# **UNITED STATES**

**SECURITIESAND EXCHANGE COMMISSION**

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

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## **FORM 10-Q**

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

# **For thequarterly period ended March 31, 2007**

# **CommissionFile Number: 333-93399-04**

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**REEF GLOBALENERGY IV, L.P.**

(Exact name of registrant asspecified in its charter)

| **Nevada**                                 |       | **20-1654113**                        |
|--------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of           |       | (I.R.S. employer                      |
| incorporation or  organization)            |       | identification  no.)                  |
|                                       |       |                                  |
| **1901 N.  Central Expressway, Suite 300** |       | ** **                            |
| **Richardson,  Texas 75080**               | ** ** | **(972)  437-6792**                   |
| (Address of  principal executive offices,  |       | (Registrant’s  telephone number, |
| including zip  code)                       |       | including area  code)                 |

 

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Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for the past90 days.  Yes  x    No  o

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “acceleratedfiler and large accelerated filer” in Rule 12b-2 of the Exchange ActLarge accelerated filer  o                         Accelerated filer  o                              Non-acceleratedfiler  x

Indicateby check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).  Yes  o    No  x

As of May 14, 2007, theregistrant had 25.028 units held by the managing general partner, 125.000 unitsof additional general partner interest and 349.972 units of limited partnerinterest outstanding.

 

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**ReefGlobal Energy IV, L.P.Index**
| **PART I — FINANCIAL  INFORMATION**                                                                 |   |   |
|----------------------------------------------------------------------------------------------------------|--------|--------|
| ** **                                                                                               |   |   |
| **ITEM 1. FINANCIAL STATEMENTS  (Unaudited)**                                                            |   |   |
| *Condensed Balance Sheets*                                                                               |   |   |
| *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 1A. RISK FACTORS**                                                                                |   |   |
| ** **                                                                                               |   |   |
| **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**                                                                                           |   |   |

 

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# **PART IFINANCIAL INFORMATION**

## **Item1. Financial Statements**

**ReefGlobal Energy IV, L.P.**

**Condensed Balance Sheets**
| ** **                                              | ** ** | **March 31,** | ** **  | **December 31** | ** ** |
|---------------------------------------------------------|------------|--------------------|-------------|----------------------|------------|
| ** **                                              | ** ** | **2007**           | ** **  | **2006**             | ** ** |
| ** **                                              | ** ** | **(Unaudited)**    | ** **  | ** **           | ** ** |
| ** **                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| **Assets**                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| ** **                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| **Current assets:**                                     | ** ** | ** **         | ** **  | ** **           | ** ** |
| Cash and cash  equivalents                              | ** ** | **$**              | 83,667      |                 | **$**      | 83,061 | ** ** |
| Accounts  receivable from affiliates                    |       | 31,551             |        | 27,920               |       |
| **Total current assets**                                | ** ** | **115,218**        | ** **  | **110,981**          | ** ** |
|                                                    |       |               |        |                 |       |
| **Property and equipment:**                             | ** ** | ** **         | ** **  | ** **           | ** ** |
| Oil and gas  properties, full cost method of accounting |       | 8,398,780          |        | 8,596,035            |       |
| Drilling in  progress                                   |       | 59,745             |        | 27,920               |       |
| Prepaid drilling  costs                                 |       | 2,559              |        | 26,597               |       |
| Accumulated  depreciation and depletion                 |       | (8,345,314         | )           | (8,456,815           | )          |
| **Net property and equipment**                          | ** ** | **115,770**        | ** **  | **193,737**          | ** ** |
| ** **                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| **Total assets**                                        | ** ** | **$**              | **230,988** | ** **           | **$**      | **304,718** | ** ** |
| ** **                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| **Liabilities and partnership  Equity**                 | ** ** | ** **         | ** **  | ** **           | ** ** |
|                                                    |       |               |        |                 |       |
| **Current liabilities:**                                | ** ** | ** **         | ** **  | ** **           | ** ** |
| Accounts payable                                        | ** ** | **$**              | 10          | ** **           | **$**      | 226 | ** ** |
| Accounts payable  to affiliates                         |       | 43,367             |        | 90,336               |       |
| **Total current liabilities**                           | ** ** | **43,377**         | ** **  | **90,562**           | ** ** |
|                                                    |       |               |        |                 |       |
| **Noncurrent liabilities:**                             | ** ** | ** **         | ** **  | ** **           | ** ** |
| Asset retirement  obligation                            |       | 128,872            |        | 94,718               |       |
| **Total non-current liabilities**                       | ** ** | **128,872**        | ** **  | **94,718**           | ** ** |
| ** **                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| **Partnership Equity**                                  | ** ** | ** **         | ** **  | ** **           | ** ** |
| General partners                                        |       | 1,611              |        | 24,716               |       |
| Limited partners                                        |       | 4,510              |        | 69,198               |       |
| Managing general  partner                               |       | 52,618             |        | 25,524               |       |
| **Partnership equity**                                  | ** ** | **58,739**         | ** **  | **119,438**          | ** ** |
| ** **                                              | ** ** | ** **         | ** **  | ** **           | ** ** |
| **Total liabilities and partnership equity**            | ** ** | **$**              | **230,988** | ** **           | **$**      | **304,718** | ** ** |

 

*See accompanying notes to condensed financialstatements.*

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

**Condensed Statements ofOperations**
| ** **                                  | ** ** | **For the three months ended  March 31 (unaudited)** | ** **  |
|---------------------------------------------|------------|------------------------------------------------------------------------------------|-------------|
| ** **                                  | ** ** | **2007**                                                                           | ** **  | **2006** | ** ** |
|                                        |       |                                                                               |        |   |   |
| **Revenues:**                               | ** ** | ** **                                                                         | ** **  | ** ** | ** ** |
| Oil and gas sales                           | ** ** | **$**                                                                              | 36,536      | ** ** | **$** | 71,777 | ** ** |
| **Total  revenues**                         | ** ** | **36,536**                                                                         | ** **  | **71,777** | ** ** |
|                                        |       |                                                                               |        |   |   |
| **Costs  and expenses:**                    | ** ** | ** **                                                                         | ** **  | ** ** | ** ** |
| Lease operating expenses                    |       | 13,540                                                                             |        | 13,195 |   |
| Production taxes                            |       | 2,255                                                                              |        | 1,989 |   |
| General and administrative expenses         |       | 9,026                                                                              |        | 24,999 |   |
| Accretion of asset retirement obligation    |       | 34,154                                                                             |        | 1,409 |   |
| Depreciation, depletion and amortization    |       | 14,992                                                                             |        | 97,045 |   |
| Property impairment                         |       | 56,256                                                                             |        | 2,153,374 |   |
| **Total  costs and expenses**               | ** ** | **130,223**                                                                        | ** **  | **2,292,011** | ** ** |
|                                        |       |                                                                               |        |   |   |
| **Loss  from operations**                   | ** ** | **(93,687**                                                                        | **)**       | **(2,220,234** | **)** |
|                                        |       |                                                                               |        |   |   |
| **Other  income:**                          | ** ** | ** **                                                                         | ** **  | ** ** | ** ** |
| Interest income                             |       | 334                                                                                |        | 3,458 |   |
| **Total  other income**                     | ** ** | **334**                                                                            | ** **  | **3,458** | ** ** |
|                                        |       |                                                                               |        |   |   |
| **Net  loss**                               | ** ** | **$**                                                                              | **(93,353** | **)** | **$** | **(2,216,776** | **)** |
|                                        |       |                                                                               |        |   |   |
| Net loss per  general partner unit          | ** ** | $                                                                                  | (184.84     | ) | $ | (4,395.47 | ) |
| Net loss per  limited partner unit          | ** ** | $                                                                                  | (184.84     | ) | $ | (4,395.47 | **)** |
| Net loss per managing general  partner unit | ** ** | $                                                                                  | (222.17     | ) | $ | (5,156.19 | **)** |

 

*See accompanying notes to condensed financialstatements.*

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**Reef Global Energy IV, L.P.Condensed Statements of Cash Flows**
| ** **                                                                         | ** ** | **For the three months ended   March 31,(unaudited)** | ** ** |
|------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------|------------|
| ** **                                                                         | ** ** | **2007**                                                                            | ** ** | **2006** | ** ** |
| ** **                                                                         | ** ** | ** **                                                                          | ** ** | ** ** | ** ** |
| **Operating  Activities**                                                          |       |                                                                                |       |   |   |
| Net loss                                                                           | ** ** | $                                                                                   | (93,353    | ) | $ | (2,216,776 | ) |
| Adjustments for  non-cash transactions:                                            |       |                                                                                |       |   |   |
| Depreciation, depletion and amortization                                           |       | 14,992                                                                              |       | 97,045 |   |
| Property impairment                                                                |       | 56,256                                                                              |       | 2,153,374 |   |
| Accretion of asset retirement obligation                                           |       | 34,154                                                                              |       | 1,409 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities: | ** ** | ** **                                                                          | ** ** | ** ** | ** ** |
| **Changes  in operating assets and liabilities:**                                  | ** ** | ** **                                                                          | ** ** | ** ** | ** ** |
| Accounts receivable from affiliates                                                |       | —                                                                              |       | (8,097 | ) |
| Accounts payable                                                                   |       | (216                                                                                | )          | (15,896 | ) |
| Accounts payable to affiliates                                                     |       | (40,250                                                                             | )          | (6,507 | ) |
| **Net  cash provided by (used in) operating activities**                           | ** ** | **(28,417**                                                                         | **)**      | **4,552** | ** ** |
|                                                                               |       |                                                                                |       |   |   |
| **Investing  Activities**                                                          | ** ** | ** **                                                                          | ** ** | ** ** | ** ** |
| Property acquisition and development                                               |       | —                                                                              |       | (406,598 | ) |
| **Net  cash used in investing activities**                                         | ** ** | **—**                                                                          | ** ** | **(406,598** | **)** |
|                                                                               |       |                                                                                |       |   |   |
| **Financing  Activities**                                                          | ** ** | ** **                                                                          | ** ** | ** ** | ** ** |
| Partner capital contributions                                                      |       | 29,023                                                                              |       | 10,446 |   |
| Syndication costs                                                                  |       | —                                                                              |       | — |   |
| Partner distributions                                                              |       | —                                                                              |       | (22,000 | ) |
| **Net  cash provided by (used in) financing activities**                           | ** ** | **29,023**                                                                          | ** ** | **(11,554** | **)** |
|                                                                               |       |                                                                                |       |   |   |
| **Net  increase (decrease) in cash and cash equivalents**                          | ** ** | **606**                                                                             | ** ** | **(413,600** | **)** |
| Cash and cash  equivalents at beginning of period                                  |       | 83,061                                                                              | ** ** | **757,983** | ** ** |
| **Cash  and cash equivalents at end of period**                                    | ** ** | **$**                                                                               | **83,667** | ** ** | **$** | **344,383** | ** ** |
|                                                                               |       |                                                                                |       |   |   |
| Non-cash  financing transactions:                                                  |       |                                                                                |       |   |   |
| Managing partner contributions included in accounts  receivable from affiliates    | ** ** | **$**                                                                               | 31,551     | ** ** | **$** | 2,126 | ** ** |
| Non-cash  investing transactions:                                                  |       |                                                                                |       |   |   |
| Property additions included in accounts payable to  affiliates                     | ** ** | **$**                                                                               | **—** | ** ** | **$** | 48,487 | ** ** |
| Property  additions and asset retirement obligation                                | ** ** | **$**                                                                               | **—** | ** ** | **$** | 1,173 | ** ** |

 

*See accompanying notes to condensedfinancial statements.*

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**ReefGlobal Energy IV, L.P.**

**Notes toCondensed Financial Statements (unaudited)**

**March 31,2007**

**1. Organization and Basis ofPresentation**

The financial statementsfor Reef Global Energy IV, L.P. (the Partnership), formed under Reef GlobalEnergy Ventures (the Program), have been prepared pursuant to the rules andregulations of the Securities and Exchange Commission (SEC). Certaininformation and footnote disclosure normally included in annual financialstatements prepared in accordance with accounting principles generally acceptedin the United States have been condensed or omitted pursuant to those rules andregulations. We have recorded all transactions and adjustments necessary tofairly present the financial statements included in this Form 10-Q. The adjustmentsare normal and recurring. The following notes describe only the materialchanges in accounting policies, account details, or financial statement notesduring the first three months of 2007. Therefore, please read these condensedfinancial statements and notes to condensed financial statements together withthe audited financial statements and notes to financial statements contained inthe Partnership’s Report on Form 10-K for the period ended December 31, 2006(the 2006 10-K).

**2. Summary of Accounting Policies**

**Oil and Gas Properties**

The Partnership followsthe full cost method of accounting for crude oil and natural gas properties.Under this method, all direct costs and certain indirect costs associated withacquisition of properties and successful as well as unsuccessful explorationand development activities are capitalized. Depreciation, depletion, andamortization of capitalized crude oil and natural gas properties and estimatedfuture development costs, excluding unproved properties, are based on theunit-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. During the three month periods ended March 31,2007 and 2006, the Partnership recognized property impairment expense of$56,256 and $2,153,374.

**Asset Retirement Obligations**

Statementof Financial Accounting Standards No. 143, “Accounting for RetirementObligations” (SFAS 143) addresses accounting and reporting for obligationsassociated with the retirement of tangible long-lived assets and the associatedasset retirement costs. SFAS 143 requires that the fair value of a liabilityfor an asset’s retirement obligation be recorded in the period in which it isincurred and the corresponding cost capitalized by increasing the carryingamount of the related long-lived asset. The liability is accreted to its thenpresent value each period, and the capitalized cost is depreciated over theuseful life of the related asset. SFAS 143 is effective for the Partnership asof its inception date.

Thefollowing table summarizes the Partnership’s asset retirement obligation forthe three months ended March 31, 2007 and the year ended December 31, 2006.

|                                        | ** ** | **Three months   ended March 31,   2007** | ** ** | **2006** | ** ** |
|----------------------------------------|------------|--------------------------------------------------------------------|------------|----------|------------|
| Beginning asset  retirement obligation | ** ** | $                                                                  | 94,718     |     | $          | 87,725 |   |
| Additions  related to new properties   |       | —                                                             |       | 1,173    |       |
| Accretion  expense                     |       | 34,154                                                             |       | 5,820    |       |
| Ending asset retirement  obligation    | ** ** | $                                                                  | 128,872    |     | $          | 94,718 |   |

 

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**3. Transactions with Affiliates**

The Partnership has noemployees. Reef Exploration, L.P. (RELP), an affiliate of Reef, employs a staffincluding geologists, petroleum engineers, landmen and accounting personnel whoadminister all of the Partnership’s operations. The Partnership reimburses RELPfor direct and administrative services at cost. During the three month periodsended March 31, 2007 and 2006, the Partnership incurred $1,308 and $4,067 ofadministrative costs, respectively.

RELP processes revenuesand joint interest billings on behalf of the Partnership. At March 31, 2007,the Partnership had net invoices totaling $42,059 due to RELP. The Partnershipowed RELP $1,308 for administrative costs provided by RELP. The Partnershipsettles its balances with RELP on a quarterly basis.

Reef Oil & GasPartners, L.P (Reef), the managing general partner, contributes 1% of allleasehold, drilling and completion costs when incurred, in addition to havingpurchased 5.01% of the Partnership units. During the three month periods endedMarch 31, 2007 and 2006, this 1% obligation totaled $(274) and $2,126. Reef hasalso agreed to pay 100% of the drilling costs for a well currently beingdrilled by the Partnership. In connection with this obligation, Reef owes$31,825 to the Partnership for drilling costs incurred during the first quarterof 2007. Amounts owed to the Partnership are shown as accounts receivable fromaffiliates on the condensed balance sheets. The Partnership settles itsbalances with Reef on a quarterly basis.

**4.Partnership Equity**

Informationregarding the number of units outstanding and the net loss per type ofPartnership unit for the three month periods ended March 31, 2007 and 2006 isdetailed below:

Forthe three months ended March 31, 2007
| Type of Unit          | ** ** | **Number of   Units** | ** ** | **Net loss** | ** ** | **Net loss per   unit** | ** ** |
|---------------------------------|------------|---------------------------------|------------|-------------------|------------|----------------------------------------|------------|
| Managing general  partner units |       | 25.028                          |       | $                 | (5,560     | )                                      | $          | (222.17 | ) |
| General partner  units          |       | 125.000                         |       | (23,105           | )          | (184.84                                | )          |
| Limited partner  units          |       | 349.972                         |       | (64,688           | )          | (184.84                                | )          |
| Total                           |       | 500.000                         |       | $                 | (93,353    | )                                      |       |   |
|                                 |            |                                 |            |                   |            |                                        |            |  |  |

 

For the three months ended March 31, 2006
| Type of Unit          | ** ** | **Number of   Units** | ** ** | **Net loss** | ** ** | **Net loss per   unit** | ** ** |
|---------------------------------|------------|---------------------------------|------------|-------------------|------------|----------------------------------------|------------|
| Managing general  partner units |       | 25.028                          |       | $                 | (129,049   | )                                      | $          | (5,156.19 | ) |
| General partner  units          |       | 125.000                         |       | (549,434          | )          | (4,395.47                              | )          |
| Limited partner  units          |       | 349.972                         |       | (1,538,293        | )          | (4,395.47                              | )          |
|                            |       |                            |       |              |       |                                   |       |
| Total                           |       | 500.000                         |       | $                 | (2,216,776 | )                                      |       |   |
|                                 |            |                                 |            |                   |            |                                        |            |  |  |

 

**Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations.**

The following is a discussion of the Partnership’s financialposition, results of operations, liquidity and capital resources. Thisdiscussion should be read in conjunction with our financial statements and therelated notes thereto, included in the 2006 10-K.

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

·                                     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;

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·                                     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;

·                                     anystatements using the words “anticipate,” “believe,” “estimate,” “expect” andsimilar such phrases or words; and

·                                     anystatements of other 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 September 21, 2004. Although Reef believes that theexpectations reflected in such forward-looking statements are reasonable, Reefcan give no assurance that such expectations will prove to have beencorrect.  Should any one or more of these or other risks or uncertaintiesmaterialize or should any underlying assumptions prove incorrect, actualresults are likely to vary materially from those described herein.  Therecan be no assurance that the projected results will occur, that these judgmentsor assumptions will prove correct or that unforeseen developments will notoccur.

Reef, as managing generalpartner, initially received a 10% interest in the Partnership as compensationfor forming the Partnership, and also received a 1% interest in the Partnershipas a result of paying 1% of all leasehold, drilling and completion costs. This11% interest was not represented by Partnership units. In addition, Reef purchased 5.01% of thePartnership units and, therefore, held 5.01% of the 89% interest in thePartnership (4.46%) held by the unit holders. Effective August 1, 2006, Reefreduced the interest it received as compensation for forming the Partnershipfrom 10% to 5%, and effective November 1, 2006 it reduced this interest from 5%to 0%. Therefore, effective November 1, 2006, Reef holds a 1% interest in thepartnership as a result of paying 1% of all leasehold, drilling and completioncosts. This 1% interest is not represented by Partnership units. EffectiveNovember 1, 2006 Reef holds 5.01% of the 99% interest in the Partnership(4.96%) held by the unit holders.

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 IV,L.P. is a Nevada limited partnership formed to acquire, explore, develop, 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 have been used to purchase thirteen prospects upon which thePartnership has conducted drilling operations, a small portion of capital hasbeen used to purchase existing reserves.

The Partnership operatessolely in the United States. RELP, an affiliate of the managing generalpartner, and its predecessor entity OREI, Inc. have expertise and have drilledand operated wells primarily in Texas and Louisiana since 1987. Seven Partnershipprospects are located in Louisiana, five are located in Texas, and one islocated in United States coastal waters in the Gulf of Mexico.

The Partnership does notoperate in any other industry segment. The Partnership is permitted but has notand is not expected to engage in commodity futures trading or hedgingactivities, and therefore is subject to commodity price risk.   See “Item3—Quantitative and Qualitative Disclosures About Market Risk.”

**CriticalAccounting Policies**

There have been no changes from the Critical Accounting Policiesdescribed in the 2006 10-K.

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**Liquidityand Capital Resources**

For the reasons describedbelow, Partnership management believes that, unless certain drilling andre-completion projects are successful, cash on hand and cash flow generated bythe Partnership will not be adequate to fund the operation of its businessbeyond a short period of time.  ThePartnership has working capital of $71,841 at March 31, 2007 from which to pay operationscosts. Drilling activities on the thirteen Partnership prospects were completedin 2006, and the Partnership has no plans to issue voluntary cash calls topartners for additional developmental drilling on any of the prospects.

The total capitalinitially available to the Partnership, net of organization and syndicationcosts, was $8,500,000. As of March 31, 2007, the Partnership has also received$84,913 in additional capital contributions from Reef representing itsobligation to pay for 1% of all leasehold, drilling, and completion costs. ThePartnership also retained the interest income earned during 2004 and 2005totaling $68,585 for use during the drilling phase of operations, resulting intotal funds available of approximately $8.653 million.

The Partnership purchasedinterests in thirteen prospects upon which thirteen wells have been drilled.These wells completed drilling operations in February 2006 and all successfulwells were operational as of July 2006. The Partnership expended approximately $8.607 million during thedrilling phase of operations. The Partnership does not expect to incuradditional costs associated with the initial drilling of these thirteen wells.The Partnership has also accrued approximately $129,000 as the estimatedabandonment liability associated with successful wells drilled by thePartnership. The Partnership expended approximately $4.002 million inconnection with six unsuccessful wells drilled, approximately $3.970 million onseven wells completed as productive wells, $0.523 million on the purchase of aroyalty interest in a field in Louisiana, and $0.112 million in general andadministrative expenses. In addition, Reef, as managing general partner, agreedin July 2006 that it would pay 100 % of the cost for a working interest in awell in Louisiana currently drilling. Reef will make an additional capitalcontribution to the Partnership, estimated at approximately $130,000, to payfor the drilling cost associated with this well.

Our independentregistered public accounting firm’s opinion on our December 31, 2006 auditedfinancial statements includes an explanatory paragraph indicating substantialdoubt about our ability to continue as a going concern. Since its inception,the Partnership has expended its operating capital on drilling for oil andnatural gas. The drilling operations that the Partnership has undertaken so farhave not resulted in the discovery or exploitation of sufficient oil and/or gasreserves to recover all of the Partnership’s investment in Partnership wells.The December 31, 2006 estimate of the Partnership’s oil and gas reserves andfuture cash flows raises doubts about the future ability of the Partnership togenerate oil and gas revenues in excess of current operating costs. Themanaging general partner has contributed to the Partnership, free of cost tothe Partnership, a working interest in a well currently being drilled. Ifsuccessful, this well, in the opinion of the managing general partner, has thepotential to generate significant cash flows to the Partnership. Another well drilledby the Partnership and shut-in at December 31, 2006 was re-completed in a newzone on May 11, 2007. Initial results of the recompletion are positive, withthe well averaging 650,000 cubic feet of natural gas per day and 2 barrels ofoil per day for the period ending May 13, 2007. The Partnership owns an 11%revenue interest in the production from this well.  The future ability of the Partnership togenerate revenues in excess of operating costs greatly depends upon the successof these projects. If these projects are not successful, we could be unable tofund our operating costs. Failure of these projects could cause us to cease ouroperations and liquidate the Partnership’s assets.

**Resultsof Operations**

**Three months ended March 31, 2007and March 31, 2006**

The Partnership incurreda net loss of $2,216,776 during the three month period ended March 31, 2006.The Partnership incurred property impairment cost of $2,153,374 during thequarter, due primarily to the fact that performance levels from the three productiveworking interest and two productive royalty interest wells caused a reductionin the estimate of proved reserves expected to be recovered from those wells.During this quarter three of the seven productive wells drilled by thePartnership were producing oil and gas, one well had ceased production during2005, and three wells had not yet begun production operations. Two royaltyinterests purchased by the Partnership were also producing oil and gas. Oil andgas revenues totaled $71,777.

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During the quarter endedMarch 31, 2007, Partnership oil and gas revenues totaled only $36,536 comparedto $71,777 during the first quarter of 2006. One of the royalty interest wellsand one of the working interest wells which were productive during the threemonths ended March 31, 2006 had ceased production prior to 2007. The otherthree wells experienced significant declines in the rates of production during2006, and revenues from these three comparable wells was $59,609 during thethree months ended March 31, 2006 compared to only $20,143 during the threemonths ended March 31, 2007. While the Partnership completed three additionalproductive wells subsequent to March 31, 2006, two of which were productiveduring the first quarter of 2007, the Partnership failed to discover reservessignificant enough to offset the declining production rates from wells drilledprior to 2006. The Partnership incurred a net loss of $93,353 during the firstquarter of 2007. Property impairment costs totaled $56,256 due to reductions inreserve estimates caused by production decline rates greater than previouslyestimated.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk.**

**InterestRate Risk**

ThePartnership currently has no borrowings. The partnership agreement prohibitedbank borrowings during the Partnership’s drilling phase of operations. ThePartnership is permitted to borrow monies or assess partners for developmentalactivities on the prospects it has drilled, however, at this time thePartnership has no plans to conduct additional activities on any of theseprospects. The Partnership is subject to interest rate risk solely to theextent that changes in interest rates affect general economic conditions.

**CommodityPrice Risk**

The Partnership has notand does not expect to engage in commodity futures trading or hedgingactivities or enter into derivative financial instrument transactions fortrading or other speculative purposes. The Partnership sells a vast majority of its production from successfuloil and gas wells on a month-to-month basis at current spot market prices.Accordingly, the Partnership is at risk for the volatility in commodity pricesinherent in the oil and gas industry, and the level of commodity prices has asignificant impact on the Partnership’s results of operations.

**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 Principal 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) of the Securities Exchange Act of 1934) with the assistance andparticipation of other members of management. Based upon that evaluation, Reef’sPrincipal Executive Officer and Chief Financial Officer have concluded that asof March 31, 2007, Reef’s disclosure controls and procedures were effective ata reasonable assurance level for gathering, analyzing and disclosing theinformation the Partnership is required to disclose in the reports it filesunder the Securities Exchange Act of 1934 within the time periods specified inthe SEC’s rules and forms. During our fiscal quarter ended March 31, 2007, nochanges occurred in our internal control over financial reporting (as definedin Rule 13a-15(f) of the Securities Exchange Act of 1934) that have materiallyaffected, or are reasonably likely to materially affect, our internal controlover financial reporting.

**PART II – OTHER INFORMATION**

**Item 1. Legal Proceedings**

None

**Item 1A. Risk Factors**

In addition to theother information set forth in this report, you should carefully consider therisk factors discussed in Part I, Item 1A in the 2006 10-K, which couldmaterially affect our business, financial condition or future results. Therisks described in our 2006 10-K are not the only risks facing the Partnership.Additional risks and uncertainties not currently known to us or that wecurrently deem to be immaterial also may materially adversely affect our 

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business,financial condition and/or operating results. There have been no materialchanges from the risk factors previously disclosed in the 2006 10-K.

The 2006 10-Kcontained the following risk factor concerning the ability of the Partnershipto continue as a going concern. This risk factor continues to be valid as ofMarch 31, 2007. One of the projects referred to in the paragraph below has beencompleted as of the date of this report, and all are expected to be completedprior to June 30, 2007.

**The Partnership’sability to continue as a going concern depends upon the success of drilling andre-completion projects which will take place during 2007.**

Our independentregistered public accounting firm’s opinion on our December 31, 2006 auditedfinancial statements includes an explanatory paragraph indicating substantialdoubt about our ability to continue as a going concern. Since its inception,the Partnership has expended its operating capital on drilling for oil andnatural gas. The drilling operations that the Partnership has undertaken so farhave not resulted in the discovery or exploitation of sufficient oil and/or gasreserves to recover all of the Partnership’s investment in Partnership wells.The December 31, 2006 estimate of the Partnership’s oil and gas reserves andfuture cash flows raises doubts about the future ability of the Partnership togenerate oil and gas revenues in excess of current operating costs. Themanaging general partner has contributed to the Partnership, free of cost tothe Partnership, a working interest in a well currently being drilled. Ifsuccessful, this well, in the opinion of the managing general partner, has thepotential to generate significant cash flows to the Partnership. Another welldrilled by the Partnership is currently shut-in and is awaiting the approval ofthird party working interest owners to re-complete the well in a new zoneexpected to be productive.  The futureability of the Partnership to generate revenues in excess of operating costsgreatly depends upon the success of these projects. If these projects are notsuccessful, we could be unable to fund our operating costs. Failure of theseprojects could cause us to cease our operations and liquidate the Partnership’sassets.

**Item 2.  Unregistered Sales of Equity Securities andUse of Proceeds**

**Use of Proceeds**

In connection with theRegistration Statement filed on Form S-1 (No. 333-93399) and declared effectiveMay 31, 2001, Reef filed a post-effective amendment to the RegistrationStatement on behalf of the Program on September 14, 2001. On January 10, 2002Reef filed a final prospectus and commenced the offering of units in theProgram. All sales of Partnership units were made through the Program’sdealer-manager, Reef Securities, Inc., and a number of soliciting dealers. TheProgram filed a prospectus supplement describing Reef Global Energy IV, L.P. onSeptember 21, 2004 and commenced offering units. The offering period ended onDecember 2, 2004.

During theoffering period, the Partnership sold 474.972 units to investor partners,consisting of 349.972 limited partner units and 125 general partner units. Reefpurchased 25.028 limited partner units, equaling 5.01% of the total Partnershipunits sold. Total offering proceeds were $9,924,916. All units except thosepurchased by Reef paid a 15% management fee to Reef to pay for the Partnershiporganization and offering costs, including sales commissions. These coststotaled $1,424,916, leaving capital contributions of $8,500,000 available forPartnership oil & gas operations. In addition, the Partnership hasavailable $68,585 of interest income and $84,913 of additional capitalcontributions from Reef in connection with its obligation to pay 1% of allleasehold, drilling and completion costs, for a total of $8.653 million. As ofMarch 31, 2007 the Partnership had expended $8.607 million on oil and gasoperations, and has accrued an estimated abandonment liability of approximately$129,000 in connection with successful wells drilled by the Partnership.

**Item 3.  Defaults Upon Senior Securities**

None

**Item 4.  Submission of Matters to a Vote of SecurityHolders**

None

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**Item 5.  Other Information**

None

**Item6.  Exhibits**

| Exhibits   | ** ** | ** **                                                                                                                                          |
|------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                                                                                          |
| 31.1       |       | Certification of Chief Executive Officer required by  Rule 13a-14(a)/15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.          |
|       |       |                                                                                                                                                |
| 31.2       |       | Certification of Chief Financial Officer required by  Rule 13a-14(a)/15d-14(a) pursuant to Section 302 of the Sarbanes-Oxley Act of  2002.          |
|       |       |                                                                                                                                                |
| 32.1       |       | Certification of Chief Executive Officer pursuant to  18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |
|       |       |                                                                                                                                                |
| 32.2       |       | Certification of Chief Financial Officer pursuant to  18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |

 

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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 IV, L.P. |
|----------------------------------|-----------------------------|
|                             |                        |
|                             | By:                         | Reef Oil & Gas Partners, L.P. |
|                             |                        | Managing General  Partner |
|                             |                        |   |
|                             | By:                         | Reef Oil & Gas Partners, GP, LLC |
|                             |                        |   |
|                             |                        |   |
| Dated:   May  15, 2007 | By:                         | /s/ Michael J. Mauceli |   |
| ** **                       |                        | **Michael J. Mauceli** |
|                             |                        | Manager and  Member |
| * *                         |                        | *(principal  executive officer)* |
| * *                         |                        | * * |
| * *                         |                        | * * |
| Dated:   May 15, 2007  | By:                         | /s/ Daniel C. Sibley |   |
| ** **                       |                        | **Daniel C. Sibley** |
|                             |                        | Chief Financial  Officer |
| * *                         |                        | *(principal  financial and accounting officer)* |

 

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