will be at prices competitive with those charged byothers in the geographical area of operations that reasonably could beavailable to the Partnership. If Reef or one of its affiliates is not engagedin the business as set forth above, the compensation, price or rental will bethe cost of the services, equipment or supplies to each entity, or thecompetitive rate that could be obtained in the area, whichever is less. Anysuch services, equipment or supplies for which Reef or one of its affiliates isto receive compensation will be embodied in a written contract that preciselydescribes the services, equipment or supplies to be rendered and allcompensation to be paid. During the period from inception (July 18, 2005) to September30, 2005, there were no such services, equipment or supplies rendered to thePartnership by Reef or any of its affiliates.

 

Reef has entered into twoagreements (the CMI Agreements) with Challenger Minerals, Inc. (CMI), asubsidiary of Global Santa Fe Corporation and a screener of oil and gasprospects in the Gulf of Mexico and North Sea regions.  The CMI Agreements allow Reef the opportunityto review and selectively participate in exploratory and developmentalprospects either originated or previewed by CMI. Reef pays CMI for thegeological and geophysical services provided by CMI under the CMI Agreements.Reef has also entered into an agreement with Access Exploration Corp (AEC), alsoa screener of domestic oil and gas prospects both onshore and in the Gulf ofMexico. This agreement allows Reef the opportunity to review and selectivelyparticipate in exploratory and developmental prospects previewed by AEC. Reefpays AEC for the geological and geophysical services provided by AEC under thisagreement.

 

Prospects approved foracquisition by Reef under these agreements are assigned to this Partnership aswell as other limited partnerships formed as part of the Program. Eachpartnership formed as a part of the Program pays Reef an estimated payment asreimbursement, on a pro rata basis, of the fees paid by Reef to CMI and AECunder these agreements. When the Program’s offering is completed, the actualfees to be reimbursed by each partnership formed as a part of the Program willbe calculated based upon each partnership’s total capital contributions. Totalreimbursement to Reef by the partnerships formed as a part of this Program willnot exceed the actual fees paid by Reef to CMI and AEC. This Partnership madean estimated reimbursement payment of $287,500 to Reef during the third quarterof 2005. This amount has been capitalized as geological and geophysical costsin accordance with the full cost method of accounting for oil and gasproperties.

 

7

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**4. Prepaid Drilling Costs**

 

At September 30, 2005,the Partnership has prepaid $1,122,731 in connection with drilling costs to beincurred on wells in which the Partnership has a working interest and which aredrilling at September 30, 2005.

 

**5. Major Customers**

 

The Partnership will sellcrude oil and natural gas on credit terms to refiners, pipelines, marketers,and other users of petroleum commodities. Revenues will be received directlyfrom these parties or, in certain circumstances, paid to the operator of theproperty who disburses to the Partnership its percentage share of the revenues.As of September 30, 2005, the Partnership had no oil and gas production and,therefore, had no customers.

 

**6. Commitments and Contingencies**

 

The Partnership is not currentlyinvolved in any legal proceedings. See Note 8 for a summary of the Partnership’sdrilling and development commitments.

 

**7. Partnership Equity**

 

Sales of Partnershipunits began on July 8, 2005. Proceeds received were placed into an interestbearing escrow account until the Partnership reached the minimum subscriptionlevel of 40 units. The Partnership was formed on July 18, 2005, and the sale ofPartnership units was closed on October 31, 2005. As of September 30, 2005, thePartnership had raised $25,089,099 from the sale of 1003.563952 Partnershipunits to investor partners. Reef purchased 52.819155 units (5%) for $1,122,407.The units purchased by Reef were paid for in October 2005. Reef will alsocontribute 1% of all leasehold, drilling, and completion costs when incurred,in addition to paying its pro rata share (4.95%) of the leasehold, drilling,and completion costs paid by the Partnership.

 

All units except thosepurchased by Reef will pay a 15% management fee to Reef to pay for Partnershiporganization and syndication costs, including sales commissions. The 15%management fee is payable to Reef in two parts. Reef initially receives anamount not to exceed 13.5% to cover actual sales commissions and actualorganization and syndication costs. The remainder of the management fee will bepaid to Reef from the net cash flow available for partner distributions, at arate not to exceed $1 million per year. At September 30, 2005, the 15%management fee totaled $3,763,365, leaving net capital contributions of $22,448,141available for Partnership oil and gas activities. Of the $3,763,365,syndication costs were $3,713,365 and organization costs were $50,000. UnderNevada law, partners purchasing general partner units have unlimited liabilityfor obligations and liabilities which arise from Partnership operations.Limited partners have limited liability that cannot exceed the amount of theirPartnership capital contribution.

 

Reef will exclusivelymanage and control all aspects of the business of the Partnership. ThePartnership agreement prohibits participation by investor partners in thePartnership’s day-to-day business decisions.

 

Information regarding thenumber of units outstanding and the net loss per type of Partnership unit forthe period from inception (July 18, 2005) to September 30, 2005 is detailedbelow:

 

| **Type of Unit**                | ** ** | **Number of  Units** | ** ** | **Net loss** | ** ** | **Net loss   per unit** | ** ** |
|---------------------------------|------------|----------------------|------------|--------------|------------|-------------------------|------------|
| Managing general  partner units |       | 52.819155            |       | $            | (2,012     | )                       | $          | (38.09 | ) |
| General partner  units          |       | 827.073043           |       | (9,465       | )          | (11.44                  | )          |
| Limited partner  units          |       | 176.490909           |       | (2,362       | )          | (13.38                  | )          |
| Total                           |       | 1,056.383107         |       | $            | (13,839    | )                       |       |   |
|                                 |            |                      |            |              |            |                         |            |  |  |

 

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**8.Partnership Projects**

 

At September 30, 2005,the Partnership had committed funds to five exploratory and twelve developmentalprojects. Estimated cost of these projects to the Partnership is approximately$12.8 million. The Partnership will commit additional funds to projects during2005 and 2006. These seventeen projects to which the Partnership has committeddrilling monies are all expected to be drilled during 2005 and 2006. AtSeptember 30, 2005, the Partnership had two exploratory projects and onedevelopmental project currently drilling.

 

REI is expected to benamed operator of five of these seventeen wells to which the Partnership hascommitted funds. None of the wells operated by REI was drilling at September30, 2005. In certain instances, private drilling partnerships managed by Reefalso own interests in these wells.

 

**9. Subsequent Events (Unaudited)**

 

Subsequent to September 30,2005, the Partnership completed the drilling of one of the exploratory projectsand the developmental project which were drilling at September 30, 2005. Theexploratory project was a dry hole and has been plugged and abandoned. Casinghas been set and completion operations are in progress on the developmentalproject. The second exploratory project is currently drilling.

 

The Partnership drilled asecond developmental project during October which was unsuccessful, and begandrilling operations on another developmental project during October which arestill ongoing as of the date of this report.

 

Subsequent to September30, 2005, the Partnership has committed funds to four additional developmentalprojects. As of November 21, 2005 the Partnership has committed funds to atotal of five exploratory and sixteen developmental projects.

 

The Partnership offeringperiod closed on October 31, 2005. Sales to outside investors totalapproximately $35.8 million.

 

**Item2.  Management’s Discussion and Analysisof Financial Condition and Results of Operations.**

 

The following discussion will assist you in understanding thePartnership’s financial position and results of operations. The informationbelow should be read in conjunction with the condensed financial statements andthe related notes to the condensed financial statements.

 

This Report on Form 10-Qcontains forward-looking statements that involve risks and uncertainties. You should exercise extreme caution with respect to all forward-looking statementsmade in this Report.  Specifically, the following statements areforward-looking:

 

•                                     statementsregarding the Partnership’s overall strategy for acquiring prospects, includingits intent to co-invest with major independent oil companies and its intent todiversify the Partnership’s investments;

 

•                                     statementsestimating any number or specific type or size of prospects the Partnership mayacquire or size of the interest the Partnership may acquire in such prospects;

 

•                                     statementsregarding the state of the oil and gas industry and the opportunity to profitwithin the oil and gas industry, competition, pricing, level of production, orthe regulations that may affect the Partnership;

 

•                                     statementsregarding the plans and objectives of Reef for future operations, including,without limitation, the uses of Partnership funds and the size and nature ofthe costs the Partnership expects to incur and people and services thePartnership may employ;

 

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•                                     any statementsusing the words “anticipate,” “believe,” “estimate,” “expect” and similar suchphrases or words; and

 

•                                     any statements ofother than historical fact.

 

Reef believes that it isimportant to communicate its future expectations to the partners. Forward-looking statements reflect the current view of management with respectto future events and are subject to numerous risks, uncertainties andassumptions, including, without limitation, the factors listed in thesection captioned “RISK FACTORS” contained in the Program’s prospectus andprospectus supplement dated July 8, 2005. Although Reef believes that theexpectations reflected in such forward-looking statements are reasonable, Reefcan give no assurance that such expectations will prove to have been correct. Should any one or more of these or other risks or uncertainties materialize orshould any underlying assumptions prove incorrect, actual results are likely tovary materially from those described herein.  There can be no assurancethat the projected results will occur, that these judgments or assumptions willprove correct or that unforeseen developments will not occur.

 

Reef does not intend toupdate its forward-looking statements.  All subsequent written and oralforward-looking statements attributable to Reef or persons acting on its behalfare expressly qualified in their entirety by the applicable cautionarystatements.

 

**Overview**

 

Reef Global Energy VI,L.P. is a Nevada limited partnership formed to explore, develop, acquire andproduce crude oil, natural gas, and natural gas liquids for the benefit of itsinvestor partners. The Partnership’s primary purposes are to generate revenuesfrom the production of oil and gas, distribute cash flow to investors, andprovide tax benefits to investors. While the majority of the partnership’sproceeds will be used to purchase prospects upon which the Partnership willconduct drilling operations, a small portion of capital may be used to purchaseexisting reserves.

 

The Partnership operates primarilyin the United States, although there are no restrictions on the location ofPartnership projects. The Partnership has not, at this time, selected anyprojects located outside of the United States. Reef Exploration, Inc. (REI), anaffiliate of the managing general partner, has expertise and has drilledprimarily in Texas and Louisiana since its inception in 1987. To date, nineteenof the projects acquired by the Partnership are located in Texas and Louisiana,one project is located in Oklahoma, and one project is located in U.S. coastalwaters of the Gulf of Mexico. Many of the projects taken in Texas and Louisianaoffer the potential for both natural gas and condensate production, and thequality of both the natural gas and condensate often bring premium prices. ThePartnership has focused more heavily on natural gas than oil prospects, due toits belief that costs of production are generally lower for natural gas andthat the price of natural gas is less influenced than the price of oil byforeign factors such as the Organization of Petroleum Exporting Countries(OPEC) production quotas. In addition, the areas in which the Partnership willfocus its drilling have a highly developed pipeline system and a highlycompetitive market for sale of the Partnership’s production.

 

The Partnership will notoperate in any other industry segment. Should prospects in which thePartnership has an interest be determined to warrant additional developmentactivity, the Partnership may borrow from banks or other financial sources anamount not to exceed 25% of the capital contributions to the Partnership.Additional borrowings in excess of 25% of the capital contributions to thePartnership may be made only with the consent of the investor partners. ThePartnership is not permitted to call for additional partner assessments. Inaddition, the Partnership is not expected to engage in commodity futurestrading or hedging activities, and therefore is subject to commodity pricerisk.   See “Item 3—Quantitative and Qualitative Disclosures AboutMarket Risk.”

 

**CriticalAccounting Policies**

 

The preparation of financial statements in conformity withaccounting principles generally accepted in the United States requires us tomake estimates and use assumptions that can affect the reporting of assets,liabilities, equity, revenues, and expenses. We base our estimates onhistorical experience and various other assumptions that are believed to bereasonable under the circumstances. Actual results may differ from theseestimates under different assumptions or conditions. We are also required toselect among alternative acceptable accounting policies. See Note 2 to the condensedfinancial statements above for a complete list of significant accountingpolicies.

 

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**Off-BalanceSheet Arrangements**

 

The Partnership does notparticipate in transactions that generate relationships with unconsolidatedentities or financial partnerships, such as entities often referred to asstructured finance or special purpose entities (SPEs), which would have beenestablished for the purpose of facilitating off-balance sheet arrangements orother contractually narrow or limited purposes.  As of September 30,2005, the Partnership was not involved in any unconsolidated SPE transactions.

 

**ContractualObligations Table**

 

The Partnership has noobligations under non-cancelable agreements at September 30, 2005.

 

**Risksand Uncertainties**

 

Historically, the oil andgas market has experienced significant price fluctuations. Prices aresignificantly impacted by local weather, supply in the area, availability andprice of competitive fuels, seasonal variations in local demand, limitedtransportation capacity to other regions, and the worldwide supply and demandbalance for crude oil.

 

The Partnership has noproduction at September 30, 2005, and has not engaged in commodity futurestrading or hedging activities and has not entered into derivative financialinstrument transactions for trading or other speculative purposes. Accordingly,the Partnership is at risk for the volatility in commodity prices inherent inthe oil and gas industry, and the level of commodity prices will have asignificant impact on the Partnership’s results of operations.

 

# **Oil and Gas Properties**

 

The Partnership willfollow the full cost method of accounting for crude oil and natural gasproperties. Under this method, all direct costs and certain indirect costsassociated with acquisition of properties and successful as well asunsuccessful exploration and development activities are capitalized.Depreciation, depletion, and amortization of capitalized crude oil and naturalgas properties and estimated future development costs, excluding unprovedproperties, are based on the unit-of-production method using proved reserves.  Proved gas reserves are converted toequivalent barrels at a rate of 6 Mcf to 1 Bbl. Net capitalized costs of crudeoil and natural gas properties, as adjusted for asset retirement obligations,are limited to the lower of unamortized cost or the cost ceiling, defined asthe sum of the present value of estimated future net revenues from provedreserves based on un-escalated prices discounted at 10 percent, plus the costof properties not being amortized, if any, plus the lower of cost or estimatedfair value of unproved properties included in the costs being amortized, ifany. Excess costs are charged to property impairment expense. No gain or lossis recognized upon sale or disposition of crude oil and natural gas properties,except in unusual circumstances. The Partnership held no productive oil and gas assets at September 30,2005 and recognized no property impairment.

 

**Restoration, Removal, andEnvironmental Liabilities**

 

In June 2001, theFinancial Accounting Standards Board (FASB) issued Statement of Financial AccountingStandards No. 143, “Accounting for Retirement Obligations” (SFAS 143). SFAS 143addresses accounting and reporting for obligations associated with theretirement of tangible long-lived assets and the associated asset retirementcosts. SFAS 143 requires that the fair value of a liability for an asset’sretirement obligation be recorded in the period in which it is incurred and thecorresponding cost capitalized by increasing the carrying amount of the relatedlong-lived asset. The liability is accreted to its then present value eachperiod, and the capitalized cost is depreciated over the useful life of therelated asset. SFAS 143 is effective for the Partnership as of its inceptiondate. As of September 30, 2005, the Partnership had no productive long-livedassets and therefore had no asset retirement obligation.

 

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**Liquidity and Capital Resources**

 

Although the Partnershiphas been formed, it continued to raise capital after September 30, 2005. ThePartnership was closed to new investors on October 31, 2005. As of September30, 2005, the Partnership had raised $25,089,099 from the sale of 827.073043additional general partner units and 176.490909 limited partner units.  Reef is required to purchase at least 5% ofthe Partnership units and purchased 52.819155 general partner units (5%) for atotal of $1,122,407 at September 30, 2005. The units purchased by Reef werepaid for in October 2005. Syndication and organization costs total $3,763,365,leaving available cash of $22,448,141 for Partnership activities. ThePartnership is currently evaluating and purchasing interests in projects, andalso drilling on projects selected for participation in the Partnership.

 

Drilling operations beganin July 2005 and are expected to continue through the end of 2006. During thisperiod, the Partnership expects to utilize the $22,448,141 available as ofSeptember 30, 2005 and the additional capital raised during October 2005 forlease acquisition, drilling activities, and general and administrative expenses.The estimated funds available to the Partnership as of October 31, 2005 areapproximately $31.8 million. The Partnership will pay 100% of general andadministrative costs and 99% of the lease acquisition, drilling and completioncosts from these funds. Reef, the managing general partner, will makeadditional capital contributions totaling 1% of all lease acquisition, drillingand completion costs incurred, in addition to the 4.95% share of costs it willpay for as a unit holder. The Partnership has acquired non-operated workinginterests in twenty-one exploratory and development drilling projects withestimated costs of $15.1 million to date. The Partnership will acquireadditional working interests during the next several months. Drilling activitywill be conducted solely with the funds raised. Should additional developmentactivity on certain Partnership prospects be required, the PartnershipAgreement allows the Partnership to either use available funds or borrow moneyfrom banks or other financial sources up to a maximum of 25% of Partnershipcapital contributions without investor partner consent in order to conduct suchoperations. Any borrowings in excess of 25% of Partnership capitalcontributions must be approved by the investor partners. The Partnershipexpects to distribute net proceeds, if any, from successful oil and gasactivities directly to the partners and to reimburse to Reef any unpaidmanagement fees.

 

The seventeen projects towhich the Partnership had committed funds at September 30, 2005 have estimatedexpenditures totaling $12.8 million. General and administrative costs, whichconsist primarily of legal and accounting fees, as well as administrative timeof REI personnel, are estimated at approximately $300,000 during the drillingphase of operations. Including projects committed after September 30, 2005, thePartnership currently has twenty-one projects with estimated expenditurestotaling $15.1 million. Uncommitted capital totaled approximately $9.6 millionas of September 30, 2005, and is currently estimated at approximately $16.7million. At September 30, 2005, the Partnership had approximately $20.3 millionof working capital with which to pay remaining budgeted expenditures.

 

**Results of Operations**

 

Because the Partnershipwas formed on July 18, 2005, there is no comparable information for the threeand nine month periods ended September 30, 2004.

 

**Period from Inception (July 18,2005) thru September 30, 2005**

 

The Partnership incurreda net loss of $13,839 during the period from inception (July 18, 2005) thru September30, 2005. The Partnership had interest income of $49,189 earned on investorpartner funds, offset by $50,000 of organization expenses (a one time charge)and $13,028 of general and administrative costs, including $11,823 inadministrative costs and services provided by REI. The Partnership will beginmonthly distributions of interest income to partners beginning in December2005. During the period, the Partnership began drilling operations on threeprojects. Drilling has been completed on two of these projects, and one of thewells is being completed as a productive well. The second well wasunsuccessful, and the third well continues drilling operations. The Partnershipwill not have any significant levels of oil and gas production during 2005.

 

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During the fourth quarterof 2005 the Partnership will continue drilling operations and the purchase ofadditional projects for participation by the Partnership. Interest income fromthe investment of partner contributions is expected to be in excess of$100,000. General and administrative expenses will increase as the Partnershipwill begin incurring legal, accounting and printing costs in connection withrequired SEC filings. The increase in drilling and operating activities willrequire additional REI administrative costs. Where possible, the Partnershipwill attempt to maximize intangible drilling cost deductions to investorpartners by prepaying costs associated with wells the Partnership expects tobegin drilling prior to March 31, 2006

 

**Item 3.  Quantitative and Qualitative Disclosuresabout Market Risk.**

 

*InterestRate Risk*

 

The Partnership Agreementallows borrowings from banks or other financial sources of up to 25% of the capitalcontributions to the Partnership without investor approval, and allowsborrowings in excess of 25% of the total capital contributions to thePartnership with the consent of investor partners. Should the Partnership electto borrow monies for additional development activity on Partnership properties,it will be subject to the interest rate risk inherent in borrowing activities.Changes in interest rates could significantly affect the Partnership’s resultsof operations and the amount of net cash flow available for partnerdistributions. Also, to the extent that changes in interest rates affectgeneral economic conditions, the Partnership will be affected by such changes.

 

*CommodityPrice Risk*

 

The Partnership has notengaged in commodity futures trading or hedging activities and has not enteredinto derivative financial instrument transactions for trading or otherspeculative purposes.  The Partnershipexpects to sell a vast majority of its production from successful oil and gaswells on a month-to-month basis at current spot market prices. Accordingly, thePartnership is at risk for the volatility in commodity prices inherent in theoil and gas industry, and the level of commodity prices will have a significantimpact on the Partnership’s results of operations.

 

*Exchange Rate Risk*

 

The Partnership currentlyhas not committed funds to any foreign projects and has no income from foreignsources or operations in foreign countries that would subject it to currencyexchange rate risk.

 

**Item 4. Controls and Procedures**

 

As the Managing GeneralPartner of the Partnership, Reef maintains a system of controls and proceduresdesigned to provide reasonable assurance as to the reliability of the financialstatements and other disclosures included in this report, as well as tosafeguard assets from unauthorized use or disposition. As of the end of theperiod covered by this report, Reef’s Chief Executive Officer and ChiefFinancial Officer have evaluated the effectiveness of the design and operationof the Partnership’s disclosure controls and procedures (as defined in Rule13a-15(e) under the Securities Exchange Act of 1934) with the assistance andparticipation of other members of management. Based upon that evaluation, Reef’sChief Executive Officer and Chief Financial Officer concluded that ourdisclosure controls and procedures are effective for gathering, analyzing anddisclosing the information the Partnership is required to disclose in thereports it files under the Securities Exchange Act of 1934 within the timeperiods specified in the SEC’s rules and forms. During our fiscal quarter endedSeptember 30, 2005, no change occurred in our internal control over financialreporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of1934) that has materially affected, or is reasonably likely to materiallyaffect, our internal control over financial reporting.

 

**PART II – OTHER INFORMATION**

 

**Item 1. Legal Proceedings**

 

None

 

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**Item2.  Unregistered Sales of Equity Securitiesand Use of Proceeds**

 

*Use ofProceeds*

 

On July 8, 2005 Reeffiled a final prospectus for the Program and filed a prospectus supplementdescribing the Partnership. At such time Reef commenced the offering of unitsin the Partnership. All sales of Partnership units were made through theProgram’s dealer-manager, Reef Securities, Inc., and a number of solicitingdealers. The offering terminated on October 31, 2005. At September 30,2005 approximately 1,004 units had been sold to investor partners. Under theterms of the offering, a minimum of 40 Partnership units at a price of $25,000per unit were required to be sold in order to form the Partnership. The maximumPartnership units offered were 400 units of limited partner interest and 1,600units of general partner interest.

 

As of September 30, 2005,the Partnership has sold 1056.383107 units of partnership interest, consistingof 176.490909 units of limited partner interest and 879.892198 units ofadditional general partner interest. Reef purchased 52.819155 general partnerunits, or 5% of the total Partnership units sold as of September 30, 2005.Total offering proceeds as of September 30, 2005 were $26,211,506.

 

All units except thosepurchased by Reef pay a 15% management fee to Reef to pay for the Partnershiporganization and offering costs, including sales commissions. These coststotaled $3,763,365, leaving capital contributions of $22,448,141 available forPartnership oil & gas operations. As of September 30, 2005, the Partnershiphad expended $1,026,739 on oil and gas operations, including amounts inaccounts payable at September 30, 2005, had made prepayments of intangibledrilling costs totaling $1,122,407, and had no capitalized asset retirementcost. The Partnership intends to utilize all available Partnership capitalduring 2005 and 2006.

 

**Item3.  Defaults Upon Senior Securities**

 

None

 

**Item4.  Submission of Matters to a Vote ofSecurity Holders**

 

None

 

**Item 5.  Other Information**

 

None

 

**Item6.  Exhibits**

 

Exhibits

 

31.1                                     Certificationof Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.

 

31.2                                     Certificationof Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.

 

32                                              Certificationof Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002.

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                           | REEF GLOBAL ENERGY VI,  L.P. |
|--------------------------------|------------------------------|
|                           |                         |   |
|                           | By:                          | Reef Oil & Gas  Partners LLC, |
|                           |                         | Managing General  Partner |
|                           |                         |   |
|                           |                         |   |
| Dated:  November 21, 2005 | By:                          | /s/ Michael J. Mauceli |   |
|                           |                         | **Michael J. Mauceli** |
|                           |                         | Manager and Member |
|                           |                         | (*Principal  Executive Officer)* |
|                           |                         |   |
|                           |                         |   |
| Dated:  November 21, 2005 | By:                          | /s/ Daniel C. Sibley |   |
|                           |                         | **Daniel C. Sibley** |
|                           |                         | Chief Financial Officer |
|                           |                         | (*Principal  Financial and Accounting Officer)* |
|                                |                              |  |  |  |

 

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**ExhibitIndex**

 

31.1                           Certificationof Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.

 

31.2                           Certificationof Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.

 

32                                    Certificationof Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002.

 

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